Omnibus Budget Reconciliation Act of 1987

(Conference report filed in House, H. Rept. 100-495) Omnibus Budget Reconciliation Act of 1987 - Title I: Agriculture and Related Programs - Agricultural Reconciliation Act of 1987 - Subtitle A: Adjustments to Agricultural Commodity Programs - Amends the Agricultural Act of 1949 to set 1988 and 1989 target prices for: (1) wheat at $4.23 per bushel and $4.10 per bushel; (2) feed grains at $2.93 per bushel and $2.84 per bushel; (3) cotton at $0.759 per pound and $0.734 per pound; (4) extra long staple cotton at 118.3 per percent of the loan rate; and (5) rice at $11.15 per hundredweight and $10.80 per hundredweight. Provides that: (1) 1988 loan rates for wheat, feed grains, rice, and cotton may not be reduced by more than three percent of the preceding year's level; and (2) 1989 loan rates for such crops may not be reduced by more than five percent of the preceding year's level, plus an additional two percent if the Secretary of Agriculture determines it necessary to maintain market competitiveness. Directs the Secretary to implement a paid ten percent land diversion program for the 1988 and 1989 feed grain crops. States that: (1) the payment rate shall be $1.75 per bushel for corn, with other feed grain rates in relation to such rate; and (2) the Secretary may not implement such program if necessary to maintain an adequate commodity supply in 1989. Directs the Secretary to reduce 1988 and 1989 tobacco by 1.4 percent through price support reductions or purchaser and producer assessments. Directs the Secretary to reduce 1988 and 1989 peanut and sugar program costs by 1.4 percent. Reduces honey loan levels by: (1) two cents per pound for 1987; (2) three-quarters cents per pound for 1988; (3) one-half cents per pound for 1989; and (4) one-quarter cents per pound for 1990. Reduces 1988 milk prices by two and one-half cents per hundredweight. Amends the National Wool Act of 1954 to set 1988 and 1989 wool and mohair price supports at 76.4 percent of the established support formula. Limits 1988 through 1990 transportation loan rate differentials to not more than the national percentage rate plus or minus two percent. Directs the Secretary to reduce FY 1988 and 1989 Commodity Credit Corporation storage costs by $230,000,000. Prohibits the Secretary from establishing an acreage reduction program in excess of five percent for the 1988 through 1990 oat crops. States that the minimum quantity of wheat and feed grains in the producer reserve program shall be 300,000,000 bushels and 450,000,000 bushels, respectively. Requires the Secretary to make yield adjustment payments to 1988 through 1990 producers of wheat, feed grains, upland cotton, and rice if program payment yields are reduced by more than ten percent of 1985 levels. Provides 1988 through 1990 advance deficiency payments for: (1) wheat and feed grains at between 40 percent and 50 percent of the projected payment rate; and (2) rice and upland cotton at between 30 percent and 50 percent of the projected payment rate. Provides advance emergency compensation payments (75 percent ) for the 1987 through 1990 wheat crops. Amends the Agricultural Adjustment Act of 1938 to: (1) permit, under specified circumstances, the lease and transfer of flue-cured tobacco quotas assigned to a farm after June 30 of any crop year; (2) repeal the required five-year yield factor adjustment for flue-cured tobacco; and (3) express the sense of the Congress that the Secretary should review current compliance procedures for acreage or poundage quotas with respect to cigar and dark-air and fire-cured tobaccos. Amends the Agricultural Act of 1949 to permit haying and grazing as conservation use acreage under specified commodity adjustment programs except during any consecutive five-month period (between April 1 and October 31) as determined by the State agriculture committee. Authorizes the Secretary to: (1) permit unlimited haying and grazing in the case of a natural disaster; and (2) prohibit haying and grazing for economic reasons. Subtitle B: Optional Acreage Diversion - Amends the Agricultural Act of 1949 to provide that producers of the 1988 through 1990 wheat and feed grain crops who devote all or a part of their permitted wheat or feed grain acreage to conservation or other authorized uses shall receive deficiency payments on the acreage considered to be planted to such crops. Subtitle C: Farm Program Payments - Amends the Food Security Act of 1985 to provide that as of the 1989 crop year, a person who receives specified agricultural payments subject to limitations under such Act shall be prohibited from holding substantial beneficial interests (ten percent or more) in more than two corporations or entities that also receive such payments. (Permits a person who does not receive such payments to hold substantial interests in three entities.) Requires the Secretary to notify affected individuals and entities. Limits agricultural payments to active farmers. Makes foreign persons ineligible for 1989 agricultural benefits. Defines "person" for payment limitation purposes to include individuals, corporations, joint stock companies, associations, limited partnerships, charitable organizations, and States and their subdivisions and agencies. Directs the Secretary to conduct payment provisions education for Department of Agriculture personnel. Makes an individual who adopts a scheme or device to avoid payment limitations ineligible for agricultural benefits for such year and the succeeding year. Repeals honey loan limitations. Subtitle D: Rural Electrification Administration Programs - Chapter 1: Prepayment of Rural Electrification Loans - Permits FY 1988 prepayment of Federal Financing Bank loans by Rural Electrification Administration (REA) borrowers without penalty. Gives prepayment priority to specified borrowers who were already eligible, or who had begun prepayment, before enactment of this Act. Requires the Comptroller General to report to the Congress regarding such prepayments by January 1, 1989. Permits a borrower of an insured or guaranteed electric loan to invest its own funds or make loans or guarantees of up to 15 percent of its total utility plant without prior REA approval. Establishes a program to permit REA electric and telephone borrowers to make voluntary advance payments into cushion or credit accounts within the Rural Electrification and Telephone Revolving Fund. Sets interest rates at five percent. Permits a borrower to reduce such account balances only to make scheduled payments on loans made under such Act. Authorizes grants or zero interest loans to be made from such funds for rural economic development purposes. Chapter 2: Rural Telephone Bank Borrowers - Permits FY 1988 prepayment of Rural Telephone Bank loans without penalty. Sets forth an interest rate formula. Establishes a telephone bank reserve fund. Requires the Comptroller General to report to the appropriate congressional committees regarding such prepayment program. Subtitle E: Miscellaneous - Amends the Agricultural Adjustment Act of 1933 to authorize marketing order handler penalties. Amends the Food Security Act of 1985 to extend the deadline for a commodity futures study from December 31, 1988, to December 31, 1989. Amends the Agricultural Act of 1949 to authorize FY 1988 appropriations for technical assistance for the sale or barter of commodities to strengthen nonprofit private organizations in the Philippines. Amends the Consolidated Farm and Rural Development Act to permit private nonprofit corporations to participate in rural industrialization grant programs. Amends the Plant Variety Protection Act regarding plant variety protection fees to: (1) establish late payment penalties; (2) permit investment of funds; (3) authorize judicial action for nonpayment; and (4) authorize appropriations. Amends Federal law to provide annual appropriations, beginning with FY 1988, to reimburse Commodity Credit Corporation net realized losses. Expresses the sense of the Congress that in carrying out the Federal Crop Insurance Act, the Federal Crop Insurance Corporation: (1) should not be required to assume full loss adjustments; and (2) should assume and perform the loss adjustment obligations of a reinsured company if such company's loss adjustment performance and practices are not carried out in accordance with the applicable reinsurance agreement. Expresses the sense of the Congress that the Administrator of the Environmental Protection Agency should use authority under the Clean Air Act to require greater use of ethanol as motor fuel. Amends the Food Stamp Act of 1977 to authorize the State of Washington to carry out a Family Independence Demonstration Project as an alternative to providing benefits under the food stamp plan. Sets forth program provisions. Requires the Secretaries of Agriculture and of Health and Human Services to evaluate such program. Title II: National Economic Commission - Establishes a National Economic Commission to make recommendations regarding: (1) methods to reduce the deficit while promoting economic growth and encouraging saving and capital formation; and (2) a means of ensuring that the burden of reducing the deficit does not undermine economic growth and is equitably distributed. Requires the Commission to submit its final report to the President and the Congress by March 1, 1989. Allows the President to extend such deadline. Terminates the Commission 30 days after submission of such report. Title III: Education Programs - Subtitle A: Guaranteed Student Loan Program Savings - Amends the Higher Education Act of 1965 to require Federal recovery of excess cash reserves accumulated by guaranty agencies under the guaranteed student loan program. Prohibits guaranty agencies from accumulating cash reserves in excess of a specified amount. Directs the Secretary of Education (the Secretary, for purposes of this title) to recover such excess in various ways. Allows guaranty agencies to appeal and request a waiver of such recovery based on special circumstances. Sets a maximum limit on the total reduction of cash reserves which the Secretary may require for all guaranty agencies during FY 1988. Repeals these reduction and recovery of cash reserves provisions on September 30, 1989. Requires (current law merely authorizes) guaranty agencies to furnish, upon request, to eligible institutions specified information on students who are delinquent or have defaulted on guaranteed student loans. Requires that such information include names and addresses of such students. Subtitle B: Sale of College Facilities and Housing Loans - Prohibits the Secretary of Education, after September 30, 1988, from selling obligations held under the program for loans for construction, reconstruction, and renovation of academic facilities and the program for housing and other educational facilities loans. Includes as a violation of such prohibition any agreement providing for delaying payment or delivery or other actions furthering such sale until after such date. Title IV: Medicare, Medicaid, and Other Health-Related Programs - Subtitle A: Medicare - Part 1: Relating Only to Part A: - Extends the reduction in Medicare payments under the President's sequestration order of November 20 1987, through March 31, 1988, for payments for inpatient hospital services and through December 31, 1987, for other items and services under part A (Hospital Insurance) of title XVIII (Medicare) of the Social Security Act. Amends the Medicare program to increase hospital prospective payment rates by: (1) three percent for rural hospitals, 1.5 percent for hospitals located in large urban areas, and one percent for other hospitals for FY 1988; (2) the market basket percentage minus 1.5 percent for rural hospitals, the market basket percentage minus two percent for hospitals located in a large urban area, and the market basket percentage minus 2.5 percent for other hospitals for FY 1989; and (3) the market basket percentage for all hospitals thereafter. Sets payment rates for hospitals which are exempt from the prospective payment system. Reduces payments to hospitals for indirect medical education costs. Increases payments to hospitals which serve a disproportionate share of low-income patients. Extends, through FY 1990, the adjustment of Medicare payments made to hospitals which serve a disproportionate share of low-income patients. Authorizes the Secretary of Health and Human Services, in certain circumstances, to treat one hospital facility of a multi-facility hospital as a disproportionate share hospital even if the hospital as a whole does not qualify as a disproportionate share hospital. Requires the Secretary to regularly update the index representing the proportion of hospital costs attributable to wages on the basis of a survey of the wage-related costs of Medicare hospitals. Treats certain hospitals which are located in a rural county which is adjacent to one or more urban areas as being urban hospitals for Medicare payment purposes. Permits a rural hospital with less than 100 beds to furnish extended care services. (Currently, rural hospitals must have less than 50 beds to furnish such services.) Prohibits the making of Medicare payments to hospitals with more than 49 beds for extended care services: (1) which a patient receives after a bed has been available for five days in a skilled nursing facility located within the same region as the hospital, unless the patient's physician certifies that transferring the patient to such facility is medically inappropriate; and (2) to the extent such services utilize more than 15 percent of the bedspace over a cost reporting period. Directs the Secretary of Health and Human Resources to report to the Congress by February 1989 concerning: (1) the proportion of hospital admissions for extended care services which are denied or approved by a peer review organization; and (2) methods of encouraging eligible hospitals that have a low occupancy rate and are located in areas in need of extended care service providers to enter into agreements with the Secretary to provide such services. Extends, through FY 1990, the provision of additional payments to sole community hospitals experiencing a decrease of more than five percent in patient volume for a cost reporting period due to circumstances beyond their control. Requires the Secretary to report to the Congress by March 1, 1988, on the appropriateness of the criteria for designating hospitals as sole community hospitals. Allows a sole community hospital to qualify for such an adjustment without regard to the formula by which its Medicare payments are determined. Sets a cap on volume payment adjustments for FY 1988 and 1989. Extends the Medicare classification of rural referral centers in include rural hospitals having more than 275 beds. (Currently, such hospitals must have more than 500 beds to be classified as rural referral centers.) Requires the Secretary to report to the Congress by March 1, 1989, on the criteria used for classifying hospitals as rural referral centers. Directs the Secretary to establish a grant program to assist small rural hospitals and their communities plan and implement projects modifying the type and extent of services such hospitals provide in order to adjust to changes in the need for such services. Prohibits a grant to a hospital from exceeding a two-year term. Sets forth reporting requirements. Authorizes appropriations for FY 1989 and 1990. Sets the amount by which a hospital's prospective payments shall be reduced to account for its capital-related costs at 12 percent of such payments for cost reporting periods occurring after January 1, 1988, and before the close of FY 1988, and at 15 percent of such payments for FY 1989. Requires that, after FY 1991, payments for such costs be made in accordance with a prospective payment system established by the Secretary. Directs the Prospective Payment Assessment Commission to report to the Congress by May 1, 1988, on the suitability and feasibility of linking payment for capitol-related costs to hospital occupancy rates. Directs the Secretary to place into effect: (1) a data base of the operating costs of inpatient hospital services for all Medicare hospitals by June 1, 1989; (2) a standardized electronic hospital cost reporting format for cost reporting periods beginning on or after October 1, 1989; and (3) a three-year demonstration project in two States to develop, and determine the feasibility of establishing a uniform hospital reporting system. Directs the Comptroller General to conduct a study into the adequacy of the existing hospital reporting system and the costs and benefits of the system adopted under such demonstration project. Prohibits the Secretary, from the date of this Act's enactment until 1989, from recouping, or otherwise reducing payments to Massachusetts hospitals for alleged overpayments made during the conduct of a specified demonstration project. Prohibits the Secretary from making any change in the policy in effect on August 1, 1987, regarding payments to providers for unrecovered costs. Covers, from April 1, 1988, until October 1, 1989, 90 percent of the costs by which burn cases exceed the point at which a case is designated an outlier case. Prohibits changes in outlier payment regulations before September 1988. Requires the Prospective Payment Assessment Commission to conduct a study and report to the Congress and the Secretary by June 1, 1988, on the method of paying for outlier cases and providing more appropriate payments for burn outlier cases. Requires the Secretary to include in the annual Medicare report to the Congress a comparison of reductions and additional payments for outliers for urban and rural hospitals. Sets forth miscellaneous and technical provisions. Part 2: Provisions Relating to Parts A & B - Subpart A: Health Maintenance Organization Reforms - Requires health maintenance organizations (HMOs) to: (1) provide assurances to the Secretary that they will provide or arrange for supplementary Medicare coverage of enrollees (for up to six months) in the event the HMO terminates operations under Medicare; and (2) inform beneficiaries that the HMO's participation in Medicare might not be renewed or may be terminated, resulting in the termination of the beneficiaries' enrollment. Repeals a provision of the Medicare program allowing direct Medicare payment of hospital and skilled nursing facility charges for which HMOs are liable. Extends, from four to six years, the period during which an HMO may reserve additional payments in the Medicare trust funds for use in stabilizing subsequent fluctuations in the amount of such payments. Imposes civil monetary penalties and intermediate sanctions on HMOs which: (1) fail substantially to provide medically necessary items and services if the failure adversely affects the enrollee; (2) charge an individual a greater premium than is permitted; (3) act to expel or refuse to re-enroll an individual for medical reasons; (4) engage in any practice that denies or discourages enrollment by individuals whose medical condition or history indicates a need for substantial future medical services; (5) misrepresent or falsify information; or (6) fail to make prompt claim payments. Authorizes the Secretary to conduct capitation demonstration projects with HMOs and employer-related groups and projects testing alternative Medicare capitation payment methodologies. Amends the Omnibus Budget Reconciliation Act of 1986 to delay from April 1, 1989, to April 1, 1990, the imposition of penalties against HMOs which make payments to physicians as an inducement to reduce or limit services to beneficiaries. Directs the Comptroller General to conduct a study and submit a final report to the Congress by January 1, 1991, on Medicare capitation rates. Waives the application of the requirement that at least one-half of an HMO's membership consist of individuals who are not entitled to Medicare or Medicaid (title XIX of the Act) benefits to: (1) certain HMOs which are a subdivision, subsidiary, or affiliate, of a parent HMO that satisfies membership requirements; and (2) a specified nonprofit corporation of Michigan which enrolls individuals with HMOs. Amends the Deficit Reduction Act of 1984 to extend, through FY 1992, waivers for demonstrations of social HMOs which provide integrated health and social services on a prepaid capitated basis. Amends the Omnibus Budget Reconciliation Act of 1986 to provide a temporary waiver of the Medicare requirement that HMOs must have an enrolled population of which not more than 50 percent are Medicare or Medicaid beneficiaries to HMOs which had a pre-existing waiver of such requirement and received specified grants in FY 1987. Subpart B: Home Health Quality - Requires a Medicare home health agency to: (1) protect and promote the rights of each individual under its care; (2) notify the State licensing or certification entity of changes in persons having an ownership or control interest in the agency or changes in the organization responsible for managing the agency; (3) furnish items and services through licensed health care professionals or persons who have completed or are enrolled in a training or competency evaluation program which meets minimum standards to be established by the Secretary by October 1, 1988; (4) ensure that suppliers of durable medical equipment do not use individuals for the demonstration and use of such equipment who do not meet minimum training standards to be established by the Secretary by October 1, 1988; and (5) include the patient's plan of care within its clinical records. Requires an appropriate State or local agency to conduct an unannounced survey on an average of once a year, but in no case later than 15 months after the previous unannounced survey, and within two months of the receipt of a significant number of complaints against a home health agency, of the quality of patient care provided by such agencies. Authorizes the survey of a home health agency within two months of any change in its ownership, administration, or management. Subjects home health agencies which perform poorly in such surveys to an extended survey. Directs the Secretary to evaluate the assessment process, report to the Congress on the results of such evaluation, and make appropriate modifications to such process by 1991. Requires that when the Secretary determines that a home health agency's deficiencies immediately jeopardize the health and safety of service recipients the Secretary take immediate action to remove the jeopardy or correct the deficiencies, or terminate the agency's Medicare participation. Authorizes the Secretary to impose intermediate sanctions against an agency whose failure to correct deficiencies does not immediately jeopardize the health and safety of health care beneficiaries, but halts Medicare payments to such agency if six months pass without the correction of deficiencies. Defines as "confined to his home", a prerequisite of eligibility for Medicare home health services, any person who has a condition which restricts his or her ability to leave the home without support or for whom leaving the home is medically contraindicated. Requires appropriate State or local agencies to maintain: (1) toll-free hotlines to collect, maintain, and continually update information on Medicare home health agencies located in the State or locality and receive complaints and answer questions regarding such agencies; and (2) units with enforcement authority and access to consumer medical records (upon the consumer's consent) and survey reports to investigate such complaints. Directs the Secretary to: (1) determine home health agency cost limits on the basis of the most recent audited wage data available from such agencies; (2) conduct a study and report to the Congress by June 1, 1988, regarding the appropriateness of adjusting home health agency cost limits to take into account differences in the costs of urban and rural home health agencies; and (3) establish a demonstration project to develop and test alternative methods of paying home health agencies on a prospective basis for services furnished under the Medicare and Medicaid programs. Subpart C: Other Provisions - Prohibits Medicare claims from being processed within ten days in the final three months of FY 1988, and 14 days in FY 1989. Prohibits the Secretary from issuing, before FY 1991, any policy change primarly intended to delay Medicare claims processing. Requires Medicare fiscal intermediaries which have denied a claim for home health or extended care services to: (1) furnish the provider and the individual with respect to whom the claim was made with a written explanation of the denial; and (2) promptly notify such individual and provider of the disposition of such reconsideration. Sets time limits on processing reconsiderations of claim denials for home health, extended care, and durable medical equipment services. Amends title II (Old Age, Survivors, and Disability Insurance) (OASDI) of the Act to provide that when individuals become entitled to OASDI disability benefits by reason of a disability which previously entitled them to such benefits, both periods of entitlement shall count toward the two-year period of OASDI disability benefit entitlement required for Medicare eligibility despite and intervening period of gainful employment. Amends the Omnibus Budget Reconciliation Act of 1986 to include government entities within the requirement that large group health plans function as the primary payer for items and services covered under such plans and the Medicare program. Directs the Secretary to: (1) publish, by September 1 of each year, the data, standards, and methodology to be used to establish budgets for fiscal intermediaries and carriers for the upcoming fiscal year; (2) promulgate rules, requirements, and policy statements which establish or change a substantive legal standard governing benefits, payments, or eligibility through the regulatory process. Sets forth miscellaneous publication and information access provisions. Makes a group health plan the primary payer for items and services covered under Medicare's end-stage renal disease program. Limits minimum utilization rate requirements for end-stage renal disease services to transplantations. Extends to July 1, 1988, the date by which guidelines for the reuse of bloodlines are required. (Currently, such guidelines must be established by January 1, 1988.) Requires the Secretary to arrange for a study of the end-stage renal disease program and report to the Congress regarding such study within three years of this Act's enactment. Directs the Secretary and the Comptroller General to conduct a study and report to the Congress within six months of this Act's enactment on holding telephonic hearings on an individual's entitlement to Medicare benefits. Directs the Secretary to enter into agreements with four hospitals to conduct three-year demonstration projects whereby such hospitals provide to rural hospitals, for one to three months of training, physicians who have completed one year of residency training. Sets forth miscellaneous and technical provisions. Part 3: Relating to Part B - Subpart A: Provisions Relating to Payments for Physicians's Services - Amends part B (Supplementary Medical Insurance) of the Medicare program to freeze the prevailing and customary charges for physicians' services in the first three months of 1988 at the level of such charges in 1987. Freezes the allowable actual charge for a nonparticipating physicians' services to Medicare beneficiaries for the first three months of 1988. Extends, to March 31, 1988: (1) Medicare participation agreements in effect on December 31, 1987, unless the physician or supplier requests that the agreement be terminated; and (2) the deadline for agreements to participate in Medicare in 1988. Requires the Secretary to establish a system to measure a carrier's performance. Sets aside one percent of appropriated part B administrative funds to reward carriers for increasing the proportion of participating physician or Medicare payments for participating physicians' services in their area. Extends the reduction in Medicare payments under the President's sequestration order of November 20, 1987, through March 31, 1988, for payments for physicians' services. Increases the medical economic index for physicians services: (1) in 1988, by 3.6 percent for primary care services and one percent for other services; and (2) in 1989, by three percent for primary care services and one percent for other services. Provides incentive payments to physicians who furnish services on an assignment-related basis in a rural area designated as a health manpower shortage area under the Public Health Service Act. Requires the Secretary to report to the Congress by January 1, 1990, on the feasibility of making additional payments for physicians' services performed in such areas. Establishes a prevailing charge floor for primary care services. Reduces the prevailing charge for bronchoscopy, carpol tunnel repair, cataract surgery, coronary artery bypass surgery, diagnostic and/or therapeutic dilation and curettage, knee arthroscopy, knee arthroplasty, pacemaker implantation surgery, total hip replacement, suprapubic prostatectomy, transurethral resection of the prostate, and upper gastrointestinal endoscopy. Limits nonparticipating physicians' actual charges for such procedures if such reductions in prevailing charges result in reductions in the reasonable charges for such procedures. Prohibits the prevailing charge for ophthalmic ultrasound procedures from exceeding five percent of the prevailing charge for extracapsular cataract removal with lens implantation. Prohibits the Secretary from setting the customary charge for a new physician's services at more than 80 percent of the prevailing charge for a service. Reduces the rate of payment for a physicians provision of medical direction to nurse anethetists when such physician is providing medical direction to two or more nurse anethetists performing anesthesia services concurrently. Directs the Comptroller General to conduct two studies regarding payments for physician supervision of nurse anethetists. Directs the Secretary to establish, and report to the Congress regarding fee schedules for radiologic services by August 1, 1988. Requires that such schedules take into account variations in the cost of furnishing services in different areas and result in certain reductions in aggregate Medicare payments for such services. Sets limits on the amount nonparticipating physicians may charge for such services. Requires the Secretary to establish proposed fee schedules for physician pathology services which could be implemented by 1990 and report to the Congress regarding such fee schedules. Prohibits a physician from charging more than the acquisition costs of a diagnostic test (other than a clinical diagnostic laboratory test) which such physician neither performed or supervised. Directs the Secretary to review prevailing charges for diagnostic tests and adjust those charges which are excessive. Directs the Secretary to enter into an agreement with any physician who, by reason of breach of a contract entered into by such physician pursuant to the National Health Service Corps Scholarship Program, owes a past-due obligation to the United States under which deductions are to be made from amounts otherwise payable to the physician under the Medicare program until the past-due obligation has been repaid. Sets forth a procedure for collecting such amounts from providers and health maintenance organizations with whom such physicians are employed. Exempts physicians who are fulfilling such obligations under a contract with the Secretary pursuant to the Public Health Service Amendments of 1987 from such deductions. Eliminates the 1975 floor on prevailing charges for physicians' services. Bases the calculation of a physician's allowable actual charge for a procedure on such physician's actual charge for the procedure if the physician had such a charge prior to June 30, 1984, but not in the calendar quarter beginning on April 1, 1984. Applies copayment and deductible requirements to outpatient surgical procedures furnished on an assignment-related basis. Directs the Secretary to: (1) conduct various studies regarding Medicare payments for physicians' services; (2) develop uniform definitions of physicians' services by July 1, 1989; (3) expand a study being conducted on the development of a relative value scale for physicians' services to include specified additional physicians' services; (4) conduct a survey of the out-of-pocket costs incurred by Medicare beneficiaries for medical care; and (5) study ways of making adequate part B payments for the provision of chemotherapy in physicians' offices. Subpart B: Provisions Relating to Payments for Other Services - Extends the reduction in Medicare payments under the President's sequestration order of November 20, 1987, through March 31, 1988, for payments for items and services under part B which are not physicians' services. Prohibits the imposition of limitations on allowable charges in 1988 for part B items and services (other than physicians' services) which is higher than limitations in effect in December 1987. Sets forth special Medicare payment rules for durable medical equipment, prosthetic devices, orthotics (leg, arm, back, and neck braces), and prosthetics. Authorizes the Secretary to designate one carrier to process all claims within a region for such items. Directs the Secretary to report to the Congress by 1991 on the impact of such rules on the availability of such items and the appropriateness of increasing payment rates for oxygen and oxygen equipment when a greater volume of oxygen or portable oxygen equipment is used. Prohibits the Secretary from conducting demonstration projects, before 1991, concerning alternative methods of paying for durable medical equipment, prosthetic devices, orthotics, and prosthetics. Requires the Comptroller General to conduct a study and report to the Congress by 1991 regarding the appropriateness of Medicare payment levels for such items. Limits the reasonable charge for an intraocular lens implanted during cataract surgery in a physician's office or an ambulatory surgical center to the acquisition cost for the lens plus a handling fee. Freezes the fee schedules for clinical diagnostic laboratory tests for the first three months of 1988. Prohibits cost-of-living increases in such fee schedules in 1988. Reduces the 1988 fee schedules for automated and similar tests by 8.3 percent. Sets the payment ceiling for a clinical laboratory diagnostic test at the median of all fee schedules established for that test for that setting. Requires the Comptroller General to conduct a study and report to the Congress by 1990 regarding the appropriateness of the fee schedules established for such tests. Authorizes the Secretary to impose intermediate sanctions on providers and clinical laboratories that fail to meet Medicare standards with respect to such tests. Treats physician office laboratories performing over 5,000 tests a year as independent laboratories which must meet State or local license requirements. Prohibits regulations providing for payment of a return on equity capital from including provision for specific recognition of any return on equity capital with respect to hospital outpatient departments. Sets a limit, determined pursuant to a specified formula, on the aggregate Medicare payment which may be made in a cost reporting period for the cost of outpatient diagnostic and outpatient hospital radiology services. Sets the maximum rate of payment per visit for independent rural health clinic services at $46 in 1988, updated annually thereafter to reflect increases in the Medicare Economic Index. Requires the Secretary to report to the Congress by March 1, 1989, on the adequacy of payments for such services. Maintains the current formula, in 1989 and 1990 for reimbursing hospitals which specialize in eye or eye and ear surgical procedures and receive over 30 percent of their revenues from outpatient procedures. Directs the Secretary to: (1) consider whether a payment differential for specialty hospitals is appropriate when studying the development of a prospective payment system for outpatient ambulatory surgery; and (2) solicit recommendations from the Prospective Payment Assessment Commission regarding such payment system and the model reimbursement system for non-surgical outpatient services, and include its recommendations in reports to the Congress. Subpart C: Eligibility and Benefits Changes - Increases part B coverage of outpatient mental health services, but excludes from such coverage brief office visits for the sole purpose of prescribing or monitoring prescription drugs used in treating mental disorders. Provides part B coverage of partial hospitalization services furnished incident to physicians' outpatient services. Provides Medicare coverage for influenza vaccines and their administration if the Secretary finds that a specified demonstration project proves such coverage to be cost-effective. Covers therapeutic shoes furnished to individuals with severe diabetic foot disease, but conditions such coverage on its being proven cost-effective by a specified demonstration project. Includes certified nurse-midwife services within covered part B services, but requires that payment for such services be made on an assignment-related basis. Covers services furnished by a clinical social worker to a member of a health maintenance organization. Limits covered immunosuppressive drugs to prescription drugs used in immunosuppressive therapy. Provides coverage for the services of physician assistants in rural health manpower shortage areas. Includes the services of clinical psychologists in the definition of covered rural health clinic services if such services would be covered if furnished by a physician or as an incident to a physician's services. Covers psychologists' services furnished at community health centers pursuant to a fee schedule to be established by the Secretary, but requires payments for such services to be made on an assignment-related basis. Provides that here shall be no requirement that comprehensive outpatient rehabilitation facilities provide physical, occupational, or speech therapy at any fixed location so long as such services are delivered pursuant to a rehabilitation plan and payments are not otherwise made for the item or service under the Medicare program. Directs the Secretary to enter into an agreement with no less than four eligible organizations for the provision of community nursing and ambulatory care on a prepaid, capitated basis for three years. Lists the services and supplies which comprise community nursing and ambulatory care. Defines an "eligible organization" as a public or private entity which: (1) primarily engages in the provision of community nursing and ambulatory care; (2) provides such care through or under the supervision of a registered nurse; (3) maintains clinical records on all patients; and (4) maintains procedures for referring cases to or consulting with other health care providers. Requires the Secretary to annually publish a per capita rate of payment for each class of enrollees equal to 95 percent of the adjusted average per capita cost for such class. Directs the Secretary to make monthly prepayments to such organizations in accordance with such rates. Authorizes retroactive payment adjustments to account for differences between the actual number of enrollees and the number of enrollees estimated for the purpose of determining the advance payment. Prohibits enrollee charges from exceeding charges for which they would be liable in the absence of their enrollment. Authorizes eligible organizations to provide enrollees with optional additional care. Requires the provision of additional care where the average of the per capita rates of payment to an organization exceeds the adjusted community rate for community nursing and ambulatory care, unless the organization elects to have such payments reduced or withheld. Makes certain Medicare provisions which are applicable to health maintenance organizations and competitive medical plans applicable to organizations providing care pursuant to this Act. Extends for one year, through 1989, current part B premium provisions. Subpart D: Other Provisions - Directs the Secretary to establish a procedure whereby a part B beneficiary may assign his or her rights of payment under a Medicare supplemental health insurance policy for an item or service furnished by a participating physician or supplier so that such physician and supplier may be paid directly by the supplemental policy. Requires the expedited administrative hearing of an appeal of a determination regarding an individual's entitlement to Medicare benefits or the amount of such benefits when there are no material issues of fact in dispute. Directs the Secretary to establish certain time limits on carriers' hearings regarding their Medicare payment determinations. Requires the Comptroller General to conduct a study and report to the Congress by June 30, 1989, regarding the cost-effectiveness of requiring a hearing before a carrier before having a hearing before an administrative law judge concerning a carrier's determinations under part B. Requires that the Physician Payment Review Commission be composed of individuals with national recognition for their expertise in health economics, physician reimbursement, medical practice, and other related fields. Repeals the requirement that the Director of the Congressional Office of Technology Assessment seek nominations for such Commission. Treats employees of such Commission as employees of the United States Senate for purposes of pay and employment benefits, rights, and privileges. Sets forth technical amendments related to certified registered nurse anesthetists. Sets forth miscellaneous and technical provisions. Part 4: Peer Review Organizations - Amends part B (Peer Review) of title XI of the Act to provide that the Secretary's contracts with peer review organizations (PROs) shall be for an initial three-year term and be renewable on a triennial basis thereafter. Requires the Secretary to publish in the Federal Register: (1) any new policy or procedure which substantially affects PRO performance of contract obligations within 30 days prior to the effective date of such policy or procedure; and (2) the general criteria and standards used in evaluating PRO performance of contract obligations. Directs the Secretary to: (1) regularly furnish each PRO with a report that documents its performance in relation to other PROs; and (2) negotiate necessary contractual modifications with PROs before requiring them to perform additional functions. Requires the Secretary to publish in the Federal Register, no later than six months before a contract with an out-of-State PRO expires, notice as to the date the existing contract expires and the period during which an in-State organization may submit a contract proposal. Provides that if one or more in-State organizations submit a proposal the new contract shall be awarded on a competitive basis. Requires PROs to give providers whose services are denied Medicare coverage an opportunity for discussion and review of the determination for 20 days before patients and organizations responsible for paying claims are notified of such determination. Requires PROs to: (1) consider, in developing norms of care, the special problems associated with delivering care in remote rural areas, the availability of service alternatives to inpatient hospitalization, and other appropriate factors that could adversely affect the safety or effectiveness of outpatient treatment; (2) perform significant on-site review activities, including on-site review at at least 20 percent of the rural hospitals in its area; (3) offer to provide, several times each year, for a physician representative of the PRO to meet with the staff of each hospital regarding the PRO's review of the hospital's Medicare services; (4) publish and distribute to providers and practitioners, at least annually, a report describing the PRO's findings with respect to situations in which the PRO has frequently found medical care to be inadequate or unnecessary; (5) determine whether individuals enrolled with an HMO have adequate access to services provided by or through such HMO; (6) apprise HMO enrollees regarding the peer review system and the method of contacting the PRO; and (7) make arrangements for the initial review of psychiatric and physical rehabilitation services to be made by a physician who is trained in psychiatry or physical rehabilitation. Directs the Secretary, when evaluating the performance of PROs, to emphasize the performance of PROs in educating providers and practitioners (particularly those in rural areas) concerning the review process and criteria being applied by the PRO. Requires the Secretary to establish demonstration projects examining the feasibility of requiring instruction and oversight of rural physicians, in lieu of imposing sanctions, through the use of video communication between rural and teaching hospitals. Prohibits the Medicare exclusion of a provider located in a rural health manpower shortage area or in a county with a population of less than 70,000 pending completion of administrative review procedures unless a hearing before an administrative law judge results in the determination that the provider or practitioner will pose a serious risk to beneficiaries if allowed to continue furnishing Medicare services. Directs the Secretary to report to the Congress, within one year of this Act's enactment, on improved procedures for imposing sanctions against Medicare providers which furnish items or services that are not medically necessary or do not meet professionally recognized health care standards. Amends part B of the Medicare program to protect Medicare beneficiaries from liability for services which PROs determine are not covered under the Medicare program. Amends part B of title XI to require a hospital to notify a patient of its request that a PRO review its determination that such patient no longer requires inpatient hospital care if the attending physician disagrees with the hospital's determination. Amends the Medicare program to require that the Secretary's budget separately state the amount of budget authority for inpatient hospital services and the amount of budget authority for the PRO program. (Currently, PRO costs are included as costs incurred by hospitals in providing inpatient hospital services.) Subtitle B: Medicaid - Part 1: Eligibility and Benefits - Amends title XIX (Medicaid) of the Act to allow States to extend Medicaid coverage to pregnant women and infants under age one whose family income exceeds current income eligibility standards, but does not exceed 185 percent of the Federal poverty level. Authorizes States to accelerate the coverage of poor children under age five. (Currently, coverage would not be extended to all poor children under age five until FY 1991.) Requires the coverage of children under age six. Allows States to extend Medicaid coverage to poor children under age eight. Authorizes States to impose a premium for the coverage of pregnant women and infants, but limits such premium to ten percent of the amount by which the family's income, minus child care expenses, exceeds 150 percent of the Federal poverty level. Requires a State, under a home or community-based waiver, to cover home or community-based services provided pursuant to a written plan of care to individuals age 65 or older with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a skilled nursing or intermediate care facility, the cost of which could be reimbursed under the Medicaid program. Provides that such a waiver shall be for an initial three-year term and, upon a State's request, for additional five-year terms. Sets funding limitations. Requires the Secretary to develop methods of projecting increases in nursing facility and home care costs, and the percentage increase in the number of residents in each State who are 75 or older. Specifies that the Secretary's denial of such a waiver shall be subject to administrative and judicial review and an existing waiver shall remain in effect for 90 days after its extension is denied. Authorizes States to apply for the temporary extension of certain waivers for the elderly which are due to expire before July 1, 1988. Provides Medicaid coverage of medical and surgical services furnished by a dentist to the extent State law permits the provision of such services by both dentists and physicians. Authorizes certain States to provide Medicaid coverage of individuals who receive only an optional State supplementary payment based on need. Clarifies the inclusion of services furnished by clinic personnel to the homeless outside the clinic within covered Medicaid clinic services. Authorizes California to set a special Medicaid income eligibility level for a family of two individuals both of whom are adults and at least one of whom is aged, blind, or disabled. Part 2: Other Provisions - Amends part A (General Provisions) of title XI of the Act to increase the maximum amount of annual Medicaid payments that may be made to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. Requires each State to specify which hospitals in the State serve a disproportionate number of low-income patients with special needs and increase the rate or amount of Medicaid payments for such services. Sets forth the criteria for determining whether a hospital serves a disproportionate share of low-income patients, including the requirement that such hospitals have at least two obstetricians on staff who have agreed to serve Medicaid beneficiaries. Amends the Medicaid program to authorize the New Jersey Medicaid agency to establish a program providing health care on a prepaid basis through a separate entity (including a subdivision of the State Medicaid agency) responsible for the operation of such program in accordance with HMO requirements. Sets the Federal Medicaid matching rate for quality review of HMO services by a private accreditation body at 75 percent. Prohibits the enrollment of an individual in a primary care case-management system, an HMO, or a similar entity from restricting that individual's freedom of choice among family planning providers. Makes provisions which protect an HMO enrollee's Medicaid eligibility and restricts his or her disenrollment without cause applicable to the Metropolitan Health Plan HMO operated by the New York City public hospitals. Waives restrictions imposed on inpatient care for Medicaid hospice patients in the case of individuals afflicted with acquired immunodeficiency syndrome (AIDS). Extends, through September 1989, an Arizona demonstration project providing Medicaid services on a prepaid basis. Authorizes New York State, upon the Secretary's approval, to conduct a three-year demonstration project testing its Prenatal/Maternity/Newborn Care Pilot Program as an alternative to existing Federal programs. Directs the Secretary to waive the application of certain Medicaid requirements with respect to Washington State's Family Independence Program upon such program's approval. Authorizes the Secretary to waive or modify Medicaid requirements with respect to the Northern Mariana Islands. Prohibits the Secretary from reducing, prior to July 1, 1988, Medicaid payments to States having high erroneous payment rates. Sets forth miscellaneous and technical amendments. Subtitle C: Nursing Home Reform - Part 1: Medicare Program - Amends the Medicare program to set forth requirements for skilled nursing facilities (other than facilities for the mentally retarded), including requirements that such facilities: (1) primarily engage in providing residents with nursing care or rehabilitation services directed toward residents' mental, psychosocial, and physical well-being; (2) maintain a quality assessment and assurance committee which meets at least quarterly to identify areas where quality assessment and assurance is necessary and implement plans to correct deficiencies; (3) provide such care in accordance with a written plan of care initially prepared and periodically reviewed and revised, by a team which includes the attending physician and a professional registered nurse, on the basis of assessments of a resident's functional capacity conducted upon the resident's admission and after a significant change in the resident's physical or mental condition, but in no case less often than annually; (4) provide, in addition to nursing and rehabilitative services, such physicians' services, medically-related social services, pharmaceutical services, dietician services, and dental services as are required to fulfill each resident's plan of care; (5) require nurse aides who are not licensed health professionals to complete a State-approved training or retraining program before participating in resident care, and have an ongoing program of nurse aide training and performance review; (6) require a physician's supervision of each resident's care, the maintenance of clinical records on all residents, and 24-hour nursing services; (7) protect specified resident rights, including the right to appeal a transfer or discharge from the facility; (8) safeguard a resident's funds upon the resident's authorization; (9) notify the State agency responsible for licensing the facility of changes in the ownership, control, or administration of the facility; (10) adopt certain measures to preserve facility safety and sanitation; and (11) meet such other conditions which the Secretary deems necessary for residents' health and safety. Subjects individuals who participate in the falsification of resident assessments to civil money penalties. Requires States, by March 1, 1989, to: (1) specify State-approved nurse aide training and testing programs which meet minimum standards to be established by the Secretary by September 1, 1988; and (2) maintain a registry of nurse aides who have successfully completed such programs, including specific findings of resident neglect or abuse or misappropriation of resident property involving such individuals. Prohibits State approval of a training program offered by a facility that has been out of compliance with the Act's requirements within the preceding two years. Requires States to: (1) establish a fair mechanism which meets Federal guidelines to be established by October 1, 1989, for hearing appeals on transfers of residents from nursing facilities; and (2) implement and enforce standards which are to be developed by the Secretary by March 1, 1989, regarding the qualifications of nursing facility administrators. Requires the Secretary to publish a list of the costs which may be charged to the personal funds of residents who are covered by Medicare. Reimburses nursing facilities for the reasonable costs of complying with this Act's requirements. Directs the Secretary to report to the Congress by January 1, 1992, on the implementation of the nursing facility resident assessment process. Requires States to conduct periodic educational programs for the staff and residents of nursing facilities on current regulations, procedures, and policies concerning the quality of care provided at such facilities. Requires States to establish a process for the receipt, review, and investigation of allegations of resident neglect and abuse, and misappropriation of resident property by a nurse aide in a nursing facility. Makes the Secretary responsible for certifying that State nursing facilities comply, and States responsible for certifying that other nursing facilities comply with Medicare nursing facility requirements. Bases such certifications on standard surveys to be conducted within two months of any change in the ownership or administration of such a facility and, on an unannounced basis, at least every 15 months. Prohibits the Statewide average interval between surveys from exceeding one year. Subjects facilities which were found to have provided substandard care to extended surveys. Requires that surveys be conducted by a multidisciplinary team of professionals who have successfully completed a training and testing program approved by the Secretary. Directs the Secretary to: (1) develop and test a protocol for conducting surveys; (2) establish minimum qualifications for surveyors; and (3) conduct sample surveys of nursing facilities, within two months of State surveys, to test the adequacy of State surveys, and, if the State surveys prove inadequate, provide for an appropriate remedy, which may include training survey teams in the State. Authorizes the Secretary to conduct a special survey of a facility when there is reason to question its compliance with this Act. Requires States to investigate complaints against, and monitor the compliance of, a facility with this Act's requirements if the facility was previously found to be out of compliance with such requirements or the State has reason to question its compliance. Authorizes States to use a specialized team to gather and survey evidence and carry out enforcement actions against chronically substandard facilities. Requires that certain information regarding nursing facilities and their compliance with this Act's requirements be made available to the public. Provides long-term care ombudsmen, resident's physicians, and the State board which licenses facility administrators with notice of a facility's poor quality of care. Gives State Medicaid (title XIX of the Act) fraud and abuse control units access to facility survey and certification information. Requires that survey results be posted in a place which is readily accessible to residents and their representatives. Requires the Secretary or a State to recommend the Secretary to terminate a nursing facility's Medicare participation or take immediate action to remove the jeopardy and correct the deficiencies through the appointment of temporary management to oversee the operation of the facility and assure residents' health and safety upon determining that such deficiencies immediately jeopardize residents' health and safety. Authorizes States to recommend certain other remedies where the health and safety of facility residents is not immediately jeopardized. Provides that if a facility is found out of compliance with any of this Act's requirements three months after having been found out of compliance with such requirements or to have provided substandard care on three consecutive surveys, Medicare payments for newly admitted residents shall be denied and, in the latter case, on-site monitoring of the facility's compliance shall be established. Requires the Secretary to report to the Congress annually on nursing facility compliance with Medicare requirements and the number and type of enforcement actions taken against such facilities. Part 2: Medicaid Program - Amends the Medicaid program to establish a single set of requirements for skilled nursing and intermediate care facilities (other than facilities for the mentally retarded), and to refer to such facilities as "nursing facilities." Sets forth requirements for nursing facilities, including requirements that such facilities: (1) primarily engage in providing residents with nursing care, rehabilitative services, and other health-related services which can only be provided through such facilities, directed toward residents' mental, psychosocial, and physical well-being; (2) maintain a quality assessment and assurance committee which meets at least quarterly to identify areas where quality assessment and assurance is necessary and implement plans to correct deficiencies; (3) provide such care in accordance with a written plan of care initially prepared and periodically reviewed and revised, by a team which includes the attending physician and a professional registered nurse on the basis of assessments of a resident's functional capacity conducted upon the resident 's admission and after a significant change in the resident's physical or mental condition, but in no case less often than annually; (4) provide, in addition to nursing and rehabilitative services, such physicians' services, medically-related social services, pharmaceutical services, dietician services, and dental services as are required to fulfill each resident's plan of care; (5) require nurse aides who are not licensed health professionals to complete a State-approved training or retraining program before participating in resident care, and have an ongoing program of nurse aide training and performance review; (6) require a physician's supervision of each patient's care, the maintenance of clinical records on all patients, and, with certain exceptions, the services of a licensed nurse 24 hours a day and a registered nurse eight hours a day; (7) employ a full-time social worker if they have over 120 beds; (8) protect specified patient rights, including the right to appeal involuntary transfer or discharge from the facility; (9) provide applicants and residents with information regarding the Medicare and Medicaid programs and not require applicants to waive their rights to such benefits, have a third party guarantee payment to the facility, or charge a Medicaid beneficiary more than is required to be paid under the Medicaid program as a condition of their admission; (10) safeguard a resident's funds upon the resident's authorization; (11) not admit any new resident, after 1988, who is mentally ill or retarded unless the State mental health authority deems such individual to require nursing facility services and decides whether the individual requires active treatment for mental illness or retardation; (12) notify the agency responsible for licensing the facility of changes in the ownership, control, or administration of the facility; (13) adopt certain measures to preserve facility safety and sanitation; and (14) meet such other conditions which the Secretary deems necessary for patient health and safety. Requires States to specify, by September 1, 1988, those nurse aide training programs which meet the minimum standards to be established by the Secretary by July 1, 1988, and have the State's approval. Prohibits State approval of a training program offered by a facility that has been out of compliance with this Act's requirements within the previous two years. Requires each State to: (1) establish a registry, by 1989, of all individuals who have satisfactorily completed a nurse aide training program in the State, including specific findings of resident neglect or abuse or misappropriation of resident property involving such individuals; (2) develop a written notice, by April 1988, of the rights and obligations of nursing facility residents under the Medicaid program; (3) establish a fair mechanism, by October 1, 1989, which meets Federal guidelines to be established by October 1, 1988, for hearing appeals on transfers of residents from nursing facilities; and (4) implement and enforce standards which are to be developed by the Secretary by March 1, 1988, regarding the qualifications of nursing facility administrators. Requires that, in addition to the preadmission review of mentally ill or retarded individuals, State mental health authorities conduct an annual review of mentally ill or retarded residents to determine whether such residents require nursing facility services and whether they require active treatment for mental illness or retardation. Directs that such preadmission and annual reviews be conducted in accordance with criteria to be developed by the Secretary by October 1, 1988. Sets forth required nursing facility responses to determinations as to whether such residents need nursing facility services and need, or do not need, active treatment for mental illness or retardation. Gives long-term residents who do not require nursing facility services, but who require active treatment, the choice of remaining in the facility or receiving covered services in an alternative setting. Require's nursing facilities to provide for the active treatment of residents in need of treatment for mental illness or retardation regardless of their continued need for nursing facility services or their dishcarge from such facility. Requires States to have an appeals process for individuals adversely affected by such preadmission and annual reviews. Directs the Secretary to publish a list of the costs which may be charged to the personal funds of residents who are covered by Medicaid. Requires the Secretary to report to the Congress by 1993 on the implementation of the resident assessment process. Imposes civil monetary penalties on individuals who falsify resident assessments. Sets the Federal matching percentage for: (1) nurse aide training and testing programs at the Federal medical assistance percentage plus 25 percent, but not exceeding 90 percent, for FYs 1988 and 1989, and at 50 percent thereafter; and (2) preadmission and annual screening of mentally ill or retarded residents at 75 percent. Directs the Secretary to: (1) provide States with technical assistance in the development and implementation of reimbursement methods for nursing facilities that take into account the case mix of residents in different facilities; and (2) report to the Congress by January 1, 1993, on the progress made in implementing this Act's nursing facility staffing requirements. Requires States to conduct periodic educational programs for the staff and residents of nursing facilities on current regulations, procedures, and policies concerning the quality of care provided at such facilities. Requires States to establish a process for the receipt, review, and investigation of allegations of resident neglect and abuse, and misappropriation of resident property by a nurse aide in a nursing facility. Makes the Secretary responsible for certifying that State nursing facilities comply, and States responsible for certifying that other nursing facilities comply with Medicaid nursing facility requirements. Bases such certifications on standard surveys to be conducted within two months of any change in the ownership or administration of such a facility and, on an unannounced basis, at least every 15 months. Prohibits the Statewide average interval between surveys from exceeding one year. Subjects facilities which were found to have provided substandard care to extended surveys. Requires that surveys be conducted by a multidisciplinary team of professional who have successfully completed a training and testing program approved by the Secretary. Directs the Secretary to: (1) develop and test a protocol for conducting surveys; (2) establish minimum qualifications for surveyors; (3) conduct sample surveys of nursing facilities, within two months of State surveys, to test the adequacy of State surveys; and (4) reduce Federal payments for State Medicaid administrative costs if State surveys prove inadequate. Authorizes the Secretary to conduct a special survey of a facility when there is reason to question its compliance with this Act. Requires States to investigate complaints against, and monitor the compliance of, a facility with this Act's requirements if the facility was previously found to be out of compliance with such requirements or the State has reason to question its compliance. Authorizes States to use a specialized team to gather and survey evidence and carry out enforcement actions against chronically substandard facilities. Requires that certain information regarding nursing facilities and their compliance with this Act's requirements be made available to the public. Provides long-term care ombudsmen, residents' physicians, and the State board which licenses facility administrators with notice of a facility's poor quality of care. Gives State Medicaid (title XIX of the Act) fraud and abuse control units access to facility survey and certification information. Requires that survey results be posted in a place which is readily accessible to residents and their representatives. Sets the Federal matching percentage for nursing facility certification activities at 90 percent in FY 1991, 85 percent in FY 1992, 80 percent in FY 1993, and 75 percent thereafter. Eliminates current penalties applied to a State when its control over the utilization of skilled nursing or intermediate care facility services is deemed inadequate. Requires that when the Secretary or a State determines that a nursing facility's deficiencies immediately jeopardize residents' health and safety, immediate action be taken to remove the jeopardy and correct the deficiencies or such facility's participation in Medicaid be terminated. Directs the Secretary and States to apply certain other remedies where the health and safety of facility residents is not immediately jeopardized. Authorizes the imposition of civil money penalties against facilities found to be in compliance with this Act's requirements but to have been out of compliance previously. Provides that if a facility is out of compliance with any of this Act's requirements three months after having been found out of compliance with such requirements or on three consecutive standard surveys, Medicaid payments for newly admitted residents shall be denied and, in the latter case, on-site monitoring of the facility's compliance shall be established. Authorizes each State to establish a program providing rewards to facilities providing the highest quality of care. Sets forth special rules which are to be applied where a State and the Secretary do not agree on a finding of noncompliance or the remedies which should be prescribed. Requires the Secretary to report to the Congress annually on nursing facility compliance with Medicaid requirements and the number and type of enforcement actions taken against such facilities. Directs the Secretary, within 30 days of this Act's enactment, to promulgate final regulations required by the Omnibus Budget Reconciliation Act of 1985 regarding State submittal of correction and reduction plans for intermediate care facilities for the mentally retarded which have deficiencies that do not immediately jeopardize residents' health and safety. Authorizes a nurse practitioner or clinical nurse specialist, in collaboration with a physician, to certify and recertify a patient's need for skilled nursing or intermediate care facility services. Subtitle D: Vaccine Compensation - Vaccine Compensation Amendments of 1987 - Amends the Public Health Service Act to provide that payment of compensation for an injury or death from administration of a vaccine before the effective date of this provision shall be made from specified appropriations and that compensation for injury or death from administration on or after the effective date shall be made from the Vaccine Injury Compensation Trust Fund. Authorizes appropriations for FY 1989 through 1992. Removes provisions: (1) placing limitations on the amount of unreimbursable expenses which may be recovered; (2) requiring payments for projected expenses to be paid on a periodic basis; and (3) allowing payments for paid and suffering, emotional distress, and incurred expenses to be paid in a lump sum. Requires compensation for injury or death from administration of a vaccine on or after the effective date to be paid in a lump sum and payment for injury or death from administration before the effective date to be made in four annual installments. Repeals provisions relating to administration by the National Vaccine Injury Compensation Program (Program) of awards and relating to revision of awards. Repeals a provision relating to annual inflation increases for certain compensation and for civil penalties. Revises provisions relating to compensation for injury or death from administration of a vaccine before the effective date to change the categories for which compensation is prohibited and allowed and to limit specified types of compensation under certain categories to a stated amount. Directs the Secretary of Health and Human Services to review the number of awards in specified periods and, if the Secretary determines that the number exceeds the number of awards listed in a specified table, to notify the Congress of the determination. Prohibits, in such case, the filing of a petition after a stated period. Makes specified provisions relating to the filing of petitions and relating to additional remedies inapplicable to civil actions for damages for a vaccine-related injury or death for which a petition may not be filed because of such prohibition. Revises provisions relating to petitions for compensation. Allows withdrawal of a petition on which a court has failed to enter a judgment within a specified time. Allows, after withdrawal, maintenance of a civil action for damages. Authorizes awarding of costs of litigation to any plaintiff in certain circumstances in a citizen action against the Secretary for failure to perform under the National Vaccine Program subtitle. (Current law authorizes awarding of costs to any party when appropriate.) Makes general rules relating to petitions for compensation apply to those who administer as well as those who manufacture a vaccine. Grants jurisdiction over matters involving vaccine injury compensation to the U.S. Claims Court. Removes provisions authorizing a court to refer a record of a proceeding, after entry of a final judgment providing for compensation, to the Secretary of Health and Human Services and the Attorney General with respect to a civil action by the Secretary under provisions relating to subrogation. Subtitle E: Rural Health - Amends title VII (Administration) of the Social Security Act to establish an Office of Rural Health Policy in the Department of Health and Human Services to: (1) advise the Secretary regarding the effects of changes in the Medicare and Medicaid programs on rural health care; (2) oversee compliance with provisions of this Act requiring regulatory impact analyses and rural health demonstration projects; (3) establish and maintain a clearinghouse for collecting and disseminating information on rural health care; (4) coordinate rural health care activities within the Department of Health and Human Services; and (5) provide the Department with information regarding the rural health care activities of other Federal departments and agencies. Amends part A (General Provisions) of title XI of the Act to require that whenever the Secretary of Health and Human Services proposes a regulation or promulgates a final version of a regulation under titles XVIII (Medicare), XIX (Medicaid), or part B (Peer Review) of title XI of the Act which will have a substantial impact on small rural hospitals, the Secretary make a regulatory impact analysis available to the public. Sets aside ten percent of amounts expended by the Secretary on certain experiments and demonstration projects relating exclusively or substantially to rural health issues. Title V: Energy and Environment Programs - Subtitle A: Nuclear Waste Amendments - Nuclear Waste Policy Amendments Act of 1987 - Part A: Redirection of the Nuclear Waste Program - Amends the Nuclear Waste Policy Act of 1982 to direct the Secretary of Energy (the Secretary) to provide for an orderly phase-out of site-specific activities at all candidate sites other than the Yucca Mountain site (Nevada); and (2) terminate all site specific activities other than reclamation activities at all other candidate sites. Declares the State of Nevada eligible to enter into a benefits agreement with the Secretary. Prescribes the termination procedure for the Secretary to follow if he should determine that the Yucca Mountain site is unsuitable for repository development. States that for purposes of the Environmental Policy Act and related environmental concerns the Secretary and the Nuclear Regulatory Commission need not consider alternate sites to the Yucca Mountain repository or nongeologic alternatives to such site. Prohibits the Secretary from conducting site-specific activities regarding a second repository unless the Congress has specifically authorized and appropriated funds for such activities. Requires the Secretary to: (1) report to the President and the Congress by January 1, 2010, on the need for a second repository; and (2) phase-out all funding for research programs regarding crystalline rock suitability as a potential repository host medium within a specified deadline. Prescribes additional criteria for the Secretary's mandatory consideration if potential crystalline rock sites are considered in the future. Part B: Monitored Retrievable Storage - Annulls and revokes the Secretary's proposal to locate a monitored retrievable storage (MRS) facility on the Clinch River in Oak Ridge, Tennessee (including an alternate site in Hartsville, Tennessee). Authorizes the Secretary to site, construct and operate one MRS facility subject to a report and recommendation transmitted to the Congress by the Monitored Retrievable Storage Review Commission (established by this Act.) Establishes such Commission (Commission) and requires it to report on the need for an MRS facility as part of a national nuclear waste management system. Prescribes the contents of such report and mandates its transmittal to the Congress by June 1, 1989. Authorizes the Secretary to survey and evaluate potentially suitable MRS sites after the Commission has submitted its report. States that the Secretary's site selection and site-specific activities shall not require an environmental impact statement under the National Environmental Policy Act of 1969. Requires the Secretary to submit an environmental assessment to the Congress at the time of site selection. Proscribes the construction of an MRS facility in the State of Nevada. Sets forth disapproval procedures and benefits for affected States and Indian tribes. Sets forth environmental assessment requirements and licensing conditions once selection of an MRS site is effective. Part C: Benefits - Authorizes the Secretary to enter into a benefits agreement with the State of Nevada concerning a repository, or with an affected State or Indian tribe concerning an MRS facility. Prescribes guidelines for such agreements, including the mandatory establishment of a Review Panel to advise, evaluate and participate in facility design, construction, operation and decommissioning. Sets forth guidelines for the termination of such agreements. Requires the Secretary, in siting Federal research projects, to: (1) give special consideration to proposals from States where a repository is located; (2) report to the Congress within one year of enactment of this Act regarding specified potential impacts of locating a repository at the Yucca Mountain site; and (3) make grants and provide technical and financial assistance to the State of Nevada (and affected local governments). Prohibits any State, other than the State of Nevada, from receiving financial assistance for repository siting purposes after the date of enactment of this Act. Part D: Nuclear Waste Negotiator - Establishes within the Executive Office of the President the Office of the Nuclear Waste Negotiator, headed by the Nuclear Waste Negotiator who shall be appointed by, and hold office at the pleasure of, the President (with the advice and consent of the Senate). Requires the Negotiator to: (1) find a State or Indian tribe willing to host a repository (or monitored retrievable storage site (MRS)); and (2) submit to the Congress any proposed agreement regarding such repository host. Directs the Secretary, upon the Negotiator's request, to prepare an environmental assessment of any site that is under negotiation. Prescribes guidelines for environmental assessments and site characterization. Authorizes grants to assess the feasibility of siting an MRS within the affected locality. Declares that the issuance of a repository construction authorization shall be considered a major Federal action under the National Environmental Policy Act of 1969 (thus requiring the Secretary of Energy to prepare a final environmental impact statement). Sets forth a termination date for the Office. Authorizes appropriations. Part E: Nuclear Waste Technical Review Board - Establishes the Nuclear Waste Technical Review Board as an independent entity within the executive branch to evaluate the Secretary's activities, including site characterization and the packaging and transportation of radioactive waste. Outlines the Board's membership, terms of office, and administrative parameters. Requires the Board to report its findings and recommendations biannually to the Congress and the Secretary. Authorizes appropriations. Terminates such Board within one year after the date on which the Secretary begins repository disposal of high-level radioactive waste or spent nuclear fuel. Part F: Miscellaneous - Prohibits the transportation of spent nuclear fuel or high-level radioactive waste by or for the Secretary except in packages that have been certified for such purpose by the Nuclear Regulatory Commission. Directs the Secretary to: (1) abide by the Commission's regulations regarding advance notification of State and local governments prior to transportation of spent nuclear fuel or high-level radioactive waste; and (2) provide States with technical assistance and funds for training public safety officials through whose jurisdiction the Secretary plans to transport radioactive materials. Prohibits the air transportation of plutonium through U.S. air space from a foreign nation to a foreign nation unless the NRC has certified to the Congress that the plutonium container is safe according to specified criteria. Authorizes the President to provide for alternative plutonium transportation routes with respect to shipments among foreign nations which are subject to certain U.S. consent rights contained in an "Agreement for Peaceful Nuclear Cooperation." Exempts certain medical and military uses from such proscription, as well as plutonium shipment containers previously certified as safe by the NRC. Provides for reimbursement of NRC testing and administrative expenditures by the foreign country receiving plutonium through U.S. airspace. Directs the Secretary to report to the Congress on subseabed disposal of spent nuclear fuel and high-level radioactive waste. Prescribes the contents of such report. Establishes an Office of Subseabed Disposal Research within the Office of Energy Research of the Department of Energy, headed by a Director responsible for research, development, and demonstration activities regarding subseabed disposal of high-level radioactive waste and spent nuclear fuel. Directs the Secretary to establish a university-based Seabed Consortium composed of oceanographic universities and institutions to investigate the technical and institutional feasibility of subseabed disposal. Requires the Consortium to report to the Congress regarding the design, costs, and impacts of a subseabed disposal system. Requires the Director of the Office of Subseabed Disposal Research to report annually to the Congress regarding Office activities. Provides funding. Sets a time-frame within which the Secretary must study and evaluate the use of dry cask storage technology at civilian nuclear power reactor sites for the temporary storage of spent nuclear fuel until a permanent geologic repository is operative for such purpose. Prescribes the contents of such study and directs the Secretary to report on it to the Congress by October 1, 1988. Subtitle B: Federal Onshore Oil and Gas Leasing Reform Act of 1987 - Federal Onshore Oil and Gas Leasing Reform Act of 1987 - Amends the Mineral Lands Leasing Act of 1920 regarding competitive leasing of oil and gas for onshore Federal lands to increase from 640 acres to 2,560 acres the units of land open to competitive leasing. Restricts the maximum units in Alaska to 5,760 acres. Provides for lease sales to be: (1) conducted by oral bidding; and (2) held at least quarterly in each State (or more frequently at the Secretary of the Interior's discretion). Conditions such lease sales upon the payment of specified royalties. Requires the Secretary to accept the highest bid from a responsible qualified bidder which is equal to or greater than the national minimum acceptable bid. Mandates rejection of all bids for less than the national minimum acceptable bid. Declares that the national minimum acceptable bid shall be $2.00 per acre for a period of two years from the date of enactment of this Act. Authorizes the Secretary to establish a higher national minimum acceptable bid thereafter. Requires the Secretary to inform certain congressional committees 90 days before modifying such bid. Cites circumstances under which lands will be available for non-competitive leasing. Increases the annual lease rental from 50 cents to $1.50 per acre for the first five years, and for a minimum of $2 per acre per year for each year thereafter. Sets forth a formula for the minimum royalty. Requires the Secretary to give notice and make maps and narrative descriptions available to the public at least: (1) 45 days before offering lands for lease; and (2) at least 30 days before substantially modifying lease terms. Prescribes guidelines under which the Secretary (or the Secretary of Agriculture for national public domain forest lands) must regulate surface-disturbing activities conducted upon lease lands. Cites circumstances under which the Secretary is authorized to disapprove certain lease assignments and subleases. Authorizes the Secretary to disapprove specified lease assignments at his discretion. Amends lease cancellation conditions to provide that leases will not be cancelled due to the lessee's non-compliance with lease terms if: (1) the leasehold contains a well capable of oil or gas production in paying quantities; or (2) the lease is committed to an approved cooperative, unit plan, or communitization agreement which contains a well capable of unitized substances production in paying quantities. Amends the Alaska National Interest Lands Conservation Act regarding oil and gas leases to bring it into conformance with this Act. Prohibits the processing of noncompetitve lease applications or offers for specified public lands pending on the date of enactment of this Act until such lands are posted for competitive bidding in accordance with this Act. Reinstates noncompetitive applications for such lands if the national minimum acceptable bids are not forthcoming. Sets forth guidelines for the promulgation of regulations regarding lease sales. Imposes civil and criminal penalties upon persons who misrepresent the value of lands and leases under this Act. Empowers States to bring civil enforcement actions in Federal district courts. Requires the Secretary to report annually to the Congress for five years after enactment of this Act certain information to facilitate congressional monitoring of this Act. Directs the National Academy of Sciences and the Comptroller General to conduct a study regarding the manner in which oil and gas resources are considered in land use plans developed by the Secretary of the Interior and the Secretary of Agriculture. Prohibits the issuance of oil or gas leases upon certain lands allocated or designated as wilderness areas. States that Federal law regarding competitive leasing of oil and gas for onshore Federal lands may be cited as the "Mineral Leasing Act". Subtitle C: Land and Water Conservation Fund and Tongass Timber Supply Fund - Amends the Land and Water Conservation Fund Act of 1965 to increase from $10 to $25 the charge for the annual admission permit (the Golden Eagle Passport) into any entrance fee area of the National Park System. Authorizes the Secretary of the Interior to make available an annual admission permit for a reasonable fee for a specific unit or units of the National Park System. Sets fee limits for single-visit permits. Prohibits charging fees at any National Park unit located in an urbanized area. Directs the Secretary to report to specified congressional committees a list of units and their proposed admission fees. Prohibits admission fees for persons 16 years of age or less or for organized educational groups. Prohibits charges at: (1) the U.S.S. Arizona Memorial, Hawaii; (2) Independence National Historical Park, Pennsylvania; (3) any National Park System unit within the District of Columbia; (4) the Robert E. Lee National Memorial; (5) San Juan National Historic Site; and (6) Canaveral National Seashore. Requires a "Fee-Free Day" at each unit where a fee is charged. Sets admission fee limitations for Yellowstone, Grand Teton, and Grand Canyon National Parks. Authorizes the Secretary to charge an admission fee at Denali National Park and Preserve in Alaska. Makes admission fees available to the collecting agency for resource protection, research, interpretation, and maintenance at outdoor recreation facilities managed by that agency. Allocates ten percent of the funds collected by the National Park Service to Park units based upon need; 40 percent for operating expenses; and 50 percent based on user and admission fees. Permits the use of such funds for resource protection, research, and interpretation, and in the case of funds from user fees, for maintenance. Authorizes volunteers or others to sell permits and collect fees if adequately trained and bonded. Permits the charge of a transportation fee in lieu of an entrance fee at parks with transportation systems. Provides for the distribution of such funds with the park itself retaining 50 percent outright. Directs the Secretary to study the feasibility of adjusting entrance fees to encourage alternative transportation usage and visitation at off-peak times. Requires the study to include a pilot program at Yosemite National Park. Directs the Secretary to report to specified congressional committees within three years on such study. Extends the Land and Water Conservation Fund through FY 2015. Amends the Alaska National Interest Lands Conservation Act to repeal the ongoing appropriations for timber utilization in the Tongass National Forest, Alaska. Authorizes appropriations to maintain a specified level of timber supply. Subtitle D: Reclamation - Authorizes the Secretary of the Interior to sell or otherwise dispose of loans made pursuant to the Distribution System Loans Act, the Small Reclamation Projects Act, and the Rehabilitation and Betterment Act in such amounts as to realize net profits to the Federal Government of at least $130,000,000 in FY 1988. Amends the Reclamation Reform Act of 1982 to direct the Secretary to conduct an audit of compliance with the reclamation laws of the United States. Requires an annual report to specified congressional committees. Requires the imposition of full cost pricing to irrigation water delivered to lands subject to a recordable contract executed prior to October 12, 1982. Requires the Secretary to collect any underpayments (with interest) for irrigation water delivered pursuant to reclamation law. Specifies the conditions under which lands placed in a revocable trust shall be attributable to the grantor. Subtitle E: Panama Canal - Part 1: Panama Canal Reauthorization - Authorizes appropriations for FY 1988 for the necessary expenses of the Panama Canal Commission (Commission), limiting the amount of any funds appropriated which may be made available for the acquisition, construction, replacement, and improvement of facilities, structures, and equipment. Amends the Panama Canal Act of 1979 to authorize the Panama Canal Commission to purchase insurance covering unpredictable events as well as the coverage for marine accidents authorized by current law. Authorizes the Commission to contract for the lease of and improvements to real property in the United States for the use of the Commission as office space. Provides for the compensation of members of the supervisory board of the Commission while on official Commission business. Revises the limits on the amount which the Commission may pay: (1) with respect to claims for injury to, or loss of, property or personal injury or death arising from operation of the Canal; and (2) regarding injuries incurred in the locks of the Canal when the vessel was not under the control of a Panama Canal pilot. Sets forth reporting requirements. Part 2: Panama Canal Revolving Fund -Panama Canal Revolving Fund Act - Amends the Panama Canal Act of 1979 to terminate the present Panama Canal Commission Fund and Panama Canal Emergency Fund and establish in the Treasury a Panama Canal Revolving Fund (Fund). Makes amounts in such Fund available to carry out the authorized purposes, functions, and powers of the Panama Canal Commission (Commission). Provides that such Fund shall consist of the balance of the Panama Canal Commission Fund, the balance of unexpended appropriations to the Commission, the balance of the Panama Canal Emergency Fund, toll receipts and all other receipts of the Commission. Prohibits funds from being obligated or expended by the Commission in any fiscal year unless the obligation or expenditure has been specifically authorized by law. Provides for an exception to the prohibition, allowing the Commission, in the event authorizing legislation for a fiscal year has not been enacted, to withdraw funds from the Fund for emergency expenses and to ensure the continuous, efficient, and safe operation of the Canal, including expenses for capital projects, but excluding administrative expenses. Authorizes the Commission to borrow from the Treasury, for any of the purposes of the Commission, not more than $100,000,000, outstanding at any time. Provides for the calculation and payment of interest on the investment of the United States in the Canal to the Treasury. Adds working capital to the list of costs of operating and maintaining the Canal which: (1) must be paid from unexpended funds before making certain payments to the Republic of Panama; and (2) toll rates must be set to cover. Subtitle F: Abandoned Mine Funds in Wyoming - Authorizes the State of Wyoming to expend a certain amount of abandoned mine reclamation funds for direct assistance to citizens evacuated from their homes in Campbell County due to hazards from methane and hydrogen sulfide gases. Subtitle G: Nuclear Regulatory Commission User Fees - Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to provide that for FY 1988 and 1989 the maximum amount of aggregate annual user charges that the Nuclear Regulatory Commission may assess shall be increased by an additional six percent of its incurred costs plus all other assessments made pursuant to a specified House joint resolution. Prohibits such percentage from being less than a total of 45 percent of such costs for such fiscal year. Title VI: Civil Service and Postal Service Programs - Provides for deferred payments of the lump-sum credit payable to Federal employees or Members of Congress who elect an alternative form of annuity, if the commencement date of such annuity occurs after January 3, 1988, and before October 1, 1989. Establishes a Postal Service Escrow Fund for the deposit of a specified amount by October 31, 1988. Terminates such Fund on October 1, 1989 and transfers such amounts into the Postal Service Fund. Requires the Postal Service to deposit a specified amount into the Civil Service Retirement and Disability Fund in FY 1988. Limits expenditures from the Postal Service Fund for the capital investment program for FY 1988 and 1989. Requires the Postal Service to make specified contributions to the Employee Health Benefits Fund for FY 1988 and 1989, without: (1) increasing borrowing authority; (2) using budgetary resources other than those derived from its operating budget; or (3) increasing postal rates. Requires reports to specified congressional committees on meeting contribution guidelines and goals. Directs the General Accounting Office to audit compliance with such requirements. Title VII: Veterans Programs - Amends Federal veterans' benefits provisions relating to default procedures on a Veterans Administration (VA) guaranteed home loan to authorize the Administrator of Veterans Affairs, before October 1, 1989, to sell with or without recourse (as determined by the Administrator to be in the best interest of the functioning of the VA home loan guaranty program) notes evidencing such guaranteed loans. Requires the Administrator, in comparing the cost-effectiveness of selling such notes either with or without recourse, to determine and consider: (1) the average amount by which the selling price for such notes with recourse would exceed the selling price for such notes sold without recourse; and (2) the total cost of selling such notes with recourse. Directs the Administrator, no later than 60 days after making any such note sale, to report to the Senate and House Veterans' Affairs committees describing such sales and any action taken by the Administrator with respect to such sales. Extends the veterans' guaranteed home loan fee (the one percent fee generally imposed on veterans who obtain a loan guaranteed, insured, or made by the VA) through September 30, 1989. Revises the percentage of purchases of property acquired by the Administrator as the result of defaults on veterans' housing loans that may be financed by VA loans in FY 1988 through 1990. States that such change achieves certain savings as required under the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 by changing program requirements. Outlines certain rules for construction for identical changes made under this title and under provisions of the Veterans' Home Loan Program Improvements and Property Rehabilitation Act of 1987. Title VIII: Budget Policy and Fiscal Procedures - Sets forth levels of budget authority and budget outlays for FY 1988 and 1989 for: (1) defense; and (2) domestic discretionary spending. Requires the House Committee on the Budget to report a budget resolution for FY 1989 containing such budget levels. Makes it out of order in the Senate, unless waived or suspended by a three-fifths' vote, to consider any concurrent resolution on the budget for FY 1989 that would fail to be consistent with such budget levels. Requires the allocations to be included in the joint explanatory statement accompanying the conference report on the FY 1989 budget resolution to be based on such budget levels. Rescinds the sequestration orders issued by the President on October 20, 1987, and November 20, 1987, pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) and restores sequestered funds. Makes technical amendments to the Congressional Budget Act of 1974. Commits the Congress to pass legislation in the FY 1989 budget process sufficient to achieve the specified budget summit agreement amount of asset sales in FY 1989. Title IX: Income Security and Related Programs - Subtitle A: OASDI Provisions - Part 1: Coverage and Benefits - Amends the IRC and title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to include inactive duty military training as covered employment. Amends the OASDI program and the IRC to treat as covered wages all cash pay of agricultural employees whose employers spend $2,500 or more a year for agricultural labor. Considers employer payments into an employee life insurance plan as covered wages if such payments are included in the employees' gross income under the IRC. Includes as covered employment services performed by one spouse in the employ of the other spouse, except for domestic services performed in the employer spouse's home. Reduces to 18 the age after which services performed in a parent's employ may be treated as employment, but requires a child to be 21 before service outside the employing parent's trade or business or domestic service in the parent's home will be considered employment. Amends the IRC to include employee tips within the wages on which social security employer taxes are based. Amends the OASDI program to make the reductions in survivors' benefits that are made to offset government pensions applicable to Federal employees receiving pensions under the Federal Employees' Retirement System or the Civil Service Retirement System, unless their pensions are based on at least five years of service after 1987. Authorizes the modification of an agreement between the Secretary and Iowa, providing OASDI coverage for certain State and local employees, to make police and firemen in Iowa eligible for OASDI coverage. Extends, until June 1989, the continuation of disability benefits pending an individual's appeal of the termination of such benefits. Preserves an individual's eligibility for disability benefits for at least 36 months following his or her engagement in trial work, unless such individual has engaged in substantial gainful activity in three of those months. Part 2: Other Social Security Provisions - Rescinds the rule that fees in excess of $1,500 charged by attorneys for representing claimants who appeal Social Security Administration (SSA) decisions be approved by the regional office of the SSA rather than by the administrative law judge. (Fees in excess of $3,000 will have to be approved by the regional office.) Prohibits the Secretary or the SSA from modifying rules relating to attorneys' fees in connection with claims for OASDI benefits. Directs the Secretary and the Comptroller General to conduct simultaneous studies of the process by which attorneys' fees are authorized and paid and submit such studies to the Congress by July 1, 1988. Treats the earnings of corporate directors as received when services are performed, regardless of when actually paid, for purposes of the tax on self-employment income and the OASDI earnings test. Part 3: Railroad Retirement Program - Amends the Railroad Retirement Tax Act to increase the tier 2 railroad retirement percent to 4.9 percent; and (2) for employers from 14.75 percent to 16.1 percent. Establishes the Commission on Railroad Retirement Reform to conduct a comprehensive study of the issues relating to the long-term financing, structure, and objectives of the railroad retirement system. Requires that the resulting report, including detailed findings, conclusions, and recommendations, be submitted to the President and to the Congress no later than October 1, 1989. Terminates the Commission 60 days after submission of its report. Amends the Railroad Retirement Solvency Act of 1983 with respect to certain transfers to the Railroad Retirement Account to: (1) extend the applicability of the provision to benefits received through FY 1989 (currently FY 1988); and (2) repeal a limitation on the aggregate transferable amount in connection with such transfers. Subtitle B: Provisions Relating to Public Assistance and Unemployment Compensation - Part 1: AFDC and SSI Amendments - Amends the Deficit Reduction Act of 1984 to permanently disregard in-kind assistance provided by nonprofit organizations to Supplemental Security Income (SSI) program (title XVI of the Social Security Act) and Aid to Families with Dependent Children (AFDC) program (part A of title IV of the Social Security Act) beneficiaries in determining the need or eligibility of such recipients. Amends the AFDC program to authorize States to establish and operate an AFDC fraud control program under which an individual who fraudulently establishes or maintains his or her family's AFDC eligibility shall have his or her needs ignored in determining the family's need for AFDC assistance. Sets the Federal share of the costs of such fraud control program at 75 percent. Amends the SSI program to exclude real property which, for specified reasons, cannot be sold from SSI resource eligibility determinations. Directs the Secretary, where necessary to avoid undue hardship, to suspend the penalties applied when individuals become SSI eligible by disposing of their resources at less than market value. Provides that SSI benefits shall not be reduced to the extent that amounts set aside for burial and related expenses are used for other purposes if the amount used for other purposes would not cause the individual to exceed SSI resource limits. Excludes AFDC and certain other assistance payments from SSI income eligibility determinations. Authorizes States to treat a husband and wife living in the same medical facility, whether or not they share a room, as though they were an SSI-eligible individual and eligible spouse rather than two eligible individuals. Extends, until July 1, 1988, for disabled widows or widowers who became ineligible for SSI benefits by reason of the increase in OASDI benefits caused by the Social Security Amendments of 1983 the deadline to apply for Medicaid coverage. Authorizes the Secretary to make an emergency cash advance to presumptively eligible individuals who are initially applying for SSI benefits up to the amount which would be payable for the first month to an eligible individual with no other income. Extends Federal reimbursement of State interim SSI assistance provided for the period during which an individual's benefits were erroneously terminated or suspended. Entitles individuals who are applying for a receiving SSI benefits on the basis of blindness to elect to receive supplementary notice by telephone, inital notice by certified mail, or notice by some alternative procedure of any determination made or other action taken with respect to such individual's SSI rights. Directs the Secretary to study the desirability and feasibility of extending such notices to other individuals who may lack the ability to read. Continues the provision of SSI benefits to individuals whose blindness has ceased if they are participating in an approved vocational rehabilitation program under the same conditions as apply to the disabled. Prohibits individuals who are in a public emergency shelter for the homeless for more than six months in any nine-month period from being eligible for SSI payments. (Currently, SSI eligibility terminates when an individual has been in such a shelter for more than three months in a 12-month period.) Excludes retroactive SSI and OASDI payments received during the two-year period beginning on October 1, 1987, from SSI resource eligibility determinations for nine months. (Currently, such payments are excluded for six months.) Continues the provision of full SSI benefits to individuals whose institutionalization is likely not to exceed three months during a continuous period of institutionalization and who need to continue to maintain and provide for the expenses of the home or living arrangement to which he or she may return after institutionalization. Treats individuals who are ineligible for SSI benefits by reason of their receipt of widow's or widower's insurance benefits under the OASDI program as SSI recipients for purposes of the Medicaid program. Authorizes the Secretary to make grants to States for projects designed to demonstrate and test the feasibility of special procedures and services to ensure that individuals receive SSI and other Social Security Act benefits to which they are entitled and receive assistance in using such benefits to obtain permanent housing, food, and health care. Prohibits Secretary from implementing, prior to October 1, 1988, a specified proposed regulation regarding assistance for homeless AFDC families. Increases SSI benefits payable to residents of medical facilities. Requires States making supplementary payments to residents of medical facilities who are receiving SSI benefits to increase and then maintain them at the increased level. Excludes death benefits from an individual's income for SSI eligibility purposes to the extent such benefits do not exceed amounts such individual expended on the decreased person's last illness and burial. Authorizes the Secretary to approve, as alternatives to the AFDC program, five-year demonstration projects testing: (1) Washington State's Family Independence Program; and (2) New York State's Child Support Supplement Program. Part 2: Social Services, Child Welfare Services, and Other Provisions Relating to Children - Amends the Adoption Assistance and Child Welfare Act of 1980 to extend indefinitely the provision permitting Federal financial participation in foster care for certain children voluntarily placed in such care. Amends part E (Foster Care and Adoption Assistance) of title IV of the Social Security Act to extend, through 1989: (1) the conditional ceiling on Federal financial participation in foster care; and (2) the provision which permits a State to use, under the Child Welfare Services program, funds made available to it under the conditional ceiling that are not needed under part E. Provides that where a child for whom foster care payments are being made resides in the same foster home or child-care institution as his or her son or daughter the payments made for such child shall include the cost of certain items provided to or on behalf of the child's son or daughter. Amends title XX (Block Grants to States for Social Services) of the Social Security Act to increase funding for such grants in FY 1988. Amends part A (General Provisions) of title XI of such Act to include American Samoa in the Social Services Block Grant program and the Child Welfare Services program under part B (Child Welfare Services) of title IV of such Act. Establishes a National Commission on Children which is to serve as a forum on behalf of children and submit an interim report to the Congress and the President by September 30, 1988, and a final report by March 31, 1989, regarding questions relating to: (1) the health of children; (2) social and support services for children and their parents; (3) education; (4) the tax policy regarding children; and (5) poverty among children. Amends part B (Child Welfare Services) of title IV of the Social Security Act to authorize appropriations for FY 1988 through 1990 so that the Secretary may make grants to public or private nonprofit entities for the development of alternative care arrangements for infants who do not require hospitalization but would otherwise remain in inappropriate hospital settings. Directs the Secretary to conduct a survey regarding: (1) the number of infants and children with acquired immune deficiency syndrome (AIDS) who have been placed in foster care; (2) the problems encountered by social service agencies in placing such infants and children in foster care; and (3) the potential increase in the number of infants and children with AIDS who will require foster care. Requires the Secretary to report to the Congress, within one year of this Act's enactment, regarding such survey and means of improving the care provided to such infants and children. Part 3: Child Support Enforcement Amendments - Amends part D (Child Support and Establishment of Paternity) of title IV of the Social Security Act to continue to provide child support enforcement services to families which cease to receive AFDC payments. Requires States to provide child support enforcement services to families covered under the Medicaid program. Eliminates the Child Support Revolving Fund in the Treasury. Part 4: Unemployment Compensation - Changes the effective date for certain extended unemployment benefits program disqualification requirements for purposes of the determination of the amount of the Federal payment to a State under the Federal-State Extended Unemployment Compensation Act of 1970. Directs the Secretary of Labor to enter into agreements with three States for a demonstration program to provide self-employment allowances in lieu of regular or extended unemployment compensation to a certain number of eligible individuals. Requires States to provide specialized services to such individuals. Makes State and Federal requirements relating to availability for work, active search for work, or refusal to accept suitable work inapplicable to such individuals. Requires State evaluation of such program. Directs the Secretary to report to the Congress on such program two years and four years after the enactment of this Act. Amends the Federal Unemployment Tax Act (FuTA) to extend the 6.2 percent rate of the gross employer tax through 1988, 1989, and 1990 (thus extending the 0.2 percent surtax for three years). Lowers such rate to 6.0 percent for 1991 and thereafter. Amends the Social Security Act to direct the Secretary of the Treasury to transfer the amount of additional revenue from such FuTA surtax from the employment security administration account as follows: (1) 50 percent to the Federal unemployment account; and (2) 50 percent to the extended unemployment compensation account. Increases the limitation on the amounts in the two latter accounts from 0.125 to 0.375 of total covered wages. Sets forth a rate of interest on advances to the Federal unemployment account and the extended unemployment compensation account. Credits to the Federal unemployment account interest paid by States on advances. Subtitle C: Manufacturers Excise Tax on Certain Vaccines - Amends Chapter 32 of the Internal Revenue Code of 1986 (relating to manufacturers excise taxes) to impose a tax on the first sale of any taxable vaccine sold by the manufacturer, producer, or importer of the vaccine. Sets forth a table listing the amount of tax imposed per does of DPT vaccine (relating to pertussis), DT (relating to diphtheria or tetanus), MMR vaccine (relating to measles, mumps, or rubella), and polio vaccine. Prohibits imposition of the tax if the Secretary of the Treasury estimates that the amounts collected would exceed the projected Vaccine Injury Compensation Trust Fund liability. Provides for credit or refund of the tax whenever any vaccine on which tax was imposed is returned to the person who paid the tax or destroyed. Establishes in the Treasury the Vaccine Injury Compensation Trust Fund. Appropriates to the Fund amounts equivalent to the net revenues received from the tax imposed. Subtitle D: Pension Provisions - Part I: Full-Funding Limitation - Amends the IRC and the Employee Retirement Income Security Act of 1974 (ERISA) to revise the definition of "full funding limitation" in connection with an employer's deductible contributions to a qualified defined benefit plan. Directs the Secretary of the Treasury, by August 15, 1988, to: (1) prescribe regulations to implement these new full-funding limitation provisions; and (2) study and report to specified congressional committees on the effect of the change on benefit security under defined benefit pension plans. Part II: Pension Funding and Termination Requirements - Pension Protection Act - Subpart A: Modifications of Minimum Funding Standard - Amends the IRC and ERISA to increase the amount charged to the funding standard account in the case of single employer defined benefit plans having more than 100 participants and an unfunded current liability for any plan year. Sets forth the formula for determining the amount of this increase. Limits the increase to the amount necessary to increase the funded current liability percentage to 100 percent. States that, with respect to plan years 1988 and thereafter, certain regulations that permit, for pension plan funding purposes, asset valuations based on a range of average value shall have no force and effect, except with respect to multiemployer plans. Authorizes the Secretary of the Treasury to issue regulations with respect to the interest rate used to value a dedicated bond portfolio. Sets out special rules for increases in the funding standard account with respect to steel companies. Amends the IRC and ERISA to: (1) revise provisions governing the period during which employer contributions to pension plans may be made after the close of a plan year; (2) require quarterly estimated payments; and (3) set an interest rate to be applied in the event of contribution underpayments. Amends the IRC to increase from five percent to ten percent (five percent for multiemployer plans) the rate of the initial tax on the amount of the accumulated funding deficiency when an employer fails to meet minimum pension plan funding standards. Amends ERISA to require an employer who fails to meet minimum funding standards to notify plan participants and beneficiaries under the plan of such failure. Amends the IRC and ERISA to impose a lien when: (1) any person fails to meet minimum funding standards; and (2) the cumulative unpaid balance due exceeds $1,000,000. Applies the lien to all property and property rights of the delinquent person and of any other person belonging to the same controlled group as that person. Requires the offending person to notify the corporation of such failure to pay required amounts. Amends the IRC to provide for joint and several liability with respect to liability for taxes on the failure to meet minimum funding standards or to make minimum funding contributions in cases when the employer is a member of a controlled group. Amends the IRC and ERISA with respect to waivers in connection with payments required to meet minimum funding standards, including provisions relating to the time for requesting waivers, the frequency of waivers, and the interest rate applicable to repayments of waiver contributions. Decreases from $2,000,000 to $1,000,000 the threshold amount with respect to the accumulated funding deficiency for which the Internal Revenue Service may require security. Makes other funding changes in both the IRC and ERISA, including revisions of amortization periods and the interest rate applicable to the funding standard account. States that the maximum amount of the income tax deduction for employer contributions to defined benefit plans having more than 100 participants shall not be less than the unfunded current liability. Subpart B: Plan Terminations - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to set limitations or reversions of excess assets to employers upon plan termination. Restricts such reversions pursuant to recently amended plans by treating any plan provision for the distribution of plan assets to the employer and any amendment increasing the amount which may be distributed to the employer as not effective before the end of the fifth calendar year following the date of its adoption. Exempts from such restriction any plan which has been in effect for fewer than five years and which has provided for such a distribution since its effective date. Makes such restriction continue to apply separately with respect to the amount of assets transferred in transactions such as plan mergers. Sets forth a transitional rule. Provides for distribution of assets attributable to employee contributions, if such assets are in excess of the plan's benefit liabilities (i.e. its termination liability), among participants, beneficiaries, alternate payees, and persons who received a total distribution of plan benefits during the three-year period before plan termination. Sets forth a fomula for determining the portion of such remaining assets which are attributable to employee contributions. Repeals provisions for the section 4049 trust, the termination trust mechanism for payment of plan benefits above guaranteed levels. Eliminates employer liability to such section 4049 trust. Increases employer liability to the Pension Benefit Guaranty Corporation (PBGC) to equal the total amount of the unfunded benefit liabilities as of the termination date to all participants and beneficiaries under the plan, together with specified interest. Limits the PBGC's lien to no more than 30 percent of the collective net worth of all liable entities. Sets forth a formula for determining liability in the case of multiple controlled groups. Directs the PBGC, in addition to other specified benefits paid with respect to a terminated plan, to pay to participants and beneficiaries a recovery percentage of the outstanding amount of benefit liabilities. Sets forth formulas for determining such payments. Provides for a reduction of liability payments by the amount of reasonable administrative expenses incurred under section 4049 trust provisions under prior terminations. Revises provisions relating to standards for termination. Increases the required plan asset level for a standard termination to the full level of the plan's benefit liabilities. Revises provisions relating to criteria for distress terminations. Requires that all members (not only substantial members) of a controlled group satisfy the distress termination criteria. Requires, for a distress termination in the case of a reorganization, that the bankruptcy court (or other appropriate court) determine that unless the plan is terminated the entity will be unable to pay all its debts pursuant to a reorganization plan and to continue in business outside the reorganization process. Declares that the determination of whether distress criteria have been met for a bankruptcy proceeding must be made as of the proposed termination date. Treats a reorganization that has been converted to a liquidation as a liquidation for distress termination determinations. Requires that the PBGC be notified in advance that the entity intends to request approval of the distress termination by the bankruptcy or other appropriate court. Authorizes the PBGC to make arrangements with contributing sponsors and members of their controlled groups who may become (as well as those who are) liable for specified termination liability payments. Provides that certain information related to the certification of an enrolled actuary is not required in the case of a standard or distress termination of certain plan funded exclusively by individual insurance contracts. Authorizes the PBGC to pool assets of terminated plans for appropriate purposes. Requires a plan administrator, upon PBGC request, to furnish specified plan information in the case of an involuntary termination. Authorizes the PBGC to assess civil penalties for failure to provide any notice or other material information required under ERISA plan termination insurance provisions. Subpart C: Increases in Premium Rates - Increases PBGC premium rates for employers maintaining single-employer defined benefit plans under ERISA plan termination insurance. Increases the flat-rate per-participant premium to $16. Charges an additional per-participant premium to the extent the plan is underfunded. Sets such additional per-participant premium at $6 per $1,000 of unfunded vested benefits, up to a maximum additional premium of $34 per-participant. Sets forth a formula for the interest rate used in valuing vested benefits for such purposes. Reduces (during the first five plan years the additional premium is in effect) $34 per-participant maximum additional premium by $3 for each plan year for which an employer made the maximum deductible contributions during one or more of the five plan years preceding the first plan year to which such additional premium applies. Makes the contributing sponsor (as well as the plan administrator) of a single-employer plan liable for premium payments. Makes each member of a controlled group liable for any premiums required to be paid by such contributing sponsor. Establishes a separate revolving fund to which such additional premiums are to be credited. Allows transfers of such amounts to other funds, but prohibits their being used to pay PBGC administrative expenses or benefits under any plan terminated before October 1, 1988, unless no other PBGC assets are available. Subpart D: Miscellaneous Provisions - Amends the Internal Revenue Code (IRC) and ERISA to require security upon the adoption of any plan amendment resulting in significant underfunding. Requires the contributing sponsor (and the members of the sponsor's controlled group) of a defined benefit plan (other than a multiemployer plan) to provide such security in specified forms. Sets forth a formula for determining the amount of such security. Provides for release of such security when specified conditions are met. Requires the employer to include in the annual report to plan participants the relevant percentage if the value of plan assets is less than 60 percent of current liability. Repeals an ERISA provision under which the statute of limitations begins to run on the filing date of a report from which the plaintiff could reasonably be expected to have obtained knowledge of a breach of fiduciary responsibility. Authorizes the Secretary of Labor to assess civil penalties for a plan administrator's failure or refusal to file a required annual report in complete form. Makes inapplicable in interpreting the IRC any ERISA provisions for protection of employee benefit rights and for pension termination guaranty insurance, except to the extent specifically provided in the or as determined by the Secretary of the Treasury. Provides that the determination of the Secretary of the Treasury in a determination letter by the Internal Revenue Service shall not be prima facie evidence on issues relating to ERISA provisions for Department of Labor enforcement of fiduciary standards. Permits a return of contributions to an employer under ERISA if the contribution is conditioned on initial qualification of the plan under specified IRC provisions: (1) if the plan does not qualify initially; and (2) if the application for determination relating to initial qualification is filed by the due date of the employer's return for the taxable year in which the plan was adopted. Limits the ERISA penalty for prohibited transactions to: (1) five percent of the amount involved for each such transaction for each year or part thereof during which the prohibited transaction continues; or (2) 100 percent of the amount involved, if the transaction is not corrected within 90 days after notice from the Secretary Labor. Sets forth additonal ERISA limitations on investment by an individual account plan forming part of a floor offset arrangement and on investment by an individual account plan in employer stock. Restricts treatment of stock as a qualifying employer security. Provides, in the case of a plan other than an eligible individual account plan, that stock shall be considered a qualifying employer security only if: (1) not more than 25 percent of the aggregate amount of stock of the same class issued and outstanding at the time of acquisition is held by the plan; and (2) at least 50 percent of the aggregate amount of such stock is held by persons independent of the issuer. Revises the interest rate on accumulated contributions under ERISA and IRC requirements for crediting interest on mandatory employee contributions to a defined benefit pension plan. Replaces the five percent interest rate with one equal to 120 percent of the applicable Federal mid-term rate. Subtitle E: Miscellaneous Provisions - Requires the Secretary, within 30 days after the expiration of any debt issuance suspension period, to issue to each Federal fund certain obligations necessary to ensure that the holdings of such fund will replicate to the maximum extent practicable the obligations that would have been held by such fund if: (1) failure to invest amounts in such fund due to the public debt limit had not occurred; and (2) issuance of such obligations had occurred immediately on the expiration of such suspension period. Requires the Secretary to credit to: (1) each fund the income and interest not earned due to such failure to invest; and (2) each holder of State and local Government Series obligations the interest lost due to such failure to invest. Requires such amounts credited to be treated as interest on such obligations. Amends the Deficit Reduction Act of 1984 to extend through July 1, 1988, provisions relating to the collection of non-tax debts owed to Federal agencies. Requires the Comptroller General to conduct a study on the effectiveness of such provisions. Increases the amount of long-term bonds that may be issued by the Secretary of the Treasury. Amends the Deficit Reduction Act of 1984 to extend through June 30, 1988, provisions under which overpayments of Federal taxes may be used to offset non-tax debts owed to Federal agencies. (Currently, such offsets are permitted with respect to refunds payable before 1988.) Expresses the intent of the Congress that, to the extent practivable, the amendments made by the Deficit Reduction Act of 1984 with respect to the collection of non-tax debts owed to Federal agencies shall extend to all Federal agencies. Directs the Secretary of the Treasury to issue regulations to carry out the purposes of this paragraph. Directs the Comptroller General to study the operation and effectiveness of these provisions and to report findings to specified congressional committees no later than April 1, 1989. Increases from $250,000,000,000 to $270,000,000,000 the amount of long-term U.S. bonds which may be issued under the exception to the 4 1/4 percent limitation on the interest rates paid on such bonds. Subtitle F: Customs User Fees; Trade and Customs Agency Authorizations - Amends the Consolidated Budget Reconciliation Act of 1985 to make articles returned to the United States after having been exported and articles assembled abroad in whole or in part of fabricated components which are products of the United States subject to the requirement that the Secretary of the Treasury collect a specified fee for the processing of any merchandise entered or withdrawn from warehouse for consumption in the United States. Requires that the fee charged with respect to the processing of merchandise: (1) for articles returned to the United States after having been exported, be applied to the value of the foreign repairs or alterations to the merchandise; and (2) for merchandise assembled abroad, be applied to the full value of such merchandise, less the cost of value of U.S. products. Allows the Secretary, for articles returned to the United States after having been exported or for articles of fabricated components assembled abroad, to collect the fee charged on the processing of the merchandise on the basis of aggregate data derived from financial and manufacturing reports used by the importer in the normal course of business. Requires that customs services, when requested, be adequately provided for: (1) the clearance of any commercial vessel, vehicle, or aircraft arriving, departing, or transiting the United States; (2) the preclearance at any customs facility outside the United States of any commercial vessel, vehicle or aircraft; and (3) the inspection or release of commercial cargo being entered into, or withdrawn from the customs territory of the United States. Requires that customs services be treated as adequately provided if the services needed to meet the needs of parties subject to customs inspection are provided in a timely manner, taking into account: (1) weather, mechanical, and other delays; (2) prompt and efficient passenger and baggage clearance; (3) the perishability of cargo; (4) late night and early morning arrivals; (5) the availability of customs personnel; and (6) the need for specific enforcement checks. Prohibits the collection of customs fees in addition to those statutorily prescribed for: (1) any preclearance or other customs activity, expense, or service performed outside the United States in connection with the departure of a vessel, vehicle, or aircraft for the United States; or (2) the activation or operation of any foreign trade zone or the designation or operation of any bonded warehouse. Makes fees used for the direct reimbursement of specified appropriations an exception to the requirement that fees collected under the schedule of fees be deposited in the Customs User Fee Account in the general fund of the Treasury. Requires that all funds in the Customs User Fee Account be available to pay the U.S. Customs Service's costs in conducting commercial operations. Prohibits the Secretary from reducing personnel staffing levels for providing commercial clearance and preclearance services if there is a surplus of funds in the Customs User Fee Account. Requires the Secretary to directly reimburse, from fees collected for customs services, each appropriation for amounts paid for the costs incurred by the Secretary in providing inspectional overtime services and all preclearance service, beginning with each fiscal year occurring after September 30, 1987. Requires the Secretary to prescribe regulations governing the work shifts of customs personnel at airports and providing that: (1) the work shifts will be adjusted to meet cyclical and seasonal demands and to minimize the use of overtime; (2) the work shifts will not be arbitrarily reduced or compressed; and (3) consultation with the Advisory Committee on Commercial Operations of the U.S. Customs Service will be carried out before making adjustments in work shifts. Extends the customs user fees program through 1990. Amends the Tax Reform Act of 1986 to extend the date for claiming certain refunds for fees for customs services until 90 days after the date of enactment of the Omnibus Budget Reconciliation Act of 1987 (currently, 90 days after the date of enactment of the Tax Reform Act of 1986). Requires the Comptroller General to conduct a comprehensive analysis of the centralized cargo examination station (CES) concept and to submit such analysis to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate not later than March 30, 1988. Directs the Customs Service to: (1) not establish any new CES at any ocean port, airport, or land border location, without providing advance notice of not less than 90 days to such committees; and (2) suspend, on the date of enactment of this Act, operations at each CES station until 90 days after a date on which the comprehensive analysis of the CES program by the Comptroller General is submitted to the committees and on which the Customs Service provides to the committees written notice of its intentions to resume operations at that station. Requires the Secretary, during the period of suspension of operations at any CES station, to maintain customs operations and staffing at a level not less than that which was in effect immediately before the suspension took effect. Amends the Tariff Act of 1930 to authorize appropriations for the International Trade Commission for FY 1988. Amends the Customs Procedural Reform and Simplification Act of 1978 to authorize appropriations for the salaries and expenses of the Customs Service for noncommercial operations for FY 1988. Authorizes appropriations from the Customs User Fee Account for the salaries and expenses of the Customs Service for commercial operations for FY 1988. Authorizes appropriations for the Customs Service's air interdiction program for FY 1988. Requires the Commissioner of Customs to notify the Senate Committee on Finance and the House Committee on Ways and Means of any action which would: (1) result in a significant reduction in force of employees (other than by attrition) or in hours of operation of any U.S. Customs Service office or port of entry; (2) eliminate or relocate an office of the Service; (3) eliminate a port of entry; or (4) reduce the number of employees assigned to an office or port of entry of the Service. Directs the Secretary to establish the Advisory Committee on Commercial Operations of the U.S. Customs Service which shall: (1) provide advice to the Secretary on matters relating to the commercial operations of the Service; and (2) submit an annual report to the Senate Committee on Finance and the House Committee on Ways and Means concerning Advisory Committee operations and recommendations regarding Service commercial operations. Amends the Trade Act of 1974 to authorize appropriations for the Office of the United States Trade Representative for FY 1988, out of which only a specified amount may be used for entertainment and representation expenses. Title X: Revenue Provisions - Revenue Act of 1987 - Subtitle A: Individual Income Tax Provisions - Amends the Internal Revenue Code (IRC) to exclude expenses of overnight camps from calculations of the dependent care income tax credit. Revises the definition of "qualified residence interest" for purposes of the income tax deduction for personal interest to distinguish between acquisition indebtedness and home equity indebtedness. Limits to $1,000,000 and $100,000 respectively the amount of indebtedness on which interest is deductible. Provides that Federal judges be treated as: (1) active participants for purposes of the limitation on the deduction of contributions to individual retirement plans; and (2) employees for purposes of the Internal Revenue Code generally. Amends the IRC to delay until 1988 (currently 1987) application of the two-percent floor to indirect income tax deductions through pass-through entities with respect to any regulated investment company (RIC) whose shares are: (1) continuously offered pursuant to a public offering; (2) regularly traded on an established securities market; or (3) held by or for at least 500 persons at all times during the taxable year. Increases from 90 percent to 98 percent the amount of a RIC's capital gain net income included as part of the required distribution for purposes of the excise tax on RIC undistributed income. Subtitle B: Business Provisions - Part I: Accounting Provisions - Amends IRC accounting provisions to repeal the deduction for additions to an employer reserve for accrual of vacation pay. Provides that for purposes of the employer deduction, vacation pay treated as deferred compensation shall be deductible for the year in which the payment is made. Amends the IRC to repeal provisions under which a taxpayer's allocable installment indebtedness is allocated on a pro rata basis to certain installment obligations arising from dispositions of property by dealers, except with regard to certain farm property, timeshares, and residential lots. Repeals the proportionate disallowance rule in connection with nondealer installment obligations arising out of dispositions of certain real property used in the taxpayer's trade or held for rental income. Requires the payment of interest on tax deferrals on nondealer installment obligations that exceed $5,000,000. Treats the net proceeds of indebtedness secured by an installment obligation as payment of such obligation. Revises accounting procedures used in connection with long-term contracts to: (1) decrease from 60 percent to 30 percent the percentage of items taken into account under the taxpayer's normal method of accounting; and (2) increase from 40 percent to 70 percent the percentage of items taken into account under the percentage of completion method. Provides that for purposes of inventory cost capitalization and special accounting rules for long-term contracts, the allocable costs with respect to any property shall include contributions paid to or under a pension or annuity plan, regardless of whether the contributions represent past service costs. Amends the IRC to require family corporations engaged in farming and having gross receipts exceeding $25,000,000 to use the accrual method of accounting for income tax purposes. Permits a partnership, S corporation, or personal service corporation, unless it is part of a tiered structure, to elect to have a taxable year other than the required one, but generally only if the deferral period of the taxable year elected is three months or less. (Current law requires partnerships, S corporations, and personal service corporations, in most cases, to conform their taxable years to the calendar years used by their owners.) Subjects the principals of a partnership or S corporation electing to change taxable years to additional estimated tax requirements to offset any tax deferral resulting from such election. Imposes deduction limitations on a personal service corporation that changes taxable years. Provides that an election with respect to taxable year shall be made by the partnership, S corporation, or personal service corporation. Sets forth the formula for determining the additional tax required when a partnership or S corporation has an aggregate deferred tax that exceeds $500 and elects not to have a required taxable year. Describes payment procedures. Requires the inclusion of specified information on returns filed by partnerships and S corporations that elect to use a non-required taxable year. Limits the tax deduction permitted to a personal service corporation for amounts paid or incurred with respect to employee-owners when such a corporation: (1) elects to have a taxable year other than the required one; and (2) fails to meet certain minimum distribution requirements regarding non-dividend amounts paid to owners. Part II: Partnership Provisions - Provides that for purposes of the Internal Revenue Code a publicly traded partnership shall be treated as a corporation. Excepts from such treatment certain partnerships with passive-type income, unless the partnership would qualify as a regulated investment company and is not primarily active in commodity buying and selling activity. Provides for the treatment of publicly traded partnerships with respect to: (1) accounting rules applied to limitations of passive activity losses and credits; and (2) unrelated business taxable income of tax-exempt organizations. Revises criteria under which members of a partnership qualify for an exception from treatment as unrelated business income of any income from debt-financed real property. Directs the Secretary of the Treasury to study and report to specified congressional committees by January 1, 1989, (with an interim report due May 1, 1988) on: (1) the issue of treating publicly traded limited partnerships and other corporation-like partnerships as corporations for income tax purposes, including the issues of disincorporation and opportunities for avoidance of the corporate tax; and (2) administrative and compliance issues related to the tax treatment of publicly traded partnerships and other large partnerships. Part III: Corporate Provisions - Reduces from 80 percent to 70 percent the corporate tax deduction with respect to: (1) dividends received from a domestic corporation; and (2) dividends received on certain preferred stock. Retains the 80 percent deduction when 20 percent of more of the stock of the corporation (both vote and value) is owned by the taxpayer. Amends IRC provisions relating to the computation and payment of tax by members of an affiliated group filing a consolidated tax return. Disregards consolidation return regulations when determining whether an entity is an 80-percent distributee for purposes of nonrecognition of gain or loss in connection with property distributed to a parent corporation in a complete liquidation of a subsidiary. Sets a fixed 34 percent tax rate with respect to the taxable income of personal service corporations. (Such corporations are currently subject to graduated corporate rates.) Amends IRC provisions relating to limitations on net operating loss carryforwards and certain built-in losses following corporate ownership changes. Adds provisions limiting the use of preacquisition losses to offset built-in gains. Directs the Secretary of the Treasury to prescribe regulations to carry out the purposes of this latter change, including regulations to ensure that the new limitations may not be circumvented in certain ways. Provides for the recapture of benefits resulting from the use of the LIFO (last-in, first-out) method of inventory accounting in the case of certain former C corporations electing to be S corporations. Amends the IRC to impose a 50 percent excise tax on gain realized by greenmail recipients. Defines "greenmail" as any consideration transferred by a corporation to acquire (directly or indirectly) its stock from any shareholder if: (1) the shareholder held such stock for less than two years; (2) at some time during the two-year period the shareholder, a person acting in concert with the shareholder, or a person related to either made or threatened to make a public tender offer for the corporation's stock; and (3) the acquisition is pursuant to an offer that was not made on the same terms to all shareholders. Imposes the tax regardless of whether gain is actually realized. Disallows an income tax deduction for payment of this tax. Part IV: Foreign Tax Provisions - Denies the foreign tax credit for taxes paid or accrued to South Africa until the Secretary of State certifies that South Africa meets specified criteria of the Comprehensive Anti-Apartheid Act of 1986. Part V: Insurance Provisions - Amends IRC provisions relating to: (1) the interest rate used by life insurance companies in computing reserves for purposes of determining income; (2) rules governing the required surplus of foreign corporations carrying on insurance business; and (3) the treatment of mutual life insurance company policyholder dividends for purposes of book preference. Directs the Secretary of the Treasury to: (1) study the proper Federal income tax treament of income earned by members of insurance or reinsurance syndicates and report findings to specified congressional committees by April 1, 1988; and (2) renegotiate by January 1, 1990, a specified closing agreement with underwriters participating in certain insurance or reinsurance syndicates. Subtitle C: Estimated Tax Provisions - Amends IRC provisions dealing with estimated income tax payments by corporations. Establishes the amount of the penalty for underpayment of estimated tax at the amount of the underpayment for the period of underpayment, plus interest on such amount. Revises the schedule for the payment of estimated tax installments. Specifies that the amount of the required annual estimated tax payment shall be the lesser of: (1) 90 percent of the current tax shown on the taxpayer's return (corporations having a taxable income of at least $1,000,000 for any taxable year during a specified period must use this option); or (2) 100 percent of the preceding year's tax liability. Permits lower estimated tax payments if the taxpayer can show that the installment payments or adjusted seasonal installments made over the year were adequate for each quarter based on annualized income and adjusted seasonal installment concepts described in this bill. Exempts from an estimated tax penalty any taxpayer whose tax liability is less than $500. Requires an addition to income tax when an adjustment of overpayment of estimated income tax by a corporation, made before the 15th day of the third month following the close of the taxable year, is found to be excessive. Repeals provisions of the IRC dealing with installment payments of estimated income tax by corporations. Amends the IRC to allow employers to elect to have revised withholding certificates put into effect more promptly than is required under current law. Delays for one year, from 1987 until 1988, implementation of the increase from 80 percent to 90 percent in the current year liability test for estimated tax payments by individuals. Prohibits an addition to any tax imposed on underpayments of estimated tax installments by corporations due on or before June 15, 1987, under certain circumstances (thus permitting corporations to use their 1986 tax in determining certain estimated tax installment amounts). Subtitle D: Estate and Gift Tax Provisions - Part I: General Provisions - Extends through 1992 the 1987 estate and gift tax rates, the highest of which is 55 percent (applied to transfers over $3,000,000). Phases out the benefits of graduated rates and the unified credit with respect to transfers of between $10,000,000 and $21,040,000 ($18,040,000 as of 1993). Limits valuation freezes, with an exception for certain family transfers, by providing that if a person holding ten percent or more of the interest in an enterprise transfers a disproportionately large share of the potential appreciation in the enterprise while retaining a disproportionately large share in the income of, or rights in, that enterprise, the retention of the retained interest shall be included in the transferor's gross estate. Part II: Estate Tax Provisions Relating to Employee Stock Ownership Plans - Amends the Internal Revenue Code to revise provisions relating to the estate tax deduction for proceeds received from a sale of employer securities to an employee stock ownership plan (ESOP) or worker-owned cooperative. Makes such a deduction available only if: (1) the decedent directly owned the securities immediately before death; and (2) after the sale, the securities are either allocated to participants or held for future allocation in connection with certain exempt loans or transfers of assets. Prohibits, except in a bona fide business transaction, the treatment of employer securities as allocated or held for future allocation insofar as they are so categorized in substitution of other employer securities so designated. Applies the deduction to any sales of qualified employer securities (current law applies only to sales made by the executor of the estate). Prohibits the amount of the deduction from exceeding: (1) the amount that would lead to a reduction in estate tax liability (before credits) equal of $750,000; or (2) 50 percent of the taxable estate. Disallows proceeds from being taken into account when: (1) they exceed the net sale amount of dispositions of employer securities by the plan during the year preceding the sale in question; (2) they are attributable to transferred assets (except for assets held by the ESOP on February 26, 1987); (3) the sale takes place after the estate tax return filing deadline; or (4) the decedent received the securities under certain specified conditions. Applies the deduction to employer securities that are: (1) issued by a domestic corporation having no stock outstanding that is readily tradable on an established securities market; (2) includable in the gross estate of the decedent; and (3) would have been includable if the decedent had died within a specified time period. Revises the requirements governing the contents of the written statement to be submitted by the executor of the decedent's estate in order to qualify for the deduction. Imposes an excise tax on ESOP dispositions of employer securities for which an estate tax deduction was allowed. Sets forth the amount of tax applicable to relevant taxable events as follows: (1) 30 percent of the amount realized from any disposition of employer securities by an ESOP or eligible worker-owned cooperative within three years of the group's acquisition of qualified employer securities; (2) 30 percent of the amount realized from a disposition (not within three years after acquisition) that occurs before allocation of such securities to participants' accounts in cases when the proceeds are not allocated; or (3) 30 percent of the repayment amount in cases of a payment by an ESOP of any part of a loan used to acquire employer securities from transferred assets. Sets out the ordering rules to govern dispositions of employer securities for purposes of this excise tax and another specified excise tax relating to ESOPs. Makes the excise tax inapplicable to: (1) dispositions to employees, in certain cases; (2) exchanges associated with the liquidation of a corporation into a cooperative or with other reorganizational purposes; and (3) sales effected to meet IRC diversification requirements relating to pension trusts. Places liability for the excise tax on the employer maintaining the ESOP or the eligible worker-owned cooperative. Subtitle E: Provisions Relating to Excise Taxes and User Fees - Part I: Excise Taxes - Extends through December 31, 1990, the three percent excise tax on telephone service. (The tax is currently due to expire as of 1988.) Amends the IRC with respect to the excise taxes on diesel fuel and aviation fuel to impose the tax on the sale of the taxable fuel by producers or importers, including wholesale distributors. (Under current law these taxes are generally imposed on the sale by a retailer to the ultimate consumer.) Repeals exemptions based on certain uses of the relevant fuels, but provides for refunds of tax paid with respect to fuels used for nontaxable purposes. Authorizes the Secretary of the Treasury to issue regulations to exempt specified types of sales from the tax. Extends until January 1, 2014 (currently January 1, 1996), the potential termination date for the temporary increase in the coal excise tax rate. (An earlier termination date applies if certain solvency conditions are met with respect to the Black Lung Disability Trust Fund.) Part II: Tax-Related User Fees - Directs the Secretary of the Treasury to establish a program requiring user fee payments in connection with requests to the Internal Revenue Service for ruling letters, opinion letters, determination letters, and for similar requests. Sets forth criteria to govern such fees. Imposes an occupational tax of $1,000 per year on proprietors of: (1) distilled spirits plants; (2) bonded wine cellars; (3) bonded wine warehouses; and (4) taxpaid wine bottling houses. Reduces the rate to $500 per year for certain small proprietors. Increases existing occupational taxes as follows: (1) for brewers, from $110 per year to $1,000 per year for each brewery, with a reduced rate of $500 per year for certain small proprietors; (2) for wholesale dealers in liquors, from $255 per year to $500 per year; (3) for wholesale dealers in beer, from $123 per year to $500 per year; (4) for retail dealers in liquors, from $54 per year to $250 per year; and (5) for retail dealers in beer, from $24 per year to $250 per year. Repeals the occupational tax on limited retail dealers of liquors, wine, or beer. Replaces variable rates used with regard to nonbeverage domestic drawback claimants with a single rate of $500 per year. Denies the validity of a permit for certain tax-free industrial uses of distilled spirits unless the holder pays a special tax of $250 with respect to the relevant site. Imposes an occupational tax of $1,000 per year for each relevant premises on persons engaged in business as manufacturers of tobacco products, cigarette papers, and tubes, and on export warehouse proprietors. Applies a reduced rate of $500 per year for certain small proprietors. Fixes criminal penalties for willful failure to pay the tax. Increases the occupational tax on importers and manufacturers of firearms from $500 per year to $1,000 per year and on dealers from $250 per year to $500 per year. Applies a reduced rate for small importers and manufacturers. Subtitle F: Other Revenue Provisions - Part I: Targeted Jobs Credit - Amends the IRC to revise the definition of "wages" for purposes of determining the amount of the targeted jobs credit against income tax. Excludes from the wages applicable to such credit any amount paid by an employer to an employee for services that are the same as, or substantially similar to, those performed by employees participating in or affected by the strike or lockout during the period of such strike or lockout when such employee's principal place of employment is the affected plant or facility. Part II: Treatment of Certain Illegal Irrigation Subsidies - Requires illegal Federal irrigation subsidies to be included in a taxpayer's gross income. Part III: Compliance - Provides that State escheat laws shall not apply to refunds of Federal tax. Expresses the sense of the Congress that: (1) the Congress should increase outlays to the IRS by specified amounts in FY 1989 and 1990 in the areas of taxpayer assistance and enforcement; (2) the IRS should offer improved taxpayer assistance and enforcement efforts by using these outlays in ways recommended in the Dorgan Task Force Report; (3) the Congress should undertake an experimental multiyear authorization and two-year appropriation for the IRS consistent with specified public law; and (4) increased funding should be provided for both research and the compilation and analysis of income. Requires the IRS: (1) to issue a report by April 15, 1989, on the extent of the tax gap and possible measures to decrease it; and (2) to report annually on the improvements being made in the audit rate, taxpayer assistance, and enforcement efforts. Part IV: Tax-Exempt Bond Provisions - Amends IRC provisions relating to taxable private activity bonds to include any bond issued as part of an issue if the amount of the proceeds to be used either directly or indirectly for the acquisition of nongovernmental output property exceeds the lesser of five percent or $5,000,000. Provides an exception for bonds in connection with property to be used to provide output in certain existing service areas and in the case of annexations meeting specified criteria. Revises provisions governing tax-exempt bonds issued by Indian tribal governments to deny the tax exclusion of interest on bonds whose proceeds are used in the exercise of functions that are not customarily performed by State and local governments. Creates an exception to permit the issuance of tax-exempt bonds to finance certain tribal manufacturing facilities. Subtitle G: Lobbying and Political Activities of Tax-Exempt Organizations - Part I: Disclosure Requirements - Requires tax-exempt organizations not eligible to receive tax-deductible charitable contributions to include in every written, broadcast, or telephone fundraising solicitation an express and conspicuous statement that gifts or contributions to the organization are not deductible as charitable contributions for Federal income tax purposes. Exempts from this requirement: (1) organizations having gross receipts of $100,000 or less; and (2) coordinated fundraising campaigns that solicit fewer than ten persons in a year. Fixes penalties for failure to comply with this disclosure requirement. Provides for public inspection, at organization offices, of both the annual returns and the application for recognition of exemption filed by tax-exempt organizations. Protects from disclosure the names and addresses of contributors. Requires that tax-exempt charitable entities (501(c)(3) organizations) provide annual information with respect to transfers and other transactions involving certain other tax-exempt organizations as the Secretary of the Treasury might require to prevent misallocation of revenues or expenses or any diversion of funds from the organization's exempt purpose. Amends IRC penalty provisions relating to required filings by tax-exempt organizations and certain trusts to: (1) revise the maximum penalty applicable in certain cases; (2) fix a penalty for failure to include required and accurate information on a return; (3) fix a penalty for failure to comply with public inspection requirements; and (4) treat the penalties as tax for administrative purposes. Assesses penalties against tax-exempt organizations that willfully fail to comply with public inspection requirements. Imposes a penalty on any tax-exempt organization or political organization that offers to sell to an individual specific information or a routine service that could be readily obtained by that individual free of charge from a Federal agency. Part II: Political Activities - Extends the prohibition against certain political activities by tax-exempt organizations to include activities in opposition to any candidate (current law includes only those activities on behalf of a candidate). Provides that any 501(c)(3) organization whose status is terminated by reason of intervening in any political campaign either for or against a candidate for public office shall never be treated as a tax-exempt not-for-profit civic league or organization. Imposes on a tax-exempt 501(c)(3) organization: (1) a ten percent excise tax on its political expenditures; and (2) a 100 percent tax on any such expenditure that has been subject to the ten percent penalty tax and has not been corrected within the taxable period. Imposes on the manager of a 501(c)(3) organization: (1) a two and one-half percent tax, to a maximum amount of $5,000, if such manager knowingly agrees to a political expenditure by the organization; and (2) a 50 percent tax, to a maximum of $10,000, if the manager refuses to agree to part or all of a correction of the prohibited expenditure. Identifies the types of expenditures considered to be political. Provides for abatement or refund of any first tier (initial) excise tax on political expenditures if the affected organization establishes that the taxable event was due to reasonable cause and not to willful neglect and was corrected within the proper time. Authorizes a civil action in U.S. district court in the name of the United States to enjoin a 501(c)(3) organization from making additional political expenditures and for other relief appropriate to ensure that the organization's assets are preserved for charitable purposes. Permits such an action only if: (1) the Internal Revenue Service has notified the organization of its intent to seek the injunction and (2) the Commissioner of Revenue has personally determined that the organization has flagrantly participated in prohibited campaign activity, and that injunctive relief is appropriate to prevent future political expenditures. Directs the Secretary of the Treasury, upon the finding that a 501(c)(3) organization has made political contributions in flagrant violation of the prohibition against such expenditures, to make an immediate termination assessment of any income tax payable by such organization, as well as any penalty taxes due with respect to political expenditures. Sets forth guidelines to govern such termination assessments. Imposes: (1) a five percent excise tax, to be paid by the organization, on the lobbying expenses of any organization whose 501(c)(3) status has been lost because of such expenditures; and (2) a corresponding penalty tax to be paid by the organization manager who agreed to such expenditures, knowing that they could result in the organization's loss of tax-exempt status.

(Measure passed House, amended, roll call #392 (206-205)) Budget Reconciliation Act of 1987 - Reaffirms the intention of the Congress to achieve balanced multiyear deficit reduction measures pursuant to the concurrent resolution on the budget for FY 1988 and the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987. Commits the Congress to enactment of appropriations and other laws reducing the Federal deficit for FY 1988 by $23,000,000,000. Specifies general revenue increases and spending reductions for FY 1988 and ensuing fiscal years. Title I: Committee on Agriculture - Subtitle A: Farm Program Revisions - Amends the Agricultural Act of 1949 to provide advance deficiency payments for wheat and feed grains at a 30 percent payment rate, and for cotton and rice at a 20 percent payment rate. Directs that 1,000,000,000 bushels of Commodity Credit Corporation (CCC) surplus stocks be sold on a bid basis for nontraditional uses by the end of FY 1990. Requires a report to the appropriate congressional committees. Amends the Agricultural Act of 1949 to limit the maximum permitted oats acreage limitation to five percent of base acreage. Directs the Secretary of Agriculture to: (1) estimate 1987 wheat, oats, and barley deficiency payments by December 1, 1987, and make 75 percent of such payments available upon producer request; and (2) estimate 1988 corn and grain sorghum deficiency payments by March 1, 1989, and make 75 percent of such payments available upon producer request. Subtitle B: Optional Acreage Diversion Act of 1987 - Optional Acreage Diversion Act of 1987 - Amends the Agricultural Act of 1949, effective for the 1988 through 1990 wheat and feed grain crops, to permit producers participating in acreage reduction programs to not plant any of their permitted acreage and receive 92 percent of their annual support benefits (0/92 program). Subtitle C: Farm Program Payments Integrity Act of 1987 - Farm Program Payments Integrity Act of 1987 - Amends the Food Security Act of 1985 to define "person" for purposes of farm program benefits limitations to include active farmers, including specified corporations, landowners, and sharecroppers, not having beneficial interest in more than three entities receiving program benefits. Subject violators to loss of benefits. Directs the Secretary to provide Department of Agriculture personnel with education and training in applying such payment limitations. Limits benefits to U.S. citizens and immigrants only. Makes State and local governments and agencies ineligible for specified benefits. Subtitle D: Rural Electification Administration Programs - Chapter 1: Amendments to Rural Electification Act of 1936 - Amends the Rural Electification Act of 1936 to authorize the prepayment of rural electification loans made by the Federal Financing Bank and guaranteed by the Rural Electrification Administration (REA). Requires prepaying borrowers to pay a processing fee. Prohibits REA borrowers or guarantee recipients from transferring property or rights without REA approval until all loans and related charges have been repaid. Directs REA to disapprove property condemnation or acquisition if such action is likely to adversely affect service or increase costs, or is otherwise against REA policy. Permits a borrower of an insured or guaranteed electric loan to invest funds or make loans of up to 15 percent of its total utility plant without prior REA approval. Directs REA to refinance and reamortize all outstanding Rural Electrification and Telephone Revolving Fund certificates of beneficial ownership. Directs REA to conduct a study and report to the Congress regarding the feasibility of creating a utility-owned electricity network. Chapter 2: Rural Telephone Bank Borrowers Fairness Act of 1987 - Rural Telephone Bank Borrowers Fairness Act of 1987 - Permits prepayment without penalty of Rural Telephone Bank loans. Limits annual interest on new Rural Telephone Bank loans to not more than five percent. Limits interest rates on loan advances. Requires a loan's interest rate to be considered in determining loan eligibility. Establishes in the Rural Telephone Bank a reserve for losses caused by interest rate fluctuations. Requires a General Accounting Office study and report to the Congress regarding Rural Telephone Bank operations. Subtitle E: Department of Agriculture Programs - Amends the Agricultural Adjustment Act to subject handlers to civil monetary penalties for agricultural marketing order violations. Amends the Federal Meat Inspection Act to revise labeling requirements for meat and meat food products that contain specified amounts of imitation cheese. Title II: Committee on Banking, Finance and Urban Affairs - Refers to an amendment of the Federal Deposit Insurance Act contained in the Competitive Equality Banking Act of 1987 for other spending reductions for FY 1988 through 1990. Title III: Committee on Education and Labor - Subtitle A: Pension Assets Protection - Pension Assets Protection Act of 1987 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to add a definition of minimum benefit security level. Sets forth a special rule for such level for plans providing qualified event-contingent benefits. Adds a definition of benefit liabilities for use in determining such level. Permits asset withdrawals by employers from ongoing single-employer plans which provide for such withdrawals if immediately after the withdrawal: (1) the current value of the assets in the plan is not less than the minimum benefit security level; and (2) the current value of the assets in each other single-employer plan maintained by the employer or any other members of the employer's controlled group is not less than the minimum benefit security level. Sets forth special rules for recently amended plans and for mergers, consolidations, and transfers of plan assets. Provides that such asset withdrawal provisions shall apply to multiemployer plans only to the extent provided in regulations prescribed by the Secretary of the Treasury in consultation with the Secretary of Labor. Sets forth a notice requirement for plan asset withdrawal. Exempts permitted asset withdrawals from prohibited transaction rules. Provides that a trust forming a part of a defined benefit plan shall not be treated as failing to constitute a qualified trust solely by reason of a permitted withdrawal of plan assets by the employer. Imposes an excise tax on plan asset withdrawals that exceed a specified permissible amount. Sets forth limitations on employer reversions upon plan termination. Sets forth procedures for distribution of plan assets remaining after satisfaction of all specified liabilities. Requires that the remaining assets of the plan which are attributable to employee contributions be equitably distributed to the participants who made such contributions or their beneficiaries. Sets forth the formula for determining the portion of assets attributable to employee contributions. Requires that, after the distribution of assets attributable to employee contributions, a certain amount of the remaining assets be distributed to participants and beneficiaries in proportion to certain accrued benefits. Allows, after such distributions, the remaining assets to be distributed to the employer if this does not contravene any law and if the plan so provides. Sets forth a special rule for recent amended plans. Provides for futheer distribution to participants and beneficiaries in the absence of a distribution to the employer. Provides for revisions of distributions to prevent certain prohibited discriminations or violations. Requires a three-year amortization of underfunding of single-employer plans of a controlled group upon a distribution to an employer from a terminated plan or upon certain transactions involving plan assets. Provides that such requirement shall not apply to multiemployer plans, except as may be prescribed by the Secretary of the Treasury. Provides for tax-free transfers between certain single-employer plans in the same controlled group. Provides that any amount transferred directly between defined benefit plans (neither of which is a multiemplpyer plan) maintained by the same employer, or by employers in the same controlled group, shall not be treated as an employer reversion or includible in gross income. Establishes a termination charge for single-employer plan terminations. Requires such charge to be paid to the Pension Benefit Guaranty Corporation (PBGC), whenever a single-employer plan terminates, by the contributing sponsor (or any member of such sponsor's controlled group in the case of a distress or involuntary termination). Sets forth a formula for determining the amount of such charge. Doubles such charge if the contributing sponsor or any member of the controlled group of a plan terminated in a distress or involuntary termination also maintains a single-employer plan that has assets in excess of the minimum benefit security level. Prohibits the transfer of assets exceeding liabilities from a defined benefit plan to a defined contribution plan in mergers, consolidations, or transfers. Repeals the exemption for employee stock ownership plans from the excise tax on reversion of qualified plan assets to the employer. Adds a benefit security funding charge to the funding standard account of any single-employer plan for which the funded ratio for any plan year is less than one. Sets forth formulas for the determination of such charge. Limits the amount of such charge for a plan under which the funded ratio at the beginning of the plan year is greater than 50 percent. Reduces the period for amortizing net experience losses and gains from 15 to five years in the case of single-employer plans. Eliminates the six-month waiver for payment of contributions to single-employer plans for plan years beginning after December 31, 1988. Reduces such extension to three months for plan years beginning during 1988. Requires quarterly estimated installment payments during the plan year for the required annual payment for any single-employer plan with an outstanding waived funding deficiency as of the end of the employer's taxable year. Requires applications for funding waivers to be submitted with two and one-half months after the close of the plan year. Allows such waivers only for temporary substantial business hardship experienced by both the employer and the controlled group if the employer is a member of such a group. Sets forth formulas for determining the interest rate used to compute the amortization charge for waivers and extensions. Adjusts the amortization period for waived funding deficiencies. Requires notice of application for funding waivers to be provided to the plan and each affected party. Requires such notice to include a description of the extent to which the plan is funded for guaranteed benefits and benefit liabilities. Increases the tax deduction for employer contributions to pension trusts to the greater of: (1) the amount necessary to satisfy the minimum funding standard; or (2) the amount necessary to increase the ratio of plan assets to vested liabilities to one. Imposes a tax on underpayments of required quarterly installments for outstanding waived funding deficiencies. Makes members of the controlled group jointly and severally liable for taxes on any failure to meet the minimum funding standards. Limits the benefit security charge for transition years with respect to plans maintained by steel companies. Defines "benefit liabilities" to mean all benefits to any person under a terminated plan as of the termination date (including benefits the reduction or elimination of which is not prohibited under specified provisions). Increases from 75 to 100 percent of unfunded guaranteed benefits the amount of liability to the PBGC in excess of 30 percent of net worth. Makes the liability to the section 4049 trust consist of the total outstanding amount of benefit liabilities under the plan. Eliminates the requirement that payments to and distributions from the section 4049 trust be tied to liability payment years. Increases the single-employer plan benefit guaranty premium to $19 per participant per plan year. Makes the contributing sponsor and each member of its controlled group jointly and severally liable to the PBGC for such single-employer plan premiums. Sets forth miscellaneous and conforming amendments relating to plan terminations. Provides that a qualified preretirement survivor annuity with respect to a participant under a multiemployer plan which has terminated or which is insolvent shall not be treated as forfeitable solely because the participant has not died as of the termination or insolvency date. Makes certain termination information requirements inapplicable to certain insurance contract plans. Requires that affected parties receive notice of benefit liabilities. Revises provisions relating to: (1) distress tests; (2) the date as of which the employer must be in a bankruptcy proceeding to qualify for distress termination; and (3) the treatment under distress tests of cases converted to liquidation. Requires, under the reorganization distress test, that the PBGC be given advance notice of the intention to request bankruptcy court approval of the plan termination. Authorizes the PBGC to pool the assets of terminated plans for appropriate purposes. Requires submission to the PBGC of certain information in cases of voluntary terminations. Sets forth provisions relating to the treatment of withdrawal of substantial employers from single-employer plans under multiple controlled groups. Authorizes the PBGC to assess civil penalties for failure to provide timely required notices or other information with respect to single-employer and multiemployer plans. Requires the plan sponsor of a multiemployer plan to serve the PBGC with a copy of any complaint, district court opinion, notice of appeal, and court of appeals opinion in any action involving ERISA to which the plan sponsor is a party. Sets forth a definition of affected party. Revises the statute of limitations with respect to certain reports. Authorizes the Secretary of Labor to assess a civil penalty for a plan administrator's failure or refusal to file a required complete annual report. Revises provisions relating to the permissible return of contributions. Revises provisions relating to the imposition of an annual sanction for prohibited transactions which are continuing in nature. Revises provisions relating to the effect of a determination letter by the Internal Revenue Service on the enforcement by the Department of Labor of fiduciary standards under ERISA. Sets forth additional limitations on investment by an individual account plan forming part of a floor-offset arrangement and on investment by an individual account plan in employer stock. Sets forth a date for plan amendments required by this title. Subtitle B: Pension Portability - Pension Portability Act of 1987 - Part A: Portable Pension Plans - Amends ERISA and the Internal Revenue Code to provide for the use of rollover individual retirement accounts and annuities as portable pension plans. Sets forth distribution and portability requirements for such plans. Sets forth investment requirements for certain portable pension plans. Establishes rules relating to rollovers and transfers to and from portable pension plans. Establishes rules relating to distributions and transfers from qualified plans. Part B: Rules Applicable to Simplified Employee Pensions and Portable Pension Plans - Defines simplified employee pension plan. Sets forth distribution requirements for simplied employee pension plans. Sets forth the manner and extent to which reporting and disclosure, participation, vesting, funding, and other specified ERISA requirements apply to simplified employee pension plans and portable pension plans. Allows employee election of a simplified alternative salary reduction arrangement under a uniform simplified employee pension. Authorizes the Secretary of the Treasury to allow certain requirements for simplified employee pensions and portable pension plans to be met by application separately with respect to separate lines of business. Title IV: Committee on Energy and Commerce - Subtitle A: Medicare Provisions - Part 1: Payment Reforms - Amends part B (Supplementary Medical Insurance) of title XVIII (Medicare) of the Social Security Act to provide for reductions in the prevailing charges, used in determining reasonable charges for Medicare services, for specified surgical procedures. Sets limits on the amount nonparticipating physicians may charge for such procedures. Reduces the rate of payment for a physician's provision of medical direction to nurse anethetists when such physician is providing medical direction to two or more nurse anesthetists performing anesthesia services concurrently. Adjusts the Medicare Economic Index to increase the prevailing charge for a physician's primary care services by six percent in 1988 while increasing such charge for a physician's other services by two percent. Provides physicians whose primary practice is family practice, general practice, general internal medicine, gynecology, or pediatrics with incentive payments for practicing in underserved rural areas. Sets forth special Medicare payment rules for durable medical equipment, prosthetic devices, otheotics (leg, arm, back, and neck braces), and prosthetics. Requires the Secretary of Health and Human Services to report to the Congress by 1991 on the impact of such rules on the availability of such services and the appropriateness of increasing payment rates for oxygen and oxygen equipment when a greater volume of oxygen or portable oxygen equipment in used. Places a moratorium, until 1991, on the Secretary's conduct of any demonstration project regarding alternative methods of paying for covered items. Directs the Secretary to establish, and report to the Congress regarding, fee schedules for radiologic services by August 1, 1988. Requires that such schedules take into account variations in the cost of furnishing services in different areas and result in certain reductions in aggregate Medicare payments for such services. Sets limits on the amount nonparticipating physicians may charge for such services. Authorizes the Secretary to allow physicians and suppliers to become participating physicians or suppliers only with respect to radiologic services. Directs the Secretary to: (1) establish proposed fee schedules for physician pathology services which may be implemented by 1990; and (2) report to the Congress regarding such fee schedules. Prohibits the Secretary from implementing or conducting a new study into a prospective payment system for radiologic, physician anesthesia, and physician pathology services under the Medicare program before 1991 unless specifically directed by law to do so. Makes technical changes regarding a nonparticipating physician's maximum allowable actual charge. Eliminates the FY 1975 floor on the prevailing charge for a physician service in a locality. Sets the maximum rate of payment per visit for independent rural health clinic services at $46 in 1988, updated annually thereafter to reflect increases in the Medicare Economic Index. Requires the Secretary to report to the Congress by March 1, 1989, on the adequacy of payments for such services. Requires that the fee schedule for certified registered nurse anesthetist services be based on data from cost reporting periods beginning in FY 1985 and such other data that the Secretary deems necessary to establish a reasonable fee schedule. Includes the services of registered nurses as assistants at surgery as "medical and other health services" for which direct Medicare payments may be made. Directs the Secretary to report to the Congress by April 1, 1989, regarding the adequacy of payments for physicians' assistants and registered nurses assisting at surgery. Establishes a floor on the reasonable charge for each physicians' services equal to 55 percent of the average of the prevailing charge levels for such service in all localities for the year. Increases the prevailing and customary charge for a service when such charges are lower than the reasonable charge floor so that by 1991 prevailing and customary charges are at least equal to the reasonable charge floor for a physicians' service. Prohibits the maximum allowable actual charge of a nonparticipating physician for a covered service furnished in 1989 or 1990 from being less than 96 percent of the minimum allowable prevailing charge for 1989 and 1990. Provides that for physicians' services furnished after 1988 the regular percentage increase in the Medicare Economic Index shall be decreased by two percentage points. Part 2: Coverage and Eligibility Changes - Amends the Medicare program to provide Medicare coverage for influenza vaccines and their administration. Limits covered immunosuppressive drugs to prescription drugs used in immunosuppressive therapy. Provides coverage under part B of the Medicare program of services furnished by a clinical social worker to a member of a health maintenance organization. Amends part A (Hospital Insurance) of the Medicare program to continue the part A eligibility of physically or mentally impaired individuals who were eligible for such benefits by reason of their entitlement to disability benefits under title II (Old Age, Survivors and Disability Insurance) of the Act, but whose title II benefits have been terminated because they engaged in substantial gainful activity. Sets forth enrollment, special enrollment, and coverage periods as well as the contingencies terminating one's enrollment. Conditions such continued part A eligibility upon the payment of a monthly premium. Requires individuals who are entitled to part B (Supplementary Medical Insurance) Medicare benefits only by reason of their continued part A eligibility provided by this Act to pay a monthly premium set at four times the amount otherwise required under part B. Prohibits such part A and B premiums from exceeding a specified percentage of the individual's adjusted gross income, unless the premium thereby sinks below 25 percent of the premium determined without income restraints. Amends title II of the Act to provide that when individuals become entitled to OASDI disability benefits by reason of a disability which previously entitled them to such benefits, both periods of entitlement shall count toward the two-year period of OASDI disability benefit entitlement required for Medicare eligibility despite an intervening period of gainful employment. Provide coverage under part B of the Medicare program for therapeutic shoes furnished to individuals with severe diabetic foot disease. Part 3: Home Health Care Quality Improvement - Defines as "homebound," a prerequisite of eligibility for Medicare home health services) any person who has a condition which restricts his or her ability to leave the home without support or for whom leaving the home is medically contraindicated. Requires Medicare fiscal intermediaries which perform home health payment services to provide an explanation of claims denials for home health services and promptly notify the parties requesting a reconsideration of such determinations of the result of such reconsideration. Requires fiscal intermediaries to make partial payments of disputed claims when such notice has not been transmitted within 60 days of receipt of the reconsideration request. Makes an intermediary's performance on appeals of home health care payment determinations part of the Secretary's overall appraisal of the intermediary. Requires a Medicare home health agency to: (1) protect and promote the rights of each individual under its care; (2) notify the State licensing or certification entity of changes in persons having an ownership or control interest in the agency or changes in the organization responsible for managing the agency; (3) furnish items and services through licensed health professionals or persons who have completed or are enrolled in a training program which meets minimums standards established by the Secretary by July 1, 1988; and (4) include the patient's plan of care within its clinical records. Requires an appropriate State or local agency to conduct an unannounced survey on an average of once a year, but in no case later than 15 months after the previous unannounced survey, and within two months of the receipt of a significant number of complaints against a home health agency, of the quality of patient care provided by such agencies. Authorizes the survey of a home health agency within two months of any change in its ownership, administration, or management. Subjects home health agencies which perform poorly in such surveys to an extended survey. Directs the Secretary to evaluate the assessment process, report to the Congress on the results of such evaluation, and make appropriate modifications to such process by 1991. Requires that when the Secretary determines that a home health agency's deficiencies immediately jeopardize the health and safety of service recipients, the Secretary take immediate action to remove the jeopardy or correct the deficiencies or terminate the agency's Medicare participation. Authorizes the Secretary to impose intermediate sanctions against an agency whose failure to correct deficiencies does not immediately jeopardize the health and safety of health care beneficiaries, but halts Medicare payments to such agency if six months pass without the correction of deficiencies. Directs the Secretary to publish and make available to the public without charge a directory of home health agencies certified to participate in the Medicare program, including information regarding all surveys and certifications made with respect to each agency. Requires appropriate State or local agencies to maintain; (1) toll-free hotlines to receive complaints and answer questions regarding home health agencies in the State or locality; and (2) units with enforcement authority and access to consumer medical records and survey reports to investigate such complaints. Directs the Secretary to: (1) report to the Congress before 1988 on the appropriateness of reimbursing home health agencies on either a rural or urban basis rather than considering an agencies mix of urban and rural clientele; (2) determine home health agency cost limits on the basis of recent agency cost reports; and (3) establish a demonstration project to develop and test alternative methods of paying home health agencies on a prospective basis for services furnished under the Medicare and Medicaid (title XIX of the Act) programs. Part 4: Peer Review Organizations - Amends part B (Peer Review) of title XI of the Act to require the physician representative of a peer review organizations (PRO) responsible for reviewing the services of a rural hospital to visit such hospital at least quarterly and meet with the hospital staff regarding such review. Requires the Secretary to emphasize a PRO's performance in educating providers and practitioners concerning the review process when evaluating a PRO's performance. Prohibit a PRO's determination that a payment should not be made from becoming final before the physician or provider involved has a reasonable and convenient opportunity to discuss the proposed determination and the physician or provider has had 30-days notice of the proposed determination. Directs the Secretary to report to the Congress within two years of this Act's enactment regarding the educational effectiveness of PROs providing Medicare beneficiaries with payment denial notices when such beneficiaries are not liable for payment. Prohibits the Medicare exclusion of a provider or practitioner pending completion of administrative review procedures unless a hearing before an administrative law judge results in the determination that the provider or practitioner will pose a serious risk to beneficiaries if allowed to continue furnishing Medicare services. Part 5: Miscellaneous Provisions - Permits Medicare beneficiaries (other than those with end-stage renal disease or already enrolled with organizations providing health services on a prepaid basis) to enroll with eligible organizations with which the Secretary's enters a contract for the provision of community nursing and ambulatory care on a prepaid, capitated basis. Lists the services and supplies which comprise community nursing and ambulatory care. Defines an "eligible organization" as a public or private entity which: (1) primarily engages in the provision of community nursing and ambulatory care; (2) provides such care through or under the supervision of a registered nurse; (3) maintains clinical records on all patients; and (4) maintains procedures for referring cases to or consulting with other health care providers. Requires the Secretary to annually publish a per capita rate of payment for each class of enrollees equal to 95 percent of the adjusted average per capita cost for such class. Directs the Secretary to make monthly prepayments to such organizations in accordance with such rates. Authorizes retroactive payment adjustments to account for differences between the actual number of enrollees and the number of enrollees estimated for the purpose of determining the advance payment. Prohibits: (1) estimated payments for prepaid community nursing and ambulatory care from exceeding the payments which the Secretary estimates would otherwise have been made for such care; and (2) enrollee charges from exceeding charges for which they would be liable in the absence of their enrollment. Authorizes eligible organizations to provide enrollees with optional additional care. Requires the provision of additional care where the average of the per capita rates of payment to an organization exceeds the adjusted community rate for community nursing and ambulatory care, unless the organization elects to have such payments reduced or withheld. Makes certain Medicare provisions which are applicable to health maintenance organizations and competitive medical plans applicable to organizations providing care pursuant to this Act, including provisions regarding: (1) enrollment periods; (2) enrollee grievance procedures; (3) health care quality assurance programs; and (4) the organization's status as a secondary payor. Requires the expedited administrative hearing of an appeal of a determination regarding an individuals entitlement to Medicare benefits or the amount of such benefits when there are no material issues of fact in dispute. Directs the secretary to establish certain time limits on carriers' hearings regarding their Medicare payment determinations. Requires the Secretary to promulgate major Medicare rules, requirements, or policy statements through the regulatory process. Sets forth publication requirements. Prohibits carriers, fiscal intermediaries, or PROs from implementing a policy change affecting a change in Medicare payments without providing 30-days notice of such change to affected parties. Requires the Secretary to include in the publication of a regulation which can reasonably be expected to affect a substantial number of rural health care providers an analysis of the regulation's impact on the access of individuals to rural health care services. Prohibits the Secretary from requiring carriers to delay payments under part B of the Medicare program. Treats employees of the Physician Payment Review Commission as employees of the United States Senate for purposes of pay and employment benefits, rights, and privileges. Limits the podiatrist services which may be considered physicians' services under the Medicare program. Makes a group health plan the primary payer for items and services covered under Medicare's end-stage renal disease program. Limits minimum utilization rate requirements for end-stage renal disease services to transplantations. Amends the Omnibus Budget Reconciliation Act of 1986 to delay, from April 1, 1989, to April 1, 1990, the effective date of the prohibition of health maintenance organizations from providing physicians with incentives to reduce or limit services. Delays, from November 21, 1987, to April 1, 1988, the application of certain standards for organ procurement agencies. Directs the Secretary to: (1) arrange for, and report to the Congress within three years of this Act's enactment on, a study of the Medicare end-stage renal disease program; and (2) study, and report to the Congress by April 1, 1989, on ways to provide adequate payments under part B of the Medicare program for the costs of providing chemotherapy to cancer patients in physicians' offices. Amends the Omnibus Budget Reconciliation Act of 1985 to delay, from July 1, 1987, to October 1, 1988, the date by which the Secretary must establish a system providing for a unique identifier for each physician furnishing Medicare services. Authorizes the Secretary to impose sanctions against a person who knowingly and willfully bills a beneficiary for a clinical diagnostic laboratory test for which payment may only be made on an assigned basis in the same manner in which they may be applied against nonparticipating physicians who overcharge for their services. Requires the Secretary to determines upon the request of a pediatric heart transplant center, whether such center meets the standards for qualification as a Medicare heart transplant center and issue a certification of such fact if the center meets such standards. Subtitle B: Provisions Relating to Medicaid Program - Part 1: Combatting Infant Mortality - Amends title XIX (Medicaid) of the Act to allow States to extend Medicaid coverage to pregnant women and infants under age one whose family income exceeds current income eligibility standards, but does not exceed 185 percent of the Federal proverty level. Authorizes States to accelerate the coverage of poor children under age five. (Currently, coverage would not be extended to all poor children under age five until FY 1991.) Allows States to extend Medicaid coverage to poor children under age eight. Directs the Secretary to provide for State demonstration projects to reduce infant mortality and early childhood morbidity by improving the access of Medicaid-eligible pregnant women and children to obstetricians and pediatricians. Increases the Medical assistance percentage for such projects, but sets a FY 1988 limit on the additional Federal Medicaid expenditures which result from such projects. Requires the Secretary to report to the Congress by March 1, 1991, regarding such projects. Sets forth miscellaneous amendments relating to Medicaid services for pregnant women and children. Part 2: Addressing Needs of Elderly Poor - Subpart A: Improvements for Nursing Home Residents - Amends the Medicaid program to establish a single set of requirements for skilled nursing and intermediate care facilities (other than facilities for the mentally retarded), and to refer to such facilities as "nursing facilities." Sets forth requirements for nursing facilities, including requirements that such facilities: (1) primarily engage in providing residents with nursing care, rehabilitative services, and other health-related services which can only be provided through such facilities, directed toward residents' mental, psychosocial, and physical well-being; (2) provide such care in accordance with a written plan of care initially prepared and periodically reviewed and revised by a licensed health care professional on the basis of assessments of a resident's of functional capacity conducted upon the resident's admission and after a significant change in the resident's physical or mental condition, but in no case less often than annually, and reviewed for accuracy at least once every three months; (3) provide, in addition to nursing and rehabilitative services, such physicians' services, medically-related social services, pharmaceutical services, dietician services, and dental services as are required to fulfill each resident's plan of care; (4) not use any individual who is not a licensed health care professional or licensed social worker as a nurse aide after 1989 unless the individual has completed a State-approved training program or is enrolled in such a program, and is competent to provide such services; (5) require a physician's supervision of each patient's care, the maintenance of clinical records on all patients, and, with certain exceptions, the services of a licensed nurse 24 hours a day and a registered nurse eight hours a day, or 16 hours a day if the nursing facility has at least 90 beds; (6) employ a full-time social worker if they have over 120 beds; (7) protect specified patient rights, including the right to appeal an involuntary transfer or discharge from the facility; (8) provide applicants and residents with information regarding the Medicare and Medicaid programs and not require applicants to waive their rights to such benefits or have a third party guarantee payment to the facility as a condition of their admission; (9) safeguard a patient's funds upon the patient's authorization; (10) not admit any new resident, after 1988, who is mentally ill or retarded unless the State mental health authority deems such individual to require nursing facility services and decides whether the individual requires active treatment for mental illness or retardation; (11) notify the agency responsible for licensing the facility of changes in the ownership, control, or administration of the facility; (12) adopt certain measures to preserve facility safety and sanitation; and (13) meet such other conditions which the Secretary deems necessary for patient health and safety. Requires States to specify, by January 1, 1989, those nurse aide training programs which meet the minimum standards to be established by the Secretary by July 1, 1988, and have the State's approval. Prohibits State approval of a training program offered by a facility that has been out of compliance with this Act's requirements within the previous two years. Requires each State to: (1) establish a registry, by 1989, of all individuals who have satisfactorily completed a nurse aide training program in the State; (2) develop a written notice, by April 1988, of the rights and obligations of nursing facility residents under the Medicaid program; and (3) establish a fair mechanism, by 1989, which meets Federal guidelines to be established by October 1, 1988, for hearing appeals on involuntary transfers of residents from nursing facilities. Requires that, in addition to the preadmission review of mentally ill or retarded individuals, State mental health authorities conduct an annual review of mentally ill or retarded residents to determine whether such residents require nursing facility services and whether they require active treatment for mental illness or retardation. Directs that such preadmission and annual reviews be conducted in accordance with criteria to be developed by the Secretary by October 1, 1988. Sets forth required nursing facility responses to determinations as to whether such residents need nursing facility services and need, or do not need, active treatment for mental illness or retardation. Gives long-term residents who do not require nursing facility services, but who require active treatment, the choice of remaining in the facility or receiving covered services in an alternative setting. Requires nursing facilities to provide for the active treatment of residents in need of treatment for mental illness or retardation regardless of their continued need for nursing facility services or their discharge from such facility. Requires States to have an appeals process for individuals adversely affected by such preadmission and annual review. Sets the Federal matching percentage for: (1) nurse aide training programs at the Federal medical assistance percentage plus 25 percent, but not exceeding 90 percent, for FY 1988 and 1989, and at 50 percent thereafter; and (2) preadmission and annual screening of mentally ill or retarded residents at 75 percent. Directs the Secretary to: (1) provide States with technical assistance in the development and implementation of reimbursement methods for nursing facilities that take into account the case mix of residents in different facilities; and (2) report to the Congress by January 1, 1993, on the progress made in implementing this Act's nursing facility staffing requirements. Requires the Secretary to designate an instrument(s) by April 1, 1990, and States to specify the instrument by July 1, 1990, for use by States in assessing a resident's functional capacity. Requires the Secretary to report to the Congress by January 1, 1992, on the implementation of the resident assessment process. Imposes civil monetary penalties on individuals who falsify resident assessments. Makes the Secretary responsible for certifying that State nursing facilities comply, and States responsible for certifying that other nursing facilities comply with Medicaid nursing facility requirements. Bases such certification on surveys conducted within two months of any change in the ownership or administration of such a facility and an annual, unannounced standard survey. Subjects facilities with poor compliance records to extended surveys. Directs the Secretary to: (1) unannounced standard survey. develop and test a protocol for conducting surveys; (2) establish minimum qualifications for surveyors and train them in the use of resident assessment instruments; and (3) conduct sample surveys of nursing facilities, within two months of State surveys, to test the adequacy of State surveys and reduce Federal payments for State Medicaid administrative costs if such State surveys prove inadequate. Authorizes the Secretary to conduct a special survey of a facility when there is reason to question its compliance with this Act. Requires States to investigate complaints against, and monitor the compliance of, a facility with this Act's requirements if the facility was previously found out of compliance with such requirements or the State has reason to question its compliance. Requires that certain information regarding nursing facilities and their compliance with this Act's requirements be made available to the public. Provides long-term care ombudsmen, resident's physicians, and the State board which licenses facility administrators with notice of a facility's poor quality of care. Gives State Medicaid fraud and abuse control units access to facility survey and certification information. Sets the Federal matching percentage for nursing facility certification activities at 90 percent in FY 1990, 85 percent in FY 1991, 80 percent in FY 1992, and 75 percent thereafter. Eliminates current penalties applied to a State when its control over the utilization of skilled nursing or intermediate care facility services is deemed inadequate. Requires that when the Secretary or a State determines that a nursing facility's deficiencies immediately jeopardize residents' health and safety, immediate action be taken to remove the jeopardy and correct the deficiencies or such facility's participation in Medicaid be terminated. Directs the Secretary and States to apply certain other remedies where the health and safety of facility residents is not immediately jeopardized. Authorizes the imposition of civil money penalties against facilities found to be in compliance with this Act's requirements but to have been out of compliance previously. Provides that if a facility is out of compliance with any of this Act's requirements three months after having been found out of compliance with such requirements or on three consecutive standard surveys, Medicaid payments for newly admitted residents shall be denied and, in the latter case, on-site monitoring of the facility's compliance shall be established. Authorizes each State to establish a program providing rewards to facilities providing the highest quality of care. Sets forth special rules which are to be applied where a State and the Secretary do not agree on a finding of noncompliance or the remedies which should be prescribed. Requires States to provide each institutionalized Medicaid beneficiary who is not receiving payments under title XVI (Supplemental Security Income) of the Act with a monthly personal needs allowance of at least $35 in 1988, with subsequent annual increases in such allowance reflecting increases in the cost-of-living. Directs the Secretary to report to the Congress annually on the extent to which nursing facilities are complying with this Act's requirements, and the number and type of enforcement actions taken against such facilities. Subpart B: Other Provisions - Authorizes California to set a special Medicaid income eligibility level for a family of two individuals both of whom are adults and at least one of whom is aged, blind, or disabled. Requires a State, under a home or community-based waiver, to cover home or community-based services provided pursuant to a written plan of care to individuals age 65 or older with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a skilled nursing or intermediate care facility, the cost of which could be reimbursed under the Medicaid program. Provides that such a waiver shall be for an initial three-year term and, upon a State's request, for additional five year terms. Sets funding limitations. Provides that for the initial determination of an institutionalized spouse's Medicaid eligibility the institutionalized spouse may transfer his or her resources to the community spouse to the extent the spousal share (computed by dividing the sum of the spouse's resources in half) is less than $12,000 (adjusted annually to reflect changes in the cost-of-living), but attributes any resources not solely in the ownership of the community spouse to the institutionalized spouse if such transfer is not made. Considers resources held in the name of the community spouse to be available to the institutionalized spouse to the extent their value exceeds $48,000 (adjusted annually to reflect changes in the cost-of-living), or, if greater, the amount a court has ordered to be retained by the community spouse for support. Provides that after the initial eligibility determination: (1) no resources of the community spouse will be considered available to the institutionalized spouse; and (2) the income of the institutionalized spouse will not be considered to include a specified personal needs allowance, community spouse monthly income allowance, family allowance, and incurred expenses for medical or remedial care for the institutionalized spouse that are not covered by a legally liable third party. Sets forth the formulas for determining such allowances. Gives either spouse the right to a hearing to establish that the minimum monthly maintenance needs allowance or community spouse monthly income allowance is not adequate to support the community spouse without financial duress so that an adequate amount of support will be substituted for the allowance. Prohibits such allowance from being less than court-ordered support payments. Delays the Medicaid eligibility of institutionalized individuals who disposed of their resources at less than fair market value within two-years prior to applying for Medicaid benefits. Sets forth situations in which a delay shall not be applied. Directs the Secretary to report to the Congress by December 31, 1988, on means of recovering amounts from the estates of deceased Medicaid beneficiaries to pay for Medicaid skilled nursing or intermediate care facility services provided to such beneficiaries. Part 3: Addressing the Needs of Working Welfare Recipients - Amends the Medicaid program to require a State to continue a family's Medicaid eligibility for: (1) six months after the family loses eligibility under part A (Aid to Families with Dependent Children) (AFDC) of title IV of the Act because of increased earnings if the family has received AFDC payments for three of the preceding six months; and (2) for an optional 18 additional months if the family has received the entire six months of extended Medicaid coverage. Terminates extended Medicaid coverage if the family ceases to include a dependent child. Authorizes the States to provide the extended Medicaid coverage by paying a family's: (1) expenses for health insurance offered by the cartaker relative's or absent parent's employer; or (2) premium and enrollment costs, during the 18 month extension period, for coverage under a group health plan offered to the caretaker relative, a group health plan offered by the State to its employees, or a health maintenance organization. Requires that States offering such alternative coverage pay, in addition to the premium and enrollment costs for such coverage, any other cost sharing amounts for pregnancy services and ambulatory preventive pediatric care for children born on or after September 30, 1985. Terminates the 18-month extension period if a family's earnings exceed 185 percent of the Federal poverty level or the caretaker relative has no earnings for a month due to his or her voluntary loss of employment without good cause. Authorizes States to impose a premium on families receiving the 18 months of extended coverage, but prohibits its exceeding ten percent of the amount by which a family's earnings exceed minimum monthly wage earnings. Requires States to extend Medicaid coverage for six months to families who lose AFDC eligibility as the result of the collection or increased collection of child or spousal support under part D (Child Support and Establishment of Paternity) of title IV of the Act if the family has received AFDC payments for three of the preceding six months. Part 4: Inflation Adjustment for Territories and Miscellaneous Provisions - Amends part A (General Provisions) of title XI of the Act to increase the maximum amount of annual Medicaid payments that may be made to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American sAmoa. Amends the Medicaid program to make it clear that: (1) Medicaid clinic services include services furnished by clinic personnel to the homeless outside the clinic; (2) Medicaid physician services include services furnished by dentists. Requires each State to specify which hospitals in the State serve a disproportionate number of low-income patients with special needs and increase the rate or amount of Medicaid payments for such services. Sets forth the criteria for determining whether a hospital serves a disproportionate share of low-income patients, including the requirement that such hospitals have at least two obstetricians on staff who have agreed to serve Medicaid beneficiaries. Treats an agency of the State of New Jersey as a legal public entity which, after an appropriate arrangement with the Secretary, shall be considered a qualified health maintenance organization for purposes of the minimum enrollment period and restrictions on the termination of enrollment without cause. Provides that Medicaid payments for inpatient hospital services, or skilled nursing or intermediate care facility services shall not be limited by the Secretary to the amount which would be paid for such services under the Medicare program. Sets forth technical and miscellaneous amendments. Subtitle C: Vaccine Compensation - Vaccine Compensation Amendments of 1987 - Amends the Public Health Service Act to provide that payment of compensation for an injury or death from administration of a vaccine before the effective date of this provision shall be made from specified appropriations and that compensation for injury or death from administration on or after the effective date shall be made from the Vaccine Injury Compensation Trust Fund. Authorizes appropriations for FY 1989 through 1992. Removes provisions: (1) placing limitations on the amount of unreimbursable expenses which may be recovered; (2) requiring payments for projected expenses to be paid on a periodic basis; and (3) allowing payments for pain and suffering, emotional distress, and incurred expenses to be paid in a lump sum. Requires compensation for injury or death from administration of a vaccine on or after the effective date to be paid in a lump sum and payment for injury or death from administration before the effective date to be made in four annual installments. Repeals provisions relating to administration by the National Vaccine Injury Compensation Program of awards and relating to revision of awards. Repeals a provision relating to annual inflation increases for certain compensation and for civil penalties. Revises provisions relating to compensation for injury or death from administration of a vaccine before the effective date to change the categories for which compensation is prohibited and allowed and to limit specified types of compensation under certain categories to a stated amount. Directs the Secretary of Health and Human Services to review the number of awards in specified periods and, if the Secretary determines that the number exceeds the number of awards listed in a specified table, to notify the Congress of the determination. Prohibits, in such case, the filing of a petition after a stated period. Makes specified provisions relating to the filing of petitions and relating to additional remedies inapplicable to civil actions for damages for a vaccine-related injury or death for which a petition may not be filed because of such prohibition. Revises provisions relating to petitions for compensation. Allows withdrawal of a petition on which a court has failed to enter a judgment within a specified time. Allows, after withdrawal, maintenance of a civil action for damages. Authorizes awarding of costs of litigation to any plaintiff in certain circumstances in a citizen action against the Secretary for failure to perform under the National Vaccine Program subtitle. (Current law authorizes awarding of costs to any party when appropriate.) Makes general rules relating to petitions for compensation apply to those who administer as well as those who manufacture a vaccine. Subtitle D - User Fees - Directs the Nuclear Regulatory Commission to annually assess user fees on those who: (1) receive a service or thing of value from the Commission; and (2) hold a license to operate certain nuclear utilization facilities. Title V: Committee on Interior and Insular Affairs - Directs the Nuclear Regulatory Commission to annually assess and collect, as of September 30, 1988, user fees in an amount that approximates 75 percent of the Commission's budget in the fiscal year in which such assessment is made. Requires any person who: (1) receives a service or thing of value from the Commission to pay user fees to cover Commission costs in providing such service or thing of value; and (2) holds certain licenses authorizing the operation of a utilization facility with specified thermal rating capacity to operation of a utilization facility with specified thermal rating capacity to pay an annual fee in addition to the user fees. Requires such fee to be determined in a manner that ensures that those licensees who require the greatest expenditure of Commission resources pay the greatest annual fee. Mandates that the user and annual fees be deposited in the General Fund of the Treasury. Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to repeal the Commission's mandate to submit a feasibility study regarding annual charges, and to collect user charges based upon such report. Authorizes the State of Wyoming to expend a certain amount of abandoned mine reclamation funds for direct assistance to citizen evacuated from their homes in Campbell County due to hazards from methane and hydrogen sulfide gases. Federal Onshore Oil and Gas Leasing Reform Act of 1987 - Amends the Mineral Lands Leasing Act of 1920 regarding competitive leasing of oil and gas for onshore Federal lands to increase from 640 acres to 2,560 units gas for of land open to competitive leasing. Restricts the maximum units in Alaska to 5,760 acres. Provides for lease sales to be: (1) conducted by oral bidding (but with sealed bids permitted); and (2) held at least quarterly in each State (or more frequently at the Secretary of the Interior's discretion). Conditions such lease sales upon the payment of specified royalties. Sets forth a $75 bidding fee. Requires the Secretary of the Interior (the Secretary) to accept the highest bid from a responsible bidder. Authorizes the Secretary not to issue a lease if, in his discretion, he determines that the highest bid would not represent a reasonable return to the public. Makes lands available for leasing without competitive bidding for a maximum one-year period if no bids have been received. Increases the annual lease rental from 50 cents to $2.00 per acre for the first five years, and for a minimum $3 per acre per year for each year thereafter. Increases the minimum royalty upon discovery of oil or gas in paying quantities from $1 per acre to $3 per acre. Requires the Secretary to make maps and narrative descriptions available to the public at least ten days before: (1) offering lands for lease; or (2) approving an oil or gas drilling permit on lease lands. Prescribes guidelines under which the Secretary (or the Secretary of Agriculture for national public domain forest lands) must regulate surface-disturbing activities conducted upon lease lands. Authorizes the Secretary to disapprove specified lease assignments at his discretion. Amends lease cancellation conditions to provide that leases will not be cancelled due to the lessee's non-compliance with lease terms if: (1) the leasehold contains a well capable of oil or gas production in paying quantities; or (2) the lease is committed to an approved cooperative, unit plan, or communitization agreement which contains a well capable of unitized substances production in paying quantities. Permits the issuance of oil or gas leases on public lands (or public domain national forest lands) only if such leasing has been evaluated and approved in a land use plan meeting certain statutory requirements. Prescribes guidelines for such land use plans. Prohibits the issuance of oil or gas leases upon certain lands allocated or designated as wilderness areas. Sets forth guidelines for the promulgation of regulations regarding lease sales. Imposes civil and criminal penalties upon persons who willfully and knowingly misrepresent the value of lands and leases under this Act. Grants to the States concurrent civil and criminal jurisdiction for violations of this Act. States that Federal law regarding competitive leasing of oil and gas for onshore Federal lands may be cited as the Mineral Lands Leasing Act of 1920. Amends the Reclamation Reform Act of 1982 to declare that it is the intent of the Congress that no person shall receive irrigation water at less than full costs on more than 960 acres of class I lands, or the equivalent, in which such person has an economic interest. Makes federal reclamation law applicable to all trusts established under State or Federal law. Modifies the Federal reclamation law requirements applicable to trust lands. Prescribes the administrative procedures applicable to any person who receives irrigation water and enters into a farm management operational relationship. Sets forth penalties for evasion of such administrative provisions. Land and Water Conservation Fund Act Amendments of 1987 - Amends the Land and Water Conservation Fund Act of 1965 to increase from $10 to $25 the charge for the annual admission permit (the Golden Eagle Passport) into any entrance fee area of the National Park System. Authorizes the Secretary of the Interior to make available an annual admission permit for a reasonable fee for a specific unit or units. Sets fee limits for single-visit permits. Prohibits charging fees at any National Park unit located in an urbanized area where a fee was not charged prior to September 30, 1986. Directs the Secretary of the Interior to report to specified congressional committees a list of units and their proposed admission fees. Prohibits admission fees for persons 16 years of age or less. Prohibits charges at: (1) the Statue of Liberty National Monument, New York; (2) the U.S.S. Arizona Memorial, Hawaii; and (3) Independence National Historical Park, Pennsylvania. Requires a "Fee-Free Day" at each unit where a fee is charged. Sets admission fee limitations for Glacier, Yellowstone, and Grand Teton National Parks. Makes admission fees available to the collecting agency for resource protection, research, interpretation, and maintenance at outdoor recreation facilities managed by that agency. Allocates funds collected by the National Park Service to Park units based upon operating expenses for 50 percent of the funds and on user and admission fees for the remainder. Permits the use of such funds for resource protection, research, and interpretation, and in the case of funds from user fees, for maintenance. Authorizes volunteers or others entities to sell permits and collect fees. Permits the charge of a transportation fee in lieu of an entrance fee at parks with transportation systems. Provides for the distribution of such funds with the park itself retaining 50 percent outright. Directs the Secretary to study the feasibility of adjusting entrance fees to encourage alternative transportation usage and visitation at off-peak times. Requires the study to include a pilot program at Yosemite National Park. Directs the Secretary to report to specified congressional committees within three years on such study. Extends the Land and Water Conservation Fund through FY 2015. Directs the President to make an annual accounting of fees collected and their proposed distribution. Prohibits fund transfers, as specified. Title VI: Committee on Merchant Marine and Fisheries - Subtitle A - Oil Pollution and Liability and Compensation - Oil Pollution Liability and Compensation Act of 1987 - Chapter I: Oil Pollution Liability and Compensation - Imposes joint, several, and strict liability for specified removal costs and damages upon the party responsible for a vessel or facility from which oil is either discharged into certain waters, or which poses a substantial threat of such a discharge. Exempts from such liability certain discharges permitted under Federal, State and local law. Defines conditions under which a mobile offshore drilling unit will be treated as either a tanker or as a facility for purposes of determining responsibility or excess liability. Sets forth defenses to liability under this Act. Sets forth limits to liability under this Act, with specified exceptions. Authorizes the Secretary of Transportation to establish by regulation a maximum liability limit. Requires the Secretary to report to the Congress from time to time regarding liability adjustments. Declares that the responsible party or his guarantor shall be liable to the claimant for interest on the amount paid in satisfaction of a claim for a specified period. Defines circumstances under which liability for injury to natural resources shall be to either: (1) the United States; (2) the affected State; or (3) a foreign government. Sets forth recovery and indemnification procedures. Sets forth the uses of the Oil Spill Liability Trust Fund (the Fund) including: (1) payment of removal costs and administrative expenses; and (2) contributions to the International Fund. Sets forth defenses to liability for such Fund and a specified maximum amount which may be paid from the Fund. Confers rights of subrogation upon the United States for payment of any claim by the Fund. Sets forth a claims procedure for removal costs or damages. Requires the Secretary to designate the source of a discharge and to immediately notify the responsible party or guarantor of such designation. Sets forth the advertisement procedures to be followed by such a designee or guarantor. Grants subrogation rights to any person (including the Fund) who pays compensation under this Act to any claimant for costs or damages. Requires the party responsible for certain vessels over 300 gross tons to establish and maintain evidence of financial responsibility to meet maximum liability limits. Requires the Secretary of the Treasury to withhold or revoke the clearance of any vessel which fails to certify such financial responsibility. Sets forth circumstances under which such vessels may have entry into U.S. ports or waters denied, or have their oil cargo seized. Imposes a civil penalty for failure to comply with the financial responsibility requirement. Restricts judicial review of any regulation promulgated under this Act to the Circuit Court of Appeals for the District of Columbia. Grants the district courts original jurisdiction over all actions arising under this Act. Sets forth a limitation period for actions for removal costs, damages, or contribution. Chapter II: Conforming Amendments - Sets forth conforming amendments to certain related statutes. Chapter III: Implementation of International Conventions - States that during any period in which the Civil Liability Convention and the Fund Convention are in force with respect to the United States, owner liability for pollution damage arising from a ship-related incident shall be determined according to such Conventions. Grants recognition to the International Oil Pollution Compensation Fund as a legal person under Federal law, and deems the Director of such Fund to have irrevocably appointed the Secretary of State as the Fund's agent for service of process for legal proceedings involving the Fund within the United States. Exempts such Fund and its assets from all direct taxation in the United States. Provides that certain required contributions with respect to oil received in the United States shall be paid to the International Fund from the Oil Spill Liability Trust Fund. Grants recognition of any final judgment of a court of any country which is a party to either the Civil Liability Convention or the Fund Convention. Sets forth the financial responsibility requirements of ship-owners whose vessels are subject to the Civil Liability Convention. Imposes specified sanctions and civil penalties upon persons violating the financial responsibility requirements. Waives all U.S. defenses based upon sovereign immunity with respect to any controversy arising under the Civil Liability Convention or the Fund Convention relating to any ship owned by the United States and used for commercial purposes. Authorizes the Secretary to prescribe regulations to implement this Act, and all Federal obligations under the specified Oil Pollution Conventions. Subtitle B: Navigation Enhancement User Fees - Navigation Enhancement User Fee Act of 1987 - Directs the Secretary of the department in which the Coast Guard is operating to establish fees to cover the costs of the Government to enhance the ability of a vessel to more safely transit the Persian Gulf, when requested or required of any department, agency, or instrumentality of the Government, and when the request is not for search and rescue services. Subtitle C: Investment in Panama Canal - Amends the Panama Canal Act of 1979 to require that the investment of the United States in the Panama Canal be increased by the amount of tolls and other receipts that covers interest on the U.S. investment and that was deposited in the Panama Canal Commission Fund before 1986. Title VII: Committee on Post Office and Civil Service - Increases Federal pay by three percent for FY 1988, 4.8 percent for FY 1989, and 5.2 percent for FY 1990. Makes such increases effective the first applicable pay period beginning on or after January 1 of the fiscal year involved (except in the case of prevailing rate employees, whose pay increases shall take effect 90 days later). Declares that amount appropriated to provide for such increases shall cover not to exceed 35 percent of the increase for FY 1988 and 50 percent of the increase for FY 1989 and 1990. Requires the President to include in the budget for the United States for FY 1988, 1989, and 1990 estimates as to: (1) the total amount attributable to Federal pay increases; and (2) the total amount which would be required to provide for the full amount of such increases. Requires the continuation of six-day delivery until October 31, 1990. Eliminates the authority for members of the Board of Governors of the United States Postal Service to serve beyond the expiration of their terms. Title VIII: Committee on Veterans' Affairs - Expresses the sense of the Congress that: (1) the Congressional Budget Office should reverse its decision on accounting for loans sold with recourse by the Veterans Administration (VA); and (2) any change in the assets sales policy of the VA should not be considered in future budget resolutions as a means of achieving deficit reduction. Amends Federal veterans' benefits provisions to revise the amount of a housing loan that may be guaranteed by the VA from not more than 60 percent of the loan amount up for $27,500 to not more than 40 percent of the loan or $40,000 whichever is less, reduced by any entitlement previously received. Revises the amount of a loan that may be guaranteed for a veteran for the purchase of manufactured homes or lots from an amount not to exceed 50 percent of the loan amount or $20,000 to 30 percent of the loan or $20,000, whichever is less, reduced by the amount of any entitlement previously received. Increases the principal amount of a direct housing loan allowed to be made to a veteran from a specified ratio using $27,500 as its denominator to a ratio using $40,000 in conformance with the revised guarantee limitations. Revises the percentage of purchases of property acquired by the Administrator as the result of defaults on veterans' housing loans that may be financed by VA loans in FY 1988 through 1990. Title IX: House Committee on Ways and Means - Spending Measures - Subtitle A: OASDI Provisions - Part 1: Coverage and Benefits - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to include inactive duty military training as covered employment. Treats all cash pay of agricultural employees whose employers spend $2,500 or more a year for agricultural labor as covered wages. Considers employer payments into a life insurance plan established for his or her employees as covered wages if such payments are included in the employee's gross income under the Internal Revenue Code. Includes as covered employment, services performed by one spouse in the employ of the other spouse, except for domestic services performed in the employer spouse's home. Reduces to 18 the age after which services performed in the parents employ may be treated as employment, but requires a child to be 21 before service outside the employing parent's trade or business or domestic service in the parent's home will be considered employment. Makes reductions in title II survivors' benefits made to offset government pensions applicable to Federal employees receiving pensions under the Federal Employees' Retirement System or the Civil Service Retirement System, unless their pensions are based on at least five years of service. Revises the OASDI benefit reductions provisions applicable to individuals whose benefits are based in part on noncovered service. Makes such reductions inapplicable to individuals who have at least 25 years of coverage. Authorizes the modification of an agreement between the Secretary and Iowa, providing OASDI coverage for certain State and local employees, to make police and firemen in Iowa eligible for OASDI coverage. Amends titles II and XVI (Supplemental Security Income) of the Act to require individuals to be paid interim benefits in cases where an administrative law judge has determined their entitlement to certain benefits, but the Secretary's final decision has not been issued within 100 days of the judge's decision. Extends, until June 1989, the continuation of disability benefits pending an individual's appeal of the termination of such benefits. Preserves an individual's eligibility for disability benefits for at least 60 months following his or her engagement in trial work, unless such individual has engaged in substantial gainful activity in three of those months. Amends the Internal Revenue Code to include employee tips within the wages on which social security employer taxes are based. Part 2: Other Social Security Provisions - Sets forth the procedure for determining the recoverable amount of fees for, and awarding fees to, attorneys who successfully represent the interests of OASDI claimants in administrative proceedings. Includes corporate directors within the definition of an "employee" under the OASDI program. Provides that when an individual dies before the close of a taxable year in which he or she would have attained retirement age the earnings test shall apply to the full 12-month taxable year. Prohibits the payment of OASDI benefits to individuals who have been deported pursuant to the Immigration and Nationality Act because of activities conducted under the direction of or in association with the Nazi government of Germany or its allies. Amends the OASDI and Medicare (title XVIII of the Act) programs to provide that public members of the Boards of Trustees of the Social Security Trust Funds who fill vacancies occurring before the expiration of their predecessor's term shall be appointed only for the remainder of such term. Part 3: Railroad Retirement Program - Amends the Internal Revenue Code to increase the rate of the tier 2 railroad retirement tax imposed on railroad employees and employers. Establishes a Commission on Railroad Retirement Reform to study issues pertaining to the long-term financing of the railroad retirement system. Requires the Commission to report to the President and the Congress regarding such study by October 1, 1989. Subtitle B: Provisions Relating to Public Assistance and Unemployment Compensation - Part 1: AFDC and SSI Amendment - Amends the Defict Reduction Act of 1984 to permanently disregard in-kind assistance provided by nonprofit organizations to Supplemental Security Income (SSI) program (under title XVI of the Social Security Act) and Aid to Families with Dependent Children program (AFDC) (under part A of title IV of the Act) beneficiaries in determining the need or eligibility of such recipients. Amends the AFDC program to authorize States to establish and operate an AFDC fraud control program under which an individual who fraudulently establishes or maintains his or her family's AFDC eligibility shall have his or her needs ignored in determining the families need for AFDC assistance. Sets the Federal share of the costs of such fraud control programs at 75 percent. Excludes real property which, for specified reasons, cannot be sold from SSI resource eligibility determinations. Directs the Secretary, where necessary to avoid undue hardship, to suspend the penalties applied when individuals become SSI eligible by disposing of their resources at less than market value. Applies such penalties only where resources were disposed of within the past 24 months at more than $3,000 below their market value. Excludes interest and appropriation on amounts set aside to meet burial and related expenses from SSI resource eligibility determinations and AFDC payments from SSI income eligibility determinations. Amends the SSI program to authorize States to treat a husband and wife living in the same medical facility, whether or not they share a room, as though they were an SSI-eligible individual and his or her eligible spouse rather than two eligible individuals. Extends, until July 1, 1988, the deadline for disabled widows or widowers who became ineligible for SSI benefits by reason of the increase in OASDI benefits caused by the Social Security Amendments of 1983 to apply for Medicaid coverage. Authorizes the Secretary to make an emergency cash advance to presumptively eligible individuals who are initially applying for SSI benefits up to the amount which would be payable for the first month to an eligible individual with no other income. Extends Federal reimbursement of State interim SSI assistance to cover such assistance provided for the period during which: (1) an individual's benefits were erroneouly terminated or suspended; or (2) an issued benefit check was lost or stolen before being negotiated and was not promptly replaced. Entitles individuals who are applying for or receiving SSI benefits on the basis of blindness to elect to receive either supplementary notice by telephone or initial notice by certified mail of any determination made or other action taken with respect to such individul's SSI rights. Directs the Secretary to study the desirability and feasibility for extending such notification rights to other individuals who may lack the ability to read. Prohibits individuals who are in a public emergency shelter for the homeless for more than 12 consecutive months from being eligible for SSI payments. (Currently, SSI eligibility terminates when an individual has been in such shelter for more than three months in a 12-month period.) Excludes amounts received under the OASDI or SSI program for the underpayment of benefits within the preceding 12 months from SSI resource eligibility determinations. (Currently, such exclusion applies to reimbursement for underpayments within the preceding six months.) Continues the provision of full SSI benefits to individuals whose institutionalization is likely not to exceed three months during a continuous period of institutionalization and who need to continue to maintain and provide for the expenses of the home or living arrangement to which he or she may return after institutionalization. Treats individual who are ineligible for SSI benefits by reason of their receipt of widow's or widower's insurance benefits under the OASDI program as SSI recipients for purposes of the Medicaid program. Authorizes the Secretary to make grants to up to ten States so that each may create an SSI Outreach and Eligibility Team to test the feasibility of developing and using special procedures to: (1) ensure that all homeless individuals in shelters understand their rights to benefits under the SSI program and other Social Security Act programs; (2) assist such individuals in applying for benefits under such programs; and (3) ensuring that all such individuals receive the benefits to which they are entitled. Requires the Secretary to report at least annually to the Congress regarding such outreach activities. Provides that an alien's three-year period of ineligibility for SSI benefits shall not apply when the organization sponsoring the alien is no longer in existence or is adjudged bankrupt. Makes it clear that a State may include in its AFDC standard of need an amount for shelter that varies according to the type of housing occupied. Authorizes States to furnish AFDC emergency shelter assistance beyond the current 30-day per year limitation on such assistance. Authorizes the Secretary to approve projects under which States encourage landlords to make permanent shelter available to families receiving AFDC emergency assistance by paying rent for such shelter for the first year at the rate paid for comparable commercial transient accommodations and for the remainder of the lease, which must run for at least two more years, at the applicable AFDC housing allowance. Part 2: Foster Care and Child Welfare Amendments - Amends the Adoption Assistance and Child Welfare Act of 1980 to extend permanently the provision of foster care payments for dependent children voluntarily placed in foster care by their parent or legal guardian. Amends part E (Foster Care and Adoption Assistance) of title IV of the Social Security Act to extend, through FY 1989: (1) the ceiling on Federal payments to States for foster care expenditures; and (2) the authority for States to use such payments to cover expenditures under part B (Child Welfare Services) of title IV of the Act. (Currently, such ceiling and authorization runs through FY 1987.) Provides that where a child for whom foster care payments are being made resides in the same foster home or child-care institution as his or her son or daughter the payments made for such child shall include the cost of certain items provided to or on behalf of the child's son or daughter. Part 3: Child Support Enforcement Amendments - Amends part D (Child Support and Establishment of Paternity) of title IV of the Act to continue to provide child support enforcement services to families which cease to receive AFDC payments. Requires States to provide child support enforcement services to families covered under the Medicaid program. Part 4: Unemployment Compensation - Changes the effective date for certain extended unemployment benefits program disqualification requirements for purposes of the determination of the amount of the Federal payment to a State under the Federal-State Extended Unemployment Compensation Act of 1970. Directs the Secretary of Labor to enter into agreements with three States for a demonstration program to provide self-employment allowances in lieu of regular or extended unemployment compensation to a certain number of eligible individuals. Requires States to provide specialized services to such individuals. Makes State and Federal requirements relating to availability for work, active search for work, or refusal to accept suitable work inapplicable to such individuals. Requires State evaluation of such program. Directs the Secretary to report to the Congress on such program two years and four years after the enactment of this Act. Amends the Federal Unemployment Tax Act (FuTA) to extend the 6.2 percent rate of the gross employer tax through 1988, 1989, and 1990 (thus extending the 0.2 percent surtax for three years). Lowers such rate to 6.0 percent for 1991 and thereafter. Amends the Social Security Act to direct the Secretary of the Treasury to transfer the amount of additional revenue from such FuTA surtax from the employment security administration account as follows: (1) 50 percent to the Federal unemployment account; and (2) 50 percent to the extended unemployment compensation account. Increases the limitation on the amounts in the two latter accounts from 0.125 to 0.375 of total covered wages. Sets forth a rate of interest on advances to the Federal unemployment account and the extended unemployment compensation account. Credits to the Federal unemployment account interest paid by States on advances. Subtitle C: Medicare Program - Part 1: Provisions Relating to part A of the Medicare Program - Subpart A: Payment for Services - Amends part A (Hospital Insurance) of title XVIII (Medicare) of the Social Security Act to increase hospital prospective payment rates by one percent for FY 1988, by the market basket percentage increase minus 4.2 percent for FY 1989, and by the market basket percentage increase minus 1.7 percent for FY 1990. Provides an additional one percent increase in such rates in FY 1988, 1989, and 1990 for hospitals located in rural and large urban areas. Makes further payment rate adjustments for hospitals which have indirect medical education costs, serve a disproportionate share of low-income patients, or are exempt from the prospective payment system (PPS). Treats certain hospitals which are located in a rural county which is adjacent to one or more urban areas as being urban hospitals for Medicare payment purposes. Permits a rural hospital with less than 100 beds to furnish extended care services. (Currently, rural hospitals must have less than 50 beds to furnish such services.) Prohibits the making of Medicare payments to hospitals with more than 49 beds for extended care services: (1) which a patient receives after a bed has been available for five days in a skilled nursing facility located within the same region as the hospital, unless the patient's physician certifies that transferring the patient to such facility is medically inappropriate; and (2) to the extent such services utilize more than 15 percent of the bedspace over a cost reporting period. Directs the Secretary of Health and Human Resources to report to the Congress by February 1989 concerning: (1) the proportion of hospital admissions for extended care services which are denied or approved by a peer review organization; and (2) methods of encouraging eligible hospitals that have a low occupancy rate and are located in areas in need of extended care service providers to enter into agreements with the Secretary to provide such services. Extends, through FY 1990, the provision of additional payments to sole community hospitals experiencing a decrease of more than five percent in patient volume for a cost reporting period due to circumstances beyond their control. Requires the Secretary to report to the Congress by March 1, 1988, on the appropriateness of the criteria for designating hospitals as sole community hospitals. Extends the Medicare classification of rural referral centers to include rural hospitals having more than 275 beds. (Currently, such hospitals must have more than 500 beds to be classified as rural referral centers.) Requires the Secretary to report to the Congress by March 1, 1989, on the criteria used for classifying hospitals as rural referral centers. Directs the Secretary to establish three-year demonstration projects to determine appropriate methods of strengthening the financial and managerial capability of isolated and financially distressed rural hospitals to provide necessary health care services. Sets forth reporting requirements. Reduces Medicare payments for a hospitals capital-related costs in FY 1987. Requires that, after FY 1991, payments for such costs be made in accordance with a prospective payment system established by the Secretary. Directs the Prospective Payment Assessment Commission to report to the Congress by May 1, 1988, on the suitability and feasibility of linking payment for capital-related costs to hospital occupancy rates. Requires Medicare fiscal intermediaries to prepare and submit to the Congress, the Health Care Financing Administration, the Congressional Budget Office, and the Congressional Research Service of the Library of Congress within 45 days after the close of each calendar quarter a report which includes, in a summary form for all hospitals and on a hospital-specific basis, information required from hospitals over the previous four calendar quarters regarding services they perform, revenues they collect, and costs they incur. Sets uniform hospital cost reporting periods. Raises the number of Medicare patient days which a skilled nursing facility must have had in the previous cost reporting period in order to elect to be paid under the PPS from 1,500 to 2,500 patient days. Sets forth miscellaneous and technical provisions. Subpart B: Nursing Home Reform - Amends the Medicare program to set forth requirements for skilled nursing facilities (other than facilities for the mentally retarded), including requirements that such facilities: (1) primarily engage in providing residents with nursing care or rehabilitation services directed toward residents' mental, psychosocial, and physical well-being; (2) provide such care in accordance with a written plan of care initially prepared and periodically reviewed and revised, by a team which includes the attending physician and a professional registered nurse, on the basis of assessments of a resident's functional capacity conducted upon the resident's admission and after a significant change in the resident's physical or mental condition, but in no case less often than annually; (3) provide, in addition to nursing and rehabilitative services, such physicians' services, medically-related social services, pharmaceutical services, dietician services, and dental services as are required to fulfill each resident's plan of care; (4) require nurse aides to complete a State-approved training or retraining program before participating in resident care, and have an ongoing program of nurse aide training and performance review; (5) require a physician's supervision of each resident's care, the maintenance of clinical records on all residents, and 24-hour nursing services; (6) protect specified resident rights, including the right to appeal an involuntary transfer or discharge from the facility; (7) safeguard a resident's funds upon the resident's authorization; (8) notify the State agency responsible for licensing the facility of changes in the ownership, control, or administration of the facility; (9) adopt certain measures to preserve facility safety and sanitation; (10) meet such other conditions which the Secretary of Health and Human Services deems necessary for resident's health and safety. Subjects nursing facilities which participate in the falsification of resident assessments to civil money penalties and the required use of independent assessors thereafter. Requires States to: (1) specify, by September 1, 1988, State-approved nurse aide training and testing programs which meet minimum standards to be established by the Secretary by March 1, 1988; and (2) maintain a registry of nurse aides who have successfully completed such programs, including specific findings of resident neglect or abuse involving such individuals. Prohibits State approval of a training program offered by a facility that has been out of compliance with the Act's requirements within the preceding two years. Requires States to: (1) establish a fair mechanism which meets Federal guidelines to be established by October 1, 1988, for hearing appeals on involuntary transfers of residents from nursing facilities; and (2) implement and enforce standards which are to be developed by the Secretary by March 1, 1988, regarding the qualifications of nursing facility administrators. Reimburses nursing facilities for the reasonable costs of complying with this Act's requirements. Directs the Secretary to report to the Congress by January 1, 1992, on the implementation of the nursing facility resident assessment process. Requires States to conduct periodic educational programs for the staff and residents of nursing facilities on current regulations, procedures, and policies concerning the quality of care provided at such facilities. Makes the Secretary responsible for certifying that State nursing facilities comply, and States responsible for certifying that other nursing facilities comply with Medicare nursing facility requirements. Bases such certifications on standard surveys to be conducted within two months of any change in the ownership or administration of such a facility and, on an unannounced basis, at least every 15 months. Prohibits the Statewide average interval between surveys from exceeding one year. Subjects facilities with poor compliance records to extended surveys. Requires that surveys be conducted by a multidisciplinary team of professionals who receive preservice and continuing training from the State. Directs States to use specialized survey teams to survey and carry out enforcement actions against chronically substandard facilities. Directs the Secretary to: (1) develop and test a protocol for conducting surveys; (2) establish minimum qualifications for surveyors; and (3) conduct sample surveys of nursing facilities, within two months of State surveys, to test the adequacy of State surveys, and, if the State surveys prove inadequate, train the State survey team or designate another State to perform such survey and certification activities. Authorizes the Secretary to conduct a special survey of a facility when there is reason to question its compliance with this Act. Requires States to investigate complaints against, and monitor the compliance of, a facility with this Act's requirements if the facility was previously found to be out of compliance with such requirements or the State has reason to question its compliance. Requires that certain information regarding nursing facilities and their compliance with this Act's requirements be made available to the public. Provides resident's physicians and the State board which licenses facility administrators with notice of a facility's poor quality of care. Gives State Medicaid (title XIX of the Act) fraud and abuse control units access to facility survey and certification information. Requires that survey results be posted in a place which is readily accessible to residents and their representatives. Requires the Secretary or a State, upon determining that a nursing facility's deficiencies immediately jeopardize residents' health and safety, to terminate facility's Medicare participation or take immediate action to remove the jeopardy and correct the deficiencies. Authorizes the Secretary and States to apply certain other remedies, which States must establish by October 1, 1989, where the health and safety of facility residents is not immediately jeopardized. Provides that if a facility is out of compliance with any of this Act's requirements six months after having been found out of compliance with such requirements, Medicare payments for newly admitted residents shall be denied. Sets forth special rules which are to be applied where a State and the Secretary disagree on a finding of noncompliance or the remedies which should be prescribed. Part 2: Provisions Relating to Parts A and B of the Medicare Program - Amends parts A (Hospital Insurance) and B (Supplementary Medical Insurance) of the Medicare program to require that the time elapsing between: (1) a fiscal intermediaries receipt of a claim under part A and its payment approximates 20 days for FY 1988 claims; and (2) a fiscal intermediaries' and carriers' receipt of a Medicare claim and its payment approximates 23 days for FY 1989 claims and 25 days for FY 1990 claims. Prohibits the Secretary from making any policy change, before October 1, 1990, which is primarily intended to delay Medicare claims processing. Imposes civil monetary penalties and intermediate sanctions on HMOs which: (1) fail substantially to provide medically necessary items and services if the failure adversely affects the enrollee; (2) impose charges on individuals in excess of those permitted; (3) act to expel or refuse to re-enroll an individual for medical reasons; (4) engage in any practice that denies or discourages enrollment by individuals whose medical condition or history indicates a need for substantial future medical services; or (5) misrepresent or falsify enrollment information, or enroll an individual without the individual's knowledge. Prohibits the Secretary from conducting any capitation demonstration project with an entity which is not an HMO if such project: (1) involves more than $15,000,000 of Medicare funds in any year without specific congressional authorization, or (2) provides for a capitated payment rate in excess of the HMO capitated payment rate. Deems a specified nonprofit corporation of Michigan which enrolls individuals with HMOs to have satisfied the limits on Medicare and Medicaid (title XIX of the Act) beneficiaries enrolled with an HMO if such limits are met with respect to all individuals enrolled with each such HMO and no more than 20 percent of the members of each such HMO are Medicare beneficiaries. Authorizes certain HMOs which contracted with a State prior to 1970 to provide services to Medicaid beneficiaries to elect to have members of their subdivisions, subsidiaries, or affiliates considered as members of the parent organization for purposes of the limitation on Medicare and Medicaid beneficiaries enrolled with HMOs. Sets forth miscellaneous and technical provisions. Part 3: Provisions Relating to Part B of Medicare Program - Amends part B (Supplementary Medical Insurance) of the Medicare program to set the prevailing charges for the services of a nonparticipating physician at 95 percent of the prevailing charges for the services of a participating physician. Increases the medical economic index by two percent for physicians' services furnished in 1988. Reduces the prevailing charge for cataract surgery, coronary artery bypass surgery, total hip replacement, transurethral resection of the prostate, suprapubic prostatectomy, diagnostic and therapeutic dilation and curetlage, and carpal tunnel repair. Limits nonparticipating physicians' actual charges for such procedures if such reductions in prevailing charges result in reductions in the reasonable charges for such procedures. Prohibits the prevailing charge for opthalmic ultrasound procedures from exceeding five percent of the prevailing charge for extracapsular cataract removal with lens implantation. Limits the reasonable charge for an intraocular lens implanted during cataract surgery in a physician's office or an ambulatory surgery center to the acquisition cost for the lens plus a handling fee. Limits nonparticipating physicians' actual charges for such procedures and lens. Requires that Medicare payments for a diagnostic test (other than a clinical diagnostic laboratory test) be made to the person who or the entity which performed or supervised the test. Prohibits physicians or suppliers from billing Medicare part B enrollees for such tests. Requires the Secretary to review prevailing charges for diagnostic tests and adjust those charges which are excessive. Requires physicians to complete and submit to Medicare carriers on beneficiaries' behalf the standard forms for benefit claims by the date they charge such beneficiaries for covered items or services when such claims are not assigned. Directs the Secretary to establish a procedure whereby a part B beneficiary may assign his or her rights of payment under an Medicare supplemental health insurance policy for an item or service furnished by a participating physician or supplier so that such physician and supplier may be paid directly by the supplemental policy. Eliminates Medicare payments for a return on equity capital for outpatient hospital services. Provide coverage under part B of the Medicare program for therapeutic shoes furnished to individuals with severe diabetic foot disease. Directs the Secretary to provide for the conduct of demonstration projects in at least four sites to determine the practicality of providing community nursing services on a prepaid, capitated basis to Medicare beneficiaries as a means to improve home health care and reduce the need for more costly institutional care. Requires the Secretary to report to the Congress within four years of this Act's enactment regarding such projects. Directs the Secretary to: (1) conduct various studies regarding Medicare payments for physicians' services; (2) develop uniform definitions of physicians' services by July 1, 1989; (3) expand a study being conducted on the development of a relative value scale for physicians' services to include specified additional physicians' services; and (4) conduct a survey of the out-of-pocket costs incurred by Medicare beneficiaries for medical care. Requires the Physician Payment Review Commission to study geographic variations in reasonable or prevailing charges under part B of the Medicare program. Sets forth reporting requirements. Sets forth miscellaneous and technical provisions. Part 4: Peer Review Organizations - Authorizes the Secretary to extend existing contracts with peer review organizations (PROs) under part B (Peer Review) of title XI of the Act for six months and for up to two one-year terms. Amends part B of title IX of the Act to authorize the Secretary to renew a PRO's contract for a three-year period if the PRO has been performing satisfactorily. (Currently, such contracts are renewable for two-year period.) Amends part B of the Medicare program to protect Medicare beneficiaries from liability for services which PROs determine are not covered under the Medicare program. Amends part B of title IX of the Act to set forth factors which PROs must take into account in developing norms for evaluating treatment which may be performed on an outpatient basis. Requires PROs to: (1) offer to provide, at least quarterly, for a physician representative of the PRO to meet with the staff of each hospital regarding the PRO's review of the hospital's Medicare services; and (2) publish and distribute to providers and practitioners, at least biannually, a report describing the PRO's findings with respect to situations in which the PRO has frequently found medical care to be inadequate. Part 5: State Health Insurance Pools - Amends the Internal Revenue Code to create an incentive for each State to establish a health insurance pool by imposing a tax on large employers equal to five percent of the gross wages of their employees in the State if such employers do not participate in such State pool. Requires that State health insurance pools: (1) be open to all State residents who are not eligible for benefits under the Medicaid program or part A of the Medicare program; and (2) provide levels of health insurance typical of levels provided by large employer groups. Subtitle D: Customs User Fees; Trade and Customs Agency Authorizations - Amends the Consolidated Budget Reconciliation Act of 1985 to make articles returned to the United States after having been exported and articles assembled abroad in whole or in part of fabricated components which are products of the United States subject to the requirement that the Secretary of the Treasury collect a specified fee for the processing of any merchandise entered or withdrawn from warehouse for consumption in the United States. Requires that the fee charged with respect to the processing of merchandise: (1) for articles returned to the United States after having been exported be applied to the value of the foreign repairs or alterations to the merchandise; and (2) for merchandise assembled abroad be applied to the full value of such merchandise, less the cost or value of U.S. products. Allows the Secretary, for articles returned to the United States after having been exported or for articles of fabricated components assembled abroad, to collect the fee charged on the processing of the merchandise on the basis of aggregate data derived from financial and manufacturing reports used by the importer in the normal course of business. Revises the dates of applicability and amounts of duty applicable to the processing of merchandise that is formally entered or withdrawn from warehouse for consumption in the United States. Requires that customs services, when requested, be adequately provided for: (1) the clearance of any commercial vessel, vehicle, or aircraft arriving, departing, or transiting the United States; (2) the preclearance at any customs facility outside the United States of any commercial vessel, vehicle or aircraft; and (3) the inspection or release of commercial cargo being entered into, or withdrawn from, the customs territory of the United States. Requires that customs services be treated as adequately provided if the services needed to meet the needs of parties subject to customs inspection are provided in a timely manner, taking into account: (1) weather, mechanical, and other delays; (2) prompt and efficient passenger and baggage clearance; (3) the perishability of cargo; (4) late night and early morning arrivals; (5) the availability of customs personnel; and (6) the need for specific enforcement checks. Prohibits the collection of customs fees in addition to those statutorily prescribed for: (1) any preclearance or other customs activity, expense, or service performed outside the United States in connection with the departure of a vessel, vehicle, or aircraft for the United States; or (2) the activation or operation of any foreign trade zone or the designation or operation of any bonded warehouse. Makes fees used for the direct reimbursement of specified appropriations an exception to the requirement that fees collected under the schedule of fees be deposited in the Customs User Fee Account in the general fund of the Treasury. Requires that all funds in the Customs User Fee Account be available to pay the U.S. Customs Service's costs in conducting commercial operations. Prohibits the Secretary from reducing personnel staffing levels for providing commercial clearance and preclearance services if there is a surplus of funds in the Customs User Fee Account. Requires the Secretary to directly reimburse, from fees collected for customs services, each appropriation for amounts paid for the costs incurred by the Secretary in providing inspectional overtime services and all preclearance services, beginning with each fiscal year occurring after September 30, 1987. Requires the Secretary to prescribe regulations governing the work shifts of customs personnel at airports and providing that: (1) the work shifts will be adjusted to meet cyclical and seasonal demands and to minimize the use of overtime; (2) the work shifts will not be arbitrarily reduced or compressed; and (3) consultation with a specified advisory committee will be carried out before making adjustments in work shifts. Amends the Tax Reform Act of 1986 to extend the date for claiming certain refunds for fees for customs services until 90 days after the date of enactment of the Omnibus Budget Reconciliation Act of 1987 (currently, 90 days after the date of enactment of the Tax Reform Act of 1986). Requires the Comptroller General to conduct a comprehensive analysis of the centralized cargo examination station (CES) concept and to submit such analysis to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate not later than March 30, 1988. Directs the Customs Service to: (1) not establish any new CES at any ocean port, airport, or land border location, without providing advance notice of not less than 90 days to such committees; and (2) suspend, on the date of enactment of this Act, operations at each CES station until 90 days after a date on which the comprehensive analysis of the CES program by the Comptroller General is submitted to the committees and on which the Customs Service provides to the committees written notice of its intentions to resume operations at that station. Requires the Secretary, during the period of suspension of operations at any CES station, to maintain customs operations and staffing at a level not less than that which was in effect immediately before the suspension took effect. Amends the Tariff Act of 1930 to authorize appropriations for the International Trade Commission for FY 1988 and 1989. Amends the Customs Procedural Reform and Simplification Act of 1978 to authorize appropriations for the salaries and expenses of the Customs Service for noncommercial operations for FY 1988 and 1989. Authorizes appropriations from the Customs User Fee Account for the salaries and expenses of the Customs Service for commercial operations for FY 1988 and 1989. Authorizes appropriations for the Customs Service's air interdiction program for FY 1988 and 1989. Amends the Trade Act of 1974 to authorize appropriations for the Office of the U.S. Trade Representative for FY 1988 and 1989. Subtitle E: Pension Funding Requirements - Part I: Modifications of Minimum Funding Standard - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to set forth additional funding requirements for plans which are not multiemployer plans. Increases the amount required to be charged to the funding standard account for a plan year by the excess of: (1) the unfunded termination liability contribution over; and (2) certain charges to the funding standard account reduced by certain credits to such account. Makes the unfunded termination liability contribution equal to the greatest of: (1) the unfunded amortization charge; (2) the anti-insolvency amount; or (3) the anti-deterioration amount. Sets forth a special rule for steel company employee plans. Reduces the period during which employer contributions may be made to plans after the close of the year. Requires employers to make installment payments of the estimated required contribution to a plan. Imposes an excise tax on underpayments of such required installments. Imposes liability for the excise tax on failure to meet minimum funding standards on members of the employer's controlled group, in addition to the employer. Revises the rules governing the availability of minimum funding waivers. Requires applications for such waivers to be submitted two and one-half months after the close of the year. Allows such waivers only for substantial temporary business hardship and requires that such hardship also exist at the controlled group level. Reduces from five to three the number of annual waivers that may be granted with respect to any plan within a 15-year period. Shortens the amortization period for any waived funding deficiencies in the case of certain underfunded plans. Reduces the period for amortizing experience gains and losses from 15 years to three years. Requires that all costs, liabilities, rates of interest, and other factors under the plan be determined on the basis of actuarial assumptions and methods each of which is reasonable. (This is in addition to the present requirement that such assumptions and methods in combination offer the actuary's best estimate of anticipated experience under the plan.) Sets a special limitation on the interest rate used for funding purposes. Revises provisions for qualified defined benefit pension plans to provide that the amortization base in determining and employer's maximum deduction for past service liability equals the unfunded costs attributable to such liability. Provides that the maximum deduction limit for contributions to certain pension plans for a plan year is not to be less than the unfunded termination liability of the plan. Applies such provision to defined benefit plans which are subject to ERISA plan termination insurance provisions and which have 100 or more participants during the plan year. Part 2: Employer Access to Plan Assets - Requires additional contributions to the minimum funding standard account of a plan where the employer receives a reversion. Applies a special funding rule to certain other underfunded defined benefit pension plans maintained by the employer during the year in which the employer reversion occurs and the following three years, if an employer receives an employer reversion with respect to certain defined benefit pension plans. Sets forth a special funding rule where such other plans with unfunded termination liability are terminated. Increases the tax on reversion of qualified plan assets to an employer. Part 3: Treatment Of Plan Terminations - Provides that standard termination procedures shall be available only when plan assets are sufficient to meet termination liability. Provides that bankruptcy reorganization proceedings are not a separate basis for distress terminations. Provides that distress terminations are not available where the plan sponsor or a controlled group member is a contributing sponsor to an overfunded single-employer defined benefit pension plan. Increases the employer's and controlled group's liability, following a distress termination, for plan benefits to participants to the full amount of the plan's unfunded termination liability to the extent not guaranteed by the PBGC. Increases the amount of such liability to the PBGC. Prohibits the establishment or increase of retirement benefits where all liabilities to the PBGC are not satisfied following a distress termination. Sets forth the PBGC's right to certain amounts held by the section 4049 trust. Entitles the PBGC to recover the full amount of unfunded guaranteed benefits before any benefits in excess of guaranteed benefits are paid by the trust. Authorizes the PBGC to require security where the fair market value of pension plan assets does not exceed 70 percent of termination liability under the plan, and to impose a lien where there is failure to provide such requested security. Authorizes the PBGC to require security for certain pension plan funding waivers and extensions. Decreases the amount of accumulated funding deficiencies exempt from waiver limitations. Part 4: Increase in Premium Rates - Increases the flat-rate PBGC premium to $14 per participant. Applies an additional per-participant premium based on the amount of potential liability the plan creates for the PBGC. Sets forth formulas for the determination of such additional premium. Makes the designated payor who is liable for the premium payment the contributing sponsor in the case of a single-employer plan, but the plan administrator in the case of a multiemployer plan. Makes each controlled group member liable for premiums required to be paid by a designated payor of a single-employer plan who is a member of such group. Directs the Secretary of Labor to study foreign pension insurance systems and practices and the relative impact such systems have on job creation and international competitiveness. Requires submission of a report on such study to specified congressional committees by December 31, 1988. Part 5: Miscellaneous Provisions - Requires the plan's annual actuarial report to employees to include a statement of the funded percentage of the plan. Requires notification to current employees of an employer's application for a funding waiver before such waiver may be granted. Provides that, except to the extent specifically provided in the Internal Revenue Code, the Code is to be interpreted as if the provisions of titles I and IV of ERISA had not been enacted. Subtitle F: Debt Management - Repeals a provision of Federal law limiting the face amount of certain interest-bearing bonds that may be issued by the Secretary of the Treasury. Requires the Secretary, within 30 days after the expiration of any debt issuance suspension period, to issue to each Federal fund certain obligations necessary to ensure that the holdings of such fund will replicate to the maximum extent practicable the obligations that would have been held by such fund if: (1) failure to invest amounts in such fund due to revision in the public debt limit by adoption of a concurrent resolution on the budget had not occurred; and (2) issuance of such obligations had occurred immediately on the expiration of such suspension period. Requires the Secretary to credit for: (1) each fund the income and interest not earned due to such failure to invest; and (2) each holder of State and local Government Series obligations the interest lost due to such failure to invest. Requires such credited amounts to be treated as interest on such obligations. Subtitle G: Miscellaneous Provisions - Amends part A (General Provisions) of title XI of the Social Security Act to establish the National Commission on Children. Declares it to be the function of such Commission to serve as a forum on behalf of the children of the nation. Requires the Commission to submit a report to the President and the Congress that sets forth recommendations with respect to: (1) child health; (2) social and support services for children; (3) child education; (4) income security for families with children; (5) tax policy considerations for families with children; (6) the identification of deficiencies in family and children services; and (7) data collection on children and child services. Subtitle H: Vaccine Injury Compensation - Part 1: Manufacturers Excise Tax on Certain Vaccines - Amends the Internal Revenue Code of 1986 (relating to manufacturers excise taxes) to impose a tax on the first sale of any taxable vaccine sold by the manufacturer, producer, or importer of the vaccine. Sets forth a table listing the amount of tax imposed per dose of DPT vaccine (relating to pertussis), DT vaccine (relating to diptheria), MMR vaccine (relating to measles, mumps, and rubella), and polio vaccine. Prohibits imposition of the tax if the Secretary of the Treasury estimates that the amounts collected would exceed the projected Vaccine Injury Compensation Trust Fund liability. Provides for credit or refund of the tax whenever any vaccine on which tax was imposed is destroyed or returned to the person who paid the tax. Establishes in the Treasury the Vaccine Injury Compensation Trust Fund. Appropriates to the Fund amounts equivalent to the net revenues received from the tax imposed. Part 2: Vaccine Compensation Amendments of 1987 - Vaccine Compensation Amendments of 1987 - Amends the Public Health Service Act to provide that payment of compensation for an injury or death from administration of a vaccine before the effective date of this provision shall be made from specified appropriations and that compensation for injury or death from administration on or after the effective date shall be made from the Vaccine Injury Compensation Trust Fund. Removes provisions: (1) placing limitations on the amount of unreimbursable expenses which may be recovered; (2) requiring payments for projected expenses to be paid on a periodic basis; and (3) allowing payments for pain and suffering, emotional distress, and incurred expenses to be paid in a lump sum. Requires compensation for injury or death from administration of a vaccine on or after the effective date to be paid in a lump sum and payment for injury or death from administration before the effective date to be made in four annual installments. Repeals provisions relating to administration by the National Vaccine Injury Compensation Program of awards and relating to revision of awards. Repeals a provision relating to annual inflation increases for certain compensation and for civil penalties. Revises provisions relating to compensation for injury or death from administration of a vaccine before the effective date to change the categories for which compensation is prohibited and allowed and to limit specified types of compensation under certain categories to a stated amount. Directs the Secretary of Health and Human Services to review the number of awards in specified periods and, if the Secretary determines that the number exceeds the number of awards listed in a specified table, to notify the Congress of the determination. Prohibits, in such case, the filing of a petition after a stated period. Makes specified provisions relating to the filing of petitions and relating to additional remedies inapplicable to civil actions for damages for a vaccine-related injury or death for which a petition may not be filed because of such prohibition. Revises provisions relating to petitions for compensation. Allows withdrawal of a petition on which a court has failed to enter a judgment within a specified time. Allows, after withdrawal, maintenance of a civil action for damages. Authorizes the awarding of costs of litigation to any plaintiff in certain circumstances to a citizen action against the Secretary for failure to perform under the National Vaccine Program subtitle. (Current law authorizes awarding of costs to any party when appropriate.) Makes general rules relating to petitions for compensation apply to those who administer as well as those who manufacture a vaccine. Title X: Committee on Ways and Means: Revenue Provisions - Revenue Act of 1987 - Subtitle A: Revenue Increases - Part I: Provisions Primarily Affecting Individuals - Subpart A: Income Tax Provisions - Amends the Internal Revenue Code (IRC) to exclude expenses of overnight camps from calculations of the dependent care income tax credit. Revises the definition of "qualified residence interest" for purposes of the income tax deduction for personal interest to distinguish between acquisition indebtedness and home equity indebtedness. Limits to $1,000,000 and $100,000 respectively the amount of indebtedness on which interest is deductible. Provides that for purposes of this deduction a boat or a mobile home used on a transient basis shall not be treated as a qualified second residence of the taxpayer. Subpart B: Employee Benefit Provisions - Limits to $500 the aggregate amount of the tax exclusion for amounts elected under cafeteria plans. Requires an employer to file an information return with the Internal Revenue Service (IRS) reporting the total amount of taxable benefits available to an employee under a cafeteria plan. Provides that Federal judges be treated as: (1) active participants for purposes of the limitation on the deduction of contributions to individual retirement plans; and (2) employees for purposes of the IRC generally. Subpart C: Limitation on Nonrecognition for Like-Kind Exchanges of Real Property - Amends the IRC to limit to $100,000 the aggregate amount of gain not recognized with respect to exchanges of like-kind real property to be held for productive use or investment. Subpart D: Estate and Gift Taxes - Extends permanently the 1987 estate and gift tax rates, the highest of which is 55 percent (applied to transfers over $3,000,000). Phases out the benefits of graduated rates and the unified credit with respect to transfers of between $5,000,000 and $16,040,000. Repeals the credit for payments of State death taxes. Allows the deduction of such amounts when determining the amount of the taxable estate. Establishes special valuation rules to apply to estate, gift, and generation-skipping taxes. Limits minority discounts by providing that the value of any stock in a corporation shall be deemed to be equal to its pro rata share of the fair market value of all the stock of the same class in the corporation unless a different value is established by clear and convincing evidence. Limits, with an exception for certain nonfamily transfers, valuation freezes by providing that if a person holding ten percent or more of the interest in an enterprise transfers a disproporionate share of the potential appreciation in the enterprise, the transferred property shall be included in the transferor's gross estate. Subpart E: Estate Tax Provisions Relating to Employee Stock Ownership Plans - Amends the IRC to revise provisions relating to the estate tax deduction for proceeds received from a sale of employer securities to an employee stock ownership plan (ESOP) or worker-owned cooperative. Makes such a deduction available only if: (1) the decedent directly owned the securities immediately before death; and (2) after the sale, the securities are either allocated to participants or held for future allocation in connection with certain exempt loans or transfers of assets. Prohibits, except in a bona fide business transaction, the treatment of employer securities as allocated or held for future allocation insofar as they are so categorized in substitution of other employer securities so designated. Applies the deduction to any sales of qualified employer securities (current law applies only to sales made by the executor of the estate). Prohibits the amount of the deduction from exceeding: (1) the amount that would lead to a reduction in estate tax liability (before credits) equal of $750,000; or (2) 50 percent of the taxable estate. Disallows proceeds from being taken into account when: (1) they exceed the net sale amount of dispositions of employer securities by the plan during the year preceding the sale in question; (2) they are attributable to transferred assets (except for assets held by the ESOP on February 26, 1987); (3) the sale takes place after the estate tax return filing deadline; or (4) the decedent received the securities under certain specified conditions. Applies the deduction to employer securities that are: (1) issued by a domestic corporation having no stock outstanding that is readily tradable on an established securities market; (2) includable in the gross estate of the decedent; and (3) would have been includable if the decedent had died within a specified time period. Revises the requirements governing the contents of the written statement to be submitted by the executor of the decedent's estate in order to qualify for the deduction. Imposes an excise tax on ESOP dispositions of employer securities for which an estate tax deduction was allowed. Sets forth the amount of tax applicable to relevant taxable events as follows: (1) 30 percent of the amount realized from any disposition of employer securities by an ESOP or eligible worker-owned cooperative within three years of the group's acquisition of qualified employer securities; (2) 30 percent of the amount realized from a disposition (not within three years after acquisition) that occurs before allocation of such securities to participants' accounts in cases when the proceeds are not allocated; or (3) 30 percent of the repayment amount in cases of a payment by an ESOP of any part of a loan used to acquire employer securities from transferred assets. Sets out the ordering rules to govern dispositions of employer securities for purposes of this excise tax and another specified excise tax relating to ESOPs. Makes the excise tax inapplicable to: (1) dispositions to employees, in certain cases; (2) exchanges associated with the liquidation of a corporation into a cooperative or with other reorganizational purposes; and (3) sales effected to meet IRC diversification requirements relating to pension trusts. Places liability for the excise tax on the employer maintaining the ESOP or the eligible worker-owned cooperative. Part II: Business Reforms - Subpart A: Accounting Provisions - Amends IRC accounting rules applicable to long-term contracts to require that taxable income from such contracts be determined under the percentage of completion method. Disallows a deduction for interest allocable to tax-exempt installment obligations acquired after 1987. Creates a de minimis rule with respect to tax-exempt obligations held by taxpayers other than financial institutions. Repeals special provisions governing the tax treatment of below-market loans to qualified continuing care facilities. Requires, with respect to bonds purchase after October 13, 1987, that the market discount be included in the gross income of the taxpayer for each relevant taxable year. Sets out rules to govern nonrecognition transactions. Revises the definition of "market discount bond" to repeal the exception for tax-exempt obligations. Requires brokers, upon the request of the Secretary of the Treasury, to file information returns regarding market discount on bonds. Permits an exception from required use of the accrual method of accounting for S corporations and for farm corporations having gross receipts of $1,000,000 or less. Establishes special rules for family corporations, requiring them to use the accrual method only when their gross receipts exceed $25,000,000. Denies a depreciation deduction for amounts paid or incurred to acquire customer base, market share, or similar intangible items. Amends accounting provisions of the IRC to repeal the deduction for additions to an employer reserve for accrual of vacation pay. Subpart B: Partnership Provisions - Provides that for purposes of the IRC a publicly traded partnership shall be treated as a corporation. Excepts from such treatment certain partnerships with passive-type income. Amends the IRC to provide for the treatment of publicly traded partnerships with respect to: (1) accounting rules applied to limitations of passive activity losses and credits; and (2) unrelated business taxable income of tax-exempt organizations. Revises criteria under which members of a partnership qualify for an except from treatment as unrelated business income of any income from debt-financed real property. Requires a registered partnership, upon notice and demand of the Secretary, to pay tax underpayments resulting from administrative or judicial determinations. (Under current law, each partner pays independently.) Directs the Secretary to study and report to specified congressional committees by January 1, 1989, on the issue of treating publicly traded limited partnerships and other corporation-like partnerships as corporations for income tax purposes, including the issues of disincorporation and opportunities for avoidance of the corporate tax. Subpart C: Corporate Provisions - Reduces from 80 percent to 75 percent the corporate tax deduction with respect to: (1) dividends received from a domestic corporation; (2) dividends received on certain preferred stock; (3) certain dividends received from foreign sales corporations; (4) the limitation on the aggregate amount of deductions; and (5) dividends received by life insurance companies. Revises provisions relating to the deduction for dividends received to change the applicable percent from 80 percent to 75 percent and to exclude from the calculations dividends on certain stock having nonstock characteristics. Amends IRC provisions relating to the computation and payment of tax by members of an affiliated group filing a consolidated tax return. Sets a fixed 34 percent tax rate with respect to the taxable income of certain personal service corporations. (Such corporations are currently subject to the graduated corporate rates.) Amends IRC provisions relating to limitations on net operating loss carryforwards and certain built-in losses following corporate ownership changes. Adds provisions limiting the use of preacquisition losses to offset built-in gains. Limits to $5,000,000 the tax deduction for any interest paid or incurred in connection with a major stock acquisition (pursuant to a plan to acquire 50 percent or more) during any taxable year, with an exception for stock purchases treated as asset acquisitions. Repeals provisions prescribing nonrecognition of gain or loss for property distributed to a parent corporation (80 percent distributee) in connection with the complete liquidation of a subsidiary. Amends the IRC to provide for similar nonrecognition treatment in such instances, but includes provisions describing cases in which the distributions are to be treated as taxable dividends. Revises provisions relating to the basis of property received in liquidations. Directs the Secretary to prescribe regulations to carry out the purposes of amendments included in this Act and in the Tax Reform Act of 1986 with respect to the recognition of gain and loss on distributions of property in liquidation. Amends IRC provisions relating to the treatment of certain intragroup transactions in connection with the redemption of stock. Provides for the recapture of benefits resulting from the use of th LIFO (last-in, first-out) method of inventory accounting in the case of certain former C corporations electing to be S corporations. Amends the IRC to impose a 50 percent excise tax on gain realized by greenmail recipients. Defines "greenmail" as any amount paid or incurred by a corporation in a direct or indirect redemption of its stock from any shareholder if: (1) the shareholder held such stock for less than two years; and (2) during the two-year period ending on the date of redemption the shareholder, a person acting in concert with the shareholder, or a person related to either, made or threatened to make a public tender offer for stock of the corporation. Imposes the tax regardless of whether gain is actually realized. Disallows an income tax deduction for payment of the tax. Requires that a hostile stock purchase in a corporate takeover attempt be treated as an asset acquisition by the purchasing corporation. Disallows an income tax deduction for any interest on indebtedness incurred or continued by a purchasing shareholder to purchase or carry corporate stock or assets acquired through a hostile purchase. Subpart D: Minimum Tax Provisions - Increases from 50 to 100 percent the excess of book income over other alternative minimum taxable income that is a tax preference for corporate taxpayers. Increases from 75 percent to 100 percent the corresponding percentage with respect to a corporation's adjusted current earnings. Subpart E: Foreign Tax Provisions - Denies the foreign tax credit for taxes paid or accrued to South Africa until the Secretary of State certifies that South Africa meets specified criteria of the Comprehensive Anti-Apartheid Act of 1986. Amends foreign tax provisions of the IRC relating to taxation of income of controlled foreign corporations that is attributable to imported property. Subpart F: Insurance Provisions - Amends IRC provisions relating to: (1) the interest rate used by life insurance companies in computing reserves for purposes of determining income; (2) rules governing the required surplus of foreign corporations carrying on insurance business; (3) the treatment of mutual life insurance company policyholder dividends for purposes of book preference; and (4) the treatment of certain insurance syndicates formed under the laws of the United Kingdom. Subpart G: Treatment of Net Investment Income of Trade Associations - Creates special rules with regard to the unrelated business taxable income of certain tax-exempt business leagues, chambers of commerce, and similar organizations. Subpart H: Full-Funding Limitation for Deductions to Qualified Plans - Amends the IRC and the Employee Retirement Income Security Act of 1974 to revise the definition of "full funding limitation" in connection with an employer's deductible contributions to a qualified defined benefit plan. Part III: Excise Taxes; User Fees - Subpart A: Excise Taxes - Extends through December 31, 1990, the three percent excise tax on telephone service. (The tax is currently due to expire as of 1988.) Repeals excise tax exemptions in connection with: (1) gasoline used by private innercity, local, or school buses; and (2) tires used by these same classes of private vehicles. Amends IRC provisions relating to the collection of the special fuels taxes on diesel fuel, taxable special fuels, and nongasoline aviation fuels. Subpart B: User Fees - Directs the Secretary of the Treasury to establish a program requiring user fee payments in connection with requests to the Internal Revenue Service for ruling letters, opinion letters, determination letters, and for similar requests. Sets forth criteria to govern such fees. Imposes an occupational tax of $1,000 per year on proprietors of: (1) distilled spirits plants; (2) bonded wine cellera; (3) bonded wine warehouses; and (4) taxpaid wine bottling houses. Reduces the rate to $500 per year for certain small proprietors. Increases existing occupational taxes as follows: (1) for brewers, from $110 per year to $1,000 per year for each brewery, with a reduced rate of $500 per year for certain small proprietors; (2) for wholesale dealers in liquors, from $255 per year to $500 year year; (3) for wholesale dealers in beer, from $123 per year to $500 year year; (4) for retail dealers in liquors, from $54 per year to $250 per year; and (5) for retail dealers in beer, from $24 year year to $250 year year. Repeals the occupational tax on limited retail dealers of liquours, wine, or beer. Replaces variable rates used with regard to nonbeverage domestic drawback claimants with a single rate of $500 year year. Denies the validity of a permit for certain tax-free industrial uses of distilled spirits unless the holder pays a special tax of $250 with respect to the relevant site. Imposes an occupational tax of $1,000 per year for each relevant premises on persons engaged in business as manufacturers of tobacco products, cigarette papers, and tubes, and on export warehouse proprietors. Applies a reduced rate of $500 per year for certain small proprietors. Fixes criminal penalties for willful failure to pay the tax. Increases the occupational tax on importers and manufacturers of firearms from $500 per year to $1,000 per year and on dealers from $250 per year to $500 per year. Applies a reduced rate for small importers and manufacturers. Part IV: Other Revenue Provisions - Subpart A: Targeted Jobs Credit - Amends the IRC to revise the definition of "wages" for purposes of determining the amount of the targeted jobs credit against income tax. Excludes from the wages applicable to such credit any amount paid by an employer to an employee for services that are the same as, or substantially similar to, those performed by employees participation in or affected by a strike or lockout during the period of the strike or lockout when such employee's principal place of employment is the affected plant or facility. Subpart B: Treatment of Certain Illegal Irrigation Subsidies - Requires illegal Federal irrigation subsidies to be included in a taxpayer's gross income. Subpart C: Compliance - Provides that State escheat laws shall not apply to refunds of Federal tax. Expresses the sense of the Congress that: (1) the Congress should increase outlays to the IRS by specified amounts in fiscal years 1989 and 1990 in the areas of taxpayer assistance and enforcement; (2) the IRS should offer improved taxpayer assistance and enforcement efforts by using these outlays in ways recommended in the Dorgan Task Force Report; (3) the Congress should undertake an experimental multiyear authorization and two-year appropriation for the IRS consistent with specified public law; and (4) increased funding should be provided for both research and the compilation and analysis of income. Requires the IRS: (1) to issue a report by April 15, 1989, on the extent of the tax gap and possible measures to decrease it; and (2) to report annually on the improvements being made in the audit rate, taxpayer assistance, and enforcement efforts. Subpart D: Estimated Tax provisions - Delays for one year, from 1987 until 1988, implementation of the increase from 80 percent to 90 percent in the current year liability test for estimated tax payments by individuals. Prohibits an addition to any tax imposed on underpayments of estimated tax installments by corporations due on or before June 15, 1987, under certain circumstances (thus permitting corporations to use their 1986 tax in determining certain estimated tax installment amounts). Amends the IRC to allow employers to elect to have revised withholding certificates put into effect more promptly than is required under current law. Amends IRC provisions dealing with estimated income tax payments by corporations. Establishes the amount of the penalty for underpayment of estimated tax at the amount of the underpayment for the period of underpayment, plus interest on such amount. Revises the schedule for the payment of estimated tax installments. Specifies that the amount of the required annual estimated tax payment shall be the lesser of: (1) 90 percent of the current tax shown on the taxpayer's return (corporations having a taxable income of at least $1,000,000 for any taxable year during a specified period must use this option); or (2) 100 percent of the preceding year's tax liability. Permits lower estimated tax payments if the taxpayer can show that the installment payments or adjusted seasonal installments made over the year were adequate for each quarter based on annualized income and adjusted seasonal installment concepts described in this bill. Exempts from an estimated tax penalty any taxpayer whose tax liability is less than $500. Requires an addition to income tax when an adjustment of overpayment of estimated income tax by a corporation, made before the 15th day of the third month following the close of the taxable year, is found to be excessive. Repeals provisions of the IRC dealing with installment payments of estimated income tax by corporations. Subpart E: Tax-Exempt Bond Provisions - Amends IRC provisions relating to taxable private activity bonds to include any bond issued as part of an issue if the amount of the proceeds to be used either directly or indirectly for the acquisition of nongovernmental output property exceeds the lesser of five percent or $5,000,000. Revises provisions governing tax-exempt bonds issued by Indian tribal governments to deny the tax exclusion of interest on such bonds whose proceeds are used in the exercise of functions that are not customarily performed by State and local governments. Subtitle B: Technical Corrections - Technical Corrections Act of 1987 - Part I: Technical Corrections to Tax Reform Act of 1986 - Amends the IRC to make a technical adjustment to an assessment rule applicable when the owner of a large amount of cash is not identified. Revises the rate of the accumulated earnings tax on corporations from a variable rate based on income below and in excess of $100,000 to a flat 28 percent of accumulated taxable income. Makes a technical amendment relating to the exemption of certain individuals from the requirement to file an income tax return. Amends IRC and Social Security Act provisions relating to nonresident aliens temporarily in the United States for the purpose of studying at vocational or other recognized nonacademic institutions. Amends the IRC to delete provisions describing the treatment of Social Security benefits for purposes of defining earned income. Amends IRC provisions relating to the two percent floor on miscellaneous itemized deductions to: (1) add provisions concerning the coordination of such limitation with the limitation on the tax deduction for trade and business expenses; and (2) revise the determination of adjusted gross income of estates and trusts with respect to such limitation. Limits the tax deduction of expenses in connection with portions of dwelling units allocated to business uses. Amends provisions governing the computation of the earnings and profits of certain foreign corporations for purposes of determining the effect of depreciation on such earnings and profits. Amends the IRC with regard to the application of the accelerated cost recovery system (ACRS) in cases of: (1) certain property placed in service in churning transactions; (2) certain transfers; and (3) certain property subject to U.S. tax and used by a foreign person or entity. Permits greater taxpayer discretion in using the 150 percent declining balance method of depreciation for ACRS purposes and specifies the applicable recovery period to be used in such cases. Terminates special rules for the tax treatment of sound recordings for property placed in service after 1985. Makes other technical amendments and corrections relating to provisions: (1) modifying the ACRS; and (2) limiting expensing of depreciable assets. Revises Tax Reform Act (TRA) provisions specifying the effective dates of various provisions of new law. Makes technical amendments and corrections to a number of transitional rules provided in the TRA with respect to urban renovation projects. Makes technical amendments and corrections to the Tax Reform Acts of both 1986 and 1984 concerning property treated under prior tax acts. Adds a number of projects to those covered under special transitional rules. Amends the TRA concerning the applicability of modifications of the ACRS to a number of specific properties. Makes technical amendments and corrections to IRC and TRA provisions relating to transition property with respect to the former regular investment tax credit. Adds: (1) an exception to the application of certain adjustment rules relating to such credit; and (2) a number of properties to be considered as transition property. Revises ordering rules governing determinations as to whether certain business related credits are used in a taxable year or as a carryback or carryforward. Makes technical amendments to TRA provisions relating to the effective 15-year carryback of existing carryforwards of steel companies. Establishes rule criteria to apply to overpayments under this section. Amends the IRC special rule governing a pass-through of the income tax research credit. Amends the IRC to disallow use of any depreciation deduction with respect to: (1) any trademark or trade name expenditure; or (2) any railroad grading or tunnel bore. Makes technical amendments and corrections to TRA provisions relating to the modification of the investment tax credit for certain rehabilitation expenditures. Makes technical amendments to the IRC with respect to the low-income housing credit, including: (1) amendments of special rules for nontaxable transfers; (2) the addition of an exception to rules governing basis reduction for certain residential rental units; (3) the exclusion from the eligible basis of a building of amounts deducted for depreciation; (4) the addition of provisions applicable to rent-restricted units in cases when Federal rental assistance is reduced as a tenant's income increases; (5) provisions relating to limitations on the aggregate credit allowable with respect to projects located in a State; and (6) a prohibition of any carryback of the low-income housing credit before 1987. Corrects a reference in the Merchant Marine Act, 1936. Makes technical amendments and corrections to IRC and TRA provisions relating to capital gains. Revises: (1) the description of taxable income from foreign sources for capital gains purposes; (2) the definition of a "capital gains rate differential" and its applicability to the calculation of the bad debt reserves of certain financial institutions; and (3) provisions dealing with incentive stock options. Makes technical amendments to the TRA and the IRC to: (1) revise and limit the tax exclusion for the discharge of qualified farm indebtedness; and (2) provide for its coordination with other tax exclusions. Amends provisions relating to gain from the disposition of interests in oil, gas, geothermal, and other mineral properties. Makes technical amendments and corrections to the IRC and the TRA with respect to tax shelter and interest limitations, including provisions relating to: (1) interests in passive activities; (2) methods of accounting; (3) the definition of a "qualified investor" for purposes of the transitional rule for interests in low-income housing projects; (4) the phase-in of the limitation on investment interest; and (5) determinations of indebtedness for purposes of the personal interest disallowance, including provisions related to qualified residence interest. Makes technical amendments and corrections to TRA and IRC corporate tax provisions. Revises the percentage to be used in computing the deduction for dividends received from certain foreign sales corporations. Includes amendments relating to: (1) the reduction of corporate shareholders' basis in stock by the nontaxed portion of extraordinary dividends; (2) the limitation on net operating loss carryforwards and certain built-in losses following a change in corporate ownership, including provisions relating to built-in gains and gains attributable to stock acquisitions (section 338 gains) rules relating to constructive stock ownership, and treatment of foreign corporations; and (3) recognition of gain and loss on distributions of property in corporate liquidations. Restructures IRC provisions dealing with transfers of partnership and trust interests by corporations. Makes technical amendments relating to: (1) transfers of property from the United States to foreign corporations; (2) sales or exchanges of stock in certain foreign corporations; and (3) the treatment of C corporations that elect subchapter S status. Adds to the IRC provisions dealing with special allocation rules for certain partnership transactions. Makes technical amendments and corrections concerning: (1) the definition of "related persons" with respect to the installment method of accounting; (2) the treatment of amortizable bond premium as interest; (3) certain entities not to be treated as corporations, including a special rule for persons holding income interests; (4) the excise tax on undistributed income of regulated investment companies, including qualification rules and the addition of provisions requiring the reduction of capital gain net income by the amount of a company's net ordinary loss for a given calendar year; (5) the treatment of business development companies; and (6) the treatment of shield funds as separate corporations, including a special rule for abnormal redemptions. Makes technical amendments to TRA and IRC provisions with respect to real estate investment trusts, including: (1) provisions specifying asset and income requirements; (2) certain definitions; (3) distribution requirements; and (4) the excise tax on undistributed income of such trusts. Makes technical amendments to IRC provisions dealing with the taxation of real estate mortgage investment conduits (REMICs). Amends the IRC to impose a 34 percent tax on the net income from foreclosure property. Reduces the amount of taxable income of a REMIC by the amount of such tax. Imposes a tax on contributions to a REMIC after the startup day in an amount equal to the amount of the contribution. Lists exceptions. Makes corrections to TRA and IRC rules for accruing the original discount on regular interests and similar debt instruments. Amends the TRA to direct the Secretary to: (1) study the operation of REMIC amendments and their competitive impact on savings and loan and similar institutions; and (2) report the results to specified congressional committees by January 1, 1990. Makes technical amendments and corrections to IRC provisions with respect to the alternative minimum tax, including provisions relating to: (1) the treatment of taxes on dividends from Puerto Rico and U.S. possession corporations; (2) adjustments applicable to individuals and to corporations; (3) tax preference items; and (4) the denial of certain losses and the determination of the amount of such losses. Disallows the deduction for personal exemptions in calculations to determine the taxable income of a noncorporate taxpayer for minimum tax purposes. Adds to the TRA provisions to reduce the amount of minimum taxable income for qualified taxpayers by the amount of the agreement vessel depreciation adjustment. Amends accounting provisions of the TRA and the IRC. Directs the Secretary to prescribe regulations as necessary to prevent the use of related parties, pass-through entities, or intermediaries to evade certain limitations on the use of the cash method of accounting. Includes technical amendments of provisions relating to: (1) the special rule for the spudding of oil or gas wells; (2) capitalization and inclusion in inventory costs of certain expenses; (3) accounting method modifications for long-term contracts, including the addition of provisions permitting the Secretary to prescribe a simplified procedure for allocation of costs in certain cases; (4) the taxable years of certain entities, such as partnerships and common trust funds; (5) allocation of installment indebtedness, including provisions dealing with dispositions of personal property under revolving credit plans and installment obligations arising out of certain stock or securities sales; (6) disallowance of the use of the installment method of accounting for certain obligations; and (7) income attributable to utility services. Makes technical amendments and corrections to TRA and IRC provisions concerning financial institutions. Includes amendments with respect to: (1) the credit for investment in certain depreciable property in cases when the mutual savings bank or other financial institution a lessee; (2) interest incurred to carry tax-exempt bonds, including the addition of properties subject to transitional rules and of provisions relating to small issuers, refunding obligations, and composite issues; and (3) the treatment of losses on deposits or accounts in insolvent financial institutions, including provisions allowing an institution whose deposits are not insured under Federal law to elect to treat losses on account of its bankruptcy or insolvency as ordinary losses. Makes technical amendments to the TRA and IRC with respect to insurance products and companies. Includes amendments relating to: (1) phase-in provisions for insurance companies whose income is now taxable but was not previously subject to taxation; (2) the treatment of certain dividends and tax-exempt interest; (3) the discounting of unpaid losses and certain unpaid expenses; and (4) the alternative tax for certain small companies. Amends provisions of the Tax Reform Act of 1984 that permit a mutual life insurance company to elect to treat individual noncancellable accident and health policies as cancellable. Delays the effective date for diversification requirements with respect to accounts for certain variable contracts that provide for the payment of an immediate annuity. Makes a technical amendment in the Social Security Act concerning simplified employment pensions (SEPs). Amends IRC and TRA provisions dealing with limitation and nondiscrimination requirements applicable to pensions and deferred compensation plans. Includes amendments relating to: (1) the treatment of married individuals filing separate returns and living apart for purposes of the limitation on the deduction for qualified retirement contributions; (2) nondeductible contributions to individual retirement plans, including the institution of a $50 penalty for failure to report designated nondeductible contributions; (3) distributions on deferrals in excess of the $7,000 limitation on the exclusion from gross income; (4) adjustments to limitations on contributions and benefits under qualified plans; (5) modifications of provisions governing tax-deferred compensation plans of State and local government and of tax-exempt organizations, including a new criterion for plan eligibility; (6) special rules for SEPs including a technical amendment to the Social Security Act and a new provision prohibiting employee election of a salary reduction arrangement in cases when the SEP does not meet the requirements necessary to ensure the distribution of excess contributions; (7) the application of nondiscrimination rules to integrated plans; (8) minimum employee coverage requirements for qualified plans, including new provisions to address employers having only highly compensated employees; (9) minimum vesting requirements, including technical amendments of the Employee Retirement Income Security Act of 1974; (10) certain definitions; (11) cash or deferred arrangements, including new provisions to govern distributions upon the termination of a plan or the disposition of either a corporation's assets or its interest in a subsidiary; and (12) nondiscrimination requirements for employer matching contributions, employee contributions, and tax-sheltered annuities. Amends TRA and IRC provisions dealing with the treatment of distributions and various other aspects of pensions and deferred compensation plans. Includes technical amendments and corrections with respect to: (1) the taxation of distributions; (2) the uniform additional tax on early distributions from qualified retirement plans, including the repeal of provisions triggering additional tax when an employee receives certain distributions before reaching age 59 1/2; (3) revision of the class of taxpayers permitted to elect to treat certain lump-sum distributions received in 1987 as if they were received in 1986; (4) the tax on nondeductible contributions to qualified employer plans; (5) the excise tax on the reversion of qualified plan assets to an employer; (6) the excise tax on excess distributions from qualified retirement plans, including an addition to the rules for computing excess retirement accumulation; and (7) the tax treatment of the Federal Thrift Savings Fund. Makes technical amendments to the Retirement Equity Act of 1984 and to the Employee Retirement Income Security Act of 1974. Makes technical amendments and corrections to TRA and IRC provisions relating to employee benefits and employee stock ownership plans (ESOPs). Includes amendments with respect to: (1) the loss of the tax-exempt status of any organization that is part of a plan failing to meet certain requirements; (2) cafeteria plans; (3) technical amendments of the Social Security Act; (4) the definition of the terms "wages" and "compensation" for certain purposes; (5) the imposition of an excise tax on funded welfare benefits funds that include discriminatory employee benefit plans; (6) the deductibility of the health insurance costs of self-employed individuals; (7) the estate tax deduction for proceeds from sales of employer securities; (8) loans used to acquire employer securities, including provisions relating to the period of applicability of the exclusion of interest on such securities acquisitions loans; and (9) qualification requirements for ESOPs. Makes technical amendments and corrections to foreign tax provisions of the TRA and the IRC. Includes amendments relating to: (1) limitations on the foreign tax credit, including a definition of "financial services income" for purposes of such limitations; (2) source rules for personal property sales, including the addition of a special rule for certain stock sales by residents of Puerto Rico; (3) the treatment of gain from the sale of stock of a foreign corporation when the gain would ordinarily be sourced in the United States but, pursuant to a treaty obligation of the United States, the taxpayer chooses to treat the gain as foreign source income; (4) rules for allocating interest, and so forth to foreign source income, including revisions to phase-in rules; (5) the taxation of income earned through foreign corporations, including special rules for certain captive insurance companies and for determining the earnings and profits of a controlled foreign corporation for purposes of computing amounts to be included in the gross income of U.S. shareholders; (6) deductions for dividends received from certain foreign corporations; (7) transitional rules with regard source income; (8) the disposition of investment in U.S. real property; (9) certain passive foreign investment companies, including the interest charge on tax deferrals, the treatment of qualified electing funds, and a special rule for the treatment of certain foreign corporations owning at least 25 percent stock in a domestic corporation; (10) the branch profits tax on foreign corporations; (11) the treatment of deferred payments and appreciation arising out of business conducted by foreign corporations or by nonresident aliens within the United States; (12) withholding tax on amounts paid by partnerships to foreign partners; (13) income of foreign governments, including the addition of limitations on the exclusion from gross income of such income; (14) the treatment of losses of separate business units of dual residence corporations; (15) foreign currency transactions, including provisions for determining foreign taxes and the earnings and profits of foreign corporations; (16) tax treatment of the Virgin Islands (V.I.), including provisions for the coordination of U.S. and V.I. income taxes; (17) the addition of provisions relating to the coordination of U.S. treaty obligations, amendments made by the TRA, and technical corrections effected by this Act; (18) taxation of domestic international sales corporation (DISC) income to tax-exempt shareholder; and (19) treatment of shared foreign sales corporations. Makes technical amendments and corrections to TRA and IRC provisions with respect to tax-exempt bonds. Includes amendments relating to: (1) various types of State and local bonds, including qualified small issue bonds, qualified student loan bonds, qualified mortgage bonds, and qualified 501(c)(3) bonds; (2) requirements applicable to certain private bonds, such as issues of scholarship funding bonds and volunteer fire department bonds; (3) arbitrage bonds, including refunding bond provisions dealing with governmental unit issuing $5,000,000 or less of bonds; (4) transitional rules relating to refundings and to the volume cap; (5) termination of the mortgage bond policy statement requirement; (6) provisions relating to certain established State programs, including a technical amendment of the Mortgage Subsidy Bond Tax Act of 1980; and (7) transitional rules for specific facilities. Makes technical amendments and corrections to IRC and TRA provisions dealing with the income taxation of trusts and estates, including provisions relating to: (1) reversionary interests; (2) the taxable year of trusts; and (3) exceptions for charitable trusts, private foundations and certain trusts and estates from the penalty tax for failure to pay estimated income tax. Makes technical amendments and corrections of the IRC and TRA relating to the unearned income of minor children, including new provisions addressing the alternative minimum tax. Makes technical amendments and corrections to IRC and TRA provisions with respect to the generation-skipping transfer tax, including provisions concerning: (1) a deduction from such tax for certain transfers for public, charitable, and religious uses; (2) special rules for determining the inclusion ratio for certain inter vivos transfers; (3) disregard of certain support obligations arising under State law when determining a person's interest in a trust; (4) the treatment of certain partial terminations of trusts and of nonreportable gifts to trusts; and (5) special rules governing certain transfers to grandchildren. Makes technical amendments and corrections to compliance and tax administration sections of the TRA and the IRC, including amendments relating to: (1) the penalty for tax underpayment due to negligence and fraud; and (2) reporting requirements applicable to real estate transactions, including provisions excluding certain farm managers from the definition of "broker" and prohibiting a real estate reporting person from separately charging a customer for making certain required filings. Creates an exception from information reporting requirements for certain classified and confidential contracts between a Federal executive agency and another person. Makes technical amendments with respect to certain tax-exempt organizations subject to corporate estimated tax rules. Declares that certain salary recommendations submitted by the President for special trial judges shall not be effective to the extent such salaries are not equal to 90 percent of the rate for Tax Court judges and are not paid in the same installments as Tax Court judges' salaries. Makes technical amendments and corrections to TRA and IRC provisions with respect to retirement pay for U.S. Tax Court judges. Amends the IRC to include the refundable earned income credit in deficiency assessments. Makes technical amendments and corrections to TRA and IRC provisions with respect to the tax-exempt status of certain title holding corporations or trusts (an exception initiated by the TRA). Makes other technical amendments and corrections to TRA and IRC provisions, such as amendments relating to the excise tax on gasoline and its companion floor stocks tax. Makes technical amendments and corrections to the IRC and to the Tax Reform Acts of both 1984 and 1986 relating to: (1) tax-exempt entity leasing provisions as applicable to tax-exempt controlled entities; (2) the nonrecognition of gain or loss with respect to certain transfers in connection with corporate reorganizations and the treatment of distributions in such cases; (3) the deductibility of excess golden parachute payments; (4) accounting changes with respect to designated settlement funds; (5) the exclusion from gross investment income of dividends from certain subsidiaries of life insurance companies; and (6) special rules for stripped bonds of tax-exempt organizations. Repeals provisions added to the Tariff Act of 1930 by the Tax Reform Act of 1986 with respect to compensation of ocean freight forwarders. Makes technical amendments related to the Medicare program and to pension plans, including technical amendments to the Employee Retirement Income Security Act of 1974 and the Public Health Service Act. Adds to the IRC new provisions concerning elections under qualified pension arrangements with respect to spousal benefits. Part II: Amendments Related to Tax Provisions in Other Legislation - Makes technical amendments and corrections to IRC provisions relating to: (1) directions to the Secretary to provide regulatory guidance to govern circumstances when a refund of the excise tax on certain chemicals shall be made directly to an exporter; (2) substances subject to the excise tax on imported chemicals; (3) the addition of an exemption of regulated investment companies and real estate investment trusts from the environmental tax; (4) the tax on certain fuels to fund the Leaking Underground Storage Tank Trust Fund; (5) taxation of qualified methanol and ethanol fuel; (6) the Leaking Underground Storage Tank Trust Fund tax as applied to gasoline used in aviation and in trains; (7) the floor stocks tax on gasoline; (8) the ordering of amendments made by the Superfund Revenue Act of 1986 and by the Harbor Maintenance Revenue Act of 1986 of provisions related to the excise tax on fuel used in commercial transportation on inland waterways; and (9) exemption from the port use excise tax for cargo transported between Alaska, Hawaii, and any U.S. possession for ultimate use or consumption at the relevant destination. Amends the Harbor Maintenance Revenue Act of 1986 to delay from November 17, 1987, to July 1, 1988, the due date for the Secretary's study of cargo diversion. Makes technical amendments related to the Omnibus Budget Reconciliation Act of 1986 with respect to tax-exempt mutual or cooperative telephone or electric companies, as well as pension plans under the IRC and the Employee Retirement Income Security Act of 1974. Subtitle C: Miscellaneous Provisions - Part I: Provisions of General Application - Subpart A: Provisions Primarily Affecting Individuals - Amends the IRC to exclude certain means-based governmental assistance from calculations determining the applicability of various income tax deductions, credits, and other features. Amends IRC provisions relating to the application of: (1) the scholarship exclusion to graduate students; and (2) the 14 percent withholding rate on nonresident alien lecturers at U.S. educational organizations. Amends the IRC to provide that the prohibition against indirect income tax deductions through pass-through entities shall not apply to any regulated investment company whose shares are: (1) continuously offered pursuant to a public offering; (2) regularly traded on an established securities market; or (3) held by or for at least 500 persons at all times during the taxable year. Increases the amount permissible as a tax deduction for entertainment tickets to include up to $5.00 of service charges. Provides that, for taxable years beginning after 1986, rural mail carriers will be permitted to compute the amount of the income tax deduction for use of their automobiles in performance of mail services: (1) by using a standard mileage rate for all miles of such use equal to 150 percent of the basic standard rate; or (2) without applying the limitation on deductions generally applicable in cases when the business use of the automobile accounts for 50 percent, or less, of its use. Prohibits the use of 150 percent of the basic standard mileage rate in determining the allowable deduction if the taxpayer claims an investment tax credit or depreciation deduction for such automobile. Amends IRC provisions relating to the nonrecognition of gain on the sale of a principal residence in cases when: (1) a spouse dies before occupying the new residence; (2) the taxpayer is an ambassador or foreign service officer; and (3) the taxpayer is a member of the armed forces required to live on base. Permits a 100 percent tax deduction (currently 80 percent) of expenses for food or beverages: (1) required by Federal law to be provided to crew members of a vessel at sea; or (2) provided on an oil or gas platform or drilling rig located offshore or in Alaska. Subpart B: Depreciation and Low-Income Housing Credit - Amends IRC provisions relating to the depreciation deduction with respect to certain agricultural or horticultural structures, citrus trees, and certain other property used in a farming business. Amends the Tax Reform Act of 1986 to add new properties to those governed by transition rules with respect to capital cost recovery. Reduces the amount of investment tax credit recapture on certain involuntary conversions when the taxpayer places in service qualified replacement property within two years of the conversion. Explains a reference in the IRC in connection with capitalization of railroad track expenses. Amends TRA provisions relating to: (1) carryback of existing carryforwards of steel companies; (2) modification of the investment tax credit for rehabilitation expenditures. Amends the IRC with respect to the low-income housing income tax credit, including revision of provisions relating to: (1) a carryover of post-1987 credit dollar amounts; (2) a reduction in the State housing credit ceiling from $1.25 to $1.10; (3) the effect of family size on low income determinations; (4) the use of State median gross income in determining qualified low-income housing project status; and (5) anti-churning rules. Subpart C: Capital Loss Deduction for Individuals Limited to Taxable Income - Amends the IRC to limit the deduction for the net capital losses of an individual to the smallest of: (1) $3,000; (2) the excess of capital losses over capital gains; or (3) the taxpayer's taxable income for the year. Subpart D: Ethyl Alcohol and Mixtures Thereof for Fuel Use - Amends the TRA to retain 30 percent the level of required indigenous processing or manufacture required for duty-free entry of ethanol into the United States. (Under current law, the percentage is due to increase in 1988.) Subpart E: Explansion of Transitional Relief from Passive Loss Rules - Amends TRA provisions implementing transitional relief from passive loss rules as applied with respect to low-income housing investments. Extends this relief from December 31, 1987, until the 90th day after enactment of the Technical Corrections Act of 1987. Subpart F: Corporate Provisions - Delays the effect of IRS Announcement 86-47 with regard to recapture treatment of certain accounts in life insurance company acquisitions. Amends IRC provisions relating to the treatment of copyright and computer software royalties of S corporations. Repeals the IRC 30 percent test used to determine whether a company qualifies for treatment as a regulated investment company. Subpart G: Provisions Relating to the Alternative Minimum Tax - Amends IRC provisions relating to the minimum tax in connection with: (1) the treatment of annuities that are part of structured settlements; (2) special rules for certain mortgage guaranty insurers; (3) rural cooperatives; and (4) an exemption for small nonlife insurance companies. Amends the IRC to treat as life insurance policies certain self-funded death benefit plans maintained by churches for their employees, thus excluding the benefits provided through such plans from gross income for income tax purposes. Subpart H: Accounting Provisions - Amends IRC accounting provisions with respect to inventory cost capitalization rules applied to: (1) animals produced in a farming business; and (2) free lance authors and photographers. Modifies IRC accounting rules with respect to both dealer and nondealer installment obligations. Amends accounting rules to be applied when a thrift institution is a member of a controlled group. Amends the IRC to permit to small water utilities a corporate income tax exclusion of contributions in aid of construction. Amends the IRC to permit a partnership, S corporation, or personal service corporation, unless it is part of a tiered structure, to elect to have a taxable year other than the required one, but generally only if the deferral period of the taxable year elected is three months or less. (Current law requires partnerships, S corporations, and personal service corporations, in most cases, to conform their taxable years to the calendar years used by their owners.) Subjects the principals of a partnership or S corporation electing to change taxable years to additional estimated tax requirements to offset any tax deferral resulting from such election. Imposes deduction limitations on a personal service corporation that changes taxable years. Provides that an election with respect to taxable year shall be made by the partnership, S corporation, or personal service corporation and shall be binding on all partners and shareholders. Sets forth the formula for determining the additional tax requirement when a taxpayer: (1) is a partner or shareholder in at least one such entity during any applicable election years of the entity that end within the taxpayer's taxable year; and (2) has an aggregate deferred tax exceeding $200 with respect to the entity. Describes payment procedures. Requires the inclusion of specified information on returns filed by partnerships and S corporations that elect to use a non-required taxable year. Limits the tax deduction permitted to a personal service corporation for amounts paid or incurred with respect to employee-owners when such a corporation: (1) elects to have a taxable year other than the required one; and (2) fails to meet certain minimum distribution requirements regarding non-dividend amounts paid to owners. States that common trust funds, beginning in 1988, must adopt the calendar year as their taxable year. Subpart I: Financial Institutions - Provides for the coordination of corporate rate reductions with methods used to calculate additions to bad debt reserves of thrift institutions. Amends IRC provisions relating to the net operating loss deduction to permit commercial banks to elect to apply normal net operating loss rules to all of their net operating losses. (Under current law, different rules may be applied to losses attributable to deductions for bad debts.) Subpart J: Provisions Relating to Insurance - Amends the IRC to state that charitable gift annuities (those owned by an individual who made a tax-deductible charitable contribution to the annuities issuer) are not commercial-type insurance for purposes of determining the tax-exempt status of an organization. Directs the Secretary of the Treasury to revise the tables used to determine the amount of a charitable contribution to reflect interest rates and recent mortality experience. Amends IRC special rules with regard to the treatment of unearned premium reserves by property/casualties insurance companies that do not deduct sales commissions on deferred premium installments. Subpart K: Pension; Employee Benefits; ESOPs - Provides that for certain payments made before 1987, a trust fund that qualifies as a voluntary employees' benefit association providing health and welfare benefits to specified persons in Pennsylvania shall be deemed to have fulfilled all employer obligations with respect to: (1) employer contributions under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act; and (2) FICA and income tax withholding. Amends the IRC to exclude from gross income as a de minimis fringe benefit the first $15 of transit passes provided per month by an employer to an employee. Amends IRC provisions governing the commencement date for benefits under qualified governmental pension plans. Amends the IRC to state that the accounting provisions applicable to the deferred compensation plans of State and local governments and of private tax-exempt organizations shall not apply to nonelective deferred compensation. Amends IRC provisions relating to: (1) adjustments to limitations on contributions and benefits under State and local government plans; (2) cash or deferred arrangements of tax-exempt organizations; (3) minimum coverage requirements for qualified governmental plans; (4) amendment of master or prototype plans; and (5) air cargo transportation as a fringe benefit. Imposes an excise tax, in the amount of $100 per day of noncompliance, on an employer, plan administrator, or any other person whose act or omission causes the failure of a group health plan to satisfy continuation coverage requirements. Includes provisions for a minimum tax in cases when the failure cannot be corrected. Describes administrative features of the tax, as well as the continuation coverage requirements that must be met by group health plans. Repeals provisions disallowing an employer's deduction for group health plan expenses and the tax exclusion of health coverage benefits of highly compensated employees in cases of an employer's failure to satisfy continuation coverage requirements. Subpart L: Foreign Provisions - Amends the IRC to increase from 50 percent to 67 percent the amount of research and development expenditures that a company must allocate to income from sources within the United States. Establishes a special rule for the qualified research and experimental expenditures required by governmental entities. Requires companies to report on a consolidated basis with respect to the expenditures associated with this source rule. Amends the IRC to delay, from 1988 to 1989, the implementation of rules under which the earnings and profits of certain foreign corporations are determined without regard to the installment method of accounting. Amends IRC provisions relating to: (1) treatment of pre-1987 interest for purposes of foreign tax credit modifications; (2) interest on U.S. obligations held by Puerto Rican banks; (3) source rules applied to certain regulated investment companies; and (4) the allocation of interest expenses of certain financial institutions. Subpart M: Tax-Exempt Bonds - Amends the IRC to raise from $5,000,000 to $10,000,000 the threshold amount of tax-exempt bonds that a small governmental unit may issue and still remain within the exception from arbitrage rebate requirements. Revises the definition of "manufacturing facility" in the context of small issue bonds. Amends TRA tax-exempt bond provisions with respect to various specific properties and projects. Subpart N: Provisions Relating to Estate Tax - Amends the IRC in connection with the valuation of farm land for estate tax purposes. Permits a surviving spouse to enter into a cash lease of farm or other real property with a family member and still have the property valued under use value principles rather than according to its highest and best use. Subpart O: Exchange of Information and Reporting Provisions - Amends the IRC to permit, under certain circumstances, the disclosure of income tax returns and return information to officials of municipalities with a population of more than 1,500,000. (Present law allows such disclosure only to municipalities with a population in excess of 2,000,000.) Exempts the Federal Home Loan Mortgage Corporation from provisions requiring the filing of an information return relating to persons receiving contracts from Federal executive agencies. Subpart P: Exempt and Nonprofit Organizations - Amends the IRC to permit an 80 percent income tax deduction of contributions to or for an institution of higher education even if the taxpayer receives, as a result of paying such an amount, the right to seating or the right to purchase seating in the institution's athletic stadium. Amends the IRC to exclude from income, for purposes of the unrelated business income tax, any income derived by a tax-exempt social welfare organization from the rental or exchange with other similar organizations of member or donor lists. Exempts from all Federal, State, or local taxation any earnings on, and distributions from, the Enjebi Community Trust Fund. Subpart Q: Miscellaneous Provisions - Amends the IRC to authorize the Secretary of the Treasury to prescribe de minimis tolerances for the volume of wine in bottles for purposes of the excise tax on wine. Amends the IRC to allow certain wholesale distributors of gasoline to pay the gasoline tax. Amends the IRC to eliminate the retroactive certification of employees for purposes of the income tax credit for certain expenses of work incentive programs. Applies such amendment to credits first claimed after March 11, 1987. Subpart R: Miscellaneous Provisions - Amends the Tax Reform Act of 1984 to add a transitional rule with respect to relieving innocent spouses of income tax liability in certain cases. Prescribes treatment of certain qualified group self-insurers' funds (workers' compensation funds) with respect to deficiency assessments and other matters. Part II: Amendments Related to Tax Legislation Other than the Tax Reform Act of 1986 - Amends the IRC to exempt from the harbor maintenance (port) tax any cargo owned or financed by a nonprofit organization or cooperative for use in humanitarian or development assistance overseas. Amends the IRC with respect to cargo entering or leaving the United States and on which the port tax has been paid or imposed. Prohibits the imposition of tax with respect to any subsequent loading or unloading of the same cargo if: (1) the shipper is the same at the time of entry and at the time of the subsequent loading or unloading; and (2) the subsequent activity is in connection with the continuous transportation of the cargo to its ultimate U.S. destination. Amends the IRC to provide an exception from the excise tax on distilled spirits in the case of certain distilled spirits removed from certain foreign trade zones. Amends the IRC to extend the potential commencement date of the Oil Spill Liability Trust Fund and petroleum tax. Subtitle D: Lobbying and Political Activities of Tax-Exempt Organizations - Part I: Disclosure Requirements - Amends the IRC to require tax-exempt organizations not eligible to receive tax-deductible charitable contributions to include in every written, broadcast, or telephone fundraising solicitation an express and conspicuous statement that gifts or contributions to the organization are not deductible as charitable contributions for Federal income tax purposes. Exempts from this requirement: (1) organizations having gross receipts of $100,000 or less; and (2) coordinated fundraising campaigns that solicit fewer than ten persons in a year. Fixes penalties for failure to comply with this disclosure requirement. Provides for public inspection, at organization offices, of both the annual returns and the application for recognition of exemption filed by tax-exempt organizations. Protects from disclosure the names and addresses of contributors. Requires that tax-exempt charitable entities (501(c)(3) organizations) provide annual information with respect to transfers and other transactions involving certain other tax-exempt organizations as the Secretary of the Treasury might require to prevent misallocation of revenues or expenses of any diversion of funds from the organization's exempt purpose. Amends IRC penalty provisions relating to required filings by tax-exempt organizations and certain trusts to: (1) revise the maximum penalty applicable in certain cases; (2) fix a penalty for failure to include required and accurate information on a return; (3) fix a penalty for failure to comply with public inspection requirements; and (4) treat the penalties as tax for administrative purposes. Assesses penalties against tax-exempt organizations that willfully fail to comply with public inspection requirements. Imposes a penalty on any tax-exempt organization or political organization that offers to sell to an individual specific information or a routine service that could be readily obtained by that individual free of charge from a Federal agency. Subpart B (sic): Political Activities - Extends the prohibition against certain political activities by tax-exempt organizations to include activities in opposition to any candidate (current law includes only those activities on behalf of a candidate). Provides that any 501(c)(3) organization whose status is terminated by reason of intervening in any political campaign either for or against a candidate for public office shall never be treated as a tax-exempt not-for-profit civic league or organization. Imposes on a tax-exempt 501(c)(3) organization: (1) a ten percent excise tax on its political expenditures; and (2) a 100 percent tax on any such expenditure that has been subject to the ten percent penalty tax and has not been corrected within the taxable period. Imposes on the manager of a 501(c)(3) organization: (1) a two and one-half percent tax, to a maximum amount of $5,000, if such manager knowingly agrees to a political expenditure by the organization; and (2) a 50 percent tax, to a maximum of $10,000, if the manager refuses to agree to part or all of a correction of the prohibited expenditure. Identifies the types of expenditures considered to be political. Authorizes a civil action in U.S. district court in the name of the United States to enjoin a 501(c)(3) organization from making additional political expenditures and for other relief appropriate to ensure that the organization's assets are preserved for charitable purposes. Permits such an action only if: (1) the IRS has notified the organization of its intent to seek the injunction; and (2) the Commissioner of Revenue has personally determined that the organization has flagrantly participated in prohibited campaign activity, and that injunctive relief is appropriate to prevent future political expenditures. Directs the Secretary, upon the finding that a 501(c)(3) organization has made political contributions in flagrant violation of the prohibition against such expenditures, to make an immediate termination assessment of any income tax payable by such organization, as well as any penalty taxes due with respect to political expenditures. Sets forth guidelines to govern such termination assessments. Imposes: (1) a five percent excise tax, to be paid by the organization, on the lobbying expenses of any organization whose 501(c)(3) status has been lost because of such expenditures; and (2) a corresponding penalty tax to be paid by the organization manager who agreed to such expenditures, knowing that they could result in the organization's loss of tax-exempt status.

Budget Reconciliation Act of 1987 - Title I: Committee on Agriculture - Subtitle A: Farm Program Revisions - Amends the Agricultural Act of 1949 to provide advance deficiency payments for wheat and feed grains at a 30 percent payment rate, and for cotton and rice at a 20 percent payment rate. Directs that 1,000,000,000 bushels of Commodity Credit Corporation (CCC) surplus stocks be sold on a bid basis for nontraditional uses by the end of FY 1990. Requires a report to the appropriate congressional committees. Amends the Agricultural Act of 1949 to limit the maximum permitted oats acreage limitation to five percent of base acreage. Directs the Secretary of Agriculture to: (1) estimate 1987 wheat, oats, and barley deficiency payments by December 1, 1987, and make 75 percent of such payments available upon producer request; and (2) estimate 1988 corn and grain sorghum deficiency payments by March 1, 1989, and make 75 percent of such payments available upon producer request. Subtitle B: Optional Acreage Diversion Act of 1987 - Optional Acreage Diversion Act of 1987 - Amends the Agricultural Act of 1949, effective for the 1988 through 1990 wheat and feed grain crops, to permit producers participating in acreage reduction programs to not plant any of their permitted acreage and receive 92 percent of their annual support benefits (0/92 program). Subtitle C: Farm Program Payments Integrity Act of 1987 - Farm Program Payments Integrity Act of 1987 - Amends the Food Security Act of 1985 to define "person" for purposes of farm program benefits limitations to include active farmers, including specified corporations, landowners, and sharecroppers, not having beneficial interests in more than three entities receiving program benefits. Subjects violators to loss of benefits. Directs the Secretary to provide Department of Agriculture personnel with education and training in applying such payment limitations. Limits benefits to U.S. citizens and immigrants only. Makes State and local governments and agencies ineligible for specified benefits. Subtitle D: Rural Electrification Administration Programs - Chapter 1: Amendments to Rural Electrification Act of 1936 - Amends the Rural Electrification Act of 1936 to authorize the prepayment of rural electrification loans made by the Federal Financing Bank and guaranteed by the Rural Electrification Administration (REA). Requires prepaying borrowers to pay a processing fee. Prohibits REA borrowers or guarantee recipients from transferring property or rights without REA approval until all loans and related charges have been repaid. Directs REA to disapprove property condemnation or acquisition if such action is likely to adversely affect service or increase costs, or is otherwise against REA policy. Permits a borrower of an insured or guaranteed electric loan to invest funds or make loans of up to 15 percent of its total utility plant without prior REA approval. Directs REA to refinance and reamortize all outstanding Rural Electrification and Telephone Revolving Fund certificates of beneficial ownership. Directs REA to conduct a study and report to the Congress regarding the feasibility of creating a utility-owned electricity network. Chapter 2: Rural Telephone Bank Borrowers Fairness Act of 1987 - Rural Telephone Bank Borrowers Fairness Act of 1987 - Permits prepayment without penalty of Rural Telephone Bank loans. Limits annual interest on new Rural Telephone Bank loans to not more than five percent. Limits interest rates on loan advances. Requires a loan's interest rate to be considered in determining loan eligibility. Establishes in the Rural Telephone Bank a reserve for losses caused by interest rate fluctuations. Requires a General Accounting Office study and report to the Congress regarding Rural Telephone Bank operations. Subtitle E: Department of Agriculture Programs - Amends the Agricultural Adjustment Act to subject handlers to civil monetary penalties for agricultural marketing order violations. Amends the Federal Meat Inspection Act to revise labeling requirements for meat and meat food products that contain specified amounts of imitation cheese. Subtitle F: Ethanol - Agricultural Ethanol Motor Fuel Act of 1987 - Directs the President to establish a phased-in ethanol-blended fuel program, including a program of ethanol development and use. Subtitle G: Cotton Research and Promotion - Cotton Research and Promotion Program of 1987 - Amends the Cotton Research and Promotion Act to require the collection of research and promotion fees from all domestic cotton producers and importers of cotton and cotton products. Requires a referendum to be held among cotton producers to ascertain whether or not they approve of such amendment; but declares that producer disapproval shall not invalidate it. Title II: Committee on Banking, Finance and Urban Affairs - Refers to an amendment of the Federal Deposit Insurance Act contained in the Competitive Equality Banking Act of 1987 for other spending reductions for FY 1988 through 1990. Title III: Committee on Education and Labor - Subtitle A: Pension Assets Protection - Pension Assets Protection Act of 1987 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to add a definition of minimum benefit security level. Sets forth a special rule for such level for plans providing qualified event-contingent benefits. Adds a definition of benefit liabilities for use in determining such level. Permits asset withdrawals by employers from ongoing single-employer plans which provide for such withdrawals if immediately after the withdrawal: (1) the current value of the assets in the plan is not less than the minimum benefit security level; and (2) the current value of the assets in each other single-employer plan maintained by the employer or any other members of the employer's controlled group is not less than the minimum benefit security level. Sets forth special rules for recently amended plans and for mergers, consolidations, and transfers of plan assets. Provides that such asset withdrawal provisions shall apply to multiemployer plans only to the extent provided in regulations prescribed by the Secretary of the Treasury in consultation with the Secretary of Labor. Sets forth a notice requirement for plan asset withdrawal. Exempts permitted asset withdrawals from prohibited transaction rules. Provides that a trust forming a part of a defined benefit plan shall not be treated as failing to constitute a qualified trust solely by reason of a permitted withdrawal of plan assets by the employer. Imposes an excise tax on plan asset withdrawals that exceed a specified permissible amount. Sets forth limitations on employer reversions upon plan termination. Sets forth procedures for distribution of plan assets remaining after satisfaction of all specified liabilities. Requires that the remaining assets of the plan which are attributable to employee contributions be equitably distributed to the participants who made such contributions or their beneficiaries. Sets forth a formula for determining the portion of assets attributable to employee contributions. Requires that, after the distribution of assets attributable to employee contributions, a certain amount of the remaining assets be distributed to participants and beneficiaries in proportion to certain accrued benefits. Allows, after such distributions, the remaining assets to be distributed to the employer if this does not contravene any law and if the plan so provides. Sets forth a special rule for recent amended plans. Provides for further distributions to participants and beneficiaries in the absence of a distribution to the employer. Provides for revisions of distributions to prevent certain prohibited discriminations or violations. Requires a three-year amortization of underfunding of single-employer plans of a controlled group upon a distribution to an employer from a terminated plan or upon certain transactions involving plan assets. Provides that such requirement shall not apply to multiemployer plans, except as may be prescribed by the Secretary of the Treasury. Provides for tax-free transfers between certain single-employer plans in the same controlled group. Provides that any amount transferred directly between defined benefit plans (neither of which is a multiemployer plan) maintained by the same employer, or by employers in the same controlled group, shall not be treated as an employer reversion or includible in gross income. Establishes a termination charge for single-employer plan terminations. Requires such charge to be paid to the Pension Benefit Guaranty Corporation (PBGC), whenever a single-employer plan terminates, by the contributing sponsor (or any member of such sponsor's controlled group in the case of a distress or involuntary termination). Sets forth a formula for determining the amount of such charge. Doubles such charge if the contributing sponsor or any member of the controlled group of a plan terminated in a distress or involuntary termination also maintains a single-employer plan that has assets in excess of the minimum benefit security level. Prohibits the transfer of assets exceeding liabilities from a defined benefit plan to a defined contribution plan in mergers, consolidations, or transfers. Repeals the exemption for employee stock ownership plans from the excise tax on reversion of qualified plan assets to the employer. Adds a benefit security funding charge to the funding standard account of any single-employer plan for which the funded ratio for any plan year is less than one. Sets forth formulas for the determination of such charge. Limits the amount of such charge for a plan under which the funded ratio at the beginning of the plan year is greater than 50 percent. Reduces the period for amortizing net experience losses and gains from 15 to five years in the case of single-employer plans. Eliminates the six-month waiver for payment of contributions to single-employer plans for plan years beginning after December 31, 1988. Reduces such extension to three months for plan years beginning during 1988. Requires quarterly estimated installment payments during the plan year for the required annual payment for any single-employer plan with an outstanding waived funding deficiency as of the end of the employer's taxable year. Requires applications for funding waivers to be submitted within two and one-half months after the close of the plan year. Allows such waivers only for temporary substantial business hardship experienced by both the employer and the controlled group if the employer is a member of such a group. Sets forth formulas for determining the interest rate used to compute the amortization charge for waivers and extensions. Adjusts the amortization period for waived funding deficiencies. Requires notice of application for funding waivers to be provided to the plan and each affected party. Requires such notice to include a description of the extent to which the plan is funded for guaranteed benefits and benefit liabilities. Increases the tax deduction for employer contributions to pension trusts to the greater of: (1) the amount necessary to satisfy the minimum funding standard; or (2) the amount necessary to increase the ratio of plan assets to vested liabilities to one. Imposes a tax on underpayments of required quarterly installments for outstanding waived funding deficiencies. Makes members of the controlled group jointly and severally liable for taxes on any failure to meet the minimum funding standards. Limits the benefit security charge for transition years with respect to plans maintained by steel companies. Defines "benefit liabilities" to mean all benefits to any person under a terminated plan as of the termination date (including benefits the reduction or elimination of which is not prohibited under specified provisions). Increases from 75 to 100 percent of unfunded guaranteed benefits the amount of liability to the PBGC in excess of 30 percent of net worth. Makes the liability to the section 4049 trust consist of the total outstanding amount of benefit liabilities under the plan. Eliminates the requirement that payments to and distributions from the section 4049 trust be tied to liability payment years. Increases the single-employer plan benefit guaranty premium to $19 per participant per plan year. Makes the contributing sponsor and each member of its controlled group jointly and severally liable to the PBGC for such single-employer plan premiums. Sets forth miscellaneous and conforming amendments relating to plan terminations. Provides that a qualified preretirement survivor annuity with respect to a participant under a multiemployer plan which has terminated or which is insolvent shall not be treated as forfeitable solely because the participant has not died as of the termination or insolvency date. Makes certain termination information requirements inapplicable to certain insurance contract plans. Requires that affected parties receive notice of benefit liabilities. Revises provisions relating to: (1) distress tests; (2) the date as of which the employer must be in a bankruptcy proceeding to qualify for distress termination; and (3) the treatment under distress tests of cases converted to liquidation. Requires, under the reorganization distress test, that the PBGC be given advance notice of the intention to request bankruptcy court approval of the plan termination. Authorizes the PBGC to pool the assets of terminated plans for appropriate purposes. Requires submission to the PBGC of certain information in cases of voluntary terminations. Sets forth provisions relating to the treatment of withdrawal of substantial employers from single-employer plans under multiple controlled groups. Authorizes the PBGC to assess civil penalties for failure to provide timely required notices or other information with respect to single-employer and multiemployer plans. Requires the sponsor of a multiemployer plan to serve the PBGC with a copy of any complaint, district court opinion, notice of appeal, and court of appeals opinion in any action involving ERISA to which the plan sponsor is a party. Sets forth a definition of affected party. Revises the statute of limitations with respect to certain reports. Authorizes the Secretary of Labor to assess a civil penalty for a plan administrator's failure or refusal to file a required complete annual report. Revises provisions relating to the permissible return of contributions. Revises provisions relating to the imposition of an annual sanction for prohibited transactions which are continuing in nature. Revises provisions relating to the effect of a determination letter by the Internal Revenue Service on the enforcement by the Department of Labor of fiduciary standards under ERISA. Sets forth additional limitations: (1) on investment by an individual account plan forming part of a floor-offset arrangement; and (2) on investment by an individual account plan in employer stock. Sets forth a date for plan amendments required by this title. Subtitle B: Pension Portability - Pension Portability Act of 1987 - Part A: Portable Pension Plans - Amends ERISA and the Internal Revenue Code to provide for the use of rollover individual retirement accounts and annuities as portable pension plans. Sets forth distribution and portability requirements for such plans. Sets forth investment requirements for certain portable pension plans. Establishes rules relating to rollovers and transfers to and from portable pension plans. Establishes rules relating to distributions and transfers from qualified plans. Part B: Rules Applicable to Simplified Employee Pensions and Portable Pension Plans - Defines simplified employee pension plan. Sets forth distribution requirements for simplified employee pension plans. Sets forth the manner and extent to which reporting and disclosure, participation, vesting, funding, and other specified ERISA requirements apply to simplified employee pension plans and portable pension plans. Allows employee election of a simplified alternative salary reduction arrangement under a uniform simplified employee pension. Authorizes the Secretary of the Treasury to allow certain requirements for simplified employee pensions and portable pension plans to be met by application separately with respect to separate lines of business. Subtitle C: Fair Work Opportunities Program - Amends part A (Aid to Families with Dependent Children) (AFDC) of title IV of the Social Security Act to require States to establish a Fair Work Opportunities Program (Program) which helps needy children and parents avoid long-term welfare dependence. Requires adult recipients of family support supplements (the aid paid to needy families with dependent children) to participate in the Program if it is available in the political subdivision where he or she resides and State resources otherwise permit. Directs the State to fully inform such recipients of the opportunities offered under the Program. Lists recipients who are exempt from mandatory participation in the Program, including individuals who: (1) are ill, incapacitated, pregnant, or age 60 or older; (2) are needed at home due to the illness or incapacity of another family member; (3) work 20 or more hours a week; (4) are children under age 16 or attending, full time, an elementary, secondary, or vocational school, except in the case of certain minor parents; or (5) care for a child under age 15, but such exception shall apply to only one parent in two-parent families. Permits States to require the participation of a parent or relative of a child who has attained age three but not age 15 if day care is guaranteed by the State and, in the case of a parent or relative of a child under age six, Program participation is on a part-time basis. Provides that if the parent, caretaker relative, or dependent child is attending a school, an accredited postsecondary institution, or a course of vocational or technical training which can reasonably be expected to lead to employment when he or she would otherwise commence participation in the Program, such attendance may constitute satisfactory participation in the Program, though the costs of such schooling or training shall not constitute federally reimbursable Program expenses. Directs States to make special efforts to develop and provide needed Program services and activities to families: (1) with teenage parents and parents who were under age 18 when their first child was born; (2) that have been receiving family support supplements continuously for two or more years; (3) with children under age six; (4) with a parent who has been unemployed during the preceding 12 months, lacks a high school diploma or its equivalent, or has special educational needs; and (5) with older children in which the youngest child is within two years of being ineligible for family support supplements because of age. Requires that if State resources are not adequate to provide Program services to all participants, priority shall be given to mandatory and voluntary participants who actively seek to participate in Program activities. Requires a State to provide each applicant for family support supplements full information (verbally and in writing) about the opportunities offered by the Program and the: (1) rights, responsibilities, and obligations of Program participants; (2) State's obligation to provide necessary supportive services; and (3) transitional child care services and health coverage that will be available. Requires local resource and referral agencies to assist parents in finding appropriate child care. Provides that any applicant for family support supplements may be required to accept job search assistance while his or her application is being processed or at any appropriate time during Program participation. Limits mandatory participation in job search to eight weeks, after which an individual who has not obtained a job must be provided with other services designed to improve his or her employment prospects. Provides that when a mandatory Program participant fails without good cause to comply with any requirement imposed on his or her participation in such Program: (1) such participant's needs shall not be taken into account in determining the family support supplement; and (2) if such participant's spouse is not participating in the Program, the spouse's need shall not be taken into account in determining the family support supplement. Continues sanctions for a minimum of three months if the participant failed to comply on a previous occasion. Directs States, after three months of a participant's noncompliance, to remind the participant in writing of his or her option to end the sanction. Authorizes any State to institute a work supplementation program under which a State reserves sums which would otherwise be payable to Program participants as family support supplements and uses such sums instead to subsidize jobs for such participants. Directs the Secretary of Health and Human Services (Secretary) to establish uniform reporting requirements under which States periodically provide the Secretary with information the Secretary needs to ensure that Program requirements are being carried out. Amends part C (Work Incentive Program) of title IV of the Act to create a new part C entitled "Fair Work Opportunities for Family Self-Sufficiency." Authorizes appropriations for carrying out part C for FY 1988 and thereafter. Reserves a specified amount of such funds for child care services. Requires the Secretary of Labor to allocate 95 percent of the funds among the States according to prior allocations and the relative number of family support recipients in each State. Sets the remaining five percent aside for State planning grants, technical assistance, demonstration programs, and States excelling in part C performance standards. Sets the Federal matching rate for FY 1988 and thereafter at 90 percent of so much of the State's allocation which does not exceed the State's FY 1986 allocation, 80 percent of the amount in excess of such allocation which is expended on education and training programs, and 70 percent of the amount in excess of FY 1986 allocations which is expended for any other purpose under part C. Directs the Governor of each State to designate a State agency as the State work initiatives agency responsible for developing the State Program plan and administering the Program. Requires that such plan contain specified provisions and assurances, including assurances that: (1) Program activities are coordinated and not duplicative of existing activities; and (2) local governments and the private sector are involved in Program planning and design so that participants are trained for jobs that are likely to be available in the community. Requires that such plan be made available to the public and then the State job training coordinating council for review and comments before being submitted to the Governor and the Secretary of Labor for approval. Requires States to make an initial assessment of the educational needs, skills, and employability of each Program participant and on that basis develop an employability plan for the participant's family which, to the maximum extent possible, reflects the participant's preferences. Requires each participant to then negotiate a contract with the State which specifies the duration of his or her participation as well as the activities the State will conduct and services it will provide in the course of such participation. Directs the State to assign a case assistant to each participating family who is responsible for: (1) obtaining, on the family's behalf, any other services which may assure the family's effective participation; (2) monitoring a participant's progress; and (3) periodically reviewing and renegotiating the family support plan and the participant's contract with the State. Requires State Programs to provide comprehensive services which include: (1) job search, training, and placement services; (2) education programs; (3) necessary support services; and (4) counseling, information, and referral for participants experiencing personal and family problems which may be affecting their ability to work. Extends coverage of day care which is reasonably necessary for a parent's or caretaker relative's continued employment, for up to 12 months after a family's eligibility for family support supplements ends, under a sliding scale formula based on the family's ability to pay for such services. Gives any participant lacking a high school diploma the opportunity to participate in a program addressing the education needs identified in the participant's initial assessment without interference from required participation in other programs and activities. Requires that children in participating families be encouraged to engage in the education or training activities available under the Program and be provided with additional services and incentives designed to keep them in school and help them obtain marketable job skills. Deems an individual who attends an accredited postsecondary institution to be satisfactorily participating in the Program for so long as such individual is making satisfactory progress in a vocational or undergraduate education or training program consistent with his or her employment goals. Prohibits an individual's mandatory repetition of an employment or training program. Authorizes any State to establish a work experience program to provide experience and training for individuals who have not been employed during the preceding six months and are not otherwise able to obtain employment. Limits such programs to projects which serve a useful public purpose utilizing, if possible, the participant's prior training, experience, and skills. Prohibits Program participants from filling unfilled vacancies. Requires that unpaid work experience be provided in conjunction with training or education and for no longer than 30 hours per week for three months. Permits a three-month extension of such work experience if the participant requests such extension and such request is reflected in a modified family support plan or such extension would lead to employment in an on-the-job training position. Requires that: (1) a reassessment be made and a new employability plan developed for participants who do not obtain employment after participation in a work experience program; and (2) other Program activities be coordinated with the work experience program so that job placement has priority over participation in such program. Authorizes States to provide individuals who have been Program participants for at least six months and have been unable to secure unsubsidized employment with transitional subsidized employment with a public or nonprofit private employer for a period which does not exceed six months, unless an extension is determined to be necessary in a review and modification of the family support plan. Directs the Secretary of Labor to establish outcome-based State Program performance standards which take into account the differing conditions which may exist in different States. Requires that final standards be published within two years of the enactment of this Act. Directs the Secretary of Labor to evaluate each State's progress toward meeting the performance standards at the completion of each fiscal year and provide technical assistance to States which fall short of such standards. Provides incentive allocations to States which exceed such standards. Requires the Secretary of Labor to review such standards at least once every three years. Sets forth general requirements regarding: (1) the notice which must be provided to an individual before the State determines that such individual has refused to participate in the Program without good cause; (2) the benefit requirements and labor standards applicable to all Program activities; (3) the suitability of work assignments, including the requirement that States provide participants with supplements for one year after they leave the Program so that their income is not reduced as a result of taking a job; (4) mandatory workfare; and (5) nondiscrimination against individuals assigned to a job or work program under this Act. Authorizes a State to reimburse other State or local agencies for Program services rendered to individuals to the extent that such services are not otherwise available on a nonreimbursable basis. Requires States to use the information provided by private industry councils on the type of jobs in an area and provide training which is related to such jobs. Authorizes States to enter into contracts and other arrangements with public and private agencies and organizations for the provision or conduct of Program services or activities. Establishes State recordkeeping and reporting requirements and a complaint review process through which the Secretary shall investigate State compliance with Program requirements. Authorizes the Comptroller General to conduct investigations of a State's use of Program funds. Authorizes the Secretary of Labor or the Secretary of Health and Human Services to terminate or suspend financial assistance in whole or in part and order appropriate sanctions or corrective actions if the State agency administering part C or part A of title IV of the Act fails to comply with a provision of the Act and the State has been given prior notice and an opportunity for a hearing. Authorizes the Secretary of Labor to make funds available to States for demonstration projects testing the effectiveness of using: (1) performance-based contracts under which private organizations operate supported-work programs placing participants in full-time private sector jobs; (2) community-based comprehensive support services to ensure long-term family self-sufficiency; (3) nonprofit community development corporations in creating job opportunities for the poor; and (4) financial incentives and interdisciplinary approaches to reducing school dropouts, encouraging skill development, and avoiding the welfare dependence of children receiving family support supplements. Requires each State to: (1) conduct an assessment of the adequacy and appropriateness of child care resources in the State prior to or in conjunction with the expenditure of child care funds; (2) provide grants for the training of child care personnel; and (3) not relax child care standards within the State. Authorizes each State to: (1) permit the use of funds in coordinating child care services with other relevant early childhood development programs so that such programs may provide full day and full year services to children; and (2) provide grants to local nonprofit child care programs to establish or renovate child care centers and family day care homes. Sets the Federal matching rate at 50 percent of Program administrative costs and 65 percent of all other Program costs. Amends part A (General Provisions) of title XI of the Act to authorize States to conduct demonstration projects testing: (1) the effect of in-home early childhood development and pre-school center-based development programs on families receiving family support supplements and participating in the Program; and (2) whether eliminating durational standards, used in defining unemployment for family support supplement eligibility purposes, and requiring parents to accept reasonable job offers while preserving their eligibility for supplements would encourage their entrance into the permanent work force and thereby reduce AFDC program costs. Authorizes the Secretary of Labor to make grants to States to assist in financing such projects. Sets forth technical and conforming amendments. Requires each State with six months of this Act's enactment to: (1) evaluate its welfare population demographics, giving particular attention to the demands of the State labor market, the training needed to meet those demands, and necessary changes in current service delivery systems; and (2) submit such evaluation to the Secretary of Labor. Title IV: Committee on Energy and Commerce - Subtitle A: Medicare Provisions - Part I: Payment Reforms - Amends part B (Supplementary Medical Insurance) of title XVIII (Medicare) of the Social Security Act to provide for reductions in the prevailing charges, used in determining reasonable charges for Medicare services, for specified surgical procedures. Sets limits on the amount nonparticipating physicians may charge for such procedures. Reduces the rate of payment for a physician's provision of medical direction to nurse anethetists when such physician is providing medical direction to two or more nurse anesthetists performing anesthesia services concurrently. Adjusts the Medicare Economic Index to increase the prevailing charge for a physician's primary care services by six percent in 1988 while increasing such charge for a physician's other services by two percent. Provides physicians whose primary practice is family practice, general practice, general internal medicine, gynecology, or pediatrics with incentive payments for practicing in underserved rural areas. Sets forth special Medicare payment rules for durable medical equipment, prosthetic devices, orthotics (leg, arm, back, and neck braces), and prosthetics. Requires the Secretary of Health and Human Services to report to the Congress by 1991 on the impact of such rules on the availability of such services and the appropriateness of increasing payment rates for oxygen and oxygen equipment when a greater volume of oxygen or portable oxygen equipment is used. Places a moratorium, until 1991, on the Secretary's conduct of any demonstration project regarding alternative methods of paying for covered items. Directs the Secretary to establish and report to the Congress regarding fee schedules for radiologic services by August 1, 1988. Requires that such schedules take into account variations in the cost of furnishing services in different areas and result in certain reductions in aggregate Medicare payments for such services. Sets limits on the amount nonparticipating physicians may charge for such services. Authorizes the Secretary to allow physicians and suppliers to become participating physicians or suppliers only with respect to radiologic services. Directs the Secretary to: (1) establish proposed fee schedules for physician pathology services which may be implemented by 1990; and (2) report to the Congress regarding such fee schedules. Prohibits the Secretary from implementing or conducting a new study into a prospective payment system for radiologic, physician anesthesia, and physician pathology services under the Medicare program before 1991 unless specifically directed by law to do so. Makes technical changes regarding a nonparticipating physician's maximum allowable actual charge. Eliminates the FY 1975 floor on the prevailing charge for a physician service in a locality. Sets the maximum rate of payment per visit for independent rural health clinic services at $46 in 1988, updated annually thereafter to reflect increases in the Medicare Economic Index. Requires the Secretary to report to the Congress by March 1, 1989, on the adequacy of payments for such services. Requires that the fee schedule for certified registered nurse anesthetist services be based on data from cost reporting periods beginning in FY 1985 and such other data that the Secretary deems necessary to establish a reasonable fee schedule. Includes the services of registered nurses as assistants at surgery as "medical and other health services" for which direct Medicare payments may be made. Directs the Secretary to report to the Congress by April 1, 1989, regarding the adequacy of payments for physicians' assistants and registered nurses assisting at surgery. Establishes a floor on the reasonable charge for each physicians' services equal to 55 percent of the average of the prevailing charge levels for such service in all localities for the year. Increases the prevailing and customary charge for a service when such charges are lower than the reasonable charge floor so that by 1991 prevailing and customary charges are at least equal to the reasonable charge floor for a physicians' service. Prohibits the maximum allowable actual charge of a nonparticipating physician for a covered service furnished in 1989 or 1990 from being less than 96 percent of the minimum allowable prevailing charge for 1989 and 1990. Provides that for physicians' services furnished after 1988 the regular percentage increase in the Medicare Economic Index shall be decreased by two percentage points. Part 2: Coverage and Eligibility Changes - Amends the Medicare program to provide Medicare coverage for influenza vaccines and their administration. Limits covered immunosuppressive drugs to prescription drugs used in immunosuppressive therapy. Provides coverage under part B of the Medicare program of services furnished by a clinical social worker to a member of a health maintenance organization. Amends part A (Hospital Insurance) of the Medicare program to continue the part A eligibility of physically or mentally impaired individuals who were eligible for such benefits by reason of their entitlement to disability benefits under title II (Old Age, Survivors and Disability Insurance) of the Act, but whose title II benefits have been terminated because they engaged in substantial gainful activity. Sets forth enrollment, special enrollment, and coverage periods as well as the contingencies terminating one's enrollment. Conditions such continued part A eligibility upon the payment of a monthly premium. Requires individuals who are entitled to part B (Supplementary Medical Insurance) Medicare benefits only by reason of their continued part A eligibility provided by this Act to pay a monthly premium set at four times the amount otherwise required under part B. Prohibits such part A and B premiums from exceeding a specified percentage of the individual's adjusted gross income, unless the premium thereby sinks below 25 percent of the premium determined without income restraints. Amends title II (Old Age, Survivors, and Disability Insurance) (OASDI) of the Act to provide that when individuals become entitled to OASDI disability benefits by reason of a disability which previously entitled them to such benefits, both periods of entitlement shall count toward the two-year period of OASDI disability benefit entitlement required for Medicare eligibility despite an intervening period of gainful employment. Provides coverage under part B of the Medicare program for therapeutic shoes furnished to individuals with severe diabetic foot diseases. Part 3: Home Health Care Quality Improvements - Defines as "homebound", (a prerequisite of eligibility for Medicare home health services), any person who has a condition which restricts his or her ability to leave the home without support or for whom leaving the home is medically contraindicated. Requires Medicare fiscal intermediaries which perform home health payment services to provide an explanation of claim denials for home health services and promptly notify the parties requesting a reconsideration of such determinations of the result of such reconsideration. Requires fiscal intermediaries to make partial payments of disputed claims when such notice has not been transmitted within 60 days of receipt of the reconsideration request. Makes an intermediary's performance on appeals of home health care payment determinations part of the Secretary's overall appraisal of the intermediary. Requires a Medicare home health agency to: (1) protect and promote the rights of each individual under its care; (2) notify the State licensing or certification entity of changes in persons having an ownership or controlling interest in the agency or changes in the organization responsible for managing the agency; (3) furnish items and services through licensed health professionals or persons who have completed or are enrolled in a training program which meets minimum standards established by the Secretary by July 1, 1988; and (4) include the patient's plan of care within its clinical records. Requires an appropriate State or local agency to conduct an unannounced survey on an average of once a year, but in no case later than 15 months after the previous unannounced survey, and within two months of the receipt of a significant number of complaints against a home health agency, of the quality of patient care provided by such agencies. Authorizes the survey of a home health agency within two months of any change in its ownership, administration, or management. Subjects home health agencies which perform poorly in such surveys to an extended survey. Directs the Secretary to evaluate the assessment process, report to the Congress on the results of such evaluation, and make appropriate modifications to such process by 1991. Requires that when the Secretary determines that a home health agency's deficiencies immediately jeopardize the health and safety of service recipients the Secretary take immediate action to remove the jeopardy or correct the deficiencies, or terminate the agency's Medicare participation. Authorizes the Secretary to impose intermediate sanctions against an agency whose failure to correct deficiencies does not immediately jeopardize the health and safety of health care beneficiaries, but halts Medicare payments to such agency if six months pass without the correction of deficiencies. Directs the Secretary to publish and make available to the public without charge a directory of home health agencies certified to participate in the Medicare program, including information regarding all surveys and certifications made with respect to each agency. Requires appropriate State or local agencies to maintain: (1) toll-free hotlines to receive complaints and answer questions regarding home health agencies in the State or locality; and (2) units with enforcement authority and access to consumer medical records and survey reports to investigate such complaints. Directs the Secretary to: (1) report to the Congress before 1988 on the appropriateness of reimbursing home health agencies on either a rural or urban basis rather than considering an agencies mix of urban and rural clientele; (2) determine home health agency cost limits on the basis of recent agency cost report; and (3) establish a demonstration project to develop and test alternative methods of paying home health agencies on a prospective basis for services furnished under the Medicare and Medicaid (title XIX of the Act) programs. Part 4: Peer Review Organizations - Amends part B (Peer Review) of title XI of the Act to require the physician representative of a peer review organization (PRO) responsible for reviewing the services of a rural hospital to visit such hospital at least quarterly and meet with the hospital staff regarding such review. Requires the Secretary to emphasize a PRO's performance in educating providers and practitioners concerning the review process evaluating a PRO's performance. Prohibits a PRO's determination that a payment should not be made from becoming final before the physician or provider involved has a reasonable and convenient opportunity to discuss the proposed determination and the physician or provider has had 30-days notice of the proposed determination. Directs the Secretary to report to the Congress within two years of this Act's enactment regarding the educational effectiveness of PROs providing Medicare beneficiaries with payment denial notices when such beneficiaries are not liable for payment. Prohibits the Medicare exclusion of a provider or practitioner pending completion of administrative review procedures unless a hearing before an administrative law judge results in the determination that the provider or practitioner will pose a serious risk to beneficiaries if allowed to continue furnishing Medicare services. Part 5: Miscellaneous Provisions - Permits Medicare beneficiaries (other than those with end-stage renal disease or already enrolled with organizations providing health services on a prepaid basis) to enroll with eligible organizations with which the Secretary enters a contract for the provision of community nursing and ambulatory care on a prepaid, capitated basis. Lists the services and supplies which comprise community nursing and ambulatory care. Defines an "eligible organization" as a public or private entity which: (1) primarily engages in the provision of community nursing and ambulatory care; (2) provides such care through or under the supervision of a registered nurse; (3) maintains clinical records on all patients; and (4) maintains procedures for referring cases to or consulting with other health care providers. Requires the Secretary to annually publish a per capita rate of payment for each class of enrollees equal to 95 percent of the adjusted average per capita cost for such class. Directs the Secretary to make monthly prepayments to such organizations in accordance with such rates. Authorizes retroactive payment adjustments to account for differences between the actual number of enrollees and the number of enrollees estimated for the purpose of determining the advance payment. Prohibits: (1) estimated payments for prepaid community nursing and ambulatory care from exceeding the payments which the Secretary estimates would otherwise have been made for such care; and (2) enrollee charges from exceeding charges for which they would be liable in the absence of their enrollment. Authorizes eligible organizations to provide enrollees with optional additional care. Requires the provision of additional care where the average of the per capita rates of payment to an organization exceeds the adjusted community rate for community nursing and ambulatory care, unless the organization elects to have such payments reduced or withheld. Makes certain Medicare provisions which are applicable to health maintenance organizations and competitive medical plans applicable to organizations providing care pursuant to this Act, including provisions regarding: (1) enrollment periods; (2) enrollee grievance procedures; (3) health care quality assurance programs; and (4) the organization's status as a secondary payor. Requires the expedited administrative hearing of an appeal of a determination regarding an individuals entitlement to Medicare benefits or the amount of such benefits when there are no material issues of fact in dispute. Directs the Secretary to establish certain time limits on carriers' hearings regarding their Medicare payment determinations. Requires the Secretary to promulgate major Medicare rules, requirements, or policy statements through the regulatory process. Sets forth publication requirements. Prohibits carriers, fiscal intermediaries, or PROs from implementing a policy change affecting a change in Medicare payments without providing 30-days notice of such change to affected parties. Requires the Secretary to include in the publication of a regulation which can reasonably be expected to affect a substantial number of rural health care providers an analysis of the regulation's impact on the access of individuals to rural health care services. Prohibits the Secretary from requiring carriers to delay payments under part B of the Medicare program. Treats employees of the Physician Payment Review Commission as employees of the United States Senate for purposes of pay and employment benefits, rights, and privileges. Limits the podiatrist services which may be considered physicians' services under the Medicare program. Makes a group health plan the primary payer for items and services covered under Medicare's end-stage renal disease program. Limits minimum utilization rate requirements for end-stage renal disease services to transplantations. Amends the Omnibus Budget Reconciliation Act of 1986 to delay, from April 1, 1989, to April 1, 1990, the effective date of the prohibition of health maintenance organizations from providing physicians with incentives to reduce or limit services. Delays, from November 21, 1987, to April 1, 1988, the application of certain standards for organ procurement agencies. Directs the Secretary to: (1) arrange for, and report to the Congress within three years of this Act's enactment on, a study of the Medicare end-stage renal disease program; and (2) study, and report to the Congress by April 1, 1989, on ways to provide adequate payments under part B of the Medicare program for the costs of providing chemotherapy to cancer patients in physicians' offices. Amends the Omnibus Budget Reconciliation Act of 1985 to delay, from July 1, 1987, to October 1, 1988, the date by which the Secretary must establish a system providing for a unique identifier for each physician furnishing Medicare services. Authorizes the Secretary to impose sanctions against a person who knowingly and willfully bills a beneficiary for a clinical diagnostic laboratory test for which payment may only be made on an assigned basis in the same manner in which they may be applied against nonparticipating physicians who overcharge for their services. Requires the Secretary to determine, upon the request of a pediatric heart transplant center, whether such center meets the standards for qualification as a Medicare heart transplant center and issue a certification of such fact if the center meets such standards. Subtitle B: Provisions Relating to Medicaid Program - Part 1: Combatting Infant Mortality - Amends title XIX (Medicaid) of the Act to allow States to extend Medicaid coverage to pregnant women and infants under age one whose family income exceeds current income eligibility standards, but does not exceed 185 percent of the Federal poverty level. Authorizes States to accelerate the coverage of poor children under age five. (Currently, coverage would not be extended to all poor children under age five until FY 1991). Allows States to extend Medicaid coverage to poor children under age eight. Directs the Secretary to provide for State demonstration projects to reduce infant mortality and early childhood morbidity by improving the access of Medicaid-eligible pregnant women and children to obstetricians and pediatricians. Increases the Medical assistance percentage for such projects, but sets a FY 1988 limit on the additional Federal Medicaid expenditures which results from such projects. Requires the Secretary to report to the Congress by March 1, 1991, regarding such projects. Sets forth miscellaneous amendments relating to Medicaid services for pregnant women and children. Part 2: Addressing Needs of Elderly Poor-Subpart A: Improvements for Nursing Home Residents - Amends the Medicaid program to establish a single set of requirements for skilled nursing and intermediate care facilities (other than facilities for the mentally retarded), and to refer to such facilities as "nursing facilities." Sets forth requirements for nursing facilities, including requirements that such facilities: (1) primarily engage in providing residents with nursing care, rehabilitative services, and other health-related services which can only be provided through such facilities, directed toward residents' mental, psychosocial, and physical well-being; (2) provide such care in accordance with a written plan of care initially prepared and periodically reviewed and revised by a licensed health care professional on the basis of assessments of a resident's functional capacity conducted upon the resident's admission and after a significant change in the resident's physical or mental condition, but in no case less often than annually, and reviewed for accuracy at least once every three months; (3) provide, in addition to nursing and rehabilitative services, such physicians' services, medically-related social services, pharmaceutical services, dietician services, and dental services as are required to fulfill each resident's plan of care; (4) not use any individual who is not a licensed health care professional or licensed social worker as a nurse aide after 1989 unless the individual has completed a State-approved training program or is enrolled in such a program, and is competent to provide such services; (5) require a physician's supervision of each patient's care, the maintenance of clinical records on all patients, and, with certain exceptions, the services of a licensed nurse 24 hours a day and a registered nurse eight hours a day, or 16 hours a day if the nursing facility has at least 90 beds; (6) employ a full-time social worker if they have over 120 beds; (7) protect specified patient rights, including the right to appeal involuntary transfer or discharge from the facility; (8) provide applicants and residents with information regarding the Medicare and Medicaid programs and not require applicants to waive their rights to such benefits or have a third party guarantee payment to the facility as a condition of their admission; (9) safeguard a patient's funds upon the patient's authorization; (10) not admit any new resident, after 1988, who is mentally ill or retarded unless the State mental health authority deems such individual to require nursing facility services and decides whether the individual requires active treatment for mental illness or retardation; (11) notify the agency responsible for licensing the facility of changes in the ownership, control, or administration of the facility; (12) adopt certain measures to preserve facility safety and sanitation; and (13) meet such other conditions which the Secretary deems necessary for patient health and safety. Requires States to specify, by January 1, 1989, those nurse aide training programs which meet the minimum standards to be established by the Secretary by July 1, 1988, and have the State's approval. Prohibits State approval of a training program offered by a facility that has been out of compliance with this Act's requirements within the previous two years. Requires each State to: (1) establish a registry, by 1989, of all individuals who have satisfactorily completed a nurse aide training program in the State; (2) develop a written notice, by April 1988, of the rights and obligations of nursing facility residents under the Medicaid program; and (3) establish a fair mechanism, by 1989, which meets Federal guidelines to be established by October 1, 1988, for hearing appeals on involuntary transfers of residents from nursing facilities. Requires that, in addition to the preadmission review of mentally ill or retarded individuals, State mental health authorities conduct an annual review of mentally ill or retarded residents to determine whether such residents require nursing facility services and whether they require active treatment for mental illness or retardation. Directs that such preadmission and annual reviews be conducted in accordance with criteria to be developed by the Secretary by October 1, 1988. Sets forth required nursing facility responses to determinations as to whether such residents need nursing facility services and need, or do not need, active treatment for mental illness or retardation. Gives long-term residents who do not require nursing facility services, but who require active treatment, the choice of remaining in the facility or receiving covered services in an alternative setting. Require's nursing facilities to provide for the active treatment of residents in need of treatment for mental illness or retardation regardless of their continued need for nursing facility services or their discharge from such facility. Requires States to have an appeals process for individuals adversely affected by such preadmission and annual reviews. Sets the Federal matching percentage for: (1) nurse aide training programs at the Federal medical assistance percentage plus 25 percent, but not exceeding 90 percent, for FY 1988 and 1989, and at 50 percent thereafter; and (2) preadmission and annual screening of mentally ill or retarded residents at 75 percent. Directs the Secretary to: (1) provide States with technical assistance in the development and implementation of reimbursement methods for nursing facilities that take into account the case mix of residents in different facilities; and (2) report to the Congress by January 1, 1993, on the progress made in implementing this Act's nursing facility staffing requirements. Requires the Secretary to designate an instrument(s) by April 1, 1990, and States to specify the instrument by July 1, 1990, for use by States in assessing a resident's functional capacity. Requires the Secretary to report to the Congress by January 1, 1992, on the implementation of the resident assessment process. Imposes civil monetary penalties on individuals who falsify resident assessment. Makes the Secretary responsible for certifying that State nursing facilities comply, and States responsible for certifying that other nursing facilities comply with Medicaid nursing facility requirements. Bases such certification on surveys conducted within two months of any change in the ownership or administration of such a facility and, an annual, unannounced standard survey. Subjects facilities with poor compliance records to extended surveys. Directs the Secretary to: (1) develop and test a protocol for conducting surveys; (2) establish minimum qualifications for surveyors and train them in the use of resident assessment instruments; and (3) conduct sample surveys of nursing facilities, within two months of State surveys, to test the adequacy of State surveys and reduce Federal payments for State Medicaid administrative costs if such State surveys prove inadequate. Authorizes the Secretary to conduct a special survey of a facility when there is reason to question its compliance with this Act. Requires States to investigate complaints against, and monitor the compliance of, a facility with this Act's requirements if the facility was previously found out of compliance with such requirements or the State has reason to question its compliance. Requires that certain information regarding nursing facilities and their compliance with this Act's requirements be made available to the public. Provides long-term care ombudsmen, resident's physicians, and the State board which licenses facility administrators with notice of a facility's poor quality of care. Gives State Medicaid fraud and abuse control units access to facility survey and certification information. Sets the Federal matching percentage for nursing facility certification activities at 90 percent in FY 1990, 85 percent in FY 1991, 80 percent in FY 1992, and 75 percent thereafter. Eliminates current penalties applied to a State when its control over the utilization of skilled nursing or intermediate care facility services is deemed inadequate. Requires that when the Secretary or a State determines that a nursing facility's deficiencies immediately jeopardize residents' health and safety, immediate action be taken to remove the jeopardy and correct the deficiencies or such facility's participation in Medicaid be terminated. Directs the Secretary and States to apply certain other remedies where the health and safety of facility residents is not immediately jeopardized. Authorizes the imposition of civil money penalties against facilities found to be in compliance with this Act's requirements but to have been out of compliance previously. Provides that if a facility is out of compliance with any of this Act's requirements three months after having been found out of compliance with such requirements or on three consecutive standard surveys, Medicaid payments for newly admitted residents shall be denied and, in the latter case, on-site monitoring of the facility's compliance shall be established. Authorizes each State to establish a program providing rewards to facilities providing the highest quality of care. Sets forth special rules which are to be applied where a State and the Secretary do not agree on a finding of noncompliance or the remedies which should be prescribed. Requires States to provide each institutionalized Medicaid beneficiary who is not receiving payments under title XVI (Supplemental Security Income) of the Act with a monthly personal needs allowance of at least $35 in 1988, with subsequent annual increases in such allowance reflecting increases in the cost-of-living. Directs the Secretary to report to the Congress annually on the extent to which nursing facilities are complying with this Act's requirements, and the number and type of enforcement actions taken against such facilities. Subpart B: Other Provisions - Authorizes California to set a special Medicaid income eligibility level for a family of two individuals both of whom are adults and at least one of whom is aged, blind, or disabled. Requires a State, under a home or community-based waiver, to cover home or community-based services provided pursuant to a written plan of care to individuals age 65 or older with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a skilled nursing or intermediate care facility, the cost of which could be reimbursed under the Medicaid program. Provides that such a waiver shall be an initial three-year term and, upon a State's request, for additional five year terms. Sets funding limitations. Provides that for the initial determination of an institutionalized spouse's Medicaid eligibility the institutionalized spouse may transfer his or her resources to the community spouse to the extent the spousal share (computed by dividing the sum of the spouse's resources in half) is less than $12,000 (adjusted annually to reflect changes in the cost-of-living), but attributes any resources not solely in the ownership of the community spouse to the institutionalized spouse if such transfer is not made. Considers resources held in the name of the community spouse to be available to the institutionalized spouse to the extent their value exceeds $48,000 (adjusted annually to reflect changes in the cost-of-living), or, if greater, the amount a court has ordered to be retained by the community spouse for support. Provides that after the initial eligibility determination: (1) no resources of the community spouse will be considered available to the institutionalized spouse; and (2) the income of the institutionalized spouse will not be considered to include a specified personal needs allowance, community spouse monthly income allowance, family allowance, and incurred expenses for medical or remedial care for the institutionalized spouse that are not covered by a legally liable third party. Sets forth the formulas for determining such allowances. Gives either spouse the right to a hearing to establish that the minimum monthly maintenance needs allowance community spouse monthly income allowance is not adequate to support the community spouse without financial duress so that an adequate amount of support will be substituted for the allowance. Prohibits such allowance from being less than court-ordered support payments. Delays the Medicaid eligibility of institutionalized individuals who disposed of their resources at less than fair market value within two-years prior to applying for Medicaid benefits. Sets forth situations in which a delay shall not be applied. Directs the Secretary to report to the Congress by December 31, 1988, on means of recovering amounts from the estates of deceased Medicaid beneficiaries to pay for Medicaid skilled nursing or intermediate care facility services provided to such beneficiaries. Part 3: Addressing the Needs of Working Welfare Recipients - Amends the Medicaid program to require a State to continue a family's Medicaid eligibility for: (1) six months after the family loses eligibility under part A (Aid to Families with Dependent Children)(AFDC) of title IV of the Act because of increased earnings if the family has received AFDC payments for three of the preceding six months; and (2) for an optional 18 additional months if the family has received the entire six months of extended Medicaid coverage. Terminates extended Medicaid coverage if the family ceases to include a dependent child. Authorizes States to provide the extended Medicaid coverage by paying a family's: (1) expenses for health insurance offered by the caretaker relative's or absent parent's employer; or (2) premium and enrollment costs, during the 18-month extension period, for coverage under a group health plan offered to the caretaker relative, a group health plan offered by the State to its employees, or a health maintenance organization. Requires that States offering such alternative coverage pay, in addition to the premium and enrollment costs for such coverage, any other cost sharing amounts for pregnancy services and ambulatory preventive pediatric care for children born on or after September 30, 1985. Terminates the 18-month extension period if a family's earnings exceed 185 percent of the Federal poverty level or the caretaker relative has no earnings for a month due to his or her voluntary loss of employment without good cause. Authorizes States to impose a premium on families receiving the 18 months of extended coverage, but prohibits its exceeding ten percent of the amount by which a family's earnings exceed minimum monthly wage earnings. Requires States to extend Medicaid coverage for six months to families who lose AFDC eligibility as the result of the collection or increased collection of child or spousal support under part D (Child Support and Establishment of Paternity) of title IV of the Act if the family has received AFDC payments for three of the preceding six months. Part 4: Inflation Adjustment for Territories and Miscellaneous Provisions - Amends part A (General Provisions) of title XI of the Act to increase the maximum amount of annual Medicaid payments that may be made to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands and American Samoa. Amends the Medicaid program to make it clear that: (1) Medicaid clinic services include services furnished by clinic personnel to the homeless outside the clinic; (2) Medicaid physician services include services furnished by dentists. Requires each State to specify which hospitals in the State serve a disproportionate number of low-income patients with special needs and increase the rate or amount of Medicaid payments for such services. Sets forth the criteria for determining whether a hospital serves a disproportionate share of low-income patients, including the requirement that such hospitals have at least two obstetricians on staff who have agreed to serve Medicaid beneficiaries. Treats an agency of the State of New Jersey as a legal public entity which, after an appropriate arrangement with the Secretary, shall be considered a qualified health maintenance organization for purposes of the minimum enrollment period and restrictions on the termination of enrollment without cause. Makes it clear that Medicaid payments for inpatient hospital services, or skilled nursing or intermedicate care facility services shall not be limited by the Secretary to the amount which would be paid for such services under the Medicare program. Sets forth technical and miscellaneous amendments. Subtitle C: Vaccine Compensation - Vaccine Compensation Amendments of 1987 - Amends the Public Health Service Act to provide that payment of compensation for an injury or death from administration of a vaccine before the effective date of this provision shall be made from specified appropriations and that compensation for injury or death from administration on or after the effective date shall be made from the Vaccine Injury Compensation Trust Fund. Authorizes appropriations for FY 1989 through 1992. Removes provisions: (1) placing limitations on the amount of unreimbursable expenses which may be recovered; (2) requiring payments for projected expenses to be paid on a periodic basis; and (3) allowing payments for pain and suffering, emotional distress, and incurred expenses to be paid in a lump sum. Requires compensation for injury or death from administration of a vaccine on or after the effective date to be paid in a lump sum and payment for injury or death from administration before the effective date to be made in four annual installments. Repeals provisions relating to administration by the National Vaccine Injury Compensation Program of awards and relating to revision of awards. Repeals a provision relating to annual inflation increases for certain compensation and for civil penalties. Revises provisions relating to compensation for injury or death from administration of a vaccine before the effective date to change the categories for which compensation is prohibited and allowed and to limit specified types of compensation under certain categories to a stated amount. Directs the Secretary of Health and Human Services to review the number of awards in specified periods and, if the Secretary determines that the number exceeds the number of awards listed in a specified table, to notify the Congress of the determination. Prohibits, in such case, the filing of a petition after a stated period. Makes specified provisions relating to the filing of petitions and relating to additional remedies inapplicable to civil actions for damages for a vaccine-related injury or death for which a petition may not be filed because of such prohibition. Revises provisions relating to petitions for compensation. Allows withdrawal of a petition on which a court has failed to enter a judgment within a specified time. Allows, after withdrawal, maintenance of a civil action for damages. Authorizes awarding of costs of litigation to any plaintiff in certain circumstances in a citizen action against the Secretary for failure to perform under the National Vaccine Program subtitle. (Current law authorizes awarding of costs to any party when appropriate.) Makes general rules relating to petitions for compensation apply to those who administer as well as those who manufacture a vaccine. Subtitle D - User Fees - Directs the Nuclear Regulatory Commission to annually assess user fees. Title V: Committee on Interior and Insular Affairs - Directs the Nuclear Regulatory Commission annually to assess and collect, as of September 30, 1988, user fees in an amount that approximates 75 percent of the Commission's budget in the fiscal year in which such assessment is made. Requires any person who: (1) receives a service or thing of value from the Commission to pay user fees to cover Commission costs in providing such service or thing of value; and (2) holds certain licenses authorizing the operation of a utilization facility with specified thermal rating capacity to pay an annual fee in addition to the user fees. Requires such fee to be determined in a manner that ensures that those licensees who require the greatest expenditure of Commission resources pay the greatest annual fee. Mandates that the user and annual fees be deposited in the General Fund of the Treasury. Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to repeal the Commission's mandate to submit a feasibility study regarding annual charges, and to collect user charges based upon such report. Authorizes the State of Wyoming to expand a certain amount of abandoned mine reclamation funds for direct assistance to citizens evacuated from their homes in Campbell County due to hazards from methane and hydrogen sulfide gases. Coal Trade Equalization Act of 1987 - Directs the Secretary of the Interior to investigate and report to the Congress on the relationship between coal imports and: (1) the management of the Federal coal leasing program; and (2) the economic condition of the U.S. coal industry. Directs the Secretary to include in such report appropriate legislative recommendations if coal imports are adversely affecting the management of the Federal coal leasing program and the economic condition of one or more sectors of the U.S. coal industry. Amends the Tariff Schedules of the United States to impose an $8 per ton tariff on coal from countries whose coal exports to the United States historically exceed their imports from the United States. Amends the Trade Act of 1974 to include within the category of import-sensitive articles coal subject to the duty imposed under the Tariff Schedules of the United States. Federal Onshore Oil and Gas Leasing Reform Act of 1987 - Amends Federal law regarding competitive leasing of oil and gas for onshore Federal lands to increase from 640 acres to 2,560 acres the units of land open to competitive leasing. Restricts the maximum units in Alaska to 5,760 acres. Provides for lease sales to be: (1) conducted by oral bidding; and (2) held at least quarterly in each State (or more frequently at the Secretary's discretion). Conditions such lease sales upon the payment of specified royalties. Sets forth a $75 bidding fee. Requires the Secretary of the Interior (the Secretary) to accept the highest bid from a responsible bidder. Makes lands available for leasing without competitive bidding for a maximum one-year period if no bids have been received. Increases the annual lease rental from 50 cents to $1.00 per acre for the first five years, and for a minimum $3 per acre per year for each year thereafter. Increases the minimum royalty upon discovery of oil or gas in paying quantities from $1 per acre to $3 per acre. Requires the Secretary to make maps and narrative descriptions available to the public at least: (1) 60 days before offering lands for lease; and (2) at least 30 days before substantially modifying lease terms. Directs the Secretary to provide periodic notice to State and local governments and to the public regarding pending applications for drilling permits. Prescribes guidelines under which the Secretary (or the Secretary of Agriculture for national public domain forest lands) must regulate surface-disturbing activities conducted upon lease lands. Authorizes the Secretary to disapprove specified lease assignments at his discretion. Amends lease cancellation conditions to provide that leases will not be cancelled due to the lessee's non-compliance with lease terms if: (1) the leasehold contains a well capable of oil or gas production in paying quantities; or (2) the lease is committed to an approved cooperative, unit plan, or communitization agreement which contains a well capable of unitized substances production in paying quantities. Permits the issuance of oil or gas leases on public lands (or public domain national forest lands) only if such leasing has been evaluated and approved in a land use plan meeting certain statutory requirements. Prescribes guidelines for such land use plans. Prohibits the issuance of oil or gas leases upon certain lands allocated or designated as wilderness areas. Sets forth guidelines for the promulgation of regulations regarding lease sales. Imposes civil and criminal penalties upon persons who willfully and knowingly misrepresent the value of lands and leases under this Act. Grants to the States concurrent civil and criminal jurisdiction for violations of this Act. States that Federal law regarding competitive leasing of oil and gas for onshore Federal lands may be cited as the Mineral Lands Leasing Act of 1920. Amends the Reclamation Reform Act of 1982 to declare that it is the intent of the Congress that no person shall receive irrigation water at less than full cost on more than 960 acres of class I lands, or the equivalent, in which such person has an economic interest. Makes Federal reclamation law applicable to all trusts established under State or Federal law. Modifies the Federal reclamation law requirements applicable to trust lands. Prescribes the administrative procedures applicable to any person who receives irrigation water and enters into a farm management operational relationship. Sets forth penalties for evasion of such administrative provisions. Land and Water Conservation Fund Act Amendments of 1987 - Amends the Land and Water Conservation Fund Act of 1965 to increase from $10 to $25 the charge for the annual admission permit (the Golden Eagle Passport) into any entrance fee area of the National Park System. Authorizes the Secretary of the Interior to make available an annual admission permit for a reasonable fee for a specific unit or units. Sets fee limits for single-visit permits. Prohibits charging fees at any National Park unit located in an urbanized area where a fee was not charged prior to September 30, 1986. Directs the Secretary of the Interior to report to specified congressional committees a list of units and their proposed admission fees. Prohibits admission fees for persons 16 years of age or less. Sets admission fee limitations for Grand Canyon, Yellowstone, and Grand Teton National Parks. Makes admission fees available to the collecting agency for resource protection, research, interpretation, and maintenance at outdoor recreation facilities managed by that agency. Allocates funds collected by the National Park Service to Park units based upon operating expenses for 50 percent of the funds and on user and admission fees for the remainder. Permits the use of such funds for resource protection, research, and interpretation, and in the case of funds from user fees, for maintenance. Authorizes volunteers or other entities to sell permits and collect fees. Permits the charge of a transportation fee in lieu of an entrance fee at parks with transportation systems. Provides for the distribution of such funds with the park itself retaining 50 percent outright. Directs the Secretary to study the feasibility of adjusting entrance fees to encourage alternative transportation usage and visitation at off-peak times. Requires the study to include a pilot program at Yosemite National Park. Directs the Secretary to report to specified congressional committees within three years on such study. Extends the Land and Water Conservation Fund through FY 2015. Directs the President to make an annual accounting of fees collected and their proposed distribution. Prohibits fund transfers, as specified. Title VI: Committee on Merchant Marine and Fisheries - Subtitle A - Oil Pollution and Liability and Compensation - Oil Pollution Liability and Compensation Act of 1987 - Chapter I: Oil Pollution Liability and Compensation - Imposes joint, several, and strict liability for specified removal costs and damages upon the party responsible for a vessel or facility from which oil is either discharged into certain waters, or which poses a substantial threat of such a discharge. Exempts from such liability certain discharges permitted under Federal, State and local law. Defines conditions under which a mobile offshore drilling unit will be treated as either a tanker or as a facility for purposes of determining responsibility or excess liability. Sets forth defenses to liability under this Act. Sets forth limits to liability under this Act, with specified exceptions. Authorizes the Secretary of Transportation to establish by regulation a maximum liability limit. Requires the Secretary to report to the Congress from time to time regarding liability adjustments. Declares that the responsible party or his guarantor shall be liable to the claimant for interest on the amount paid in satisfaction of a claim for a specified period. Defines circumstances under which liability for injury to natural resources shall be to either: (1) the United States; (2) the affected State; or (3) a foreign government. Sets forth recovery and indemnification procedures. Sets forth the uses of the Oil Spill Liability Trust Fund (the Fund) including: (1) payment of removal costs and administrative expenses; and (2) contributions to the International Fund. Sets forth defenses to liability for such Fund and a specified maximum amount which may be paid from the Fund. Confers rights of subrogation upon the United States for payment of any claim by the Fund. Sets forth a claims procedure for removal costs or damages. Requires the Secretary to designate the source of a discharge and to immediately notify the responsible party or guarantor of such designation. Sets forth the advertisement procedures to be followed by such a designee or guarantor. Grants subrogation rights to any person (including the Fund) who pays compensation under this Act to any claimant for costs or damages. Requires the party responsible for certain vessels over 300 gross tons to establish and maintain evidence of financial responsibility to meet maximum liability limits. Requires the Secretary of the Treasury to withhold or revoke the clearance of any vessel which fails to certify such financial responsibility. Sets forth circumstances under which such vessels may have entry into U.S. ports or waters denied, or have their oil cargo seized. Imposes a civil penalty for failure to comply with the financial responsibility requirement. Restricts judicial review of any regulation promulgated under this Act to the Circuit Court of Appeals for the District of Columbia. Grants the district courts original jurisdiction over all actions arising under this Act. Sets forth a limitation period for actions for removal costs, damages, or contribution. Chapter II: Conforming Amendments - Sets forth conforming amendments to certain related statutes. Chapter III: Implementation of International Conventions - States that during any period in which the Civil Liability Convention and the Fund Convention are in force with respect to the United States, owner liability for pollution damage arising from a ship-related incident shall be determined according to such Conventions. Grants recognition to the International Oil Pollution Compensation Fund as a legal person under Federal law, and deems the Director of such Fund to have irrevocably appointed the Secretary of State as the Fund's agent for service of process for legal proceedings involving the Fund within the United States. Exempts such Fund and its assets from all direct taxation in the United States. Provides that certain required contributions with respect to oil received in the United States shall be paid to the International Fund from the Oil Spill Liability Trust Fund. Grants recognition of any final judgment of a court of any country which is a party to either the Civil Liability Convention or the Fund Convention. Sets forth the financial responsibility requirements of ship-owners whose vessels are subject to the Civil Liability Convention. Imposes specified sanctions and civil penalties upon persons violating the financial responsibility requirements. Waives all U.S. defenses based upon sovereign immunity with respect to any controversy arising under the Civil Liability Convention or the Fund Convention relating to any ship owned by the United States and used for commercial purposes. Authorizes the Secretary to prescribe regulations to implement this Act, and all Federal obligations under the specified Oil Pollution Conventions. Subtitle B: Navigation Enhancement User Fees - Navigation Enhancement User Fee Act of 1987 - Directs the Secretary of the department in which the Coast Guard is operating to establish fees to cover the costs of the Government to enhance the ability of a vessel to more safely transit the Persian Gulf, when requested or required of any department, agency, or instrumentality of the Government, and when the request is not for research and rescue services. Subtitle C: Investment in Panama Canal - Amends the Panama Canal Act of 1979 to require that the investment of the United States in the Panama Canal be increased by the amount of tolls and other receipts that covers interest on the U.S. investment and that was deposited in the Panama Canal Commission Fund before 1986. Title VII: Committee on Post Office and Civil Service - Increases Federal pay by three percent for FY 1988, 4.8 percent for FY 1989, and 5.2 percent for FY 1990. Makes such increases effective the first applicable pay period beginning on or after January 1, of the fiscal year involved (except in the case of prevailing rate employees, whose pay increases shall take effect 90 days later). Declares that amounts appropriated to provide for such increases shall cover not to exceed 35 percent of the increase for FY 1988 and 50 percent of the increase for FY 1989 and 1990. Requires the President to include in the budget for the United States for FY 1988, 1989, and 1990, estimates as to: (1) the total amount attributable to Federal pay increases; and (2) the total amount which would be required to provide for the full amount of such increases. Requires the continuation of six-day mail delivery until October 31, 1990. Eliminates the authority for members of the Board of Governors of the United States Postal Service to serve beyond the expiration of their terms. Title VIII: Committee on Veterans' Affairs - Expresses the sense of the Congress that: (1) the Congressional Budget Office should reverse its decision on accounting for loans sold with recourse by the Veterans Administration (VA); and (2) any change in the assets sales policy of the VA should not be considered in future budget resolutions as a means of achieving deficit reduction. Amends Federal veterans' benefits provisions to revise the amount of a housing loan that may be guaranteed by the VA from not more than 60 percent of the loan amount up to $27,500 to not more than 40 percent of the loan or $40,000, whichever is less, reduced by any entitlement previously received. Revises the amount of a loan that may be guaranteed for a veteran for the purchase of manufactured homes or lots from an amount not to exceed 50 percent of the loan amount or $20,000 to 30 percent of the loan or $20,000, whichever is less, reduced by the amount of any entitlement previously received. Increases the principal amount of a direct housing loan allowed to be made to a veteran from a specified ratio using $27,500 as its denominator to a ratio using $40,000, in conformance with the revised guarantee limitations. Revises the percentage of purchases of property acquired by the Administrator as the result of defaults on veterans' housing loans that may be financed by VA loans in FY 1988 through 1990. Title IX: House Committee on Ways and Means - Spending Measures - Subtitle A: OASDI Provisions - Part I: Coverage and Benefits - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to include inactive duty military training as covered employment. Treats all cash pay of agricultural employees who employers spend $2,500 or more a year for agricultural labor as covered wages. Considers employer payments into a life insurance plan established for his or her employees as covered wages if such payments are included in the employees' gross income under the Internal Revenue Code. Includes as covered employment, services performed by one spouse in the employ of the other spouse, except for domestic services performed in the employer spouse's home. Reduces to 18 the age after which services performed in the parents employ may be treated as employment, but requires a child to be 21 before service outside the employing parent's trade or business or domestic service in the parent's home will be considered employment. Makes reductions in title II survivors' benefits made to offset government pensions applicable to Federal employees receiving pensions under the Federal Employees' Retirement System or the Civil Service Retirement System, unless their pensions are based on at least five years of service. Lessens the severity of OASDI benefit reductions applicable to individuals whose benefits are based in part on noncovered service. Makes such reductions inapplicable to individuals who have at least 25 years of coverage. Authorizes the modification of an agreement between the Secretary and Iowa, providing OASDI coverage for certain State and local employees, to make police and firemen in Iowa eligible for OASDI coverage. Amends titles II and XVI (Supplemental Security Income) of the Act to require individuals to be paid interim benefits in cases where an administrative law judge has determined their entitlement to certain benefits, but the Secretary's final decision has not been issued within 110 days of the judge's decision. Extends, until June 1989, the continuation of disability benefits pending an individual's appeal of the termination of such benefits. Preserves an individual's eligibility for disability benefits for at least 60 months following his or her engagement in trial work, unless such individual has engaged in substantial gainful activity in three of those months. Amends the Internal Revenue Code to include employee tips within the wages on which social security employer taxes are based. Part 2: Other Social Security Provisions - Sets forth the procedure for determining the recoverable amount of fees for, and awarding fees to, attorneys who successfully represent the interests of OASDI claimants in administrative proceedings. Includes corporate directors within the definition of an "employee" under the OASDI program. Provides that when an individual dies before the close of a taxable year in which he or she would have attained retirement age the earnings test shall apply to the full 12-month taxable year. Prohibits the payment of OASDI benefits to individuals who have been deported pursuant to the Immigration and Nationality Act because of activities conducted under the direction of or in association with the Nazi government of Germany or its allies. Amends the OASDI and Medicare (title XVIII of the Act) programs to provide that public members of the Boards of Trustees of the Social Security Trust Funds who fill vacancies occurring before the expiration of their predecessor's term shall be appointed only for the remainder of such term. Part 3: Railroad Retirement Program - Amends the Internal Revenue Code to increase the rate of the tier 2 railroad retirement tax imposed on railroad employees and employers. Establishes a Commission on Railroad Retirement Reform to study issues pertaining to the long-term financing of the railroad retirement system. Requires the Commission to report to the President and the Congress regarding such study by October 1, 1989. Subtitle B: Family Welfare Reform - Family Welfare Reform Act of 1987 - Declares that, hereafter, the Aid to Families with Dependent Children program (part A of title IV of the Social Security Act) shall be known as the Family Support Program (FSP) and the aid paid to needy families with dependent children shall be called family support supplements. Part 1: National Education, Training, and Work (Network) Program - Amends the Aid to Families with Dependent Children (AFDC) program to require States to establish an education, training, and work program (Program) which helps needy children and parents avoid long-term welfare dependence. Requires private sector and local government involvement in planning and Program design to assure that participants are trained for jobs that will actually be available in the community. Requires adult recipients of family support supplements to participate in the Program if it is available in the political subdivision where he or she resides and State resources otherwise permit. Directs the State to fully inform such recipients of the opportunities offered under the Program. Lists recipients who are exempt from mandatory participation in the Program, including individuals who: (1) are ill, incapacitated, pregnant, or age 60 or older; (2) are needed at home due to the illness or incapacity of another family member; (3) work 20 or more hours a week; (4) are children under age 16 or attending, full time, an elementary, secondary, or vocational school, except in the case of certain minor parents; or (5) care for a child under age three, but such exception shall apply to only one percent in two-parent families. Prohibits States from requiring the participation of a parent or relative of a child under age six unless day or infant care is guaranteed by the State and participation is on a part-time basis. Authorizes the Secretary of Health and Human Services to permit States to require the participation of a parent or relative of a child who has attained age one but not age three if infant care is guaranteed by the State, within certain dollar limitations, and participation is on a part-time basis. Provides that if the caretaker relative or dependent child is attending a school or a course of vocational or technical training designed to lead to employment when he or she would otherwise commence participation in the Program, such attendance may constitute satisfactory participation in the Program, though the costs of such schooling or training shall not be covered by the FSP. Directs States to give priority in Program participation to families: (1) with teenage parents and parents who were under age 18 when their first child was born; (2) that have been receiving family support supplements continuously for two or more years; and (3) with children under age six. Requires States to make an initial assessment of the educational needs, skills, and employability of each Program participant and on that basis negotiate a family support plan with each participant which, to the maximum extent possible, reflects the participant's preferences. Requires each participant to then negotiate a contract with the State which specifies the duration of his or her participation as well as the activities the State will conduct and services it will provide in the course of such participation. Directs the State to assign a case manager to each participating family who is responsible for: (1) obtaining, on the family's behalf, any other services which may assure the family's effective participation; (2) monitoring a participant's progress; and (3) periodically reviewing and renegotiating the family support plan and the participant's contract with the State. Requires State Programs to provide a broad range of services and activities, including: (1) high school or equivalent education; (2) remedial education; (3) job search, training and placement services; and (4) counseling, information, and referral for participants experiencing personal and family problems which may be affecting their ability to work. Gives any participant lacking a high school diploma the opportunity to participate in a program addressing the education needs identified in the participant's initial assessment without interference from required participation in other programs and activities. Requires that children in participating families be encouraged to engage in the education or training activities available under the Program and be provided with additional services and incentives designed to keep them in school and help them obtain marketable job skills. Requires each work assignment to be consistent with the physical capacity, skills, experience, health, family responsibilities, and place of residence of each participant. Prohibits work assignments which displace a currently employed worker or position, impair existing contracts for services or collective bargaining agreements, fill the job of a worker who has been laid off or fired, or infringe on the promotional opportunities of a currently employed worker. Requires that the wage rate for any position to which a participant is assigned be at least equal to the current pay scale for that position, or, if there is no current pay scale for that position, at least equal to the greater of the applicable Federal or State minimum wage. Establishes a grievance procedure for complaints about the Program which are received from participants, subgrantees, subcontractors, and other interested persons. Prohibits States from requiring participants to accept a job which would result in a loss of income to the participant or his or her family. Requires that Program activities be coordinated with Job Training Partnership Act programs and any other relevant employment, training, and education programs available in the State. Authorizes any State to institute a work supplementation program under which such State reserves sums which would otherwise be payable to program participants as family support supplements and uses such sums instead to subsidize jobs for such participants. Authorizes any State to establish a community work experience program to provide experience and training for individuals not otherwise able to obtain employment. Limits such programs to projects which serve a useful public purpose utilizing, if possible, the participant's prior training, experience, and skills. Prohibits Program participants from filling established unfilled position vacancies. Limits community work program participants to work or training (or both) for up to six months or unpaid work experience or training for up to three months. Requires that: (1) a reassessment be made and a new employability plan developed for participants who do not obtain employment after participation in a community work program; and (2) other Program activities be coordinated with the community work program so that job placement has priority over participation in such program. Prohibits an individual from participating in job search without participating in one or more other Program services or activities if job search has continued for eight weeks or longer without the individual obtaining a job. Provides that when a mandatory Program participant fails without good cause to comply with any requirement imposed on his or her participation in such Program: (1) such participant's needs shall not be taken into account in determining the family support supplement; and (2) if such participant's spouse is not participating in the Program, the spouse's need shall not be taken into account in determining the family support supplement. Continues sanctions for a minimum of three months if the participant failed to comply on a previous occasion. Directs States, after three months of a participant's noncompliance, to remind the participant in writing of his or her option to end the sanction. Requires the Secretary of Health and Human Services to: (1) publish final regulations, within nine months of this Act's enactment, and performance standards, within one year of this Act's enactment, for such Programs; (2) develop a legislative proposal for modifying the Federal AFDC matching rate so that it reflects the relative effectiveness of the various States in carrying out the Programs; and (3) provide for the continuing evaluation of State Programs and the conduct of research on making such Programs more effective. Directs the Secretary to establish uniform reporting requirements requiring each State to periodically furnish Program information to the Secretary, including the average monthly number and types of families assisted under each Program service and activity, the amounts expended on such families, and the length of time for which such families are assisted. Sets the Federal matching rate at 65 percent of the expenditures for education and training under the Program and 50 percent of the administrative costs of such Program. Amends title XI (General Provisions) of the Act to authorize States to conduct demonstration projects testing: (1) financial incentives and interdisciplinary approaches to reducing school dropouts, encouraging skill development, and avoiding the welfare dependence of children receiving family support supplements; (2) the effect of in-home early childhood development and pre-school center-based development programs on families receiving family support supplement payments and participating in this Act's Program; and (3) whether eliminating durational standards, used in defining unemployment for family support supplement eligibility purposes, and requiring parents to accept reasonable job offers while preserving their eligibility for supplement payments would encourage their entrance into the permanent work force and thereby reduce FSP costs. Authorizes the Secretary to make grants to States to assist in financing such projects. Part 2: Day Care, Transportation, and Other Work-Related Expenses - Requires States to either: (1) provide day care for dependent children and incapacitated individuals living in the same home as a dependent child; or (2) reimburse the caretaker relative for the cost of such care, if and to the extent such care is directly related to an individual's participation in the Program, reasonably necessary for such participation, and cost-effective. Provides coverage for certain transportation and other work-related costs. Continues day care coverage for six months after a family's eligibility for support supplements ceases, but permits States to reduce such coverage on the basis of a family's ability to pay. Authorizes State demonstration projects testing: (1) whether the employment of parents receiving family support supplements as day care providers for children receiving such aid will make additional day care services available while creating employment opportunities for such parents; and (2) the effect of increasing the maximum excludable value of automobiles for FSP eligibility purposes. Directs States to regularly assess the availability and reliability of child care services available to Program participants, and when necessary, develop new child care resources and coordinate Family Support program child care with other child care programs. Part 3: Real Work Incentives - Excludes, in determining a family's eligibility for supplement payments: (1) the earned income of students who are not full-time employees; (2) $100 plus 25 percent of any family member's monthly earned income; (3) $50 of monthly child support payments; and (4) earned income credits payable to the family under the Internal Revenue Code. Authorizes States to disregard certain of the income of dependent children or minor parents applying for family support supplements if the dependent children are full-time students or the income is derived from a Job Training Partnership Act program. Prohibits application of the $100 and 25 percent earned income exclusion in the case of individuals who, without good cause: (1) terminate their employment or reduce their income; (2) refuse a bona fide offer of employment; or (3) fail to make a timely report of their monthly earned income. Authorizes States to increase the amount of an individual's earned income excluded under this Act in making family support supplement eligibility determinations. Part 4: Transitional Services for Families - Requires a State to continue a family's Medicaid (title XIX of the Act) eligibility for six months after the family's eligibility for family support supplements ends, unless such eligibility was terminated due to fraud or the imposition of a sanction. Terminates extended Medicaid coverage if the family ceases to include a dependent child or a family member engages in certain conduct which would warrant sanctions under the Family Support program. Part 5: Child Support Enforcement Amendments - Amends part D (Child Support and Establishment of Paternity) of title IV of the Act to direct States to establish binding guidelines for child support award amounts. (Currently, such guidelines need not be binding.) Creates a rebuttable presumption in any judicial or administrative proceeding that the child support award which results from the application of such guidelines is correct. Requires States to review and, if necessary, update such guidelines once every three years and review and update all child support orders at least once every two years to ensure that they continue to comply with child support award guidelines. Requires States to abide by State due process requirements when updating child support awards. Directs States to: (1) determine the paternity of every child within the State whose family receives family support supplements as soon as possible after the child's birth but in no event later than their 18th birthday; and (2) require the parties in a contested paternity case to submit to genetic tests upon the request of a party in such case, using a 95 percent probability index from blood tests as a rebuttable presumption of paternity. Encourages States to establish and implement simple civil processes for voluntarily acknowledging paternity and a civil procedure for establishing paternity in contested cases. Sets performance standards for paternity determinations from FY 1989 through 1993. Alters the formula for determining the incentive payment to be paid to a State for its child support collection efforts to take into account cases in which a child's paternity has been established but support collection has not begun or amounts to less than $100 a month. Amends part A (General Provisions) of title XI of the Act to authorize States to conduct demonstration projects identifying and testing possible solutions to problems arising in connection with visitation by absent parents and child custody. Authorizes the Secretary to make grants to States to assist in financing such projects. Requires the Department of Health and Human Services to establish the time within which a State must respond to requests for assistance in locating absent parents or establishing paternity, and begin proceedings to establish child support awards. Requires States to have an operational automatic data processing and information retrieval system for the child support enforcement and establishment of paternity determination process by October 1, 1992. Excludes the cost of certain interestate child support enforcement projects from the computation of the incentive payment to a State for its child support collection efforts. Lowers the Federal matching rate for part D expenses to 66 percent for States which are not fully in compliance with the Child Support Enforcement Amendments of 1984 at any time after the expiration of six months after this Act's enactment. Sets such rate at 70 percent for States which comply with such amendments and have in effect a law providing, with specified exceptions, for the immediate withholding of court-ordered child support from a parent's wages. Establishes a commission to examine the problems of interestate child support enforcement and develop a new model interestate law to facilitate and strengthen such enforcement. Requires such commission to report its findings to the President and the Congress with one year of this Act's enactment. Authorizes appropriations. Directs the Secretary to conduct a study of the patterns of expenditures on children in two-parent families, in single-parent families following divorce, and in single-parent families in which the parents were never married, giving particular attention to the relative standards-of-living in households in which both parents and all of the children do not live together. Directs the Secretary to report to the Congress on such study within two years of this Act's enactment. Authorizes appropriations for such study. Requires the Secretary to make grants to States for demonstration projects under which absent parents who owe child support, but whose income is insufficient to pay such support, are encouraged to participate in work, education, and training activities available in the State. Directs the Secretary to collect and maintain up-to-date child support enforcement data. Requires the Secretary of Labor to make the name, social security number, current address, and place of employment of any specified individual available to the Parent Locator Service and State child support enforcement agencies which request such information. Part 6: Pro-Family Welfare Policies - Requires States to pay family support supplements with respect to dependent children of unemployed parents in two-parent families. Includes within the definition "quarter of work", for the purpose of determining a family's eligibility for assistance, the parent's: (1) full-time attendance as an elementary or secondary school student; (2) full-time attendance in a vocational or technical training course; and (3) participation in a Job Training Partnership Act education or training program. Directs the Comptroller General to conduct a study of State FSP administration in cases involving unemployed parents and recommend changes to the Congress, within six months of this Act's enactment, which would make such administration less cumbersome and prone to error. Directs States to assign an individual case manager to each family receiving family support supplements which is headed by a minor parent. Requires unmarried minor parents to live with a parent, legal guardian, other adult relative, or in a foster home, maternity home, or other supportive living arrangement, unless the State determines that, given specified circumstances, it is impossible or inappropriate for them to do so. Treats the minor parent and minor parent's children as a family separate from the parent and parent's children with whom the minor parent resides in determining the minor parent's eligibility for supplement payments. Authorizes States to condition a minor parent's eligibility on his or her: (1) part-time school attendance; or (2) training in parenting and family living skills. Repeals the requirement that part of the income of the parent of a minor parent with whom such minor parent resides be attributed to the dependent child in a minor parent family. Part 7: Benefit Improvements - Directs each State to re-evaluate annually its FSP need and payment standard, giving particular attention to whether the amount it has assumed to be necessary for shelter is adequate. Sets forth reporting requirements. Increases by 25 percent the Federal share of family support supplements which represent an increase in the supplement level in effect on September 30, 1988. Requires the National Academy of Sciences to conduct a study of a new national system of welfare benefits for low-income families with children giving particular attention to what an appropriate national minimum benefit might be and how it should be calculated. Directs the Academy to report its recommendations to the Secretary (for prompt transmittal to the Congress) within two years of this Act's enactment. Part 8: Miscellaneous Provisions - Establishes a Commission on the Coordination of Family Support and Food Stamp Policies to conduct a study and make recommendations to the President and the Congress within one year of this Act's enactment regarding the coordination of the food stamp program under the Food Stamp Act of 1977 and the Family Support Program. Directs the Secretary to establish uniform reporting requirements requiring each State to periodically furnish the Secretary with information regarding FSP implementation. Amends title XX (Block Grants to States for Social Services) to require each State to submit an annual report to the Secretary containing specified information regarding the use of such funds. Directs the Secretary to convene an Interagency Panel to design, implement, and monitor a series of implementation and evaluation studies to assess the methods and effects of the programs initiated under this subtitle. Requires the Panel to report to the President and the Congress annually over the five-year period beginning with this Act's enactment on such studies. Establishes a program providing grants to States selected to conduct demonstration projects testing whether FSP housing costs can be reduced by constructing and rehabilitating permanent housing for rental to FSP families who would otherwise require FSP emergency assistance in the form of temporary housing. Provides that, to be eligible for selection as one of three States authorized to conduct such a project, a State must: (1) be currently providing FSP emergency housing assistance; (2) have an acute need for Federal assistance by virtue of the large number of homeless FSP families, and shortages of low-income housing, in the jurisdiction(s) where such project would be conducted; and (3) submit a plan to achieve significant cost saving over a ten-year period through the conduct of such project. Requires that such grants be used to provide permanent housing which is: (1) owned by the State, an instrumentality of the State, or a nonprofit organization; (2) available to families who have been unable to find decent housing at rents that can be paid with FSP aid for shelter; and (3) located in jurisdictions experiencing a critical shortage of such housing. Requires that: (1) the most costly temporary housing be retired from use in the emergency assistance program as permanent housing becomes available for occupancy, unless temporary housing is demonstrably needed; and (2) the costs of providing permanent housing be lower than costs which would be incurred if, instead, the State made FSP emergency assistance payments providing temporary housing. Sets the State contribution to the cost of constructing or rehabilitating such housing at least the current State FSP share increased by ten percent. Authorizes appropriations for the grant program for each of the first five fiscal years following FY 1987. Authorizes the Secretary to approve, as alternatives to the Family Support Program: (1) a five-year demonstration project testing New York State's Child Support Supplement Program; and (2) a five-year demonstration project testing Washington State's Family Independence Program. Requires the Secretary of Health and Human Services and the Secretary of Housing and Urban Development to establish an interagency working group to conduct a study and report to the Congress within six months of this Act's enactment on the housing problems faced by FSP families. Provides that in determining a family's support supplement level the needs of a family member who is a drug addict or alcoholic shall not be taken into account if such individual terminates his or her enrollment in a treatment program before such treatment is completed and does not resume treatment. Amends part A (General Provisions) of title XI of the Act to include American Samoa in the Family Support program. Limits Federal funding for American Samoa's program to $1,000,000 for any fiscal year. Increases the total amount of Federal payments which may be made to Puerto Rico, Guam, and the Virgin Islands in any fiscal year under titles I (Grants to States for Old-Age Assistance for the Aged), X (Grants for States for Aid to the Blind), XIV (Grants to States for Aid to the Permanently and Totally Disabled), XVI (Grants to States for Aid to the Aged, Blind, or Disabled), and parts A (Aid to Families with Dependent Children) and E (Foster Care and Adoption Assistance) of title IV of the Act. Subtitle C: Provisions Relating to Public Assistance and Unemployment Compensation - Part 1: AFDC and SSI Amendments - Amends the Deficit Reduction Act of 1984 to permanently disregard in-kind assistance provided by nonprofit organizations to Supplemental Security Income (SSI) program (under title XVI of the Social Security Act) and FSP beneficiaries in determining the need or eligibility of such recipients. Amends the Family Support program to authorize States to establish and operate an FSP fraud control program under which an individual who fraudulently establishes or maintains his or her family's FSP eligibility shall have his or her needs ignored in determining the families need for FSP assistance. Sets the Federal share of the costs of such fraud control programs at 75 percent. Excludes real property which, for specified reasons, cannot be sold from SSI resource eligibility determinations. Directs the Secretary, where necessary to avoid undue hardship, to suspend the penalties applied when individuals become SSI eligible by disposing of their resources at less than market value. Applies such penalties only where resources were disposed of within the past 24 months at more than $3,000 below their market value. Excludes interest and appreciation on amounts set aside to meet burial and related expenses from SSI resource eligibility determinations and family support supplement payments from SSI income eligibility determinations. Amends the SSI program to authorize States to treat a husband and wife living in the same medical facility, whether or not they share a room, as though they were an SSI-eligible individual and his or her eligible spouse rather than two eligible individuals. Extends, until July 1, 1988, the deadline for disabled widows or widowers who became ineligible for SSI benefits by reason of the increase in OASDI benefits caused by the Social Security Amendments of 1983 to apply for Medicaid coverage. Authorizes the Secretary to make an emergency cash advance to presumptively eligible individuals who are initially applying for SSI benefits up to the amount which would be payable for the first month to an eligible individual with no other income. Extends Federal reimbursement of State interim SSI assistance to cover such assistance provided for the period during which: (1) an individual's benefits were erroneously terminated or suspended; or (2) an issued benefit check was lost or stolen before being negotiated and was not promptly replaced. Entitles individuals who are applying for or receiving SSI benefits on the basis of blindness to elect to receive either supplementary notice by telephone or initial notice by certified mail of any determination made or other action taken with respect to such individual's SSI rights. Directs the Secretary to study the desirability and feasibility for extending such notification rights to other individuals who may lack the ability to read. Prohibits individuals who are in a public emergency shelter for the homeless for more than 12 consecutive months from being eligible for SSI payments. (Currently, SSI eligibility terminates when an individual has been in such shelter for more than three months in a 12-month period.) Excludes amounts received under the OASDI or SSI program for the underpayment of benefits within the preceding 12 months from SSI resource eligibility determinations. (Currently, such exclusion applies to reimbursement for under payments within the preceding six months.) Continues the provision of full SSI benefits to individuals whose institutionalization is likely not to exceed three months during a continuous period of institutionalization and who need to continue to maintain and provide for the expenses of the home or living arrangement to which he or she may return after institutionalization. Treats individuals who are ineligible for SSI benefits by reason of their receipt of widow's or widower's insurance benefits under the OASDI program as SSI recipients for purposes of the Medicaid program. Authorizes the Secretary to make grants to up to ten States so that each may create an SSI Outreach and Eligibility Team to test the feasibility of developing and using special procedures to: (1) ensure that all homeless individuals in shelters understand their rights to benefits under the SSI program and other Social Security Act programs; (2) assist such individuals in applying for benefits under such programs; and (3) ensuring that all such individuals receive the benefits to which they are entitled. Requires the Secretary to report at least annually to the Congress regarding such outreach activities. Provides that an alien's three-year period of ineligibility for SSI benefits shall not apply when the organization sponsoring the alien is no longer in existence or is adjudged bankrupt. Makes it clear that a State may include in its FSP standard of need an amount for shelter that varies according to the type of housing occupied. Authorizes States to furnish AFDC emergency shelter assistance beyond the current 30-day per year limitation on such assistance. Authorizes the Secretary to approve projects under which States encourage landlords to make permanent shelter available to families receiving AFDC emergency assistance by paying rent for such shelter for the first year at the rate paid for comparable commercial transient accommodations and for the remainder of the lease, which must run for at least two more years, at the applicable AFDC housing allowance. Part 2: Foster Care and Child Welfare Amendments - Amends the Adoption Assistance and Child Welfare Act of 1980 to extend permanently the provision of foster care payments for dependent children voluntarily placed in foster care by their parent or legal guardian. Amends part E (Foster Care and Adoption Assistance) of title IV of the Act to extend, through FY 1989: (1) the ceiling on Federal payments to States for foster care expenditures; and (2) the authority for States to use such payments to cover expenditures under part B (Child Welfare Services) of title IV of the Act. (Currently, such ceiling and authorization runs through FY 1987.) Provides that where a child for whom foster care payments are being made resides in the same foster home or child-care institution as his or her son or daughter the payments made for such child shall include the cost of certain items provided to or on behalf of the child's son or daughter. Part 3: Child Support Enforcement Amendments - Amends part D (Child Support and Establishment of Paternity) of title IV of the Act to continue to provide child support enforcement services to families which cease to receive assistance under the FSP. Requires States to provide child support enforcement services to families covered under the Medicaid program. Part 4: Unemployment Compensation - Changes the effective date for certain extended unemployment benefits program disqualification requirements for purposes of the determination of the amount of the Federal payment to a State under the Federal-State Extended Unemployment Compensation Act of 1970. Directs the Secretary of Labor to enter into agreements with three States for a demonstration program to provide self-employment allowances in lieu of regular or extended unemployment compensation to a certain number of eligible individuals. Requires States to provide specialized services to such individuals. Makes State and Federal requirements relating to availability for work, active search for work, or refusal to accept suitable work inapplicable to such individuals. Requires State evaluation of such program. Directs the Secretary to report to the Congress on such program two years and four years after the enactment of this Act. Amends the Federal Unemployment Tax Act (FuTA) to extend the 6.2 percent rate of the gross employer tax through 1988, 1989, and 1990 (thus extending the 0.2 percent surtax for three years). Lowers such rate to 6.0 percent for 1991 and thereafter. Amends the Social Security Act to direct the Secretary of the Treasury to transfer the amount of additional revenue from such FuTA surtax from the employment security administration account as follows: (1) 50 percent to the Federal unemployment account; and (2) 50 percent to the extended unemployment compensation account. Increases the limitation on the amounts in the two latter accounts from 0.125 to 0.375 of total covered wages. Sets forth a rate of interest on advances to the Federal unemployment account and the extended unemployment compensation account. Credits to the Federal unemployment account interest paid by States on advances. Subtitle D: Medicare Program - Part 1: Provisions Relating to part A of the Medicare Program - Subpart A: Payment for Services - Amends part A (Hospital Insurance) of title XVIII (Medicare) of the Social Security Act to increase hospital prospective payment rates by one percent for FY 1988, by the market basket percentage increase minus 4.2 percent for FY 1989, and by the market basket percentage increase minus 1.7 percent for FY 1990. Provides an additional one percent increase in such rates in FY 1988, 1989, and 1990 for hospitals located in rural and large urban areas. Makes further payment rate adjustments for hospitals which have indirect medical education costs, serve a disproportionate share of low-income patients, or are exempt from the prospective payment system (PPS). Treats certain hospitals which are located in a rural county which is adjacent to one or more urban areas as being urban hospitals for Medicare payment purposes. Permits a rural hospital with less than 100 beds to furnish extended care services. (Currently, rural hospitals must have less than 50 beds to furnish such services.) Prohibits the making of Medicare payments to hospitals with more than 49 beds for extended care services: (1) which a patient receives after a bed has been available for five days in a skilled nursing facility located within the same region as the hospital, unless the patient's physician certifies that transferring the patient to such facility is medically inappropriate; and (2) to the extent such services utilize more than 15 percent of the bedspace over a cost reporting period. Directs the Secretary of Health and Human Services to report to the Congress by February 1989 concerning: (1) the proportion of hospital admissions for extended care services which are denied or approved by a peer review organization; and (2) methods of encouraging eligible hospitals that have a low occupancy rate and are located in areas in need of extended care service providers to enter into agreements with the Secretary to provide such services. Extends, through FY 1990, the provision of additional payments to sole community hospitals experiencing a decrease of more than five percent in patient volume for a cost reporting period due to circumstances beyond their control. Requires the Secretary to report to the Congress by March 1, 1988, on the appropriateness of the criteria for designating hospitals as sole community hospitals. Extends the Medicare classification of rural referral centers to include rural hospitals having more than 275 beds. (Currently, such hospitals must have more than 500 beds to be classified as rural referral centers.) Requires the Secretary to report to the Congress by March 1, 1989, on the criteria used for classifying hospitals as rural referral centers. Directs the Secretary to establish three-year demonstration projects to determine appropriate methods of strengthening the financial and managerial capability of isolated and financially distressed rural hospitals to provide necessary health care services. Sets forth reporting requirements. Reduces Medicare payments for a hospital's capital-related costs in FY 1987. Requires that, after FY 1991, payments for such costs be made in accordance with a prospective payment system established by the Secretary. Directs the Prospective Payment Assessment Commission to report to the Congress by May 1, 1988, on the suitability and feasibility of linking payment for capital-related costs to hospital occupancy rates. Requires Medicare fiscal intermediaries to prepare and submit to the Congress, the Health Care Financing Administration, the Congressional Budget Office, and the Congressional Research Service of the Library of Congress within 45 days after the close of each calendar quarter a report which includes, in a summary form for all hospitals and on a hospital-specific basis, information required from hospitals over the previous four calendar quarters regarding services they perform, revenues they collect, and costs they incur. Sets uniform hospital cost reporting periods. Raises the number of Medicare patient days which a skilled nursing facility must have had in the previous cost reporting period in order to elect to be paid under the PPS from 1,500 to 2,500 patient days. Sets forth miscellaneous and technical provisions. Subpart B: Nursing Home Reform - Amends the Medicare program to set forth requirements for skilled nursing facilities (other than facilities for the mentally retarded), including requirements that such facilities: (1) primarily engage in providing residents with nursing care or rehabilitation services directed toward residents' mental, psychosocial, and physical well-being; (2) provide such care in accordance with a written plan of care initially prepared and periodically reviewed and revised, by a team which includes the attending physician and a professional registered nurse, on the basis of assessments of a resident's functional capacity conducted upon the resident's admission and after a significant change in the resident's physical or mental condition, but in no case less often than annually; (3) provide, in addition to nursing and rehabilitative services, such physicians' services, medically-related social services, pharmaceutical services, dietician services, and dental services as are required to fulfill each resident's plan of care; (4) require nurse aides to complete a State-approved training or retraining program before participating in resident care, and have an ongoing program of nurse aide training and performance review; (5) require a physician's supervision of each resident's care, the maintenance of clinical records on all residents, and 24-hour nursing services; (6) protect specified resident rights, including the right to appeal an involuntary transfer or discharge from the facility; (7) safeguard a resident's funds upon the resident's authorization; (8) notify the State agency responsible for licensing the facility of changes in the ownership, control, or administration of the facility; (9) adopt certain measures to preserve facility safety and sanitation; (10) meet such other conditions which the Secretary of Health and Human Services deems necessary for resident's health and safety. Subjects nursing facilities which participate in the falsification of resident assessments to civil money penalties and the required use of independent assessors thereafter. Requires States to: (1) specify, by September 1, 1988, State-approved nurse aide training and testing programs which meet minimum standards to be established by the Secretary by March 1, 1988; and (2) maintain a registry of nurse aides who have successfully completed such programs, including specific findings of resident neglect or abuse involving such individuals. Prohibits State approval of a training program offered by a facility that has been out of compliance with the Act's requirements within the preceding two years. Requires States to: (1) establish a fair mechanism which meets Federal guidelines to be established by October 1, 1988, for hearing appeals on involuntary transfers of residents from nursing facilities; and (2) implement and enforce standards which are to be developed by the Secretary by March 1, 1988, regarding the qualifications of nursing facility administrators. Reimburses nursing facilities for the reasonable costs of complying with this Act's requirements. Directs the Secretary to report to the Congress by January 1, 1992, on the implementation of the nursing facility resident assessment process. Requires States to conduct periodic educational programs for the staff and residents of nursing facilities on current regulations, procedures, and policies concerning the quality of care provided at such facilities. Makes the Secretary responsible for certifying that State nursing facilities comply, and States responsible for certifying that other nursing facilities comply with Medicare nursing facility requirements. Bases such certifications on standard surveys to be conducted within two months of any change in the ownership or administration of such a facility and, on an unannounced basis, at least every 15 months. Prohibits the Statewide average interval between surveys from exceeding one year. Subjects facilities with poor compliance records to extended surveys. Requires that surveys be conducted by a multidisciplinary team of professionals who receive preservice and continuing training from the State. Directs States to use specialized survey teams to survey and carry out enforcement actions against chronically substandard facilities. Directs the Secretary to: (1) develop and test a protocol for conducting surveys; (2) establish minimum qualifications for surveyors; and (3) conduct sample surveys of nursing facilities, within two months of State surveys, to test the adequacy of State surveys, and, if the State surveys prove inadequate, train the State survey team or designate another State to perform such survey and certification activities. Authorizes the Secretary to conduct a special survey of a facility when there is reason to question its compliance with this Act. Requires States to investigate complaints against, and monitor the compliance of, a facility with this Act's requirements if the facility was previously found to be out of compliance with such requirements or the State has reason to question its compliance. Requires that certain information regarding nursing facilities and their compliance with this Act's requirements be made available to the public. Provides resident's physicians and the State board which licenses facility administrators with notice of a facility's poor quality of care. Gives State Medicaid (title XIX of the Act) fraud and abuse control units access to facility survey and certification information. Requires that survey results be posted in a place which is readily accessible to residents and their representatives. Requires the Secretary or a State, upon determining that a nursing facility's deficiencies immediately jeopardize residents' health and safety, to terminate facility's Medicare participation or take immediate action to remove the jeopardy and correct the deficiencies. Authorizes the Secretary and States to apply certain other remedies, which States must establish by October 1, 1989, where the health and safety of facility residents is not immediately jeopardized. Provides that if a facility is out of compliance with any of this Act's requirements six months after having been found out of compliance with such requirements, Medicare payments for newly admitted residents shall be denied. Sets forth special rules which are to be applied where a State and the Secretary disagree on a finding of noncompliance or the remedies which should be prescribed. Part 2: Provisions Relating to Parts A and B of the Medicare Program - Amends part A (Hospital Insurance) and B (Supplementary Medical Insurance) of the Medicare program to require that the time elapsing between: (1) a fiscal intermediaries' receipt of a claim under part A and its payment approximates 20 days for FY 1988 claims; and (2) a fiscal intermediaries' and carriers' receipt of a Medicare claim and its payment approximates 23 days for FY 1989 claims and 25 days for FY 1990 claims. Prohibits the Secretary from making any policy change, before October 1, 1990, which is primarily intended to delay Medicare claims processing. Imposes civil monetary penalties and intermediate sanctions on HMOs which: (1) fail substantially to provide medically necessary items and services if the failure adversely affects the enrollee; (2) impose charges on individuals in excess of those permitted; (3) act to expel or refuse to re-enroll an individual for medical reasons; (4) engage in any practice that denies or discourages enrollment by individuals whose medical condition or history indicates a need for substantial future medical services; or (5) misrepresent or falsify enrollment information, or enroll an individual without the individual's knowledge. Prohibits the Secretary from conducting any capitation demonstration project with an entity which is not an HMO if such project: (1) involves more than $15,000,000 of Medicare funds in any year without specific congressional authorization, or (2) provides for a capitated payment rate in excess of the HMO capitated payment rate. Deems a specified nonprofit corporation of Michigan which enrolls individuals with HMOs to have satisfied the limits on Medicare and Medicaid (title XIX of the Act) beneficiaries enrolled with an HMO if such limits are met with respect to all individuals enrolled with each such HMO and no more than 20 percent of the members of each such HMO are Medicare beneficiaries. Authorizes certain HMOs which contracted with a State prior to 1970 to provide services to Medicaid beneficiaries to elect to have members of their subdivisions, subsidiaries, or affiliates considered as members of the parent organization for purposes of the limitation on Medicare and Medicaid beneficiaries enrolled with HMOs. Sets forth miscellaneous and technical provisions. Part 3: Provisions Relating to Part B of Medicare Program - Amends part B (Supplementary Medical Insurance) of the Medicare program to set the prevailing charges for the services of a nonparticipating physician at 95 percent of the prevailing charges for the services of a participating physician. Increases the medical economic index by two percent for physicians' services furnished in 1988. Reduces the prevailing charge for cataract surgery, coronary artery bypass surgery, total hip replacement, transurethral resection of the prostate, suprapubic prostatectomy, diagnostic and therapeutic dilation and curettage, and carpal tunnel repair. Limits nonparticipating physicians' actual charges for such procedures if such reductions in prevailing charges result in reductions in the reasonable charges for such procedures. Prohibits the prevailing charge for ophthalmic ultrasound procedures from exceeding five percent of the prevailing charge for extracapsular cataract removal with lens implantation. Limits the reasonable charge for an intraocular lens implanted during cataract surgery in a physician's office or an ambulatory surgery center to the acquisition cost for the lens plus a handling fee. Limits nonparticipating physicians' actual charges for such procedures and lens. Requires that Medicare payments for a diagnostic test (other than a clinical diagnostic laboratory test) be made to the person who or the entity which performed or supervised the test. Prohibits physicians or suppliers from billing Medicare part B enrollees for such tests. Requires the Secretary to review prevailing charges for diagnostic tests and adjust those charges which are excessive. Requires physicians to complete and submit to Medicare carriers on beneficiaries' behalf the standard forms for benefit claims by the date they charge such beneficiaries for covered items or services when such claims are not assigned. Directs the Secretary to establish a procedure whereby a part B beneficiary may assign his or her rights of payment under a Medicare supplemental health insurance policy for an item or service furnished by a participating physician or supplier so that such physician and supplier may be paid directly by the supplemental policy. Eliminates Medicare payments for a return on equity capital for outpatient hospital services. Provides coverage under part B of the Medicare program for therapeutic shoes furnished to individuals with severe diabetic foot disease. Directs the Secretary to provide for the conduct of demonstration projects in at least four sites to determine the practicality of providing community nursing services on a prepaid, capitated basis to Medicare beneficiaries as a means to improve home health care and reduce the need for more costly institutional care. Requires the Secretary to report to the Congress within four years of this Act's enactment regarding such projects. Directs the Secretary to: (1) conduct various studies regarding Medicare payments for physicians' services; (2) develop uniform definitions of physicians' services by July 1, 1989; (3) expand a study being conducted on the development of a relative value scale for physicians' services to include specified additional physicians' services; and (4) conduct a survey of the out-of-pocket costs incurred by Medicare beneficiaries for medical care. Requires the Physician Payment Review Commission to study geographic variations in reasonable or prevailing charges under part B of the Medicare program. Sets forth reporting requirements. Sets forth miscellaneous and technical provisions. Part 4: Peer Review Organizations - Authorizes the Secretary to extend existing contracts with peer review organizations (PROs) under part B (Peer Review) of title XI of the Act for six months and for up to two one-year terms. Amends part B of title IX of the Act to authorize the Secretary to renew a PRO's contract for a three-year period if the PRO has been performing satisfactorily. (Currently, such contracts are renewable for two-year periods.) Amends part B of the Medicare program to protect Medicare beneficiaries from liability for services which PROs determine are not covered under the Medicare program. Amends part B of title IX of the Act to set forth factors which PROs must take into account in developing norms for evaluating treatment which may be performed on an outpatient basis. Requires PROs to: (1) offer to provide, at least quarterly, for a physician representative of the PRO to meet with the staff of each hospital regarding the PRO's review of the hospital's Medicare services; and (2) publish and distribute to providers and practitioners, at least biannually, a report describing the PRO's findings with respect to situations in which the PRO has frequently found medical care to be inadequate. Part 5: State Health Insurance Pools - Amends the Internal Revenue Code to create an incentive for each State to establish a health insurance pool by imposing a tax on large employers equal to five percent of the gross wages of their employees in the State if such employers do not participate in such State pool. Requires that State health insurance pools: (1) be open to all State residents who are not eligible for benefits under the Medicaid program or part A of the Medicare program; and (2) provide levels of health insurance typical of levels provided by large employer groups. Subtitle E: Customs User Fees; Trade and Customs Agency Authorizations - Amends the Consolidated Budget Reconciliation Act of 1985 to make articles returned to the United States after having been exported and articles assembled abroad in whole or in part of fabricated components which are products of the United States subject to the requirement that the Secretary of the Treasury collect a specified fee for the processing of any merchandise entered or withdrawn from warehouse for consumption in the United States. Requires that the fee charged with respect to the processing of merchandise: (1) for articles returned to the United States after having been exported be applied to the value of the foreign repairs or alterations to the merchandise; and (2) for merchandise assembled abroad be applied to the full value of such merchandise, less the cost of value of U.S. products. Allows the Secretary, for articles returned to the United States after having been exported or for articles of fabricated components assembled abroad, to collect the fee charged on the processing of the merchandise on the basis of aggregate data derived from financial and manufacturing reports used by the importer in the normal course of business. Revises the dates of applicability and amounts of duty applicable to the processing of merchandise that is formally entered or withdrawn from warehouse for consumption in the United States. Requires that customs services, when requested, be adequately provided for: (1) the clearance of any commercial vessel, vehicle, or aircraft arriving, departing, or transiting the United States; (2) the preclearance at any customs facility outside the United States of any commercial vessel, vehicle or aircraft; and (3) the inspection or release of commercial cargo being entered into, or withdrawn from the customs territory of the United States. Requires that customs services be treated as adequately provided if the services needed to meet the needs of parties subject to customs inspection are provided in a timely manner, taking into account: (1) weather, mechanical, and other delays; (2) prompt and efficient passenger and baggage clearance; (3) the perishability of cargo; (4) late night and early morning arrivals; (5) the availability of customs personnel; and (6) the need for specific enforcement checks. Prohibits the collection of customs fees in addition to those statutorily prescribed for: (1) any preclearance or other customs activity, expense, or service performed outside the United States in connection with the departure of a vessel, vehicle, or aircraft for the United States; or (2) the activation or operation of any foreign trade zone or the designation or operation of any bonded warehouse. Makes fees used for the direct reimbursement of specified appropriations an exception to the requirement that fees collected under the schedule of fees be deposited in the Customs User Fee Account in the general fund of the Treasury. Requires that all funds in the Customs User Fee Account be available to pay the U.S. Customs Service's costs in conducting commercial operations. Prohibits the Secretary from reducing personnel staffing levels for providing commercial clearance and preclearance services if there is a surplus of funds in the Customs User Fee Account. Requires the Secretary to directly reimburse, from fees collected for customs services, each appropriation for amounts paid for the costs incurred by the Secretary in providing inspectional overtime services and all preclearance service, beginning with each fiscal year occurring after September 30, 1987. Requires the Secretary to prescribe regulations governing the work shifts of customs personnel at airports and providing that: (1) the work shifts will be adjusted to meet cyclical and seasonal demands and to minimize the use of overtime; (2) the work shifts will not be arbitrarily reduced or compressed; and (3) consultation with a specified advisory committee will be carried out before making adjustments in work shifts. Amends the Tax Reform Act of 1986 to extend the date for claiming certain refunds for fees for customs services until 90 days after the date of enactment of the Omnibus Budget Reconciliation Act of 1987 (currently, 90 days after the date of enactment of the Tax Reform Act of 1986). Requires the Comptroller General to conduct a comprehensive analysis of the centralized cargo examination station (CES) concept and to submit such analysis to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate not later than March 30, 1988. Directs the Customs Service to: (1) not establish any new CES at any ocean port, airport, or land border location, without providing advance notice of not less than 90 days to such committees; and (2) suspend, on the date of enactment of this Act, operations at each CES station until 90 days after a date on which the comprehensive analysis of the CES program by the Comptroller General is submitted to the committees and on which the Customs Service provides to the committees written notice of its intentions to resume operations at that station. Requires the Secretary, during the period of suspension of operations at any CES station, to maintain customs operations and staffing at a level not less than that which was in effect immediately before the suspension took effect. Amends the Tariff Act of 1930 to authorize appropriations for the International Trade Commission for FY 1988 and 1989. Amends the Customs Procedural Reform and Simplification Act of 1978 to authorize appropriations for the salaries and expenses of the Customs Service for noncommercial operations for FY 1988 and 1989. Authorizes appropriations from the Customs User Fee Account for the salaries and expenses of the Customs Service for commercial operations for FY 1988 and 1989. Authorizes appropriations for the Customs Service's air interdiction program for FY 1988 and 1989. Amends the Trade Act of 1974 to authorize appropriations for the Office of the U.S. Trade Representative for FY 1988 and 1989. Subtitle F: Pension Funding Requirements - Part 1: Modifications of Minimum Funding Standard - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code to set forth additional funding requirements for plans which are not multiemployer plans. Increases the amount required to be charged to the funding standard account for a plan year by the excess of: (1) the unfunded termination liability contribution; over (2) certain charges to the funding standard account reduced by certain credits to such account. Makes the unfunded termination liability contribution equal to the greatest of: (1) the unfunded amortization charge; (2) the anti-insolvency amount; or (3) the anti-deterioration amount. Sets forth a special rule for steel company employee plans. Reduces the period during which employer contributions may be made to plans after the close of the year. Requires employers to make installment payments of the estimated required contribution to a plan. Imposes an excise tax on underpayments of such required installments. Imposes liability for the excise tax on failure to meet minimum funding standards on members of the employer's controlled group, in addition to the employer. Revises the rules governing the availability of minimum funding waivers. Requires applications for such waivers to be submitted two and one-half months after the close of the year. Allows such waivers only for substantial temporary business hardships, and requires that such hardship also exist at the controlled group level. Reduces from five to three the number of annual waivers that may be granted with respect to any plan within a 15-year period. Shortens the amortization period for any waived funding deficiencies in the case of certain underfunded plans. Reduces the period for amortizing experience gain and losses from 15 years to three years. Requires that all costs, liabilities, rates of interest, and other factors under the plan be determined on the basis of actuarial assumptions and methods each of which is reasonable. (This is in addition to the present requirement that such assumptions and methods in combination offer the actuary's best estimate of anticipated experience under the plan.) Sets a special limitation on the interest rate used for funding purposes. Revises provisions for qualified defined benefit pension plans to provide that the amortization base in determining an employer's maximum deduction for past service liability equals the unfunded costs attributable to such liability. Provides that the maximum deduction limit for contributions to certain pension plans for a plan year is not to be less than the unfunded termination liability of the plan. Applies such provision to defined benefit plans which are subject to ERISA plan termination insurance provisions and which have 100 or more participants during the plan year. Part 2: Employer Access to Plan Assets - Requires additional contributions to the minimum funding standard account of a plan where the employer receives a reversion. Applies a special funding rule to certain other underfunded defined benefit pension plans maintained by the employer during the year in which the employer reversion occurs and the following three years, if an employer receives an employer reversion with respect to certain defined benefit pension plans. Sets forth a special funding rule where such other plans with unfunded termination liability are terminated. Increases the tax on reversion of qualified plan assets to an employer. Part 3: Of Plan Terminations - Provides that standard termination procedures shall be available only when plan assets are sufficient to meet termination liability. Provides that bankruptcy reorganization proceedings are not a separate basis for distress terminations. Provides that distress terminations are not available where the plan sponsor or a controlled group member is a contributing sponsor to an overfunded single-employer defined benefit pension plan. Increases the employer's and controlled group's liability, following a distress termination, for plan benefits to participants to the full amount of the plan's unfunded termination liability to the extent not guaranteed by the PBGC. Increases the amount of such liability to the PBGC. Prohibits the establishment or increase of retirement benefits where all liabilities to the PBGC are not satisfied following a distress termination. Sets forth the PBGC's right to certain amounts held by the section 4049 trust. Entitles the PBGC to recover the full amount of unfunded guaranteed benefits before any benefits in excess of guaranteed benefits are paid by the trust. Authorizes the PBGC to require security where the fair market value of pension plan assets does not exceed 70 percent of termination liability under the plan, and to impose a lien where there is failure to provide such requested security. Authorizes the PBGC to require security for certain pension plan funding waivers and extensions. Decreases the amount of accumulated funding deficiencies exempt from waiver limitations. Part 4: Increase in Premium Rates - Increases the flat-rate PBGC premium to $14 per participant. Applies an additional per-participant premium based on the amount of potential liability the plan creates for the PBGC. Sets forth formulas for the determination of such additional premium. Makes the designated payor who is liable for the premium payment the contributing sponsor in the case of a single-employer plan (but the plan administrator in the case of a multiemployer plan). Makes each controlled group member liable for premiums required to be paid by a designated payor of single-employer plan who is a member of such group. Directs the Secretary of Labor to study foreign pension insurance systems and practices and the relative impact such systems have on job creation and international competitiveness. Requires submission of a report on such study to specified congressional committees by December 31, 1988. Part 5: Miscellaneous Provisions - Requires the plan's annual actuarial report to employees to include a statement of the funded percentage of the plan. Requires notification to current employees of an employer's application for a funding waiver before such waiver may be granted. Provides that, except to the extent specifically provided in the Internal Revenue Code, the Code is to be interpreted as if the provisions of titles I and IV of ERISA had not been enacted. Subtitle G - Debt Management - Repeals a provision of Federal law limiting the face amount of certain interest-bearing bonds that may be issued by the Secretary of the Treasury. Requires the Secretary, within 30 days after the expiration of any debt issuance suspension period, to issue to each Federal fund certain obligations necessary to ensure that the holdings of such fund will replicate to the maximum extent practicable the obligations that would have been held by such fund if: (1) failure to invest amounts in such fund due to a revision in the public debt limit by adoption of a concurrent resolution on the budget had not occurred; and (2) issuance of such obligations had occurred immediately on the expiration of such suspension period. Requires the Secretary to credit to: (1) each fund the income and interest not earned due to such failure to invest; and (2) each holder of State and local Government Series obligations the interest lost due to such failure to invest. Requires such amounts credited to be treated as interest on such obligations. Subtitle H: Miscellaneous Provisions - Amends the Deficit Reduction Act of 1984 to extend for three years the authority of the Internal Revenue Service to offset against any refund of Federal taxes the amount of certain non-tax debts owed to Federal agencies. (The extension would make the offset provisions applicable to refunds payable before January 1, 1990.) Prohibits the exemption of corporate debts or any other category of persons from application of such offset. Expresses the sense of the Congress that such offset provisions shall extend to all Federal agencies. Directs the Comptroller General to study and report to certain congressional committees of the effects of such offset provisions. Amends part A (General Provisions) of title XI of the Social Security Act to establish the National Commission on Children. Declares it to be the function of such Commission to serve as a forum on behalf of the children of the nation. Requires the Commission to submit a report to the President and the Congress that sets forth recommendations with respect to: (1) child health; (2) social and support services for children; (3) child education; (4) income security for families with children; (5) tax policy considerations for families with children; (6) the identification of deficiencies in family and children services; and (7) data collection on children and child services. Subtitle I: Vaccine Injury Compensation - Part 1: Manufacturers Excise Tax on Certain Vaccines - Amends Chapter 32 of the Internal Revenue Code of 1986 (relating to manufacturers excise taxes) to impose a tax on the first sale of any taxable vaccine sold by the manufacturer, producer, or importer of the vaccine. Sets forth a table listing the amount of tax imposed per dose of DPT vaccine (relating to pertussis), DT (relating to diphtheria), MMR vaccine (relating to measles, mumps, and rubella), and polio vaccine. Prohibits imposition of the tax if the Secretary of the Treasury estimates that the amounts collected would exceed the projected Vaccine Injury Compensation Trust Fund liability. Provides for credit or refund of the tax whenever any vaccine on which tax was imposed is returned to the person who paid the tax or destroyed. Establishes in the Treasury the Vaccine Injury Compensation Trust Fund. Appropriates to the Fund amounts equivalent to the net revenues received from the tax imposed. Part 2: Vaccine Compensation Amendments of 1987 - Vaccine Compensation Amendments of 1987 - Amends the Public Health Service Act to provide that payment of compensation for an injury or death from administration of a vaccine before the effective date of this provision shall be made from specified appropriations and that compensation for injury or death from administration on or after the effective date shall be made from the Vaccine Injury Compensation Trust Fund. Removes provisions: (1) placing limitations on the amount of unreimbursable expenses which may be recovered; (2) requiring payments for projected expenses to be paid on a periodic basis; and (3) allowing payments for pain and suffering, emotional distress, and incurred expenses to be paid in a lump sum. Requires compensation for injury or death from administration of a vaccine on or after the effective date to be paid in a lump sum and payment for injury or death from administration before the effective date to be made in four annual installments. Repeals provisions relating to administration by the National Vaccine Injury Compensation Program of awards and relating to revision of awards. Repeals a provision relating to annual inflation increases for certain compensation and for civil penalties. Revises provisions relating to compensation for injury or death from administration of a vaccine before the effective date to change the categories for which compensation is prohibited and allowed and to limit specified types of compensation under certain categories to a stated amount. Directs the Secretary of Health and Human Services to review the number of awards in specified periods and, if the Secretary determines that the number exceeds the number of awards listed in a specified table, to notify the Congress of the determination. Prohibits, in such case, the filing of a petition after a stated period. Makes specified provisions relating to the filing of petitions and relating to additional remedies inapplicable to civil actions for damages for a vaccine-related injury or death for which a petition may not be filed because of such prohibition. Revises provisions relating to petitions for compensation. Allows withdrawal of a petition on which a court has failed to enter a judgement within a specified time. Allows, after withdrawal, maintenance of a civil action for damages. Authorizes awarding of costs of litigation to any plaintiff in certain circumstances in a citizen action against the Secretary for failure to perform under the National Vaccine Program subtitle. (Current law authorizes awarding of costs to any party when appropriate.) Makes general rules relating to petitions for compensation apply to those who administer as well as those who manufacture a vaccine. Title X: Committee on Ways and Means: Revenue Provisions - Revenue Act of 1987. Subtitle A: Revenue Increases - Part I: Provisions Primarily Affecting Individuals - Subpart A: Income Tax Provisions - Amends the Internal Revenue Code (IRC) to exclude expenses of overnight camps from calculations of the dependent care income tax credit. Revises the definition of "qualified residence interest" for purposes of the income tax deduction for personal interest to distinguish between acquisition indebtedness and home equity indebtedness. Limits to $1,000,000 and $100,000 respectively the amount of indebtedness on which interest is deductible. Provides that for purposes of this deduction a boat or a mobile home used on a transient basis shall not be treated as a qualified second residence of the taxpayer. Subpart B: Employee Benefit Provisions - Limits to $500 the aggregate amount of the tax exclusion for amounts elected under cafeteria plans. Requires an employer to file an information return with the Internal Revenue Service (IRS) reporting the total amount of taxable benefits available to an employee under a cafeteria plan. Provides that Federal judges be treated as: (1) active participants for purposes of the limitation on the deduction of contributions to individual retirement plans; and (2) employees for purposes of the IRC generally. Subpart C: Limitation on Nonrecognition for Like-Kind Exchanges of Real Property - Amends the IRC to limit to $100,000 the aggregate amount of gain not recognized with respect to exchanges of like-kind real property to be held for productive use or investment. Subpart D: Estate and Gift Taxes - Extends permanently the 1987 estate and gift tax rates, the highest of which is 55 percent (applied to transfers over $3,000,000). Phases out the benefits of graduated rates and the unified credit with respect to transfers of between $5,000,000 and $16,040,000. Repeals the credit for payments of State death taxes. Allows the deduction of such amounts when determining the amount of the taxable estate. Establishes special valuation rules to apply to estate, gift, and generation-skipping taxes. Limits minority discounts by providing that the value of any stock in a corporation shall be deemed to be equal to its pro rata share of the fair market value of all the stock of the same class in the corporation unless a different value is established by clear and convincing evidence. Limits, with an exception for certain nonfamily transfers, valuation freezes by providing that if a person holding ten percent or more of the interest in an enterprise transfers a disproportionate share of the potential appreciation in the enterprise, the transferred property shall be included in the transferor's gross estate. Subpart E: Estate Tax Provisions Relating to Employee Stock Ownership Plans - Amends the IRC to revise provisions relating to the estate tax deduction for proceeds received from a sale of employer securities to an employee stock ownership plan (ESOP) or worker-owned cooperative. Makes such a deduction available only if: (1) the decedent directly owned the securities immediately before death; and (2) after the sale, the securities are either allocated to participants or held for future allocation in connection with certain exempt loans or transfers of assets. Prohibits, except in a bona fide business transaction, the treatment of employer securities as allocated or held for future allocation insofar as they are so categorized in substitution of other employer securities so designated. Applies the deduction to any sales of qualified employer securities (current law applies only to sales made by the executor of the estate). Prohibits the amount of the deduction from exceeding: (1) the amount that would lead to a reduction in estate tax liability (before credits) equal of $750,000; or (2) 50 percent of the taxable estate. Disallows proceeds from being taken into account when: (1) they exceed the net sale amount of dispositions of employer securities by the plan during the year preceding the sale in question; (2) they are attributable to transferred assets (except for assets held by the ESOP on February 26, 1987); (3) the sale takes place after the estate tax return filing deadline; or (4) the decedent received the securities under certain specified conditions. Applies the deduction to employer securities that are: (1) issued by a domestic corporation having no stock outstanding that is readily tradable on an established securities market; (2) includable in the gross estate of the decedent; and (3) would have been includable if the decedent had died within a specified time period. Revises the requirements governing the contents of the written statement to be submitted by the executor of the decedent's estate in order to qualify for the deduction. Imposes an excise tax on ESOP dispositions of employer securities for which an estate tax deduction was allowed. Sets forth the amount of tax applicable to relevant taxable events as follows: (1) 30 percent of the amount realized from any disposition of employer securities by an ESOP or eligible worker-owned cooperative within three years of the group's acquisition of qualified employer securities; (2) 30 percent of the amount realized from a disposition (not within three years after acquisition) that occurs before allocation of such securities to participants' accounts in cases when the proceeds are not allocated; or (3) 30 percent of the repayment amount in cases of a payment by an ESOP of any part of a loan used to acquire employer securities from transferred assets. Sets out the ordering rules to govern dispositions of employer securities for purposes of this excise tax and another specified excise tax relating to ESOPs. Makes the excise tax inapplicable to: (1) dispositions to employees, in certain cases; (2) exchanges associated with the liquidation of a corporation into a cooperative or with other reorganizational purposes; and (3) sales effected to meet IRC diversification requirements relating to pension trusts. Places liability for the excise tax on the employer maintaining the ESOP or the eligible worker-owned cooperative. Part II: Business Reforms - Subpart A: Accounting Provisions - Amends IRC accounting rules applicable to long-term contracts to require that taxable income from such contracts be determined under the percentage of completion method. Disallows a deduction for interest allocable to tax-exempt installment obligations acquired after 1987. Creates a de minimis rule with respect to tax-exempt obligations held by taxpayers other than financial institutions. Repeals special provisions governing the tax treatment of below-market loans to qualified continuing care facilities. Requires, with respect to bonds purchased after October 13, 1987, that the market discount be included in the gross income of the taxpayer for each relevant taxable year. Sets out rules to govern nonrecognition transactions. Revises the definition of "market discount bond" to repeal the exception for tax-exempt obligations. Requires brokers, upon the request of the Secretary of the Treasury, to file information returns regarding market discount on bonds. Permits an exception from required use of the accrual method of accounting for S corporations and for farm corporations having gross receipts of $1,000,000 or less. Establishes special rules for family corporations, requiring them to use the accrual method only when their gross receipts exceed $25,000,000. Denies a depreciation deduction for amounts paid or incurred to acquire customer base, market share, or similar intangible items. Amends accounting provisions of the IRC to repeal the deduction for additions to an employer reserve for accrual of vacation pay. Subpart B: Partnership Provisions - Provides that for purposes of the IRC a publicly traded partnership shall be treated as a corporation. Excepts from such treatment certain partnerships with passive-type income. Amends the IRC to provide for the treatment of publicly traded partnerships with respect to: (1) accounting rules applied to limitations of passive activity losses and credits; and (2) unrelated business taxable income of tax-exempt organizations. Revises criteria under which members of a partnership qualify for an exception from treatment as unrelated business income of any income from debt-financed real property. Requires a registered partnership, upon notice and demand of the Secretary, to pay tax underpayments resulting from administrative or judicial determinations. (Under current law, each partner pays independently.) Directs the Secretary to study and report to specified congressional committees by January 1, 1989, on the issue of treating publicly traded limited partnerships and other corporation-like partnerships as corporations for income tax purposes, including the issues of disincorporation and opportunities for avoidance of the corporate tax. Subpart C: Corporate Provisions - Reduces from 80 percent to 75 percent the corporate tax deduction with respect to: (1) dividends received from a domestic corporation; (2) dividends received on certain preferred stock; (3) certain dividends received from foreign sales corporations; (4) the limitation on the aggregate amount of deductions; and (5) dividends received by life insurance companies. Revises provisions relating to the deduction for dividends received to change the applicable percent from 80 percent to 75 percent and to exclude from the calculations dividends on certain stock having nonstock characteristics. Amends IRC provisions relating to the computation and payment of tax by members of an affiliated group filing a consolidated tax return. Sets a fixed 34 percent tax rate with respect to the taxable income of personal service corporations. (Such corporations are currently subject to graduated corporate rates.) Amends IRC provisions relating to limitations on net operating loss carryforwards and certain built-in losses following corporate ownership changes. Adds provisions limiting the use of preacquisition losses to offset built-in gains. Limits to $5,000,000 the tax deduction for any interest paid or incurred in connection with a major stock acquisition (pursuant to a plan to acquire 50 percent or more) during any taxable year, with an exception for stock purchases treated as asset acquisitions. Repeals provisions prescribing nonrecognition of gain or loss for property distributed to a parent corporation (80 percent distributee) in connection with the complete liquidation of a subsidiary. Amends the IRC to provide for similar nonrecognition treatment in such instances, but includes provisions describing cases in which the distributions are to be treated as taxable dividends. Revises provisions relating to the basis of property received in liquidations. Directs the Secretary to prescribe regulations to carry out the purposes of amendments included in this Act and in the Tax Reform Act of 1986 with respect to the recognition of gain and loss on distributions of property in liquidation. Amends IRC provisions relating to the treatment of certain intragroup transactions in connection with the redemption of stock. Provides for the recapture of benefits resulting from the use of the LIFO (last-in, first-out) method of inventory accounting in the case of certain former C corporations electing to be S corporations. Amends the IRC to impose a 50 percent excise tax on gain realized by greenmail recipients. Defines "greenmail" as any amount paid or incurred by a corporation in a direct or indirect redemption of its stock from any shareholder if: (1) the shareholder held such stock for less than two years; and (2) during the two-year period ending on the date of redemption the shareholder, a person acting in concert with the shareholder, or a person related to either, made or threatened to make a public tender offer for stock of the corporation. Imposes the tax regardless of whether gain is actually realized. Disallows an income tax deduction for payment of the tax. Requires that a hostile stock purchase in a corporate takeover attempt be treated as an asset acquisition by the purchasing corporation. Disallows an income tax deduction for any interest on indebtedness incurred or continued by a purchasing shareholder to purchase or carry corporate stock or assets acquired through a hostile purchase. Subpart D: Minimum Tax Provisions - Increases from 50 percent to 100 percent the excess of book income over other alternative minimum taxable income that is a tax preference for corporate taxpayers. Increases from 75 percent to 100 percent the corresponding percentage with respect to a corporation's adjusted current earnings. Subpart E: Foreign Tax Provisions - Denies the foreign tax credit for taxes paid or accrued to South Africa until the Secretary of State certifies that South Africa meets specified criteria of the Comprehensive Anti-Apartheid Act of 1986. Amends foreign tax provisions of the IRC relating to taxation of income of controlled foreign corporations that is attributable to imported property. Subpart F: Insurance Provisions - Amends IRC provisions relating to: (1) the interest rate used by life insurance companies in computing reserves for purposes of determining income; (2) rules governing the required surplus of foreign corporations carrying on insurance business; (3) the treatment of mutual life insurance company policyholder dividends for purposes of book preference; and (4) the treatment of certain insurance syndicates formed under the laws of the United Kingdom. Subpart G: Treatment of Net Investment Income of Trade Associations - Creates special rules with regard to the unrelated business taxable income of certain tax-exempt business leagues, chambers of commerce, and similar organizations. Subpart H: Full-Funding Limitation for Deductions to Qualified Plans - Amends the IRC and the Employee Retirement Income Security Act of 1974 to revise the definition of "full funding limitation" in connection with an employer's deductible contributions to a qualified defined benefit plan. Part III: Excise Taxes; User Fees - Subpart A: Excise Taxes - Extends through December 31, 1990, the three percent excise tax on telephone service. (The tax is currently due to expire as of 1988.) Repeals excise tax exemptions in connection with: (1) gasoline used by private intercity, local, or school buses; and (2) tires used by these same classes of private vehicles. Amends IRC provisions relating to the collection of the special fuels taxes on diesel fuel, taxable special fuels, and nongasoline aviation fuels. Subpart B: User Fees - Directs the Secretary of the Treasury to establish a program requiring user fee payments in connection with requests to the IRS for ruling letters, opinion letters, determination letters, and for similar requests. Sets forth criteria to govern such fees. Imposes an occupational tax of $1,000 per year on proprietors of: (1) distilled spirits plants; (2) bonded wine cellars; (3) bonded wine warehouses; and (4) taxpaid wine bottling houses. Reduces the rate to $500 per year for certain small proprietors. Increases existing occupational taxes as follows: (1) for brewers, from $110 per year to $1,000 per year for each brewery, with a reduced rate of $500 per year for certain small proprietors; (2) for wholesale dealers in liquors, from $255 per year to $500 per year; (3) for wholesale dealers in beer, from $123 per year to $500 per year; (4) for retail dealers in liquors, from $54 per year to $250 per year; and (5) for retail dealers in beer, from $24 per year to $250 per year. Repeals the occupational tax on limited retail dealers of liquors, wine, or beer. Replaces variable rates used with regard to nonbeverage domestic drawback claimants with a single rate of $500 per year. Denies the validity of a permit for certain tax-free industrial uses of distilled spirits unless the holder pays a special tax of $250 with respect to the relevant site. Imposes an occupational tax of $1,000 per year for each relevant premises on persons engaged in business as manufacturers of tobacco products, cigarette papers, and tubes, and on export warehouse proprietors. Applies a reduced rate of $500 per year for certain small proprietors. Fixes criminal penalties for willful failure to pay the tax. Increases the occupational tax on importers and manufacturers of firearms from $500 per year to $1,000 per year and on dealers from $250 per year to $500 per year. Applies a reduced rate for small importers and manufacturers. Part IV: Other Revenue Provisions - Subpart A: Targeted Jobs Credit - Amends the IRC to revise the definition of "wages" for purposes of determining the amount of the targeted jobs credit against income tax. Excludes from the wages applicable to such credit any amount paid by an employer to an employee for services that are the same as, or substantially similar to, those performed by employees participating in or affected by a strike or lockout during the period of the strike or lockout when such employee's principal place of employment is the affected plant or facility. Subpart B: Treatment of Certain Illegal Irrigation Subsidies - Requires illegal Federal irrigation subsidies to be included in a taxpayer's gross income. Subpart C: Compliance - Provides that State escheat laws shall not apply to refunds of Federal tax. Expresses the sense of the Congress that: (1) the Congress should increase outlays to the IRS by specified amounts in fiscal years 1989 and 1990 in the areas of taxpayer assistance and enforcement; (2) the IRS should offer improved taxpayer assistance and enforcement efforts by using these outlays in ways recommended in the Dorgan Task Force Report; (3) the Congress should undertake an experimental multiyear authorization and two-year appropriation for the IRS consistent with specified public law; and (4) increased funding should be provided for both research and the compilation and analysis of income. Requires the IRS: (1) to issue a report by April 15, 1989, on the extent of the tax gap and possible measures to decrease it; and (2) to report annually on the improvements being made in the audit rate, taxpayer assistance, and enforcement efforts. Subpart D: Estimated Tax Provisions - Delays for one year, from 1987 to 1988, implementation of the increase from 80 percent to 90 percent in the current year liability test for estimated tax payments by individuals. Prohibits an addition to any tax imposed on underpayments of estimated tax installments by corporations due on or before June 15, 1987, under certain circumstances (thus permitting corporations to use their 1986 tax in determining certain estimated tax installment amounts). Amends the IRC to allow employers to elect to have revised withholding certificates put into effect more promptly than is required under current law. Amends IRC provisions dealing with estimated income tax payments by corporations. Establishes the amount of the penalty for underpayment of estimated tax at the amount of the underpayment for the period of underpayment, plus interest on such amount. Revises the schedule for the payment of estimated tax installments. Specifies that the amount of the required annual estimated tax payment shall be the lesser of: (1) 90 percent of the current tax shown on the taxpayer's return (corporations having a taxable income of at least $1,000,000 for any taxable year during a specified period must use this option); or (2) 100 percent of the preceding year's tax liability. Permits lower estimated tax payments if the taxpayer can show that the installment payments or adjusted seasonal installments made over the year were adequate for each quarter based on annualized income and adjusted seasonal installment concepts described in this bill. Exempts from an estimated tax penalty any taxpayer whose tax liability is less than $500. Requires an addition to income tax when an adjustment of overpayment of estimated income tax by a corporation, made before the 15th day of the third month following the close of the taxable year, is found to be excessive. Repeals provisions of the IRC dealing with installment payments of estimated income tax by corporations. Subpart E: Tax-Exempt Bond Provisions - Amends IRC provisions relating to taxable private activity bonds to include any bond issued as part of an issue if the amount of the proceeds to be used either directly or indirectly for the acquisition of nongovernmental output property exceeds the lesser of five percent or $5,000,000. Revises provisions governing tax-exempt bonds issued by Indian tribal governments to deny the tax exclusion of interest on such bonds whose proceeds are used in the exercise of functions that are not customarily performed by State and local governments. Subtitle B: Technical Corrections - Technical Corrections Act of 1987 - Part I: Technical Corrections to Tax Reform Act of 1986 - Amends the IRC to make a technical adjustment to an assessment rule applicable when the owner of a large amount of cash is not identified. Revises the rate of the accumulated earnings tax on corporations from a variable rate based on income below and in excess of $100,000 to a flat 28 percent of accumulated taxable income. Makes a technical amendment relating to the exemption of certain individuals from the requirement to file an income tax return. Amends IRC and Social Security Act provisions relating to nonresident aliens temporarily in the United States for the purpose of studying at vocational or other recognized nonacademic institutions. Amends the IRC to delete provisions describing the treatment of Social Security benefits for purposes of defining earned income. Amends IRC provisions relating to the two percent floor on miscellaneous itemized deductions to: (1) add provisions concerning the coordination of such limitation with the limitation on the tax deduction for trade and business expenses; and (2) revise the determination of adjusted gross income of estates and trusts with respect to such limitation. Limits the tax deduction of expenses in connection with portions of dwelling units allocated to business uses. Amends provisions governing the computation of the earnings and profits of certain foreign corporations for purposes of determining the effect of depreciation on such earnings and profits. Amends the IRC with regard to the application of the accelerated cost recovery system (ACRS) in cases of: (1) certain property placed in service in churning transactions; (2) certain transfers; and (3) certain property subject to U.S. tax and used by a foreign person or entity. Permits greater taxpayer discretion in using the 150 percent declining balance method of depreciation for ACRS purposes and specifies the applicable recovery period to be used in such cases. Terminates special rules for the tax treatment of sound recordings for property placed in service after 1985. Makes other technical amendments and corrections relating to provisions: (1) modifying the ACRS; and (2) limiting expensing of depreciable assets. Revises Tax Reform Act (TRA) provisions specifying the effective dates of various provisions of new law. Makes technical amendments and corrections to a number of transitional rules provided in the TRA with respect to urban renovation projects. Makes technical amendments and corrections to the Tax Reform Acts of both 1986 and 1984 concerning property treated under prior tax acts. Adds a number of projects to those covered under special transitional rules. Amends the TRA concerning the applicability of modifications of the ACRS to a number of specific properties. Makes technical amendments and corrections to IRC and TRA provisions relating to transition property with respect to the former regular investment tax credit. Adds: (1) an exception to the application of certain adjustment rules relating to such credit; and (2) a number of properties to be considered as transition property. Revises ordering rules governing determinations as to whether certain business related credits are used in a taxable year or as a carryback or carryforward. Makes technical amendments to TRA provisions relating to the effective 15-year carryback of existing carryforwards of steel companies. Establishes rule criteria to apply to overpayments under this section. Amends the IRC special rule governing a pass-through of the income tax research credit. Amends the IRC to disallow use of any depreciation deduction with respect to: (1) any trademark or trade name expenditure; or (2) any railroad grading or tunnel bore. Makes technical amendments and corrections to TRA provisions relating to the modification of the investment tax credit for certain rehabilitation expenditures. Makes technical amendments to the IRC with respect to the low-income housing credit, including: (1) amendments of special rules for nontaxable transfers; (2) the addition of an exception to rules governing basis reduction for certain residential rental units; (3) the exclusion from the eligible basis of a building of amounts deducted for depreciation; (4) the addition of provisions applicable to rent-restricted units in cases when Federal rental assistance is reduced as a tenant's income increases; (5) provisions relating to limitations on the aggregate credit allowable with respect to projects located in a State; and (6) a prohibition of any carryback of the low-income housing credit before 1987. Corrects a reference in the Merchant Marine Act, 1936. Makes technical amendments and corrections to IRC and TRA provisions relating to capital gains. Revises: (1) the description of taxable income from foreign sources for capital gains purposes; (2) the definition of a "capital gains rate differential" and its applicability to the calculation of the bad debt reserves of certain financial institutions; and (3) provisions dealing with incentive stock options. Makes technical amendments to the TRA and the IRC to: (1) revise and limit the tax exclusion for the discharge of qualified farm indebtedness; and (2) provide for its coordination with other tax exclusions. Amends provisions relating to gain from the disposition of interests in oil, gas, geothermal, and other mineral properties. Makes technical amendments and corrections to the IRC and the TRA with respect to tax shelter and interest limitations, including provisions relating to: (1) interests in passive activities; (2) methods of accounting; (3) the definition of a "qualified investor" for purposes of the transitional rule for interests in low-income housing projects; (4) the phase-in of the limitation on investment interest; and (5) determinations of indebtedness for purposes of the personal interest disallowance, including provisions related to qualified residence interest. Makes technical amendments and corrections to TRA and IRC corporate tax provisions. Revises the percentage to be used in computing the deduction for dividends received from certain foreign sales corporations. Includes amendments relating to: (1) the reduction of corporate shareholders' basis in stock by the nontaxed portion of extraordinary dividends; (2) the limitation on net operating loss carryforwards and certain built-in losses following a change in corporate ownership, including provisions relating to built-in gains and gains attributable to stock acquisitions (section 338 gains) rules relating to constructive stock ownership, and treatment of foreign corporations; and (3) recognition of gain and loss on distributions of property in corporate liquidations. Restructures IRC provisions dealing with transfers of partnership and trust interests by corporations. Makes technical amendments relating to: (1) transfers of property from the United States to foreign corporations; (2) sales or exchanges of stock in certain foreign corporations; and (3) the treatment of C corporations that elect subchapter S status. Adds to the IRC provisions dealing with special allocation rules for certain partnership transactions. Makes technical amendments and corrections concerning: (1) the definition of "related persons" with respect to the installment method of accounting; (2) the treatment of amortizable bond premium as interest; (3) certain entities not to be treated as corporations, including a special rule for persons holding income interests; (4) the excise tax on undistributed income of regulated investment companies, including qualification rules and the addition of provisions requiring the reduction of capital gain net income by the amount of a company's net ordinary loss for a given calendar year; (5) the treatment of business development companies; and (6) the treatment of shield funds as separate corporations, including a special rule for abnormal redemptions. Makes technical amendments to TRA and IRC provisions with respect to real estate investment trusts, including: (1) provisions specifying asset and income requirements; (2) certain definitions; (3) distribution requirements; and (4) the excise tax on undistributed income of such trusts. Makes technical amendments to IRC provisions dealing with the taxation of real estate mortgage investment conduits (REMICs). Amends the IRC to impose a 34 percent tax on the net income from foreclosure property. Reduces the amount of taxable income of a REMIC by the amount of such tax. Imposes a tax on contributions to a REMIC after the startup day in an amount equal to the amount of the contribution. Lists exceptions. Makes corrections to TRA and IRC rules for accruing the original discount on regular interests and similar debt instruments. Amends the TRA to direct the Secretary of the Treasury (Secretary) to: (1) study the operation of REMIC amendments and their competitive impact on savings and loan and similar institutions; and (2) report the results to specified congressional committees by January 1, 1990. Makes technical amendments and corrections to IRC provisions with respect to the alternative minimum tax, including provisions relating to: (1) the treatment of taxes on dividends from Puerto Rico and U.S. possession corporations; (2) adjustments applicable to individuals and to corporations; (3) tax preference items; and (4) the denial of certain losses and the determination of the amount of such losses. Disallows the deduction for personal exemptions in calculations to determine the taxable income of a noncorporate taxpayer for minimum tax purposes. Adds to the TRA provisions to reduce the amount of minimum taxable income for qualified taxpayers by the amount of the agreement vessel depreciation adjustment. Amends accounting provisions of the TRA and the IRC. Directs the Secretary to prescribe regulations as necessary to prevent the use of related parties, pass-through entities, or intermediaries to evade certain limitations on the use of the cash method of accounting. Includes technical amendments of provisions relating to: (1) the special rule for the spudding of oil or gas wells; (2) capitalization and inclusion in inventory costs of certain expenses; (3) accounting method modifications for long-term contracts, including the addition of provisions permitting the Secretary to prescribe a simplified procedure for allocation of costs in certain cases; (4) the taxable years of certain entities, such as partnerships and common trust funds; (5) allocation of installment indebtedness, including provisions dealing with dispositions of personal property under revolving credit plans and installment obligations arising out of certain stock or securities sales; (6) disallowance of the use of the installment method of accounting for certain obligations; and (7) income attributable to utility services. Makes technical amendments and corrections to TRA and IRC provisions concerning financial institutions. Includes amendments with respect to: (1) the credit for investment in certain depreciable property in cases when the mutual savings bank or other financial institution is a lessee; (2) interest incurred to carry tax-exempt bonds, including the addition of properties subject to transitional rules and of provisions relating to small issuers, refunding obligations, and composite issues; and (3) the treatment of losses on deposits or accounts in insolvent financial institutions, including provisions allowing an institution whose deposits are not insured under Federal law to elect to treat losses on account of its bankruptcy or insolvency as ordinary losses. Makes technical amendments to the TRA and IRC with respect to insurance products and companies. Includes amendments relating to: (1) phase-in provisions for insurance companies whose income is now taxable but was not previously subject to taxation; (2) the treatment of certain dividends and tax-exempt interest; (3) the discounting of unpaid losses and certain unpaid expenses; and (4) the alternative tax for certain small companies. Amends provisions of the Tax Reform Act of 1984 that permit a mutual life insurance company to elect to treat individual noncancellable accident and health policies as cancellable. Delays the effective date for diversification requirements with respect to accounts for certain variable contracts that provide for the payment of an immediate annuity. Makes a technical amendment in the Social Security Act concerning simplified employment pensions (SEPs). Amends IRC and TRA provisions dealing with limitation and nondiscrimination requirements applicable to pensions and deferred compensation plans. Includes amendments relating to: (1) the treatment of married individuals filing separate returns and living apart for purposes of the limitation on the deduction for qualified retirement contributions; (2) nondeductible contributions to individual retirement plans, including the institution of a $50 penalty for failure to report designated nondeductible contributions; (3) distributions on deferrals in excess of the $7,000 limitation on the exclusion from gross income; (4) adjustments to limitations on contributions and benefits under qualified plans; (5) modifications of provisions governing tax-deferred compensation plans of State and local government and of tax-exempt organizations, including a new criterion for plan eligibility; (6) special rules for SEP including a technical amendment to the Social Security Act and a new provision prohibiting employee election of a salary reduction arrangement in cases when the SEP does not meet the requirements necessary to ensure the distribution of excess contributions; (7) the application of nondiscrimination rules to integrated plans; (8) minimum employee coverage requirements for qualified plans, including new provisions to address employers having only highly compensated employees; (9) minimum vesting requirements, including technical amendments of the Employee Retirement Income Security Act of 1974; (10) certain definitions; (11) cash or deferred arrangements, including new provisions to govern distributions upon the termination of a plan or the disposition of either a corporation's assets or its interest in a subsidiary; and (12) nondiscrimination requirements for employer matching contributions, employee contributions, and tax-sheltered annuities. Amends TRA and IRC provisions dealing with the treatment of distributions and various other aspects of pensions and deferred compensation plans. Includes technical amendments and corrections with respect to: (1) the taxation of distributions; (2) the uniform additional tax on early distributions from qualified retirement plans, including the repeal of provisions triggering additional tax when an employee receives certain distributions before reaching age 59 1/2; (3) revision of the class of taxpayers permitted to elect to treat certain lump-sum distributions received in 1987 as if they were received in 1986; (4) the tax on nondeductible contributions to qualified employer plans; (5) the excise tax on the reversion of qualified plan assets to an employer; (6) the excise tax on excess distributions from qualified retirement plans, including an addition to the rules for computing excess retirement accumulation; and (7) the tax treatment of the Federal Thrift Savings Fund. Makes technical amendments to the Retirement Equity Act of 1984 and to the Employee Retirement Income Security Act of 1974. Makes technical amendments and corrections to TRA and IRC provisions relating to employee benefits and employee stock ownership plans (ESOPs). Includes amendments with respect to: (1) the loss of the tax-exempt status of any organization that is part of a plan failing to meet certain requirements; (2) cafeteria plans; (3) technical amendments of the Social Security Act; (4) the definition of the terms "wages" and "compensation" for certain purposes; (5) the imposition of an excise tax on funded welfare benefits funds that include discriminatory employee benefit plans; (6) the deductibility of the health insurance costs of self-employed individuals; (7) the estate tax deduction for proceeds from sales of employer securities; (8) loans used to acquire employer securities, including provisions relating to the period of applicability of the exclusion of interest on such securities acquisitions loans; and (9) qualification requirements for ESOPs. Makes technical amendments and corrections to foreign tax provisions of the TRA and the IRC. Includes amendments relating to: (1) limitations on the foreign tax credit, including a definition of "financial services income" for purposes of such limitations; (2) source rules for personal property sales, including the addition of a special rule for certain stock sales by residents of Puerto Rico; (3) the treatment of gain from the sale of stock of a foreign corporation when the gain would ordinarily be sourced in the United States but, pursuant to a treaty obligation of the United States, the taxpayer chooses to treat the gain as foreign source income; (4) rules for allocating interest, and so forth to foreign source income, including revisions to phase-in rules; (5) the taxation of income earned through foreign corporations, including special rules for certain captive insurance companies and for determining the earnings and profits of a controlled foreign corporation for purposes of computing amounts to be included in the gross income of U.S. shareholders; (6) deductions for dividends received from certain foreign corporations; (7) transitional rules with regard to U.S. possession source income; (8) the disposition of investment in U.S. real property; (9) certain passive foreign investment companies, including the interest charge on tax deferrals, the treatment of qualified electing funds, and a special rule for the treatment of certain foreign corporations owning at least 25 percent stock in a domestic corporation; (10) the branch profits tax on foreign corporations; (11) the treatment of deferred payments and appreciation arising out of business conducted by foreign corporations or by nonresident aliens within the United States; (12) withholding tax on amounts paid by partnerships to foreign partners; (13) income of foreign governments, including the addition of limitations on the exclusion from gross income of such income; (14) the treatment of losses of separate business units of dual residence corporations; (15) foreign currency transactions, including provisions for determining foreign taxes and the earnings and profits of foreign corporations; (16) tax treatment of the Virgin Islands (V.I.), including provisions for the coordination of U.S. and V.I. income taxes; (17) the addition of provisions relating to the coordination of U.S. treaty obligations, amendments made by the TRA, and technical corrections effected by this Act; (18) taxation of domestic international sales corporation (DISC) income to tax-exempt shareholders; and (19) treatment of shared foreign sales corporations. Makes technical amendments and corrections to TRA and IRC provisions with respect to tax-exempt bonds. Includes amendments relating to: (1) various types of State and local bonds, including qualified small issue bonds, qualified student loan bonds, qualified mortgage bonds, and qualified 501(c)(3) bonds; (2) requirements applicable to certain private bonds, such as issues of scholarship funding bonds and volunteer fire department bonds; (3) arbitrage bonds, including refunding bond provisions dealing with governmental unit issuing $5,000,000 or less of bonds; (4) transitional rules relating to refundings and to the volume cap; (5) termination of the mortgage bond policy statement requirement; (6) provisions relating to certain established State programs, including a technical amendment of the Mortgage Subsidy Bond Tax Act of 1980; and (7) transitional rules for specific facilities. Makes technical amendments and corrections to IRC and TRA provisions dealing with the income taxation of trusts and estates, including provisions relating to: (1) reversionary interests; (2) the taxable year of trusts; (3) exceptions for charitable trusts, private foundations and certain trusts and estates from the penalty tax for failure to pay estimated income tax. Makes technical amendments and corrections of the IRC and TRA relating to the unearned income of minor children, including new provisions addressing the alternative minimum tax. Makes technical amendments and corrections to IRC and TRA provisions with respect to the generation-skipping transfer tax, including provisions concerning: (1) a deduction from such tax for certain transfers for public, charitable, and religious uses; (2) special rules for determining the inclusion ratio for certain inter vivos transfers; (3) disregard of certain support obligations arising under State law when determining a person's interest in a trust; (4) the treatment of certain partial terminations of trusts and of nonreportable gifts to trusts; and (5) special rules governing certain transfers to grandchildren. Makes technical amendments and corrections to compliance and tax administration sections of the TRA and the IRC, including amendments relating to: (1) the penalty for tax underpayment due to negligence and fraud; and (2) reporting requirements applicable to real estate transactions, including provisions excluding certain farm managers from the definition of "broker" and prohibiting a real estate reporting person from separately charging a customer for making certain required filings. Creates an exception from information reporting requirements for certain classified and confidential contracts between a Federal executive agency and another person. Makes technical amendments with respect to certain tax-exempt organizations subject to corporate estimated tax rules. Declares that certain salary recommendations submitted by the President for special trial judges shall not be effective to the extent such salaries are not equal to 90 percent of the rate for Tax Court judges and are not paid in the same installments as Tax Court judges' salaries. Makes technical amendments and corrections to TRA and IRC provisions with respect to retirement pay for U.S. Tax Court judges. Amends the IRC to include the refundable earned income credit in deficiency assessments. Makes technical amendments and corrections to TRA and IRC provisions with respect to the tax-exempt status of certain title holding corporations or trusts (an exception initiated by the TRA). Makes other technical amendments and corrections to TRA and IRC provisions, such as amendments relating to the excise tax on gasoline and its companion floor stocks tax. Makes technical amendments and corrections to the IRC and to the Tax Reform Acts of both 1984 and 1986 relating to: (1) tax-exempt entity leasing provisions as applicable to tax-exempt controlled entities; (2) the nonrecognition of gain or loss with respect to certain transfers in connection with corporate reorganizations and the treatment of distributions in such cases; (3) the deductibility of excess golden parachute payments; (4) accounting changes with respect to designated settlement funds; (5) the exclusion from gross investment income of dividends from certain subsidiaries of life insurance companies; and (6) special rules for stripped bonds of tax-exempt organizations. Repeals provisions added to the Tariff Act of 1930 by the Tax Reform Act of 1986 with respect to compensation of ocean freight forwarders. Makes technical amendments related to the Medicare program and to pension plans, including technical amendments to the Employee Retirement Income Security Act of 1974 and the Public Health Service Act. Adds to the IRC new provisions concerning elections under qualified pension arrangements with respect to spousal benefits. Part II: Amendments Related to Tax Provisions in Other Legislation - Makes technical amendments and corrections to IRC provisions relating to: (1) directions to the Secretary to provide regulatory guidance to govern circumstances when a refund of the excise tax on certain chemicals shall be made directly to an exporter; (2) substances subject to the excise tax on imported chemicals; (3) the addition of an exemption of regulated investment companies and real estate investment trusts from the environmental tax; (4) the tax on certain fuels to fund the Leaking Underground Storage Tank Trust Fund; (5) taxation of qualified methanol and ethanol fuel; (6) the Leaking Underground Storage Tank Trust Fund tax as applied to gasoline used in aviation and in trains; (7) the floor stocks tax on gasoline; (8) the ordering of amendments made by the Superfund Revenue Act of 1986 and by the Harbor Maintenance Revenue Act of 1986 of provisions related to the excise tax on fuel used in commercial transportation on inland waterways; and (9) exemption from the port use excise tax for cargo transported between Alaska, Hawaii, and any U.S. possession for ultimate use or consumption at the relevant destination. Amends the Harbor Maintenance Revenue Act of 1986 to delay from November 17, 1987, to July 1, 1988, the due date for the Secretary is study of cargo diversion. Makes technical amendments related to the Omnibus Budget Reconciliation Act of 1986 with respect to tax-exempt mutual or cooperative telephone or electric companies, as well as pension plans under the IRC and the Employee Retirement Income Security Act of 1974. Subtitle C: Miscellaneous Provisions - Part I: Provisions of General Application - Subpart A: Provisions Primarily Affecting Individuals - Amends the IRC to exclude certain means-based governmental assistance from calculations determining the applicability of various income tax deductions, credits, and other features. Amends IRC provisions relating to the application of: (1) the scholarship exclusion to graduate students; and (2) the 14 percent withholding rate on nonresident alien lecturers at U.S. educational organizations. Amends the IRC to provide that the prohibition against indirect income tax deductions through pass-through entities shall not apply to any regulated investment company whose shares are: (1) continuously offered pursuant to a public offering; (2) regularly traded on an established securities market; or (3) held by or for at least 500 persons at all times during the taxable year. Increases the amount permissible as a tax deduction for entertainment tickets to include up to $5.00 of service charges. Provides that, for taxable years beginning after 1986, rural mail carriers will be permitted to compute the amount of the income tax deduction for use of their automobiles in performance of mail services: (1) by using a standard mileage rate for all miles of such use equal to 150 percent of the basic standard rate; or (2) without applying the limitation on deductions generally applicable in cases when the business use of the automobile accounts for 50 percent, or less, of its use. Prohibits the use of 150 percent of the basic standard mileage rate in determining the allowable deduction if the taxpayer claims an investment tax credit or depreciation deduction for such automobile. Amends IRC provisions relating to the nonrecognition of gain on the sale of a principal residence in cases when: (1) a spouse dies before occupying the new residence; (2) the taxpayer is an ambassador or foreign service officer; and (3) the taxpayer is a member of the armed forces required to live on base. Permits a 100 percent tax deduction (currently 80 percent) of expenses for food or beverages: (1) required by Federal law to be provided to crew members of a vessel at sea; or (2) provided on an oil or gas platform or drilling rig located offshore or in Alaska. Subpart B: Depreciation and Low-Income Housing Credit - Amends IRC provisions relating to the depreciation deduction with respect to certain agricultural or horticultural structures, citrus trees, and certain other property used in a farming business. Amends the Tax Reform Act of 1986 to add new properties to those governed by transition rules with respect to capital cost recovery. Reduces the amount of investment tax credit recapture on certain involuntary conversions when the taxpayer places in service qualified replacement property within two years of the conversion. Explains a reference in the IRC in connection with capitalization of railroad track expenses. Amends TRA provisions relating to: (1) carryback of existing carryforwards of steel companies; (2) modification of the investment tax credit for rehabilitation expenditures. Amends the IRC with respect to the low-income housing income tax credit, including revision of provisions relating to: (1) a carryover of post-1987 credit dollar amounts; (2) a reduction in the State housing credit ceiling from $1.25 to $1.10; (3) the effect of family size on low income determinations; (4) the use of State median gross income in determining qualified low-income housing project status; and (5) anti-churning rules. Subpart C: Capital Loss Deduction for Individuals Limited to Taxable Income - Amends the IRC to limit the deduction for the net capital losses of an individual to the smallest of: (1) $3,000; (2) the excess of capital losses over capital gains; or (3) the taxpayer's taxable income for the year. Subpart D: Ethyl Alcohol and Mixtures Thereof for Fuel Use - Amends the TRA to retain at 30 percent the level of required indigenous processing or manufacture required for duty-free entry of ethanol into the United States. (Under current law, the percentage is due to increase in 1988.) Subpart E: Explansion of Transtitional Relief from Passive Loss Rules - Amends TRA provisions implementing transitional relief from passive loss rules as applied with respect to low-income housing investments. Extends this relief from December 31, 1987, until the 90th day after enactment of the Technical Corrections Act of 1987. Subpart F: Corporate Provisions - Delays the effect of IRS Announcement 86-47 with regard to recapture treatment of certain accounts in life insurance company acquisitions. Amends IRC provisions relating to the treatment of copyright and computer software royalties of S corporations. Repeals the IRC 30 percent test used to determine whether a company qualifies for treatment as a regulated investment company. Subpart G: Provisions Relating to the Alternative Minimum Tax - Amends the IRC provisions relating to the minimum tax in connection with: (1) the treatment of annuities that are part of structured settlements; (2) special rules for certain mortgage guaranty insurers; (3) rural cooperatives; and (4) an exemption for small nonlife insurance companies. Amends the IRC to treat as life insurance policies certain self-funded death benefit plans maintained by churches for their employees, thus excluding the benefits provided through such plans from gross income for income tax purposes. Subpart H: Accounting Provisions - Amends IRC accounting provisions with respect to inventory cost capitalization rules applied to: (1) animals produced in a farming business; and (2) free lance authors and photographers. Modifies IRC accounting rules with respect to both dealer and nondealer installment obligations. Amends accounting rules to be applied when a thrift institution is a member of a controlled group. Amends the IRC to permit to small water utilities a corporate income tax exclusion of contributions in aid of construction. Amends the IRC to permit a partnership, S corporation, or personal service corporation, unless it is part of a tiered structure, to elect to have a taxable year other than the required one, but generally only if the deferral period of the taxable year elected is three months or less. (Current law requires partnerships, S corporations, and personal service corporations, in most cases, to conform their taxable years to the calendar years used by their owners.) Subjects the principals of a partnership or S corporation electing to change taxable years to additional estimated tax requirements to offset any tax deferral resulting from such election. Imposes deduction limitations on a personal service corporation that changes taxable years. Provides that an election with respect to taxable year shall be made by the partnership, S corporation, or personal service corporation and shall be binding on all partners and shareholders. Sets forth the formula for determining the additional tax requirement when a taxpayer: (1) is a partner or shareholder in at least one such entity during any applicable election years of the entity that end within the taxpayer's taxable year; and (2) has an aggregate deferred tax exceeding $200 with respect to the entity. Describes payment procedures. Requires the inclusion of specified information on returns filed by partnerships and S corporations that elect to use a non-required taxable year. Limits the tax deduction permitted to a personal service corporation for amounts paid or incurred with respect to employee-owners when such a corporation: (1) elects to have a taxable year other than the required one; and (2) fails to meet certain minimum distribution requirements regarding non-dividend amounts paid to owners. States that common trust funds, beginning in 1988, must adopt the calendar year as their taxable year. Subpart I: Financial Institutions - Provides for the coordination of corporate rate reductions with methods used to calculate additions to bad debt reserves of thrift institutions. Amends IRC provisions relating to the net operating loss deduction to permit commercial banks to elect to apply normal net operating loss rules to all of their net operating losses. (Under current law, different rules may be applied to losses attributable to deductions for bad debts.) Subpart J: Provisions Relating to Insurance - Amends the IRC to state that charitable gift annuities (those owned by an individual who made a tax-deductible charitable contribution to the annuities issuer) are not commercial-type insurance for purposes of determining the tax-exempt status of an organization. Directs the Secretary of the Treasury to revise the tables used to determine the amount of a charitable contribution to reflect interest rates and recent mortality experience. Amends IRC special rules with regard to the treatment of unearned premium reserves by property/casualty insurance companies that do not deduct sales commissions on deferred premium installments. Subpart K: Pension; Employee Benefits; ESOPs - Provides that for certain payments made before 1987, a trust fund that qualifies as a voluntary employees' benefit association providing health and welfare benefits to specified persons in Pennsylvania shall be deemed to have fulfilled all employer obligations with respect to: (1) employer contributions under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act; and (2) FICA and income tax withholding. Amends the IRC to exclude from gross income as a de minimis fringe benefit the first $15 of transit passes provided per month by an employer to an employee. Amends IRC provisions governing the commencement date for benefits under qualified governmental pension plans. Amends the IRC to state that the accounting provisions applicable to the deferred compensation plans of State and local governments and of private tax-exempt organizations shall not apply to nonelective deferred compensation. Amends IRC provisions relating to: (1) adjustments to limitations on contributions and benefits under State and local government plans; (2) cash or deferred arrangements of tax-exempt organizations; (3) minimum coverage requirements for qualified governmental plans; (4) amendment of master or prototype plans; and (5) air cargo transportation as a fringe benefit. Imposes an excise tax, in the amount of $100 per day of noncompliance, on an employer, plan administrator, or any other person whose act or omission causes the failure of a group health plan to satisfy continuation coverage requirements. Includes provisions for a minimum tax in cases when the failure cannot be corrected. Describes administrative features of the tax, as well as the continuation coverage requirements that must be met by group health plans. Repeals provisions disallowing an employer's deduction for group health plan expenses and the tax exclusion of health coverage benefits of highly compensated employees in cases of an employer's failure to satisfy continuation coverage requirements. Subpart L: Foreign Provisions - Amends the IRC to increase from 50 percent to 67 percent the amount of research and development expenditures that a company must allocate to income from sources within the United States. Establishes a special rule for the qualified research and experimental expenditures required by governmental entities. Requires companies to report on a consolidated basis with respect to the expenditures associated with this source rule. Amends the IRC to delay, from 1988 to 1989, the implementation of rules under which the earnings and profits of certain foreign corporations are determined without regard to the installment method of accounting. Amends IRC provisions relating to: (1) treatment of pre-1987 interest for purposes of foreign tax credit modifications; (2) interest on U.S. obligations held by Puerto Rican banks; (3) source rules applied to certain regulated investment companies; and (4) the allocation of interest expenses of certain financial institutions. Subpart M: Tax-Exempt Bonds - Amends the IRC to raise from $5,000,000 to $10,000,000 the threshold amount of tax-exempt bonds that a small governmental unit may issue and still remain within the exception from arbitrage rebate requirements. Revises the definition of "manufacturing facility" in the context of small issue bonds. Amends TRA tax-exempt bond provisions with respect to various specific properties and projects. Subpart N: Provisions Relating to Estate Tax - Amends the IRC in connection with the valuation of farm land for estate tax purposes. Permits a surviving spouse to enter into a cash lease of farm or other real property with a family member and still have the property valued under use value principles rather than according to its highest and best use. Subpart O: Exchange of Information and Reporting Provisions - Amends the IRC to permit, under certain circumstances, the disclosure of income tax returns and return information to officials of municipalities with a population of more than 1,500,000. (Present law allows such disclosure only to municipalities with a population in excess of 2,000,000.) Exempts the Federal Home Loan Mortgage Corporation from provisions requiring the filing of an information return relating to persons receiving contracts from Federal executive agencies. Subpart P: Exempt and Nonprofit Organizations - Amends the IRC to permit an 80 percent income tax deduction of contributions to or for an institution of higher education, even if the taxpayer receives, as a result of paying such an amount, the right to seating or the right to purchase seating in the institution's athletic stadium. Amends the IRC to exclude from income, for purposes of the unrelated business income tax, any income derived by a tax-exempt social welfare organization from the rental or exchange with other similar organizations of member or donor lists. Exempts from all Federal, State, or local taxation any earnings on, and distributions from, the Enjebi Community Trust Fund. Subpart Q: Miscellaneous Provisions - Amends the IRC to authorize the Secretary of the Treasury to prescribe de minimis tolerances for the volume of wine in bottles for purposes of the excise tax on wine. Amends the IRC to allow certain wholesale distributors of gasoline to pay the gasoline tax. Amends the IRC to eliminate the retroactive certification of employees for purposes of the income tax credit for certain expenses of work incentive programs. Makes such amendment applicable to credits first claimed after March 11, 1987. Subpart R: Miscellaneous Provisions - Amends the Tax Reform Act of 1984 to add a transitional rule with respect to relieving innocent spouses of income tax liability in certain cases. Prescribes treatment of certain qualified group self-insurers' funds (workers' compensation funds) with respect to deficiency assessments and other matters. Part II: Amendments Related to Tax Legislation Other than the Tax Reform Act of 1986 - Amends the IRC to exempt from the harbor maintenance (port) tax any cargo owned or financed by a nonprofit organization or cooperative for use in humanitarian or development assistance overseas. Amends the IRC with respect to cargo entering or leaving the United States and on which the harbor maintenance (port) tax has been paid or imposed. Prohibits the imposition of tax with respect to any subsequent loading or unloading of the same cargo if: (1) the shipper is the same at the time of entry or of the imposition of the tax and at the time of the subsequent loading or unloading; and (2) the subsequent activity is in connection with the continuous transportation of the cargo to its ultimate U.S. destination. Amends the IRC to provide an exception from the excise tax on distilled spirits in the case of certain distilled spirits removed from certain foreign trade zones. Amends the IRC to extend the potential commencement date of the Oil Spill Liability Trust Fund and petroleum tax. Subtitle D: Lobbying and Political Activities of Tax-Exempt Organizations - Part I: Disclosure Requirements - Amends the IRC to require tax-exempt organizations not eligible to receive tax-deductible charitable contributions to include in every written, broadcast, or telephone fundraising solicitation an express and conspicuous statement that gifts or contributions to the organization are not deductible as charitable contributions for Federal income tax purposes. Exempts from this requirement: (1) organizations having gross receipts of $100,000 or less; and (2) coordinated fundraising campaigns that solicit fewer than ten persons in a year. Fixes penalties for failure to comply with this disclosure requirement. Provides for public inspection, at organization offices, of both the annual returns and the application for recognition of exemption filed by tax-exempt organizations. Protects from disclosure the names and addresses of contributors. Requires that tax-exempt charitable entities (501(c)(3) organizations) provide annual information with respect to transfers and other transactions involving certain other tax-exempt organizations as the Secretary of the Treasury might require to prevent misallocation of revenues or expenses of any diversion of funds from the organization's exempt purpose. Amends IRC penalty provisions relating to required filings by tax-exempt organizations and certain trusts to: (1) revise the maximum penalty applicable in certain cases; (2) fix a penalty for failure to include required and accurate information on a return; (3) fix a penalty for failure to comply with public inspection requirements; and (4) treat the penalties as tax for administrative purposes. Assesses penalties against tax-exempt organizations that willfully fail to comply with public inspection requirements. Imposes a penalty on any tax-exempt organization or political organization that offers to sell to an individual specific information or a routine service that could be readily obtained by that individual free of charge from a Federal agency. Subpart B (Sic): Political Activities - Extends the prohibition against certain political activities by tax-exempt organizations to include activities in opposition to any candidate (current law includes only those activities on behalf of a candidate). Provides that any 501(c)(3) organization whose status is terminated by reason of intervening in any political campaign either for or against a candidate for public office shall never be treated as a tax-exempt not-for-profit civic league or organization. Imposes on a tax-exempt 501(c)(3) organization: (1) a ten percent excise tax on its political expenditures; and (2) a 100 percent tax on any such expenditure that has been subject to the ten percent penalty tax and has not been corrected within the taxable period. Imposes on the manager of a 501(c)(3) organization: (1) a two and one-half percent tax, to a maximum amount of $5,000, if such manager knowingly agrees to a political expenditure by the organization; and (2) a 50 percent tax, to a maximum of $10,000, if the manager refuses to agree to part or all of a correction of the prohibited expenditure. Identifies the types of expenditures considered to be political. Authorizes a civil action in U.S. district court in the name of the United States to enjoin a 501(c)(3) organization from making additional political expenditures and for other relief appropriate to ensure that the organization's assets are preserved for charitable purposes. Permits such an action only If: (1) the IRS has notified the organization of its intent to seek the injunction; and (2) the Commissioner of Revenue has personally determined that the organization has flagrantly participated in prohibited campaign activity, and that injunctive relief is appropriate to prevent future political expenditures. Directs the Secretary, upon the finding that a 501(c)(3) organization has made political contributions in flagrant violation of the prohibition against such expenditures, to make an immediate termination assessment of any income tax payable by such organization, as well as any penalty taxes due with respect to political expenditures. Sets forth guidelines to govern such termination assessments. Imposes: (1) a five percent excise tax, to be paid by the organization, on the lobbying expenses of any organization whose 501(c)(3) status has been lost because of such expenditures; and (2) a corresponding penalty tax to be paid by the organization manager who agreed to such expenditures, knowing that they could result in the organization's loss of tax-exempt status.