(a) Short title.—This Act may be cited as the “Territorial Equity Act of 2021”.

(b) Table of contents.—The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

(a) In general.—Section 1108 of the Social Security Act (42 U.S.C. 1308) is amended—

(1) in subsection (f), in the matter preceding paragraph (1), by striking “and (h)” and inserting “(h), and (i)”;

(2) in subsection (g)(2), in the matter preceding subparagraph (A), by inserting “subsection (i),” after “subject to”; and

(3) by adding at the end the following new subsection:

“(i) Sunset of Medicaid funding limitations for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa.—Subsections (f) and (g) shall not apply to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa beginning with fiscal year 2022.”.

(b) Conforming amendments.—

(1) Section 1902(j) of the Social Security Act (42 U.S.C. 1396a(j)) is amended by striking “, the limitation in section 1108(f),”.

(2) Section 1903(u) of the Social Security Act (42 U.S.C. 1396b(u)) is amended by striking paragraph (4).

(c) Effective date.—The amendments made by this section shall apply beginning with fiscal year 2022.

Section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) is amended—

(1) in clause (2), by inserting “for fiscal years before fiscal year 2022” after “American Samoa”; and

(2) by adding at the end the following new sentence: “Notwithstanding the first sentence of this subsection, for each of fiscal years 2022 and 2023, the Federal medical assistance percentage for Puerto Rico and the Virgin Islands shall be 100 percent.”.

(a) In general.—Section 1902(j) of the Social Security Act (42 U.S.C. 1396a(j)) is amended—

(1) by striking “American Samoa and the Northern Mariana Islands” and inserting “Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa”;

(2) by striking “American Samoa or the Northern Mariana Islands” and inserting “Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa”;

(3) by inserting “(1)” before “Notwithstanding”;

(4) by inserting “except as otherwise provided in this subsection,” after “Notwithstanding any other requirement of this title”; and

(5) by adding at the end the following:

“(2) The Secretary may not waive under this subsection—

“(A) the requirement of subsection (a)(10)(A)(i)(IX) (relating to coverage of adults formerly under foster care) with respect to any territory;

“(B) the requirement to provide medical assistance for early and periodic screening, diagnostic, and treatment services (as defined in section 1905(r)) for individuals who are eligible for assistance under the program and who under the age of 21; or

“(C) the requirement to provide for payment for services described in section 1905(a)(2)(C) furnished by a Federally-qualified health center and services described in section 1905(a)(2)(B) furnished by a rural health clinic in accordance with the provisions of subsection (bb).”.

(b) Effective date.—The amendments made by this section shall apply beginning October 1, 2021.

Section 1923(f) of the Social Security Act (42 U.S.C. 1396r–4(f)) is amended—

(1) in paragraph (6), by adding at the end the following new subparagraph:

“(C) TERRITORIES.—

“(i) FISCAL YEAR 2021.—For fiscal year 2022, the DSH allotment for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa shall bear the same ratio to $300,000,000 as the ratio of the number of individuals who are low-income or uninsured and residing in such respective territory (as estimated from time to time by the Secretary) bears to the sums of the number of such individuals residing in all of the territories.

“(ii) SUBSEQUENT FISCAL YEAR.—For each subsequent fiscal year, the DSH allotment for each such territory is subject to an increase in accordance with paragraph (3).”; and

(2) in paragraph (9), by inserting before the period at the end the following: “, and includes, beginning with fiscal year 2022, Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa”.

Section 1886(d)(9)(D)(iii) of the Social Security Act (42 U.S.C. 1395ww(d)(9)(D)(iii)) is amended to read as follows:

“(iii) Subparagraph (F) (relating to disproportionate share payments), including application of subsection (r), except that for this purpose—

“(I) the sum described in clause (ii) of this subparagraph shall be substituted for the sum referred to in paragraph (5)(F)(ii)(I); and

“(II) for discharges occurring on or after October 1, 2021, subclause (I) of paragraph (5)(F)(vi) shall be applied by substituting for the numerator described in such subclause the number of subsection (d) Puerto Rico hospital’s patient days for the cost reporting period involved which were made up of patients who (for such days) were entitled to benefits under part A of this title and were—

“(aa) entitled to supplementary security income benefits (excluding any State supplementation) under title XVI of this Act;

“(bb) eligible for medical assistance under a State plan under title XIX; or

“(cc) receiving aid or assistance under any plan of the State approved under title I, X, XIV, or XVI.”.

Section 1886(b)(3) of the Social Security Act (42 U.S.C. 1395ww(b)(3)) is amended by adding at the end the following new subparagraph:

“(M) (i) For each cost reporting period beginning on or after October 1, 2021, in the case of a hospital located in a territory of the United States, there shall be substituted for the target amount otherwise determined under subparagraph (A) the rebased target amount (as defined in clause (ii)), if such substitution results in an amount of payment under this section to the hospital for such period that is greater than the amount of payment that would be made under this section to the hospital for such period if this subparagraph were not to apply.

“(ii) For purposes of this subparagraph, the term ‘rebased target amount’ has the meaning given the term ‘target amount’ in subparagraph (A), except that—

“(I) there shall be substituted for the preceding 12-month cost reporting period the 12-month cost reporting period beginning during fiscal year 2017 (or, at the option of the hospital, beginning during fiscal year 2019);

“(II) any reference in subparagraph (A)(i) to the ‘first such cost reporting period’ is deemed a reference to the first cost reporting period following the 12-month cost reporting period beginning during fiscal year 2017 (or, at the option of the hospital, beginning during fiscal year 2019); and

“(III) the applicable percentage increase shall only be applied under subparagraph (B)(ii) for cost reporting periods beginning on or after October 1, 2021.

“(iii) Nothing in this subparagraph shall affect any pending request by a hospital for a new target amount for any cost reporting period beginning during a fiscal year before fiscal year 2022.”.

Section 1886(b)(3) of the Social Security Act (42 U.S.C. 1395ww(b)(3)), as amended by section 112, is further amended by adding at the end the following new subparagraph:

“(N) (i) For each cost reporting period beginning on or after October 1, 2020, in the case of a hospital that is located in a territory of the United States other than Puerto Rico and that would be a subsection (d) hospital if it were located in one of the 50 States, the target amount shall be increased by—

“(I) in the case that such hospital has a disproportionate patient percentage of not less than 15 percent and not greater than 40 percent, 10 percent; and

“(II) in the case that such hospital has a disproportionate patient percentage of greater than 40 percent, 10 percent plus 60 percent of the number of percentage points by which such hospital’s disproportionate patient percentage exceeds 40 percent.

“(ii) For purposes of this subparagraph, the term ‘disproportionate patient percentage’ has the meaning given such term in subsection (d)(5)(F)(vi), except that in applying such meaning any reference under such subsection to individuals entitled to supplementary security income under title XVI shall be deemed for purposes of this subparagraph to include individuals—

“(I) eligible for medical assistance under a State plan under title XIX; or

“(II) receiving aid or assistance under any plan of the territory approved under title I, X, XIV, or XVI.”.

(a) Application of part B deemed enrollment process to residents of Puerto Rico.—Section 1837(f)(3) of the Social Security Act (42 U.S.C. 1395p(f)(3)) is amended by striking “, exclusive of Puerto Rico”.

(b) Effective date.—The amendment made by subsection (a) shall apply to individuals whose initial enrollment period under section 1837(d) of the Social Security Act begins on or after the first day of the effective month, specified by the Secretary of Health and Human Services under section 1839(k)(1)(C) of such Act, as added by subsection (c)(2).

(c) Transition providing special enrollment period and limit on late enrollment penalties for certain Medicare beneficiaries.—Section 1839 of the Social Security Act (42 U.S.C. 1395r) is amended—

(1) in the first sentence of subsection (b), by inserting “subject to subsection (k)(2) of this section,” after “subsection (i)(4), (l), or (l) of section 1837,”; and

(2) by adding at the end the following new subsection:

“(k) Special rules for certain residents of Puerto Rico.—

“(1) SPECIAL ENROLLMENT PERIOD, COVERAGE PERIOD FOR RESIDENTS WHO ARE ELIGIBLE BUT NOT ENROLLED.—

“(A) IN GENERAL.—In the case of a transition individual (as defined in paragraph (3)) who is not enrolled under this part as of the day before the first day of the effective month (as defined in subparagraph (C)), the Secretary shall provide for a special enrollment period under section 1837 of 7 months beginning with such effective month during which the individual may be enrolled under this part.

“(B) COVERAGE PERIOD.—In the case of such an individual who enrolls during such special enrollment period, the coverage period under section 1838 shall begin on the first day of the second month after the month in which the individual enrolls.

“(C) EFFECTIVE MONTH DEFINED.—In this section, the term ‘effective month’ means a month, not earlier than October 2022 and not later than January 2023, specified by the Secretary.

“(2) REDUCTION IN LATE ENROLLMENT PENALTIES FOR CURRENT ENROLLEES AND INDIVIDUALS ENROLLING DURING TRANSITION.—

“(A) IN GENERAL.—In the case of a transition individual who is enrolled under this part as of the day before the first day of the effective month or who enrolls under this part on or after the date of the enactment of this subsection but before the end of the special enrollment period under paragraph (1)(A), the amount of the late enrollment penalty imposed under section 1839(b) shall be recalculated by reducing the penalty to 15 percent of the penalty otherwise established.

“(B) APPLICATION.—Subparagraph (A) shall be applied in the case of a transition individual who—

“(i) is enrolled under this part as of the month before the effective month, for premiums for months beginning with such effective month; or

“(ii) enrolls under this part on or after the date of the enactment of this Act and before the end of the special enrollment period under paragraph (1)(A), for premiums for months during the coverage period under this part which occur during or after the effective month.

“(C) LOSS OF REDUCTION IF INDIVIDUAL TERMINATES ENROLLMENT.—Subparagraph (A) shall not apply to a transition individual if the individual terminates enrollment under this part after the end of the special enrollment period under paragraph (1).

“(3) TRANSITION INDIVIDUAL DEFINED.—In this section, the term ‘transition individual’ means an individual who resides in Puerto Rico and who would have been deemed enrolled under this part pursuant to section 1837(f) before the first day of the effective month but for the fact that the individual was a resident of Puerto Rico, regardless of whether the individual is enrolled under this part as of such first day.”.

Section 1853(n) of the Social Security Act (42 U.S.C. 1395w–23(n)) is amended—

(1) in paragraph (1), by striking “and (5)” and inserting “(5), and (6)”;

(2) in paragraph (4), by striking “In no case” and inserting “Subject to paragraph (6), in no case”; and

(3) by adding at the end the following new paragraph:

“(6) SPECIAL RULES FOR BLENDED BENCHMARK AMOUNT FOR TERRITORIES.—

“(A) IN GENERAL.—Subject to subparagraph (B), the blended benchmark amount for an area in a territory for a year (beginning with 2022) shall not be less than 80 percent of the national average of the base payment amounts specified in subparagraph (2)(E) for such year for areas within the 50 States and the District of Columbia.

“(B) LIMITATION.—In no case shall the blended benchmark amount for an area in a territory for a year under subparagraph (A) exceed the lowest blended benchmark amount for any area within the 50 States and the District of Columbia for such year.”.

Section 1935(e) of the Social Security Act (42 U.S.C. 1396u–5(e)) is amended—

(1) by redesignating paragraph (5) as paragraph (6); and

(2) by inserting after paragraph (4) the following new paragraph:

“(5) IMPROVED USE OF FUNDS FOR LOW-INCOME PART D ELIGIBLE INDIVIDUALS.—This subsection shall be applied beginning with fiscal year 2022 as follows, notwithstanding any other provision of this title:

“(A) CLARIFYING STATE FLEXIBILITY TO COVER NON-DUAL-ELIGIBLE INDIVIDUALS.—In this title, the term ‘medical assistance’ includes financial assistance furnished by a State under this subsection to part D eligible individuals who, if they were residing in one of the 50 States or the District of Columbia, would qualify as subsidy eligible individuals under section 1860D–14(a)(3), and without regard to whether such individuals otherwise qualify for medical assistance under this title.

“(B) 100 PERCENT FMAP TO REFLECT NO STATE MATCHING REQUIRED FOR PART D LOW INCOME SUBSIDIES.—The Federal medical assistance percentage applicable to the assistance furnished under this subsection is 100 percent.

“(C) LIMITED FUNDING FOR SPECIAL RULES.—Subparagraphs (A) and (B), and the provision of medical assistance for covered part D drugs to low-income part D eligible individuals for a State and period under this subsection, is limited to the amount specified in paragraph (3) for such State and period.”.

Paragraph (6) of section 1935(e) of the Social Security Act (42 U.S.C. 1396u–5(e)), as redesignated by section 141, is amended to read as follows:

“(6) REPORT ON APPLICATION OF SUBSECTION.—

“(A) IN GENERAL.—Not later than February 1, 2023, the Secretary shall submit to Congress a report on the application of this subsection during the period beginning fiscal year 2006 and ending fiscal year 2022.

“(B) INFORMATION TO BE INCLUDED IN REPORT.—Such report shall include—

“(i) program guidance issued by the Secretary to implement this subsection;

“(ii) for each territory, information on the increased amount under paragraph (3) and how the territory has applied such amount, including the territory’s program design, expenditures, and number of individuals (and dual-eligible individuals) assisted; and

“(iii) differences between how such territories are treated under part D of title XVIII and under this title compared with the treatment of the 50 States and the District of Columbia under such part and this title for different fiscal years within the period covered under the report.

“(C) RECOMMENDATIONS.—Such report shall include recommendations for improving prescription drug coverage for low-income individuals in each territory, including recommendations regarding each of the following alternative approaches:

“(i) Adjusting the aggregate amount specified in paragraph (3)(B).

“(ii) Allowing residents of the territories to be subsidy eligible individuals under section 1860D–14, notwithstanding subsection (a)(3)(F) of such section, or providing substantially equivalent low-income prescription drug subsidies to such residents.”.

(a) Publication of information on Federal expenditures under Medicaid and CHIP in the territories.—Not later than 180 days after the date of the enactment of this Act, the Secretary of Health and Human Services shall publish, and periodically update, on the Internet site of the Centers for Medicare & Medicaid Services information on Medicaid and CHIP carried out in the territories of the United States. Such information shall include, with respect to each such territory—

(1) the income levels established by the territory for purposes of eligibility of an individual to receive medical assistance under Medicaid or child health assistance under CHIP;

(2) the number of individuals enrolled in Medicaid and CHIP in such territory;

(3) any State plan amendments in effect to carry out Medicaid or CHIP in such territory;

(4) any waiver of the requirements of title XIX or title XXI issued by the Secretary to carry out Medicaid or CHIP in the territory, including a waiver under section 1115 of the Social Security Act (42 U.S.C. 1315), any application for such a waiver, and any documentation related to such application (including correspondence);

(5) the amount of the Federal and non-Federal share of expenditures under Medicaid and CHIP in such territory;

(6) the systems in place for the furnishing of health care items and services under Medicaid and CHIP in such territory;

(7) the design of CHIP in such territory; and

(8) other information regarding the carrying out of Medicaid and CHIP in the territory that is published on such Internet site with respect to carrying out Medicaid and CHIP in each State and the District of Columbia.

(b) Definitions.—In this section:

(1) CHIP.—The term “CHIP” means the State Children’s Health Insurance Program under title XXI of the Social Security Act.

(2) MEDICAID.—The term “Medicaid” means the Medicaid program under title XIX of the Social Security Act.

(3) TERRITORY.—The term “territory of the United States” includes Puerto Rico, the Virgin Islands of the United States, Guam, the Northern Mariana Islands, and American Samoa.

(a) In general.—Not later than 180 days after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report that details the adverse impacts in each territory from the practical exclusion of the territories from the provisions of part II or III of subtitle D of title I of the Patient Protection and Affordable Care Act insofar as such provisions provide for the establishment of an American Health Benefit Exchange or the administration of a federally facilitated Exchange in each State and in the District of Columbia for the purpose of making health insurance more affordable and accessible for individuals and small businesses.

(b) Information in report.—The report shall include information on the following:

(1) An estimate of the total number of individuals residing in each territory with health insurance coverage, and the total number of individuals in each territory without health insurance coverage.

(2) The number of health insurance issuers in each territory and the health insurance coverage each such issuer offers.

(3) An estimate of the number of individuals residing in each territory who are denied premium and cost-sharing assistance that would otherwise be available to them for obtaining health insurance coverage through an Exchange if they resided in one of the 50 States or in the District of Columbia.

(4) An estimate of the amount of Federal assistance described in paragraph (3) that is not being made available to residents of each territory.

(5) An estimate of the number of small employers in each territory that would be eligible to purchase health insurance coverage through a Small Business Health Options Program (SHOP) Marketplace that would operate as part of an Exchange if the employers were in one of the 50 States or in the District of Columbia.

Part 2 of subtitle D of title I of the Patient Protection and Affordable Care Act (42 U.S.C. 18031 et seq.) is amended by adding at the end the following:

(a) Definitions.—Section 3 of the Food and Nutrition Act of 2008 (7 U.S.C. 2012) is amended—

(1) in subsection (r), by inserting “the Commonwealth of Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands,” after “Guam,”; and

(2) in subsection (u)(3), by inserting “the Commonwealth of Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands,” after “Guam,”.

(b) Eligible households.—Section 5 of the Food and Nutrition Act of 2008 (7 U.S.C. 2014) is amended—

(1) in subsection (b), in the first sentence, by inserting “the Commonwealth of Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands,” after “Guam,”;

(2) in subsection (c)(1), by striking “and Guam,” and inserting “Guam, the Commonwealth of Puerto Rico, American Samoa, and the Commonwealth of the Northern Mariana Islands,”; and

(3) in subsection (e)—

(A) in paragraph (1)(A), by inserting “the Commonwealth of Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands,” after “Hawaii,” each place it appears; and

(B) in paragraph (6)(B), in the matter preceding clause (i), by inserting “the Commonwealth of Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands,” after “Guam,”.

(c) Effective date.—

(1) IN GENERAL.—The amendments made by subsections (a) and (b) shall be effective with respect to the Commonwealth of Puerto Rico, American Samoa, and the Commonwealth of the Northern Mariana Islands, as applicable, on the date described in paragraph (2) if the Secretary of Agriculture submits to Congress a certification under subsection (f)(2)(B) of section 19 of the Food and Nutrition Act of 2008 (7 U.S.C. 2028).

(2) DATE DESCRIBED.—The date referred to in paragraph (1) is, with respect to the Commonwealth of Puerto Rico, American Samoa, and the Commonwealth of the Northern Mariana Islands, the date established by the Commonwealth of Puerto Rico, American Samoa, or the Commonwealth of the Northern Mariana Islands, respectively, in the applicable plan of operation submitted to the Secretary of Agriculture under subsection (f)(1) of section 19 of the Food and Nutrition Act of 2008 (7 U.S.C. 2028).

(d) Transition of Puerto Rico, American Samoa, and the Northern Mariana Islands to supplemental nutrition assistance program.—Section 19 of the Food and Nutrition Act of 2008 (7 U.S.C. 2028) is amended—

(1) in subsection (a)(1)—

(A) in subparagraph (A), by striking “and” at the end;

(B) in subparagraph (B), by striking the period at the end and inserting “; and”; and

(C) by adding at the end the following:

“(C) the Commonwealth of the Northern Mariana Islands.”; and

(2) by adding at the end the following:

“(f) Transition of Puerto Rico, American Samoa, and the Northern Mariana Islands to supplemental nutrition assistance program.—

“(1) DEFINITION OF GOVERNMENTAL ENTITY.—In this subsection, the term ‘governmental entity’ means—

“(A) the Commonwealth of Puerto Rico;

“(B) American Samoa; and

“(C) the Commonwealth of the Northern Mariana Islands.

“(2) REQUEST FOR PARTICIPATION.—A governmental entity may submit to the Secretary a request to participate in the supplemental nutrition assistance program, which shall include a plan of operation described in section 11(d), which shall include the date on which the governmental entity intends to begin participation in the program.

“(3) CERTIFICATION BY SECRETARY.—

“(A) IN GENERAL.—The Secretary shall certify a governmental entity that submits a request under paragraph (2) as qualified to participate in the supplemental nutrition assistance program if the Secretary—

“(i) approves the plan of operation submitted with the request, in accordance with this subsection; and

“(ii) approves the applications described in paragraph (5) in accordance with that paragraph.

“(B) SUBMISSION OF CERTIFICATION TO CONGRESS.—The Secretary shall submit each certification under subparagraph (A) to Congress.

“(C) CERTIFICATION DECISION.—The Secretary shall certify or not certify a governmental entity that submits a request under paragraph (2) not later than 90 days after the date on which the Secretary receives the request.

“(4) DETERMINATION OF PLAN OF OPERATION.—

“(A) APPROVAL.—The Secretary shall approve a plan of operation submitted with a request under paragraph (2) if the plan satisfies the requirements under this Act.

“(B) DISAPPROVAL.—If the Secretary does not approve a plan of operation submitted with a request under paragraph (2), the Secretary shall provide to the governmental entity a statement that describes each requirement under this Act that is not satisfied by the plan.

“(5) RETAIL FOOD STORES.—If the Secretary approves a plan of operation under paragraph (4)(A) for a governmental entity, the Secretary shall accept applications from retail food stores located in that governmental entity to be authorized under section 9 to participate in the supplemental nutrition assistance program.

“(6) PUERTO RICO.—In the case of a request under paragraph (2) by the Commonwealth of Puerto Rico, notwithstanding subsection (g), the Secretary shall allow the Commonwealth of Puerto Rico to continue to carry out under the supplemental nutrition assistance program the Family Market Program established pursuant to this section.

“(7) TEMPORARY FUNDING.—Any governmental entity that has a request under paragraph (2) pending before the Secretary (including a plan of operation pending under paragraph (4)) shall receive block grants under this section, in amounts determined by the Secretary, until the date on which the Secretary certifies the governmental entity.

“(8) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary such sums as are necessary to carry out this subsection for fiscal year 2021, to remain available until expended.

“(g) Technical infrastructure implementation.—

“(1) IN GENERAL.—A governmental entity (as defined in subsection (f)) may request from the Secretary a 1-time grant to pay for the cost of the technology infrastructure necessary to implement the supplemental nutrition assistance program, including the cost of information technology, information technology personnel, and training relating to program implementation.

“(2) APPLICATION.—A governmental entity making a request under paragraph (1) for a grant shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including—

“(A) a description of the costs to be paid for by the grant; and

“(B) a plan for implementing the technology infrastructure described in paragraph (1)—

“(i) within 1 year of receiving the grant; and

“(ii) that is reasonably cost efficient, as determined by the Secretary.

“(3) DETERMINATION.—

“(A) TIME LIMIT.—The Secretary shall approve or deny an application submitted under paragraph (2) not later than 90 days after the date on which the application is submitted.

“(B) DENIAL.—If the Secretary denies an application submitted under paragraph (2), the governmental entity may amend the plan described in subparagraph (B) of that paragraph, in coordination with the Secretary, to resubmit to the Secretary for approval.

“(4) FUNDING.—

“(A) IN GENERAL.—There is appropriated to the Secretary, out of funds in the Treasury not otherwise appropriated, $5,000,000 to carry out this subsection, to remain available until 3 years after the date of enactment of this subsection.

“(B) REVERSION OF FUNDS.—Any funds appropriated to the Secretary under subparagraph (A) that remain available by the date described in that subparagraph shall revert to the Treasury.

“(h) Termination of effectiveness.—

“(1) IN GENERAL.—Subsections (a) through (e) shall cease to be effective with respect to the Commonwealth of Puerto Rico, American Samoa, and the Commonwealth of the Northern Mariana Islands, as applicable, on the date described in paragraph (2) if the Secretary submits to Congress a certification under subsection (f)(3)(B) for that governmental entity.

“(2) DATE DESCRIBED.—The date referred to in paragraph (1) is, with respect to the Commonwealth of Puerto Rico, American Samoa, and the Commonwealth of the Northern Mariana Islands, the date established by the Commonwealth of Puerto Rico, American Samoa, or the Commonwealth of the Northern Mariana Islands, respectively, in the applicable plan of operation submitted to the Secretary under subsection (f)(2).”.

(a) Puerto Rico residents eligible for earned income tax credit.—

(1) IN GENERAL.—Section 32 of the Internal Revenue Code of 1986, as amended by section 9621(a) of the American Rescue Plan Act of 2021 (Public Law 117–2), is amended by adding at the end the following new subsection:

“(o) Residents of Puerto Rico.—

“(1) IN GENERAL.—In the case of residents of Puerto Rico—

“(A) the United States shall be treated as including Puerto Rico for purposes of subsections (c)(1)(A)(ii)(I) and (c)(3)(C),

“(B) subsection (c)(1)(D) shall not apply to nonresident alien individuals who are residents of Puerto Rico, and

“(C) adjusted gross income and gross income shall be computed without regard to section 933 for purposes of subsections (a)(2)(B) and (c)(2)(A)(i).

“(2) LIMITATION.—The credit allowed under this section by reason of this subsection for any taxable year shall not exceed the amount, determined under regulations or other guidance promulgated by the Secretary, that a similarly situated taxpayer would receive if residing in a State.”.

(2) CHILD TAX CREDIT NOT REDUCED.—Subclause (II) of section 24(d)(1)(B)(ii) of such Code is amended by inserting before the period “(determined without regard to section 32(n) in the case of residents of Puerto Rico)”.

(3) EFFECTIVE DATE.—The amendments made this subsection shall apply to taxable years beginning after December 31, 2020.

(b) Equitable treatment for residents of Puerto Rico with respect to the refundable portion of the child tax credit.—

(1) IN GENERAL.—Section 24(d)(1) of the Internal Revenue Code of 1986 is amended by inserting “or section 933” after “section 112”.

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to taxable years beginning after December 31, 2020.

(c) Treatment of residents of the Virgin Islands.—

(1) IN GENERAL.—The Secretary of the Treasury shall pay to the government of the Virgin Islands amounts equal to the loss to that possession by reason of the application of—

(A) section 32 of the Internal Revenue Code of 1986 (determined as if subsection (o) of such section, as added by subsection (a), applied to bona fide residents of that possession), and

(B) section 24(d) of such Code (determined as if the amendment made by subsection (b) applied to bona fide residents of that possession),

with respect to taxable years beginning after December 31, 2020. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the Virgin Islands.

(2) TREATMENT OF PAYMENTS.—For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from the credit allowed under section 32 or 24 (by reason of subsection (d) thereof), whichever is applicable, of the Internal Revenue Code of 1986.

Section 6(g) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(g)) is amended—

(1) by striking paragraph (2) and redesignating paragraphs (3) through (5) as paragraphs (2) through (4), respectively;

(2) in paragraph (2), as so redesignated, by striking “or (2)”; and

(3) in paragraph (4), as so redesignated, by striking “20 years, except” and all that follows through the period and inserting “20 years.”.

Section 404 of the Puerto Rico Oversight, Management, and Economic Stability Act (48 U.S.C. 2193) is repealed.

(a) Application of Social Security Amendments of 1972 amendments and repeals to territories.—

(1) IN GENERAL.—Effective January 1, 2022, the amendments made by sections 301 and 302 of the Social Security Amendments of 1972 (Public Law 92–603) and the repeals made by section 303(a) of the Social Security Amendments of 1972 shall be applicable in the case of Puerto Rico, Guam, the Virgin Islands, and American Samoa.

(2) CONFORMING AMENDMENT.—Effective January 1, 2022, section 303 of the Social Security Amendments of 1972 (Public Law 92–603) is amended by striking subsection (b).

(b) Conforming amendments.—

(1) DEFINITION OF STATE.—Section 1101(1) of the Social Security Act (42 U.S.C. 1301(1)) is amended by striking the fifth sentence and inserting the following: “In the case of supplemental security income under title XVI, such term also includes the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa.”.

(2) DEFINITION OF UNITED STATES.—Section 1614(e) of the Social Security Act (42 U.S.C. 1382c(e)) is amended by striking “and the District of Columbia” and inserting “, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on January 1, 2022.