To amend the Higher Education Act of 1965 to authorize grant programs to enhance the access of low-income Black students to higher education.

Summary: Predominantly Black Institution Act of 2006 - Amends the Higher Education Act of 1965 to provide grants to Predominantly Black Institutions to: (1) enhance their capacity to serve more low and middle-income Black American students; (2) expand higher education opportunities for students eligible for student assistance under title IV of the Act by encouraging such students to prepare for college and persist in secondary and postsecondary education; and (3) strengthen their financial ability to serve the academic needs of such students.

Defines such institutions as accredited institutions: (1) serving at least 1,000 undergraduate students, at least 50% of which are pursuing a bachelor's or associate's degree; (2) serving an undergraduate population at least 40% of which are Black Americans and at least 50% of which are low-income or first-generation college students; and (3) whose spending per full-time undergraduate student is low in comparison to that of institutions offering similar instruction.

Allows grant recipients to use up to 20% of their grant on an endowment fund, provided they raise nonfederal matching funds at least equal to the amount of the grant used for such endowment. Allots funding among institutions on the basis of their share of Pell Grant recipients, graduates, and graduates pursuing a higher degree.

Establishes a minimum allotment for each institution of $250,000, which is to be ratably reduced if appropriations are insufficient to pay such amount.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Predominantly Black Institution Act 
of 2006''.

SEC. 2. PREDOMINANTLY BLACK INSTITUTIONS.

    Part A of title III of the Higher Education Act of 1965 (20 U.S.C. 
1051 et seq.) is amended by inserting after section 317 (20 U.S.C. 
1059d) the following new section:

``SEC. 318. PREDOMINANTLY BLACK INSTITUTIONS.

    ``(a) Findings and Purpose.--
            ``(1) Findings.--The Congress finds that--
                    ``(A) although Black Americans have made 
                significant progress in closing the `gap' between Black 
                and White enrollment in higher education--
                            ``(i) Black Americans continue to trail 
                        Whites in the percentage of the college-age 
                        cohort who enroll and graduate from college;
                            ``(ii) the college participation rate of 
                        Whites was 46 percent from 2000-2002, while 
                        that for Blacks was only 39 percent; and
                            ``(iii) the gap between White and Black 
                        baccalaureate degree attainment rates also 
                        remains high, continuing to exceed 10 percent;
                    ``(B) a growing number of Black American students 
                are participating in higher education and are enrolled 
                at a growing number of urban and rural Predominantly 
                Black Institutions that have included in their mission 
                the provision of academic training and education for 
                both traditional and non-traditional minority students;
                    ``(C) the overwhelming majority of students 
                attending Predominantly Black Institutions come from 
                low- and middle-income families and qualify for 
                participation in the Federal student assistance 
                programs or other need-based Federal programs; and 
                recent data from the National Postsecondary Student Aid 
                Study indicate that 47 percent of Pell grant recipients 
                were Black compared to only 21 percent of Whites;
                    ``(D) many of these students are also `first 
                generation' college students who lack the appropriate 
                academic preparation for success in college and whose 
                parents lack the ordinary knowledge and information 
                regarding financing a college education;
                    ``(E) there is a particular national need to aid 
                institutions of higher education that have become 
                Predominantly Black Institutions by virtue of the fact 
                that they have expanded opportunities for Black 
                American and other minority students;
                    ``(F) Predominantly Black Institutions fulfill a 
                unique mission and represent a vital component of the 
                American higher education landscape, far beyond that 
                which was initially envisioned;
                    ``(G) Predominantly Black Institutions serve the 
                cultural and social advancement of low-income, Black 
                American and other minority students and are a 
                significant access point for these students to higher 
                education and the opportunities offered by American 
                society;
                    ``(H) the concentration of these students in a 
                limited number of two-year and four-year Predominantly 
                Black Institutions and their desire to secure a degree 
                to prepare them for a successful career places special 
                burdens on those institutions who attract, retain, and 
                graduate these students; and
                    ``(I) financial assistance to establish or 
                strengthen the physical plants, financial management, 
                academic resources, and endowments of the Predominantly 
                Black Institutions are appropriate methods to enhance 
                these institutions and facilitate a decrease in 
                reliance on governmental financial support and to 
                encourage reliance on endowments and private sources.
            ``(2) Purpose.--It is the purpose of this section to assist 
        Predominantly Black Institutions in expanding educational 
        opportunity through a program of Federal assistance.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Predominantly black institution.--The term 
        `Predominantly Black Institution' means an institution of 
        higher education--
                    ``(A) that is an eligible institution (as defined 
                in paragraph (5)(A) of this subsection) with a minimum 
                of 1,000 undergraduate students;
                    ``(B) at which at least 50 percent of the 
                undergraduate students enrolled at the institution are 
                low-income individuals or first-generation college 
                students (as that term is defined in section 402A(g)); 
                and
                    ``(C) at which at least 50 percent of the 
                undergraduate students are enrolled in an educational 
                program leading to a bachelor's or associate's degree 
                that the institution is licensed to award by the State 
                in which it is located.
            ``(2) Low-income individual.--The term `low-income 
        individual' has the meaning given such term in section 402A(g).
            ``(3) Means-tested federal benefit program.--The term 
        `means-tested Federal benefit program' means a program of the 
        Federal Government, other than a program under title IV, in 
        which eligibility for the programs' benefits, or the amount of 
        such benefits, or both, are determined on the basis of income 
        or resources of the individual or family seeking the benefit.
            ``(4) State.--The term `State' means each of the 50 States 
        and the District of Columbia.
            ``(5) Other definitions.--For purposes of this section, the 
        terms defined by section 312 have the meanings provided by that 
        section, except as follows:
                    ``(A) Eligible institution.--
                            ``(i) The term `eligible institution' means 
                        an institution of higher education that--
                                    ``(I) has an enrollment of needy 
                                undergraduate students as required and 
                                defined by subparagraph (B);
                                    ``(II) except as provided in 
                                section 392(b), the average educational 
                                and general expenditure of which are 
                                low, per full-time equivalent 
                                undergraduate student in comparison 
                                with the average educational and 
                                general expenditure per full-time 
                                equivalent undergraduate student of 
                                institutions that offer similar 
                                instruction;
                                    ``(III) has an enrollment of 
                                undergraduate students that is at least 
                                40 percent Black American students;
                                    ``(IV) is legally authorized to 
                                provide, and provides within the State, 
                                an educational program for which the 
                                institution awards a bachelors degree, 
                                or in the case of a junior or community 
                                college, an associate's degree; and
                                    ``(V) is accredited by a nationally 
                                recognized accrediting agency or 
                                association determined by the Secretary 
                                to be a reliable authority as to the 
                                quality of training offered, or is, 
                                according to such an agency or 
                                association, making reasonable progress 
                                toward accreditation.
                            ``(ii) For purposes of the determination of 
                        whether an institution is an eligible 
                        institution under this subparagraph, the factor 
                        described under clause (i)(I) shall be given 
                        twice the weight of the factor described under 
                        clause (i)(III).
                    ``(B) Enrollment of needy students.--The term 
                `enrollment of needy students' means the enrollment at 
                an eligible institution with respect to which at least 
                50 percent of the undergraduate students enrolled in an 
                academic program leading to a degree--
                            ``(i) in the second fiscal year preceding 
                        the fiscal year for which the determination is 
                        made, were Pell Grant recipients in such year;
                            ``(ii) come from families that receive 
                        benefits under a means-tested Federal benefits 
                        program (as defined in subsection (b)(3));
                            ``(iii) attended a public or nonprofit 
                        private secondary school which is in the school 
                        district of a local educational agency which 
                        was eligible for assistance pursuant to title I 
                        of the Elementary and Secondary Education Act 
                        of 1965 in any year during which the student 
                        attended that secondary school, and which for 
                        the purpose of this paragraph and for that year 
                        was determined by the Secretary (pursuant to 
                        regulations and after consultation with the 
                        State educational agency of the State in which 
                        the school is located) to be a school in which 
                        the enrollment of children counted under 
                        section 1113(a)(5) of the Elementary and 
                        Secondary Education Act of 1965 exceeds 30 
                        percent of the total enrollment of that school; 
                        or
                            ``(iv) are `first-generation college 
                        students' as that term is defined in section 
                        402A(g), and a majority of such first-
                        generation college students are low-income 
                        individuals.
    ``(c) Authorized Activities.--
            ``(1) Types of activities authorized.--Grants awarded 
        pursuant to subsection (d) shall be used by Predominantly Black 
        Institutions--
                    ``(A) to assist the institution to plan, develop, 
                undertake, and implement programs to enhance the 
                institution's capacity to serve more low- and middle-
                income Black American students;
                    ``(B) to expand higher education opportunities for 
                title IV eligible students by encouraging college 
                preparation and student persistence in secondary and 
                postsecondary education; and
                    ``(C) to strengthen the institution's financial 
                ability to serve the academic needs of the students 
                described in subparagraphs (A) and (B).
            ``(2) Authorized activities.--Grants made to an institution 
        under subsection (d) shall be used for one or more of the 
        following activities:
                    ``(A) The activities described in section 311(a)(1) 
                through (11).
                    ``(B) Academic instruction in disciplines in which 
                Black Americans are underrepresented.
                    ``(C) Establishing or enhancing a program of 
                teacher education designed to qualify students to teach 
                in a public elementary or secondary school in the State 
                that shall include, as part of such program, 
                preparation for teacher certification.
                    ``(D) Establishing community outreach programs 
                which will encourage elementary and secondary students 
                to develop the academic skills and the interest to 
                pursue postsecondary education.
                    ``(E) Other activities proposed in the application 
                submitted pursuant to subsection (e) that--
                            ``(i) contribute to carrying out the 
                        purposes of this section; and
                            ``(ii) are approved by the Secretary as 
                        part of the review and acceptance of such 
                        application.
            ``(3) Endowment fund.--
                    ``(A) In general.--A Predominantly Black 
                Institution may use not more than 20 percent of the 
                grant funds provided under this section to establish or 
                increase an endowment fund at the institution.
                    ``(B) Matching requirement.--In order to be 
                eligible to use grant funds in accordance with 
                subparagraph (A), the Predominantly Black Institution 
                shall provide matching funds from non-Federal sources, 
                in an amount equal to or greater than the Federal funds 
                used in accordance with subparagraph (A), for the 
                establishment or increase of the endowment fund.
                    ``(C) Comparability.--The provisions of part C 
                regarding the establishment or increase of an endowment 
                fund, that the Secretary determines are not 
                inconsistent with this subsection, shall apply to funds 
                used under subparagraph (A).
            ``(4) Limitation.--Not more than 50 percent of the 
        allotment of any Predominantly Black Institution may be 
        available for the purpose of constructing or maintaining a 
        classroom, library, laboratory, or other instructional 
        facility.
    ``(d) Allotments to Predominantly Black Institutions.--
            ``(1) Allotment: pell grant basis.--From the amounts 
        appropriated to carry out this section for any fiscal year, the 
        Secretary shall allot to each Predominantly Black Institution a 
        sum which bears the same ratio to one-half that amount as the 
        number of Pell Grant recipients in attendance at such 
        institution at the end of the academic year preceding the 
        beginning of that fiscal year bears to the total number of Pell 
        Grant recipients at all institutions eligible under this 
        section.
            ``(2) Allotment: graduates basis.--From the amounts 
        appropriated to carry out this section for any fiscal year, the 
        Secretary shall allot to each Predominantly Black Institution a 
        sum which bears the same ratio to one-fourth that amount as the 
        number of graduates for such school year at such institution 
        bears to the total number of graduates for such school year at 
        all intuitions eligible under this section.
            ``(3) Allotment: graduates seeking a higher degree basis.--
        From the amounts appropriated to carry out this section for any 
        fiscal year, the Secretary shall allot to each Predominantly 
        Black Institution a sum which bears the same ratio to one-
        fourth of that amount as the percentage of graduates per 
        institution who are admitted to and in attendance at, within 2 
        years of graduation with an associates degree or a 
        baccalaureate degree, either a baccalaureate degree-granting 
        institution or a graduate or professional school in a degree 
        program in disciplines in which Black American students are 
        underrepresented, bears to the percentage of such graduates per 
        institution for all eligible institutions.
            ``(4) Minimum allotment.--(A) Notwithstanding paragraphs 
        (1), (2), and (3), the amount allotted to each Predominantly 
        Black Institution under this section shall not be less than 
        $250,000.
            ``(B) If the amount appropriated pursuant to section 399 
        for any fiscal year is not sufficient to pay the minimum 
        allotment, the amount of such minimum allotment shall be 
        ratably reduced. If additional sums become available for such 
        fiscal year, such reduced allocation shall be increased on the 
        same basis as it was reduced until the amount allotted equals 
        the minimum allotment required by subparagraph (A).
            ``(5) Reallotment.--The amount of a Predominantly Black 
        Institution's allotment under paragraph (1), (2), (3), or (4) 
        for any fiscal year, which the Secretary determines will not be 
        required for such institution for the period such allotment is 
        available, shall be available for reallotment to other 
        Predominantly Black Institutions in proportion to the original 
        allotment to such other institutions under this section for 
        such fiscal year. The Secretary shall reallot such amounts from 
        time to time, on such date and during such period as the 
        Secretary deems appropriate.
    ``(e) Applications.--No Predominantly Black Institution shall be 
entitled to its allotment of Federal funds for any grant under 
subsection (d) for any period unless the institution submits an 
application to the Secretary at such time, in such manner, and 
containing or accompanied by such information as the Secretary may 
reasonably require.
    ``(f) Application Review Process.--Section 393 shall not apply to 
applications under this section.
    ``(g) Prohibition.--No Predominantly Black Institution that applies 
for and receives a grant under this section may apply for or receive 
funds under any other program under this part or part B of this title.
    ``(h) Duration and Carryover.--Any funds paid to a Predominantly 
Black Institution under this section and not expended or used for the 
purposes for which the funds were paid within 10 years following the 
date of the grant awarded to such institution under this section shall 
be repaid to the Treasury of the United States.''.