II 

109TH CONGRESS 

2D SESSION S. 2357 

To provide for economic security and prosperity. 

IN THE SENATE OF THE UNITED STATES 

MARCH 2, 2006 

Mr. KENNEDY introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To provide for economic security and prosperity. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Right Time to Reinvest 

5 in America’s Competitiveness and Knowledge Act’’ or the 

6 ‘‘Right TRACK Act’’. 

7 SEC. 2. TABLE OF CONTENTS. 

8 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—INVESTING IN THE ECONOMY OF THE FUTURE AND 

CREATING HIGH QUALITY JOBS 

Subtitle A—Supporting Innovation for the Economy of the Future 


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CHAPTER 1—PRESIDENTIAL RESEARCH AND DEVELOPMENT COMMISSION

Sec. 1111. Research and Development Advisory Committee. 

CHAPTER 2—INTERAGENCY WORKING GROUP

Sec. 1121. Accelerating and broadening participation in biomedical, science, engineering, and technology research in the United States. 

CHAPTER 3—RESEARCH AND DEVELOPMENT TAX CREDIT EXTENSION

Sec. 1131. Findings. 

Sec. 1132. Permanent extension of research credit. 

Sec. 1133. Increase in rates of alternative incremental credit. 

Sec. 1134. Alternative simplified credit for qualified research expenses. 

Sec. 1135. Expansion of research credit. 

CHAPTER 4—INCREASING RESEARCH AND DEVELOPMENT

Sec. 1141. Authorization of appropriations for the Department of Defense. 

Sec. 1142. Authorization of appropriations for the National Science Foundation 

for research and related activities. 

Sec. 1143. Authorization of appropriations for the National Aeronautics and 

Space Administration for research and development activities. 

Sec. 1144. Authorization of appropriations for the Department of Energy for 

basic research. 

Sec. 1145. Authorization of appropriations for National Institutes of Health for 

research and development. 

Subtitle B—Building the Economy of the Future 

CHAPTER 1—NANOTECHNOLOGY

Sec. 1211. Tax credit for investment in nanotechnology firms. 

Sec. 1212. Nanotechnology assistance. 

CHAPTER 2—INVESTING IN HIGH-TECH MANUFACTURING

Sec. 1221. Manufacturing Extension Partnership Program. 

Sec. 1222. Advanced Technology Program. 

CHAPTER 3—DOMESTIC VACCINES

Sec. 1231. Incentives for the construction of domestic vaccine manufacturing 

facilities. 

CHAPTER 4—PROGRAMS AND TAX CREDITS TO INCREASE ENERGY

EFFICIENCY

Sec. 1241. Grant program for green building and zero-energy home design and 

construction training. 

Sec. 1242. Extension of certain tax credits for solar energy. 

Sec. 1243. Tax credit for purchasing green power. 

CHAPTER 5—RENEWABLE PORTFOLIO STANDARD

Sec. 1251. Renewable portfolio standard. 

CHAPTER 6—IMPROVING THE EFFICIENCY OF HEALTH CARE TO ENHANCE

AMERICA’S ECONOMIC COMPETITIVENESS


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SUBCHAPTER A—IMPROVING INFORMATION PROVIDED TO PATIENTS

Sec. 1261. Requirement for health insurers to implement computerized claims 

processing systems. 

Sec. 1262. Making health care more responsive to the consumer. 

Sec. 1263. Regulations. 

SUBCHAPTER B—APPLICATION TO PUBLIC HEALTH SERVICE ACT AND

EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974

Sec. 1271. Application to group health plans and group health insurance coverage under the Public Health Service Act. 

Sec. 1272. Application to individual health insurance coverage under the Public 

Health Service Act. 

Sec. 1273. Application to group health plans and group health insurance coverage under the Employee Retirement Income Security Act of 

1974. 

SUBCHAPTER C—MISCELLANEOUS PROVISIONS

Sec. 1281. Definitions. 

Sec. 1282. Effect on State law. 

Subtitle C—Supporting the Infrastructure Our Economy Needs 

CHAPTER 1—CREATING A NATIONAL BROADBAND POLICY

Sec. 1311. National broadband policy. 

CHAPTER 2—AMTRAK REAUTHORIZATION

Sec. 1321. Authorization for Amtrak operating grants. 

Sec. 1322. Authorization for Amtrak capital grants. 

Sec. 1323. Authorization for repayment of long-term debt and capital leases. 

CHAPTER 3—INVESTING IN SCHOOL INFRASTRUCTURE

Sec. 1331. Short title. 

Sec. 1332. Expansion of incentives for public schools. 

Sec. 1333. Indian school construction. 

Sec. 1334. Application of certain labor standards on construction projects financed under public school modernization program. 

Sec. 1335. Training services relating to construction or reconstruction of public 

school facilities. 

TITLE II—EDUCATE AMERICANS TO FILL THE JOBS OF THE 

FUTURE 

Sec. 2001. Short title.

Sec. 2002. Findings.

Subtitle A—Modernizing America’s Education System 

CHAPTER 1—PREKINDERGARTEN THROUGH GRADE 16 EDUCATION

Sec. 2111. Purposes.

Sec. 2112. Definitions. 

Sec. 2113. Aligning State standards with national benchmarks. 

Sec. 2114. National Assessment of Educational Progress changes. 


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Sec. 2115. Prekindergarten through grade 16 student preparedness council 

grants.

Sec. 2116. Collaborative standards grants. 

CHAPTER 2—INVESTING IN TEACHERS

Sec. 2121. Purpose. 

Sec. 2122. Definition of engineering and technology education. 

Sec. 2123. Expanding teacher loan forgiveness. 

Sec. 2124. Exclusion from gross income of compensation of teachers and principals in certain high-need schools and teaching high-need subjects. 

Sec. 2125. Mathematics and science education partnerships and teacher institutes for the 21st century through the National Science Foundation. 

Sec. 2126. TEACH grants; recruiting teachers with mathematics, science, engineering, technology, or language majors. 

CHAPTER 3—ENSURING COLLEGE ACCESS FOR ALL

Sec. 2131. Contract for educational opportunity (CEO) grants. 

Subtitle B—Arming Americans With 21st Century Knowledge and Skills 

CHAPTER 1—INCREASING THE NUMBER OF NEW AMERICAN SCIENTISTS, 

ENGINEERS, AND LANGUAGE EXPERTS

Sec. 2211. Purpose. 

Sec. 2212. Grants for strengthening mathematics, science, and engineering and 

technology education infrastructure.

Sec. 2213. Science, technology, engineering, mathematics, and critical-need foreign language scholars. 

Sec. 2214. Expansion of National Science Foundation Education and Human 

Resources Directorate. 

CHAPTER 2—IMPROVING GLOBAL KNOWLEDGE AND SKILLS

Sec. 2221. Definitions. 

Sec. 2222. Critical-need languages. 

Sec. 2223. Critical-need language program grants. 

Sec. 2224. International summer institute grants. 

Sec. 2225. International and foreign language studies. 

CHAPTER 3—INVESTING IN WORKERS THROUGH JOB TRAINING

Sec. 2231. Projects to provide literacy, technology, and technical skills training. 

TITLE III—KEEPING GOOD JOBS IN THE UNITED STATES 

Subtitle A—Right To Know When Jobs Are Shipped Overseas 

Sec. 3101. Amendments to the Worker Adjustment and Retraining Notification 

Act. 

Subtitle B—Removing Tax Incentives for Companies To Ship Jobs Overseas 

Sec. 3201. Taxation of income of controlled foreign corporations attributable to 

imported property. 


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Subtitle C—Requiring Government Contractors To Use American Workers for 

Taxpayer-Funded Work 

Sec. 3301. Short title. 

Sec. 3302. Limitations on off-shore performance of contracts for the procurement of goods and services. 

TITLE IV—LEVELING THE PLAYING FIELD FOR WORKERS HERE 

AND ABROAD 

Subtitle A—Raise Living Standards Worldwide 

Sec. 4101. Limitation on trade authorities procedures. 

Subtitle B—Prevention of Currency Manipulation 

Sec. 4201. International negotiations on exchange rate and economic policies. 

Subtitle C—Encouraging Multilateral Corporations To Adopt Labor Practices 

Sec. 4301. Short title. 

Sec. 4302. Findings. 

Sec. 4303. Definitions. 

Sec. 4304. Establishment. 

Sec. 4305. Conferring of awards and certificates. 

Sec. 4306. Procedure and administration. 

Sec. 4307. Criteria for eligibility. 

Sec. 4308. Reporting requirements. 

TITLE V—HELPING WORKERS AND COMMUNITIES HARMED BY 

TRADE 

Subtitle A—Wage Insurance Program and Improvement of Credit for Health 

Insurance Costs for Eligible Individuals 

Sec. 5101. Wage insurance for qualifying displaced workers upon reemployment. 

Sec. 5102. Improvement of the affordability of the credit for health insurance 

costs. 

Sec. 5103. 100 percent credit and payment for monthly premiums paid prior 

to certification of eligibility for the credit. 

Sec. 5104. Eligibility for certain pension plan recipients; presumptive eligibility. 

Sec. 5105. Clarification of 3-month creditable coverage requirement. 

Sec. 5106. TAA pre-certification period rule for purposes of determining whether there is a 63-day lapse in creditable coverage. 

Sec. 5107. Continued qualification of family members after certain events. 

Sec. 5108. Offering of national fallback coverage. 

Sec. 5109. Additional requirements for individual health insurance costs. 

Sec. 5110. Alignment of COBRA coverage with TAA period for TAA-eligible individuals. 

Sec. 5111. Notice requirements. 

Sec. 5112. Annual report on enhanced TAA benefits. 

Sec. 5113. Extension of national emergency grants. 

Subtitle B—Modernization of Trade Adjustment Assistance 

CHAPTER 1—SERVICE WORKERS AND FIRMS


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Sec. 5211. Short title. 

Sec. 5212. Extension of trade adjustment assistance to services sector. 

Sec. 5213. Trade adjustment assistance for firms and industries. 

Sec. 5214. Monitoring and reporting. 

Sec. 5215. Effective date. 

CHAPTER 2—EXPANDING TRADE ADJUSTMENT ASSISTANCE TO COVER ALL

COUNTRIES

Sec. 5221. Short title. 

Sec. 5222. Shifts in production. 

CHAPTER 3—EXPANDING TRADE ADJUSTMENT ASSISTANCE TO COVER

COMMUNITIES

Sec. 5231. Purpose. 

Sec. 5232. Trade adjustment assistance for communities. 

Sec. 5233. Termination. 

Sec. 5234. Conforming amendments. 

CHAPTER 4—AGREEMENTS WITH STATES

Sec. 5241. Agreements with States. 

TITLE VI—MODERNIZATION OF LABOR AND EMPLOYMENT LAWS 

Subtitle A—Protecting Workers’ Right To Organize 

Sec. 6101. Short title. 

Sec. 6102. Streamlining union certification. 

Sec. 6103. Facilitating initial collective bargaining agreements. 

Sec. 6104. Strengthening enforcement. 

Subtitle B—Raising the Federal Minimum Wage 

Sec. 6201. Short title. 

Sec. 6202. Minimum wage. 

Sec. 6203. Applicability of minimum wage to the Commonwealth of the Northern Mariana Islands. 

Subtitle C—Modernization of Unemployment Insurance 

CHAPTER 1—IMPROVEMENTS IN REGULAR UNEMPLOYMENT COMPENSATION

Sec. 6311. Part-time and low-wage workers. 

Sec. 6312. No reduction in unemployment compensation as a result of pension 

rollovers. 

CHAPTER 2—IMPROVEMENTS TO THE FEDERAL-STATE EXTENDED

UNEMPLOYMENT COMPENSATION PROGRAM

Sec. 6321. Lowering of extended benefit ‘‘on’’ indicator. 

Sec. 6322. Revision of definition of rate of insured unemployment. 

Sec. 6323. Repeal of certain State law extended benefit requirements. 

CHAPTER 3—EFFECTIVE DATE

Sec. 6331. Effective date. 


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1 TITLE I—INVESTING IN THE 

2 ECONOMY OF THE FUTURE 

3 AND CREATING HIGH QUAL4 ITY JOBS 

5 Subtitle A—Supporting Innovation 

6 for the Economy of the Future 

7 CHAPTER 1—PRESIDENTIAL RESEARCH 

8 AND DEVELOPMENT COMMISSION 

9 SEC. 1111. RESEARCH AND DEVELOPMENT ADVISORY COM10 MITTEE. 

11 (a) IN GENERAL.—There is established an advisory 

12 committee to be known as the ‘‘Presidential Research and 

13 Development Advisory Committee’’ (referred to in this sec14 tion as the ‘‘Advisory Committee’’) to advise the President 

15 with respect to competitive trends in global technology and 

16 industry and in allocating Federal resources in education 

17 and technology development. 

18 (b) MEMBERSHIP.— 

19 (1) IN GENERAL.—The Committee shall be 

20 composed of 25 members to be appointed by the 

21 President from among the individuals nominated 

22 under paragraph (2) and the ex officio members de23 scribed in paragraph (3). 

24 (2) NOMINATIONS.—Not later than 30 days 

25 after the date of enactment of this Act, the National 


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1 Academies of Science shall submit to the President 

2 a list of 50 individuals nominated by the National 

3 Academies for service as members of the Advisory 

4 Committee. Such list shall include individuals who 

5 have expertise in industry, science, technology, edu6 cation, and economics, including— 

7 (A) representatives from vaccine produc8 tion, high tech manufacturing, computer 

9 science, engineering, the energy sector, univer10 sity technology transfer offices, investors and 

11 chief executive officers, biotechnology firms, 

12 trade associations, academic researchers, and 

13 economists; 

14 (B) representatives from consumer organi15 zations; and 

16 (C) representatives from patient or dis17 ease-specific advocacy groups. 

18 (3) EX OFFICIO MEMBERS.—The following shall 

19 be ex officio members of the Advisory Committee: 

20 (A) The Secretary of Health and Human 

21 Services. 

22 (B) The Secretary of Defense. 

23 (C) The Commissioner of Food and Drugs. 

24 (D) The Director of the National Vaccine 

25 Program. 


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1 (E) The Director of the National Institutes 

2 of Health. 

3 (F) The Director of the Centers for Dis4 ease Control and Prevention. 

5 (G) The Secretary of Energy. 

6 (H) The Administrator of the National 

7 Aeronautics and Space Administration. 

8 (I) The Secretary of Homeland Security. 

9 (J) The Secretary of Commerce. 

10 (4) CHAIRPERSON.—The members of the Advi11 sory Committee appointed under paragraph (1) shall 

12 select a Chairperson from among such members. 

13 (c) MEETINGS.—The Advisory Committee shall meet 

14 on a biannual basis at the call of the Chairperson, except 

15 that the initial meeting of the Advisory Committee shall 

16 occur not later than 6 months after the date of enactment 

17 of this Act. 

18 (d) DUTIES OF THE ADVISORY COMMITTEE.—The 

19 Advisory Committee shall— 

20 (1) provide advice to the President with respect 

21 to competitive trends in the global technology; 

22 (2) provide advice to the President in the allo23 cation of Federal resources in education, job train24 ing, and technology development; and 


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1 (3) not later than 2 years after the date of en2 actment of this Act, and annually thereafter, submit 

3 to the President and Congress a report containing 

4 the recommendations of the Advisory Committee on 

5 strategies to keep the United States a world leader 

6 in research and development and technological inno7 vation, and the current status of the United States 

8 in such areas. 

9 (e) ADMINISTRATIVE PROVISIONS.— 

10 (1) COMPENSATION.— 

11 (A) IN GENERAL.— 

12 (i) EMPLOYEES OF FEDERAL GOVERN13 MENT.—Each ex officio or other member 

14 of the Advisory Committee that is an offi15 cer or employee of the Federal Government 

16 shall serve on the Advisory Committee 

17 without compensation in addition to that 

18 received in their regular public employ19 ment. 

20 (ii) OTHER MEMBERS.—Each member 

21 of the Advisory Committee that is not an 

22 officer or employee of the Federal Govern23 ment shall be compensated at a rate equal 

24 to the daily equivalent of the annual rate 

25 of basic pay prescribed for level IV of the 


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1 Executive Schedule under section 5315 of 

2 title 5, United States Code, for each day 

3 (including travel time) during which such 

4 member is engaged in the performance of 

5 the duties of the Advisory Committee. 

6 (B) TRAVEL EXPENSES.—A member of the 

7 Advisory Committee shall be allowed travel ex8 penses, including per diem in lieu of subsist9 ence, at rates authorized for an employee of an 

10 agency under subchapter I of chapter 57 of title 

11 5, United States Code, while away from the 

12 home or regular place of business of the mem13 ber in the performance of the duties of the Ad14 visory Committee. 

15 (2) STAFF.— 

16 (A) IN GENERAL.—The Director shall pro17 vide the Advisory Committee with such profes18 sional and clerical staff, such information, and 

19 the services of such consultants as may be nec20 essary to assist the Advisory Committee in car21 rying out the functions under this section. 

22 (B) DETAIL OF FEDERAL GOVERNMENT

23 EMPLOYEES.— 

24 (i) IN GENERAL.—An employee of the 

25 Federal Government may be detailed to the 


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1 Advisory Committee without reimburse2 ment. 

3 (ii) CIVIL SERVICE STATUS.—The de4 tail of the employee shall be without inter5 ruption or loss of civil service status or 

6 privilege. 

7 (C) PROCUREMENT OF TEMPORARY AND

8 INTERMITTENT SERVICES.—The Chairperson of 

9 the Advisory Committee may procure temporary 

10 and intermittent services in accordance with 

11 section 3109(b) of title 5, United States Code, 

12 at rates for individuals that do not exceed the 

13 daily equivalent of the annual rate of basic pay 

14 prescribed for level V of the Executive Schedule 

15 under section 5316 of that title. 

16 (3) AVAILABILITY OF RECORD TO CONGRESS.— 

17 Upon the request of a Member of Congress, the 

18 Chairperson of the Advisory Committee shall submit 

19 to Congress a record of the proceedings of the Advi20 sory Committee. 


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1 CHAPTER 2—INTERAGENCY WORKING 

2 GROUP 

3 SEC. 1121. ACCELERATING AND BROADENING PARTICIPA4 TION IN BIOMEDICAL, SCIENCE, ENGINEER5 ING, AND TECHNOLOGY RESEARCH IN THE 

6 UNITED STATES. 

7 (a) JOINT WORKING GROUP.— 

8 (1) ESTABLISHMENT.—The Director of the Na9 tional Science Foundation (referred to in this section 

10 as the ‘‘Director’’) shall establish a joint working 

11 group for the purpose of developing collaborative re12 search with respect to physical and life sciences. 

13 (2) REPRESENTATION.—The joint working 

14 group established under paragraph (1) shall be com15 prised of the Director and representatives from the 

16 Office of Science of the Department of Energy, the 

17 Office of Research and Engineering of the Depart18 ment of Defense, the National Oceanic and Atmos19 pheric Administration, the Environmental Protection 

20 Agency, the National Aeronautics and Space Admin21 istration, and any other Federal agencies determined 

22 appropriate by the Director. 

23 (3) DUTIES.—The joint working group estab24 lished under paragraph (1) shall— 


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1 (A) develop and recommend a permanent 

2 mechanism, and establish temporary or perma3 nent programs as appropriate, to fund collabo4 rative research and development relating to the 

5 physical and life sciences; 

6 (B) establish temporary or permanent bi7 agency and multi-agency programs as appro8 priate, to fund collaborative research and devel9 opment relating to physical and life sciences 

10 and the development of research tools for phys11 ical and life science applications; 

12 (C) develop and recommend a permanent 

13 mechanism, and establish temporary or perma14 nent multi-agency programs, to fund science, 

15 engineering, and technology research with broad 

16 impacts and particular relevance for public 

17 health, environmental health, sustainability, and 

18 other global issues of the future; 

19 (D) establish multi-agency and multi-dis20 ciplinary peer review processes, as appropriate, 

21 based on both intellectual merit and broader 

22 impacts; and 

23 (E) not later than 2 years after the estab24 lishment of the group, and every 2 years there25 after, submit to Congress a report describing 


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1 the activities of the group for the period for 

2 which the report is submitted, including evalua3 tions of efforts to broaden participation in 

4 science, engineering, and technology research by 

5 underrepresented groups. 

6 (4) TERMINATION.—The joint working group 

7 established under paragraph (1) shall terminate on 

8 the date that is 5 years after the date on which the 

9 group is established under such paragraph. 

10 (b) INCREASED FUNDING.— 

11 (1) RESEARCH AND DEVELOPMENT.—The 

12 heads of the agencies represented on the join work13 ing group under subsection (a), shall— 

14 (A) enhance and improve activities for, and 

15 establish additional grant programs to support, 

16 research and development in multi-disciplinary 

17 areas including biodefense, pharmacoepidemiol18 ogy, pharmacoeconomics, and high tech fields, 

19 as necessary; and 

20 (B) give special consideration to grant pro21 posals from researchers and research institu22 tions with demonstrated records of broadening 

23 participation of underrepresented groups in 

24 science, engineering, and technology. 


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1 (2) EDUCATION AND TRAINING.—The heads of 

2 the agencies represented on the joint working group 

3 under subsection (a) shall— 

4 (A) enhance and improve activities for, and 

5 establish additional grant programs to support, 

6 the education, mentoring, and ongoing training 

7 of undergraduate, graduate, early-career, and 

8 mid-career researchers in multi-disciplinary 

9 areas of research, including biodefense, 

10 pharmacoepidemiology, pharmacoeconomics, 

11 and high tech fields; and 

12 (B) establish additional grant programs to 

13 support the outreach to and recruitment of pre14 college students from underserved or disadvan15 taged communities by researchers at all stages 

16 of their careers who are affiliated with degree17 granting institutions. 

18 (3) BROADENING PARTICIPATION.—The heads 

19 of the agencies represented in the joint working 

20 group under subsection (a) shall ensure that the ac21 tivities authorized under paragraphs (1) and (2) pro22 mote full and equal development and use of the tal23 ents of men and women of all ethnic, racial, and eco24 nomic backgrounds, including individuals with disVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 abilities, in advancing the United States’ competi2 tiveness in the global economy. 

3 CHAPTER 3—RESEARCH AND 

4 DEVELOPMENT TAX CREDIT EXTENSION 

5 SEC. 1131. FINDINGS. 

6 Congress finds the following: 

7 (1) Research and development performed in the 

8 United States results in quality jobs, better and 

9 safer products, increased ownership of technology10 based intellectual property, and higher productivity 

11 in the United States. 

12 (2) Since 1994, private sector research and de13 velopment employment has grown at a faster rate 

14 than overall private sector employment in the United 

15 States. From 1994 to 2000, there was an average 

16 annual growth rate of 5.4 percent in research and 

17 development employment, compared with 2.7 percent 

18 in total employment. 

19 (3) The extent to which companies perform and 

20 increase research and development activities in the 

21 United States is in part dependent on Federal tax 

22 policy. 

23 (4) The private sector performed most of the 

24 Nation’s research and development and accounted 

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1 opment performance in 2003. Of the 

2 $194,000,000,000 in industrial research and devel3 opment performed in 2003, more than 90 percent 

4 was funded by industry. 

5 (5) Many of the countries with which the 

6 United States competes have introduced new or re7 vised national plans for science, technology, and in8 novation policy, and a growing number of countries 

9 have established targets for increased research and 

10 development spending. Virtually all countries are 

11 seeking ways to enhance the quality and efficiency of 

12 public research, stimulate business investments in 

13 research and development, and strengthen linkages 

14 between the public and private sectors. 

15 (6) Direct government support to business re16 search and development has declined, both in abso17 lute terms and as a share of business research and 

18 development, and greater emphasis is being placed 

19 on indirect measures, such as tax incentives for re20 search and development. 

21 (7) Congress should make permanent a re22 search and development credit that provides a mean23 ingful incentive to all types of taxpayers. 


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1 SEC. 1132. PERMANENT EXTENSION OF RESEARCH CREDIT. 

2 (a) IN GENERAL.—Section 41 of the Internal Rev3 enue Code of 1986 (relating to credit for increasing re4 search activities) is amended by striking subsection (h). 

5 (b) CONFORMING AMENDMENT.—Paragraph (1) of 

6 section 45C(b) of such Code is amended by striking sub7 paragraph (D). 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to amounts paid or incurred after 

10 the date of the enactment of this Act, in taxable years 

11 ending after such date. 

12 SEC. 1133. INCREASE IN RATES OF ALTERNATIVE INCRE13 MENTAL CREDIT. 

14 (a) IN GENERAL.—Subparagraph (A) of section 

15 41(c)(4) of the Internal Revenue Code of 1986 (relating 

16 to election of alternative incremental credit) is amended— 

17 (1) by striking ‘‘2.65 percent’’ and inserting ‘‘3 

18 percent’’, 

19 (2) by striking ‘‘3.2 percent’’ and inserting ‘‘4 

20 percent’’, and 

21 (3) by striking ‘‘3.75 percent’’ and inserting ‘‘5 

22 percent’’. 

23 (b) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to taxable years ending after the 

25 date of the enactment of this Act. 


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1 SEC. 1134. ALTERNATIVE SIMPLIFIED CREDIT FOR QUALI2 FIED RESEARCH EXPENSES. 

3 (a) IN GENERAL.—Subsection (c) of section 41 of the 

4 Internal Revenue Code of 1986 (relating to base amount) 

5 is amended by redesignating paragraphs (5) and (6) as 

6 paragraphs (6) and (7), respectively, and by inserting 

7 after paragraph (4) the following new paragraph: 

8 ‘‘(5) ELECTION OF ALTERNATIVE SIMPLIFIED

9 CREDIT.— 

10 ‘‘(A) IN GENERAL.—At the election of the 

11 taxpayer, the credit determined under sub12 section (a)(1) shall be equal to 12 percent of so 

13 much of the qualified research expenses for the 

14 taxable year as exceeds 50 percent of the aver15 age qualified research expenses for the 3 tax16 able years preceding the taxable year for which 

17 the credit is being determined. 

18 ‘‘(B) SPECIAL RULE IN CASE OF NO

19 QUALIFIED RESEARCH EXPENSES IN ANY OF 3

20 PRECEDING TAXABLE YEARS.— 

21 ‘‘(i) TAXPAYERS TO WHICH SUBPARA22 GRAPH APPLIES.—The credit under this 

23 paragraph shall be determined under this 

24 subparagraph if the taxpayer has no quali25 fied research expenses in any 1 of the 3 


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1 taxable years preceding the taxable year 

2 for which the credit is being determined. 

3 ‘‘(ii) CREDIT RATE.—The credit de4 termined under this subparagraph shall be 

5 equal to 6 percent of the qualified research 

6 expenses for the taxable year. 

7 ‘‘(C) ELECTION.—An election under this 

8 paragraph shall apply to the taxable year for 

9 which made and all succeeding taxable years 

10 unless revoked with the consent of the Sec11 retary. An election under this paragraph may 

12 not be made for any taxable year to which an 

13 election under paragraph (4) applies.’’. 

14 (b) COORDINATION WITH ELECTION OF ALTER15 NATIVE INCREMENTAL CREDIT.— 

16 (1) IN GENERAL.—Section 41(c)(4)(B) of the 

17 Internal Revenue Code of 1986 (relating to election) 

18 is amended by adding at the end the following: ‘‘An 

19 election under this paragraph may not be made for 

20 any taxable year to which an election under para21 graph (5) applies.’’. 

22 (2) TRANSITION RULE.—In the case of an elec23 tion under section 41(c)(4) of the Internal Revenue 

24 Code of 1986 which applies to the taxable year 

25 which includes the date of the enactment of this Act, 


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1 such election shall be treated as revoked with the 

2 consent of the Secretary of the Treasury if the tax3 payer makes an election under section 41(c)(5) of 

4 such Code (as added by subsection (a)) for such 

5 year. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to taxable years ending after the 

8 date of the enactment of this Act. 

9 SEC. 1135. EXPANSION OF RESEARCH CREDIT. 

10 (a) EXPANSION OF CREDIT TO EXPENSES OF GEN11 ERAL COLLABORATIVE RESEARCH CONSORTIA.—Section 

12 41 of the Internal Revenue Code of 1986 (relating to cred13 it for increased research activities) is amended— 

14 (1) by striking ‘‘an energy research consor15 tium’’ in subsections (a)(3) and (b)(3)(C)(i) and in16 serting ‘‘a research consortium’’, 

17 (2) by striking ‘‘energy’’ each place it appears 

18 in subsection (f)(6)(A), 

19 (3) by inserting ‘‘or 501(c)(6)’’ after ‘‘section 

20 501(c)(3)’’ in subsection (f)(6)(A)(i)(I), and 

21 (4) by striking ‘‘ENERGY RESEARCH’’ in the 

22 heading for subsection (f)(6)(A) and inserting ‘‘RE23 SEARCH’’. 

24 (b) EFFECTIVE DATE.—The amendments made by 

25 this section shall apply to amounts paid or incurred after 


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1 the date of the enactment of this Act, in taxable years 

2 ending after such date. 

3 CHAPTER 4—INCREASING RESEARCH AND 

4 DEVELOPMENT 

5 SEC. 1141. AUTHORIZATION OF APPROPRIATIONS FOR THE 

6 DEPARTMENT OF DEFENSE. 

7 (a) BASIC RESEARCH.—There is authorized to be ap8 propriated for the Department of Defense for basic (6.1) 

9 research, for the research, development, test, and evalua10 tion accounts of the Department, and for other accounts 

11 of the Department providing funding for such research, 

12 aggregate amounts as follows: 

13 (1) $1,565,801,000 for fiscal year 2007. 

14 (2) $1,722,381,000 for fiscal year 2008. 

15 (3) $1,894,619,000 for fiscal year 2009. 

16 (4) $2,084,080,000 for fiscal year 2010. 

17 (5) $2,292,489,000 for fiscal year 2011. 

18 (6) $2,521,737,000 for fiscal year 2012. 

19 (7) $2,773,911,000 for fiscal year 2013. 

20 (b) APPLIED RESEARCH.—There is authorized to be 

21 appropriated for the Department of Defense for applied 

22 (6.2) research, for the research, development, test, and 

23 evaluation accounts of the Department, and for other ac24 counts of the Department providing funding for such re25 search, aggregate amounts as follows: 


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1 (1) $4,908,093,000 for fiscal year 2007. 

2 (2) $5,398,903,000 for fiscal year 2008. 

3 (3) $5,938,793,000 for fiscal year 2009. 

4 (4) $6,532,672,000 for fiscal year 2010. 

5 (5) $7,185,939,000 for fiscal year 2011. 

6 (6) $7,904,533,000 for fiscal year 2012. 

7 (7) $8,694,987,000 for fiscal year 2013. 

8 SEC. 1142. AUTHORIZATION OF APPROPRIATIONS FOR THE 

9 NATIONAL SCIENCE FOUNDATION FOR RE10 SEARCH AND RELATED ACTIVITIES. 

11 There is authorized to be appropriated for the Na12 tional Science Foundation for Research and Related Ac13 tivities, amounts as follows: 

14 (1) $4,826,250,000 for fiscal year 2007. 

15 (2) $5,308,875,000 for fiscal year 2008. 

16 (3) $5,839,763,000 for fiscal year 2009 

17 (4) $6,423,739,000 for fiscal year 2010. 

18 (5) $7,066,113,000 for fiscal year 2011. 

19 (6) $7,772,724,000 for fiscal year 2012. 

20 (7) $8,549,996,000 for fiscal year 2013. 


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1 SEC. 1143. AUTHORIZATION OF APPROPRIATIONS FOR THE 

2 NATIONAL AERONAUTICS AND SPACE ADMIN3 ISTRATION FOR RESEARCH AND DEVELOP4 MENT ACTIVITIES. 

5 There is authorized to be appropriated for the Na6 tional Aeronautics and Space Administration for research 

7 and development activities (including research and devel8 opment activities for Space Flight Capabilities, research 

9 and development activities for Science, Aeronautics and 

10 Exploration, and other research and development activi11 ties), aggregate amounts as follows: 

12 (1) $10,737,100,000 for fiscal year 2007. 

13 (2) $11,810,810,000 for fiscal year 2008. 

14 (3) $12,991,891,000 for fiscal year 2009. 

15 (4) $14,291,080,000 for fiscal year 2010. 

16 (5) $15,720,188,000 for fiscal year 2011. 

17 (6) $17,292,207,000 for fiscal year 2012. 

18 (7) $19,021,428,000 for fiscal year 2013. 

19 SEC. 1144. AUTHORIZATION OF APPROPRIATIONS FOR THE 

20 DEPARTMENT OF ENERGY FOR BASIC RE21 SEARCH. 

22 There is authorized to be appropriated for the De23 partment of Energy for the Office of Science for basic re24 search, amounts as follows: 

25 (1) $4,135,000,000 for fiscal year 2007. 

26 (2) $4,548,500,000 for fiscal year 2008. 


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1 (3) $5,003,350,000 for fiscal year 2009 

2 (4) $5,503,685,000 for fiscal year 2010. 

3 (5) $6,054,054,000 for fiscal year 2011. 

4 (6) $6,659,459,000 for fiscal year 2012. 

5 (7) $7,325,405,000 for fiscal year 2013. 

6 SEC. 1145. AUTHORIZATION OF APPROPRIATIONS FOR NA7 TIONAL INSTITUTES OF HEALTH FOR RE8 SEARCH AND DEVELOPMENT. 

9 There is authorized to be appropriated to the Na10 tional Institutes of Health for research and development, 

11 amounts as follows: 

12 (1) $31,251,440,000 for fiscal year 2007. 

13 (2) $34,376,584,000 for fiscal year 2008. 

14 (3) $37,814,242,000 for fiscal year 2009. 

15 (4) $41,595,667,000 for fiscal year 2010. 

16 (5) $45,755,233,000 for fiscal year 2011. 

17 (6) $50,330,757,000 for fiscal year 2012. 

18 (7) $55,363,832,000 for fiscal year 2013. 

19 Subtitle B—Building the Economy 

20 of the Future 

21 CHAPTER 1—NANOTECHNOLOGY 

22 SEC. 1211. TAX CREDIT FOR INVESTMENT IN 

23 NANOTECHNOLOGY FIRMS. 

24 (a) IN GENERAL.—Part IV of subchapter A of chap25 ter 1 of the Internal Revenue Code of 1986 (relating to 


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1 credits against tax) is amended by adding at the end the 

2 following new subpart: 

3 ‘‘Subpart G—Nanotechnology Development Credit 

4 ‘‘SEC. 54A. CREDIT FOR PURCHASE OF NANOTECHNOLOGY 

5 DEVELOPER STOCK. 

6 ‘‘(a) ALLOWANCE OF CREDIT.— 

7 ‘‘(1) IN GENERAL.—There shall be allowed as a 

8 credit against the tax imposed by this chapter for 

9 the taxable year an amount equal to the applicable 

10 percentage of the aggregate amount paid by the tax11 payer for the purchase of qualified nanotechnology 

12 developer stock. 

13 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

14 of subsection (a), the applicable percentage is— 

15 ‘‘(A) 5.25 percent for the taxable year in 

16 which the qualified nanotechnology developer 

17 stock is purchased, 

18 ‘‘(B) 3.75 percent for the taxable year fol19 lowing the year in which such stock is pur20 chased, 

21 ‘‘(C) 3 percent for the second taxable year 

22 following the year in which such stock is pur23 chased, 


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1 ‘‘(D) 1.5 percent for the third taxable year 

2 following the year in which such stock is pur3 chased, 

4 ‘‘(E) 1.5 percent for fourth taxable year 

5 following the year in which such stock is pur6 chased, and 

7 ‘‘(F) 0 percent for any taxable year after 

8 the fourth taxable year following the year in 

9 which such stock is purchased. 

10 ‘‘(b) LIMITATIONS.— 

11 ‘‘(1) AMOUNT OF INVESTMENT ELIGIBLE.—No 

12 credit shall be allowed under subsection (a) with re13 spect to amounts paid in any taxable year for the 

14 purchase of qualified nanotechnology developer stock 

15 which is in excess of $10,000,000. 

16 ‘‘(2) APPLICATION WITH OTHER CREDITS.— 

17 The credit allowed under subsection (a) for any tax18 able year shall not exceed the excess of— 

19 ‘‘(A) the regular tax for the taxable year 

20 reduced by the sum of the credits allowable 

21 under this part (other than subpart C thereof), 

22 over 

23 ‘‘(B) the tentative minimum tax for the 

24 taxable year. 


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1 ‘‘(c) QUALIFIED NANOTECHNOLOGY DEVELOPER

2 STOCK.—For purposes of this section— 

3 ‘‘(1) IN GENERAL.—The term ‘qualified 

4 nanotechnology developer stock’ means any common 

5 stock in a C corporation or any membership unit in 

6 a State-registered limited liability company if— 

7 ‘‘(A) as of the date of issuance of such 

8 stock or membership unit, such corporation or 

9 company is a qualified nanotechnology devel10 oper, 

11 ‘‘(B) such stock is acquired by the tax12 payer at its original issue (directly or through 

13 an underwriter) in exchange for money or other 

14 property (not including stock), and 

15 ‘‘(C) the proceeds of such issue are used 

16 by such issuer during the 5-year period begin17 ning on the date of issuance for the develop18 ment, production, or sale of products using 

19 nanotechnology. 

20 ‘‘(2) QUALIFIED NANOTECHNOLOGY DEVEL21 OPER.—The term ‘qualified nanotechnology devel22 oper’ means any entity— 

23 ‘‘(A) which is a C corporation or limited li24 ability company organized under the laws of 

25 any State or of the United States, 


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1 ‘‘(B) which is a small business concern (as 

2 defined in section 3(a) of the Small Business 

3 Act), and 

4 ‘‘(C) with respect to which a certification 

5 under subsection (d) is in effect. 

6 ‘‘(3) NANOTECHNOLOGY.—The term ‘nanotech7 nology’ means the science of understanding and ma8 nipulating matter on an atomic or molecular scale, 

9 generally to create structures, and usually at a size 

10 smaller than 100 nanometers. 

11 ‘‘(d) CERTIFICATION.— 

12 ‘‘(1) IN GENERAL.—The Secretary, in consulta13 tion with the National Nanotechnology Coordination 

14 Office, shall certify an entity under this subsection 

15 if such entity demonstrates by the submission of 

16 such information as required by the Secretary that 

17 not less than 51 percent of its activities relate to the 

18 development, production, and sale of products using 

19 nanotechnology. 

20 ‘‘(2) REVOCATION.—The Secretary shall revoke 

21 the certification of any entity which is certified 

22 under paragraph (1) if the Secretary determines 

23 that— 

24 ‘‘(A) the proceeds from any qualified 

25 nanotechnology developer stock issued by such 


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1 entity are used during the 5-year period fol2 lowing such issue for a purpose other than the 

3 development, production, or sale of products 

4 using nanotechnology, or 

5 ‘‘(B) such entity no longer meets the re6 quirements of paragraph (1). 

7 ‘‘(3) SUBMISSION OF INFORMATION.—The Sec8 retary may require any entity certified under para9 graph (1) to provide such information as the Sec10 retary may require in order ensure compliance with 

11 the purposes of this section. 

12 ‘‘(e) CARRYOVER OF UNUSED CREDIT.— 

13 ‘‘(1) IN GENERAL.—If the credit amount allow14 able under subsection (a) for a taxable year exceeds 

15 the amount of the limitation under subsection (h) 

16 for such taxable year, such excess shall be allowed 

17 as a credit carryforward for each of the 20 taxable 

18 years following the unused credit year. 

19 ‘‘(2) RULES.—Rules similar to the rules of sec20 tion 39 shall apply with respect to the credit 

21 carryforward under paragraph (1). 

22 ‘‘(f) RECAPTURE OF CREDIT.—If— 

23 ‘‘(1) the taxpayer fails to hold qualified 

24 nanotechnology developer stock for the 7-year period 


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1 beginning on the date such stock was purchased by 

2 the taxpayer, or 

3 ‘‘(2) during such 7-year period, the issuer of 

4 such stock ceases to be a qualified nanotechnology 

5 developer, 

6 then notwithstanding any other provision of this subtitle, 

7 the tax imposed by this chapter on the taxpayer for the 

8 taxable year beginning in the calendar year in which such 

9 cessation occurred shall be increased by the aggregate 

10 amount of credit allowed under subsection (a) to the tax11 payer with respect to such stock. 

12 ‘‘(g) SPECIAL RULE.—For purposes of this section, 

13 rules similar to the rules of section 1202(c)(3) shall apply. 

14 ‘‘(h) BASIS ADJUSTMENTS.—For purposes of this 

15 subtitle, if a credit is allowed under this section for the 

16 purchase of any stock— 

17 ‘‘(1) the increase in the basis of such stock 

18 which would (but for this subsection) result from 

19 such purchase shall be reduced by the amount of the 

20 credit so allowed, and 

21 ‘‘(2) the basis of such stock shall be increased 

22 by the amount of any increase in tax by reason of 

23 subsection (f).’’. 

24 (b) CONFORMING AMENDMENT.—Subsection (a) of 

25 section 1016 of such Code is amended by striking ‘‘and’’ 


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1 at the end of paragraph (36), by striking the period at 

2 the end of paragraph (37) and inserting ‘‘; and’’, and by 

3 adding at the end the following new paragraph: 

4 ‘‘(38) to the extent provided in section 54A(h), 

5 in the case of amounts with respect to which a credit 

6 has been allowed under section 54A or a recapture 

7 imposed under section 54A(f).’’. 

8 (c) CLERICAL AMENDMENT.—The table of subparts 

9 for part IV is amended by adding at the end the following 

10 new item: 

‘‘SUBPART G. NANOTECHNOLOGY DEVELOPMENT CREDIT.’’. 

11 (d) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to amounts paid after December 

13 31, 2005. 

14 SEC. 1212. NANOTECHNOLOGY ASSISTANCE. 

15 (a) DEFINITIONS.—In this section: 

16 (1) COMMERCIALIZATION.—The term ‘‘commer17 cialization’’ means the process of converting 

18 nanotechnology research into products and processes 

19 that are used in the marketplace. 

20 (2) DEGREE-GRANTING INSTITUTION.—The 

21 term ‘‘degree-granting institution’’ means an institu22 tion of higher education, as defined in section 101 

23 of the Higher Education Act of 1965 (20 U.S.C. 

24 1001), that awards an associate or baccalaureate de25 gree. 


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1 (3) INCUBATOR.—The term ‘‘incubator’’ means 

2 an entity affiliated with or housed in a degree-grant3 ing institution that provides space and coordinated 

4 and specialized services to entrepreneurial businesses 

5 that work in the field of nanotechnology commer6 cialization and that meets selected criteria during 

7 the businesses’ startup phase, including providing 

8 services such as shared office space and services, ac9 cess to equipment, access to telecommunications and 

10 technology services, flexible leases, specialized man11 agement assistance, access to financing, and other 

12 coordinated business or technical support services. 

13 (4) NANOTECHNOLOGY.—The term 

14 ‘‘nanotechnology’’ means the science of under15 standing and manipulating matter on an atomic or 

16 molecular scale, generally to create structures, and 

17 usually at a size smaller than 100 nanometers. 

18 (5) SECRETARY.—The term ‘‘Secretary’’ means 

19 the Secretary of Commerce. 

20 (b) GRANTS AUTHORIZED.— 

21 (1) IN GENERAL.—The Secretary is authorized 

22 to establish within the Technology Administration of 

23 the Department of Commerce a grant program to 

24 support the establishment and development of incu25 bators. 


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1 (2) ALLOCATION OF FUNDS.—From the 

2 amount appropriated pursuant to the authorization 

3 of appropriations in subsection (e) for a fiscal year, 

4 the Secretary— 

5 (A) shall use 80 percent of such amount 

6 to— 

7 (i) make awards, on a competitive 

8 basis, in amounts of up to $2,500,000, to 

9 help acquire or renovate space for incuba10 tors; and 

11 (ii) make awards, on a competitive 

12 basis, in amounts of $50,000 to $150,000, 

13 for— 

14 (I) developing curricula related to 

15 nanotechnology; 

16 (II) providing services for com17 mercialization, including preparing 

18 providing services to appropriate busi19 nesses including corporate charters, 

20 partnership agreements, and basic 

21 contracts, assistance with patents, 

22 trademarks, and copyrights, and tech23 nology acquisition services; or 


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1 (III) providing programming for 

2 entrepreneurs working in nanotech3 nology housed in an incubator; 

4 (B) shall reserve 10 percent of the amount 

5 to make awards, on a competitive basis, in 

6 amounts of $50,000 to $150,000, for feasibility 

7 studies for determining the need for or siting of 

8 incubators; and 

9 (C) shall reserve 10 percent for research 

10 regarding best practices for incubator pro11 grams, including the development of a 

12 benchmarking system based on uniform meas13 ures, and for dissemination of information re14 garding such practices. 

15 (3) CONTRACTS.—The Secretary is authorized 

16 to contract with organizations with expertise in incu17 bation practices for the purposes of carrying out 

18 paragraph (2)(C). 

19 (4) USES OF FUNDS.—Funds awarded under 

20 paragraph (2)(A)(ii) may be used for— 

21 (A) curriculum, training, or technical as22 sistance related to nanotechnology developed by 

23 academic faculty with participation from entre24 preneurship experts; 


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1 (B) programming that contributes to a co2 ordinated set of business assistance tools, such 

3 as developing management teams, providing 

4 workforce development, forming strategic alli5 ances, developing capital formation networks, 

6 and developing customized plans for commer7 cialization; and 

8 (C) hiring staff to coordinate the activities 

9 described in subparagraph (A) or (B) or for 

10 curriculum development. 

11 (5) RECIPIENTS.—The Secretary shall make an 

12 award— 

13 (A) described in paragraph (2)(A) to a 

14 nonprofit entity that has a strong affiliation 

15 with a degree-granting institution and manages 

16 or provides technical assistance to the degree17 granting institution’s affiliated incubator, or if 

18 no nonprofit entity manages or provides tech19 nical assistance to the incubator, to the degree20 granting institution managing the incubator; 

21 and 

22 (B) described in paragraph (2)(B) to a de23 gree-granting institution. 

24 (6) APPLICATIONS.—Each entity desiring as25 sistance under this section shall submit an applicaVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 tion to the Secretary at such time, in such manner, 

2 and accompanied by such information as the Sec3 retary may require. 

4 (7) SELECTION.— 

5 (A) PRIORITY.—The Secretary shall give 

6 priority to funding applications under this sub7 section for activities that— 

8 (i) will be carried out at a facility that 

9 is included in the Centers and Networks of 

10 Excellence of the research and development 

11 program known as the National 

12 Nanotechnology Initiative; 

13 (ii) provide strong educational oppor14 tunities to students in fields related to 

15 nanotechnology and commercialization; and 

16 (iii) require significant collaboration 

17 between businesses and academia. 

18 (B) CONSIDERATION.—The Secretary may 

19 give consideration to funding applications under 

20 this subsection that support— 

21 (i) the building of new incubators; 

22 (ii) incubators that work with faculty 

23 entrepreneurs or university-based research; 

24 (iii) incubators that are located in 

25 areas with an established venture capital 


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1 industry and other industry support, in2 cluding leadership and legal support, for 

3 commercialization; or 

4 (iv) incubators that have secured ad5 ditional private funding. 

6 (c) NANOTECHNOLOGY STARTUP ADVISORY COUN7 CIL.— 

8 (1) ESTABLISHMENT.—The Secretary shall es9 tablish a Nanotechnology Startup Advisory Council 

10 composed of industry leaders, business and mar11 keting professionals, venture capitalists, attorneys, 

12 and nanotechnology researchers. 

13 (2) PURPOSE.—The purpose of the 

14 Nanotechnology Start-up Advisory Council is to en15 sure that emerging nanotechnology companies create 

16 a sound foundation for new business. 

17 (d) REPORT.—Not later than September 30 of the 

18 third fiscal year during which assistance is provided under 

19 this section, the Secretary shall prepare and submit to 

20 Congress a report that— 

21 (1) describes the most effective or innovative 

22 additions to curricula related to nanotechnology that 

23 were developed with such assistance; and 

24 (2) contains a comparison of the success of 

25 nanotechnology companies developed in incubators 


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1 that received such assistance with the success of 

2 other nanotechnology companies; 

3 (3) describes any factors leading to success of 

4 companies that were developed in incubators; 

5 (4) recommends the best role for degree-grant6 ing institutions in commercialization; and 

7 (5) contains a comparison of academic-affiliated 

8 incubators of specific missions and ages that re9 ceived assistance under this section with other incu10 bators with similar missions and ages. 

11 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to carry out this section 

13 $25,000,000 for each of the fiscal years 2007, 2008, and 

14 2009. 

15 CHAPTER 2—INVESTING IN HIGH-TECH 

16 MANUFACTURING 

17 SEC. 1221. MANUFACTURING EXTENSION PARTNERSHIP 

18 PROGRAM. 

19 (a) IN GENERAL.—There is authorized to be appro20 priated for the National Institute of Standards and Tech21 nology for the Manufacturing Extension Partnership Pro22 gram amounts as follows: 

23 (1) For fiscal year 2007, $212,000,000. 

24 (2) For fiscal year 2008, $272,000,000. 

25 (3) For fiscal year 2009, $332,000,000. 


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1 (4) For fiscal year 2010, $392,000,000. 

2 (5) For fiscal year 2011, $452,000,000. 

3 (6) For fiscal year 2012, $512,000,000. 

4 (7) For fiscal year 2013, $572,000,000. 

5 (8) For fiscal year 2014, $632,000,000. 

6 (9) For fiscal year 2015, $692,000,000. 

7 (10) For fiscal year 2016, $752,000,000. 

8 (11) For fiscal year 2017, $812,000,000. 

9 (b) MANUFACTURING EXTENSION PARTNERSHIP

10 PROGRAM DEFINED.—In this section, the term ‘‘Manufac11 turing Extension Partnership Program’’ means the pro12 gram of Manufacturing Extension Partnership carried out 

13 by the National Institute of Standards and Technology 

14 under section 26 of the National Institute of Standards 

15 and Technology Act (15 U.S.C. 278l), as provided in part 

16 292 of title 15, Code of Federal Regulations. 

17 SEC. 1222. ADVANCED TECHNOLOGY PROGRAM. 

18 There are authorized to be appropriated for the Na19 tional Institute of Standards and Technology for carrying 

20 out the Advanced Technology Program under section 28 

21 of the National Institute of Standards and Technology Act 

22 (15 U.S.C. 278n), $320,000,000 for each of the fiscal 

23 years 2007 through 2016. 


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1 CHAPTER 3—DOMESTIC VACCINES 

2 SEC. 1231. INCENTIVES FOR THE CONSTRUCTION OF DO3 MESTIC VACCINE MANUFACTURING FACILI4 TIES. 

5 (a) DOMESTIC VACCINE MANUFACTURING FACILI6 TIES INVESTMENT TAX CREDIT.— 

7 (1) ALLOWANCE OF CREDIT.—Section 46 of the 

8 Internal Revenue Code of 1986 (relating to amount 

9 of investment credit) is amended by striking ‘‘and’’ 

10 at the end of paragraph (3), by striking the period 

11 at the end of paragraph (4) and inserting ‘‘, and’’, 

12 and by adding at the end the following new para13 graph: 

14 ‘‘(5) the vaccine manufacturing facilities invest15 ment credit.’’. 

16 (2) AMOUNT OF CREDIT.—Subpart E of part 

17 IV of subchapter A of chapter 1 of such Code is 

18 amended inserting after section 45B the following 

19 new section: 

20 ‘‘SEC. 48C. VACCINE MANUFACTURING FACILITIES INVEST21 MENT CREDIT 

22 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

23 vaccine manufacturing facilities investment credit for any 

24 taxable year is an amount equal to 10 percent of the quali25 fied investment for such taxable year. 


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1 ‘‘(b) QUALIFIED INVESTMENT.—For purposes of 

2 subsection (a), the qualified investment for any taxable 

3 year is the basis of each vaccine manufacturing facilities 

4 property placed in service by the taxpayer during such tax5 able year. 

6 ‘‘(c) VACCINE MANUFACTURING FACILITIES PROP7 ERTY.—For purposes of this section, the term ‘vaccine 

8 manufacturing facilities property’ means real and tangible 

9 personal property— 

10 ‘‘(1) the original use of which commences with 

11 the taxpayer, 

12 ‘‘(2) which is depreciable under section 167, 

13 with a class life of less than 20 years, 

14 ‘‘(3) which is substantially used for the manu15 facture or research and development of vaccines or 

16 antibiotics or antiviral agents which are widely con17 sidered potentially useful for the prevention or con18 tainment of public health crises, and 

19 ‘‘(4) which is in compliance with any standards 

20 and regulations which are promulgated by the Food 

21 and Drug Administration, the Occupational Safety 

22 and Health Administration, or the Environmental 

23 Protection Agency and which are applicable to such 

24 property. 


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1 ‘‘(d) CERTAIN PROGRESS EXPENDITURE RULES

2 MADE APPLICABLE.—Rules similar to rules of subsections 

3 (c)(4) and (d) of section 46 (as in effect on the day before 

4 the date of the enactment of the Revenue Reconciliation 

5 Act of 1990) shall apply for purposes of this subsection.’’. 

6 (b) TECHNICAL AMENDMENTS.— 

7 (1) Subparagraph (C) of section 49(a)(1) of 

8 such Code is amended by striking ‘‘and’’ at the end 

9 of clause (iii), by striking the period at the end of 

10 clause (iv) and inserting ‘‘, and’’, and by adding at 

11 the end the following new clause: 

12 ‘‘(v) the basis of any vaccine manufac13 turing facilities property under section 

14 48C.’’. 

15 (2) Subparagraph (E) of section 50(a)(2) of 

16 such Code is amended by inserting ‘‘or 48C(d)’’ be17 fore the period. 

18 (3) The table of sections for subpart E of part 

19 IV of subchapter A of chapter 1 of such Code is 

20 amended by striking the item relating to section 48B 

21 and inserting the following: 

‘‘Sec. 48C. Vaccine manufacturing facilities investment credit.’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to periods after the date of the 

24 enactment of this Act under rules similar to the rules of 

25 section 48(m) of the Internal Revenue Code of 1986 (as 


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1 in effect on the day before the date of enactment of the 

2 Revenue Reconciliation Act of 1990). 

3 CHAPTER 4—PROGRAMS AND TAX CRED4 ITS TO INCREASE ENERGY EFFI5 CIENCY 

6 SEC. 1241. GRANT PROGRAM FOR GREEN BUILDING AND 

7 ZERO-ENERGY HOME DESIGN AND CON8 STRUCTION TRAINING. 

9 (a) IN GENERAL.—The Secretary of Education, in 

10 consultation with the Secretary of Energy, may award 

11 grants to postsecondary educational institutions to enable 

12 the institutions to train 10,000 individuals in green build13 ing and zero-energy home design and construction by fis14 cal year 2011. 

15 (b) APPLICATION.—A postsecondary educational in16 stitution that desires to receive a grant under this section 

17 shall submit an application to the Secretary of Education 

18 at such time, in such manner, and accompanied by such 

19 information as the Secretary of Education may reasonably 

20 require. 

21 (c) REIMBURSEMENT.— 

22 (1) IN GENERAL.—A postsecondary educational 

23 institution that receives a grant under this section 

24 shall use the grant funds to reimburse an individual 

25 who completes training in zero-energy home design 


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1 and construction at, and receives accreditation as a 

2 green building professional from, the institution for 

3 an amount that is not more than 50 percent of the 

4 amount the individual paid to receive the training at 

5 the institution. 

6 (2) DETERMINATION OF AMOUNT.—For pur7 poses of calculating the amount of the reimburse8 ment under paragraph (1), the amount the indi9 vidual paid to receive the training at the institution 

10 shall be reduced by the amount of any other grants 

11 received by the individual for the training. 

12 (3) EFFECT ON OTHER FEDERAL LOANS.—A 

13 reimbursement provided to an individual under para14 graph (1) shall not affect the eligibility of the indi15 vidual for other Federal loans, including student 

16 loans. 

17 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated such sums as are nec19 essary to carry out this section. 

20 SEC. 1242. EXTENSION OF CERTAIN TAX CREDITS FOR 

21 SOLAR ENERGY. 

22 (a) EXTENSION OF RESIDENTIAL RENEWABLE EN23 ERGY EFFICIENT PROPERTY CREDIT THROUGH 2012.— 

24 Section 25D(g) of the Internal Revenue Code of 1986 is 

25 amended to read as follows: 


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1 ‘‘(g) TERMINATION.—The credit allowed under this 

2 section shall not apply to— 

3 ‘‘(1) property described in paragraph (1) or (2) 

4 of subsection (d) placed in service after December 

5 31, 2012, and 

6 ‘‘(2) property described in subsection (d)(3) 

7 placed in service after December 31, 2007.’’. 

8 (b) EXTENSION OF RENEWABLE ENERGY INVEST9 MENT TAX CREDIT THROUGH 2012.—Paragraphs 

10 (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) of the Internal 

11 Revenue Code of 1986 (relating to energy credit) is 

12 amended by striking ‘‘2008’’ both places it appears and 

13 inserting ‘‘2013’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to taxable years beginning after 

16 the date of the enactment of this Act. 

17 SEC. 1243. TAX CREDIT FOR PURCHASING GREEN POWER. 

18 (a) IN GENERAL.—Subpart B of part IV of sub19 chapter A of chapter 1 of the Internal Revenue Code of 

20 1986 (relating to other credits) is amended by adding at 

21 the end the following new section: 

22 ‘‘SEC. 30D. CREDIT FOR GREEN PRICING PREMIUMS. 

23 ‘‘(a) IN GENERAL.—There shall be allowed as a cred24 it against the tax imposed by this chapter for the taxable 


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1 year an amount equal to 50 percent of the green pricing 

2 premiums paid by the taxpayer during the taxable year. 

3 ‘‘(b) APPLICATION WITH OTHER CREDITS.—The 

4 credit allowed by subsection (a) for any taxable year shall 

5 not exceed the excess (if any) of— 

6 ‘‘(1) the regular tax for the taxable year re7 duced by the sum of the credits allowable under sub8 part A and sections 27, 30, 30B, and 30C, over 

9 ‘‘(2) the tentative minimum tax for the taxable 

10 year. 

11 ‘‘(c) DEFINITIONS.—For purposes of this section: 

12 ‘‘(1) GREEN PRICING PREMIUM.—The term 

13 ‘green pricing premium’ means the excess of the 

14 amount paid, pursuant to a qualified green power 

15 program, for green power electricity over the market 

16 price for electricity produced from non-renewable re17 sources. 

18 ‘‘(2) GREEN POWER ELECTRICITY.—The term 

19 ‘green power electricity’ means electricity produced 

20 from wind, solar, geothermal, biomass, biogas, and 

21 low-impact hydropower sources. 

22 ‘‘(3) QUALIFIED GREEN POWER PROGRAM.— 

23 The term ‘qualified green power program’ means a 

24 voluntary program— 


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1 ‘‘(A) under which an electric utility offers 

2 to customers of the electric utility the oppor3 tunity to pay a green pricing premium for the 

4 purchase of green power electricity; and 

5 ‘‘(B) that is approved by the Secretary, in 

6 consultation with the Secretary of Energy.’’. 

7 (b) CONFORMING AMENDMENTS.— 

8 (1) Section 55(c)(2) of the Internal Revenue 

9 Code of 1986 is amended by inserting ‘‘30D(b),’’ 

10 after ‘‘30C(d)(2),’’. 

11 (2) The table of sections for subpart B of part 

12 IV of subchapter A of chapter 1 of such Code is 

13 amended by adding at the end the following new 

14 item: 

‘‘Sec. 30D. Credit for green pricing premiums.’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to amounts paid after December 

17 31, 2005. 

18 CHAPTER 5—RENEWABLE PORTFOLIO 

19 STANDARD 

20 SEC. 1251. RENEWABLE PORTFOLIO STANDARD. 

21 Title VI of the Public Utility Regulatory Policies Act 

22 of 1978 (16 U.S.C. 2601 et seq.) is amended by adding 

23 at the end the following: 

24 ‘‘SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD. 

25 ‘‘(a) RENEWABLE ENERGY REQUIREMENT.— 


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1 ‘‘(1) IN GENERAL.—Not later than January 1, 

2 2020, each electric utility that sells electricity to 

3 electric consumers shall obtain 20 percent of the 

4 base amount of electricity the electric utility sells to 

5 electric consumers in a calendar year from new re6 newable energy or existing renewable energy, of 

7 which at least 1 percent shall be obtained from dis8 tributed resources. 

9 ‘‘(2) MEANS OF COMPLIANCE.—An electric util10 ity shall meet the requirements of paragraph (1) 

11 by— 

12 ‘‘(A) generating electric energy using new 

13 renewable energy or existing renewable energy; 

14 ‘‘(B) purchasing electric energy generated 

15 by new renewable energy or existing renewable 

16 energy; 

17 ‘‘(C) purchasing renewable energy credits 

18 issued under subsection (b); or 

19 ‘‘(D) a combination of the foregoing. 

20 ‘‘(b) RENEWABLE ENERGY CREDIT TRADING PRO21 GRAM.— 

22 ‘‘(1) IN GENERAL.—Not later than January 1, 

23 2010, the Secretary shall establish a renewable en24 ergy credit trading program for electric utilities that 

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1 tricity from renewable energy sources to meet its ob2 ligations under subsection (a)(1) to satisfy such obli3 gations by purchasing renewable energy credits. 

4 ‘‘(2) REQUIREMENTS.—As part of the program 

5 established under paragraph (1), the Secretary 

6 shall— 

7 ‘‘(A) issue regulations binding utilities to a 

8 schedule of gradual increases in the percentage 

9 or amount of electricity obtained from renew10 able energy sources and sold to consumers, in11 cluding distributed sources, prior to the 20 per12 cent level mandated for January 1, 2020; 

13 ‘‘(B) issue annually 1 renewable energy 

14 credit for each kilowatt hour of electricity ob15 tained from renewable energy sources and sold 

16 to consumers in the prior calendar year; 

17 ‘‘(C) establish civil penalties of no less 

18 than the going market value of a renewable en19 ergy credit, and levy those penalties against 

20 utilities that fail to obtain the required percent21 age or amount of renewable energy credits; 

22 ‘‘(D) monitor the sale or exchange of, and 

23 track, renewable energy credits; and 

24 ‘‘(E) except as provided for in subsection 

25 (f)(1), ensure that any renewable energy credit 


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1 shall be used only once for compliance with this 

2 section. 

3 ‘‘(c) ENFORCEMENT.— 

4 ‘‘(1) INSUFFICIENT DISTRIBUTED SOURCES

5 CIVIL PENALTY.—The amount of the civil penalty 

6 for not meeting the 1 percent distributed resources 

7 requirement under subsection (a)(1) shall be the 

8 greater of— 

9 ‘‘(A) the product of the number of kilowatt 

10 hours of electricity sold to consumers in viola11 tion of the requirement and 10 cents; and 

12 ‘‘(B) an amount equal to twice the civil 

13 penalties established under subsection 

14 (b)(2)(C). 

15 ‘‘(2) MITIGATION OR WAIVER.—The Secretary 

16 may mitigate or waive a civil penalty under sub17 section (b)(2)(C) or this subsection if the electric 

18 utility— 

19 ‘‘(A) was unable to comply with subsection 

20 (a) for reasons outside of the reasonable control 

21 of the utility; or 

22 ‘‘(B) is developing a new renewable energy 

23 source for use in the generation of electricity 

24 that will— 


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1 ‘‘(i) be in use before January 1, 2020; 

2 and 

3 ‘‘(ii) satisfy a significant percentage 

4 of the 20 percent renewable energy re5 quirement of the electric utility under sub6 section (a)(1). 

7 ‘‘(d) PROHIBITION ON INCREASING RATES TO PAY

8 FINES.—An electric utility shall not raise ratepayer rates 

9 to cover civil penalties established under subsection 

10 (b)(2)(C) or (c)(1). 

11 ‘‘(e) USE.—In addition to amounts made available 

12 under section 7101(d), amounts received by the Secretary 

13 as a civil penalty under subsection (b)(2)(C) or (c)(1) shall 

14 be used to— 

15 ‘‘(1) provide grants under section 7101(a); and 

16 ‘‘(2) comply with any renewable energy require17 ments applicable to the Federal Government. 

18 ‘‘(f) STATE PROGRAMS.— 

19 ‘‘(1) CALCULATION OF RENEWABLE ENERGY

20 REQUIREMENT.—In calculating the number of kilo21 watt hours of electricity a utility obtained from new 

22 or existing renewable energy sources and sold to 

23 consumers in a year in order to issue an equal num24 ber of renewable energy credits, the Secretary may 

25 include kilowatt hours of electricity a utility obtained 


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1 from new and existing renewable energy sources and 

2 sold to consumers in the same year in order to meet 

3 a State law or regulation. 

4 ‘‘(2) EFFECT.—Nothing in this section dimin5 ishes any authority of a State or political subdivision 

6 of a State to adopt or enforce any law (including a 

7 regulation) with respect to renewable energy, if the 

8 law does not conflict with this section. 

9 ‘‘(g) DEFINITIONS.—For purposes of this section: 

10 ‘‘(1) DISTRIBUTED GENERATION FACILITY.— 

11 The term ‘distributed generation facility’ means a 

12 facility at a customer site. 

13 ‘‘(2) DISTRIBUTED RESOURCE.—The term ‘dis14 tributed resource’ means a renewable energy re15 source located at the point of use or the customer 

16 side of the meter. 

17 ‘‘(3) EXISTING RENEWABLE ENERGY.—The 

18 term ‘existing renewable energy’ means electric en19 ergy generated at a facility (including a distributed 

20 generation facility) placed in service prior to the 

21 date of enactment of this section from solar, wind, 

22 or geothermal energy; ocean energy; biomass (as de23 fined in section 203(b) of the Energy Policy Act of 

24 2005); or landfill gas. 


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1 ‘‘(4) NEW RENEWABLE ENERGY.—The term 

2 ‘new renewable energy’ means electric energy gen3 erated at a facility (including a distributed genera4 tion facility) placed in service on or after the date 

5 of enactment of this section from— 

6 ‘‘(A) solar, wind, or geothermal energy or 

7 ocean energy; 

8 ‘‘(B) biomass (as defined in section 203(b) 

9 of the Energy Policy Act of 2005); 

10 ‘‘(C) landfill gas; or 

11 ‘‘(D) incremental hydropower. 

12 ‘‘(5) OCEAN ENERGY.—The term ‘ocean energy’ 

13 includes current, wave, tidal, and thermal energy. 

14 ‘‘(h) SUNSET.—This section expires on December 31, 

15 2030.’’. 


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1 CHAPTER 6—IMPROVING THE EFFI2 CIENCY OF HEALTH CARE TO EN3 HANCE AMERICA’S ECONOMIC COM4 PETITIVENESS 

5 Subchapter A—Improving Information 

6 Provided to Patients 

7 SEC. 1261. REQUIREMENT FOR HEALTH INSURERS TO IM8 PLEMENT COMPUTERIZED CLAIMS PROC9 ESSING SYSTEMS. 

10 (a) IN GENERAL.—Not later than 7 years after the 

11 date of enactment of this Act, each group health plan and 

12 health insurance issuer offering health insurance coverage 

13 shall have in effect an automated, integrated system that 

14 allows for efficient and effective adjudication of claims and 

15 the detection of fraud and abuse in accordance with this 

16 section. 

17 (b) ELEMENTS OF ADJUDICATION.—The system de18 scribed in subsection (a) shall include determinations con19 cerning payments and coverage for items or services under 

20 the terms and conditions of the plan or coverage involved, 

21 including any cost-sharing amount that the participant, 

22 beneficiary, or enrollee is required to pay with respect to 

23 such claim. 


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1 (c) TIMEFRAME.—The plan or issuer shall complete 

2 the adjudication of claims under this section immediately 

3 after the plan or issuer receives— 

4 (1) the claim; and 

5 (2) any additional information requested by the 

6 plan or issuer that is necessary to make a deter7 mination relating to the claim. 

8 (d) ACCURACY.—In adjudicating claims under this 

9 section the plan or issuer shall ensure that— 

10 (1) such claims are adjudicated with an accu11 racy of at least 99 percent; 

12 (2) the plan or issuer has the ability to accept 

13 claims submitted via the Internet; and 

14 (3) the plan or issuer has the ability to issue 

15 denials where necessary instantaneously via the 

16 Internet, and to provide an opportunity for challenge 

17 to and resolution of such denials (except in cases of 

18 dispute over medical necessity) via the Internet. 

19 (e) DETECTION SYSTEM.—Not later than 2 years 

20 after the date of enactment of this Act, each group health 

21 plan and health insurance issuer offering health insurance 

22 coverage shall use the system described in subsection (a) 

23 to detect fraud and abuse in real-time as part of the adju24 dication of claims under this section. 


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1 (f) REGULATIONS.—The Secretary shall issue such 

2 regulations as may be necessary or appropriate to carry 

3 out this section. 

4 SEC. 1262. MAKING HEALTH CARE MORE RESPONSIVE TO 

5 THE CONSUMER. 

6 (a) STATEMENT OF ACCOUNT FOR CONSUMERS.— 

7 (1) IN GENERAL.—Not later than 7 years after 

8 the date of enactment of this Act, each group health 

9 plan and health insurance issuer offering health in10 surance coverage shall have in effect a computerized 

11 system that provides each participant, beneficiary, or 

12 enrollee with a statement of account that— 

13 (A) includes information, with respect to 

14 the participant, beneficiary, or enrollee, on— 

15 (i) claims received, claims denied, and 

16 the reasons for any denials; 

17 (ii) status of coverage; and 

18 (iii) deductible information; and 

19 (B) is issued quarterly. 

20 (2) INTERNET ACCESS.—The plan or issuer 

21 may comply with this subsection by making the 

22 quarterly statements available on the Internet 24 

23 hours a day, 7 days a week, through a secure 

24 website. 


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1 (b) STATEMENT OF ACCOUNT FOR EMPLOYERS AND

2 PURCHASES.—Not later than 7 years after the date of en3 actment of this Act, each group health plan and health 

4 insurance issuer shall have in effect a computerized system 

5 to provide to employers and other purchasers of health in6 surance products a statement of account that— 

7 (1) includes— 

8 (A) current information on coverage sta9 tus; and 

10 (B) reports of customer satisfaction that 

11 are updated annually; and 

12 (2) is available 24 hours a day, 7 days a week, 

13 through— 

14 (A) the Internet through a secure website; 

15 or 

16 (B) a toll-free telephone number. 

17 (c) INTERNET ENROLLMENT.— 

18 (1) IN GENERAL.—Not later than 7 years after 

19 the date of enactment of this Act, each group health 

20 plan and health insurance issuer shall have in effect 

21 a computerized system to provide to employers and 

22 other purchasers of health insurance products an op23 tion to enroll for coverage under such health insur24 ance products on the Internet through a secure 

25 website. 


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1 (2) ELIGIBILITY REQUIREMENTS.—The Inter2 net website described in paragraph (1) shall include 

3 information on eligibility requirements for coverage. 

4 (d) CONSUMER EXPLANATION OF BENEFITS.— 

5 (1) IN GENERAL.—Not later than 7 years after 

6 the date of enactment of this Act, each group health 

7 plan and health insurance issuer shall have in effect 

8 a computerized system to provide, to a participant, 

9 beneficiary, or enrollee— 

10 (A) an explanation of benefits at the point 

11 of service or not later than 48 hours after the 

12 time that service is provided; and 

13 (B) a description of the coverage and cost 

14 of each services provided to the participant, 

15 beneficiary, or enrollee under the plan or cov16 erage. 

17 (2) LANGUAGE.—Any explanation of benefits 

18 under this subsection shall be provided in a printed 

19 form and written in a manner calculated to be un20 derstood by the average participant, beneficiary, or 

21 enrollee. 

22 (e) REFERRALS AND AUTHORIZATIONS.— 

23 (1) IN GENERAL.—Not later than 7 years after 

24 the date of enactment of this Act, each group health 

25 plan and health insurance issuer shall have in effect 


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1 a computerized system for making and checking re2 ferrals and pre-authorizations where such referrals 

3 and pre-authorizations are required under the plan 

4 or coverage. 

5 (2) ACCESS.—The system described in para6 graph (1) shall permit access by physicians and by 

7 participants, beneficiaries, and enrollees to informa8 tion on the completion of referrals and pre-author9 izations and whether health care services and prod10 ucts have been authorized, through— 

11 (A) the Internet through a secure website; 

12 or 

13 (B) a toll-free telephone number. 

14 (f) PATIENT CLAIM HISTORY.—Not later than 7 

15 years after the date of enactment of this Act, each group 

16 health plan and health insurance issuer shall establish a 

17 system— 

18 (1) by which a health care provider may, with 

19 patient authorization, have access to the patient’s 

20 statement of account, as described in subsection (a); 

21 and 

22 (2) that is accessible through— 

23 (A) the Internet through a secure website; 

24 or 

25 (B) a toll-free telephone number. 


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1 (g) MODERNIZING FINANCIAL TRANSACTIONS IN

2 HEALTH CARE.—Not later than 7 years after the date 

3 of enactment of this Act, each group health plan and 

4 health insurance issuer offering health insurance coverage 

5 shall have in effect a computerized system that— 

6 (1) permits health care providers to receive 

7 claim payments through electronic transfer of funds; 

8 (2) permits participants, beneficiaries, and en9 rollees to make payments for deductibles through 

10 electronic transfer of funds; and 

11 (3) provides automated, integrated audit con12 trols to monitor any duplicate payments or overpay13 ments within the adjudication system. 

14 SEC. 1263. REGULATIONS. 

15 The Secretary shall issue such regulations as may be 

16 necessary or appropriate to carry out this title. 

17 Subchapter B—Application to Public Health 

18 Service Act and Employee Retirement In19 come Security Act of 1974 

20 SEC. 1271. APPLICATION TO GROUP HEALTH PLANS AND 

21 GROUP HEALTH INSURANCE COVERAGE 

22 UNDER THE PUBLIC HEALTH SERVICE ACT. 

23 (a) IN GENERAL.—Subpart 2 of part A of title 

24 XXVII of the Public Health Service Act is amended by 

25 adding at the end the following new section: 


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1 ‘‘SEC. 2707. HEALTH CARE MODERNIZATION STANDARDS. 

2 ‘‘Each group health plan shall comply with health 

3 care modernization requirements under subchapter A of 

4 chapter 6 of subtitle B of title I of the Right Time to 

5 Reinvest in America’s Competitiveness and Knowledge 

6 Act, and each health insurance issuer shall comply with 

7 health care modernization requirements under such sub8 title with respect to group health insurance coverage it of9 fers, and such requirements shall be deemed to be incor10 porated into this section.’’. 

11 (b) CONFORMING AMENDMENT.—Section 

12 2721(b)(2)(A) of such Act (42 U.S.C. 300gg–21(b)(2)(A)) 

13 is amended by inserting ‘‘(other than section 2707)’’ after 

14 ‘‘requirements of such subparts’’. 

15 SEC. 1272. APPLICATION TO INDIVIDUAL HEALTH INSUR16 ANCE COVERAGE UNDER THE PUBLIC 

17 HEALTH SERVICE ACT. 

18 Part B of title XXVII of the Public Health Service 

19 Act is amended by inserting after section 2752 the fol20 lowing new section: 

21 ‘‘SEC. 2753. HEALTH CARE MODERNIZATION STANDARDS. 

22 ‘‘Each health insurance issuer shall comply with 

23 health care modernization requirements under subchapter 

24 A of chapter 6 of subtitle B of title I of the Right Time 

25 to Reinvest in America’s Competitiveness and Knowledge 

26 Act with respect to individual health insurance coverage 


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1 it offers, and such requirements shall be deemed to be in2 corporated into this section.’’. 

3 SEC. 1273. APPLICATION TO GROUP HEALTH PLANS AND 

4 GROUP HEALTH INSURANCE COVERAGE 

5 UNDER THE EMPLOYEE RETIREMENT IN6 COME SECURITY ACT OF 1974. 

7 Subpart B of part 7 of subtitle B of title I of the 

8 Employee Retirement Income Security Act of 1974 is 

9 amended by adding at the end the following new section: 

10 ‘‘SEC. 714. HEALTH CARE MODERNIZATION STANDARDS. 

11 ‘‘A group health plan (and a health insurance issuer 

12 offering group health insurance coverage in connection 

13 with such a plan) shall comply with the requirements of 

14 subchapter A of chapter 6 of subtitle B of title I of the 

15 Right Time to Reinvest in America’s Competitiveness and 

16 Knowledge Act (as in effect as of the date of the enact17 ment of such Act), and such requirements shall be deemed 

18 to be incorporated into this section.’’. 

19 Subchapter C—Miscellaneous Provisions 

20 SEC. 1281. DEFINITIONS. 

21 In this title: 

22 (1) CLAIM.—The term ‘‘claim’’ means any re23 quest for coverage (including authorization of cov24 erage), for eligibility, or for payment in whole or in 


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1 part, for an item or service under a group health 

2 plan or health insurance coverage. 

3 (2) COST-SHARING.—The term ‘‘cost-sharing’’ 

4 means any deductibles, coinsurance, copayment 

5 amounts, and liability for balance billing, for which 

6 the participant, beneficiary, or enrollee will be re7 sponsible. 

8 (3) ENROLLEE.—The term ‘‘enrollee’’ means, 

9 with respect to health insurance coverage offered by 

10 a health insurance issuer, an individual enrolled with 

11 the issuer to receive such coverage. 

12 (4) GROUP HEALTH PLAN.—The term ‘‘group 

13 health plan’’ has the meaning given such term in 

14 section 733(a) of the Employee Retirement Income 

15 Security Act of 1974 (29 U.S.C. 1191b(a)). 

16 (5) HEALTH CARE PROVIDER.—The term 

17 ‘‘health care provider’’ has the meaning given such 

18 term in section 1855(d)(5) of the Social Security 

19 Act (42 U.S.C. 1395w–25(d)(5)). 

20 (6) HEALTH INSURANCE ISSUER.—The term 

21 ‘‘health insurance issuer’’ has the meaning given 

22 such term in section 733(b) of the Employee Retire23 ment Income Security Act of 1974 (29 U.S.C. 

24 1191b(b)). 


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1 (7) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Health and Human Services. 

3 SEC. 1282. EFFECT ON STATE LAW. 

4 Nothing in this title or any amendment made by this 

5 title shall be construed to diminish the obligation of a non6 profit health care provider, health care facility, group 

7 health plan, or health insurance issuer to comply with any 

8 State law that provides greater rights relating to health 

9 care modernization to participants, beneficiaries, or enroll10 ees than the rights established under this title or any 

11 amendment made by this title. 

12 Subtitle C—Supporting the 

13 Infrastructure Our Economy Needs 

14 CHAPTER 1—CREATING A NATIONAL 

15 BROADBAND POLICY 

16 SEC. 1311. NATIONAL BROADBAND POLICY. 

17 (a) FINDINGS.—Congress finds as follows: 

18 (1) In 2004, President George W. Bush de19 clared that the United States should have ‘‘uni20 versal, affordable access for broadband technology 

21 by 2007’’. 

22 (2) Instead, the United States has fallen to 

23 16th in global rankings of broadband penetration, 

24 behind South Korea, Japan, and urban China. 


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1 (3) The United Sates is the only G7 nation 

2 without a national broadband policy. 

3 (4) Economists assert that widespread adoption 

4 of basic broadband could add $500,000,000,000 to 

5 the economy of the United States and create 

6 1,200,000 new jobs. 

7 (b) BROADBAND POLICY.— 

8 (1) RESPONSIBILITY OF PRESIDENT’S COUNCIL

9 OF ADVISORS ON SCIENCE AND TECHNOLOGY.— 

10 (A) IN GENERAL.—Not later than Decem11 ber 31, 2006, the President’s Council of Advi12 sors on Science and Technology (in this section 

13 referred to as the ‘‘Council’’), shall— 

14 (i) establish a national broadband pol15 icy for improving and expanding 

16 broadband access in the United States by 

17 2010; and 

18 (ii) develop a strategy and make rec19 ommendations to the President and Con20 gress on how to best achieve such policy. 

21 (B) PRESIDENT’S COUNCIL.—The Council, 

22 under Executive Order No. 13385 of September 

23 29, 2005, was assigned all responsibilities for24 merly performed by the President’s Information 

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1 mittee was authorized under section 101(b) of 

2 the High-Performance Computing Act of 1991 

3 (15 U.S.C. 5511(b)) and established by Execu4 tive Order No. 13035 of February 11, 1997, as 

5 amended by Executive Order No. 13092 of July 

6 24, 1998. 

7 (2) CONTENT OF POLICY.—As part of the pol8 icy established under paragraph (1), the Council 

9 shall develop and propose strategies and goals relat10 ing to the following: 

11 (A) BASIC BROADBAND ACCESS.— 

12 (i) GOAL.—To provide basic 

13 broadband access at an affordable price to 

14 all households in the United States. 

15 (ii) CONSIDERATIONS.—In developing 

16 strategies related to the goal described 

17 under clause (i), the Council shall consider 

18 incentives to ensure that rural and under19 served areas receive basic broadband ac20 cess, including— 

21 (I) tax credits; 

22 (II) debt guarantees; 

23 (III) trust funds; and 

24 (IV) expensing allowances. 


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1 (iii) DEFINITION.—For purposes of 

2 this subparagraph, the term ‘‘basic 

3 broadband’’ means a communications serv4 ice enabling the reliable transmission of 

5 communications that is— 

6 (I) at least 1 megabit per second 

7 in both directions; and 

8 (II) connected at all times. 

9 (B) HIGH-SPEED BROADBAND ACCESS.— 

10 (i) GOAL.—To provide high-speed 

11 broadband access at an affordable price to 

2 12 ⁄3 of all households in the United States. 

13 (ii) CONSIDERATIONS.—In developing 

14 strategies related to the goal described 

15 under clause (i), the Council shall consider 

16 how to create a more competitive environ17 ment for the provision of high-speed 

18 broadband over— 

19 (I) digital subscriber lines; 

20 (II) cable lines; 

21 (III) power lines; and 

22 (IV) wireless broadband tech23 nologies. 

24 (iii) DEFINITION.—For purposes of 

25 this subparagraph, the term ‘‘high-speed 


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1 broadband’’ means a communications serv2 ice enabling the transmission of commu3 nications at a capacity that is at least 22 

4 megabits per second. 

5 (C) ULTRA HIGH-SPEED BROADBAND

6 FIBER ACCESS.— 

7 (i) GOAL.—To provide ultra highspeed broadband fiber access to 1 8 ⁄3 of all 

9 households in the United States. 

10 (ii) CONSIDERATIONS.—In developing 

11 strategies related to the goal described 

12 under clause (i), the Council shall consider, 

13 in consultation with interested stake14 holders, the extent to which unused exist15 ing fiber that run below city streets can be 

16 preserved and used to achieve such goal. 

17 (iii) DEFINITION.—For purposes of 

18 this subparagraph, the term ‘‘ultra high19 speed broadband’’ means a communica20 tions service enabling the transmission of 

21 communications at a capacity that is at 

22 least 100 megabits per second. 

23 (D) HIGH-SPEED BROADBAND ACCESS IN

24 PUBLIC INSTITUTIONS.— 


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1 (i) GOAL.—To provide high-speed 

2 broadband access at an affordable price to 

3 all public schools, universities, libraries, 

4 and hospitals in the United States. 

5 (ii) DEFINITION.—For purposes of 

6 this subparagraph, the term ‘‘high-speed 

7 broadband’’ has the same meaning as in 

8 subparagraph (B)(iii). 

9 (E) COMPREHENSIVE CELLULAR INFRA10 STRUCTURE.—To create a comprehensive, na11 tionwide, cellular infrastructure to enable the 

12 convergence of wireline and wireless tech13 nologies that provide ‘‘anytime, anywhere, any14 device connections’’. 

15 (c) ADDITIONAL RESPONSIBILITIES OF THE COUN16 CIL.— 

17 (1) EXAMINATION AND REPORT ON PROPOSED

18 AND EXISTING TELECOMMUNICATION STRATEGIES.— 

19 In addition to its responsibilities under subsection 

20 (b), not later than December 31, 2006, the Council 

21 shall examine and make recommendations to the 

22 President, Congress, the Commissioner of the Fed23 eral Communications Commission, the Secretary of 

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1 cil determines appropriate, on proposed and existing 

2 telecommunication strategies— 

3 (A) to ensure that rural and underserved 

4 communities have access to broadband tech5 nology, including strategies relating to the— 

6 (i) deployment of municipal wireless7 fidelity; and 

8 (ii) expansion of the universal service 

9 fund established under section 254 of the 

10 Communications Act of 1934 (47 U.S.C. 

11 254) to support broadband access; and 

12 (B) to promote usage of, to encourage in13 vestment in, and to stimulate consumer uptake 

14 of current and next generation broadband net15 works, including strategies relating to the elimi16 nation of barriers and creation of incentives for 

17 developing applications in— 

18 (i) communications; 

19 (ii) healthcare; 

20 (iii) distance learning; 

21 (iv) telecommuting; 

22 (v) distributed energy; 

23 (vi) eGovernment; and 

24 (vii) entertainment. 


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1 (2) CONSIDERATION OF PRINCIPLES.—In mak2 ing any recommendations under paragraph (1), the 

3 Council shall consider the following principles: 

4 (A) Affordable, highly advanced, and se5 cure communications services should be avail6 able to all Americans and communities. 

7 (B) Broadband connections should be as 

8 reliable as other basic service connections, such 

9 as electricity and telephone service. 

10 (C) Access to broadband service should be 

11 provided without limitations on usage or 

12 prioritization of data by broadband providers. 

13 (D) Speeds of connectivity for the sending 

14 and receiving of data over broadband services 

15 should be the same. 

16 (E) Competitive market forces, with regu17 lation as necessary, should be the principle 

18 means of achieving any goal under this sub19 section. 

20 (F) Minimal disruption to existing services 

21 should be achieved through targeted efforts. 

22 (d) REPORT ON PROGRESS OF NATIONAL POLICY.— 

23 (1) IN GENERAL.—Not later than December 31, 

24 2006, and every December 31 thereafter until 2010, 

25 the Council shall evaluate and submit a report to 


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1 Congress on the progress made in implementing the 

2 strategies and achieving the goals and recommenda3 tions established in subsection (b). 

4 (2) CONTENT OF REPORT.— 

5 (A) PRIOR TO 2010.—Prior to January 1, 

6 2010, each report submitted under paragraph 

7 (1) shall include an accurate count of— 

8 (i) Americans with access to 

9 broadband services; and 

10 (ii) the number of homes and busi11 nesses that use— 

12 (I) basic broadband service; 

13 (II) high-speed broadband serv14 ice; and 

15 (III) ultra high-speed broadband 

16 service. 

17 (B) FOR 2010.—The report submitted 

18 under paragraph (1) on or after January 1, 

19 2010, and not later than December 31, 2010, 

20 shall include recommendations of the Council to 

21 Congress on establishing reasonable— 

22 (i) goals for broadband penetration in 

23 the future; and 

24 (ii) Congressional expectations for— 


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1 (I) broadband connection speeds; 

2 and 

3 (II) broadband usage in light of 

4 advances in broadband technology. 

5 CHAPTER 2—AMTRAK REAUTHORIZATION 

6 SEC. 1321. AUTHORIZATION FOR AMTRAK OPERATING 

7 GRANTS. 

8 There are authorized to be appropriated to the Sec9 retary of Transportation for operating costs of Amtrak the 

10 following amounts: 

11 (1) For fiscal year 2007, $570,000,000. 

12 (2) For fiscal year 2008, $570,000,000. 

13 (3) For fiscal year 2009, $570,000,000. 

14 SEC. 1322. AUTHORIZATION FOR AMTRAK CAPITAL 

15 GRANTS. 

16 There are authorized to be appropriated to the Sec17 retary of Transportation for the use of Amtrak to bring 

18 the Northeast Corridor (as defined in section 24102(a) of 

19 title 49, United States Code) to a state of good repair, 

20 for capital expenses of the national railroad passenger 

21 transportation system, and for purposes of making capital 

22 grants to States, the following amounts: 

23 (1) For fiscal year 2007, $858,000,000. 

24 (2) For fiscal year 2008, $788,000,000. 

25 (3) For fiscal year 2009, $767,000,000. 


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1 SEC. 1323. AUTHORIZATION FOR REPAYMENT OF LONG2 TERM DEBT AND CAPITAL LEASES. 

3 (a) PRINCIPAL AND INTEREST ON DEBT.—There are 

4 authorized to be appropriated to the Secretary of Trans5 portation for the use of Amtrak for the payment of prin6 cipal and interest on loans for capital equipment, or cap7 ital leases, the following amounts: 

8 (1) For fiscal year 2007, $357,000,000. 

9 (2) For fiscal year 2008, $305,000,000. 

10 (3) For fiscal year 2009, $306,000,000. 

11 (b) EARLY BUYOUT OPTION.—There are authorized 

12 to be appropriated to the Secretary of Transportation such 

13 sums as may be necessary for the use of Amtrak for the 

14 payment of costs associated with early buyout options if 

15 the Secretary determines that the exercise of those options 

16 is advantageous to Amtrak. 

17 (c) LEGAL EFFECT OF PAYMENTS UNDER THIS SEC18 TION.—The payment of principal and interest on secured 

19 debt, with the proceeds of the grants authorized by this 

20 section, shall not— 

21 (1) modify the extent or nature of any indebt22 edness of the National Railroad Passenger Corpora23 tion to the United States in existence on the date of 

24 enactment of this Act; 

25 (2) change the private nature of the liabilities 

26 of Amtrak or its successors; or 


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1 (3) imply any Federal guarantee or commit2 ment to amortize Amtrak’s outstanding indebted3 ness. 

4 CHAPTER 3—INVESTING IN SCHOOL 

5 INFRASTRUCTURE 

6 SEC. 1331. SHORT TITLE. 

7 This chapter may be cited as the ‘‘America’s Better 

8 Classroom Act of 2006’’. 

9 SEC. 1332. EXPANSION OF INCENTIVES FOR PUBLIC 

10 SCHOOLS. 

11 (a) IN GENERAL.—Chapter 1 of the Internal Rev12 enue Code of 1986 is amended by adding at the end the 

13 following new subchapter: 

14 ‘‘Subchapter Z—Public School Modernization 

15 Provisions 

‘‘Sec. 1400U. Credit to holders of qualified public school modernization bonds. 

‘‘Sec. 1400V. Qualified school construction bonds. 

‘‘Sec. 1400W. Qualified zone academy bonds. 

‘‘Sec. 1400X. Qualified tribal school modernization bonds. 

16 ‘‘SEC. 1400U. CREDIT TO HOLDERS OF QUALIFIED PUBLIC 

17 SCHOOL MODERNIZATION BONDS. 

18 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax19 payer who holds a qualified public school modernization 

20 bond on a credit allowance date of such bond which occurs 

21 during the taxable year, there shall be allowed as a credit 

22 against the tax imposed by this chapter for such taxable 

23 year an amount equal to the sum of the credits determined 


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1 under subsection (b) with respect to credit allowance dates 

2 during such year on which the taxpayer holds such bond. 

3 ‘‘(b) AMOUNT OF CREDIT.— 

4 ‘‘(1) IN GENERAL.—The amount of the credit 

5 determined under this subsection with respect to any 

6 credit allowance date for a qualified public school 

7 modernization bond is 25 percent of the annual 

8 credit determined with respect to such bond. 

9 ‘‘(2) ANNUAL CREDIT.—The annual credit de10 termined with respect to any qualified public school 

11 modernization bond is the product of— 

12 ‘‘(A) the applicable credit rate, multiplied 

13 by 

14 ‘‘(B) the outstanding face amount of the 

15 bond. 

16 ‘‘(3) APPLICABLE CREDIT RATE.—For purposes 

17 of paragraph (1), the applicable credit rate with re18 spect to an issue is the rate equal to an average 

19 market yield (as of the day before the date of 

20 issuance of the issue) on outstanding long-term cor21 porate debt obligations (determined under regula22 tions prescribed by the Secretary). 

23 ‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE24 DEMPTION.—In the case of a bond which is issued 

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1 ance date, the amount of the credit determined 

2 under this subsection with respect to such credit al3 lowance date shall be a ratable portion of the credit 

4 otherwise determined based on the portion of the 3- 

5 month period during which the bond is outstanding. 

6 A similar rule shall apply when the bond is re7 deemed. 

8 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 

9 ‘‘(1) IN GENERAL.—The credit allowed under 

10 subsection (a) for any taxable year shall not exceed 

11 the excess of— 

12 ‘‘(A) the sum of the regular tax liability 

13 (as defined in section 26(b)) plus the tax im14 posed by section 55, over 

15 ‘‘(B) the sum of the credits allowable 

16 under part IV of subchapter A (other than sub17 part C thereof, relating to refundable credits 

18 and subpart H thereof). 

19 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

20 credit allowable under subsection (a) exceeds the 

21 limitation imposed by paragraph (1) for such taxable 

22 year, such excess shall be carried to the succeeding 

23 taxable year and added to the credit allowable under 

24 subsection (a) for such taxable year. 


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1 ‘‘(d) QUALIFIED PUBLIC SCHOOL MODERNIZATION

2 BOND; CREDIT ALLOWANCE DATE.—For purposes of this 

3 section— 

4 ‘‘(1) QUALIFIED PUBLIC SCHOOL MODERNIZA5 TION BOND.—The term ‘qualified public school mod6 ernization bond’ means— 

7 ‘‘(A) a qualified zone academy bond, 

8 ‘‘(B) a qualified school construction bond, 

9 and 

10 ‘‘(C) a qualified tribal school moderniza11 tion bond. 

12 ‘‘(2) CREDIT ALLOWANCE DATE.—The term 

13 ‘credit allowance date’ means— 

14 ‘‘(A) March 15, 

15 ‘‘(B) June 15, 

16 ‘‘(C) September 15, and 

17 ‘‘(D) December 15. 

18 Such term includes the last day on which the bond 

19 is outstanding. 

20 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

21 subchapter— 

22 ‘‘(1) LOCAL EDUCATIONAL AGENCY.—The term 

23 ‘local educational agency’ has the meaning given to 

24 such term by section 9101 of the Elementary and 

25 Secondary Education Act of 1965. Such term inVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 cludes the local educational agency that serves the 

2 District of Columbia but does not include any other 

3 State agency. 

4 ‘‘(2) BOND.—The term ‘bond’ includes any ob5 ligation. 

6 ‘‘(3) STATE.—The term ‘State’ includes the 

7 District of Columbia and any possession of the 

8 United States. 

9 ‘‘(4) PUBLIC SCHOOL FACILITY.—The term 

10 ‘public school facility’ shall not include— 

11 ‘‘(A) any stadium or other facility pri12 marily used for athletic contests or exhibitions 

13 or other events for which admission is charged 

14 to the general public, or 

15 ‘‘(B) any facility which is not owned by a 

16 State or local government or any agency or in17 strumentality of a State or local government. 

18 ‘‘(f) CREDIT INCLUDED IN GROSS INCOME.—Gross 

19 income includes the amount of the credit allowed to the 

20 taxpayer under this section (determined without regard to 

21 subsection (c)) and the amount so included shall be treat22 ed as interest income. 

23 ‘‘(g) RECAPTURE OF PORTION OF CREDIT WHERE

24 CESSATION OF COMPLIANCE.— 


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1 ‘‘(1) IN GENERAL.—If any bond which when 

2 issued purported to be a qualified public school mod3 ernization bond ceases to be a qualified public school 

4 modernization bond, the issuer shall pay to the 

5 United States (at the time required by the Sec6 retary) an amount equal to the sum of— 

7 ‘‘(A) the aggregate of the credits allowable 

8 under this section with respect to such bond 

9 (determined without regard to subsection (c)) 

10 for taxable years ending during the calendar 

11 year in which such cessation occurs and the 2 

12 preceding calendar years, and 

13 ‘‘(B) interest at the underpayment rate 

14 under section 6621 on the amount determined 

15 under subparagraph (A) for each calendar year 

16 for the period beginning on the first day of 

17 such calendar year. 

18 ‘‘(2) FAILURE TO PAY.—If the issuer fails to 

19 timely pay the amount required by paragraph (1) 

20 with respect to such bond, the tax imposed by this 

21 chapter on each holder of any such bond which is 

22 part of such issue shall be increased (for the taxable 

23 year of the holder in which such cessation occurs) by 

24 the aggregate decrease in the credits allowed under 

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1 ning in such 3 calendar years which would have re2 sulted solely from denying any credit under this sec3 tion with respect to such issue for such taxable 

4 years. 

5 ‘‘(3) SPECIAL RULES.— 

6 ‘‘(A) TAX BENEFIT RULE.—The tax for 

7 the taxable year shall be increased under para8 graph (2) only with respect to credits allowed 

9 by reason of this section which were used to re10 duce tax liability. In the case of credits not so 

11 used to reduce tax liability, the carryforwards 

12 and carrybacks under section 39 shall be appro13 priately adjusted. 

14 ‘‘(B) NO CREDITS AGAINST TAX.—Any in15 crease in tax under paragraph (2) shall not be 

16 treated as a tax imposed by this chapter for 

17 purposes of determining— 

18 ‘‘(i) the amount of any credit allow19 able under this subchapter, or 

20 ‘‘(ii) the amount of the tax imposed 

21 by section 55. 

22 ‘‘(h) BONDS HELD BY REGULATED INVESTMENT

23 COMPANIES.—If any qualified public school modernization 

24 bond is held by a regulated investment company, the credit 

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1 holders of such company under procedures prescribed by 

2 the Secretary. 

3 ‘‘(i) CREDITS MAY BE STRIPPED.—Under regula4 tions prescribed by the Secretary— 

5 ‘‘(1) IN GENERAL.—There may be a separation 

6 (including at issuance) of the ownership of a quali7 fied public school modernization bond and the enti8 tlement to the credit under this section with respect 

9 to such bond. In case of any such separation, the 

10 credit under this section shall be allowed to the per11 son who on the credit allowance date holds the in12 strument evidencing the entitlement to the credit 

13 and not to the holder of the bond. 

14 ‘‘(2) CERTAIN RULES TO APPLY.—In the case 

15 of a separation described in paragraph (1), the rules 

16 of section 1286 shall apply to the qualified public 

17 school modernization bond as if it were a stripped 

18 bond and to the credit under this section as if it 

19 were a stripped coupon. 

20 ‘‘(j) TREATMENT FOR ESTIMATED TAX PURPOSES.— 

21 Solely for purposes of sections 6654 and 6655, the credit 

22 allowed by this section to a taxpayer by reason of holding 

23 a qualified public school modernization bond on a credit 

24 allowance date shall be treated as if it were a payment 

25 of estimated tax made by the taxpayer on such date. 


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1 ‘‘(k) CREDIT MAY BE TRANSFERRED.—Nothing in 

2 any law or rule of law shall be construed to limit the trans3 ferability of the credit allowed by this section through sale 

4 and repurchase agreements. 

5 ‘‘(l) REPORTING.—Issuers of qualified public school 

6 modernization bonds shall submit reports similar to the 

7 reports required under section 149(e). 

8 ‘‘(m) CREDIT TREATED AS NONREFUNDABLE BOND9 HOLDER CREDIT.—For purposes of this title, the credit 

10 allowed by this section shall be treated as a credit allow11 able under subpart H of part IV of subchapter A of this 

12 chapter. 

13 ‘‘(n) TERMINATION.—This section shall not apply to 

14 any bond issued after September 30, 2008 (December 31, 

15 2013, in the case of any qualified tribal school moderniza16 tion bond). 

17 ‘‘SEC. 1400V. QUALIFIED SCHOOL CONSTRUCTION BONDS. 

18 ‘‘(a) QUALIFIED SCHOOL CONSTRUCTION BOND.— 

19 For purposes of this subchapter, the term ‘qualified school 

20 construction bond’ means any bond issued as part of an 

21 issue if— 

22 ‘‘(1) 95 percent or more of the proceeds of such 

23 issue are to be used for the construction, rehabilita24 tion, or repair of a public school facility or for the 


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1 acquisition of land on which such a facility is to be 

2 constructed with part of the proceeds of such issue, 

3 ‘‘(2) the bond is issued by a State or local gov4 ernment within the jurisdiction of which such school 

5 is located, 

6 ‘‘(3) the issuer designates such bond for pur7 poses of this section, and 

8 ‘‘(4) the term of each bond which is part of 

9 such issue does not exceed 15 years. 

10 ‘‘(b) LIMITATION ON AMOUNT OF BONDS DES11 IGNATED.—The maximum aggregate face amount of 

12 bonds issued during any calendar year which may be des13 ignated under subsection (a) by any issuer shall not exceed 

14 the limitation amount allocated under subsection (d) for 

15 such calendar year to such issuer. 

16 ‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS

17 DESIGNATED.—There is a national qualified school con18 struction bond limitation for each calendar year. Such lim19 itation is— 

20 ‘‘(1) $11,000,000,000 for 2007, 

21 ‘‘(2) $11,000,000,000 for 2008, and 

22 ‘‘(3) except as provided in subsection (f), zero 

23 after 2008. 

24 ‘‘(d) LIMITATION ALLOCATED AMONG STATES.— 


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1 ‘‘(1) IN GENERAL.—The limitation applicable 

2 under subsection (c) for any calendar year shall be 

3 allocated by the Secretary among the States in pro4 portion to the respective amounts each such State 

5 received for basic grants under section 1124 of the 

6 Elementary and Secondary Education Act of 1965 

7 for the most recent fiscal year ending before such 

8 calendar year. The limitation amount allocated to a 

9 State under the preceding sentence shall be allocated 

10 by the State to issuers within such State. 

11 ‘‘(2) MINIMUM ALLOCATIONS TO STATES.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 adjust the allocations under this subsection for 

14 any calendar year for each State to the extent 

15 necessary to ensure that the amount allocated 

16 to such State under this subsection for such 

17 year is not less than an amount equal to such 

18 State’s minimum percentage of the amount to 

19 be allocated under paragraph (1) for the cal20 endar year. 

21 ‘‘(B) MINIMUM PERCENTAGE.—A State’s 

22 minimum percentage for any calendar year is 

23 the minimum percentage described in section 

24 1124(d) of the Elementary and Secondary Edu25 cation Act of 1965 for such State for the most 


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1 recent fiscal year ending before such calendar 

2 year. 

3 ‘‘(3) ALLOCATIONS TO CERTAIN POSSES4 SIONS.—The amount to be allocated under para5 graph (1) to any possession of the United States 

6 other than Puerto Rico shall be the amount which 

7 would have been allocated if all allocations under 

8 paragraph (1) were made on the basis of respective 

9 populations of individuals below the poverty line (as 

10 defined by the Office of Management and Budget). 

11 In making other allocations, the amount to be allo12 cated under paragraph (1) shall be reduced by the 

13 aggregate amount allocated under this paragraph to 

14 possessions of the United States. 

15 ‘‘(e) CARRYOVER OF UNUSED LIMITATION.—If for 

16 any calendar year— 

17 ‘‘(1) the amount allocated under subsection (d) 

18 to any State, exceeds 

19 ‘‘(2) the amount of bonds issued during such 

20 year which are designated under subsection (a) pur21 suant to such allocation, 

22 the limitation amount under such subsection for such 

23 State for the following calendar year shall be increased 

24 by the amount of such excess. A similar rule shall apply 

25 to the amounts allocated under subsection (d)(4). 


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1 ‘‘(f) SPECIAL RULES RELATING TO ARBITRAGE.— 

2 ‘‘(1) IN GENERAL.—A bond shall not be treated 

3 as failing to meet the requirement of subsection 

4 (a)(1) solely by reason of the fact that the proceeds 

5 of the issue of which such bond is a part are in6 vested for a temporary period (but not more than 36 

7 months) until such proceeds are needed for the pur8 pose for which such issue was issued. 

9 ‘‘(2) BINDING COMMITMENT REQUIREMENT.— 

10 Paragraph (1) shall apply to an issue only if, as of 

11 the date of issuance, there is a reasonable expecta12 tion that— 

13 ‘‘(A) at least 10 percent of the proceeds of 

14 the issue will be spent within the 6-month pe15 riod beginning on such date for the purpose for 

16 which such issue was issued, and 

17 ‘‘(B) the remaining proceeds of the issue 

18 will be spent with due diligence for such pur19 pose. 

20 ‘‘(3) EARNINGS ON PROCEEDS.—Any earnings 

21 on proceeds during the temporary period shall be 

22 treated as proceeds of the issue for purposes of ap23 plying subsection (a)(1) and paragraph (1) of this 

24 subsection. 


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1 ‘‘SEC. 1400W. QUALIFIED ZONE ACADEMY BONDS. 

2 ‘‘(a) QUALIFIED ZONE ACADEMY BOND.—For pur3 poses of this subchapter— 

4 ‘‘(1) IN GENERAL.—The term ‘qualified zone 

5 academy bond’ means any bond issued as part of an 

6 issue if— 

7 ‘‘(A) 95 percent or more of the proceeds of 

8 such issue are to be used for a qualified pur9 pose with respect to a qualified zone academy 

10 established by a local educational agency, 

11 ‘‘(B) the bond is issued by a State or local 

12 government within the jurisdiction of which 

13 such academy is located, 

14 ‘‘(C) the issuer— 

15 ‘‘(i) designates such bond for purposes 

16 of this section, 

17 ‘‘(ii) certifies that it has written as18 surances that the private business con19 tribution requirement of paragraph (2) will 

20 be met with respect to such academy, and 

21 ‘‘(iii) certifies that it has the written 

22 approval of the local educational agency 

23 for such bond issuance, and 

24 ‘‘(D) the term of each bond which is part 

25 of such issue does not exceed 15 years. 


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1 Rules similar to the rules of section 1400V(f) shall 

2 apply for purposes of subparagraph (A). 

3 ‘‘(2) PRIVATE BUSINESS CONTRIBUTION RE4 QUIREMENT.— 

5 ‘‘(A) IN GENERAL.—For purposes of para6 graph (1), the private business contribution re7 quirement of this paragraph is met with respect 

8 to any issue if the local educational agency that 

9 established the qualified zone academy has writ10 ten commitments from private entities to make 

11 qualified contributions having a present value 

12 (as of the date of issuance of the issue) of not 

13 less than 10 percent of the proceeds of the 

14 issue. 

15 ‘‘(B) QUALIFIED CONTRIBUTIONS.—For 

16 purposes of subparagraph (A), the term ‘quali17 fied contribution’ means any contribution (of a 

18 type and quality acceptable to the local edu19 cational agency) of— 

20 ‘‘(i) equipment for use in the qualified 

21 zone academy (including state-of-the-art 

22 technology and vocational equipment), 

23 ‘‘(ii) technical assistance in developing 

24 curriculum or in training teachers in order 


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•S 2357 IS 

1 to promote appropriate market driven tech2 nology in the classroom, 

3 ‘‘(iii) services of employees as volun4 teer mentors, 

5 ‘‘(iv) internships, field trips, or other 

6 educational opportunities outside the acad7 emy for students, or 

8 ‘‘(v) any other property or service 

9 specified by the local educational agency. 

10 ‘‘(3) QUALIFIED ZONE ACADEMY.—The term 

11 ‘qualified zone academy’ means any public school (or 

12 academic program within a public school) which is 

13 established by and operated under the supervision of 

14 a local educational agency to provide education or 

15 training below the postsecondary level if— 

16 ‘‘(A) such public school or program (as the 

17 case may be) is designed in cooperation with 

18 business to enhance the academic curriculum, 

19 increase graduation and employment rates, and 

20 better prepare students for the rigors of college 

21 and the increasingly complex workforce, 

22 ‘‘(B) students in such public school or pro23 gram (as the case may be) will be subject to the 

24 same academic standards and assessments as 


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1 other students educated by the local educational 

2 agency, 

3 ‘‘(C) the comprehensive education plan of 

4 such public school or program is approved by 

5 the local educational agency, and 

6 ‘‘(D)(i) such public school is located in an 

7 empowerment zone or enterprise community 

8 (including any such zone or community des9 ignated after the date of the enactment of this 

10 section), or 

11 ‘‘(ii) there is a reasonable expectation (as 

12 of the date of issuance of the bonds) that at 

13 least 35 percent of the students attending such 

14 school or participating in such program (as the 

15 case may be) will be eligible for free or reduced16 cost lunches under the school lunch program es17 tablished under the Richard B. Russell National 

18 School Lunch Act. 

19 ‘‘(4) QUALIFIED PURPOSE.—The term ‘quali20 fied purpose’ means, with respect to any qualified 

21 zone academy— 

22 ‘‘(A) constructing, rehabilitating, or repair23 ing the public school facility in which the acad24 emy is established, 


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•S 2357 IS 

1 ‘‘(B) acquiring the land on which such fa2 cility is to be constructed with part of the pro3 ceeds of such issue, 

4 ‘‘(C) providing equipment for use at such 

5 academy, 

6 ‘‘(D) developing course materials for edu7 cation to be provided at such academy, and 

8 ‘‘(E) training teachers and other school 

9 personnel in such academy. 

10 ‘‘(b) LIMITATIONS ON AMOUNT OF BONDS DES11 IGNATED.— 

12 ‘‘(1) IN GENERAL.—There is a national zone 

13 academy bond limitation for each calendar year. 

14 Such limitation is— 

15 ‘‘(A) $400,000,000 for 1998, 

16 ‘‘(B) $400,000,000 for 1999, 

17 ‘‘(C) $400,000,000 for 2000, 

18 ‘‘(D) $400,000,000 for 2001, 

19 ‘‘(E) $400,000,000 for 2002, 

20 ‘‘(F) $400,000,000 for 2003, 

21 ‘‘(G) $400,000,000 for 2004, 

22 ‘‘(H) $400,000,000 for 2005, 

23 ‘‘(I) $1,400,000,000 for 2006, 

24 ‘‘(J) $1,400,000,000 for 2007, and 


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1 ‘‘(K) except as provided in paragraph (3), 

2 zero after 2007. 

3 ‘‘(2) ALLOCATION OF LIMITATION.— 

4 ‘‘(A) ALLOCATION AMONG STATES.— 

5 ‘‘(i) PRE-2006 LIMITATIONS.—The na6 tional zone academy bond limitations for 

7 calendar years before 2006 shall be allo8 cated by the Secretary among the States 

9 on the basis of their respective populations 

10 of individuals below the poverty line (as de11 fined by the Office of Management and 

12 Budget). 

13 ‘‘(ii) LIMITATION AFTER 2005.—The 

14 national zone academy bond limitation for 

15 any calendar year after 2005 shall be allo16 cated by the Secretary among the States in 

17 proportion to the respective amounts each 

18 such State received for basic grants under 

19 section 1124 of the Elementary and Sec20 ondary Education Act of 1965 for the 

21 most recent fiscal year ending before such 

22 calendar year. 

23 ‘‘(B) ALLOCATION TO LOCAL EDU24 CATIONAL AGENCIES.—The limitation amount 

25 allocated to a State under subparagraph (A) 


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1 shall be allocated by the State to qualified zone 

2 academies within such State. 

3 ‘‘(C) DESIGNATION SUBJECT TO LIMITA4 TION AMOUNT.—The maximum aggregate face 

5 amount of bonds issued during any calendar 

6 year which may be designated under subsection 

7 (a) with respect to any qualified zone academy 

8 shall not exceed the limitation amount allocated 

9 to such academy under subparagraph (B) for 

10 such calendar year. 

11 ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If 

12 for any calendar year— 

13 ‘‘(A) the limitation amount under this sub14 section for any State, exceeds 

15 ‘‘(B) the amount of bonds issued during 

16 such year which are designated under sub17 section (a) (or the corresponding provisions of 

18 prior law) with respect to qualified zone acad19 emies within such State, 

20 the limitation amount under this subsection for such 

21 State for the following calendar year shall be in22 creased by the amount of such excess. 


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1 ‘‘SEC. 1400X. QUALIFIED TRIBAL SCHOOL MODERNIZATION 

2 BONDS. 

3 ‘‘(a) QUALIFIED TRIBAL SCHOOL MODERNIZATION

4 BOND.—For purposes of this subchapter— 

5 ‘‘(1) IN GENERAL.—The term ‘qualified tribal 

6 school modernization bond’ means, subject to para7 graph (2), any bond issued as part of an issue under 

8 section 1333 of the America’s Better Classroom Act 

9 of 2006, as in effect on the date of the enactment 

10 of this section, if— 

11 ‘‘(A) 95 percent or more of the proceeds of 

12 such issue are to be used for the construction, 

13 rehabilitation, or repair of a school facility 

14 funded by the Bureau of Indian Affairs of the 

15 Department of the Interior or for the acquisi16 tion of land on which such a facility is to be 

17 constructed with part of the proceeds of such 

18 issue, 

19 ‘‘(B) the bond is issued by an Indian tribe, 

20 ‘‘(C) the issuer designates such bond for 

21 purposes of this section, and 

22 ‘‘(D) the term of each bond which is part 

23 of such issue does not exceed 15 years. 

24 ‘‘(2) NATIONAL LIMITATION ON AMOUNT OF

25 BONDS DESIGNATED.— 


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1 ‘‘(A) NATIONAL LIMITATION.—There is a 

2 national qualified tribal school modernization 

3 bond limitation for each calendar year. Such 

4 limitation is— 

5 ‘‘(i) $200,000,000 for 2006, 

6 ‘‘(ii) $200,000,000 for 2007, and 

7 ‘‘(iii) zero after 2007. 

8 ‘‘(B) ALLOCATION OF LIMITATION.—The 

9 national qualified tribal school modernization 

10 bond limitation shall be allocated to Indian 

11 tribes by the Secretary of the Interior subject 

12 to the provisions of section 1333 of the Amer13 ica’s Better Classroom Act of 2006, as in effect 

14 on the date of the enactment of this section. 

15 ‘‘(C) DESIGNATION SUBJECT TO LIMITA16 TION AMOUNT.—The maximum aggregate face 

17 amount of bonds issued during any calendar 

18 year which may be designated under paragraph 

19 (1) with respect to any Indian tribe shall not 

20 exceed the limitation amount allocated to such 

21 government under subparagraph (B) for such 

22 calendar year. 

23 ‘‘(D) CARRYOVER OF UNUSED LIMITA24 TION.—If for any calendar year— 


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•S 2357 IS 

1 ‘‘(i) the limitation amount under this 

2 paragraph, exceeds 

3 ‘‘(ii) the amount of qualified tribal 

4 school modernization bonds issued during 

5 such year, the limitation amount under 

6 this paragraph for the following calendar 

7 year shall be increased by the amount of 

8 such excess. The preceding sentence shall 

9 not apply if such following calendar year is 

10 after 2014. 

11 ‘‘(b) TRIBE.—For purposes of this section, the term 

12 ‘tribe’ has the meaning given the term ‘Indian tribal gov13 ernment’ by section 7701(a)(40), including the application 

14 of section 7871(d). Such term includes any consortium of 

15 tribes approved by the Secretary of the Interior.’’. 

16 (b) REPORTING.—Subsection (d) of section 6049 of 

17 such Code (relating to returns regarding payments of in18 terest) is amended by adding at the end the following new 

19 paragraph: 

20 ‘‘(9) REPORTING OF CREDIT ON QUALIFIED

21 PUBLIC SCHOOL MODERNIZATION BONDS.— 

22 ‘‘(A) IN GENERAL.—For purposes of sub23 section (a), the term ‘interest’ includes amounts 

24 includible in gross income under section 

25 1400U(f) and such amounts shall be treated as 


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1 paid on the credit allowance date (as defined in 

2 section 1400U(d)(2)). 

3 ‘‘(B) REPORTING TO CORPORATIONS, 

4 ETC.—Except as otherwise provided in regula5 tions, in the case of any interest described in 

6 subparagraph (A) of this paragraph, subsection 

7 (b)(4) of this section shall be applied without 

8 regard to subparagraphs (A), (H), (I), (J), (K), 

9 and (L)(i). 

10 ‘‘(C) REGULATORY AUTHORITY.—The Sec11 retary may prescribe such regulations as are 

12 necessary or appropriate to carry out the pur13 poses of this paragraph, including regulations 

14 which require more frequent or more detailed 

15 reporting.’’. 

16 (c) CONFORMING AMENDMENTS.— 

17 (1) Subchapter U of chapter 1 of such Code is 

18 amended by striking part IV, by redesignating part 

19 V as part IV, and by redesignating section 1397F 

20 as section 1397E. 

21 (2) The table of subchapters for chapter 1 of 

22 such Code is amended by adding at the end the fol23 lowing new item: 

‘‘Subchapter Z. Public school modernization provisions.’’. 


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1 (3) The table of parts of subchapter U of chap2 ter 1 of such Code is amended by striking the last 

3 2 items and inserting the following item: 

‘‘Part IV. Regulations.’’. 

4 (d) SOVEREIGN IMMUNITY.—This section and the 

5 amendments made by this section shall not be construed 

6 to impact, limit, or affect the sovereign immunity of the 

7 Federal Government or any State or local tribal govern8 ment. 

9 (e) EFFECTIVE DATES.— 

10 (1) IN GENERAL.—Except as otherwise pro11 vided in this subsection, the amendments made by 

12 this section shall apply to obligations issued after 

13 December 31, 2005. 

14 (2) REPEAL OF RESTRICTION ON ZONE ACAD15 EMY BOND HOLDERS.—In the case of bonds to 

16 which section 1397E of the Internal Revenue Code 

17 of 1986 (as in effect before the date of the enact18 ment of this Act) applies, the limitation of such sec19 tion to eligible taxpayers (as defined in subsection 

20 (d)(6) of such section) shall not apply after the date 

21 of the enactment of this Act. 

22 SEC. 1333. INDIAN SCHOOL CONSTRUCTION. 

23 (a) DEFINITIONS.—In this section: 

24 (1) BUREAU.—The term ‘‘Bureau’’ means the 

25 Bureau of Indian Affairs of the Department. 


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1 (2) DEPARTMENT.—The term ‘‘Department’’ 

2 means the Department of the Interior. 

3 (3) ESCROW ACCOUNT.—The term ‘‘escrow ac4 count’’ means the tribal school modernization escrow 

5 account established under subsection (b)(6)(B)(i). 

6 (4) INDIAN.—The term ‘‘Indian’’ means any in7 dividual who is a member of an Indian tribe. 

8 (5) INDIAN TRIBE.— 

9 (A) IN GENERAL.—The term ‘‘Indian 

10 tribe’’ has the meaning given the term ‘‘Indian 

11 tribal government’’ by section 7701(a)(40) of 

12 the Internal Revenue Code of 1986 (including 

13 the application of section 7871(d) of that 

14 Code). 

15 (B) INCLUSION.—The term ‘‘Indian tribe’’ 

16 includes a consortium of Indian tribes approved 

17 by the Secretary. 

18 (6) SECRETARY.—The term ‘‘Secretary’’ means 

19 the Secretary of the Interior. 

20 (7) TRIBAL SCHOOL.—The term ‘‘tribal school’’ 

21 means an elementary school, secondary school, or 

22 dormitory that— 

23 (A) is operated by a tribal organization or 

24 the Bureau for the education of Indian chil25 dren; and 


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1 (B) under a contract, a grant, or an agree2 ment, or for a Bureau-operated school, receives 

3 financial assistance to pay the costs of oper4 ation from funds made available under— 

5 (i) section 102, 103(a), or 208 of the 

6 Indian Self-Determination and Education 

7 Assistance Act (25 U.S.C. 450f, 450h(a), 

8 458d); or 

9 (ii) the Tribally Controlled Schools 

10 Act of 1988 (25 U.S.C. 2501 et seq.). 

11 (b) ISSUANCE OF BONDS.— 

12 (1) IN GENERAL.—The Secretary shall establish 

13 a pilot program under which eligible Indian tribes 

14 may issue qualified tribal school modernization 

15 bonds to provide funding for the construction, reha16 bilitation, or repair of tribal schools (including the 

17 advance planning and design of tribal schools). 

18 (2) ELIGIBILITY.— 

19 (A) IN GENERAL.—To be eligible to issue 

20 any qualified tribal school modernization bond 

21 under the program under paragraph (1), an In22 dian tribe shall— 

23 (i) prepare and submit to the Sec24 retary a plan of construction that meets 

25 the requirements of subparagraph (B); 


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1 (ii) provide for quarterly and final in2 spection of the project by the Bureau; and 

3 (iii) pledge that the facilities financed 

4 by the bond will be used primarily for ele5 mentary and secondary educational pur6 poses for not less than the period during 

7 which the bond remains outstanding. 

8 (B) PLAN OF CONSTRUCTION.—A plan of 

9 construction referred to in subparagraph (A)(i) 

10 meets the requirements of this subparagraph if 

11 the plan— 

12 (i) contains a description of the con13 struction to be carried out with funding 

14 provided under a qualified tribal school 

15 modernization bond; 

16 (ii) demonstrates that a comprehen17 sive survey has been completed to deter18 mine the construction needs of the tribal 

19 school involved; 

20 (iii) contains assurances that funding 

21 under the bond will be used only for the 

22 activities described in the plan; 

23 (iv) contains a response to the evalua24 tion criteria contained in Instructions and 

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1 struction, Revision 6, dated February 6, 

2 1999; and 

3 (v) contains any other reasonable and 

4 related information determined to be ap5 propriate by the Secretary. 

6 (C) PRIORITY.—In determining whether an 

7 Indian tribe is eligible to participate in the pro8 gram under this subsection, the Secretary shall 

9 give priority to an Indian tribe that, as dem10 onstrated by the relevant plans of construction, 

11 will fund projects— 

12 (i) described in the Education Facili13 ties Replacement Construction Priorities 

14 List, as of fiscal year 2000, of the Bureau 

15 (65 Fed. Reg. 4623); 

16 (ii) described in any subsequent prior17 ities list published in the Federal Register; 

18 or 

19 (iii) that meet the criteria for ranking 

20 schools as described in Instructions and 

21 Application for Replacement School Con22 struction, Revision 6, dated February 6, 

23 1999. 

24 (D) ADVANCE PLANNING AND DESIGN

25 FUNDING.— 


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1 (i) IN GENERAL.—An Indian tribe 

2 may propose in the plan of construction of 

3 the Indian tribe to receive advance plan4 ning and design funding from the escrow 

5 account. 

6 (ii) CONDITIONS ON ALLOCATION OF

7 FUNDS.—As a condition to the allocation 

8 to an Indian tribe of advance planning and 

9 design funds from the escrow account 

10 under clause (i), the Indian tribe shall 

11 agree— 

12 (I) to issue qualified tribal school 

13 modernization bonds after the date of 

14 receipt of the funds; and 

15 (II) as a condition of each bond 

16 issuance, that the Indian tribe will de17 posit into the escrow account, or a 

18 fund managed by the trustee as de19 scribed in paragraph (4)(C), an 

20 amount equal to the amount of funds 

21 received from the escrow account. 

22 (3) PERMISSIBLE ACTIVITIES.—In addition to 

23 the use of funds permitted under paragraph (1), an 

24 Indian tribe may use amounts received through the 


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1 issuance of a qualified tribal school modernization 

2 bond— 

3 (A) to enter into and make payments 

4 under contracts with licensed and bonded archi5 tects, engineers, and construction firms— 

6 (i) to determine the needs of the tribal 

7 school; and 

8 (ii) for the design and engineering of 

9 the tribal school; 

10 (B) enter into and make payments under 

11 contracts with financial advisers, underwriters, 

12 attorneys, trustees, and other professionals who 

13 would be able to provide assistance to the In14 dian tribe in issuing bonds; and 

15 (C) carry out other activities determined to 

16 be appropriate by the Secretary. 

17 (4) BOND TRUSTEE.— 

18 (A) IN GENERAL.—Notwithstanding any 

19 other provision of law, any qualified tribal 

20 school modernization bond issued by an Indian 

21 tribe under this subsection shall be subject to a 

22 trust agreement between the Indian tribe and a 

23 trustee. 

24 (B) TRUSTEE.—Any bank or trust com25 pany that meets requirements established by 


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1 the Secretary may be designated as a trustee 

2 under subparagraph (A). 

3 (C) CONTENT OF TRUST AGREEMENT.—A 

4 trust agreement entered into by an Indian tribe 

5 under this paragraph shall specify that the 

6 trustee, with respect to any bond issued under 

7 this subsection, shall— 

8 (i) act as a repository for the proceeds 

9 of the bond; 

10 (ii) make payments to bondholders; 

11 (iii) receive, as a condition to the 

12 issuance of the bond, a transfer of funds 

13 from the escrow account, or from other 

14 funds furnished by or on behalf of the In15 dian tribe, in an amount that (including 

16 interest earnings from the investment of 

17 the funds in obligations of, or fully guaran18 teed by, the United States, or from other 

19 investments authorized by paragraph (10)) 

20 will produce funds sufficient to timely pay 

21 in full the entire principal amount of the 

22 bond on the stated maturity date of the 

23 bond; 


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1 (iv) invest the funds transferred under 

2 clause (iii) in an investment described in 

3 that clause; and 

4 (v)(I) hold and invest the funds trans5 ferred under clause (iii) in a segregated 

6 fund or account under the agreement; and 

7 (II) use the fund or account solely for 

8 payment of the costs of items described in 

9 paragraph (3). 

10 (D) REQUIREMENTS FOR MAKING DIRECT

11 PAYMENTS.— 

12 (i) PAYMENTS.— 

13 (I) IN GENERAL.—Notwith14 standing any other provision of law, 

15 the trustee shall make any payment 

16 referred to in subparagraph (C)(v) in 

17 accordance with such requirements as 

18 the Indian tribe shall prescribe in the 

19 trust agreement entered into under 

20 subparagraph (C). 

21 (II) INSPECTION.—Before mak22 ing a payment for a project to a con23 tractor under subparagraph (C)(v), to 

24 ensure completion of the project, the 


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1 trustee shall require an inspection of 

2 the project by— 

3 (aa) a local financial institu4 tion; or 

5 (bb) an independent inspect6 ing architect or engineer. 

7 (ii) CONTRACTS.—Each contract re8 ferred to in paragraph (3) shall specify, or 

9 be renegotiated to specify, that payments 

10 under the contract shall be made in ac11 cordance with this paragraph. 

12 (5) PAYMENTS OF PRINCIPAL AND INTEREST.— 

13 (A) PRINCIPAL.— 

14 (i) IN GENERAL.—No principal pay15 ment on any qualified tribal school mod16 ernization bond shall be required under 

17 this subsection until the final, stated date 

18 on which the bond reaches maturity. 

19 (ii) MATURITY; OUTSTANDING PRIN20 CIPAL.—With respect to a qualified tribal 

21 school modernization bond issued under 

22 this subsection— 

23 (I) the bond shall reach maturity 

24 not later than 15 years after the date 

25 of issuance of the bond; and 


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1 (II) on the date on which the 

2 bond reaches maturity, the entire out3 standing principal under the bond 

4 shall become due and payable. 

5 (B) INTEREST.—There shall be awarded a 

6 tax credit under section 1400U of the Internal 

7 Revenue Code of 1986 in lieu of interest on a 

8 qualified tribal school modernization bond 

9 issued under this subsection. 

10 (6) BOND GUARANTEES.— 

11 (A) IN GENERAL.—Payment of the prin12 cipal portion of a qualified tribal school mod13 ernization bond issued under this subsection 

14 shall be guaranteed solely by amounts deposited 

15 with each respective bond trustee as described 

16 in paragraph (4)(C)(iii). 

17 (B) ESTABLISHMENT OF ACCOUNT.— 

18 (i) IN GENERAL.—Notwithstanding 

19 any other provision of law, the Secretary 

20 may— 

21 (I) establish a tribal school mod22 ernization escrow account; and 

23 (II) beginning in fiscal year 

24 2007, from amounts made available 

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1 struction account of the Bureau, de2 posit not more than $30,000,000 for 

3 each fiscal year into the escrow ac4 count. 

5 (ii) TRANSFERS OF EXCESS PRO6 CEEDS.—Excess proceeds held under any 

7 trust agreement that are not needed for 

8 any of the purposes described in clauses 

9 (iii) and (v) of paragraph (4)(C) shall be 

10 transferred, from time to time, by the 

11 trustee for deposit into the escrow account. 

12 (iii) PAYMENTS.—The Secretary shall 

13 use any amounts deposited in the escrow 

14 account under clauses (i) and (ii)— 

15 (I) to make payments to trustees 

16 appointed and acting in accordance 

17 with paragraph (4); or 

18 (II) to make payments described 

19 in paragraph (2)(D). 

20 (7) LIMITATIONS.— 

21 (A) OBLIGATION TO REPAY.— 

22 (i) IN GENERAL.—Notwithstanding 

23 any other provision of law, the principal 

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1 section shall be repaid only to the extent of 

2 any escrowed funds provided under para3 graph (4)(C)(iii). 

4 (ii) NO GUARANTEE.—No qualified 

5 tribal school modernization bond issued by 

6 an Indian tribe under this subsection shall 

7 be an obligation of, and no payment of the 

8 principal of such a bond shall be guaran9 teed by— 

10 (I) the United States; 

11 (II) the Indian tribe; or 

12 (III) the tribal school for which 

13 the bond was issued. 

14 (B) LAND AND FACILITIES.—No land or 

15 facility purchased or improved with amounts 

16 derived from a qualified tribal school mod17 ernization bond issued under this subsection 

18 shall be mortgaged or used as collateral for the 

19 bond. 

20 (8) SALE OF BONDS.—A qualified tribal school 

21 modernization bond may be sold at a purchase price 

22 equal to, in excess of, or at a discount from, the par 

23 amount of the bond. 

24 (9) TREATMENT OF TRUST AGREEMENT EARN25 INGS.—No amount earned through the investment of 


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1 funds under the control of a trustee under any trust 

2 agreement described in paragraph (4) shall be sub3 ject to Federal income taxation. 

4 (10) INVESTMENT OF SINKING FUNDS.—A 

5 sinking fund established for the purpose of the pay6 ment of principal on a qualified tribal school mod7 ernization bond issued under this subsection shall be 

8 invested in— 

9 (A) obligations issued by or guaranteed by 

10 the United States; or 

11 (B) such other assets as the Secretary of 

12 the Treasury may by regulation allow. 

13 SEC. 1334. APPLICATION OF CERTAIN LABOR STANDARDS 

14 ON CONSTRUCTION PROJECTS FINANCED 

15 UNDER PUBLIC SCHOOL MODERNIZATION 

16 PROGRAM. 

17 Section 439 of the General Education Provisions Act 

18 (20 U.S.C. 1232b) is amended— 

19 (1) by inserting ‘‘(a)’’ before ‘‘All laborers and 

20 mechanics’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(b)(1) For purposes of this section, the term ‘appli23 cable program’ also includes the qualified zone academy 

24 bond provisions enacted by section 226 of the Taxpayer 


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1 Relief Act of 1997 and the program established by section 

2 1332 of the America’s Better Classroom Act of 2006. 

3 ‘‘(2) A State or local government participating in a 

4 program described in paragraph (1) shall— 

5 ‘‘(A) in the awarding of contracts, give priority 

6 to contractors with substantial numbers of employ7 ees residing in the school district to be served by the 

8 school being constructed; and 

9 ‘‘(B) include in the construction contract for 

10 such school a requirement that the contractor give 

11 priority in hiring new workers to individuals residing 

12 in such school district. 

13 ‘‘(3) In the case of a program described in paragraph 

14 (1), nothing in this subsection or subsection (a) shall be 

15 construed to deny any tax credit allowed under such pro16 gram. If amounts are required to be withheld from con17 tractors to pay wages to which workers are entitled, such 

18 amounts shall be treated as expended for construction pur19 poses in determining whether the requirements of such 

20 program are met.’’. 


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1 SEC. 1335. TRAINING SERVICES RELATING TO CONSTRUC2 TION OR RECONSTRUCTION OF PUBLIC 

3 SCHOOL FACILITIES. 

4 (a) IN GENERAL.—Section 134(d) of the Workforce 

5 Investment Act of 1998 (29 U.S.C. 2864(d)) is amended 

6 by adding at the end the following: 

7 ‘‘(5) TRAINING SERVICES RELATING TO CON8 STRUCTION OR RECONSTRUCTION OF PUBLIC

9 SCHOOL FACILITIES.— 

10 ‘‘(A) IN GENERAL.—The Governor of each 

11 State, and each local board in the State, shall 

12 ensure that each one-stop center in the State 

13 provides training services related to construc14 tion or reconstruction of public school facilities 

15 receiving funding assistance under an applicable 

16 program. 

17 ‘‘(B) SPECIALIZED PROGRAM.—The pro18 vider of such services shall establish a special19 ized program of training services meeting the 

20 following requirements: 

21 ‘‘(i) The specialized program provides 

22 training for jobs in the construction indus23 try. 

24 ‘‘(ii) The specialized program provides 

25 trained workers for projects for the con26 struction or reconstruction of public school 


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1 facilities receiving funding assistance under 

2 an applicable program. 

3 ‘‘(iii) The specialized program ensures 

4 that skilled workers (residing in the area 

5 to be served by the school facilities) will be 

6 available for the construction or recon7 struction work. 

8 ‘‘(C) COORDINATION.— 

9 ‘‘(i) IN GENERAL.—The specialized 

10 program established under subparagraph 

11 (B) shall be integrated with other activities 

12 carried out under this Act, with the activi13 ties carried out under the Act of August 

14 16, 1937 (commonly known as the ‘Na15 tional Apprenticeship Act’, 50 Stat. 664, 

16 chapter 663; 29 U.S.C. 50 et seq.) by the 

17 State apprenticeship council or agency or 

18 through the Bureau of Apprenticeship and 

19 Training in the Department of Labor, as 

20 appropriate, and with activities carried out 

21 under the Carl D. Perkins Vocational and 

22 Technical Education Act of 1998 (20 

23 U.S.C. 2301 et seq.). 

24 ‘‘(ii) CONSTRUCTION.—Nothing in 

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1 quire services duplicative of the activities 

2 referred to in clause (i). 

3 ‘‘(D) APPLICABLE PROGRAM.—In this sub4 section, the term ‘applicable program’ has the 

5 meaning given the term in section 400(c) of the 

6 General Education Provisions Act (20 U.S.C. 

7 1221(c)) or in 439(b) of such Act (as added by 

8 section 1334 of the Right Time to Reinvest in 

9 America’s Competitiveness and Knowledge 

10 Act).’’. 

11 (b) STATE PLAN.—Section 112(b)(17)(A) of the 

12 Workforce Investment Act of 1998 (29 U.S.C. 

13 2822(b)(17)(A)) is amended— 

14 (1) in clause (iii), by striking ‘‘and’’ at the end; 

15 (2) by redesignating clause (iv) as clause (v); 

16 and 

17 (3) by inserting after clause (iii) the following: 

18 ‘‘(iv) how the Governor of the State, 

19 and each local board in the State, will en20 sure that each one-stop center in the State 

21 will provide a specialized program of train22 ing services under section 134(d)(5); and’’. 


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1 TITLE II—EDUCATE AMERICANS 

2 TO FILL THE JOBS OF THE 

3 FUTURE 

4 SEC. 2001. SHORT TITLE. 

5 This title may be cited as the ‘‘New National Defense 

6 Education Act’’. 

7 SEC. 2002. FINDINGS. 

8 Congress finds the following: 

9 (1) Throughout our Nation’s history, the skills 

10 and education of our workforce have been a major 

11 determinant of the standard of living of the people 

12 of the United States. 

13 (2) Spurred into action by the launch of Sput14 nik, Congress passed the National Defense Edu15 cation Act of 1958 (Public Law 85–864, 72 Stat. 

16 1580). The law, now nearly 50 years old, declared 

17 a national ‘‘educational emergency’’, and Federal ex18 penditures for education more than doubled in the 4 

19 years after its passage. The programs authorized 

20 under the Act helped the United States to improve 

21 rapidly in mathematics, science, engineering, tech22 nology, and foreign languages and led to our domi23 nance in the arms race and the global economy. 

24 (3) Today, our Nation once again faces an 

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1 front a shortage of highly skilled and educated work2 ers, especially in mathematics, science, engineering, 

3 technology, and critical-need foreign languages. As a 

4 percentage of total first university degrees granted, 

5 the United States produced fewer graduates in 

6 mathematics, science, and engineering in 2002 than 

7 the Nation did in 1985. Currently, the United States 

8 Government requires 34,000 employees with foreign 

9 language skills in 100 languages across more than 

10 80 Federal agencies. These trends pose a threat to 

11 our national security and our economic security. 

12 (4) Student achievement in mathematics and 

13 science in elementary school and secondary school 

14 lags behind other nations, according to the Trends 

15 in International Mathematics and Science study and 

16 other studies, including the Programme for Inter17 national Student Assessment, that recently ranked 

18 United States secondary school students 28th out of 

19 40 first- and second-world nations, and tied with 

20 Latvia, in mathematics performance and problem 

21 solving. 

22 (5) According to the most recent National As23 sessment of Educational Progress, less than 40 per24 cent of the students in grade 4 and 30 percent of 

25 the students in grade 8, and only 17 percent of the 


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1 students in grade 12, reach the proficient level in 

mathematics, and approximately 1 2 ⁄3 of the students 

in grades 4 and 8, and nearly 1 3 ⁄2 of the students in 

4 grade 12, do not reach the basic level in science. 

5 (6) A State-by-State comparison of the 2005 

6 National Assessment of Educational Progress aver7 age scale scores for 8th grade mathematics reveals 

that 31 States—more than 1 8 ⁄2 of the States in the 

9 Nation—scored more than 10 points (about 1 grade 

10 level) below the highest scoring State, Massachu11 setts. 

12 (7) More than 200,000,000 children in China 

13 are studying English, a compulsory subject for all 

14 Chinese primary school students. By comparison, 

15 only about 24,000 of approximately 54,000,000 ele16 mentary and secondary school children in the United 

17 States are studying Chinese. 

18 (8) There is a significant shortage of trained 

19 and qualified mathematics and science teachers in 

20 the United States. According to the National Science 

21 Board, in 2002, between 17 and 28 percent of public 

22 secondary school science teachers (depending on the 

23 specific scientific field), and 20 percent of public sec24 ondary school mathematics teachers, lacked full cer25 tification in their teaching field. 


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(9) More than 1 1 ⁄2 of the 20 fastest growing oc2 cupations require postsecondary degrees in mathe3 matics or science. According to the National Science 

4 Board, out of more than 15,000,000 college stu5 dents, less than 400,000 Americans a year graduate 

6 with a bachelor’s degree in mathematics, science, en7 gineering, or technology. According to the National 

8 Science Foundation, only 75,000 American under9 graduate students obtain a master’s degree in math10 ematics, science, engineering, or technology. 

11 (10) In a 2002 Government Accountability Of12 fice report, the United States Army reported that it 

13 was experiencing serious shortfalls of translators and 

14 interpreters in 5 of its 6 critical languages: Arabic, 

15 Korean, Mandarin Chinese, Persian-Farsi, and Rus16 sian. According to the Modern Language Associa17 tion, enrollment in foreign languages declined from 

18 16 percent of college students in 1965 to 8 percent 

19 in 1974, rebounding to just 8.6 percent in 2002. 

20 Less commonly taught languages accounted for only 

21 12 percent of all language enrollments. This means 

22 that 1 percent of American undergraduate students 

23 are studying these critical languages. 

24 (11) In 2002, 79 percent of Americans agreed 

25 that students should have a study-abroad experience 


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1 sometime during college. Only 1 percent of all 

2 United States undergraduate students studied 

3 abroad in the 2001–2002 school year. 

4 (12) The Government Accountability Office es5 timates that the number of students enrolled in 

6 science, technology, engineering, or mathematics 

7 doctoral degree programs at United States institu8 tions of higher education declined from 217,395 dur9 ing the 1995–1996 academic year to 198,504 during 

10 the 2003–2004 academic year. 

11 (13) The extent of this crisis requires a coordi12 nated Federal response and an increased Federal in13 vestment in programs of the Department of Edu14 cation and the National Science Foundation. 

15 Subtitle A—Modernizing America’s 

16 Education System 

17 CHAPTER 1—PREKINDERGARTEN 

18 THROUGH GRADE 16 EDUCATION 

19 SEC. 2111. PURPOSES. 

20 The purposes of this chapter are the following: 

21 (1) To ensure students receive an education 

22 competitive with other industrialized countries. 

23 (2) To assist States in improving the rigor of 

24 standards and assessments. 


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1 (3) To provide for the establishment of pre2 kindergarten through grade 16 student preparedness 

3 councils to better link early childhood education and 

4 school readiness with elementary school success, ele5 mentary student skills with success in secondary 

6 school, and secondary student skills and curricula, 

7 especially with respect to reading, mathematics, and 

8 science, with the demands of higher education, the 

9 21st century workforce, and the Armed Forces, in 

10 order to— 

11 (A) ensure that greater number of stu12 dents, especially low-income and minority stu13 dents, complete secondary school with the 

14 coursework and skills necessary to enter— 

15 (i) credit-bearing coursework in higher 

16 education without the need for remedi17 ation; 

18 (ii) high-paying employment in the 

19 21st century workforce; or 

20 (iii) the Armed Forces. 

21 (4) To establish a system that encourages local 

22 educational agencies to adopt a curriculum that 

23 meets State academic content standards and student 

24 academic achievement standards and prepares all 

25 students for success in elementary school, secondary 


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1 school, and post-secondary endeavors in the 21st 

2 century. 

3 SEC. 2112. DEFINITIONS. 

4 In this chapter: 

5 (1) IN GENERAL.—The terms ‘‘elementary 

6 school’’, ‘‘limited English proficient’’, ‘‘local edu7 cational agency’’, ‘‘scientifically based research’’, 

8 ‘‘secondary school’’, ‘‘Secretary’’, and ‘‘State edu9 cational agency’’ have the meanings given such 

10 terms in section 9101 of the Elementary and Sec11 ondary Education Act of 1965 (20 U.S.C. 7801). 

12 (2) ACADEMIC CONTENT STANDARDS; STUDENT

13 ACADEMIC ACHIEVEMENT STANDARDS.—The terms 

14 ‘‘academic content standards’’ and ‘‘student aca15 demic achievement standards’’, when used with re16 spect to a particular State, mean the academic con17 tent standards and student academic achievement 

18 standards adopted by a State under section 

19 1111(b)(1) of the Elementary and Secondary Edu20 cation Act of 1965 (20 U.S.C. 6311(b)(1)). 

21 (3) 21ST CENTURY CURRICULUM.—The term 

22 ‘‘21st century curriculum’’ means a course of study 

23 identified by a State as preparing secondary school 

24 students for entrance into credit-bearing coursework 

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1 ation, employment in the 21st century workforce, or 

2 entrance into the Armed Forces. A State shall define 

3 the 21st century curriculum in terms of content as 

4 well as course names. 

5 (4) END OF COURSE EXAMINATION.—The term 

6 ‘‘end of course examination’’ means an assessment 

7 of student learning given at the end of a particular 

8 course that is used to measure student learning of 

9 State academic content standards in the subject 

10 matter of the course. 

11 (5) GRADUATION RATE.—The term ‘‘graduation 

12 rate’’ means the percentage of students who grad13 uate from secondary school with a regular diploma 

14 in the standard number of years. 

15 (6) INSTITUTION OF HIGHER EDUCATION.—The 

16 term ‘‘institution of higher education’’ has the 

17 meaning given the term in section 101(a) of the 

18 Higher Education Act of 1965 (20 U.S.C. 1001(a)). 

19 (7) PROFESSIONAL DEVELOPMENT.—The term 

20 ‘‘professional development’’ includes activities that— 

21 (A) improve and increase teachers’ knowl22 edge of the academic subjects the teachers 

23 teach, and enable teachers to become highly 

24 qualified; 


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1 (B) are an integral part of broad edu2 cational improvement plans across the school 

3 and across the local educational agency; 

4 (C) give teachers, principals, and adminis5 trators the knowledge and skills to provide stu6 dents with the opportunity to meet the State 

7 academic content standards and student aca8 demic achievement standards and the 21st cen9 tury curriculum demands; 

10 (D) are high-quality, sustained, intensive, 

11 and classroom-focused, in order to have a posi12 tive and lasting effect on classroom instruction 

13 and the teacher’s performance in the classroom; 

14 (E) advance teacher understanding of ef15 fective instructional strategies that are based on 

16 scientifically based research and are directly 

17 aligned with the State academic content stand18 ards and State assessments; 

19 (F) are designed to give teachers the 

20 knowledge and skills to provide instruction and 

21 appropriate language and academic support 

22 services to limited English proficient students 

23 and students with special needs, including the 

24 appropriate use of curricula and assessments; 


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1 (G) are, as a whole, regularly evaluated for 

2 their impact on increased teacher effectiveness 

3 and improved student academic achievement, 

4 with the findings of the evaluations used to im5 prove the quality of professional development; 

6 and 

7 (H) include instruction in the use of data 

8 and assessments to inform and instruct class9 room practice. 

10 (8) STATE.—The term ‘‘State’’ means each of 

11 the several States of the United States, the District 

12 of Columbia, the Commonwealth of Puerto Rico, the 

13 United States Virgin Islands, Guam, American 

14 Samoa, the Commonwealth of the Northern Mariana 

15 Islands, the Republic of the Marshall Islands, the 

16 Federated States of Micronesia, and the Republic of 

17 Palau. 

18 (9) STATE ASSESSMENT.—The term ‘‘State as19 sessment’’, when used with respect to a particular 

20 State, means the student academic assessments im21 plemented by the State pursuant to section 

22 1111(b)(3) of the Elementary and Secondary Edu23 cation Act of 1965 (20 U.S.C. 6311(b)(3)). 


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1 (10) STUDENT PREPAREDNESS.—The term 

2 ‘‘student preparedness’’ means preparedness based 

3 on the knowledge and skills that— 

4 (A) are prerequisites for entrance into— 

5 (i) credit-bearing coursework in higher 

6 education without the need for remedi7 ation; 

8 (ii) the 21st century workforce; and 

9 (iii) the Armed Forces; 

10 (B) can be measured and verified objec11 tively using widely accepted professional assess12 ment standards; and 

13 (C) are consistent with widely accepted 

14 professional assessment standards and competi15 tive with international levels of preparedness of 

16 students for postsecondary success. 

17 SEC. 2113. ALIGNING STATE STANDARDS WITH NATIONAL 

18 BENCHMARKS. 

19 (a) REPORT ON RESULTS OF STATE ASSESSMENTS

20 AND NATIONAL ASSESSMENT.—Not later than 90 days 

21 after each release of the results of the National Assess22 ment of Educational Progress (as carried out under sec23 tion 303(b)(2) of the National Assessment of Educational 

24 Progress Authorization Act (20 U.S.C. 9622(b)(2)) and 

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1 cation Act of 1965 (20 U.S.C. 6311(c)(2)) in reading or 

2 mathematics (or, beginning in 2009, science) in grades 4 

3 and 8, the Secretary shall— 

4 (1) prepare and submit to Congress the report 

5 described in subsection (b) on the results of the 

6 State assessments and the assessments of reading 

7 and mathematics, and, beginning in 2009, science, 

8 in grades 4 and 8, required under section 1111(c)(2) 

9 of the Elementary and Secondary Education Act of 

10 1965; and 

11 (2) identify States with significant discrepancies 

12 in performance between the 2 assessments, as de13 scribed in subsection (b)(3). 

14 (b) CONTENTS OF REPORT.— 

15 (1) IN GENERAL.—The report described in this 

16 subsection shall include the following information for 

17 each subject area and grade described in subsection 

18 (a)(1) in each State: 

19 (A) The percentage of students who per20 formed at or above the basic level on the State 

21 assessment— 

22 (i) for the most recent applicable year; 

23 (ii) for the preceding year; and 

24 (iii) for the previous year in which the 

25 assessment required under section 


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1 1111(c)(2) of the Elementary and Sec2 ondary Education Act of 1965 was given 

3 in such subject, 

4 and the change in such percentages between 

5 those assessments. 

6 (B) The percentage of students who per7 formed at or above the proficient level on the 

8 State assessment— 

9 (i) for the most recent applicable year; 

10 (ii) for the preceding year; and 

11 (iii) for the previous year in which the 

12 assessment required under section 

13 1111(c)(2) of the Elementary and Sec14 ondary Education Act of 1965 was given 

15 in such subject, 

16 and the change in such percentages between 

17 those assessments. 

18 (C) The percentage of students who per19 formed at or above the basic level on the assess20 ment required under section 1111(c)(2) of the 

21 Elementary and Secondary Education Act of 

22 1965— 

23 (i) for the most recent applicable year; 

24 and 

25 (ii) for the previous such assessment, 


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1 and the change in such percentages between 

2 those assessments. 

3 (D) The percentage of students who per4 formed at or above the proficient level on the 

5 assessment required under section 1111(c)(2) 

6 of the Elementary and Secondary Education 

7 Act of 1965— 

8 (i) for the most recent applicable year; 

9 and 

10 (ii) for the previous such assessment, 

11 and the change in such percentages between 

12 those assessments. 

13 (E) The difference between— 

14 (i) the percentage of students who 

15 performed at or above the basic level for 

16 the most recent applicable year on the as17 sessment required under section 

18 1111(c)(2) of the Elementary and Sec19 ondary Education Act of 1965; and 

20 (ii) the percentage of students who 

21 performed at or above the basic level on 

22 the State assessment for such year. 

23 (F) The difference between— 

24 (i) the percentage of students who 

25 performed at or above the proficient level 


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1 for the most recent applicable year on the 

2 assessment required under section 

3 1111(c)(2) of the Elementary and Sec4 ondary Education Act of 1965; and 

5 (ii) the percentage of students who 

6 performed at or above the proficient level 

7 on the State assessment for such year. 

8 (2) ANALYSIS.—In addition to the information 

9 described in paragraph (1), the Secretary shall in10 clude in the report— 

11 (A) an analysis of how the achievement of 

12 students in grades 4, 8, and 12, and the pre13 paredness of students in grade 12 (when such 

14 data on preparedness exists from assessments 

15 described in section 303 of the National Assess16 ment of Educational Progress Authorization 

17 Act), in the United States compares to the 

18 achievement and preparedness of students in 

19 other industrialized countries; and 

20 (B) possible reasons for any deficiencies 

21 identified in the achievement or preparedness of 

22 United States students compared to students in 

23 other industrialized countries. 

24 (3) RANKING.—The Secretary shall— 


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1 (A) using the information described in 

2 paragraph (1), rank the States according to the 

3 degree to which student performance on State 

4 assessments differs from performance on the 

5 assessments required under section 1111(c)(2) 

6 of the Elementary and Secondary Education 

7 Act of 1965; and 

8 (B) identify those States with the most 

9 significant discrepancies in performance be10 tween the State assessments and the assess11 ments required under section 1111(c)(2) of the 

12 Elementary and Secondary Education Act of 

13 1965. 

14 (c) REPORT ON STATE PROGRESS.—Beginning 5 

15 years after the date of enactment of this Act, the Sec16 retary shall include in the report described in subsection 

17 (a)(1) the following: 

18 (1) Information about the progress made by 

19 States to decrease discrepancies in student perform20 ance on the State assessments and the assessments 

21 required under section 1111(c)(2) of the Elementary 

22 and Secondary Education Act of 1965. 

23 (2) The differences that exist in States across 

24 subject areas and grades. 


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1 SEC. 2114. NATIONAL ASSESSMENT OF EDUCATIONAL 

2 PROGRESS CHANGES. 

3 (a) NATIONAL ASSESSMENT GOVERNING BOARD.— 

4 Section 302 of the National Assessment of Educational 

5 Progress Authorization Act (20 U.S.C. 9621) is amend6 ed— 

7 (1) in subsection (a), by striking ‘‘shall formu8 late’’ and all that follows through the period at the 

9 end and inserting ‘‘shall— 

10 ‘‘(1) formulate policy guidelines for the Na11 tional Assessment of Educational Progress (carried 

12 out under section 303); and 

13 ‘‘(2) carry out, upon the request of a State, an 

14 alignment analysis (under section 304) comparing a 

15 State’s academic content standards and student aca16 demic achievement standards adopted under section 

17 1111(b)(1) of the Elementary and Secondary Edu18 cation Act of 1965, assessment specifications, as19 sessment questions, and performance standards with 

20 national benchmarks reflected in the assessments 

21 authorized under this Act.’’; 

22 (2) in subsection (b)(1), by adding at the end 

23 the following: 

24 ‘‘(O) One representative of the Armed 

25 Forces with expertise in military personnel re26 quirements and military preparedness, who 


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1 shall serve as an ex-officio, nonvoting mem2 ber.’’; 

3 (3) in subsection (c), by striking paragraph (4); 

4 (4) in subsection (e)— 

5 (A) in paragraph (1)— 

6 (i) in subparagraph (B), by inserting 

7 ‘‘and grade 12 student preparedness lev8 els’’ after ‘‘achievement levels’’; 

9 (ii) in subparagraph (D), by inserting 

10 ‘‘members of the business and military 

11 communities,’’ after ‘‘parents,’’; 

12 (iii) in subparagraph (E), by inserting 

13 ‘‘and’’ after ‘‘subject matter,’’; 

14 (iv) by redesignating subparagraphs 

15 (G), (H), (I), and (J) as subparagraphs 

16 (H), (I), (K), and (L), respectively; 

17 (v) by inserting after subparagraph 

18 (F) the following: 

19 ‘‘(G) consistent with section 303, measure 

20 grade 12 student preparedness;’’; 

21 (vi) by inserting after subparagraph 

22 (I) (as redesignated by clause (iv)) the fol23 lowing: 


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1 ‘‘(J) ensure the rigor of the National As2 sessment of Educational Progress framework 

3 and assessments, taking into consideration— 

4 ‘‘(i) the knowledge and skills that are 

5 prerequisite to credit-bearing coursework 

6 in higher education without the need for 

7 remediation, the 21st century workforce, 

8 and the Armed Forces; and 

9 ‘‘(ii) rigorous international content 

10 and performance standards, and how the 

11 achievement of students in grades 4, 8, 

12 and 12, and the preparedness of students 

13 in grade 12, in the United States compare 

14 to the achievement and the preparedness of 

15 students in other industrialized coun16 tries;’’; 

17 (vii) in subparagraph (K) (as redesig18 nated by clause (iv)), by striking ‘‘and’’ 

19 after the semicolon; 

20 (viii) in subparagraph (L) (as redesig21 nated by clause (iv)), by striking the period 

22 and inserting ‘‘; and’’; 

23 (ix) by inserting after subparagraph 

24 (L) the following: 


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1 ‘‘(M) conduct an alignment analysis as de2 scribed in section 304 for each State that re3 quests such analysis.’’; and 

4 (x) in the flush matter at the end— 

5 (I) by inserting ‘‘for an assess6 ment’’ after ‘‘data’’; 

7 (II) by inserting ‘‘Assessment 

8 Board’s’’ after ‘‘prior to the’’; and 

9 (III) by striking ‘‘(J)’’ and in10 serting ‘‘(L)’’; 

11 (B) in paragraph (4), by inserting ‘‘of 

12 Educational Progress’’ after ‘‘National Assess13 ment’’; 

14 (C) in paragraph (5), in the paragraph 

15 heading, by inserting ‘‘ADVICE’’ after ‘‘TECH16 NICAL’’; and 

17 (D) in paragraph (6), by inserting ‘‘or 

18 grade 12 student preparedness levels’’ after 

19 ‘‘student achievement levels’’; and 

20 (5) in subsection (g)(1), by inserting ‘‘of Edu21 cational Progress’’ after ‘‘National Assessment’’. 

22 (b) NATIONAL ASSESSMENT OF EDUCATIONAL

23 PROGRESS.—Section 303 of the National Assessment of 

24 Educational Progress Authorization Act (20 U.S.C. 9622) 

25 is amended— 


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1 (1) in subsection (b)— 

2 (A) in the subsection heading, by striking 

3 ‘‘PURPOSE’’ and inserting ‘‘PURPOSES’’; 

4 (B) by striking paragraph (1) and insert5 ing the following: 

6 ‘‘(1) PURPOSES.—The purposes of this section 

7 are— 

8 ‘‘(A) to provide, in a timely manner, a fair 

9 and accurate measurement of student achieve10 ment and grade 12 student preparedness in 

11 reading, mathematics, science, and other sub12 ject matter as specified in this section; and 

13 ‘‘(B) to report trends in student achieve14 ment and grade 12 student preparedness in 

15 reading, mathematics, science, and other sub16 ject matter as specified in this section.’’; 

17 (C) in paragraph (2)— 

18 (i) in subparagraph (B), by striking 

19 ‘‘reading and mathematics’’ and inserting 

20 ‘‘reading, mathematics, and science’’; 

21 (ii) by striking subparagraph (C) and 

22 inserting the following: 

23 ‘‘(C) conduct a national assessment and 

24 collect and report assessment data, including 

25 achievement and student preparedness data 


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1 trends, in a valid and reliable manner on stu2 dent academic achievement and student pre3 paredness in public and private schools in read4 ing, mathematics, and science at least once 

5 every 2 years in grade 12;’’; 

6 (iii) in subparagraph (D)— 

7 (I) by striking ‘‘subparagraph 

8 (B) are implemented and the require9 ments described in subparagraph (C) 

10 are met,’’ and inserting ‘‘subpara11 graphs (B) and (C) are imple12 mented,’’; and 

13 (II) by striking ‘‘science,’’; 

14 (iv) in subparagraph (E)— 

15 (I) by striking ‘‘reading and 

16 mathematics’’ and inserting ‘‘reading, 

17 mathematics, and science’’; and 

18 (II) by striking ‘‘subparagraph 

19 (B)’’ and inserting ‘‘subparagraphs 

20 (B) and (C)’’; and 

21 (v) in subparagraph (H), by striking 

22 ‘‘achievement data’’ and inserting ‘‘student 

23 achievement data and grade 12 student 

24 preparedness data’’; 

25 (D) in paragraph (3)— 


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1 (i) in subparagraph (A)— 

2 (I) in clause (i), by striking 

3 ‘‘reading and mathematics’’ and in4 serting ‘‘reading, mathematics, and 

5 science’’; 

6 (II) in clause (ii)— 

7 (aa) by inserting ‘‘and grade 

8 12 student preparedness’’ after 

9 ‘‘achievement’’; and 

10 (bb) by striking ‘‘reading 

11 and mathematics’’ and inserting 

12 ‘‘reading, mathematics, and 

13 science’’; and 

14 (III) in clause (iv), by striking 

15 ‘‘an evaluation’’ and inserting ‘‘a re16 view’’; and 

17 (ii) in subparagraph (C)(ii), by strik18 ing ‘‘reading and mathematics’’ and insert19 ing ‘‘reading, mathematics, and science’’; 

20 (E) in paragraph (4)(B), by striking ‘‘, re21 quire, or influence’’ and inserting ‘‘or require’’; 

22 and 

23 (F) in paragraph (5)(B), by striking ‘‘aca24 demic achievement’’ and inserting ‘‘academic 


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1 achievement or grade 12 student prepared2 ness’’; 

3 (2) in subsection (c)(3)(A), by striking ‘‘aca4 demic achievement’’ and inserting ‘‘academic 

5 achievement or grade 12 preparedness’’; 

6 (3) in subsection (d)(3)— 

7 (A) in subparagraph (A), by striking 

8 ‘‘reading and mathematics in grades 4 and 8’’ 

9 and inserting ‘‘reading, mathematics, and 

10 science in grades 4 and 8’’; and 

11 (B) in subparagraph (B), by striking 

12 ‘‘reading and mathematics assessments in 

13 grades 4 and 8’’ and inserting ‘‘reading, mathe14 matics, and science assessments in grades 4 

15 and 8’’; 

16 (4) in subsection (e)— 

17 (A) in the subsection heading, by inserting 

18 ‘‘AND GRADE 12 STUDENT PREPAREDNESS

19 LEVELS’’ after ‘‘LEVELS’’; 

20 (B) in paragraph (1)— 

21 (i) by striking the paragraph heading 

22 and inserting ‘‘DEVELOPMENT.—’’; and 

23 (ii) by inserting ‘‘, and develop grade 

24 12 student preparedness levels’’ after 

25 ‘‘subsection (b)(2)(F)’’; 


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1 (C) in paragraph (2)— 

2 (i) by striking subparagraph (A) and 

3 inserting the following: 

4 ‘‘(A) STUDENT ACHIEVEMENT AND GRADE

5 12 PREPAREDNESS LEVELS.— 

6 ‘‘(i) STUDENT ACHIEVEMENT LEV7 ELS.—The student achievement levels de8 scribed in paragraph (1) shall be deter9 mined by— 

10 ‘‘(I) identifying the knowledge 

11 and skills that— 

12 ‘‘(aa) are prerequisite to 

13 credit-bearing coursework in 

14 higher education without the 

15 need for remediation in English, 

16 mathematics, or science, partici17 pation in the 21st century work18 force, and the Armed Forces or, 

19 in the case of grade 4 and grade 

20 8 students, are prerequisite to 

21 grade 12 preparedness; 

22 ‘‘(bb) are competitive with 

23 rigorous international content 

24 and performance standards; and 


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1 ‘‘(cc) can be measured and 

2 verified objectively using widely 

3 accepted professional assessment 

4 standards; and 

5 ‘‘(II) developing student achieve6 ment levels that are— 

7 ‘‘(aa) based on the knowl8 edge and skills identified in sub9 clause (I); 

10 ‘‘(bb) based on the appro11 priate level of subject matter 

12 knowledge for the grade levels to 

13 be assessed, or the age of the 

14 students, as the case may be; and 

15 ‘‘(cc) consistent with rel16 evant widely accepted profes17 sional assessment standards. 

18 ‘‘(ii) GRADE 12 STUDENT PREPARED19 NESS LEVELS.—The grade 12 student pre20 paredness levels described in paragraph (1) 

21 shall be determined by— 

22 ‘‘(I) identifying the knowledge 

23 and skills that— 

24 ‘‘(aa) are prerequisite to 

25 credit-bearing coursework in 


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1 higher education without the 

2 need for remediation in English, 

3 mathematics, or science, partici4 pation in the 21st century work5 force, and the Armed Forces; 

6 ‘‘(bb) are competitive with 

7 rigorous international content 

8 and performance standards; and 

9 ‘‘(cc) can be measured and 

10 verified objectively using widely 

11 accepted professional assessment 

12 standards; and 

13 ‘‘(II) developing grade 12 student 

14 preparedness levels that are— 

15 ‘‘(aa) based on the knowl16 edge and skills identified in sub17 clause (I); and 

18 ‘‘(bb) consistent with widely 

19 accepted professional assessment 

20 standards.’’; and 

21 (ii) in subparagraph (C), by striking 

22 ‘‘achievement levels’’ and inserting ‘‘stu23 dent achievement levels and grade 12 stu24 dent preparedness levels’’; 

25 (D) in paragraph (3)— 


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1 (i) by striking ‘‘After determining 

2 that such levels’’ and inserting ‘‘After de3 termining that the student achievement 

4 levels and grade 12 student preparedness 

5 levels’’; and 

6 (ii) by striking ‘‘an evaluation’’ and 

7 inserting ‘‘a review’’; and 

8 (E) in paragraph (4), by inserting ‘‘or 

9 grade 12 student preparedness levels’’ after 

10 ‘‘achievement levels’’; and 

11 (5) in subsection (f)(1)— 

12 (A) in subparagraph (A), by inserting 

13 ‘‘and grade 12 student preparedness levels’’ 

14 after ‘‘student achievement levels’’; and 

15 (B) in subparagraph (B)— 

16 (i) in clause (i), by inserting ‘‘or 

17 grade 12 student preparedness’’ after 

18 ‘‘achievement’’; 

19 (ii) in clause (ii), by inserting ‘‘and 

20 grade 12 student preparedness levels’’ 

21 after ‘‘achievement levels’’; 

22 (iii) by striking clause (iii) and insert23 ing the following: 

24 ‘‘(iii) whether any authorized assess25 ment is being administered as a random 


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1 sample and is reporting the trends in stu2 dent achievement or grade 12 student pre3 paredness in a valid and reliable manner in 

4 the subject areas being assessed;’’; 

5 (iv) in clause (iv), by striking ‘‘and’’ 

6 after the semicolon; 

7 (v) in clause (v), by striking ‘‘and 

8 mathematical knowledge.’’ and inserting 

9 ‘‘and mathematical knowledge and sci10 entific knowledge; and’’; and 

11 (vi) by adding at the end the fol12 lowing: 

13 ‘‘(vi) whether the appropriate author14 ized assessments are measuring, consistent 

15 with this section, the preparedness of stu16 dents in grade 12 in the United States for 

17 entry into— 

18 ‘‘(I) credit-bearing coursework in 

19 higher education without the need for re20 mediation in English, mathematics, or 

21 science; 

22 ‘‘(II) the 21st century workforce; and 

23 ‘‘(III) the Armed Forces.’’. 


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1 (c) NATIONAL BENCHMARKS.—The National Assess2 ment of Educational Progress Authorization Act (20 

3 U.S.C. 9621 et seq.) is amended— 

4 (1) by redesignating sections 304 and 305 as 

5 sections 305 and 306, respectively; and 

6 (2) by inserting after section 303 the following: 

7 ‘‘SEC. 304. NATIONAL BENCHMARKS. 

8 ‘‘(a) PURPOSES.—The purposes of this section are— 

9 ‘‘(1) to encourage the coordination of, and con10 sistency between— 

11 ‘‘(A) a State’s academic content standards 

12 and student academic achievement standards 

13 adopted under section 1111(b)(1) of the Ele14 mentary and Secondary Education Act of 1965, 

15 assessment specifications, and assessment ques16 tions; and 

17 ‘‘(B) national benchmarks, as reflected in 

18 the National Assessment of Educational 

19 Progress; 

20 ‘‘(2) to assist States in increasing the rigor of 

21 their State academic content standards, student aca22 demic achievement standards, assessment specifica23 tions, and assessment questions, to ensure that such 

24 are competitive with rigorous national and inter25 national benchmarks; and 


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1 ‘‘(3) to improve the instruction and academic 

2 achievement of students, beginning in the early 

3 grades, to ensure that secondary school graduates 

4 are well-prepared to enter— 

5 ‘‘(A) credit-bearing coursework in higher 

6 education without the need for remediation; 

7 ‘‘(B) the 21st century workforce; or 

8 ‘‘(C) the Armed Forces. 

9 ‘‘(b) ALIGNMENT ANALYSIS.— 

10 ‘‘(1) IN GENERAL.—When the chief State 

11 school officer of a State identifies a need for, and re12 quests the Assessment Board to conduct, an align13 ment analysis for the State in reading, mathematics, 

14 or science in grades 4 and 8, the Assessment Board 

15 shall perform an alignment analysis of the State’s 

16 academic content standards and student academic 

17 achievement standards adopted under section 

18 1111(b)(1) of the Elementary and Secondary Edu19 cation Act of 1965 (20 U.S.C. 6311(b)(1)), assess20 ment specifications, and assessment questions, for 

21 the identified subject in grades 4 and 8. Such anal22 ysis shall begin not later than 180 days after the 

23 alignment analysis is requested. 


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1 ‘‘(2) ASSESSMENT BOARD RESPONSIBILITIES.— 

2 As part of the alignment analysis, the Assessment 

3 Board shall— 

4 ‘‘(A) identify the differences between the 

5 State’s academic content standards and student 

6 academic achievement standards, assessment 

7 specifications, and assessment questions for the 

8 subject identified by the State, and national 

9 benchmarks reflected in the National Assess10 ment of Educational Progress in such subject in 

11 grades 4 and 8; 

12 ‘‘(B) at the State’s request, recommend 

13 steps for, and policy questions such State 

14 should consider regarding, the alignment of the 

15 State’s academic content standards and student 

16 academic achievement standards in the identi17 fied subject, with national benchmarks reflected 

18 in the National Assessment of Educational 

19 Progress in such subject in grades 4 and 8; and 

20 ‘‘(C) at the State’s request, and in con21 junction with a State prekindergarten through 

22 grade 16 student preparedness council estab23 lished under section 2115 of the New National 

24 Defense Education Act, assist in the developVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00150 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 ment of a plan described in section 

2 2115(e)(1)(C) of such Act. 

3 ‘‘(3) CONTRACT.—At the discretion of the As4 sessment Board, the Assessment Board may enter 

5 into a contract with an entity that possesses the 

6 technical expertise to conduct the analysis described 

7 in this subsection. 

8 ‘‘(4) STATE PANEL.—The chief State school of9 ficer of a State participating in an alignment anal10 ysis described in this subsection shall appoint a 

11 panel of not less than 6 individuals to partner with 

12 the Assessment Board in conducting the alignment 

13 analysis. Such panel— 

14 ‘‘(A) shall include— 

15 ‘‘(i) local and State curriculum ex16 perts; 

17 ‘‘(ii) relevant content and pedagogy 

18 experts, including representatives of enti19 ties with widely accepted national edu20 cational standards and assessments; and 

21 ‘‘(iii) not less than 1 entity that pos22 sesses the technical expertise to assist the 

23 State in implementing standards-based re24 form, which may be the same entity with 

25 which the Assessment Board contracts to 


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1 conduct the analysis under paragraph (3); 

2 and 

3 ‘‘(B) may include other State and local 

4 representatives and representatives of organiza5 tions with relevant expertise.’’. 

6 (d) DEFINITION OF SECRETARY.—Section 305 of the 

7 National Assessment of Educational Progress Authoriza8 tion Act (as redesignated by subsection (c)(1)) is amend9 ed— 

10 (1) by redesignating paragraph (2) as para11 graph (3); and 

12 (2) by inserting after paragraph (1) the fol13 lowing: 

14 ‘‘(2) SECRETARY.—The term ‘Secretary’ means 

15 the Secretary of Education.’’. 

16 (e) AUTHORIZATION OF APPROPRIATIONS.—Section 

17 306(a) of the National Assessment of Educational 

18 Progress Authorization Act (as redesignated by subsection 

19 (c)(1)) is amended— 

20 (1) by striking paragraph (1) and inserting the 

21 following: 

22 ‘‘(1) for fiscal year 2007— 

23 ‘‘(A) $7,500,000 to carry out section 302; 

24 ‘‘(B) $200,000,000 to carry out section 

25 303; and 


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1 ‘‘(C) $10,000,000 to carry out section 304; 

2 and’’; and 

3 (2) in paragraph (2)— 

4 (A) by striking ‘‘5 succeeding’’ and insert5 ing ‘‘4 succeeding’’; and 

6 (B) by striking ‘‘and 303, as amended by 

7 section 401 of this Act’’ and inserting ‘‘, 303, 

8 and 304’’. 

9 (f) CONFORMING CHANGES AND AMENDMENTS.— 

10 (1) CONFORMING CHANGES TO THE ELEMEN11 TARY AND SECONDARY EDUCATION ACT OF 1965.— 

12 (A) STATE PLANS.—Section 1111(c)(2) of 

13 the Elementary and Secondary Education Act 

14 of 1965 (20 U.S.C. 6311(c)(2)) is amended by 

15 striking ‘‘and mathematics’’ and inserting ‘‘, 

16 mathematics, and science’’. 

17 (B) LOCAL EDUCATIONAL AGENCY

18 PLANS.—Section 1112(b)(1)(F) of the Elemen19 tary and Secondary Education Act of 1965 (20 

20 U.S.C. 6312(b)(1)(F)) is amended by striking 

21 ‘‘reading and mathematics’’ and inserting 

22 ‘‘reading, mathematics, and science’’. 

23 (2) CONFORMING AMENDMENT.—Section 

24 113(a)(1) of the Education Sciences Reform Act of 

25 2002 (20 U.S.C. 9513(a)(1)) is amended by striking 


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1 ‘‘section 302(e)(1)(J)’’ and inserting ‘‘section 

2 302(e)(1)(L)’’. 

3 SEC. 2115. PREKINDERGARTEN THROUGH GRADE 16 STU4 DENT PREPAREDNESS COUNCIL GRANTS. 

5 (a) PROGRAM AUTHORIZED.— 

6 (1) IN GENERAL.—From amounts appropriated 

7 under subsection (g) for a fiscal year, the Secretary 

8 is authorized to award, on a competitive basis, 

9 grants to States for the purpose of allowing the 

10 States to establish State prekindergarten through 

11 grade 16 student preparedness councils (referred to 

12 in this section as ‘‘councils’’) that— 

13 (A) convene stakeholders within the State 

14 and create a forum for identifying and delib15 erating on educational issues that cut across 

16 prekindergarten through grade 12 education 

17 and higher education, and transcend any single 

18 system of education’s ability to address; 

19 (B) develop and implement a plan for im20 proving the rigor of a State’s academic content 

21 standards, student academic achievement stand22 ards, assessment specifications, and assessment 

23 questions as necessary, to ensure such stand24 ards and assessments meet national and inter25 national benchmarks as reflected in the assessVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00154 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 ments required under section 303(b)(2) of the 

2 National Assessment of Educational Progress 

3 Authorization Act (20 U.S.C. 9622(b)(2)) or as 

4 defined by the council as necessary for success 

5 in credit-bearing coursework in higher edu6 cation without the need for remediation, the 

7 21st century workforce, or the Armed Forces; 

8 (C) inform the design and implementation 

9 of integrated prekindergarten through grade 16 

10 data systems, which— 

11 (i) will allow the State to track the 

12 progress of individual students from pre13 kindergarten through grade 12 and into 

14 higher education; and 

15 (ii) shall be capable of being linked 

16 with appropriate databases on service in 

17 the Armed Forces and participation in the 

18 21st century workforce; and 

19 (D) shall develop challenging— 

20 (i) school readiness standards; 

21 (ii) curricula for elementary schools 

22 and middle schools; and 

23 (iii) 21st century curricula for sec24 ondary schools. 


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1 (2) DURATION.—The Secretary shall award 

2 grants under this section for a period of not more 

3 than 5 years. 

4 (3) EXISTING STATE COUNCIL.—A State with 

5 an existing State council may qualify for the pur6 poses of a grant under this section if— 

7 (A) such council— 

8 (i) has the authority to carry out this 

9 section; and 

10 (ii) includes the members required 

11 under subsection (b); or 

12 (B) the State amends the membership or 

13 responsibilities of the existing council to meet 

14 the requirements of subparagraph (A). 

15 (b) COMPOSITION.— 

16 (1) REQUIRED MEMBERS.—The members of a 

17 council described in subsection (a) shall include— 

18 (A) the Governor of the State or the des19 ignee of the Governor; 

20 (B) the chief executive officer of the State 

21 public institution of higher education system, if 

22 such a position exists; 

23 (C) the chief executive officer of the State 

24 Higher Education Coordinating Board; 

25 (D) the chief State school officer; 


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1 (E) not less than 1 representative each 

2 from— 

3 (i) the business community; and 

4 (ii) the Armed Forces; 

5 (F) a public elementary school teacher em6 ployed in the State; and 

7 (G) a public secondary school teacher em8 ployed in the State. 

9 (2) OPTIONAL MEMBERS.—The council de10 scribed in subsection (a) may also include— 

11 (A) a representative from— 

12 (i) a private institution of higher edu13 cation; 

14 (ii) the Chamber of Commerce for the 

15 State; 

16 (iii) a civic organization; 

17 (iv) a civil rights organization; 

18 (v) a community organization; or 

19 (vi) an organization with expertise in 

20 world cultures; 

21 (B) the State official responsible for eco22 nomic development, if such a position exists; or 

23 (C) a dean or similar representative for a 

24 school of education at an institution of higher 


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1 education or a similar teacher certification or li2 censure program. 

3 (c) TIMELINE.—A State receiving a grant under this 

4 section shall establish a council (or use or amend an exist5 ing council in accordance with subsection (a)(3)) not later 

6 than 60 days after the receipt of the grant. 

7 (d) APPLICATION.— 

8 (1) IN GENERAL.—Each State desiring a grant 

9 under this section shall submit an application to the 

10 Secretary at such time, in such manner, and accom11 panied by such information as the Secretary may 

12 reasonably require. 

13 (2) CONTENTS.—Each application submitted 

14 under paragraph (1) shall— 

15 (A) demonstrate that the opinions of the 

16 larger education, business, and military commu17 nity, including parents, students, teachers, 

18 teacher educators, principals, school administra19 tors, and business leaders, will be represented 

20 during the determination of the State academic 

21 content standards and student academic 

22 achievement standards, assessment specifica23 tions, assessment questions, and the develop24 ment of curricula, if applicable; 


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1 (B) include a comprehensive plan to pro2 vide high-quality professional development for 

3 teachers, paraprofessionals, principals, and 

4 school administrators; 

5 (C) explain how the State will provide as6 sistance to local educational agencies in imple7 menting rigorous State standards through sub8 stantive curricula, including scientifically based 

9 remediation and acceleration opportunities for 

10 students; and 

11 (D) explain how the State and the council 

12 will leverage additional State, local, and other 

13 funds to pursue curricular alignment and stu14 dent success. 

15 (e) USE OF FUNDS.— 

16 (1) REQUIRED ACTIVITIES.—A State receiving 

17 a grant under this section shall use the grant funds 

18 to establish a council that shall carry out the fol19 lowing: 

20 (A) Design and implement an integrated 

21 prekindergarten through grade 16 longitudinal 

22 data system for the State, if such system does 

23 not exist, that will allow the State to track the 

24 progress of students from prekindergarten, 

25 through grade 12, and into higher education, 


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1 the 21st century workforce, and the Armed 

2 Forces. The data system shall— 

3 (i) include— 

4 (I) a unique statewide student 

5 identifier for each student; 

6 (II) student-level enrollment, de7 mographic, and program participation 

8 information, including race or eth9 nicity, gender, and income status; 

10 (III) the ability to match indi11 vidual students’ test records from year 

12 to year to measure academic growth; 

13 (IV) information on untested stu14 dents; 

15 (V) a teacher identifier system 

16 with the ability to match teachers to 

17 students; 

18 (VI) student-level transcript in19 formation, including information on 

20 courses completed and grades earned; 

21 (VII) student-level college pre22 paredness examination scores; 

23 (VIII) student-level graduation 

24 and dropout data; 


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1 (IX) the ability to match student 

2 records between the prekindergarten 

3 through grade 12 and the postsec4 ondary systems; 

5 (X) a State data audit system as6 sessing data quality, validity, and reli7 ability; 

8 (XI) rates of student attendance 

9 at institutions of higher education; 

10 (XII) rates of student enrollment 

11 and retention in the Armed Forces; 

12 and 

13 (XIII) student nonmilitary post14 secondary employment information; 

15 (ii) to the extent possible, coordinate 

16 with other relevant State databases, such 

17 as criminal justice or social services data 

18 systems; 

19 (iii) allow the State to analyze correla20 tions between course-taking patterns in 

21 prekindergarten through grade 12 and out22 comes after secondary school graduation, 

23 including— 

24 (I) entry into higher education; 


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1 (II) the need for, and cost of, re2 mediation in higher education; 

3 (III) graduation from higher edu4 cation; 

5 (IV) entry into the 21st century 

6 workforce; 

7 (V) entry into the Armed Forces; 

8 and 

9 (VI) to the extent possible 

10 through linkages with appropriate 

11 databases on service in the Armed 

12 Forces and participation in the 21st 

13 century workforce, persistence in the 

14 Armed Forces and continued partici15 pation in the 21st century workforce; 

16 and 

17 (iv) ensure that the use of any avail18 able data does not allow for the public 

19 identification of the individual student’s 

20 personally identifiable information, and 

21 that all data shall be collected and main22 tained in accordance with section 444 of 

23 the General Education Provisions Act (20 

24 U.S.C. 1232g; commonly referred to as the 


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1 Family Educational Rights and Privacy 

2 Act of 1974). 

3 (B) If an integrated prekindergarten 

4 through grade 16 longitudinal data system ex5 ists or is currently being built, ensure that it 

6 complies with the requirements described in 

7 subparagraph (A). 

8 (C) Develop and implement a plan to in9 crease the rigor of standards or assessments in 

10 reading, mathematics, or science in order to 

11 better align such standards or assessments with 

12 national benchmarks reflected in the National 

13 Assessment of Educational Progress in grades 4 

14 and 8 (in accordance with the results of the 

15 alignment analysis conducted under section 304 

16 of the National Assessment of Educational 

17 Progress Authorization Act), and in other 

18 grades to ensure the alignment of kindergarten 

19 through grade 12 standards or assessments 

20 with the revisions made in grades 4 and 8, or 

21 to align such standards or assessments with the 

22 demands of higher education, the 21st century 

23 workforce, or the Armed Forces or other na24 tional and international benchmarks identified 

25 by the council. Such plan may include— 


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1 (i) an articulation of the steps nec2 essary— 

3 (I) for revising the State aca4 demic content standards and student 

5 academic achievement standards, as6 sessment specifications, and assess7 ment questions for the identified sub8 ject; and 

9 (II) to better align the standards 

10 and the assessment specifications and 

11 questions described in subclause (I) 

12 with— 

13 (aa) national benchmarks as 

14 reflected in the National Assess15 ment of Educational Progress re16 quired under section 303 of the 

17 National Assessment of Edu18 cational Progress Authorization 

19 Act (20 U.S.C. 9622) for the 

20 identified subject; or 

21 (bb) the demands of higher 

22 education, the 21st century work23 force, or the Armed Forces or 

24 other national or international 


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1 benchmarks identified by the 

2 council; 

3 (ii) an articulation of the steps nec4 essary and the process the State will un5 dertake to revise standards or assessments, 

6 or both, in the identified subject; 

7 (iii) a description of the partners the 

8 State will work with to revise standards or 

9 assessments, or both; and 

10 (iv) a description of the activities the 

11 State will undertake to implement the re12 vised standards or assessments, or both, at 

13 the State educational agency level and the 

14 local educational agency level, which activi15 ties may include— 

16 (I) preservice and in-service 

17 teacher, paraprofessional, principal, 

18 and school administrator training; 

19 (II) statewide meetings to pro20 vide professional development oppor21 tunities for teachers and administra22 tors; 

23 (III) development of curricula 

24 and instructional methods and mate25 rials; 


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1 (IV) the redesign of existing as2 sessments, or the development or pur3 chase of new high-quality assess4 ments, with a focus on ensuring that 

5 such assessments are rigorous, meas6 ure significant depth of knowledge, 

7 use multiple measures and formats 

8 (such as student portfolios), and are 

9 sensitive to inquiry-based, project10 based, or differentiated instruction; 

11 and 

12 (V) other activities necessary for 

13 the effective implementation of the 

14 new State standards or assessments, 

15 or both. 

16 (D) Analyze the State’s level of prekinder17 garten through grade 16 curricular alignment 

18 and the success of the State’s education system 

19 in preparing students for higher education, the 

20 21st century workforce, and the Armed Forces 

21 by— 

22 (i) using the data produced by a data 

23 system described in subparagraph (A) or 

24 (B), or other information as appropriate; 

25 and 


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1 (ii) exploring a possible agreement be2 tween the State educational agency and 

3 the higher education system in the State 

4 on a common assessment or assessments 

5 that— 

6 (I) shall follow established guide7 lines to guarantee reliability and va8 lidity; 

9 (II) shall provide adequate ac10 commodations for students who are 

11 limited English proficient and stu12 dents with disabilities; and 

13 (III) may be a placement exam14 ination, end of course examination, 

15 college, workforce, or Armed Forces 

16 preparedness examination, or admis17 sions examination, that measures sec18 ondary students’ preparedness to suc19 ceed in postsecondary, credit-bearing 

20 courses. 

21 (E) If the State has an officially des22 ignated college preparatory curriculum at the 

23 time the State applies for a grant under this 

24 section— 


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1 (i) describe the extent to which stu2 dents who completed the college pre3 paratory curriculum are more or less suc4 cessful than other students, including stu5 dents who did not complete a college pre6 paratory curriculum, in entering and grad7 uating from a program of study at an in8 stitution of higher education or entering 

9 the 21st century workforce or the Armed 

10 Forces; 

11 (ii) examine the extent to which the 

12 expectations of the college preparatory cur13 riculum are aligned with the entry stand14 ards of the State’s institutions of higher 

15 education, including whether such cur16 riculum enables secondary school students 

17 to enter credit-bearing coursework in high18 er education without the need for remedi19 ation; and 

20 (iii) examine the extent to which the 

21 curriculum allows graduates to attain the 

22 skills necessary to enter the 21st century 

23 workforce or the Armed Forces. 

24 (F) If the State has not designated a col25 lege preparatory curriculum at the time the 


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1 State applied for a grant under this section, or 

2 if the curriculum described in subparagraph (E) 

3 does not result in a higher number of students 

4 enrolling in and graduating from institutions of 

5 higher education or entering the 21st century 

6 workforce or the Armed Forces, or is not 

7 aligned with the entry standards described in 

8 subparagraph (E)(ii), develop a 21st century 

9 curriculum that— 

10 (i) may be adopted by the local edu11 cational agencies in the State for use in 

12 secondary schools; 

13 (ii) enables secondary school students 

14 to enter credit-bearing coursework in high15 er education without the need for remedi16 ation; 

17 (iii) allows graduates to attain the 

18 skills necessary to enter the 21st century 

19 workforce or the Armed Forces; 

20 (iv) reflects the input of teachers, 

21 principals, school administrators, and col22 lege faculty; and 

23 (v) focuses on providing rigorous core 

24 courses that reflect the State academic 


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1 content standards and student academic 

2 achievement standards. 

3 (G) Develop and make available specific 

4 opportunities for extensive professional develop5 ment for teachers, paraprofessionals, principals, 

6 and school administrators, to improve instruc7 tion and support mechanisms for students using 

8 a curriculum described in subparagraph (E) or 

9 (F). 

10 (H) Develop a plan to provide remediation 

11 and additional learning opportunities for stu12 dents below grade level to ensure that all stu13 dents will have the opportunity to meet the cur14 ricular standards of a curriculum described in 

15 subparagraph (E) or (F). 

16 (I) Use data gathered by the council to im17 prove instructional methods, better tailor stu18 dent support services, and serve as the basis for 

19 all school reform initiatives. 

20 (J) Implement activities designed to ensure 

21 the enrollment of all students in rigorous 

22 coursework, which may include— 

23 (i) specifying the courses and per24 formance levels required for acceptance 

25 into public institutions of higher education; 


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1 (ii) collaborating with institutions of 

2 higher education or other State educational 

3 agencies to develop assessments aligned to 

4 State academic content standards and a 

5 curriculum described in subparagraph (E) 

6 or (F), which assessments may be used as 

7 measures of student achievement in sec8 ondary school as well as for entrance or 

9 placement at institutions of higher edu10 cation; 

11 (iii) creating ties between elementary 

12 schools and secondary schools, and institu13 tions of higher education, to offer— 

14 (I) accelerated learning opportu15 nities, particularly with respect to 

16 mathematics, science, engineering, 

17 technology, and critical-need foreign 

18 languages (as determined by the Sec19 retary under section 2222) to sec20 ondary school students, which may in21 clude— 

22 (aa) granting postsecondary 

23 credit for secondary school 

24 courses; 


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1 (bb) providing early enroll2 ment opportunities in postsec3 ondary education for secondary 

4 students enrolled in postsec5 ondary-level coursework; 

6 (cc) creating dual enrollment 

7 programs; 

8 (dd) creating satellite sec9 ondary school campuses on the 

10 campuses of institutions of high11 er education; and 

12 (ee) providing opportunities 

13 for higher education faculty who 

14 are highly qualified, as such term 

15 is defined in section 9101 of the 

16 Elementary and Secondary Edu17 cation Act of 1965 (20 U.S.C. 

18 7801), to teach credit-bearing 

19 postsecondary courses in sec20 ondary schools; and 

21 (II) professional development ac22 tivities for teachers, which may in23 clude— 

24 (aa) mentoring opportuni25 ties; and 


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1 (bb) summer institutes; 

2 (iv) expanding or creating higher edu3 cation awareness programs for middle 

4 school and secondary school students; 

5 (v) expanding opportunities for stu6 dents to enroll in highly rigorous postsec7 ondary preparatory courses, such as Ad8 vanced Placement and International Bac9 calaureate courses; and 

10 (vi) developing a high-quality profes11 sional development curriculum to provide 

12 professional development opportunities for 

13 paraprofessionals, teachers, principals, and 

14 administrators. 

15 (2) PLANNING AND IMPLEMENTATION.—A 

16 State receiving a grant under this section may use 

17 grant funds received for the first fiscal year to form 

18 the council and plan the activities described in para19 graph (1). Grant funds received for subsequent fiscal 

20 years shall be used for the implementation of the ac21 tivities described in such paragraph. 

22 (f) REPORTS AND PUBLICATION.— 

23 (1) REPORTS.— 

24 (A) INITIAL REPORT.—Not later than 9 

25 months after a State receives a grant under 


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1 this section, the State shall submit a report to 

2 the Secretary that includes— 

3 (i) an analysis of alignment and ar4 ticulation across the State’s systems of 

5 public education for prekindergarten 

6 through grade 16, including data that indi7 cates the percent of students who— 

8 (I) graduate from secondary 

9 school with a regular diploma in the 

10 standard number of years; 

11 (II) complete a curriculum de12 scribed in subparagraph (E) or (F) of 

13 subsection (e)(1); 

14 (III) matriculate into an institu15 tion of higher education (disaggre16 gated by 2-year and 4-year degree17 granting programs); 

18 (IV) are secondary school grad19 uates who need remediation in read20 ing, writing, mathematics, or science 

21 before pursuing credit-bearing post22 secondary courses in English, mathe23 matics, or science; 


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1 (V) persist in an institution of 

2 higher education into the second year; 

3 and 

4 (VI) graduate from an institution 

5 of higher education within 150 per6 cent of the expected time for degree 

7 completion (within 3 years for a 2- 

8 year degree program and within 6 

9 years for a baccalaureate degree); 

10 (ii) an analysis of the strengths and 

11 weaknesses of the State— 

12 (I) in transitioning students from 

13 the prekindergarten through grade 12 

14 education system into higher edu15 cation, the 21st century workforce, 

16 and the Armed Forces; and 

17 (II) in transitioning students 

18 from the prekindergarten through 

19 grade 12 education system into math20 ematics, science, engineering, tech21 nology, and critical-need foreign lan22 guage degree programs at institutions 

23 of higher education; 

24 (iii) an analysis of the quality and 

25 rigor of the State’s curriculum described in 


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1 subparagraph (E) or (F) of subsection 

2 (e)(1), and the accessibility of the cur3 riculum to all students in prekindergarten 

4 through grade 12; 

5 (iv) an analysis of the strengths and 

6 weaknesses of the State in recruiting, re7 taining, and supporting qualified teachers, 

8 including— 

9 (I) whether the State needs to re10 cruit additional teachers at the sec11 ondary level for specific subjects (such 

12 as mathematics, science, engineering 

13 and technology education, (as such 

14 term is defined in section 9101 of the 

15 Elementary and Secondary Education 

16 Act of 1965 (20 U.S.C. 7801), and 

17 critical-need foreign languages (as de18 termined by the Secretary under sec19 tion 2222)), particular schools, or 

20 local educational agencies; and 

21 (II) recommendations on how to 

22 set and achieve goals in this pursuit; 

23 and 

24 (v) a detailed action plan that de25 scribes how the council will accomplish the 


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1 goals and tasks required by the grant 

2 under this section, including a timeline for 

3 accomplishing all activities under the 

4 grant. 

5 (B) ANNUAL REPORTS.—Not later than 1 

6 year following the submission of the initial re7 port described in subparagraph (A), and annu8 ally thereafter for the duration of the grant, a 

9 State receiving a grant under this section shall 

10 prepare and submit to the Secretary a report 

11 that describes the State’s progress in accom12 plishing the goals and tasks required by the 

13 grant, including progress on each item de14 scribed in subparagraph (A). The final annual 

15 report under this subparagraph shall be sub16 mitted 1 year after the expiration of the grant. 

17 (2) PUBLICATION.—A State submitting a re18 port in accordance with this subsection shall publish 

19 and widely disseminate the report to the public, in20 cluding posting the report on the Internet. 

21 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

22 are authorized to be appropriated to carry out this section 

23 $200,000,000 for fiscal year 2007, and such sums as may 

24 be necessary for each of the 4 succeeding fiscal years. 


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1 SEC. 2116. COLLABORATIVE STANDARDS AND ASSESS2 MENTS GRANTS. 

3 (a) DEFINITIONS.—In this section: 

4 (1) ELIGIBLE STATE.—The term ‘‘eligible 

5 State’’ means a State that demonstrates that it has 

6 analyzed and, where applicable, revised the State 

7 standards and assessments, through participation in 

8 a prekindergarten through grade 16 student pre9 paredness council described in section 2115 or 

10 through other State action, to ensure the standards 

11 and assessments— 

12 (A) are aligned with the demands of the 

13 21st century; and 

14 (B) prepare students for entry into— 

15 (i) credit-bearing coursework in higher 

16 education without the need for remedi17 ation; 

18 (ii) the 21st century workforce; and 

19 (iii) the Armed Forces 

20 (2) ELIGIBLE CONSORTIUM.— 

21 (A) IN GENERAL.—The term ‘‘eligible con22 sortium’’ means a consortium of 2 or more eli23 gible States that agrees to allow the Secretary, 

24 under subsection (e), to make available any as25 sessment developed by the consortium under 

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1 ing a State that is not a member of the consor2 tium. 

3 (B) ADDITIONAL MEMBERS.—An eligible 

4 consortium may include, in addition to 2 or 

5 more eligible States, an entity with the tech6 nical expertise to carry out a grant under this 

7 section. 

8 (b) PROGRAM AUTHORIZED.—From amounts author9 ized under subsection (f), the Secretary shall award 

10 grants, on a competitive basis, to eligible consortia to en11 able the eligible consortia to develop common standards 

12 and assessments that— 

13 (1) are highly rigorous, internationally competi14 tive, and aligned with the demands of higher edu15 cation, the 21st century workforce, and the Armed 

16 Forces; and 

17 (2) in the case of assessments, set rigorous per18 formance standards comparable to rigorous national 

19 and international benchmarks. 

20 (c) APPLICATION.—An eligible consortium desiring a 

21 grant under this section shall submit an application to the 

22 Secretary at such time, in such manner, and containing 

23 such information as the Secretary may require. 

24 (d) REPORT.—Not later than 90 days after the end 

25 of the grant period, an eligible consortium receiving a 


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1 grant under this section shall prepare and submit a report 

2 to the Secretary describing the grant activities. 

3 (e) AVAILABILITY OF ASSESSMENTS.—The Secretary 

4 shall— 

5 (1) make available, to a State that so requests 

6 and at no charge to the State, any rigorous, high7 quality assessment developed by an eligible consor8 tium under this section; and 

9 (2) notify potential eligible States, at reasonable 

10 intervals, of all assessments currently under develop11 ment by eligible consortia under this section. 

12 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated to carry out this section 

14 $75,000,000 for fiscal year 2007 and such sums as are 

15 necessary for each of the 4 succeeding fiscal years. 

16 CHAPTER 2—INVESTING IN TEACHERS 

17 SEC. 2121. PURPOSE. 

18 The purpose of this chapter is to increase the number 

19 and quality of teachers of mathematics, science, engineer20 ing and technology education, and critical-need foreign 

21 languages, in order to prepare students for entry into 

22 credit-bearing courses in higher education without the 

23 need for remediation, the 21st century workforce, and the 

24 Armed Forces. 


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1 SEC. 2122. DEFINITION OF ENGINEERING AND TECH2 NOLOGY EDUCATION. 

3 (a) ELEMENTARY AND SECONDARY EDUCATION ACT

4 OF 1965.—Section 9101 of the Elementary and Secondary 

5 Education Act of 1965 (20 U.S.C. 7801) is amended— 

6 (1) by redesignating paragraphs (19) through 

7 (43) as paragraphs (20) through (44), respectively; 

8 and 

9 (2) by inserting after paragraph (18) the fol10 lowing: 

11 ‘‘(19) ENGINEERING AND TECHNOLOGY EDU12 CATION.—The term ‘engineering and technology 

13 education’ means a curriculum and instruction 

14 that— 

15 ‘‘(A) uses technology as a knowledge base 

16 or as a way of teaching innovation using an en17 gineering design process and context; 

18 ‘‘(B) develops an appreciation and funda19 mental understanding of technology through de20 sign skills and the use of materials, tools, proc21 esses, and limited resources; 

22 ‘‘(C) is taught in conjunction with applied 

23 mathematics, science, language arts, fine arts, 

24 and social studies as a part of a comprehensive 

25 education; 


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1 ‘‘(D) applies the use of tools and skills em2 ployed by a globalized skilled 21st century 

3 workforce that are necessary for communica4 tion, manufacturing, construction, energy sys5 tems, biomedical systems, transportation sys6 tems, and other related fields; and 

7 ‘‘(E) through the application of engineer8 ing principles and concepts, develops proficiency 

9 in abstract ideas and in problem-solving tech10 niques that build a comprehensive education.’’. 

11 (b) HIGHER EDUCATION ACT OF 1965.—Section 103 

12 of the Higher Education Act of 1965 (20 U.S.C. 1003) 

13 is amended— 

14 (1) by redesignating paragraphs (5) through 

15 (16) as paragraphs (6) through (17), respectively; 

16 and 

17 (2) by inserting after paragraph (4) the fol18 lowing: 

19 ‘‘(5) ENGINEERING AND TECHNOLOGY EDU20 CATION.—The term ‘engineering and technology 

21 education’ has the meaning given the term in section 

22 9101 of the Elementary and Secondary Education 

23 Act of 1965.’’. 


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1 SEC. 2123. EXPANDING TEACHER LOAN FORGIVENESS. 

2 (a) INCREASED AMOUNT; APPLICABILITY OF EX3 PANDED PROGRAM TO READING SPECIALIST.—Sections 

4 428J(c)(3) and 460(c)(3) of the Higher Education Act of 

5 1965 (20 U.S.C. 1078–10(c)(3), 1087j(c)(3)) are each 

6 amended— 

7 (1) by striking the paragraph heading and in8 serting ‘‘ADDITIONAL AMOUNTS FOR TEACHERS IN

9 MATHEMATICS, SCIENCE, ENGINEERING AND TECH10 NOLOGY EDUCATION, A CRITICAL-NEED FOREIGN

11 LANGUAGE, OR SPECIAL EDUCATION’’; 

12 (2) in the matter preceding subparagraph (A), 

13 by striking ‘‘$17,500’’ and inserting ‘‘$23,000’’; and 

14 (3) in subparagraph (A)(ii), by striking ‘‘or 

15 science’’ and all that follows through ‘‘; and’’ and in16 serting ‘‘, science, engineering and technology edu17 cation, or a critical-need foreign language (as deter18 mined by the Secretary under section 2222 of the 

19 New National Defense Education Act), on a full20 time basis; and’’. 

21 (b) ANNUAL INCREMENTS INSTEAD OF END OF

22 SERVICE LUMP SUMS.— 

23 (1) FFEL LOANS.—Section 428J(c) of the 

24 Higher Education Act of 1965 (20 U.S.C. 1078– 

25 10(c)) is amended by adding at the end the fol26 lowing: 


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1 ‘‘(4) ANNUAL INCREMENTS.—Notwithstanding 

2 paragraph (1), in the case of an individual quali3 fying for loan forgiveness under paragraph (3), the 

4 Secretary shall, in lieu of waiting to assume an obli5 gation only upon completion of 5 complete years of 

6 service, assume the obligation to repay— 

7 ‘‘(A) after each of the first and second 

8 years of service by an individual in a position 

9 qualifying under paragraph (3), 15 percent of 

10 the total amount of principal and interest of the 

11 loans described in paragraph (1) to such indi12 vidual that are outstanding immediately pre13 ceding such first year of such service; 

14 ‘‘(B) after each of the third and fourth 

15 years of such service, 20 percent of such total 

16 amount; and 

17 ‘‘(C) after the fifth year of such service, 30 

18 percent of such total amount.’’. 

19 (2) DIRECT LOANS.—Section 460(c) of the 

20 Higher Education Act of 1965 (20 U.S.C. 1087j(c)) 

21 is amended by adding at the end the following: 

22 ‘‘(4) ANNUAL INCREMENTS.—Notwithstanding 

23 paragraph (1), in the case of an individual quali24 fying for loan cancellation under paragraph (3), the 

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1 gation only upon completion of 5 complete years of 

2 service, assume the obligation to repay— 

3 ‘‘(A) after each of the first and second 

4 years of service by an individual in a position 

5 qualifying under paragraph (3), 15 percent of 

6 the total amount of principal and interest of the 

7 loans described in paragraph (1) to such indi8 vidual that are outstanding immediately pre9 ceding such first year of such service; 

10 ‘‘(B) after each of the third and fourth 

11 years of such service, 20 percent of such total 

12 amount; and 

13 ‘‘(C) after the fifth year of such service, 30 

14 percent of such total amount.’’. 

15 SEC. 2124. EXCLUSION FROM GROSS INCOME OF COM16 PENSATION OF TEACHERS AND PRINCIPALS 

17 IN CERTAIN HIGH-NEED SCHOOLS AND 

18 TEACHING HIGH-NEED SUBJECTS. 

19 (a) IN GENERAL.—Part III of subchapter B of chap20 ter 1 of the Internal Revenue Code of 1986 is amended 

21 by inserting after section 139A the following new section: 

22 ‘‘SEC. 139B. COMPENSATION OF CERTAIN TEACHERS AND 

23 PRINCIPALS. 

24 ‘‘(a) PRINCIPALS IN HIGH-NEED SCHOOLS.—In the 

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1 need school during the taxable year, gross income does not 

2 include so much remuneration for such employment 

3 (which would but for this paragraph be includible in gross 

4 income) as does not exceed $15,000. 

5 ‘‘(b) TEACHERS IN HIGH-NEED SCHOOLS AND OF

6 HIGH-NEED SUBJECTS.— 

7 ‘‘(1) IN GENERAL.—In the case of an individual 

8 employed as a teacher of high-need subjects and in 

9 a high-need school during the taxable year, gross in10 come does not include so much remuneration for 

11 such employment (which would but for this para12 graph be includible in gross income) as does not ex13 ceed $15,000. 

14 ‘‘(2) TEACHER OF HIGH-NEED SUBJECTS.—For 

15 purposes of this subsection, the term ‘teacher of 

16 high-need subjects’ means any teacher in a public el17 ementary or secondary school who— 

18 ‘‘(A)(i) teaches primarily 1 or more high19 need subjects in 1 or more of grades 9 through 

20 12, or 

21 ‘‘(ii) teaches 1 or more high-need subjects 

22 in 1 or more of grades kindergarten through 8, 

23 ‘‘(B) received a baccalaureate or similar 

24 degree from an eligible educational institution 


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1 (as defined in section 25A(f)(2)) with a major 

2 in a high-need subject, and 

3 ‘‘(C) is highly qualified (as defined in sec4 tion 9101 of the Elementary and Secondary 

5 Education Act of 1965 or, in the case of a spe6 cial education teacher, in section 602 of the In7 dividuals with Disabilities Education Act). 

8 ‘‘(3) HIGH-NEED SUBJECTS.—For purposes of 

9 this subsection, the term ‘high-need subject’ means 

10 mathematics, science, engineering and technology 

11 education, a critical-need foreign language (as deter12 mined by the Secretary of Education under section 

13 2222 of the New National Defense Education Act), 

14 special education, teaching English language learn15 ers, or any other subject identified as a high-need 

16 subject by the Secretary of Education for purposes 

17 of this section. 

18 ‘‘(c) LIMITATION ON TOTAL REMUNERATION TAKEN

19 INTO ACCOUNT.—In the case of any individual whose em20 ployment is described in subsections (a) and (b)(1), the 

21 total amount of remuneration which may be taken into 

22 account with respect to such employment under this sec23 tion for the taxable year shall not exceed $25,000. 

24 ‘‘(d) HIGH-NEED SCHOOL.—For purposes of this 

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1 mentary school or secondary school that is eligible for as2 sistance under section 1114(a) of the Elementary and Sec3 ondary Education Act of 1965 (20 U.S.C. 6314(a)).’’. 

4 (b) CLERICAL AMENDMENT.—The table of sections 

5 of such part is amended by inserting after the item relat6 ing to section 139A the following new item: 

‘‘Sec. 139B. Compensation of certain teachers and principals.’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to remuneration received in taxable 

9 years beginning after the date of the enactment of this 

10 Act. 

11 SEC. 2125. MATHEMATICS AND SCIENCE EDUCATION PART12 NERSHIPS AND TEACHER INSTITUTES FOR 

13 THE 21ST CENTURY THROUGH THE NA14 TIONAL SCIENCE FOUNDATION. 

15 (a) AUTHORIZATION OF APPROPRIATIONS.— 

16 (1) SENSE OF THE SENATE.—It is the sense of 

17 the Senate that— 

18 (A) the activities of the mathematics and 

19 science education partnerships of the National 

20 Science Foundation, described in section 9 of 

21 the National Science Foundation Authorization 

22 Act of 2002, meet a distinct need separate from 

23 other Federal investments in improving science, 

24 technology, engineering, and mathematics edu25 cation; 


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1 (B) funding for the mathematics and 

2 science education partnerships for fiscal year 

3 2007 should be increased to the $400,000,000 

4 level authorized for fiscal year 2005 under sec5 tion 5 of such Act, and increased by 10 percent 

6 annually for each of the fiscal years 2008 

7 through 2011; and 

8 (C) the increase in funding for the mathe9 matics and science education partnerships 

10 should be in addition to any other amounts au11 thorized or appropriated for the National 

12 Science Foundation. 

13 (2) AUTHORIZATION OF APPROPRIATIONS FOR

14 NSF MATHEMATICS AND SCIENCE EDUCATION PART15 NERSHIPS.—There is authorized to be appropriated 

16 to the National Science Foundation for education 

17 and human resources to carry out the mathematics 

18 and science education partnerships described in sec19 tion 9 of the National Science Foundation Author20 ization Act of 2002, in addition to the amounts au21 thorized under section 2214(b), amounts as follows: 

22 (A) For fiscal year 2007, $400,000,000, of 

23 which $50,000,000 shall be for the teacher in24 stitutes for the 21st century under section 


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1 9(a)(3)(B) of the National Science Foundation 

2 Authorization Act of 2002. 

3 (B) For fiscal year 2008, $440,000,000, of 

4 which $60,000,000 shall be for the teacher in5 stitutes for the 21st century under such section. 

6 (C) For fiscal year 2009, $484,000,000, of 

7 which $70,000,000 shall be for the teacher in8 stitutes for the 21st century under such section. 

9 (D) For fiscal year 2010, $532,400,000, of 

10 which 80,000,000 shall be for the teacher insti11 tutes for the 21st century under such section. 

12 (E) For fiscal year 2011, $585,640,000, of 

13 which $90,000,000 shall be for the teacher in14 stitutes for the 21st century under such section. 

15 (b) TEACHER INSTITUTES FOR THE 21ST CEN16 TURY.—Section 9(a) of the National Science Foundation 

17 Authorization Act of 2002 (42 U.S.C. 1862n(a)) is 

18 amended— 

19 (1) in paragraph (3)(B), by striking ‘‘summer 

20 or’’ and inserting ‘‘teacher institutes for the 21st 

21 century, as described in paragraph (7)’’; 

22 (2) by redesignating paragraph (7) as para23 graph (8); and 

24 (3) by inserting after paragraph (6) the fol25 lowing: 


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1 ‘‘(7) TEACHER INSTITUTES FOR THE 21ST CEN2 TURY.— 

3 ‘‘(A) IN GENERAL.—Teacher institutes for 

4 the 21st century carried out in accordance with 

5 paragraph (3)(B) shall— 

6 ‘‘(i) be carried out in conjunction with 

7 a school served by the local educational 

8 agency in the partnership; 

9 ‘‘(ii) be science, mathematics, engi10 neering, and technology focused institutes 

11 that provide professional development to 

12 elementary school and secondary school 

13 teachers during the summer; 

14 ‘‘(iii) serve teachers who are consid15 ered highly qualified (as defined in section 

16 9101 of the Elementary and Secondary 

17 Education Act of 1965), teach high-need 

18 subjects, and teach in high-need schools 

19 (as defined in section 1114(a) of the Ele20 mentary and Secondary Education Act of 

21 1965); 

22 ‘‘(iv) focus on the theme and struc23 ture developed by the Director under sub24 paragraph (C); 


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1 ‘‘(v) be content-based and build on 

2 school year curricula that are object-cen3 tered, experiment-oriented, content-based, 

4 and grounded in current research; 

5 ‘‘(vi) ensure that any pedagogy com6 ponent is designed around specific strate7 gies that are relevant to teaching the sub8 ject and content on which teachers are 

9 being trained, which may include training 

10 teachers in the essential components of ad11 olescent literacy instruction in order to im12 prove student reading skills within the sub13 ject areas of mathematics, science, and en14 gineering and technology education (as de15 fined in section 9101 of the Elementary 

16 and Secondary Education Act of 1965); 

17 ‘‘(vii) be a multiyear program that is 

18 conducted for a period of not less than 2 

19 weeks per year; 

20 ‘‘(viii) provide for direct interaction 

21 between students and faculty of the teach22 er institute; 

23 ‘‘(ix) have a component that includes 

24 the use of the Internet; 


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1 ‘‘(x) provide for followup training in 

2 the classroom during the academic year for 

3 a period of not less than 3 days, which 

4 may or may not be consecutive, for partici5 pants in the teacher institute, except that 

6 for teachers in rural local educational 

7 agencies, the followup training may be pro8 vided through the Internet; 

9 ‘‘(xi) provide teachers participating in 

10 the teacher institute with travel expense 

11 reimbursement, stipends, and classroom 

12 materials related to the teacher institute; 

13 and 

14 ‘‘(xii) establish a mechanism to pro15 vide supplemental support during the aca16 demic year for teacher institute partici17 pants. 

18 ‘‘(B) OPTIONAL MEMBERS OF THE PART19 NERSHIP.—In addition to the partnership re20 quirement under paragraph (2), an institution 

21 of higher education or eligible nonprofit organi22 zation (or consortia) desiring a grant for a 

23 teacher institute for the 21st century may also 

24 partner with a museum or educational partner25 ship organization. 


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1 ‘‘(C) THEME AND STRUCTURE.—Each 

2 year, not later than 180 days before the appli3 cation deadline for a grant under this section, 

4 the Director shall, in consultation with a broad 

5 group of professional education organizations, 

6 develop a theme and structure for the teacher 

7 institutes of the 21st century supported under 

8 paragraph (3)(B).’’. 

9 SEC. 2126. TEACH GRANTS; RECRUITING TEACHERS WITH 

10 MATHEMATICS, SCIENCE, ENGINEERING, 

11 TECHNOLOGY, OR LANGUAGE MAJORS. 

12 (a) TEACH GRANTS.—Title II of the Higher Edu13 cation Act of 1965 (20 U.S.C. 1021 et seq.) is amended 

14 by adding at the end the following: 

15 ‘‘PART C—TEACH GRANTS 

16 ‘‘SEC. 231. PURPOSES. 

17 ‘‘The purposes of this part are— 

18 ‘‘(1) to improve student academic achievement; 

19 ‘‘(2) to help recruit and prepare teachers to 

20 meet the national demand for a highly qualified 

21 teacher in every classroom; and 

22 ‘‘(3) to increase opportunities for Americans of 

23 all educational, ethnic, class, and geographic back24 grounds to become highly qualified teachers. 


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1 ‘‘SEC. 232. PROGRAM ESTABLISHED. 

2 ‘‘(a) PROGRAM AUTHORITY.— 

3 ‘‘(1) PAYMENTS REQUIRED.—For each of the 

4 fiscal years 2007 through 2014, the Secretary shall 

5 pay to each eligible institution of higher education 

6 such sums as may be necessary to pay to each eligi7 ble student (defined in accordance with section 484) 

8 who files an application and agreement in accord9 ance with section 233, and qualifies under sub10 section (a)(2) of such section, a TEACH Grant in 

11 the amount of $7,000 for each academic year during 

12 which that student is in attendance at an institution 

13 of higher education. 

14 ‘‘(2) REFERENCE.—Grants made under this 

15 part shall be known as ‘Teacher Education Assist16 ance for College and Higher Education Grants’ or 

17 ‘TEACH Grants’. 

18 ‘‘(b) PAYMENT METHODOLOGY.— 

19 ‘‘(1) PREPAYMENT.—Not less than 85 percent 

20 of such sums shall be advanced to eligible institu21 tions prior to the start of each payment period and 

22 shall be based upon an amount requested by the in23 stitution as needed to pay eligible students until 

24 such time as the Secretary determines and publishes 

25 in the Federal Register with an opportunity for com26 ment, an alternative payment system that provides 


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1 payments to institutions in an accurate and timely 

2 manner, except that this sentence shall not be con3 strued to limit the authority of the Secretary to 

4 place an institution on a reimbursement system of 

5 payment. 

6 ‘‘(2) DIRECT PAYMENT.—Nothing in this sec7 tion shall be interpreted to prohibit the Secretary 

8 from paying directly to students, in advance of the 

9 beginning of the academic term, an amount for 

10 which they are eligible, in cases where the eligible in11 stitution elects not to participate in the disburse12 ment system required by paragraph (1). 

13 ‘‘(3) DISTRIBUTION OF GRANTS TO STU14 DENTS.—Payments under this part shall be made, in 

15 accordance with regulations promulgated by the Sec16 retary for such purpose, in such manner as will best 

17 accomplish the purposes of this part. Any disburse18 ment allowed to be made by crediting the student’s 

19 account shall be limited to tuition and fees and, in 

20 the case of institutionally owned housing, room and 

21 board. The student may elect to have the institution 

22 provide other such goods and services by crediting 

23 the student’s account. 

24 ‘‘(c) REDUCTIONS IN AMOUNT.— 


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1 ‘‘(1) PART-TIME STUDENTS.—In any case 

2 where a student attends an institution of higher edu3 cation on less than a full-time basis (including a stu4 dent who attends an institution of higher education 

5 on less than a half-time basis) during any academic 

6 year, the amount of the TEACH Grant for which 

7 that student is eligible shall be reduced in proportion 

8 to the degree to which that student is not so attend9 ing on a full-time basis, in accordance with a sched10 ule of reductions established by the Secretary for the 

11 purpose of this part, computed in accordance with 

12 this part. Such schedule of reductions shall be estab13 lished by regulation and published in the Federal 

14 Register in accordance with section 482 of this Act. 

15 ‘‘(2) NO EXCEEDING COST OF ATTENDANCE.— 

16 No TEACH Grant for a student under this part 

17 shall exceed the cost of attendance (as defined in 

18 section 472) at the institution that such student at19 tends. If, with respect to any student, it is deter20 mined that the amount of a TEACH Grant exceeds 

21 the cost of attendance for that year, the amount of 

22 the TEACH Grant shall be reduced until the 

23 TEACH Grant does not exceed the cost of attend24 ance at such institution. 

25 ‘‘(d) PERIOD OF ELIGIBILITY FOR GRANTS.— 


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1 ‘‘(1) UNDERGRADUATE STUDENTS.—The period 

2 during which an undergraduate student may receive 

3 TEACH Grants shall be the period required for the 

4 completion of the first undergraduate baccalaureate 

5 course of study being pursued by the student at the 

6 institution that the student attends, except that— 

7 ‘‘(A) any period during which the student 

8 is enrolled in a noncredit or remedial course of 

9 study, subject to paragraph (3), shall not be 

10 counted for the purpose of this paragraph; and 

11 ‘‘(B) the total amount that a student may 

12 receive under this part for undergraduate study 

13 shall not exceed $28,000. 

14 ‘‘(2) GRADUATE STUDENTS.—The period dur15 ing which a graduate student pursuing a master’s 

16 degree or doctoral degree may receive TEACH 

17 Grants shall be the period required for the comple18 tion of a course of study for the degree at the insti19 tution the student attends, except that the total 

20 amount that a student may receive under this part 

21 for graduate study shall not exceed $14,000 for a 

22 student pursuing a master’s degree or $28,000 for 

23 a student pursuing a doctoral degree. 

24 ‘‘(3) REMEDIAL COURSE; STUDY ABROAD.— 

25 Nothing in this section shall exclude from eligibility 


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1 a course of study that is noncredit or remedial in 

2 nature (including a course in English language ac3 quisition) if such course is determined by the institu4 tion to be necessary to help the student be prepared 

5 for the pursuit of a first undergraduate bacca6 laureate degree or certificate or, in the case of 

7 courses in English language instruction, to be nec8 essary to enable the student to utilize existing 

9 knowledge, training, or skills. Nothing in this section 

10 shall exclude from eligibility a program of study 

11 abroad that is approved for credit by the home insti12 tution at which the student is enrolled. 

13 ‘‘SEC. 233. ELIGIBILITY AND APPLICATIONS FOR GRANTS. 

14 ‘‘(a) APPLICATIONS; DEMONSTRATION OF ELIGI15 BILITY.— 

16 ‘‘(1) FILING REQUIRED.—The Secretary shall 

17 from time to time set dates by which students shall 

18 file applications for TEACH Grants under this part. 

19 Each student desiring a TEACH Grant for any year 

20 shall file an application therefore containing such in21 formation and assurances as the Secretary may 

22 deem necessary to enable the Secretary to carry out 

23 the functions and responsibilities of this part. 


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1 ‘‘(2) DEMONSTRATION OF ELIGIBILITY.—Each 

2 such application shall contain such information as is 

3 necessary to demonstrate that— 

4 ‘‘(A) if the applicant is an enrolled stu5 dent— 

6 ‘‘(i) the student is an eligible student 

7 for purposes of section 484 (other than 

8 subsection (r) of such section); 

9 ‘‘(ii) the student— 

10 ‘‘(I) has a grade point average 

11 that is determined, under standards 

12 prescribed by the Secretary, to be 

13 comparable to a 3.25 average on a 

14 zero to 4.0 scale, except that, if the 

15 student is in the first year of a pro16 gram of undergraduate education, 

17 such grade point average shall be de18 termined on the basis of the student’s 

19 cumulative secondary school grade 

20 point average; or 

21 ‘‘(II) displayed high academic ap22 titude by receiving a score above the 

23 75th percentile on at least 1 of the 

24 batteries in an undergraduate or 

25 graduate school admissions test; and 


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1 ‘‘(iii) the student is completing 

2 coursework and other requirements nec3 essary to begin a career in teaching, or 

4 plans to complete such coursework and re5 quirements prior to graduating; or 

6 ‘‘(B) if the applicant is a current or pro7 spective teacher applying for a grant to obtain 

8 a graduate degree— 

9 ‘‘(i) the applicant is a teacher or a re10 tiree from another occupation with exper11 tise in a field in which there is a shortage 

12 of teachers, such as mathematics, science, 

13 engineering and technology education, a 

14 critical-need foreign language (as deter15 mined by the Secretary under section 2222 

16 of the New National Defense Education 

17 Act), special education, English language 

18 acquisition, or another high-need subject; 

19 or 

20 ‘‘(ii) the applicant is or was a teacher 

21 who is using high-quality alternative cer22 tification routes, such as Teach for Amer23 ica, to get certified. 


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1 ‘‘(b) AGREEMENTS TO SERVE.—Each application 

2 under subsection (a) shall contain or be accompanied by 

3 an agreement by the applicant that— 

4 ‘‘(1) the applicant will— 

5 ‘‘(A) serve as a full-time teacher for a total 

6 of not less than 4 academic years within 8 

7 years after completing the course of study for 

8 which the applicant receives a TEACH Grant 

9 under this part; 

10 ‘‘(B) teach— 

11 ‘‘(i) in a school eligible for assistance 

12 under section 1114(a) of the Elementary 

13 and Secondary Education Act of 1965; and 

14 ‘‘(ii) in any of the following fields: 

15 mathematics, science, engineering and 

16 technology education, a critical-need for17 eign language (as determined by the Sec18 retary under section 2222 of the New Na19 tional Defense Education Act), bilingual 

20 education, or special education, or as a 

21 reading specialist, or another field docu22 mented as high-need by the Federal Gov23 ernment, State government, or local edu24 cational agency and submitted to the Sec25 retary; 


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1 ‘‘(C) submit evidence of such employment 

2 in the form of a certification by the chief ad3 ministrative officer of the school upon comple4 tion of each year of such service; and 

5 ‘‘(D) comply with the requirements for 

6 being a highly qualified teacher as defined in 

7 section 9101 of the Elementary and Secondary 

8 Education Act of 1965 or, in the case of a spe9 cial education teacher, in section 602 of the In10 dividuals With Disabilities Education Act; and 

11 ‘‘(2) in the event that the applicant is deter12 mined to have failed or refused to carry out such 

13 service obligation, the sum of the amounts of such 

14 TEACH Grants will be treated as a loan and col15 lected from the applicant in accordance with sub16 section (c) and the regulations thereunder. 

17 ‘‘(c) REPAYMENT FOR FAILURE TO COMPLETE

18 SERVICE.—In the event that any recipient of a TEACH 

19 Grant fails or refuses to comply with the service obligation 

20 in the agreement under subsection (b), the sum of the 

21 amounts of such TEACH Grants provided to such recipi22 ent shall be treated as a Direct Loan under part D of 

23 title IV, and shall be subject to repayment in accordance 

24 with terms and conditions specified by the Secretary in 

25 regulations promulgated to carry out this part. 


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1 ‘‘SEC. 234. AUTHORIZATION OF APPROPRIATIONS. 

2 ‘‘There are authorized to be appropriated to carry out 

3 this part $600,000,000 for fiscal year 2007 and such sums 

4 as may be necessary for each of the 4 succeeding fiscal 

5 years. 

6 ‘‘PART D—RECRUITING TEACHERS WITH MATHE7 MATICS, SCIENCE, ENGINEERING, TECH8 NOLOGY, OR LANGUAGE MAJORS 

9 ‘‘SEC. 241. PROGRAM AUTHORIZED. 

10 ‘‘(a) DEFINITION OF HIGH-NEED SCHOOL.—In this 

11 section, the term ‘high-need school’ means a school de12 scribed in section 1114(a) of the Elementary and Sec13 ondary Education Act of 1965. 

14 ‘‘(b) GRANTS AUTHORIZED.— 

15 ‘‘(1) IN GENERAL.—From the amounts appro16 priated under section 242, the Secretary shall make 

17 competitive grants to institutions of higher education 

18 to improve the availability and recruitment of teach19 ers from among students majoring in mathematics, 

20 science, engineering, technology, a critical-need for21 eign language (as determined by the Secretary under 

22 section 2222 of the New National Defense Edu23 cation Act), special education, or teaching the 

24 English language to students with limited English 

25 proficiency. 


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1 ‘‘(2) PRIORITY.—In awarding grants under 

2 paragraph (1), the Secretary shall give priority to 

3 institutions of higher education offering programs 

4 that— 

5 ‘‘(A) focus on preparing teachers in sub6 jects in which there is a shortage of highly 

7 qualified teachers and increasing the number of 

8 teachers from minority or underrepresented 

9 groups; and 

10 ‘‘(B) prepare students to teach in high11 need schools. 

12 ‘‘(c) APPLICATION.—Any institution of higher edu13 cation desiring to obtain a grant under this section shall 

14 submit to the Secretary an application at such time, in 

15 such form, and containing such information and assur16 ances as the Secretary may require, which shall— 

17 ‘‘(1) include reporting on baseline production of 

18 teachers— 

19 ‘‘(A) with expertise in mathematics, 

20 science, a critical-need foreign language, special 

21 education, or teaching students with limited 

22 English proficiency; 

23 ‘‘(B) from minorities or underrepresented 

24 groups; and 


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1 ‘‘(C) who teach for 5 years or more in a 

2 high-need school; and 

3 ‘‘(2) establish a goal and timeline for increasing 

4 the number of teachers described in each subpara5 graph of paragraph (1) who are prepared for teach6 ing by the institution. 

7 ‘‘(d) GRANT AWARD AMOUNTS.—In determining the 

8 amount of a grant award under this section to an institu9 tion of higher education, the Secretary shall consider— 

10 ‘‘(1) the extent to which the institution— 

11 ‘‘(A) focuses on preparing teachers in sub12 jects in which there is a shortage of highly 

13 qualified teachers and increasing the number of 

14 teachers from minority or underrepresented 

15 groups; and 

16 ‘‘(B) prepares students to teach in high17 need schools; and 

18 ‘‘(2) in the case of an institution that has pre19 viously received a grant under this section, the 

20 progress made by the institution in increasing the 

21 number of teachers described in subsection (c)(1), as 

22 compared to the baseline production of such teachers 

23 reported in the institution’s initial application. 

24 ‘‘(e) USE OF FUNDS.—Funds made available by a 

25 grant under this section— 


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1 ‘‘(1) shall be used to create new recruitment in2 centives to teaching for students from other majors, 

3 with an emphasis on high-need subjects such as 

4 mathematics, science, engineering and technology 

5 education, a critical-need foreign language, special 

6 education, and teaching the English language to stu7 dents with limited English proficiency and other 

8 subjects identified as high-need by the Federal Gov9 ernment, State government, or local educational 

10 agency; 

11 ‘‘(2) may be used to upgrade the curriculum in 

12 order to provide all students studying to become 

13 teachers with high-quality instructional strategies for 

14 teaching reading and teaching the English language 

15 to students with limited English proficiency, and for 

16 modifying instruction to teach students with special 

17 needs; 

18 ‘‘(3) may be used to integrate school of edu19 cation faculty with other arts and science faculty in 

20 mathematics, science, engineering, technology, a crit21 ical-need foreign language, or teaching the English 

22 language to students with limited English pro23 ficiency, through steps such as— 


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1 ‘‘(A) dual appointments for faculty be2 tween schools of education and schools of arts 

3 and science or engineering; and 

4 ‘‘(B) integrating coursework with clinical 

5 experience; 

6 ‘‘(4) may be used to develop strategic plans be7 tween schools of education and local educational 

8 agencies to better prepare teachers for high-need 

9 schools, including the creation of professional devel10 opment partnerships for training new teachers in 

11 state-of-the-art practice; 

12 ‘‘(5) may be used to create pilot programs to 

13 foster collaborations at the institution of higher edu14 cation between a school of science, mathematics, or 

15 engineering, or a foreign language department or 

16 language center, and a school of education in order 

17 to enable the collaborating entities to develop a 4- 

18 year program of study that would combine a bacca19 laureate degree in mathematics, science, engineering, 

20 or technology with concurrent teacher certification 

21 or licensure; and 

22 ‘‘(6) may be used to develop and implement a 

23 master’s degree program for current mathematics, 

24 science, or engineering and technology education 

25 teachers that— 


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1 ‘‘(A) will strengthen the participating 

2 teachers’ subject area knowledge and peda3 gogical skills; and 

4 ‘‘(B) shall be designed to allow a teacher 

5 to enroll in the program on a part-time basis 

6 and obtain a master’s degree within a 2-year 

7 period. 

8 ‘‘(f) REPORTS.—For each year that an institution of 

9 higher education receives a grant under this section, the 

10 institution of higher education shall prepare and submit 

11 to the Secretary an annual report documenting the base12 line data regarding the teachers described in subsection 

13 (c)(1) and the progress made toward increasing the num14 ber of such teachers, as described in subsection (c)(2). 

15 ‘‘SEC. 242. AUTHORIZATION OF APPROPRIATIONS. 

16 ‘‘There are authorized to be appropriated to carry out 

17 this part $500,000,000 for fiscal year 2007 and such sums 

18 as may be necessary for each of the 4 succeeding fiscal 

19 years.’’. 

20 (b) PART A AUTHORIZATION.—Section 210 of the 

21 Higher Education Act of 1965 (20 U.S.C. 1030) is 

22 amended by striking ‘‘$300,000,000 for fiscal year 1999’’ 

23 and inserting ‘‘$400,000,000 for fiscal year 2007’’. 


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1 CHAPTER 3—ENSURING COLLEGE ACCESS 

2 FOR ALL 

3 SEC. 2131. CONTRACT FOR EDUCATIONAL OPPORTUNITY 

4 (CEO) GRANTS. 

5 (a) DEFINITIONS.—In this section: 

6 (1) COHORT.—The term ‘‘cohort’’ means a 

7 group of students in a State who are in the same 

8 grade for an identified school year. 

9 (2) EXPECTED FAMILY CONTRIBUTION.—The 

10 term ‘‘expected family contribution’’, with respect to 

11 a student, means the student’s expected family con12 tribution as determined in accordance with part F of 

13 the Higher Education Act of 1965 (20 U.S.C. 

14 1087kk et seq.). 

15 (3) UNMET NEED.—The term ‘‘unmet need’’, 

16 with respect to a student, means the difference be17 tween the cost of attendance (as defined in section 

18 472 of the Higher Education Act of 1965 (20 

19 U.S.C. 108711) to attend an institution of higher 

20 education for an academic year and the resources 

21 available to the student for such academic year, in22 cluding Federal, State, and institutional financial as23 sistance and the student’s expected family contribu24 tion. 

25 (b) PURPOSES.—The purposes of this section are— 


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1 (1) to encourage States to provide a financial 

2 aid guarantee for low-income students; 

3 (2) to increase student academic performance 

4 and achievement; 

5 (3) to increase public school secondary school 

6 graduation rates as well as enrollment, persistence, 

7 and graduation rates in public and private institu8 tions of higher education, especially among low-in9 come and underrepresented minority students; and 

10 (4) to improve the overall quality and supply of 

11 a State’s workforce. 

12 (c) PAYMENTS TO STATES AUTHORIZED.— 

13 (1) IN GENERAL.—The Secretary shall pay to 

14 States the Federal share, as determined under sub15 section (e), in order to assist the States in awarding 

16 contract for educational opportunity grants (referred 

17 to in this section as ‘‘CEO grants’’), under sub18 section (g) to students in a cohort who sign a con19 tract for educational opportunity in grade 8 and sat20 isfy the requirements of the contract. A CEO grant 

21 shall provide each such student with a need-based fi22 nancial aid guarantee, in an amount equal to the 

23 student’s calculated unmet need to attend a 2- or 4- 

24 year degree-granting public institution of higher 

25 education in the State, to enable the student to atVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00211 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 tend a 2- or 4-year degree-granting public or private 

2 institution of higher education in the State. 

3 (2) MANDATORY SPENDING.—This subsection 

4 constitutes budget authority in advance of appro5 priations Acts and represents the obligation of the 

6 Secretary to provide for the payment of amounts 

7 provided under this subsection. 

8 (d) APPLICATION.— 

9 (1) IN GENERAL.—A State desiring a payment 

10 under subsection (c) shall submit, through the State 

11 agency identified in the application, to the Secretary 

12 an application at such time, in such manner, and 

13 containing such information as the Secretary may 

14 require. 

15 (2) APPLICATION.—An application submitted 

16 under paragraph (1) shall include the following: 

17 (A) A description of how the State will es18 tablish a State benchmark for increasing the 

19 overall public school secondary school gradua20 tion rate and the enrollment, persistence, and 

21 graduation rates at the State’s 2- and 4-year 

22 degree-granting public and private institutions 

23 of higher education, as well as a description of 

24 strategies and activities the State will employ to 


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1 achieve the State’s set goals as reflected in the 

2 benchmark. 

3 (B) The identification of the State agency 

4 that will administer the CEO grants program, 

5 and a description of the State agency’s capacity 

6 to administer such program. 

7 (C) A description of the entities that will 

8 contribute funds for the non-Federal share of 

9 the CEO grants program. 

10 (D) A description of the State’s academic 

11 and nonacademic components of the contract 

12 for educational opportunity, including 100 

13 hours of community service, and how the State 

14 defines satisfactory academic progress toward 

15 completing coursework that leads to a sec16 ondary school diploma. 

17 (E) A description of how the State agency 

18 will provide access for all students to a State 

19 curriculum that prepares the students to enter 

20 into credit-bearing coursework in higher edu21 cation without the need for remediation, the 

22 21st century workforce, or the Armed Forces. 

23 (F) A description of how the State agency 

24 will notify students in grade 7 of their eligibility 

25 to participate in the CEO grants program and 


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1 earn a CEO grant, as well as how the State will 

2 specifically target students from low-income and 

3 underrepresented minority families. 

4 (G) A description of how the State agency 

5 will regularly communicate with a cohort from 

6 the time the students sign the contract for edu7 cational opportunity through the period that the 

8 students are eligible for CEO grants. 

9 (H) An assurance that the State will 

10 award a CEO grant, in the amount of the stu11 dent’s calculated unmet need to attend a 2- or 

12 4-year degree-granting public institution of 

13 higher education in the State, to each student 

14 who successfully meets the requirements of the 

15 contract for educational opportunity. 

16 (I) An assurance that decisions regarding 

17 the State’s higher education budget shall not 

18 lead to increases in tuition and fees at public 2- 

19 or 4-year degree-granting institutions of higher 

20 education that are greater than the Consumer 

21 Price Index. 

22 (J) An assurance that the State shall 

23 maintain current levels of investment in State 

24 student aid programs in addition to providing 


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1 the non-Federal share required under sub2 section (e)(4). 

3 (e) PAYMENTS; USE OF FUNDS.— 

4 (1) IN GENERAL.—The Secretary shall pay the 

5 Federal share of the CEO grants program, in the 

6 amount described in paragraph (4), to each State 

7 that submits a complete application pursuant to sub8 section (d). 

9 (2) USE OF FUNDS.—The Federal share and 

10 non-Federal share described in paragraph (4) shall 

11 be used exclusively for awarding financial aid grants 

12 to cover the unmet need for all students in a cohort 

13 who have successfully met the components of the 

14 State’s contract, except that a State may use not 

15 more than 2 percent of such funds for administra16 tive purposes. 

17 (3) SUBSEQUENT PAYMENTS.— 

18 (A) IN GENERAL.—The Secretary shall 

19 make subsequent annual payments for future 

20 cohorts to States, in accordance with paragraph 

21 (4), that receive a payment under this section 

22 and that are not determined to be ineligible 

23 under subparagraph (B). 

24 (B) INELIGIBILITY.— 


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1 (i) IN GENERAL.—Except as provided 

2 in clause (ii), the Secretary shall determine 

3 a State to be temporarily ineligible to re4 ceive a payment under subparagraph (A) 

5 if— 

6 (I) the State fails to submit an 

7 annual report pursuant to subsection 

8 (h); or 

9 (II) the Secretary determines, 

10 based on information submitted in the 

11 annual report submitted under sub12 section (h), that— 

13 (aa) the State is not effec14 tively meeting the terms and 

15 goals of the application; or 

16 (bb) that the State is not 

17 making satisfactory progress to18 ward the benchmark set forth in 

19 subsection (d)(2)(A). 

20 (ii) INELIGIBILITY NOT TO AFFECT

21 CERTAIN COHORTS.—A determination of 

22 ineligibility to receive subsequent payments 

23 for future cohorts under clause (i) with re24 spect to a State shall not apply to pay25 ments for students in a cohort in the State 


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•S 2357 IS 

1 who are in grade 8, 9, 10, 11, or 12 at the 

2 time of the determination. 

3 (iii) REINSTATEMENT.—If the Sec4 retary determines a State is ineligible 

5 under clause (i), the Secretary may enter 

6 into an agreement with the State setting 

7 forth the terms and conditions under which 

8 the State may regain eligibility to receive 

9 payments under this section. 

10 (4) MATCHING REQUIREMENT.—The amount of 

11 the Federal share under this section for an academic 

12 year shall be equal to the amount of the non-Federal 

13 share provided by the State for such year. The sum 

14 of the Federal share and the non-Federal share for 

15 an academic year shall be an amount equal to the 

16 total unmet need, for the academic year, to attend 

17 a 2- or 4-year degree-granting public institution of 

18 higher education in the State, for all students in an 

19 identified cohort that complete all eligibility require20 ments of a contract for educational opportunity. 

21 (f) REALLOTMENT OR REDISTRIBUTION OF

22 FUNDS.—If funds remain for a cohort for 6 years after 

23 the cohort has graduated from secondary school, the State 

24 shall return excess Federal funds to the Secretary. Any 


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1 returned excess funds shall be used by the Secretary to 

2 carry out the program under this section. 

3 (g) CEO GRANTS.— 

4 (1) IN GENERAL.—A State receiving a payment 

5 under subsection (c) for a cohort shall provide, in 

6 the amount determined under paragraph (3), a CEO 

7 grant to each student in the cohort who— 

8 (A) successfully completes the require9 ments of the contract for educational oppor10 tunity; and 

11 (B) enrolls in a 2- or 4-year degree-grant12 ing institution of higher education in the State 

13 not later than 2 years after receiving a sec14 ondary school diploma. 

15 (2) CONTRACTS FOR EDUCATIONAL OPPOR16 TUNITY.— 

17 (A) IN GENERAL.—A student who is in a 

18 cohort for which a State is eligible for payments 

19 under subsection (c) and who desires to receive 

20 a CEO grant shall sign a contract for edu21 cational opportunity when the student begins 

22 grade 8 stating that the student will carry out 

23 all of the following by the time the student 

24 graduates from secondary school: 


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1 (i) Receive a secondary school di2 ploma. 

3 (ii) By the beginning of grade 11 (ex4 cept as provided in subparagraph (B)), 

5 demonstrate satisfactory academic progress 

6 (as determined by the State agency) to7 ward completing coursework that leads to 

8 a secondary school diploma. 

9 (iii) Complete the academic compo10 nents of the State contract for educational 

11 opportunity, as determined by the State 

12 agency. 

13 (iv) Complete the nonacademic por14 tion of the State contract for educational 

15 opportunity (as determined by the State 

16 agency), including 100 hours of community 

17 service, of which at least 50 hours of com18 munity service shall be completed before 

19 the student begins grade 11 (except as 

20 provided in subparagraph (B)). 

21 (v) Apply for admission to a 2- or 4- 

22 year degree-granting institution of higher 

23 education in the State. 

24 (vi) Preceding the date that the stu25 dent intends to enroll in an institution of 


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1 higher education, file for Federal financial 

2 aid. 

3 (B) SPECIAL CIRCUMSTANCES.— 

4 (i) TRANSITION.—During the aca5 demic year following the date of enactment 

6 of this Act, in the case of students in a co7 hort who are in grade 9, 10, 11, or 12 for 

8 such academic year, the students of such 

9 cohort shall be eligible for CEO grants if 

10 such students sign the contract for edu11 cational opportunity during the academic 

12 year and otherwise complete all of the eli13 gibility requirements for the contract for 

14 educational opportunity under subpara15 graph (A) as applicable and by such time 

16 as determined by the State and approved 

17 by the Secretary. 

18 (ii) STUDENTS WHO MOVE INTO THE

19 STATE.—In the case of a student who 

20 moves into a State after the student begins 

21 grade 8, such student shall be eligible for 

22 a CEO grant from such State if such stu23 dent signs the contract for educational op24 portunity at the time the student moves 

25 into the State and the student otherwise 


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•S 2357 IS 

1 completes all of the eligibility requirements 

2 for the contract for educational oppor3 tunity under subparagraph (A), as applica4 ble and by such time as determined by the 

5 State and approved by the Secretary. 

6 (3) AMOUNT OF CEO GRANTS.— 

7 (A) IN GENERAL.—A CEO grant for an 

8 academic year shall be in an amount equal to 

9 the student’s calculated unmet need to attend a 

10 2- or 4-year degree-granting public institution 

11 of higher education in the State for such year. 

12 (B) PRIVATE INSTITUTIONS.—A CEO 

13 grant for a student who elects to enroll in a pri14 vate 2- or 4-year degree-granting public institu15 tion of higher education in the State shall be in 

16 the amount described in subparagraph (A). 

17 (4) MULTIPLE GRANTS.— 

18 (A) IN GENERAL.—A State shall award a 

19 CEO grant to a student who meets the require20 ments of this section for each academic year 

21 that the student attends a 2- or 4-year degree22 granting institution of higher education in the 

23 State. 

24 (B) MAXIMUM NUMBER OF GRANTS.—Dur25 ing the 6-year period beginning on the date of 


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1 receipt of a CEO grant under this subsection, 

2 a student who meets the requirements of this 

3 subsection shall be eligible to receive a CEO 

4 grant for each year that the student is enrolled 

5 in a 2- or 4-year degree-granting institution of 

6 higher education in the State, except that no 

7 student shall receive a total of more than 4 

8 CEO grants. 

9 (5) INELIGIBILITY.—A student who otherwise 

10 meets the requirements for a CEO grant shall be in11 eligible if the student fails to maintain an acceptable 

12 level of academic standing, as determined by the in13 stitution of higher education that the student at14 tends, or is dismissed from the institution of higher 

15 education for disciplinary reasons. 

16 (h) EVALUATION AND REPORT.—A State receiving a 

17 payment under subsection (c) for a cohort shall prepare 

18 and submit an annual report to the Secretary on the suc19 cess of the cohort. The State report shall include the fol20 lowing: 

21 (1) The following information relating to the 

22 students in the cohort who sign a contract for edu23 cational opportunity, as applicable: 

24 (A) The participation and completion rates 

25 in the CEO grants program under this section. 


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•S 2357 IS 

1 (B) The public school secondary school 

2 graduation rate and how the rate relates to the 

3 established State benchmark described in sub4 section (d)(2). 

5 (C) The rate of enrollment in public and 

6 private institutions of higher education and how 

7 the rate relates to the established State bench8 mark. 

9 (D) The rate of persistence in public and 

10 private institutions of higher education and how 

11 the rate relates to the established State bench12 mark. 

13 (E) The rate of graduation from public 

14 and private institutions of higher education and 

15 how the rate relates to the established State 

16 benchmark. 

17 (F) Average CEO grant aid per student. 

18 (G) A description of, and justification for, 

19 any increase in tuition and fees at the public 2- 

20 or 4-year degree-granting institutions of higher 

21 education in the State. 

22 (2) A comparison of the rates described in sub23 paragraphs (B) through (E) of paragraph (1) for 

24 students in the cohort who sign a contract for edu25 cational opportunity to such rates for a representaVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00223 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 tive sample of students in the cohort in the State 

2 who do not sign a contract. 

3 Subtitle B—Arming Americans 

4 With 21st Century Knowledge 

5 and Skills 

6 CHAPTER 1—INCREASING THE NUMBER 

7 OF NEW AMERICAN SCIENTISTS, ENGI8 NEERS, AND LANGUAGE EXPERTS 

9 SEC. 2211. PURPOSE. 

10 The purpose of this chapter is to increase the number 

11 of low-income and middle-income students who pursue ca12 reers in mathematics, science, technology, engineering, 

13 and critical-need foreign languages. 

14 SEC. 2212. GRANTS FOR STRENGTHENING MATHEMATICS, 

15 SCIENCE, AND ENGINEERING AND TECH16 NOLOGY EDUCATION INFRASTRUCTURE. 

17 (a) GRANTS FOR STRENGTHENING MATHEMATICS, 

18 SCIENCE, AND ENGINEERING AND TECHNOLOGY EDU19 CATION INFRASTRUCTURE.—Part D of title V of the Ele20 mentary and Secondary Education Act of 1965 (20 U.S.C. 

21 7241 et seq.) is amended by adding at the end the fol22 lowing: 


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1 ‘‘SUBPART 22—GRANTS FOR STRENGTHENING 

2 MATHEMATICS, SCIENCE, AND ENGINEERING 

3 AND TECHNOLOGY EDUCATION INFRA4 STRUCTURE 

5 ‘‘SEC. 5621. GRANTS FOR STRENGTHENING MATHEMATICS, 

6 SCIENCE, AND ENGINEERING AND TECH7 NOLOGY EDUCATION INFRASTRUCTURE. 

8 ‘‘(a) PURPOSE.—The purpose of this section is to im9 prove mathematics, science, and engineering and tech10 nology education infrastructure in public elementary 

11 schools and secondary schools to facilitate improved edu12 cational opportunities for all students. 

13 ‘‘(b) DEFINITION OF HIGH-NEED.—In this section, 

14 the term ‘high-need’, when used with respect to a school, 

15 means a public elementary school or secondary school that 

16 is eligible for assistance under section 1114(a) of the Ele17 mentary and Secondary Education Act of 1965. 

18 ‘‘(c) PROGRAM AUTHORIZED.—From amounts appro19 priated under section 5401(b) for a fiscal year, and sub20 ject to subsection (d), the Secretary, in consultation with 

21 the Director of the National Science Foundation, shall 

22 award grants to local educational agencies to enable the 

23 local educational agencies to carry out the activities de24 scribed in subsection (g). 

25 ‘‘(d) RESERVATION OF FUNDS.—From amounts ap26 propriated under section 5401(b) for a fiscal year, the SecVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00225 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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retary shall reserve a total of 1 1 ⁄2 of 1 percent for the Sec2 retary of the Interior to award grants to elementary 

3 schools and secondary schools operated or funded by the 

4 Bureau of Indian Affairs to enable such elementary 

5 schools and secondary schools to carry out the activities 

6 described in subsection (g). 

7 ‘‘(e) APPLICATION.— 

8 ‘‘(1) IN GENERAL.—A local educational agency 

9 desiring a grant under subsection (c) shall submit 

10 an application to the Secretary at such time, in such 

11 manner, and containing such information as the Sec12 retary may reasonably require. 

13 ‘‘(2) CONTENTS.—The application described in 

14 paragraph (1) shall include the following: 

15 ‘‘(A) A description of the activities under 

16 subsection (g) for which assistance is sought 

17 and the costs of such activities. 

18 ‘‘(B) A description of the process through 

19 which the local educational agency identified 

20 the activities described in subparagraph (A). 

21 ‘‘(C) Clear principles that the local edu22 cational agency used to determine the priority 

23 of qualifying activities under this section that 

24 prioritize the use of quantitative data, such as 

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1 ments and income data, in order to give priority 

2 to projects benefiting high-need schools. 

3 ‘‘(D) An assurance that the local edu4 cational agency will provide a complete and de5 tailed accounting of the use of grant funds 

6 awarded to the local educational agency under 

7 this section. 

8 ‘‘(E) A description of the evaluation proc9 ess that will assess the accomplishments of the 

10 program. 

11 ‘‘(f) APPLICATION APPROVAL.— 

12 ‘‘(1) DETERMINATION IN CONSULTATION WITH

13 NATIONAL SCIENCE FOUNDATION.—The Secretary 

14 shall review each application submitted under sub15 section (e) to determine whether the application is 

16 sufficient. In making such a determination, the Sec17 retary shall consult with the Director of the Na18 tional Science Foundation, in part to ensure that the 

19 application is coordinated with any preexisting Na20 tional Science Foundation initiatives in the State. 

21 ‘‘(2) DETERMINATION OF INSUFFICIENT APPLI22 CATION.—If the Secretary determines that an appli23 cation submitted by a local educational agency does 

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1 section (e), the Secretary shall provide the local edu2 cational agency with— 

3 ‘‘(A) a written explanation of why the ap4 plication did not comply with such require5 ments; and 

6 ‘‘(B) an opportunity to submit an amended 

7 application. 

8 ‘‘(3) PRIORITY.—In awarding grants under this 

9 section, the Secretary shall give priority to local edu10 cational agencies with a high percentage of high11 need schools. 

12 ‘‘(g) REQUIRED USE OF FUNDS.—A local educational 

13 agency that receives a grant under subsection (c) shall use 

14 grant funds, in accordance with the application of the local 

15 educational agency, to carry out not less than 1 of the 

16 following: 

17 ‘‘(1) The purchase or refurbishment of mathe18 matics, science, and engineering and technology edu19 cation equipment, including laboratory equipment. 

20 ‘‘(2) The purchase of instructional materials or 

21 curricula with proven effectiveness in improving 

22 mathematics, science, and engineering and tech23 nology education outcomes, including age-appro24 priate reading materials on varying grade levels that 

25 provide poor readers with access to mathematics, 


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1 science, and engineering and technology education 

2 subject matter. 

3 ‘‘(3) Support for a science, mathematics, or en4 gineering and technology education specialist in each 

5 school who is responsible for— 

6 ‘‘(A) assisting in the implementation of the 

7 school’s science, mathematics, or engineering 

8 and technology education program; 

9 ‘‘(B) assisting other teachers in delivering 

10 quality instruction; 

11 ‘‘(C) assisting in identifying and devel12 oping professional development opportunities 

13 tied to the curriculum; and 

14 ‘‘(D) providing guidance on curricula, 

15 equipment, and other components necessary for 

16 high-quality instruction. 

17 ‘‘(4) Any other directly related activity— 

18 ‘‘(A) identified by the local educational 

19 agency in the application required under sub20 section (e); and 

21 ‘‘(B) approved by the Secretary, in con22 sultation with the Director of the National 

23 Science Foundation. 

24 ‘‘(h) REPORT.— 


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1 ‘‘(1) IN GENERAL.—A local educational agency 

2 that receives a grant under this section for a fiscal 

3 year shall submit, not later than January 31 of the 

4 succeeding fiscal year, a report in such form and 

5 containing such information as the Secretary deter6 mines to be reasonably necessary to evaluate the 

7 compliance of the local educational agency with the 

8 provisions of this section. 

9 ‘‘(2) CONTENTS.—The report described in 

10 paragraph (1) shall include the following: 

11 ‘‘(A) A description of the activities carried 

12 out with grant funds under this section. 

13 ‘‘(B) A complete and detailed accounting 

14 of the use of funds awarded under this section, 

15 including how the local educational agency gave 

16 priority to projects benefiting students served 

17 by high-need schools. 

18 ‘‘(C) A description of how the local edu19 cational agency assesses the impact of the pro20 gram. 

21 ‘‘(D) A description of how students were 

22 served by the projects assisted under this sec23 tion, including any expansion of inquiry-based 

24 learning opportunities, and an accounting of the 

25 approximate number of students so served. 


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1 ‘‘(E) An accounting of student academic 

2 progress made as a result of activities funded 

3 under this section, using previously established 

4 statewide academic achievement assessments in 

5 mathematics and science. 

6 ‘‘(F) Qualitative testimony from students, 

7 teachers, administrators, or parents on the ef8 fect of activities funded under this section. 

9 ‘‘(3) PENALTY.—A local educational agency 

10 that receives a grant under this section for a fiscal 

11 year but does not submit the report required under 

12 this subsection shall not be eligible to receive any 

13 subsequent grant funds under this section.’’. 

14 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

15 5401 of the Elementary and Secondary Education Act of 

16 1965 (20 U.S.C. 7241) is amended— 

17 (1) by striking ‘‘this part’’ and inserting ‘‘this 

18 part (excluding subpart 22)’’; 

19 (2) by striking ‘‘There are’’ and inserting the 

20 following: 

21 ‘‘(a) GENERAL AUTHORIZATION.—There are’’; and 

22 (3) by adding at the end the following: 

23 ‘‘(b) MATHEMATICS, SCIENCE, AND ENGINEERING

24 AND TECHNOLOGY EDUCATION INFRASTRUCTURE.— 

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1 part 22, $500,000,000 for fiscal year 2007 and such sums 

2 as may be necessary for each of the 4 succeeding fiscal 

3 years.’’. 

4 (c) TABLE OF CONTENTS.—The table of contents in 

5 section 2 of the Elementary and Secondary Education Act 

6 of 1965 is amended by inserting after the item relating 

7 to section 5618 the following: 

‘‘Subpart 22—Grants for Strengthening Mathematics, Science, and 

Engineering and Technology Education Infrastructure 

‘‘Sec. 5621. Grants for strengthening mathematics, science, and engineering and technology education infrastructure.’’. 

8 SEC. 2213. SCIENCE, TECHNOLOGY, ENGINEERING, MATHE9 MATICS, AND CRITICAL-NEED FOREIGN LAN10 GUAGE SCHOLARS. 

11 (a) DEFINITIONS.—In this section: 

12 (1) INSTITUTION OF HIGHER EDUCATION.—The 

13 term ‘‘institution of higher education’’ has the 

14 meaning given the term in section 101(a) of the 

15 Higher Education Act of 1965 (20 U.S.C. 1001(a)). 

16 (2) SECRETARY.—The term ‘‘Secretary’’ means 

17 the Secretary of Education. 

18 (b) PROGRAM AUTHORIZED.—From amounts appro19 priated under subsection (j) for a fiscal year, the Secretary 

20 shall carry out a program to award grants, on a competi21 tive basis, to institutions of higher education (or consortia 

22 of such institutions) to enable the institutions of higher 

23 education (or consortia) to provide scholarships to make 


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1 higher education tuition free for low-income and middle2 income undergraduate and graduate students who are en3 rolled at the institutions of higher education to earn de4 grees in science, technology, engineering, mathematics, 

5 and critical-need foreign languages (as determined by the 

6 Secretary under section 2222). 

7 (c) APPLICATION.—An institution of higher edu8 cation or a consortium seeking a grant under this section 

9 shall submit an application to the Secretary at such time, 

10 in such manner, and containing such information as the 

11 Secretary may require. 

12 (d) AWARD BASIS.—In awarding grants under this 

13 section, the Secretary shall give special consideration to 

14 programs that— 

15 (1) are a central organizational focus of the in16 stitution of higher education or consortium; 

17 (2) enable scholarship recipients to become suc18 cessful members of the science, technology, engineer19 ing, mathematics, and critical-need foreign language 

20 21st century workforce; and 

21 (3) recruit undergraduate and graduate stu22 dents, especially female and underrepresented minor23 ity students, who would otherwise not pursue careers 

24 in science, technology, engineering, mathematics, or 

25 a critical-need foreign language. 


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1 (e) USE OF FUNDS.—An institution of higher edu2 cation or a consortium receiving a grant under this section 

3 shall use the grant funds to carry out a program to en4 courage low-income and middle-income undergraduate and 

5 graduate students enrolled at the institution of higher 

6 education, or at an institution of higher education that 

7 is a member of the consortium, respectively, to earn de8 grees in science, technology, engineering, mathematics, or 

9 a critical-need foreign language, through administering 

10 scholarships in accordance with subsection (f). 

11 (f) SCHOLARSHIPS.— 

12 (1) SCHOLARSHIP REQUIREMENTS.—Scholar13 ships under this subsection shall be available to a 

14 student enrolled at an institution of higher education 

15 that receives a grant under this section or is a mem16 ber of a consortium that receives a grant under this 

17 section— 

18 (A)(i) whose parents have an adjusted 

19 gross income for the most recent tax year avail20 able of— 

21 (I) less than $53,000 if single; or 

22 (II) less than $107,000 if married; or 

23 (ii) in the case of a student who is inde24 pendent (as defined in section 480 of the High25 er Education Act of 1965 (20 U.S.C. 1087vv), 


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1 who meets the adjusted gross income require2 ments of clause (i); and 

3 (B)(i) in the case of a student in the first 

4 or second year of a program of undergraduate 

5 education, who enrolls in prerequisite courses 

6 for a baccalaureate degree with a major in 

7 science, technology, engineering, mathematics, 

8 or a critical-need foreign language, as deter9 mined by the institution of higher education 

10 that the student attends; 

11 (ii) in the case of a student who has com12 pleted 2 years of a program of undergraduate 

13 education, who is pursuing a baccalaureate de14 gree with a major in science, technology, engi15 neering, mathematics, or a critical-need foreign 

16 language; or 

17 (iii) in the case of a graduate student, who 

18 is pursuing a graduate degree in science, tech19 nology, engineering, mathematics, or a critical20 need foreign language. 

21 (2) AMOUNT.— 

22 (A) ANNUAL AMOUNT.—An institution of 

23 higher education or consortium that receives a 

24 grant under this section shall award a scholar25 ship to a student described in paragraph (1) in 


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1 an amount that does not exceed $5,500 per 

2 academic year, except that no student shall re3 ceive for any academic year an amount that is 

4 more than the cost of attendance, as deter5 mined under section 472 of the Higher Edu6 cation Act of 1965 (20 U.S.C. 1087ll)), at the 

7 institution where the student is enrolled for 

8 such academic year. 

9 (B) REDUCTIONS IN AMOUNT FOR PART10 TIME STUDENTS.—In any case where a student 

11 attends an institution of higher education on 

12 less than a full-time basis (including a student 

13 who attends an institution of higher education 

14 on less than a half-time basis) during any aca15 demic year, the amount of the scholarship for 

16 which that student is eligible shall be reduced 

17 in proportion to the degree to which that stu18 dent is not so attending on a full-time basis, in 

19 accordance with a schedule of reductions estab20 lished by the Secretary for the purpose of this 

21 section, computed in accordance with this sub22 section. Such schedule of reductions shall be es23 tablished by regulation and published in the 

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1 ule described in section 482 of the Higher Edu2 cation Act of 1965 (20 U.S.C. 1089). 

3 (C) CUMULATIVE AMOUNT.—An institution 

4 of higher education or consortium receiving a 

5 grant under this section may award an indi6 vidual a scholarship under this subsection for 

7 more than 1 year, or for both undergraduate 

8 and graduate study, except that— 

9 (i) no individual shall receive a total 

10 amount of scholarship support under this 

11 subsection for undergraduate study that is 

12 more than $22,000; and 

13 (ii) no individual shall receive a total 

14 amount of scholarship support under this 

15 section for graduate study that is more 

16 than $22,000. 

17 (g) CONDITIONS OF SUPPORT.—As a condition of ac18 ceptance of a scholarship under this section, a recipient 

19 shall enter into an agreement with the institution of higher 

20 education or consortium— 

21 (1) accepting the terms of the scholarship; and 

22 (2) agreeing to provide the awarding institution 

23 of higher education or consortium with up-to-date 

24 contact information and to participate in surveys 

25 provided by the Secretary of Education, institution 


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1 of higher education, or consortium as part of an as2 sessment program. 

3 (h) FAILURE TO COMPLETE OBLIGATION.— 

4 (1) GENERAL RULE.—An individual who has 

5 received a scholarship under this section shall be lia6 ble to the institution of higher education or consor7 tium that awarded the scholarship, as well as to the 

8 United States, for the amount of the scholarship, if 

9 such individual— 

10 (A) fails to maintain an acceptable level of 

11 academic standing in the institution of higher 

12 education in which the individual is enrolled, as 

13 determined by the institution of higher edu14 cation; 

15 (B) is dismissed from such institution for 

16 disciplinary reasons; or 

17 (C) withdraws from the baccalaureate or 

18 graduate degree program for which the scholar19 ship was made before the completion of such 

20 program, and does not transfer into another 

21 program that meets the requirements of sub22 section (f)(1)(B). 

23 (2) EXCLUSION FROM FUTURE SCHOLAR24 SHIPS.—If a circumstance described in paragraph 

25 (1) occurs, all of the following shall apply: 


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1 (A) NONRENEWAL OF SCHOLARSHIP.—The 

2 institution of higher education or consortium 

3 shall not renew the scholarship to the indi4 vidual. However, at the discretion of the institu5 tion of higher education or consortium award6 ing the scholarship, an individual may regain 

7 eligibility for a scholarship under this section 

8 after completing not less than 1 academic term 

9 at the institution, if the individual— 

10 (i) maintains an acceptable level of 

11 academic standing in the institution of 

12 higher education, as determined by the in13 stitution; and 

14 (ii) reenrolls in the baccalaureate or 

15 graduate degree program for which the 

16 scholarship was made. 

17 (B) INELIGIBILITY FOR FEDERAL SCHOL18 ARSHIPS.—The individual shall become auto19 matically ineligible to participate in any Federal 

20 scholarship programs for future years. 

21 (3) USE OF RECOVERED SCHOLARSHIP

22 FUNDS.—An institution of higher education or con23 sortium that recovers funds under paragraph (1) 

24 shall use such funds to provide additional scholar25 ships under subsection (f). 


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1 (i) DATA COLLECTION.—An institution of higher 

2 education or consortium receiving a grant under this sec3 tion shall supply to the Secretary any relevant statistical 

4 and demographic data on scholarship recipients the Sec5 retary may request. 

6 (j) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated to carry out this section 

8 $750,000,000 for fiscal year 2007 and such sums as may 

9 be necessary for each of the 4 succeeding fiscal years. 

10 SEC. 2214. EXPANSION OF NATIONAL SCIENCE FOUNDA11 TION EDUCATION AND HUMAN RESOURCES 

12 DIRECTORATE. 

13 (a) PURPOSE.—The purpose of this section is to en14 sure the continued involvement of experts at the National 

15 Science Foundation in improving science, technology, en16 gineering, and mathematics at the elementary, secondary, 

17 and postsecondary levels by doubling funding for the edu18 cation and human resources programs of the National 

19 Science Foundation, in addition to the increases made 

20 under section 2125 for the mathematics and science part21 nerships described in section 9 of the National Science 

22 Foundation Authorization Act of 2002 and in addition to 

23 any other amounts authorized or appropriated to the Na24 tional Science Foundation. 


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1 (b) AUTHORIZATION OF APPROPRIATIONS FOR NSF 

2 EDUCATION AND HUMAN RESOURCES.—There is author3 ized to be appropriated to the National Science Founda4 tion for education and human resources, in addition to the 

5 amounts authorized under section 2125(a)(2), amounts as 

6 follows: 

7 (1) For fiscal year 2007, $886,810,000. 

8 (2) For fiscal year 2008, $1,040,110,000. 

9 (3) For fiscal year 2009, $1,193,410,000. 

10 (4) For fiscal year 2010, $1,346,710,000. 

11 (5) For fiscal year 2011, $1,500,000,000. 

12 (c) SCIENCE, MATHEMATICS, ENGINEERING, AND

13 TECHNOLOGY TALENT EXPANSION PROGRAM.—Section 

14 8(7)(C) of the National Science Foundation Authorization 

15 Act of 2002 (Public Law 107–368) is amended— 

16 (1) by redesignating clauses (i) through (vi) as 

17 subclauses (I) through (VI), respectively, and in18 denting appropriately; 

19 (2) by striking ‘‘include those that promote 

20 high quality—’’ and inserting ‘‘include programs 

21 that— 

22 ‘‘(i) promote high-quality—’’; and 

23 (3) in clause (i)— 

24 (A) in subclause (III) (as redesignated by 

25 paragraph (1)), by striking ‘‘for students;’’ and 


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1 inserting ‘‘for students, especially underrep2 resented minority and female mathematics, 

3 science, engineering, and technology students;’’; 

4 and 

5 (B) in subclause (VI) (as redesignated by 

6 paragraph (1)), by striking the period and in7 serting a semicolon; and 

8 (4) by adding at the end the following: 

9 ‘‘(ii) finance summer internships for math10 ematics, science, engineering, and technology 

11 undergraduate students; 

12 ‘‘(iii) facilitate smaller mathematics, 

13 science, engineering, and technology class sizes; 

14 ‘‘(iv) facilitate the hiring of additional 

15 mathematics, science, engineering, and tech16 nology faculty; 

17 ‘‘(v) serve as bridges to enable underrep18 resented minority and female secondary school 

19 students to obtain extra mathematics, science, 

20 engineering, and technology training prior to 

21 entering an institution of higher education; and 

22 ‘‘(vi) finance mathematics, science, engi23 neering, and technology student research activi24 ties.’’. 


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1 CHAPTER 2—IMPROVING GLOBAL 

2 KNOWLEDGE AND SKILLS 

3 SEC. 2221. DEFINITIONS. 

4 In this chapter: 

5 (1) INSTITUTION OF HIGHER EDUCATION.—The 

6 term ‘‘institution of higher education’’ has the 

7 meaning given the term in section 101(a) of the 

8 Higher Education Act of 1965 (20 U.S.C. 1001(a)). 

9 (2) LOCAL EDUCATIONAL AGENCY; STATE EDU10 CATIONAL AGENCY.—The terms ‘‘local educational 

11 agency’’ and ‘‘State educational agency’’ have the 

12 meanings given the terms in section 9101 of the Ele13 mentary and Secondary Education Act of 1965 (20 

14 U.S.C. 7801). 

15 (3) SECRETARY.—The term ‘‘Secretary’’ means 

16 the Secretary of Education. 

17 SEC. 2222. CRITICAL-NEED LANGUAGES. 

18 The Secretary shall, prior to requesting applications 

19 for grants under this chapter during each grant cycle, con20 sult with, and receive recommendations regarding, critical 

21 need for expertise in foreign languages and world regions 

22 from the head official, or a designee of such head official, 

23 of the National Security Council, the Department of 

24 Homeland Security, the Department of Defense, the De25 partment of State, the Federal Bureau of Investigation, 


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1 the Department of Labor, and the Department of Com2 merce, and the Director of National Intelligence. The Sec3 retary shall take into account such recommendations when 

4 developing a list of critical-need languages and when re5 questing applications for grants under this chapter. The 

6 Secretary shall also make available to applicants the list 

7 of the critical-need languages for the grant cycle. 

8 SEC. 2223. CRITICAL-NEED LANGUAGE PROGRAM GRANTS. 

9 (a) DEFINITIONS.—In this section: 

10 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti11 ty’’ means— 

12 (A) a State educational agency; or 

13 (B) a partnership between a local edu14 cational agency and an institution of higher 

15 education. 

16 (2) HIGH-NEED SCHOOL.—The term ‘‘high-need 

17 school’’ means a public elementary or secondary 

18 school that is eligible for assistance under section 

19 1114(a) of the Elementary and Secondary Edu20 cation Act of 1965 (20 U.S.C. 6314(a)). 

21 (b) PROGRAM AUTHORIZED.—The Secretary shall 

22 award grants, on a competitive basis, to eligible entities 

23 to enable the eligible entities to develop programs that 

24 allow students to be exposed to and immersed in other 


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1 languages and cultures from the early grades throughout 

2 the students’ education. 

3 (c) APPLICATION.—An eligible entity desiring a grant 

4 under this section shall submit an application to the Sec5 retary at such time, in such manner, and containing such 

6 information as the Secretary may require. 

7 (d) AWARD BASIS.—In awarding grants under this 

8 section, the Secretary shall give priority to eligible entities 

9 that will use grant funds for programs that target a high10 need school. 

11 (e) USE OF FUNDS.—An eligible entity receiving a 

12 grant under this section shall use grant funds to carry 

13 out 1 or more of the following: 

14 (1) Establish and maintain programs in a crit15 ical-need language (as determined by the Secretary 

16 under section 2222) in the elementary schools served 

17 by the eligible entity. 

18 (2) Offer additional or more advanced critical19 need language classes in middle schools and sec20 ondary schools. 

21 (3) Create and implement effective models of 

22 instruction in critical-need languages and world cul23 tures. 

24 (4) Create and maintain internationally themed 

25 schools that— 


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1 (A) offer dual language immersion pro2 grams; 

3 (B) focus on international content; and 

4 (C) use technology to bring the world into 

5 the classroom virtually. 

6 (f) TECHNICAL ASSISTANCE CENTERS.— 

7 (1) IN GENERAL.—The Secretary shall enter 

8 into contracts with entities to establish a system of 

9 regional critical-need foreign language technical as10 sistance centers focused on developing critical-need 

11 language programs in kindergarten through grade 

12 12 education. 

13 (2) APPLICATION.—An entity desiring a con14 tract under this subsection shall submit an applica15 tion to the Secretary at such time, in such manner, 

16 and containing such information as the Secretary 

17 may require. 

18 (3) ACTIVITIES.—Each center established under 

19 this subsection shall— 

20 (A) assist States and local educational 

21 agencies in developing critical-need language 

22 curricula; and 

23 (B) disseminate best practices in the field. 

24 (g) REPORT.—Not later than 90 days after the last 

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1 ceiving a grant under subsection (a) or an entity receiving 

2 a contract under subsection (f) shall prepare and submit 

3 a report to the Secretary describing the supported activi4 ties. 

5 (h) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated to carry out this section 

7 $100,000,000 for fiscal year 2007 and such sums as may 

8 be necessary for each of the 4 succeeding fiscal years. 

9 SEC. 2224. INTERNATIONAL SUMMER INSTITUTE GRANTS. 

10 (a) PROGRAM AUTHORIZED.—The Secretary shall 

11 award grants, on a competitive basis, to institutions of 

12 higher education or nonprofit organizations (or consortia 

13 of such institutions or organizations) to carry out summer 

14 institute programs that help teachers integrate inter15 national content into the curricula and improve the teach16 ers’ knowledge and teaching of foreign cultures. 

17 (b) PARTNERSHIP.—In order to receive a grant under 

18 this section, an institution of higher education or a non19 profit organization (or a consortium of such institutions 

20 or organizations) shall enter into a partnership with a 

21 local educational agency to carry out the grant activities. 

22 (c) APPLICATION.—An institution of higher edu23 cation, nonprofit organization, or consortium desiring a 

24 grant under this section shall submit an application to the 


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1 Secretary at such time, in such manner, and containing 

2 such information as the Secretary may require. 

3 (d) USE OF FUNDS.—An institution of higher edu4 cation, nonprofit organization, or consortium receiving a 

5 grant under this section shall use grant funds to carry 

6 out 1 or more of the following: 

7 (1) Integrate international content into existing 

8 summer institute programs. 

9 (2) Assist States in creating new summer insti10 tutes to prepare teachers— 

11 (A) to teach international subjects, such as 

12 world history, global economics, and geography; 

13 and 

14 (B) to integrate international content into 

15 other subjects to improve global competence. 

16 (e) REPORT.—Not later than 90 days after the last 

17 day of the grant period, an institution of higher education, 

18 nonprofit organization, or consortium receiving a grant 

19 under this section shall prepare and submit a report to 

20 the Secretary describing the grant activities. 

21 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

22 are authorized to be appropriated to carry out this section 

23 $100,000,000 for fiscal year 2007 and such sums as may 

24 be necessary for each of the 4 succeeding fiscal years. 


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1 SEC. 2225. INTERNATIONAL AND FOREIGN LANGUAGE 

2 STUDIES. 

3 (a) PURPOSE.—The purpose of this section is to in4 crease study abroad and foreign language study opportu5 nities in critical-need languages for secondary school, un6 dergraduate, and graduate students. 

7 (b) DEFINITION OF ELIGIBLE ENTITY.—In this sec8 tion, the term ‘‘eligible entity’’ means— 

9 (1) an institution of higher education; 

10 (2) a consortium of institutions of higher edu11 cation; 

12 (3) an institution of higher education in part13 nership with an international university; 

14 (4) an institution of higher education in part15 nership with a local educational agency; 

16 (5) a State educational agency; or

17 (6) a local educational agency. 

18 (c) PROGRAM AUTHORIZED.—From amounts appro19 priated under this section for a fiscal year, the Secretary 

20 shall award grants, on a competitive basis, to eligible enti21 ties to enable the eligible entities to establish or strengthen 

22 foreign language study programs in critical-need lan23 guages, as determined by the Secretary under section 

24 2222. 

25 (d) AMOUNT AND DURATION OF GRANT.—Each 

26 grant awarded under this section shall be— 


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1 (1) for an amount of not less than $500,000 for 

2 each year of the grant; and 

3 (2) for a period of not less than 4 years. 

4 (e) APPLICATION.—An eligible entity that desires a 

5 grant under this section shall submit an application to the 

6 Secretary at such time, in such manner, and containing 

7 such information as the Secretary may require. 

8 (f) USE OF FUNDS.—An eligible entity receiving a 

9 grant under this section shall use the grant funds to estab10 lish or strengthen foreign language study programs in crit11 ical-need languages, which may include the following ac12 tivities: 

13 (1) The recruitment and retention of faculty in 

14 critical-need languages. 

15 (2) Curriculum development. 

16 (3) The acquisition of materials to improve in17 structional programs. 

18 (4) The expansion of study abroad programs 

19 for participating students. 

20 (5) The development of foreign language im21 mersion programs. 

22 (6) Summer institutes for faculty development. 

23 (7) Bridge programs that allow dual enrollment 

24 for secondary school students in institutions of high25 er education. 


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1 (8) Programs to expand the understanding and 

2 knowledge of cultural, geographic, and political fac3 tors within countries with populations who speak 

4 critical-need languages. 

5 (9) Research on, and evaluation of, the teaching 

6 of critical-need foreign languages. 

7 (10) Participation in national programs impact8 ing critical-need foreign languages. 

9 (11) Data collection and analysis regarding the 

10 outcomes of various student recruitment strategies 

11 and program design and curricula approaches, and 

12 their impact on increasing— 

13 (A) the number of students studying crit14 ical-need languages; and 

15 (B) the fluency of the students in the lan16 guages. 

17 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to carry out this section 

19 $100,000,000 for fiscal year 2007 and such sums as may 

20 be necessary for each of the 4 succeeding fiscal years. 

21 CHAPTER 3—INVESTING IN WORKERS 

22 THROUGH JOB TRAINING 

23 SEC. 2231. PROJECTS TO PROVIDE LITERACY, TECH24 NOLOGY, AND TECHNICAL SKILLS TRAINING. 

25 (a) DEFINITIONS.—In this section: 


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1 (1) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Labor. 

3 (2) SMALL BUSINESS.—The term ‘‘small busi4 ness’’ means a business with not more than 100 em5 ployees. 

6 (b) PROJECTS.—The Secretary shall carry out 

7 projects to provide literacy, technology, and technical skills 

8 training for workers, including both employed and unem9 ployed workers. 

10 (c) GRANTS.—In carrying out projects described in 

11 subsection (b), the Secretary shall make grants to eligible 

12 partnerships. 

13 (d) ELIGIBLE PARTNERSHIPS.— 

14 (1) IN GENERAL.—To be eligible to receive such 

15 a grant, a partnership shall be a local or regional 

16 public-private partnership consisting of at least— 

17 (A) 1 State or local workforce investment 

18 board established under section 111 or 117 of 

19 the Workforce Investment Act of 1998 (29 

20 U.S.C. 2821 or 2832) (including a consortium 

21 of such boards in a region); 

22 (B) 1 institution of higher education, as 

23 defined in section 101(a) of the Higher Edu24 cation Act of 1965, (including a consortium of 

25 such institutions); 


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1 (C) 1 business (including a consortium of 

2 such businesses) or nonprofit employer; and 

3 (D) 1 community-based organization, labor 

4 union, trade association, or other intermediary. 

5 (2) DESIGNATION OF RESPONSIBLE FISCAL

6 AGENTS.—Each partnership described in paragraph 

7 (1) shall designate a responsible fiscal agent to re8 ceive and disburse grant funds under this section. 

9 (e) TRAINING.— 

10 (1) PARTICIPANTS.—A partnership that re11 ceives a grant under subsection (c) shall provide 

12 training through a project described in subsection 

13 (b) to persons who are employed and who wish to 

14 obtain and upgrade skills to qualify for existing jobs 

15 (as of the date such training begins) and to persons 

16 who are unemployed. 

17 (2) PREPARATION.—Such training shall, to the 

18 extent practicable, include the preparation of work19 ers for a broad range of positions along a career lad20 der. 

21 (f) START-UP ACTIVITIES.— 

22 (1) IN GENERAL.—Except as provided in para23 graph (2), not more than 5 percent, or $75,000, 

24 whichever is less, of the funds made available 

25 through a single grant made under this section may 


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1 be used toward the start-up costs of a partnership 

2 or training project. 

3 (2) EXCEPTION.—In the case of partnerships 

4 consisting primarily of small businesses, not more 

5 than 10 percent, or $150,000, whichever is less, of 

6 the funds made available through a single grant 

7 made under this section may be used toward the 

8 start-up costs of a partnership or training project. 

9 (3) DURATION OF START-UP PERIOD.—For 

10 purposes of this subsection, a start-up period con11 sists of a period of not more than 1 month, begin12 ning on the first day of the grant period. At the end 

13 of the start-up period, training shall immediately 

14 begin and no further Federal funds may be used for 

15 start-up costs. 

16 (g) APPLICATIONS.— 

17 (1) IN GENERAL.—To be eligible to receive a 

18 grant under this section, a partnership shall submit 

19 an application to the Secretary at such time, in such 

20 manner, and containing such information as the Sec21 retary may require. 

22 (2) CONTENTS.—Each application for such a 

23 grant shall— 

24 (A) provide evidence of the need for the 

25 training to be provided through the grant, by 


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1 providing evidence of skill shortages in existing 

2 or emerging industries as demonstrated through 

3 reliable regional, State, or local data; 

4 (B) articulate the level of skills that work5 ers will be trained for and the manner by which 

6 attainment of those skills will be measured; and 

7 (C) include an agreement that the project 

8 will be subject to evaluation by the Secretary to 

9 measure the effectiveness of the project. 

10 (3) MATCHING FUNDS.—Each application for a 

11 grant to carry out a project described in subsection 

12 (b) shall state the manner by which the partnership 

13 will— 

14 (A) make available, with respect to the 

15 costs to be incurred by the partnership in car16 rying out the project, non-Federal contributions 

17 (in cash or in kind) in an amount equal to not 

18 less than 50 percent of the Federal funds pro19 vided under the grant; and 

20 (B) make the contributions available di21 rectly or through donations from public or private entities, and ensure that at least 1 22 ⁄2 of the 

23 contributions will be from businesses or non24 profit employers involved in the partnership. 

25 (h) CONSIDERATIONS.— 


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1 (1) PROJECTS WITH COMMITMENTS.—In mak2 ing grants under this section, the Secretary shall 

3 give consideration to an applicant that provides a 

4 specific, measurable commitment— 

5 (A) upon successful completion of a train6 ing course by a participant— 

7 (i) who is unemployed, to hire or ef8 fectuate the hiring of the participant 

9 (where applicable); 

10 (ii) who is an incumbent worker, to 

11 increase the wages or salary of the worker 

12 (where applicable); or 

13 (iii) to provide skill certification to the 

14 participant; 

15 (B) to provide training that is linked to in16 dustry-accepted occupational skill standards, 

17 certificates, or licensing requirements; or 

18 (C) to provide a project that will lead to 

19 attainment of baccalaureate or associate de20 grees. 

21 (2) EXPANDED AND COLLABORATIVE

22 PROJECTS.—In making grants under this section, 

23 the Secretary shall give consideration to an applicant 

24 that proposes to use grant funds— 


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1 (A) to demonstrate a significant ability to 

2 expand a training project through such means 

3 as training more workers or offering more 

4 courses; and 

5 (B) to carry out a training project result6 ing from a collaboration, especially with more 

7 than 1 small business or with an entity carrying 

8 out a labor-management training project. 

9 (3) PARTNERSHIPS INVOLVING SMALL BUSI10 NESSES.—In making grants under this section, the 

11 Secretary shall give consideration to an applicant 

12 that involves and directly benefits more than 1 small 

13 business. 

14 (4) DONATIONS FROM PUBLIC OR PRIVATE EN15 TITIES.—In making grants under this section, the 

16 Secretary shall give consideration to an applicant 

17 that provides a specific commitment that a portion 

18 of the non-Federal contribution described in sub19 section (g)(3) will be made available through dona20 tions from other public or private entities, so as to 

21 demonstrate the long-term sustainability of the 

22 project after the expiration of the grant period in23 volved. 

24 (i) ADMINISTRATIVE COSTS.—A partnership that re25 ceives a grant to carry out a project described in subVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00257 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 section (b) may not use more than 10 percent of the funds 

2 made available through the grant to pay for administrative 

3 costs associated with the project. 

4 (j) AUTHORIZATION OF APPROPRIATIONS.—There 

5 are authorized to be appropriated to carry out this section 

6 $300,000,000 for fiscal year 2007 and such sums as may 

7 be necessary for each of the 4 succeeding fiscal years. 

8 TITLE III—KEEPING GOOD JOBS 

9 IN THE UNITED STATES 

10 Subtitle A—Right To Know When 

11 Jobs are Shipped Overseas 

12 SEC. 3101. AMENDMENTS TO THE WORKER ADJUSTMENT 

13 AND RETRAINING NOTIFICATION ACT. 

14 (a) DEFINITION.—Section 2(a) of the Worker Ad15 justment and Retraining Notification Act (29 U.S.C. 

16 2101(a)) is amended— 

17 (1) in paragraph (3)(B), by striking ‘‘for—’’ 

18 and all that follows through ‘‘500 employees’’ in 

19 clause (ii), and inserting ‘‘for not less than 50 em20 ployees’’; 

21 (2) in paragraph (7), by striking ‘‘and’’ after 

22 the semicolon; 

23 (3) in paragraph (8), by striking the period and 

24 inserting ‘‘; and’’; and 

25 (4) by adding at the end the following: 


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1 ‘‘(9) the term ‘offshoring of jobs’ means any ac2 tion taken by an employer the effect of which is to 

3 create, shift, or transfer employment positions or fa4 cilities outside the United States and that results in 

5 an employment loss during any 30-day period for 15 

6 or more employees.’’. 

7 (b) NOTICE.—Section 3 of the Worker Adjustment 

8 and Retraining Notification Act (29 U.S.C. 2102) is 

9 amended— 

10 (1) in subsection (a)— 

11 (A) in the matter preceding paragraph (1), 

12 by striking ‘‘60-day’’ and inserting ‘‘90-day’’; 

13 (B) in paragraph (1), by striking ‘‘and’’ 

14 after the semicolon; 

15 (C) in paragraph (2), by striking the pe16 riod and inserting ‘‘; and’’; and 

17 (D) by inserting after paragraph (2), the 

18 following: 

19 ‘‘(3) to the Secretary of Labor.’’; 

20 (2) in subsection (b), by striking ‘‘60-day’’ both 

21 places that such term appears and inserting ‘‘90- 

22 day’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(e) NOTICE FOR OFFSHORING OF JOBS.—In the 

25 case of a notice under subsection (a) regarding the 


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1 offshoring of jobs, the notice shall include, in addition to 

2 the information otherwise required by the Secretary with 

3 respect to other notices under such subsection, informa4 tion concerning— 

5 ‘‘(1) the number of jobs affected; 

6 ‘‘(2) the location where the jobs are being cre7 ated, or shifted or transferred to; and 

8 ‘‘(3) the reasons that such creation, shifting, or 

9 transferring is occurring.’’. 

10 (c) TECHNICAL AMENDMENTS.—The Worker Adjust11 ment and Retraining Notification Act (29 U.S.C. 2101 et 

12 seq.) is amended— 

13 (1) by striking ‘‘plant closing or mass layoff’’ 

14 each place that such term appears and inserting 

15 ‘‘plant closing, mass layoff, or offshoring of jobs’’; 

16 (2) by striking ‘‘closing or layoff’’ each place 

17 that such term appears and inserting ‘‘closing, lay18 off, or offshoring’’; 

19 (3) in section 3— 

20 (A) in the section heading, by striking 

21 ‘‘PLANT CLOSINGS AND MASS LAYOFFS’’ 

22 and inserting ‘‘PLANT CLOSINGS, MASS LAY23 OFFS, AND OFFSHORING OF JOBS’’; 


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1 (B) in subsection (b)(2)(A), by striking 

2 ‘‘the closing or mass layoff’’ and inserting ‘‘the 

3 closing, layoff, or offshoring’’; and 

4 (C) in subsection (d), by striking ‘‘section 

5 2(a) (2) or (3)’’ and inserting ‘‘paragraph (2), 

6 (3), or (9) of section 2(a)’’; 

7 (4) in section 5— 

8 (A) in subsection (a)— 

9 (i) in paragraph (1), in the matter fol10 lowing subparagraph (B), by striking ‘‘60 

11 days’’ and inserting ‘‘90 days’’; and 

12 (ii) in paragraph (3), by striking 

13 ‘‘shutdown or layoff’’ and inserting ‘‘clos14 ing, layoff, or offshoring involved’’; and 

15 (B) in subsection (b), by inserting ‘‘and 

16 section 11(c)’’ after ‘‘in this section’’; and 

17 (5) in the table of contents, by striking the item 

18 relating to section 3 and inserting the following: 

‘‘Sec. 3. Notice required before plant closings, mass layoffs, and offshoring of 

jobs.’’. 

19 (d) POSTING OF EMPLOYEE RIGHTS.— 

20 (1) REDESIGNATION.—The Worker Adjustment 

21 and Retraining Notification Act (29 U.S.C. 2101 et 

22 seq.) is amended by redesignating section 11 as sec23 tion 13. 


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1 (2) POSTING.—The Worker Adjustment and 

2 Retraining Notification Act, as amended by para3 graph (1), is further amended by inserting after sec4 tion 10 the following: 

5 ‘‘SEC. 11. POSTING OF NOTICE OF RIGHTS. 

6 ‘‘(a) DEVELOPMENT.—Not later than 60 days after 

7 the date of enactment of this section, the Secretary of 

8 Labor shall develop a notice of employee rights under this 

9 Act for posting by employers. 

10 ‘‘(b) POSTING.—Each employer shall post in a con11 spicuous place in places of employment the notice of em12 ployee rights as developed by the Secretary under sub13 section (a). 

14 ‘‘(c) PENALTY.—Any employer that willfully violates 

15 this section may be assessed a civil money penalty not to 

16 exceed $100 for each separate offense.’’. 

17 (e) ANNUAL REPORT.—The Worker Adjustment and 

18 Retraining Notification Act (29 U.S.C. 2101 et seq.), as 

19 amended by subsection (d), is further amended by insert20 ing after section 11 the following: 

21 ‘‘SEC. 12. CONTENTS OF ANNUAL REPORTS BY THE SEC22 RETARY OF LABOR. 

23 ‘‘(a) STATISTICAL REPORTS.— 

24 ‘‘(1) STATISTICS.—The Secretary of Labor 

25 shall collect and compile statistics based on the inVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00262 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 formation submitted to the Secretary under sub2 sections (a)(3) and (e) of section 3. 

3 ‘‘(2) REPORTS.—The Secretary of Labor shall 

4 annually prepare and submit to the President and 

5 the appropriate committees of Congress reports con6 taining statistics collected or compiled under para7 graph (1). 

8 ‘‘(b) OFFSHORING REPORTS.— 

9 ‘‘(1) STUDIES.—The Secretary of Labor shall 

10 annually conduct studies on the offshoring of jobs 

11 (as defined in section 2(a)(9)), including collecting 

12 information concerning— 

13 ‘‘(A) the number of jobs affected; 

14 ‘‘(B) the locations where the jobs are being 

15 created, or shifted or transferred to; and 

16 ‘‘(C) the reasons that such creation, shift17 ing, or transferring is occurring. 

18 ‘‘(2) REPORTS.—Not later than 120 days after 

19 the date on which each regular session of Congress 

20 commences, the Secretary of Labor shall prepare 

21 and submit to the President and the appropriate 

22 committees of Congress a report containing the re23 sults of the most recent study conducted under para24 graph (1).’’. 


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1 Subtitle B—Removing Tax Incen2 tives for Companies to Ship 

3 Jobs Overseas 

4 SEC. 3201. TAXATION OF INCOME OF CONTROLLED FOR5 EIGN CORPORATIONS ATTRIBUTABLE TO IM6 PORTED PROPERTY. 

7 (a) GENERAL RULE.—Subsection (a) of section 954 

8 of the Internal Revenue Code of 1986 (defining foreign 

9 base company income) is amended by striking ‘‘and’’ at 

10 the end of paragraph (4), by striking the period at the 

11 end of paragraph (5) and inserting ‘‘, and’’, and by adding 

12 at the end the following new paragraph: 

13 ‘‘(6) imported property income for the taxable 

14 year (determined under subsection (j) and reduced 

15 as provided in subsection (b)(5)).’’. 

16 (b) DEFINITION OF IMPORTED PROPERTY IN17 COME.—Section 954 of the Internal Revenue Code of 1986 

18 is amended by adding at the end the following new sub19 section: 

20 ‘‘(j) IMPORTED PROPERTY INCOME.— 

21 ‘‘(1) IN GENERAL.—For purposes of subsection 

22 (a)(6), the term ‘imported property income’ means 

23 income (whether in the form of profits, commissions, 

24 fees, or otherwise) derived in connection with— 


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1 ‘‘(A) manufacturing, producing, growing, 

2 or extracting imported property; 

3 ‘‘(B) the sale, exchange, or other disposi4 tion of imported property; or 

5 ‘‘(C) the lease, rental, or licensing of im6 ported property. 

7 Such term shall not include any foreign oil and gas 

8 extraction income (within the meaning of section 

9 907(c)) or any foreign oil related income (within the 

10 meaning of section 907(c)). 

11 ‘‘(2) IMPORTED PROPERTY.—For purposes of 

12 this subsection— 

13 ‘‘(A) IN GENERAL.—Except as otherwise 

14 provided in this paragraph, the term ‘imported 

15 property’ means property which is imported 

16 into the United States by the controlled foreign 

17 corporation or a related person. 

18 ‘‘(B) IMPORTED PROPERTY INCLUDES CER19 TAIN PROPERTY IMPORTED BY UNRELATED

20 PERSONS.—The term ‘imported property’ in21 cludes any property imported into the United 

22 States by an unrelated person if, when such 

23 property was sold to the unrelated person by 

24 the controlled foreign corporation (or a related 

25 person), it was reasonable to expect that— 


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1 ‘‘(i) such property would be imported 

2 into the United States; or 

3 ‘‘(ii) such property would be used as 

4 a component in other property which would 

5 be imported into the United States. 

6 ‘‘(C) EXCEPTION FOR PROPERTY SUBSE7 QUENTLY EXPORTED.—The term ‘imported 

8 property’ does not include any property which is 

9 imported into the United States and which— 

10 ‘‘(i) before substantial use in the 

11 United States, is sold, leased, or rented by 

12 the controlled foreign corporation or a re13 lated person for direct use, consumption, 

14 or disposition outside the United States; or 

15 ‘‘(ii) is used by the controlled foreign 

16 corporation or a related person as a com17 ponent in other property which is so sold, 

18 leased, or rented. 

19 ‘‘(3) DEFINITIONS AND SPECIAL RULES.— 

20 ‘‘(A) IMPORT.—For purposes of this sub21 section, the term ‘import’ means entering, or 

22 withdrawal from warehouse, for consumption or 

23 use. Such term includes any grant of the right 

24 to use intangible property (as defined in section 

25 936(h)(3)(B)) in the United States. 


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1 ‘‘(B) UNITED STATES.—For purposes of 

2 this subsection, the term ‘United States’ in3 cludes the Commonwealth of Puerto Rico, the 

4 Virgin Islands of the United States, Guam, 

5 American Samoa, and the Commonwealth of 

6 the Northern Mariana Islands. 

7 ‘‘(C) UNRELATED PERSON.—For purposes 

8 of this subsection, the term ‘unrelated person’ 

9 means any person who is not a related person 

10 with respect to the controlled foreign corpora11 tion. 

12 ‘‘(D) COORDINATION WITH FOREIGN BASE

13 COMPANY SALES INCOME.—For purposes of this 

14 section, the term ‘foreign base company sales 

15 income’ shall not include any imported property 

16 income.’’. 

17 (c) SEPARATE APPLICATION OF LIMITATIONS ON

18 FOREIGN TAX CREDIT FOR IMPORTED PROPERTY IN19 COME.— 

20 (1) BEFORE 2007.— 

21 (A) IN GENERAL.—Paragraph (1) of sec22 tion 904(d) of the Internal Revenue Code of 

23 1986 (relating to separate application of section 

24 with respect to certain categories of income), as 

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1 uary 1, 2007, is amended by striking ‘‘and’’ at 

2 the end of subparagraph (H), by redesignating 

3 subparagraph (I) as subparagraph (J), and by 

4 inserting after subparagraph (H) the following 

5 new subparagraph: 

6 ‘‘(I) imported property income, and’’. 

7 (B) IMPORTED PROPERTY INCOME DE8 FINED.—Paragraph (2) of section 904(d) of 

9 such Code, as so in effect, is amended by redes10 ignating subparagraphs (H) and (I) as subpara11 graphs (I) and (J), respectively, and by insert12 ing after subparagraph (G) the following new 

13 subparagraph: 

14 ‘‘(H) IMPORTED PROPERTY INCOME.—The 

15 term ‘imported property income’ means any in16 come received or accrued by any person which 

17 is of a kind which would be imported property 

18 income (as defined in section 954(j)).’’. 

19 (C) LOOK-THRU RULES TO APPLY.—Sub20 paragraph (F) of section 904(d)(3) of such 

21 Code, as so in effect, is amended by striking 

22 ‘‘or (D)’’ and inserting ‘‘(D), or (I)’’. 

23 (2) AFTER 2006.— 

24 (A) IN GENERAL.—Paragraph (1) of sec25 tion 904(d) of such Code (relating to separate 


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1 application of section with respect to certain 

2 categories of income), as in effect for taxable 

3 years beginning after December 31, 2006, is 

4 amended by striking ‘‘and’’ at the end of sub5 paragraph (A), by redesignating subparagraph 

6 (B) as subparagraph (C), and by inserting after 

7 subparagraph (A) the following new subpara8 graph: 

9 ‘‘(B) imported property income, and’’. 

10 (B) IMPORTED PROPERTY INCOME DE11 FINED.—Paragraph (2) of section 904(d) of 

12 such Code, as so in effect, is amended by redes13 ignating subparagraphs (I) and (J) as subpara14 graphs (J) and (K), respectively, and by insert15 ing after subparagraph (H) the following new 

16 subparagraph: 

17 ‘‘(I) IMPORTED PROPERTY INCOME.—The 

18 term ‘imported property income’ means any in19 come received or accrued by any person which 

20 is of a kind which would be imported property 

21 income (as defined in section 954(j)).’’. 

22 (C) CONFORMING AMENDMENT.—Clause 

23 (ii) of section 904(d)(2)(A) of such Code, as so 

24 in effect, is amended by inserting ‘‘or imported 


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1 property income’’ after ‘‘passive category in2 come’’. 

3 (d) TECHNICAL AMENDMENTS.— 

4 (1) Clause (iii) of section 952(c)(1)(B) of the 

5 Internal Revenue Code of 1986 (relating to certain 

6 prior year deficits may be taken into account) is 

7 amended— 

8 (A) by redesignating subclauses (II), (III), 

9 (IV), and (V) as subclauses (III), (IV), (V), and 

10 (VI), and 

11 (B) by inserting after subclause (I) the fol12 lowing new subclause: 

13 ‘‘(II) imported property in14 come,’’. 

15 (2) Paragraph (5) of section 954(b) of such 

16 Code (relating to deductions to be taken into ac17 count) is amended by striking ‘‘and the foreign base 

18 company oil related income’’ and inserting ‘‘the for19 eign base company oil related income, and the im20 ported property income’’. 

21 (e) EFFECTIVE DATES.— 

22 (1) IN GENERAL.—Except as provided in para23 graph (2), the amendments made by this section 

24 shall apply to taxable years of foreign corporations 

25 beginning after the date of the enactment of this 


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1 Act, and to taxable years of United States share2 holders within which or with which such taxable 

3 years of such foreign corporations end. 

4 (2) SUBSECTION (c).—The amendments made 

5 by subsection (c)(1) shall apply to taxable years be6 ginning after the date of the enactment of this Act 

7 and before January 1, 2007, and the amendments 

8 made by subsection (c)(2) shall apply to taxable 

9 years beginning after December 31, 2006. 

10 Subtitle C—Requiring Government 

11 Contractors To Use American 

12 Workers for Taxpayer-Funded 

13 Work 

14 SEC. 3301. SHORT TITLE. 

15 This subtitle may be cited as the ‘‘United States 

16 Workers Protection Act of 2006’’. 

17 SEC. 3302. LIMITATIONS ON OFF-SHORE PERFORMANCE OF 

18 CONTRACTS FOR THE PROCUREMENT OF 

19 GOODS AND SERVICES. 

20 (a) LIMITATIONS.— 

21 (1) IN GENERAL.—The Office of Federal Pro22 curement Policy Act (41 U.S.C. 403 et seq.) is 

23 amended by adding at the end the following new sec24 tion: 


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1 ‘‘SEC. 42. LIMITATIONS ON OFF-SHORE PERFORMANCE OF 

2 CONTRACTS FOR THE PROCUREMENT OF 

3 GOODS AND SERVICES. 

4 ‘‘(a) CONVERSIONS TO CONTRACTOR PERFORMANCE

5 OF FEDERAL ACTIVITIES.—An activity or function of an 

6 executive agency that is converted to contractor perform7 ance under Office of Management and Budget Circular 

8 A–76 may not be performed by the contractor or any sub9 contractor at a location outside the United States except 

10 to the extent that such activity or function was previously 

11 performed by Federal Government employees outside the 

12 United States. 

13 ‘‘(b) FEDERAL CONTRACTS FOR THE PROCUREMENT

14 OF SERVICES.—(1) A contract for the procurement of 

15 goods or services that is entered into by the head of an 

16 executive agency may not be performed outside the United 

17 States except to meet a requirement of the executive agen18 cy for goods or services specifically at a location outside 

19 the United States. 

20 ‘‘(2) The President may waive the prohibition in 

21 paragraph (1) in the case of any contract for which the 

22 President determines in writing that it is necessary in the 

23 national security interests of the United States for goods 

24 or services under the contract to be performed outside the 

25 United States. 


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1 ‘‘(3) Paragraph (1) does not apply to goods or serv2 ices performed outside the United States under the excep3 tion provided in subsection (a). 

4 ‘‘(c) STATE CONTRACTS FOR THE PROCUREMENT OF

5 SERVICES.—(1) Funds appropriated for financial assist6 ance for a State may not be disbursed to or for such State 

7 during a fiscal year unless the chief executive of that State 

8 has transmitted to the Administrator for Federal Procure9 ment Policy, not later than April 1 of the preceding fiscal 

10 year, a written certification that none of such funds will 

11 be expended for goods or services performed outside the 

12 United States under contracts for the procurement of 

13 goods or services entered into by such State. 

14 ‘‘(2) In this subsection, the term ‘State’ means each 

15 of the several States of the United States, the District 

16 of Columbia, the Commonwealth of Puerto Rico, the Com17 monwealth of the Northern Mariana Islands, the Virgin 

18 Islands, Guam, American Samoa, and the Trust Territory 

19 of the Pacific Islands.’’. 

20 (2) CLERICAL AMENDMENT.—The table of sec21 tions in section 1(b) of such Act is amended by add22 ing at the end the following new item: 

‘‘Sec. 42. Limitations on off-shore performance of contracts for the procurement 

of services.’’. 

23 (b) INAPPLICABILITY TO STATES DURING FIRST

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1 eral Procurement Policy Act (as added by subsection (a)) 

2 shall not apply to disbursements of funds to a State dur3 ing the fiscal year in which this Act is enacted and the 

4 next fiscal year. 

5 (c) REPEAL OF SUPERSEDED LAW.—Section 647 of 

6 the Transportation, Treasury, and Independent Agencies 

7 Appropriations Act, 2004 (division F of Public Law 108– 

8 199) is amended by striking subsection (e). 

9 TITLE IV—LEVELING THE PLAY10 ING FIELD FOR WORKERS 

11 HERE AND ABROAD 

12 Subtitle A—Raise Living Standards 

13 Worldwide 

14 SEC. 4101. LIMITATION ON TRADE AUTHORITIES PROCE15 DURES. 

16 (a) IN GENERAL.—Notwithstanding any other provi17 sion of law, section 2103(b)(3) of the Bipartisan Trade 

18 Promotion Authority Act of 2002 (19 U.S.C. 3803(b)(3)) 

19 and the provisions of chapter 5 of title I of the Trade Act 

20 of 1974 (19 U.S.C. 2191 et seq.) (in this section referred 

21 to as ‘‘trade authorities procedures’’) shall not apply to 

22 any bill implementing a bilateral or regional trade agree23 ment unless that agreement— 

24 (1) prohibits forced and compulsory labor and 

25 prohibits child labor; and 


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1 (2) contains dispute settlement and enforce2 ment provisions for failure to adhere to the prohibi3 tions described in paragraph (1) if the failure affects 

4 trade between the parties to the agreement. 

5 (b) DEFINITIONS.—For purposes of subsection (a) 

6 the terms ‘‘forced and compulsory labor’’ and ‘‘child 

7 labor’’ have the meaning such terms have when used in 

8 the 1998 International Labor Organization Declaration on 

9 Fundamental Principles and Rights at Work. 

10 (c) MONITORING.—There are authorized to be appro11 priated such sums as may be necessary to the Department 

12 of Labor to fund the International Labor Organization to 

13 monitor the compliance of countries with the 1998 Inter14 national Labor Organization Declaration on Fundamental 

15 Principles and Rights at Work. 

16 Subtitle B—Prevention of Currency 

17 Manipulation 

18 SEC. 4201. INTERNATIONAL NEGOTIATIONS ON EXCHANGE 

19 RATE AND ECONOMIC POLICIES. 

20 Section 3004 of the Exchange Rates and International 

21 Economic Policy Coordination Act of 1988 (22 U.S.C. 

22 5304) is amended to read as follows: 


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1 ‘‘SEC. 3004. INTERNATIONAL NEGOTIATIONS ON EXCHANGE 

2 RATE AND ECONOMIC POLICIES. 

3 ‘‘(a) MULTILATERAL NEGOTIATIONS.—The Presi4 dent shall seek to confer and negotiate with other coun5 tries— 

6 ‘‘(1) to achieve— 

7 ‘‘(A) better coordination of macroeconomic 

8 policies of the major industrialized nations; and 

9 ‘‘(B) more appropriate and sustainable levels 

10 of trade and current account balances, and ex11 change rates of the dollar and other currencies 

12 consistent with such balances; and 

13 ‘‘(2) to develop a program for improving existing 

14 mechanisms for coordination and improving the 

15 functioning of the exchange rate system to provide 

16 for long-term exchange rate stability consistent with 

17 more appropriate and sustainable current account 

18 balances. 

19 ‘‘(b) BILATERAL NEGOTIATIONS.— 

20 ‘‘(1) IN GENERAL.—The Secretary of the 

21 Treasury shall analyze on an annual basis the ex22 change rate policies of foreign countries, in consulta23 tion with the International Monetary Fund, and con24 sider whether countries manipulate the rate of ex25 change between their currency and the United 

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1 ance of payments adjustments or gaining unfair 

2 competitive advantage in international trade. If the 

3 Secretary considers that such manipulation is occur4 ring with respect to any country that (A) has mate5 rial global current account surpluses and (B) has 

6 significant bilateral trade surpluses with the United 

7 States, the Secretary shall take action to initiate ne8 gotiations with such foreign country on an expedited 

9 basis, in the International Monetary Fund or bilat10 erally, for the purpose of ensuring that such country 

11 regularly and promptly adjusts the rate of exchange 

12 between its currencies and the United States dollar 

13 to permit effective balance of payments adjustments 

14 and to eliminate the unfair advantage. 

15 ‘‘(2) INITIATION OF NEGOTIATIONS.— 

16 ‘‘(A) IN GENERAL.—On and after the date 

17 that is 180 days after the date negotiations de18 scribed in paragraph (1) are initiated with re19 spect to a country, unless a certification de20 scribed in paragraph (3) has been made to Con21 gress with respect to such country, in addition 

22 to any other duty, there shall be imposed an ad23 ditional rate of duty equal to an amount deter24 mined by the Secretary on any article that is 


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1 the growth, product, or manufacture of the that 

2 country. 

3 ‘‘(B) FACTORS TO CONSIDER IN ESTAB4 LISHING DUTY.—In determining the additional 

5 rate of duty to impose with respect to a country 

6 under this paragraph, the Secretary of the 

7 Treasury, in consultation with the Secretary of 

8 Commerce, shall take into consideration— 

9 ‘‘(i) the length of time the country has 

10 intervened in the value of its currency in 

11 one direction or another; 

12 ‘‘(ii) the country’s rate of foreign ex13 change accumulation; 

14 ‘‘(iii) the country’s capital controls 

15 and payment restrictions; and 

16 ‘‘(iv) the country’s trade and current 

17 account balances. 

18 ‘‘(3) CERTIFICATION.—The certification de19 scribed in this paragraph means a certification by 

20 the President to Congress that the country with re21 spect to which negotiations described in paragraph 

22 (1) have been initiated is no longer acquiring foreign 

23 exchange reserves to prevent the appreciation of the 

24 rate of exchange between its currency and the 

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1 fair competitive advantage in international trade. 

2 The certification shall also include a determination 

3 that the currency of the country has undergone a 

4 substantial upward revaluation placing it at or near 

5 its fair market value. 

6 ‘‘(4) ADDITIONAL RATE OF DUTY.—For pur7 poses of this subsection, the term ‘additional rate of 

8 duty’ means a rate of duty determined by the Sec9 retary to be necessary to correct any unfair advan10 tage resulting from a country’s acquiring foreign ex11 change reserves or otherwise gaining an unfair com12 petitive advantage in the rate of exchange between 

13 its currency and the United States dollar. 

14 ‘‘(5) EXCEPTION.—The Secretary shall not be 

15 required to initiate negotiations in any case where 

16 such negotiations would have a serious detrimental 

17 impact on vital national economic and security inter18 ests. In such a case, the Secretary shall inform the 

19 chairman and the ranking minority member of the 

20 Committee on Banking, Housing, and Urban Affairs 

21 of the Senate and of the Committee on Financial 

22 Services of the House of Representatives of the Sec23 retary’s determination.’’. 


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1 Subtitle C—Encouraging Multilat2 eral Corporations to Adopt 

3 Labor Practices 

4 SEC. 4301. SHORT TITLE. 

5 This subtitle may be cited as the ‘‘Global Worker 

6 Fairness Act’’. 

7 SEC. 4302. FINDINGS. 

8 Congress finds that— 

9 (1) 1,400,000,000 workers around the world 

10 earn less than $2 per day; 

11 (2) most of those workers live in countries that 

12 lack basic labor protections, such as the protections 

13 against compulsory and prison labor, protections 

14 against child labor, the right to collective bargaining, 

15 and the right to a safe work environment; 

16 (3) many of those workers are willing to do jobs 

17 that workers in the United States do now, but for 

18 much lower wages, reduced benefits, and reduced 

19 workplace safety and protections; 

20 (4) companies are often able to cut costs by ex21 ploiting workers in other nations and not providing 

22 the workers with adequate wages, benefits, or a safe 

23 workplace environment; 


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1 (5) that exploitation creates a race to the bot2 tom that undercuts United States workers and costs 

3 jobs in the United States; and 

4 (6) therefore, the United States needs to re5 ward companies that treat their foreign workers with 

6 decency and fairness, because those companies are 

7 working to level the global playing field for United 

8 States workers and deserve recognition for their ef9 forts. 

10 SEC. 4303. DEFINITIONS. 

11 In this subtitle: 

12 (1) CORE LABOR STANDARDS.—The term ‘‘core 

13 labor standards’’ means the 8 fundamental labor 

14 conventions that the International Labour Organiza15 tion has identified. 

16 (2) LABOR MARKET.—The term ‘‘labor market’’ 

17 means a system consisting of employers as buyers 

18 and workers as sellers, the purpose of which is to 

19 match job vacancies with job applicants and to set 

20 wages. 

21 (3) MULTINATIONAL COMPANY.—The term 

22 ‘‘multinational company’’ means a corporation, en23 terprise, or partnership, including its subsidiaries, 

24 local affiliates, contractors, and subcontractors, that 

25 does business in 2 or more countries. 


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1 (4) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Labor. 

3 SEC. 4304. ESTABLISHMENT. 

4 There are established the Global Worker Fairness 

5 Awards (referred to individually in this subtitle as an 

6 ‘‘Award’’) and the Fair Labor Certifications (referred to 

7 individually in this subtitle as a ‘‘Certificate’’). 

8 SEC. 4305. CONFERRING OF AWARDS AND CERTIFICATES. 

9 (a) IN GENERAL.—The President or the Secretary 

10 shall annually confer the Awards and Certificates on mul11 tinational companies that meet the criteria set forth in 

12 section 4307(a), in accordance with section 4307(d). 

13 (b) PLAQUES FOR AWARD.—Each Award shall be evi14 denced by a plaque bearing the inscription ‘‘Global Worker 

15 Fairness Award.’’ One such plaque shall be presented to 

16 each Award recipient. The plaque shall be of such design 

17 and materials and bear such additional inscriptions as the 

18 Secretary may prescribe. 

19 (c) DOCUMENTS FOR CERTIFICATE.—Each Certifi20 cate shall be evidenced by a framed document bearing the 

21 words ‘‘Fair Labor Certification’’. One such document 

22 shall be presented to each Certificate recipient. The docu23 ment shall be of such design and materials and bear such 

24 additional inscriptions as the Secretary may prescribe. 


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1 (d) CEREMONIES.—The President or the Secretary 

2 shall confer the Awards and Certificates, with such cere3 monies as the President or the Secretary, respectively, 

4 may determine to be proper. 

5 (e) NUMBER OF AWARDS.—No more than 1 Award 

6 may be conferred in any year in each classification de7 scribed in section 4307(b). If no multinational company 

8 in such a classification meets the criteria of section 

9 4307(a) for a year, the President or the Secretary shall 

10 not confer an Award in that classification for that year. 

11 (f) PUBLICITY CONCERNING AWARD OR CERTIFI12 CATE.—A multinational company on which an Award or 

13 Certificate is conferred, and that agrees to help other mul14 tinational companies improve their labor practices, may 

15 publicize its receipt of the Award or Certificate, including 

16 using the Award or Certificate in its advertising and mar17 keting. 

18 SEC. 4306. PROCEDURE AND ADMINISTRATION. 

19 (a) DIRECTOR.—The Director of the Office of Inter20 national Economic Affairs in the Bureau of International 

21 Labor Affairs of the Department of Labor (referred to in 

22 this subtitle as the ‘‘Director’’) shall carry out the admin23 istration of the Awards and Certificates pursuant to the 

24 terms of this subtitle. 

25 (b) BOARD.— 


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1 (1) APPOINTMENT.—The Director shall estab2 lish and appoint the members of a Board of Global 

3 Worker Fairness (referred to in this subtitle as the 

4 ‘‘Board’’), consisting of 1 expert from each of the 

5 following fields: 

6 (A) Business. 

7 (B) Human rights. 

8 (C) Government. 

9 (D) Academia. 

10 (E) Labor. 

11 (2) TERMS.—Members of the Board shall serve 

12 for a single term of 3 years. 

13 (3) DUTIES.—The Board shall advise the Di14 rector on the administration of the Awards. The 

Board shall, by a 3 15 ⁄5 vote of the Board, recommend 

16 multinational companies to receive Awards. 

17 SEC. 4307. CRITERIA FOR ELIGIBILITY. 

18 (a) ELIGIBILITY.—To be eligible to receive an Award 

19 under this section, a multinational company— 

20 (1) shall submit an application to the Director 

21 at such time, in such manner, and containing— 

22 (A) documentation and evidence dem23 onstrating that the criteria specified in para24 graphs (2) through (5) are satisfied; 


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1 (B) documentation of the number of work2 ers employed by the company, to assist the Di3 rector in making the classification described in 

4 subsection (b); and 

5 (C) such information as the Director may 

6 require, in application specifications established 

7 and disseminated by the Director; 

8 (2) shall consent to a rigorous evaluation and 

9 audit of the company’s labor practices; 

10 (3) shall be in compliance with the labor stand11 ards set forth in each trade agreement to which the 

12 nation in which the company employs workers is a 

13 party; 

14 (4) shall be in compliance with the Inter15 national Labour Organization’s core labor standards, 

16 including standards pertaining to child labor, collec17 tive bargaining, prison and compulsory labor, safety, 

18 and wages; and 

19 (5) shall verify that, in each labor market in 

20 which the company employs workers, the company 

21 pays wages and provides benefits, as defined by the 

22 National Compensation Survey, above the median 

23 level for like occupations in that market. 

24 (b) CLASSIFICATION.—An applicant under subsection 

25 (a) shall be classified as— 


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1 (1) a small employer of foreign labor of the 

2 company employs not more than 100 workers in for3 eign countries; 

4 (2) a medium employer of foreign labor if the 

5 company employs not less than 101 and not more 

6 than 1000 workers in foreign countries; or 

7 (3) a large employer of foreign labor if the com8 pany employs not less than 1001 workers in foreign 

9 countries. 

10 (c) DOCUMENTATION AND EVIDENCE.—All informa11 tion submitted in an application described in subsection 

12 (a) shall be subject to verification through an audit au13 thorized in subsection (a)(2). If the Director finds that 

14 an applicant has knowingly provided false information in 

15 such an application for a particular year the Director shall 

16 disqualify the applicant from consideration for an Award 

17 for that year and the 2 subsequent years. 

18 (d) SELECTION OF APPLICANTS TO RECEIVE

19 AWARDS AND CERTIFICATES.— 

20 (1) AWARDS.—The Secretary or the President 

21 shall confer an Award on an applicant only if the ap22 plicant qualifies for an Award under subsection (a) 

23 and only after reviewing the recommendations of the 

24 Board under section 4306(b). 


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1 (2) CERTIFICATES.—The Secretary or the 

2 President shall confer a Certificate on an applicant 

3 that qualifies for an Award under subsection (a) but 

4 is not selected to receive an Award under paragraph 

5 (1). 

6 SEC. 4308. REPORTING REQUIREMENTS. 

7 (a) INFORMATION TO APPLICANTS.—The Director 

8 shall ensure that all applicants under section 4307(a) re9 ceive the complete results of their audits under section 

10 4307(a) as well as detailed explanations of decisions re11 garding their applications. The Director shall also provide, 

12 to all applicants and to other appropriate groups, informa13 tion about the Awards made to successful applicants. 

14 (b) REPORT TO CONGRESS.—Not later than 3 years 

15 after the date of enactment of this subtitle, the Director 

16 shall prepare and submit to the President and the appro17 priate committees of Congress, a report on the progress 

18 made through, and the findings and conclusions resulting 

19 from, activities conducted pursuant to this subtitle, along 

20 with recommendations for possible modifications of the 

21 subtitle. 


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1 TITLE V—HELPING WORKERS 

2 AND COMMUNITIES HARMED 

3 BY TRADE 

4 Subtitle A—Wage Insurance Pro5 gram and Improvement of Cred6 it for Health Insurance Costs for 

7 Eligible Individuals 

8 SEC. 5101. WAGE INSURANCE FOR QUALIFYING DISPLACED 

9 WORKERS UPON REEMPLOYMENT. 

10 (a) IN GENERAL.—Section 246 of the Trade Act of 

11 1974 (19 U.S.C. 2318) is amended to read as follows: 

12 ‘‘SEC. 246. WAGE INSURANCE FOR DISPLACED WORKERS. 

13 ‘‘(a) IN GENERAL.— 

14 ‘‘(1) ESTABLISHMENT.—The Secretary shall es15 tablish a wage insurance program for displaced 

16 workers that provides the benefits described in para17 graph (2). 

18 ‘‘(2) BENEFITS. 

19 ‘‘(A) PAYMENTS.—A State shall use the 

20 funds provided to the State under section 241 

21 to pay, for a period not to exceed 2 years, to 

22 a worker described in paragraph (3)(B), 50 per23 cent of the difference between— 

24 ‘‘(i) the wages received by the worker 

25 from reemployment; and 


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1 ‘‘(ii) the wages received by the worker 

2 at the time of separation. 

3 ‘‘(B) HEALTH INSURANCE.—A worker de4 scribed in paragraph (3)(B) participating in the 

5 program established under paragraph (1) is eli6 gible to receive, for a period not to exceed 2 

7 years, a credit for health insurance costs under 

8 section 35 of the Internal Revenue Code of 

9 1986. 

10 ‘‘(3) ELIGIBILITY.— 

11 ‘‘(A) FIRM ELIGIBILITY.— 

12 ‘‘(i) IN GENERAL.—The Secretary 

13 shall provide the opportunity for a group 

14 of workers on whose behalf a petition is 

15 filed under section 221 to request that the 

16 group of workers be certified for the wage 

17 insurance program under this section at 

18 the time the petition is filed. 

19 ‘‘(ii) CRITERIA.—In determining 

20 whether to certify a group of workers as el21 igible for the wage insurance program, the 

22 Secretary shall consider the following cri23 teria: 


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1 ‘‘(I) Whether the workers in the 

2 workers’ firm possess skills that are 

3 not easily transferable. 

4 ‘‘(II) The competitive conditions 

5 within the workers’ industry. 

6 ‘‘(iii) DEADLINE.—The Secretary 

7 shall determine whether the workers in the 

8 group are eligible for the wage insurance 

9 program by the date specified in section 

10 223(a). 

11 ‘‘(B) INDIVIDUAL ELIGIBILITY.—A worker 

12 in the group that the Secretary has certified as 

13 eligible for the wage insurance program may 

14 elect to receive benefits under the wage insur15 ance program if the worker— 

16 ‘‘(i) is covered by a certification under 

17 subchapter A of this chapter; 

18 ‘‘(ii) obtains reemployment not more 

19 than 26 weeks after the date of separation 

20 from the adversely affected employment; 

21 and 

22 ‘‘(iii) is at least 50 years of age; 

23 ‘‘(iv) is employed on a full-time basis 

24 as defined by State law in the State in 

25 which the worker is employed; and 


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1 ‘‘(v) does not return to the employ2 ment from which the worker was sepa3 rated. 

4 ‘‘(4) TOTAL AMOUNT OF PAYMENTS.—The pay5 ments described in paragraph (2)(A) made to a 

6 worker may not exceed $20,000 per worker during 

7 the 2-year eligibility period. 

8 ‘‘(b) LIMITATION ON OTHER BENEFITS.— 

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (2) and subsection (a)(2)(B), if a worker is 

11 receiving payments pursuant to the program estab12 lished under subsection (a)(1), the worker shall not 

13 be eligible to receive any other benefits under this 

14 title. 

15 ‘‘(2) TRAINING SERVICES.—Notwithstanding 

16 subsection (a)(1)(A) of section 236, a worker who is 

17 receiving payments pursuant to the program estab18 lished under subsection (a)(1) is eligible to receive 

19 training under section 236 if the Secretary deter20 mines that— 

21 ‘‘(A) the provision of such training, con22 sistent with the worker’s full-time employment, 

23 will assist the worker in securing more suitable 

24 employment; and 


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1 ‘‘(B) the other requirements under sub2 section (a)(1) of section 236 are met.’’. 

3 (b) CONFORMING AMENDMENT.—The table of con4 tents for title II of the Trade Act of 1974 is amended 

5 by striking the item relating to section 246 and inserting 

6 the following: 

‘‘Sec. 246. Wage insurance for displaced workers.’’. 

7 (c) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—The amendments made by 

9 this section shall apply to workers certified as eligi10 ble for adjustment assistance under chapter 2 of 

11 title II of the Trade Act of 1974 on or after the date 

12 of the enactment of this Act. 

13 (2) INCREASED TOTAL AMOUNT OF PAYMENTS

14 AND TRAINING SERVICES FOR INDIVIDUALS CUR15 RENTLY RECEIVING PAYMENTS.—Subsections (a)(4) 

16 and (b)(2) of section 246 of the Trade Act of 1974 

17 (19 U.S.C. 2318), as amended by subsection (a), 

18 shall apply with respect to a worker receiving pay19 ments under the program under such section 246 on 

20 the day before the date of the enactment of this Act 

21 for the duration of such worker’s eligibility period 

22 under such program. 

23 SEC. 5102. IMPROVEMENT OF THE AFFORDABILITY OF THE 

24 CREDIT FOR HEALTH INSURANCE COSTS. 

25 (a) IMPROVEMENT OF AFFORDABILITY.— 


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1 (1) IN GENERAL.—Section 35(a) of the Inter2 nal Revenue Code of 1986 (relating to credit for 

3 health insurance costs of eligible individuals) is 

4 amended to read as follows: 

5 ‘‘(a) AMOUNT OF CREDIT.— 

6 ‘‘(1) IN GENERAL.—In the case of an indi7 vidual, there shall be allowed as a credit against the 

8 tax imposed by subtitle A an amount equal to the 

9 greater of— 

10 ‘‘(A) 95 percent of the amount paid by the 

11 taxpayer for coverage of the taxpayer and quali12 fying family members under qualified health in13 surance for eligible coverage months beginning 

14 in the taxable year; and 

15 ‘‘(B) an amount equal to the excess of— 

16 ‘‘(i) the amount paid by the taxpayer 

17 for coverage of the taxpayer and qualifying 

18 family members under qualified health in19 surance for eligible coverage months begin20 ning in the taxable year, over 

21 ‘‘(ii) an amount equal to 5 percent of 

22 the taxpayer’s certified income (as deter23 mined under subsection (g)(9)) for such 

24 taxable year.’’. 


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1 (2) CONFORMING AMENDMENT.—Section 

2 7527(b) of such Code (relating to advance payment 

3 of credit for health insurance costs of eligible indi4 viduals) is amended by striking ‘‘65 percent of the 

5 amount’’ and all that follows through the period at 

6 the end and inserting ‘‘the amount determined 

7 under section 35(a) for such taxable year.’’. 

8 (b) DETERMINATION OF CERTIFIED INCOME.—Sec9 tion 35(g) of such Code (relating to special rules), is 

10 amended— 

11 (1) by redesignating paragraph (9) as para12 graph (10), and 

13 (2) by inserting after paragraph (8) the fol14 lowing new paragraph: 

15 ‘‘(9) CERTIFIED INCOME.— 

16 ‘‘(A) IN GENERAL.—The Secretary shall 

17 enter into agreements with States to determine 

18 an individual’s certified income for purposes of 

19 subsection (a)(1)(B)(ii) for any taxable year. 

20 ‘‘(B) REQUIREMENTS.—An agreement 

21 under subparagraph (A) with a State shall— 

22 ‘‘(i) permit an individual to complete 

23 an application for certification of income 

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1 ner as the Secretary shall determine) and 

2 to submit the application to the State, 

3 ‘‘(ii) require the State to determine 

4 the individual’s income for the taxable year 

5 on the basis of the individual’s monthly 

6 family income as of the month preceding 

7 the month in which the application is sub8 mitted, and 

9 ‘‘(iii) require the State to issue a cer10 tification of income to the individual upon 

11 receipt of an application under clause (i), 

12 which shall apply for purposes of deter13 mining the taxpayer’s certified income for 

14 purposes of subsection (a)(1)(B)(ii) for the 

15 taxable year unless the State determines 

16 upon completion of the processing of the 

17 application that the certification is erro18 neous. 

19 ‘‘(C) NOTIFICATION OF CHANGE IN IN20 COME.—An individual issued a certification of 

21 income shall notify the State of any substantial 

22 change in income that applies for at least 60 

23 days and the taxpayer’s certified income for the 

24 taxable year shall be adjusted accordingly. An 

25 individual who fails to so notify the State shall 


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1 remit the difference (if any) between the 

2 amount described in subsection (a)(1)(A) for 

3 the taxable year and the amount described in 

4 subsection (a)(1)(B), plus interest at the under5 payment rate established under section 6621.’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section apply to taxable years beginning after Decem8 ber 31, 2005. 

9 SEC. 5103. 100 PERCENT CREDIT AND PAYMENT FOR 

10 MONTHLY PREMIUMS PAID PRIOR TO CER11 TIFICATION OF ELIGIBILITY FOR THE CRED12 IT. 

13 (a) IN GENERAL.—Subsection (a) of section 35 of the 

14 Internal Revenue Code of 1986, as amended by section 

15 5102(a)(1), is amended by adding at the end the following 

16 new paragraph: 

17 ‘‘(2) 100 PERCENT CREDIT FOR MONTHS PRIOR

18 TO ISSUANCE OF ELIGIBILITY CERTIFICATE.—The 

19 amount allowed as a credit against the tax imposed 

20 by subtitle A shall be equal to 100 percent in the 

21 case of the taxpayer’s first eligible coverage months 

22 occurring prior to the issuance of a qualified health 

23 insurance costs credit eligibility certificate.’’. 

24 (b) PAYMENT FOR PREMIUMS DUE PRIOR TO CER25 TIFICATION OF ELIGIBILITY FOR THE CREDIT.—Section 


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1 7527 of the Internal Revenue Code of 1986 (relating to 

2 advance payment of credit for health insurance costs of 

3 eligible individuals) is amended by adding at the end the 

4 following new subsection: 

5 ‘‘(e) PAYMENT FOR PREMIUMS DUE PRIOR TO

6 ISSUANCE OF CERTIFICATE.—The program established 

7 under subsection (a) shall provide— 

8 ‘‘(1) that the Secretary shall make payments on 

9 behalf of a certified individual of an amount equal 

10 to 100 percent of the premiums for coverage of the 

11 taxpayer and qualifying family members under quali12 fied health insurance for eligible coverage months 

13 (as defined in section 35(b)) occurring prior to the 

14 issuance of a qualified health insurance costs credit 

15 eligibility certificate; and 

16 ‘‘(2) that any payments made under paragraph 

17 (1) shall not be included in the gross income of the 

18 taxpayer on whose behalf such payments were 

19 made.’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to months beginning after the date 

22 of the enactment of this Act in taxable years ending after 

23 such date. 


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1 SEC. 5104. ELIGIBILITY FOR CERTAIN PENSION PLAN RE2 CIPIENTS; PRESUMPTIVE ELIGIBILITY. 

3 (a) ELIGIBILITY FOR CERTAIN PENSION PLAN RE4 CIPIENTS.—Subsection (c) of section 35 of the Internal 

5 Revenue Code of 1986 is amended— 

6 (1) in paragraph (1)— 

7 (A) in subparagraph (B), by striking 

8 ‘‘and’’ at the end; 

9 (B) in subparagraph (C), by striking the 

10 period and inserting ‘‘, and’’; and 

11 (C) by adding at the end the following: 

12 ‘‘(D) an eligible multiemployer pension 

13 participant.’’; and 

14 (2) by adding at the end the following new 

15 paragraph: 

16 ‘‘(5) ELIGIBLE MULTIEMPLOYER PENSION RE17 CIPIENT.—The term ‘eligible multiemployer pension 

18 recipient’ means, with respect to any month, any in19 dividual— 

20 ‘‘(A) who has attained age 55 as of the 

21 first day of such month, 

22 ‘‘(B) who is receiving a benefit from a 

23 multiemployer plan (as defined in section 

24 3(37)(A) of the Employee Retirement Income 

25 Security Act of 1974), and 


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1 ‘‘(C) whose former employer has with2 drawn from such multiemployer plan pursuant 

3 to section 4203(a) of such Act.’’. 

4 (b) PRESUMPTIVE ELIGIBILITY FOR PETITIONERS

5 FOR TRADE ADJUSTMENT ASSISTANCE.—Subsection (c) 

6 of section 35 of the Internal Revenue Code of 1986, as 

7 amended by subsection (a), is amended by adding at the 

8 end the following new paragraph: 

9 ‘‘(6) PRESUMPTIVE STATUS AS A TAA RECIPI10 ENT.—The term ‘eligible individual’ shall include 

11 any individual who is covered by a petition filed with 

12 the Secretary of Labor under section 221 of the 

13 Trade Act of 1974. This paragraph shall apply to 

14 any individual only with respect to months which— 

15 ‘‘(A) end after the date that such petition 

16 is so filed, and 

17 ‘‘(B) begin before the earlier of— 

18 ‘‘(i) the 90th day after the date of fil19 ing of such petition, or 

20 ‘‘(ii) the date on which the Secretary 

21 of Labor makes a final determination with 

22 respect to such petition.’’. 

23 (c) CONFORMING AMENDMENTS.— 

24 (1) Paragraph (1) of section 7527(d) of such 

25 Code is amended by striking ‘‘or an eligible alterVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00299 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 native TAA recipient (as defined in section 

2 35(c)(3))’’ and inserting ‘‘, an eligible alternative 

3 TAA recipient (as defined in section 35(c)(3)), an el4 igible multiemployer pension recipient (as defined in 

5 section 35(c)(5), or an individual who is an eligible 

6 individual by reason of section 35(c)(6)’’. 

7 (2) Section 173(f)(4) of the Workforce Invest8 ment Act of 1998 (29 U.S.C. 2918(f)(4)) is amend9 ed— 

10 (A) in subparagraph (B), by striking 

11 ‘‘and’’ at the end; and 

12 (B) by inserting after subparagraph (C), 

13 the following new subparagraphs: 

14 ‘‘(D) an eligible multiemployer pension re15 cipient (as defined in section 35(c)(5) of the In16 ternal Revenue Code of 1986), and 

17 ‘‘(E) an individual who is an eligible indi18 vidual by reason of section 35(c)(6) of the In19 ternal Revenue Code of 1986,’’. 

20 (d) TECHNICAL AMENDMENT CLARIFYING ELIGI21 BILITY OF CERTAIN DISPLACED WORKERS RECEIVING A

22 BENEFIT UNDER A DEFINED BENEFIT PENSION

23 PLAN.—The first sentence of section 35(c)(2) of the Inter24 nal Revenue Code of 1986 is amended by inserting before 

25 the period the following: ‘‘, and shall include any such inVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00300 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 dividual who would be eligible to receive such an allowance 

2 but for the fact that the individual is receiving a benefit 

3 under a defined benefit plan (as defined in section 3(35) 

4 of the Employee Retirement Income Security Act of 

5 1974).’’. 

6 (e) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to months beginning after the date 

8 of the enactment of this Act in taxable years ending after 

9 such date. 

10 SEC. 5105. CLARIFICATION OF 3-MONTH CREDITABLE COV11 ERAGE REQUIREMENT. 

12 (a) IN GENERAL.—Clause (i) of section 35(e)(2)(B) 

13 of the Internal Revenue Code of 1986 (defining qualifying 

14 individual) is amended by inserting ‘‘(prior to the employ15 ment separation necessary to attain the status of an eligi16 ble individual)’’ after ‘‘9801(c)’’. 

17 (b) CONFORMING AMENDMENT.—Section 

18 173(f)(2)(B)(ii)(I) of the Workforce Investment Act of 

19 1998 (29 U.S.C. 2918(f)(2)(B)(ii)(I)) is amended by in20 serting ‘‘(prior to the employment separation necessary to 

21 attain the status of an eligible individual)’’ after ‘‘1986’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to months beginning after the date 

24 of the enactment of this Act in taxable years ending after 

25 such date. 


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1 SEC. 5106. TAA PRE-CERTIFICATION PERIOD RULE FOR 

2 PURPOSES OF DETERMINING WHETHER 

3 THERE IS A 63-DAY LAPSE IN CREDITABLE 

4 COVERAGE. 

5 (a) ERISA AMENDMENT.—Section 701(c)(2) of the 

6 Employee Retirement Income Security Act of 1974 (29 

7 U.S.C. 1181(c)(2)) is amended by adding at the end the 

8 following new subparagraph: 

9 ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— 

10 ‘‘(i) TAA PRE-CERTIFICATION PERIOD

11 RULE.—In the case of a TAA-eligible indi12 vidual, the period beginning on the date 

13 the individual has a TAA-related loss of 

14 coverage and ending on the date that is 5 

15 days after the postmark date of the notice 

16 by the Secretary (or by any person or enti17 ty designated by the Secretary) that the 

18 individual is eligible for a qualified health 

19 insurance costs credit eligibility certificate 

20 for purposes of section 7527 of the Inter21 nal Revenue Code of 1986 shall not be 

22 taken into account in determining the con23 tinuous period under subparagraph (A). 

24 ‘‘(ii) DEFINITIONS.—The terms ‘TAA25 eligible individual’, and ‘TAA-related loss 


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1 of coverage’ have the meanings given such 

2 terms in section 605(b)(4).’’. 

3 (b) PHSA AMENDMENT.—Section 2701(c)(2) of the 

4 Public Health Service Act (42 U.S.C. 300gg(c)(2)) is 

5 amended by adding at the end the following new subpara6 graph: 

7 ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— 

8 ‘‘(i) TAA PRE-CERTIFICATION PERIOD

9 RULE.—In the case of a TAA-eligible indi10 vidual, the period beginning on the date 

11 the individual has a TAA-related loss of 

12 coverage and ending on the date that is 5 

13 days after the postmark date of the notice 

14 by the Secretary (or by any person or enti15 ty designated by the Secretary) that the 

16 individual is eligible for a qualified health 

17 insurance costs credit eligibility certificate 

18 for purposes of section 7527 of the Inter19 nal Revenue Code of 1986 shall not be 

20 taken into account in determining the con21 tinuous period under subparagraph (A). 

22 ‘‘(ii) DEFINITIONS.—The terms ‘TAA23 eligible individual’, and ‘TAA-related loss 

24 of coverage’ have the meanings given such 

25 terms in section 2205(b)(4).’’. 


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1 (c) IRC AMENDMENT.—Section 9801(c)(2) of the In2 ternal Revenue Code of 1986 (relating to not counting pe3 riods before significant breaks in creditable coverage) is 

4 amended by adding at the end the following new subpara5 graph: 

6 ‘‘(D) TAA-ELIGIBLE INDIVIDUALS.— 

7 ‘‘(i) TAA PRE-CERTIFICATION PERIOD

8 RULE.—In the case of a TAA-eligible indi9 vidual, the period beginning on the date 

10 the individual has a TAA-related loss of 

11 coverage and ending on the date which is 

12 5 days after the postmark date of the no13 tice by the Secretary (or by any person or 

14 entity designated by the Secretary) that 

15 the individual is eligible for a qualified 

16 health insurance costs credit eligibility cer17 tificate for purposes of section 7527 shall 

18 not be taken into account in determining 

19 the continuous period under subparagraph 

20 (A). 

21 ‘‘(ii) DEFINITIONS.—The terms ‘TAA22 eligible individual’, and ‘TAA-related loss 

23 of coverage’ have the meanings given such 

24 terms in section 4980B(f)(5)(C)(iv).’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to months beginning after the date 

3 of the enactment of this Act in taxable years ending after 

4 such date. 

5 SEC. 5107. CONTINUED QUALIFICATION OF FAMILY MEM6 BERS AFTER CERTAIN EVENTS. 

7 (a) IN GENERAL.—Subsection (g) of section 35 of the 

8 Internal Revenue Code of 1986, as amended by section 

9 5102(b), is amended by redesignating paragraph (10) as 

10 paragraph (11) and inserting after paragraph (9) the fol11 lowing new paragraph: 

12 ‘‘(10) CONTINUED QUALIFICATION OF FAMILY

13 MEMBERS AFTER CERTAIN EVENTS.— 

14 ‘‘(A) ELIGIBLE INDIVIDUAL BECOMES

15 MEDICARE ELIGIBLE.—In the case of a month 

16 which would be an eligible coverage month with 

17 respect to an eligible individual but for sub18 section (f)(2)(A), such month shall be treated 

19 as an eligible coverage month with respect to 

20 any qualifying family member of such eligible 

21 individual (but not with respect to such eligible 

22 individual). 

23 ‘‘(B) DIVORCE.—In the case of a month 

24 which would be an eligible coverage month with 

25 respect to a former spouse of a taxpayer but for 


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1 the finalization of a divorce between the spouse 

2 and the taxpayer that occurs during the period 

3 in which the taxpayer is an eligible individual, 

4 such month shall be treated as an eligible cov5 erage month with respect to such former 

6 spouse. 

7 ‘‘(C) DEATH.—In the case of a month 

8 which would be an eligible coverage month with 

9 respect to an eligible individual but for the 

10 death of such individual, such month shall be 

11 treated as an eligible coverage month with re12 spect to any qualifying family of such eligible 

13 individual.’’. 

14 (b) CONFORMING AMENDMENT.—Section 173(f) of 

15 the Workforce Investment Act of 1998 (29 U.S.C. 

16 2918(f)) is amended by adding at the end the following: 

17 ‘‘(8) CONTINUED QUALIFICATION OF FAMILY

18 MEMBERS AFTER CERTAIN EVENTS.— 

19 ‘‘(A) ELIGIBLE INDIVIDUAL BECOMES

20 MEDICARE ELIGIBLE.—In the case of a month 

21 which would be an eligible coverage month with 

22 respect to an eligible individual but for para23 graph (7)(B)(i), such month shall be treated as 

24 an eligible coverage month with respect to any 

25 qualifying family member of such eligible indiVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00306 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 vidual (but not with respect to such eligible in2 dividual). 

3 ‘‘(B) DIVORCE.—In the case of a month 

4 which would be an eligible coverage month with 

5 respect to a former spouse of a taxpayer but for 

6 the finalization of a divorce between the spouse 

7 and the taxpayer that occurs during the period 

8 in which the taxpayer is an eligible individual, 

9 such month shall be treated as an eligible cov10 erage month with respect to such former 

11 spouse. 

12 ‘‘(C) DEATH.—In the case of a month 

13 which would be an eligible coverage month with 

14 respect to an eligible individual but for the 

15 death of such individual, such month shall be 

16 treated as an eligible coverage month with re17 spect to any qualifying family of such eligible 

18 individual. 

19 ‘‘(D) DEFINITION.—In this paragraph, the 

20 term ‘eligible coverage month’ means any 

21 month if— 

22 ‘‘(i) as of the first day of such month, 

23 the taxpayer involved— 

24 ‘‘(I) is an eligible individual; 


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1 ‘‘(II) is covered by qualified 

2 health insurance, the premium for 

3 which is paid by the taxpayer; 

4 ‘‘(III) does not have other speci5 fied coverage; and 

6 ‘‘(IV) is not imprisoned under 

7 Federal, State, or local authority; and 

8 ‘‘(ii) such month begins more than 90 

9 days after the date of the enactment of the 

10 Trade Act of 2002.’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to months beginning after the date 

13 of the enactment of this Act in taxable years ending after 

14 such date. 

15 SEC. 5108. OFFERING OF NATIONAL FALLBACK COVERAGE. 

16 (a) OFFERING OF NATIONAL FALLBACK COV17 ERAGE.— 

18 (1) IN GENERAL.—The Director of the Office 

19 of Personnel Management jointly with the Secretary 

20 of the Treasury shall establish a program under 

21 which eligible individuals (as defined in section 35(c) 

22 of the Internal Revenue Code of 1986) are offered 

23 enrollment under health benefit plans that are made 

24 available under FEHBP. 


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1 (2) TERMS AND CONDITIONS.—The terms and 

2 conditions of health benefits plans under paragraph 

3 (1) shall be the same as the terms and coverage of4 fered under FEHBP, except that the premium 

5 charged for such health benefit plans offered under 

6 such paragraph— 

7 (A) shall be equal to the full premium (in8 cluding both employer and beneficiary share) 

9 charged for such coverage determined in the 

10 same manner, subject to subparagraph (B), it 

11 is determined for full-time employees; and 

12 (B) shall be determined for the pool of in13 dividuals covered under this subsection, sepa14 rately from the pool of individuals otherwise 

15 covered under FEHBP. 

16 (3) STUDY.—The Director of the Office of Per17 sonnel Management jointly with the Secretary of the 

18 Treasury shall conduct a study of the impact of the 

19 offering of health benefit plans under this subsection 

20 on the terms and conditions, including premiums, 

21 for health benefit plans offered under FEHBP and 

22 shall submit to Congress, not later than 2 years 

23 after the date of the enactment of this Act, a report 

24 on such study. Such report may contain such rec25 ommendations regarding the establishment of sepaVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00309 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 rate risk pools for individuals covered under 

2 FEHBP and eligible individuals covered this sub3 section as may be appropriate to protect the inter4 ests of individuals covered under FEHBP. 

5 (4) FEHBP DEFINED.—For purposes of this 

6 subsection, the term ‘‘FEHBP’’ means the Federal 

7 Employees Health Benefits Program offered under 

8 chapter 89 of title 5, United States Code. 

9 (b) CONFORMING AMENDMENTS.— 

10 (1) Paragraph (1) of section 35(e) of the Inter11 nal Revenue Code of 1986 is amended by inserting 

12 after subparagraph (J) the following new subpara13 graph: 

14 ‘‘(K) Coverage under a health benefits plan 

15 offered under section 5108(a)(1) of Right Time 

16 to Reinvest in America’s Competitiveness and 

17 Knowledge Act.’’. 

18 (2) Section 173(f)(2)(A) of the Workforce In19 vestment Act of 1998 (29 U.S.C. 2918(f)(2)(A)) is 

20 amended by inserting after clause (x) the following 

21 new clause: 

22 ‘‘(xi) Coverage under a health benefits 

23 plan offered under section 5108(a)(1) of 

24 Right Time to Reinvest in America’s Com25 petitiveness and Knowledge Act.’’. 


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1 SEC. 5109. ADDITIONAL REQUIREMENTS FOR INDIVIDUAL 

2 HEALTH INSURANCE COSTS. 

3 (a) IN GENERAL.—Subparagraph (A) of section 

4 35(e)(2) of the Internal Revenue Code of 1986 is amended 

5 by striking ‘‘subparagraphs (B) through (H) of paragraph 

6 (1)’’ and inserting ‘‘paragraph (1) (other than subpara7 graphs (A), (I), and (K) thereof)’’. 

8 (b) RATING SYSTEM REQUIREMENT.—Subparagraph 

9 (J) of section 35(e)(1) of such Code is amended by adding 

10 at the end the following: ‘‘For purposes of this subpara11 graph and clauses (ii), (iii), and (iv) of subparagraph (F), 

12 such term does not include any insurance unless the pre13 miums for such insurance are restricted based on a com14 munity rating system (determined other than on the basis 

15 of age).’’. 

16 (c) CLARIFICATION OF CONGRESSIONAL INTENT TO

17 LIMIT USE OF INDIVIDUAL HEALTH INSURANCE COV18 ERAGE OPTION.—Section 35(e)(1)(J) (relating to quali19 fied health insurance) is amended in the matter preceding 

20 clause (i), by inserting ‘‘, but only’’ after ‘‘coverage under 

21 individual health insurance’’. 

22 (d) CONFORMING AMENDMENTS.—Section 173(f)(2) 

23 of the Workforce Investment Act of 1998 (29 U.S.C. 

24 2918(f)(2)) is amended— 

25 (1) in subparagraph (A)(x)— 


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1 (A) in the matter preceding subclause (I), 

2 by inserting ‘‘, but only’’ after ‘‘under indi3 vidual health insurance’’ the first place it ap4 pears; and 

5 (B) by adding at the end the following: 

6 ‘‘For purposes of this clause, such term does 

7 not include any insurance unless the premiums 

8 for such insurance are restricted based on a 

9 community rating system (determined other 

10 than on the basis of age).’’; and 

11 (2) in subparagraph (B)(i), by striking ‘‘clauses 

12 (ii) through (viii) of subparagraph (A)’’ and insert13 ing ‘‘subparagraph (A) (other than clauses (i), (x), 

14 and (xi) of such subparagraph)’’. 

15 SEC. 5110. ALIGNMENT OF COBRA COVERAGE WITH TAA PE16 RIOD FOR TAA-ELIGIBLE INDIVIDUALS. 

17 (a) ERISA.—Section 605(b) of the Employee Retire18 ment Income Security Act of 1974 (29 U.S.C. 1165(b)) 

19 is amended— 

20 (1) in the subsection heading, by inserting 

21 ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and 

22 (2) in paragraph (2)— 

23 (A) in the paragraph heading, by inserting 

24 ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; 


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1 (B) by striking ‘‘and shall’’ and inserting 

2 ‘‘, shall’’; and 

3 (C) by inserting ‘‘, and in no event shall 

4 the maximum period required under section 

5 602(2)(A) be less than the period during which 

6 the individual is a TAA-eligible individual’’ be7 fore the period at the end. 

8 (b) INTERNAL REVENUE CODE OF 1986.—Section 

9 4980B(f)(5)(C) of the Internal Revenue Code of 1986 is 

10 amended— 

11 (1) in the subparagraph heading, by inserting 

12 ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and 

13 (2) in clause (ii)— 

14 (A) in the clause heading, by inserting 

15 ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; 

16 (B) by striking ‘‘and shall’’ and inserting 

17 ‘‘, shall’’; and 

18 (C) by inserting ‘‘, and in no event shall 

19 the maximum period required under paragraph 

20 (2)(B)(i) be less than the period during which 

21 the individual is a TAA-eligible individual’’ be22 fore the period at the end. 

23 (c) PUBLIC HEALTH SERVICE ACT.—Section 

24 2205(b) of the Public Health Service Act (42 U.S.C. 

25 300bb–5(b)) is amended— 


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1 (1) in the subsection heading, by inserting 

2 ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and 

3 (2) in paragraph (2)— 

4 (A) in the paragraph heading, by inserting 

5 ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; 

6 (B) by striking ‘‘and shall’’ and inserting 

7 ‘‘, shall’’; and 

8 (C) by inserting ‘‘, and in no event shall 

9 the maximum period required under section 

10 2202(2)(A) be less than the period during 

11 which the individual is a TAA-eligible indi12 vidual’’ before the period at the end. 

13 SEC. 5111. NOTICE REQUIREMENTS. 

14 Section 7527 of the Internal Revenue Code of 1986 

15 (relating to advance payment of credit for health insur16 ance costs of eligible individuals), as amended by section 

17 5103(b), is amended by adding at the end the following 

18 new subsection: 

19 ‘‘(f) INCLUSION OF CERTAIN INFORMATION.—The 

20 notice by the Secretary (or by any person or entity des21 ignated by the Secretary) that an individual is eligible for 

22 a qualified health insurance costs credit eligibility certifi23 cate shall include— 

24 ‘‘(1) the name, address, and telephone number 

25 of the State office or offices responsible for deterVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00314 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 mining that the individual is eligible for such certifi2 cate and for providing the individual with assistance 

3 with enrollment in qualified health insurance (as de4 fined in section 35(e)), 

5 ‘‘(2) a list of the coverage options that are 

6 treated as qualified health insurance (as so defined) 

7 by the State in which the individual resides, and 

8 ‘‘(3) in the case of a TAA-eligible individual (as 

9 defined in section 4980B(f)(5)(C)(iv)(II)), a state10 ment informing the individual that the individual 

11 has 63 days from the date that is 5 days after the 

12 postmark date of such notice to enroll in such insur13 ance without a lapse in creditable coverage (as de14 fined in section 9801(c)).’’. 

15 SEC. 5112. ANNUAL REPORT ON ENHANCED TAA BENEFITS. 

16 Not later than October 1 of each year (beginning in 

17 2007) the Secretary of the Treasury, after consultation 

18 with the Secretary of Labor, shall report to the Committee 

19 on Finance and the Committee on Health, Education, 

20 Labor, and Pensions of the Senate and the Committee on 

21 Ways and Means and the Committee on Education and 

22 the Workforce of the House of Representatives the fol23 lowing information with respect to the most recent taxable 

24 year ending before such date: 


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1 (1) The total number of participants utilizing 

2 the health insurance tax credit under section 35 of 

3 the Internal Revenue Code of 1986, including a 

4 measurement of such participants identified— 

5 (A) by State, and 

6 (B) by coverage under COBRA continu7 ation provisions (as defined in section 

8 9832(d)(1) of such Code) and by non-COBRA 

9 coverage (further identified by group and indi10 vidual market). 

11 (2) The range of monthly health insurance pre12 miums offered and the average and median monthly 

13 health insurance premiums offered to TAA-eligible 

14 individuals (as defined in section 

15 4980B(f)(5)(C)(iv)(II) of such Code) under COBRA 

16 continuation provisions (as defined in section 

17 9832(d)(1) of such Code), State-based continuation 

18 coverage provided under a State law that requires 

19 such coverage, and each category of coverage de20 scribed in section 35(e)(1) of such Code, identified 

21 by State and by the actuarial value of such coverage 

22 and the specific benefits provided and cost-sharing 

23 imposed under such coverage. 

24 (3) The number of States applying for and re25 ceiving national emergency grants under section 


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1 173(f) of the Workforce Investment Act of 1998 (29 

2 U.S.C. 2918(f)) and the time necessary for applica3 tion approval of such grants. 

4 (4) The cost of administering the health credit 

5 program under section 35 of such Code, by function, 

6 including the cost of subcontractors. 

7 SEC. 5113. EXTENSION OF NATIONAL EMERGENCY GRANTS. 

8 (a) IN GENERAL.—Section 173(f) of the Workforce 

9 Investment Act of 1998 (29 U.S.C. 2918(f)) is amended— 

10 (1) by striking paragraph (1) and inserting the 

11 following new paragraph: 

12 ‘‘(1) USE OF FUNDS.— 

13 ‘‘(A) HEALTH INSURANCE COVERAGE FOR

14 ELIGIBLE INDIVIDUALS IN ORDER TO OBTAIN

15 QUALIFIED HEALTH INSURANCE THAT HAS

16 GUARANTEED ISSUE AND OTHER CONSUMER

17 PROTECTIONS.—Funds made available to a 

18 State or entity under paragraph (4)(A) of sub19 section (a) shall be used to provide an eligible 

20 individual and such individual’s qualifying fam21 ily members with health insurance coverage for 

22 the 3-month period that immediately precedes 

23 the first eligible coverage month (as defined in 

24 section 35(b) of the Internal Revenue Code of 

25 1986) in which such eligible individual and such 


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1 individual’s qualifying family members are cov2 ered by qualified health insurance that meets 

3 the requirements described in clauses (i) 

4 through (iv) of section 35(e)(2)(A) of the Inter5 nal Revenue Code of 1986 (or such longer min6 imum period as is necessary in order for such 

7 eligible individual and such individual’s quali8 fying family members to be covered by qualified 

9 health insurance that meets such requirements). 

10 ‘‘(B) ADDITIONAL USES.—Funds made 

11 available to a State or entity under paragraph 

12 (4)(A) of subsection (a) may be used by the 

13 State or entity for the following: 

14 ‘‘(i) HEALTH INSURANCE COV15 ERAGE.—To assist an eligible individual 

16 and such individual’s qualifying family 

17 members with enrolling in health insurance 

18 coverage and qualified health insurance or 

19 paying premiums for such coverage or in20 surance. 

21 ‘‘(ii) ADMINISTRATIVE EXPENSES AND

22 START-UP EXPENSES TO ESTABLISH

23 GROUP HEALTH PLAN COVERAGE OPTIONS

24 FOR QUALIFIED HEALTH INSURANCE.—To 

25 pay the administrative expenses related to 


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1 the enrollment of eligible individuals and 

2 such individuals’ qualifying family mem3 bers in health insurance coverage and 

4 qualified health insurance, including ex5 penses incurred for— 

6 ‘‘(I) eligibility verification activi7 ties; 

8 ‘‘(II) the notification of eligible 

9 individuals of available health insur10 ance and qualified health insurance 

11 options; 

12 ‘‘(III) processing qualified health 

13 insurance costs credit eligibility cer14 tificates provided for under section 

15 7527 of the Internal Revenue Code of 

16 1986; 

17 ‘‘(IV) providing assistance to eli18 gible individuals in enrolling in health 

19 insurance coverage and qualified 

20 health insurance; 

21 ‘‘(V) the development or installa22 tion of necessary data management 

23 systems; and 

24 ‘‘(VI) any other activities deter25 mined appropriate by the Secretary, 


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1 including start-up costs and ongoing 

2 administrative expenses, in order for 

3 the State to treat the coverage de4 scribed in subparagraph (C), (D), (E), 

5 or (F)(i) of section 35(e)(1) of the In6 ternal Revenue Code of 1986, or, only 

7 if the coverage is under a group 

8 health plan, the coverage described in 

9 subparagraph (F)(ii), (F)(iii), (F)(iv), 

10 (G), or (H) of such section, as quali11 fied health insurance under that sec12 tion. 

13 ‘‘(iii) OUTREACH.—To pay for out14 reach to eligible individuals to inform such 

15 individuals of available health insurance 

16 and qualified health insurance options, in17 cluding outreach consisting of notice to eli18 gible individuals of such options made 

19 available after the date of the enactment of 

20 this clause and direct assistance to help 

21 potentially eligible individuals and such in22 dividual’s qualifying family members qual23 ify and remain eligible for the credit estab24 lished under section 35 of the Internal 

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1 ment of such credit under section 7527 of 

2 such Code. 

3 ‘‘(iv) BRIDGE FUNDING.—To assist 

4 potentially eligible individuals to purchase 

5 qualified health insurance coverage prior to 

6 issuance of a qualified health insurance 

7 costs credit eligibility certificate under sec8 tion 7527 of the Internal Revenue Code of 

9 1986 and commencement of advance pay10 ment, and receipt of expedited payment, 

11 under subsections (a) and (e), respectively, 

12 of that section. 

13 ‘‘(C) RULE OF CONSTRUCTION.—The in14 clusion of a permitted use under this paragraph 

15 shall not be construed as prohibiting a similar 

16 use of funds permitted under subsection (g).’’; 

17 and 

18 (2) by striking paragraph (2) and inserting the 

19 following new paragraph: 

20 ‘‘(2) QUALIFIED HEALTH INSURANCE.—For 

21 purposes of this subsection and subsection (g), the 

22 term ‘qualified health insurance’ has the meaning 

23 given that term in section 35(e) of the Internal Rev24 enue Code of 1986.’’. 


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1 (b) FUNDING.—Section 174(c)(1) of the Workforce 

2 Investment Act of 1998 (29 U.S.C. 2919(c)(1)) is amend3 ed— 

4 (1) in the paragraph heading, by striking ‘‘AU5 THORIZATION AND APPROPRIATION FOR FISCAL

6 YEAR 2002’’ and inserting ‘‘APPROPRIATIONS’’; and 

7 (2) by striking subparagraph (A) and inserting 

8 the following new subparagraph: 

9 ‘‘(A) to carry out subsection (a)(4)(A) of 

10 section 173— 

11 ‘‘(i) $10,000,000 for fiscal year 2002; 

12 and 

13 ‘‘(ii) $300,000,000 for the period of 

14 fiscal years 2007 through 2009; and’’. 

15 (c) REPORT REGARDING FAILURE TO COMPLY WITH

16 REQUIREMENTS FOR EXPEDITED APPROVAL PROCE17 DURES.—Section 173(f) of the Workforce Investment Act 

18 of 1998 (29 U.S.C. 2918(f)), as amended by section 

19 5107(b), is amended by adding at the end the following 

20 new paragraph: 

21 ‘‘(9) REPORT FOR FAILURE TO COMPLY WITH

22 REQUIREMENTS FOR EXPEDITED APPROVAL PROCE23 DURES.—If the Secretary fails to make the notifica24 tion required under clause (i) of paragraph (3)(A) 

25 within the 15-day period required under that clause, 


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1 or fails to provide the technical assistance required 

2 under clause (ii) of such paragraph within a timely 

3 manner so that a State or entity may submit an ap4 proved application within 2 months of the date on 

5 which the State or entity’s previous application was 

6 disapproved, the Secretary shall submit a report to 

7 Congress explaining such failure.’’. 

8 (d) TECHNICAL AMENDMENT.—Effective as if in9 cluded in the enactment of the Trade Act of 2002 (Public 

10 Law 107–210; 116 Stat. 933), subsection (f) of section 

11 203 of that Act is repealed. 

12 Subtitle B—Modernization of Trade 

13 Adjustment Assistance 

14 CHAPTER 1—SERVICE WORKERS AND 

15 FIRMS 

16 SEC. 5211. SHORT TITLE. 

17 This chapter may be cited as the ‘‘Trade Adjustment 

18 Assistance Equity for Service Workers Act of 2006’’. 

19 SEC. 5212. EXTENSION OF TRADE ADJUSTMENT ASSIST20 ANCE TO SERVICES SECTOR. 

21 (a) ADJUSTMENT ASSISTANCE FOR WORKERS.—Sec22 tion 221(a)(1)(A) of the Trade Act of 1974 (19 U.S.C. 

23 2271(a)(1)(A)) is amended by striking ‘‘agricultural 

24 firm)’’ and inserting ‘‘agricultural firm, and workers in 


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1 a service sector firm or subdivision of a service sector firm 

2 or public agency)’’. 

3 (b) GROUP ELIGIBILITY REQUIREMENTS.—Section 

4 222 of the Trade Act of 1974 (19 U.S.C. 2272) is amend5 ed— 

6 (1) in subsection (a)— 

7 (A) in the matter preceding paragraph (1), 

8 by striking ‘‘agricultural firm)’’ and inserting 

9 ‘‘agricultural firm, and workers in a service sec10 tor firm or subdivision of a service sector firm 

11 or public agency)’’; 

12 (B) in paragraph (1), by inserting ‘‘or 

13 public agency’’ after ‘‘of the firm’’; and 

14 (C) in paragraph (2)— 

15 (i) in subparagraph (A)(ii), by strik16 ing ‘‘like or directly competitive with arti17 cles produced’’ and inserting ‘‘or services 

18 like or directly competitive with articles 

19 produced or services provided’’; and 

20 (ii) by striking subparagraph (B) and 

21 inserting the following: 

22 ‘‘(B)(i) there has been a shift, by such workers’ 

23 firm, subdivision, or public agency to a foreign coun24 try, of production of articles, or in provision of serv25 ices, like or directly competitive with articles which 


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1 are produced, or services which are provided, by 

2 such firm, subdivision, or public agency; or 

3 ‘‘(ii) such workers’ firm, subdivision, or public 

4 agency has obtained or is likely to obtain such serv5 ices from a foreign country.’’; 

6 (2) in subsection (b)— 

7 (A) in the matter preceding paragraph (1), 

8 by striking ‘‘agricultural firm)’’ and inserting 

9 ‘‘agricultural firm, and workers in a service sec10 tor firm or subdivision of a service sector firm 

11 or public agency)’’; 

12 (B) in paragraph (2), by inserting ‘‘or 

13 service’’ after ‘‘related to the article’’; and 

14 (C) in paragraph (3)(A), by inserting ‘‘or 

15 services’’ after ‘‘component parts’’; 

16 (3) in subsection (c)— 

17 (A) in paragraph (3)— 

18 (i) by inserting ‘‘or services’’ after 

19 ‘‘value-added production processes’’; 

20 (ii) by striking ‘‘assembly or fin21 ishing’’ and inserting ‘‘assembly, finishing, 

22 or testing’’; 

23 (iii) by inserting ‘‘or services’’ after 

24 ‘‘for articles’’; and 


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1 (iv) by inserting ‘‘(or subdivision)’’ 

2 after ‘‘such other firm’’; and 

3 (B) in paragraph (4)— 

4 (i) by striking ‘‘for articles’’ and in5 serting ‘‘, or services, used in the produc6 tion of articles or in the provision of serv7 ices’’; and 

8 (ii) by inserting ‘‘(or subdivision)’’ 

9 after ‘‘such other firm’’; and 

10 (4) by adding at the end the following new sub11 section: 

12 ‘‘(d) BASIS FOR SECRETARY’S DETERMINATIONS.— 

13 ‘‘(1) INCREASED IMPORTS.—For purposes of 

14 subsection (a)(2)(A)(ii), the Secretary may deter15 mine that increased imports of like or directly com16 petitive articles or services exist if the workers’ firm 

17 or subdivision or customers of the workers’ firm or 

18 subdivision accounting for not less than 20 percent 

19 of the sales of the workers’ firm or subdivision cer20 tify to the Secretary that they are obtaining such ar21 ticles or services from a foreign country. 

22 ‘‘(2) OBTAINING SERVICES ABROAD.—For pur23 poses of subsection (a)(2)(B)(ii), the Secretary may 

24 determine that the workers’ firm, subdivision, or 

25 public agency has obtained or is likely to obtain like 


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1 or directly competitive services from a firm in a for2 eign country based on a certification thereof from 

3 the workers’ firm, subdivision, or public agency. 

4 ‘‘(3) AUTHORITY OF THE SECRETARY.—The 

5 Secretary may obtain the certifications under para6 graphs (1) and (2) through questionnaires or in 

7 such other manner as the Secretary determines is 

8 appropriate.’’. 

9 (c) TRAINING.—Section 236(a)(2)(A) of the Trade 

10 Act of 1974 (19 U.S.C. 2296(a)(2)(A)) is amended by 

11 striking ‘‘for any fiscal year shall not exceed 

12 $220,000,000.’’ and inserting ‘‘shall not exceed— 

13 ‘‘(i) $440,000,000 in fiscal year 2007; 

14 ‘‘(ii) $484,000,000 in fiscal year 2008; 

15 ‘‘(iii) $528,000,000 in fiscal year 2009; 

16 ‘‘(iv) $572,000,000 in fiscal year 2010; 

17 ‘‘(v) $616,000,000 in fiscal year 2011; and 

18 ‘‘(vi) $660,000,000 in fiscal year 2012.’’. 

19 (d) DEFINITIONS.—Section 247 of the Trade Act of 

20 1974 (19 U.S.C. 2319) is amended— 

21 (1) in paragraph (1)— 

22 (A) by inserting ‘‘or public agency’’ after 

23 ‘‘of a firm’’; and 

24 (B) by inserting ‘‘or public agency’’ after 

25 ‘‘or subdivision’’; 


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1 (2) in paragraph (2)(B), by inserting ‘‘or public 

2 agency’’ after ‘‘the firm’’; 

3 (3) by redesignating paragraphs (8) through 

4 (17) as paragraphs (9) through (18), respectively; 

5 and 

6 (4) by inserting after paragraph (6) the fol7 lowing: 

8 ‘‘(7) The term ‘public agency’ means a depart9 ment or agency of a State or local government or of 

10 the Federal Government. 

11 ‘‘(8) The term ‘service sector firm’ means an 

12 entity engaged in the business of providing serv13 ices.’’. 

14 (e) TECHNICAL AMENDMENT.—Section 245(a) of the 

15 Trade Act of 1974 (19 U.S.C. 2317(a)) is amended by 

16 striking ‘‘, other than subchapter D’’. 

17 SEC. 5213. TRADE ADJUSTMENT ASSISTANCE FOR FIRMS 

18 AND INDUSTRIES. 

19 (a) FIRMS.— 

20 (1) ASSISTANCE.—Section 251 of the Trade 

21 Act of 1974 (19 U.S.C. 2341) is amended— 

22 (A) in subsection (a), by inserting ‘‘or 

23 service sector firm’’ after ‘‘(including any agri24 cultural firm’’; 

25 (B) in subsection (c)(1)— 


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1 (i) in the matter preceding subpara2 graph (A), by inserting ‘‘or service sector 

3 firm’’ after ‘‘(including any agricultural 

4 firm’’; 

5 (ii) in subparagraph (B)(ii), by insert6 ing ‘‘or service’’ after ‘‘of an article’’; and 

7 (iii) in subparagraph (C), by striking 

8 ‘‘articles like or directly competitive with 

9 articles which are produced’’ and inserting 

10 ‘‘articles or services like or directly com11 petitive with articles or services which are 

12 produced or provided’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(e) BASIS FOR SECRETARY DETERMINATION.— 

15 ‘‘(1) INCREASED IMPORTS.—For purposes of 

16 subsection (c)(1)(C), the Secretary may determine 

17 that increases of imports of like or directly competi18 tive articles or services exist if customers accounting 

19 for not less than 20 percent of the sales of the work20 ers’ firm certify to the Secretary that they are ob21 taining such articles or services from a foreign coun22 try. 

23 ‘‘(2) AUTHORITY OF THE SECRETARY.—The 

24 Secretary may obtain the certifications under para25 graph (1) through questionnaires or in such other 


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1 manner as the Secretary determines is appropriate. 

2 The Secretary may exercise the authority under sec3 tion 249 in carrying out this subsection.’’. 

4 (2) AUTHORIZATION OF APPROPRIATIONS.— 

5 Section 256(b) of the Trade Act of 1974 (19 U.S.C. 

6 2346(b)) is amended to read as follows: 

7 ‘‘(b) There are authorized to be appropriated to the 

8 Secretary $16,000,000 for each of the fiscal years 2003 

9 through 2005, and $32,000,000 for each of the fiscal 

10 years 2006 and 2007 to carry out the Secretary’s func11 tions under this chapter in connection with furnishing ad12 justment assistance to firms. Amounts appropriated under 

13 this subsection shall remain available until expended.’’. 

14 (3) DEFINITIONS.—Section 261 of the Trade 

15 Act of 1974 (19 U.S.C. 2351) is amended to read 

16 as follows: 

17 ‘‘SEC. 261. DEFINITIONS. 

18 ‘‘For purposes of this chapter: 

19 ‘‘(1) FIRM.—The term ‘firm’ includes an indi20 vidual proprietorship, partnership, joint venture, as21 sociation, corporation (including a development cor22 poration), business trust, cooperative, trustee in 

23 bankruptcy, and receiver under decree of any court. 

24 A firm, together with any predecessor or successor 

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1 tially beneficially owned by substantially the same 

2 persons, may be considered a single firm where nec3 essary to prevent unjustifiable benefits. 

4 ‘‘(2) SERVICE SECTOR FIRM.—The term ‘service 

5 sector firm’ means a firm engaged in the business 

6 of providing services.’’. 

7 (b) INDUSTRIES.—Section 265(a) of the Trade Act 

8 of 1974 (19 U.S.C. 2355(a)) is amended by inserting ‘‘or 

9 service’’ after ‘‘new product’’. 

10 SEC. 5214. MONITORING AND REPORTING. 

11 Section 282 of the Trade Act of 1974 (19 U.S.C. 

12 2393) is amended— 

13 (1) in the first sentence— 

14 (A) by striking ‘‘The Secretary’’ and in15 serting ‘‘(a) MONITORING PROGRAMS.—The 

16 Secretary’’; 

17 (B) by inserting ‘‘and services’’ after ‘‘im18 ports of articles’’; 

19 (C) by inserting ‘‘and domestic provision of 

20 services’’ after ‘‘domestic production’’; 

21 (D) by inserting ‘‘or providing services’’ 

22 after ‘‘producing articles’’; and 

23 (E) by inserting ‘‘, or provision of serv24 ices,’’ after ‘‘changes in production’’; and 

25 (2) by adding at the end the following: 


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1 ‘‘(b) COLLECTION OF DATA AND REPORTS ON SERV2 ICES SECTOR.— 

3 ‘‘(1) SECRETARY OF LABOR.—Not later than 3 

4 months after the date of the enactment of the Trade 

5 Adjustment Assistance Equity for Service Workers 

6 Act of 2006, the Secretary of Labor shall implement 

7 a system to collect data on adversely affected service 

8 workers that includes the number of workers by 

9 State, industry, and cause of dislocation of each 

10 worker. 

11 ‘‘(2) SECRETARY OF COMMERCE.—Not later 

12 than 6 months after such date of enactment, the 

13 Secretary of Commerce shall, in consultation with 

14 the Secretary of Labor, conduct a study and report 

15 to the Congress on ways to improve the timeliness 

16 and coverage of data on trade in services, including 

17 methods to identify increased imports due to the re18 location of United States firms to foreign countries, 

19 and increased imports due to United States firms 

20 obtaining services from firms in foreign countries.’’. 

21 SEC. 5215. EFFECTIVE DATE. 

22 The amendments made by this chapter shall take ef23 fect on the date of the enactment of this Act. 


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1 CHAPTER 2—EXPANDING TRADE ADJUST2 MENT ASSISTANCE TO COVER ALL 

3 COUNTRIES 

4 SEC. 5221. SHORT TITLE. 

5 This chapter may be cited as the ‘‘Workers Equity 

6 Act’’. 

7 SEC. 5222. SHIFTS IN PRODUCTION. 

8 (a) IN GENERAL.—Section 222(a)(2)(B)(ii)(II) of 

9 the Trade Act of 1974 (19 U.S.C. 2272(a)(2)(B)(ii)(II)) 

10 is amended by inserting before the semicolon the following: 

11 ‘‘or a country to which the United States has extended 

12 permanent normal trade relations’’. 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 this section shall take effect on the date of the enactment 

15 of this Act. 

16 CHAPTER 3—EXPANDING TRADE ADJUST17 MENT ASSISTANCE TO COVER COMMU18 NITIES 

19 SEC. 5231. PURPOSE. 

20 The purpose of this chapter is to assist communities 

21 with economic adjustment through the integration of polit22 ical and economic organizations, the coordination of Fed23 eral, State, and local resources, the creation of commu24 nity-based development strategies, and the provision of 

25 economic transition assistance. 


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1 SEC. 5232. TRADE ADJUSTMENT ASSISTANCE FOR COMMU2 NITIES. 

3 Chapter 4 of title II of the Trade Act of 1974 (19 

4 U.S.C. 2371 et seq.) is amended to read as follows: 

5 ‘‘CHAPTER 4—COMMUNITY ECONOMIC 

6 ADJUSTMENT 

7 ‘‘SEC. 271. DEFINITIONS. 

8 ‘‘In this chapter: 

9 ‘‘(1) CIVILIAN LABOR FORCE.—The term ‘civil10 ian labor force’ has the meaning given that term in 

11 regulations prescribed by the Secretary of Labor. 

12 ‘‘(2) COMMUNITY.—The term ‘community’ 

13 means a county or equivalent political subdivision of 

14 a State. 

15 ‘‘(A) RURAL COMMUNITY.—The term 

16 ‘rural community’ means a community that has 

17 a rural-urban continuum code of 4 through 9. 

18 ‘‘(B) URBAN COMMUNITY.—The term 

19 ‘urban community’ means a community that 

20 has a rural-urban continuum code of 0 through 

21 3. 

22 ‘‘(3) COMMUNITY ECONOMIC DEVELOPMENT CO23 ORDINATING COMMITTEE.—The term ‘Community 

24 Economic Development Coordinating Committee’ 

25 means a community group established under section 

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1 fected by an increase in imports or a shift in produc2 tion, including local, regional, tribal, and State gov3 ernments, regional councils of governments and eco4 nomic development, and business, labor, education, 

5 health, religious, and other community-based organi6 zations. 

7 ‘‘(4) DIRECTOR.—The term ‘Director’ means 

8 the Director of the Office of Community Trade Ad9 justment. 

10 ‘‘(5) ELIGIBLE COMMUNITY.—The term ‘eligible 

11 community’ means a community certified under sec12 tion 273 as eligible for assistance under this chap13 ter. 

14 ‘‘(6) JOB LOSS.—The term ‘job loss’ means the 

15 total or partial separation of an individual, as those 

16 terms are defined in section 221. 

17 ‘‘(7) OFFICE.—The term ‘Office’ means the Of18 fice of Community Trade Adjustment established 

19 under section 272. 

20 ‘‘(8) RURAL-URBAN CONTINUUM CODE.—The 

21 term ‘rural-urban continuum code’ means a code as22 signed to a community according to the rural-urban 

23 continuum code system, as defined by the Economic 

24 Research Service of the Department of Agriculture. 


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1 ‘‘(9) SECRETARY.—The term ‘Secretary’ means 

2 the Secretary of Commerce. 

3 ‘‘SEC. 272. OFFICE OF COMMUNITY TRADE ADJUSTMENT. 

4 ‘‘(a) ESTABLISHMENT.—Within 6 months of the date 

5 of the enactment of the Right Time to Reinvest in Amer6 ica’s Competitiveness and Knowledge Act, there shall be 

7 established in the Economic Development Administration 

8 of the Department of Commerce an Office of Community 

9 Trade Adjustment. 

10 ‘‘(b) PERSONNEL.—The Office shall be headed by a 

11 Director, and shall have such staff as may be necessary 

12 to carry out the responsibilities described in this chapter. 

13 ‘‘(c) COORDINATION OF FEDERAL RESPONSE.—The 

14 Office shall— 

15 ‘‘(1) provide leadership, support, and coordina16 tion for a comprehensive management program to 

17 address economic dislocation in eligible communities; 

18 ‘‘(2) establish an easily accessible, one-stop 

19 clearinghouse for States and eligible communities to 

20 obtain information regarding economic development 

21 assistance available under Federal law; 

22 ‘‘(3) coordinate the Federal response to an eli23 gible community— 

24 ‘‘(A) by identifying all Federal, State, and 

25 local resources that are available to assist the 


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1 eligible community in recovering from economic 

2 distress; 

3 ‘‘(B) by ensuring that all Federal agencies 

4 offering assistance to an eligible community do 

5 so in a targeted, integrated manner that en6 sures that an eligible community has access to 

7 all available Federal assistance; 

8 ‘‘(C) by assuring timely consultation and 

9 cooperation between Federal, State, and re10 gional officials concerning community economic 

11 adjustment; 

12 ‘‘(D) by identifying and strengthening ex13 isting agency mechanisms designed to assist 

14 communities in economic adjustment and work15 force reemployment; 

16 ‘‘(E) by applying consistent policies, prac17 tices, and procedures in the administration of 

18 Federal programs that are used to assist com19 munities adversely impacted by an increase in 

20 imports or a shift in production; 

21 ‘‘(F) by creating, maintaining, and using a 

22 uniform economic database to analyze commu23 nity adjustment activities; and 


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1 ‘‘(G) by assigning a community economic 

2 adjustment advisor to work with each eligible 

3 community; 

4 ‘‘(4) provide comprehensive technical assistance 

5 to any eligible community in the efforts of that com6 munity to— 

7 ‘‘(A) identify serious economic problems in 

8 the community that result from an increase in 

9 imports or shift in production; 

10 ‘‘(B) integrate the major groups and orga11 nizations significantly affected by the economic 

12 adjustment; 

13 ‘‘(C) organize a Community Economic De14 velopment Coordinating Committee; 

15 ‘‘(D) access Federal, State, and local re16 sources designed to assist in economic develop17 ment and trade adjustment assistance; 

18 ‘‘(E) diversify and strengthen the commu19 nity economy; and 

20 ‘‘(F) develop a community-based strategic 

21 plan to address workforce dislocation and eco22 nomic development; 

23 ‘‘(5) establish specific criteria for submission 

24 and evaluation of a strategic plan submitted under 

25 section 276(d); 


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1 ‘‘(6) administer the grant programs established 

2 under sections 276 and 277; and 

3 ‘‘(7) establish an interagency Trade Adjustment 

4 Assistance Working Group, consisting of the rep5 resentatives of any Federal department or agency 

6 with responsibility for economic adjustment assist7 ance, including the Department of Agriculture, the 

8 Department of Defense, the Department of Edu9 cation, the Department of Labor, the Department of 

10 Housing and Urban Development, the Department 

11 of Health and Human Services, the Small Business 

12 Administration, the Department of the Treasury, the 

13 Department of Commerce, the Office of the United 

14 States Trade Representative, and the National Eco15 nomic Council. 

16 ‘‘(d) WORKING GROUP.—The working group estab17 lished under subsection (c)(7) shall examine other options 

18 for addressing trade impacts on communities, such as: 

19 ‘‘(1) Seeking legislative language directing the 

20 Foreign Trade Zone (‘FTZ’) Board to expedite con21 sideration of FTZ applications from communities or 

22 businesses that have been found eligible for trade 

23 adjustment assistance. 


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1 ‘‘(2) Seeking legislative language to make new 

2 markets tax credits available in communities im3 pacted by trade. 

4 ‘‘(3) Seeking legislative language to make work 

5 opportunity tax credits available for hiring unem6 ployed workers who are certified eligible for trade 

7 adjustment assistance. 

8 ‘‘(4) Examining ways to assist trade impacted 

9 rural communities and industries take advantage of 

10 the Department of Agriculture’s rural development 

11 program. 

12 ‘‘SEC. 273. NOTIFICATION AND CERTIFICATION AS AN ELI13 GIBLE COMMUNITY. 

14 ‘‘(a) NOTIFICATION.—The Secretary of Labor, not 

15 later than 15 days after making a determination that a 

16 group of workers is eligible for trade adjustment assist17 ance under section 231, shall notify the Governor of the 

18 State in which the community in which the worker’s firm 

19 is located and the Director, of the Secretary’s determina20 tion. 

21 ‘‘(b) CERTIFICATION.—Not later than 30 days after 

22 notification by the Secretary of Labor described in sub23 section (a), the Director shall certify as eligible for assist24 ance under this chapter a community in which 1 of the 

25 following conditions applies: 


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1 ‘‘(1) NUMBER OF JOB LOSSES.—The Director 

2 shall certify that a community is eligible for assist3 ance under this chapter if— 

4 ‘‘(A) in an urban community, at least 500 

5 workers have been certified for assistance under 

6 section 231 in the most recent 36-month period 

7 preceding the date of certification under this 

8 section for which data are available; or 

9 ‘‘(B) in a rural community, at least 300 

10 workers have been certified for assistance under 

11 section 231 in the most recent 36-month period 

12 preceding the date of certification under this 

13 section for which data are available. 

14 ‘‘(2) PERCENT OF WORKFORCE UNEM15 PLOYED.—The Director shall certify that a commu16 nity is eligible for assistance under this chapter if 

17 the unemployment rate for the community is at least 

18 1 percent greater than the national unemployment 

19 rate for the most recent 12-month period for which 

20 data are available. 

21 ‘‘(c) NOTIFICATION TO ELIGIBLE COMMUNITIES.— 

22 Not later than 15 days after the Director certifies a com23 munity as eligible under subsection (b), the Director shall 

24 notify the community— 

25 ‘‘(1) of its determination under subsection (b); 


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1 ‘‘(2) of the provisions of this chapter; 

2 ‘‘(3) how to access the clearinghouse established 

3 under section 272(c)(2); and 

4 ‘‘(4) how to obtain technical assistance provided 

5 under section 272(c)(4). 

6 ‘‘SEC. 274. COMMUNITY ECONOMIC DEVELOPMENT COORDI7 NATING COMMITTEE. 

8 ‘‘(a) ESTABLISHMENT.—In order to apply for and re9 ceive benefits under this chapter, an eligible community 

10 shall establish a Community Economic Development Co11 ordinating Committee certified by the Director as meeting 

12 the requirements of subsection (b)(1). 

13 ‘‘(b) COMPOSITION OF THE COMMITTEE.— 

14 ‘‘(1) LOCAL PARTICIPATION.—The Community 

15 Economic Development Coordinating Committee es16 tablished by an eligible community under subsection 

17 (a) shall include representatives of those groups sig18 nificantly affected by economic dislocation, such as 

19 local, regional, tribal, and State governments, re20 gional councils of governments and economic devel21 opment, business, labor, education, health organiza22 tions, religious, and other community-based groups 

23 providing assistance to workers, their families, and 

24 communities. 


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1 ‘‘(2) FEDERAL PARTICIPATION.—Pursuant to 

2 section 275(b)(3), the community economic adjust3 ment advisor, assigned by the Director to assist an 

4 eligible community, shall serve as an ex officio mem5 ber of the Community Economic Development Co6 ordinating Committee, and shall arrange for partici7 pation by representatives of other Federal agencies 

8 on that Committee as necessary. 

9 ‘‘(3) EXISTING ORGANIZATION.—An eligible 

10 community may designate an existing organization 

11 in that community as the Community Economic De12 velopment Coordinating Committee if that organiza13 tion meets the requirements of paragraph (1) for the 

14 purposes of this chapter. 

15 ‘‘(c) DUTIES.—The Community Economic Develop16 ment Coordinating Committee shall— 

17 ‘‘(1) ascertain the severity of the community 

18 economic adjustment required as a result of the in19 crease in imports or shift in production; 

20 ‘‘(2) assess the capacity of the community to 

21 respond to the required economic adjustment and 

22 the needs of the community as it undertakes eco23 nomic adjustment, taking into consideration such 

24 factors as the number of jobs lost, the size of the 

25 community, the diversity of industries, the skills of 


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1 the labor force, the condition of the current labor 

2 market, the availability of financial resources, the 

3 quality and availability of educational facilities, the 

4 adequacy and availability of public services, and the 

5 existence of a basic and advanced infrastructure in 

6 the community; 

7 ‘‘(3) facilitate a dialogue between concerned in8 terests in the community, represent the impacted 

9 community, and ensure all interests in the commu10 nity work collaboratively toward collective goals 

11 without duplication of effort or resources; 

12 ‘‘(4) oversee the development of a strategic plan 

13 for community economic development, taking into 

14 consideration the factors mentioned under para15 graph (2), and consistent with the criteria estab16 lished by the Secretary for the strategic plan devel17 oped under section 276; 

18 ‘‘(5) create an executive council of members of 

19 the Community Economic Development Coordinating 

20 Committee, which shall include representatives of 

21 labor, employers, and community organizations, to 

22 promote the strategic plan within the community 

23 and ensure coordination and cooperation among all 

24 stakeholders; 


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1 ‘‘(6) apply for any grant, loan, or loan guar2 antee available under Federal law to develop or im3 plement the strategic plan, and be an eligible recipi4 ent for funding for economic adjustment for that 

5 community; and 

6 ‘‘(7) assess the impact on public services in the 

7 community as a result of economic dislocation. 

8 ‘‘SEC. 275. COMMUNITY ECONOMIC ADJUSTMENT ADVI9 SORS. 

10 ‘‘(a) IN GENERAL.—Pursuant to section 

11 272(c)(3)(G), the Director shall assign a community eco12 nomic adjustment advisor to each eligible community. 

13 ‘‘(b) DUTIES.—The community economic adjustment 

14 advisor shall— 

15 ‘‘(1) provide technical assistance to the eligible 

16 community, assist in the development and implemen17 tation of a strategic plan, including applying for any 

18 grant available under this or any other Federal law 

19 to develop or implement that plan; 

20 ‘‘(2) at the local and regional level, coordinate 

21 the response of all Federal agencies offering assist22 ance to the eligible community; 

23 ‘‘(3) serve as an ex officio member of the Com24 munity Economic Development Coordinating ComVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00345 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 mittee established by an eligible community under 

2 section 274; 

3 ‘‘(4) act as liaison between the Community Eco4 nomic Development Coordinating Committee estab5 lished by the eligible community and all other Fed6 eral agencies that offer assistance to eligible commu7 nities, including the Department of Agriculture, the 

8 Department of Defense, the Department of Edu9 cation, the Department of Labor, the Department of 

10 Housing and Urban Development, the Department of 

11 Health and Human Services, the Small Business Ad12 ministration, the Department of the Treasury, the 

13 National Economic Council, and other offices or 

14 agencies of the Department of Commerce; 

15 ‘‘(5) report regularly to the Director regarding 

16 the progress of development activities in the commu17 nity to which the community economic adjustment 

18 advisor is assigned; and 

19 ‘‘(6) perform other duties as directed by the 

20 Secretary or the Director. 

21 ‘‘SEC. 276. STRATEGIC PLANS. 

22 ‘‘(a) IN GENERAL.—With the assistance of the com23 munity economic adjustment advisor, an eligible commu24 nity may develop a strategic plan for community economic 

25 adjustment and diversification. 


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1 ‘‘(b) REQUIREMENTS FOR STRATEGIC PLAN.—A 

2 strategic plan shall contain, at a minimum, the following: 

3 ‘‘(1) A description and justification of the ca4 pacity for economic adjustment, including the meth5 od of financing to be used, the anticipated manage6 ment structure of the Community Economic Devel7 opment Coordinating Committee, and the commit8 ment of the community to the strategic plan over the 

9 long term. 

10 ‘‘(2) A description of, and a plan to accomplish, 

11 the projects to be undertaken by the eligible commu12 nity. 

13 ‘‘(3) A description of how the plan and the 

14 projects to be undertaken by the eligible community 

15 will lead to job creation and job retention in the 

16 community. 

17 ‘‘(4) A description of any alternative develop18 ment plans that were considered, particularly less 

19 costly alternatives, and why those plans were re20 jected in favor of the proposed plan. 

21 ‘‘(5) A description of any additional steps the 

22 eligible community will take to achieve economic ad23 justment and diversification, including how the plan 

24 and the projects will contribute to establishing or 


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1 maintaining a level of public services necessary to 

2 attract and retain economic investment. 

3 ‘‘(6) A description and justification for the cost 

4 and timing of proposed basic and advanced infra5 structure improvements in the eligible community. 

6 ‘‘(7) A description of the occupational and 

7 workforce conditions in the eligible community, in8 cluding but not limited to existing levels of work9 force skills and competencies, and educational pro10 grams available for workforce training and future 

11 employment needs. 

12 ‘‘(8) A description of how the plan will adapt to 

13 changing markets, business cycles, and other vari14 ables. 

15 ‘‘(9) A graduation strategy through which the 

16 eligible community demonstrates that the community 

17 will terminate the need for Federal assistance. 

18 ‘‘(10) A description of the ways in which the 

19 community will support labor-management partner20 ships. 

21 ‘‘(11) A description of the strategies that will 

22 be used to support a level of public service needed 

23 to attract and retain investment. 

24 ‘‘(12) A description of ways in which the com25 munity will support labor-management partnerships. 


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1 ‘‘(13) A description of the strategies that will 

2 be used to support a level of public service needed 

3 to retain and attract investment. 

4 ‘‘(c) GRANTS TO DEVELOP STRATEGIC PLANS.— 

5 ‘‘(1) IN GENERAL.—The Director, upon receipt 

6 of an application from a Community Economic De7 velopment Coordinating Committee on behalf of an 

8 eligible community, shall award a grant to that com9 munity to be used to develop the strategic plan. 

10 ‘‘(2) AMOUNT.—The amount of a grant made 

11 under paragraph (1) shall be determined by the Sec12 retary, but may not exceed $50,000 to each commu13 nity. 

14 ‘‘(3) LIMIT.—Each community can only receive 

15 1 grant under this subsection for the purpose of de16 veloping a strategic plan in any 5-year period. 

17 ‘‘(d) SUBMISSION OF PLAN.—A strategic plan devel18 oped under subsection (a) shall be submitted to the Direc19 tor for evaluation and approval. 

20 ‘‘SEC. 277. GRANTS FOR ECONOMIC DEVELOPMENT. 

21 ‘‘The Director, upon receipt of an application from 

22 the Community Economic Development Coordinating 

23 Committee on behalf of an eligible community, may award 

24 a grant to that community to carry out any project or 


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1 program included in the strategic plan approved under 

2 section 276(d) that— 

3 ‘‘(1) will be located in, or will create or preserve 

4 high-wage jobs, in that eligible community; 

5 ‘‘(2) implements the strategy of that eligible 

6 community to create high-wage jobs in sectors that 

7 are expected to expand, including projects that— 

8 ‘‘(A) encourage industries to locate in that 

9 eligible community, if such funds are not used 

10 to encourage the relocation of any employer in 

11 a manner that causes the dislocation of employ12 ees of that employer at another facility in the 

13 United States; 

14 ‘‘(B) leverage resources to create or im15 prove Internet or telecommunications capabili16 ties to make the community more attractive for 

17 business; 

18 ‘‘(C) establish a funding pool for job cre19 ation through entrepreneurial activities; 

20 ‘‘(D) assist existing firms in that commu21 nity to restructure or retool to become more 

22 competitive in world markets and prevent job 

23 loss; or 

24 ‘‘(E) assist the community in acquiring the 

25 resources and providing the level of public servVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00350 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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1 ices necessary to meet the objectives set out in 

2 the strategic plan; 

3 ‘‘(3) gives priority to community efforts that 

4 support labor-management partnerships and regional 

5 and sectoral strategies for skill development and job 

6 creation; and 

7 ‘‘(4) assists and supports a level of public serv8 ice needed to attract and retain investment. 

9 ‘‘SEC. 278. AUTHORIZATION OF APPROPRIATIONS. 

10 ‘‘There are authorized to be appropriated to the De11 partment of Commerce, for the period beginning on Octo12 ber 1, 2006 and ending September 30, 2016 such sums 

13 as may be necessary to carry out the purposes of this 

14 chapter. 

15 ‘‘SEC. 279. GENERAL PROVISIONS. 

16 ‘‘(a) REPORT BY THE DIRECTOR.—Not later than 6 

17 months after the date of the enactment of the Right Time 

18 to Reinvest in America’s Competitiveness and Knowledge 

19 Act, and annually thereafter, the Director shall submit to 

20 the Committee on Finance of the Senate and the Com21 mittee on Ways and Means of the House of Representa22 tives a report regarding the programs established under 

23 this chapter. 


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1 ‘‘(b) REGULATIONS.—The Secretary shall prescribe 

2 such regulations as are necessary to carry out the provi3 sions of this chapter. 

4 ‘‘(c) SUPPLEMENT NOT SUPPLANT.—Funds appro5 priated under this chapter shall be used to supplement and 

6 not supplant other Federal, State, and local public funds 

7 expended to provide economic development assistance for 

8 communities.’’. 

9 SEC. 5233. TERMINATION. 

10 Section 285(b) of the Trade Act of 1974 (19 U.S.C. 

11 2271 note) is amended by adding at the end the following: 

12 ‘‘(3) ASSISTANCE FOR COMMUNITIES.—Tech13 nical assistance and other payments may not be pro14 vided under chapter 4 after September 30, 2016.’’. 

15 SEC. 5234. CONFORMING AMENDMENTS. 

16 The table of contents for chapter 4 of title II of the 

17 Trade Act of 1974 is amended to read as follows: 

‘‘CHAPTER 4—COMMUNITY ECONOMIC ADJUSTMENT

‘‘Sec. 271. Definitions. 

‘‘Sec. 272. Office of Community Trade Adjustment. 

‘‘Sec. 273. Notification and certification as an eligible community. 

‘‘Sec. 274. Community Economic Development Coordinating Committee. 

‘‘Sec. 275. Community economic adjustment advisors. 

‘‘Sec. 276. Strategic plans. 

‘‘Sec. 277. Grants for economic development. 

‘‘Sec. 278. Authorization of appropriations. 

‘‘Sec. 279. General provisions.’’. 


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1 CHAPTER 4—AGREEMENTS WITH STATES 

2 SEC. 5241. AGREEMENTS WITH STATES. 

3 Section 239(a) of the Trade Act of 1974 (19 U.S.C. 

4 2311(a)) is amended by striking ‘‘and (4)’’ and inserting 

5 ‘‘(4) will use personnel standards on a merit basis in the 

6 administration of services and payment of benefits to ad7 versely affected workers under this chapter, and (5)’’. 

8 TITLE VI—MODERNIZATION OF 

9 LABOR AND EMPLOYMENT LAWS 

10 Subtitle A—Protecting Workers’

11 Right To Organize 

12 SEC. 6101. SHORT TITLE. 

13 This subtitle may be cited as the ‘‘Employee Free 

14 Choice Act’’. 

15 SEC. 6102. STREAMLINING UNION CERTIFICATION. 

16 (a) IN GENERAL.—Section 9(c) of the National 

17 Labor Relations Act (29 U.S.C. 159(c)) is amended by 

18 adding at the end the following: 

19 ‘‘(6) Notwithstanding any other provision of this sec20 tion, whenever a petition shall have been filed by an em21 ployee or group of employees or any individual or labor 

22 organization acting in their behalf alleging that a majority 

23 of employees in a unit appropriate for the purposes of col24 lective bargaining wish to be represented by an individual 

25 or labor organization for such purposes, the Board shall 


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1 investigate the petition. If the Board finds that a majority 

2 of the employees in a unit appropriate for bargaining has 

3 signed authorizations designating the individual or labor 

4 organization specified in the petition as their bargaining 

5 representative and that no other individual or labor orga6 nization is currently certified or recognized as the exclu7 sive representative of any of the employees in the unit, 

8 the Board shall not direct an election but shall certify the 

9 individual or labor organization as the representative de10 scribed in subsection (a). 

11 ‘‘(7) The Board shall develop guidelines and proce12 dures for the designation by employees of a bargaining 

13 representative in the manner described in paragraph (6). 

14 Such guidelines and procedures shall include— 

15 ‘‘(A) model collective bargaining authorization 

16 language that may be used for purposes of making 

17 the designations described in paragraph (6); and 

18 ‘‘(B) procedures to be used by the Board to es19 tablish the authenticity of signed authorizations des20 ignating bargaining representatives.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) NATIONAL LABOR RELATIONS BOARD.—Sec23 tion 3(b) of the National Labor Relations Act (29 

24 U.S.C. 153(b)) is amended, in the second sentence— 


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1 (A) by striking ‘‘and to’’ and inserting 

2 ‘‘to’’; and 

3 (B) by striking ‘‘and certify the results 

4 thereof,’’ and inserting ‘‘, and to issue certifi5 cations as provided for in that section,’’. 

6 (2) UNFAIR LABOR PRACTICES.—Section 8(b) 

7 of the National Labor Relations Act (29 U.S.C. 

8 158(b)) is amended— 

9 (A) in paragraph (7)(B), by striking ‘‘, or’’ 

10 and inserting ‘‘or a petition has been filed 

11 under section 9(c)(6), or’’; and 

12 (B) in paragraph (7)(C), by striking 

13 ‘‘when such a petition has been filed’’ and in14 serting ‘‘when such a petition other than a peti15 tion under section 9(c)(6) has been filed’’. 

16 SEC. 6103. FACILITATING INITIAL COLLECTIVE BAR17 GAINING AGREEMENTS. 

18 Section 8 of the National Labor Relations Act (29 

19 U.S.C. 158) is amended by adding at the end the fol20 lowing: 

21 ‘‘(h) Whenever collective bargaining is for the pur22 pose of establishing an initial agreement following certifi23 cation or recognition, the provisions of subsection (d) shall 

24 be modified as follows: 


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1 ‘‘(1) Not later than 10 days after receiving a 

2 written request for collective bargaining from an in3 dividual or labor organization that has been newly 

4 organized or certified as a representative as defined 

5 in section 9(a), or within such further period as the 

6 parties agree upon, the parties shall meet and com7 mence to bargain collectively and shall make every 

8 reasonable effort to conclude and sign a collective 

9 bargaining agreement. 

10 ‘‘(2) If after the expiration of the 90-day period 

11 beginning on the date on which bargaining is com12 menced, or such additional period as the parties may 

13 agree upon, the parties have failed to reach an 

14 agreement, either party may notify the Federal Me15 diation and Conciliation Service of the existence of 

16 a dispute and request mediation. Whenever such a 

17 request is received, it shall be the duty of the Service 

18 promptly to put itself in communication with the par19 ties and to use its best efforts, by mediation and con20 ciliation, to bring them to agreement. 

21 ‘‘(3) If after the expiration of the 30-day period 

22 beginning on the date on which the request for me23 diation is made under paragraph (2), or such addi24 tional period as the parties may agree upon, the 

25 Service is not able to bring the parties to agreement 


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1 by conciliation, the Service shall refer the dispute to 

2 an arbitration board established in accordance with 

3 such regulations as may be prescribed by the Serv4 ice. The arbitration panel shall render a decision set5 tling the dispute and such decision shall be binding 

6 upon the parties for a period of 2 years, unless 

7 amended during such period by written consent of 

8 the parties.’’. 

9 SEC. 6104. STRENGTHENING ENFORCEMENT. 

10 (a) INJUNCTIONS AGAINST UNFAIR LABOR PRAC11 TICES DURING ORGANIZING DRIVES.— 

12 (1) IN GENERAL.—Section 10(l) of the National 

13 Labor Relations Act (29 U.S.C. 160(l)) is amend14 ed— 

15 (1) in the second sentence, by striking ‘‘If, after 

16 such’’ and inserting the following: 

17 ‘‘(2) If, after such’’; and 

18 (2) by striking the first sentence and inserting 

19 the following: 

20 ‘‘(1) Whenever it is charged— 

21 ‘‘(A) that any employer— 

22 ‘‘(i) discharged or otherwise discriminated 

23 against an employee in violation of subsection 

24 (a)(3) of section 8; 


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1 ‘‘(ii) threatened to discharge or to other2 wise discriminate against an employee in viola3 tion of subsection (a)(1) of section 8; or 

4 ‘‘(iii) engaged in any other unfair labor 

5 practice within the meaning of subsection (a)(1) 

6 that significantly interferes with, restrains, or 

7 coerces employees in the exercise of the rights 

8 guaranteed in section 7; 

9 while employees of that employer were seeking rep10 resentation by a labor organization or during the pe11 riod after a labor organization was recognized as a 

12 representative defined in section 9(a) until the first 

13 collective bargaining contract is entered into between 

14 the employer and the representative; or 

15 ‘‘(B) that any person has engaged in an unfair 

16 labor practice within the meaning of subparagraph 

17 (A), (B), or (C) of section 8(b)(4), section 8(e), or 

18 section 8(b)(7); 

19 the preliminary investigation of such charge shall be made 

20 forthwith and given priority over all other cases except 

21 cases of like character in the office where it is filed or 

22 to which it is referred.’’. 

23 (2) CONFORMING AMENDMENT.—Section 10(m) 

24 of the National Labor Relations (29 U.S.C. 160(m)) 


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1 is amended by inserting ‘‘under circumstances not 

2 subject to section 10(l)’’ after ‘‘section 8’’. 

3 (b) REMEDIES FOR VIOLATIONS.— 

4 (1) BACKPAY.—Section 10(c) of the National 

5 Labor Relations Act (29 U.S.C. 160(c)) is amended 

6 by striking ‘‘And provided further,’’ and inserting 

7 ‘‘Provided further, That if the Board finds that an 

8 employer has discriminated against an employee in 

9 violation of subsection (a)(3) of section 8 while em10 ployees of the employer were seeking representation 

11 by a labor organization, or during the period after 

12 a labor organization was recognized as a representa13 tive defined in subsection (a) of section 9 until the 

14 first collective bargaining contract was entered into 

15 between the employer and the representative, the 

16 Board in such order shall award the employee back 

17 pay and, in addition, 2 times that amount as liq18 uidated damages: Provided further,’’. 

19 (2) CIVIL PENALTIES.—Section 12 of the Na20 tional Labor Relations Act (29 U.S.C. 162) is 

21 amended— 

22 (A) by striking ‘‘Any’’ and inserting ‘‘(a) 

23 Any’’; and 

24 (B) by adding at the end the following: 


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1 ‘‘(b) Any employer who willfully or repeatedly com2 mits any unfair labor practice within the meaning of sub3 section (a)(1) or (a)(3) of section 8 while employees of 

4 the employer are seeking representation by a labor organi5 zation or during the period after a labor organization has 

6 been recognized as a representative defined in subsection 

7 (a) of section 9 until the first collective bargaining con8 tract is entered into between the employer and the rep9 resentative shall, in addition to any make-whole remedy 

10 ordered, be subject to a civil penalty of not to exceed 

11 $20,000 for each violation. In determining the amount of 

12 any penalty under this section, the Board shall consider 

13 the gravity of the unfair labor practice and the impact 

14 of the unfair labor practice on the charging party, on other 

15 persons seeking to exercise rights guaranteed by this Act, 

16 or on the public interest.’’. 

17 Subtitle B—Raising the Federal 

18 Minimum Wage 

19 SEC. 6201. SHORT TITLE. 

20 This subtitle may be cited as the ‘‘Fair Minimum 

21 Wage Act of 2006’’. 

22 SEC. 6202. MINIMUM WAGE. 

23 (a) IN GENERAL.—Section 6(a)(1) of the Fair Labor 

24 Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended 

25 to read as follows: 


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1 ‘‘(1) except as otherwise provided in this sec2 tion, not less than— 

3 ‘‘(A) $5.85 an hour, beginning on the 60th 

4 day after the date of enactment of the Fair 

5 Minimum Wage Act of 2006; 

6 ‘‘(B) $6.55 an hour, beginning 12 months 

7 after that 60th day; and 

8 ‘‘(C) $7.25 an hour, beginning 24 months 

9 after that 60th day;’’. 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 subsection (a) shall take effect 60 days after the date of 

12 enactment of this Act. 

13 SEC. 6203. APPLICABILITY OF MINIMUM WAGE TO THE 

14 COMMONWEALTH OF THE NORTHERN MAR15 IANA ISLANDS. 

16 (a) IN GENERAL.—Section 6 of the Fair Labor 

17 Standards Act of 1938 (29 U.S.C. 206) shall apply to the 

18 Commonwealth of the Northern Mariana Islands. 

19 (b) TRANSITION.—Notwithstanding subsection (a), 

20 the minimum wage applicable to the Commonwealth of the 

21 Northern Mariana Islands under section 6(a)(1) of the 

22 Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) 

23 shall be— 

24 (1) $3.55 an hour, beginning on the 60th day 

25 after the date of enactment of this Act; and 


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1 (2) increased by $0.50 an hour (or such lesser 

2 amount as may be necessary to equal the minimum 

3 wage under such section 6(a)(1)), beginning 6 

4 months after the date of enactment of this Act and 

5 every 6 months thereafter until the minimum wage 

6 applicable to the Commonwealth of the Northern 

7 Mariana Islands under this subsection is equal to 

8 the minimum wage set forth in such section. 

9 Subtitle C—Modernization of 

10 Unemployment Insurance 

11 CHAPTER 1—IMPROVEMENTS IN REG12 ULAR UNEMPLOYMENT COMPENSA13 TION 

14 SEC. 6311. PART-TIME AND LOW-WAGE WORKERS. 

15 Section 3304(a) of the Internal Revenue Code of 

16 1986 (relating to requirements for State unemployment 

17 compensation laws) is amended— 

18 (1) in paragraph (18), by striking ‘‘and’’ at the 

19 end; 

20 (2) by redesignating paragraph (19) as para21 graph (21); and 

22 (3) by inserting after paragraph (18) the fol23 lowing new paragraphs: 

24 ‘‘(19) in the case of an individual who is not eli25 gible for regular compensation under the State law 


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1 because such individual does not meet requirements 

2 relating to availability for work, active search for 

3 work, or refusal to accept work, because such indi4 vidual is seeking, or is available for, less than full5 time work, compensation is not denied by such State 

6 to an otherwise eligible individual who seeks less 

7 than full-time work or fails to accept full-time work; 

8 ‘‘(20) in the case of an individual who is not eli9 gible for regular compensation under the State law 

10 because of the use of a definition of base period that 

11 does not count wages earned in the most recently 

12 completed calendar quarter, eligibility for compensa13 tion is determined by applying a base period ending 

14 at the close of the most recently completed calendar 

15 quarter; and’’. 

16 SEC. 6312. NO REDUCTION IN UNEMPLOYMENT COMPENSA17 TION AS A RESULT OF PENSION ROLLOVERS. 

18 (a) IN GENERAL.—Section 3304(a) of the Internal 

19 Revenue Code of 1986 (relating to requirements for State 

20 unemployment compensation laws) is amended by adding 

21 at the end the following new flush sentence: 

22 ‘‘Compensation shall not be reduced under paragraph (15) 

23 for any pension, retirement or retired pay, annuity, or 

24 similar payment which is not includible in gross income 


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1 of the individual for the taxable year in which paid because 

2 it was part of a rollover distribution.’’ 

3 CHAPTER 2—IMPROVEMENTS TO THE 

4 FEDERAL-STATE EXTENDED UNEM5 PLOYMENT COMPENSATION PROGRAM 

6 SEC. 6321. LOWERING OF EXTENDED BENEFIT ‘‘ON’’ INDI7 CATOR. 

8 (a) REGULAR TRIGGERS.—Section 203(d) of the 

9 Federal-State Extended Unemployment Compensation Act 

10 of 1970 (26 U.S.C. 3304 note) is amended— 

11 (1) in paragraph (1)(B), by striking ‘‘5 per cen12 tum’’ and inserting ‘‘4 percent’’; and 

13 (2) in the matter following paragraph (2), by 

14 striking ‘‘the figure ‘5’ contained in subparagraph 

15 (B) thereof were ‘6’;’’ and inserting ‘‘the figure ‘4’ 

16 contained in subparagraph (B) thereof were ‘5’;’’. 

17 (b) ADDITIONAL TRIGGER.—Section 203(f)(1) of the 

18 Federal-State Extended Unemployment Compensation Act 

19 of 1970 (26 U.S.C. 3304 note) is amended— 

20 (1) in the matter preceding subparagraph (A), 

21 by striking ‘‘Effective with respect to compensation 

22 for weeks of unemployment beginning after March 6, 

23 1993, the State may by law provide that for pur24 poses of beginning or ending any extended benefit 

25 period under this section’’ and inserting ‘‘Each State 


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1 shall by law provide that for purposes of beginning 

2 or ending any extended benefit period under this 

3 section’’; and 

4 (2) in subparagraph (A)(i), by striking ‘‘6.5’’ 

5 and inserting ‘‘6’’. 

6 (c) HIGH UNEMPLOYMENT PERIOD TRIGGER.—Sec7 tion 202(b)(3)(B) of the Federal-State Extended Unem8 ployment Compensation Act of 1970 (26 U.S.C. 3304 

9 note) is amended by striking ‘‘substituting ‘8 percent’ for 

10 ‘6.5 percent’.’’ and inserting ‘‘substituting ‘7.5 percent’ 

11 for ‘6 percent’.’’ 

12 (d) CONFORMING AND TECHNICAL AMENDMENTS.— 

13 (1) The matter following paragraph (2) of sec14 tion 203(d) of the Federal-State Extended Unem15 ployment Compensation Act of 1970 (26 U.S.C. 

16 3304 note) is amended by striking ‘‘Effective with 

17 respect to compensation for weeks of unemployment 

18 beginning after March 30, 1977 (or, if later, the 

19 date established pursuant to State law), the State’’ 

20 and inserting ‘‘A State’’. 

21 (2) Section 207 of the Federal-State Extended 

22 Unemployment Compensation Act of 1970 (26 

23 U.S.C. 3304 note) is repealed. 

24 (3) The heading of subsection (f) of section 203 

25 of the Federal-State Extended Unemployment ComVerDate Aug 31 2005 16:41 Mar 04, 2006 Jkt 049200 PO 00000 Frm 00365 Fmt 6652 Sfmt 6201 E:\BILLS\S2357.IS S2357

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•S 2357 IS 

1 pensation Act of 1970 (26 U.S.C. 3304 note) is 

2 amended to read as follows: 

3 ‘‘Additional Trigger’’. 

4 SEC. 6322. REVISION OF DEFINITION OF RATE OF INSURED 

5 UNEMPLOYMENT. 

6 (a) IN GENERAL.—Section 203(e)(1) of the Federal7 State Extended Unemployment Compensation Act of 1970 

8 (26 U.S.C. 3304 note) is amended by adding at the end 

9 the following new paragraph: 

10 ‘‘(3) Notwithstanding paragraph (1), the term 

11 ‘rate of insured unemployment’ shall have the mean12 ing given that term under paragraph (1), except that 

13 each individual exhausting the right of such indi14 vidual to regular compensation during the most re15 cent 3 calendar months for which data are available 

16 before the close of the period for which such rate is 

17 being determined shall be taken into account as if 

18 each such individual was filing a claim for regular 

19 compensation for each week during the period for 

20 which such rate is being determined.’’. 

21 SEC. 6323. REPEAL OF CERTAIN STATE LAW EXTENDED 

22 BENEFIT REQUIREMENTS. 

23 (a) IN GENERAL.—Section 202 of the Federal-State 

24 Extended Unemployment Compensation Act of 1970 (26 

25 U.S.C. 3304 note) is amended— 


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1 (1) in subsection (a), by striking paragraphs 

2 (3) through (7); and 

3 (2) by striking subsection (c). 

4 (b) CONFORMING AMENDMENT.—Paragraph (4) of 

5 section 231(a) of the Trade Act of 1974 (19 U.S.C. 

6 2291(a)(4)) is repealed. 

7 CHAPTER 3—EFFECTIVE DATE 

8 SEC. 6331. EFFECTIVE DATE. 

9 (a) IN GENERAL.—Except as provided in subsection 

10 (b), the amendments made by this subtitle shall apply in 

11 the case of compensation paid for weeks beginning on or 

12 after the expiration of 180 days from the date of enact13 ment of this Act. 

14 (b) EXTENSION OF EFFECTIVE DATE FOR STATE

15 LAW AMENDMENT.— 

16 (1) IN GENERAL.—If the Secretary of Labor 

17 identifies a State as requiring a change to its stat18 utes or regulations in order to comply with the 

19 amendments made by this subtitle, such amend20 ments shall apply in the case of compensation paid 

21 for weeks beginning after the earlier of— 

22 (A) the date the State changes its statutes 

23 or regulations in order to comply with such 

24 amendments; or 


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1 (B) the end of the first session of the State 

2 legislature which begins after the date of enact3 ment of this Act or which began prior to such 

4 date and remained in session for at least 25 

5 calendar days after such date; 

6 except that in no case shall such amendments 

7 apply before the date that is 180 days after the 

8 date of enactment of this Act. 

9 (2) SESSION DEFINED.—In this subsection, the 

10 term ‘‘session’’ means a regular, special, budget, or 

11 other session of a State legislature. 

Æ 


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