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H.R. 6675 (89th): An Act to provide a hospital insurance program for the aged under the Social Security Act with a supplementary health benefits program and an expanded program of medical assistance, to increase benefits under the Old-Age, Survivors, and Disability Insurance System, to improve the Federal-State public assistance programs, and far other purposes

The text of the bill below is as of Jul 30, 1965 (Passed Congress).


286                                    PUBLIC LAW 89-97-JULY 30, 1965                            [79 STAT.

                  Public Law 89-97
    |H/R°66?f]    ^                                   AN ACT
.                 To provide a hospital insurance program for the aged under the Social Security
                    Act with a supplementary medical benefits program and an expanded program
                    of medical assistance, to increase benefits under the Old-Age, Survivors, and
                    Disability Insurance System, to improve the Federal-State public assistance
                    programs, and for other purposes.

                    Be it enacted hy the Senate and House of Representatives of the
Am^ndments'^f*^   ?7m^e<^ States of America in Congress assembled, That this Act, with
1965.             the following table of contents, may be cited as the "Social Security
                  Amendments of 1965".
                                                 TABLE OF CONTENTS
                        TITLE I—HEALTH INSTJBANCE FOB THE AGED AND MEDICAL ASSISTANCE

                  SEC. 100. Short title.
                                  P A E T I—HEALTH INSURANCE BENEFITS FOR THE AGED

                  SEC. 101. Entitlement to hospital insurance benefits.
                  SEC. 102. Hospital insurance benefits and supplementary medical insurance
                             benefits.
                                    TITLE XVIII—HEALTH INSURANCE FOR THE AGED

                      SEC. 1801. Prohibition against any Federal interference.
                      SEC. 1802. Free choice by patient guaranteed.
                      SEC. 1803. Option to individuals to obtain other health insurance protec-
                                   tion.
                                     PART A — H O S P I T A L INSURANCE BENEFITS FOB THE AGED
                      SEC. 1811. Description of program.
                      SEC. 1812. Scope of benefits.
                      SEC. 1813. Deductibles and coinsurance.
                      SEC. 1814. Conditions of and limitations on payment for services.
                                     (a) Requirement of requests and certifications.
                                     (b) Reasonable cost of services.
                                     (c) No payments to Federal providers of services.
                                     (d) Payments for emergency hospital services.
                                     (e) Payment for inpatient hospital services prior to notifi-
                                           cation of noneligibility.
                                     (f) Payment for certain emergency hospital services furn-
                                           ished outside the United States.
                      SEC. 1815. Payment to providers of services
                      SEC. 1816. Use of public agencies or private organizations to facilitate pay-
                                   ment to providers of services.
                      SEC. 1817. Federal hospital insurance trust fund.
                             PART B — S U P P L E M E N T A B Y MEDICAL INSUBANCE BENEFITS FOB THE AGED

                      SEC. 1831. Establishment of supplementary medical insurance program for
                                   the aged.
                      SEC. 1832. Scope of benefits.
                      SEC. 1833. Payment of benefits.
                      SEC. 1834. Limitation on home health services.
                      SEC. 1835. Procedure for payment of claims of providers of services.
                      SEC. 1836. Eligible individuals.
                      SEC. 1837. Enrollment periods.
                      SEC. 1838. Coverage period.
                      SEC. 1839. Amounts of premiums.
                      SEC. 1840. Payment of premiums.
                      SEC. 1841. Federal supplementary medical insurance trust fund.
                      SEC. 1842. Use of carriers for administration of benefits.
                      SEC. 1843. State agreements for coverage of eligible individuals who are
                                   receiving money payments under public assistance programs.
                      SEC. 1844. Appropriations to cover Grovernment contributions and con-
                                   tingency reserve.

79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 287 TABLE OF CONTENTS—Continued TITLE XVIII—HEALTH INSURANCE FOR THE AGED—Continued PART C — M I S C E L L A N E O U S PROVISIONS j SEC. 1861. Definitions of services, institutions, etc. (a) Spell of illness. (b) Inpatient hospital services. I (c) Inpatient psychiatric hospital services. (d) Inpatient tuberculosis hospital services. (e) Hospital. (f) Psychiatric hospital. (g) Tuberculosis hospital, (h) Extended care services. (i) Post-hospital extended care services, (j) Extended care facility, (k) Utilization review. (1) Agreements for transfer between extended care facili- ties and hospitals, (m) Home health services, (n) Post-hospital home health services, (o) Home health agency, (p) Outpatient hospital diagnostic services, (q) Physicians' services, (r) Physician. (s) Medical and other health services, (t) Drugs and biologicals. (u) Provider of services, (v) Reasonable cost, (w) Arrangements for certain services, (x) State and United States. (y) Post-hospital extended care in CJhristian Science ex- tended care facilities. SEC. 1862. Exclusions from coverage. SEC 1863. Consultation with State agencies and other organizations to develop conditions of participation for providers of services. SEC 1864. Use of State agencies to determine compliance by providers of services with conditions of participation. SEC 1865. Effect of accreditation. SEC 1866. Agreements with providers of services. SEC 1867. Health insurance benefits advisory council. SEC 1868. National medical review committee. SEC 1869. Determinations; appeals. SEC 1870. Overpayments on behalf of individuals. SEC 1871. Regulations. SEC. 1872. Application of certain provisions of title II. SEC 1873. Designation of organization or publication by name. SEC 1874. Administration. SEC 1875. Studies and recommendations. SEC. 103. Transitional provision on eligibility of presently uninsured individuals for hospital insurance benefits. SEC. 104. Suspension in case of aliens; persons convicted of subversive activities. SEC 105. Railroad retirement amendments. SEC 106. Medical expense deduction. SEC 107. Receipts for employees must show taxes separately. SEC 108. Technical and administrative amendments relating to trust funds. SEC 109. Advisory council on social security. SEC 110. Meaning of term "Secretary". SEC 111. Role of the Railroad Retirement Board in the administration of hos- pital insurance for the aged.
288 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. TABLE OF CONTENTS—Continued TITLE XVIII—HEALTH INSURANCE FOR THE AGED—Continued PART 2—GRANTS' TO STATES FOR MEDICAL ASSISTANCE PROGRAMS SEC. 121. Establishment of programs. TiTi-E XIX—GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS SEC. 1901. Appropriation. SEC. 1902. State plans for medical assistance. SEC. 1903. Payment to States. SEC. 1904. Operation of State plans. SEC. 1905. Definitions. SEC. 122. Payment by States of premiums for supplementary medical insurance. TITLE II—OTHES AMENDMENTS RELATING TO HEALTH CARE PART 1 — M A T E R N A L AND CHILD HEALTH AND CRIPPLED CHILDREN'S SERVICES SEC. 201. Increase in maternal and child health services. SEC. 202. Increase in crippled children's services. SEC. 203. Training of professional personnel for the care of crippled children. SEC 204. Payment for inpatient hospital services. SEC. 205. Special project grants for health of school and preschool children. SEC 206. Evaluation and report. SEC 207. Increase in child welfare services. SEC. 208. Day care services. PART 2—IMPLEMENTATION OF MENTAL RETARDATION PLANNING SEC. 211. Authorization of appropriations. PART 3 — P U B L I C ASSISTANCE AMENDMENTS RELATING TO HEALTH CARE SEC. 22L Removal of limitations on Federal participation in assistance to individuals with tuberculosis or mental disease. SEC. 222. Amendment to definition of medical assistance for the aged. PART 4—MISCELLANEOUS AMENDMENTS RELATING TO HEALTH CARE SEC 231. Health study of resources relating to children's emotional illness. TITLE III—SOCIAL SECURITY AMENDMENTS SEC. 300. Short title. SEC. 301. Increase in old-age, survivors, and disability insurance benefits. SEC 302. Computation and recomputation of benefits. SEC. 303. Disability insurance benefits. SEC. 304. Payment of disability insurance benefits after entitlement to other monthly insurance benefits. SEC. 305. Disability insurance trust fund. SEC 306. Payment of child's insurance benefits after attainment of age 18 in case of child attending school. SEC 307. Reduced benefits for widows at age 60. SEC 308. Wife's and widow's benefits for divorced women. SEC 309. Transitional insured status. SEC 310. Increase in amount an individual is permitted to earn without suffer- ing full deductions from benefits. SEC 311. Coverage for doctors of medicine. SEC 312. Gross income of farmers. SEC 313. Coverage of tips. SEC 314. Inclusion of Alaska among States permitted to divide their retirement systems.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 289 TABLE OF CONTENTS—Continued TITLE III—SOCIAL SECURITY AMENDMENTS—Continued SEC. 315. Additional period for electing coverage under divided retirement system. SEC. 316. Employees of nonprofit organizations. SEC. 317. Coverage of temporary employees of the District of Columbia. SEC. 318. Coverage for certain additional hospital employees in California. SEC. 319. Tax exemption for religious groups opposed to insurance. SEC. 320. Increase of earnings counted for benefit and tax purposes. SEC. 321. Changes in tax schedules. SEC. 322. Reimbursement of trust funds for cost of noncontributory military service credits. SEC. 323. Adoption of child by retired worker. SEC. 324. Extension of period for filing proof of support and applications for lump-sum death payment. SEC. 325. Treatment of certain royalties for retirement test purposes. SEC. 326. Amendments preserving relationship between railroad retirement and old-age, survivors, and disability insurance systems. SEC. 327. Technical amendment relating to meetings of board of trustees of the old-age, survivors, and disability insurance trust funds. SEC. 328. Applications for benefits. SEC. 329. Underpayments. SEC. 330. Payments to two or more individuals of the same family. SEC. 331. Validating certificates filed by ministers. SEC. 332. Determination of attorneys' fees in court proceedings under title II. SEC. 333. Continuation of widow's and widower's insurance benefits after remarriage. SEC. 334. Changes in definitions of wife, widow, husband, and widower. SEC. 335. Reduction of benefits on receipt of workmen's compensation. SEC. 336. Payment of costs of rehabilitation services from the trust funds. SEC. 337. Teachers in the State of Maine. SEC 338. Modification of agreement with North Dakota and Iowa with respect to certain students. SEC. 339. Qualification of children not qualified under State law. SEC. 340. Disclosure, under certain circumstances, to courts and interested welfare agencies of whereabouts of individuals. SEC. 341. Additional period for filing of ministers certificates. SEC 342. Rectifying error in interpreting law with respect to certain school employees in Alaska. SEC 343. Continuation of child's insurance benefits after adoption by brother or sister. SEC. 344. Disability insurance benefits for the blind; special provisions. TITLE IV—PUBLIC ASSISTANCE AMENDMENTS SEC. 401. Increased Federal payments under public assistance titles of the Social Security Act. SEC 402. Protective payments. SEC 403. Disregarding certain earnings in determining need under assistance programs for the aged, blind, and disabled. SEC 404. Administrative and judicial review of public assistance determina- tions. SEC 405. Maintenance of State public assistance expenditures. SEC 406. Disregarding OASDI benefit increase, and child's insurance benefit payments beyond age 18, to the extent attributable to retroactive effective date. SEC 407. Extension of grace period for disregarding certain income for States where legislature has not met in regular session. SEC 408. Technical amendments relating to public assistance programs. SEC 409. Eligibility of children over age 18 attending school. SEC 410. Disregarding certain earnings in determining need of certain de- pendent children. SEC 411. Federal share of public assistance expenditures.
290 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. TITLE I—HEALTH INSURANCE FOR T H E AGED AND MEDICAL ASSISTANCE SHORT TITLE Health insur- gj,(,. iQO. This title mav be cited as the "Health Insurance for a n c e for t h e AT, A J A j.« Aged Act. the Aged Act". PART 1—HEALTH INSURANCE BENEFITS FOR THE AGED ENTITLEMENT TO HOSPITAL INSURANCE BENEFITS 11 f.?'- 1362. SEC. 101. Title I I of the Social Security Act is amended by adding 42 u s e 401-425. at the end thereof the following new section: a.ENTITLEMENT TO HOSPITAL INSURANCE BENEFITS "SEC. 226. (a) Every individual who— " (1) has attained the age of 65, and "(2) is entitled to monthly insurance benefits under section 42 use 40 2. 202 or is a qualified railroad retirement beneficiary, shall be entitled to hospital insurance benefits under part A of title Post, p. 291. X V I I I for each month for which he meets the condition specified in paragraph (2), beginning with the first month after June 1966 for which he meets the conditions specified in paragraphs (1) and (2). " ( b ) F o r purposes of subsection ( a ) — "(1) entitlement of an individual to hospital insurance bene- fits for a month shall consist of entitlement to have payment made under, and subject to the limitations in, part A of title X V I I I on his behalf for inpatient hospital services, post-hospital extended care services, post-hospital home health services, and outpatient hospital diagnostic services (as such terms are defined in part C of title X V I I I ) furnished him in the United States (or outside the United States in the case of inpatient hospital serv- ices furnished under the conditions described in section 1814(f)) during such month; except that (A) no such payment may be made for post-hospital extended care services furnished before January 1967, and (B) no such payment may be made for post- hospital extended care services or post-hospital home health services unless the discharge from the hospital required to qualify such services for payment under pa-rt A of title X V I I I occurred after June 30, 1966, or on or after the first day of the month in which he attains age 65, whichever is later; and "(2) an individual shall be deemed entitled to monthly insur- ance benefits under section 202, or to be a qualified railroad retirement beneficiary, for the month in which he died if he would have been entitled to such benefits, or would have been a qualified railroad retirement beneficiary, for such month had he died in the next month. "(c) For purposes of this section, the term 'qualified railroad retirement beneficiary' means an individual whose name has been certified to the Secretary by the Railroad Retirement Board under Post. pp. 335, section 21 of the Railroad Retirement Act of 1937. A n individual 340. shall cease to be a qualified railroad retirement beneficiary at the close of the month preceding the month which is certified by the
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 291 Kailroad Retirement Board as the month in which he ceased to meet the requirements of section 21 of the Railroad Retirement Act of 1937. ^ 34^°^'' pp- " ^ ' " ( d ) For entitlement to hospital insurance benefits in the case of certain uninsured individuals, see section 103 of the Social Security Amendments of 1965." HOSPITAL INSURANCE BENEFITS AND SUPPLEMENTARY MEDICAL INSURANCE BENEFITS SEC. 102. (a) The Social Security Act is amended by adding after title X V I I the following new title: 4 2 use i sos. "TITLE XVIII—HEALTH INSURANCE FOR T H E AGED " P R O H I B I T I O N AGAINST ANY FEDERAL INTERFERENCE "SEC. 1801. Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the adminis- tration or operation of any such institution, agency, or person. u FREE CHOICE BY PATIENT GUARANTEED "SEC. 1802. Any individual entitled to insurance benefits under this title may obtain health services from any institution, agency, or person qualified to participate under this title if such institution, agency, or person undertakes to provide him such services. " O P T I O N T O INDIVIDUAIiS TO OBTAIN OTHER HEALTH INSURANCE PROTECTION " S E C 1803. Nothing contained in this title shall be construed to preclude any State from providing, or any individual from pur- chasing or otherwise securing, protection against the cost of any health services. " P A R T A—HOSPITAL INSURANCE BENEFITS FOR THE AGED "DESCRIPTION OF PROGRAM "SEC. 1811. The insurance program for which entitlement is estab- lished by section 226 provides basic protection against the costs of hos- ^"'*' P- 290. pital and related post-hospital services in accordance with this part for individuals who are age 65 or over and are entitled to retirement benefits under title I I of this Act or under the railroad retirement 42 use 401-425. system. " S C O P E o r BENEFITS "SEC. 1812. (a) The benefits provided to an individual by the insurance program under this part shall consist of entitlement to have payment made on his behalf (subject to the provisions of this part) for— "(1) inpatient hospital services for up to 90 days during any spell of ilmess;
292 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "(2) post-hospital extended care services for up to 100 days during any spell of illness; "(3) post-hospital home health services for up to 100 visits Post, p. 320. (during the one-year period described in section 1861 ( n ) ) after the beginning of one spell of illness and before the beginning of the next; and " (4) outpatient hospital diagnostic services, "^b) Payment under this part for services furnished an individual during a spell of illness may not (subject to subsection (c)) be made for— "(1) inpatient hospital services furnished to him during such spell after such services have been furnished to him for 90 days during such spell; "(2) post-hospital extended care services furnished to him during such spell after such services have been furnished to him for 100 days during such spell; or "(3) inpatient psychiatric hospital services furnished to him after such services have been furnished to him for a total of 190 days during his lifetime. "(c) If an individual is an inpatient of a psychiatric hospital or a tuberculosis hospital on the first day of the first month for which he is entitled to benefits under this part, the days on which he was an inpatient of such a hospital in the 90-day period immediately before such first day shall be included in determining the 90-day limit under subsection (b) (1) (but not in determining the 190-day limit under subsection (b) ( 3 ) ) . " ( d ) Payment under this part may be made for post-hospital home health services furnished an individual only during the one- year period described in section 1861 (n) following his most recent hospital discharge which meets the requirements of such section, and only for the first 100 visits in such period. The number of visits to be charged for purposes of the limitation in the preceding sentence, in connection with items or services described in section 1861 ( m ) , shall be determined in accordance with regulations. "(e) For purposes of subsections (b), (c), and ( d ) , inpatient hospital services, inpatient psychiatric hospital services, post-hospital extended care services, and post-hospital home health services shall be taken into account only if payment is or would be, except for this section or the failure to comply with the request and certification requirements of or under section 1814(a), made with respect to such services under this part. " ( f ) F o r definition of 'spell of illness', and for definitions of other Post, p. 3 1 3 . terms used in this part, see section 1861. IIDEDUCTIBLES A N D C O I N S U R A N C E Inpatient hos. "SEC. 1813. ( a ) ( 1 ) The amount payable for inpatient hospital pitai services. sorvices fumished an individual during any spell of illness shall be reduced by a deduction equal to the inpatient hospital deductible or, if less, the charges imposed with respect to such individual for such services, except that, if the customary charges for such services are greater than the charges so imposed, such customary charges shall be considered to be the charges so imposed. Such amount shall be further reduced by a coinsurance amount equal to one-fourth of the
79 STAT.] PUBLIC LAW 89-97-JULY 30, 1965 293 inpatient hospital deductible for each day (before the 91st day) on which such individual is furnished such services during such spell of illness after such services have been furnished to him for 60 days during such spell. "(2) The amount payable for outpatient hospital diagnostic Outpatient hospuai services furnished an individual during a diagnostic study shall be diagnost reduced by a deduction equal to the sum of (A) one-half of the services. inpatient hospital deductible which is applicable to spells of illness beginning in the same calendar year as such diagnostic study and (B) 20 per centum of the remainder of such amount. For purposes of the preceding sentence, a diagnostic study for any individual consists of the outpatient hospital diagnostic services provided by (or under arrangements made by) the same hospital during the 20-day period beginning on the first day (not included in a previous diagnostic study) on which he is entitled to hospital insurance benefits under section 226 and on which outpatient hospital diagnostic services are Ante, p. 290. furnished him. "(3) The amount payable to any provider of services under this part for services furnished an individual during any spell of illness shall be further reduced by an amount equal to the cost of the first three pints of whole blood furnished to him as part of such services during such spell of illness. "(4) The amount payable for post-hospital extended care services furnished an individual during any spell of illness shall be reduced by a coinsurance amount equal to one-eighth of the inpatient hospital deductible for each day (before the 101st day) on which he is fur- nished such services after such services have been furnished to him for 20 days during such spell. " ( b ) ( 1 ) The inpatient hospital deductible which shall be appli- Inpatient hospital cable for the purposes of subsection (a) shall be $40 in the case of any deduc'tibie. spell of illness or diagnostic study beginning before 1969. "(2) The Secretary shall, between July 1 and October 1 of 1968, and of each year thereafter, determine and promulgate the inpatient hospital deductible which shall be applicable for the purposes of subsection (a) in the case of any spell of illness or diagnostic study beginning during the succeeding calendar year. Such inpatient hospital deductible shall be equal to $40 multiplied by the ratio of (A) the current average per diem rate for inpatient hospital serv- ices for the calendar year preceding the promulgation, to (B) the current average per diem rate for such services for 1966. Any amount determined under the preceding sentence which is not a multiple of $4 shall be rounded to the nearest multiple of $4 (or, if it is midway between two multiples of $4, to the next higher multiple of $4). The current average per diem rate for any year shall be determined by the Secretary on the basis of the best informa- tion available to him (at the time the determination is made) as to the amounts paid under this part on account of inpatient hospital services furnished during such year, by hospitals which have agree- ments in effect under section 1866, to individuals who are entitled Post, p. 327. to hospital insurance benefits under section 226, plus the amount which would have been so paid but for subsection (a) (1) of this section.
294 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "CONDITIONS OF AND L I M I T A T I O N S ON P A Y M E N T FOR SERVICES "Requirement of Requests and Certifications "SEC. 1814. (a) Except as provided in subsection ( d ) , payment for services furnished an individual may be made only to providers Post, p. 327. Qf services which are eligible therefor under section 1866 and only "(1) written request, signed by such individual except in cases in which the Secretary finds it impracticable for the indi- vidual to do so, is filed for such payment in such form, in such manner, within such time, and by such person or persons as the Secretary may by regulation prescribe; "(2) a physician certifies (and recertifies, where such services are furnished over a period of time, in such cases, with such frequency, and accompanied by such supporting material, appro- priate to the case involved, as may be provided by regulations, except that the first of such recertifications shall be required in each case of inpatient hospital services not later than the 20th day of such period) that— " ( A ) in the case of inpatient hospital services (other than inj)atient psychiatric hospital services and inpatient tubercu- losis hospital services), such services are or were required to be given on an inpatient basis for such individual's medical treatment, or that inpatient diagnostic study is or was medically required and such services are or were necessary for such purpose; " ( B ) in the case of inpatient psychiatric hospital services, such services are or were required to be given on an inpatient basis, by or under the supervision of a physician, for the psychiatric treatment of an individual; and (i) such treat- ment can or could reasonably be expected to improve the condition for which such treatment is or was necessary or (ii) inpatient diagnostic study is or was medically required and such services are or were necessary for such purposes; " ( C ) in the case of inpatient tuberculosis hospital services, such services are or were required to be given on an inpatient basis, by or under the supervision of a physician, for the treatment of an individual for tuberculosis; and such treat- ment can or could reasonably be expected to (i) improve the condition for which such treatment is or was necessary or (ii) render the condition noncommunicable; " ( D ) in the case of post-hospital extended care services, such services are or were required to be given on an inpatient basis because the individual needs or needed skilled nursing care on a continuing basis for any of the conditions with respect to which he was receiving inpatient hospital services (or, services whi-ch would constitute inpatient hospital serv- ices if the institution met the requirements of paragraphs Post. p. 314. (6) and (8> of section 1861(e)) prior to transfer to the extended care facility or for a condition requiring such extended care services which arose after such transfer and while he was still in the facility for treatment of the con- dition or conditions for which he was receiving such inpa- tient hospital services;
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 295 " ( E ) in the case of post-hospital home health services, such services are or were required because the individual is or was confined to his home (except when receiving items and services referred to in section 1861 (m) (7)) and ^°«''P- 319. needed skilled nursing care on an intermittent basis, or physical or speech therapy, for any of the conditions with respect to which he was receiving inpatient hospital services (or services which would constitute inpatient hospital services if the institution met the requirements of para- graphs (6) and (8) of section 1861(e)) or post-hospital extended care services; a plan for furnishing such services to such individual has been established and is periodically reviewed by a physician; and such services are or were furnished while the individual was under the care of a physician; or " ( F ) in the case of outpatient hospital diagnostic serv- ices, such services are or were required for diagnostic study; "(3) in the case of inpatient psychiatric hospital services, the services are those which the records of the hospital indicate were furnished to the individual during periods when he was receiving (A) intensive treatment services, (B) admission and related services necessary for a diagnostic study, or (C) equiva- lent services; "(4) in the case of inpatient tuberculosis hospital services, the services are those which the records of the hospital indicate were furnished to the individual during periods when he was receiving treatment which could reasonably be expected to (A) improve his condition or (B) render it noncommunicable; "(5) with respect to inpatient hospital services furnished such individual after the 20th day of a continuous period of such services and with respect to post-hospital extended care services furnished after such day of a continuous period of such services as may be prescribed in or pursuant to regulations, there was not in effect, at the time of admission of such individual to the hospital or extended care facility, as the case may be, a decision under section 1866(d) (based on a finding that utilization Post, p. in. review of long-stay cases is not being made in such hospital or facility); and "(6) with respect to inpatient hospital services or post- hospital extended care services furnished such individual during a continuous period, a finding has not been made (by the physi- cian members of the committee or group, as described in section 1861 (k) (4)) pursuant to the system of utilization review that further inpatient hospital services or further post-hospital extended care services, as the case may be, are not medically necessary; except that, if such a finding has been made, payment may be made for such services furnished before the 4tli day after the day on which the hospital or extended care facility, as the case may be, received notice of such finding. To the extent provided by regulations, the certification and recertifica- tion requirements of paragraph (2) shall be deemed satisfied where, at a later date, a physician makes certification of the kind provided in subparagraph ( A ) , ( B ) , ( C ) , ( D ) , ( E ) , or ( F ) of paragraph (2)
296 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. (whichever would have applied), but only where such certification is accompanied by such medical and other evidence as may be required by such regulations. "Eeasonable Cost of Services "(b) The amount paid to any provider of services with respect to services for which payment may be made under this part shall, subject Ante, p. 292. to the provisious of section 1813, be the reasonable cost of such services, Post, p . 322. as determined under section 1861 ( v ) . "No Payments to Federal Providers of Services "(c) No payment may be made under this part (except under sub- section ( d ) ) to any Federal provider of services, except a provider of services which the Secretary determines is providing services to the public generally as a community institution or agency; and no such payment may be made to any provider of services for any item or service which such provider is obligated by a law of, or a contract with, the United States to render at public expense. "Payments for Emergency Hospital Services " ( d ) Payments shall also be made to any hospital for inpatient hos- pital services or outpatient hospital diagnostic services furnished, by the hospital or under arrangements (as defined in section 1861 (w)) with it, to an individual entitled to hospital insurance benefits under Ante, p. 290. sectiou 226 even though such hospital does not have an agreement in effect under this title if (A) such services were emergency services and (B) the Secretary would be required to make such payment if the hospital had such an agreement in effect and otherwise met the condi- tions of payment hereunder. Such payments shall be made only in the amounts provided under subsection (b) and then only if such hos- pital agrees to complv, with respect to the emergency services pro- Post, p . 327. vided, with the provisions of section 1866(a). "Payment for Inpatient Hospital Services Prior to Notification of Noneligibility "(e) Notwithstanding that an individual is not entitled to have payment made under this part for inpatient hospital services fur- nished by any hospital, payment shall be made to such hospital (unless it elects not to receive such payment or, if payment has already been made by or on behalf of such individual, fails to refund such payment within the time specified by the Secretary) for such services which are furnished to the individual prior to notification to such hospital from the Secretary of his lack of entitlement, if such payments are pre- Ante.p. 291. cluded ouly by reason of section 1812 and if such hospital complies with the requirements of and regulations under this title with respect to such payments, has acted in good faith and without knowledge of such lack of entitlement, and has acted reasonably in assuming entitle- ment existed. Payment under the preceding sentence may not be made for services furnished an individual pursuant to any admission after the 6th elapsed day (not including as an elapsed day Saturday, Sunday, or a legal holiday) after the day on which such admission occurred.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 297 "Payment for Certain Emergency Hospital Services Furnished Outside the United States "(f) The authority contained in subsection (d) shall be applicable to emergency inpatient hospital services furnished an individual by a hospital located outside the United States if— "(1) such individual was physically present in a place within the United States at the time the emergency which neces- sitated such inpatient hospital services occurred; and "(2) such hospital was closer to, or substantially more acces- sible from, such place than the nearest hospital within the United States which was adequately equipped to deal with, and was available for the treatment of, such individual's illness or injury. ((PAYMENT TO PROVTOERS OF SERVICES "SEC. 1815. The Secretary shall periodically determine the amount which should be paid under this part to each provider of services with respect to the services furnished by it, and the provider of services shall be paid, at such time or times as the Secretary believes appro- priate (but not less often than monthly) and prior to audit or settle- ment by the General Accounting Office, from the Federal Hospital Insurance Trust Fund, the amounts so determined, with necessary ^°^^' P- 299. adjustments on account of previously made overpayments or under- payments; except that no such payments shall be made to any pro- vider unless it has furnished such information as the Secretary may request in order to determine the amounts due such provider under this part for the period with respect to which the amounts are being paid or any prior period. " U S E O F P U B L I C AGENCIES OR PRIVATE ORGANIZATIONS TO FACILITATE PAYMENT TO PROVIDERS OF SERVICES "SEC. 1816. (a) If any group or association of providers of services wishes to have payments under this part to such providers made through a national. State, or other public or private agency or organization and nominates such agency or organization for this purpose, the Secretary is authorized to enter into an agreement with such agency or organization providing for the determination by such agency or organization (subject to such review by the Secretary as may be provided for by the agreement) of the amount of the pay- ments required pursuant to this part to be made to such providers, and for the making of such payments by such agency or organization to such providers. Such agreement may also include provision for the agency or organization to do all or any part of the following: (1) to provide consultative services to institutions or agencies to enable them to establish and maintain fiscal records necessary for purposes of this part and otherwise to qualify as hospitals, extended care facilities, or home health agencies, and (2) with respect to the providers of services which are to receive payments through it (A) to serve as a center for, and communicate to providers, any informa- tion or instructions furnished to it by the Secretary, and serve as a channel of communication from providers to the Secretary; (B) to make such audits of the records of providers as may be necessary to insure that proper payments are made under this part; and (C) to perform such other functions as are necessary to carry out this subsection. 49-850 0-66—22
298 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. " ( b ) The Secretary shall not enter into an agreement with any agency or organization under this section unless (1) he finds (A) that to do so is consistent with the effective and efficient administra- tion of this part, and (B) that such agency or organization is willing and able to assist the providers to which payments are made through it under this part in the application of safeguards against unneces- sarv utilization of services furnished by them to individuals entitled Ante. p. 290, to hospital insuraucc benefits under section 226, and the agreement provides for such assistance, and (2) such agency or organization agrees to furnish to the Secretary such of the information acquired by it in carrying out its agreement under this section as the Secre- tary may find necessary in performing his functions under this part. (c) An agreement with any agency or organization under this section may contain such terms and conditions as the Secretary finds necessary or appropriate, may provide for advances of funds to the agency or organization for the making of pavments by it under subsection ( a ) , and shall provide for payment of so much of the cost of administration of the agency or organization as is determined by the Secretary to be necessary and proper for carrying out the func- tions covered by the agreement. " ( d ) If the nomination of an agency or organization as provided in this section is made by a group or association of providers of services, it shall not be binding on members of the group or associa- tion which notify the Secretary of their election to that effect. Any provider may, upon such notice as may be specified in the agreement under this section with an agency or organization, withdraw its nomination to receive payments through such agency or organization. Any provider which has withdrawn its nominatioUj and any provider which has not made a nomination, may elect to receive payments from any agency or organization which has entered into an agreement with the Secretary under this section if the Secretary and such agency or organization agree to it. "(e) An agreement with the Secretary under this section may be terminated— "(1) by the agency or organization which entered into such agreement at such time and upon such notice to the Secretary, to the public, and to the providers as may be provided in regu- lations, or "(2) by the Secretary at such time and upon such notice to the agency or organization, to the providers which have nomi- nated it for purposes of this section, and to the public, as may be provided in regulations, but only if he finds, after reasonable notice and opportunity for hearing to the agency or organiza- tion, that (A) the agency or organization has failed substantially to carry out the agreement, or (B) the continuation of some or all of the functions provided for in the agreement with the agency or organization is disadvantageous or is inconsistent with the efficient administration of this part. " ( f ) An agreement with an agency or organization under this section may require any of its officers or employees certifying pay- ments or disbursing funds pursuant to the agreement, or otherwise participating in carrying out the agreement, to give surety bond to the ITnited States in such amount as the Secretary may deem appropriate.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 299 " (g) (1) ^ o individual designated pursuant to an agreement under this section as a certifying officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payments certified by him under this section. " (2) No disbursing officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment by him under this section if it was based upon a voucher signed by a certifying officer designated as provided in paragraph (1) of this subsection, "(3) No such agency or organization shall be liable to the United States for any payments referred to in paragraph (1) or (2), "FEDERAL HOSPITAL INSURANCE TRUST FUND "SEC. 1817. (a) There is hereby created on the books of the Treasury of the United States a trust fund to be known as the 'Federal Hospital Insurance Trust Fund' (hereinafter in this sec- tion referred to as the 'Trust F u n d ' ) . The Trust Fund shall consist of such amounts as may be deposited in, or appropriated to, such fund as provided in this part. There are hereby appropriated to the Trust F u n d for the fiscal year ending June 30,1966, and for each fiscal year thereafter, out of any moneys in the Treasury not otherwise appro- priated, amounts equivalent to 100 per centum of— "(1) the taxes imposed by sections 3101(b) and 3111(b) of the Internal Eevenue Code of 1954 with respect to wages reported ^°®*' PP* ^^^' ^^^• to the Secretary of the Treasury or his delegate pursuant to sub- title F of such Code after December 31, 1965, as determined by J^^^^ ^''°^ "^ the Secretary of the Treasury by applying the applicable rates of tax under such sections to such wages, which wages shall be cer- tified by the Secretary of Health, Education, and Welfare on the basis 01 records of wages established and maintained by the Sec- retary of Health, Education, and Welfare in accordance with such reports; and "(2) the taxes imposed by section 1401(b) of the Internal Revenue Code of 1954 with respect to self-employment income ^°®/' P* ^^'^^ reported to the Secretary of the Treasury or his delegate on tax returns under subtitle F of such Code, as determined by the Secretary of the Treasury by applying the applicable rate of tax under such section to such self-employment income, which self-employment income shall be certified by the Secretary of Health, Education, and Welfare on the basis of records of self- employment established and maintained by the Secretary of Health, Education, and Welfare in accordance with such returns. The amounts appropriated by the preceding sentence shall be trans- ferred from time to time from the general fund in the Treasury to the Trust Fund, such amounts to be determined on the basis of estimates by the Secretary of the Treasury of the taxes, specified in the preceding sentence, paid to or deposited into the Treasury; and proper adjustments shall be made in amounts subsequently trans- ferred to the extent prior estimates were in excess of or were less than the taxes specified in such sent-ence. " ( b ) With respect to the Trust Fund, there is hereby created a Tm°stets^ body to be known as the Board of Trustees of the Trust Fund (here- inafter in this section referred to as the 'Board of Trustees') com- posed of the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health, Education, and Welfare, all ex officio. The Secretary of the Treasury shall be the Managing Trustee of the Board of Trustees (hereinafter in this section referred to as the
300 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. 'Managing Trustee'). The Commissioner of Social Security shall gresT'*'''° ^°"" serve as the Secretary of the Board of Trustees. The Board of Trustees shall meet not less frequently than once each calendar year. I t shall be the duty of the Board of Trustees to— " (1) Hold the Trust F u n d ; "(2) Report to the Congress not later than the first day of March of each year on the operation and status of the Trust Fund during the preceding fiscal year and on its expected operation and status during the current fiscal year and the next 2 fiscal years; "(3) Report immediately to the Congress whenever the Board is of the opinion that the amount of the Trust Fund is unduly small; and "(4) Review the general policies followed in managing the Trust Fund, and recommend changes in such policies, including necessary changes in the provisions of law which govern the way in which the Trust Fund is to be managed. The report provided for in paragraph (2) shall include a statement of the assets of, and the disbursements made from, the Trust Fund during the preceding fiscal year, an estimate of the expected income to, and disbursements to be made from, the Trust Fund during the current fiscal year and each of the next 2 fiscal years, and a state- ment of the actuarial status of the Trust Fund. Such report shall be printed as a House document of the session of the Congress to which the report is made. Fund"oniTs°^ "(c) It shall be the duty of the Managing Trustee to invest such portion of the Trust Fund as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired (1) on original issue at the issue price, or (2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the 31 use 77^4.' United States may be issued under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at par of public-debt obligations for purchase by the Trust Fund. Such obligations issued for purchase by the Trust F u n d shall have maturi- ties fixed with due regard for the needs of the Trust Fund and shall bear interest at a rate equal to the average market yield (computed by the Managing Trustee on the basis of market quotations as of the end of the calendar month next preceding the date of such issue) on all marketable interest-bearing obligations of the United States then forming a part of the public debt which are not due or callable until after the expiration of 4 years from the end of such calendar month; except that where such average market yield is not a multiple of one- eighth of 1 per centum, the rate of interest on such obligations shall be the multiple of one-eighth of 1 per centum nearest such market yield. The Managing Trustee may purchase other interest-bearing obligations of the United States or obligations guaranteed as to both principal and interest by the United States, on original issue or at the market price, only where he determines that the purchase of such other obligations is in the public interest. " ( d ) Any obligations acquired by the Trust F u n d (except public- debt obligations issued exclusively to the Trust Fund) may be sold by the Managing Trustee at the market price, and such public-debt obligations may be redeemed at par plus accrued interest.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 301 "(e) The interest on, and the proceeds from the sale or redemption of, any obligations held in the Trust Fund shall be credited to and form a part of the Trust Fund. " ( f ) ( 1 ) The Managing Trustee is directed to pay from time to time from the Trust Fund into the Treasury the amount estimated by him as taxes imposed under section 3101(b) which are subject to ^°®'' P- •^^^• refund under section 6413(c) of the Internal Eevenue Code of 1954 ^°«'' P- ^^3. with respect to wages paid after December 31, 1965. Such taxes shall be determined on the basis of the records of wages established and maintained by the Secretary of Health, Education, and Welfare in accordance with the wages reported to the Secretary of the Treasury or his delegate pursuant to subtitle F of the Internal Eevenue Code ^6 use eoo i et of 1954, and the Secretary of Health, Education, and Welfare shall ^^'^' furnish the Managing Trustee such information as may be required by the Managing Trustee for such purpose. The payments by the Managing Trustee shall be covered into the Treasury as repayments to the account for refunding internal revenue collections. "(2) Repayments made under paragraph (1) shall not be available for expenditures but shall be carried to the surplus fund of the Treasury. If it subsequently appears that the estimates under such paragraph in any particular period were too hi^h or too low, appro- priate adjustments shall be made by the Managing Trustee in future payments. " ( g ) There shall be transferred periodically (but not less often than once each fiscal year) to the Trust Fund from the Federal Old-Age and Survivors Insurance Trust F u n d and from the Federal Disability Insurance Trust Fund amounts equivalent to the amounts not previously so transferred which the Secretary of Health, Educa- tion, and Welfare shall have certified as overpayments (other than amounts so certified to the Railroad Retirement Board) pursuant to section 1870(b) of this Act. There shall be transferred periodi- Post, p. 331. cally (but not less often than once each fiscal year) to the Trust Fund from the Railroad Retirement Account amounts equivalent to the amounts not previously so transferred which the Secretary of Health, Education, and Welfare shall have certified as overpayments to the Railroad Retirement Board pursuant to section 1870(b) of this Act. " ( h ) The Managing Trustee shall also pay from time to time from the Trust F u n d such amounts as the Secretary of Health, Edu- cation, and Welfare certifies are necessary to make the payments provided for by this part, and the payments with respect to admin- istrative expenses in accordance with section 201 (g) (1). ^°^^' P« -'38. " P A R T B—SUPPLEMENTARY MEDICAL INSURANCE BENEFITS FOR THE AGED "ESTABLISHMENT OF SUPPLEMENTARY MEDICAL INSURANCE PROGRAM FOR THE AGED "SEC. 1831. There is hereby established a voluntary insurance pro- gram to provide medical insurance benefits in accordance with the provisions of this part for individuals 65 years of age or over who elect to enroll under such program, to be financed from premium payments by enrollees together with contributions from funds ap- propriated by the Federal Government.
002 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "SCOPE OF B E N E F I T S "SEC. 1832. (a) The benefits provided to an individual by the in- surance program established by this part shall consist of— "(1) entitlement to have payment made to him or on his behalf (subject to the provisions of this part) for medical and other health services, except those described in paragraph (2) (B);and "(2) entitlement to have payment made on his behalf (sub- ject to the provisions of this part) for— " ( A ) home health services for up to 100 visits during a calendar year; and " ( B ) medical and other health services (other than physi- cians' services unless furnished by a resident or intern of a hospital) furnished by a provider of services or by others under arrangements with them made by a provider of services. "(b) For definitions of 'spell of illness', 'medical and other health Post, p. 313. services', and other terms used in this part, see section 1861. il PAYMENT OF BENEFITS "SEC. 1833. (a) Subject to the succeeding provisions of this sec- tion, there shall be paid from the Federal Supplementary Medical Post, p. 308. Insurance Trust Fund, in the case of each individual who is covered under the insurance program established by this part and incurs expenses for services with respect to which benefits are payable under this part, amounts equal to— "(1) in the case of services described in section 1832(a) (1)— 80 percent of the reasonable cliarges for the services; except that an organization which provides medical and other health services (or arranges for their availability) on a prepayment basis may elect to be paid 80 percent of the reasonable cost of services for which payment may be made under this p a r t on behalf of indi- viduals enrolled in such organization in lieu of 80 percent of the reasonable charges for such services if the organization under- takes to charge such individuals no more than 20 percent of such reasonable cost plus any amounts payable by them as a result of subsection ( b ) ; and "(2) in the case of services described in section 1832(a) (2)— 80 percent of the reasonable cost of the services (as determined Post, p. 322. yjjder section 1861 ( v ) ) . Deductible pro- "(j^) Before applying subsection (a) with respect to expenses ^*°"" incurred by an individual during any calendar year, the total amount of the expenses incurred by such individual during such year (which would, except for this subsection, constitute incurred expenses from which benefits payable under subsection (a) are determinable) shall be reduced by a deductible of $50; except that (1) the amount of the deductible for such calendar year as so determined shall first be reduced by the amount of any expenses incurred by such individual in the last three months of the preceding calendar year (or regarded under clause (2) as incurred in such preceding year with respect to services fur- nished in such last three months) and applied toward such individual's deductible under this section for such preceding year, and (2) the Ante, p. 29 2. amount of any deduction imposed under section 1813(a) (2) (A) with
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 303 respect to outpatient hospital diagnostic services furnished in any calendar year shall be regarded as an incurred expense under this part for such year. "(c) Notwithstanding any other provision of this part, with respect Mental d i s - orders. to expenses incurred in any calendar year in connection with the treat- ment of mental, psychoneurotic, and personality disorders of an indi- vidual who is not an inpatient of a hospital at the time such expenses are incurred, there shall be considered as incurred expenses for pur- poses of subsections (a) and (b) only whichever of the following amounts is the smaller: "(1) $312.50, or " (2) 621/^ percent of such expenses. " ( d ) No payment may be made under this part with respect to any services furnished an individual to the extent that such individual is entitled (or would be entitled except for section 1813 other than ^"**' P- '^9 2. subsection ( a ) ( 2 ) ( A ) thereof) to have payment made with respect to such services under part A. "(e) No payment shall be made to any provider of services or other person under this part unless there has been furnished such informa- tion as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period. a L I M I T A T I O N ON H O M E H E A L T H SERVICES "SEC. 1834. (a) Payment under this part may be made for home health services furnished an individual during any calendar year only for 100 visits during such year. The number of visits to be charged for purposes of the limitation in the preceding sentence, in connection with items and services described in section 1861 ( m ) , shall be deter- ^°^^' P- 3^9. mined in accordance with regulations. " ( b ) F o r purposes of subsection ( a ) , home health services shall be taken into account only if payment under this part is or would be, except for this section or the failure to comply with the request and certification requirements of or under section 1835(a), made with respect to such services. " P R O C E D U R E F O R P A Y M E N T OF CLAIMS OF PROVIDERS OF SERVICES "SEC. 1835. (a) Paym.ent for services described in section 1832(a) (2) furnished an individual may be made only to providers of services which are eligible therefor under section 1866(a), and only if— Post, p . 327. "(1) written request, signed b ^ such individual except in cases in which the Secretary finds it impracticable for the individual to do so, is filed for such payment in such form, in such manner, within such time, and by such person or persons as the Secretary may by regulations prescribe; and "(2) a physician certifies (and recertifies, where such services are furnished over a period of time, in such cases, with such frequency, and accompanied by such supporting material, appro- priate to the case involved, as may be provided by regulations) that— " ( A ) in the case of home health services (i) such services are or were required because the individual is or was con- fined to his home (except when receiving items and services referred to in section 1861 (m) (7)) and needed skilled nursing care on an intermittent basis, or physical or speech therapy,
304 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. (ii) a plan for furnishing such services to such individual has been established and is periodically reviewed by a physician, and (iii) such services are or were furnished while the indi- vidual is or was under the care of a physician; and " ( B ) in the case of medical and other health services, such services are or were medically required. To the extent provided by regulations, the certification and recertifica- tion requirements of paragraph (2) shall be deemed satisfied where, at a later date, a phvsician makes a certification of the kind provided in subparagraph (A) or (B) of paragraph (2) (whichever would have applied), but only w^here such certification is accompanied by such medical and other evidence as may be required by such regulations. "(b) No payment may be made under this part to any Federal provider of services or other Federal agency, except a provider of services which the Secretary determines is providing services to the public generally as a community institution or agency; and no such payment may be made to any provider of services or other person for any item or service which such provider or person is obligated by a law of, or a contract with, the United States to render at pufclic expense. "ELIGIBLE INDIVIDUALS "SEC. 1836. Every individual who— " (1) has attained the age of 65, and "(2) (A) is a resident of the United States, and is either (i) a citizen or (ii) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the 5 years immediately preceding the month in which he applies for enrollment under this part, or (B) is entitled to hospital insurance benefits under part A, is eligible to enroll in the insurance program established by this part. "ENROLLMENT PERIODS "SEC. 1837. (a) An individual may enroll in the insurance program established by this part only in such manner and form as may be prescribed by regulations, and only during an enrollment period pre- scribed in or under this section. " ( b ) (1) No individual may enroll for the first time under this part more than 3 years after the close of the first enrollment period during which he could have enrolled under this part. " (2) An individual whose enrollment under this part has terminated may not enroll for the second time under this part unless he does so in a general enrollment period (as provided in subsection (e)) which begins within 3 years after the effective date of such termination. No individual may enroll under this part more than twice. "(c) I n the case of individuals who first satisfy paragraphs (1) and (2) of section 1836 before January 1, 1966, the initial general enrollment period shall begin on the first day of the second month which begins after the date of enactment of this title and shall end on March 31, 1966. For purposes of this subsection and subsection ( d ) , an individual who satisfies paragraph (2) of section 1836 solely by reason of subparagraph (B) thereof shall be treated as satisfying such paragraph (2) on the first day on which he is (or on filing applica- tion would be) entitled to hospital insurance benefits under part A. " ( d ) In the case of an individual who first satisfies paragraphs (1) and (2) of section 1836 on or after January 1,1966, his initial enroll-
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 305 ment period shall begin on the first day of the third month before the month in which he first satisfies such paragraphs and shall end seven months later. "(e) There shall be a general enrollment period, after the period described in subsection (c), during the period beginning on October 1 and ending on December 31 of each odd-numbered year beginning with 1967. "COVERAGE PERIOD "SEC. 1838. (a) The period during which an individual is entitled to benefits under the insurance program established hj this part (herein- after referred to as his 'coverage period') shall begin on whichever of the following is the latest: "(1) July 1,1966; or "(2) (A) in the case of an individual who enrolls pursuant to subsection (d) of section 1837 before the month in which he first satisfies paragraphs (1) and (2) of section 1836, the first day of such month, or " ( B ) in the case of an individual who enrolls pursuant to such subsection (d) in the month in which he first satisfies such para- graphs, the first day of the month following the month in which he so enrolls, or " ( C ) in the case of an individual who enrolls pursuant to such subsection (d) in the month following the month in which he first satisfies such paragraphs, the first day of the second month follow- ing the month in which he so enrolls, or " ( D ) in the case of an individual who enrolls pursuant to such subsection (d) more than one month following the month in which he satisfies such paragraphs, the first day of the third month fol- lowing the month in which he so enrolls, or " ( E ) in the case of an individual who enrolls pursuant to sub- section (e) of section 1837, the July 1 following the month in which he so enrolls. " (b) An individual's coverage period shall continue until his enroll- ment has been terminated— "(1) by the filing of notice, during a general enrollment period described in section 1837(e), that the individual no longer wishes to participate in the insurance program estsiblished by this part, or "(2) for nonpayment of premiums. The termination of a coverage period under paragraph (1) shall take effect at the close of December 31 of the year in which the notice is filed. The termination of a coverage period under paragraph (2) shall take effect on a date determined under regulations, which may be determined so as to provide a grace period (not in excess of 90 days) in which overdue premiums may be paid and coverage continued. "(c) No payments may be made under this part with respect to the expenses of an individual unless such expenses were incurred by such individual during a period which, with respect to him, is a cover- age period. "AMOUNTS OF PREMIUMS "SEC. 1839. (a) The monthly premium of each individual enrolled imder this part for each month before 1968 shall be $3. "(b) (1) The monthly premium of each individual enrolled under this part for each month after 1967 shall be the amount determined under paragraph (2).
306 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "(2) The Secretary shall, between July 1 and October 1 of 1967 and of each odd-numbered year thereafter, determine and promulgate the dollar amount which shall be applicable for premiums for months occurring in either of the two succeeding calendar years. Such dollar amount snail be such amount as the Secretary estimates to be necessary so that the aggregate premiums for such two succeeding calendar years will equal one-half of the total of the benefits and admmistrative costs which he estimates will be payable from the Federal Supplementary Post, p. 308. Medical Insurance Trust Fund for such two succeeding calendar years. I n estimating aggregate benefits payable for any period, the Secretary shall include an appropriate amount for a contingency margin. " ( c ) In the case of an individual whose coverage period began pursuant to an enrollment after his initial enrollment period (deter- mined pursuant to subsection (c) or (d) of section 1837), the monthly premium determined under subsection (b) shall be increased by 10 percent of the monthly premium so determined for each full 12 months m which he could have been but was not enrolled. F o r purposes of the preceding sentence, there shall be taken into account (1) the months which elapsed between the close of his initial enrollment period and the close of the enrollment period in which he enrolled, plus (in the case of an individual who enrolls for a second time) (2) the months which elapsed between the date of the termination of his first coverage period and the close of the enrollment period in which he enrolled for the second time. " ( d ) If any monthly premium determined under the foregoing provisions of this section is not a multiple of 10 cents, such premium shall be rounded to the nearest multiple of 10 cents. ('T P A Y M E N T OF P R E M I U M S "SEC. 1840. (a) (1) I n the case of an individual who is entitled to 42 u*sc 40^2 ^* monthly benefits under section 202, his monthly premiums under this part shall (except as provided in subsection ( d ) ) be collected by deducting the amount thereof from the amount of such monthly bene- fits. Such deduction shall be made in such manner and at such times as the Secretary shall by regulation prescribe. " (2) The Secretary of the Treasury shall, from time to time, trans- 70 Stat. 819. fer from the Federal Old-Age and Survivors Insurance Trust Fund ^^ "^ ' or the Federal Disability Insurance Trust F u n d to the Federal Sup- Post. p. 308. plementary Medical Insurance Trust F u n d the aggregate amount deducted under paragraph (1) for the period to which such transfer relates from benefits under section 202 which are payable from such Trust Fund. Such transfer shall be made on the basis of a certification by the Secretary of Health, Education, and Welfare and shall be appropriately adjusted to the extent that prior transfers were too great or too small. milt^Acrl^u"'*' " ( ^ ) (1) I ^ ^^^ ^^'^^ ^f ^^ individual who is entitled to receive for ^n"s. "" ^"""^" g^ month an annuity or pension under the Railroad Retirement Act of P°^*' pp- 335. 1937, his monthly premiums under this part shall (except as provided in subsection ( d ) ) be collected by deducting the amount thereof from such annuity or pension. Such deduction shall be made in such man- ner and at such times as the Secretary shall by regulations prescribe. Such regulations shall be prescribed only after consultation with the Railroad Retirement Board. "(2) The Secretary of the Treasury shall, from time to time, trans- 45 use 228o. |QJ. ffQjn the Railroad Retirement Account to the Federal Supple- mentary Medical Insurance Trust Fund the aggregate amount
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 307 deducted under paragraph (1) for the period to which such transfer relates. Such transfers shall be made on the basis of a certification by the Kailroad Eetirement Board and shall be appropriately ad- justed to the extent that prior transfers were too great or too small. "(c) I n the case of an individual who is entitled both to monthly benefits under section 202 and to an annuity or pension under the ^2 use 402. Railroad Retirement Act of 1937 at the time he enrolls under this part, 34^°4QO^''' ^^^' subsection (a) shall apply so long as he continues to be entitled both to such benefits and such annuity or pension. In the case of an in- dividual who becomes entitled both to such benefits and such an annuity or pension after he enrolls under this part, subsection (a) shall apply if the first month for which he was entitled to such benefits was the same as or earlier than the first month for which he was en- titled to such annuity or pension, and otherwise subsection (b) shall " ( d ) If an individual to whom subsection (a) or (b) applies esti- mates that the amount which will be available for deduction under such subsection for any premium payment period will be less than the amount of the monthly premiums for such period, he may (under regulations) pay to the Secretary such portion of the monthly pre miums for such period as he desires. " (e) (1) I n the case of an individual receiving an annuity under the R^lfiJnenrAcT Civil Service Retirement Act, or other Act administered by the Civil annuitants. Service Commission providing retirement or survivorship protection, l^i^sc^l^i' to whom neither subsection (a) nor subsection (b) applies, his monthly note. premiums under this part (and the monthly premiums of the spouse of such individual under this part if neither subsection (a) nor sub- section (b) applies to such spouse and if such individual agrees) shall, upon notice from the Secretary of Health, Education, and Welfare to the Civil Service Commission, be collected by deducting the amount thereof from each installment of such annuity. Such deduction shall be made in such manner and at such times as the Civil Service Com- mission may determine. The Civil Service Commission shall furnish such information as the Secretary of Health, Education, and Welfare may reasonably request in order to carry out his functions under this part with respect to individuals to whom this subsection applies. "(2) The Secretary of the Treasury shall, from time to time, but not less often than quarterly, transfer from the Civil Service Retire- ment and Disability Fund, or the account (if any) applicable in the case of such other Act administered by the Civil Service Commission, to the Federal Supplementary Medical Insurance Trust F u n d the aggregate amount deducted under paragraph (1) for the period to which such transfer relates. Such transfer shall be made on the basis of a certification by the Civil Service Commission and shall be appro- priately adjusted to the extent that prior transfers were too great or too small. " ( f ) I n the case of an individual who participates in the insurance program established by this part but with respect to whom none of the preceding provisions of this section applies, or with respect to whom subsection (d) applies, the premiums shall be paid to the Secretary at such times, and m such manner, as the Secretary shall by regulations prescribe. " ( g ) Amounts paid to the Secretary under subsection (d) or (f) shall be deposited m the Treasury to the credit of the Federal Supple- mentary Medical Insurance Trust Fund.
308 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. " ( h ) I n the case of an individual who participates in the insurance program established hj this part, premiums shall be payable for the period commencing with the first month of his coverage period and ending with the month in which he dies or, if earlier, in which his coverage under such program terminates. "rEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND "SEC. 1841. (a) There is hereby created on the books of the Treas- ury of the United States a trust fund to be known as the 'Federal Sup- plementary Medical Insurance Trust F u n d ' (hereinafter in this sec- tion referred to as the 'Trust F u n d ' ) . The Trust F u n d shall consist of such amounts as may be deposited in, or appropriated to, such fund as provided in this part. Board of " (b) With respect to the Trust Fund, there is hereby created a body Trustees. to be known as the Board of Trustees of the Trust F u n d (hereinafter in this section referred to as the 'Board of Trustees') composed of the Secretary of the T r e a s u r y the Secretary of Labor, and the Secretary of Health, Education, ana Welfare, all ex officio. The Secretary of the Treasury shall be the Managing Trustee of the Board of Trustees (hereinafter in this section referred to as the 'Managing Trustee'). The Commissioner of Social Security shall serve as the Secretary of the Board of Trustees. The Board of Trustees shall meet not less Reports to Con- frequently than once each calendar year. I t shall be the duty of the gress, Board of Trustees to— " (1) Hold the Trust F u n d ; "(2) Report to the Congress not later than the first day of March of each year on the operation and status of the Trust Fund during the preceding fiscal year and on its expected operation and status during the current fiscal year and the next 2 fiscal years; "(3) Report immediately to the Congress whenever the Board is of the opinion that the amount of the Trust Fund is unduly small; and "(4) Review the general policies followed in managing the Trust Fund, and recommend changes in such policies, including necessary changes in the provisions of law which govern the way in which the Trust F u n d is to be managed. The report provided for in paragraph (2) shall include a statement of the assets of, and the disbursements made from, the Trust Fund during the preceding fiscal year, an estimate of the expected income to, and disbursements to be made from, the Trust Fund during the current fiscal year and each of the next 2 fiscal years, and a statement of the actuarial status of the Trust Fund. Such report shall be printed as a House document of the session of the Congress to which the report is made. Investment of "(c) I t shall be the duty of the Managing Trustee to invest such Fund monies. portion of the Trust Fund as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired (1) on original issue at the issue price, or (2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the 40 Stat. 288. United States may be issued under the Second Liberty Bond Act, 31 u s e 774. as amended, are hereby extended to authorize the issuance at par of public-debt obligations for purchase by the Trust Fund. Such obligations issued for purchase by the Trust F u n d shall have matu-
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 309 rities fixed with due regard for the needs of the Trust Fund and shall bear interest at a rate equal to the average market yield (computed by the Managing Trustee on the basis of market quota- tions as of the end of the calendar month next preceding the date of such issue) on all marketable interest-bearing obligations of the United States then forming a part of the public debt which are not due or callable until after the expiration of 4 years from the end of such calendar month; except that where such average market yield is not a multiple of one-eighth of 1 per centum, the rate of interest on such obligations shall be the multiple of one-eighth of 1 per cen- tum nearest such market yield. The Managing Trustee may purchase other interest-bearing obligations of the United States or obliga- tions guaranteed as to both principal and interest by the United States, on original issue or at the market price, only where he determines that the purchase of such other obligations is in the public interest. " ( d ) Any obligations acquired by the Trust Fund (except public- debt obligations issued exclusively to the Trust Fund) may be sold by the Managing Trustee at the market price, and such public-debt obligations may be redeemed at par plus accrued interest. "(e) The interest on, and the proceeds from the sale or redemption of, any obligations held in the Trust Fund shall be credited to and form a part of the Trust Fund. " ( f ) There shall be transferred periodically (but not less often than once each fiscal year) to the Trust Fund from the Federal Old-Age and Survivors Insurance Trust Fund and from the Federal Disability Insurance Trust F u n d amounts equivalent to the amounts not pre- viously so transferred which the Secretary of Health, Education, and Welfare shall have certified as overpayments (other than amounts so certified to the Railroad Retirement Board) pursuant to section 1870(b) of this Act. There shall be transferred periodically (but ^°®'' P- •'3^- not less often than once each fiscal year) to the Trust Fund from the Railroad Retirement Account amounts equivalent to the amounts not previously so transferred which the Secretary of Health, Education, and Welfare shall have certified as overpayments to the Railroad Retirement Board pursuant to section 1870(b) of this Act. " ( g ) The Managing Trustee shall pay from time to time from the Trust Fund such amounts as the Secretary of Health, Education, and Welfare certifies are necessary to make the payments provided for by this part, and the payments with respect to administrative expenses in accordance with section 201(g) (1). Post, p . 338. " ( h ) The Managing Trustee shall pay from time to time from the Trust F u n d such amounts as the Secretary of Health, Education, and Welfare certifies are necessary to pay the costs incurred by the Civil Service Commission in making deductions pursuant to section 1840 (e). During each fiscal year, or after the close of such fiscal year, the Civil Service Commission shall certify to the Secretary the amount of the costs it incurred in making such deductions, and such certified amount shall be the basis for the amount of such costs certified by the Secretary to the Managing Trustee. "USE OF CARRIERS FOR ADMINISTRATION OF BENEFITS "SEC, 1842. (a) I n order to provide for the administration of the benefits under this part with maximum efficiency and convenience for individuals entitled to benefits under this p a r t and for providers of services and other persons furnishing services to such individuals, and with a view to furthering coordination of the administration of the
310 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. benefits under part A and under this part, the Secretary is authorized to enter into contracts with carriers, including carriers with which Ante, p. 297. agreements under section 1816 are in effect, which will perform some or all of the following functions (or, to the extent provided in such contracts, will secure performance thereof by other organizations); and, with respect to any of the following functions which involve pay- ments for physicians' services, the Secretary shall to the extent possible enter into such contracts: " (1) (A) make determinations of the rates and amounts of pay- ments required pursuant to this part to be made to providers of services and other persons on a reasonable cost or reasonable charge basis (as may oe applicable); " ( B ) receive, disburse, and account for funds in making such payments; and " ( C ) make such audits of the records of providers of services as may be necessary to assure that proper payments are made under this p a r t ; "(2) (A) determine compliance with the requirements of sec- tion 1861 (k) as to utilization review; and " ( B ) assist providers of services and other persons who fur- nish services for which payment may be made under this part in the development of procedures relating to utilization practices, make studies of the effectiveness of such procedures and methods for their improvement, assist in the application of safeguards against unnecessary utilization of services furnished by providers of services and other persons to individuals entitled to benefits under this part, and provide procedures for and assist in arrang- ing, where necessary, the establishment of groups outside hos- Post. p. 318. pitals (meeting the requirements of section 1861 (k) (2)) to make reviews of utilization; "(3) serve as a channel of communication of information re- lating to the administration of this p a r t ; and " (4) otherwise assist, in such manner as the contract may pro- vide, in discharging administrative duties necessary to carry out the purposes of this part. Contracts with " ( b ) (1) Contracts with carriers under subsection (a) may be en- carriers. 41 u s e 5. tered into without regard to section 3709 of the Eevised Statutes or any other provision of law requiring competitive bidding. "(2) No such contract shall be entered into with any carrier unless the Secretary finds that such carrier will perform its obligations under the contract efficiently and effectively and will meet such requirements as to financial responsibility, legal authority, and other matters as he finds pertinent. "(3) Each such contract shall provide that the carrier— " ( A ) will take such action as may be necessary to assure that, where payment under this part for a service is on a cost basis, the Post, p. 322. cost is reasonable cost (as''determined under section 1861(v)); " ( B ) will take such action as may be necessary to assure that, where payment under this part for a service is on a charge basis, (i) such charge will be reasonable and not higher than the charge applicable, for a comparable service and under comparable cir- cumstances, to the policyholders and subscribers of the carrier, and (ii) such payment will be made on the basis of a receipted bill, or on the basis of an assignment under the terms of which the reason- able charge is the full charge for the service; " ( C ) will establish and maintain procedures pursuant to which an individual enrolled under this part will be granted an oppor-
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 311 tunity for a fair hearing by the carrier when requests for pay- ment under this part with respect to services furnished him are denied or are not acted upon with reasonable promptness or when the amount of such payment is in controversy; " ( D ) will furnish to the Secretary such timely information and reports as he may find necessary in performing his functions under this p a r t ; and " ( E ) will maintain such records and afford such access thereto as the Secretary finds necessary to assure the correctness and verification of the information and reports under subparagraph (D) and otherwise to carry out the purposes of this p a r t ; and shall contain such other terms and conditions not inconsistent with this section as the Secretary may find necessary or appropriate. I n determining the reasonable charge for services for purposes of this paragraph, there shall be taken into consideration the customary charges for similar services generally made by the physician or other person furnishing such services, as well as the prevailing charges in the locality for similar services. "(4) Each contract under this section shall be for a term of at least one year, and may be made automatically renewable from term to term in the absence oi notice by either party of intention to terminate at the end of the current term; except that the Secretary may terminate any such contract at any time (after such reasonable notice and oppor- tunity for hearing to the carrier involved as he may provide in regula- tions) if he finds that the carrier has failed substantially to carry out the contract or is carrying out the contract in a manner inconsistent with the efficient and effective administration of the insurance program established by this part. "(c) Any contract entered into with a carrier under this section shall provide for advances of funds to the carrier for the making of pay- ments by it under this part, and shall provide for payment of the cost of administration of the carrier, as determined by the Secretary to be necessary and proper for carrying out the functions covered by the contract. " ( d ) Any contract with a carrier under this section may require such carrier or any of its officers or employees certifying payments or disbursing funds pursuant to the contract, or otherwise participating in carrying out the contract, to give surety bond to the United States in such amount as the Secretary may deem appropriate. " (e) (1) No individual designated pursuant to a contract under this section as a certifying officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payments certified by him under this section. "(2) No disbursing officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment by him under this section if it was based upon a voucher signed by a certifying officer designated as provided in paragraph (1) of this subsection. "(3) No such carrier shall be liable to the United States for any payments referred to in paragraph (1) or (2). "(f) For purposes of this part, the term 'carrier' means— "Carrier." "(1) with respect to providers of services and other persons, a voluntary association, corporation, partnership, or other non- governmental organization which is lawfully engaged in provid- ing, paying for, or reimbursing the cost of, health services under group insurance policies or contracts, medical or hospital service agreements, membership or subscription contracts, or similar
312 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. group arrangements, in consideration of premiums or other periodic charges payable to the carrier, including a health benefits plan duly sponsored or underwritten by an employee organiza- tion; and "(2) with respect to providers of services only, any agency or organization (not described in paragraph (1)) with which an Ante, p. 29 7. agreement is in effect under section 1816. ((STATE AGREEMENTS FOR COVERAGE OF ELIGIBLE INDIVIDUALS WHO ARE RECEIVING MONEY PAYMENTS UNDER PUBLIC ASSISTANCE PROGRAMS "SEC. 1843. (a) The Secretary shall, at the request of a State made before January 1,1968, enter into an agreement with such State pur- suant to which all eligible individuals in either of the coverage groups described in subsection (b) (as specified in the agreement) will be enrolled under the program established by this part. " ( b ) An agreement entered into with any State pursuant to sub- section (a) may be applicable to either oi the following coverage groups: "(1) individuals receiving money payments under the plan of such State approved under title I or title X V I ; or "(2) individuals receiving money payments under all of the plans of such State approved under titles I, I V , X , X I V , and 42 u s e 30 1, 60 1, XVI • except that there shall be excluded from any coverage group any 42 u s e 401. individual who is entitled to monthly insurance benefits under title I I or who is entitled to receive an annuity or pension under the Railroad 340° 400^^* ^^^' I^tirement Act of 1937. "(c) For purposes of this section, an individual shall be treated as an eligible individual only if he is an eligible individual (within Ante, p. 304. ^j^g meaning of section 1836) on the date an agreement covering him is entered into under subsection (a) or he becomes an eligible indi- vidual (within the meaning of such section) at any time after such date and before January 1,1968; and he shall be treated as receiving money payments described in subsection (b) if he receives such pay- ments for the month in which the agreement is entered into or any month thereafter before January 1968. " ( d ) I n the case of any individual enrolled pursuant to this section— "(1) the monthly premium to be paid by the State shall be determined under section 1839 (without any increase under sub- section (c) thereof); "(2) his coverage period shall begin on whichever of the fol- lowing is the latest; " ( A ) July 1,1966; " ( B ) the first firs day " of the third month following the month in which the State agreement is entered into; " ( C ) the first day of the first month in which he is both an eligible individual and a member^f a coverage group specified in the agreement under this section; or " ( D ) such date (not later than January 1,1968) as may be specified in the agreement; and " (3) his coverage period attributable to the agreement with the State under this section shall end on the last day of whichever of the following first occurs: " ( A ) the month in which he is determined by the State agency to have become ineligible for money payments of a kind specified in the agreement, or
79 STAT. ] PUBLIC LAW 89-97- JULY 30, 1965 313 " ( B ) the month preceding the first month for which he becomes entitled to monthly benefits under title I I or to an 42 u s e 401. annuity or pension under the Railroad Retirement Act of ]^937_ Post, pp. 335, "(e) Any individual whose coverage period attributable to the State agreement is terminated pursuant to subsection (d) (3) shall be deemed for purposes of this part (including the continuation of his coverage period under this part) to have enrolled under section 1837 in the mitial general enrollment period provided by section ^"^^' P- ^°'*- 1837(c). "(f) With respect to eligible individuals receiving money pay- ments under the plan of a State approved under title I, IV, X, X I V , or X V I , if the agreement entered into under this section so provides, ^^^ ^^oi ^usi the t e r m ' c a r r i e r ' a s defined in section 1842(f) also includes the State iss'i. agency, specified in such agreement, which administers or supervises the administration of the plan of such State approved under title I , X V I , or X I X . The agreement shall also contain such provisions as will facilitate the financial transactions of the State and the carrier with respect to deductions, coinsurance, and otherwise, and as will lead to economy and efficiency of operation, with respect to individuals receiving money payments under plans of the State approved under titles I, IV, X, X I V , and X V I . "APPROPRIATIONS TO COVER GOVERNMENT CONTRIBUTIONS AND CONTINGENCY RESERVE "SEC. 1844. (a) There are authorized to be appropriated from time to time, out of any moneys in the Treasury not otherwise appropriated, to the Federal Supplementary Medical Insurance Trust Fund, a Gov- ernment contribution equal to the aggregate premiums payable under this part. "(b) I n order to assure prompt payment of benefits provided under this part and the administrative expenses thereunder during the early months of the program established by this part, and to provide a contingency reserve, there is also authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, to remain available through the calendar year 1967 for repayable advances (without interest) to the Trust Fund, an amount equal to $18 multi- plied by the number of individuals (as estimated by the Secretary) who could be covered in July 1966 by the insurance program estab- lished by this part if they had theretofore enrolled under this part. " P A R T C—MISCELLANEOUS PROVISIONS "DEFINITIONS OF SERVICES, INSTITUTIONS, ETC. "SEC. 1861. For purposes of this title— "Spell of Illness " ( a ) The term 'spell of illness' with respect to any individual means a period of consecutive days— "(1) beginning with the first day (not included in a previous spell of illness) (A) on which such individual is furnished inpa- tient hospital services or extended care services, and (B) which occurs in a month for which he is entitled to benefits under part A, and Ante. p. 291. 49-850 0-66—23
314 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "(2) ending with the close of the first period of 60 consecutive days thereafter on each of which he is neither an inpatient of a hospital nor an inpatient of an extended care facility. "Inpatient Hospital Services " ( b ) The term 'inpatient hospital services' means the following items and services furnished to an inpatient of a hospital and (except as provided in paragraph (3)) by the hospital— "(1) bed and board; "(2) such nursing services and other related services, such use of hospital facilities, and such medical social services as are ordinarily furnished by the hospital for the care and treatment of inpatients, and such drugs, biologicals, supplies, appliances, and equipment, for use in the hospital, as are ordinarily furnished by such hospital for the care and treatment of inpatients; and "(3) such other diagnostic or therapeutic items or services, furnished by the hospital or by others under arrangements with them made by the hospital, as are ordinarily furnished to inpatients either by such hospital or by others under such arrange- ments; excluding, however— "(4) medical or surgical services provided by a physician, resi- dent, or intern; and "(5) the services of a private-duty nurse or other private-duty attendant. Paragraph (4) shall not apply to services provided in the hospital by an intern or a resident-in-training under a teaching program approved by the Council on Medical Education of the American Medical Asso- ciation or, in the case of an osteopathic hospital, approved by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association, or, in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of dentistry, approved by the Council on Dental Education of the American Dental Association. "Inpatient Psychiatric Hospital Services "(c) The term 'inpatient psychiatric hospital services' means inpatient hospital services furnished to an inpatient of a psychiatric hospital. "Inpatient Tuberculosis Hospital Services " ( d ) The term 'inpatient tuberculosis hospital services' means in- patient hospital services fumisheid to an inpatient of a tuberculosis hospital. "Hospital Ante, p. 296. "(e) The term 'hospital' (except for purposes of section 1814^d), subsection (a) (2) of this section, paragraph (7) of this subsection, and subsections (i) and (n) of this section) means an institution which— " (1) is primarily engaged in providing, by or under the super- vision of physicians, to inpatients (A) diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons; " (2) maintains clinical records on all patients;
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 315 " (3) has bylaws in effect with respect to its staff of physicians; "(4) has a requirement that every patient must be under the care of a physician; "(5) provides 24-hour nursing service rendered or supervised by a registered professional nurse, and has a licensed practical nurse or registered professional nurse on duty at all times; "(6) has in effect a hospital utilization review plan which meets the requirements of subsection ( k ) ; "(7) in the case of an institution in any State in which State or apjplicable local law provides for the licensing of hospitals, (A) is licensed pursuant to such law or (B) is approved, by the agency of such State or locality responsible for licensing hos- pitals, as meeting the standards established for such licensing; and "(8) meets such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the institution, except that such other requirements may not be higher than the comparable requirements prescribed for the accreditation of hospitals by the Joint Commission on Accreditation of Hospitals (subject to the second sentence of section 1863). ^°^'' P* ^2^- For purposes of subsection (a) (2), such term includes any institution which meets the rec[uirements of paragraph (1) of this subsection. For purposes of sections 1814(d) (including determination of whether Ante, p . 296. an individual received inpatient hospital services for purposes of such section), and subsections (i) and (n) of this section, such term includes any institution which meets the requirements of paragraphs (1), (2), (3), (4), (5^, and (7) of this subsection. Notwithstanding the pre- ceding provisions of this subsection, such term shall not, except for purposes of subsection (a) (2), include any institution which is pri- marily for the care and treatment of mental diseases or tuberculosis unless it is a tuberculosis hospital (as defined in subsection (g)) or unless it is a psychiatric hospital (as defined in subsection ( f ) ) . The term 'hospital' also includes a Christian Science sanatorium operated, or listed and certified, by the First Church of Christ, Scientist, Boston, Massachusetts, but only with respect to items and services ordinarily furnished by such institution to inpatients, and payment may be made with respect to services provided by or in such an institution only to such extent and under such conditions, limitations, and requirements (in addition to or in lieu of the conditions, limitations, and require- ments otherwise applicable) as may be provided in regulations. For provisions deeming certain requirements of this subsection to be met in the case of accredited institutions, see section 1865. "Psychiatric Hospital " ( f ) The term 'psychiatric hospital' means an institution which— "(1) is primarily engaged in providing, by or under tlie super- vision of a physician, psychiatric services for the diagnosis and treatment of mentally ill persons; "(2) satisfies the requirements of paragraphs (3) through (8) of subsection ( e ) ; "(3) maintains clinical records on all patients and maintains such records as the Secretary finds to be necessary to determine the degree and intensity of the treatment provided to individuals entitled to hospital insurance benefits under p a r t A ;
316 PUBUC LAW 89-97-JULY 30, 1965 [79 STAT. "(4) meets such staffing requirements as the Secretary finds necessary for the institution to carry out an active program of treatment for individuals who are furnished services in the institution; and " (5) is accredited by the Joint Commission on Accreditation of Hospitals. I n the case of an institution which satisfies paragraphs (1) and (2) of the preceding sentence and which contains a distinct part which also satisfies paragraphs (3) and (4) of such sentence, such distinct part shall be considered to be a 'psychiatric hospital' if the institution is accredited by the Joint Commission on Accreditation of Hospitals or if such distinct part meets requirements equivalent to such accredita- tion requirements as determined by the Secretary. "Tuberculosis Hospital " (g) The term 'tuberculosis hospital' means an institution which— " (1) is primarily engaged in providing, by or under the super- vision of a physician, medical services for the diagnosis and treat- ment of tuoerculosis; "(2) satisfies the requirements of paragraphs (3) through (8) of .subsection ( e ) ; "(3) maintains clinical records on all patients and maintains such records as the Secretary finds to be necessary to determine the degree and intensity of the treatment provided to individuals covered by the insurance program established by part A ; "(4) meets such staffing requirements as the Secretary finds necessary for the institution to carry out an active program of treatment for individuals who are furnished services in the insti- tution; and " (5) is accredited by the Joint Commission on Accreditation of Hospitals. I n the case of an institution which satisfies paragraphs (1) and (2) of the preceding sentence and which contains a distinct part which also satisfies paragraphs (3) and (4) of such sentence, such distinct part shall be considered to be a, 'tuberculosis hospital' if the institution is accredited by the Joint Commission on Accreditation of Hospitals or if such distinct part meets requirements equivalent to such accredita- tion requirements as determined by the Secretary. "Extended Care Services " ( h ) The term 'extended care services' means the following items and services furnished to an inpatient of an extended care facility and (except as provided in paragraphs (3) and (6)) by such extended care facility— "(1) nursing care provided by or under the supervision of a registered professional nurse; "(2) bed and board in connection with the furnishing of such nursing care; "(3) physical, occupational, or speech therapy furnished by the extended care facility or by others under arrangements with them made by the f acility^; "(4) medical social services; "(5) such drugs, biologicals, supplies, appliances, and equip- ment, furnished tor use in the extended care facility, as are ordi- nariljj/^ furnished by such facility for the care and treatment of inpatients;
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 317 " (6) medical services provided by an intern or resident-in-train- ing of a hospital with which the facility has in effect a transfer agreement (meeting the requirements of subsection (1)), under a teaching program of such hospital approved as provided in the last sentence of subsection ( b ) , and other diagnostic or therapeutic services provided by a hospital with which the facility has such an agreement in effect; and "(7) such other services necessary to the health of the patients as are generally provided by extended care facilities; excluding, however, any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital. "Post-Hospital Extended Care Services " ( i ) The term 'post-hospital extended care services' means extended care services furnished an individual after transfer from a hospital ui which he was an inpatient for not less than 3 consecutive days before his discharge from the hospital in connection with such transfer. For purposes of the preceding sentence, items and services shall be deemed to have been furnished to an individual after transfer from a hospital, and he shall be deemed to have been an inpatient in the hospital immediately before transfer therefrom, if ne is admitted to the extended care facility within 14 days after discharge from such hos- pital ; and an individual shall be deemed not to have been discharged from an extended care facility if, within 14 days after discharge there- from, he is admitted to such facility or any other extended care facility. "Extended Care Facility " ( j ) The term 'extended care facility' means (except for purposes of subsection (a) (2)) an institution (or a distinct part of an institu- tion) which has in effect a transfer agreement (meeting the require- ments of subsection (1)) with one or more hospitals having agreements in effect under section 1866 and which— ^°®'' P- ^'^'^• "(1) is primarily engaged in providing to inpatients (A) skilled nursing care and related services for patients who require medical or nursing care, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons; "(2) has policies, which are developed with the advice of (and with provision of review of such policies from time to time by) a group of professional personnel, including one or more physicians and one or more registered professional nurses, to govern the skilled nursing care and related medical or other services it provides; "(3) has a physician, a registered professional nurse, or a medical staff responsible for the execution of such policies; " (4) (A) has a requirement that the health care of every patient must be under the supervision of a phj^sician, and (B) provides for having a. physician available to furnish necessary medical c«,re in case of emergency; "(5) maintains clinical records on all patients; "(6) provides 24-hour nursing service which is sufficient to meet nursing needs in accordance with the policies developed as provided in paragraph (2), and has at least one registered pro- fessional nurse employed full time; "(7) provides appropriate methods and procedures for the dispensing and administering of drugs and biologicals;
318 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "(8) has in effect a utilization review plan which meets the reqjiirements of subsection ( k ) ; "(9) in the case of an institution in any State in which State or applicable local law provides for the licensing of institutions of this nature, (A) is licensed pursuant to such law, or (B) is approved, by the agency of such State or locality responsible for licensing institutions of this nature, as meeting the standards established for such licensing; and "(10) meets such other conditions relating to the health and safety of individuals who are furnished services in such institution or relating to the physical facilities thereof as the Secretary may find necessary (subject to the second sentence of section 1863); except that such term shall not (other than for purposes of subsection (a) (2)) include any institution which is primarily for the care and treatment of mental diseases or tuberculosis. For purposes of subsec- tion ( a ) ( 2 ) , such term includes any institution which meets the requirements of paragraph (1) of this subsection. The term 'extended care facility' also includes an institution described in paragraph (1) of subsection ( y ) , to the extent and subject to the limitations provided in such subsection. "Utilization Review " (k) A utilization review plan of a hospital or extended care facility shall be considered sufficient if it is applicable to services furnished by the institution to individuals entitled to insurance benefits under this title and if it provides— "(1) for the review, on a sample or other basis, of admissions to the institution, the duration of stays therein, and the profes- sional services (including drugs and biologicals) furnished, (A) with respect to the medical necessity of the services, and (B) for the purpose of promoting the most efficient use of available health facilities and services; " (2) for such review to be made by either (A) a staff committee of the institution composed of two or more physicians, with or without participation of other professional personnel, or (B) a group outside the institution which is similarly composed and (i) which is established by the local medical society and some or all of the hospitals and extended care facilities in the locality, or (ii) if (and for as long as) there has not been established such a group which serves such institution, which is established in such other manner as may be approved by the Secretary; " (3) for such review, in each case of inpatient hospital services or extended care services furnished to such an individual during a continuous period of extended duration, as of such days of such period (which may differ for different classes of cases) as may be specified in regulations, with such review to be made as promptly as possible, after each day so specified, and in no event later than one week following such day; and "(4) for prompt notification to the institution, the individual, and his attending physician of any finding (made after oppor- tunity for consultation to such attending physician) by the physi- cian members of such committee or group that any further stay in the institution is not medically necessary. The review committee must be composed as provided in clause (B) of paragraph (2) rather than as provided in clause (A) of such para,- graph in the case of any hospital or extended care facility where, because of the small size of the institution, or (in the case of an
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 319 extended care facility) because of lack of an organized medical staff, or for such other reason or reasons as may be included in regulations, it is impracticable for the institution to have a properly functioning staff conmiittee for the purposes of this subsection. "Agreements for Transfer Between Extended Care Facilities and Hospitals "(1) A hospital and an extended care facility shall be considered to have a transfer agreement in effect if, by reason of a written agree- ment between them or (in case the two institutions are under common control) by reason of a written undertaking by the person or body which controls them, there is reasonable assurance that— "(1) transfer of patients will be effected between the hospital and the extended care facility whenever such transfer is medically appropriate as determined by the attending physician; and "(2) there will be interchange of medical and other informa- tion necessary or useful in the care and treatment of individuals transferred between the institutions, or in determining whether such individuals can be adequately cared for otherwise than in either of such institutions. Any extended care facility which does not have such an agreement in effect, but which is found by a State agency (of the State in which such facility is situated) with which an agreement under section 1864 Post, p. 326. is in effect (or, in the case of a State in which no such agency has an agreement under section 1864, by the Secretary) to have attempted in good faith to enter into such an agreement with a hospital suffi- ciently close to the facility to make feasible the transfer between them of patients and the information referred to in paragraph (2), shall be considered to have such an agreement in effect if and for so long as such agency (or the Secretary, as the case may be) finds that to do so is in the public interest and essential to assuring extended care services for persons in the community who are eligible for payments with respect to such services under this title. "Home Health Services " ( m ) The term 'home health services' means the following items and services furnished to an individual, who is under the care of a physician, by a home health agency or by others under arrangements with them made by such agency, under a plan (for furnishing such items and services to such individual) established and periodically reviewed by a physician, which items and services are, except as pro- vided in paragraph (7), provided on a visiting basis in a place of residence used as such individual's home— "(1) part-time or intermittent nursing care provided by or under the supervision of a registered professional nurse; "(2) physical, occupational, or speech therapy; " (3) medical social services under the direction of a physician; "(4) to the extent permitted in regulations, part-time or inter- mittent services of a home health aide; "(5) medical supplies (other than drugs and biologicals), and the use of medical appliances, while under such a plan; "(6) in the case of a home health agency which is affiliated or under common control with a hospital, medical services pro- vided b j an intern or resident-in-training of such hospital, under a teachmg program of such hospital approved as provided in the last sentence of subsection (b) ; and
320 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "(7) any of the foregoing items and services which are pro- vided on an outpatient basis, under arrangements made by the home health agency, at a hospital or extended care facility, or at a rehabilitation center which meets such standards as may be pre- scribed in regulations, and— " ( A ) the furnishing of which involves the use of equip- ment of such a nature that the items and services cannot readily be made available to the individual in such place of residence, or " ( B ^ which are furnished at such facility while he is there to receive any such item or service described in clause ( A ) , but not including transportation of the individual in connection with any such item or service; excluding, however, any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital, "Post-Hospital Home Health Services " ( n ) The term 'post-hospital home health services' means home health services furnished an individual within one year after his most recent discharge from a hospital of which he was an inpatient for not less than 3 consecutive days or (if later) within one year after his most recent discharge from an extended care facility oi which he was an inpatient entitled to payment under part A for post-hospital extended care services, but only if the plan covering the home health services (as described in subsection ( m ) ) is established within 14 days after his discharge from such hospital or extended care facility. "Home Health Agency "(o) The term 'home health agency' means a public agency or ])rivate organization, or a subdivision of such an agency or orga- nization, which— " ( 1 ) is primarily engaged in providing skilled nursing services and other therapeutic services; "(2) has policies, established by a group of professional per- sonnel (associated with the agency or organization), including one or more physicians and one or more registered professional nurses, to govern the services (referred to in paragraph (1)) which it provides, and provides for supervision of such services by a physician or registered professional nurse; "(3) maintains clinical records on all patients; "(4) in the case of an agency or organization in any State in which State or applicable local law provides for the licensing of agencies or organizations of this nature, (A) is licensed pursuant to such law, or (B) is approved, by the agency of such State or locality responsible for licensing agencies or organizations of this nature, as meeting the standards established for such licensing; and • "(5) meets such other conditions of participation as the Secre- tary may find necessary in the interest of the health and safety of individuals who are furnished services by such agency or or- ganization; except that such term shall not include a private organization which is not a nonprofit organization exempt from Federal income taxation 26ljscf*5o\^^' "nder section 501 of the Internal Revenue Code of 1954 (or a subdivi- sion of such organization) unless it is licensed pursuant to State law and it meets such additional standards and requirements as may be
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 321 prescribed in regulations; and except that for purposes of part A such term shall not include any agency or organization which is primarily for the care and treatment of mental diseases. "Outpatient Hospital Diagnostic Services " ( p ) The term 'outpatient hospital diagnostic services' means diagnostic services— "(1) which are furnished to an individual as an outpatient by a hospital or by others under arrangements with them made by a hospital; and "(2) which are ordinarily furnished by such hospital (or by others under such arrangements) to its outpatients for the pur- pose of diagnostic study; excluding, however— "(3) any item or service if it would not be included under sub- section (b) if furnished to an inpatient of a hospital; and " (4) any services furnished under such arrangements unless furnished in the hospital or in other facilities operated by or under the supervision of the hospital or its organized medical staff. "Physicians' Services " (q) The term 'physicians' services' means professional services per- formed by physicians, including surgery, consultation, and home, office, and institutional calls (but not including services described in the last sentence of subsection ( b ) ) . "Physician " ( r ) The term 'physician', when used in connection with the per- formance of any function or action, means (1) a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he performs such function or action (including a physi- cian within the meaning of section 1101(a) ( 7 ) ) , or (2) a doctor of ^4 st^t, 559. dentistry or of dental or oral surgery who is legally authorized to prac- 42 u s e 1301. tice dentistry by the State in which he performs such function but only with respect to (A) surgery related to the jaw or any structure contiguous to the jaw or (B) the reduction of any fracture of the jaw or any facial bone. "Medical and Other Health Services "(s) The term 'medical and other health services' means any of the following items or services (unless they would otherwise constitute inpatient hospital services, extended care services, or home health services): "(1) physicians' services; "(2) services and supplies (including d r u ^ and biologicals which cannot, as determined in accordance with regulations, be self-administered) furnished as an incident to a physician's professional service, of kinds which are commonly furnished in physicians' offices and are commonly either rendered without charge or included in the physicans' bills, and hospital services (including drugs and biologicals which cannot, as determined in accordance with regulations, be self-administered) incident to physicians' services rendered to outpatients;
322 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "(3) diagnostic X-ray tests, diagnostic laboratory tests, and other diagnostic tests; "(4) X-ray, radium, and radioactive isotope therapy, including materials and services of technicians; "(5) surgical dressings, and splints, casts, and other devices used for reduction of fractures and dislocations; "(6) rental of durable medical equipment, including iron lungs, oxygen tents, hospital beds, and wheelchairs used in the patient's home (including an institution used as his home); "(7) ambulance service where the use of other methods of transportation is contraindicated by the individual's condition, but only to the extent provided in regulations; "(8) prosthetic devices (other than dental) which replace all (Or part of an internal body organ, including replacement of such devices; and "(9) leg, arm, back, and neck braces, and artificial legs, arms, and eyes, including replacements if required because of a change in the patient's physical condition. No diagnostic tests performed in any laboratory which is independent of a physician's office or a hospital shall be included within paragraph (3) unless such laboratory— " (10) if situated in any State in which State or applicable local law provides for licensing of establishments of this nature, (A) is licensed pursuant to such law, or (B) is approved, by the agency of such State or locality responsible for licensing estab- lishments of this nature, as meeting the standards establi^ed for such licensing; and "(11) meets such other conditions relating to the health and safety of individuals with respect to whom such tests are per- formed as the Secretary may find necessary. "Drugs and Biologicals " ( t ) The term 'drugs' and the term 'biologicals', except for pur- poses of subsection (m) (5) of this section, include only such drugs and biologicals, respectively, as are included (or approved for inclu- sion) in the United States Pharmacopoeia, the National Formulary, or the United States Homeopathic Pharmacopoeia, or in New Drugs or Accepted Dental Remedies (except for any drugs and biologicals unfavorably evaluated therein), or as are approved by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of the hospital furnishing such drugs and biologicals for use in such hospital. "Provider of Services " ( u ) The term 'provider of services' means a hospital, extended care facility, or home health agency. "Keasonable Cost " ( v ) ( l ) The reasonable cost of any services shall be determined in accordance with regulations establishing the method or methods to be used, and the items to be included, in determining such costs for various types or classes of institutions, agencies, and services; except that in any case to which paragraph (2) or (3) applies, the amount of the payment determined under such paragraph with respect to the services involved shall be considered the reasonable cost of such serv- ices. I n prescribing the regulations referred to in the preceding
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 323 sentence, the Secretary shall consider, among other things, the prin- ciples generally applied by national organizations or established pre- payment organizations (which have developed such principles) in com- puting the amount of payment, to be made by persons other than the recipients of services, to providers of services on account of services furnished to such recipients by such providers. Such regulations may provide for determination of the costs of services on a per diem, per unit, per capita, or other basis, may provide for using different meth- ods in different circumstances, may provide for the use of estimates of costs of particular items or services, and may provide for the use of charges or a percentage of charges where this method reasonably reflects the costs. Such regulations shall (A) take into account both direct and indirect costs of providers of services in order that, under the methods of determining costs, the costs with respect to individuals covered by the insurance programs established by this title will not be borne by individuals not so covered, and the costs with respect to individuals not so covered will not be borne by such insurance pro- grams, and (B) provide for the making of suitable retroactive cor- rective adjustments where, for a provider of services for any fiscal period, the aggregate reimbursement produced by the methods of determining costs proves to be either inadequate or excessive. "(2) (A) If the bed and board furnished as part of inpatient hospital services (including inpatient tuberculosis hospital services a n d inpatient psychiatric hospital services) or post-hospital extended care services is in accommodations more expensive than semi-private accommodations, the amount taken into account for purposes of pay- ment under this title with respect to such services may not exceed an amount equal to the reasonable cost of such services if furnished in such semi-private accommodations unless the more expensive ac- commodations were recfuired for medical reasons. " ( B ) Where a provider of services which has an agreement in effect under this title furnishes to an individual items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under part A or part B, as the case may 30"^"'*' ^^* ^^ ^' be, the Secretary shall take into account for purposes of payment to such provider of services only the equivalent of the reasonable cost of the items or services with respect to which such payment may be made. "(3) If the bed and board furnished as part of inpatient hospital services (including inpatient tuberculosis hospital services and inpa- tient psychiatric hospital services) or post-nospital extended care services is in accommodations other than, but not more expensive than, semi-private accommodations and the use of such other accommoda- tions rather than semi-private accommodations was neither at the request of the patient nor for a reason which the Secretary determines is consistent with the purposes of this title, the amount of the payment with respect to such bed and board under part A shall be the reasonable cost of such bed and board furnished in semi-private accommodations (determined pursuant to paragraph (1)) minus the difference between the charge customarily made by the hospital or extended care facility for bed and board in semi-private accommodations and the charge customarily made by it for bed and board in the accommodations furnished. " (4) For purposes of this subsection, the t«rm 'semi-private accom- accomwauont •» modations' means two-bed, three-bed, or four-bed accommodations.
324 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "Arrangements for Certain Services " ( w ) The term 'arrangements' is limited to arrangements under which receipt of payment by the hospital, extended care facility, or home health agency (whether in its own right or as agent), with respect to services for which an individual is entitled to have payment made under this title, discharges the liability of such individual or any other person to pay for the services. "State and United States " (x) The terms 'State' and 'United States' have the meaning given 42 use 4fo^.' ^^ them by subsections (h) and (i), respectively, of section 210. 'Tost-Hospital Extended Care in Christian Science Extended Care Facilities " ( y ) (1) The term 'extended care facility' also includes a Christian Science sanatorium operated, or listed and certified, by the First Church of Christ, Scientist, Boston, Massachusetts, but only (except for purposes of subsection (a) (2)) with respect to items and services ordinarily furnished by such an institution to inpatients, and payment majr be made with respect to services provided hj or in such an insti- tution only to such extent and under such conditions, limitations, and requirements (in addition to or in lieu of the conditions, limitations, and requirements otherwise applicable) as may be provided in regula- tions. "(2) Notwithstanding any other provision of this title, payment under part A may not be made for services furnished an individual in an extended care facility to which paragraph (1) applies unless such individual elects, in accordance with regulations, for a spell of illness to have such services treated as post-hospital extended care services for purposes of such p a r t ; and payment under part A may not be made for post-hospital extended care services— " ( A ) furnished an individual during such spell of illness in an extended care facility to which paragraph (1) applies after— "(i) such services have been furnished to him in such a facility for 30 days during such spell, or "(ii) such services have been furnished to him during such spell in an extended care facility to which such paragraph does not apply; or " ( B ) furnished an individual during such spell of illness in an extended care facility to which paragraph (1) does not apply after such services have been furnished to him during such spell in an extended care facility to which such paragraph applies. "(3) The amount payable under part A for post-hospital extended care services furnished an individual during any spell of illness in an extended care facility to which paragraph (1) applies shall be reduced by a coinsurance amount equal to one-eighth of the inpatient hospital deductible for each day before the 31st day on which he is furnished such services in such a facility during such spell (and the reduction under this paragraph shall be in lieu of any reduction under section Ante. p. 292. 1813(a)(4)). "(4) F o r purposes of subsection ( i ) , the determination of whether services furnished hy or in an institution described in paragraph (1) constitute post-hospital extended care services shall be made in accord- ance with and subject to such conditions, limitations, and requirements as may be provided in regulations.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 325 " T 'EXCLUSIONS FROM COVERAGE "SEC. 1862. (a) Notwithstanding any other provision of this title, no payment may be made under part A or part B for any expenses ^Q^"*''^^' '^^^' incurred for items or services— "(1) which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member; "(2) for which the individual furnished such items or services has no legal obligation to pay, and which no other person (by reason of such individual's membership in a prepayment plan or otherwise) has a legal obligation to provide or pay for; "(3) which are paid for directly or indirectly by a govern- mental entity (other than under this Act and other than under a health benefits or insurance plan established for employees of such an entity), except in such cases as the Secretary may specify; "(4) which are not provided within the United States (except for emergency inpatient hospital services furnished outside the United States under the conditions described in section 1814 ( f ) ) ; Ante, p. 294. " (5) which are required as a result of war, or of an act of war, occurring after the effective date of such individual's current coverage im^der such p a r t ; "(6) which constitute personal comfort items; "(7) where such expenses are for routine physical checkups, eyeglasses or eye examinations for the purpose of prescribing, fitting, or changing eyeglasses, hearing aids or examinations there- for, or immunizations; "(8) where such expenses are for orthopedic shoes or other supportive devices for the feet; "(9) where such expenses are for custodial care; "(10) where such expenses are for cosmetic surgery or are incurred in connection therewith, except as required for the prompt repair of accidental injury or for improvement of the functioning of a malformed body memiber; "(11) where such expenses constitute charges imposed by immediate relatives of such individual or members of his house- hold; or "(12) where such expenses are for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth. " (b) Payment under this title may not be made with respect to any item or service to the extent that payment has been made, or can reasonably be expected to be made (as determined in accordance with regulations), with respect to such item or service, under a workmen's compensation law or plan of the United States or a State. Any pay- ment under this title with respect to any item or service shall be conditioned on reimbursement to the appropriate Trust F u n d estab- lished by this title when notice or other information is received that payment for such item or service has been made under such a law or plan. IC CONSULTATION W I T H STATE AGENCIES AND OTHER ORGANIZATIONS TO DEVELOP C O N D I T I O N S O F P A R T I C I P A T I O N FOR PROVIDERS OF SERVICES "SEC. 1863. I n carr;^ing out his functions, relating to determination of conditions of participation by providers of services, under sub- sections (e) (8), (f) (4), (g) (4), (j) (10), and (o) (5) of section 1861, the Secretary shall consult with the Health Insurance Benefits Advis- ory Coimcil established by section 1867, appropriate State agencies,
326 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. and recognized national listing or accrediting bodies, and may consult with appropriate local agencies. Such conditions prescribed undeir any of such subsections may be varied for different areas or different classes of institutions or agencies and may, at the request of a State, provide higher requirements for such State than for other States; except that, in the case of any State or political subdivision of a State which imposes higher requirements on institutions as a condition to the purchase of services (or of certain specified services) in such institu- 42 use 301, tions under a State plan approved under title I , X V I , or X I X , the 1381. Post. p. 343. gg(jj.gtary shall impose like requirements as a condition to the payment for services (or for the services specified by the State or subdivision) in such institutions in such State or subdivision. "USE OF STATE AGENCIES TO DETERMINE COMPLIANCE BY PROVIDERS OP SERVICES WITH CONDITIONS OF PARTICIPATION "SEC. 1864. (a) The Secretary shall make an agreement with any State which is able and willing to do so under which the services of the State health agency or other appropriate State agency (or the appropriate local agencies^ will be utilized by him for the purpose of determining whemer an institution therein is a hospital or extended care facility, or whether an agency therein is a home health agency, or whether a laboratory meets the requirements of paragraphs (10) Ante. p. 321. and (11) of sectiou 1861 (s). To the extent that the Secretary finds it appropriate, an institution or agency which such a State (or local) agency certifies is a hospital, extended care facility, or home health agency (as those terms are defined in section 1861) may be treated as such by the Secretary. The Secretary may also, pursuant to agreement, utilize the services of State health agencies and other appropriate State agencies (and the appropriate local agencies) to do any one or more of the following: (1) to provide consultative serv- ices to institutions or agencies to assist them (A) to establish and maintain fiscal records necessary for purposes of this title, or other- wise to qualify as hospitals, extended care facilities, or home health agencies, or (B) to provide information which may be necessary to permit determination under this title as to whether payments are due and the amounts thereof, and (2) to provide consultative serv- ices to institutions, agencies, or organizations to assist in the establish- ment of utilization review procedures meeting the requirements of section 1861 (k) and in evaluating their effectiveness. " (b) The Secretary shall pay any such State, in advance or by way of reimbursement, as may be provided in the agreement with it (and may make adjustments in such payments on account of overpayments or underpayments previously made), for the reasonable cost of per- forming the functions specified in subsection ( a ) , and for the Federal Ante. p. 299. Hospital Insurauce Trust Fund's fair share of the costs attributable to the planning and other efforts directed toward coordination of activ- ities in carrying out its agreement and other activities related to the provision of services similar to those for which payment may be made under part A, or related to the facilities and personnel required for the provision of such services, or related to improving the quality of such services. " E F F E C T O F ACCREDITATION "SEC. 1865. Except as provided in the second sentence of section 1863, an institution shall be deemed to meet the requirements of the numbered paragraphs of section 1861(e) (except paragraph (6) thereof) if such institution is accredited as a hospital by the Joint Commission on Accreditation of Hospitals. If such Commission, as
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 327 a condition for accreditation of a hospital, requires a utilization review plan or imposes another requirement which serves substantially the same purpose, the Secretary is authorized to find that all institutions so accredited by the Commission comply also with section 1861(e) (6). In addition, if the Secretary finds that accreditation of an institution or agency by the American Osteopathic Association or any other national accreditation body provides reasonable assurance that any or all of the conditions of section 1861 (e), ( j ) , or (o), as the case may be, are met, he may, to the extent he deems it appropriate, treat such institution or agency as meeting the condition or conditions with respect to which he made such finding. ((AGREEIMENTS WITH PROVIDERS OF SERVICES "SEC. 1866. (a) (1) Any provider of services shall be qualified to participate under this title and shall be eligible for payments under this title if it files with the Secretary an agreement— " ( A ) not to charge, except as provided in paragraph (2), any individual or any other person for items or services for which such individual is entitled to have payment made under this title (or for which he would be so entitled if such provider of services had complied with the procedural and other requirements under or pursuant to this title or for which such provider is paid pursuant to the provisions of section 1814(e)), and ^ ^^®' P- ^^^• " ( B ) to make adequate provision for return (or other disposi- tion, in accordance with regulations) of any moneys incorrectly collected from such individual or other person. " (2) (A) A provider of services may charj^e such individual or other person (i) the amount of any deduction or coinsurance amount imposed pursuant to section 1813 (a) (1), (a) (2), or (a) (4), section 1833 ( b ) , or section 1861 (y) (3) with respect to such items and services (not in excess of the amount customarily charged for such items and services by such provider), and (ii) an amount equal to 20 per centum of the reasonable charges for such items and services (not m excess of 20 per centum of the amount customarily charged for such items and services by such provider) for which payment is made under p a r t B or, in the case of outpatient hospital diagnostic services, for which payment is made under part A. I n the case of items and services described in section 1833(c), clause (ii) of the preceding sentence shall be applied by substituting for 20 percent the proportion which is appropriate under such section. " ( B ) Where a provider of services has furnished, at the request of such individual, items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under this title, such provider of services may also charge such individual or other person for such more expensive items or services to the extent that the amount customarily charged by it for the items or services furnished at such request exceeds the amount customarily charged by it for the items or services with respect to which payment may be made under this title. " ( C ) A provider of services may also charge any such individual for any whole blood furnished him with respect to which a deductible is imposed under section 1813(a)(3), except that (i) any excess of such charge over the cost to such provider for the blood shall be deducted from any payment to such provider under this title, (ii) no such charge may be imposed for the cost of administration of such
328 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. blood, and (iii) such charge may not be made to the extent such blood has been replaced on behalf of such individual or arrangements have been made for its replacement on his behalf. Termination of «ny\ ^j^ agreement with the Secretary under this section may be agreements. j • , T termmated— "(1) by the provider of services at such time and upon such notice to the Secretary and the public as may be provided in regulations, except that notice of more than 6 months shall not be required, or "(2) by the Secretary at such time and upon such reasonable notice to the provider of services and the public as may be speci- fied in regulations, but only after the Secretary has determmed (A) that such pjrovider of services is not complying substantially with the provisions of such agreement, or with the provisions of this title and regulations thereunder, or (B) that such provider of services no longer substantially meets the applicable provisions of section 1861, or (C) that such provider of services has failed to provide such information as the Secretary finds necessary to determine whether payments are or were due under this title and the amounts thereof, or has refused to permit such examination of its fiscal and other records by or on behalf of the Secretary as may be necessary to verify such information. Any termination shall be applicable— "(3) in the case of inpatient hospital services (including inpatient tuberculosis hospital services and inpatient psychiatric hospital services) or post-hospital extended care services, with respect to such services furnished to any individual who is admit- ted to the hospital or extended care facility furnishing such services on or after the effective date of such termination, "(4) (A) with respect to home health services furnished to an individual under a plan therefor established on or after the effec- tive date of such termination, or (B) if a plan is established before such effective date, with respect to such services furnished to such individual after the calendar year in which such termination is effective, and "(5) with respect to any other items and services furnished on or after the effective date of such termination. "(c) Where an agreement filed under this title by a provider of services has been terminated by the Secretary, such provider may not file another agreement under this title unless the Secretary finds that the reason for the termination has been removed and that there is reasonable assurance that it will not recur. " ( d ) If the Secretary finds that there is a substantial failure to make timely review in accordance with section 1861 (k) of long-stay cases in a hospital or extended care facility, he may, in lieu of terminating his agreement with such hospital or facility, decide that, with respect to any individual admitted to such hospital or facility after a subsequent date specified by him, no payment shall be made under this title for inpatient hospital services (including inpatient tuberculosis hospital services and inpatient psychiatric hospital services) after the 20th day of a continuous period of such services or for post-hospital extended care services after such day of a continuous period of such care as is prescribed in or pursuant to regulations, as the case may be. Such decision may be made effective only after such notice to the hospital, or (in the case of an extended care facility) to the facility and the hospital or hospitals with which it has a transfer agreement, and to the public, as may be prescribed by regulations, and its effectiveness
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 329 shall terminate when the Secretary finds that tlie reason tlierefor has been removed and that there is reasonable assurance that it will not recur. The Secretary shall not make any such decision except after reasonable notice and opportunity for hearing to the institution or agency affected thereby. "HEALTH INSURANCE BENEFITS ADVISORY COUNCIL "SEC. 1867. For the purpose of advising the Secretary on matters of general policy in the administration of this title and in the formulation of regulations under this title, there is hereby created a Health Insur- ance Benefits Advisory Council which shall consist of 16 persons, not otherwise in the employ of the United States, appointed by the Sec- retary without regard to the civil service laws. The Secretary shall from time to time appoint one of the members to serve as Chairman. The members shall include persons who are outstanding in fields related to hospital, medical, and other health activities, and at least one person who is representative of the general public. Each member shall hold office for a term of 4 years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and except that the terms of office of the members first taking office shall expire, as designated by the Secretary at the time of appointment, four at the end of the first year, four at the end of the second year, four at the end of the third year, and four at the end of the fourth year after the date of appointment. A member shall not be eligible to serve continuously for more than 2 terms. The Secretary may, at the request of the Council or otherwise, appoint such special advisory professional or technical committees as may be useful in carry- ing out this title. Members of the Advisory Council and members of any such advisory or technical committee, while attending meetings or conferences thereof or otherwise serving on business of the Advisory Council or of such committee, shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding $100 per day, includ- ing travel time, and while so serving away from their homes or regular places of business they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5 of the Adminis- trative Expenses Act of 1946 (5 U.S.C. V3b-2) for persons in the 75^513^*339^' Government service employed intermittently. The Advisory Council 340. shall meet as frequently as the Secretary deems necessary. Upon request of 4 or more members, it shall be the duty of the Secretary to call a meeting of the Advisory Council. ((NATIONAL MEDICAL RE\IEW COMMITTEE "SEC. 1868. (a) There is hereby created a National Medical Review Committee (hereinafter in this section referred to as the 'Committee') which shall consist of nine persons, not otherwise in the employ of the United States, appointed by the Secretary without regard to the civil service laws. The Secretary shall from time to time appoint one of the members to serve as chairman. The members shall be selected from among individuals who are representative of organizations and associations of professional personnel in the field of medicine and other individuals who are outstanding in the field of medicine or in related fields; except that at least one member shall be representative of the general public, and at least a majority of the members shall be physi- cians. Each member shall hold office for a term of three years, except 49-850 0-66—24
330 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and except that the terms of office of the members first taking office shall expire, as designated by the Secretary at the time of appointment, three at the end of the first year, three at the end of the second year, and three at the end of the third year after the date of appointment. A member shall not be eligible to serve continuously for more than two terms. "(b) Members of the Committee, while attending meetings or con- ferences thereof or otherwise serving on business of the Committee, shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding $100 per day, including travel time, and while so serving away from their homes or regular places of business they may be allowed travel expenses, including per diem in lieu of sub- sistence, as authorized by section 5 of the Administrative Expenses Act 7 5^star*339°^' ^^ ^^^^ C^ U.S.C. 73b-2) for persons in the Government service 340. ^ * ' employed intermittently. (c) I t shall be the Junction of the Committee to study the utiliza- tion of hospital and other medical care and services for which payment may be made under this title with a view to recommending any changes which may seem desirable in the way in which such care and services are utilized or in the administration of the programs Report to Con- establishcd by this title, or in the provisions of this title. The Com- mittee shall make an annual report to the Secretary of the results of its study, including any recommendations it may have with respect thereto, and such report shall be transmitted promptly by the Secre- tary to the Congress. (d) The Committee is authorized to engage such technical assist- ance as may be required to carry out its functions, and the Secretary shall, in addition, make available to the Committee such secretarial, clerical, and other assistance and such pertinent data obtained and prepared by the Department of Health, Education, and Welfare as the Committee may require to carry out its functions. "DETERMINATIONS; APPEALS "SEC. 1869. (a) The determination of whether an individual is en- t itled to benefits under part A or part B, and the determination of the amount of benefits under part A, shall be made by the Secretary in accordance with regulations prescribed by him. " ( b ) Any individual dissatisfied with any determination under subsection (a) as to entitlement under part A or p a r t B, or as to amount of benefits under part A where the matter in controversy is $100 or more, shall be entitled to a hearing thereon by the Secretary 42 use 405. ^Q ^j^g same extent as is provided in section 205 (b), and, in the case of a determination as to entitlement or as to amount of benefits where the amount in controversy is $1,000 or more, to judicial review of the Secretary's final decision after such hearing as is provided in section 205(g). "(c) Any institution or agency dissatisfied with any determination by the Secretary that it is not a provider of services, or with any determination described in section 1866(b) (2), shall be entitled to a hearing thereon by the Secretary (after reasonable notice and oppor- tunity for hearing) to the same extent as is provided in section 205(b), and to judicial review of the Secretary's final decision after such hearing as is provided in section 205(g).
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 331 "OVERPAYMENTS O N B E H A L F O F INDIVIDTrALS "SEO. 18T0. (a) Any payment under this title to any provider of services or other person with respect to any items or services furnished any individual shall be regarded as a payment to such individual, ^(b) Where— "(1) more than the correct amount is paid under this title to a provider of services or other person for items or services fur- nished an individual and the Secretary determines that, within such period as he may specify, the excess over the correct amount cannot be recouped from such provider of services or other per- son, or "(2) any payment has been made under section 1814(e) to a "*"'*' P- •^^'*- provider of services or other person for items or services fur- nished an individual, proper adjustments shall be made, under regulations prescribed (after consultation with the Railroad Retirement Board) by the Secretary, by decreasing subsequent payments— "(3) to which such individual is entitled under title I I of this Act or under the Railroad Retirement Act of 1937, as the case ''^ use 4oi. r ' Post, pp. 335, may be, or . . . . 34o, 4oo. "(4) if such individual dies before such adjustment has been completed, to which any other individual is entitled under title I I of this Act or under the Railroad Retirement Act of 1937, as the case may be, with respect to the wages and self-employment income or the compensation constituting the basis of the benefits of such deceased individual under title I I of such Act. As soon as practicable after any adjustment under paragraph (3) or (4) is determined to be necessary, the Secretary, for purposes of this section, section 1817(g), and section 1841(f), shall certify (to the Railroad Retirement Board if the adjustment is to be made by decreas- ing subsequent payments under the Railroad Retirement Act of 1937) the amount of the overpayment as to which the adjustment is to be made. "(c) There shall be no adjustment as provided in subsection (b) (nor shall there be recovery) in any case where the incorrect payment has been made (including payments under section 1814(e)) with respect to an individual who is without fault and where such adjust- ment (or recovery) would defeat the purposes of title I I or would be against equity and good conscience. "(d) No certifying or disbursing officer shall be held liable for any amount certified or paid by him to any provider of services or other person where the adjustment or recovery of such amount is waived under subsection (c) or where adjustment under subsection (b) is not completed prior to the death of all persons against whose benefits such adjustment is authorized. "REGULATIONS "SEC. 1871. The Secretary shall prescribe such regulations as may be necessarj^ to carry out the administration of the insurance programs under this title. "When used in this title, the term 'regulations' means, unless the context otherwise requires, regulations prescribed by the Secretary.
332 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. 42 u s e 401-425. "APPLICATION OF CERTAIN PROVISIONS OF TITLE I I "SEC. 1872. The provisions of sections 206, 208, and 216 (j), and of subsections ( a ) , ( d ) , ( e ) , ( f ) , ( h ) , ( i ) , ( j ) , ( k ) , and (1) of sec- tion 205, shall also apply with respect to this title to the same extent as they are applicable with respect to title I I . " D E S I G N A T I O N o r O R G A N I Z A T I O N OR PUBLICATION BT NAME "SEC. 1873. Designation in this title, by name, of any nongovern- mental organization or publication shall not be affected by change of name of such organization or publication, and shall apply to any successor organization or publication which the Secretary finds serves the purpose for which such designation is made. "ADMINISTRATION "SEC. 1874. (a) Except as otherwise provided in this title, the insurance programs established by this title shall be administered by the Secretary. The Secretary may perform any of his functions under this title directly, or by contract providing for payment in advance or by way of reimbursement, and in such installments, as the Secretary may deem necessary. "(b) The Secretary may contract with any person, agency, or institution to secure on a reimbursable basis such special data, actuarial information, and other information as may be necessary in the carry- ing out of his functions under this title. "STUDIES AND RECOMMENDATIONS "SEC. 1875. (a) The Secretary shall carry on studies and develop recommendations to be submitted from time to time to the Congress relating to health care of the aged, including studies and recommenda- tions concerning (1) the adequacy of existing personnel and facilities Ante, pp. 291, for health care for purposes of the programs under parts A and B ; 301. (2) methods for encouraging the further development of efficient and economical forms of health care which are a constructive alternative to inpatient hospital care; and (3) the effects of the deductibles and coinsurance provisions upon beneficiaries, persons who provide health services, and the financing of the program. Reports to Con- «(b) The Secretary shall make a continuing study of the operation gress and administration of the insurance programs under parts A and B, and shall transmit to the Congress annually a report concerning the operation of such programs." (b) I f - . . (1) an individual was eligible to enroll under section 1837(e) of the Social Security Act before April 1,1966, but failed to enroll before such date, and (2) it is shown to the satisfaction of the Secretary of Health, Education, and Welfare that there was good cause for such failure to enroll before April 1,1966, such individual may enroll pursuant to this subsection at any time before October 1, 1966. The determination of what constitutes good cause for purposes of the preceding sentence shall be made in accord- ance with regulations of the Secretary. I n the case of any individual who enrolls pursuant to this subsection, the coverage period (within the meaning of section 1838 of the Social Security Act) shall begin on the first day of the 6th month after the month in which he so enrolls.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 333 T R A N S I T I O N A L PROVISION ON E L I G I B I L I T Y O F P R E S E N T L Y U N I N S U R E D I N D I V I D U A L S FOR H O S P I T A L I N S U R A N C E B E N E F I T S SEC. 103. (a) Anyone who— (1) has attained the age of 65, (2) (A) attained such age before 1968, or (B) has not less than 3 quarters of coverage (as defined in title I I of the Social Security Act or section 6(1) of the Kailroad Retirement Act of ^2 use 4oi. 1937), whenever acquired, for each calendar year elapsing after ^° ^*g^- '^^^^ 1965 and before the year in which he attained such age, (3) is not, and upon filing application for monthly insurance benefits under section 202 of the Social Security Act would not ^2 use 40 2. be, entitled to hospital insurance benefits under section 226 of ^"'^' P- 29O. such Act, and is not certifiable as a qualified railroad retirement beneficiary under section 21 of the Railroad Retirement Act of 1937 (as added by section 105 (a) of this A c t ) , (4) is a resident of the United States (as defined in section 210(i) of the Social Security Act), and is (A) a citizen of the 74 stat. 937. United States or (B) an alien lawfully admitted for permanent residence who has resided in the United States (as so defined) continuously during the 5 years immediately preceding the month in which he files application under this section, and (5) has filed an application under this section in such manner and in accordance with such other requirements as may be pre- scribed in regulations of the Secretary, shall (subject to the limitations in this section) be deemed, solely for purposes of section 226 of the Social Security Act, to be entitled to monthly insurance benefits under such section 202 for each month, beginning with the first month in which he meets the requirements of this subsection and ending with the month in which he dies, or, if earlier, the month before the month in which he becomes (or upon filing application for monthly insurance benefits under section 202 of such Act would become) entitled to hospital insurance benefits under section 226 or becomes certifiable as a qualified railroad retirement beneficiary. An individual who would have met the preceding require- ments of this subsection in any month had he filed application under paragraph (5) hereof before the end of such month shall be deemed to have met such requirements in such month if he files such applica- tion before the end of the twelfth month following such month. No application under this section which is filed by an individual more than 3 months before the first month in which he meets the require- ments of paragraphs (1), (2), (3), and (4) shall be accepted as an application for purposes of this section. (b) The provisions of subsection (a) shall not apply to any indi- vidual who— (1) is, at the beginning of the first month in which he meets the requirements of subsection ( a ) , a member of any organization referred to in section 210 (a) (17) of the Social Security Act, ^o stat. 839. (2) has, prior to the be^innin^ of such first month, been con- victed of any offense listed m section 202 (u) of the Social Security Act, or Pose, p. 334. (3) (A) at the beginning of such first month is covered by an enrollment in a health benefits plan under the Federal Employees Health Benefits Act of 1959, s^ulc'sJo f' (B) was so covered on February 16,1965, or note.
334 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. (C) oould have been so covered for such first month if he or some other person had availed himself of opportunities to enroll in a health benefits plan under such Act and to continue such enrollment (but this subparagraph shall not apply unless he or such other person, was a Federal employee at any time after February 15,1965). P a r a g r a p h (3) shall not apply in the case of any individual for the month (or any month thereafter) in which coverage under such a health benefits plan ceases (or would have ceased if he had had such coverage) by reason of his or some other person's separation from Federal service, if he or such other person was not (or would not have been) eligible to continue such coverage after such separation. (c) There are authorized to be appropriated to the Federal Hospital Insurance Trust Fund (esta;blished by section 1817 of the Social Secu- rity Act) from time to time such sums as the Secretary deems necessary for any fiscal year, on account of— (1) payments made or to be made during such fiscal year from Ante, p. 291. gych Trust Futid under part A of title X V I I I of such Act with respect to individuals who are entitled to hospital insurance Ante, p. 290. benefits under section 226 of such Act solely by reason of this section, (2) the additional administrative expenses resulting or expected to result therefrom, and (3) any loss in interest to such Trust F u n d resulting from the payment of such amounts, in order to place such Trust Fund in the same position at the end of such fiscal year in which it would have been if the preceding subsec- tions of this section had not been enacted. SUSPENSION I N CASE OF A U E N S ; PERSONS CONVICTED O r SUBVERSIVE ACTTVITIES I?usc'4of* ^^^- ^^^' ( * ) ( ! ) Section 202(t) of the Social Security Act is amended by adding at the end thereof the following new paragraph: " (9) No payments shall be made under part A of title X V I I I with respect to items or services furnished to an individual in any month for which the prohibition in paragraph (1) against payment of bene- fits to him is applicable (or would be if he were entitled to any such benefits)." (2) Section 202 (u) of such Act is amended by striking out "and" before the phrase "in determining the amount of any such benefit payable to such individual for any such month," and inserting after such phrase "and in determining whether such individual is entitled to insurance benefits under p a r t A of title X V I I I for any such month,". (b) (1) No payments shall be made under part B of title X V I I I of Ante, p. 301. tlie Soclal Security Act with respect to expenses incurred by an individual during any month for which such individual may not be paid monthly benefits under title I I of such Act (or for which such monthly benefits would be suspended if he were otherwise entitled thereto) by reason of section 202(t) of such Act (relating to suspen- sion of benefits of aliens who are outside the United States). (2) An individual who has been convicted of any offense under (A) chapter 37 (relating to espionage and censorship), chapter 105 (relating to sabotage), or chapter 115 (relating to treason, sedition,
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 335 and subversive activities) of title 18 of the United States Code, or (B) ^/g^i "fasT^' section 4,112, or 113 of the Internal Security Act of 1950, as amended, 64 stat. 991, may not enroll under part B of title XVIII of the Social Security Act. 1029. ^^ 822, 823. RAILROAD RETIREMENT AMENDMENTS SEC. 105. (a) (1) The Railroad Retirement Act of 1937 is amended so st^at. 3o^7^_ by adding after section 20 the following new section: 228S.1. 'HOSPITAL I N S U R A N C E BENEFITS FOR THE AGED "SEC. 21. For the purposes of part A of title XVIII of the Social ^"''' P- ^^L Security Act, in order to provide hospital insurance benefits for annui- tants, pensioners, and certain other aged individuals, the Board shall, upon request of the Secretary of Health, Education, and "Welfare, certify to the Secretary the name of any individual who has attained age 65 and who (1) is entitled to an annuity or pension under this Act, (2) would be entitled to such an annuity had he (i) ceased com- pensated service and (in the case of a spouse) had such spouse's hus- band or wife ceased compensated service and (ii) applied for such annuity, or (3) bears a relationship to an employee which, by reason of section 3(e) of this Act, has been, or would be, taken into account in calculating the amount of an annuity of such employee or his survivors. Such a certification shall include such additional information as may be necessary to carry out the provisions of part A of title X V I I I of the Social Security Act, and shall become effective on the date of certi- fication or on such earlier date not more than one year prior to the date of certification as the Board states that such individual first met the requirements for certification. The Board shall notify the Secre- tary of the date on which such individual no longer meets the require- ments of this section." (2) For purposes of section 21 of the Railroad Retirement Act of 1937 (and sections 1840, 1843, and 1870 of the Social Security Act), entitlement to an annuity or pension under the Railroad Retirement Act of 1937 shall be deemed to include entitlement under the Railroad Retirement Act of 1935. ^s use 215.228. (b) (1) Section 3201 of the Internal Revenue Code of 1954 (relating to rate of tax on employees under the Railroad Retirement Tax Act) ^3 st^t. 28. is amended by striking out "the rate of the tax imposed with respect °' to wages by section 3101 at such time exceeds the rate provided by paragraph (2) of such section 3101 as amended by the Social Security Amendments of 1956" and inserting in lieu thereof "the rate of the tax imposed with respect to wages by section 3101(a) at such time ^°'''' P- ^SS, exceeds 2% percent (the rate provided by paragraph (2) of section 3101 as amended by the Social Security Amendments of 1956)". 7o stat. 845. (2) Section 3211 of such Code (relating to the rate of tax on 73 stat. 29. employee representatives under the Railroad Retirement Tax Act) ^^ "^ ^^^^' is amended by striking out "the rate of the tax imposed with respect to wages by section 3101 at such time exceeds the rate provided by paragraph (2) of such section 3101 as amended by the Social Security Amendments of 1956" and inserting in lieu thereof "the rate of the tax imposed with respect to w a ^ s by section 3101(a) at such time exceeds 2% percent (the rate provided by paragraph (2) of section 3101 as amended by the Social Security Amendments of 1956)". (3) Section 3221(b) of such Code (relating to the rate of tax on 26 use 3221. employers under the Railroad Retirement Tax Act) is amended by striking out "the rate of the tax imposed with respect to wages by section 3111 at such time exceeds the rate provided by paragraph (2)
336 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. of such section 3111 as amended by the Social Security Amendments of 1956" and inserting in lieu thereof "the rate of the tax imposed with Post, p . 396. respect to wages by section 3111(a) at such time exceeds 2 % percent (the rate provided by paragraph (2) of section 3111 as amended by 70 Stat. 845, the Social Security Amendments of 1956)". (4) The amendments made by this subsection shall be effective with respect to compensation paid for services rendered after December 31, 1965. (c) For amendments preserving relationship between the railroad retirement and old-age, survivors, and disability insurance systems, see Post, p . 400. section 326 of this Act. MEDICAL EXPENSE DEDUCTION SEC. 106. (a) Subsection (a) of section 213 of the Internal Kevenue 74 Stat. 133. Code of 1954 (relating to allowance of deduction) is amended to read 26 u s e 213. as follows: " (a) ALLOWANCE OF DEDUCTION.—There shall be allowed as a deduc- tion the following amounts, ^ot compensated for by insurance or otherwise— "(1) the amount by which the amount of the expenses paid during the taxable year (reduced by any amount deductible under paragraph (2)) for medical care of the taxpayer, his spouse, and 68A Stat. 43. dependents (as defined in section 152) exceeds 3 percent of the 26 u s e 152. adjusted gross income, and "(2) an amount (not in excess of $150) equal to one-half of the expenses paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents." Repeal. (b) The second sentence of section 213(b) of such Code (relating to limitation with respect to medicine and drugs) is repealed. (c) Section 213 (e) of such Code (relating to definitions) is amended by renumbering paragraph (2) as paragraph (4), and by striking out paragraph (1) and inserting in lieu thereof the following: "Medical c a r e . " "(1) The term 'medical care' means amounts paid— " ( A ) for the diagnosis, cure, mitigation, treatment, or pre- vention of disease, or for the purpose of affecting any struc- ture or function of the body, " ( B ) for transportation primarily for and essential to medical care referred to in subparagraph ( A ) , or " ( C ) for insurance (including amounts paid as premiums Ante, p . 301. under part B of title X V I I I of the Social Security Act, re- lating to supplementary medical insurance for the aged) covering medical care referred to in subparagraphs (A) and (B). " (2) I n the case of an insurance contract under which amounts are payable for other than medical care referred to in subpara- graphs (A) and (B) of paragraph (1)— " ( A ) no amount shall be treated as paid for insurance to which paragraph (1) (C) applies unless the charge for such insurance is either separately stated in the contract, or furn- ished to the policyholder by the insurance company in a separate statement, " ( B ) the amount taken into account as the amount paid for such insurance sjiall not exceed such charge, and " ( C ) no amount shall be treated as paid for such insurance if the amount specified in the contract (or furnished to the
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 337 policyholder by the insurance company in a separate state- ment) as the charge for such insurance is unreasonably large in relation to the total charges under the contract. "(3) Subject to the limitations of paragraph (2), premiums paid during the taxable year by a taxpayer before he attains the age of 65 for insurance covering medical care (within the meaning of subparagraphs (A) and (B) of paragraph (1)) for the tax- payer, his spouse, or a dependent after the taxpayer attains the age of 65 shall be treated as expenses paid during the taxable year for insurance which constitutes medical care if premiums for such insurance are payable (on a level payment basis) under the contract for a period of 10 years or more or until the year in which the taxpayer attains the age of 65 (but in no case for a period of less than 5 years)." (d) (1) Section 213 of such Code (relating to medical, dental, etc., ^^ stat^. ^IM3. expenses) is amended by striking out subsections (c) and (g) of such section. (2) (A) Section 72(m) (5) (A) (i) of such Code (relating to special 76 Stat. 821. 26 u s e 72. rules applicable to employment annuities and distributions under employee plans) is amended by striking out "section 213(g) ( 3 ) " and inserting in lieu thereof "paragraph (7) of this subsection". (B) Section 72 (m) of such Code is further amended by adding at the end thereof the following new paragraph: "(7) MEANING OF DISABLED.—For purposes of this section, an individual shall be considered to be disabled if he is unable to en- gage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite dura- tion. An individual shall not be considered to be disabled unless he furnishes proof of the existence thereof in such form and manner as the Secretary or his delegate may require." (C) Subparagraphs (A) (iii) and ( B ) ( i i i ) of section 7 2 ( n ) ( l ) of such Code (relating to treatment of certain distributions with respect to contributions by self-employed individuals) are each amended by striking out "section 2 1 3 ( g ) ( 3 ) " and inserting in lieu thereof "subsection (m) (7)". (3) Section 79(b)(1) of such Code (relating to group-term life 26 use ^^' insurance purchased for employees) is amended by striking out "para- graph (3) of section 213(g), determined without regard to paragraph (4) thereof" and inserting in lieu thereof "section 72 (m) (7)". (4) Section 4 0 1 ( d ) ( 4 ) ( B ) of such Code (relating to additional Hl'^^'^Si' requirements for qualification of trusts and plans benefiting owner- employees) is amended by striking out "section 213 (g) ( 3 ) " and insert- ing in lieu thereof "section 72(m) (7)". (5) Section 405(b) (1) (D) (ii) of such Code (relating to qualified 26 use 405. bond purchase plans) is amended by striking out "section 213(g) ( 3 ) " and inserting in lieu thereof "section 72 (m) (7)". (e) The amendments made by this section shall apply to taxable years beginning after December 31,1966. RECEIPTS FOR EMPLOYEES MUST SHOW TAXES SEPARATELY SEC. 107. Section 6051(c) of the Internal Revenue Code of 1954 ^J^us^eosY (relating to additional requirements) is amended by adding at the end thereof the following new sentence: "The statements required under this section shall also show the proportion of the total amount
338 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. Post, p. 395. withheld as tax under section 3101 which is for financing the cost of Ante, p. 291. hospital insurance benefits under part A of title X V I I I of the Social Security Act." TECHNICAL AND ADMINISTRATIVE AMENDMENTS RELATING TO TRUST FUNDS l2vic!oi' ^^^- 1^^- (.^) (^). Section 201(a) (3) of the Social Security Act is amended by inserting "(other than sections 3101(b) and 3111(b))" after "chapter 21" each place it appears therein. (2) Section 201 (a) (4) of such Act is amended by inserting "(other than section 1401(b))" after "chapter 2" and after "such subchapter or chapter". (3) Section 201(g) (1) of such Act is amended to read as follows: " ( 1 ) ( A ) There are authorized to be made available for expendi- ture, out of any or all of the Trust Funds (which for purposes of this paragraph shall include also the Federal Hospital Insurance Trust 30^"'"' ^^" ^^^' Fund and the Federal Supplementary Medical Insurance Trust Fund established by title X V I I I ) , such amounts as the Congress may deem appropriate to pay the costs of the part of the administration of this title and title X V I I I for which the Secretary of Health, Education, and Welfare is responsible. During each fiscal year or after the close of such fiscal year (or at both times), the Secretary of Health, Educa- tion, and Welfare shall analyze the costs of administration of this title and title X V I I I during the aj)propriate part or all of such fiscal year in order to determine the portion of such costs which should be borne by each of the Trust Funds and shall certify to the Managing Trustee the amount, if any, which should be transferred among such Trust Funds in order to assure that each of the Trust Funds bears its proper share of the costs incurred during such fiscal year for the part of the administration of this title and title X V I I I lor which the Secretary of Health, Education, and Welfare is responsible. The Managing Trustee is authorized and directed to transfer any such amount (deter- mined under the preceding sentence) among such Trust Funds in accordance with any certification so made. " ( B ) The Managing Trustee is directed to pay from the Trust Funds into the Treasury the amounts estimated by him which will be expended, out of moneys appropriated from the general funds in the Treasury, during each calendar quarter by the Treasury Department for the part of the administration of this title and title X V I I I for which the Treasury Department is responsible and for the administra- ^^68A Stat. 353, ^'^^^ ^f chapters 2 and 21 of the Internal Revenue Code of 1954. Such 26 use 1401- payments shall be covered into the Treasury as repayment to the 1403,3101-3126. ftccount for reimbursement of expenses incurred in connection with such administration of this title and title X V I I I and chapters 2 and 21 of the Internal Revenue Code of 1954." (4) Section 201(g) (2) of such Act is amended by inserting after "the amount estimated by him as taxes" the following: "imposed under section 3101(a)". (5) Section 201(h) of such Act is amended by inserting "(other than section 226)" after "this title". 5° J*s^*-4^2^^; (b) Section 218(h)(1) of such Act is amended by striking out "Trust Funds in the ratio in which amounts are appropriated to such Funds pursuant to subsections (a) (3) and (b) (1) of section 201" and inserting in lieu thereof "Trust Funds and the Federal Hospital In- surance Trust Fund in the ratio in which amounts are appropriated to such Funds pursuant to subsection (a) (3) of section 201, subsec- Ante.p. 299. t-ioii (b)(1) of sucli scctlou, aiid subsection ( a ) ( 1 ) of section 1817, respectively".
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 339 (c) Section 1106(b) of such Act is amended by striking out "and ^2 st^^ wss. the Federal Disability Insurance Trust F u n d " and inserting in lieu thereof ", the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, and the Federal Supplementary Med- ical Insurance Trust Fimd". ADVISORY COUNCIL ON SOCIAL SECURITY SEC. 109. (a) Title V I I of the Social Security Act is amended by jg stat^. eas.^^^ adding at the end thereof the following new section: " A D V I S O R Y COUNCIL ON SOCIAL SECURITY "SEC. 706. (a) During 1968 and every fifth year thereafter, the Secretary shall appoint an Advisory Council on Social Security for the purpose of reviewing the status of the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, and the 42usc4oi. Federal Supplementary Medical Insurance Trust Fund in relation to 3„^"'*' ^P' ^^^' the long-term commitments of the old-age, survivors, and disability insurance program and the programs under parts A and B of title X V I I I , and of reviewing the scope of coverage and the adequacy of ^"'«' PP- 291, benefits under, and all other aspects of, these programs, including ^°^* their impact on the public assistance programs under this Act. " ( b ) Each such Council shall consist of the Commissioner of Social Security, as Chairman, and 12 other persons, appointed by the Secretary without regard to the civil service laws. The appointed members shall, to the extent possible, represent organizations of em- ployers and employees in equal numbers, and represent self-employed persons and the public. "(c) (1) Any Council appointed hereunder is authorized to engage such technical assistance, including actuarial services, as may be re- quired to carry out its functions, and the Secretary shall, in addition, make available to such Council such secretarial, clerical, and other assistance and such actuarial and other pertinent data prepared by the Department of Health, Education, and Welfare as it may require to carry out such functions. "(2) Appointed members of any such Council, while serving on business of the Council (inclusive of travel time), shall receive com- pensation at rates fixed by the Secretary, but not exceeding $100 per day and, while so serving away from their homes or regular places of business, they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5 of the Administrative Expenses Act of 1946 (5 U.S.C. 73b-2) for persons in the Government eo stat. sos; employed intermittently. ^^ *^** ^^^' ^'*°' " ( d ) Each such Council shall submit reports of its findings and Reports to con- recommendations to the Secretary not later than January 1 of the ^'^^^* second year after the year in which it is appointed, and such reports and recommendations shall thereupon be transmitted to the Congress and to the Board of Trustees of each of the Trust Funds. The reports required by this subsection shall include— "(1) a separate report with respect to the old-age, survivors, and disability insurance program under title I I and of the taxes 42 use 401. imposed under sections 1401(a), 3101(a), and 3111(a) of the Internal Revenue Code of 1954, Poat, pp. 394- "(2) a separate report with respect to the hospital insurance ^^^* program under part A of title X V I I I and of the taxes imposed by sections 1401(b), 3101(b), and 3111(b) of the Internal Revenue Code of 1954, and
340 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. " (3) a separate report with respect to the supplementary medical Ante, p. 301. insurancc program established by part B of title X V I I I and of the financing thereof. After the date of the transmittal to the Congress of the reports required by this subsection, the Council shall cease to exist." ^^p^^i- (b) Effective January 1, 1966, section 116(e) of the Social Security 42 uS;' 40 u Amendments of 1956 is repealed. M E A N I N G OF T E R M " S E C R E T A R Y " SEC. 110. As used in this Act, and in the provisions of the Social Security Act amended by this Act, the term "Secretary", unless the context otherwise requires, means the Secretary of Health, Education, and Welfare. ROLE OF T H E RAILROAD R E T I R E M E N T BOARD I N T H E A D M I N I S T R A T I O N OF H O S P I T A L I N S U R A N C E FOR T H E AGED SEC. 111. (a) The first sentence of section 1874(a) of the Social Ante, p. 332. Security Act is amended to read as follows: "Except as otherwise pro- p^sT^' ^400^^' vided in this title and in the Kailroad Retirement Act of 1937, the insurance programs established by this title shall be administered by the Secreta^v." (b) (1) Section 21 of the Railroad Retirement Act of 1937 (as added by section 105 of this Act) is amended to read as follows: uH O S P I T A L I N S U R A N C E B E N E F I T S FOR T H E AGED "SEC. 21. (a) F o r the purposes of this section, the Board shall have the same authority to determine the rights of individuals described in subsection (b) of this section to have payments made on their behalf for hospital insurance benefits consisting of inpatient hospital services, post-hospital extended care services, post-hospital home health services, and outpatient hospital diagnostic services (all hereinafter referred to ^^"f,«;,pp' 290, as 'services') under section 226, and parts A and C of title X V I I I , of 291, 313. the Social Security Act as the Secretary of Health, Education, and Welfare has under such section and such parts with respect to indi- viduals to whom such section and such parts apply. For purposes of 45 use 228k. section 11, a determination with respect to the rights of an individual under this section shall, except in the case of a provider of services, be considered to be a decision with respect to an annuity. "(b) Except as otherwise provided in this section, every individual who— "(1) has attained age 65, and " (2) (A) is entitled to an annuity under this Act, or (B) would be entitled to such an annuity had he ceased compensated service and, in the case of a spouse, had such spouse's husband or wife ceased compensated service, or (C) had been awarded a pension 45 use 228f. under section 6, or (D) bears a relationship to an employee which, 45 use 228c. by reasou of section 3 (e), has been, or would be, taken into account in calculating the amount of an annuity of such employee or his survivors, shall be certified to the Secretary of Health, Education, and Welfare as a qualified railroad retirement beneficiary under section 226 of the Social Security Act. "(c) The Board and the Secretary of Health, Education, and Wel- fare shall furnish each other with such information, records, and doc-
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 341 uments as may be considered necessary to the administration of this section or section 226, and part A of title X V I I I , of the Social Secu- ^g^"'^' ^^- ^^°' rity Act. " ( d ) For purposes of this section (and sections 1840,1843, and 1870 of the Social Security Act), entitlement to an annuity or pension ^IT'^SSI'^'^^^' under this Act shall be deemed to include entitlement under the Rail- road Ketirement Act of 1935. 45 use 215-228. "(e) The rights of individuals described in subsection (b) of this section to have payment made on their behalf for the services referred to in subsection (a) of this section but provided in Canada shall be the same as those of individuals to whom section 226 and part A of title X V I I I of the Social Security Act apply, and this subsection shall be administered by the Board as if the provisions of section 226 and part A of title X V I I I of the Social Security Act were applicable, as if references to the Secretary of Health, Education, and Welfare were to the Board, as if references to the Federal Hospital Insurance Trust Fund were to the Railroad Retirement Account, as if refer- ences to the United States or a State included Canada or a subdivision thereof, and as if the provisions of sections 1862(a) (4), 1863, 1864, 1867, 1868, 1869, 1874(b), and 1875 of such title X V I I I were not included in such title. The payments for services herein provided for in Canada shall be made from the Railroad Retirement Account (in accordance with, and subject to, the conditions applicable under section 10(b) in making payment of other benefits) to the hospital, extended care facility, or home health agency providing such services in Canada to individuals to whom subsection (b) of this section applies, but only to the extent that the amount of payments for services other- wise hereunder provided for an individual exceeds the amount pay- able for like services provided pursuant to the law in effect in the place in Canada where such services are furnished. For the purposes of section 9 of this Act, any overpayment under this subsection shall "^^ "^^ ^^si. be treated as if it were an overpayment of an annuity." (2) Section 5(k) (2) of such Act is amended— ^^ use 228e. (A) by striking out subparagraphs (A) and (B) and redesig- nating subparagraphs ( C ) , ( D ) , and (E) as subparagraphs ( A ) , (B^, and ( C ) , respectively; (B) by striking out the second sentence and the last sentence of subdivision (i) of the subparagraph redesignated as subpara- graph (A) by subparagraph (A) of this paragraph; and by striking out from such subdivision (i) "the Retirement Account" and inserting in lieu thereof "the Railroad Retirement Account (hereinafter termed 'Retirement Account')"; (C) by adding at the end of the subparagraph redesignated as subparagraph (A) by subparagraph (A) of this paragraph the following new subdivision: "(iii) A t the close of the fiscal year ending June 30, 1966, and each fiscal year thereafter, the Board and the Secretary of Health, Education, and Welfare shall determine the amount, if any, which, if added to or subtracted from the Federal Hospital Insurance Trust Fund, would place such fund in the same position in which it would have been if service as an employee after Decem- ber 31, 1936, had been included in the term 'employment' as defined in the Social Security Act and in the Federal Insurance Contributions Act. Such determination shall be made no later _^,°^'' PP- ^^S, 396. than J u n e 15 following the close of the fiscal year. If such amount is to be added to the Federal Hospital Insurance Trust Fund, the Board shall, within ten days after the determination,
342 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. certify such amount to the Secretary of the Treasury for transfer from the Retirement Account to the Federal Hospital Insurance Trust F u n d ; and if such amount is to be subtracted from the Federal Hospital Insurance Trust Fund the Secretary of Health, Education, and "Welfare shall, within ten days after the deter- mination, certify such amount to the Secretary of the Treasury for transfer from the Federal Hospital Insurance Trust Fund to the Retirement Account. The amount so certified shall further include interest (at the rate determined under subparagraph (B) for the fiscal year under consideration) payable from the close of such fiscal year until the date of certification."; (D) by striking out "subparagraph ( D ) " where it appears in the subparagraph redesignated as suoparagraph (A) by subpara- graph (A) of this paragraph, and inserting in lieu thereof "sub- paragraph ( B ) " ; (E) by striking out "subparagraphs (B) and ( C ) " where it appears m the subparagraph redesignated as subparagraph (B) by subparagraph (A) of this paragraph and inserting in lieu thereof "subparagraph ( A ) " ; and ( F ) by amending the subparagraph redesignated as subpara- graph (C) by subparagraph (A) of this paragraph to read as follows: " ( C ) The Secretary of the Treasury is authorized and directed to transfer to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, or the Federal Hospital Insurance Trust Fund from the Retirement Account or to the Retire- ment Account from the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, or the Federal Hospital Insurance Trust Fund, as the case may be, such amounts as, from time to timej may be determined by the Board and the Secretary of Health, Education, and Welfare pursuant to the provi- sions of subparagraph ( A ) , and certified by the Board or the Secre- tary of Health, Education, and Welfare for transfer from the Retire- ment Account or from the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, or the Federal Hospital Insurance Trust Fund." Ante, p. 335. (c) (1) Section 3201 of the Internal Revenue Code of 1954 (relating to rate of tax on employees under the Railroad Retirement Tax Act) is amended by striking out "section 3101(a)" and inserting in lieu thereof "section 3101(a) plus the rate imposed by section 3101(b)". Ante, p. 335. (£) Sectjon 3211 of such Code (relating to the rate of tax on em- ployee representatives under the Railroad Retirement Tax Act) is amended by striking out "section 3101(a)" and inserting in lieu thereof "section 3101(a) plus the rate imposed by section 3101(b)". Ante, p. 335. (3) Section 3221 (b) of such Code (relating to the rate of tax on em- ployers under the Railroad Retirement Tax Act) is amended by strik- mg out "section 3111(a)" and inserting in lieu thereof "section 3111 (a) plus the rate imposed by section 3111(b)". (4) Section 1401 (b) (as amended by section 321 of this Act) of such Post, p. 394. Code (relating to the rate of tax under the Self-Employment Contri- butions Act) is amended by striking out the last sentence. Post. p. 395. (5) Section 3101(b) of such Code (relating to the rate of tax on employees under the Federal Insurance Contributions Act) is amended by striking out ", but without regard to the provisions of paragraph (9) thereof insofar as it relates to employees".
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 343 (6) Section 3111(b) of such Code (relating to the rate of tax on ^°«'' P- 396. employers under the Federal Insurance Contributions Act) is amended by striking out ", but without regard to the provisions of paragraph (9) thereof insofar as it relates to employees". (d) There are authorized to be appropriated to the Federal Hospital Insurance Trust Fund (established by section 1817 of the Social Security Act) from time to time such sums as the Secretary deems '*"'^' P- ^^^• necessary for any fiscal year, on account of— (1) payments made or to be made during such fiscal year from siich Trust Fund under part A of title X V I I I of such Act with ^"'^' P- ^ ' L respect to individuals who are qualified railroad retirement bene- ficiaries (as defined in section 226(c) of such Act) and who are ^"'^' P- ^^O. not, and upon filing application for monthly insurance benefits under section 202 of such Act would not be, entitled to such benefits '^^ "^^ '^^^' if service as an employee (as defined in the Railroad Retirement Act of 1937) after December 31, 1936, had been included in the g/^lf^JJ^' "^' term "employment" as defined in the Social Security Act, ^'*°' °*'' ^' ^^°' (2) the additional administrative expenses resulting or expected to result therefrom, and (3) any loss of interest to such Trust Fund resulting from the payment of such amounts, in order to place such Trust Fund in the same position at the end of such fiscal year in which it would have been if the individuals described in paragraph (1) had not been entitled to benefits under part A of title X V I I I of the Social Security Act. (e) (1) The amendments made by the preceding provisions of this section shall apply to the calendar year 1966 or to any subsequent calendar year, but only if the requirement in paragraph (2) has been met with respect to such calendar year. (2) The requirement referred to in paragraph (1) shall be deemed to have been met with respect to any calendar year if, as of the October 1 immediately preceding ^uch calendar year, the Railroad Retirement Tax Act provides that the maximum amount of monthly compensation ^^ ^^^ ^2'^^- taxable under such Act during all months of such calendar year will be an amount equal to one-twelfth of the maximum wages which the Federal Insurance Contributions Act provides may be counted for 30^°^*' ^^' ^^^' such calendar year. PART 2—GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS ESTABLISHMENT OF PROGRAMS SEC. 121. (a) The Social Security Act is amended by adding at the end thereof (after the new title X V I I I added by section 102) the ^ ' * ' P- 291. following new title: "TITLE XIX—GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS "APPROPRIATION "SEC. 1901. For the purpose of enabling each State, as far as prac- ticable under the conditions in such State, to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or permanently and totally disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such fam- ilies and individuals attain or retain capability for independence or
344 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. self-care, there is hereby authorized to be appropriated for each fiscal year a sum sufficient t o carry out the purposes of this title. The sums made available under this section shall be used for making payments to States which have submitted, and had approved by the Secretary of Health, Education, and Welfare, State plans for medical assistance. U STATE P L A N S FOR MEDICAL ASSISTANCE "SEO. 1902. (a) A State plan for medical assistance must— "(1) provide that it shall be in effect in all political subdi- visions of the State, and, if administered by them, be mandatory upon them; "(2) provide for financial participation by the State equal to not less than 40 per centum of uie non-Federal share of the expend- itures under the plan with respect to which payments under sec- tion 1903 are authorized by this title; and, effective July 1, 1970, provide for financial participation by the State equal to all of such non-Federal share or provide for distribution of funds from Federal or State sources, for carrying out the State plan, on an equalization or other basis which will assure that the lack of adequate funds from local sources will not result in lowering the amount, duration, scope, or quality of care and services available under the plan; "(3) provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness; "(4) provide such methods of administration (including methods relating to the establishment and maintenance of per- sonnel standards on a merit basis, except that the Secretary shall exercise no authority with respect to the selection, tenure or office, and compensation of any individual employed in accordance with such methods, and including provision for utilization of profes- sional medical personnel in the administration and, where admin- istered locally, supervision of administration of the plan) as are found by the Secretary to be necessary for the proper and efficient operation of the plan; "(5) either provide for the establishment or designation of a single State agency to administer the plan, or provide for the establishment or designation of a single State agency to supervise the administration of the plan, except that the determination of eligibility for medical assistance under the plan shall be made by the State or local agency administering the State plan approved n^ y,^^ f°a; 306, 1381-1385. under title I or X V I (insofar as it relates to the a g e d ) ; "(6) provide that the State agency will make such reports, in such form and containing such information, as the Secretary may from time to time require, and comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports; "(7) provide s a f e ^ a r d s which restrict the use or disclosure of information concerning applicants and recipients to purposes di- rectly connected with the administration of the plan; "(8) provide that all individuals wishing to make application for medical assistance under the plan shall have opportunity to do so, and that such assistance shall be furnished with reasonable promptness to all eligible individuals;
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 345 "(9) provide for the establishment or designation of a State authority or authorities which shall be responsible for establishing and maintaining standards for private or public institutions in which recipients of medical assistance under the plan may receive care or services; "(10) provide for making medical assistance available to all individuals receiving aid or assistance under State plans ap- proved under titles I, IV, X , X I V , and X V I ; and— izolTs^'^'ist'' " ( A ) provide that the medical assistance made available to individuals receiving aid or assistance under any such State plan— "(i) shall not be less in amount, duration, or scope than the medical assistance made available to individ- uals receiving aid or assistance under any other such State plan, and "(ii) shall not be less in amount, duratioUj or scope than the medical or remedial care and services made available to individuals not receiving aid or assistance under any such plan; and " ( B ) if medical or remedial care and services are included for any group of individuals who are not receiving aid or a;ssistance under any such State plan and who do not meet the income and resources requirements of the one of such State plans which is appropriate, as determined in accord- ance with standards prescribed by the Secretary, provide— " ( i ) for making medical or remedial care and serv- ices available to all individuals who would, if needy, be eligible for aid or assistance under any such State plan and who have insufficient (as determined in accordance with comparable standards) income and resources to meet the costs of necessary medical or remedial care and services, and "(ii) that the medical or remedial care and services made available to all individuals not receiving aid or assistance under any such State plan shall be equal in amount, duration, and scope; except that the making available of the services described in paragraph (4) or (14) of section 1905(a) to individuals meet- Post, p. ssi. m ^ the age requirement prescribed therein shall not, by reason of this paragraph (10), require the making available of any such services, or the making available of such services of the same amount, duration, and scope, to individuals of any other ages; "(11) provide for entering into cooperative arrangements with the State agencies responsible for administering or super- vising the administration of health services and vocational rehabilitation services in the State looking toward maximum utilization of such services in the provision of medical assistance under the plan; "(12) provide that, in determining whether an individual is blind, there shall be an examination by a physician skilled in the diseases of the eye or by an optometrist, whichever the individual may select; "(13) provide for inclusion of some institutional and some noninstitutional care and services, and, effective J u l y 1, 1967, provide (A) for inclusion of at least the care and services listed m clauses (1) through (5) of section 1905(a), and (B) for 49-850 0-66—25
346 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. payment of the reasonable cost (as determined in accordance with standards approved by the Secretary and included in the plan) of inpatient hospital services provided under the plan; "(14) provide that (A) no deduction, cost sharing, or similar charge will be imposed under the plan on the individual with respect to inpatient hospital services furnished him under the plan, and (B) any deduction, cost sharing, or similar charge imposed under the plan with respect to any other medical assistance furnished him thereunder, and any enrollment fee, premium, or similar charge imposed under the plan, shall be reasonably related (as determined in accordance with standards approved by the Secretary and included in the plan) to the recipient's income or his income and resources; "(15) in the case of eligible individuals 65 years of age or older who are covered by either or both of the insurance programs Ante. p. 291. established by title X V I I I , provide— " (A) for meeting the full cost of any deductible imposed with respect to any such individual under the insurance pro- gram established by part A of such title; and " ( B ) where, under the plan, all of any deductible, cost sharing, or similar charge imposed with respect to any such individual under the insurance program established by part B of such title is not met, the portion thereof which is met shall be determined on a basis reasonably related (as deter- mined in accordance with standards approved by the Secre- tary and included in the plan) to such individual's income or his income and resources; "(16) provide for inclusion, to the extent required by regula- tions prescribed by the Secretary, of provisions (conforming to such regulations) with respect to the furnishing of medical assist- ance under the plan to individuals who are residents of the State but are absent therefrom; " (17) include reasonable standards (which shall be comparable for all groups) for determining eligibility for and the extent of medical assistance under the plan which (A) are consistent with the objectives of this title, (B) provide for taking into account only such income and resources as are, as determined in accord- ance with standards prescribed by the Secretary, available to the applicant or recipient and (in the case of any applicant or recipi- ent who would, if he met the requirements as to need, be eligible for aid or assistance in the form of money payments under a State 12S Tsli^Vas? ^' P l ^ approved under title I, I V , X , X I V , or X V I ) as would not be disregarded (or set aside for future needs) in determining his eligibility for and amount of such aid or assistance under such plan, (C) provide for reasonable evaluation of any such income or resources, and (D) do not take into account the financial respon- sibility of any individual for any applicant or recipient of assist- ance under the plan unless such applicant or recipient is such individual's spouse or such individual's child who is under age 21 or is blind or permanently^ and totally disabled; and provide for flexibility in the application of such standards with respect to income by taking into account, except to the extent prescribed by the Secretary, the costs (whether in the form of insurance pre- miums or otherwise) incurred for medical care or for any other type of remedial care recognized under State law;
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 347 " (18) provide that no lien may be imposed against the property of any individual prior to his death on account of medical assist- ance paid or to be paid on his behalf under the plan (except pursuant to the judgment of a court on account of benefits in- correctly paid on behalf of such individual), and that there shall be no adjustment or recovery (except, in the case of an individual who was 65 years of age or older when he received such assistance, from his estate, and then only after the death of his surviving spouse, if any, and only at a time when he has no surviving child who is under age 21 or is blind or permanently and totally dis- abled) of any medical assistance correctly paid on behalf or such individual under the plan; "(19) provide such safeguards as may be necessary to assure that eligibility for care and services under the plan will be deter- mined, and such care and services will be provided, in a manner consistent with simplicity of administration and the best inter- ests of the recipients; "(20) if the State plan includes medical assistance in behalf of individuals 65 years of age or older who are patients in institutions for mental diseases— " (A) provide for having in effect such agreements or other arrangements with State authorities concerned with mental diseases, and, where appropriate, with such institutions, as may be necessary for carrying out the State plan, including arrangements for joint planning and for development of alternate methods of care, arrangements providing assurance of immediate readmittance to institutions where needed for individuals under alternate plans of care, and arrangements providing for access to patients and facilities, for furnishing information, and for making reports; " ( B ) provide for an individual plan for each such patient to assure that the institutional care provided to him is in his best interests, including, to that end, assurances that there will be initial and periodic review of his medical and other needs, that he will be given appropriate medical treatment within the institution, and that there will be a periodical determi- nation of his need for continued treatment in the institution; " ( C ) provide for the development of alternate plans of care, making maximum utilization of available resources, for recipients 65 years of age or older who would otherwise need care in such institutions, including appropriate medical treat- ment and other aid or assistance; for services referred to in section 3 fa) (4) (A) (i) and (ii) or section 1603(a) (4) (A) (i) and (ii) which are appropriate for such recipients and ^6 stat. 173, for such patients; and for methods of administration neces- 42 use 303, sary to assure that the responsibilities of the State agency i383. under the State plan with respect to such recipients and such patients will be effectively carried out; and " ( D ) provide methods of determining the reasonable cost of institutional care for such patients; "(21) if the State plan includes medical assistance in behalf of individuals 65 years of age or older who are patients in public institutions for mental diseases, show that the State is making satisfactory progress toward developing and implementing a com- prehensive mental health program, including provision for utiliza- tion of community mental health centers, nursing homes, and other alternatives to care in public institutions for mental dis- eases; and
348 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. " (22) include descriptions of (A) the kinds and numbei-s of pro- fessional medical personnel and supporting staff that will be used in the administration of the plan and of the responsibilities they will have, (B) the standards, for private or public institutions in which recipients of medical assistance under the plan may receive care or services, that will be utilized by the State authority or authorities responsible for establishing and maintaining such standards, (C) the coop|erative arrangements with State health agencies and State vocational rehabilitation agencies entered into with a view to maximum utilization of and coordination of the provision of medical assistance with the services administered or supervised by such agencies, and (D) other standards and methods that the State will use to assure that medical or remedial care and services provided to recipients of medical assistance are of high quality. Notwithstanding paragraph (5), if on January 1,1965, and on the date on which a State submits its plan for approval under this title, the State agency which administered or supervised the administration of 1206 "fas/AVs's ^^^ P^^^ ^^ ^^^^ State approved under title X (or title X V I , insofar as it relates to the blind) was different from the State agency which administered or supervised the administration of the State plan 42 use 301-306. approvcd under title I (or title X V I , insofar as it relates to the aged), the State agency which administered or supervised the administration of such plan approved under title X (or title X V I , insofar as it relates to the blind) may be designated to administer or supervise the admin- istration of the portion of the State plan for medical assistance which relates to blind individuals and a different State agency may be estab- lished or designated to administer or supervise the administration of the rest of the State plan for medical assistance; and in such case the part, of the plan which each such agency administers, or the adminis- tration of which each such agency supervises, shall be regarded as a separate plan for purposes of this title (except for purposes of parasfraph (10)). " (b) The Secretary shall approve any plan which fulfills the con- ditions specified in subsection ( a ) , except that he shall not approve any plan which imposes, as a condition of eligibility for medical assistance under the plan— "(1) an age requirement of more than 65 years; or "(2) effective July 1,1967, any age requirement which excludes any individual who has not attained the age of 21 and is or would, 78 Stat. 1042. except for the provisions of section 406(a) (2), be a dependent I 2 S ? 6211609. child under title I V ; or . , . . . , "(3) any residence requirement which excludes any individual who resides in the State; or "(4) any citizenship requirement which excludes any citizen of the United States. " ( c ) Notwithstanding subsection ( b ) , the Secretary shall not approve any State plan for medical assistance if he determines that the approval and operation of the plan will result in a reduction in aid or assistance (other than so much of the aid or assistance as is pro- vided for under the plan of the State approved under this title) provided for eligible individuals under a plan of such State approved 42 use 301 et ^^^^^j, ^jtle I , I V , X , X I V , Or X V I . seq.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 349 "PAYMENT TO STATES "SEC. 1903. (a) From the sums appropriated therefor, the Secre- tary (except as otherwise provided m this section and section 1117) P°«'' P- ^^2O. shall pay to each State which has a plan approved under this title, for each quarter, beginning with the quarter commencing January 1, 1966— "(1) an amount equal to the Federal medical assistance per- centage (as defined in section 1905(b)) of the total amoiint expended during such quarter as medical assistance under the State plan (including expenditures for premiums under part B of title X V I I I , for individuals who are recipients of money pay- ^"f^' P- ''oi. ments under a State plan approved under title I, IV, X, X l V , or X V I , and other insurance premiums for medical or any other 120^1 "f35f'VasV' type of remedial care or the cost thereof); plus " (2) an amount equal to 75 per centum of so much of the sums expended during such quarter (as found necessary by the Secre- tary for the proper and efficient administration of the State plan) as are attributable to compensation or training of skilled profes- sional medical personnel, and staff directly supporting such per- sonnel, of the State agency (or of the local agency administering the State plan in the political subdivision); plus " (3) an amount equal to 50 per centum of the remainder of the amounts expended during such quarter as found necessary by the Secretary for the proper and efficient administration of the State plan. "(b) Notwithstanding the preceding provisions of this section, the amount determined under such provisions for any State for any quar- ter which is attributable to expenditures with respect to individuals 65 years of age or older who are patients in institutions for mental diseases shall be paid only to the extent that the State makes a showing satisfactory to the Secretary that total expenditures from Federal, State, and local sources for mental health services (including pay- ments to or in behalf of individuals with mental health problems) under State and local public health and public welfare programs for such quarter exceed the average of the total expenditures from such sources for such services under such programs for each quarter of the fiscal year ending June 30, 1965. For purposes of this subsection, expenditures for such services for each quarter in the fiscal year ending June 30,1965, in the case of any State shall be determined on the basis of the latest data, satisfactory to the Secretary, available to him at the time of the first determination by him under this subsection for such State; and expenditures for such services for any quarter beginning after December 31,1965, in the case of any State shall be determined on the basis of the latest data, satisfactory to the Secretary, available to him at the time of the determination under this subsection for such State for such quarter; and determinations so made shall be conclusive for purposes of this subsection. " ( c ) ( 1 ) If the Secretary finds, on the basis of satisfactory informa- tion furnished by a State, that the Federal medical assistance percent- age for such State applicable to any quarter in the period beginning January 1, 1966, and ending with the close of June 30, 1969, is less than 105 per centum of the Federal share of medical expenditures by the State during the fiscal year ending June 30,1965 (as determined under paragraph ( 2 ) ) , then 105 per centum of such Federal share shall be the Federal medical assistance percentage (instead of the percentage determined under section 1905(b)) for such State for
350 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. such quarter and each quarter thereafter occurring in such period and prior to the first quarter with respect to which such a finding is not applicable. "(2) For purposes of paragraph (1), the Federal share of medical expenditures by a State during the fiscal year ending J u n e 30, 1965, means the percentage which the excess of— " ( A ) the total of the amounts determined under sections 3, 42 use 303,603, 403, 1003, 1403, and 1603 with respect to expenditures by such 1203, 1353, 1383. State during such year as aid or assistance under its State plans approved under titles I, I V , X , X I V , and X V I , over " ( B ) the total of the amounts which would have been deter- mined under such sections with respect to such expenditures dur- ing such year if expenditures as aid or assistance in the form of medical or any other type of remedial care had not been counted, is of the total expenditures as aid or assistance in the form of medical or any other tjj^pe of remedial care under such plans during such year. " (d) (1) Prior to the beginning of each quarter, the Secretary shall estimate the amount to which a State will be entitled under subsections ( a ) , (b), and (c) for such quarter, such estimates to be based on (A) a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such subsections, and stating the amount appropriated or made available by the State and its political subdivisions for such expendi- tures in such quarter, and if such amount is less than the State's proportionate share of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived, and (B) such other investigation as the Secretary may find necessary. "(2) The Secretary shall then pay to the State, in such installments as he may determine, the amount so estimated, reduced or increased to the extent of any overpayment or underpayment which the Secre- tary determines was made under this section to such State for any prior quarter and with respect to which adjustment has not already been made under this subsection. "(3) The pro rata share to which the United States is equitably entitled, as determined by the Secretary, of the net amount recovered during any quarter by the State or any political subdivision thereof with respect to medical assistance furnished under the State plan shall be considered an overpayment to be adjusted under this subsection. " (4) Upon the making of any estimate by the Secretary under this subsection, any appropriations available for payments under this section shall be deemed obligated. "(e) The Secretary shall not make payments under the preceding ]Drovisions of this section to any State unless the State makes a satis- factory showing that it is making efforts in the direction of broaden- ing the scope of the care and services made available under the plan and in the direction of liberalizing the eligibility requirements for medical assistance, with a view toward furnishing by July 1,1975, com- prehensive care and services to substantially all individuals who meet the plan's eligibility standards with respect to income and resources, including services to enable such individuals to attain or retain inde- ])eiidence or self-care.
79 STAT. ] PUBLIC LAW 89-97-JULY 30,1965 351 "OPERATION OF STATE PLANS "SEC. 1904. If the Secretary, after reasonable notice and opportunity for hearing to the State agency administering or supervising the ad- ministration of the State plan approved under this title, finds— "(1) that the plan has been so changed that it no longer com- plies with the provisions of section 1902; or "(2) that in the administration of the plan there is a failure to comply substantially with any such provision; the Secretary shall notify such State agency that further payments will not be made to the State (or, in his discretion, that payments will be limited to categories under or parts of the State plan not affected by such failure), until the Secretary is satisfied that there will no longer be any such failure to comply. Until he is so satisfied he shall make no further payments to such State (or shall limit payments to categories under or parts of the State plan not affected by such failure). "DEFINITIONS "SEC. 1905. For purposes of this title— "(a) The term 'medical assistance' means payment of part or all of the cost of the following care and services (if provided m or after the third month before the month in which the recipient makes application for assistance) for individuals who are— " ri) under the age of 21, "(ii) relatives specified in section 406(b)(1) with whom a j^tttt^\^g^%o child is living if such child, except for section 406(a) (2), is (or 42 use eoe. would, if needy, be) a dependent child under title IV, „ 78 stat. 1042; U/"K ntf J 1J3 Post, p. 422, (ill) 65 years of age or older, 42 use eo 1-609. "fiv) blind, or "(v) 18 years of age or older and permanently and totally disabled, but whose income and resources are insufficient to meet all of such cost— "(1) inpatient hospital services (other than services in an institution for tuberculosis " ^2) outpatient hospital or mental diseases); services; "(3) other laboratory and X-ray services; "(4) skilled nursing home services (other than services in an institution for tuberculosis or mental diseases) for individuals 21 years of a ^ or older; "(6) physicians' services, whether furnished in the office, the patient's home, a hospital, or a skilled nursing home, or elsewhere; "(6) medical care, or any other tyjpe of remedial care recog- nized under State law, furnished by licensed practitioners withm the scope of their practice as defined by State law; f7) home health care services; ;8) private duty nursing services; 19) clinic services; 10) dental services; ^11^ physical therapy and related services; 12) prescribed drugs, dentures, and prosthetic devices; and eyeglasses prescribed by a physician skilled in diseases of the eye or by an optometrist, whichever the individual may select; " (13) other diagnostic, screening, preventive, and rehabilitative services;
352 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "(14) inpatient hospital services and skilled nursing home serv- ices for individuals 65 years of age or over in an institution for tuberculosis or mental diseases; and "(15) anj other medical care, and any other type of remedial care recognized under State law, specified by the Secretary; except that such term does not include— "(A) any such payments with respect to care or services for any individual who is an inmate of a public institution (except as a patient in a medical institution); or "(B) anv such payments with respect to care or services for any individual who has not attained 65 years of age and who is a patient in an institution for tuberculosis or mentafdiseases. "(b) The term 'Federal medical assistance percentage' for any State shall be 100 per centum less the State percentage; and the State per- centage shall be that percentage which bears the same ratio to 45 per centum as the square of the ^er capita income of such State bears to the square of the per capita income of the continental United States (including Alaska) and Hawaii; except that (1) the Federal medical assistance percentage shall in no case be less than 50 per centum or more than 83 per centum, and (2) the Federal medical assistance per-^ centage for Puerto Rico, the Virgin Islands, and Guam shall be 55 per centum. The Federal medical assistance percentage for any State shall be determined and promulgated in accordance with the provisions 42 u^c u ^1*' ^^ subparagraph (B) of section 1101 (a) (8); except that the Secretary shall promulgate such percentage as soon as possible after the enact- ment of this title, which promulgation shall be conclusive for each of the six quarters in the period beginning January 1, 1966, and ending with the close of June 30,1967." (b) No payment may be made to any State under title I, IV, X, 42 use 301 et XIV, or XVI of the Social Security Act with respect to aid or assist- ^*'^' ance in the form of medical or any other type of remedial care for Ante, p. 343. any period for which such State receives payments under title X I X of such Act, or for any period after December 31, 1969. (c) (1) Effective January 1,1966, section 1101(a) (1) of the Social -rJL^l^^^^I^' Security Act is amended by striking out "and XVI" and inserting in 76 Stat. 20|6. .. . J <; « - V - T T T J -VTV?) 42 use 1301. lieu thereof "XVI, and XIX". 42 use 1^309 (^) Section 1109 of such Act is amended to read as follows: " A M O U N T S DISREGARDED N O T TO BE T A K E N I N T O ACCOUNT I N D E T E R M I N I N G E L I G I B I L I T R OF OTHER INDIVIDUALS "SEC. 1109. Any amount which is disregarded (or set aside for future needs) in determining the eligibility of and amount of the aid or assistance for any individual under a State plan approved under title I, IV, X, XIV, XVI, or X I X shall not be taken mto considera- tion in determining the eligibility of and amount of aid or assistance for any other individual under a State plan approved under any other of such titles." 76 Stat. 192. (3) Effectivo JaixuaTy 1,1966, section 1115 of such Act is amended 42 use 1315. ^y striking out "or XVI", "or 1602", and "or 1603" and inserting in lieu thereof "XVI, or XIX", "1602, or 1902", and "1603, or 1903", respectively.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 353 PAYMENT BY STATES OF PREMIUMS FOR SUPPLEMENTARY MEDICAL INSURANCE SEC. 122. Sections 3 ( a ) , 403(a), 1003(a), 1403(a), and 1603(a) of the Social Security Act are each amended by inserting "premiums 174^ fng^j^^'*' under p a r t B of title X V I I I for individuals who are recipients of 42 use 303', 603, money payments under such plan and other" after "expenditures for" 1203, 1353, isss. in the parenthetical phrase appearing in so much of paragraph (1) thereof as precedes clause ( A ) , and in the parenthetical phrase appearing in paragraph (2) thereof. T I T L E I I — O T H E R A M E N D M E N T S R E L A T I N G TO H E A L T H CARE PART 1—MATERNAL AND CHILD HEALTH AND CRIPPLED CHILDREN'S SERVICES I N C R E A S E I N MATERNAL AND CHILD HEALTH SERVICES SEC. 201. (a) The first sentence of section 501 of the Social Security Act is amended by striking out "$40,000,000" and all that follows and 77 staj. 273. inserting in lieu thereof "$45,000,000 for the fiscal year ending June ^^ ^°^" 30, 1966, $50,000,000 for the fiscal year ending June 30, 1967, $55,000,000 for the fiscal year ending June 30,1968, $55,000,000 for the fiscal year ending June 30, 1969, and $60,000,000 for the fiscal year ending JiHie 30,1970, and each fiscal year thereafter." (b) Section 504 of such Act is amended by adding at the end '•^ ^^^^- ^^°- thereof the loilowmg new subsection: 42 u s e 704. " ( d ) Notwithstanding the preceding provisions of this section, no payment shall be made to any State thereunder for any period after June 30,1966, unless it makes a satisfactory showing that the State is extending the provision of maternal and child health services in the State with a view to making such services available by July 1,1975, to children in all parts of the State." INCREASE I N CRIPPLED CHILDREN'S SERVICES SEC. 202. (a) The first sentence of section 511 of the Social Security Act is amended by striking out "$40,000,000" and all that follows and 77 st^au 273. inserting in lieu thereof "$45,000,000 for the fiscal year ending J u n e "^^ ' ^^^' 30, 1966, $50,000,000 for the fiscal year ending June 30, 1967, $55,000,000 for the fiscal year ending June 30,1968, $55,000,000 for the fiscal year ending J u n e 30, 1969, and $60,000,000 for the fiscal year ending June 30,1970, and each fiscal year thereafter." (b) Section 514 of such Act is amended by adding at the end sg'^ltat^^Is"^' thereof the following new subsection: 42 use 714*. " ( d ) Notwithstanding the preceding provisions of this subsection, no payment shall be made to any State thereunder for any period after June 30, 1966, unless it makes a satisfactory showing that the State is extending the provision of crippled children's services in the State with a view to making such services available by July 1, 1975, to children in all parts of the State." TRAINING OF PROFESSIONAL PERSONNEL FOR THE CARE OF CRIPPLED CHILDREN SEC. 203. (a) P a r t 2 of title V of the Social Security Act is amended ^9 stau 63 u^ ^^ by adding at the end thereof the following new section:
354 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. ('T R A I N I N G OF PROFESSIONAL P E R S O N N E L "SEC. 516. There are authorized to be appropriated $5,000,000 for the fiscal year ending June 30, 1967, $10,000,000 for the fiscal year ending J u n e 30, 1968, and $17,500,000 for each fiscal year thereafter, for grants hj the Secretary to public or other nonprofit institutions of higher learning for training professional personnel for health and related care of crippled children, particularly mentally retarded chil- dren and children with multiple handicaps." 42 u^c 7\^4 ^* (^) '^^^ second sentence of section 514(c) of such Act is amended by striking out "section 512(b)" and inserting in lieu thereof "section 512(b) or 516". P A Y M E N T FOR I N P A T I E N T H O S P I T A L SERVICES 42 us^c 7?3* ^^^' ^9^' (^) Section 503(a) of the Social Security Act is amended by striking out "and" before clause (7) and by inserting before the period at the end thereof the following new clause: " ; and (8) effective July 1,1967, provide for payment of the reasonable cost (as determined in accordance with standards approved by the Secretary and included in the plan) of inpatient hospital services provided under the plan". 42 use 713. ^|3^ Section 513(a) of such Act is amended by striking out "and" before clause (6) and by inserting before the period at the end thereof the following new clause: " ; and (7) effective July 1, 1967, provide for payment of the reasonable cost (as determined in accordance with standards approved by the Secretary and included in the plan) of inpatient hospital services provided under the plan". SPECIAL PROJECT GRANTS FOR H E A L T H OF SCHOOL AND PRESCHOOL CHILDREN 42usc'729^729a. ^^C- ^05. P a r t 4 of title V of the Social Security Act is amended (1) by revising the heading thereof to read as follows: " P A R T 4— GRANTS FOR SPECIAL MATERNITY AND INFANT CARE PROJECTS, FOR PROJECTS FOR HEALTH OF SCHOOL AND PRESCHOOL CHILDREN, AND FOR KESEARCH PROJECTS"; (2) by redesignating section 532 as section 533; and (3) by inserting after section 531 the following new section: "SPECIAL PROJECT GRANTS FOR HEALTH OF SCHOOL AND PRESCHOOL CHILDREN "SEC. 532. (a) I n order to promote the health of children and youth of school or preschool age, particularly in areas with concentra- tions of low-income families, there are authorized to be appropriated $15,000,000 for the fiscal year ending June 30, 1966, $35,000,000 for the fiscal year ending June 30, 1967, $40,000,000 for the fiscal year ending June 30, 1968, $45,000,000 for the fiscal year ending J u n e 30, 1969, and $50,000,000 for the fiscal year ending June 30,1970, for grants as provided in this section. " ( b ) From the sums appropriated pursuant to subsection ( a ) , the Secretary is authorized to make grants to the State health agency of any State and (with the consent of such agency) to the health agency of any political subdivision of the State, to the State agency of the State administering or supervising the administration of the State plan approved under section 513, to any school of medicine (with appropriate participation by a school of dentistry), and to any teach- ing hospital affiliated with such a school, to pay not to exceed 75 per centum of the cost of projects of a comprehensive nature for health
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 355 care and services for children and youth of school age or for preschool children (to help them prepare to start school). No projept shall be eligible for a grant under this section unless it provides (1) for the coordination of health care and services provided under it with, and utilization (to the extent feasible) of, other State or local health, welfare, and education programs for such children, (2) for payment of the reasonable cost (as determined in accordance with standards approved by the Secretary) of inpatient hospital services provided under the project, and (3) that any treatment, correction of defects, or aftercare provided under the project is available only to children who would not otherwise receive it because they are from low-income families or for other reasons beyond their control; and no such project for children and youth of school age shall be considered to be of a comprehensive nature for purposes of this section unless it includes (subject to the limitation in the preceding provisions of this sentence) at least such screening, diagnosis, preventive services, treatment, cor- rection of defects, and aftercare, both medical and dental, as may be provided for in regulations of the Secretary. "(c) Payment of grants under this section may be made (after nec- essary adjustment on account of previously made underpayments or overpayments) in advance or by way of reimbursement, and in such installments and on such conditions, as the Secretary may determine.-' EVALUATION A N D REPORT SEC. 206. The Secretary shall submit to the President for transmis- ^^^^°^^ corress sion to the Congress before July 1,1969, a full report of the adminis- " ^" ongress. tration of the provisions of section 532 of the Social Security Act (as added by section 205 of this Act), together with an evaluation of the program established thereby and his recommendations as to continua- tion of and modifications in that program. INCREASE I N C H I L D WELFARE SERVICES SEC. 207. Section 621 of the Social Security Act is amended by strik- '^^ use 721. ing out "$40,000,000" and all that follows and inserting in lieu thereof "$40,000,000 for the fiscal year ending June 30, 1965, $45,000,000 for the fiscal year ending June 30,1966, $50,000,000 for the fiscal year end- ing June 30,1967, $55,000,000 for the fiscal year ending June 30,1968, $55,000,000 for the fiscal year ending June 30, 1969, and $60,000,000 for the fiscal year ending June 30,1970, and each fiscal year thereafter." D A T CARE SERVICES SEC. 208. ( a ) ( 1 ) P a r t 3 of title V of the Social Security Act is amended by striking out section 527. 76 stat^. iss. (2) The second sentence of section 1108 of such Act is amended by 42 u s e 727. 42 u s e 1.308. striking out "522(a), and 527(a)" and inserting in lieu thereof "and 522(a)" and by striking out " ( o r , in the case of section 527(a), the minimum)". (b) Section 522 of such Act is amended to read as follows: '^'^ ^^^ -'^s "ALLOTMENTS TO STATES "SEC. 522. The sum appropriated pursuant to section 521 for each fiscal year shall be allotted by the Secretary for use by cooperating State public welfare agencies which have plans developed jointly by the State agency and the Secretary, as follows: H e shall allot $70,000
356 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. to each State, and shall allot to each State an amount which bears the same ratio to the remainder of the smn so appropriated for such year as the product of (1) the population of such State under the age of 21 and (2) the allotment percentage of such State (as determined under 42 use 724. section 524) bears to the sum of the corresponding products of all the States." 42 use 723. (c) Section 523(a) (1) (B) of such Act is amended by striking out "and" at the end of clause (lii) and by inserting after clause (iv) the following new clause: "(v) that day care j)rovided under the plan will be provided only in facilities (including private homes) which are licensed by the State, or approved (as meeting the standards established for such licensing) by the State agency responsible for licensing facilities of this type, and", Effective date. (d) The amendments made by this section shall take effect on January 1,1966. PART 2—IMPLEMENTATION OF MENTAL EETTARDATION PLANNING AUTHORIZATION OP APPROPRIATIONS 42 us^c 1^391 ^^^' ?^^' (^) Section 1701 of the Social Security Act is amended bv adding at the end thereof the following new sentence: "There are also authorized to be appropriatedj for assisting such States in initiat- ing the implementation and carrymg out of planning and other steps to combat mental retardation, $2,750,000 for the fiscal year ending J u n e 30,1966, and $2,750,000 for the fiscal year ending June 30,1967.^' 42 use 139 2. (b) xjie first sentence of section 1702 of such Act is amended by inserting "the first sentence of" before "section 1701" and by inserting the following before the period at the end thereof " ; and the sums appropriated pursuant to the second sentence of such section for the fiscal year ending June 30, 1966, shall be available for such grants during such year and the next two fiscal years, and sums appropriated pursuant thereto for the fiscal year ending June 30, 1967, shall be available for such grants during such year and the succeeding fiscal year". PART 3—PUBLIC ASSISTANCE AMENDMENTS RELATING TO HEALTH CARE REMOVAL o r L I M I T A T I O N S ON FEDERAL PARTICIPATION IN ASSISTANCE TO INDIVIDUALS WITH TUBERCULOSIS OR MENTAL DISEASE ^ 64 s^tat^ M9; SEC. 221. ( a ) ( 1 ) Sectlon 6(a) of the Social Security Act is amended Post^p. 415. to read as follows: 42 use 306. '<(a) For the purposes of this title, the term 'old-age assistance' means money payments to, or (if j)roviaed in or after the third month before the month in which the recipient makes application for assist- ance) medical care in behalf of or any t^pe of remedial care recognized under State law in behalf of, needy individuals who are 65 years of age or older, but does not include any such payments to or care m behalf of any individual who is an inmate of a public institution (except as a patient in a medical institution)." (2) Section 6(b) of such Act is amended by striking out all that follows clause (12) and inserting in lieu thereof the following: "except that such term does not include any such payments with respect to care or services for any individual who is an inmate of a public institution (except as a patient in a medical institution)."
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 357 (8) Section 2(a) of such Act is amended (A) by striking out "and" 4^2 use 3^2' at the end of paragraph (10); (B) by striking out the period at the end of p a r a ^ a p h (11) and inserting in lieu thereof a semicolon; and (C) by adding after paragraph (11) the following new paragraphs: "(12) if the State plan includes assistance to or m bSialf of individuals who are patients in institutions for mental diseases— " ( A ) provide for having in effect such agreements or other arrangements with State authorities concerned with mental diseases, and, where appropriate, with such institu- tions, as may be necessary for carrying out the State plan, including arrangements for joint planning and for develop- ment of alternate methods of care, arrangements providing assurance of immediate readmittance to institutions where needed for individuals under alternate plans of care, and arrangements providing for access to patients and facilities, for furnishing information, and for making reports; " ( B ) provide for an individual plan for each such patient to assure that the institutional care provided to him is in his best interests, including, to that end, assurances that there will be initial and periodic review of his medical and other needs, that he will oe given appropriate medical treatment within the institution, and that there will be a periodic deter- mination of his need for continued treatment in the institution; " ( C ) provide for the development of alternate plans of care, making maximum utilization of available resources^ for recipients vmo would otherwise need care in such institutions, including appropriate medical treatment and other assistance; for services referred to in section 3(a) (4) (A) (i) and (ii) ''^ ^*sc 3^3^' which are appropriate for such recipients and for sucli patients; and for methods of administration necessary to assure that the responsibilities of the State agency under the State plan with respect to such recipients and such patients will be effectively carried out; and " ( D ) provide methods of determining the reasonable cost of institutional care for such patients; and "(13) if the State plan includes assistance to or in behalf of patients in public institutions for mental diseases, show that the State is making satisfactory progress toward developing and implementing a comprehensive mental health program, including l)rovision for utilization of community mental health centers, nursing homes, and other alternatives to care in public institu- tions for mental diseases." (4) Section 3 of such Act is amended by adding at the end thereof yg^ltat^Y//^^' the following new subsection: 42 use 3o'3. " ( d ) Notwithstanding the preceding provisions of this section, the amount determined under such provisions for any State for any quar- ter which is attributable to expenditures with respect to patients in institutions for mental diseases shall be paid only to the extent that the State makes a showing satisfactoir to the Secretary that total expenditures in the State from Federal, State, and local sources for mental health services (including payments to or in behalf of individ- uals with mental health problems) under State and local public health and public welfare programs for such quarter exceed the aver- age of the total expenditures m the State from such sources for such services under such programs for each Quarter of the fiscal year ending June 30,1965. For purposes of this suosection, expenditures for such services for each quarter in the fiscal year ending J u n e 30,1965, in the
358 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. case of any State shall be determined on the basis of the latest data, satisfactor;^ to the Secretary, available to him at the time of the first determination by him under this subsection for such State; and expenditures for such services for any quarter beginning after Decem- ber 31, 1965, in the case of any State shall be determined on the basis of the latest data, satisfactory to the Secretary, available to him at the time of the determination under this subsection for such State for such quarter; and determinations so made shall be conclusive for purposes of this subsection." Pott^T-^416^' i^) Section 1006 of such Act is amended by striking out clauses 42'use 1206. (a) and (b) and inserting in lieu thereof the following: "who is a patient in an institution for tuberculosis or mental diseases". 42 use'1355*. (^) Section 1405 of such Act is amended by striking out clauses (a) and (b) and inserting in lieu thereof the following: "who is a patient in an institution for tuberculosis or mental diseases". plltfIT416^' ( d ) ( 1 ) Section 1605 (a) of such Act is amended to read as follows: 42 use 1385, " ( a ) For purposes of this title, the term 'aid to the aged, blind, or disabled' means money payments to, or (if provided in or after the third month before the month in which the recipient makes application for aid) medical care in behalf of or any type of remedial care recog- nized under State law in behalf of, needy individuals who are 65 years of age or older, are blind, or are 18 years of age or over and perma- nently and totally disabled, but such term does not include— "(1) any such payments to or care in behalf of any individual who is an inmate of a public institution (except as a patient in a medical institution); or "(2) any such payments to or care in behalf of any individual who has not attained 65 jedivs of age and who is a patient in an institution for tuberculosis or m e n t S diseases." (2) Section 1605 (b) of such Act is amended by striking out all that follows clause (12) and inserting in lieu thereof the following: "except that such term does not include any such payments with respect to care or services for any individual who is an inmate of a public institution (except as a patient in a medical institution)." (3) Section 1602(a) of such Act (as amended by section 403(e) of Post, p. 418. this Act) is amended (A) by striking out "and" at the end of para- graph (14); (B) by striking out the period at the end of paragraph (15) and inserting in lieu thereof a semicolon; and (C) by adding after paragraph (15) the following new paragraphs: " (16) if the State plan includes aid or assistance to or in behalf of individuals 65 years of age or older who are patients in insti- tutions for mental diseases— " (A) provide for having in effect such agreements or other arrangements with State authorities concerned with mental diseases, and, where appropriate, with such institutions, as may be necessary for carrying out the State plan, including arrangements for joint planning and for development of alternate methods of care, arrangements providing assurance of immediate readmittance to institutions where needed for individuals under alternate plans of care, and arrangements providing for access to patients and facilities, for furnishing information, and for making reports; " ( B ) provide for an individual plan for each such patient to assure that the instit-itional care provided to him is in his best interests, including, to that end, assurances that there will be initial and periodic review of his medical and other needs, that he will oe given appropriate medical treatment
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 359 within the institution, and that there will be a periodic determination of his need for continued treatment in the institution; " ( C ) provide for the development of alternate plans of care, making maximum utilization of available resources, for recipients 65 years of age or older who would otherwise need care in such institutions, including appropriate medi- cal treatment and other aid or assistance; for services referred to in section 1603(a)(4)(A) (i) and (ii) which 76 stat. 200. are appropriate for such recipients and for such patients; '^^ ^^^^' and for methods of administration necessary to assure that the responsibilities of the State agency under the State plan with respect to such recipients and such patients will be effectively carried out; and " ( D ) provide methods of determining the reasonable cost of institutional care for such patients; and "(17) if the State plan includes aid or assistance to or in behalf of individuals 65 years of a^e or older who are patients in public institutions for mental diseases, show that the State is making satisfactory progress toward developing and imple- menting a comprehensive mental health program, including provision for utilization of community mental health centers, nursing homes, and other alternatives to care in public institu- tions for mental diseases." (4) Section 1603 of such Act is amended by adding at the end thereof the following new subsection: " ( d ) Notwithstanding the preceding provisions of this section, the amount determined under such provisions for any State for any quarter which is attributable to expenditures with respect to in- dividuals 65 years of age or older who are patients in institutions for mental diseases shall be paid only to the extent that the State makes a showing satisfactory to the Secretary that total expenditures in the State from Federal, State, and local sources for mental health services (including payments to or in behalf of individuals with mental health problems) under State and local public health and public welfare programs for such quarter exceed the average of the total expenditures in the State from such sources for such services under such programs for each quarter of the fiscal year ending June 30,1965. For purposes of this subsection, expenditures for such services for each quarter in the fiscal year ending J u n e 30, 1965, in the case of any State shall be determined on the basis of the latest data, satisfactory to the Secretary, available to him at the time of the first determination by him under this subsection for such State; and expenditures for such services for any quarter beginning after December 31, 1965, in the case of any State shall be determined on the basis of the latest data, satisfactory to the Secretary, available to him at the time of the determination under this subsection for such State for such quarter; and determina- tions so made shall be conclusive for purposes of this subsection.'' (e) The amendments made by this section shall apply in the case of expenditures made after D u m b e r 31, 1965, under a State plan approved under title I, X, X I V , or X V I of the Social Security Act. ^2 use 301 et acq.
360 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. AMENDMENT TO DEFINITION OF MEDICAL ASSISTANCE FOR THE AGED 74 Stat. 991. 42 u s e 306. SEC. 222. (a^ Section 6(b) of the Social Security Act is amended by striking out "who are not recipients of old-age assistance" and in- serting in lieu thereof "who are not recipients of old-age assist- ance (except, for any month, for recipients of old-age assistance who are admitted to or discharged from a medical institution during such month)". 76 Stat, 204. (b) Section 1605(b) of such Act is amended by striking out "who 42 u s e 1385. are not recipients of aid to the a ^ d , blind, or disabled" and inserting in lieu thereof "who are not recipients of aid to the aged, blind, or disabled (except, for any month, for recipients of aid to the aged, blind, or disabled who are admitted to or discharged from a medical institu- tion during such month)". (c) The amendments made by this section shall apply in the case of expenditures under a State plan approved under title I or XVI of 42 u s e 301, 1385. the Social Security Act with respect to care and services provided under such plan after June 1965. PART 4—MISCELLANEOUS AMENDMENTS RELATING TO HEALTH CARE H E A L T H STUDY O F RESOURCES RELATING TO CHILDREN'S EMOTIONAL ILLNESS Program grants. ggc. 231. (a) Tlio Secretary of Health, Education, and Welfare is authorized, upon the recommendation of the National Advisory Mental Health Council and after securing the advice of experts in pediatrics and child welfare, to make grants for carrying out a pro- gram of research into and study of our resources, methods, and prac- tices for diagnosing or preventing emotional illness in children and of treating, caring for, and rehabilitating children with emotional illnesses. (b) Such grants may be made to one or more organizations, but only on condition that the organization will undertake and conduct, or if more than one organization is to receive such grants, only on condition that such organizations have agreed among themselves to imdertake and conduct, a coordinated program of research into and study of all aspects of the resources, methods, and practices referred to in subsection (a). "Organization.'* (c) As used m subsection (b), the term "organization" means a nongovernmental agency, or^nization, or commission, composed of representatives of leading national medical, welfare, educational, and other professional associations, organizations, or agencies active in the field of mental health of children. Appropriation. (d) There are authorized to be appropriated for the fiscal year ending June 30, 1966, the sum of $500,000 to be used for a grant or grants to help initiate the research and study provided for in this section; and the sum of $500,000 for the succeeding fiscal year for the making of such grants as may be needed to carry the research and Reports to eon- study to completion. The terms of any such grant shall provide that gress. the research and study shall be completed not later than two years from the date it is inaugurated; that the grantee shall file annual reports with the Congress, the Secretary, and the Governors of the several States, among others that the grantee may select; and that the final report shall be similarly filed.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 361 TITLE III—SOCIAL SECUEITY AMENDMENTS SHORT TITLE Old-Age, Sur- SEO. 300. This title may be cited as the "Old-Age, Survivors, and vivors, ancJ D i s - Disability Insurance Amendments of 1965". ability Insurance Amendments of 1965. INCREASE I N OLD-AGE, SURVIVORS, AND D I S A B I U T T I N S U R A N C E BENEFITS SEC. 301. (a) Section 215(a) of the Social Security Act is amended 72 Stat. 1014. 42 u s e 415. by striking out the table and inserting in lieu thereof the following: "TABLE FOB DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS "I II m IV V (Primary (Primary Insurance benefit insurance (Primary (Maximum under 1939 Act, as modi- amount (Average monthly wage) insurance family fied) under 1958 amount) benefits) Act, as modified) If an individual's primary Or his average monthly And the maxi- insurance benefit (as de- Or his wage (as determined mum amount termined under subsec. primary under subsec. (b)) is— The amount of benefits (d))is- insurance referred to in payable (as amount provided in the preceding sec. (as deter- paragraphs of 203(a)) on mined this subsection thewages basis of his But not under But not shall be— and At least— more than— subsec. At least— more than— self-employ- (c)) i s - ment income shall be— $13.48 $40 $67 $44.00 $66.00 $13.49 14.00 41 $68 69 45.00 67.50 14.01 14.48 42 70 70 46.00 69.00 14.49 16.00 43 71 72 47.00 70.60 15.01 15.60 44 73 74 48.00 72.00 16.61 16.20 45 76 76 49.00 73.60 16.21 16.84 46 77 78 50.00 75.00 16.86 17,60 47 79 80 51.00 76.50 17.61 18.40 48 81 81 52.00 78.00 18.41 19.24 49 82 83 63.00 79.50 19.26 20.00 50 84 85 54.00 81.00 20.01 20.64 51 86 87 55.00 82.60 20.65 21.28 52 88 89 56.00 84.00 21.29 21.88 53 90 90 57.00 85.60 21.89 22.28 64 91 92 58.00 87.00 22.29 22.68 66 93 94 59.00 88.50 22.69 23.08 56 95 96 60.00 90.00 23.09 23.44 57 97 97 61.00 91.60 23.45 23.76 58 98 99 62.10 93.20 23.77 24.20 59 100 101 63.20 9180 24.21 24.60 60 102 102 64.20 96.30 24.61 25.00 61 103 104 65.30 98.00 25.01 25.48 62 105 106 66.40 99.60 26.49 25.92 63 107 107 67.50 101.30 26.93 26.40 64 108 109 68.50 102.80 26.41 26.94 66 110 113 69.60 104.40 26.95 27.46 66 114 118 70.70 106.10 27.47 28.00 67 119 122 71.70 107.60 28.01 28.68 68 123 127 72.80 109.20 28.69 29.26 69 128 132 73.90 110.90 29.26 29.68 70 133 136 74.90 112.40 29.69 30.36 71 137 141 76.00 11400 30.37 30.92 72 142 146 77.10 116.80 30.93 31.36 73 147 150 78.20 120.00 31.37 32.00 74 151 155 79.20 124.00 32.01 32.60 76 156 160 80.30 128.00 32.61 33.20 76 161 164 81.40 131.20 33.21 33.88 77 165 169 82.40 135.20 33.89 34.50 78 170 174 83.60 139.20 34.61 35.00 79 175 178 84.60 142.40 36.01 35.80 80 179 183 85.60 146.40 35.81 36.40 81 184 188 86.70 160.40 36.41 37.08 82 189 193 87.80 154.40 37.09 37.60 83 194 197 88.90 157.60 37.61 38.20 84 193 202 89.90 161.60 38.21 39.12 86 203 207 91.00 165.60 39.13 39.68 86 208 211 92.10 168.80 39.69 40.33 87 212 216 93.10 172.80 40.34 41.12 88 217 221 94.20 176.80 41.13 41.76 89 222 225 95.30 180.00 4L77 42.44 90 226 230 9&30 184.00 42.46 43.20 91 231 236 97.40 188.00 49-850 0-66—26
362 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "TABLE FOR D E T E R M I N I N G P R I M A R Y I N S U R A N C E A M O U N T A N D MAXIMUM FAMILY BENEFITS—Continued "I II III IV V (Primary (Primary insurance benefit Insurance (Primary (Maximum under 1939 Act, as modi- amount (Average m o n t h l y wage) insurance family fied) under 1958 amount) benefits) Act, as modified) If an individual's primary Or his average m o n t h l y A n d the maxi- Insurance benefit (as de- Or his wage (as determined m u m amount termined under subsec. primary under subsec. (b)) is— of benefits insurance The amount (d)) i s - referred to in payable (as amount provided in (as deter- the preceding mined paragraphs of sec. 203(a)) on this subsection the basis of his But not under B u t not wages and subsec. shall be— A t least— more than— A t least— more than— self-employ- (c)) i s - m e n t income shall be— $43.21 $43.76 $92 $236 $-239 $98.50 $191.20 43.77 4144 93 240 244 99.60 195.20 44.45 44.88 94 246 249 100.60 199.20 44.89 45.60 95 250 253 101.70 202.40 96 264 268 102.80 206.40 97 269 263 103.80 210.40 98 264 267 104.90 213.60 99 268 272 106.00 217.60 100 273 277 107.00 221.60 101 278 281 108.10 224.80 102 282 286 109.20 228.80 103 287 291 110.30 232.80 104 292 295 111.30 236.00 106 296 300 112.40 240.00 106 301 306 113.50 244.00 107 306 309 114.60 247.20 108 310 314 115.60 251.20 109 316 319 116.70 255.20 110 320 323 117.70 258.40 111 324 328 118.80 262.40 112 329 333 119.90 266.40 113 334 337 121.00 269.60 114 338 342 122.00 273.60 116 343 347 123.10 277.60 116 348 351 124.20 280.80 117 352 356 125.20 284.80 118 357 361 126.30 288.80 119 362 366 127.40 292.00 120 366 370 128.40 296.00 121 371 376 129.50 298.00 122 376 379 130.60 299.60 123 380 384 131.70 301.60 124 386 389 132.70 303.60 125 390 393 133.80 305.20 126 394 398 134.90 307.20 127 399 403 135.90 309.20 404 407 137.00 310.80 408 412 138.00 312.80 413 417 139.00 314.80 418 421 140.00 316.40 422 426 141.00 318.40 427 431 142.00 320.40 432 436 143.00 322.40 437 440 144.00 324.00 441 446 146.00 326.00 446 450 146.00 328.00 461 454 147.00 329.60 456 459 148.00 331.60 460 464 149.00 333.60 465 468 150.00 335.20 469 473 151.00 337.20 474 478 152.00 339.20 479 482 163.00 340.80 483 487 154.00 342.80 488 492 156.00 344.80 493 496 156.00 346.40 497 501 167.00 348.40 602 506 168.00 350.40 607 510 159.00 362.00 511 516 160.00 364.00 616 620 161.00 356.00 621 624 162.00 367.60 625 529 163.00 359.60 630 634 164.00 361.60 635 538 166.00 363.20 639 643 166.00 366.20 644 648 167.00 367.20 649 660 168.00 368.00"
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 363 (b) Section 215(c) of such Act is amended to read as follows: ^ ^^^ ^^f^^^- "Primary Insurance Amount Under 1958 Act, as Modified "(c) (1) F o r the purposes of column I I of the table appearing in subsection (a) of this section, an individual's primary insurance amount shall be computed as provided in, and subject to the limita- tions specified in, (A) this section as in effect prior to the enactment of the Social Security Amendments of 1965, and (B) the applicable provisions of the Social Security Amendments of 1960. '^'* s*^*- 5'24. "(2) The provisions of this subsection shall be applicable only in note. the case of an individual who became entitled to benefits under section 202(a) or section 223 before the date of enactment of the Social ^Q^staS^si?^' Security Amendments of 1965 or who died before such date." 42 use 402,423. (c) Section 203(a) of such Act is amended by striking out para- pj|^^*^*' ^°^'^' graphs (2) and (3) and inserting in lieu thereof the following: °4Vusc 403. "(2) when two or more persons were entitled (without the ap- plication of section 2 0 2 ( j ) ( l ) and section 223(b)) to monthly benefits under section 202 or 223 for any month which begins after December 1964 and before the enactment of the Social Security Amendments of 1965, on the basis of the wages and self- employment income of such insured individual, such total of benefits for any month occurring after December 1964 shall not be reduced to less than the larger of— " ( A ) the amount determined under this subsection with- out regard to this paragraph, or " ( B ) (i) with respect to the month in which such Amend- ments are enacted or any prior month, an amount equal to the sum of the amounts derived by multiplying the benefit amount determined under this title (including this subsec- tion, but without the application of section 222(b), section 202(q), and subsections ( b ) , (c), and (d) of this section), ^H^^^^^l^'^' as in effect prior to the enactment of such Amendments, 42 use 422,402. for each such person (other than a person who would not be entitled to such benefits for such month without the appli- cation of the amendments made by section 306 of the Social Security Amendments of 1965), for such month, by 107 per- cent and raising each such increased amount, if it is not a mul- tiple of $0.10, to the next higher multiple of $0,10, and "(ii) with respect to any month after the month in which such Amendments are enacted, an amount equal to the sum of the amounts derived by multiplying the benefit amount determined under this title (including this subsection, but without the application of section 222(b), section 202 (q), and subsections ( b ) , (c), and (d) of this section), as in effect prior to the enactment of such Amendments, for each such person (other than a person who would not be entitled to such benefits for such month without the application of the amendments made by section 306 of the Social Security Amendments of 1965) for the month of enactment, by 107 percent and raising each such increased amount, if it is not a multiple of $0.10, to the next higher multiple of $0.10; but in any such case ( I ) paragraph (1) of this subsection shall not be applied to such total of benefits after the application of subparagraph (B) of this paragraph, and ( I I ) if section 202(k) (2) (A) was applicable in the case of any of such benefits for any ^^ ^^^ ^^^j- such month b%inniiig before the enactment of the Social Secu-
364 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. rity Amendments of 1965, and ceases to apply after such month, the provisions of subparagraph (B) shall be applied, for and 42 use 40 2. after the month in which such section 202(k) (2) (AJ ceases to apply, as though paragraph (1) had not been applicable to such total of benefits for such month beginning prior to such enact- ment." (d) The amendments made by subsections ( a ) , ( b ) , and (c) of this section shall apply with respect to monthly benefits under title I I of 42 use 401. ^i^e Social Security Act for months after December 1964 and with respect to lump-sum death payments under such title in the case of deaths occurring in or after the month in which this Act is enacted. (e) If an individual is entitled to a disability insurance benefit under 42 u'sc 423^' section 223 of the Social Security Act for December 1964 on the basis of an application filed after enactment of this Act and is entitled to 42 use 402. old-age insurance benefits under section 202 (a) of such Act for January 1965, then, for purposes of section 215(a) (4) of the Social Security ^75 Stat. 135: \(.t (if applicable) the amount in column I V of the table appearing 42 u^e 415. iu such section 215 (a) for such individual shall be the amount in such Ante, p. 361. columu ou the line on which in column I I appears his primary insur- ance amount (as determined under section 215(c) of such Act) instead of the amount in column I V equal to his disability insurance benefit. C O M P U T A T I O N A N D R E C O M P U T A T I G N OF B E N E F I T S SEC. 302. (a) (1) Subparagraph (C) of section 215 (b) (2) of the 74 Stat. 960. Social Sccurity Act is amended to read as follows: " ( C ) F o r purposes of subparagraph (B),'computation base years' include only calendar years in the period after 1950 and prior to the earlier of the following years— "(i) the year in which occurred (whether by reason of section 42 use 402* ^02 (j) (1) or otherwise) the first month for which the individual was entitled to old-age insurance benefits, or "(ii) the year succeeding the year in which he died. Any calendar year all of which is included in a period of disability shall not be included as a computation base year." (2) Clauses ( A ) , ( B ) , and (C) of the first sentence of section 75 Stat. 135. 2 1 5 ( b ) (3) of such A c t a r e a m e n d e d t o r e a d as follows: " ( A ) in the case of a woman, the year in which she died or, if it occurred earlier but after 1960, the year in which she attained age 62, " ( B ) in the case of a man who has died, the year in which he died or, if it occurred earlier but after 1960, the year in which he attained age 65, or " ( C ) in the case of a man who has not died, the year occurring after 1960 in which he attained (or would attain) age 65." 74 Stat. 960. (3) Paragraphs (4) and (5) of section 215(b) of such Act are amended to read as follows: "(4) The provisions of this subsection shall be applicable only in the case of an individual— " ( A ) who becomes entitled, after December 1965, to benefits 64 Stat. 482; uuder scctiou 202 (a) or section 223; or '4fus'c402,423. "(I^) ^ h o dies after December 1965 without being entitled to benefits under section 202 (a) or section 223; or " ( C ) whose primary insurance amount is required to be recom- puted under subsection (f) (2), as amended by the Social Security Post, p. 365. Amendments of 1965; except that it shall not apply to any such individual for purposes of monthly benefits for months before Januarv 1966.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 365 "(5) For the purposes of column I I I of the table appearing in subsection (a) of this section, the provisions of this subsection, as in effect prior to the enactment of the Social Security Amendments of 1965, shall apply— "(A) in the case of an individual to whom the provisions of this subsection are not made applicable by paragraph (4), but who, on or after the date of the enactment of the Social Security Amendments of 1965 and prior to 1966, met the requirements of this paragraph or paragraph (4), as in effect prior to such enact- ment, and "(B) with respect to monthly benefits for months before Jan- uary 1966, in the case of an individual to whom the provisions of this subsection are made applicable by paragraph (4)." (b)(1) Subparagraph (A) of section 215(d)(1) of such Act is 42usc4.f5' amended by striking out "(2) (C) (i) and (3) (A) (i)" and inserting in lieu thereof "(2)(C) and (3)", by stnking out "December 31, 1936," and inserting in lieu thereof "1936", and by striking out "De- cember 31, 1950" and inserting in lieu thereof "1950". (2) Section 215(d)(3) of such Act is amended by striking out "1960" and inserting in lieu thereof "1965" and by stnking out "but without regard to whether such individual has six quarters of coverage after 1950'T (c) Section 215 (e) of such Act is amended by inserting "and" ^"^ ^*^*- ^°^- after the semicolon at the end of paragraph (1), by striking out " ; and" at the end of paragraph (2) and inserting in lieu thereof a period, and by striking out paragraph (3). (d) (1) Paragraph (2) of section 215(f) of such Act is amended ^^ ^'^'' i°^^- to read as follows: " (2) With respect to each year— " (A) which begins after December 31,1964, and "(B) for any part of which an individual is entitled to old-age insurance benefits, the Secretary shall, at such time or times and within such period as he may by regulations prescribe, recompute the primary insurance amount of such individual. Such recomputation shall be made— "(C) as provided in subsection (a) (1) and (3) if such year is either the year in which he became entitled to such old-age in- surance benefits or the year preceding such year, or "(D) as provided in subsection (a) (1) in any other case; and in all cases such recomputation shall be made as though the year with respect to which such recomputation is made is the last year of the period specified in paragraph (2) (C) of subsection (b). A re- computation under this paragraph with respect to any year shall be effective— "(E) in the case of an indiddual who did not die in such year, for monthly benefits beginning with benefits for January of the following year; or "(F) in the case of an individual who died in such year (in- cluding any individual whose increase in his primary insurance amount is attributable to compensation which, upon his death, is treated as remuneration for employment under section 205 (o)), ^^ ^^^ ^^°' for monthly benefits beginning with benefits for the month in which he died." (2) Effective January 2, 1966, paragraphs (3), (4), and (7) of such section are repealed, and paragraphs (5) and (6] of sucli section are redesignated as paragraphs (3) and (4), respectively.
366 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. pJ4^Stat. 964; (e)(1) The first sentence of section 223(a)(2) of such Act is V2 u^c 423. amended by inserting before the period at the end thereof "and was entitled to an old-a^e insurance benefit for each month for which (pursuant to subsection (b)) he was entitled to a disability insurance benefit". (2) The last sentence of section 223(a) (2) of such Act is amended by striking out "first year" and inserting in lieu thereof "year"; and by striking out the phrase "both was fully insured and had" both times it appears in such sentence. ( f ) ( 1 ) T h e amendments made by subsection (c) shall apply only to individuals who become entitled to old-age insurance benefits under It use 40 2.* section 202(a) of the Social Security Act after 1965. (2) Any individual who would, upon filing an application prior to January 2,1966, be entitled to a recomputation of his monthly benefit 42 use 401. amount for purposes of title I I of the Social Security Act shall be deemed to have filed such application on the earliest date on which such application could have been filed, or on the day on which this Act is enacted, whichever is the later. (3) I n the case of an individual who died after 1960 and prior to 1966 and who was entitled to old-age insurance benefits under section 202(a) of the Social Security Act at the time of his death, the provi- es^staTioe"' ^^^^^ ^* sections 215(f) (3) (B) and 215(f) (4) of such Act as in effect before the enactment of this Act shall apply. (4) I n the case of a man who attains age 65 prior to 1966, or dies before such year, the provisions of section 215(f) (Y) of the Social Security Act as in effect before the enactment of this Act shall apply. (5) The amendments made by subsection (e) of this section shall apply in the case of individuals who become entitled to disability 42 use 423' insurance benefits under section 223 of the Social Security Act after December 1965. 74 Stat. 964. - (6) Section 303(g) (1) of the Social Security Amendments of 1960 42USC415note. . ^ ' j -, ^'^^ ^ ' '^ IS amended— (A) by striking out "notwithstanding the amendments made by the preceding subsections of this section," in the first sentence and inserting in lieu thereof "notwithstanding the amendments made by the preceding subsections of this section, or the amend- ments made by section 302 of the Social Security Amendments of 1965,"; and (B) by striking out "Social Security Amendments of 1960," in the second sentence and inserting in lieu thereof "Social Secu- rity Amendments of 1960, or (if such individual becomes entitled to old-age insurance benefits after 1965, or dies after 1965 without becoming so entitled) as amended by the Social Security Amend- ments of 1965,". R^'p^^i- (7) Effective January 2, 1966, subparagraph (B) of section 42usc*4i^5loU ^02 (f) (2) of the Social Security Amendments of 1954 is repealed. DISABILrrT INSURANCE BENEFITS SEC. 303. (a) (1) Clause (A) of the first sentence of section 216(1) 68 Stat. 1080. ^j) Qf ^^Q Social Security Act is amended by striking out "or to be 42 use 4 6. ^£ long-continued and indefinite duration" and inserting in lieu thereof "or has lasted or can be expected to last for a continuous period of not less than 12 months".
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 367 (2) So much of section 223 (c) (2) of such Act as precedes the second pj°,^^^\il^' sentence thereof is amended to read as follows: 42 use 423. "(2) The term'disability'means— " ( A ) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impair- ment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months; or". (b)(1) Paragraph (2) of section 216(i) of such Act is amended ^°usc4]i6°' to read as follows: "Period of dis- "(2) (A) The term 'period of disability' means a continuous period ability." (beginning and ending as hereinafter provided in this subsection) during which an individual was under a disability (as defined in paragraph ( 1 ) ) , but only if such period is of not less than 6 full calendar months' duration or such individual was entitled to benefits under section 223 for one or more months in such period. '^^ use 423, " ( B ) No period of disability shall begin as to any individual unless such individual files an application for a disability determination with respect to such period; and no such period shall oegin as to any indi- vidual after such individual attains the age of 65. " ( C ) A period of disability shall begin— " ( i ) on the day the disability began, but only if the individual satisfies the requirements of paragraph (3) on such day; or '(ii) if such individual does not satisfy the requirements of paragraph (3) on such day, then on the first day of the first quar- ter thereafter in w^hich he satisfies such requirements. " ( D ) A period of disability shall end with the close of whichever of the following months is the earlier: (i) the month preceding the month in which the individual attains age 65, or (ii) the second month following the month in which the disability ceases. " ( E ) No application for a disability determination which is filed more than 12 months after the month prescribed by subparagraph (D) as the month in which the period of disability ends (determined with- out regard to subparagraph (B) and this subparagraph) shall be accepted as an application for purposes of this paragraph." (2) Section 216(i) (3) of such Act is amended by^ striking out p^^,^^^\^^^^ "clauses (A) and (B) of paragraph ( 2 ) " and inserting in lieu thereof ' ^' "clauses (i) and (ii) of paragraph (2) ( C ) " . (3) Subparagraph (D) of section 223 ( a ) ( 1 ) of such Act is amended p^^^^^ ^A^ by striking out "at the time such application is filed,". So much of ' P- • such section 223(a) (1) as follows subparagraph (D) is amended by striking out "the first month for which he is entitled to old-age insur- ance benefits,". (4) Section 223(c) (3) (A) of such Act is amended by striking out ^2 stau ^1020 "which continues until such application is filed". (c) Section 223(b) of such Act is amended by striking out the last sentence and inserting in lieu thereof the following: "An individual who would have been entitled to a disabilitv insurance benefit for any month had he filed application therefor before the end of such month shall be entitled to such benefit for such month if he files such applica- tion before the end of the 12th month immediately succeeding such month." (d) The second sentence of section 202( j) (1) of such Act is amended ^^ ^*|'!: '**,^- by inserting "under this title" after "Any benefit". (e) So much of section 215(a)(4) of such Act as precedes "the pj^^^*^** ^^^' amount in column I V " is amended to read as follows: 42 u^'c 415. " (4) In the case of an individual who was entitled to a disability insurance benefit for the month before the month in which he died, became entitled to old-age insurance benefits, or attained age 65,".
368 PUBLIC LAW 89-97-JULY 30, 1965 [79 SlA_T. (f) (1) The amendments made by subsection (a), paragraphs (3) and (4) of subsection (b), and subsections (c) and (d), and the pro- Ante, p. 367. visions of subparagraphs (B) and (E) of section 216 (i) (2) of the Social Security Act (as amended by subsection (b) (1) of this sec- tion), shall be effective with respect to applications for disability insur- 70 Stat. 815. ance benefits under section 223, and for disability determinations under 42 u s e 423. section 216 (i), of the Social Security Act filed— (A) in or after the month in which this Act is enacted, or (B) before the month in which this Act is enacted, if the appli- cant has not died before such month and if— (i) notice of the final decision of the Secretary of Health, Education, and Welfare has not been given to the applicant before such month; or (ii) the notice referred to in subparagraph (i) has been so given before such month but a civil action with respect to such final decision is commenced under section 205(g) of the S3 Stat. 1370. 3cxiial Security Act (whether before, in, or after such month) 42 u s e 405. and the decision in such civil action has not become final before such month; except that no monthly insurance benefits under title I I of the Social Security Act shall be payable or increased by reason of the amend- ments made b j subsections (a) and (b) for months before the second month following the month m which this Act is enacted. The preced- ing sentence shall also be applicable in the case of applications for 42 u s e 401. monthly insurance benefits under title I I of the Social Security Act based on the wages and self-employment income of an applicant with respect to whose application for disability insurance benefits under section 223 of such Act such preceding sentence is applicable. (2) The amendment made by subsection (e) shall apply in the case of the primary insurance amounts of individuals who attain age 65 after the date of enactment of this Act. PAYMENT OF DISABILITY INSURANCE BENEFFTS AFTER ENTITT^MENT TO OTHER MONTHLY INSURANCE BENEFITS 64 Stat. 487. SEC. 304. (a) Section 202(k) of the Social Security Act is amended 42 u s e 402. by adding at the end thereof the following new paragraph: "(4) Any individual who, under this section and section 223, is entitled for any month to both an old-age insurance benefit and a disability insurance benefit under this title shall be entitled to only the larger of such benefits for such month, except that, if such individ- ual so elects, he shall instead be entitled to only the smaller of such benefits for such month." 75 Stat. 131; (b) The heading of section 202 (q) of such Act is amended to read Post, p. 374. as follows: "Reduction of Old-Age, Disability, Wife's, Husband's, or Widow's Insurance Benefit Amounts" (c) Section 202 (q) of such Act is further amended by renumbering paragraphs (2), (3), (4), (5), (6), and (7) as paragraphs (3), (4), (6), (6), (7), and (8), respectively, by renumbering the cross ref- erences in such section accordingly, and by inserting after paragraph (1) the following new paragraph: "(2) If an individual is entitled to a disability insurance benefit for a month after a month for which such individual was entitled to an old-age insurance benefit, such disability insurance benefit for each month shall be reduced by the amount such old-age insurance
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 369 benefit would be reduced under paragraphs (1) and (4) for such month had such individual attained age 65 in the first month for which he most recently became entitled to a disability insurance benefit." (d) Subparagraph (B) of paragraph (3) (as redesignated by sub- section (c) of this section) of section 202 (q) of such Act is amended by— (1) striking out "benefit," the first time it appears and insert- ing in lieu thereof "benefit and is not entitled to a disability insurance benefit,"; . (2) striking out in clause (i) thereof "(1)," and inserting in lieu thereof "(1) for such month,"; and (3) striking out in clause (ii) thereof "(1)" and inserting in lieu thereof "(1) for such month". (e) Subparagraph (C) of paragraph (3) (as redesignated by sub- section (c) of this section) of section 202 (q) of such Act is amended to read as follows: "(C) For any month for which such individual is entitled to a dis- abil^,ty insurance benefit, such individual's wife's, husband's, or widow's insurance benefit shall be reduced by the sum of— "(i) the amount by which such disability insurance benefit is reduced under paragraph (2) for such month (if such paragraph applied to such benefit), and "(ii) the amount bv which such wife's, husband's, or-widow's insurance benefit would be reduced under paragraph (1) for such month if it were equal to the excess of such wife's, husband's, or widow's insurance benefit (before reduction under this subsec- tion) over such disability insurance benefit (before reduction under this subsection)." (f) Paragraph (3) (as redesignated by subsection (c) of this sec- tion) of section 202 (q) is further amended by adding alter subpara- graph (E) (added by section 307(b) (4) of this Act) the following Post, p. 374. new subparagraphs: "(F) If the first month for which an individual is entitled to a dis- ability insurance benefit (when such first month occurs with or after the month in which such individual attains the age of 62) is a month for which such individual is also (or would, but for subsection (e] (1), be) entitled to a widow's insurance benefit to which such individual was first entitled for a month before she attained retirement age, then such disability insurance benefit for each month shall be reduced by whichever of the following is larger: "(i) the amount by which (but for this subparagraph) such disability insurance benefit would have been reduced under para- graph (2), or "(ii) the amount equal to the sum of the amount by which such widow's insurance benefit was reduced for the month in which such individual attained retirement age and the amount by which such disability insurance benefit would be reduced under paragraph (2) if it were equal to the excess of such disability insurance benefit (before reduction under this subsection) over such widow's insurance benefit (before reduction under this subsection). "(G) If the first month for which an individual is entitled to a disability insurance benefit (when such first month occurs before the month in which such individual attains the age of 62) is a month for which such individual is also (or would, but for subsection (e)(1), be) entitled to a widow's insurance benefit, then such disability insur- ance benefit for each montli shall be reduced by the amount ^ c h widow's insurance benefit would be reduced under paragraphs (1) and
370 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. (4) for such month had such individual attained age 62 in the first month for which he most recently became entitled to a disability insur- ance benefit." (g) Paragraph (4) (as redesignated by subsection (c) of this sec- tion) of section 202 (q) of such Act is amended by striking out in sub- paragraph (A) thereof "under" and inserting in lieu thereof: "under paragraph (1) or (3) of". (h) Paragraph (7) (as redesignated by subsection (c) of this section and as amended by section 307(b) (7) of this Act) of section 202 (q) of such Act is amended by adding after subparagraph ( E ) the followingnew subparagraph: " ( F ) in the case of old-age insurance benefits, any month for which such individual was entitled to a disability insurance benefit." (i) Paragraph (8) (as redesignated by subsection (c) of this sec- tion) of section 202 (q) of such Act is amended by striking out "(1)'* and inserting in lieu thereof " ( 1 ) , (2),". 75 Stat. 133. (j) Scction 202(r) (2) of such Act is amended by inserting after inJe! p. ?68. "eligible" the following: " (but for section 202 (k) ( 4 ) ) " . ^A ^^^^'oiy ^' (^) Section 215 (a) (4) of such Act is amended by striking out "such '42*'us"c 415. disability insurance benefit" and inserting in lieu thereof "the primary insurance amount upon which such disability insurance benefit is based". 42 u s e 416. (1) Section 216 (i) (2) of such Act is amended by striking out Ante, p. 367. " (subject to section 223(a) ( 3 ) ) " . 74 Stat. 964; ^^^ (m) Section 223(a) (2) of such Act is amended by striking out the 42^'usc 423. word "Such" and inserting in lieu thereof "Except as provided in section 202(q), such". ^n) Section 223(a) (3) of such Act is repealed. (o) The amendments made by this section shall apply with respect 42 use 401. to monthly insurance benefits under title I I of the Social Security Act for and after the second month following the month in which this Act is enacted, but only on the basis of applications filed in or after the month in which this Act is enacted. D I S A B I L I T Y I N S U R A N C E TRUST F U N D 70 Stat. 8^20. SEC. 305, (a) Section 201(b)(1) of the Social Security Act is amended by inserting "and before January 1,1966," after "December 31, 1956,", and by inserting after "1954," the following: "and 0.70 of 1 per centum of the wages (as so defined) paid after December 31, 1965, and so reported,". (b) Section 201(b) (2) of such Act is amended by inserting after "December 31,1956," the following: "and before January 1,1966, and 0.525 of 1 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after Decem- ber 31,1965,". P A Y M E N T OP C H I L D ' S I N S U R A N C E B E N E F I T S AFTER A T T A I N M E N T OP AGE 1 8 I N CASE OF C H I L D A T T E N D I N G SCHOOL II use ioT' ^^^- ^^^' (^) Section 202(d) (1) (B) of the Social Security Act is amended to read as follows: "(B) at the time such application was filed was unmarried and (i) either had not attained the age of 18 or was a full-time student and had not attained the age of 22, or (ii) is under a disability (as Ant^'^^'VeV defined in section 223(c)) which began before he attained the age of 18, and".
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 371 (b) (1) So much of the first sentence of section 202(d) (1) of such 72 Stat. 1022; Post, p. 397, Act as follows subparagraph (C) is amended to read as follows: 42 u s e 402. "shall be entitled to a child's insurance benefit for each month, begin- ning with the first month after August 1950 in which such child becomes so entitled to such insurance benefits and ending with the month preceding whichever of the following first occurs— "(D) the month in which such child dies, marries, or is adopted (except for adoption by a stepparent, grandparent, aunt^ or uncle subsequent to the death of such fully or currently insured individual), "(E) the month in which such child attains the age of 18, but only if he (i) is not under a disability (as so defined) at the time he attains such age, and (ii) is not a luU-time student during any part of such month, "(F) if such child was not under a disability (as so defined) at the time he attained the age of 18, the earlier oi— "(i) the first month during no part of which he is a full- time student, or "(ii) the month in which he attains the age of 22, or "(G) if such child was under a disability (as so defined) at the time he attained the age of 18, the third month followmg the month in which he ceases to be under such disability or (if later) the earlier of— "(i) the first month during no part of which he is a full- time student, or "(ii) the mon^h in which he attains the age of 22." (2) The second sentence of section 202(d)(1) of such Act is repealed. (3) Section 202(d) of such Act is further amended by adding at the end thereof the fdllowing new paragraphs: "(7) A child whose entitlement to child's insurance benefits on the basis of the wages and self-employment income of an insured individ- ual terminated with the month preceding the month in which such child attained the age of 18, or with a subsequent month, may again become entitled to such benefits (provided no event specified in para- graph (1) (D) has occurred) beginning with the first month thereafter in which he is a full-time student and has not attained the age of 22 if he has filed application for such reentitlement. Such reentitlement shall end with the month preceding whichever of the following first occurs: The first month during no part of which he is a full-time student, the month in which he attains the age of 22, or the first month in which an event specified in paragraph (1) (D) occurs. "(8) For the purposes of this subsection— "(A) A 'full-time student' is an individual who is in full-time "Full-time student." attendance as a student at an educational institution, as deter- mined by the Secretary (in accordance with regulations pre- scribed by him) in the light of the standards and practices of the institutions involved, except that no individual shall be con- sidered a 'full-time studenr if he is paid by his employer while attending an educational institution at the request, or pursuant to a requirement, of his employer. "(B) Except to the extent provided in such regulations, an indi- vidual shall be deemed to be a full-time student during any period of nonattendance at an educational institution at which he has been in full-time attendance if (i) such period is 4 calendar months or less, and (ii) he shows to the satisfaction of the Secre- tary that he intends to continue to be in full-time attendance at an educational institution immediately following such period. An
372 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. individual who does not meet the requirement of clause (ii) with respect to such period of nonattendance shall be deemed to have met such requirement (as of the beginning of such period) if he is in full-time attendance at an educational institution immedi- ately following such period. •'Educational " ( C ) A n 'educational institution' is (i) a school or college or institution." university operated or directly supported by the United States, or by any State or local government or political subdivision thereof, or (ii) a school or college or university which has been approved by a State or accredited by a Stajte-reoo^ized or nationally-recognized accrediting agency or bodv, or (iii) a non- accredited school or college or university whose credits are accepted, on transfer, by not less than three institutions which are so accredited, for credit on the same basis as if transferred from an institution so accredited." 42 u s e 402. (c) (1) Section 202 of such Act is amended by inserting immedi- ately after subsection (r) the following new subsection: "Child Aged 18 or Over Attending School " ( s ) ( l ) F o r the purposes of subsections ( b ) ( 1 ) , ( g ) ( 1 ) , ( q ) ( 5 ) , and (q) (T) of this section and paragraphs (2), (3), and (4) of section 42 u s e 403, 203(c), a child who is entitled to child's insurance benefits under sub- section (d) for any month, and who has attained the age of 18 but is not in such month under a disability (as defined in section 223(c)) which began before he attained such age, shall be deemed not entitled to such benefits for such month, unless he was under such a disability m the third month before such month. "(2) Subsection ( f ) ( 4 ) , and so much of subsections ( b ) ( 3 ) , (d) (6), (e) (3), (g) (3), and (h) (4) of this section as precedes the semi- colon, shall not apply in the case of any child unless such child, at the time of the marriage referred to therein, was under a disability (as Ante, p. 367. defined in section 223(c)) which be^an before such child attained the 42 u s e 423. age of 18 or had been under such a disability in the third month before the month in which such marriage occurred. "(3) Subsections ( c ) ( 2 ) ( B ) and ( f ) ( 2 ) ( B ) of this section, so much of subsections (b) (3), (d) (6), (e) (3), (g) (3), and (h) (4) of this section as follows the semicolon, the last sentence of subsection 74 Stat. 954, (c) of section 203, subsection (f) (1) (C) of section 203, and subsec- 955;Post, p. 373. 42 u s e 403. tions (b) (3) ( B ) , (c) (6) ( B ) , (f) (3) ( B ) , and (g) (6) (B) of section 7 2 Stat. 10 26- 216 shall not apply in the case of any child with respect to any month 1028. 42 u s e 416. referred to therein unless in such month or the third month prior thereto such child was under a disability (as defined in section 223(c)) which began before such child attained the age of 18." 72 Stat. 1026; (2) So much of subsection (c) (2] of such section 202 as precedes Post, p. 405. 42 u s e 402. subparagraph (A) is amended by inserting "(subject to subsection ( s ) ) " after "shall". (3) So much of subsection (d) (6) of such section 202 as follows subparagraph (B) is amended by inserting "but subject to subsection ( s ) " after "notwithstanding the provisions of paragraph (1)". (4) So much of subsection (e)(3) of such section 202 as follows subparagraph (B) is amended by inserting "but subject to subsection ( s ) " after "notwithstanding the provisions of paragraph (1)". (5) So much of subsection (f) (2) of such section 202 as precedes subparagraph (A) is amended by inserting "(subject to subsection ( s ) ) " a f t « r "shall".
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 373 (6) So much of subsection (f) (4) of such section 202 as follows sub- paragraph (B) is amended by inserting "but subject to subsection ( s ) " after "notwithstanding the provisions of p a r a ^ a p h (1)". (7) So much of the first sentence of subsection (g) (1) of such sec- tion 202 as follows subparagraph ( F ) is amended by inserting "(sub- Postf^.^'arff' ject to subsection ( s ) ) " after "shall". 42 use 402. (8) So much of subsection ( g ) ( 3 ) of such section 202 as follows subparagraph (B) is amended by inserting "but subject to subsection ( s ) " after "notwithstanding the provisions of paragraph (1)". (9) So much of subsection (h) (4) of such section 202 as follows ^^ stat. 1032. subparagraph (B) is amended by inserting "but subject to subsection ( s ) " after "notwithstanding the provisions of parEigraph (1)". (10) The next to last sentence of subsection (c) of section 203 of ^^ ^^^ ^''^• such Act is amended by striking out "for any month in which" and inserting in lieu thereof "for any month in which paragraph (1) of section 202 (s) applies or". (11) The last sentence of subsection (c) of such section 203 is amended by striking out "No" and inserting in lieu thereof "Subject to paragraph (3) of such section 202 (s), no". ^"'^' ^- ^'^^' (12) The last sentence of subsection (f)(1) of such section 203 is amended by inserting "but subject to section 202 ( s ) " after "Not- withstanding the preceding provisions of this paragraph". (13) Subsections (b), (c), (f), and (g) of section 216 of such Act Js°^'' ""• ^°^' are each amended by inserting before the period at the end thereof 42 use 416. "(subject, however, to section 202(s))". (14) Section 222(b) of such Act is amended by adding at the end ^^ "^*^ ^22. thereof the following new paragraph : "(4) The provisions of paragraph (1) shall not apply to any child entitled to benefits under section 202(d), if he has attained the age of 3^^"'^' ^^' ^^°' 18 but has not attained the age of 22, for any month during which he 42 use 402. is a full-time student (as defined and determined under section 202(d))." (16) Section 225 of such Act is amended by adding at the end 42u*sc425' thereof the following new sentence: "The first sentence of this section shall not apply to any child entitled to benefits under section 202(d), if he has attained the age of 18 but has not attained the age of 22, for any month during which he is a full-time student (as defined and determined under section 2 0 2 ( d ) ) . " (d) The amendments made by this section shall apply with respect to monthly insurance benefits under section 202 of the Social Security Act for months after December 1964; except that— S'* stat. 482, 42 u s e 402. (1) m the case of an individual who was not entitled to a child's insurance benefit under subsection (d) of such section for the month in which this Act is enacted, such amendments shall apply only on the basis of an application filed in or after the month in which this Act is enacted, and (2) no monthly insurance benefit shall be payable for any month before the second month following the month in which this Act is enacted by reason of section 202(d) (1) (B) (ii) of the Social Security Act as amended by this section. Ante, p . 370. REDUCED B E N E F I T S FOR W m O W S AT AGE 60 SEC. 307, ( a ) ( 1 ) Paragraph (1) (B) of section 202(e) of the Social Security Act (as amended by section 308(b) of this Act) is amended Post, p . 376. by striking out "age 62" and inserting in lieu thereof "age 60". (2) Paragraph (2) of such section (as so amended) is amended by striking out "Such" and inserting in lieu thereof "Except as provided in subsection (q), such".
374 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. 42 use ^^^' (t>) (1) Paragraph (1) of section 202(q) of such Act is amended to read as follows: "(1) I f the first month for which an individual is entitled to an old-age, wife's, husband's, or widow's insurance benefit is a month before the month in which such individual attains retirement age, the amount of such benefit for each month shall, subject to the succeeding paragraphs of this subsection, be reduced by— " ( a ) 5/9 of 1 percent of such amount if such benefit is an old- age or widow's insurance benefit, or 25/36 of 1 percent of such amount if such benefit is a wife's or husband's insurance benefit, multiplied by " (B) (i) the number of months in the reduction period for such benefit (determined under paragraph ( 6 ) ) , if such benefit is for a month before the month in which such individual attains re- tirement age, or "(ii) the number of months in the adjusted reduction period for such benefit (determined under paragraph ( 7 ) ) , if such benefit is for the month in which such individual attains retirement age or for any month thereafter." Ante, p. 368. (£) Paragraph (3) (A) (as renumbered by section 304(c) of this Act) of such section is amended— (A) by striking out "wife's or husband's insurance benefit'^* each place it appears and inserting in lieu thereof "wife's, hus- band's, or widow's insurance benefit"; and (B) by striking out "age 62" and inserting in lieu thereof "age 62 (in the case of a wife's or husband's insurance benefit) or age 60 (in the case of a widow's insurance benefit)". (3) Paragraph ( 3 ) ( D ) (as so renumbered) of such section is amended by striking out "wife's or husband's" and inserting in lieu thereof "wife's, husband's, or widow's". (4) Paragraph (3) (as so renumbered) of such section is amended by adding at the end thereof the following new subparagraph: " ( E ) if the first month for which an mdividual is entitled to an old-age insurance benefit (whether such first month occurs before, with^ or after the month in which such individual attains the age of 65) IS a month for which such individual is also (or would, but for subsection (e) (1), be) entitled to a widow's insurance benefit to Which such individual was first entitled for a month before she attained retirement age, then such old-age insurance benefit shall be reduced by whichever of the following is the larger: "(i) the amount by which (but for this subparagraph) such old-age insurance benefit would have been reduced under para- graph (1), or " (ii) the amount equal to the sum of the amount by which such widow's insurance benefit was reduced for the month in which such individual attained retirement age and the amount by which such old-age insurance benefit would be reduced under para- graph (1) if it were equal to the excess of such old-age insurance benefit (before reduction under this subsection) over such wid- ow's insurance benefit (before reduction under this subsection)." (5) Paragraph (5) (as so renumbered) of such section is amended by adding at the end thereof the following new subj>aragraph: " ( D ) No widow's insurance benefit for a month in which she has in her care a child of her deceased husband (or deceased former hus- band) entitled to child's insurance benefits shall be reduced under this subsection below the amount to which she would have been
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 375 entitled had she been entitled for such month to mother's insurance benefits on the basis of her deceased husband's (or deceased former husband's) wages and self-employment income." (6) Paragraph (6) (as so renumbered) of such section is amended— (A) by striking out "wife's, or husband's" and inserting in lieu thereof "wife's, husband's, or widow's"; (B) by striking out "or husband's" in subparagraph (A) (i) and inserting in lieu thereof ", husband's, or widow's"; and (C) by striking out "age 65" in subparagraph (B) and insert- ingin lieu thereof "retirement age". (7) Paragraph (7) (as so renumbered) of such section is amended— (A) by striking out "wife's, or husband's" and inserting in lieu thereof "wife's, husband's, or widow's"; and (B) by striking out "and" at the end of subparagraph ( B ) , by striking out the period at the end of subparagraph (C) and insert- ing in lieu thereof a comma, and by adding at the end thereof the following new subparagraphs: " ( D ) m the case of widow's insurance benefits, any month in which the reduction in the amount of such benefit was determined under paragraph (5) ( D ) , " ( E ) in the case of widow's insurance benefits, any month before the month in which she attained retirement age for which she was not entitled to such benefit because of the occurrence of an event that terminated her entitlement to such benefits, and". (8) Section 202(q) of such Act (as amended by section 304(c) of this Act) is further amended by adding at the end thereof the ^"'®' P- ^^S- following new paragraph: "(9) For purposes of this subsection, the term 'retirement age' means age 65 with respect to an old-age, wife's, or husband's insurance benefit and age 62 with respect to a widow's insurance benefit." (c) The amendments made by this section shall apply with respect to monthly insurance benefits under section 202 of the Social Security Act for and after the second month following the month in which this ^^ ^*|^- ^^j^^^- Act is enacted, but only on the basis of applications filed in or after the month in which this Act is enacted. WIFE'S AND WIDOW'S BENEFITS FOR DIVORCED WOMEN SEC. 308. (a) Section 202(b) of the Social Security Act is amended to read as follows: "Wife's Insurance Benefits " (b) (1) The wife (as defined in section 216 (b)) and every divorced wife (as defined in section 216(d)) of an individual entitled to old-age f°tTco'/i«^' or disability insurance benefits, if such wife or such divorced wife— 42 u s e 416. " (A) has filed application for wife's insurance benefits, " ( B ) has attained ag:e 62 or (in the case of a wife) has in her care (individually or jointly with such individual) at the time of filing such application a child entitled to a child's insurance benefit on the basis of the wages and self-employment income of such individual, "^C) in the case of a divorced wife, is not married, " ( D ) in the case of a divorced wife, was receiving at least one- half of her support, as determined in accordance with regulations prescribed by the Secretary, from such individual, or was receiv- ing substantial contributions from such individual (pursuant to a written agreement) or there was in effect a court order for substantial contributions to her support from such individual—
376 PUBLIC LAW 89-97~JULY 30, 1965 [79 STAT. "(i) if he had a period of disability which did not end before the month in which he became entitled to old-age or disability insurance benefits, at the beginning of such period or at the time he became entitled to such benefits, or "(ii) if he did not have such a period of disability, at the time he became entitled to old-age msurance benefits, and "(E) is not entitled to old-age or disability insurance benefits, or is entitled to old-age or disability insurance benefits based on a primary insurance amount which is less than one-half of the primary insurance amount of such individual, shall (subject to subsection (s)) be entitled to a wife's insurance bene- fit for each month, beginning with the first month in which she becomes so entitled to such insurance benefits and ending with the month preceding the first month in which any of the following occurs— "(F) she dies, "^G) such individual dies, "(H) in the case of a wife, they are divorced and either (i) she has not attained age 62, or (ii) she has attained age 62 but has not been married to such individual for a period of 20 years imme- diately before the date the divorce became effective, "(I) in the case of a divorced wife, she marries a person other than such individual, " (J) in the case of a wife who has not attained age 62, no child of such individual is entitled to a child's insurance benefit, " (K) she becomes entitled to an old-age or disability insurance benefit based on a primary insurance amount which is equal to or exceeds one-half of the primary insurance amount of such indi- vidual, or "(L) such individual is not entitled to disability insurance benefits and is not entitled to old-age insurance benefits. "(2) Except as provided in subsection (q), such wife's insurance benefit for each month shall be equal to one-half of the primary insur- ance amount of her husband (or, in the case of a divorced wife, her former husband) for such month. "(3) In the case of any divorced wife who marries— "(A) an individual entitled to benefits under subsection (f) or (h) of this section, or "(B) an individual who has attained the age of 18 and is entitled to benefits under subsection (d), such divorced wife's entitlement to benefits under this subsection shall, notwithstanding the provisions of paragraph (1) (but subject to sub- section (s)), not be terminated by reason of such marriage; except that, in the case of such a marriage to an individual entitled to benefits under subsection (d), the precedmg provisions of this paragraph shall not apply with respect to oienefits for months after the last month for which such individual is entitled to such benefits under subsection (d) unless he ceases to be so entitled by reason of his death." 42 use 402. (b) (1) Paragraphs (1) and (2) of section 202(e) of such Act are amended to read as follows: "(1) The widow (as defined in section 216(c)) and every surviving Post, p. 377. divorced wife (as defined in section 216(d)) of an individual who died a fully insured individual, if such widow or such surviving divorced wife— "(A) is not married, "(B) has attained age 62,
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 377 " ( 0 ) (i) has filed application for widow's insurance benefits, or was entitled, after attainment of age 62, to wife's insurance bene- fits, on the basis of the wages and self-employment income of such individual, for the month preceding the month in which he died, or "(ii) was entitled, on the basis of such wages and self-employ- ment income, to mother's insurance benefits for the month pre- ceding the month in which she attained age 62, "(D) in the case of a surviving divorced wife who was not entitled to wife's insurance benefits on the basis of the wages and self-employment iilcome of such individual for the month pre- ceding the month in which he died, was receiving at least one-half of her support, as determined in accordance with regulations pre- scribed by the Secretary, from such individual, or was receiving substantial contributions from such individual (pursuant to a written agreement) or there was in effect a court order for sub- stantial contributions to her support from such individual— "(i) at the time of his aeath (or, if such individual had a period of disability which did not end prior to the month in which he died, at the time such period began or at the time of his death), or "(ii) at the time he became entitled to old-age insurance benefite or disability insurance benefits (or, if such individual had a period of disability which did not end before the month in which he became entitled to such benefits, at the time such g eriod began or at the time he became entitled to such bene- ts),and "(E) is not entitled to old-age insurance benefits or is entitled to old-age insurance benefits each of which is less than 821/^ percent of the primary insurance amount of such deceased individual, shall be entitled to a widow's insurance benefit for each month, beginning with the first month in which she becomes so entitled to such insurance benefits and ending with the month preceding the first month in which any of the following occurs: she remarries, dies, or becomes entitled to an old-age insurance benefit equal to or exceeding 82i/^ percent of the primary insurance amount of such deceased individual. "(2) Such widow's insurance benefit for each month shall be equal to 8214 percent of the primary insurance amount of such deceased individual." (2) Paragraph (3) of section 202(e) of such Act is repealed. 42 use 402. (3) Section 202(e) of such Act is amended by redesignating paragraph (4) as paragraph (3) and such paragraph is further amended by striking out "widow" and inserting in lieu thereof "widow or surviving divorced wife" and by striking out "widow's" and inserting in lieu thereof "widow's or surviving divorced wife's". (c) Section 216(d) of such Act is amended to read as follows: H ^^^ 4f6^^' "Divorced Wives; Divorce "(d) (1) The term 'divorced wife' means a woman divorced from an individual, but only if she had been married to such individual for a period of 20 years immediately before the date the divorce became effective. "(2) The term 'surviving divorced wife' means a woman divorced from an individual who has died, but only if she had been married to the individual for a period of 20 years immediately before the date the divorce became effective. 49-850 0-66—27
378 PUBLIC LAW 89-97-JULY 30,1965 {79 STAT. " (3) The term 'surviving divorc;ed mother' means a woman divorced from an individual who has died, but only if (A) she is the mother of his son or daughter, (B^ she legally adopted his son or daughter while she was married to nim and while such son or daughter was under the age of 18, (C) he legally adopted her son or daughter while she was married to him and while such son or daughter was under the age of 18, or (D) she was married to him at the time both of them legiQly adopted a child under the age of 18. " (4) The terms 'divorce' and 'divorced' refer to a divorce a vinculo matrimonii." 64 Stat. 483. 42 u s e 402. (d) (1) Section 202(c) (1) of such Act is amended by striking out "divorced a vinculo matrunonii," and inserting in lieu thereof "divorced,". 72 Stat. 10 so- (2) (A) Subsections (d)(6)(A), (f)(4)(A), and (h) (4) (A) of lo 3 2. section 202 of such Act are each amended by inserting " (b)," before "(e),". 64 Stat. 510; 72 Stat. 10 27. (B) Subsections (b) and (c) of section 216 of such Act are each 42 u s e 416. amended by striking out " (e) or" and inserting in lieu thereof " (b), (e), or". Ante, p. 373. (3) Subparagraph (A) of section 202(g) (1) of such Act is 42 u s e 402. amended by striking out "has not remarried" and inserting in lieu thereof "is not married". (4) Subparagraph (F) of section 202 (g) (1) of such Act is amended to read as follows: "(F) in the case of a surviving divorced mother— "(i) at the time of such individual's death (or, if such individual had a period of disability which did not end before the month in which he died, at the time such period began or at the time of such death)— " (I) she was receiving at least one-half of her support, as determined in accordance with regulations prescribed by the Secretary, from such individual, or " (II) she was receiving substantial contributions from such individual (pursuant to a written agreement), or " ( I I I ) there was a court order for substential contri- butions to her support from such individual, "(ii) the child referred to in subparagraph (E) is her son, daughter, or legally adopted child, and "(iii) the benefits referred to in such subparagraph are payable on the basis of such individual's wages and self- employment income,". (5) Section 202(g) of such Act is further amended by striking out "former wife divorced" each place it appears and inserting in lieu thereof "surviving divorced mother". (6) Section 203(a) of such Act (as amended by section 301(c) of Ante, p. 363. this Act) is amended b j striking out the period at the end of the first sentence and inserting m lieu thereof ", or" and by adding the follow- ing new paragraph: "(3) when any of such individuals is entitled to monthly bene- fits as a divorced wife under section 202(b) or as a surviving divorced wife imder section 202(e) for any month, the benefit to which she is entitled on the basis of the wages and self- employment income of such insured individual for such month shall oe determined without regard to this subsection, and the benefits of all other individuals who are entitled for such month to monthly benefits under section 202 on the wages and self-
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 ' 379 employment income of such insured individual shall be deter- mined as if no such divorced wife or surviving divorced wife were entitled to benefits for such month." (7) Section 203(c) (4^ of such Act is amended by striking out 42 u s e 403. "former wife divorced" and inserting in lieu thereof "surviving divorced mother". (8) Section 203(d)(1) of such Act is amended by striking out "wife," and inserting in lieu thereof "wife, divorced wife,". (9) The second sentence of section 205 (b^ of such Act is amended by striking out "wife, widow, former wife divorced," and inserting in lieu thereof "wife, divorced wife, widow, surviving divorced wife, sur- viving divorced mother,". (10) Section 205(c) (1) (C) of such Act is amended by striking out 42 u s e 405. "former wife divorced," and inserting in lieu thereof "surviving divorced wife, surviving divorced mother,". (11) Section 222(b)(3) of such Act is amended by inserting « u s e 422. "divorced wife," after "wife,". ^ (12) Paragraph (3) of section 202(g) of such Act is repealed. 42^^jsc 402. (13) Section 202 (g) of such Act is amended by redesignating para- graph (4) as paragraph (3). (e) The amendments made by this section shall be applicable with respect to monthly insurance benefits under title I I of the Social Security Act beginning with the second month following the month ^^ "^^ '*°^- in which this Act is enacted; but, in the case of an individual who was not entitled to a monthly insurance benefit under section 202 of such Act for the first month following the month in which this Act is enacted, only on the basis of an application filed in or after the month ill which this Act is enacted. TRANSITIONAL INSURED STATUS SEC. 309. (a) Title I I of the Social Security Act is further amended by adding at the end thereof (after the new section 226 added by sec- tion 101 of this Act) the following new section: "*"'"' P- ^^°- ^'TRANSITIONAL INSURED STATUS "SECL 227. (a) In the case of any individual who attains the age of 72 before 1969 but who does not meet the requirements of section 214(a), the 6 (quarters of coverage referred to in so much of H upc iu.' aragraph (1) of section 214(a) as follows clause (C) shall, instead, P e 3 Quarters of coverage for purposes of determining entitlement of sucli individual to benefits under section 202(a), and of his wife ^'^ ^^^ '*°^* to benefits under section 202(b), but, in the case of such wife, only ^"*®' P- 375. if she attains the age of 72 before 1969 and only with respect to wife's insurance benefits under section 202(b) for and after the month in which she attains such age. For each month before the month in which any such individual meets the requirements oi section 214(a), the amount of his old-age insurance benefit shall, notwith- standing the provisions of section 2C^(a), be $35 and the amount of the wife's insurance benefit of his wife shall, notwithstanding the provisions of section 202 (b), be $17.50. "(b) In the case of any individual who has died, who does not meet the requirements of section 214(a), and whose widow attains age 72 before 1969, the 6 quarters of coverage referred to in para- graph (3) of section 214(a) and in so much of paragraph (1) thereof as follows clause (C) shall, for purposes of determining her entitle-
380 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. ^^^nte, pp. 376, meiit to wldow's insurance benefits under section 202(e), instead be— 42 use 402. "(1) 3 quarters of coverage if such widow attains the age of 72 in or before 1966, " (2) 4 quarters of coverage if such widow attains the age of 72 in 1967, or "(3) 5 quarters of coverage if such widow attains the age of 72 in 1968. The amount of her widow's insurance benefit for each month shall, notwithstanding the provisions of section 202(e) (and section 202 f,f4^<^r^' 42 u s e 402. (m)),be$35. "(c) In the case of any individual who becjomes, or upon filing application therefor would become, entitled to benefits under section 202(a) by reason of the application of subsection (a) of this section, who dies, and whose w i d ^ attains the age of 72 before 1969, such deceased individual shall be deemed to meet the requirements of sub- Section (b) of this section for purposes of determining entitlement of such widow to widow's insurance benefits under section 202(e)." (b) The amendment made by subsection (a) shall apply in the case of monthly benefits under title I I of the Social Security Act for and after the second month following the month in which this Act is enacted on the basis of applications filed in or after the month in which this Act is enacted. INCREASE IN AMOUNT AN INDIVIDUAL IS PERMITTED TO EARN WITHOUT SUFFERING FULL DEDUCTIONS FROM BENEFITS SEO. 310. (a)(1) Paragraphs (1), (3), and (4) (B) of subsection 42 u s e 403. (f) of section 203 of the Social Security Act are each amended by strik- ing out "$100" wherever it appears therein and inserting in lieu thereof "$125". (2) The first sentence of paragraph (3) of such subsection (f) is amended by striking out " ^ 0 0 " each place it appears therein and inserting in lieu thereof "$1,200". (3) Paragraph (1) (A) of subsection (h) of section 203 of such Act IS amended by striking out "$100" and inserting in lieu thereof "$125". (b) The amendments made by subsection (a) shall apply with • respect to taxable years ending after December 31,1965. COVERAGE FOR D0C1X>RS OF MEDICINE 42 use 411. SEC. 3 U . (a) (1) Section 211(c) (5) of the Social Security Act is amended to read as follows: "(5) The performance of service by an individual in the exercise of his profession as a Christian Science practitioner." (2) Section 211 (c) of such Act is further amended by striking out the last two sentences and inserting in lieu thereof the following: "The provisions of paragraph (4) or (5) shall not apply to service (other than service performed by a member of a religious order who has taken a vow of poverty as a member of such order) performed by an individual during the period for which a certificate filed by Post, p. 381. jjjuj under section 1402(e) of the Internal Revenue Code of 1954 is 68 Stat. 1053 in effect." 42 u s e 410. (3) Section 210(a) (6) (C) (iv) of such Act is amended by insert- ing before the semicolon at the end thereof the following: ", other than as a medical or dental intern or a medical or dental resident in training".
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 381 (4) Section 210(a) (13) of such Act is amended by striking out all Jt^H^^Q^^' that follows the first semicolon. 42 use 4io. (b) (1) Section 1402(c) (5) of the Internal Revenue Code of 1954 ^o stat. M^I. (relating to definition of trade or business) is amended to read as follows: "(5) the performance of service by an individual in the exercise of his profession as a Christian Science practitioner." (2) Section 1402(c) of such Code is further amended bv striking ^^ ^*^** ^''^^• out the last.two sentences and inserting in lieu thereof the following: "The provisions of paragraph (4) or (5) shall not apply to service (other than service performed by a member of a religious order who has taken a vow of poverty as a member of such order) performed by an individual during the period for which a certificate filed by him under subsection (e) is in effect." (3) (A) Section 1402(e)(1) of such Code (relating to filing of waiver certificate by ministers, members of religious orders, and Christian Science practitioners) is amended by striking out "extended to service" and all that follows and inserting in lieu thereof "extended to service described in subsection (c) (4) or (c) (5) performed bv him." (B) Clause (A) of section 1402(e) (2) of such Code (relating to time for filing waiver certificate) is amended to read as follows: "(A) the due date of the return (including any extension thereof) for his second taxable year ending after 1954 for which he has net earnings from self-employment (computed without regard to sub- sections (c) (4) and (c) (5)) of $400 or more, any part of which was derived from the performance of service described in subsection (c) (4) or (c)(5); or". (4) Section 3121(b) (6) (C) (iv) of such Code (relating to defi- ^s st^a^ 1092. nition of employment) is amended by inserting before the semicolon ^'^^* at the end thereof the following: ", other than as a medical or dental intern or a medical or dental resident in training". (5) Section 3121(b) (13) of such Code is amended by striking out ^^^ttH-gf^^' all that follows the first semicolon. (c) The amendments made by paragraphs (1) and (2) of subsec- tion (a), and by paragraphs (1), (2), and (3) of subsection (b), shall apply only with respect to taxable years ending on or after December 31, 1965, The amendments made by paragraphs (3) and (4) of sub- section (a), and by paragraphs (4) and (5) of subsection (b), shall apply only with respect to services performed after 1965. GROSS INCOME OF FARMERS SEC. 312. (a) The second sentence following paragraph (8) in section 211(a) of the Social Security Act is amended by striking out ^2 use 411. "$1,800" each place it appears and inserting in lieu thereof "$2,400", and by striking out "$1,200" each place it appears and inserting in lieu thereof "$1,600". (b) The second sentence following paragraph (9) in section 1402(a) of the Internal Revenue Code of 1954 (relating to net earn- ings from self-employment) is amended by striking out "$1,800" each place it appears and inserting in lieu thereof "$2,400", and by striking out "$1,200" each place it appears and inserting in lieu thereof '^$1,600". (c) The amendments made by this section shall apply only with respect to taxable years beginning after December 31, 1965.
382 PUBUC LAW 89-97-JULY 30, 1965 [79 STAT. <X)VERAGE OF TIPS yg64^stat.^492; jgEo. 313, (ft) (1) SectioH 209 of the Social Security Act is amended 42 use 409. by striking out "or" at the end of subsection ( j ) , by striking out the period at the end of subsection (k) and inserting in lieu thereof " ; or", and by adding immediately after subsection (k) the following new subsection: " Q) (1) Tips paid in any medium other than cash; "(2) Cash tips received by an employee in any calendar month in the course of his employment by an employer unless the amount of such cash tips is $20 or more." (2) Section 209 of such Act is-further amended by adding at the end thereof the following new paragraph: "For purposes of this title, tips received by an employee in the course of his employment snail be considered remuneration for employment. Such remuneratic«i shall be deemed to be paid at the time a written statement including such tips is furnished to the employer pursuant to section 6053(a) of the Internal Revenue Code Post, p. 384. of 1954 or (if no statement including such tips is so furnished) at the time received." 26ljs? 45\"' (b) Section 451 of the Internal Revenue Code of 1954 (relating to general rule for taxable year of inclusion) is amended by adding at the end thereof the following new subsection: "(c) S P ^ I A L R U L E FOR EMPLOYEE T I P S . — F o r purposes of sub- section ( a ) , tips included in a written statement furnished an employer by an employee pursuant to section 6053(a) shall be deemed to be received at the time the written statement including such tips is fur- nished to the employer." 26 use 3102. (c)(1) Section 3102 of such Code (relating to deduction of tax from wages) is amended by adding at the end thereof the following new subsection: "(c) SPECIAL R U L E FOR T I P S . — "(1) I n the case of tips which constitute wages, subsection (a) shall be applicable only to such tips as are included in a written statement furnished to the employer pursuant to section 6053(a), and only to the extent that collection can be made by the employer, at or after the time such statement is so furnished and before the close of the 10th day following the calendar month (or, if para- graph (3) applies, the 30th day following the quarter) in which the tips were deemed paid, by deducting the amount of the tax from such wages of the employee (excluding tips, but including funds turned over by the employee to the employer pursuant to paragraph (2)) as are under control of the emj)loyer. Post, p. 39 5. «(2) If the tax imposed by section 3101, with respect to tips which are included in written statements furnished in any month to the employer pursuant to section 6053(a), exceeds the wages of the employee (excluding tips) from which the employer is required to collect the tax under paragraph (1), the employee may furnish to the employer on or before the 10th day of the following month (or, if paragraph (3) applies, on or before the 30th day of the following quarter) an amount of money equal to the amount of the excess. "(3) The Secretary or his delegate may, under regulations prescribed by him, authorize employers— " ( A ) to estimate the amount of tips that will be reported by the employee pursuant to section 6053 (a) in any quarter of the calendar year,
79 STAT. ] PUBLIC LAW 89-97-JULY 30,1965 383 "(B) to detennine the amount to be deducted trpon each payment of wages (exclusive of tips) during such quarter as if the tips so estimated constituted the actual tips so reported, and "(G) to deduct upon any payment of wages (other than tips, but including funds turned over by the employee to the employer pursuant to paragraph (2)) to such employee dur- ing such quarter (and within 30 days thereafter) such amount as may be necessary to adjust the amount actually deducted upon such wages of the employee during the quarter to the amount required to be deducted in respect of tips included in written statements furnished to the employer during the quarter. "(4) If the tax imposed by section 3101 with respect to tips ^°^^' ^' '^^^• which constitute wages exceeds the portion of such tax which can be collected by the employer from the wages of the employee pur- suant to paragraph (1) or paragraph (3), such excess shall be paid by the employee." (2) The second sentence of section 3102 (a) of such Code is amended 68^l4t!*io93.^^' by inserting before the period at the end thereof the following: "; and 26 use 3102. an emploj^er who is furnished by an employee a written statement of tips (received in a calendar month) pursuant to section 6053(a) to Post, p. 384. which paragraph (12) (B) of section 3121(a) is applicable may deduct 26 u s e 3121. an amount equivalent to such tax with respect to such tips from any wages of the employee (exclusive of tips) under his control, even though at the time such statement is furnished the total amount of the tips included in statements furnished to the employer as having been received by the employee in such calendar month in the course of his employment by such employer is less than $20". (3) Section 3121(a) of such Code (relating to definition of wages under the Federal Insurance Contributions Actj is amended by striking out "or" at the end of paragraph (10), by striking out the period at the end of paragraph (11) and inserting in lieu thereof "; or ", and by adding after paragraph (11) the following new paragraph: "(12) (A) tips paid in any medium other than cash; "(B) cash tips received by an employee in any calendar month in the course of his employment by an employer unless the amount of such cash tips is $20 or more." (4) Section 3121 of such Code is further amended by adding at the end thereof the following new subsection: "(q) TIPS iNCiiUOED FOR EMPLOYEE TAXES.—^For purposes of this chapter other than for purposes of the taxes imposed by section 3111, ^°^^' P- 396. tips received by an employee in the course of his employment shall be considered remuneration for employment. Such remuneration shall be deemed to be paid at the time a written statement including such tips is furnished to the employer pursuant to section 6053(a) or (if no statement including such tips is so furnished) at the time received." (d) (1) Section 3401 of such Code (relating to definitions for pur- 26^scr34(u^* poses of collecting income tax at source on wages) is amended by adding^at the end thereof the following new subsection: "(f) TIPS.—For purposes of subsection (a), the term 'wages' "Wages." includes tips received by an employee in the course of his employment. Such wages shall be deemed to be paid at the time a written statement including such tips is furnished to the employer pursuant to section 6053(a) or (if no statement including sudi tips is so furnished) at the time received."
384 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. 69 Stat. 616; (2) Section 3401(a) of such Code (relating to definition of wa^es 7 5 Stat. 625; 78 Stat. 36, 52. for purposes of collecting income tax at source) is amended by st,rikmg 26 u s e 3401. out ", or" at the end of paragraph (6) and inserting in lieuihereof or'" b y striking out the period at the end of paragraph (12) and inserting in lieu thereof " ; or", by striking out the period at the end of paragraph (15) and inserting in lieu thereof " ; or", and )by adding after paragraph (15) the followmgnew p a r a g r a p h : "(16) (A) as tips in any medium other than cash; " ( B ) as cash tips to an employee in any calendar month in the course of his employment by an employer unless the amount of such cash tips is $20 or more." 68A Stat. 457; 69 Stat. 605. (3) Subsection (a) of section 3402 of such Code (relating to in- 26 u s e 3402. come tax collected at source) is amended by striking out "subsection ( j ) " and inserting in lieu thereof "subsections {]) and ( k ) " . (4) Section 3402(h) (3) of such Code (relating to income tax with- holding on basis of average wages) is amended by inserting after "quarter" the first place it appears the following: "(and, in the case of tips referred to in subsection ( k ) , within 30 days thereafter)". (5) Section 3402 of such Code is further amended by adding at the end thereof the follow^ing new subsection: " ( k ) TIPS.—In the case of tips which constitute wages, subsection (a) shall be applicable only to such tips as are included in a written Intra. statement furnished to the employer pursuant to section 6053(a), and only to the extent that the tax can be deducted and withheld by the employer, at or after the time such statement is so furnished and before the close of the calendar year in which such statement is furnished, from such wages of the employee (excluding tips, but including funds turned over by the employee to the employer for the purpose of such deduction and withholding) as are under the contr(M of the employer; and an employer who is furnished by an employee a written statement of tips (received in a calendar month) pursuant to section 6053(a) to which paragraph (16) (B) of section 3401(a) is applicable may deduct and withhold the tax with respect to such tips from any wages of the employee (excluding tips) under his con- trol, even though at the time such statement is furnished the total amount of the tips included in statements furnished to the employer as having been received by the employee in such calendar month in the course of his employment by such employer is less than $20. Such tax shall not at any time be deducted and withheld in an amount which exceeds the aggregate of such wages and funds (including funds Ante, p. 382. turned over under section 3102(c)(2)) minus any tax required by Ante, p . 383. section 3102(a) to be collected from such wages and funds." 68A Stat. 747. (e) (1) Section 6051(a) of such Code (relating to receipts for em- 26 u s e 6 0 5 1 . ployees) is amended by adding at the end thereof the following new sentence: " I n the case of tips received by an employee in the course of his employment, the amounts required to be shown by paragraphs (3) and (5) shall include only sucn tips as are included in statements furnished to the employer pursuant to section 6053(a)." (2) (A) Subpart C of part I I I of subchapter A of chapter 61 of such Code (relating to information regarding wages paid employees) is amended by adding at the end thereof the following new section: *SEC. 6053. REPORTING OF TIPS. " (^) REPORTS BY EMPLOYEES.—Every employee who, in the course of his employment by an employer, receives in any calendar month tips 26 u s e 3121, which are wages (as defined in section 3121(a) or section 3401(a)) 3401. shall report all such tips in one or more written statements furnished to his employer on or before the 10th day following such month. Such
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 385 statements shall be furnished by the employee under such regulations, at such other times before such lOth day, and in such form and manner, as may be prescribed by the Secretary or his delegate. "(b) STATEMENTS FURNISHED BY EMPLOYERS.—If the tax imposed Post, p. 39 5. by section 3101 with respect to tips reported by an employee pursuant to subsection (a) exceeds the tax which can be collected by the employer 26 u s e 3102. pursuant to section 3102, the employer shall furnish to the employee a written statement showing the amount of such excess. The statement required to be furnished pursuant to this subsection shall be furnished at such time, shall contain such other information, and shall be in such form as the Secretary or his delegate may by regulations prescribe. When required by such regulations, a duplicate of any such statement shall be filed with the Secretary or his delegate." (B) Section 6652(b) of such Code (relating to failure to file infor- H l"^^^ ^^l mation returns) is amended by inserting after "income tax withheld)," the following: "and in the case of each failure t o furnish a statement required by section 6053(b) (relating to statements furnished by em- ^"^'^* ployers with respect to tips),". 68A Stat. 8 28. (C) Section 6674 of such Code (relating to fraudulent statement or 26 u s e 6674. failure to furnish statement to emj>loyee] is amended by striking out "6051" each place it appears and inserting in lieu thereof "6051 or o^'^il^^^^nlV 6053(b)". ^ ^^ ^ 26 use 6051. (D) The table of sections for such subpart G is amended by adding at the end thereof the following: "Sec. 6053. Reporting of tips." (3) Section 6652 of such Code (relating to failure to file certain information returns) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: "(c) FAILURE To EEPORT T I P S . — I n the case of failure by an em- ployee to report to his employer on the date and in the manner pre- scribed therefor any amount of tips required to be so reported by sec- tion 6053(a) which are wages (as defined in section 3121(a)), unless ^6"usc*3m' it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be paid by the employee, in addition t o the tax imposed by section 3101 with respect to the amount of tips which ^°^'' P- ^^S. he so failed to report, an amount fequal to 50 percent of such tax." (f) T h e amendments made by this section shall apply only with respect to tips received by employees after 1965. I N C L U S I O N OP ALASKA AMONG STATES PERMITTED TO DIVIDE THEIR RETIRE- M E N T SYSTEMS SEC. 314. The first sentence of section 218(d) (6) (C) of the Social Security Act is amended by inserting "Alaska," before "California". \l ^*|^- ^^^g^^- ADDITIONAL PERIOD FOR ELECTING COVERAGE UNDER DIVIDED RETIREMENT SYSTEM SEC. 315. The first sentence of section 218(d) (6) ( F ) of the Social Security Act is amended by striking out "1963" and inserting in lieu ,Jof*f*'ii°^^' thereof "1967". 42 use fis.
386 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. EMPLOYEES OF NONPROFIT ORGANIZATIONS SEC. 316. (a) (1) Section 3121 (k) (1) (B) (iii) of the Internal Reve- 72 Stat. 1044. 26 u s e 3121. nue Code of 1954 (relating to effective date of exemption of religious, charitable, and certain other organizations) is amended to read as follows: "(iii) the first day of any calendar quarter preceding the calendar quarter in which the certificate is filed, except that such date may not be earlier than the first day of the twentieth calendar quarter preceding the quarter in which such certifi- cate is filed." (2) The amendment made by paragraph (1) shall applv in the case of any certificate filed under section 3121 (k) (1) (A) oi such Code after the date of the enactment of this Act. (b) Section 3121 (k) (1) of such Code (relating to waiver of exemp- tion by religious, charita;ble, and certain other organizations) is fur- ther amended by adding at the end thereof the following new subparagraph: "(H) An organization which files a certificate under sub- paragraph (A) before 1966 may amend such certificate dur- ing 1965 or 1966 to make the certificate effective with the first day of any calendar quarter preceding the quarter for which such certificate originally became effective, except that such date may not be earlier than the first day of the twentieth calendar quarter preceding the quarter in which such certifi- cate is so amended. If an organization amends its certifixjate pursuant to the preceding sentence, such amendment shall be effective with respect to the service of individuals who concurred in the filing of such certificate (initially or through the filing of a supplemental list) and who concur in the filing of such amendment. An amendment to a cer- tificate filed pursuant to this subparagraph shall be filed with such official and in such form and manner as may be pre- scribed by regulations made under this chapter. If an amendment is filed pursuant to this subparagraph— "(i) for purposes of computing interest and for pur- 68A Stat. 821. poses of sectiou 6651 (relating to addition to tax for 26 use 6651. failure to file tax return), the due date for the return and payment of the tax for any calendar quarter result- ing from the filing of such an amendment shall be the last day of the calendar month following the calendar quarter in which the amendment is filed; and "(ii) the statutory period for the assessment of such tax shall not expire before the expiration of three years It use I m (c) (1) Section 105(b) of the Social Security Amendments of 1960 '*°^*- is amended to read as follows: "(b)(1) I f - ^ "(A) an individual performed service in the employ of an organization with respect to which remuneration was paid before the first day of the calendar quarter in which the organization filed a waiver certificate pursuant to section 3121 (k) (1) of the Internal Revenue Code of 1954, and such service is excepted from employment under section 210(a) ^2 usc*4\o!^* (8) (B) of the Social Security Act, "(B) such service would have constituted employment as defined In section 210 of such Act if the requirements of sec- tion 3121 (k) (1) of such Code were satisfied,
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 387 " ( C ) such organization paid, on or before the due date of the tax return for the calendar quarter before the calendar quarter in which the organization filed a certificate pursuant to section 3121 ( k ) ( l ) of such Code, any amount, as taxi^s oe u*sc 3121** imposed by sections 3101 and 3111 of such Code, with respect Post, pp. 395, to such remuneration paid by the organization to the individ- 396. ual for such service, " ( D ) such individual, or a fiduciary acting for such individual or his estate, or his survivor (within the meaning of section 205(c)(1)(C) of such A c t ) , requests that such AnL^'p.^fgf' remuneration be deemed to constitute remuneration for employment for purposes of title I I of such Act, and "^^ "^^ '*°^' " ( E ) the request is made in such form and manner, and with such official, as may be prescribed by regulations made by the Secretary of Health, Education, and Welfare, then, subject to the conditions stated in paragraphs ( 2 ) , ( 3 ) , ( 4 ) , and (5), the remuneration with respect to which the amount has been paid as taxes shall be deemed to constitute remuneration for employment for purposes of title I I of such Act. "(2) Paragraph (1) shall not apply with respect to an individual unless the organization referred to in paragraph ( 1 ) ( A ) , on or before the date on which the request described in paragraph (1) is made, has filed a certificate pursuant to section 3121 (k) (1) of such Code. "(3) Paragraph (1) shall not apply with respect to an individual who is employed by the organization referred to in paragraph (2) on the date the certificate is filed. "(4) If credit or refund of any portion of the amount referred to in paragraph (1) (C) (other than a credit or refund which would be allowed if the service constituted employment for purposes of chapter 21 of such Code) has been obtained, paragraph (1) shall oe^uscTsiVi-' not apply with respect to the individual unless the amount credited 3126. or refunded (including any interest under section 6611 of such Code) ^SA stat. 819. is repaid before January 1, 1968, or, if later, the first day of the ^^^^^ ^*^^- third year after the year in which the organization filed a certificate pursuant to section 3121 (k) (1) of such Code. "(5) Paragraph (1) shall not apply to any service performed for the organization in a period for which a certificate filed pursuant to section 3121 (k) (1) of such Code is not in effect." (2) The amendment made by paragraph (1) shall take effect on the date of the enactment of this Act. The provisions of section 105(b) of the Social Security Amendments of 1960 which were in Itfj^n^t^; 26 u s e 3121 effect before the date of the enactment of this Act shall be applicable note. with respect to any request filed under section 105(b)(1) of such Amendments before such date. Nothing in the preceding sentence shall prevent the filing of a request under section 105(b) (1) of such Amendments as amended by this Act. (d) I f - . . . (1) an individual performed service with respect to which remuneration was paid before the date of enactment of this Act by an organization which, before such date, filed a waiver cer- tificate pursuant to section 3121 (k) (1) of the Internal Revenue Code, (2) such service is excluded from employment under title I I of the Social Security Act but would not be excluded therefrom if the requirements 01 such section 3121 (k) (1) had been met with respect to such service, (3) such service was performed during the period such cer- tificate was in effect, and
388 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. (4) such individual was listed pursuant to such section 3121 26 u*^c 3 °2f* (k) (1) ^t any time during such period and before the date of enactment of this Act as an employee who concurred in the filing of such certificate or such individual filed a request for coverage pursuant to section 105(b) of the Social Security Amendments of 26 use 3 m 1960, as in effect prior to the enactment of this Act (but such list- note, ing or request was not effective with respect to the service described above), then, subject to the conditions stated in subparagraphs ( B ) , ( C ) , ( D ) , and (E) of paragraph (1), and paragraph (4), of section 105(b) of the Social Security Amendments of 1960, as amended by this section, the remuneration of such individual which was paid with respect to such excluded service shall be deemed to constitute remuneration for 42 use 401. employment for purposes of such title I I ; except that, for purposes of this subsection, in applying subparagraph (C) of paragraph (1) of such section 105(b) the date of enactment of this Act shall be con- sidered to be the date on which the organization filed its certificate under section 3121 (k) (1) and any reference, in paragraph (4) of such section, to such paragraph (1) shall be considered a reference to the preceding provisions of this subsection. COVERAGE OF TEMPORARY EMPLOYEES OF THE DISTRICT OF COLUMBIA 74 Stat. 9 36. 8^0. 317. (a) Scction 210(a)(7) of the Social Security Act is amended^— (1^ by striking out "or" at the end of subparagraph ( B ) , (2) by striking out the semicolon at the end of subparagraph (C) (ii) and inserting in lieu thereof ", or", and (3) by adding after subparagraph (C) the following new sub- paragraph : " (D) service performed in the employ of the District of Colum- bia or any instrumentality which is wholly owned thereby, if such service is not covered by a retirement system established by a law of the United States; except that the provisions of this subpara- graph shall not be applicable to service performed— " (i) in a hospital or penal institution by a patient or inmate thereof; "(ii) by any individual as an employee included under section 2 of the Act of August 4, 1947 (relating to certain interns, student nurses, and other student employees of hos- pitals of the District of Columbia Government; 5 U.S.C. 61 Stat. 727; 1058), otheT thau as a medical or dental intern or as a 63 Stat. 972. medical or dental resident in training; "(iii) by any individual as an employee serving on a tem- porary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency; or "(iv) by a member of a board, committee, or council of the District of Columbia, paid on a per diem, meeting, or other fee basis;". 74 Stat. 938. (b) Section 3121 ( b ) ( 7 ) of the Internal Revenue Code of 1954 (relating to certain services not included in definition of employ- ment) is amended— (1^ by striking out "or" at the end of subparagraph ( A ) , (2) by striking out the semicolon at the end of subparagraph (B) and inserting in lieu thereof ", or", and (3) by adding after subparagraph (B) the following new subparagraph:
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 389 "(C) service j)erformed in the emi>loy of the District of Columbia or any instrumentality which is wholly owned thereby, if such service is not covered by a retirement system established by a law of the United States; except that the provisions of this subparagraj)h shall not be applicable to service performed— "(i) in a hospital or penal institution by a patient or inmate thereof; "(ii) by any individual as an employee included under section 2 of the Act of August 4, 1947 (relating to certain interns, student nurses, and other student employ^ of hos- pitals of the District of Columbia Grovemment; 5 U.S.C. 1052), other than as a medical or dental intern or as a medical ga^stat^ 97^2^^' or dental resident in training; "(iii) by any individual as an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood or other similar emergency; or "(iv) by a member of a board, committee, or council of the District of Columbia, paid on a per diem, meeting, or other fee basis;". (c) (1) Section 3125 of such Code (relating to returns in the case ^'^ ^*^*' ^^^• of governmental employees in Guam and American Samoa) is amended ^^ ^^^ ^^^^• by adding at the end thereof the following new subsection: "(c) DISTRICT OF COLUMBIA.—In the case of the taxes imposed by this chapter with respect to service performed in the employ of the District of Columbia or in the employ of any instrumentality which is wholly owned thereby, the return and payment of the taxes may be made by the Commissioners of the District of Columbia or by such agents as they may designate. The person making such return may, for convenience of administration, make payments of the tax imposed by section 3111 with respect to such service without regard to the ^°s<' ?• 396. $6,600 limitation in section 3121 (a) (1)." ^°«'' P- ^sa- (2) The heading of such section 3125 is amended by striking out "AND AMERICAN SAMOA" and inserting in lieu thereof ", AMER- ICAN SAMOA, AND THE DISTRICT OF COLUMBIA". (3) The table of sections for subchapter C of chapter 21 of such Code (relating to general provisions for Federal Insurance Contri- butions Act) IS amended by striking out "Sec. 3125. Returns in the case of governmental employees in Guam and American Samoa." and inserting in lieu thereof "Sec. 3125. Returns in the case of governmental employees in Guam, American Samoa, and the District of Columbia." (d) Section 6205(a) of such Code (relating to adjustment of tax) 7/^^^*940^^^' is amended by adding at the end thereof the following new paragraph: 26 use 6205. "(4) DISTRICT OF COLUMBIA AS EMPLOYER.—For purposes of this subsection, in the case of remuneration received during any calen- dar year from the District of Columbia or any instrumentality which is wholly owned thereby, the Commissioners of the District of Columbia and each agent designated by them who makes a return pursuant to section 3126 shall be deemed a separate employer." (e) Seotion 6413(a) of such Code (relating to adjustment of certain y/litfgVo^^^' emj)loyment taxes) is amended by adding at the end thereof the fol- 26 use 64i3. lowing paragraph: "(4) DISTRICT OF COLUMBIA AS EMPLOYER.—For purposes of this subsection, in the case of remuneration received durmg any cal- endar year from the District of Columbia or any instrumentality
390 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. which is wholly owned thereby, the Commissioners of the District of Columbia and each agent designated by them who makes '74 Stat. 939. a return pursuant to section 3125 shall be deemed a separate em- 26 u s e 3125. 68A Stat. 797. ployer." 26 u s e 6413. (f) (1) Section 6413(c) (2) of such Code (relating to applicability of special refunds to certain employment taxes) is amended by adding at the end thereof the following new subparagraph: "(F) GOVERNMENTAL EMPLOYEES IN THE DISTRICT OF CJOLUM- BiA.—In the case of remuneration received from the District of Columbia or any instrumentality wholly owned thereby, during any calendar year, the Commissioners of the District Ante, p. 389. of Columbia and each agent designated by them who makes a return pursuant to section 3125(c) shall, for purposes of this subsection, be deemed a separate employer." (2) The heading of such section 6413(c) (2) is amended by striking out "AND AMERICAN SAMOA" and inserting in lieu thereof ", A3IERICAN SAMOA, A N D T H E DISTRICT OF COLUMBIA". (g) The amendments made by this section shall apply with respect to service performed after the calendar (quarter in which this section is enacted and after the calendar quarter m which the Secretary of the Treasury receives a certificaition from the Commissioners of the Dis- trict of Columbia expressing their desire to have the insurance system established by title I I (and part A of title XVIII) of the Social 42 u s e 401; Security Act extended to the oflSicers and employees coming under the Ante, p. 291. provisions of such amendments. COVERAGE FOR CERTAIN ADDITIONAL HOSPITAL EMPLOYEES I N CALIFORNIA 74 Stat. 935. 42 u s e 418 SEC. 318. Section 102 (k) of the Social Security Amendments of note. 1960 is amended by inserting "(1)" immediately after "(k)", and by adding at the end thereof the following new paragraph: "(2) Such agreement, as modified pursuant to paragraph (1), may at the option of such State be further modified, at any time prior to the seventh month after the month in which this paragraph is enacted, so as to apply to services performed for any hospital affected by such earlier modification by any individual who after December 31, 1959, is or was employed by such State (or any political subdivision thereof) in any position described in paragraph (1). Such modification shall be effective with respect to (A) all services performed by such individ- ual in any such position on or after January 1,1962, and (B) all such services, performed before such date, with respect to which amounts equivalent to the sum of the taxes which would have been imposed by P o s t , pp. 39 5, sections 3101 and 3111 of the Internal Revenue Code of 1954 if such 396. services had constituted employment for purposes of chapter 21 of 68A Stat. 415. such Code at the time they were performed have, prior to the date of 26 u s e 3101- 3126. the enactment of this paragraph, been paid." TAX EXEMPTION FOR RELIGIOUS GROUPS OPPOSED TO I N S U R A N C E SEC. 319. (a) Subsection (c) of section 1402 of the Internal Revenue 68A Stat. 353. Code of 1954 is amended by striking out "or" at the end of paragraph 26 u s e 1402. (4), by striking out the period at the end of paragraph (5) and insert- ing in lieu thereof "; or", and by adding after paragraph (5) the fol- lowing new paragraph: "(6) the performance of service by an individual during the P o s t , p. 391. period for which an exemption under subsection (h) is effective with respect to him."
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 391 (b) Subsection (c) of section 211 of the Social Security Act is 42 ulc 411.' amended by striking out "or" at the end of paragraph (4), by striking out the period at the end of paragraph (5) and inserting in lieu thereof •'; or", and by adding after paragraph (5) the following new para- graph: *'(6) The performance of service by an individual during the eriod for which an exemption under section 1402(h) of the f nternal Revenue Code of 1954 is effective with respect to him." (c) Section 1402 of the Internal Revenue Code of 1954 is further aelisc MO"' amended by adding at the end thereof the following new subsection: "(h) MEMBERS or CERTAIN RELIGIOUS FAITHS.— "(1) EXEMPTION.—^Any individual may file an application (in such form and manner, and with such official, as may be prescribed by regulations under this chapter) for an exemption from the tax imposed by this chapter if he is a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he is con- scientiously opposed to acceptance of the benefits of any private or public insurance which makes payments in the event of death, disability, old-age, or retirement or makes payments toward the cost of, or provides services for, medical care (including the bene- fits of any insurance system established by the Social Security Act). Such exemption may be granted only if the application 4^2 use ilo's. contains or is accompanied by— ^'(A) such evidence of such individual's membership in, and adherence to the tenets or teachings of, the sect or division thereof as the Secretary or his delegate may require for pur- poses of determining such individual's compliance with the preceding sentence, and "(B) his waiver of all benefits and other payments under titles I I and XVIII of the Social Security Act on the basis J,l^l^^g\^' of his wages and self-employment income as well as all such benefits and other payments to him on the basis of the wages and self-employment income of any other person, and only if the Secretary of Health, Education, and Welfare finds that— "(C) such sect or division thereof has the established tenets or teachings referred to in the preceding sentence, "(D) it is the practice, and has been for a period of time which he deems to be substantial, for members of such sect or division thereof to make provision for their dependent members which in his judgment is reasonable in view of their general level of living, and "(E) such sect or division thereof has been in existence at all times since December 31,1950. An exemption may not be granted to any individual if any benefit or other payment referred to in subparagraph (B) became pay- able (or, but for section 203 or 222(b) of the Social Security Act, ya^tarioa^a"' would have become payable) at or before the time of the filing of 42 use 403, such waiver. 422. " ^2) TIME FOR FILING APPLICATION.—For purposes of this sub- section, an application must be filed— " (A) In the case of an individual who has self-employment income (determined without regard to this subsection and subsection (c) (6)) for any taxable year ending before "*"'*' ^' ^^°* December 31, 1965, on or before April 15, 1966, and
392 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. " ( B ^ I n any other case, on or before the time prescribed for fihng the return (including any extension thereof) for the first taxable year ending on or after December 31, 1965, for which he has self-employment income (as so determined). "(3) PERIOD FOR WHICH EXEMPTION EFFECTIVE.—An exemption granted to any individual pursuant to this subsection shall apply with respect to all taxable years beginning after December 31, 1950, except that such exemption shall not apply for any taxable year— " ( A ) beginning (i) before the taxable year in which such individual first met the requirements of the first sentence of paragraph (1), or (ii) before the time as of which the Secre- tary of Health, Education, and Welfare finds that the sect or division thereof of which such individual is a member met the requirements of subparagraphs (C) and ( D ) , or " ( B ) ending (i) after the time such individual ceases to meet tne requirements of the first sentence of paragraph (1), or (ii) after the time as of which the Secretary of Health, Education, and Welfare finds that the sect or division thereof of which he is a member ceases to meet the requirements of subparagraph (C) or ( D ) . "(4) APPLICATION BY FIDUCIARIES OR suRvivoRS.-^In any case where an individual who has self-employment income dies before the expiration of the time prescribed by paragraph (2) for filing an application for exemption pursuant to this subsection, such an application may be filed with respect to such individual within such time by a fiduciary acting for such individual's estate or by such individual's survivor (within the meaning of section 205 64 Stat. 518. 42 u s e 405. (c) (1) (C) of the Social Security A c t ) . " 64 Stat. 482; (d) Section 202 of the Social Security Act is amended by adding 70 Stat. 838. 42 u s e 402. at the end thereof the following new subsection: "Waiver of Benefits "(v) Notwithstanding any other provisions of this title, in the case of any individual who files a waiver pursuant to section 1402(h) of Ante, p . 391. the Internal Revenue Code of 1954 and is granted a tax exemption thereunder, no benefits or other payments shall be payable under tbis title to him, no payments shall be made on his behalf under part A Ante, p . 291. of title X y i l l , ?tnd no benefits or other payments under this title shall be payable on the basis of his wages and self-employment income to any other person, after the filing of such waiver; except that, if there- after such individual's tax exemption under such section 1402(h) ceases to be effective, such waiver shall cease to be applicable in the case of benefits and other payments under this title and part A of title X V I I I to the eittent based on his self-employment income for and after the first taxable year for which such tax exemption ceases to be effective and on his wages for and after the calendar year (if any) which begins in or with the beginning of such taxable year." (e) The amendments made by this section shall apply with respect to taxable years beginning after December 31, 1950. F o r such pur- 68A Stat. 353. pose, chapter 2 of the Internal Revenue Code of 1954 shall be treated 26 u s e 1401- 1403. as applying to all taxable years beginning after such date. (f) If refund or credit of any overpayment resulting from the enactment of this section is prevented on the date of the enactment of this Act or at any time on or before April 15, 1966, by the operation of any law or rule of law, refund or credit of such overpayment may,
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 393 nevertheless, be made or allowed if claim therefor is filed on or before April 15,1966. No interest shall be allowed or paid on any overpay- ment resulting from the enactment of this section. INCREASE OF E A R N I N G S COUNTED FOR B E N E F I T A N D TAX PURPOSES SEC. 320. (a) (1) (A) Section 209(a) (3) of the Social Security Act H stat. mg. is amended by inserting "and prior to 1966" after "1958". (B) Section 209(a) of such Act is further amended by adding at the end thereof the following new paragraph: "(4) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding sub- sections of this section) equal to $6,600 with respect to employ- ment has been paid to an individual during any calendar year after 1965, is paid to such individual during such calendar year;". (2) (A) Section 211 (b) (1) (C) of such Act is amended by inserting ^^ use 4i i. "and prior to 1966" after "1958", and by striking out " ; or" and inserting in lieu thereof " ; and". (B) Section 211(b) (1) of such Act is further amended by adding at the end thereof the following new subparagraph: " ( D ) For any taxable year ending after 1965, (i) $6,600, minus (ii) the amount of the wages paid to such individual during the taxable year; or". (3) (A) Section 213(a) (2) (ii) of such Act is amended by striking ^/stfrsi"^^' out "after 1958" and inserting in lieu thereof "after 1958 and before 42 use 413. 1966, or $6,600 in the case of a calendar year after 1965". (B) Section 213(a) (2) (iii) of such Act is amended by striking out "after 1958" and insertmg in lieu thereof "after 1958 and before 1966, or $6,600 in the case of a taxable year ending after 1965". (4) Section 215(e) (1) of such Act is amended by striking out "and '^^ ^^^ '^^^^ the excess over $4,800 in the case of any calendar year after 1958" and inserting in lieu thereof "the excess over $4,800 in the case of any calendar year after 1958 and before 1966, and the excess over $6,600 in the case of any calendar year after 1965". (b) (1) (A) Section 1402(b) (1) (C) of the Internal Revenue Code of 1954 (relating to definition of self-employment income) is amended 26 u s e 1402. by inserting "and before 1966" after "1958", and by striking out " ; or" and inserting in lieu thereof " ; and". (B) Section 1402(b) (1) of such Code is further amended by add- ing at the end thereof the following new subparagraph: " ( D ) for any taxable year ending after 1965, (i) $6,600, minus (ii) the amount of the wages paid to such individual during the taxable year; or". (2) Section 3121(a)(1) of such Code (relating to definition of esA stat. 417; wages) is amended by striking out "$4,800" each place it appears and ^\TvscVv2i inserting in lieu thereof "$6,600". (3) The second sentence of section 3122 of such Code (relating to 26 use 3122. Federal service) is amended by striking out "$4,800" and inserting in lieu thereof "$6,600". (4) Section 3125 of such Code (relating to returns in the case of 74 stat, 939. overnmental employees in Guam and American Samoa) is amended f y striking out "$4,800" where it appears in subsections (a) and (b) and inserting in lieu thereof "$6,600 . (5) Section 6413(c)(1) of such Code (relating to special refunds U f}^X' }?^^- m t , . \ . I T \ C i ^f) U o C 6 4 1 3 . of employment taxes) is amended— (A) by inserting "and prior to the calendar year 1966" after "the calendar year 1958"; 49-850 0-66—28
394 PUBUC LAW 89-97-JULY 30, 1965 [79 STAT. (B) by inserting after "exceed $4,800," the following: "or (C) during any calendar year after the calendar year 1965, the wages received by him during such year exceed $6,600". (C) by inserting before the period at the end thereof the fol- lowing : "and before 1966, or which exceeds the tax with respect to the first $6,600 of such wages received in such calendar year after 1965". 26 ? l c eJu.' (^) Section 6413(c) (2) (A) of such Code (relating to refunds of employment taxes in the case of Federal employees) is amended by striking out "or $4,800 for any calendar year after 1958" and inserting in lieu thereof "$4,800 for the calendar year 1959, 1960, 1961, 1962, 1963,1964, or 1965, or $6,600 for anv calendar year after 1965". (c) The amendments made by subsections (a) (1) and (a) (3) ( A ) , and the amendments made by subsection (b) (except paragraph (1) thereof), shall a p ^ y only with respect to remuneration paid after December 1965. The amendments made by subsections ( a ) ( 2 ) , ( a ) ( 3 ) ( B ) , and (b) (1) shall apply only with respect to taxable years ending after 1965. The amendment made by subsection (a) (4) shall apply only with respect to calendar years after 1965. CHANGES I N TAX SCHEDULES 26 use uoi S^^: ^^^- (^) Section 1401 of the Internal Revenue Code of 1954 (relating to rate of tax under the Self-Employment Contributions xVct) is amended to read as follows: "SEC. 1401. RATE OF TAX. " ( a ) OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE.—In addi- tion to other taxes, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax as follows: "(1) in the case of any taxable year beginning after December 31, 1965, and before January 1, 1967, the tax shall be equal to 5.8 percent of the amount of the self-employment income for such taxable year; "(2) in the case of any taxable year beginning after December 31,1966, and before January 1,1969, the tax shall be equal to 5.9 percent of the amount of the self-employment income for such taxable year; "(3) m the case of any taxable year beginning after December 31,1968, and before January 1, 19T3, the tax shall be equal to 6.6 percent of the amount of the self-employment income for such taxable year; and "(4) in the case of any taxable year beginning after December 31, 19Y2, the tax shall be equal to 7.0 percent of the amount of the self-employment income for such taxable year. " ( b ) HOSPITAL INSURANCE.—In addition to the tax imposed by the preceding subsection, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax as follows: "(1) in the case of any taxable year beginning after December 31,1965, and before January 1,1967, the tax shall be equal to 0.35 percent of the amount of the self-employment income for such taxable year; "(2) m the case of any taxable year beginning after Decem- ber 31, 1966, and before January 1,1973, the tax shall be equal to 0.50 percent of the amount of the self-employment income for such taxable year;
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 395 "(3) in the case of any taxable year beginning after Decem- ber 31,1972, and before January 1,1976, the t a x shall be equal to 0.55 percent of the amount of the self-employment income for such taxable year; "(4) in the case of any taxable year beginning after Decem- ber 31,1975, and before January 1,1980, the tax shall be equal to 0.60 percent of the amount of the self-employment income for such taxable year; "(5) in the case of any taxable year begiiming after Decem- ber 31,1979, and before January 1,1987, the tax shall be equal to 0.70 percent of the amount of the self-employment income for such taxable year; and "(6) in the case of any taxable year beginning after Decem- ber 31, 1986, the tax shall be equal to 0.80 percent of the amount of the self-employment income for such taxable year. F o r purposes of the tax imposed by this subsection, the exclusion of ^ 8 A Stat. 3 55. employee representatives by section 1402(c) (3) shall not apply." 26 u s e 1402. (b) Section 3101 of the Internal Kevenue Code of 1954 (relating to 75 Stat. 141. rate of tax on employees under the Federal Insurance Contributions ^^ "^^ ^^°^- Act) is amended to read as follows: '*SEC. 3101. RATE OF TAX. " (a) OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE.—In addition to other taxes, there is hereby imposed on the income of every indi- vidual a tax equal to the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employ- 26^scf*3i2i' ment (as defined in section 3121 ( b ) ) — "(1) with respect to wages received during the calendar year 1966, the rate shall be 3.85 percent; "(2) with respect to wages received during the calendar years 1967 and 1968, the rate shall be 3.9 percent; " ( 3 ) with respect to wages received during the calendar years 1969,1970,1971, and 1972, the rate shall be 4.4 percent; and "(4) with respect to wages received after December 31, 1972, the rate shall be 4.85 percent. " (b) HOSPITAL INSURANCE.—In addition to the tax imposed by the preceding subsection, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employ- ment (as defined in section 3121(b), but without regard to the pro- visions of paragraph (9) thereof insofar as it relates to employees)— "(1) with respect to wages received during the calendar year 1966, the rate shall be 0.35 percent; "(2) with respect to wages received during the calendar years 1967,1968^ 1969,1970,1971, and 1972, the rate shall be 0.50 percent; "(3) with respect to wages received during the calendar years 1973,1974j and 1975, the rate shall be 0.55 percent; "(4) with respect to wages received during the calendar years 1976,1977j 1978, and 1979, the rate shall be 0.60 percent; "(5) with respect to wages received during the calendar years 1980, 1981,1982,1983,1984,1985, and 1986, the rate shall be 0.70 percent; and "(6) with respect to wages received after December 31, 1986, the rate shall be 0.80 percent."
396 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. 75 Stat. 141. 26 u s e 3111. (c) Section 3111 of the Internal Revenue Code of 1954 (relating to rate of tax on employers under the Federal Insurance Contributions Act) is amended to read as follows: "SEC. 3 l l l . RATE OF TAX. " ( a ) OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE.—^In addi- tion to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 68A Stat. 417. the following percentages of the wages (as denned in section 3121(a)) 26 u s e 3121. paid by him with respect to employment (as defined in section 3121(b))— "(1) with respect to wages paid during the calendar year 1966, the rate shall be 3.85 percent; "(2) with respect to wages paid during the calendar years 1967 and 1968, the rate shall be 3.9 percent; "(3) with respect to wages paid during the calendar years 1969,1970, 1971, and 1972, the rate shall be 4.4 percent; and "(4) with respect to wages paid after December 31, 1972, the rate shall be 4.85 percent. " ( b ) HOSPITAL INSURANCE.—In addition to the tax imposed by the preceding subsection, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal t o the following percentages of the wages (as defined in section 3121 ( a ) ) aid by him with respect to employment (as defined in section 3121 (b), Eut without regard to the provisions of paragraph (9) thereof insofar as dt relates to employees)— "(1) with respect to wages paid during the calendar year 1966, the rate shall be 0.35 percent; "(2) with respect to wages paid during the calendar years 1967,1968,1969,1970,1971, and 1972, the rate shall be 0.50 percent; "(3) with respect t o wages paid during the calendar years 1973, 1974, and 1975, the rate shall be 0.55 percent; " (4) with respect to wages paid during the calendar years 1976, 1977,1978, and 1979, the rate shall be 0.60 percent; "(5) with respect t o wages paid during the calendar years 1980,1981,1982,1983,1984,1985, and 1986, the rate shall be 0.70 percent; "(6) with respect to wages paid after December 31, 1986, the rate shall be 0.80 percent." (d) The amendments made by subsection (a) shall apply only with respect to taxable years beginning after December 31, 1965. The amendments made by subsections (b) and (c) shall apply only with respect to remuneration paid after December 31,1965. R E I M B U R S E M E N T OF T R U S T - F U N D S FOR COST OF NONCONTRIBUTOR:Y M I L I - TARY SERVICE CREDITS 42 use 4\7.* ^^^- ^22- Section 217(g) of the Social Security Act is amended to read as follows: " ( g ) ( 1 ) I n September 1965, and in every fifth September there- after up to and including September 2010, the Secretary shall deter- mine the amount which, if paid in equal installments at the beginning of each fiscal year in the period beginning— " (A) with July 1, 1965, in the case of the first such determina- tion, and " ( B ) with the July 1 following the determination in the case of all other such determinations,
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 397 and ending with the close of June 30, 2015, would accumulate, with interest compounded annually, to an amount equal to the amount needed to place each of the Trust Funds and the Federal Hospital Insurance Trust F u n d in the same position at the close of June 30, Ante, p . 299. 2015, as he estimates they would otherwise be in at the close of that date if section 210 of this Act as in effect prior to the Social Security 42 u s e 410. Act Amendments of 1950, and this section, had not been enacted. 64 Stat. 477. 42 u s e 301 The rate of interest to be used in determining such amount shall be note. the rate determined under section 201(d) for public-debt obligations 70 Stat. 42 u s e 819. 401. which were or could have been issued for purchase by the Trust Funds in the June preceding the September in which such determination is made. " (2) There are authorized to be appropriated to the Trust Funds and the Federal Hospital Insurance Trust Fund— " (A) for the fiscal year ending June 30,1966, an amount equal to the amount determined under paragraph (1) in September 1965, and " ( B ) for each fiscal year in the period beginning with July 1, 1966, and ending with the close of J u n e 30, 2015, an amount equal to the annual mstallment for such fiscal year under the most recent determination under paragraph (1) which precedes such fiscal year. "(3) F o r the fiscal year ending June 30, 2016, there is authorized to be approOTiated to the Trust Funds and the Federal Hospital Insur- ance Trust F u n d such sums as the Secretary determines would place tiie Trust Funds and the Federal Hospital Insurance Trust F u n d in the same position in which they would have been at the close of June 30, 2015, if section 210 of this Act as in effect prior to the Social Security Act Amendments of 1950, and this section, had not been enacted. " (4) There are authorized to be appropriated to the Trust Funds and the Federal Hospital Insurance Trust Fund annually, as benefits under this title and part A of title X V I I I are paid after June 30, Ante, p . 291, 2015, such sums as the Secretary determines to be necessary to meet the additional costs, resulting from subsections ( a ) , ( b ) , and (e), of such benefits (including lump-sum death payments)." ADOPTION O F C H I L D B Y RETIRED WORKER SEC. 323. (a) Section 202 (d) of the Social Security Act is amended— 72 Stat. 1022. 42 u s e 402. (1) by striking out the last sentence in paragraph (1), and (2) by adding at the end thereof (after the new paragraphs added by section 306 of this Act) the following new paragraphs: Ante, p . 370. " (9) I n the case of— " ( A ) an individual entitled to disability insurance benefits, or " ( B ) an individual entitled to old-age insurance benefits who was entitled to disability insurance benefits for the month preced- ing the first month for which he was entitled to old-age insurance benefits, a child of such individual adopted after such individual became entitled to such disability insurance benefits shall be deemed not to meet the rec[uirements of clause (i) or (iii) of paragraph (1) (C) unless such child— " (C) is the natural child or stepchild of such individual (includ- ing such a child who was legally adopted by such individual), or (D) was legally adopted by such individual before the end of the 24-month period beginning with the month after the month in which such individual most recently became entitled to disability insurance benefits, but only if—
398 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. " ( i ) proceedings for such adoption of the child had been instituted by such individual in or before the month in which be^an the period of disability of such individual which still exists at the time of such adoption (or, if such child was adopted by such individual after such individual attained age 65, the period of disability of such individual which existed in the month preceding the month in which he attained age 65), or "(ii) such adopted child was living with such individual in such month. '*(10J If an individual entitled to old-age insurance benefits (but not an individual included under paragraph (9)) adopts a child after such individual becomes entitled to such oenefits, such child shall be deemed not to meet the requirements of clause (i) of paragraph (1) (C) unless such child— " ( A ) is the natural child or stepchild of such individual (in- cluding such a child who was legally adopted by such individual), or " ( B ) was legally adopted by such individual before the end of the 24-month period beginning with the month after the month in which such individual became entitled to old-age insurance benefits, but only if— " ( i ) such child had been receiving at least one-half of his support from such individual for the year before such indi- vidual filed his application for old-age insurance benefits or, if such individual had a period of disability which continued until he had become entitled to old-age insurance benefits, for the year before such period of disability began, and " (ii) either p r o c e e d m ^ for such adoption of the child had been instituted by such mdividual in or before the month in which the individual filed his application for old-age insur- ance benefits or such adopted child was living with such in- dividual in such month." (b) The amendments made by subsection (a) of this section shall be applicable to persons who file applications, or on whose behalf ap- plications are filed, for benefits under section 202(d) of the Social 42 u*sc 4o°2^^' Security Act on or after the date this section is enacted. The time limit supta. ' provided by section 202(d) (10) (B) of such Act as amended by this section for legally adopting a child shall not apply in the case of any child who is adopted before the end of the 12-month period following the month in which this section is enacted. EXTEXSION OF PERIOD FOR FILING PROOF OF SUPPORT AND APPLICATIONS FOR LUMP-SUM DEATH PAYMENT 42 us^c 40^2 * ^^^- ^^'*- ^^) Section 202 ( p ) of t h e Social S e c u r i t y A c t is a m e n d e d t o r e a d as follows: "Extension of Period for Filing Proof of Support and Applications for Lump-Sum Death Payment " (p) I n any case in which there is a failure— "(1) to file proof of support under subparagraph (C) of sub- section ( c ) Q ) , clause (i) or (ii) of subparagraph (D) of sub- section ( f ) ( 1 ) , or subparagraph ( B ) of subsection ( h ) ( 1 ) . or
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 399 tinder clause (B) of subsection (f) (1) of this section as in effect prior to the Social Security Act Amendments of 1950, within the 64 Stat. 42 u s e 477. 301 period prescribed by such subparagraph or clause, or note "(2) to file, in the case of a death after 1946, application for a lump-sum death payment under subsection ( i ) , or under sub- section (g) of this section as in effect prior to the Social Security 42 u s e 40 2. Act Amendments of 1950, within the period prescribed by such subsection, any such proof or application, as the case may be, which is filed after the expiration of such period shall be deemed to have been filed within such period if it is shown to the satisfaction of the Secretary that there was good cause for failure to file such proof or application within such period. The determination of what constitutes good cause for purposes of this subsection shall be made in accordance with regulations of the Secretary." (b) The amendments made by this section shall be effective with respect to (1) applications for lump-sum death payments filed in or after the month m which this Act is enacted, and (2) monthly benefits based on applications filed in or after such month. TREATMENT OF CERTAIN ROYALTIES FOR RETIREMENT TE8T PURPOSES SEC. 325. (a) (1) Subparagraph (B) of section 203 (f) (5) of the Social Security Act is amended to read as follows: 42 use 40^3^." " ( B ) F o r purposes of this section— " (i) an individual's net earnings from self-employment for any taxable year shall be determined as provided in section 42 u s e 411. 211, except that paragraphs (1), (4), and (5) of section 211(c) shall not apply and the gross income shall be com- puted by excluding the amounts provided by subparagraph (D),and "(ii) an individual's net loss from self-employment for any taxable year is the excess of the deductions (plus his distributive share of loss described in section 702(a)(9) of 68A Stat. 239. the Internal Revenue Code of 1954) taken into account under 26 u s e 702. clause (i) over the gross income (plus his distributive share of income so descrited) taken into account under clause (i)." (2) Such section 203(f) (5) is further amended by adding at the end thereof the following new subparagraph: "(D) In the case of an individual— "(i) who has attained the age of 65 on or before the last day of the taxable year, and "(ii) who shows to the satisfaction of the Secretary that he is receiving royalties attributable to a copyright or patent obtained before the taxable year in which he attained the age of 65 and that the property to which the copyright or patent relates was created oy his own personal efforts, there shall be excluded from gross mcome any such royalties." (b) The amendments made by subsection (a) shall apply with respect to the computation of net earnings from self-employment and the net loss from self-employment for taxable years beginning after 1964.
400 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. A M E N D M E N T S PRESERVING R E L A T I O N S H I P B E T W E E N RAILROAD R E T I R E - MENT AND OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE SYSTEMS ^/o^^tat.^307; SEC. 326. (a) Section l ( q ) of the Railroad Retirement Act of 1937 45 use 228a. IS amended by striking out "1961" and inserting in lieu thereof "1965". 73 Stat. 27. (b) Section 5(1) (9) of such Act is amended by striking out "after 45 use 228e. jggg -^ j ^ ^ ^ ^^^^ $4,800" aud inserting in lieu thereof the following: "after 1958 and before 1966 is less than $4,800. or for any calendar year after 1965 is less than $6,600"; and by striking out "and $4,800 for years after 1958", and inserting in lieu thereof the following: "$4,800 for years after 1958 and before 1966, and $6,600 for years after 1965". T E C H N I C A L A M E N D M E N T R E L A T I N G TO M E E T I N G S OF BOARD OF TRU8TEIES OP T H E OLD-AGE, SURVIVORS, A N D D I S A B I L I T Y I N S U R A N C E TRUST FUNDS II us^c 4o\^" ^^'9' ^^'^- S^9<^ion 201(c) of the Social Security Act is amended by striking out "six months" in the fourth sentence and inserting in lieu thereof "calendar year". A P P L I C A T I O N S FOR B E N E F I T S «ulc4oJ.' S ^ - ^28. (a) Section 202(j) (2) of the Social Security Act is amended to read as follows: "(2) An application for any monthly benefits under this section filed before the first month in which the applicant satisfies the require- ments for such benefits shall be deemed a valid application only if the applicant satisfies the requirements for such benefits before the Secre- tary makes a final decision on the application. If upon final decision by the Secretary, or decision upon judicial review thereof, such appli- cant is found to satisfy such requirements, the application shall be deemed to have been filed in such first month." (b) Section 216(i) (2) of such Act (as amended by subsection Ante, p . 367. (b) (1) of section 303) is amended by inserting after subparagraph ( E ) the following: " ( F ) A n application for a disability determination filed before the first day on which the applicant satisfies the requirements for a period of disability under this subsection shall be deemed a valid application only if the applicant satisfies the requirements for a period of dis- ability before the Secretary makes a final decision on the application. I f upon final decision by the Secretary, or decision upon judicial review thereof, such applicant is found to satisfy such requirements, the application shall be deemed t o have been filed on such first day." 42 use 423* (^) "^^^ ^ ^ sentence of section 223(b) of such Act is amended to read as follows: "An application for disability insurance benefits filed before the first month in which the applicant satisfies the requirements for such benefits (as prescribed in subsection (a) (1)) shall be deemed a valid application only if the applicant satisfies the requirements for such benefits before the Secretary makes a final decision on the appli- cation. If, upon final decision by the Secretary, or decision upon judicial review thereof, such applicant is found to satisfy such re- quirements, the application shall be deemed to have been filed in such first month."
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 401 (d) The amendments made by this section shall apply with respect to (1) applications filed on or after the date of enactment of this Act^ (2) applications as to which the Secretary has not made a final decision before the date of enactment of this Act, and (3) if a civil action with respect to final decision by the Secretary has been com- menced under section 205 (g^ of the Social Security Act before the ^^ u^c 4 ^ ° ' date of enactment of this Act, applications as to which there has been no final judicial decision before the date of enactment of this Act. UNDERPAYMENTS SEC. 329. Section 204 of the Social Security Act is amended by ^^ use 404. adding at the end thereof the following new subsection: " ( d ) Notwithstanding the provisions of subsection (a), if an indi- vidual dies before any payment due him under this title is completed, and the total amount due at the time of his death does not exceed the amount of the monthly insurance benefit to which he was entitled for the month preceding the month in which he died, payment of the amount due shall be made— "(1) to the person, if any, determined by the Secretary to be the surviving spouse of the deceased individual and to have been living in the same ;household with the deceased at the time of his death, or "(2) if there is no such person, or if such person dies before receiving payment, to the legal representative of the estate of such deceased individual." PAYMENTS TO TWO OR MORE INDIVIDUALS OF THE SAME FAMILY SEC. 330. Section 205 (n) of the Social Security Act is amended to read as follows: " ( n ) The Secretary may, in his discretion, certify to the Managing Trustee any two or more individuals of the same family for joint pay- ment of the total benefits payable to such individuals for any month, and if one of such individuals dies before a check representing such joint payment is negotiated, payment of the amount of such unnegoti- ated check to the surviving individual or individuals may be authorized in accordance with regulations of the Secretary of the Treasury; except that appropriate adjustment or recovery shall be made under section 204(a) with respect to so much of the amount of such check as exceeds the amount to which such surviving individual or individuals are entitled under this title for such month." VALIDATING CERTIFICATES FILED BY MINISTERS SEC. 331. (a) Section 1402(e) of the Internal Revenue Code of 1954 (relating to certificates to waive tax exemption on self-employ- ^^ stat. loss. ment income m the case of ministers, members of religious orders, and Christian Science practitioners) is amended by striking out para- graphs (5) and (6) and inserting in lieu thereof the following: "(5) OPTIONAL PROVISION FOR CERTAIN CERTIFICATES FILED ON OR BEFORE APRIL 15, 1967.—Notwithstanding any other provision of this section, in any case where an individual has derived earnings in any taxable year ending after 1954 from the performance of service described in subsection ( c ) ( 4 ) , or in subsection (c)(5) insofar as it related to the performance of service by an individual
402 PUBLIC LAW 89-97-JULy 30, (1965 [79 STAT. in the exercise of his profession as a Christian Science practitioner, and has reported such earnings as self-employment mcome on a return filed on or before the due date prescribed for filing such return (including any extension thereof)— "(A) a certificate filed by such individual on or before April 15,1966, which (but for this subparagraph) is ineffec- tive for the first taxable year ending after 1954 for which such a return was filed shall be effective for such first taxable year and for all succeeding taxable years, provided a supple- mental certificate is filed by such individual (or a fiduciary acting for such individual or his estate, or his survivor within the meaning of section 205(c) (1) (C) of the Social Security 42 u*sc 405' -^^^^ after the date of enactment of the Social Security Amendments of 1965 and on or before April 15, 1967, and "(B) a certificate filed after the date oi enactment of the Social Security Amendments of 1965 and on or before April 15,1967, by a survivor (within the meaning of section 205(c) (1) (C) of the Social Security Act) of such an individual who died on or before April 15,1966, may be effective, at the election of the person filing such a certificate, for the first taxable year ending after 1954 for which such a return was filed and for all succeeding years, but only if— Ante, p. 394. «(i) th© tax undcr section 1401 in respect to all such individual's self-employment income (except for underpay- ments of tax attributable to errors made in good faith), for each such year described in subparagraphs (A) and (B) ending before January 1,1966, is paid on or before April 15, 1967,. and "(ii) in any case where refund has been made of any such tax which (but for this paragraph) is an overpayment, the amount refunded (including any interest paid under section aeljsc 66u^" ^^^-^J ^^ repaid on or before April 15,1967. 26 use 640i! The provisions of section 6401 shall not apply to any payment or repayment described in this paragraph." (b) In the case of a certificate or supplemental certificate filed pur- suant to section 1402(e) (5) of the Internal Jlevenue Code of 1954, as amended by subsection (a)— (1) for purposes of computing interest, the due date for the payment of the tax under section 1401 of such Code which is due for any taxable year ending before January 1, 1966, solely by reason of the filing of a certificate which is effective under such section 1402(e) (5) shall be April 15,1967; 26 use 6501. (2) for purposes of section 6501 of such Code, the statutory period for the assessment of any tax for any taxable year for which tax is due solely hy reason of the filing of such certificate shall not expire before April 16,1970; and 26 use 6651. (3) fpj. purposes of section 6651 of such Code (relating to addi- tion to tax for failure to file tax return), the amount of tax required to be shown on the return shall not include tax under section 1401 of such Code "which is due for any taxable year ending before January 1,1966, solely by reason of the filing of a certificate which is effective under section 1402(e) (6). (c) Notwithstanding any provision of section 205(c) (5) (F) of the It 42 fr^^ ?«^ u s e 405. Social Security Act, the Secretary of Health, Education, and Welfare may conform, before April 16,1970, his records to tax returns or state-
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 403 ments of earnings which constitute self-employment income solely by reason of the filing of a certificate which is effective under section 1402(e)(5) of such Code. (d) The amendments made by this section shall be applicable (except as otherwise specifically provided therein) only to certificates with respect to which supplemental certificates are filed pursuant to section 1402(e) (5) (A) of such Code after the date of the enactment of Ante, p. 401. this Act, and to certificates filed pursuant to section 1402(e) (5) (B) after such date; except that no monthly benefits under title I I of the Social Securitv Act for the month in which this Act is enacted or any ^^ "^^ '*°^- prior month snail be payable or increased by reason of such amend- ments, and no lump-sum death payment under such title shall be pay- able or increased by reason of such amendments in the case of any individual who died prior to the date of the enactment of this Act. The provisions of section 1402(e) (5) and (6) of the Internal Kevenue Code of 1954 which were in effect before the date of enactment of this 75^ stat!*i4i!'' Act shall be applicable with respect to any certificate filed pursuant 26 use 1402. thereto before such date if a supplemental certificate is not filed with respect to such certificate as provided in this section. DETERMINATION OF ATTORNEYS' FEES I N COURT PROCEEDINGS UNDER TITLE I I SEC. 332. The heading of section 206 of the Social Security Act H l^^^ l^^- is amended to read "REPRESENTATION OF CLAIMANTS". Such section is further amended by inserting " ( a ) " after "SEC. 206." and by adding at the end of such section the following new subsection: "(b)(1) Whenever a court renders a judgment favorable to a claimant under this title who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Secretary may, notwithstanding the provisions of section 205 (i), certify the amount of such fee for pay- ^"^ "^^ '*"^5- ment to such attorney out of, and not in addition to, the amount of such past-due benefits. In case of any such judgment, no other fee may Ibe payable or certified for pajmient for such representation except as provided in this paragraph. "(2) Any attorney who charges, demands, receives, or collects for services rendered in connection with proceedings before a court to which paragraph (1) is applicable any amount in excess of that al- lowed by the court thereunder shall be guilty of a misdemeanor and upon conviction thereof shall be subject to a fine of not more than $500, or imprisonment for not more than one year, or both." CONTINUATION oi' WIDOW's AND W I D O W E R ' S INSURANCE BENEFITS APIER REMARRIAGE SEC. 333. (a) (1) Subsection (e) of section 202 of the Social Secu- rity Act, as amended by section 308 of this Act, is amended by adding Ante, p. 376. at the end thereof the following new paragraph: "(4) If a widow, after attaining the age of 60, marries an indi- vidual (other than one described m subparagraph (A) or (B) of paragraph (3)), such marriage shall, for purposes of paragraph (1), be deemed not to have occurred; except that, notwithstanding the provisions of paragraph (2) and subsection (q), such widow's insur- 37^"'°' ^^' ^'^'
404 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. ance benefit for the month in which such marriage occurs and each month thereafter prior to the month in which the husband dies or such marriage is otherwise terminated, shall be equal to 50 per centum of the primary insurance amount of the deceased individual on whose wages and self-employment income such benefit is based." (2) Paragraph (2) of such subsection, as amended by section 307 Ante, p. 373. of this Act, Is furthcr amended by inserting before the comma "and paragraph (4) of this subsection". 4 2u*sc402^' ( b ) ( 1 ) Subsection (f) of such section is amended by adding at the end thereof the following new paragraph: "(5) If a widower, after attaining the age of 62, marries an individual (other than one described in subparagraph (A) or (B) of aragraph ( 4 ) ) , such marriage shall, for purposes of paragraph (1), Ante, p. 3 7 4 . P e deemed not to have occurred; except that, notwithstandmg the provisions of paragraph (3) and subsection (q), such widower's insurance benefit for the month in which such marriage occurs and each month thereafter prior to the month in which the wife dies or such marriage is otherwise terminated, shall be equal to 50 per centum of the primary insurance amount of the deceased individual on whose wages and self-employment income such benefit is based." (2) Paragraph (3) of such subsection is amended by striking out "Such" and inserting in lieu thereof "Except as provided in para- graph (5), such". (c)(1) Paragraph ( 2 ) ( B ) of subsection (k) of such section 202 is amended by inserting "other than an individual to whom subsection Ante. p. 403. (g) (4) ^j. (f^ (5) applics)" after "Any individual" and by adding at the end thereof the following new sentence: "Any individual who is entitled for any month to more than one widow's or widower's insur- ance benefit to which subsection (e)(4) or (f)(5) applies shall be entitled to only one such benefit for such month, such benefit to be the largest of such benefits.". (2) Paragraph (3) of such subsection is amended by inserting " ( A ) " after " ( 3 ) " and by adding at the end thereof the following new subparagraph: " ( B ) If an individual is entitled for any month to a widow's or widower's insurance benefit to which subsection (e)(4) or ( f ) ( 5 ) applies and to any other monthly insurance benefit under section 202 (other than an old-age insurance benefit), such other insurance benefit for such month, after any reduction under subparagraph ( A ) , any reduction under subsection ( q ) , and any reduction under section 42 u*sc 403V* 203(a), shall be reduced, but not below zero, by an amount equal to such widow's or widower's insurance benefit after any reduction or reductions under such subparagraph (A) and such section 203(a)." (d) The amendments made by this section shall apply with respect, to monthly insurance benefits under section 202 of the Social Securitvi Act beginning with the second month following the month in which this Act is enacted; but, in the case of an individual who was not 403"'sup^ra! ^^^' entitled to a monthly insurance benefit under section 202(e) or (f) of such Act for the first month following the month in which this Act ds enacted, only on the basis of an application filed in or after the month in which this Act is enacted. C H A N G E S I N D E F I N I T I O N S OF W I F E , W I D O W , H U S B A N D , A N D WIDOWER SEC. 334. (a) Section 216 (b) of the Social Security Act, as amended Ante. p. 373. ^jy gectiou 306 of this Act, is amended by striking out "or" at the end of clause (3) ( A ) , and by inserting immediately before the period at the end thereof the following:", or (C) was entitled to, or upon appli-
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 405 cation therefor and attainment of the required a ^ (if any) would have been entitled to, a widow's, child's (after attainment or age 18), or parent's insurance annuity under section 5 of the Railroad Retire- ment Act of 193T, as amended". 45u1c228;. (b) Section 216(c) of such Act, as amended by section 306 of this Act, is amended by striking out "or" at the end of clause (6) ( A ) , and '^"^^' ^' ^'^^• by inserting immediately before the period at the end thereof the fol- lowing: ", or (C) she was entitled to, or upon application therefor and attainment of the required age (if any) would have been entitled to, a widow's, child's (after attainment of age 18), or parent's insur- ance annuity under section 5 of the Railroad Retirement Act of 1937, as amended". (c) Section 216(f) of such Act, as amended by section 306 of this Act, is amended by striking out "or" at the end oi clause (3) ( A ) , and by inserting immediately before the period at the end thereof the fol- lowing : ", or (C) he was entitled to, or upon application therefor and attainment of the required age (if any) he would have been entitled to, a widower's, child's (after attainment of age 18), or parent's insurance annuity under section 5 of the Railroad Retirement Act of 1937, as amended". (d) Section 216(g) of such Act, as amended by section 306 of this Act, is amended by striking out "or" at the end of clause (6) ( A ) , and by inserting immediately before the period at the end thereof the following: , or (C) he was entitled to, or on application therefor and attainment of the required age (if any) he would have been entitled to, a widower's, child's (after attainment of age 18), or parent's insur- ance annuity under section 5 of the Railroad Retirement Act of 1937, as amended". (e) Section 202(c) (2) is amended by striking out "or" at the end AJtl,%^^37^2.^^'' of subparagraph ( A ) , by striking out the period at the end of sub- 42 use 402. paragraph (B) and inserting in lieu thereof " ; or", and by adding after such subparagraph (B) the following new subparagraph: " ( C ) in the month prior to the month of his marriage to such individual he was entitled to, or on application therefor and attainment of the required age (if any) would have been entitled to, a widower's, child's (after attainment of age 18), or parent's insurance annuity under section 5 of the Railroad Retirement Act of 1937, as amended." (f) Section 202(f) (2) of such Act is amended by striking out "or" at the end of subparagraph ( A ) , by striking out the period at the end of subparagraph (B) and inserting in lieu thereof " ; or", and by adding after such subparagraph (B) the following new subpara- graph : " ( C ) in the month prior to the month of his marriage to such individual he was entitled to, or on application therefor and attainment of the required age (if a n y ) , would have been entitled to, a widower's, child's (after attainment of age 18), or parent's insurance annuity under section 5 of the Railroad Retirement Act of 1937, as amended." (g) The amendments made by this section shall be applicable only with respect to monthly insurance benefits under title I I of the Social Security Act beginning with the second month following the month 42 use 401. in which this Act is enacted, but only on the basis of applications filed in or after the month in which this Act is enacted.
406 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. REDUCTION OF BENEFITS ON RECEIPT OF W O R K M E N ' S COMPENSATION SEC. 335. Effective with respect to benefits under title I I of the 42 use 401. Social Security Act for months after December 1965 based on the wages and self-employment income of an individual who is entitled 42 u'sc 423^.' to benefits under section 223 of such Act and whose period of disability (as defined in such title) began after June 1, 1965, title I I of such Act is amended by inserting after section 223 the following new section: " R E D U C T I O N OF BENEFITS BASED ON DISABILITT ON ACCOUNT OF RECEIPT OF W O R K M E N ' S COMPENSATION "SEC 224. (a) If for any month prior to the month in which an individual attains the age of 62— "(1) such individual is entitled to benefits under section 223, and "(2) such individual is entitled for such month, under a work- men's compensation law or plan of the United States or a State, to periodic benefits for a total or partial disability (whether or not permanent), and the Secretary has, in a prior month, received notice of such entitlement for such month, the total of his benefits under section 223 for such month and of an 42 u*sc 402^' '_ ' ' t benefits under section 202 for such month based on his wages and sel employment income shall be reduced (but not below zero) by the amount by which the sum of— "(3) such total of benefits under sections 223 and 202 for such month, and "(4) such periodic benefits payable (and actually paid) for such month to such individual under the workmen's compensation law or plan, exceeds the nigher of— "(5) 80 per centum of his 'average current earnings', or "(6) the total of such individuals disability insurance benefits under section 223 for such month and of any monthly insurance benefits under section 202 for such month based on his wa^es and self-employment income, prior to reduction under this section. In no case shall the reduction in the total of such benefits under sec- tions 223 and 202 for a month (in a continuous period of months) reduce such total below the sum of— "(7) the total of the benefits under sections 223 and 202, after reduction under this section, with respect to all persons entitled to benefits on the basis of such individual's wages and self-employ- ment income for such month which were determined for such individual and such persons for the first month for which reduc- tion under this section was made (or which would have been so determined if all of them had been so entitled in such first month), and "(8) any increfise in such benefits with respect to such indi- vidual and such persons, before reduction under this section, which is made effective for months after the first month for which reduc- tion under this section is made. For purposes of clause (5), an individual's average current earnings means the larger of (A) the average monthly wage used for purposes of computing his benefits under section 223, or (B) one-sixtieth of the total of his wages and self-employment income for the five consecutive calendar years after 1950 for which such wages and self-employment income were highest.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 407 "(b) If any periodic benefit under a workmen's compensation law or plan is payable on other than a monthly basis (excluding a benefit payable as a lump sum except to the extent that it is a commutation of, or a substitute for, periodic payments), the reduction under this sec- tion shall be made at such time or times and in such amounts as the Secretary finds will approximate as nearly as practicable the reduction prescribed by subsection (a). "(c) Reduction of benefits under this section shall be made after any reduction under subsection (a) of section 203, but before deduc- Ante, p. 363, 378. tions under such section and under section 222(b). 70 Stat. 817. 42 u s e 422. "(d) The reduction of benefits reg^uired by this section shall not be made if the workmen's compensation law or plan under which a periodic benefit is payable provides for the reduction thereof when anyone is entitled to benefits under this title on the basis of the wages and self-employment income of an individual entitled to benefits under section 223. 70 Stat. 815. 42 u s e 423. "(e) If it appears to the Secretary that an individual may be eligi- ble for periodic benefits under a workmen's compensation law or plan which would give rise to reduction under this section, he may require, as a condition of certification for payment of any benefits under section 223 to any individual for any month and of any benefits under section 202 for such month based on such individual's wages and self- 64 Stat. 48 2. 42 u s e 402. employment income, that such individual certify (i) whether he has filed or intends to file any claim for such periodic benefits, and (ii) if he has so filed, whether there has been a decision on such claim. The Secretary may, in the absence of evidence to the contrary, rely upon such a certification by such individual that he has not filed and does not intend to file such a claim, or that he has so filed and no final decision thereon has been made, in certifying benefits for payment pursuant to section 205 (i). S3 Stat. 1371. 42 u s e 405. "(f) (1) In the second calendar year after the year in which reduc- tion under this section in the total of an individual's benefits under section 223 and any benefits under section 202 based on his wages and self-employment income was first required (in a continuous period of months), and in each third year thereafter, the Secretary shall redetermine the amount of such benefits which are still subject to reduction under this section; but such redetermination shall not result in any decrease in the total amount of benefits payable under this title on the basis of such individual's wages and self-employment income. Such redetermined benefit shall be determined as of, and shall become effective with, the January following the year in which such redeter- mination was made. "(2) In making the redetermination required by paragraph (1), the individual's average current earnings (as defined in subsection (a)) shall be deemed to be the product of his average current earnings as initially determined under subsection (a) and the ratio of (i) the average of the taxable wages of all persons for whom taxable wages were reported to the Secretary for the first calendar quarter of the calendar year in which such redetermination is made, to (ii) the average of the taxable wages of such persons reported to the Secretary for the first calendar quarter of the taxable year in which the reduction was first computed (but not counting any reduction made in benefits for a previous period of disability). Any amount determined under the preceding sentence which is not a multiple of $1 shall be reduced to the next lower multiple of $1.
408 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. " ( g ) Whenever a reduction in the total of benefits for any monlh based on an individual's wages and self-employment income is made under this section, each benefit, except the disability insurance benefit, shall first be proportionately decreased, and any excess of such reduc- tion over the sum of all such benefits other than the disability insurance benefit shall then be applied to such disability insurance benefit." PAYMENT OF COSTS OF REHABILITATION SERVICES FROM THE TRUST FUNDS 42 use ^22.' ^ ^ - ^^^- Section 222 of the Social Security Act is amended by adding at the end thereof the following new subsection: " C O S T S O F REHABILITATION SERVICES FROM TRUST FUNDS " ( d ) ( 1 ) F o r the purpose of making vocational rehabilitation services more readily available to disabled individuals who are— " ( A ) entitled to disability insurance benefits under section 70 Stat. 815. 223. or 64 Stat. 482. " ( B ) entitled to child's insurance benefits under section 202 42 use 402. (d) after having attained age 18 (and are under a disability), to the end that savings will result to the Trust Funds as a result of rehabilitating the maximum number of such individuals into pro- ductive activity, there are authorized to be transferred from the Trust Funds such sums as may be necessary to enable the Secretary to pay the costs of vocational rehabilitation services for such individ- uals (including (i) services during their waiting periods, and (ii) so much of the expenditures for the administration of any State plan as is attributable to carrying out this subsection); except that the total amount so made available pursuant to this subsection in any fiscal year may not exceed 1 percent of the total of the benefits ^^Ante. pp. 370, uuder section 202(d) for children who have attained age 18 and are under a disability, and the benefits under section 223, which were certified for payment in the preceding year. The selection of in- dividuals (including the order in which they shall be selected) to receive such services shall be made in accordance with criteria formu- lated by the Secretary which are based upon the effect the provision of such services would have upon the Trust Funds. "(2) In the case of each State which is willing to do so, such vocational rehabilitation services shall be furnished under a State plan for vocational rehabilitation services which— " ( A ) has been approved under section 5 of the Vocational 68 Stat. 656. Eehabilitatlou Act, 29 u s e 35. " ( B ) pr^ovides that, to the extent funds provided under this subsection are adequate for the purpose, such services will be furnished, to any individual in the State who meets the criteria prescribed by the Secretary pursuant to paragraph (1), with reasonable promptness and in accordance with the order of selec- tion determmed under such criteria, and " ( C ) provides that such services will be furnished to any individual without regard to (i) his citizenship or place of resi- dence, (ii) his need for financial assistance except as provided in reg^ulations of the Secretary in the case of maintenance during rehabilitation, or (iii) any order of selection which would other- wise be followed under the State plan pursuant to section 5 (a) (4) of the Vocational Rehabilitation Act. " (3) In the case of any State which does not have a plan which meets the requirements of paragraph (2), the Secretary may provide such services by agreement or contract with other pulilio or private agencies, organizations, institutions, or individuals.
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 409 " (4) Payments under this subsection may be made in installments, and in advance or by way of reimbursement, with necessary adjust- ments on account of overpayments or underpayments. " (5) Money paid from the Trust Funds under this subsection to pay the costs of providing services to individuals who are entitled to bene- fits under section 223 (including services during their waiting periods), ^° ^*|^- ^^y- or who are entitled to benefits under section 202(d) on the basis of the 64 stat. 482; wages and self-employment income of such individuals shall be ^"'®' PP; •^^°' 3^^- charged to the Federal Disability Insurance Trust Fund, and all other Ante, p. 370. money paid out from the Trust Funds under this subsection shall be charged to the Federal Old-Age and Survivors Insurance Trust Fund. The Secretary shall determine according to such methods and pro- cedures as he may deem appropriate— " (A) the total cost or the services provided under this subsection, and " ( B ) subject to the provisions of the preceding sentence, the amount of such cost which should be charged to each of such Trust Funds. "(6) For the purposes of this subsection the term 'vocational reha- bilitation services' shall have the meaning assigned to it in the Voca- tional Rehabilitation Act, except that such services may be limited in 68 Stat. 652. 29 u s e 31 note. type, scope, or amount in accordance with regulations of the Secretary designed to achieve the purposes of this subsection." TEACHERS I N T H E STATE OF M A I N E SEC. 337. (a) Section 316 of the Social Security Amendments of 1958 yJl^H^'^Ao'^'^'' is amended by striking out "July 1,1965" and inserting in lieu thereof 42 use 418 "July 1,1967". "°t«- (b) The amendment made by this section shall be effective as of J u l y 1,1965. MODIFICATION OF A G R E E M E N T W I T H N O R T H DAKOTA AND IOWA WITH RESPECT TO CERTAIN S T U D E N T S SEC. 338. Notwithstanding any provision of section 218 of the Social Security Act, the agreements with the States of North Dakota ^^ ^*^^- ^Yg"^- and Iowa entered into pursuant to such section may, at the option of the State, be modified so as to exclude service performed in any calen- dar quarter in the employ of a school, college, or university if such service is performed by a student who is enrolled and is regularly attending classes at such school, college, or university and if the remu- neration for such service is less than $50. Any modification of either of such agreements pursuant to this Act shall be effective with respect to services performed after an effective date specified in such modifica- tion, except that such date shall not be earlier than the date of enact- ment of this Act. Q U A L I F I C A T I O N OF C H I L D R E N N O T Q U A L I F I E D U N D E R STATE L A W SEC. 339. (a) Section 216(h) of the Social Security Act is amended 7/statr\'o3o^' by adding at the end thereof the following new paragraph: 42 use 416. " (3) An applicant who is the son or daughter of a fully or currently insured individual, but who is not (and is not deemed to be) the child of such insured individual under paragraph (2), shall nevertheless be deemed to be the child of such insured individual if: " ( A ) in the case of an insured individual entitled to old-age insurance benefits (who was not, in the month preceding such entitlement, entitled to disability insurance benefits)— 49-850 0-66—29
410 PUBLIC LAW 89-97-JULY 30, 1965 ^79 STAT. " ( i ) such insured individual— " ( I ) has acknowledged in writing that the applicant is his son or daughter, " ( I I ) has been decreed by a court to be the father of the applicant, or " ( I I I ) has been ordered by a court to contribute to the support of the applicant because the applicant is his son or daughter, and such acknowledgment, court decree, or court order was made not less than one year before such insured individual became entitled to old-age insurance benefits or attained age 65, whichever is earlier; or "(ii) such insured individual is shown by evidence satis- factory to the Secretary to be the father of the applicant and was living with or contributing to the support of the appli- cant at the time such insured mdividual became entitled to benefits or attained age 65, whichever first occurred; " ( B ) in the case of an insured individual entitled to disability insurance benefits, or who was entitled to such benefits in the month preceding the first month for which he was entitled to old- age insurance benefits— "(i) such insured individual—• " ( I ) has acknowledged in writing that the applicant is his son or daughter, " ( I I ) has been decreed by a court to be the father of the applicant, or " ( I I I ) has been ordered by a court to contribute to the support of the applicant because the applicant is his son or daughter, and such acknowledgment, court decree, or court order was made before such insured individuaj's most recent period of disability began; or "(ii) such insured individual is shown by evidence satis- factory to the Secretary to be the father of the applicant and was living with or contributing to the support of that appli- cant at the time such period of disability began; " ( C ) in the case of a deceased individual— " ( i ) such insured individual— " ( I ) had acknowledged in writing that the applicant is his son or daughter, " ( I I ) had been decreed by a court to be the father of the applicant, or "(III) had been ordered by a court to contribute to the support of the applicant because the applicant was his son or daughter, and such acknowledgment, court decree, or court order was made before the death of such insured individual, or "(ii) such insured individual is shown by evidence satis- factory to the Secretary to have been the father of the appli- cant, and such insured individual was living with or contributing to the support of the applicant at the time such insured individual died." 74 Stat. 952. (b) Sectlou 202(d) of such Act is amended by inserting after 42 use 402. «216(h) (2) ( B ) " the following: "or section 216(h) (3)".
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 411 (c) The amendments made by subsections (a) and (b) shall be applicable with respect to monthly insurance benefits under title I I of the Social Security Act beginning with the second month following ^2 use 401. the month in which this Act is enacted but only on the basis of an application filed in or after the month in which this Act is enacted. DISCLOSURE, UNDER CERTAIN CIRCUMSTANCES, TO COURTS A N D INTERESTED WELFARE AGENCIES OF WHEREABOUTS OF INDIVIDUALS SEC. 340. Section 1106 of the Social Security Act is amended by ^J Jta^ 5^59^ adding at the end thereof the following new subsection: "(c) (1) Upon request (filed in accordance with paragraph (2) of this subsection) of any State or local agency participating in admin- istration of the State plan approved under title I, IV, X, X I V , X V I , or X I X , or participating in the administration of any other State or 42 use 301 et local public assistance program, for the most recent address of any ^*'^* individual included in the files of the Department of Health, Educa- tion, and Welfare maintained pursuant to section 205, the Secretary ^2^*|l* ^Q^^' shall furnish such address, or the address of the most recent employer, or both, if such agency certifies that— " ( A ) an order has been issued by a court of competent juris- diction against such individual for the support and maintenance of his child or children who are under the age of 16 in destitute or necessitous circumstances, '^(B) such child or children are applicants for or recipients of assistance available under such a plan or program, " ( C ) such agency has attempted without success to secure such information from all other sources reasonably available to it, and " ( D ) such information is requested (for its own use, or on the request and for the use of the court which issued the order) for the purpose of obtaining such support and maintenance. "(2) A request under paragraph ( l ) shall be filed in such manner and form as the Secretary may prescribe, and shall be accompanied by a certified copy of the order referred to in paragraph (1) ( A ) . "(3) The penalties provided in the second sentence of subsection (a) shall apply with respect to use of information provided under paragraph (1) of this subsection except for the purpose authorized by subparagraph (D) thereof. "(4) The Secretary, in such cases and to such extent as he may prescribe in accordance with regulations, may require payment for the cost of information provided under paragraph ( 1 ) ; and the pro- visions of the second sentence of subsection (D) shall apply also with respect to payment under this paragraph." ADDITIONAL PERIOD FOR FILING MINISTERS CERTIFICATES SEC. 341. (a) Clause (B) of section 1402(e)(2) of the Internal Revenue Code of 1954 (relating to time for filing waiver certificate by 7g^stft^\*o76^' ministers, members of religious orders, and Christian Science practi- 26 use 1402. tioners) is amended by striking out "his second taxable year ending after 1962" and inserting in lieu thereof "his second taxable year end- ing after 1963". (b) Section 1402(e) (3) of such Code (relating to effective date of ''l^H^^ ^ " ; certificate) is amended by adding at the end thereof the following ^^ new subparagraph:
412 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. " ( D ) Notwithstanding the first sentence of subparagraph ( A ) , if an individual files a certificate after the date of the enactment of this subparagraph and on or before the due date of the return (including any extension thereof) for his sec- ond taxable year ending after 1963, such certificate shall be effective for his first taxable year ending after 1962 and all succeeding years." (c) The amendments made by subsections (a) and (b) shall be ap- plicable only with respect to certificates filed pursuant to section 1402 26 use 1402 (g^ of the Internal Revenue Code of 1954 after the date of the enact- ment of this Act; except that no monthly benefits under title I I of the 42 u s e 4 0 1 . Social Security Act for the month in which this Act is enacted or any prior month shall be payable or increased by reason of such amend- ments. RECTEFYING ERROR I N I N T E R P R E T I N G L A W W I T H RESPECT TO CERTAIN SCHOOL E M P L O Y E E S I N ALASKA SEC. 342. For purposes of the agreement under section 218 of the 4 2 use' 4\^8l' Social Security Act entered into by the State of Alaska, or its prede- cessor the Territory of Alaska, where employees of an integral unit of a political subdivision of the State or Territory of Alaska have in good faith been included under the State or Territory's agreement as a coverage group on the basis that such integral unit of a political sub- division was a political subdivision, then such unit of the political subdivision shall, for purposes of section 218(b) (2) of such Act, be deemed to be a political subdivision, and employees performing serv- ices within such unit shall be deemed to be a coverage group, effective with the effective date specified in such agreement or modification of such agreement with respect to such coverage group and ending with the last day of the year in which this Act is enacted. CONTINUATION OF C H I L D ' S INSURANCE BENEFITS AFTER ADOPTION BY BROTHER OR SISTER SEC. 343. (a) Section 202(d) (1) (D) of the Social Security Act (as Ante,, p . 371. amended by section 306(b) of this Act) is further amended by strik- ing out "or uncle" and inserting in lieu thereof "uncle, brother, or sister". (b) The amendment made by subsection (a) shall apply only with respect to monthly insurance benefits under title I I of the Social Secu- rity Act for months after the month in which this Act is enacted; except that, in the case of an individual who was not entitled to child's /intt ^*^*'370' insurance benefits under section 202(d) of such Act for the month in 397.' ' ' which this Act was enacted, such amendment shall apply only on the 42 use 402. basis of an application filed in or after the month in which this Act is enacted. DISABILITY I N S U R A N C E B E N E F I T S FOR T H E BLIND; SPECIAL PROVISIONS SEC. 344. (a) Section 216(i) (3) of the Social Security Act (as Ants, p. 367. amended by section 303 of this Act) is further amended by striking out subparagraph (B) and all that follows and inserting in lieu thereof the following: " ( B ) (i) he had not less than 20 quarters of coverage during the 40-quarter period which ends with such quarter, or "(ii) if such quarter ends before he attains (or would attain) age 31 and he is under a disability by reason of blindness (as
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 413 defined in paragraph ( 1 ) ) , not less than one-half (and not less' than 6) of the quarters during the period ending with such quarter and beginning after he attained the age of 21 were quarters of coverage, or (if the number of quarters in such period is less than 12) not less than 6 of the quarters in the 12- quarter period ending with such quarter were quarters of coverage; except that the provisions of subparagraph (A) of this paragraph shall not apply in the case of an individual with respect to whom a period of disability would, but for such subparagraph, begin before 1951. For purposes of subparagraph (B) of this paragraph, when the number of quarters in any period is an odd number, such number shall be reduced by one, and a quarter shall not be counted as part of any period if any part of such quarter was included in a prior period of disability unless such quarter was a quarter of coverage." (b) Section 223(c) (1) of such Act is amended by striking out sub- ^o sm. s^is. paragraph (B) and inserting in lieu thereof the following: " ( B ) (i) he had not less than 20 quarters of coverage during the 40-quarter period which ends with the quarter in which such month occurred, or "(ii) if such month ends before he attains (or would attain) age 31 and he is under a disability by reason of blindness (as defined in section 2 1 6 ( i ) ( l ) ) , not less than one-half (and not es stat. loso. less than 6) of the quarters during the period ending with the '*^ usc4i6. quarter in which such month occurred and beginning after he attained the age of 21 were quarters of coverage, or (if the number of quarters in such period is less than 12) not less than 6 of the quarters in the 12-quarter period ending with such quarter were quarters of coverage. F o r purposes of subparagraph (B) of this paragraph, when the number of quarters in any period is an odd number, such number shall be reduced by one, and a quarter shall not be counted as part of any period if any part of such quarter was included in a period of disability unless such quarter was a quarter of coverage." (c) Section 223(a)(1) of such Act (as amended by section 303 of this Act) is further amended by adding the following sentence ^"'*' P* 367. at the end thereof: "No payment under this paragraph may be made to an individual who would not meet the definition of disability in subsection (c) (2) except for subparagraph (B) thereof for any month in which he engages in substantial gainful activity, and no payment may be made for such month under subsection ( b ) , (c), or (d) of section 202 to any person on the basis of the wages and self- ^"'*' f^" ^7°' employment income of such individual." 482! (d) The first sentence of section 223(c)(2) of such Act (as 42 use 402. amended by section 303 of this Act) is further amended by adding a'fter subparagraph (A) the following new subparagraph: " ( B ) in the case of an individual who has attained the age of 55 and is blind (within the meaning of 'blindness' as defined in section 2 1 6 ( i ) ( l ) ) , inability by reason of such blindness to engage in substantial gainful activity requiring skills or abilities comparable to those of any gainful activity in which he has previously engaged with some regularity and over a substantial period of time." (e) The amendments made by this section shall apply only with respect to monthly benefits under title I I of the Social Security Act '^^ use 401. for months after the first month following the month in which this Act is enacted, on the basis of applications for such benefits filled in or after the month in which this Act is enacted.
414 PUBLIC LAW 89-97-JULY 30, 1%5 [79 STAT. TITLE IV—PUBLIC ASSISTANCE AMENDMENTS INCREASED FEDERAL P A Y M E N T S U N D E R P U B L I C ASSISTANCE TITLES OF T H E SOCIAL S E C U R I T Y ACT 76 Stat.^193. SEC. 401. (a) Sectioii 3 (ti) (1) of the Soclal Security Act is amended (1) by striking out, in so much thereof as precedes clause ( A ) , "during such quarter" and inserting in lieu thereof "during each month of such quarter"; (2) by striking out, in clause ( A ) , "29/35", "any month", and "$35" and inserting in lieu thereof "31/37", "such month", and "$37", respectively; and (3) by striking out clauses (B) and (C) and inserting in lieu thereof the following: " (B) the larger of the f ollowmg: " ( i ) ( I ) the Federal percentage (as defined in section 72 Stat. loso. 1101(a)(8)) of the amount by which such expenditures '^^ " ^ ^ * exceed the amount which may be counted under clause ( A ) , not counting so much of such excess with respect to such month as exceeds the product of $38 multiplied by the total number of recipients of old-age assistance for such month, plus ( I I ) 15 per centum of the total expended during such month as om-age assistance under the State plan m the form of medical or any other type of remedial care, not counting so much of such expenditure with respect to such month as exceeds the product of $15 multiplied oy the total number of recipients of old-age assistance for such month, or " ( i i ) ( I ) the Federal medical percentage (as defined in 42us"c306* section 6(c)) of the amount by which such expenditures exceed the maximum which may be counted under clause ( A ) , not counting so much of any expenditures with respect to such month as exceeds (a) the product of $52 multiplied by the total number of such recipients of old-age assistance for such month, or (b) if smaller, the total expended as old-age assist- ance in the form of medical or any other type of remedial care with respect to such month plus the product of $37 multiplied by such total number of such recipients, plus ( I I ) the Federal percentage of the amount by which the total expended during such month as old-age assistance under the State plan exceeds the amount which may be counted under clause (A) and the preceding provisions of this clause (B) (ii), not counting so much of such excess with respect to such month as exceeds the product of $38 multiplied by the total number of such recipients of old-age assistance for such month;". l\ usl; U83. (b) Section 1603(a) (1) of such Act is amended (1) by striking out, in so much thereof as precedes clause ( A ) , "during such quarter" and inserting in lieu thereof "during each month of such quarter"; (2) by striking out, in clause ( A ) , "29/35", "any month", and "$35" and mserting in lieu thereof "31/37", "such month", and "$37", respec- tively; and (3) by striking out clauses (B) and (C) and inserting in lieu thereof the following: " ( B ) the larger of the following: " ( i ) ( I ) the Federal percentage (as defined in section 1101(a)(8)) of the amount by which such expenditures exceed the amount which may be counted under clause ( A ) , not counting so much of such excess with respect to such month as exceeds the product of $38 multiplied by the total number of recipients of aid to the aged, blind, or disabled for such month, plus ( I I ) 15 per centum of the total expended during such month as aid to the aged, blind, or disabled under
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 415 the State plan in the form of medical or any other type of remedial care, not counting so much of such expenditure with respect to such month as exceeds the product of $15 multiplied by the total number of recipients of aid to the aged, blind, or disabled for such month, or " ( i i ) ( I ) the Federal medical percentage (as defined in section 6(c)) of the amount by which such expenditures lofi^^n^nl' 42 u s e 306. exceed the maximum which may be counted under clause ( A ) , not counting so much of any expenditures with respect to such month as exceeds (a) the product of $52 multiplied by the total number of such recipients of aid to the aged, blind, or disabled for such month, or (b) if smaller, the total expended as aid to the aged, blind, or disabled in the form of medical or any other type of remedial care with respect to such month plus the product of $37 multiplied by such total number of such recipients, plus ( I I ) the Federal percentage of the amount by which the total expended during such month as aid to the aged, blind, or disabled under the State plan exceeds the amount which may be counted under clause (A) and the preceding provisions of this clause ( B ) ( i i ) , not counting so much of such excess with respect to such month as exceeds the product of $38 multiplied by the total number of such recipients of aid to the aged, olind, or disabled for such month;". (c) Section 403(a) (1) of such Act is amended (1) by striking out ^6 stat. ^74. 42 u s e 603. ''fourteen-seventeenths" and "$17" in clause (A) and inserting in lieu "^ ""'" ""' thereof "five-sixths" and "$18", respectively; and (2) by striking out *'$30" in clause (B) and inserting in lieu thereof "$32". 42 u s e 1203. (d) Section 1003(a)(1) of such Act is amended (1) by striking out, in clause ( A ) , "29/35" and "$35" and inserting in lieu thereof "31/37" and "$37", respectively; and (2) by striking out, in clause ( B ) , "$70" and inserting in lieu thereof "$75". (e) Section 1403(a)(1) of such Act is amended (1) by striking 42 use 1353. out, in clause ( A ) , "29/35" and "$35" and inserting in lieu thereof "31/37" and "$37", respectively; and (2) by striking out, in clause ( B ) , "$70" and inserting in lieu thereof "$75". (f) The amendments made by this section shall apply in the case of exiDenditures made after December 31, 1965, under a State plan ap- proved under title I, IV, X , X I V , or X V I of the Social Security Act. ^2 use 301. ^ 7 5 > ? J gOi^ 1201, 1351, 1381. PROTECTIVE PAYMENTS SEC. 402. (a) Section 6(a) of the Social Security Act (as amended by section 221 of this Act) is amended by adding at the end thereof ^"'*' P* '^^^' the following new sentence: "Such term also includes payments which are not included within the meaning of such term under the preceding sentence, but which would be go included except that they are made on behalf of such a needy individual to another individual who (as determined in accordance with standards prescribed by the Secretary) is interested in or concerned with the welfare of such needy individual, but only with respect to a State whose State plan approved under section 2 includes provision for— "^2 use 302. "(1) determination by the Stat© agency that such needy indi- yidual has, by reason of his physical or mental condition, such inability to manage funds that making payments to him would be contrary to his welfare and, therefore, it is necessary to provide such assistance through payments described in this sentence;
416 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. "(2) making such payments only in cases in which such pay- ments will, under the rules otherwise applicable under the State plan for determining need and the amount of old-age assistance to Be paid (and in conjunction with other income and resources), meet all the need of the individuals with respect to whom such payments are made; "(3) undertaking and continuing special efforts to protect the welfare of such individual and to improve, to the extent possible, his capacity for self-care and to manage funds; " (4) periodic review by such State agency of the determination under paragraph (1) to ascertain whether conditions justifying such determination still exist, with provision for termination of such payments if they do not and for seeking judicial appointment of a guardian or other legal representative, as described in sec- 72 Stat. 10 52. tion 1111, if and when it appears that such action will best serve • 42 u s e 1311. the interests of such needy individual; and "(5) opportunity for a fair hearing before the State agency on the determination referred to in paragraph (1) for any individual with respect to whom it is made." (b) Section 1605(a) of such Act (as amended by section 221 of this Ante, p . 358. Act) is amended by adding at the end thereof (after and below para- graph (2)) the following new sentence: "Such term also includes payments which are not included within the meaning of such term under the preceding sentence, but which would be so included except that they are made on behalf of such a needy individual to another individual who (as determined in accord- ance with standards prescribed by the Secretary) is interested in or concerned with the welfare of such needy individual, but only with 76 Stat. 198. respect to a State whose State plan approved under section 1602 42 u s e 138 2. includes provision for— " ( A ) determination by the State agency that such needy in- dividual has, by reason of his physical or mental condition, such inability to manage funds that making payments to him would be contrary to his welfare and, therefore, it is necessary to provide such aid through payments described in this sentence; " ( B ) making such payments only in cases in which such pay- ments will, under the rules otherwise'applicable under the otate plan for determining need and the amount of aid to the aged, blind, or disabled to be paid (and in conjunction with other income and resources), meet all the need of the individuals with respect to whom such payments are made; " ( C ) undertaking and continuing special efforts to protect the welfare of such individual and to improve, to the extent possible, his capacity for self-care and to manage funds; " ( D ) periodic review by such State agency of the determination under clause (A) to ascertain whether conditions justifying such determination still exist, with provision for termination of such payments if they do not and for seeking judicial appointment of a guardian or other legal representative, as described in section 1111, if and when it appears that such action will best serve the interests of such needy individual; and " ( E ) opportunity for a fair hearing before the State agency on the determination referred to in clause (A) for any individual with respect to whom it is made." (c) Section 1006 of the Social Security Act (as amended by section Ante, p . 358. 221 of this Act) is amended by adding at the end thereof the following new sentence: "Such term also includes payments which are not in-
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 417 eluded within the meaning of such term under the preceding sentence, but which would be so included except that they are made on behalf of such a needy individual to another individual who (as determined in accordance with standards prescribed by the Secretary) is interested in or concerned with the welfare of such needy individual, but only with respect to a State whose State plan approved under section 1002 42 49 Stat. 645. u s e 120 2. includes provision for— "(1) determination by the State agency that such needy indi- vidual has, by reason of his physical or mental condition, such inability to manage funds that making payments to him would be contrary to his welfare and, therefore, it is necessary to provide such aid through payments described in this sentence; "(2) making such payments only in cases in which such pay- ments will, under the rules otherwise applicable under the State plan for determining need and the amount of aid to the blind to be paid (and in conjunction with other income and resources), meet all the need of the individuals with respect to whom such payments are made; "(3) undertaking and continuing special efforts to protect the welfare of such individual and to improve, to the extent possible, his capacity for self-care and to manage funds; "(4) periodic review by such State agency of the determina- tion under paragraph (1) to ascertain whether conditions justi- fying such determination still exist, with provision for termina- tion of such payments if they do not and for seeking judicial appointment of a guardian or other legal representative, as de- scribed in section 1111, if and when it appears that such action ^2 stat. 1052. will best serve the interests of such needy individual; and "* "(5) opportunity for a fair hearing before the State agency on the determination referred to in paragraph (1) for any individual with respect to whom it is made." (d) Section 1405 of the Social Security Act (as amended by section 221 of this Act) is amended by adding at the end thereof the follow- ^"'*' P* ^^^' ing new sentence: "Such term also includes payments which are not included within the meaning of such term under the preceding sen- tence, but which would be so included except that they are made on behalf of such a needy individual to another individual who (as de- termined in accordance with standards prescribed by the Secretary) is interested in or concerned with the welfare of such needy individual, but only with respect to a State whose State plan approved under section 1402 includes provision for— J^ ^^^^' ^^^^^ "(1) determination by the State agency that such needy individual has, by reason of his physical or mental condition, such inability to manage funds that making payments to him would be contrary to his welfare and, therefore, it is necessary to provide such aid through payments described in this sentence; "(2) making such payments only in cases in which such pay- ments will, under the rules otherwise applicable under the State plan for determining need and the amount of aid to the perma- nently and totally disabled to be paid (and in conjunction with other income and resources), meet all the need of the individuals with respect to whom such payments are made; "(3) undertaking and continuing special efforts to protect the welfare of such individual and to improve, to the extent possible, his capacity for self-care and to manage funds; "(4) periodic review by such Staite agency of the determination nnder Daragraph (1) to ascertain whether conditions justifying
418 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. such determination still exist, with provision for termination of such payments if they do not and for seeking judicial appointment 72 Stat 10 52 ^^ ^ guardiau or other legal representative, as described in sec- 42 use 1311.* tion 1111, if and when it appears that such action will best serve the interests of such needy mdividual; and "(5) opportunity for a fair hearing before the State agency on the determination referred to in paragraph (1) for any individual with respect to whom it is made." (e) The amendments made by this section shall apply in the case of expenditures made after December 31, 1965, under a State plan i2ol"f35i^°i38i. approved under title I, X , X I V , or X V I of the Social Security Act. DISREGARDING C E R T A I N E A R N I N G S I N D E T E R M I N I N G N E E D U N D E R ASSIST- A N C E PROGRAMS FOR T H E AGED, B L I N D , A N D DISABLED SEC, 403. (a) Effective October 1, 1965, section 2(a) (10) (A) of the 42 us^c* 30^2' Social Security Act is amended by striking out " ; except that, in mak- ing such determination, of the first $50 per month of earned income the State agency may disregard, after December 31, 1962, not more than the first $10 thereof plus one-half of the remainder" and insert- ing in lieu thereof the following: " ; except that, in making such determination, (i) the State agency may disregard not more than $5 per month of any income and (li) of the first $80 per month of additional income which is earned the State agency may disregard not more than the first $20 thereof plus one-half of the remainder". (b) Effective October 1, 1965, section 402(a) (7) of the Social Se- Post, p. 423. curity Act (as amended by section 410 of this Act) is further amended by inserting before the semicolon at the end thereof the following: ", and (C) the State agency may, before disregarding the amounts referred to in clauses (A) and ( B ) , disregard not more than $5 of any income". (c) Effective October 1, 1965, section 1002(a)(8) of the Social 42 use n^l* Security Act is amended by inserting before the semicolon at the end thereof the following: ", and (C) may, before disregarding the amounts referred to in clauses (A) and ( B ) , disregard not more than $5 of any income". 64 Stat. 5|5. ((J) Effcctive October 1, 1965, section 1402(a) (8) of such Act is amended by inserting after the semicolon at the end thereof the fol- lowing: "except that, in making such determination, (A) the State agency may disregard not more than $5 of any income, (B) of the first $80 per month of additional income which is earned the State agency may disregard not more than the first $20 thereof plus one-half of the remainder, and (C) the State agency may, for a period not in excess of 36 months, disregard such additional amounts of other income and resources, in the case of an individual who has a plan for achieving self-support approved by the State agency, as may be necessary for the fulfillment of such plan, but only with respect to the part or parts of such period during substantially all of which he is actually under- going vocational rehabilitation;". II I'ic'SI!: (e) Effective October 1, 1965, section 1602(a) (14) of such Act is amended to read as follows: " (14) provide that the State agency shall, in determining need for aid to the aged, blind, or disabled, take into consideration any other income and resources of an individual claiming such aid, as well as any expenses reasonably attributable to the earning of any such income; except that, in making such determination with respect to any individual—
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 419 " ( A ) if such individual is blind, the State agency (i) shall disregard the first $85 per month of earned income plus one-half of earned income in excess of $85 per month, and (ii) shall, for a period not in excess of 12 months, and may, for a period not m excess of 36 months, disregard such addi- tional amounts of other income and resources, in the case of any such individual who has a plan for achieving self- support approved by the State agency, as may be necessary for the fulfillment of such plan, " ( B ) if such individual is not blind but is permanently and totally disabled, (i) of the first $80 per month of earned income, the State agency may disregard not more than the first $20 thereof plus one-half of the remainder, and (ii) the State agency may, for a period not in excess of 36 months, disregard such additional amounts of other income and resources, in the case of any such individual who has a plan for achieving self-support approved by the State agency, as may be necessary for the fulfillment of such plan, but only with respect to the part or parts of such period during sub- stantially all of which he is actually undergoing vocational rehabilitation, " ( C ) if such individual has attained age 65 and is neither blind nor permanently and totally disabled, of the first $80 per month of earned income the State agency may disregard not more than the first $20 thereof plus one-half of the remainder, and " ( D ) the State agency may, before disregarding the amounts referred to above in this paragraph (14), disregard not more than $5 of any income; and". ADMINISTRATIVE AND JUDICIAL REVIEW OF PUBLIC ASSISTANCE DETERMINATIONS SEC. 404. (a) Title X I of the Social Security Act is amended by ^' "^^ *^^^- adding at the end thereof the following new section: " A D M I N I S T R A T I V E AND JUDICIAL REVIEW OF CERTAIN ADMINISTRATIVE DETERMINATIONS "SEC. 1116. (a) (1) Whenever a State plan is submitted to the Sec- retary by a State for approval under title I, IV, X, X I V , X V I , or X I X , he shall, not later than 90 days after the date the plan is sub- ^^^ "s^^^ soi, mitted to him, make a determination as to whether it conforms to the lasi. requirements for approval under such title. The 90-day period pro- ^"^^' P- 343. vided herein may be extended by written agreement of the Secretary and the affected State. "(2) Any State dissatisfied with a determination of the Secretary under paragraph (1) with respect to any plan may, within 60 days after it has been notified of such determination, file a petition with the Secretary for reconsideration of the issue of whether such plan conforms to the requirements for approval under such title. Within 30 days after receipt of such a petition, the Secretary shall notify the State of the time and place at which a hearing will be held for the purpose of reconsidering such issue. Such hearing shall be held not less than 20 days nor more than 60 days after the date notice of such hearing is furnished to such State, unless the Secretary and such
420 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. State agree in writing to holding the hearing at another time. The^ Secretary shall affirm, modify, or reverse his original determination within 60 days of the conclusion of the hearing. " (3) Any State which is dissatisfied with a final determination made by the Secretary on such a reconsideration or a final determination of the Secretary under section 4,404,1004,1404,1604^ or 1904 may, within 60 days after it has been notified of such determmation, file with the United States court of appeals for the circuit in which such State is located a petition for review of sudh determination. A copy of the petition shall be forthwith transmitted by the clerk of the court to the Secretary. The Secretary thereupon shall file in the court the record of the proceedings on w'hich he based his determination as provided in 72 Stat. 941. scctiou 2112 of title 28, United States Code. "(4) The findings of fact by the Secretary, if supported by sub- stantial evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Secretary to take further evidence, and the Secretary may thereupon make new or modified findings of fact and may modify his previous action, and shall certify to the court the transcript and record of the further proceedings. Such new or modified findings of fact shall likewise be conclusive if supported by substantial evidence. "(5) The court shall have jurisdiction to affirm the action of the Secretary or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of 62 Stat. 9 28. title 28, United States Code. " ( b ) For the purposes of subsection ( a ) , any amendment of a State 601 S ^?35i P^^? approved under title I, IV, X, X I V , X V I , or X I X may, at the 1381. ' ' option of the State, be treated as the submission of a new State plan. Ante, p. 343. "(c) Actiou pursuaut to an initial determination of the Secretary described in subsection (a) shall not be stayed pending reconsidera- tion, but in the event that the Secretary subsequently determines that his initial determination was incorrect he shall certify restitution forthwith in a lump sum of any funds incorrectly withheld or other- wise denied. " ( d ) Whenever the Secretary determines that any item or class of items on account of which Federal financial participation is claimed under title I, IV, X, X I V , X V I , or X I X shall be disallowed for such participation, the State shall be entitled to and upon request shall receive a reconsideration of the disallowance." (b) The amendment made by subsection (a) shall apply only with respect to determinations made after December 31, 1965. M A I N T E N A N C E OF STATE P U B L I C ASSISTANCE E X P E N D I T U R E S 42 use 1301. gj,(3 405. Title X I of the Social Security Act is amended by adding at the end thereof (after the new section 1116 added by section 404 of Ante, p. 419. ^hls Act) thc foUowlug new section: u M A I N T E N A N C E OF STATE EFFORT "SEC. 1117. (a) The total of the amounts determined under sec- tions 3, 403, 1003, 1403, 1603, and 1903 for any State for any quarter beginning after December 31, 1965, and ending before July 1, 1969, shall be reduced to the extent that— "(1) the excess of (A) the total of the amounts determined for the State under sections 3, 403, 1003, 1403, 1603, and 1903 for such quarter over (B) the total of the amounts determined for
79 STAT. ] PUBLIC LAW 89-97-JULY 30, 1965 421 the State under sections 3, 403, 1003, 1403, and 1603 for the same quarter of the fiscal year ending June 30, 1965, is greater than "(2) the excess of (A) the total of the expenditures for such quarter (for which the determination is being made) under the plans of the State approved under titles I, IV, X, X I V , X V I , and X I X over (B) the total of the expenditures under the State ^^^ ^^^^ ^"g'g^ plans of the State approved under titles I, I V , X, X I V , and X V I las'i. for the same quarter of the fiscal year ending June 30, 1965; ^"'®' P- ^^S. except that, at the option of the State, any of the following may be substituted (with respect to the quarters of any fiscal year) for the amount determined as provided in paragraph ( 1 ) ( B ) — "(3) the total of the amounts determined for the State under sections 3, 403, 1003, 1403, and 1603 for the same quarter in the fiscal year ending June 30, 1964; or "(4) the average of the totals determined for the State under sections 3, 403, 1063, 1403, and 1603 for each quarter in the fiscal year ending June 30, 1964, or June 30, 1965. If the substitution of the total referred to in paragraph (3) is chosen by the State, there shall be substituted for the amount determined under clause (B) of paragraph (2) the total of the expenditures under the plans of the State approved under titles I, IV, X, X I V , and X V I for the quarter referred to in such paragraph (3), If the substitu- tion of the average for either of the years referred to in paragraph (4) is chosen by the State, there shall be substituted for the amount determined under clause (B) of paragraph (2) the average of the total expenditures under the plans of the State approved under titles I, IV, X, X I V , and X V I for each quarter in the same fiscal year. " (b) For purposes of this section, expenditures under the plans of any State approved under titles I , IV, X, X I V , X V I , and X I X and the reduction determined with respect thereto under this section, shall be determined on the basis of data furnished by the State in the quar- terly reports submitted by the State to the Secretary pursuant to and in accordance with the requirements of the Secretary under title I, IV, X , X I V , X V I , or X I X ; and determinations so made shall be conclusive for purposes of this section. "(c) If a reduction is required under the preceding provisions of this section in the total of the amounts determined for a State under sections 3,403,1003,1403,1603, and 1903 for any quarter, the Secretary shall determine which of such amounts shall be reduced and the extent thereof in such manner as in his judgment will best carry out the purpose of maintaining State effort under the Federal-State public assistance programs of the State, and with the total of such reductions to be equal to the reduction required under subsections (a) and (b) of this section." DISREGARDING OASDI B E N E F I T I N C R E A S E , A N D C H I L D ' S I N S U R A N C E B E N E F I T P A Y M E N T S BEYOND AGE 1 8 , TO T H E E X T E N T ATTRIBUTABLE TO RETROAC- TIVE E F F E C T I V E DATE SEC. 406. Notwithstanding the provisions of sections 2(a) (10) and (11) ( D ) , 402(a)(7), 1002(a)(8), 1402(a)(8), and 1602(a) (13) and (14) of the Social Security Act, a State may disregard, in deter- ^74 stat. gss; mining need for aid or assistance under a State plan approved under stLt.'ioVs; 7*1 stat. title I, I V , X , X I V , or X V I of such Act, any amount paid to any 523; 76 st'at. 199. individual under title I I of such Act (or under the Kailroad Eetirement '^ ^ ^^^ '*° ^'
422 PUBLIC LAW 89-97-JULY 30, 1965 [79 STAT. Ante, p. 400. ^ ^ t of 1937 by reason of section 326(a) of this A c t ) , for any one or more months which occur after December 1964 and before the third month following the month in which this Act is enacted, to the extent that such payment is attributable— (1) to the increase in monthly insurance benefits under the old- age, survivors, and disability insurance system resulting from the Ante, p. 361. euactmeut of section 301 of this Act, or (2) to the payment of child's insurance benefits under such sys- tem after attainment of age 18, in the case of individuals attending Ante. p. 370. school, rcsultiug from the enactment of section 306 of this Act. E X T E N S I O N OF GRACE PERIOD FOR DISREGARDING CERTAIN I N C O M E FOR STATES W H E R E LEGISLATURE H A S N O T M E T I N REGULAR SESSION SEC. 407. Notwithstanding the provisions of section 701 of the lo fr^tfA' oQ^'^i Economic Opportunity Act of 1964, no funds to which a State is use 298 1. otj^erwise entitled under title I, IV, X , X I V , X V I , or X I X of the 42 use 301, Social Security Act for any period before the first month beginning las'i. ' ' after the adjournment of a State's first regular legislative session Ante. p. 343. which adjoums after August 20, 1964 (the date of enactment pf the Economic Opportunity Act of 1964), shall be withheld by reason of any action taken pursuant to a State statute which prevents such State from complying with the requirements of subsection (a) of such section 701. TECHNICAL AMENDMENTS RELATING TO P U B L I C ASSISTANCE PROGRAMS 76 Stat. 206. ggc. 408. (a) Section 1108 of the Social Security Act is amended— 42 use 1308. ^ j ^ ^y striking out "$9,800,000, of which $625,000 may be used 42 use 303. only for payments certified with respect to section 3(a) (2) (B) 42 use 1383. or 1 6 0 3 ( a ) ( 2 ) ( B ) " and inserting in lieu thereof "$9,800,000"; (2) by striking out "$330,000, of which $18,750 may be used only for payments certified with respect to section 3(a) (2) (B) or 1 6 0 3 ( a ) ( 2 ) ( B ) " and inserting m lieu thereof "$330,000"; and (3) by striking out "$450,000, of which $25,000 may be used only for payments certified with respect to section 3(a) (2) (B) or 1603(a) (2) ( B ) " and inserting in lieu thereof "$450,000". (b) The amendments made by subsection (a) shall be effective in the case of Puerto Rico, the Virgin Islands, or Guam with respect to fiscal years beginning on or after the date on which its plan under Ante, p. 343. ^{^1^ X l X of Uie Soclal Security Act is approved. 42 us^c ?3f2. (^) (-^) Section 1112 of such Act is amended by striking out "for the aged". (2) The heading of section 1112 of such Act is amended by striking out "FOR THE AGED". E L I G I B I L I T Y OF C H I L D R E N OVER AGE 1 8 A T T E N D I N G SCHOOL SEC. 409. Clause (2) (B) of section 406(a) of the Social Security 42 us^'60^6^^* ^^^ ^s amended by striking out "(as determined in accordance with standards prescribed by the Secretary) a student regularly attending a high school in pursuance of a course of study leading to a high school diploma or its equivalent," and inserting in lieu thereof " ( a s deter- mined by the State in accordance with standards prescribed by the Secretary) a student regularly attending a school, college, or university,".
79 STAT.] PUBLIC LAW 89-98-JULY 30, 1965 423 DISREGARDING CERTAIN EARNINGS IN DETERMINING NEED OF CERTAIN DEPENDENT CHILDREN SEC. 410. Effective July 1, 1965, so much, of clause (7) of section 402(a) of the Social Security Act as follows the first semicolon is ^J^tfpf4 is^f' amended by inserting after "except that, in making such determina- 42 use 602. tion," the following: " ( A ) the State agency may disregard not more than $50 per month of earned income of each dependent child under the age of 18 but not in excess of $150 per month of earned income of such dependent children in the same home, ( B ) " . FEDERAL SHARE OF PUBLIC ASSISTANCE EXPENDITURES SEC. 411. Title X I of the Social vSeeuiity Act is amended by adding 42 u s e 1301. at the end thereof (after section 1117, added by section 405 of this Act), the following new section: ^"^®' P. 420. "ALTERNATIVE FEDERAL PAYMENT WITH RESPECT TO PUBLIC ASSISTANCE EXPENDITURES "SEC. 1118. In the case of any State which has in effect a plan approved under title X I X for any calendar quarter, the total of the ^"'*' ^' ^'*^' payments to which such State is entitled for such quarter, and for each succeeding quarter in the same fiscal year (which for purposes of this section means the 4 calendar quarters ending with June 30), under paragraphs (1) and (2) of sections 3 ( a ) , 403(a), 1003(a), 1403(a), and 1603 (a) shall, at the option of the State, be determined by applica- tion of the Federal medical assistance percentage (as defined in section 1905), instead of the percentages provided under each such Ante, p. 351. section, to tne expenditures under its State plans approved under titles I , IV, X , X I V , and X V I , which would be included in deter- 42 use 301, mining the amounts of the Federal payments to which such State is 1381.^^°^' ^^^^' entitled under such sections, but without regard to any maximum on the dollar amounts per recipient which may be counted under such sections." Approved July 30, 1965, 5:19 p.m. Public Law 89-98 AN A C T July 30, 1965 To amend the Revised Organic Act of t h e Virgin I s l a n d s to provide for t h e [H. R. 8721] p a y m e n t of legislative salaries a n d expenses by t h e government of t h e Virgin Islands. Be it enacted hy the Senate and House of Representatives of the United States of America in Congress assembled, That subsection ^e) Ll'"J^s"iat^orT'^^" of section 6 of the Eevised Organic Act of the Virgin Islands (68 sauael an"' Stat. 497, 499), as amended (73 Stat. 568; 48 U.S.C. 1572(e)), is expenses. further amended to read as follows: "(e) Each member of the legislature shall be paid such compen- sation and shall receive such additional allowances or benefits as may be fixed under the laws of the Virgin Islands. Such compensation, allowances, or benefits, together with all other legislative expenses, shall be appropriated Iby, and paid out of funds of, the government of the Virgin Islands." Approved July 30, 1965.