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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2357 Introduced in Senate (IS)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Right Time to Reinvest in America's 
Competitiveness and Knowledge Act'' or the ``Right TRACK Act''.

SEC. 2. TABLE OF CONTENTS.

    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

      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 
        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.
Sesubchapter 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 
                 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.
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.
 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

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.

   TITLE I--INVESTING IN THE ECONOMY OF THE FUTURE AND CREATING HIGH 
                              QUALITY JOBS

    Subtitle A--Supporting Innovation for the Economy of the Future

      CHAPTER 1--PRESIDENTIAL RESEARCH AND DEVELOPMENT COMMISSION

SEC. 1111. RESEARCH AND DEVELOPMENT ADVISORY COMMITTEE.

    (a) In General.--There is established an advisory committee to be 
known as the ``Presidential Research and Development Advisory 
Committee'' (referred to in this section as the ``Advisory Committee'') 
to advise the President with respect to competitive trends in global 
technology and industry and in allocating Federal resources in 
education and technology development.
    (b) Membership.--
            (1) In general.--The Committee shall be composed of 25 
        members to be appointed by the President from among the 
        individuals nominated under paragraph (2) and the ex officio 
        members described in paragraph (3).
            (2) Nominations.--Not later than 30 days after the date of 
        enactment of this Act, the National Academies of Science shall 
        submit to the President a list of 50 individuals nominated by 
        the National Academies for service as members of the Advisory 
        Committee. Such list shall include individuals who have 
        expertise in industry, science, technology, education, and 
        economics, including--
                    (A) representatives from vaccine production, high 
                tech manufacturing, computer science, engineering, the 
                energy sector, university technology transfer offices, 
                investors and chief executive officers, biotechnology 
                firms, trade associations, academic researchers, and 
                economists;
                    (B) representatives from consumer organizations; 
                and
                    (C) representatives from patient or disease-
                specific advocacy groups.
            (3) Ex officio members.--The following shall be ex officio 
        members of the Advisory Committee:
                    (A) The Secretary of Health and Human Services.
                    (B) The Secretary of Defense.
                    (C) The Commissioner of Food and Drugs.
                    (D) The Director of the National Vaccine Program.
                    (E) The Director of the National Institutes of 
                Health.
                    (F) The Director of the Centers for Disease Control 
                and Prevention.
                    (G) The Secretary of Energy.
                    (H) The Administrator of the National Aeronautics 
                and Space Administration.
                    (I) The Secretary of Homeland Security.
                    (J) The Secretary of Commerce.
            (4) Chairperson.--The members of the Advisory Committee 
        appointed under paragraph (1) shall select a Chairperson from 
        among such members.
    (c) Meetings.--The Advisory Committee shall meet on a biannual 
basis at the call of the Chairperson, except that the initial meeting 
of the Advisory Committee shall occur not later than 6 months after the 
date of enactment of this Act.
    (d) Duties of the Advisory Committee.--The Advisory Committee 
shall--
            (1) provide advice to the President with respect to 
        competitive trends in the global technology;
            (2) provide advice to the President in the allocation of 
        Federal resources in education, job training, and technology 
        development; and
            (3) not later than 2 years after the date of enactment of 
        this Act, and annually thereafter, submit to the President and 
        Congress a report containing the recommendations of the 
        Advisory Committee on strategies to keep the United States a 
        world leader in research and development and technological 
        innovation, and the current status of the United States in such 
        areas.
    (e) Administrative Provisions.--
            (1) Compensation.--
                    (A) In general.--
                            (i) Employees of federal government.--Each 
                        ex officio or other member of the Advisory 
                        Committee that is an officer or employee of the 
                        Federal Government shall serve on the Advisory 
                        Committee without compensation in addition to 
                        that received in their regular public 
                        employment.
                            (ii) Other members.--Each member of the 
                        Advisory Committee that is not an officer or 
                        employee of the Federal Government shall be 
                        compensated at a rate equal to the daily 
                        equivalent of the annual rate of basic pay 
                        prescribed for level IV of the Executive 
                        Schedule under section 5315 of title 5, United 
                        States Code, for each day (including travel 
                        time) during which such member is engaged in 
                        the performance of the duties of the Advisory 
                        Committee.
                    (B) Travel expenses.--A member of the Advisory 
                Committee shall be allowed travel expenses, including 
                per diem in lieu of subsistence, at rates authorized 
                for an employee of an agency under subchapter I of 
                chapter 57 of title 5, United States Code, while away 
                from the home or regular place of business of the 
                member in the performance of the duties of the Advisory 
                Committee.
            (2) Staff.--
                    (A) In general.--The Director shall provide the 
                Advisory Committee with such professional and clerical 
                staff, such information, and the services of such 
                consultants as may be necessary to assist the Advisory 
                Committee in carrying out the functions under this 
                section.
                    (B) Detail of federal government employees.--
                            (i) In general.--An employee of the Federal 
                        Government may be detailed to the Advisory 
                        Committee without reimbursement.
                            (ii) Civil service status.--The detail of 
                        the employee shall be without interruption or 
                        loss of civil service status or privilege.
                    (C) Procurement of temporary and intermittent 
                services.--The Chairperson of the Advisory Committee 
                may procure temporary and intermittent services in 
                accordance with section 3109(b) of title 5, United 
                States Code, at rates for individuals that do not 
                exceed the daily equivalent of the annual rate of basic 
                pay prescribed for level V of the Executive Schedule 
                under section 5316 of that title.
            (3) Availability of record to congress.--Upon the request 
        of a Member of Congress, the Chairperson of the Advisory 
        Committee shall submit to Congress a record of the proceedings 
        of the Advisory Committee.

                  CHAPTER 2--INTERAGENCY WORKING GROUP

SEC. 1121. ACCELERATING AND BROADENING PARTICIPATION IN BIOMEDICAL, 
              SCIENCE, ENGINEERING, AND TECHNOLOGY RESEARCH IN THE 
              UNITED STATES.

    (a) Joint Working Group.--
            (1) Establishment.--The Director of the National Science 
        Foundation (referred to in this section as the ``Director'') 
        shall establish a joint working group for the purpose of 
        developing collaborative research with respect to physical and 
        life sciences.
            (2) Representation.--The joint working group established 
        under paragraph (1) shall be comprised of the Director and 
        representatives from the Office of Science of the Department of 
        Energy, the Office of Research and Engineering of the 
        Department of Defense, the National Oceanic and Atmospheric 
        Administration, the Environmental Protection Agency, the 
        National Aeronautics and Space Administration, and any other 
        Federal agencies determined appropriate by the Director.
            (3) Duties.--The joint working group established under 
        paragraph (1) shall--
                    (A) develop and recommend a permanent mechanism, 
                and establish temporary or permanent programs as 
                appropriate, to fund collaborative research and 
                development relating to the physical and life sciences;
                    (B) establish temporary or permanent bi-agency and 
                multi-agency programs as appropriate, to fund 
                collaborative research and development relating to 
                physical and life sciences and the development of 
                research tools for physical and life science 
                applications;
                    (C) develop and recommend a permanent mechanism, 
                and establish temporary or permanent multi-agency 
                programs, to fund science, engineering, and technology 
                research with broad impacts and particular relevance 
                for public health, environmental health, 
                sustainability, and other global issues of the future;
                    (D) establish multi-agency and multi-disciplinary 
                peer review processes, as appropriate, based on both 
                intellectual merit and broader impacts; and
                    (E) not later than 2 years after the establishment 
                of the group, and every 2 years thereafter, submit to 
                Congress a report describing the activities of the 
                group for the period for which the report is submitted, 
                including evaluations of efforts to broaden 
                participation in science, engineering, and technology 
                research by underrepresented groups.
            (4) Termination.--The joint working group established under 
        paragraph (1) shall terminate on the date that is 5 years after 
        the date on which the group is established under such 
        paragraph.
    (b) Increased Funding.--
            (1) Research and development.--The heads of the agencies 
        represented on the join working group under subsection (a), 
        shall--
                    (A) enhance and improve activities for, and 
                establish additional grant programs to support, 
                research and development in multi-disciplinary areas 
                including biodefense, pharmacoepidemiology, 
                pharmacoeconomics, and high tech fields, as necessary; 
                and
                    (B) give special consideration to grant proposals 
                from researchers and research institutions with 
                demonstrated records of broadening participation of 
                underrepresented groups in science, engineering, and 
                technology.
            (2) Education and training.--The heads of the agencies 
        represented on the joint working group under subsection (a) 
        shall--
                    (A) enhance and improve activities for, and 
                establish additional grant programs to support, the 
                education, mentoring, and ongoing training of 
                undergraduate, graduate, early-career, and mid-career 
                researchers in multi-disciplinary areas of research, 
                including biodefense, pharmacoepidemiology, 
                pharmacoeconomics, and high tech fields; and
                    (B) establish additional grant programs to support 
                the outreach to and recruitment of pre-college students 
                from underserved or disadvantaged communities by 
                researchers at all stages of their careers who are 
                affiliated with degree-granting institutions.
            (3) Broadening participation.--The heads of the agencies 
        represented in the joint working group under subsection (a) 
        shall ensure that the activities authorized under paragraphs 
        (1) and (2) promote full and equal development and use of the 
        talents of men and women of all ethnic, racial, and economic 
        backgrounds, including individuals with disabilities, in 
        advancing the United States' competitiveness in the global 
        economy.

        CHAPTER 3--RESEARCH AND DEVELOPMENT TAX CREDIT EXTENSION

SEC. 1131. FINDINGS.

    Congress finds the following:
            (1) Research and development performed in the United States 
        results in quality jobs, better and safer products, increased 
        ownership of technology-based intellectual property, and higher 
        productivity in the United States.
            (2) Since 1994, private sector research and development 
        employment has grown at a faster rate than overall private 
        sector employment in the United States. From 1994 to 2000, 
        there was an average annual growth rate of 5.4 percent in 
        research and development employment, compared with 2.7 percent 
        in total employment.
            (3) The extent to which companies perform and increase 
        research and development activities in the United States is in 
        part dependent on Federal tax policy.
            (4) The private sector performed most of the Nation's 
        research and development and accounted for more than two-thirds 
        of total research and development performance in 2003. Of the 
        $194,000,000,000 in industrial research and development 
        performed in 2003, more than 90 percent was funded by industry.
            (5) Many of the countries with which the United States 
        competes have introduced new or revised national plans for 
        science, technology, and innovation policy, and a growing 
        number of countries have established targets for increased 
        research and development spending. Virtually all countries are 
        seeking ways to enhance the quality and efficiency of public 
        research, stimulate business investments in research and 
        development, and strengthen linkages between the public and 
        private sectors.
            (6) Direct government support to business research and 
        development has declined, both in absolute terms and as a share 
        of business research and development, and greater emphasis is 
        being placed on indirect measures, such as tax incentives for 
        research and development.
            (7) Congress should make permanent a research and 
        development credit that provides a meaningful incentive to all 
        types of taxpayers.

SEC. 1132. PERMANENT EXTENSION OF RESEARCH CREDIT.

    (a) In General.--Section 41 of the Internal Revenue Code of 1986 
(relating to credit for increasing research activities) is amended by 
striking subsection (h).
    (b) Conforming Amendment.--Paragraph (1) of section 45C(b) of such 
Code is amended by striking subparagraph (D).
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 1133. INCREASE IN RATES OF ALTERNATIVE INCREMENTAL CREDIT.

    (a) In General.--Subparagraph (A) of section 41(c)(4) of the 
Internal Revenue Code of 1986 (relating to election of alternative 
incremental credit) is amended--
            (1) by striking ``2.65 percent'' and inserting ``3 
        percent'',
            (2) by striking ``3.2 percent'' and inserting ``4 
        percent'', and
            (3) by striking ``3.75 percent'' and inserting ``5 
        percent''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 1134. ALTERNATIVE SIMPLIFIED CREDIT FOR QUALIFIED RESEARCH 
              EXPENSES.

    (a) In General.--Subsection (c) of section 41 of the Internal 
Revenue Code of 1986 (relating to base amount) is amended by 
redesignating paragraphs (5) and (6) as paragraphs (6) and (7), 
respectively, and by inserting after paragraph (4) the following new 
paragraph:
            ``(5) Election of alternative simplified credit.--
                    ``(A) In general.--At the election of the taxpayer, 
                the credit determined under subsection (a)(1) shall be 
                equal to 12 percent of so much of the qualified 
                research expenses for the taxable year as exceeds 50 
                percent of the average qualified research expenses for 
                the 3 taxable years preceding the taxable year for 
                which the credit is being determined.
                    ``(B) Special rule in case of no qualified research 
                expenses in any of 3 preceding taxable years.--
                            ``(i) Taxpayers to which subparagraph 
                        applies.--The credit under this paragraph shall 
                        be determined under this subparagraph if the 
                        taxpayer has no qualified research expenses in 
                        any 1 of the 3 taxable years preceding the 
                        taxable year for which the credit is being 
                        determined.
                            ``(ii) Credit rate.--The credit determined 
                        under this subparagraph shall be equal to 6 
                        percent of the qualified research expenses for 
                        the taxable year.
                    ``(C) Election.--An election under this paragraph 
                shall apply to the taxable year for which made and all 
                succeeding taxable years unless revoked with the 
                consent of the Secretary. An election under this 
                paragraph may not be made for any taxable year to which 
                an election under paragraph (4) applies.''.
    (b) Coordination With Election of Alternative Incremental Credit.--
            (1) In general.--Section 41(c)(4)(B) of the Internal 
        Revenue Code of 1986 (relating to election) is amended by 
        adding at the end the following: ``An election under this 
        paragraph may not be made for any taxable year to which an 
        election under paragraph (5) applies.''.
            (2) Transition rule.--In the case of an election under 
        section 41(c)(4) of the Internal Revenue Code of 1986 which 
        applies to the taxable year which includes the date of the 
        enactment of this Act, such election shall be treated as 
        revoked with the consent of the Secretary of the Treasury if 
        the taxpayer makes an election under section 41(c)(5) of such 
        Code (as added by subsection (a)) for such year.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 1135. EXPANSION OF RESEARCH CREDIT.

    (a) Expansion of Credit to Expenses of General Collaborative 
Research Consortia.--Section 41 of the Internal Revenue Code of 1986 
(relating to credit for increased research activities) is amended--
            (1) by striking ``an energy research consortium'' in 
        subsections (a)(3) and (b)(3)(C)(i) and inserting ``a research 
        consortium'',
            (2) by striking ``energy'' each place it appears in 
        subsection (f)(6)(A),
            (3) by inserting ``or 501(c)(6)'' after ``section 
        501(c)(3)'' in subsection (f)(6)(A)(i)(I), and
            (4) by striking ``Energy research'' in the heading for 
        subsection (f)(6)(A) and inserting ``Research''.
    (b) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act, in taxable years ending after such date.

             CHAPTER 4--INCREASING RESEARCH AND DEVELOPMENT

SEC. 1141. AUTHORIZATION OF APPROPRIATIONS FOR THE DEPARTMENT OF 
              DEFENSE.

    (a) Basic Research.--There is authorized to be appropriated for the 
Department of Defense for basic (6.1) research, for the research, 
development, test, and evaluation accounts of the Department, and for 
other accounts of the Department providing funding for such research, 
aggregate amounts as follows:
            (1) $1,565,801,000 for fiscal year 2007.
            (2) $1,722,381,000 for fiscal year 2008.
            (3) $1,894,619,000 for fiscal year 2009.
            (4) $2,084,080,000 for fiscal year 2010.
            (5) $2,292,489,000 for fiscal year 2011.
            (6) $2,521,737,000 for fiscal year 2012.
            (7) $2,773,911,000 for fiscal year 2013.
    (b) Applied Research.--There is authorized to be appropriated for 
the Department of Defense for applied (6.2) research, for the research, 
development, test, and evaluation accounts of the Department, and for 
other accounts of the Department providing funding for such research, 
aggregate amounts as follows:
            (1) $4,908,093,000 for fiscal year 2007.
            (2) $5,398,903,000 for fiscal year 2008.
            (3) $5,938,793,000 for fiscal year 2009.
            (4) $6,532,672,000 for fiscal year 2010.
            (5) $7,185,939,000 for fiscal year 2011.
            (6) $7,904,533,000 for fiscal year 2012.
            (7) $8,694,987,000 for fiscal year 2013.

SEC. 1142. AUTHORIZATION OF APPROPRIATIONS FOR THE NATIONAL SCIENCE 
              FOUNDATION FOR RESEARCH AND RELATED ACTIVITIES.

    There is authorized to be appropriated for the National Science 
Foundation for Research and Related Activities, amounts as follows:
            (1) $4,826,250,000 for fiscal year 2007.
            (2) $5,308,875,000 for fiscal year 2008.
            (3) $5,839,763,000 for fiscal year 2009
            (4) $6,423,739,000 for fiscal year 2010.
            (5) $7,066,113,000 for fiscal year 2011.
            (6) $7,772,724,000 for fiscal year 2012.
            (7) $8,549,996,000 for fiscal year 2013.

SEC. 1143. AUTHORIZATION OF APPROPRIATIONS FOR THE NATIONAL AERONAUTICS 
              AND SPACE ADMINISTRATION FOR RESEARCH AND DEVELOPMENT 
              ACTIVITIES.

    There is authorized to be appropriated for the National Aeronautics 
and Space Administration for research and development activities 
(including research and development activities for Space Flight 
Capabilities, research and development activities for Science, 
Aeronautics and Exploration, and other research and development 
activities), aggregate amounts as follows:
            (1) $10,737,100,000 for fiscal year 2007.
            (2) $11,810,810,000 for fiscal year 2008.
            (3) $12,991,891,000 for fiscal year 2009.
            (4) $14,291,080,000 for fiscal year 2010.
            (5) $15,720,188,000 for fiscal year 2011.
            (6) $17,292,207,000 for fiscal year 2012.
            (7) $19,021,428,000 for fiscal year 2013.

SEC. 1144. AUTHORIZATION OF APPROPRIATIONS FOR THE DEPARTMENT OF ENERGY 
              FOR BASIC RESEARCH.

    There is authorized to be appropriated for the Department of Energy 
for the Office of Science for basic research, amounts as follows:
            (1) $4,135,000,000 for fiscal year 2007.
            (2) $4,548,500,000 for fiscal year 2008.
            (3) $5,003,350,000 for fiscal year 2009
            (4) $5,503,685,000 for fiscal year 2010.
            (5) $6,054,054,000 for fiscal year 2011.
            (6) $6,659,459,000 for fiscal year 2012.
            (7) $7,325,405,000 for fiscal year 2013.

SEC. 1145. AUTHORIZATION OF APPROPRIATIONS FOR NATIONAL INSTITUTES OF 
              HEALTH FOR RESEARCH AND DEVELOPMENT.

    There is authorized to be appropriated to the National Institutes 
of Health for research and development, amounts as follows:
            (1) $31,251,440,000 for fiscal year 2007.
            (2) $34,376,584,000 for fiscal year 2008.
            (3) $37,814,242,000 for fiscal year 2009.
            (4) $41,595,667,000 for fiscal year 2010.
            (5) $45,755,233,000 for fiscal year 2011.
            (6) $50,330,757,000 for fiscal year 2012.
            (7) $55,363,832,000 for fiscal year 2013.

             Subtitle B--Building the Economy of the Future

                       CHAPTER 1--NANOTECHNOLOGY

SEC. 1211. TAX CREDIT FOR INVESTMENT IN NANOTECHNOLOGY FIRMS.

    (a) In General.--Part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to credits against tax) is 
amended by adding at the end the following new subpart:

             ``Subpart G--Nanotechnology Development Credit

``SEC. 54A. CREDIT FOR PURCHASE OF NANOTECHNOLOGY DEVELOPER STOCK.

    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year an 
        amount equal to the applicable percentage of the aggregate 
        amount paid by the taxpayer for the purchase of qualified 
        nanotechnology developer stock.
            ``(2) Applicable percentage.--For purposes of subsection 
        (a), the applicable percentage is--
                    ``(A) 5.25 percent for the taxable year in which 
                the qualified nanotechnology developer stock is 
                purchased,
                    ``(B) 3.75 percent for the taxable year following 
                the year in which such stock is purchased,
                    ``(C) 3 percent for the second taxable year 
                following the year in which such stock is purchased,
                    ``(D) 1.5 percent for the third taxable year 
                following the year in which such stock is purchased,
                    ``(E) 1.5 percent for fourth taxable year following 
                the year in which such stock is purchased, and
                    ``(F) 0 percent for any taxable year after the 
                fourth taxable year following the year in which such 
                stock is purchased.
    ``(b) Limitations.--
            ``(1) Amount of investment eligible.--No credit shall be 
        allowed under subsection (a) with respect to amounts paid in 
        any taxable year for the purchase of qualified nanotechnology 
        developer stock which is in excess of $10,000,000.
            ``(2) Application with other credits.--The credit allowed 
        under subsection (a) for any taxable year shall not exceed the 
        excess of--
                    ``(A) the regular tax for the taxable year reduced 
                by the sum of the credits allowable under this part 
                (other than subpart C thereof), over
                    ``(B) the tentative minimum tax for the taxable 
                year.
    ``(c) Qualified Nanotechnology Developer Stock.--For purposes of 
this section--
            ``(1) In general.--The term `qualified nanotechnology 
        developer stock' means any common stock in a C corporation or 
        any membership unit in a State-registered limited liability 
        company if--
                    ``(A) as of the date of issuance of such stock or 
                membership unit, such corporation or company is a 
                qualified nanotechnology developer,
                    ``(B) such stock is acquired by the taxpayer at its 
                original issue (directly or through an underwriter) in 
                exchange for money or other property (not including 
                stock), and
                    ``(C) the proceeds of such issue are used by such 
                issuer during the 5-year period beginning on the date 
                of issuance for the development, production, or sale of 
                products using nanotechnology.
            ``(2) Qualified nanotechnology developer.--The term 
        `qualified nanotechnology developer' means any entity--
                    ``(A) which is a C corporation or limited liability 
                company organized under the laws of any State or of the 
                United States,
                    ``(B) which is a small business concern (as defined 
                in section 3(a) of the Small Business Act), and
                    ``(C) with respect to which a certification under 
                subsection (d) is in effect.
            ``(3) Nanotechnology.--The term `nanotechnology' means the 
        science of understanding and manipulating matter on an atomic 
        or molecular scale, generally to create structures, and usually 
        at a size smaller than 100 nanometers.
    ``(d) Certification.--
            ``(1) In general.--The Secretary, in consultation with the 
        National Nanotechnology Coordination Office, shall certify an 
        entity under this subsection if such entity demonstrates by the 
        submission of such information as required by the Secretary 
        that not less than 51 percent of its activities relate to the 
        development, production, and sale of products using 
        nanotechnology.
            ``(2) Revocation.--The Secretary shall revoke the 
        certification of any entity which is certified under paragraph 
        (1) if the Secretary determines that--
                    ``(A) the proceeds from any qualified 
                nanotechnology developer stock issued by such entity 
                are used during the 5-year period following such issue 
                for a purpose other than the development, production, 
                or sale of products using nanotechnology, or
                    ``(B) such entity no longer meets the requirements 
                of paragraph (1).
            ``(3) Submission of information.--The Secretary may require 
        any entity certified under paragraph (1) to provide such 
        information as the Secretary may require in order ensure 
        compliance with the purposes of this section.
    ``(e) Carryover of Unused Credit.--
            ``(1) In general.--If the credit amount allowable under 
        subsection (a) for a taxable year exceeds the amount of the 
        limitation under subsection (h) for such taxable year, such 
        excess shall be allowed as a credit carryforward for each of 
        the 20 taxable years following the unused credit year.
            ``(2) Rules.--Rules similar to the rules of section 39 
        shall apply with respect to the credit carryforward under 
        paragraph (1).
    ``(f) Recapture of Credit.--If--
            ``(1) the taxpayer fails to hold qualified nanotechnology 
        developer stock for the 7-year period beginning on the date 
        such stock was purchased by the taxpayer, or
            ``(2) during such 7-year period, the issuer of such stock 
        ceases to be a qualified nanotechnology developer,
then notwithstanding any other provision of this subtitle, the tax 
imposed by this chapter on the taxpayer for the taxable year beginning 
in the calendar year in which such cessation occurred shall be 
increased by the aggregate amount of credit allowed under subsection 
(a) to the taxpayer with respect to such stock.
    ``(g) Special Rule.--For purposes of this section, rules similar to 
the rules of section 1202(c)(3) shall apply.
    ``(h) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section for the purchase of any stock--
            ``(1) the increase in the basis of such stock which would 
        (but for this subsection) result from such purchase shall be 
        reduced by the amount of the credit so allowed, and
            ``(2) the basis of such stock shall be increased by the 
        amount of any increase in tax by reason of subsection (f).''.
    (b) Conforming Amendment.--Subsection (a) of section 1016 of such 
Code is amended by striking ``and'' at the end of paragraph (36), by 
striking the period at the end of paragraph (37) and inserting ``; 
and'', and by adding at the end the following new paragraph:
            ``(38) to the extent provided in section 54A(h), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 54A or a recapture imposed under section 
        54A(f).''.
    (c) Clerical Amendment.--The table of subparts for part IV is 
amended by adding at the end the following new item:
           ``subpart g. nanotechnology development credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid after December 31, 2005.

SEC. 1212. NANOTECHNOLOGY ASSISTANCE.

    (a) Definitions.--In this section:
            (1) Commercialization.--The term ``commercialization'' 
        means the process of converting nanotechnology research into 
        products and processes that are used in the marketplace.
            (2) Degree-granting institution.--The term ``degree-
        granting institution'' means an institution of higher 
        education, as defined in section 101 of the Higher Education 
        Act of 1965 (20 U.S.C. 1001), that awards an associate or 
        baccalaureate degree.
            (3) Incubator.--The term ``incubator'' means an entity 
        affiliated with or housed in a degree-granting institution that 
        provides space and coordinated and specialized services to 
        entrepreneurial businesses that work in the field of 
        nanotechnology commercialization and that meets selected 
        criteria during the businesses' startup phase, including 
        providing services such as shared office space and services, 
        access to equipment, access to telecommunications and 
        technology services, flexible leases, specialized management 
        assistance, access to financing, and other coordinated business 
        or technical support services.
            (4) Nanotechnology.--The term ``nanotechnology'' means the 
        science of understanding and manipulating matter on an atomic 
        or molecular scale, generally to create structures, and usually 
        at a size smaller than 100 nanometers.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Commerce.
    (b) Grants Authorized.--
            (1) In general.--The Secretary is authorized to establish 
        within the Technology Administration of the Department of 
        Commerce a grant program to support the establishment and 
        development of incubators.
            (2) Allocation of funds.--From the amount appropriated 
        pursuant to the authorization of appropriations in subsection 
        (e) for a fiscal year, the Secretary--
                    (A) shall use 80 percent of such amount to--
                            (i) make awards, on a competitive basis, in 
                        amounts of up to $2,500,000, to help acquire or 
                        renovate space for incubators; and
                            (ii) make awards, on a competitive basis, 
                        in amounts of $50,000 to $150,000, for--
                                    (I) developing curricula related to 
                                nanotechnology;
                                    (II) providing services for 
                                commercialization, including preparing 
                                providing services to appropriate 
                                businesses including corporate 
                                charters, partnership agreements, and 
                                basic contracts, assistance with 
                                patents, trademarks, and copyrights, 
                                and technology acquisition services; or
                                    (III) providing programming for 
                                entrepreneurs working in nanotechnology 
                                housed in an incubator;
                    (B) shall reserve 10 percent of the amount to make 
                awards, on a competitive basis, in amounts of $50,000 
                to $150,000, for feasibility studies for determining 
                the need for or siting of incubators; and
                    (C) shall reserve 10 percent for research regarding 
                best practices for incubator programs, including the 
                development of a benchmarking system based on uniform 
                measures, and for dissemination of information 
                regarding such practices.
            (3) Contracts.--The Secretary is authorized to contract 
        with organizations with expertise in incubation practices for 
        the purposes of carrying out paragraph (2)(C).
            (4) Uses of funds.--Funds awarded under paragraph 
        (2)(A)(ii) may be used for--
                    (A) curriculum, training, or technical assistance 
                related to nanotechnology developed by academic faculty 
                with participation from entrepreneurship experts;
                    (B) programming that contributes to a coordinated 
                set of business assistance tools, such as developing 
                management teams, providing workforce development, 
                forming strategic alliances, developing capital 
                formation networks, and developing customized plans for 
                commercialization; and
                    (C) hiring staff to coordinate the activities 
                described in subparagraph (A) or (B) or for curriculum 
                development.
            (5) Recipients.--The Secretary shall make an award--
                    (A) described in paragraph (2)(A) to a nonprofit 
                entity that has a strong affiliation with a degree-
                granting institution and manages or provides technical 
                assistance to the degree-granting institution's 
                affiliated incubator, or if no nonprofit entity manages 
                or provides technical assistance to the incubator, to 
                the degree-granting institution managing the incubator; 
                and
                    (B) described in paragraph (2)(B) to a degree-
                granting institution.
            (6) Applications.--Each entity desiring assistance under 
        this section shall submit an application to the Secretary at 
        such time, in such manner, and accompanied by such information 
        as the Secretary may require.
            (7) Selection.--
                    (A) Priority.--The Secretary shall give priority to 
                funding applications under this subsection for 
                activities that--
                            (i) will be carried out at a facility that 
                        is included in the Centers and Networks of 
                        Excellence of the research and development 
                        program known as the National Nanotechnology 
                        Initiative;
                            (ii) provide strong educational 
                        opportunities to students in fields related to 
                        nanotechnology and commercialization; and
                            (iii) require significant collaboration 
                        between businesses and academia.
                    (B) Consideration.--The Secretary may give 
                consideration to funding applications under this 
                subsection that support--
                            (i) the building of new incubators;
                            (ii) incubators that work with faculty 
                        entrepreneurs or university-based research;
                            (iii) incubators that are located in areas 
                        with an established venture capital industry 
                        and other industry support, including 
                        leadership and legal support, for 
                        commercialization; or
                            (iv) incubators that have secured 
                        additional private funding.
    (c) Nanotechnology Startup Advisory Council.--
            (1) Establishment.--The Secretary shall establish a 
        Nanotechnology Startup Advisory Council composed of industry 
        leaders, business and marketing professionals, venture 
        capitalists, attorneys, and nanotechnology researchers.
            (2) Purpose.--The purpose of the Nanotechnology Start-up 
        Advisory Council is to ensure that emerging nanotechnology 
        companies create a sound foundation for new business.
    (d) Report.--Not later than September 30 of the third fiscal year 
during which assistance is provided under this section, the Secretary 
shall prepare and submit to Congress a report that--
            (1) describes the most effective or innovative additions to 
        curricula related to nanotechnology that were developed with 
        such assistance; and
            (2) contains a comparison of the success of nanotechnology 
        companies developed in incubators that received such assistance 
        with the success of other nanotechnology companies;
            (3) describes any factors leading to success of companies 
        that were developed in incubators;
            (4) recommends the best role for degree-granting 
        institutions in commercialization; and
            (5) contains a comparison of academic-affiliated incubators 
        of specific missions and ages that received assistance under 
        this section with other incubators with similar missions and 
        ages.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $25,000,000 for each of the 
fiscal years 2007, 2008, and 2009.

            CHAPTER 2--INVESTING IN HIGH-TECH MANUFACTURING

SEC. 1221. MANUFACTURING EXTENSION PARTNERSHIP PROGRAM.

    (a) In General.--There is authorized to be appropriated for the 
National Institute of Standards and Technology for the Manufacturing 
Extension Partnership Program amounts as follows:
            (1) For fiscal year 2007, $212,000,000.
            (2) For fiscal year 2008, $272,000,000.
            (3) For fiscal year 2009, $332,000,000.
            (4) For fiscal year 2010, $392,000,000.
            (5) For fiscal year 2011, $452,000,000.
            (6) For fiscal year 2012, $512,000,000.
            (7) For fiscal year 2013, $572,000,000.
            (8) For fiscal year 2014, $632,000,000.
            (9) For fiscal year 2015, $692,000,000.
            (10) For fiscal year 2016, $752,000,000.
            (11) For fiscal year 2017, $812,000,000.
    (b) Manufacturing Extension Partnership Program Defined.--In this 
section, the term ``Manufacturing Extension Partnership Program'' means 
the program of Manufacturing Extension Partnership carried out by the 
National Institute of Standards and Technology under section 26 of the 
National Institute of Standards and Technology Act (15 U.S.C. 278l), as 
provided in part 292 of title 15, Code of Federal Regulations.

SEC. 1222. ADVANCED TECHNOLOGY PROGRAM.

    There are authorized to be appropriated for the National Institute 
of Standards and Technology for carrying out the Advanced Technology 
Program under section 28 of the National Institute of Standards and 
Technology Act (15 U.S.C. 278n), $320,000,000 for each of the fiscal 
years 2007 through 2016.

                      CHAPTER 3--DOMESTIC VACCINES

SEC. 1231. INCENTIVES FOR THE CONSTRUCTION OF DOMESTIC VACCINE 
              MANUFACTURING FACILITIES.

    (a) Domestic Vaccine Manufacturing Facilities Investment Tax 
Credit.--
            (1) Allowance of credit.--Section 46 of the Internal 
        Revenue Code of 1986 (relating to amount of investment credit) 
        is amended by striking ``and'' at the end of paragraph (3), by 
        striking the period at the end of paragraph (4) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(5) the vaccine manufacturing facilities investment 
        credit.''.
            (2) Amount of credit.--Subpart E of part IV of subchapter A 
        of chapter 1 of such Code is amended inserting after section 
        45B the following new section:

``SEC. 48C. VACCINE MANUFACTURING FACILITIES INVESTMENT CREDIT

    ``(a) In General.--For purposes of section 46, the vaccine 
manufacturing facilities investment credit for any taxable year is an 
amount equal to 10 percent of the qualified investment for such taxable 
year.
    ``(b) Qualified Investment.--For purposes of subsection (a), the 
qualified investment for any taxable year is the basis of each vaccine 
manufacturing facilities property placed in service by the taxpayer 
during such taxable year.
    ``(c) Vaccine Manufacturing Facilities Property.--For purposes of 
this section, the term `vaccine manufacturing facilities property' 
means real and tangible personal property--
            ``(1) the original use of which commences with the 
        taxpayer,
            ``(2) which is depreciable under section 167, with a class 
        life of less than 20 years,
            ``(3) which is substantially used for the manufacture or 
        research and development of vaccines or antibiotics or 
        antiviral agents which are widely considered potentially useful 
        for the prevention or containment of public health crises, and
            ``(4) which is in compliance with any standards and 
        regulations which are promulgated by the Food and Drug 
        Administration, the Occupational Safety and Health 
        Administration, or the Environmental Protection Agency and 
        which are applicable to such property.
    ``(d) Certain Progress Expenditure Rules Made Applicable.--Rules 
similar to rules of subsections (c)(4) and (d) of section 46 (as in 
effect on the day before the date of the enactment of the Revenue 
Reconciliation Act of 1990) shall apply for purposes of this 
subsection.''.
    (b) Technical Amendments.--
            (1) Subparagraph (C) of section 49(a)(1) of such Code is 
        amended by striking ``and'' at the end of clause (iii), by 
        striking the period at the end of clause (iv) and inserting ``, 
        and'', and by adding at the end the following new clause:
                            ``(v) the basis of any vaccine 
                        manufacturing facilities property under section 
                        48C.''.
            (2) Subparagraph (E) of section 50(a)(2) of such Code is 
        amended by inserting ``or 48C(d)'' before the period.
            (3) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 48B and inserting the following:

``Sec. 48C. Vaccine manufacturing facilities investment credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act under 
rules similar to the rules of section 48(m) of the Internal Revenue 
Code of 1986 (as in effect on the day before the date of enactment of 
the Revenue Reconciliation Act of 1990).

   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.

    (a) In General.--The Secretary of Education, in consultation with 
the Secretary of Energy, may award grants to postsecondary educational 
institutions to enable the institutions to train 10,000 individuals in 
green building and zero-energy home design and construction by fiscal 
year 2011.
    (b) Application.--A postsecondary educational institution that 
desires to receive a grant under this section shall submit an 
application to the Secretary of Education at such time, in such manner, 
and accompanied by such information as the Secretary of Education may 
reasonably require.
    (c) Reimbursement.--
            (1) In general.--A postsecondary educational institution 
        that receives a grant under this section shall use the grant 
        funds to reimburse an individual who completes training in 
        zero-energy home design and construction at, and receives 
        accreditation as a green building professional from, the 
        institution for an amount that is not more than 50 percent of 
        the amount the individual paid to receive the training at the 
        institution.
            (2) Determination of amount.--For purposes of calculating 
        the amount of the reimbursement under paragraph (1), the amount 
        the individual paid to receive the training at the institution 
        shall be reduced by the amount of any other grants received by 
        the individual for the training.
            (3) Effect on other federal loans.--A reimbursement 
        provided to an individual under paragraph (1) shall not affect 
        the eligibility of the individual for other Federal loans, 
        including student loans.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 1242. EXTENSION OF CERTAIN TAX CREDITS FOR SOLAR ENERGY.

    (a) Extension of Residential Renewable Energy Efficient Property 
Credit Through 2012.--Section 25D(g) of the Internal Revenue Code of 
1986 is amended to read as follows:
    ``(g) Termination.--The credit allowed under this section shall not 
apply to--
            ``(1) property described in paragraph (1) or (2) of 
        subsection (d) placed in service after December 31, 2012, and
            ``(2) property described in subsection (d)(3) placed in 
        service after December 31, 2007.''.
    (b) Extension of Renewable Energy Investment Tax Credit Through 
2012.--Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) of the 
Internal Revenue Code of 1986 (relating to energy credit) is amended by 
striking ``2008'' both places it appears and inserting ``2013''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 1243. TAX CREDIT FOR PURCHASING GREEN POWER.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to other credits) is 
amended by adding at the end the following new section:

``SEC. 30D. CREDIT FOR GREEN PRICING PREMIUMS.

    ``(a) In General.--There shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an amount equal to 50 
percent of the green pricing premiums paid by the taxpayer during the 
taxable year.
    ``(b) Application With Other Credits.--The credit allowed by 
subsection (a) for any taxable year shall not exceed the excess (if 
any) of--
            ``(1) the regular tax for the taxable year reduced by the 
        sum of the credits allowable under subpart A and sections 27, 
        30, 30B, and 30C, over
            ``(2) the tentative minimum tax for the taxable year.
    ``(c) Definitions.--For purposes of this section:
            ``(1) Green pricing premium.--The term `green pricing 
        premium' means the excess of the amount paid, pursuant to a 
        qualified green power program, for green power electricity over 
        the market price for electricity produced from non-renewable 
        resources.
            ``(2) Green power electricity.--The term `green power 
        electricity' means electricity produced from wind, solar, 
        geothermal, biomass, biogas, and low-impact hydropower sources.
            ``(3) Qualified green power program.--The term `qualified 
        green power program' means a voluntary program--
                    ``(A) under which an electric utility offers to 
                customers of the electric utility the opportunity to 
                pay a green pricing premium for the purchase of green 
                power electricity; and
                    ``(B) that is approved by the Secretary, in 
                consultation with the Secretary of Energy.''.
    (b) Conforming Amendments.--
            (1) Section 55(c)(2) of the Internal Revenue Code of 1986 
        is amended by inserting ``30D(b),'' after ``30C(d)(2),''.
            (2) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

        ``Sec. 30D. Credit for green pricing premiums.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid after December 31, 2005.

                CHAPTER 5--RENEWABLE PORTFOLIO STANDARD

SEC. 1251. RENEWABLE PORTFOLIO STANDARD.

    Title VI of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2601 et seq.) is amended by adding at the end the following:

``SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    ``(a) Renewable Energy Requirement.--
            ``(1) In general.--Not later than January 1, 2020, each 
        electric utility that sells electricity to electric consumers 
        shall obtain 20 percent of the base amount of electricity the 
        electric utility sells to electric consumers in a calendar year 
        from new renewable energy or existing renewable energy, of 
        which at least 1 percent shall be obtained from distributed 
        resources.
            ``(2) Means of compliance.--An electric utility shall meet 
        the requirements of paragraph (1) by--
                    ``(A) generating electric energy using new 
                renewable energy or existing renewable energy;
                    ``(B) purchasing electric energy generated by new 
                renewable energy or existing renewable energy;
                    ``(C) purchasing renewable energy credits issued 
                under subsection (b); or
                    ``(D) a combination of the foregoing.
    ``(b) Renewable Energy Credit Trading Program.--
            ``(1) In general.--Not later than January 1, 2010, the 
        Secretary shall establish a renewable energy credit trading 
        program for electric utilities that permits a utility that does 
        not obtain enough electricity from renewable energy sources to 
        meet its obligations under subsection (a)(1) to satisfy such 
        obligations by purchasing renewable energy credits.
            ``(2) Requirements.--As part of the program established 
        under paragraph (1), the Secretary shall--
                    ``(A) issue regulations binding utilities to a 
                schedule of gradual increases in the percentage or 
                amount of electricity obtained from renewable energy 
                sources and sold to consumers, including distributed 
                sources, prior to the 20 percent level mandated for 
                January 1, 2020;
                    ``(B) issue annually 1 renewable energy credit for 
                each kilowatt hour of electricity obtained from 
                renewable energy sources and sold to consumers in the 
                prior calendar year;
                    ``(C) establish civil penalties of no less than the 
                going market value of a renewable energy credit, and 
                levy those penalties against utilities that fail to 
                obtain the required percentage or amount of renewable 
                energy credits;
                    ``(D) monitor the sale or exchange of, and track, 
                renewable energy credits; and
                    ``(E) except as provided for in subsection (f)(1), 
                ensure that any renewable energy credit shall be used 
                only once for compliance with this section.
    ``(c) Enforcement.--
            ``(1) Insufficient distributed sources civil penalty.--The 
        amount of the civil penalty for not meeting the 1 percent 
        distributed resources requirement under subsection (a)(1) shall 
        be the greater of--
                    ``(A) the product of the number of kilowatt hours 
                of electricity sold to consumers in violation of the 
                requirement and 10 cents; and
                    ``(B) an amount equal to twice the civil penalties 
                established under subsection (b)(2)(C).
            ``(2) Mitigation or waiver.--The Secretary may mitigate or 
        waive a civil penalty under subsection (b)(2)(C) or this 
        subsection if the electric utility--
                    ``(A) was unable to comply with subsection (a) for 
                reasons outside of the reasonable control of the 
                utility; or
                    ``(B) is developing a new renewable energy source 
                for use in the generation of electricity that will--
                            ``(i) be in use before January 1, 2020; and
                            ``(ii) satisfy a significant percentage of 
                        the 20 percent renewable energy requirement of 
                        the electric utility under subsection (a)(1).
    ``(d) Prohibition on Increasing Rates To Pay Fines.--An electric 
utility shall not raise ratepayer rates to cover civil penalties 
established under subsection (b)(2)(C) or (c)(1).
    ``(e) Use.--In addition to amounts made available under section 
7101(d), amounts received by the Secretary as a civil penalty under 
subsection (b)(2)(C) or (c)(1) shall be used to--
            ``(1) provide grants under section 7101(a); and
            ``(2) comply with any renewable energy requirements 
        applicable to the Federal Government.
    ``(f) State Programs.--
            ``(1) Calculation of renewable energy requirement.--In 
        calculating the number of kilowatt hours of electricity a 
        utility obtained from new or existing renewable energy sources 
        and sold to consumers in a year in order to issue an equal 
        number of renewable energy credits, the Secretary may include 
        kilowatt hours of electricity a utility obtained from new and 
        existing renewable energy sources and sold to consumers in the 
        same year in order to meet a State law or regulation.
            ``(2) Effect.--Nothing in this section diminishes any 
        authority of a State or political subdivision of a State to 
        adopt or enforce any law (including a regulation) with respect 
        to renewable energy, if the law does not conflict with this 
        section.
    ``(g) Definitions.--For purposes of this section:
            ``(1) Distributed generation facility.--The term 
        `distributed generation facility' means a facility at a 
        customer site.
            ``(2) Distributed resource.--The term `distributed 
        resource' means a renewable energy resource located at the 
        point of use or the customer side of the meter.
            ``(3) Existing renewable energy.--The term `existing 
        renewable energy' means electric energy generated at a facility 
        (including a distributed generation facility) placed in service 
        prior to the date of enactment of this section from solar, 
        wind, or geothermal energy; ocean energy; biomass (as defined 
        in section 203(b) of the Energy Policy Act of 2005); or 
        landfill gas.
            ``(4) New renewable energy.--The term `new renewable 
        energy' means electric energy generated at a facility 
        (including a distributed generation facility) placed in service 
        on or after the date of enactment of this section from--
                    ``(A) solar, wind, or geothermal energy or ocean 
                energy;
                    ``(B) biomass (as defined in section 203(b) of the 
                Energy Policy Act of 2005);
                    ``(C) landfill gas; or
                    ``(D) incremental hydropower.
            ``(5) Ocean energy.--The term `ocean energy' includes 
        current, wave, tidal, and thermal energy.
    ``(h) Sunset.--This section expires on December 31, 2030.''.

CHAPTER 6--IMPROVING THE EFFICIENCY OF HEALTH CARE TO ENHANCE AMERICA'S 
                        ECONOMIC COMPETITIVENESS

        Subchapter A--Improving Information Provided to Patients

SEC. 1261. REQUIREMENT FOR HEALTH INSURERS TO IMPLEMENT COMPUTERIZED 
              CLAIMS PROCESSING SYSTEMS.

    (a) In General.--Not later than 7 years after the date of enactment 
of this Act, each group health plan and health insurance issuer 
offering health insurance coverage shall have in effect an automated, 
integrated system that allows for efficient and effective adjudication 
of claims and the detection of fraud and abuse in accordance with this 
section.
    (b) Elements of Adjudication.--The system described in subsection 
(a) shall include determinations concerning payments and coverage for 
items or services under the terms and conditions of the plan or 
coverage involved, including any cost-sharing amount that the 
participant, beneficiary, or enrollee is required to pay with respect 
to such claim.
    (c) Timeframe.--The plan or issuer shall complete the adjudication 
of claims under this section immediately after the plan or issuer 
receives--
            (1) the claim; and
            (2) any additional information requested by the plan or 
        issuer that is necessary to make a determination relating to 
        the claim.
    (d) Accuracy.--In adjudicating claims under this section the plan 
or issuer shall ensure that--
            (1) such claims are adjudicated with an accuracy of at 
        least 99 percent;
            (2) the plan or issuer has the ability to accept claims 
        submitted via the Internet; and
            (3) the plan or issuer has the ability to issue denials 
        where necessary instantaneously via the Internet, and to 
        provide an opportunity for challenge to and resolution of such 
        denials (except in cases of dispute over medical necessity) via 
        the Internet.
    (e) Detection System.--Not later than 2 years after the date of 
enactment of this Act, each group health plan and health insurance 
issuer offering health insurance coverage shall use the system 
described in subsection (a) to detect fraud and abuse in real-time as 
part of the adjudication of claims under this section.
    (f) Regulations.--The Secretary shall issue such regulations as may 
be necessary or appropriate to carry out this section.

SEC. 1262. MAKING HEALTH CARE MORE RESPONSIVE TO THE CONSUMER.

    (a) Statement of Account for Consumers.--
            (1) In General.--Not later than 7 years after the date of 
        enactment of this Act, each group health plan and health 
        insurance issuer offering health insurance coverage shall have 
        in effect a computerized system that provides each participant, 
        beneficiary, or enrollee with a statement of account that--
                    (A) includes information, with respect to the 
                participant, beneficiary, or enrollee, on--
                            (i) claims received, claims denied, and the 
                        reasons for any denials;
                            (ii) status of coverage; and
                            (iii) deductible information; and
                    (B) is issued quarterly.
            (2) Internet access.--The plan or issuer may comply with 
        this subsection by making the quarterly statements available on 
        the Internet 24 hours a day, 7 days a week, through a secure 
        website.
    (b) Statement of Account for Employers and Purchases.--Not later 
than 7 years after the date of enactment of this Act, each group health 
plan and health insurance issuer shall have in effect a computerized 
system to provide to employers and other purchasers of health insurance 
products a statement of account that--
            (1) includes--
                    (A) current information on coverage status; and
                    (B) reports of customer satisfaction that are 
                updated annually; and
            (2) is available 24 hours a day, 7 days a week, through--
                    (A) the Internet through a secure website; or
                    (B) a toll-free telephone number.
    (c) Internet Enrollment.--
            (1) In general.--Not later than 7 years after the date of 
        enactment of this Act, each group health plan and health 
        insurance issuer shall have in effect a computerized system to 
        provide to employers and other purchasers of health insurance 
        products an option to enroll for coverage under such health 
        insurance products on the Internet through a secure website.
            (2) Eligibility requirements.--The Internet website 
        described in paragraph (1) shall include information on 
        eligibility requirements for coverage.
    (d) Consumer Explanation of Benefits.--
            (1) In general.--Not later than 7 years after the date of 
        enactment of this Act, each group health plan and health 
        insurance issuer shall have in effect a computerized system to 
        provide, to a participant, beneficiary, or enrollee--
                    (A) an explanation of benefits at the point of 
                service or not later than 48 hours after the time that 
                service is provided; and
                    (B) a description of the coverage and cost of each 
                services provided to the participant, beneficiary, or 
                enrollee under the plan or coverage.
            (2) Language.--Any explanation of benefits under this 
        subsection shall be provided in a printed form and written in a 
        manner calculated to be understood by the average participant, 
        beneficiary, or enrollee.
    (e) Referrals and Authorizations.--
            (1) In general.--Not later than 7 years after the date of 
        enactment of this Act, each group health plan and health 
        insurance issuer shall have in effect a computerized system for 
        making and checking referrals and pre-authorizations where such 
        referrals and pre-authorizations are required under the plan or 
        coverage.
            (2) Access.--The system described in paragraph (1) shall 
        permit access by physicians and by participants, beneficiaries, 
        and enrollees to information on the completion of referrals and 
        pre-authorizations and whether health care services and 
        products have been authorized, through--
                    (A) the Internet through a secure website; or
                    (B) a toll-free telephone number.
    (f) Patient Claim History.--Not later than 7 years after the date 
of enactment of this Act, each group health plan and health insurance 
issuer shall establish a system--
            (1) by which a health care provider may, with patient 
        authorization, have access to the patient's statement of 
        account, as described in subsection (a); and
            (2) that is accessible through--
                    (A) the Internet through a secure website; or
                    (B) a toll-free telephone number.
    (g) Modernizing Financial Transactions in Health Care.--Not later 
than 7 years after the date of enactment of this Act, each group health 
plan and health insurance issuer offering health insurance coverage 
shall have in effect a computerized system that--
            (1) permits health care providers to receive claim payments 
        through electronic transfer of funds;
            (2) permits participants, beneficiaries, and enrollees to 
        make payments for deductibles through electronic transfer of 
        funds; and
            (3) provides automated, integrated audit controls to 
        monitor any duplicate payments or overpayments within the 
        adjudication system.

SEC. 1263. REGULATIONS.

    The Secretary shall issue such regulations as may be necessary or 
appropriate to carry out this title.

  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.

    (a) In General.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act is amended by adding at the end the following new 
section:

``SEC. 2707. HEALTH CARE MODERNIZATION STANDARDS.

    ``Each group health plan shall comply with health care 
modernization requirements under subchapter A of chapter 6 of subtitle 
B of title I of the Right Time to Reinvest in America's Competitiveness 
and Knowledge Act, and each health insurance issuer shall comply with 
health care modernization requirements under such subtitle with respect 
to group health insurance coverage it offers, and such requirements 
shall be deemed to be incorporated into this section.''.
    (b) Conforming Amendment.--Section 2721(b)(2)(A) of such Act (42 
U.S.C. 300gg-21(b)(2)(A)) is amended by inserting ``(other than section 
2707)'' after ``requirements of such subparts''.

SEC. 1272. APPLICATION TO INDIVIDUAL HEALTH INSURANCE COVERAGE UNDER 
              THE PUBLIC HEALTH SERVICE ACT.

    Part B of title XXVII of the Public Health Service Act is amended 
by inserting after section 2752 the following new section:

``SEC. 2753. HEALTH CARE MODERNIZATION STANDARDS.

    ``Each health insurance issuer shall comply with health care 
modernization requirements under subchapter A of chapter 6 of subtitle 
B of title I of the Right Time to Reinvest in America's Competitiveness 
and Knowledge Act with respect to individual health insurance coverage 
it offers, and such requirements shall be deemed to be incorporated 
into this section.''.

SEC. 1273. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
              COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY 
              ACT OF 1974.

    Subpart B of part 7 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended by adding at the end 
the following new section:

``SEC. 714. HEALTH CARE MODERNIZATION STANDARDS.

    ``A group health plan (and a health insurance issuer offering group 
health insurance coverage in connection with such a plan) shall comply 
with the requirements of subchapter A of chapter 6 of subtitle B of 
title I of the Right Time to Reinvest in America's Competitiveness and 
Knowledge Act (as in effect as of the date of the enactment of such 
Act), and such requirements shall be deemed to be incorporated into 
this section.''.

                 Subchapter C--Miscellaneous Provisions

SEC. 1281. DEFINITIONS.

    In this title:
            (1) Claim.--The term ``claim'' means any request for 
        coverage (including authorization of coverage), for 
        eligibility, or for payment in whole or in part, for an item or 
        service under a group health plan or health insurance coverage.
            (2) Cost-sharing.--The term ``cost-sharing'' means any 
        deductibles, coinsurance, copayment amounts, and liability for 
        balance billing, for which the participant, beneficiary, or 
        enrollee will be responsible.
            (3) Enrollee.--The term ``enrollee'' means, with respect to 
        health insurance coverage offered by a health insurance issuer, 
        an individual enrolled with the issuer to receive such 
        coverage.
            (4) Group health plan.--The term ``group health plan'' has 
        the meaning given such term in section 733(a) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1191b(a)).
            (5) Health care provider.--The term ``health care 
        provider'' has the meaning given such term in section 
        1855(d)(5) of the Social Security Act (42 U.S.C. 1395w-
        25(d)(5)).
            (6) Health insurance issuer.--The term ``health insurance 
        issuer'' has the meaning given such term in section 733(b) of 
        the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1191b(b)).
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 1282. EFFECT ON STATE LAW.

    Nothing in this title or any amendment made by this title shall be 
construed to diminish the obligation of a nonprofit health care 
provider, health care facility, group health plan, or health insurance 
issuer to comply with any State law that provides greater rights 
relating to health care modernization to participants, beneficiaries, 
or enrollees than the rights established under this title or any 
amendment made by this title.

      Subtitle C--Supporting the Infrastructure Our Economy Needs

            CHAPTER 1--CREATING A NATIONAL BROADBAND POLICY

SEC. 1311. NATIONAL BROADBAND POLICY.

    (a) Findings.--Congress finds as follows:
            (1) In 2004, President George W. Bush declared that the 
        United States should have ``universal, affordable access for 
        broadband technology by 2007''.
            (2) Instead, the United States has fallen to 16th in global 
        rankings of broadband penetration, behind South Korea, Japan, 
        and urban China.
            (3) The United Sates is the only G7 nation without a 
        national broadband policy.
            (4) Economists assert that widespread adoption of basic 
        broadband could add $500,000,000,000 to the economy of the 
        United States and create 1,200,000 new jobs.
    (b) Broadband Policy.--
            (1) Responsibility of president's council of advisors on 
        science and technology.--
                    (A) In general.--Not later than December 31, 2006, 
                the President's Council of Advisors on Science and 
                Technology (in this section referred to as the 
                ``Council''), shall--
                            (i) establish a national broadband policy 
                        for improving and expanding broadband access in 
                        the United States by 2010; and
                            (ii) develop a strategy and make 
                        recommendations to the President and Congress 
                        on how to best achieve such policy.
                    (B) President's council.--The Council, under 
                Executive Order No. 13385 of September 29, 2005, was 
                assigned all responsibilities formerly performed by the 
                President's Information Technology Advisory Committee, 
                as such Committee was authorized under section 101(b) 
                of the High-Performance Computing Act of 1991 (15 
                U.S.C. 5511(b)) and established by Executive Order No. 
                13035 of February 11, 1997, as amended by Executive 
                Order No. 13092 of July 24, 1998.
            (2) Content of policy.--As part of the policy established 
        under paragraph (1), the Council shall develop and propose 
        strategies and goals relating to the following:
                    (A) Basic broadband access.--
                            (i) Goal.--To provide basic broadband 
                        access at an affordable price to all households 
                        in the United States.
                            (ii) Considerations.--In developing 
                        strategies related to the goal described under 
                        clause (i), the Council shall consider 
                        incentives to ensure that rural and underserved 
                        areas receive basic broadband access, 
                        including--
                                    (I) tax credits;
                                    (II) debt guarantees;
                                    (III) trust funds; and
                                    (IV) expensing allowances.
                            (iii) Definition.--For purposes of this 
                        subparagraph, the term ``basic broadband'' 
                        means a communications service enabling the 
                        reliable transmission of communications that 
                        is--
                                    (I) at least 1 megabit per second 
                                in both directions; and
                                    (II) connected at all times.
                    (B) High-speed broadband access.--
                            (i) Goal.--To provide high-speed broadband 
                        access at an affordable price to \2/3\ of all 
                        households in the United States.
                            (ii) Considerations.--In developing 
                        strategies related to the goal described under 
                        clause (i), the Council shall consider how to 
                        create a more competitive environment for the 
                        provision of high-speed broadband over--
                                    (I) digital subscriber lines;
                                    (II) cable lines;
                                    (III) power lines; and
                                    (IV) wireless broadband 
                                technologies.
                            (iii) Definition.--For purposes of this 
                        subparagraph, the term ``high-speed broadband'' 
                        means a communications service enabling the 
                        transmission of communications at a capacity 
                        that is at least 22 megabits per second.
                    (C) Ultra high-speed broadband fiber access.--
                            (i) Goal.--To provide ultra high-speed 
                        broadband fiber access to \1/3\ of all 
                        households in the United States.
                            (ii) Considerations.--In developing 
                        strategies related to the goal described under 
                        clause (i), the Council shall consider, in 
                        consultation with interested stakeholders, the 
                        extent to which unused existing fiber that run 
                        below city streets can be preserved and used to 
                        achieve such goal.
                            (iii) Definition.--For purposes of this 
                        subparagraph, the term ``ultra high-speed 
                        broadband'' means a communications service 
                        enabling the transmission of communications at 
                        a capacity that is at least 100 megabits per 
                        second.
                    (D) High-speed broadband access in public 
                institutions.--
                            (i) Goal.--To provide high-speed broadband 
                        access at an affordable price to all public 
                        schools, universities, libraries, and hospitals 
                        in the United States.
                            (ii) Definition.--For purposes of this 
                        subparagraph, the term ``high-speed broadband'' 
                        has the same meaning as in subparagraph 
                        (B)(iii).
                    (E) Comprehensive cellular infrastructure.--To 
                create a comprehensive, nationwide, cellular 
                infrastructure to enable the convergence of wireline 
                and wireless technologies that provide ``anytime, 
                anywhere, any-device connections''.
    (c) Additional Responsibilities of the Council.--
            (1) Examination and report on proposed and existing 
        telecommunication strategies.--In addition to its 
        responsibilities under subsection (b), not later than December 
        31, 2006, the Council shall examine and make recommendations to 
        the President, Congress, the Commissioner of the Federal 
        Communications Commission, the Secretary of Commerce, and any 
        other Federal agency the Council determines appropriate, on 
        proposed and existing telecommunication strategies--
                    (A) to ensure that rural and underserved 
                communities have access to broadband technology, 
                including strategies relating to the--
                            (i) deployment of municipal wireless-
                        fidelity; and
                            (ii) expansion of the universal service 
                        fund established under section 254 of the 
                        Communications Act of 1934 (47 U.S.C. 254) to 
                        support broadband access; and
                    (B) to promote usage of, to encourage investment 
                in, and to stimulate consumer uptake of current and 
                next generation broadband networks, including 
                strategies relating to the elimination of barriers and 
                creation of incentives for developing applications in--
                            (i) communications;
                            (ii) healthcare;
                            (iii) distance learning;
                            (iv) telecommuting;
                            (v) distributed energy;
                            (vi) eGovernment; and
                            (vii) entertainment.
            (2) Consideration of principles.--In making any 
        recommendations under paragraph (1), the Council shall consider 
        the following principles:
                    (A) Affordable, highly advanced, and secure 
                communications services should be available to all 
                Americans and communities.
                    (B) Broadband connections should be as reliable as 
                other basic service connections, such as electricity 
                and telephone service.
                    (C) Access to broadband service should be provided 
                without limitations on usage or prioritization of data 
                by broadband providers.
                    (D) Speeds of connectivity for the sending and 
                receiving of data over broadband services should be the 
                same.
                    (E) Competitive market forces, with regulation as 
                necessary, should be the principle means of achieving 
                any goal under this subsection.
                    (F) Minimal disruption to existing services should 
                be achieved through targeted efforts.
    (d) Report on progress of national policy.--
            (1) In general.--Not later than December 31, 2006, and 
        every December 31 thereafter until 2010, the Council shall 
        evaluate and submit a report to Congress on the progress made 
        in implementing the strategies and achieving the goals and 
        recommendations established in subsection (b).
            (2) Content of report.--
                    (A) Prior to 2010.--Prior to January 1, 2010, each 
                report submitted under paragraph (1) shall include an 
                accurate count of--
                            (i) Americans with access to broadband 
                        services; and
                            (ii) the number of homes and businesses 
                        that use--
                                    (I) basic broadband service;
                                    (II) high-speed broadband service; 
                                and
                                    (III) ultra high-speed broadband 
                                service.
                    (B) For 2010.--The report submitted under paragraph 
                (1) on or after January 1, 2010, and not later than 
                December 31, 2010, shall include recommendations of the 
                Council to Congress on establishing reasonable--
                            (i) goals for broadband penetration in the 
                        future; and
                            (ii) Congressional expectations for--
                                    (I) broadband connection speeds; 
                                and
                                    (II) broadband usage in light of 
                                advances in broadband technology.

                   CHAPTER 2--AMTRAK REAUTHORIZATION

SEC. 1321. AUTHORIZATION FOR AMTRAK OPERATING GRANTS.

    There are authorized to be appropriated to the Secretary of 
Transportation for operating costs of Amtrak the following amounts:
            (1) For fiscal year 2007, $570,000,000.
            (2) For fiscal year 2008, $570,000,000.
            (3) For fiscal year 2009, $570,000,000.

SEC. 1322. AUTHORIZATION FOR AMTRAK CAPITAL GRANTS.

    There are authorized to be appropriated to the Secretary of 
Transportation for the use of Amtrak to bring the Northeast Corridor 
(as defined in section 24102(a) of title 49, United States Code) to a 
state of good repair, for capital expenses of the national railroad 
passenger transportation system, and for purposes of making capital 
grants to States, the following amounts:
            (1) For fiscal year 2007, $858,000,000.
            (2) For fiscal year 2008, $788,000,000.
            (3) For fiscal year 2009, $767,000,000.

SEC. 1323. AUTHORIZATION FOR REPAYMENT OF LONG-TERM DEBT AND CAPITAL 
              LEASES.

    (a) Principal and Interest on Debt.--There are authorized to be 
appropriated to the Secretary of Transportation for the use of Amtrak 
for the payment of principal and interest on loans for capital 
equipment, or capital leases, the following amounts:
            (1) For fiscal year 2007, $357,000,000.
            (2) For fiscal year 2008, $305,000,000.
            (3) For fiscal year 2009, $306,000,000.
    (b) Early Buyout Option.--There are authorized to be appropriated 
to the Secretary of Transportation such sums as may be necessary for 
the use of Amtrak for the payment of costs associated with early buyout 
options if the Secretary determines that the exercise of those options 
is advantageous to Amtrak.
    (c) Legal Effect of Payments Under This Section.--The payment of 
principal and interest on secured debt, with the proceeds of the grants 
authorized by this section, shall not--
            (1) modify the extent or nature of any indebtedness of the 
        National Railroad Passenger Corporation to the United States in 
        existence on the date of enactment of this Act;
            (2) change the private nature of the liabilities of Amtrak 
        or its successors; or
            (3) imply any Federal guarantee or commitment to amortize 
        Amtrak's outstanding indebtedness.

             CHAPTER 3--INVESTING IN SCHOOL INFRASTRUCTURE

SEC. 1331. SHORT TITLE.

    This chapter may be cited as the ``America's Better Classroom Act 
of 2006''.

SEC. 1332. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.

    (a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subchapter:

         ``Subchapter Z--Public School Modernization 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.

``SEC. 1400U. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL 
              MODERNIZATION BONDS.

    ``(a) Allowance of Credit.--In the case of a taxpayer who holds a 
qualified public school modernization bond on a credit allowance date 
of such bond which occurs during the taxable year, there shall be 
allowed as a credit against the tax imposed by this chapter for such 
taxable year an amount equal to the sum of the credits determined under 
subsection (b) with respect to credit allowance dates during such year 
on which the taxpayer holds such bond.
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any credit allowance date 
        for a qualified public school modernization bond is 25 percent 
        of the annual credit determined with respect to such bond.
            ``(2) Annual credit.--The annual credit determined with 
        respect to any qualified public school modernization bond is 
        the product of--
                    ``(A) the applicable credit rate, multiplied by
                    ``(B) the outstanding face amount of the bond.
            ``(3) Applicable credit rate.--For purposes of paragraph 
        (1), the applicable credit rate with respect to an issue is the 
        rate equal to an average market yield (as of the day before the 
        date of issuance of the issue) on outstanding long-term 
        corporate debt obligations (determined under regulations 
        prescribed by the Secretary).
            ``(4) Special rule for issuance and redemption.--In the 
        case of a bond which is issued during the 3-month period ending 
        on a credit allowance date, the amount of the credit determined 
        under this subsection with respect to such credit allowance 
        date shall be a ratable portion of the credit otherwise 
        determined based on the portion of the 3-month period during 
        which the bond is outstanding. A similar rule shall apply when 
        the bond is redeemed.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under part 
                IV of subchapter A (other than subpart C thereof, 
                relating to refundable credits and subpart H thereof).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year.
    ``(d) Qualified Public School Modernization Bond; Credit Allowance 
Date.--For purposes of this section--
            ``(1) Qualified public school modernization bond.--The term 
        `qualified public school modernization bond' means--
                    ``(A) a qualified zone academy bond,
                    ``(B) a qualified school construction bond, and
                    ``(C) a qualified tribal school modernization bond.
            ``(2) Credit allowance date.--The term `credit allowance 
        date' means--
                    ``(A) March 15,
                    ``(B) June 15,
                    ``(C) September 15, and
                    ``(D) December 15.
        Such term includes the last day on which the bond is 
        outstanding.
    ``(e) Other Definitions.--For purposes of this subchapter--
            ``(1) Local educational agency.--The term `local 
        educational agency' has the meaning given to such term by 
        section 9101 of the Elementary and Secondary Education Act of 
        1965. Such term includes the local educational agency that 
        serves the District of Columbia but does not include any other 
        State agency.
            ``(2) Bond.--The term `bond' includes any obligation.
            ``(3) State.--The term `State' includes the District of 
        Columbia and any possession of the United States.
            ``(4) Public school facility.--The term `public school 
        facility' shall not include--
                    ``(A) any stadium or other facility primarily used 
                for athletic contests or exhibitions or other events 
                for which admission is charged to the general public, 
                or
                    ``(B) any facility which is not owned by a State or 
                local government or any agency or instrumentality of a 
                State or local government.
    ``(f) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section 
(determined without regard to subsection (c)) and the amount so 
included shall be treated as interest income.
    ``(g) Recapture of Portion of Credit Where Cessation of 
Compliance.--
            ``(1) In general.--If any bond which when issued purported 
        to be a qualified public school modernization bond ceases to be 
        a qualified public school modernization bond, the issuer shall 
        pay to the United States (at the time required by the 
        Secretary) an amount equal to the sum of--
                    ``(A) the aggregate of the credits allowable under 
                this section with respect to such bond (determined 
                without regard to subsection (c)) for taxable years 
                ending during the calendar year in which such cessation 
                occurs and the 2 preceding calendar years, and
                    ``(B) interest at the underpayment rate under 
                section 6621 on the amount determined under 
                subparagraph (A) for each calendar year for the period 
                beginning on the first day of such calendar year.
            ``(2) Failure to pay.--If the issuer fails to timely pay 
        the amount required by paragraph (1) with respect to such bond, 
        the tax imposed by this chapter on each holder of any such bond 
        which is part of such issue shall be increased (for the taxable 
        year of the holder in which such cessation occurs) by the 
        aggregate decrease in the credits allowed under this section to 
        such holder for taxable years beginning in such 3 calendar 
        years which would have resulted solely from denying any credit 
        under this section with respect to such issue for such taxable 
        years.
            ``(3) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (2) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under paragraph (2) shall not be treated as a tax 
                imposed by this chapter for purposes of determining--
                            ``(i) the amount of any credit allowable 
                        under this subchapter, or
                            ``(ii) the amount of the tax imposed by 
                        section 55.
    ``(h) Bonds Held by Regulated Investment Companies.--If any 
qualified public school modernization bond is held by a regulated 
investment company, the credit determined under subsection (a) shall be 
allowed to shareholders of such company under procedures prescribed by 
the Secretary.
    ``(i) Credits May Be Stripped.--Under regulations prescribed by the 
Secretary--
            ``(1) In general.--There may be a separation (including at 
        issuance) of the ownership of a qualified public school 
        modernization bond and the entitlement to the credit under this 
        section with respect to such bond. In case of any such 
        separation, the credit under this section shall be allowed to 
        the person who on the credit allowance date holds the 
        instrument evidencing the entitlement to the credit and not to 
        the holder of the bond.
            ``(2) Certain rules to apply.--In the case of a separation 
        described in paragraph (1), the rules of section 1286 shall 
        apply to the qualified public school modernization bond as if 
        it were a stripped bond and to the credit under this section as 
        if it were a stripped coupon.
    ``(j) Treatment for Estimated Tax Purposes.--Solely for purposes of 
sections 6654 and 6655, the credit allowed by this section to a 
taxpayer by reason of holding a qualified public school modernization 
bond on a credit allowance date shall be treated as if it were a 
payment of estimated tax made by the taxpayer on such date.
    ``(k) Credit May Be Transferred.--Nothing in any law or rule of law 
shall be construed to limit the transferability of the credit allowed 
by this section through sale and repurchase agreements.
    ``(l) Reporting.--Issuers of qualified public school modernization 
bonds shall submit reports similar to the reports required under 
section 149(e).
    ``(m) Credit Treated as Nonrefundable Bondholder Credit.--For 
purposes of this title, the credit allowed by this section shall be 
treated as a credit allowable under subpart H of part IV of subchapter 
A of this chapter.
    ``(n) Termination.--This section shall not apply to any bond issued 
after September 30, 2008 (December 31, 2013, in the case of any 
qualified tribal school modernization bond).

``SEC. 1400V. QUALIFIED SCHOOL CONSTRUCTION BONDS.

    ``(a) Qualified School Construction Bond.--For purposes of this 
subchapter, the term `qualified school construction bond' means any 
bond issued as part of an issue if--
            ``(1) 95 percent or more of the proceeds of such issue are 
        to be used for the construction, rehabilitation, or repair of a 
        public school facility or for the acquisition of land on which 
        such a facility is to be constructed with part of the proceeds 
        of such issue,
            ``(2) the bond is issued by a State or local government 
        within the jurisdiction of which such school is located,
            ``(3) the issuer designates such bond for purposes of this 
        section, and
            ``(4) the term of each bond which is part of such issue 
        does not exceed 15 years.
    ``(b) Limitation on Amount of Bonds Designated.--The maximum 
aggregate face amount of bonds issued during any calendar year which 
may be designated under subsection (a) by any issuer shall not exceed 
the limitation amount allocated under subsection (d) for such calendar 
year to such issuer.
    ``(c) National Limitation on Amount of Bonds Designated.--There is 
a national qualified school construction bond limitation for each 
calendar year. Such limitation is--
            ``(1) $11,000,000,000 for 2007,
            ``(2) $11,000,000,000 for 2008, and
            ``(3) except as provided in subsection (f), zero after 
        2008.
    ``(d) Limitation Allocated Among States.--
            ``(1) In general.--The limitation applicable under 
        subsection (c) for any calendar year shall be allocated by the 
        Secretary among the States in proportion to the respective 
        amounts each such State received for basic grants under section 
        1124 of the Elementary and Secondary Education Act of 1965 for 
        the most recent fiscal year ending before such calendar year. 
        The limitation amount allocated to a State under the preceding 
        sentence shall be allocated by the State to issuers within such 
        State.
            ``(2) Minimum allocations to states.--
                    ``(A) In general.--The Secretary shall adjust the 
                allocations under this subsection for any calendar year 
                for each State to the extent necessary to ensure that 
                the amount allocated to such State under this 
                subsection for such year is not less than an amount 
                equal to such State's minimum percentage of the amount 
                to be allocated under paragraph (1) for the calendar 
                year.
                    ``(B) Minimum percentage.--A State's minimum 
                percentage for any calendar year is the minimum 
                percentage described in section 1124(d) of the 
                Elementary and Secondary Education Act of 1965 for such 
                State for the most recent fiscal year ending before 
                such calendar year.
            ``(3) Allocations to certain possessions.--The amount to be 
        allocated under paragraph (1) to any possession of the United 
        States other than Puerto Rico shall be the amount which would 
        have been allocated if all allocations under paragraph (1) were 
        made on the basis of respective populations of individuals 
        below the poverty line (as defined by the Office of Management 
        and Budget). In making other allocations, the amount to be 
        allocated under paragraph (1) shall be reduced by the aggregate 
        amount allocated under this paragraph to possessions of the 
        United States.
    ``(e) Carryover of Unused Limitation.--If for any calendar year--
            ``(1) the amount allocated under subsection (d) to any 
        State, exceeds
            ``(2) the amount of bonds issued during such year which are 
        designated under subsection (a) pursuant to such allocation,
the limitation amount under such subsection for such State for the 
following calendar year shall be increased by the amount of such 
excess. A similar rule shall apply to the amounts allocated under 
subsection (d)(4).
    ``(f) Special Rules Relating to Arbitrage.--
            ``(1) In general.--A bond shall not be treated as failing 
        to meet the requirement of subsection (a)(1) solely by reason 
        of the fact that the proceeds of the issue of which such bond 
        is a part are invested for a temporary period (but not more 
        than 36 months) until such proceeds are needed for the purpose 
        for which such issue was issued.
            ``(2) Binding commitment requirement.--Paragraph (1) shall 
        apply to an issue only if, as of the date of issuance, there is 
        a reasonable expectation that--
                    ``(A) at least 10 percent of the proceeds of the 
                issue will be spent within the 6-month period beginning 
                on such date for the purpose for which such issue was 
                issued, and
                    ``(B) the remaining proceeds of the issue will be 
                spent with due diligence for such purpose.
            ``(3) Earnings on proceeds.--Any earnings on proceeds 
        during the temporary period shall be treated as proceeds of the 
        issue for purposes of applying subsection (a)(1) and paragraph 
        (1) of this subsection.

``SEC. 1400W. QUALIFIED ZONE ACADEMY BONDS.

    ``(a) Qualified Zone Academy Bond.--For purposes of this 
subchapter--
            ``(1) In general.--The term `qualified zone academy bond' 
        means any bond issued as part of an issue if--
                    ``(A) 95 percent or more of the proceeds of such 
                issue are to be used for a qualified purpose with 
                respect to a qualified zone academy established by a 
                local educational agency,
                    ``(B) the bond is issued by a State or local 
                government within the jurisdiction of which such 
                academy is located,
                    ``(C) the issuer--
                            ``(i) designates such bond for purposes of 
                        this section,
                            ``(ii) certifies that it has written 
                        assurances that the private business 
                        contribution requirement of paragraph (2) will 
                        be met with respect to such academy, and
                            ``(iii) certifies that it has the written 
                        approval of the local educational agency for 
                        such bond issuance, and
                    ``(D) the term of each bond which is part of such 
                issue does not exceed 15 years.
        Rules similar to the rules of section 1400V(f) shall apply for 
        purposes of subparagraph (A).
            ``(2) Private business contribution requirement.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the private business contribution requirement of this 
                paragraph is met with respect to any issue if the local 
                educational agency that established the qualified zone 
                academy has written commitments from private entities 
                to make qualified contributions having a present value 
                (as of the date of issuance of the issue) of not less 
                than 10 percent of the proceeds of the issue.
                    ``(B) Qualified contributions.--For purposes of 
                subparagraph (A), the term `qualified contribution' 
                means any contribution (of a type and quality 
                acceptable to the local educational agency) of--
                            ``(i) equipment for use in the qualified 
                        zone academy (including state-of-the-art 
                        technology and vocational equipment),
                            ``(ii) technical assistance in developing 
                        curriculum or in training teachers in order to 
                        promote appropriate market driven technology in 
                        the classroom,
                            ``(iii) services of employees as volunteer 
                        mentors,
                            ``(iv) internships, field trips, or other 
                        educational opportunities outside the academy 
                        for students, or
                            ``(v) any other property or service 
                        specified by the local educational agency.
            ``(3) Qualified zone academy.--The term `qualified zone 
        academy' means any public school (or academic program within a 
        public school) which is established by and operated under the 
        supervision of a local educational agency to provide education 
        or training below the postsecondary level if--
                    ``(A) such public school or program (as the case 
                may be) is designed in cooperation with business to 
                enhance the academic curriculum, increase graduation 
                and employment rates, and better prepare students for 
                the rigors of college and the increasingly complex 
                workforce,
                    ``(B) students in such public school or program (as 
                the case may be) will be subject to the same academic 
                standards and assessments as other students educated by 
                the local educational agency,
                    ``(C) the comprehensive education plan of such 
                public school or program is approved by the local 
                educational agency, and
                    ``(D)(i) such public school is located in an 
                empowerment zone or enterprise community (including any 
                such zone or community designated after the date of the 
                enactment of this section), or
                    ``(ii) there is a reasonable expectation (as of the 
                date of issuance of the bonds) that at least 35 percent 
                of the students attending such school or participating 
                in such program (as the case may be) will be eligible 
                for free or reduced-cost lunches under the school lunch 
                program established under the Richard B. Russell 
                National School Lunch Act.
            ``(4) Qualified purpose.--The term `qualified purpose' 
        means, with respect to any qualified zone academy--
                    ``(A) constructing, rehabilitating, or repairing 
                the public school facility in which the academy is 
                established,
                    ``(B) acquiring the land on which such facility is 
                to be constructed with part of the proceeds of such 
                issue,
                    ``(C) providing equipment for use at such academy,
                    ``(D) developing course materials for education to 
                be provided at such academy, and
                    ``(E) training teachers and other school personnel 
                in such academy.
    ``(b) Limitations on Amount of Bonds Designated.--
            ``(1) In general.--There is a national zone academy bond 
        limitation for each calendar year. Such limitation is--
                    ``(A) $400,000,000 for 1998,
                    ``(B) $400,000,000 for 1999,
                    ``(C) $400,000,000 for 2000,
                    ``(D) $400,000,000 for 2001,
                    ``(E) $400,000,000 for 2002,
                    ``(F) $400,000,000 for 2003,
                    ``(G) $400,000,000 for 2004,
                    ``(H) $400,000,000 for 2005,
                    ``(I) $1,400,000,000 for 2006,
                    ``(J) $1,400,000,000 for 2007, and
                    ``(K) except as provided in paragraph (3), zero 
                after 2007.
            ``(2) Allocation of limitation.--
                    ``(A) Allocation among states.--
                            ``(i) Pre-2006 limitations.--The national 
                        zone academy bond limitations for calendar 
                        years before 2006 shall be allocated by the 
                        Secretary among the States on the basis of 
                        their respective populations of individuals 
                        below the poverty line (as defined by the 
                        Office of Management and Budget).
                            ``(ii) Limitation after 2005.--The national 
                        zone academy bond limitation for any calendar 
                        year after 2005 shall be allocated by the 
                        Secretary among the States in proportion to the 
                        respective amounts each such State received for 
                        basic grants under section 1124 of the 
                        Elementary and Secondary Education Act of 1965 
                        for the most recent fiscal year ending before 
                        such calendar year.
                    ``(B) Allocation to local educational agencies.--
                The limitation amount allocated to a State under 
                subparagraph (A) shall be allocated by the State to 
                qualified zone academies within such State.
                    ``(C) Designation subject to limitation amount.--
                The maximum aggregate face amount of bonds issued 
                during any calendar year which may be designated under 
                subsection (a) with respect to any qualified zone 
                academy shall not exceed the limitation amount 
                allocated to such academy under subparagraph (B) for 
                such calendar year.
            ``(3) Carryover of unused limitation.--If for any calendar 
        year--
                    ``(A) the limitation amount under this subsection 
                for any State, exceeds
                    ``(B) the amount of bonds issued during such year 
                which are designated under subsection (a) (or the 
                corresponding provisions of prior law) with respect to 
                qualified zone academies within such State,
        the limitation amount under this subsection for such State for 
        the following calendar year shall be increased by the amount of 
        such excess.

``SEC. 1400X. QUALIFIED TRIBAL SCHOOL MODERNIZATION BONDS.

    ``(a) Qualified Tribal School Modernization Bond.--For purposes of 
this subchapter--
            ``(1) In general.--The term `qualified tribal school 
        modernization bond' means, subject to paragraph (2), any bond 
        issued as part of an issue under section 1333 of the America's 
        Better Classroom Act of 2006, as in effect on the date of the 
        enactment of this section, if--
                    ``(A) 95 percent or more of the proceeds of such 
                issue are to be used for the construction, 
                rehabilitation, or repair of a school facility funded 
                by the Bureau of Indian Affairs of the Department of 
                the Interior or for the acquisition of land on which 
                such a facility is to be constructed with part of the 
                proceeds of such issue,
                    ``(B) the bond is issued by an Indian tribe,
                    ``(C) the issuer designates such bond for purposes 
                of this section, and
                    ``(D) the term of each bond which is part of such 
                issue does not exceed 15 years.
            ``(2) National limitation on amount of bonds designated.--
                    ``(A) National limitation.--There is a national 
                qualified tribal school modernization bond limitation 
                for each calendar year. Such limitation is--
                            ``(i) $200,000,000 for 2006,
                            ``(ii) $200,000,000 for 2007, and
                            ``(iii) zero after 2007.
                    ``(B) Allocation of limitation.--The national 
                qualified tribal school modernization bond limitation 
                shall be allocated to Indian tribes by the Secretary of 
                the Interior subject to the provisions of section 1333 
                of the America's Better Classroom Act of 2006, as in 
                effect on the date of the enactment of this section.
                    ``(C) Designation subject to limitation amount.--
                The maximum aggregate face amount of bonds issued 
                during any calendar year which may be designated under 
                paragraph (1) with respect to any Indian tribe shall 
                not exceed the limitation amount allocated to such 
                government under subparagraph (B) for such calendar 
                year.
                    ``(D) Carryover of unused limitation.--If for any 
                calendar year--
                            ``(i) the limitation amount under this 
                        paragraph, exceeds
                            ``(ii) the amount of qualified tribal 
                        school modernization bonds issued during such 
                        year, the limitation amount under this 
                        paragraph for the following calendar year shall 
                        be increased by the amount of such excess. The 
                        preceding sentence shall not apply if such 
                        following calendar year is after 2014.
    ``(b) Tribe.--For purposes of this section, the term `tribe' has 
the meaning given the term `Indian tribal government' by section 
7701(a)(40), including the application of section 7871(d). Such term 
includes any consortium of tribes approved by the Secretary of the 
Interior.''.
    (b) Reporting.--Subsection (d) of section 6049 of such Code 
(relating to returns regarding payments of interest) is amended by 
adding at the end the following new paragraph:
            ``(9) Reporting of credit on qualified public school 
        modernization bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in 
                gross income under section 1400U(f) and such amounts 
                shall be treated as paid on the credit allowance date 
                (as defined in section 1400U(d)(2)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A) of this 
                paragraph, subsection (b)(4) of this section shall be 
                applied without regard to subparagraphs (A), (H), (I), 
                (J), (K), and (L)(i).
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this 
                paragraph, including regulations which require more 
                frequent or more detailed reporting.''.
    (c) Conforming Amendments.--
            (1) Subchapter U of chapter 1 of such Code is amended by 
        striking part IV, by redesignating part V as part IV, and by 
        redesignating section 1397F as section 1397E.
            (2) The table of subchapters for chapter 1 of such Code is 
        amended by adding at the end the following new item:

                              ``Subchapter Z. Public school 
                                        modernization provisions.''.
            (3) The table of parts of subchapter U of chapter 1 of such 
        Code is amended by striking the last 2 items and inserting the 
        following item:

                              ``Part IV. Regulations.''.
    (d) Sovereign Immunity.--This section and the amendments made by 
this section shall not be construed to impact, limit, or affect the 
sovereign immunity of the Federal Government or any State or local 
tribal government.
    (e) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        obligations issued after December 31, 2005.
            (2) Repeal of restriction on zone academy bond holders.--In 
        the case of bonds to which section 1397E of the Internal 
        Revenue Code of 1986 (as in effect before the date of the 
        enactment of this Act) applies, the limitation of such section 
        to eligible taxpayers (as defined in subsection (d)(6) of such 
        section) shall not apply after the date of the enactment of 
        this Act.

SEC. 1333. INDIAN SCHOOL CONSTRUCTION.

    (a) Definitions.--In this section:
            (1) Bureau.--The term ``Bureau'' means the Bureau of Indian 
        Affairs of the Department.
            (2) Department.--The term ``Department'' means the 
        Department of the Interior.
            (3) Escrow account.--The term ``escrow account'' means the 
        tribal school modernization escrow account established under 
        subsection (b)(6)(B)(i).
            (4) Indian.--The term ``Indian'' means any individual who 
        is a member of an Indian tribe.
            (5) Indian tribe.--
                    (A) In general.--The term ``Indian tribe'' has the 
                meaning given the term ``Indian tribal government'' by 
                section 7701(a)(40) of the Internal Revenue Code of 
                1986 (including the application of section 7871(d) of 
                that Code).
                    (B) Inclusion.--The term ``Indian tribe'' includes 
                a consortium of Indian tribes approved by the 
                Secretary.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (7) Tribal school.--The term ``tribal school'' means an 
        elementary school, secondary school, or dormitory that--
                    (A) is operated by a tribal organization or the 
                Bureau for the education of Indian children; and
                    (B) under a contract, a grant, or an agreement, or 
                for a Bureau-operated school, receives financial 
                assistance to pay the costs of operation from funds 
                made available under--
                            (i) section 102, 103(a), or 208 of the 
                        Indian Self-Determination and Education 
                        Assistance Act (25 U.S.C. 450f, 450h(a), 458d); 
                        or
                            (ii) the Tribally Controlled Schools Act of 
                        1988 (25 U.S.C. 2501 et seq.).
    (b) Issuance of Bonds.--
            (1) In general.--The Secretary shall establish a pilot 
        program under which eligible Indian tribes may issue qualified 
        tribal school modernization bonds to provide funding for the 
        construction, rehabilitation, or repair of tribal schools 
        (including the advance planning and design of tribal schools).
            (2) Eligibility.--
                    (A) In general.--To be eligible to issue any 
                qualified tribal school modernization bond under the 
                program under paragraph (1), an Indian tribe shall--
                            (i) prepare and submit to the Secretary a 
                        plan of construction that meets the 
                        requirements of subparagraph (B);
                            (ii) provide for quarterly and final 
                        inspection of the project by the Bureau; and
                            (iii) pledge that the facilities financed 
                        by the bond will be used primarily for 
                        elementary and secondary educational purposes 
                        for not less than the period during which the 
                        bond remains outstanding.
                    (B) Plan of construction.--A plan of construction 
                referred to in subparagraph (A)(i) meets the 
                requirements of this subparagraph if the plan--
                            (i) contains a description of the 
                        construction to be carried out with funding 
                        provided under a qualified tribal school 
                        modernization bond;
                            (ii) demonstrates that a comprehensive 
                        survey has been completed to determine the 
                        construction needs of the tribal school 
                        involved;
                            (iii) contains assurances that funding 
                        under the bond will be used only for the 
                        activities described in the plan;
                            (iv) contains a response to the evaluation 
                        criteria contained in Instructions and 
                        Application for Replacement School 
                        Construction, Revision 6, dated February 6, 
                        1999; and
                            (v) contains any other reasonable and 
                        related information determined to be 
                        appropriate by the Secretary.
                    (C) Priority.--In determining whether an Indian 
                tribe is eligible to participate in the program under 
                this subsection, the Secretary shall give priority to 
                an Indian tribe that, as demonstrated by the relevant 
                plans of construction, will fund projects--
                            (i) described in the Education Facilities 
                        Replacement Construction Priorities List, as of 
                        fiscal year 2000, of the Bureau (65 Fed. Reg. 
                        4623);
                            (ii) described in any subsequent priorities 
                        list published in the Federal Register; or
                            (iii) that meet the criteria for ranking 
                        schools as described in Instructions and 
                        Application for Replacement School 
                        Construction, Revision 6, dated February 6, 
                        1999.
                    (D) Advance planning and design funding.--
                            (i) In general.--An Indian tribe may 
                        propose in the plan of construction of the 
                        Indian tribe to receive advance planning and 
                        design funding from the escrow account.
                            (ii) Conditions on allocation of funds.--As 
                        a condition to the allocation to an Indian 
                        tribe of advance planning and design funds from 
                        the escrow account under clause (i), the Indian 
                        tribe shall agree--
                                    (I) to issue qualified tribal 
                                school modernization bonds after the 
                                date of receipt of the funds; and
                                    (II) as a condition of each bond 
                                issuance, that the Indian tribe will 
                                deposit into the escrow account, or a 
                                fund managed by the trustee as 
                                described in paragraph (4)(C), an 
                                amount equal to the amount of funds 
                                received from the escrow account.
            (3) Permissible activities.--In addition to the use of 
        funds permitted under paragraph (1), an Indian tribe may use 
        amounts received through the issuance of a qualified tribal 
        school modernization bond--
                    (A) to enter into and make payments under contracts 
                with licensed and bonded architects, engineers, and 
                construction firms--
                            (i) to determine the needs of the tribal 
                        school; and
                            (ii) for the design and engineering of the 
                        tribal school;
                    (B) enter into and make payments under contracts 
                with financial advisers, underwriters, attorneys, 
                trustees, and other professionals who would be able to 
                provide assistance to the Indian tribe in issuing 
                bonds; and
                    (C) carry out other activities determined to be 
                appropriate by the Secretary.
            (4) Bond trustee.--
                    (A) In general.--Notwithstanding any other 
                provision of law, any qualified tribal school 
                modernization bond issued by an Indian tribe under this 
                subsection shall be subject to a trust agreement 
                between the Indian tribe and a trustee.
                    (B) Trustee.--Any bank or trust company that meets 
                requirements established by the Secretary may be 
                designated as a trustee under subparagraph (A).
                    (C) Content of trust agreement.--A trust agreement 
                entered into by an Indian tribe under this paragraph 
                shall specify that the trustee, with respect to any 
                bond issued under this subsection, shall--
                            (i) act as a repository for the proceeds of 
                        the bond;
                            (ii) make payments to bondholders;
                            (iii) receive, as a condition to the 
                        issuance of the bond, a transfer of funds from 
                        the escrow account, or from other funds 
                        furnished by or on behalf of the Indian tribe, 
                        in an amount that (including interest earnings 
                        from the investment of the funds in obligations 
                        of, or fully guaranteed by, the United States, 
                        or from other investments authorized by 
                        paragraph (10)) will produce funds sufficient 
                        to timely pay in full the entire principal 
                        amount of the bond on the stated maturity date 
                        of the bond;
                            (iv) invest the funds transferred under 
                        clause (iii) in an investment described in that 
                        clause; and
                            (v)(I) hold and invest the funds 
                        transferred under clause (iii) in a segregated 
                        fund or account under the agreement; and
                            (II) use the fund or account solely for 
                        payment of the costs of items described in 
                        paragraph (3).
                    (D) Requirements for making direct payments.--
                            (i) Payments.--
                                    (I) In general.--Notwithstanding 
                                any other provision of law, the trustee 
                                shall make any payment referred to in 
                                subparagraph (C)(v) in accordance with 
                                such requirements as the Indian tribe 
                                shall prescribe in the trust agreement 
                                entered into under subparagraph (C).
                                    (II) Inspection.--Before making a 
                                payment for a project to a contractor 
                                under subparagraph (C)(v), to ensure 
                                completion of the project, the trustee 
                                shall require an inspection of the 
                                project by--
                                            (aa) a local financial 
                                        institution; or
                                            (bb) an independent 
                                        inspecting architect or 
                                        engineer.
                            (ii) Contracts.--Each contract referred to 
                        in paragraph (3) shall specify, or be 
                        renegotiated to specify, that payments under 
                        the contract shall be made in accordance with 
                        this paragraph.
            (5) Payments of principal and interest.--
                    (A) Principal.--
                            (i) In general.--No principal payment on 
                        any qualified tribal school modernization bond 
                        shall be required under this subsection until 
                        the final, stated date on which the bond 
                        reaches maturity.
                            (ii) Maturity; outstanding principal.--With 
                        respect to a qualified tribal school 
                        modernization bond issued under this 
                        subsection--
                                    (I) the bond shall reach maturity 
                                not later than 15 years after the date 
                                of issuance of the bond; and
                                    (II) on the date on which the bond 
                                reaches maturity, the entire 
                                outstanding principal under the bond 
                                shall become due and payable.
                    (B) Interest.--There shall be awarded a tax credit 
                under section 1400U of the Internal Revenue Code of 
                1986 in lieu of interest on a qualified tribal school 
                modernization bond issued under this subsection.
            (6) Bond guarantees.--
                    (A) In general.--Payment of the principal portion 
                of a qualified tribal school modernization bond issued 
                under this subsection shall be guaranteed solely by 
                amounts deposited with each respective bond trustee as 
                described in paragraph (4)(C)(iii).
                    (B) Establishment of account.--
                            (i) In general.--Notwithstanding any other 
                        provision of law, the Secretary may--
                                    (I) establish a tribal school 
                                modernization escrow account; and
                                    (II) beginning in fiscal year 2007, 
                                from amounts made available for school 
                                replacement under the construction 
                                account of the Bureau, deposit not more 
                                than $30,000,000 for each fiscal year 
                                into the escrow account.
                            (ii) Transfers of excess proceeds.--Excess 
                        proceeds held under any trust agreement that 
                        are not needed for any of the purposes 
                        described in clauses (iii) and (v) of paragraph 
                        (4)(C) shall be transferred, from time to time, 
                        by the trustee for deposit into the escrow 
                        account.
                            (iii) Payments.--The Secretary shall use 
                        any amounts deposited in the escrow account 
                        under clauses (i) and (ii)--
                                    (I) to make payments to trustees 
                                appointed and acting in accordance with 
                                paragraph (4); or
                                    (II) to make payments described in 
                                paragraph (2)(D).
            (7) Limitations.--
                    (A) Obligation to repay.--
                            (i) In general.--Notwithstanding any other 
                        provision of law, the principal amount on any 
                        qualified tribal school modernization bond 
                        issued under this subsection shall be repaid 
                        only to the extent of any escrowed funds 
                        provided under paragraph (4)(C)(iii).
                            (ii) No guarantee.--No qualified tribal 
                        school modernization bond issued by an Indian 
                        tribe under this subsection shall be an 
                        obligation of, and no payment of the principal 
                        of such a bond shall be guaranteed by--
                                    (I) the United States;
                                    (II) the Indian tribe; or
                                    (III) the tribal school for which 
                                the bond was issued.
                    (B) Land and facilities.--No land or facility 
                purchased or improved with amounts derived from a 
                qualified tribal school modernization bond issued under 
                this subsection shall be mortgaged or used as 
                collateral for the bond.
            (8) Sale of bonds.--A qualified tribal school modernization 
        bond may be sold at a purchase price equal to, in excess of, or 
        at a discount from, the par amount of the bond.
            (9) Treatment of trust agreement earnings.--No amount 
        earned through the investment of funds under the control of a 
        trustee under any trust agreement described in paragraph (4) 
        shall be subject to Federal income taxation.
            (10) Investment of sinking funds.--A sinking fund 
        established for the purpose of the payment of principal on a 
        qualified tribal school modernization bond issued under this 
        subsection shall be invested in--
                    (A) obligations issued by or guaranteed by the 
                United States; or
                    (B) such other assets as the Secretary of the 
                Treasury may by regulation allow.

SEC. 1334. APPLICATION OF CERTAIN LABOR STANDARDS ON CONSTRUCTION 
              PROJECTS FINANCED UNDER PUBLIC SCHOOL MODERNIZATION 
              PROGRAM.

    Section 439 of the General Education Provisions Act (20 U.S.C. 
1232b) is amended--
            (1) by inserting ``(a)'' before ``All laborers and 
        mechanics''; and
            (2) by adding at the end the following:
    ``(b)(1) For purposes of this section, the term `applicable 
program' also includes the qualified zone academy bond provisions 
enacted by section 226 of the Taxpayer Relief Act of 1997 and the 
program established by section 1332 of the America's Better Classroom 
Act of 2006.
    ``(2) A State or local government participating in a program 
described in paragraph (1) shall--
            ``(A) in the awarding of contracts, give priority to 
        contractors with substantial numbers of employees residing in 
        the school district to be served by the school being 
        constructed; and
            ``(B) include in the construction contract for such school 
        a requirement that the contractor give priority in hiring new 
        workers to individuals residing in such school district.
    ``(3) In the case of a program described in paragraph (1), nothing 
in this subsection or subsection (a) shall be construed to deny any tax 
credit allowed under such program. If amounts are required to be 
withheld from contractors to pay wages to which workers are entitled, 
such amounts shall be treated as expended for construction purposes in 
determining whether the requirements of such program are met.''.

SEC. 1335. TRAINING SERVICES RELATING TO CONSTRUCTION OR RECONSTRUCTION 
              OF PUBLIC SCHOOL FACILITIES.

    (a) In General.--Section 134(d) of the Workforce Investment Act of 
1998 (29 U.S.C. 2864(d)) is amended by adding at the end the following:
            ``(5) Training services relating to construction or 
        reconstruction of public school facilities.--
                    ``(A) In general.--The Governor of each State, and 
                each local board in the State, shall ensure that each 
                one-stop center in the State provides training services 
                related to construction or reconstruction of public 
                school facilities receiving funding assistance under an 
                applicable program.
                    ``(B) Specialized program.--The provider of such 
                services shall establish a specialized program of 
                training services meeting the following requirements:
                            ``(i) The specialized program provides 
                        training for jobs in the construction industry.
                            ``(ii) The specialized program provides 
                        trained workers for projects for the 
                        construction or reconstruction of public school 
                        facilities receiving funding assistance under 
                        an applicable program.
                            ``(iii) The specialized program ensures 
                        that skilled workers (residing in the area to 
                        be served by the school facilities) will be 
                        available for the construction or 
                        reconstruction work.
                    ``(C) Coordination.--
                            ``(i) In general.--The specialized program 
                        established under subparagraph (B) shall be 
                        integrated with other activities carried out 
                        under this Act, with the activities carried out 
                        under the Act of August 16, 1937 (commonly 
                        known as the `National Apprenticeship Act', 50 
                        Stat. 664, chapter 663; 29 U.S.C. 50 et seq.) 
                        by the State apprenticeship council or agency 
                        or through the Bureau of Apprenticeship and 
                        Training in the Department of Labor, as 
                        appropriate, and with activities carried out 
                        under the Carl D. Perkins Vocational and 
                        Technical Education Act of 1998 (20 U.S.C. 2301 
                        et seq.).
                            ``(ii) Construction.--Nothing in this 
                        paragraph shall be construed to require 
                        services duplicative of the activities referred 
                        to in clause (i).
                    ``(D) Applicable program.--In this subsection, the 
                term `applicable program' has the meaning given the 
                term in section 400(c) of the General Education 
                Provisions Act (20 U.S.C. 1221(c)) or in 439(b) of such 
                Act (as added by section 1334 of the Right Time to 
                Reinvest in America's Competitiveness and Knowledge 
                Act).''.
    (b) State Plan.--Section 112(b)(17)(A) of the Workforce Investment 
Act of 1998 (29 U.S.C. 2822(b)(17)(A)) is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) by redesignating clause (iv) as clause (v); and
            (3) by inserting after clause (iii) the following:
                            ``(iv) how the Governor of the State, and 
                        each local board in the State, will ensure that 
                        each one-stop center in the State will provide 
                        a specialized program of training services 
                        under section 134(d)(5); and''.

       TITLE II--EDUCATE AMERICANS TO FILL THE JOBS OF THE FUTURE

SEC. 2001. SHORT TITLE.

    This title may be cited as the ``New National Defense Education 
Act''.

SEC. 2002. FINDINGS.

    Congress finds the following:
            (1) Throughout our Nation's history, the skills and 
        education of our workforce have been a major determinant of the 
        standard of living of the people of the United States.
            (2) Spurred into action by the launch of Sputnik, Congress 
        passed the National Defense Education Act of 1958 (Public Law 
        85-864, 72 Stat. 1580). The law, now nearly 50 years old, 
        declared a national ``educational emergency'', and Federal 
        expenditures for education more than doubled in the 4 years 
        after its passage. The programs authorized under the Act helped 
        the United States to improve rapidly in mathematics, science, 
        engineering, technology, and foreign languages and led to our 
        dominance in the arms race and the global economy.
            (3) Today, our Nation once again faces an international 
        challenge in education: we must confront a shortage of highly 
        skilled and educated workers, especially in mathematics, 
        science, engineering, technology, and critical-need foreign 
        languages. As a percentage of total first university degrees 
        granted, the United States produced fewer graduates in 
        mathematics, science, and engineering in 2002 than the Nation 
        did in 1985. Currently, the United States Government requires 
        34,000 employees with foreign language skills in 100 languages 
        across more than 80 Federal agencies. These trends pose a 
        threat to our national security and our economic security.
            (4) Student achievement in mathematics and science in 
        elementary school and secondary school lags behind other 
        nations, according to the Trends in International Mathematics 
        and Science study and other studies, including the Programme 
        for International Student Assessment, that recently ranked 
        United States secondary school students 28th out of 40 first- 
        and second-world nations, and tied with Latvia, in mathematics 
        performance and problem solving.
            (5) According to the most recent National Assessment of 
        Educational Progress, less than 40 percent of the students in 
        grade 4 and 30 percent of the students in grade 8, and only 17 
        percent of the students in grade 12, reach the proficient level 
        in mathematics, and approximately \1/3\ of the students in 
        grades 4 and 8, and nearly \1/2\ of the students in grade 12, 
        do not reach the basic level in science.
            (6) A State-by-State comparison of the 2005 National 
        Assessment of Educational Progress average scale scores for 8th 
        grade mathematics reveals that 31 States--more than \1/2\ of 
        the States in the Nation--scored more than 10 points (about 1 
        grade level) below the highest scoring State, Massachusetts.
            (7) More than 200,000,000 children in China are studying 
        English, a compulsory subject for all Chinese primary school 
        students. By comparison, only about 24,000 of approximately 
        54,000,000 elementary and secondary school children in the 
        United States are studying Chinese.
            (8) There is a significant shortage of trained and 
        qualified mathematics and science teachers in the United 
        States. According to the National Science Board, in 2002, 
        between 17 and 28 percent of public secondary school science 
        teachers (depending on the specific scientific field), and 20 
        percent of public secondary school mathematics teachers, lacked 
        full certification in their teaching field.
            (9) More than \1/2\ of the 20 fastest growing occupations 
        require postsecondary degrees in mathematics or science. 
        According to the National Science Board, out of more than 
        15,000,000 college students, less than 400,000 Americans a year 
        graduate with a bachelor's degree in mathematics, science, 
        engineering, or technology. According to the National Science 
        Foundation, only 75,000 American undergraduate students obtain 
        a master's degree in mathematics, science, engineering, or 
        technology.
            (10) In a 2002 Government Accountability Office report, the 
        United States Army reported that it was experiencing serious 
        shortfalls of translators and interpreters in 5 of its 6 
        critical languages: Arabic, Korean, Mandarin Chinese, Persian-
        Farsi, and Russian. According to the Modern Language 
        Association, enrollment in foreign languages declined from 16 
        percent of college students in 1965 to 8 percent in 1974, 
        rebounding to just 8.6 percent in 2002. Less commonly taught 
        languages accounted for only 12 percent of all language 
        enrollments. This means that 1 percent of American 
        undergraduate students are studying these critical languages.
            (11) In 2002, 79 percent of Americans agreed that students 
        should have a study-abroad experience sometime during college. 
        Only 1 percent of all United States undergraduate students 
        studied abroad in the 2001-2002 school year.
            (12) The Government Accountability Office estimates that 
        the number of students enrolled in science, technology, 
        engineering, or mathematics doctoral degree programs at United 
        States institutions of higher education declined from 217,395 
        during the 1995-1996 academic year to 198,504 during the 2003-
        2004 academic year.
            (13) The extent of this crisis requires a coordinated 
        Federal response and an increased Federal investment in 
        programs of the Department of Education and the National 
        Science Foundation.

           Subtitle A--Modernizing America's Education System

         CHAPTER 1--PREKINDERGARTEN THROUGH GRADE 16 EDUCATION

SEC. 2111. PURPOSES.

    The purposes of this chapter are the following:
            (1) To ensure students receive an education competitive 
        with other industrialized countries.
            (2) To assist States in improving the rigor of standards 
        and assessments.
            (3) To provide for the establishment of prekindergarten 
        through grade 16 student preparedness councils to better link 
        early childhood education and school readiness with elementary 
        school success, elementary student skills with success in 
        secondary school, and secondary student skills and curricula, 
        especially with respect to reading, mathematics, and science, 
        with the demands of higher education, the 21st century 
        workforce, and the Armed Forces, in order to--
                    (A) ensure that greater number of students, 
                especially low-income and minority students, complete 
                secondary school with the coursework and skills 
                necessary to enter--
                            (i) credit-bearing coursework in higher 
                        education without the need for remediation;
                            (ii) high-paying employment in the 21st 
                        century workforce; or
                            (iii) the Armed Forces.
            (4) To establish a system that encourages local educational 
        agencies to adopt a curriculum that meets State academic 
        content standards and student academic achievement standards 
        and prepares all students for success in elementary school, 
        secondary school, and post-secondary endeavors in the 21st 
        century.

SEC. 2112. DEFINITIONS.

    In this chapter:
            (1) In general.--The terms ``elementary school'', ``limited 
        English proficient'', ``local educational agency'', 
        ``scientifically based research'', ``secondary school'', 
        ``Secretary'', and ``State educational agency'' have the 
        meanings given such terms in section 9101 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 7801).
            (2) Academic content standards; student academic 
        achievement standards.--The terms ``academic content 
        standards'' and ``student academic achievement standards'', 
        when used with respect to a particular State, mean the academic 
        content standards and student academic achievement standards 
        adopted by a State under section 1111(b)(1) of the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 6311(b)(1)).
            (3) 21st century curriculum.--The term ``21st century 
        curriculum'' means a course of study identified by a State as 
        preparing secondary school students for entrance into credit-
        bearing coursework in higher education without the need for 
        remediation, employment in the 21st century workforce, or 
        entrance into the Armed Forces. A State shall define the 21st 
        century curriculum in terms of content as well as course names.
            (4) End of course examination.--The term ``end of course 
        examination'' means an assessment of student learning given at 
        the end of a particular course that is used to measure student 
        learning of State academic content standards in the subject 
        matter of the course.
            (5) Graduation rate.--The term ``graduation rate'' means 
        the percentage of students who graduate from secondary school 
        with a regular diploma in the standard number of years.
            (6) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            (7) Professional development.--The term ``professional 
        development'' includes activities that--
                    (A) improve and increase teachers' knowledge of the 
                academic subjects the teachers teach, and enable 
                teachers to become highly qualified;
                    (B) are an integral part of broad educational 
                improvement plans across the school and across the 
                local educational agency;
                    (C) give teachers, principals, and administrators 
                the knowledge and skills to provide students with the 
                opportunity to meet the State academic content 
                standards and student academic achievement standards 
                and the 21st century curriculum demands;
                    (D) are high-quality, sustained, intensive, and 
                classroom-focused, in order to have a positive and 
                lasting effect on classroom instruction and the 
                teacher's performance in the classroom;
                    (E) advance teacher understanding of effective 
                instructional strategies that are based on 
                scientifically based research and are directly aligned 
                with the State academic content standards and State 
                assessments;
                    (F) are designed to give teachers the knowledge and 
                skills to provide instruction and appropriate language 
                and academic support services to limited English 
                proficient students and students with special needs, 
                including the appropriate use of curricula and 
                assessments;
                    (G) are, as a whole, regularly evaluated for their 
                impact on increased teacher effectiveness and improved 
                student academic achievement, with the findings of the 
                evaluations used to improve the quality of professional 
                development; and
                    (H) include instruction in the use of data and 
                assessments to inform and instruct classroom practice.
            (8) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the United States Virgin Islands, 
        Guam, American Samoa, the Commonwealth of the Northern Mariana 
        Islands, the Republic of the Marshall Islands, the Federated 
        States of Micronesia, and the Republic of Palau.
            (9) State assessment.--The term ``State assessment'', when 
        used with respect to a particular State, means the student 
        academic assessments implemented by the State pursuant to 
        section 1111(b)(3) of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 6311(b)(3)).
            (10) Student preparedness.--The term ``student 
        preparedness'' means preparedness based on the knowledge and 
        skills that--
                    (A) are prerequisites for entrance into--
                            (i) credit-bearing coursework in higher 
                        education without the need for remediation;
                            (ii) the 21st century workforce; and
                            (iii) the Armed Forces;
                    (B) can be measured and verified objectively using 
                widely accepted professional assessment standards; and
                    (C) are consistent with widely accepted 
                professional assessment standards and competitive with 
                international levels of preparedness of students for 
                postsecondary success.

SEC. 2113. ALIGNING STATE STANDARDS WITH NATIONAL BENCHMARKS.

    (a) Report on Results of State Assessments and National 
Assessment.--Not later than 90 days after each release of the results 
of the National Assessment of Educational Progress (as carried out 
under section 303(b)(2) of the National Assessment of Educational 
Progress Authorization Act (20 U.S.C. 9622(b)(2)) and section 
1111(c)(2) of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6311(c)(2)) in reading or mathematics (or, beginning in 2009, 
science) in grades 4 and 8, the Secretary shall--
            (1) prepare and submit to Congress the report described in 
        subsection (b) on the results of the State assessments and the 
        assessments of reading and mathematics, and, beginning in 2009, 
        science, in grades 4 and 8, required under section 1111(c)(2) 
        of the Elementary and Secondary Education Act of 1965; and
            (2) identify States with significant discrepancies in 
        performance between the 2 assessments, as described in 
        subsection (b)(3).
    (b) Contents of Report.--
            (1) In general.--The report described in this subsection 
        shall include the following information for each subject area 
        and grade described in subsection (a)(1) in each State:
                    (A) The percentage of students who performed at or 
                above the basic level on the State assessment--
                            (i) for the most recent applicable year;
                            (ii) for the preceding year; and
                            (iii) for the previous year in which the 
                        assessment required under section 1111(c)(2) of 
                        the Elementary and Secondary Education Act of 
                        1965 was given in such subject,
                and the change in such percentages between those 
                assessments.
                    (B) The percentage of students who performed at or 
                above the proficient level on the State assessment--
                            (i) for the most recent applicable year;
                            (ii) for the preceding year; and
                            (iii) for the previous year in which the 
                        assessment required under section 1111(c)(2) of 
                        the Elementary and Secondary Education Act of 
                        1965 was given in such subject,
                and the change in such percentages between those 
                assessments.
                    (C) The percentage of students who performed at or 
                above the basic level on the assessment required under 
                section 1111(c)(2) of the Elementary and Secondary 
                Education Act of 1965--
                            (i) for the most recent applicable year; 
                        and
                            (ii) for the previous such assessment,
                and the change in such percentages between those 
                assessments.
                    (D) The percentage of students who performed at or 
                above the proficient level on the assessment required 
                under section 1111(c)(2) of the Elementary and 
                Secondary Education Act of 1965--
                            (i) for the most recent applicable year; 
                        and
                            (ii) for the previous such assessment,
                and the change in such percentages between those 
                assessments.
                    (E) The difference between--
                            (i) the percentage of students who 
                        performed at or above the basic level for the 
                        most recent applicable year on the assessment 
                        required under section 1111(c)(2) of the 
                        Elementary and Secondary Education Act of 1965; 
                        and
                            (ii) the percentage of students who 
                        performed at or above the basic level on the 
                        State assessment for such year.
                    (F) The difference between--
                            (i) the percentage of students who 
                        performed at or above the proficient level for 
                        the most recent applicable year on the 
                        assessment required under section 1111(c)(2) of 
                        the Elementary and Secondary Education Act of 
                        1965; and
                            (ii) the percentage of students who 
                        performed at or above the proficient level on 
                        the State assessment for such year.
            (2) Analysis.--In addition to the information described in 
        paragraph (1), the Secretary shall include in the report--
                    (A) an analysis of how the achievement of students 
                in grades 4, 8, and 12, and the preparedness of 
                students in grade 12 (when such data on preparedness 
                exists from assessments described in section 303 of the 
                National Assessment of Educational Progress 
                Authorization Act), in the United States compares to 
                the achievement and preparedness of students in other 
                industrialized countries; and
                    (B) possible reasons for any deficiencies 
                identified in the achievement or preparedness of United 
                States students compared to students in other 
                industrialized countries.
            (3) Ranking.--The Secretary shall--
                    (A) using the information described in paragraph 
                (1), rank the States according to the degree to which 
                student performance on State assessments differs from 
                performance on the assessments required under section 
                1111(c)(2) of the Elementary and Secondary Education 
                Act of 1965; and
                    (B) identify those States with the most significant 
                discrepancies in performance between the State 
                assessments and the assessments required under section 
                1111(c)(2) of the Elementary and Secondary Education 
                Act of 1965.
    (c) Report on State Progress.--Beginning 5 years after the date of 
enactment of this Act, the Secretary shall include in the report 
described in subsection (a)(1) the following:
            (1) Information about the progress made by States to 
        decrease discrepancies in student performance on the State 
        assessments and the assessments required under section 
        1111(c)(2) of the Elementary and Secondary Education Act of 
        1965.
            (2) The differences that exist in States across subject 
        areas and grades.

SEC. 2114. NATIONAL ASSESSMENT OF EDUCATIONAL PROGRESS CHANGES.

    (a) National Assessment Governing Board.--Section 302 of the 
National Assessment of Educational Progress Authorization Act (20 
U.S.C. 9621) is amended--
            (1) in subsection (a), by striking ``shall formulate'' and 
        all that follows through the period at the end and inserting 
        ``shall--
            ``(1) formulate policy guidelines for the National 
        Assessment of Educational Progress (carried out under section 
        303); and
            ``(2) carry out, upon the request of a State, an alignment 
        analysis (under section 304) comparing a State's academic 
        content standards and student academic achievement standards 
        adopted under section 1111(b)(1) of the Elementary and 
        Secondary Education Act of 1965, assessment specifications, 
        assessment questions, and performance standards with national 
        benchmarks reflected in the assessments authorized under this 
        Act.'';
            (2) in subsection (b)(1), by adding at the end the 
        following:
                    ``(O) One representative of the Armed Forces with 
                expertise in military personnel requirements and 
                military preparedness, who shall serve as an ex-
                officio, nonvoting member.'';
            (3) in subsection (c), by striking paragraph (4);
            (4) in subsection (e)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by inserting ``and 
                        grade 12 student preparedness levels'' after 
                        ``achievement levels'';
                            (ii) in subparagraph (D), by inserting 
                        ``members of the business and military 
                        communities,'' after ``parents,'';
                            (iii) in subparagraph (E), by inserting 
                        ``and'' after ``subject matter,'';
                            (iv) by redesignating subparagraphs (G), 
                        (H), (I), and (J) as subparagraphs (H), (I), 
                        (K), and (L), respectively;
                            (v) by inserting after subparagraph (F) the 
                        following:
                    ``(G) consistent with section 303, measure grade 12 
                student preparedness;'';
                            (vi) by inserting after subparagraph (I) 
                        (as redesignated by clause (iv)) the following:
                    ``(J) ensure the rigor of the National Assessment 
                of Educational Progress framework and assessments, 
                taking into consideration--
                            ``(i) the knowledge and skills that are 
                        prerequisite to credit-bearing coursework in 
                        higher education without the need for 
                        remediation, the 21st century workforce, and 
                        the Armed Forces; and
                            ``(ii) rigorous international content and 
                        performance standards, and how the achievement 
                        of students in grades 4, 8, and 12, and the 
                        preparedness of students in grade 12, in the 
                        United States compare to the achievement and 
                        the preparedness of students in other 
                        industrialized countries;'';
                            (vii) in subparagraph (K) (as redesignated 
                        by clause (iv)), by striking ``and'' after the 
                        semicolon;
                            (viii) in subparagraph (L) (as redesignated 
                        by clause (iv)), by striking the period and 
                        inserting ``; and'';
                            (ix) by inserting after subparagraph (L) 
                        the following:
                    ``(M) conduct an alignment analysis as described in 
                section 304 for each State that requests such 
                analysis.''; and
                            (x) in the flush matter at the end--
                                    (I) by inserting ``for an 
                                assessment'' after ``data'';
                                    (II) by inserting ``Assessment 
                                Board's'' after ``prior to the''; and
                                    (III) by striking ``(J)'' and 
                                inserting ``(L)'';
                    (B) in paragraph (4), by inserting ``of Educational 
                Progress'' after ``National Assessment'';
                    (C) in paragraph (5), in the paragraph heading, by 
                inserting ``advice'' after ``Technical''; and
                    (D) in paragraph (6), by inserting ``or grade 12 
                student preparedness levels'' after ``student 
                achievement levels''; and
            (5) in subsection (g)(1), by inserting ``of Educational 
        Progress'' after ``National Assessment''.
    (b) National Assessment of Educational Progress.--Section 303 of 
the National Assessment of Educational Progress Authorization Act (20 
U.S.C. 9622) is amended--
            (1) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Purpose'' and inserting ``Purposes'';
                    (B) by striking paragraph (1) and inserting the 
                following:
            ``(1) Purposes.--The purposes of this section are--
                    ``(A) to provide, in a timely manner, a fair and 
                accurate measurement of student achievement and grade 
                12 student preparedness in reading, mathematics, 
                science, and other subject matter as specified in this 
                section; and
                    ``(B) to report trends in student achievement and 
                grade 12 student preparedness in reading, mathematics, 
                science, and other subject matter as specified in this 
                section.'';
                    (C) in paragraph (2)--
                            (i) in subparagraph (B), by striking 
                        ``reading and mathematics'' and inserting 
                        ``reading, mathematics, and science'';
                            (ii) by striking subparagraph (C) and 
                        inserting the following:
                    ``(C) conduct a national assessment and collect and 
                report assessment data, including achievement and 
                student preparedness data trends, in a valid and 
                reliable manner on student academic achievement and 
                student preparedness in public and private schools in 
                reading, mathematics, and science at least once every 2 
                years in grade 12;'';
                            (iii) in subparagraph (D)--
                                    (I) by striking ``subparagraph (B) 
                                are implemented and the requirements 
                                described in subparagraph (C) are 
                                met,'' and inserting ``subparagraphs 
                                (B) and (C) are implemented,''; and
                                    (II) by striking ``science,'';
                            (iv) in subparagraph (E)--
                                    (I) by striking ``reading and 
                                mathematics'' and inserting ``reading, 
                                mathematics, and science''; and
                                    (II) by striking ``subparagraph 
                                (B)'' and inserting ``subparagraphs (B) 
                                and (C)''; and
                            (v) in subparagraph (H), by striking 
                        ``achievement data'' and inserting ``student 
                        achievement data and grade 12 student 
                        preparedness data'';
                    (D) in paragraph (3)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i), by striking 
                                ``reading and mathematics'' and 
                                inserting ``reading, mathematics, and 
                                science'';
                                    (II) in clause (ii)--
                                            (aa) by inserting ``and 
                                        grade 12 student preparedness'' 
                                        after ``achievement''; and
                                            (bb) by striking ``reading 
                                        and mathematics'' and inserting 
                                        ``reading, mathematics, and 
                                        science''; and
                                    (III) in clause (iv), by striking 
                                ``an evaluation'' and inserting ``a 
                                review''; and
                            (ii) in subparagraph (C)(ii), by striking 
                        ``reading and mathematics'' and inserting 
                        ``reading, mathematics, and science'';
                    (E) in paragraph (4)(B), by striking ``, require, 
                or influence'' and inserting ``or require''; and
                    (F) in paragraph (5)(B), by striking ``academic 
                achievement'' and inserting ``academic achievement or 
                grade 12 student preparedness'';
            (2) in subsection (c)(3)(A), by striking ``academic 
        achievement'' and inserting ``academic achievement or grade 12 
        preparedness'';
            (3) in subsection (d)(3)--
                    (A) in subparagraph (A), by striking ``reading and 
                mathematics in grades 4 and 8'' and inserting 
                ``reading, mathematics, and science in grades 4 and 
                8''; and
                    (B) in subparagraph (B), by striking ``reading and 
                mathematics assessments in grades 4 and 8'' and 
                inserting ``reading, mathematics, and science 
                assessments in grades 4 and 8'';
            (4) in subsection (e)--
                    (A) in the subsection heading, by inserting ``and 
                Grade 12 Student Preparedness Levels'' after 
                ``Levels'';
                    (B) in paragraph (1)--
                            (i) by striking the paragraph heading and 
                        inserting ``Development.--''; and
                            (ii) by inserting ``, and develop grade 12 
                        student preparedness levels'' after 
                        ``subsection (b)(2)(F)'';
                    (C) in paragraph (2)--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) Student achievement and grade 12 preparedness 
                levels.--
                            ``(i) Student achievement levels.--The 
                        student achievement levels described in 
                        paragraph (1) shall be determined by--
                                    ``(I) identifying the knowledge and 
                                skills that--
                                            ``(aa) are prerequisite to 
                                        credit-bearing coursework in 
                                        higher education without the 
                                        need for remediation in 
                                        English, mathematics, or 
                                        science, participation in the 
                                        21st century workforce, and the 
                                        Armed Forces or, in the case of 
                                        grade 4 and grade 8 students, 
                                        are prerequisite to grade 12 
                                        preparedness;
                                            ``(bb) are competitive with 
                                        rigorous international content 
                                        and performance standards; and
                                            ``(cc) can be measured and 
                                        verified objectively using 
                                        widely accepted professional 
                                        assessment standards; and
                                    ``(II) developing student 
                                achievement levels that are--
                                            ``(aa) based on the 
                                        knowledge and skills identified 
                                        in subclause (I);
                                            ``(bb) based on the 
                                        appropriate level of subject 
                                        matter knowledge for the grade 
                                        levels to be assessed, or the 
                                        age of the students, as the 
                                        case may be; and
                                            ``(cc) consistent with 
                                        relevant widely accepted 
                                        professional assessment 
                                        standards.
                            ``(ii) Grade 12 student preparedness 
                        levels.--The grade 12 student preparedness 
                        levels described in paragraph (1) shall be 
                        determined by--
                                    ``(I) identifying the knowledge and 
                                skills that--
                                            ``(aa) are prerequisite to 
                                        credit-bearing coursework in 
                                        higher education without the 
                                        need for remediation in 
                                        English, mathematics, or 
                                        science, participation in the 
                                        21st century workforce, and the 
                                        Armed Forces;
                                            ``(bb) are competitive with 
                                        rigorous international content 
                                        and performance standards; and
                                            ``(cc) can be measured and 
                                        verified objectively using 
                                        widely accepted professional 
                                        assessment standards; and
                                    ``(II) developing grade 12 student 
                                preparedness levels that are--
                                            ``(aa) based on the 
                                        knowledge and skills identified 
                                        in subclause (I); and
                                            ``(bb) consistent with 
                                        widely accepted professional 
                                        assessment standards.''; and
                            (ii) in subparagraph (C), by striking 
                        ``achievement levels'' and inserting ``student 
                        achievement levels and grade 12 student 
                        preparedness levels'';
                    (D) in paragraph (3)--
                            (i) by striking ``After determining that 
                        such levels'' and inserting ``After determining 
                        that the student achievement levels and grade 
                        12 student preparedness levels''; and
                            (ii) by striking ``an evaluation'' and 
                        inserting ``a review''; and
                    (E) in paragraph (4), by inserting ``or grade 12 
                student preparedness levels'' after ``achievement 
                levels''; and
            (5) in subsection (f)(1)--
                    (A) in subparagraph (A), by inserting ``and grade 
                12 student preparedness levels'' after ``student 
                achievement levels''; and
                    (B) in subparagraph (B)--
                            (i) in clause (i), by inserting ``or grade 
                        12 student preparedness'' after 
                        ``achievement'';
                            (ii) in clause (ii), by inserting ``and 
                        grade 12 student preparedness levels'' after 
                        ``achievement levels'';
                            (iii) by striking clause (iii) and 
                        inserting the following:
                            ``(iii) whether any authorized assessment 
                        is being administered as a random sample and is 
                        reporting the trends in student achievement or 
                        grade 12 student preparedness in a valid and 
                        reliable manner in the subject areas being 
                        assessed;'';
                            (iv) in clause (iv), by striking ``and'' 
                        after the semicolon;
                            (v) in clause (v), by striking ``and 
                        mathematical knowledge.'' and inserting ``and 
                        mathematical knowledge and scientific 
                        knowledge; and''; and
                            (vi) by adding at the end the following:
                            ``(vi) whether the appropriate authorized 
                        assessments are measuring, consistent with this 
                        section, the preparedness of students in grade 
                        12 in the United States for entry into--
                            ``(I) credit-bearing coursework in higher 
                        education without the need for remediation in 
                        English, mathematics, or science;
                            ``(II) the 21st century workforce; and
                            ``(III) the Armed Forces.''.
    (c) National Benchmarks.--The National Assessment of Educational 
Progress Authorization Act (20 U.S.C. 9621 et seq.) is amended--
            (1) by redesignating sections 304 and 305 as sections 305 
        and 306, respectively; and
            (2) by inserting after section 303 the following:

``SEC. 304. NATIONAL BENCHMARKS.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to encourage the coordination of, and consistency 
        between--
                    ``(A) a State's academic content standards and 
                student academic achievement standards adopted under 
                section 1111(b)(1) of the Elementary and Secondary 
                Education Act of 1965, assessment specifications, and 
                assessment questions; and
                    ``(B) national benchmarks, as reflected in the 
                National Assessment of Educational Progress;
            ``(2) to assist States in increasing the rigor of their 
        State academic content standards, student academic achievement 
        standards, assessment specifications, and assessment questions, 
        to ensure that such are competitive with rigorous national and 
        international benchmarks; and
            ``(3) to improve the instruction and academic achievement 
        of students, beginning in the early grades, to ensure that 
        secondary school graduates are well-prepared to enter--
                    ``(A) credit-bearing coursework in higher education 
                without the need for remediation;
                    ``(B) the 21st century workforce; or
                    ``(C) the Armed Forces.
    ``(b) Alignment Analysis.--
            ``(1) In general.--When the chief State school officer of a 
        State identifies a need for, and requests the Assessment Board 
        to conduct, an alignment analysis for the State in reading, 
        mathematics, or science in grades 4 and 8, the Assessment Board 
        shall perform an alignment analysis of the State's academic 
        content standards and student academic achievement standards 
        adopted under section 1111(b)(1) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6311(b)(1)), 
        assessment specifications, and assessment questions, for the 
        identified subject in grades 4 and 8. Such analysis shall begin 
        not later than 180 days after the alignment analysis is 
        requested.
            ``(2) Assessment board responsibilities.--As part of the 
        alignment analysis, the Assessment Board shall--
                    ``(A) identify the differences between the State's 
                academic content standards and student academic 
                achievement standards, assessment specifications, and 
                assessment questions for the subject identified by the 
                State, and national benchmarks reflected in the 
                National Assessment of Educational Progress in such 
                subject in grades 4 and 8;
                    ``(B) at the State's request, recommend steps for, 
                and policy questions such State should consider 
                regarding, the alignment of the State's academic 
                content standards and student academic achievement 
                standards in the identified subject, with national 
                benchmarks reflected in the National Assessment of 
                Educational Progress in such subject in grades 4 and 8; 
                and
                    ``(C) at the State's request, and in conjunction 
                with a State prekindergarten through grade 16 student 
                preparedness council established under section 2115 of 
                the New National Defense Education Act, assist in the 
                development of a plan described in section 
                2115(e)(1)(C) of such Act.
            ``(3) Contract.--At the discretion of the Assessment Board, 
        the Assessment Board may enter into a contract with an entity 
        that possesses the technical expertise to conduct the analysis 
        described in this subsection.
            ``(4) State panel.--The chief State school officer of a 
        State participating in an alignment analysis described in this 
        subsection shall appoint a panel of not less than 6 individuals 
        to partner with the Assessment Board in conducting the 
        alignment analysis. Such panel--
                    ``(A) shall include--
                            ``(i) local and State curriculum experts;
                            ``(ii) relevant content and pedagogy 
                        experts, including representatives of entities 
                        with widely accepted national educational 
                        standards and assessments; and
                            ``(iii) not less than 1 entity that 
                        possesses the technical expertise to assist the 
                        State in implementing standards-based reform, 
                        which may be the same entity with which the 
                        Assessment Board contracts to conduct the 
                        analysis under paragraph (3); and
                    ``(B) may include other State and local 
                representatives and representatives of organizations 
                with relevant expertise.''.
    (d) Definition of Secretary.--Section 305 of the National 
Assessment of Educational Progress Authorization Act (as redesignated 
by subsection (c)(1)) is amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by inserting after paragraph (1) the following:
            ``(2) Secretary.--The term `Secretary' means the Secretary 
        of Education.''.
    (e) Authorization of Appropriations.--Section 306(a) of the 
National Assessment of Educational Progress Authorization Act (as 
redesignated by subsection (c)(1)) is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) for fiscal year 2007--
                    ``(A) $7,500,000 to carry out section 302;
                    ``(B) $200,000,000 to carry out section 303; and
                    ``(C) $10,000,000 to carry out section 304; and''; 
                and
            (2) in paragraph (2)--
                    (A) by striking ``5 succeeding'' and inserting ``4 
                succeeding''; and
                    (B) by striking ``and 303, as amended by section 
                401 of this Act'' and inserting ``, 303, and 304''.
    (f) Conforming Changes and Amendments.--
            (1) Conforming changes to the elementary and secondary 
        education act of 1965.--
                    (A) State plans.--Section 1111(c)(2) of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 6311(c)(2)) is amended by striking ``and 
                mathematics'' and inserting ``, mathematics, and 
                science''.
                    (B) Local educational agency plans.--Section 
                1112(b)(1)(F) of the Elementary and Secondary Education 
                Act of 1965 (20 U.S.C. 6312(b)(1)(F)) is amended by 
                striking ``reading and mathematics'' and inserting 
                ``reading, mathematics, and science''.
            (2) Conforming amendment.--Section 113(a)(1) of the 
        Education Sciences Reform Act of 2002 (20 U.S.C. 9513(a)(1)) is 
        amended by striking ``section 302(e)(1)(J)'' and inserting 
        ``section 302(e)(1)(L)''.

SEC. 2115. PREKINDERGARTEN THROUGH GRADE 16 STUDENT PREPAREDNESS 
              COUNCIL GRANTS.

    (a) Program Authorized.--
            (1) In general.--From amounts appropriated under subsection 
        (g) for a fiscal year, the Secretary is authorized to award, on 
        a competitive basis, grants to States for the purpose of 
        allowing the States to establish State prekindergarten through 
        grade 16 student preparedness councils (referred to in this 
        section as ``councils'') that--
                    (A) convene stakeholders within the State and 
                create a forum for identifying and deliberating on 
                educational issues that cut across prekindergarten 
                through grade 12 education and higher education, and 
                transcend any single system of education's ability to 
                address;
                    (B) develop and implement a plan for improving the 
                rigor of a State's academic content standards, student 
                academic achievement standards, assessment 
                specifications, and assessment questions as necessary, 
                to ensure such standards and assessments meet national 
                and international benchmarks as reflected in the 
                assessments required under section 303(b)(2) of the 
                National Assessment of Educational Progress 
                Authorization Act (20 U.S.C. 9622(b)(2)) or as defined 
                by the council as necessary for success in credit-
                bearing coursework in higher education without the need 
                for remediation, the 21st century workforce, or the 
                Armed Forces;
                    (C) inform the design and implementation of 
                integrated prekindergarten through grade 16 data 
                systems, which--
                            (i) will allow the State to track the 
                        progress of individual students from 
                        prekindergarten through grade 12 and into 
                        higher education; and
                            (ii) shall be capable of being linked with 
                        appropriate databases on service in the Armed 
                        Forces and participation in the 21st century 
                        workforce; and
                    (D) shall develop challenging--
                            (i) school readiness standards;
                            (ii) curricula for elementary schools and 
                        middle schools; and
                            (iii) 21st century curricula for secondary 
                        schools.
            (2) Duration.--The Secretary shall award grants under this 
        section for a period of not more than 5 years.
            (3) Existing state council.--A State with an existing State 
        council may qualify for the purposes of a grant under this 
        section if--
                    (A) such council--
                            (i) has the authority to carry out this 
                        section; and
                            (ii) includes the members required under 
                        subsection (b); or
                    (B) the State amends the membership or 
                responsibilities of the existing council to meet the 
                requirements of subparagraph (A).
    (b) Composition.--
            (1) Required members.--The members of a council described 
        in subsection (a) shall include--
                    (A) the Governor of the State or the designee of 
                the Governor;
                    (B) the chief executive officer of the State public 
                institution of higher education system, if such a 
                position exists;
                    (C) the chief executive officer of the State Higher 
                Education Coordinating Board;
                    (D) the chief State school officer;
                    (E) not less than 1 representative each from--
                            (i) the business community; and
                            (ii) the Armed Forces;
                    (F) a public elementary school teacher employed in 
                the State; and
                    (G) a public secondary school teacher employed in 
                the State.
            (2) Optional members.--The council described in subsection 
        (a) may also include--
                    (A) a representative from--
                            (i) a private institution of higher 
                        education;
                            (ii) the Chamber of Commerce for the State;
                            (iii) a civic organization;
                            (iv) a civil rights organization;
                            (v) a community organization; or
                            (vi) an organization with expertise in 
                        world cultures;
                    (B) the State official responsible for economic 
                development, if such a position exists; or
                    (C) a dean or similar representative for a school 
                of education at an institution of higher education or a 
                similar teacher certification or licensure program.
    (c) Timeline.--A State receiving a grant under this section shall 
establish a council (or use or amend an existing council in accordance 
with subsection (a)(3)) not later than 60 days after the receipt of the 
grant.
    (d) Application.--
            (1) In general.--Each State desiring a grant under this 
        section shall submit an application to the Secretary at such 
        time, in such manner, and accompanied by such information as 
        the Secretary may reasonably require.
            (2) Contents.--Each application submitted under paragraph 
        (1) shall--
                    (A) demonstrate that the opinions of the larger 
                education, business, and military community, including 
                parents, students, teachers, teacher educators, 
                principals, school administrators, and business 
                leaders, will be represented during the determination 
                of the State academic content standards and student 
                academic achievement standards, assessment 
                specifications, assessment questions, and the 
                development of curricula, if applicable;
                    (B) include a comprehensive plan to provide high-
                quality professional development for teachers, 
                paraprofessionals, principals, and school 
                administrators;
                    (C) explain how the State will provide assistance 
                to local educational agencies in implementing rigorous 
                State standards through substantive curricula, 
                including scientifically based remediation and 
                acceleration opportunities for students; and
                    (D) explain how the State and the council will 
                leverage additional State, local, and other funds to 
                pursue curricular alignment and student success.
    (e) Use of Funds.--
            (1) Required activities.--A State receiving a grant under 
        this section shall use the grant funds to establish a council 
        that shall carry out the following:
                    (A) Design and implement an integrated 
                prekindergarten through grade 16 longitudinal data 
                system for the State, if such system does not exist, 
                that will allow the State to track the progress of 
                students from prekindergarten, through grade 12, and 
                into higher education, the 21st century workforce, and 
                the Armed Forces. The data system shall--
                            (i) include--
                                    (I) a unique statewide student 
                                identifier for each student;
                                    (II) student-level enrollment, 
                                demographic, and program participation 
                                information, including race or 
                                ethnicity, gender, and income status;
                                    (III) the ability to match 
                                individual students' test records from 
                                year to year to measure academic 
                                growth;
                                    (IV) information on untested 
                                students;
                                    (V) a teacher identifier system 
                                with the ability to match teachers to 
                                students;
                                    (VI) student-level transcript 
                                information, including information on 
                                courses completed and grades earned;
                                    (VII) student-level college 
                                preparedness examination scores;
                                    (VIII) student-level graduation and 
                                dropout data;
                                    (IX) the ability to match student 
                                records between the prekindergarten 
                                through grade 12 and the postsecondary 
                                systems;
                                    (X) a State data audit system 
                                assessing data quality, validity, and 
                                reliability;
                                    (XI) rates of student attendance at 
                                institutions of higher education;
                                    (XII) rates of student enrollment 
                                and retention in the Armed Forces; and
                                    (XIII) student nonmilitary 
                                postsecondary employment information;
                            (ii) to the extent possible, coordinate 
                        with other relevant State databases, such as 
                        criminal justice or social services data 
                        systems;
                            (iii) allow the State to analyze 
                        correlations between course-taking patterns in 
                        prekindergarten through grade 12 and outcomes 
                        after secondary school graduation, including--
                                    (I) entry into higher education;
                                    (II) the need for, and cost of, 
                                remediation in higher education;
                                    (III) graduation from higher 
                                education;
                                    (IV) entry into the 21st century 
                                workforce;
                                    (V) entry into the Armed Forces; 
                                and
                                    (VI) to the extent possible through 
                                linkages with appropriate databases on 
                                service in the Armed Forces and 
                                participation in the 21st century 
                                workforce, persistence in the Armed 
                                Forces and continued participation in 
                                the 21st century workforce; and
                            (iv) ensure that the use of any available 
                        data does not allow for the public 
                        identification of the individual student's 
                        personally identifiable information, and that 
                        all data shall be collected and maintained in 
                        accordance with section 444 of the General 
                        Education Provisions Act (20 U.S.C. 1232g; 
                        commonly referred to as the Family Educational 
                        Rights and Privacy Act of 1974).
                    (B) If an integrated prekindergarten through grade 
                16 longitudinal data system exists or is currently 
                being built, ensure that it complies with the 
                requirements described in subparagraph (A).
                    (C) Develop and implement a plan to increase the 
                rigor of standards or assessments in reading, 
                mathematics, or science in order to better align such 
                standards or assessments with national benchmarks 
                reflected in the National Assessment of Educational 
                Progress in grades 4 and 8 (in accordance with the 
                results of the alignment analysis conducted under 
                section 304 of the National Assessment of Educational 
                Progress Authorization Act), and in other grades to 
                ensure the alignment of kindergarten through grade 12 
                standards or assessments with the revisions made in 
                grades 4 and 8, or to align such standards or 
                assessments with the demands of higher education, the 
                21st century workforce, or the Armed Forces or other 
                national and international benchmarks identified by the 
                council. Such plan may include--
                            (i) an articulation of the steps 
                        necessary--
                                    (I) for revising the State academic 
                                content standards and student academic 
                                achievement standards, assessment 
                                specifications, and assessment 
                                questions for the identified subject; 
                                and
                                    (II) to better align the standards 
                                and the assessment specifications and 
                                questions described in subclause (I) 
                                with--
                                            (aa) national benchmarks as 
                                        reflected in the National 
                                        Assessment of Educational 
                                        Progress required under section 
                                        303 of the National Assessment 
                                        of Educational Progress 
                                        Authorization Act (20 U.S.C. 
                                        9622) for the identified 
                                        subject; or
                                            (bb) the demands of higher 
                                        education, the 21st century 
                                        workforce, or the Armed Forces 
                                        or other national or 
                                        international benchmarks 
                                        identified by the council;
                            (ii) an articulation of the steps necessary 
                        and the process the State will undertake to 
                        revise standards or assessments, or both, in 
                        the identified subject;
                            (iii) a description of the partners the 
                        State will work with to revise standards or 
                        assessments, or both; and
                            (iv) a description of the activities the 
                        State will undertake to implement the revised 
                        standards or assessments, or both, at the State 
                        educational agency level and the local 
                        educational agency level, which activities may 
                        include--
                                    (I) preservice and in-service 
                                teacher, paraprofessional, principal, 
                                and school administrator training;
                                    (II) statewide meetings to provide 
                                professional development opportunities 
                                for teachers and administrators;
                                    (III) development of curricula and 
                                instructional methods and materials;
                                    (IV) the redesign of existing 
                                assessments, or the development or 
                                purchase of new high-quality 
                                assessments, with a focus on ensuring 
                                that such assessments are rigorous, 
                                measure significant depth of knowledge, 
                                use multiple measures and formats (such 
                                as student portfolios), and are 
                                sensitive to inquiry-based, project-
                                based, or differentiated instruction; 
                                and
                                    (V) other activities necessary for 
                                the effective implementation of the new 
                                State standards or assessments, or 
                                both.
                    (D) Analyze the State's level of prekindergarten 
                through grade 16 curricular alignment and the success 
                of the State's education system in preparing students 
                for higher education, the 21st century workforce, and 
                the Armed Forces by--
                            (i) using the data produced by a data 
                        system described in subparagraph (A) or (B), or 
                        other information as appropriate; and
                            (ii) exploring a possible agreement between 
                        the State educational agency and the higher 
                        education system in the State on a common 
                        assessment or assessments that--
                                    (I) shall follow established 
                                guidelines to guarantee reliability and 
                                validity;
                                    (II) shall provide adequate 
                                accommodations for students who are 
                                limited English proficient and students 
                                with disabilities; and
                                    (III) may be a placement 
                                examination, end of course examination, 
                                college, workforce, or Armed Forces 
                                preparedness examination, or admissions 
                                examination, that measures secondary 
                                students' preparedness to succeed in 
                                postsecondary, credit-bearing courses.
                    (E) If the State has an officially designated 
                college preparatory curriculum at the time the State 
                applies for a grant under this section--
                            (i) describe the extent to which students 
                        who completed the college preparatory 
                        curriculum are more or less successful than 
                        other students, including students who did not 
                        complete a college preparatory curriculum, in 
                        entering and graduating from a program of study 
                        at an institution of higher education or 
                        entering the 21st century workforce or the 
                        Armed Forces;
                            (ii) examine the extent to which the 
                        expectations of the college preparatory 
                        curriculum are aligned with the entry standards 
                        of the State's institutions of higher 
                        education, including whether such curriculum 
                        enables secondary school students to enter 
                        credit-bearing coursework in higher education 
                        without the need for remediation; and
                            (iii) examine the extent to which the 
                        curriculum allows graduates to attain the 
                        skills necessary to enter the 21st century 
                        workforce or the Armed Forces.
                    (F) If the State has not designated a college 
                preparatory curriculum at the time the State applied 
                for a grant under this section, or if the curriculum 
                described in subparagraph (E) does not result in a 
                higher number of students enrolling in and graduating 
                from institutions of higher education or entering the 
                21st century workforce or the Armed Forces, or is not 
                aligned with the entry standards described in 
                subparagraph (E)(ii), develop a 21st century curriculum 
                that--
                            (i) may be adopted by the local educational 
                        agencies in the State for use in secondary 
                        schools;
                            (ii) enables secondary school students to 
                        enter credit-bearing coursework in higher 
                        education without the need for remediation;
                            (iii) allows graduates to attain the skills 
                        necessary to enter the 21st century workforce 
                        or the Armed Forces;
                            (iv) reflects the input of teachers, 
                        principals, school administrators, and college 
                        faculty; and
                            (v) focuses on providing rigorous core 
                        courses that reflect the State academic content 
                        standards and student academic achievement 
                        standards.
                    (G) Develop and make available specific 
                opportunities for extensive professional development 
                for teachers, paraprofessionals, principals, and school 
                administrators, to improve instruction and support 
                mechanisms for students using a curriculum described in 
                subparagraph (E) or (F).
                    (H) Develop a plan to provide remediation and 
                additional learning opportunities for students below 
                grade level to ensure that all students will have the 
                opportunity to meet the curricular standards of a 
                curriculum described in subparagraph (E) or (F).
                    (I) Use data gathered by the council to improve 
                instructional methods, better tailor student support 
                services, and serve as the basis for all school reform 
                initiatives.
                    (J) Implement activities designed to ensure the 
                enrollment of all students in rigorous coursework, 
                which may include--
                            (i) specifying the courses and performance 
                        levels required for acceptance into public 
                        institutions of higher education;
                            (ii) collaborating with institutions of 
                        higher education or other State educational 
                        agencies to develop assessments aligned to 
                        State academic content standards and a 
                        curriculum described in subparagraph (E) or 
                        (F), which assessments may be used as measures 
                        of student achievement in secondary school as 
                        well as for entrance or placement at 
                        institutions of higher education;
                            (iii) creating ties between elementary 
                        schools and secondary schools, and institutions 
                        of higher education, to offer--
                                    (I) accelerated learning 
                                opportunities, particularly with 
                                respect to mathematics, science, 
                                engineering, technology, and critical-
                                need foreign languages (as determined 
                                by the Secretary under section 2222) to 
                                secondary school students, which may 
                                include--
                                            (aa) granting postsecondary 
                                        credit for secondary school 
                                        courses;
                                            (bb) providing early 
                                        enrollment opportunities in 
                                        postsecondary education for 
                                        secondary students enrolled in 
                                        postsecondary-level coursework;
                                            (cc) creating dual 
                                        enrollment programs;
                                            (dd) creating satellite 
                                        secondary school campuses on 
                                        the campuses of institutions of 
                                        higher education; and
                                            (ee) providing 
                                        opportunities for higher 
                                        education faculty who are 
                                        highly qualified, as such term 
                                        is defined in section 9101 of 
                                        the Elementary and Secondary 
                                        Education Act of 1965 (20 
                                        U.S.C. 7801), to teach credit-
                                        bearing postsecondary courses 
                                        in secondary schools; and
                                    (II) professional development 
                                activities for teachers, which may 
                                include--
                                            (aa) mentoring 
                                        opportunities; and
                                            (bb) summer institutes;
                            (iv) expanding or creating higher education 
                        awareness programs for middle school and 
                        secondary school students;
                            (v) expanding opportunities for students to 
                        enroll in highly rigorous postsecondary 
                        preparatory courses, such as Advanced Placement 
                        and International Baccalaureate courses; and
                            (vi) developing a high-quality professional 
                        development curriculum to provide professional 
                        development opportunities for 
                        paraprofessionals, teachers, principals, and 
                        administrators.
            (2) Planning and implementation.--A State receiving a grant 
        under this section may use grant funds received for the first 
        fiscal year to form the council and plan the activities 
        described in paragraph (1). Grant funds received for subsequent 
        fiscal years shall be used for the implementation of the 
        activities described in such paragraph.
    (f) Reports and Publication.--
            (1) Reports.--
                    (A) Initial report.--Not later than 9 months after 
                a State receives a grant under this section, the State 
                shall submit a report to the Secretary that includes--
                            (i) an analysis of alignment and 
                        articulation across the State's systems of 
                        public education for prekindergarten through 
                        grade 16, including data that indicates the 
                        percent of students who--
                                    (I) graduate from secondary school 
                                with a regular diploma in the standard 
                                number of years;
                                    (II) complete a curriculum 
                                described in subparagraph (E) or (F) of 
                                subsection (e)(1);
                                    (III) matriculate into an 
                                institution of higher education 
                                (disaggregated by 2-year and 4-year 
                                degree-granting programs);
                                    (IV) are secondary school graduates 
                                who need remediation in reading, 
                                writing, mathematics, or science before 
                                pursuing credit-bearing post-secondary 
                                courses in English, mathematics, or 
                                science;
                                    (V) persist in an institution of 
                                higher education into the second year; 
                                and
                                    (VI) graduate from an institution 
                                of higher education within 150 percent 
                                of the expected time for degree 
                                completion (within 3 years for a 2-year 
                                degree program and within 6 years for a 
                                baccalaureate degree);
                            (ii) an analysis of the strengths and 
                        weaknesses of the State--
                                    (I) in transitioning students from 
                                the prekindergarten through grade 12 
                                education system into higher education, 
                                the 21st century workforce, and the 
                                Armed Forces; and
                                    (II) in transitioning students from 
                                the prekindergarten through grade 12 
                                education system into mathematics, 
                                science, engineering, technology, and 
                                critical-need foreign language degree 
                                programs at institutions of higher 
                                education;
                            (iii) an analysis of the quality and rigor 
                        of the State's curriculum described in 
                        subparagraph (E) or (F) of subsection (e)(1), 
                        and the accessibility of the curriculum to all 
                        students in prekindergarten through grade 12;
                            (iv) an analysis of the strengths and 
                        weaknesses of the State in recruiting, 
                        retaining, and supporting qualified teachers, 
                        including--
                                    (I) whether the State needs to 
                                recruit additional teachers at the 
                                secondary level for specific subjects 
                                (such as mathematics, science, 
                                engineering and technology education, 
                                (as such term is defined in section 
                                9101 of the Elementary and Secondary 
                                Education Act of 1965 (20 U.S.C. 7801), 
                                and critical-need foreign languages (as 
                                determined by the Secretary under 
                                section 2222)), particular schools, or 
                                local educational agencies; and
                                    (II) recommendations on how to set 
                                and achieve goals in this pursuit; and
                            (v) a detailed action plan that describes 
                        how the council will accomplish the goals and 
                        tasks required by the grant under this section, 
                        including a timeline for accomplishing all 
                        activities under the grant.
                    (B) Annual reports.--Not later than 1 year 
                following the submission of the initial report 
                described in subparagraph (A), and annually thereafter 
                for the duration of the grant, a State receiving a 
                grant under this section shall prepare and submit to 
                the Secretary a report that describes the State's 
                progress in accomplishing the goals and tasks required 
                by the grant, including progress on each item described 
                in subparagraph (A). The final annual report under this 
                subparagraph shall be submitted 1 year after the 
                expiration of the grant.
            (2) Publication.--A State submitting a report in accordance 
        with this subsection shall publish and widely disseminate the 
        report to the public, including posting the report on the 
        Internet.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $200,000,000 for fiscal year 
2007, and such sums as may be necessary for each of the 4 succeeding 
fiscal years.

SEC. 2116. COLLABORATIVE STANDARDS AND ASSESSMENTS GRANTS.

    (a) Definitions.--In this section:
            (1) Eligible state.--The term ``eligible State'' means a 
        State that demonstrates that it has analyzed and, where 
        applicable, revised the State standards and assessments, 
        through participation in a prekindergarten through grade 16 
        student preparedness council described in section 2115 or 
        through other State action, to ensure the standards and 
        assessments--
                    (A) are aligned with the demands of the 21st 
                century; and
                    (B) prepare students for entry into--
                            (i) credit-bearing coursework in higher 
                        education without the need for remediation;
                            (ii) the 21st century workforce; and
                            (iii) the Armed Forces
            (2) Eligible consortium.--
                    (A) In general.--The term ``eligible consortium'' 
                means a consortium of 2 or more eligible States that 
                agrees to allow the Secretary, under subsection (e), to 
                make available any assessment developed by the 
                consortium under this section to a State that so 
                requests, including a State that is not a member of the 
                consortium.
                    (B) Additional members.--An eligible consortium may 
                include, in addition to 2 or more eligible States, an 
                entity with the technical expertise to carry out a 
                grant under this section.
    (b) Program Authorized.--From amounts authorized under subsection 
(f), the Secretary shall award grants, on a competitive basis, to 
eligible consortia to enable the eligible consortia to develop common 
standards and assessments that--
            (1) are highly rigorous, internationally competitive, and 
        aligned with the demands of higher education, the 21st century 
        workforce, and the Armed Forces; and
            (2) in the case of assessments, set rigorous performance 
        standards comparable to rigorous national and international 
        benchmarks.
    (c) Application.--An eligible consortium desiring a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information as the Secretary may 
require.
    (d) Report.--Not later than 90 days after the end of the grant 
period, an eligible consortium receiving a grant under this section 
shall prepare and submit a report to the Secretary describing the grant 
activities.
    (e) Availability of Assessments.--The Secretary shall--
            (1) make available, to a State that so requests and at no 
        charge to the State, any rigorous, high-quality assessment 
        developed by an eligible consortium under this section; and
            (2) notify potential eligible States, at reasonable 
        intervals, of all assessments currently under development by 
        eligible consortia under this section.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $75,000,000 for fiscal year 2007 
and such sums as are necessary for each of the 4 succeeding fiscal 
years.

                    CHAPTER 2--INVESTING IN TEACHERS

SEC. 2121. PURPOSE.

    The purpose of this chapter is to increase the number and quality 
of teachers of mathematics, science, engineering and technology 
education, and critical-need foreign languages, in order to prepare 
students for entry into credit-bearing courses in higher education 
without the need for remediation, the 21st century workforce, and the 
Armed Forces.

SEC. 2122. DEFINITION OF ENGINEERING AND TECHNOLOGY EDUCATION.

    (a) Elementary and Secondary Education Act of 1965.--Section 9101 
of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801) 
is amended--
            (1) by redesignating paragraphs (19) through (43) as 
        paragraphs (20) through (44), respectively; and
            (2) by inserting after paragraph (18) the following:
            ``(19) Engineering and technology education.--The term 
        `engineering and technology education' means a curriculum and 
        instruction that--
                    ``(A) uses technology as a knowledge base or as a 
                way of teaching innovation using an engineering design 
                process and context;
                    ``(B) develops an appreciation and fundamental 
                understanding of technology through design skills and 
                the use of materials, tools, processes, and limited 
                resources;
                    ``(C) is taught in conjunction with applied 
                mathematics, science, language arts, fine arts, and 
                social studies as a part of a comprehensive education;
                    ``(D) applies the use of tools and skills employed 
                by a globalized skilled 21st century workforce that are 
                necessary for communication, manufacturing, 
                construction, energy systems, biomedical systems, 
                transportation systems, and other related fields; and
                    ``(E) through the application of engineering 
                principles and concepts, develops proficiency in 
                abstract ideas and in problem-solving techniques that 
                build a comprehensive education.''.
    (b) Higher Education Act of 1965.--Section 103 of the Higher 
Education Act of 1965 (20 U.S.C. 1003) is amended--
            (1) by redesignating paragraphs (5) through (16) as 
        paragraphs (6) through (17), respectively; and
            (2) by inserting after paragraph (4) the following:
            ``(5) Engineering and technology education.--The term 
        `engineering and technology education' has the meaning given 
        the term in section 9101 of the Elementary and Secondary 
        Education Act of 1965.''.

SEC. 2123. EXPANDING TEACHER LOAN FORGIVENESS.

    (a) Increased Amount; Applicability of Expanded Program to Reading 
Specialist.--Sections 428J(c)(3) and 460(c)(3) of the Higher Education 
Act of 1965 (20 U.S.C. 1078-10(c)(3), 1087j(c)(3)) are each amended--
            (1) by striking the paragraph heading and inserting 
        ``Additional amounts for teachers in mathematics, science, 
        engineering and technology education, a critical-need foreign 
        language, or special education'';
            (2) in the matter preceding subparagraph (A), by striking 
        ``$17,500'' and inserting ``$23,000''; and
            (3) in subparagraph (A)(ii), by striking ``or science'' and 
        all that follows through ``; and'' and inserting ``, science, 
        engineering and technology education, or a critical-need 
        foreign language (as determined by the Secretary under section 
        2222 of the New National Defense Education Act), on a full-time 
        basis; and''.
    (b) Annual Increments Instead of End of Service Lump Sums.--
            (1) FFEL loans.--Section 428J(c) of the Higher Education 
        Act of 1965 (20 U.S.C. 1078-10(c)) is amended by adding at the 
        end the following:
            ``(4) Annual increments.--Notwithstanding paragraph (1), in 
        the case of an individual qualifying for loan forgiveness under 
        paragraph (3), the Secretary shall, in lieu of waiting to 
        assume an obligation only upon completion of 5 complete years 
        of service, assume the obligation to repay--
                    ``(A) after each of the first and second years of 
                service by an individual in a position qualifying under 
                paragraph (3), 15 percent of the total amount of 
                principal and interest of the loans described in 
                paragraph (1) to such individual that are outstanding 
                immediately preceding such first year of such service;
                    ``(B) after each of the third and fourth years of 
                such service, 20 percent of such total amount; and
                    ``(C) after the fifth year of such service, 30 
                percent of such total amount.''.
            (2) Direct loans.--Section 460(c) of the Higher Education 
        Act of 1965 (20 U.S.C. 1087j(c)) is amended by adding at the 
        end the following:
            ``(4) Annual increments.--Notwithstanding paragraph (1), in 
        the case of an individual qualifying for loan cancellation 
        under paragraph (3), the Secretary shall, in lieu of waiting to 
        assume an obligation only upon completion of 5 complete years 
        of service, assume the obligation to repay--
                    ``(A) after each of the first and second years of 
                service by an individual in a position qualifying under 
                paragraph (3), 15 percent of the total amount of 
                principal and interest of the loans described in 
                paragraph (1) to such individual that are outstanding 
                immediately preceding such first year of such service;
                    ``(B) after each of the third and fourth years of 
                such service, 20 percent of such total amount; and
                    ``(C) after the fifth year of such service, 30 
                percent of such total amount.''.

SEC. 2124. EXCLUSION FROM GROSS INCOME OF COMPENSATION OF TEACHERS AND 
              PRINCIPALS IN CERTAIN HIGH-NEED SCHOOLS AND TEACHING 
              HIGH-NEED SUBJECTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139A the following new section:

``SEC. 139B. COMPENSATION OF CERTAIN TEACHERS AND PRINCIPALS.

    ``(a) Principals in High-Need Schools.--In the case of an 
individual employed as a principal in a high-need school during the 
taxable year, gross income does not include so much remuneration for 
such employment (which would but for this paragraph be includible in 
gross income) as does not exceed $15,000.
    ``(b) Teachers in High-Need Schools and of High-Need Subjects.--
            ``(1) In general.--In the case of an individual employed as 
        a teacher of high-need subjects and in a high-need school 
        during the taxable year, gross income does not include so much 
        remuneration for such employment (which would but for this 
        paragraph be includible in gross income) as does not exceed 
        $15,000.
            ``(2) Teacher of high-need subjects.--For purposes of this 
        subsection, the term `teacher of high-need subjects' means any 
        teacher in a public elementary or secondary school who--
                    ``(A)(i) teaches primarily 1 or more high-need 
                subjects in 1 or more of grades 9 through 12, or
                    ``(ii) teaches 1 or more high-need subjects in 1 or 
                more of grades kindergarten through 8,
                    ``(B) received a baccalaureate or similar degree 
                from an eligible educational institution (as defined in 
                section 25A(f)(2)) with a major in a high-need subject, 
                and
                    ``(C) is highly qualified (as defined in section 
                9101 of the Elementary and Secondary Education Act of 
                1965 or, in the case of a special education teacher, in 
                section 602 of the Individuals with Disabilities 
                Education Act).
            ``(3) High-need subjects.--For purposes of this subsection, 
        the term `high-need subject' means mathematics, science, 
        engineering and technology education, a critical-need foreign 
        language (as determined by the Secretary of Education under 
        section 2222 of the New National Defense Education Act), 
        special education, teaching English language learners, or any 
        other subject identified as a high-need subject by the 
        Secretary of Education for purposes of this section.
    ``(c) Limitation on Total Remuneration Taken Into Account.--In the 
case of any individual whose employment is described in subsections (a) 
and (b)(1), the total amount of remuneration which may be taken into 
account with respect to such employment under this section for the 
taxable year shall not exceed $25,000.
    ``(d) High-Need School.--For purposes of this section, the term 
`high-need school' means a public elementary school or secondary school 
that is eligible for assistance under section 1114(a) of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 6314(a)).''.
    (b) Clerical Amendment.--The table of sections of such part is 
amended by inserting after the item relating to section 139A the 
following new item:

        ``Sec. 139B. Compensation of certain teachers and 
                            principals.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to remuneration received in taxable years beginning after the 
date of the enactment of this Act.

SEC. 2125. MATHEMATICS AND SCIENCE EDUCATION PARTNERSHIPS AND TEACHER 
              INSTITUTES FOR THE 21ST CENTURY THROUGH THE NATIONAL 
              SCIENCE FOUNDATION.

    (a) Authorization of Appropriations.--
            (1) Sense of the senate.--It is the sense of the Senate 
        that--
                    (A) the activities of the mathematics and science 
                education partnerships of the National Science 
                Foundation, described in section 9 of the National 
                Science Foundation Authorization Act of 2002, meet a 
                distinct need separate from other Federal investments 
                in improving science, technology, engineering, and 
                mathematics education;
                    (B) funding for the mathematics and science 
                education partnerships for fiscal year 2007 should be 
                increased to the $400,000,000 level authorized for 
                fiscal year 2005 under section 5 of such Act, and 
                increased by 10 percent annually for each of the fiscal 
                years 2008 through 2011; and
                    (C) the increase in funding for the mathematics and 
                science education partnerships should be in addition to 
                any other amounts authorized or appropriated for the 
                National Science Foundation.
            (2) Authorization of appropriations for nsf mathematics and 
        science education partnerships.--There is authorized to be 
        appropriated to the National Science Foundation for education 
        and human resources to carry out the mathematics and science 
        education partnerships described in section 9 of the National 
        Science Foundation Authorization Act of 2002, in addition to 
        the amounts authorized under section 2214(b), amounts as 
        follows:
                    (A) For fiscal year 2007, $400,000,000, of which 
                $50,000,000 shall be for the teacher institutes for the 
                21st century under section 9(a)(3)(B) of the National 
                Science Foundation Authorization Act of 2002.
                    (B) For fiscal year 2008, $440,000,000, of which 
                $60,000,000 shall be for the teacher institutes for the 
                21st century under such section.
                    (C) For fiscal year 2009, $484,000,000, of which 
                $70,000,000 shall be for the teacher institutes for the 
                21st century under such section.
                    (D) For fiscal year 2010, $532,400,000, of which 
                80,000,000 shall be for the teacher institutes for the 
                21st century under such section.
                    (E) For fiscal year 2011, $585,640,000, of which 
                $90,000,000 shall be for the teacher institutes for the 
                21st century under such section.
    (b) Teacher Institutes for the 21st Century.--Section 9(a) of the 
National Science Foundation Authorization Act of 2002 (42 U.S.C. 
1862n(a)) is amended--
            (1) in paragraph (3)(B), by striking ``summer or'' and 
        inserting ``teacher institutes for the 21st century, as 
        described in paragraph (7)'';
            (2) by redesignating paragraph (7) as paragraph (8); and
            (3) by inserting after paragraph (6) the following:
            ``(7) Teacher institutes for the 21st century.--
                    ``(A) In general.--Teacher institutes for the 21st 
                century carried out in accordance with paragraph (3)(B) 
                shall--
                            ``(i) be carried out in conjunction with a 
                        school served by the local educational agency 
                        in the partnership;
                            ``(ii) be science, mathematics, 
                        engineering, and technology focused institutes 
                        that provide professional development to 
                        elementary school and secondary school teachers 
                        during the summer;
                            ``(iii) serve teachers who are considered 
                        highly qualified (as defined in section 9101 of 
                        the Elementary and Secondary Education Act of 
                        1965), teach high-need subjects, and teach in 
                        high-need schools (as defined in section 
                        1114(a) of the Elementary and Secondary 
                        Education Act of 1965);
                            ``(iv) focus on the theme and structure 
                        developed by the Director under subparagraph 
                        (C);
                            ``(v) be content-based and build on school 
                        year curricula that are object-centered, 
                        experiment-oriented, content-based, and 
                        grounded in current research;
                            ``(vi) ensure that any pedagogy component 
                        is designed around specific strategies that are 
                        relevant to teaching the subject and content on 
                        which teachers are being trained, which may 
                        include training teachers in the essential 
                        components of adolescent literacy instruction 
                        in order to improve student reading skills 
                        within the subject areas of mathematics, 
                        science, and engineering and technology 
                        education (as defined in section 9101 of the 
                        Elementary and Secondary Education Act of 
                        1965);
                            ``(vii) be a multiyear program that is 
                        conducted for a period of not less than 2 weeks 
                        per year;
                            ``(viii) provide for direct interaction 
                        between students and faculty of the teacher 
                        institute;
                            ``(ix) have a component that includes the 
                        use of the Internet;
                            ``(x) provide for followup training in the 
                        classroom during the academic year for a period 
                        of not less than 3 days, which may or may not 
                        be consecutive, for participants in the teacher 
                        institute, except that for teachers in rural 
                        local educational agencies, the followup 
                        training may be provided through the Internet;
                            ``(xi) provide teachers participating in 
                        the teacher institute with travel expense 
                        reimbursement, stipends, and classroom 
                        materials related to the teacher institute; and
                            ``(xii) establish a mechanism to provide 
                        supplemental support during the academic year 
                        for teacher institute participants.
                    ``(B) Optional members of the partnership.--In 
                addition to the partnership requirement under paragraph 
                (2), an institution of higher education or eligible 
                nonprofit organization (or consortia) desiring a grant 
                for a teacher institute for the 21st century may also 
                partner with a museum or educational partnership 
                organization.
                    ``(C) Theme and structure.--Each year, not later 
                than 180 days before the application deadline for a 
                grant under this section, the Director shall, in 
                consultation with a broad group of professional 
                education organizations, develop a theme and structure 
                for the teacher institutes of the 21st century 
                supported under paragraph (3)(B).''.

SEC. 2126. TEACH GRANTS; RECRUITING TEACHERS WITH MATHEMATICS, SCIENCE, 
              ENGINEERING, TECHNOLOGY, OR LANGUAGE MAJORS.

    (a) TEACH Grants.--Title II of the Higher Education Act of 1965 (20 
U.S.C. 1021 et seq.) is amended by adding at the end the following:

                         ``PART C--TEACH GRANTS

``SEC. 231. PURPOSES.

    ``The purposes of this part are--
            ``(1) to improve student academic achievement;
            ``(2) to help recruit and prepare teachers to meet the 
        national demand for a highly qualified teacher in every 
        classroom; and
            ``(3) to increase opportunities for Americans of all 
        educational, ethnic, class, and geographic backgrounds to 
        become highly qualified teachers.

``SEC. 232. PROGRAM ESTABLISHED.

    ``(a) Program Authority.--
            ``(1) Payments required.--For each of the fiscal years 2007 
        through 2014, the Secretary shall pay to each eligible 
        institution of higher education such sums as may be necessary 
        to pay to each eligible student (defined in accordance with 
        section 484) who files an application and agreement in 
        accordance with section 233, and qualifies under subsection 
        (a)(2) of such section, a TEACH Grant in the amount of $7,000 
        for each academic year during which that student is in 
        attendance at an institution of higher education.
            ``(2) Reference.--Grants made under this part shall be 
        known as `Teacher Education Assistance for College and Higher 
        Education Grants' or `TEACH Grants'.
    ``(b) Payment Methodology.--
            ``(1) Prepayment.--Not less than 85 percent of such sums 
        shall be advanced to eligible institutions prior to the start 
        of each payment period and shall be based upon an amount 
        requested by the institution as needed to pay eligible students 
        until such time as the Secretary determines and publishes in 
        the Federal Register with an opportunity for comment, an 
        alternative payment system that provides payments to 
        institutions in an accurate and timely manner, except that this 
        sentence shall not be construed to limit the authority of the 
        Secretary to place an institution on a reimbursement system of 
        payment.
            ``(2) Direct payment.--Nothing in this section shall be 
        interpreted to prohibit the Secretary from paying directly to 
        students, in advance of the beginning of the academic term, an 
        amount for which they are eligible, in cases where the eligible 
        institution elects not to participate in the disbursement 
        system required by paragraph (1).
            ``(3) Distribution of grants to students.--Payments under 
        this part shall be made, in accordance with regulations 
        promulgated by the Secretary for such purpose, in such manner 
        as will best accomplish the purposes of this part. Any 
        disbursement allowed to be made by crediting the student's 
        account shall be limited to tuition and fees and, in the case 
        of institutionally owned housing, room and board. The student 
        may elect to have the institution provide other such goods and 
        services by crediting the student's account.
    ``(c) Reductions in Amount.--
            ``(1) Part-time students.--In any case where a student 
        attends an institution of higher education on less than a full-
        time basis (including a student who attends an institution of 
        higher education on less than a half-time basis) during any 
        academic year, the amount of the TEACH Grant for which that 
        student is eligible shall be reduced in proportion to the 
        degree to which that student is not so attending on a full-time 
        basis, in accordance with a schedule of reductions established 
        by the Secretary for the purpose of this part, computed in 
        accordance with this part. Such schedule of reductions shall be 
        established by regulation and published in the Federal Register 
        in accordance with section 482 of this Act.
            ``(2) No exceeding cost of attendance.--No TEACH Grant for 
        a student under this part shall exceed the cost of attendance 
        (as defined in section 472) at the institution that such 
        student attends. If, with respect to any student, it is 
        determined that the amount of a TEACH Grant exceeds the cost of 
        attendance for that year, the amount of the TEACH Grant shall 
        be reduced until the TEACH Grant does not exceed the cost of 
        attendance at such institution.
    ``(d) Period of Eligibility for Grants.--
            ``(1) Undergraduate students.--The period during which an 
        undergraduate student may receive TEACH Grants shall be the 
        period required for the completion of the first undergraduate 
        baccalaureate course of study being pursued by the student at 
        the institution that the student attends, except that--
                    ``(A) any period during which the student is 
                enrolled in a noncredit or remedial course of study, 
                subject to paragraph (3), shall not be counted for the 
                purpose of this paragraph; and
                    ``(B) the total amount that a student may receive 
                under this part for undergraduate study shall not 
                exceed $28,000.
            ``(2) Graduate students.--The period during which a 
        graduate student pursuing a master's degree or doctoral degree 
        may receive TEACH Grants shall be the period required for the 
        completion of a course of study for the degree at the 
        institution the student attends, except that the total amount 
        that a student may receive under this part for graduate study 
        shall not exceed $14,000 for a student pursuing a master's 
        degree or $28,000 for a student pursuing a doctoral degree.
            ``(3) Remedial course; study abroad.--Nothing in this 
        section shall exclude from eligibility a course of study that 
        is noncredit or remedial in nature (including a course in 
        English language acquisition) if such course is determined by 
        the institution to be necessary to help the student be prepared 
        for the pursuit of a first undergraduate baccalaureate degree 
        or certificate or, in the case of courses in English language 
        instruction, to be necessary to enable the student to utilize 
        existing knowledge, training, or skills. Nothing in this 
        section shall exclude from eligibility a program of study 
        abroad that is approved for credit by the home institution at 
        which the student is enrolled.

``SEC. 233. ELIGIBILITY AND APPLICATIONS FOR GRANTS.

    ``(a) Applications; Demonstration of Eligibility.--
            ``(1) Filing required.--The Secretary shall from time to 
        time set dates by which students shall file applications for 
        TEACH Grants under this part. Each student desiring a TEACH 
        Grant for any year shall file an application therefore 
        containing such information and assurances as the Secretary may 
        deem necessary to enable the Secretary to carry out the 
        functions and responsibilities of this part.
            ``(2) Demonstration of eligibility.--Each such application 
        shall contain such information as is necessary to demonstrate 
        that--
                    ``(A) if the applicant is an enrolled student--
                            ``(i) the student is an eligible student 
                        for purposes of section 484 (other than 
                        subsection (r) of such section);
                            ``(ii) the student--
                                    ``(I) has a grade point average 
                                that is determined, under standards 
                                prescribed by the Secretary, to be 
                                comparable to a 3.25 average on a zero 
                                to 4.0 scale, except that, if the 
                                student is in the first year of a 
                                program of undergraduate education, 
                                such grade point average shall be 
                                determined on the basis of the 
                                student's cumulative secondary school 
                                grade point average; or
                                    ``(II) displayed high academic 
                                aptitude by receiving a score above the 
                                75th percentile on at least 1 of the 
                                batteries in an undergraduate or 
                                graduate school admissions test; and
                            ``(iii) the student is completing 
                        coursework and other requirements necessary to 
                        begin a career in teaching, or plans to 
                        complete such coursework and requirements prior 
                        to graduating; or
                    ``(B) if the applicant is a current or prospective 
                teacher applying for a grant to obtain a graduate 
                degree--
                            ``(i) the applicant is a teacher or a 
                        retiree from another occupation with expertise 
                        in a field in which there is a shortage of 
                        teachers, such as mathematics, science, 
                        engineering and technology education, a 
                        critical-need foreign language (as determined 
                        by the Secretary under section 2222 of the New 
                        National Defense Education Act), special 
                        education, English language acquisition, or 
                        another high-need subject; or
                            ``(ii) the applicant is or was a teacher 
                        who is using high-quality alternative 
                        certification routes, such as Teach for 
                        America, to get certified.
    ``(b) Agreements to Serve.--Each application under subsection (a) 
shall contain or be accompanied by an agreement by the applicant that--
            ``(1) the applicant will--
                    ``(A) serve as a full-time teacher for a total of 
                not less than 4 academic years within 8 years after 
                completing the course of study for which the applicant 
                receives a TEACH Grant under this part;
                    ``(B) teach--
                            ``(i) in a school eligible for assistance 
                        under section 1114(a) of the Elementary and 
                        Secondary Education Act of 1965; and
                            ``(ii) in any of the following fields: 
                        mathematics, science, engineering and 
                        technology education, a critical-need foreign 
                        language (as determined by the Secretary under 
                        section 2222 of the New National Defense 
                        Education Act), bilingual education, or special 
                        education, or as a reading specialist, or 
                        another field documented as high-need by the 
                        Federal Government, State government, or local 
                        educational agency and submitted to the 
                        Secretary;
                    ``(C) submit evidence of such employment in the 
                form of a certification by the chief administrative 
                officer of the school upon completion of each year of 
                such service; and
                    ``(D) comply with the requirements for being a 
                highly qualified teacher as defined in section 9101 of 
                the Elementary and Secondary Education Act of 1965 or, 
                in the case of a special education teacher, in section 
                602 of the Individuals With Disabilities Education Act; 
                and
            ``(2) in the event that the applicant is determined to have 
        failed or refused to carry out such service obligation, the sum 
        of the amounts of such TEACH Grants will be treated as a loan 
        and collected from the applicant in accordance with subsection 
        (c) and the regulations thereunder.
    ``(c) Repayment for Failure To Complete Service.--In the event that 
any recipient of a TEACH Grant fails or refuses to comply with the 
service obligation in the agreement under subsection (b), the sum of 
the amounts of such TEACH Grants provided to such recipient shall be 
treated as a Direct Loan under part D of title IV, and shall be subject 
to repayment in accordance with terms and conditions specified by the 
Secretary in regulations promulgated to carry out this part.

``SEC. 234. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$600,000,000 for fiscal year 2007 and such sums as may be necessary for 
each of the 4 succeeding fiscal years.

 ``PART D--RECRUITING TEACHERS WITH MATHEMATICS, SCIENCE, ENGINEERING, 
                     TECHNOLOGY, OR LANGUAGE MAJORS

``SEC. 241. PROGRAM AUTHORIZED.

    ``(a) Definition of High-Need School.--In this section, the term 
`high-need school' means a school described in section 1114(a) of the 
Elementary and Secondary Education Act of 1965.
    ``(b) Grants Authorized.--
            ``(1) In general.--From the amounts appropriated under 
        section 242, the Secretary shall make competitive grants to 
        institutions of higher education to improve the availability 
        and recruitment of teachers from among students majoring in 
        mathematics, science, engineering, technology, a critical-need 
        foreign language (as determined by the Secretary under section 
        2222 of the New National Defense Education Act), special 
        education, or teaching the English language to students with 
        limited English proficiency.
            ``(2) Priority.--In awarding grants under paragraph (1), 
        the Secretary shall give priority to institutions of higher 
        education offering programs that--
                    ``(A) focus on preparing teachers in subjects in 
                which there is a shortage of highly qualified teachers 
                and increasing the number of teachers from minority or 
                underrepresented groups; and
                    ``(B) prepare students to teach in high-need 
                schools.
    ``(c) Application.--Any institution of higher education desiring to 
obtain a grant under this section shall submit to the Secretary an 
application at such time, in such form, and containing such information 
and assurances as the Secretary may require, which shall--
            ``(1) include reporting on baseline production of 
        teachers--
                    ``(A) with expertise in mathematics, science, a 
                critical-need foreign language, special education, or 
                teaching students with limited English proficiency;
                    ``(B) from minorities or underrepresented groups; 
                and
                    ``(C) who teach for 5 years or more in a high-need 
                school; and
            ``(2) establish a goal and timeline for increasing the 
        number of teachers described in each subparagraph of paragraph 
        (1) who are prepared for teaching by the institution.
    ``(d) Grant Award Amounts.--In determining the amount of a grant 
award under this section to an institution of higher education, the 
Secretary shall consider--
            ``(1) the extent to which the institution--
                    ``(A) focuses on preparing teachers in subjects in 
                which there is a shortage of highly qualified teachers 
                and increasing the number of teachers from minority or 
                underrepresented groups; and
                    ``(B) prepares students to teach in high-need 
                schools; and
            ``(2) in the case of an institution that has previously 
        received a grant under this section, the progress made by the 
        institution in increasing the number of teachers described in 
        subsection (c)(1), as compared to the baseline production of 
        such teachers reported in the institution's initial 
        application.
    ``(e) Use of Funds.--Funds made available by a grant under this 
section--
            ``(1) shall be used to create new recruitment incentives to 
        teaching for students from other majors, with an emphasis on 
        high-need subjects such as mathematics, science, engineering 
        and technology education, a critical-need foreign language, 
        special education, and teaching the English language to 
        students with limited English proficiency and other subjects 
        identified as high-need by the Federal Government, State 
        government, or local educational agency;
            ``(2) may be used to upgrade the curriculum in order to 
        provide all students studying to become teachers with high-
        quality instructional strategies for teaching reading and 
        teaching the English language to students with limited English 
        proficiency, and for modifying instruction to teach students 
        with special needs;
            ``(3) may be used to integrate school of education faculty 
        with other arts and science faculty in mathematics, science, 
        engineering, technology, a critical-need foreign language, or 
        teaching the English language to students with limited English 
        proficiency, through steps such as--
                    ``(A) dual appointments for faculty between schools 
                of education and schools of arts and science or 
                engineering; and
                    ``(B) integrating coursework with clinical 
                experience;
            ``(4) may be used to develop strategic plans between 
        schools of education and local educational agencies to better 
        prepare teachers for high-need schools, including the creation 
        of professional development partnerships for training new 
        teachers in state-of-the-art practice;
            ``(5) may be used to create pilot programs to foster 
        collaborations at the institution of higher education between a 
        school of science, mathematics, or engineering, or a foreign 
        language department or language center, and a school of 
        education in order to enable the collaborating entities to 
        develop a 4-year program of study that would combine a 
        baccalaureate degree in mathematics, science, engineering, or 
        technology with concurrent teacher certification or licensure; 
        and
            ``(6) may be used to develop and implement a master's 
        degree program for current mathematics, science, or engineering 
        and technology education teachers that--
                    ``(A) will strengthen the participating teachers' 
                subject area knowledge and pedagogical skills; and
                    ``(B) shall be designed to allow a teacher to 
                enroll in the program on a part-time basis and obtain a 
                master's degree within a 2-year period.
    ``(f) Reports.--For each year that an institution of higher 
education receives a grant under this section, the institution of 
higher education shall prepare and submit to the Secretary an annual 
report documenting the baseline data regarding the teachers described 
in subsection (c)(1) and the progress made toward increasing the number 
of such teachers, as described in subsection (c)(2).

``SEC. 242. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$500,000,000 for fiscal year 2007 and such sums as may be necessary for 
each of the 4 succeeding fiscal years.''.
    (b) Part A Authorization.--Section 210 of the Higher Education Act 
of 1965 (20 U.S.C. 1030) is amended by striking ``$300,000,000 for 
fiscal year 1999'' and inserting ``$400,000,000 for fiscal year 2007''.

               CHAPTER 3--ENSURING COLLEGE ACCESS FOR ALL

SEC. 2131. CONTRACT FOR EDUCATIONAL OPPORTUNITY (CEO) GRANTS.

    (a) Definitions.--In this section:
            (1) Cohort.--The term ``cohort'' means a group of students 
        in a State who are in the same grade for an identified school 
        year.
            (2) Expected family contribution.--The term ``expected 
        family contribution'', with respect to a student, means the 
        student's expected family contribution as determined in 
        accordance with part F of the Higher Education Act of 1965 (20 
        U.S.C. 1087kk et seq.).
            (3) Unmet need.--The term ``unmet need'', with respect to a 
        student, means the difference between the cost of attendance 
        (as defined in section 472 of the Higher Education Act of 1965 
        (20 U.S.C. 108711) to attend an institution of higher education 
        for an academic year and the resources available to the student 
        for such academic year, including Federal, State, and 
        institutional financial assistance and the student's expected 
        family contribution.
    (b) Purposes.--The purposes of this section are--
            (1) to encourage States to provide a financial aid 
        guarantee for low-income students;
            (2) to increase student academic performance and 
        achievement;
            (3) to increase public school secondary school graduation 
        rates as well as enrollment, persistence, and graduation rates 
        in public and private institutions of higher education, 
        especially among low-income and underrepresented minority 
        students; and
            (4) to improve the overall quality and supply of a State's 
        workforce.
    (c) Payments to States Authorized.--
            (1) In general.--The Secretary shall pay to States the 
        Federal share, as determined under subsection (e), in order to 
        assist the States in awarding contract for educational 
        opportunity grants (referred to in this section as ``CEO 
        grants''), under subsection (g) to students in a cohort who 
        sign a contract for educational opportunity in grade 8 and 
        satisfy the requirements of the contract. A CEO grant shall 
        provide each such student with a need-based financial aid 
        guarantee, in an amount equal to the student's calculated unmet 
        need to attend a 2- or 4-year degree-granting public 
        institution of higher education in the State, to enable the 
        student to attend a 2- or 4-year degree-granting public or 
        private institution of higher education in the State.
            (2) Mandatory spending.--This subsection constitutes budget 
        authority in advance of appropriations Acts and represents the 
        obligation of the Secretary to provide for the payment of 
        amounts provided under this subsection.
    (d) Application.--
            (1) In general.--A State desiring a payment under 
        subsection (c) shall submit, through the State agency 
        identified in the application, to the Secretary an application 
        at such time, in such manner, and containing such information 
        as the Secretary may require.
            (2) Application.--An application submitted under paragraph 
        (1) shall include the following:
                    (A) A description of how the State will establish a 
                State benchmark for increasing the overall public 
                school secondary school graduation rate and the 
                enrollment, persistence, and graduation rates at the 
                State's 2- and 4-year degree-granting public and 
                private institutions of higher education, as well as a 
                description of strategies and activities the State will 
                employ to achieve the State's set goals as reflected in 
                the benchmark.
                    (B) The identification of the State agency that 
                will administer the CEO grants program, and a 
                description of the State agency's capacity to 
                administer such program.
                    (C) A description of the entities that will 
                contribute funds for the non-Federal share of the CEO 
                grants program.
                    (D) A description of the State's academic and 
                nonacademic components of the contract for educational 
                opportunity, including 100 hours of community service, 
                and how the State defines satisfactory academic 
                progress toward completing coursework that leads to a 
                secondary school diploma.
                    (E) A description of how the State agency will 
                provide access for all students to a State curriculum 
                that prepares the students to enter into credit-bearing 
                coursework in higher education without the need for 
                remediation, the 21st century workforce, or the Armed 
                Forces.
                    (F) A description of how the State agency will 
                notify students in grade 7 of their eligibility to 
                participate in the CEO grants program and earn a CEO 
                grant, as well as how the State will specifically 
                target students from low-income and underrepresented 
                minority families.
                    (G) A description of how the State agency will 
                regularly communicate with a cohort from the time the 
                students sign the contract for educational opportunity 
                through the period that the students are eligible for 
                CEO grants.
                    (H) An assurance that the State will award a CEO 
                grant, in the amount of the student's calculated unmet 
                need to attend a 2- or 4-year degree-granting public 
                institution of higher education in the State, to each 
                student who successfully meets the requirements of the 
                contract for educational opportunity.
                    (I) An assurance that decisions regarding the 
                State's higher education budget shall not lead to 
                increases in tuition and fees at public 2- or 4-year 
                degree-granting institutions of higher education that 
                are greater than the Consumer Price Index.
                    (J) An assurance that the State shall maintain 
                current levels of investment in State student aid 
                programs in addition to providing the non-Federal share 
                required under subsection (e)(4).
    (e) Payments; Use of Funds.--
            (1) In general.--The Secretary shall pay the Federal share 
        of the CEO grants program, in the amount described in paragraph 
        (4), to each State that submits a complete application pursuant 
        to subsection (d).
            (2) Use of funds.--The Federal share and non-Federal share 
        described in paragraph (4) shall be used exclusively for 
        awarding financial aid grants to cover the unmet need for all 
        students in a cohort who have successfully met the components 
        of the State's contract, except that a State may use not more 
        than 2 percent of such funds for administrative purposes.
            (3) Subsequent payments.--
                    (A) In general.--The Secretary shall make 
                subsequent annual payments for future cohorts to 
                States, in accordance with paragraph (4), that receive 
                a payment under this section and that are not 
                determined to be ineligible under subparagraph (B).
                    (B) Ineligibility.--
                            (i) In general.--Except as provided in 
                        clause (ii), the Secretary shall determine a 
                        State to be temporarily ineligible to receive a 
                        payment under subparagraph (A) if--
                                    (I) the State fails to submit an 
                                annual report pursuant to subsection 
                                (h); or
                                    (II) the Secretary determines, 
                                based on information submitted in the 
                                annual report submitted under 
                                subsection (h), that--
                                            (aa) the State is not 
                                        effectively meeting the terms 
                                        and goals of the application; 
                                        or
                                            (bb) that the State is not 
                                        making satisfactory progress 
                                        toward the benchmark set forth 
                                        in subsection (d)(2)(A).
                            (ii) Ineligibility not to affect certain 
                        cohorts.--A determination of ineligibility to 
                        receive subsequent payments for future cohorts 
                        under clause (i) with respect to a State shall 
                        not apply to payments for students in a cohort 
                        in the State who are in grade 8, 9, 10, 11, or 
                        12 at the time of the determination.
                            (iii) Reinstatement.--If the Secretary 
                        determines a State is ineligible under clause 
                        (i), the Secretary may enter into an agreement 
                        with the State setting forth the terms and 
                        conditions under which the State may regain 
                        eligibility to receive payments under this 
                        section.
            (4) Matching requirement.--The amount of the Federal share 
        under this section for an academic year shall be equal to the 
        amount of the non-Federal share provided by the State for such 
        year. The sum of the Federal share and the non-Federal share 
        for an academic year shall be an amount equal to the total 
        unmet need, for the academic year, to attend a 2- or 4-year 
        degree-granting public institution of higher education in the 
        State, for all students in an identified cohort that complete 
        all eligibility requirements of a contract for educational 
        opportunity.
    (f) Reallotment or Redistribution of Funds.--If funds remain for a 
cohort for 6 years after the cohort has graduated from secondary 
school, the State shall return excess Federal funds to the Secretary. 
Any returned excess funds shall be used by the Secretary to carry out 
the program under this section.
    (g) CEO Grants.--
            (1) In general.--A State receiving a payment under 
        subsection (c) for a cohort shall provide, in the amount 
        determined under paragraph (3), a CEO grant to each student in 
        the cohort who--
                    (A) successfully completes the requirements of the 
                contract for educational opportunity; and
                    (B) enrolls in a 2- or 4-year degree-granting 
                institution of higher education in the State not later 
                than 2 years after receiving a secondary school 
                diploma.
            (2) Contracts for educational opportunity.--
                    (A) In general.--A student who is in a cohort for 
                which a State is eligible for payments under subsection 
                (c) and who desires to receive a CEO grant shall sign a 
                contract for educational opportunity when the student 
                begins grade 8 stating that the student will carry out 
                all of the following by the time the student graduates 
                from secondary school:
                            (i) Receive a secondary school diploma.
                            (ii) By the beginning of grade 11 (except 
                        as provided in subparagraph (B)), demonstrate 
                        satisfactory academic progress (as determined 
                        by the State agency) toward completing 
                        coursework that leads to a secondary school 
                        diploma.
                            (iii) Complete the academic components of 
                        the State contract for educational opportunity, 
                        as determined by the State agency.
                            (iv) Complete the nonacademic portion of 
                        the State contract for educational opportunity 
                        (as determined by the State agency), including 
                        100 hours of community service, of which at 
                        least 50 hours of community service shall be 
                        completed before the student begins grade 11 
                        (except as provided in subparagraph (B)).
                            (v) Apply for admission to a 2- or 4-year 
                        degree-granting institution of higher education 
                        in the State.
                            (vi) Preceding the date that the student 
                        intends to enroll in an institution of higher 
                        education, file for Federal financial aid.
                    (B) Special circumstances.--
                            (i) Transition.--During the academic year 
                        following the date of enactment of this Act, in 
                        the case of students in a cohort who are in 
                        grade 9, 10, 11, or 12 for such academic year, 
                        the students of such cohort shall be eligible 
                        for CEO grants if such students sign the 
                        contract for educational opportunity during the 
                        academic year and otherwise complete all of the 
                        eligibility requirements for the contract for 
                        educational opportunity under subparagraph (A) 
                        as applicable and by such time as determined by 
                        the State and approved by the Secretary.
                            (ii) Students who move into the state.--In 
                        the case of a student who moves into a State 
                        after the student begins grade 8, such student 
                        shall be eligible for a CEO grant from such 
                        State if such student signs the contract for 
                        educational opportunity at the time the student 
                        moves into the State and the student otherwise 
                        completes all of the eligibility requirements 
                        for the contract for educational opportunity 
                        under subparagraph (A), as applicable and by 
                        such time as determined by the State and 
                        approved by the Secretary.
            (3) Amount of ceo grants.--
                    (A) In general.--A CEO grant for an academic year 
                shall be in an amount equal to the student's calculated 
                unmet need to attend a 2- or 4-year degree-granting 
                public institution of higher education in the State for 
                such year.
                    (B) Private institutions.--A CEO grant for a 
                student who elects to enroll in a private 2- or 4-year 
                degree-granting public institution of higher education 
                in the State shall be in the amount described in 
                subparagraph (A).
            (4) Multiple grants.--
                    (A) In general.--A State shall award a CEO grant to 
                a student who meets the requirements of this section 
                for each academic year that the student attends a 2- or 
                4-year degree-granting institution of higher education 
                in the State.
                    (B) Maximum number of grants.--During the 6-year 
                period beginning on the date of receipt of a CEO grant 
                under this subsection, a student who meets the 
                requirements of this subsection shall be eligible to 
                receive a CEO grant for each year that the student is 
                enrolled in a 2- or 4-year degree-granting institution 
                of higher education in the State, except that no 
                student shall receive a total of more than 4 CEO 
                grants.
            (5) Ineligibility.--A student who otherwise meets the 
        requirements for a CEO grant shall be ineligible if the student 
        fails to maintain an acceptable level of academic standing, as 
        determined by the institution of higher education that the 
        student attends, or is dismissed from the institution of higher 
        education for disciplinary reasons.
    (h) Evaluation and Report.--A State receiving a payment under 
subsection (c) for a cohort shall prepare and submit an annual report 
to the Secretary on the success of the cohort. The State report shall 
include the following:
            (1) The following information relating to the students in 
        the cohort who sign a contract for educational opportunity, as 
        applicable:
                    (A) The participation and completion rates in the 
                CEO grants program under this section.
                    (B) The public school secondary school graduation 
                rate and how the rate relates to the established State 
                benchmark described in subsection (d)(2).
                    (C) The rate of enrollment in public and private 
                institutions of higher education and how the rate 
                relates to the established State benchmark.
                    (D) The rate of persistence in public and private 
                institutions of higher education and how the rate 
                relates to the established State benchmark.
                    (E) The rate of graduation from public and private 
                institutions of higher education and how the rate 
                relates to the established State benchmark.
                    (F) Average CEO grant aid per student.
                    (G) A description of, and justification for, any 
                increase in tuition and fees at the public 2- or 4-year 
                degree-granting institutions of higher education in the 
                State.
            (2) A comparison of the rates described in subparagraphs 
        (B) through (E) of paragraph (1) for students in the cohort who 
        sign a contract for educational opportunity to such rates for a 
        representative sample of students in the cohort in the State 
        who do not sign a contract.

  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.

    The purpose of this chapter is to increase the number of low-income 
and middle-income students who pursue careers in mathematics, science, 
technology, engineering, and critical-need foreign languages.

SEC. 2212. GRANTS FOR STRENGTHENING MATHEMATICS, SCIENCE, AND 
              ENGINEERING AND TECHNOLOGY EDUCATION INFRASTRUCTURE.

    (a) Grants for Strengthening Mathematics, Science, and Engineering 
and Technology Education Infrastructure.--Part D of title V of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 7241 et seq.) 
is amended by adding at the end 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.

    ``(a) Purpose.--The purpose of this section is to improve 
mathematics, science, and engineering and technology education 
infrastructure in public elementary schools and secondary schools to 
facilitate improved educational opportunities for all students.
    ``(b) Definition of High-Need.--In this section, the term `high-
need', when used with respect to a school, means a public elementary 
school or secondary school that is eligible for assistance under 
section 1114(a) of the Elementary and Secondary Education Act of 1965.
    ``(c) Program Authorized.--From amounts appropriated under section 
5401(b) for a fiscal year, and subject to subsection (d), the 
Secretary, in consultation with the Director of the National Science 
Foundation, shall award grants to local educational agencies to enable 
the local educational agencies to carry out the activities described in 
subsection (g).
    ``(d) Reservation of Funds.--From amounts appropriated under 
section 5401(b) for a fiscal year, the Secretary shall reserve a total 
of \1/2\ of 1 percent for the Secretary of the Interior to award grants 
to elementary schools and secondary schools operated or funded by the 
Bureau of Indian Affairs to enable such elementary schools and 
secondary schools to carry out the activities described in subsection 
(g).
    ``(e) Application.--
            ``(1) In general.--A local educational agency desiring a 
        grant under subsection (c) shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may reasonably require.
            ``(2) Contents.--The application described in paragraph (1) 
        shall include the following:
                    ``(A) A description of the activities under 
                subsection (g) for which assistance is sought and the 
                costs of such activities.
                    ``(B) A description of the process through which 
                the local educational agency identified the activities 
                described in subparagraph (A).
                    ``(C) Clear principles that the local educational 
                agency used to determine the priority of qualifying 
                activities under this section that prioritize the use 
                of quantitative data, such as student achievement on 
                standardized assessments and income data, in order to 
                give priority to projects benefiting high-need schools.
                    ``(D) An assurance that the local educational 
                agency will provide a complete and detailed accounting 
                of the use of grant funds awarded to the local 
                educational agency under this section.
                    ``(E) A description of the evaluation process that 
                will assess the accomplishments of the program.
    ``(f) Application Approval.--
            ``(1) Determination in consultation with national science 
        foundation.--The Secretary shall review each application 
        submitted under subsection (e) to determine whether the 
        application is sufficient. In making such a determination, the 
        Secretary shall consult with the Director of the National 
        Science Foundation, in part to ensure that the application is 
        coordinated with any preexisting National Science Foundation 
        initiatives in the State.
            ``(2) Determination of insufficient application.--If the 
        Secretary determines that an application submitted by a local 
        educational agency does not meet the requirements of paragraph 
        (1) or subsection (e), the Secretary shall provide the local 
        educational agency with--
                    ``(A) a written explanation of why the application 
                did not comply with such requirements; and
                    ``(B) an opportunity to submit an amended 
                application.
            ``(3) Priority.--In awarding grants under this section, the 
        Secretary shall give priority to local educational agencies 
        with a high percentage of high-need schools.
    ``(g) Required Use of Funds.--A local educational agency that 
receives a grant under subsection (c) shall use grant funds, in 
accordance with the application of the local educational agency, to 
carry out not less than 1 of the following:
            ``(1) The purchase or refurbishment of mathematics, 
        science, and engineering and technology education equipment, 
        including laboratory equipment.
            ``(2) The purchase of instructional materials or curricula 
        with proven effectiveness in improving mathematics, science, 
        and engineering and technology education outcomes, including 
        age-appropriate reading materials on varying grade levels that 
        provide poor readers with access to mathematics, science, and 
        engineering and technology education subject matter.
            ``(3) Support for a science, mathematics, or engineering 
        and technology education specialist in each school who is 
        responsible for--
                    ``(A) assisting in the implementation of the 
                school's science, mathematics, or engineering and 
                technology education program;
                    ``(B) assisting other teachers in delivering 
                quality instruction;
                    ``(C) assisting in identifying and developing 
                professional development opportunities tied to the 
                curriculum; and
                    ``(D) providing guidance on curricula, equipment, 
                and other components necessary for high-quality 
                instruction.
            ``(4) Any other directly related activity--
                    ``(A) identified by the local educational agency in 
                the application required under subsection (e); and
                    ``(B) approved by the Secretary, in consultation 
                with the Director of the National Science Foundation.
    ``(h) Report.--
            ``(1) In general.--A local educational agency that receives 
        a grant under this section for a fiscal year shall submit, not 
        later than January 31 of the succeeding fiscal year, a report 
        in such form and containing such information as the Secretary 
        determines to be reasonably necessary to evaluate the 
        compliance of the local educational agency with the provisions 
        of this section.
            ``(2) Contents.--The report described in paragraph (1) 
        shall include the following:
                    ``(A) A description of the activities carried out 
                with grant funds under this section.
                    ``(B) A complete and detailed accounting of the use 
                of funds awarded under this section, including how the 
                local educational agency gave priority to projects 
                benefiting students served by high-need schools.
                    ``(C) A description of how the local educational 
                agency assesses the impact of the program.
                    ``(D) A description of how students were served by 
                the projects assisted under this section, including any 
                expansion of inquiry-based learning opportunities, and 
                an accounting of the approximate number of students so 
                served.
                    ``(E) An accounting of student academic progress 
                made as a result of activities funded under this 
                section, using previously established statewide 
                academic achievement assessments in mathematics and 
                science.
                    ``(F) Qualitative testimony from students, 
                teachers, administrators, or parents on the effect of 
                activities funded under this section.
            ``(3) Penalty.--A local educational agency that receives a 
        grant under this section for a fiscal year but does not submit 
        the report required under this subsection shall not be eligible 
        to receive any subsequent grant funds under this section.''.
    (b) Authorization of Appropriations.--Section 5401 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 7241) is 
amended--
            (1) by striking ``this part'' and inserting ``this part 
        (excluding subpart 22)'';
            (2) by striking ``There are'' and inserting the following:
    ``(a) General Authorization.--There are''; and
            (3) by adding at the end the following:
    ``(b) Mathematics, Science, and Engineering and Technology 
Education Infrastructure.--There are authorized to be appropriated to 
carry out subpart 22, $500,000,000 for fiscal year 2007 and such sums 
as may be necessary for each of the 4 succeeding fiscal years.''.
    (c) Table of Contents.--The table of contents in section 2 of the 
Elementary and Secondary Education Act of 1965 is amended by inserting 
after the item relating 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.''.

SEC. 2213. SCIENCE, TECHNOLOGY, ENGINEERING, MATHEMATICS, AND CRITICAL-
              NEED FOREIGN LANGUAGE SCHOLARS.

    (a) Definitions.--In this section:
            (1) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
    (b) Program Authorized.--From amounts appropriated under subsection 
(j) for a fiscal year, the Secretary shall carry out a program to award 
grants, on a competitive basis, to institutions of higher education (or 
consortia of such institutions) to enable the institutions of higher 
education (or consortia) to provide scholarships to make higher 
education tuition free for low-income and middle-income undergraduate 
and graduate students who are enrolled at the institutions of higher 
education to earn degrees in science, technology, engineering, 
mathematics, and critical-need foreign languages (as determined by the 
Secretary under section 2222).
    (c) Application.--An institution of higher education or a 
consortium seeking a grant under this section shall submit an 
application to the Secretary at such time, in such manner, and 
containing such information as the Secretary may require.
    (d) Award Basis.--In awarding grants under this section, the 
Secretary shall give special consideration to programs that--
            (1) are a central organizational focus of the institution 
        of higher education or consortium;
            (2) enable scholarship recipients to become successful 
        members of the science, technology, engineering, mathematics, 
        and critical-need foreign language 21st century workforce; and
            (3) recruit undergraduate and graduate students, especially 
        female and underrepresented minority students, who would 
        otherwise not pursue careers in science, technology, 
        engineering, mathematics, or a critical-need foreign language.
    (e) Use of Funds.--An institution of higher education or a 
consortium receiving a grant under this section shall use the grant 
funds to carry out a program to encourage low-income and middle-income 
undergraduate and graduate students enrolled at the institution of 
higher education, or at an institution of higher education that is a 
member of the consortium, respectively, to earn degrees in science, 
technology, engineering, mathematics, or a critical-need foreign 
language, through administering scholarships in accordance with 
subsection (f).
    (f) Scholarships.--
            (1) Scholarship requirements.--Scholarships under this 
        subsection shall be available to a student enrolled at an 
        institution of higher education that receives a grant under 
        this section or is a member of a consortium that receives a 
        grant under this section--
                    (A)(i) whose parents have an adjusted gross income 
                for the most recent tax year available of--
                            (I) less than $53,000 if single; or
                            (II) less than $107,000 if married; or
                    (ii) in the case of a student who is independent 
                (as defined in section 480 of the Higher Education Act 
                of 1965 (20 U.S.C. 1087vv), who meets the adjusted 
                gross income requirements of clause (i); and
                    (B)(i) in the case of a student in the first or 
                second year of a program of undergraduate education, 
                who enrolls in prerequisite courses for a baccalaureate 
                degree with a major in science, technology, 
                engineering, mathematics, or a critical-need foreign 
                language, as determined by the institution of higher 
                education that the student attends;
                    (ii) in the case of a student who has completed 2 
                years of a program of undergraduate education, who is 
                pursuing a baccalaureate degree with a major in 
                science, technology, engineering, mathematics, or a 
                critical-need foreign language; or
                    (iii) in the case of a graduate student, who is 
                pursuing a graduate degree in science, technology, 
                engineering, mathematics, or a critical-need foreign 
                language.
            (2) Amount.--
                    (A) Annual amount.--An institution of higher 
                education or consortium that receives a grant under 
                this section shall award a scholarship to a student 
                described in paragraph (1) in an amount that does not 
                exceed $5,500 per academic year, except that no student 
                shall receive for any academic year an amount that is 
                more than the cost of attendance, as determined under 
                section 472 of the Higher Education Act of 1965 (20 
                U.S.C. 1087ll)), at the institution where the student 
                is enrolled for such academic year.
                    (B) Reductions in amount for part-time students.--
                In any case where a student attends an institution of 
                higher education on less than a full-time basis 
                (including a student who attends an institution of 
                higher education on less than a half-time basis) during 
                any academic year, the amount of the scholarship for 
                which that student is eligible shall be reduced in 
                proportion to the degree to which that student is not 
                so attending on a full-time basis, in accordance with a 
                schedule of reductions established by the Secretary for 
                the purpose of this section, computed in accordance 
                with this subsection. Such schedule of reductions shall 
                be established by regulation and published in the 
                Federal Register in accordance with the schedule 
                described in section 482 of the Higher Education Act of 
                1965 (20 U.S.C. 1089).
                    (C) Cumulative amount.--An institution of higher 
                education or consortium receiving a grant under this 
                section may award an individual a scholarship under 
                this subsection for more than 1 year, or for both 
                undergraduate and graduate study, except that--
                            (i) no individual shall receive a total 
                        amount of scholarship support under this 
                        subsection for undergraduate study that is more 
                        than $22,000; and
                            (ii) no individual shall receive a total 
                        amount of scholarship support under this 
                        section for graduate study that is more than 
                        $22,000.
    (g) Conditions of Support.--As a condition of acceptance of a 
scholarship under this section, a recipient shall enter into an 
agreement with the institution of higher education or consortium--
            (1) accepting the terms of the scholarship; and
            (2) agreeing to provide the awarding institution of higher 
        education or consortium with up-to-date contact information and 
        to participate in surveys provided by the Secretary of 
        Education, institution of higher education, or consortium as 
        part of an assessment program.
    (h) Failure To Complete Obligation.--
            (1) General rule.--An individual who has received a 
        scholarship under this section shall be liable to the 
        institution of higher education or consortium that awarded the 
        scholarship, as well as to the United States, for the amount of 
        the scholarship, if such individual--
                    (A) fails to maintain an acceptable level of 
                academic standing in the institution of higher 
                education in which the individual is enrolled, as 
                determined by the institution of higher education;
                    (B) is dismissed from such institution for 
                disciplinary reasons; or
                    (C) withdraws from the baccalaureate or graduate 
                degree program for which the scholarship was made 
                before the completion of such program, and does not 
                transfer into another program that meets the 
                requirements of subsection (f)(1)(B).
            (2) Exclusion from future scholarships.--If a circumstance 
        described in paragraph (1) occurs, all of the following shall 
        apply:
                    (A) Nonrenewal of scholarship.--The institution of 
                higher education or consortium shall not renew the 
                scholarship to the individual. However, at the 
                discretion of the institution of higher education or 
                consortium awarding the scholarship, an individual may 
                regain eligibility for a scholarship under this section 
                after completing not less than 1 academic term at the 
                institution, if the individual--
                            (i) maintains an acceptable level of 
                        academic standing in the institution of higher 
                        education, as determined by the institution; 
                        and
                            (ii) reenrolls in the baccalaureate or 
                        graduate degree program for which the 
                        scholarship was made.
                    (B) Ineligibility for federal scholarships.--The 
                individual shall become automatically ineligible to 
                participate in any Federal scholarship programs for 
                future years.
            (3) Use of recovered scholarship funds.--An institution of 
        higher education or consortium that recovers funds under 
        paragraph (1) shall use such funds to provide additional 
        scholarships under subsection (f).
    (i) Data Collection.--An institution of higher education or 
consortium receiving a grant under this section shall supply to the 
Secretary any relevant statistical and demographic data on scholarship 
recipients the Secretary may request.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $750,000,000 for fiscal year 
2007 and such sums as may be necessary for each of the 4 succeeding 
fiscal years.

SEC. 2214. EXPANSION OF NATIONAL SCIENCE FOUNDATION EDUCATION AND HUMAN 
              RESOURCES DIRECTORATE.

    (a) Purpose.--The purpose of this section is to ensure the 
continued involvement of experts at the National Science Foundation in 
improving science, technology, engineering, and mathematics at the 
elementary, secondary, and postsecondary levels by doubling funding for 
the education and human resources programs of the National Science 
Foundation, in addition to the increases made under section 2125 for 
the mathematics and science partnerships described in section 9 of the 
National Science Foundation Authorization Act of 2002 and in addition 
to any other amounts authorized or appropriated to the National Science 
Foundation.
    (b) Authorization of Appropriations for NSF Education and Human 
Resources.--There is authorized to be appropriated to the National 
Science Foundation for education and human resources, in addition to 
the amounts authorized under section 2125(a)(2), amounts as follows:
            (1) For fiscal year 2007, $886,810,000.
            (2) For fiscal year 2008, $1,040,110,000.
            (3) For fiscal year 2009, $1,193,410,000.
            (4) For fiscal year 2010, $1,346,710,000.
            (5) For fiscal year 2011, $1,500,000,000.
    (c) Science, Mathematics, Engineering, and Technology Talent 
Expansion Program.--Section 8(7)(C) of the National Science Foundation 
Authorization Act of 2002 (Public Law 107-368) is amended--
            (1) by redesignating clauses (i) through (vi) as subclauses 
        (I) through (VI), respectively, and indenting appropriately;
            (2) by striking ``include those that promote high quality--
        '' and inserting ``include programs that--
                    ``(i) promote high-quality--''; and
            (3) in clause (i)--
                    (A) in subclause (III) (as redesignated by 
                paragraph (1)), by striking ``for students;'' and 
                inserting ``for students, especially underrepresented 
                minority and female mathematics, science, engineering, 
                and technology students;''; and
                    (B) in subclause (VI) (as redesignated by paragraph 
                (1)), by striking the period and inserting a semicolon; 
                and
            (4) by adding at the end the following:
                    ``(ii) finance summer internships for mathematics, 
                science, engineering, and technology undergraduate 
                students;
                    ``(iii) facilitate smaller mathematics, science, 
                engineering, and technology class sizes;
                    ``(iv) facilitate the hiring of additional 
                mathematics, science, engineering, and technology 
                faculty;
                    ``(v) serve as bridges to enable underrepresented 
                minority and female secondary school students to obtain 
                extra mathematics, science, engineering, and technology 
                training prior to entering an institution of higher 
                education; and
                    ``(vi) finance mathematics, science, engineering, 
                and technology student research activities.''.

            CHAPTER 2--IMPROVING GLOBAL KNOWLEDGE AND SKILLS

SEC. 2221. DEFINITIONS.

    In this chapter:
            (1) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            (2) Local educational agency; state educational agency.--
        The terms ``local educational agency'' and ``State educational 
        agency'' have the meanings given the terms in section 9101 of 
        the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        7801).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.

SEC. 2222. CRITICAL-NEED LANGUAGES.

    The Secretary shall, prior to requesting applications for grants 
under this chapter during each grant cycle, consult with, and receive 
recommendations regarding, critical need for expertise in foreign 
languages and world regions from the head official, or a designee of 
such head official, of the National Security Council, the Department of 
Homeland Security, the Department of Defense, the Department of State, 
the Federal Bureau of Investigation, the Department of Labor, and the 
Department of Commerce, and the Director of National Intelligence. The 
Secretary shall take into account such recommendations when developing 
a list of critical-need languages and when requesting applications for 
grants under this chapter. The Secretary shall also make available to 
applicants the list of the critical-need languages for the grant cycle.

SEC. 2223. CRITICAL-NEED LANGUAGE PROGRAM GRANTS.

    (a) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means--
                    (A) a State educational agency; or
                    (B) a partnership between a local educational 
                agency and an institution of higher education.
            (2) High-need school.--The term ``high-need school'' means 
        a public elementary or secondary school that is eligible for 
        assistance under section 1114(a) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6314(a)).
    (b) Program Authorized.--The Secretary shall award grants, on a 
competitive basis, to eligible entities to enable the eligible entities 
to develop programs that allow students to be exposed to and immersed 
in other languages and cultures from the early grades throughout the 
students' education.
    (c) Application.--An eligible entity desiring a grant under this 
section shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
require.
    (d) Award Basis.--In awarding grants under this section, the 
Secretary shall give priority to eligible entities that will use grant 
funds for programs that target a high-need school.
    (e) Use of Funds.--An eligible entity receiving a grant under this 
section shall use grant funds to carry out 1 or more of the following:
            (1) Establish and maintain programs in a critical-need 
        language (as determined by the Secretary under section 2222) in 
        the elementary schools served by the eligible entity.
            (2) Offer additional or more advanced critical-need 
        language classes in middle schools and secondary schools.
            (3) Create and implement effective models of instruction in 
        critical-need languages and world cultures.
            (4) Create and maintain internationally themed schools 
        that--
                    (A) offer dual language immersion programs;
                    (B) focus on international content; and
                    (C) use technology to bring the world into the 
                classroom virtually.
    (f) Technical Assistance Centers.--
            (1) In general.--The Secretary shall enter into contracts 
        with entities to establish a system of regional critical-need 
        foreign language technical assistance centers focused on 
        developing critical-need language programs in kindergarten 
        through grade 12 education.
            (2) Application.--An entity desiring a contract under this 
        subsection shall submit an application to the Secretary at such 
        time, in such manner, and containing such information as the 
        Secretary may require.
            (3) Activities.--Each center established under this 
        subsection shall--
                    (A) assist States and local educational agencies in 
                developing critical-need language curricula; and
                    (B) disseminate best practices in the field.
    (g) Report.--Not later than 90 days after the last day of the grant 
or contract period, an eligible entity receiving a grant under 
subsection (a) or an entity receiving a contract under subsection (f) 
shall prepare and submit a report to the Secretary describing the 
supported activities.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $100,000,000 for fiscal year 
2007 and such sums as may be necessary for each of the 4 succeeding 
fiscal years.

SEC. 2224. INTERNATIONAL SUMMER INSTITUTE GRANTS.

    (a) Program Authorized.--The Secretary shall award grants, on a 
competitive basis, to institutions of higher education or nonprofit 
organizations (or consortia of such institutions or organizations) to 
carry out summer institute programs that help teachers integrate 
international content into the curricula and improve the teachers' 
knowledge and teaching of foreign cultures.
    (b) Partnership.--In order to receive a grant under this section, 
an institution of higher education or a nonprofit organization (or a 
consortium of such institutions or organizations) shall enter into a 
partnership with a local educational agency to carry out the grant 
activities.
    (c) Application.--An institution of higher education, nonprofit 
organization, or consortium desiring a grant under this section shall 
submit an application to the Secretary at such time, in such manner, 
and containing such information as the Secretary may require.
    (d) Use of Funds.--An institution of higher education, nonprofit 
organization, or consortium receiving a grant under this section shall 
use grant funds to carry out 1 or more of the following:
            (1) Integrate international content into existing summer 
        institute programs.
            (2) Assist States in creating new summer institutes to 
        prepare teachers--
                    (A) to teach international subjects, such as world 
                history, global economics, and geography; and
                    (B) to integrate international content into other 
                subjects to improve global competence.
    (e) Report.--Not later than 90 days after the last day of the grant 
period, an institution of higher education, nonprofit organization, or 
consortium receiving a grant under this section shall prepare and 
submit a report to the Secretary describing the grant activities.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $100,000,000 for fiscal year 
2007 and such sums as may be necessary for each of the 4 succeeding 
fiscal years.

SEC. 2225. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES.

    (a) Purpose.--The purpose of this section is to increase study 
abroad and foreign language study opportunities in critical-need 
languages for secondary school, undergraduate, and graduate students.
    (b) Definition of Eligible Entity.--In this section, the term 
``eligible entity'' means--
            (1) an institution of higher education;
            (2) a consortium of institutions of higher education;
            (3) an institution of higher education in partnership with 
        an international university;
            (4) an institution of higher education in partnership with 
        a local educational agency;
            (5) a State educational agency; or   
            (6) a local educational agency.
    (c) Program Authorized.--From amounts appropriated under this 
section for a fiscal year, the Secretary shall award grants, on a 
competitive basis, to eligible entities to enable the eligible entities 
to establish or strengthen foreign language study programs in critical-
need languages, as determined by the Secretary under section 2222.
    (d) Amount and Duration of Grant.--Each grant awarded under this 
section shall be--
            (1) for an amount of not less than $500,000 for each year 
        of the grant; and
            (2) for a period of not less than 4 years.
    (e) Application.--An eligible entity that desires a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information as the Secretary may 
require.
    (f) Use of Funds.--An eligible entity receiving a grant under this 
section shall use the grant funds to establish or strengthen foreign 
language study programs in critical-need languages, which may include 
the following activities:
            (1) The recruitment and retention of faculty in critical-
        need languages.
            (2) Curriculum development.
            (3) The acquisition of materials to improve instructional 
        programs.
            (4) The expansion of study abroad programs for 
        participating students.
            (5) The development of foreign language immersion programs.
            (6) Summer institutes for faculty development.
            (7) Bridge programs that allow dual enrollment for 
        secondary school students in institutions of higher education.
            (8) Programs to expand the understanding and knowledge of 
        cultural, geographic, and political factors within countries 
        with populations who speak critical-need languages.
            (9) Research on, and evaluation of, the teaching of 
        critical-need foreign languages.
            (10) Participation in national programs impacting critical-
        need foreign languages.
            (11) Data collection and analysis regarding the outcomes of 
        various student recruitment strategies and program design and 
        curricula approaches, and their impact on increasing--
                    (A) the number of students studying critical-need 
                languages; and
                    (B) the fluency of the students in the languages.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $100,000,000 for fiscal year 
2007 and such sums as may be necessary for each of the 4 succeeding 
fiscal years.

          CHAPTER 3--INVESTING IN WORKERS THROUGH JOB TRAINING

SEC. 2231. PROJECTS TO PROVIDE LITERACY, TECHNOLOGY, AND TECHNICAL 
              SKILLS TRAINING.

    (a) Definitions.--In this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (2) Small business.--The term ``small business'' means a 
        business with not more than 100 employees.
    (b) Projects.--The Secretary shall carry out projects to provide 
literacy, technology, and technical skills training for workers, 
including both employed and unemployed workers.
    (c) Grants.--In carrying out projects described in subsection (b), 
the Secretary shall make grants to eligible partnerships.
    (d) Eligible Partnerships.--
            (1) In general.--To be eligible to receive such a grant, a 
        partnership shall be a local or regional public-private 
        partnership consisting of at least--
                    (A) 1 State or local workforce investment board 
                established under section 111 or 117 of the Workforce 
                Investment Act of 1998 (29 U.S.C. 2821 or 2832) 
                (including a consortium of such boards in a region);
                    (B) 1 institution of higher education, as defined 
                in section 101(a) of the Higher Education Act of 1965, 
                (including a consortium of such institutions);
                    (C) 1 business (including a consortium of such 
                businesses) or nonprofit employer; and
                    (D) 1 community-based organization, labor union, 
                trade association, or other intermediary.
            (2) Designation of responsible fiscal agents.--Each 
        partnership described in paragraph (1) shall designate a 
        responsible fiscal agent to receive and disburse grant funds 
        under this section.
    (e) Training.--
            (1) Participants.--A partnership that receives a grant 
        under subsection (c) shall provide training through a project 
        described in subsection (b) to persons who are employed and who 
        wish to obtain and upgrade skills to qualify for existing jobs 
        (as of the date such training begins) and to persons who are 
        unemployed.
            (2) Preparation.--Such training shall, to the extent 
        practicable, include the preparation of workers for a broad 
        range of positions along a career ladder.
    (f) Start-Up Activities.--
            (1) In general.--Except as provided in paragraph (2), not 
        more than 5 percent, or $75,000, whichever is less, of the 
        funds made available through a single grant made under this 
        section may be used toward the start-up costs of a partnership 
        or training project.
            (2) Exception.--In the case of partnerships consisting 
        primarily of small businesses, not more than 10 percent, or 
        $150,000, whichever is less, of the funds made available 
        through a single grant made under this section may be used 
        toward the start-up costs of a partnership or training project.
            (3) Duration of start-up period.--For purposes of this 
        subsection, a start-up period consists of a period of not more 
        than 1 month, beginning on the first day of the grant period. 
        At the end of the start-up period, training shall immediately 
        begin and no further Federal funds may be used for start-up 
        costs.
    (g) Applications.--
            (1) In general.--To be eligible to receive a grant under 
        this section, a partnership shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            (2) Contents.--Each application for such a grant shall--
                    (A) provide evidence of the need for the training 
                to be provided through the grant, by providing evidence 
                of skill shortages in existing or emerging industries 
                as demonstrated through reliable regional, State, or 
                local data;
                    (B) articulate the level of skills that workers 
                will be trained for and the manner by which attainment 
                of those skills will be measured; and
                    (C) include an agreement that the project will be 
                subject to evaluation by the Secretary to measure the 
                effectiveness of the project.
            (3) Matching funds.--Each application for a grant to carry 
        out a project described in subsection (b) shall state the 
        manner by which the partnership will--
                    (A) make available, with respect to the costs to be 
                incurred by the partnership in carrying out the 
                project, non-Federal contributions (in cash or in kind) 
                in an amount equal to not less than 50 percent of the 
                Federal funds provided under the grant; and
                    (B) make the contributions available directly or 
                through donations from public or private entities, and 
                ensure that at least \1/2\ of the contributions will be 
                from businesses or nonprofit employers involved in the 
                partnership.
    (h) Considerations.--
            (1) Projects with commitments.--In making grants under this 
        section, the Secretary shall give consideration to an applicant 
        that provides a specific, measurable commitment--
                    (A) upon successful completion of a training course 
                by a participant--
                            (i) who is unemployed, to hire or 
                        effectuate the hiring of the participant (where 
                        applicable);
                            (ii) who is an incumbent worker, to 
                        increase the wages or salary of the worker 
                        (where applicable); or
                            (iii) to provide skill certification to the 
                        participant;
                    (B) to provide training that is linked to industry-
                accepted occupational skill standards, certificates, or 
                licensing requirements; or
                    (C) to provide a project that will lead to 
                attainment of baccalaureate or associate degrees.
            (2) Expanded and collaborative projects.--In making grants 
        under this section, the Secretary shall give consideration to 
        an applicant that proposes to use grant funds--
                    (A) to demonstrate a significant ability to expand 
                a training project through such means as training more 
                workers or offering more courses; and
                    (B) to carry out a training project resulting from 
                a collaboration, especially with more than 1 small 
                business or with an entity carrying out a labor-
                management training project.
            (3) Partnerships involving small businesses.--In making 
        grants under this section, the Secretary shall give 
        consideration to an applicant that involves and directly 
        benefits more than 1 small business.
            (4) Donations from public or private entities.--In making 
        grants under this section, the Secretary shall give 
        consideration to an applicant that provides a specific 
        commitment that a portion of the non-Federal contribution 
        described in subsection (g)(3) will be made available through 
        donations from other public or private entities, so as to 
        demonstrate the long-term sustainability of the project after 
        the expiration of the grant period involved.
    (i) Administrative Costs.--A partnership that receives a grant to 
carry out a project described in subsection (b) may not use more than 
10 percent of the funds made available through the grant to pay for 
administrative costs associated with the project.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $300,000,000 for fiscal year 
2007 and such sums as may be necessary for each of the 4 succeeding 
fiscal years.

           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.

    (a) Definition.--Section 2(a) of the Worker Adjustment and 
Retraining Notification Act (29 U.S.C. 2101(a)) is amended--
            (1) in paragraph (3)(B), by striking ``for--'' and all that 
        follows through ``500 employees'' in clause (ii), and inserting 
        ``for not less than 50 employees'';
            (2) in paragraph (7), by striking ``and'' after the 
        semicolon;
            (3) in paragraph (8), by striking the period and inserting 
        ``; and''; and
            (4) by adding at the end the following:
            ``(9) the term `offshoring of jobs' means any action taken 
        by an employer the effect of which is to create, shift, or 
        transfer employment positions or facilities outside the United 
        States and that results in an employment loss during any 30-day 
        period for 15 or more employees.''.
    (b) Notice.--Section 3 of the Worker Adjustment and Retraining 
Notification Act (29 U.S.C. 2102) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``60-day'' and inserting ``90-day'';
                    (B) in paragraph (1), by striking ``and'' after the 
                semicolon;
                    (C) in paragraph (2), by striking the period and 
                inserting ``; and''; and
                    (D) by inserting after paragraph (2), the 
                following:
            ``(3) to the Secretary of Labor.'';
            (2) in subsection (b), by striking ``60-day'' both places 
        that such term appears and inserting ``90-day''; and
            (3) by adding at the end the following:
    ``(e) Notice for Offshoring of Jobs.--In the case of a notice under 
subsection (a) regarding the offshoring of jobs, the notice shall 
include, in addition to the information otherwise required by the 
Secretary with respect to other notices under such subsection, 
information concerning--
            ``(1) the number of jobs affected;
            ``(2) the location where the jobs are being created, or 
        shifted or transferred to; and
            ``(3) the reasons that such creation, shifting, or 
        transferring is occurring.''.
    (c) Technical Amendments.--The Worker Adjustment and Retraining 
Notification Act (29 U.S.C. 2101 et seq.) is amended--
            (1) by striking ``plant closing or mass layoff'' each place 
        that such term appears and inserting ``plant closing, mass 
        layoff, or offshoring of jobs'';
            (2) by striking ``closing or layoff'' each place that such 
        term appears and inserting ``closing, layoff, or offshoring'';
            (3) in section 3--
                    (A) in the section heading, by striking ``plant 
                closings and mass layoffs'' and inserting ``plant 
                closings, mass layoffs, and offshoring of jobs'';
                    (B) in subsection (b)(2)(A), by striking ``the 
                closing or mass layoff'' and inserting ``the closing, 
                layoff, or offshoring''; and
                    (C) in subsection (d), by striking ``section 2(a) 
                (2) or (3)'' and inserting ``paragraph (2), (3), or (9) 
                of section 2(a)'';
            (4) in section 5--
                    (A) in subsection (a)--
                            (i) in paragraph (1), in the matter 
                        following subparagraph (B), by striking ``60 
                        days'' and inserting ``90 days''; and
                            (ii) in paragraph (3), by striking 
                        ``shutdown or layoff'' and inserting ``closing, 
                        layoff, or offshoring involved''; and
                    (B) in subsection (b), by inserting ``and section 
                11(c)'' after ``in this section''; and
            (5) in the table of contents, by striking the item relating 
        to section 3 and inserting the following:

``Sec. 3. Notice required before plant closings, mass layoffs, and 
                            offshoring of jobs.''.
    (d) Posting of Employee Rights.--
            (1) Redesignation.--The Worker Adjustment and Retraining 
        Notification Act (29 U.S.C. 2101 et seq.) is amended by 
        redesignating section 11 as section 13.
            (2) Posting.--The Worker Adjustment and Retraining 
        Notification Act, as amended by paragraph (1), is further 
        amended by inserting after section 10 the following:

``SEC. 11. POSTING OF NOTICE OF RIGHTS.

    ``(a) Development.--Not later than 60 days after the date of 
enactment of this section, the Secretary of Labor shall develop a 
notice of employee rights under this Act for posting by employers.
    ``(b) Posting.--Each employer shall post in a conspicuous place in 
places of employment the notice of employee rights as developed by the 
Secretary under subsection (a).
    ``(c) Penalty.--Any employer that willfully violates this section 
may be assessed a civil money penalty not to exceed $100 for each 
separate offense.''.
    (e) Annual Report.--The Worker Adjustment and Retraining 
Notification Act (29 U.S.C. 2101 et seq.), as amended by subsection 
(d), is further amended by inserting after section 11 the following:

``SEC. 12. CONTENTS OF ANNUAL REPORTS BY THE SECRETARY OF LABOR.

    ``(a) Statistical Reports.--
            ``(1) Statistics.--The Secretary of Labor shall collect and 
        compile statistics based on the information submitted to the 
        Secretary under subsections (a)(3) and (e) of section 3.
            ``(2) Reports.--The Secretary of Labor shall annually 
        prepare and submit to the President and the appropriate 
        committees of Congress reports containing statistics collected 
        or compiled under paragraph (1).
    ``(b) Offshoring Reports.--
            ``(1) Studies.--The Secretary of Labor shall annually 
        conduct studies on the offshoring of jobs (as defined in 
        section 2(a)(9)), including collecting information concerning--
                    ``(A) the number of jobs affected;
                    ``(B) the locations where the jobs are being 
                created, or shifted or transferred to; and
                    ``(C) the reasons that such creation, shifting, or 
                transferring is occurring.
            ``(2) Reports.--Not later than 120 days after the date on 
        which each regular session of Congress commences, the Secretary 
        of Labor shall prepare and submit to the President and the 
        appropriate committees of Congress a report containing the 
        results of the most recent study conducted under paragraph 
        (1).''.

Subtitle B--Removing Tax Incentives for Companies to Ship Jobs Overseas

SEC. 3201. TAXATION OF INCOME OF CONTROLLED FOREIGN CORPORATIONS 
              ATTRIBUTABLE TO IMPORTED PROPERTY.

    (a) General Rule.--Subsection (a) of section 954 of the Internal 
Revenue Code of 1986 (defining foreign base company income) is amended 
by striking ``and'' at the end of paragraph (4), by striking the period 
at the end of paragraph (5) and inserting ``, and'', and by adding at 
the end the following new paragraph:
            ``(6) imported property income for the taxable year 
        (determined under subsection (j) and reduced as provided in 
        subsection (b)(5)).''.
    (b) Definition of Imported Property Income.--Section 954 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
    ``(j) Imported Property Income.--
            ``(1) In general.--For purposes of subsection (a)(6), the 
        term `imported property income' means income (whether in the 
        form of profits, commissions, fees, or otherwise) derived in 
        connection with--
                    ``(A) manufacturing, producing, growing, or 
                extracting imported property;
                    ``(B) the sale, exchange, or other disposition of 
                imported property; or
                    ``(C) the lease, rental, or licensing of imported 
                property.
        Such term shall not include any foreign oil and gas extraction 
        income (within the meaning of section 907(c)) or any foreign 
        oil related income (within the meaning of section 907(c)).
            ``(2) Imported property.--For purposes of this subsection--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `imported property' means 
                property which is imported into the United States by 
                the controlled foreign corporation or a related person.
                    ``(B) Imported property includes certain property 
                imported by unrelated persons.--The term `imported 
                property' includes any property imported into the 
                United States by an unrelated person if, when such 
                property was sold to the unrelated person by the 
                controlled foreign corporation (or a related person), 
                it was reasonable to expect that--
                            ``(i) such property would be imported into 
                        the United States; or
                            ``(ii) such property would be used as a 
                        component in other property which would be 
                        imported into the United States.
                    ``(C) Exception for property subsequently 
                exported.--The term `imported property' does not 
                include any property which is imported into the United 
                States and which--
                            ``(i) before substantial use in the United 
                        States, is sold, leased, or rented by the 
                        controlled foreign corporation or a related 
                        person for direct use, consumption, or 
                        disposition outside the United States; or
                            ``(ii) is used by the controlled foreign 
                        corporation or a related person as a component 
                        in other property which is so sold, leased, or 
                        rented.
            ``(3) Definitions and special rules.--
                    ``(A) Import.--For purposes of this subsection, the 
                term `import' means entering, or withdrawal from 
                warehouse, for consumption or use. Such term includes 
                any grant of the right to use intangible property (as 
                defined in section 936(h)(3)(B)) in the United States.
                    ``(B) United states.--For purposes of this 
                subsection, the term `United States' includes the 
                Commonwealth of Puerto Rico, the Virgin Islands of the 
                United States, Guam, American Samoa, and the 
                Commonwealth of the Northern Mariana Islands.
                    ``(C) Unrelated person.--For purposes of this 
                subsection, the term `unrelated person' means any 
                person who is not a related person with respect to the 
                controlled foreign corporation.
                    ``(D) Coordination with foreign base company sales 
                income.--For purposes of this section, the term 
                `foreign base company sales income' shall not include 
                any imported property income.''.
    (c) Separate Application of Limitations on Foreign Tax Credit for 
Imported Property Income.--
            (1) Before 2007.--
                    (A) In general.--Paragraph (1) of section 904(d) of 
                the Internal Revenue Code of 1986 (relating to separate 
                application of section with respect to certain 
                categories of income), as in effect for taxable years 
                beginning before January 1, 2007, is amended by 
                striking ``and'' at the end of subparagraph (H), by 
                redesignating subparagraph (I) as subparagraph (J), and 
                by inserting after subparagraph (H) the following new 
                subparagraph:
                    ``(I) imported property income, and''.
                    (B) Imported property income defined.--Paragraph 
                (2) of section 904(d) of such Code, as so in effect, is 
                amended by redesignating subparagraphs (H) and (I) as 
                subparagraphs (I) and (J), respectively, and by 
                inserting after subparagraph (G) the following new 
                subparagraph:
                    ``(H) Imported property income.--The term `imported 
                property income' means any income received or accrued 
                by any person which is of a kind which would be 
                imported property income (as defined in section 
                954(j)).''.
                    (C) Look-thru rules to apply.--Subparagraph (F) of 
                section 904(d)(3) of such Code, as so in effect, is 
                amended by striking ``or (D)'' and inserting ``(D), or 
                (I)''.
            (2) After 2006.--
                    (A) In general.--Paragraph (1) of section 904(d) of 
                such Code (relating to separate application of section 
                with respect to certain categories of income), as in 
                effect for taxable years beginning after December 31, 
                2006, is amended by striking ``and'' at the end of 
                subparagraph (A), by redesignating subparagraph (B) as 
                subparagraph (C), and by inserting after subparagraph 
                (A) the following new subparagraph:
                    ``(B) imported property income, and''.
                    (B) Imported property income defined.--Paragraph 
                (2) of section 904(d) of such Code, as so in effect, is 
                amended by redesignating subparagraphs (I) and (J) as 
                subparagraphs (J) and (K), respectively, and by 
                inserting after subparagraph (H) the following new 
                subparagraph:
                    ``(I) Imported property income.--The term `imported 
                property income' means any income received or accrued 
                by any person which is of a kind which would be 
                imported property income (as defined in section 
                954(j)).''.
                    (C) Conforming amendment.--Clause (ii) of section 
                904(d)(2)(A) of such Code, as so in effect, is amended 
                by inserting ``or imported property income'' after 
                ``passive category income''.
    (d) Technical Amendments.--
            (1) Clause (iii) of section 952(c)(1)(B) of the Internal 
        Revenue Code of 1986 (relating to certain prior year deficits 
        may be taken into account) is amended--
                    (A) by redesignating subclauses (II), (III), (IV), 
                and (V) as subclauses (III), (IV), (V), and (VI), and
                    (B) by inserting after subclause (I) the following 
                new subclause:
                                    ``(II) imported property income,''.
            (2) Paragraph (5) of section 954(b) of such Code (relating 
        to deductions to be taken into account) is amended by striking 
        ``and the foreign base company oil related income'' and 
        inserting ``the foreign base company oil related income, and 
        the imported property income''.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years of 
        foreign corporations beginning after the date of the enactment 
        of this Act, and to taxable years of United States shareholders 
        within which or with which such taxable years of such foreign 
        corporations end.
            (2) Subsection (c).--The amendments made by subsection 
        (c)(1) shall apply to taxable years beginning after the date of 
        the enactment of this Act and before January 1, 2007, and the 
        amendments made by subsection (c)(2) shall apply to taxable 
        years beginning after December 31, 2006.

 Subtitle C--Requiring Government Contractors To Use American Workers 
                        for Taxpayer-Funded Work

SEC. 3301. SHORT TITLE.

    This subtitle may be cited as the ``United States Workers 
Protection Act of 2006''.

SEC. 3302. LIMITATIONS ON OFF-SHORE PERFORMANCE OF CONTRACTS FOR THE 
              PROCUREMENT OF GOODS AND SERVICES.

    (a) Limitations.--
            (1) In general.--The Office of Federal Procurement Policy 
        Act (41 U.S.C. 403 et seq.) is amended by adding at the end the 
        following new section:

``SEC. 42. LIMITATIONS ON OFF-SHORE PERFORMANCE OF CONTRACTS FOR THE 
              PROCUREMENT OF GOODS AND SERVICES.

    ``(a) Conversions to Contractor Performance of Federal 
Activities.--An activity or function of an executive agency that is 
converted to contractor performance under Office of Management and 
Budget Circular A-76 may not be performed by the contractor or any 
subcontractor at a location outside the United States except to the 
extent that such activity or function was previously performed by 
Federal Government employees outside the United States.
    ``(b) Federal Contracts for the Procurement of Services.--(1) A 
contract for the procurement of goods or services that is entered into 
by the head of an executive agency may not be performed outside the 
United States except to meet a requirement of the executive agency for 
goods or services specifically at a location outside the United States.
    ``(2) The President may waive the prohibition in paragraph (1) in 
the case of any contract for which the President determines in writing 
that it is necessary in the national security interests of the United 
States for goods or services under the contract to be performed outside 
the United States.
    ``(3) Paragraph (1) does not apply to goods or services performed 
outside the United States under the exception provided in subsection 
(a).
    ``(c) State Contracts for the Procurement of Services.--(1) Funds 
appropriated for financial assistance for a State may not be disbursed 
to or for such State during a fiscal year unless the chief executive of 
that State has transmitted to the Administrator for Federal Procurement 
Policy, not later than April 1 of the preceding fiscal year, a written 
certification that none of such funds will be expended for goods or 
services performed outside the United States under contracts for the 
procurement of goods or services entered into by such State.
    ``(2) In this subsection, the term `State' means each of the 
several States of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, the Virgin Islands, Guam, American Samoa, and the Trust 
Territory of the Pacific Islands.''.
            (2) Clerical amendment.--The table of sections in section 
        1(b) of such Act is amended by adding at the end the following 
        new item:

``Sec. 42. Limitations on off-shore performance of contracts for the 
                            procurement of services.''.
    (b) Inapplicability to States During First Two Fiscal Years.--
Section 42(c) of the Office of Federal Procurement Policy Act (as added 
by subsection (a)) shall not apply to disbursements of funds to a State 
during the fiscal year in which this Act is enacted and the next fiscal 
year.
    (c) Repeal of Superseded Law.--Section 647 of the Transportation, 
Treasury, and Independent Agencies Appropriations Act, 2004 (division F 
of Public Law 108-199) is amended by striking subsection (e).

    TITLE IV--LEVELING THE PLAYING FIELD FOR WORKERS HERE AND ABROAD

              Subtitle A--Raise Living Standards Worldwide

SEC. 4101. LIMITATION ON TRADE AUTHORITIES PROCEDURES.

    (a) In General.--Notwithstanding any other provision of law, 
section 2103(b)(3) of the Bipartisan Trade Promotion Authority Act of 
2002 (19 U.S.C. 3803(b)(3)) and the provisions of chapter 5 of title I 
of the Trade Act of 1974 (19 U.S.C. 2191 et seq.) (in this section 
referred to as ``trade authorities procedures'') shall not apply to any 
bill implementing a bilateral or regional trade agreement unless that 
agreement--
            (1) prohibits forced and compulsory labor and prohibits 
        child labor; and
            (2) contains dispute settlement and enforcement provisions 
        for failure to adhere to the prohibitions described in 
        paragraph (1) if the failure affects trade between the parties 
        to the agreement.
    (b) Definitions.--For purposes of subsection (a) the terms ``forced 
and compulsory labor'' and ``child labor'' have the meaning such terms 
have when used in the 1998 International Labor Organization Declaration 
on Fundamental Principles and Rights at Work.
    (c) Monitoring.--There are authorized to be appropriated such sums 
as may be necessary to the Department of Labor to fund the 
International Labor Organization to monitor the compliance of countries 
with the 1998 International Labor Organization Declaration on 
Fundamental Principles and Rights at Work.

            Subtitle B--Prevention of Currency Manipulation

SEC. 4201. INTERNATIONAL NEGOTIATIONS ON EXCHANGE RATE AND ECONOMIC 
              POLICIES.

  Section 3004 of the Exchange Rates and International Economic Policy 
Coordination Act of 1988 (22 U.S.C. 5304) is amended to read as 
follows:

``SEC. 3004. INTERNATIONAL NEGOTIATIONS ON EXCHANGE RATE AND ECONOMIC 
              POLICIES.

    ``(a) Multilateral Negotiations.--The President shall seek to 
confer and negotiate with other countries--
          ``(1) to achieve--
                  ``(A) better coordination of macroeconomic policies 
                of the major industrialized nations; and
                  ``(B) more appropriate and sustainable levels of 
                trade and current account balances, and exchange rates 
                of the dollar and other currencies consistent with such 
                balances; and
          ``(2) to develop a program for improving existing mechanisms 
        for coordination and improving the functioning of the exchange 
        rate system to provide for long-term exchange rate stability 
        consistent with more appropriate and sustainable current 
        account balances.
  ``(b) Bilateral Negotiations.--
            ``(1) In general.--The Secretary of the Treasury shall 
        analyze on an annual basis the exchange rate policies of 
        foreign countries, in consultation with the International 
        Monetary Fund, and consider whether countries manipulate the 
        rate of exchange between their currency and the United States 
        dollar for purposes of preventing effective balance of payments 
        adjustments or gaining unfair competitive advantage in 
        international trade. If the Secretary considers that such 
        manipulation is occurring with respect to any country that (A) 
        has material global current account surpluses and (B) has 
        significant bilateral trade surpluses with the United States, 
        the Secretary shall take action to initiate negotiations with 
        such foreign country on an expedited basis, in the 
        International Monetary Fund or bilaterally, for the purpose of 
        ensuring that such country regularly and promptly adjusts the 
        rate of exchange between its currencies and the United States 
        dollar to permit effective balance of payments adjustments and 
        to eliminate the unfair advantage.
            ``(2) Initiation of negotiations.--
                    ``(A) In general.--On and after the date that is 
                180 days after the date negotiations described in 
                paragraph (1) are initiated with respect to a country, 
                unless a certification described in paragraph (3) has 
                been made to Congress with respect to such country, in 
                addition to any other duty, there shall be imposed an 
                additional rate of duty equal to an amount determined 
                by the Secretary on any article that is the growth, 
                product, or manufacture of the that country.
                    ``(B) Factors to consider in establishing duty.--In 
                determining the additional rate of duty to impose with 
                respect to a country under this paragraph, the 
                Secretary of the Treasury, in consultation with the 
                Secretary of Commerce, shall take into consideration--
                            ``(i) the length of time the country has 
                        intervened in the value of its currency in one 
                        direction or another;
                            ``(ii) the country's rate of foreign 
                        exchange accumulation;
                            ``(iii) the country's capital controls and 
                        payment restrictions; and
                            ``(iv) the country's trade and current 
                        account balances.
            ``(3) Certification.--The certification described in this 
        paragraph means a certification by the President to Congress 
        that the country with respect to which negotiations described 
        in paragraph (1) have been initiated is no longer acquiring 
        foreign exchange reserves to prevent the appreciation of the 
        rate of exchange between its currency and the United States 
        dollar for purposes of gaining an unfair competitive advantage 
        in international trade. The certification shall also include a 
        determination that the currency of the country has undergone a 
        substantial upward revaluation placing it at or near its fair 
        market value.
            ``(4) Additional rate of duty.--For purposes of this 
        subsection, the term `additional rate of duty' means a rate of 
        duty determined by the Secretary to be necessary to correct any 
        unfair advantage resulting from a country's acquiring foreign 
        exchange reserves or otherwise gaining an unfair competitive 
        advantage in the rate of exchange between its currency and the 
        United States dollar.
            ``(5) Exception.--The Secretary shall not be required to 
        initiate negotiations in any case where such negotiations would 
        have a serious detrimental impact on vital national economic 
        and security interests. In such a case, the Secretary shall 
        inform the chairman and the ranking minority member of the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and of the Committee on Financial Services of the House of 
        Representatives of the Secretary's determination.''.

   Subtitle C--Encouraging Multilateral Corporations to Adopt Labor 
                               Practices

SEC. 4301. SHORT TITLE.

    This subtitle may be cited as the ``Global Worker Fairness Act''.

SEC. 4302. FINDINGS.

    Congress finds that--
            (1) 1,400,000,000 workers around the world earn less than 
        $2 per day;
            (2) most of those workers live in countries that lack basic 
        labor protections, such as the protections against compulsory 
        and prison labor, protections against child labor, the right to 
        collective bargaining, and the right to a safe work 
        environment;
            (3) many of those workers are willing to do jobs that 
        workers in the United States do now, but for much lower wages, 
        reduced benefits, and reduced workplace safety and protections;
            (4) companies are often able to cut costs by exploiting 
        workers in other nations and not providing the workers with 
        adequate wages, benefits, or a safe workplace environment;
            (5) that exploitation creates a race to the bottom that 
        undercuts United States workers and costs jobs in the United 
        States; and
            (6) therefore, the United States needs to reward companies 
        that treat their foreign workers with decency and fairness, 
        because those companies are working to level the global playing 
        field for United States workers and deserve recognition for 
        their efforts.

SEC. 4303. DEFINITIONS.

    In this subtitle:
            (1) Core labor standards.--The term ``core labor 
        standards'' means the 8 fundamental labor conventions that the 
        International Labour Organization has identified.
            (2) Labor market.--The term ``labor market'' means a system 
        consisting of employers as buyers and workers as sellers, the 
        purpose of which is to match job vacancies with job applicants 
        and to set wages.
            (3) Multinational company.--The term ``multinational 
        company'' means a corporation, enterprise, or partnership, 
        including its subsidiaries, local affiliates, contractors, and 
        subcontractors, that does business in 2 or more countries.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.

SEC. 4304. ESTABLISHMENT.

    There are established the Global Worker Fairness Awards (referred 
to individually in this subtitle as an ``Award'') and the Fair Labor 
Certifications (referred to individually in this subtitle as a 
``Certificate'').

SEC. 4305. CONFERRING OF AWARDS AND CERTIFICATES.

    (a) In General.--The President or the Secretary shall annually 
confer the Awards and Certificates on multinational companies that meet 
the criteria set forth in section 4307(a), in accordance with section 
4307(d).
    (b) Plaques for Award.--Each Award shall be evidenced by a plaque 
bearing the inscription ``Global Worker Fairness Award.'' One such 
plaque shall be presented to each Award recipient. The plaque shall be 
of such design and materials and bear such additional inscriptions as 
the Secretary may prescribe.
    (c) Documents for Certificate.--Each Certificate shall be evidenced 
by a framed document bearing the words ``Fair Labor Certification''. 
One such document shall be presented to each Certificate recipient. The 
document shall be of such design and materials and bear such additional 
inscriptions as the Secretary may prescribe.
    (d) Ceremonies.--The President or the Secretary shall confer the 
Awards and Certificates, with such ceremonies as the President or the 
Secretary, respectively, may determine to be proper.
    (e) Number of Awards.--No more than 1 Award may be conferred in any 
year in each classification described in section 4307(b). If no 
multinational company in such a classification meets the criteria of 
section 4307(a) for a year, the President or the Secretary shall not 
confer an Award in that classification for that year.
    (f) Publicity Concerning Award or Certificate.--A multinational 
company on which an Award or Certificate is conferred, and that agrees 
to help other multinational companies improve their labor practices, 
may publicize its receipt of the Award or Certificate, including using 
the Award or Certificate in its advertising and marketing.

SEC. 4306. PROCEDURE AND ADMINISTRATION.

    (a) Director.--The Director of the Office of International Economic 
Affairs in the Bureau of International Labor Affairs of the Department 
of Labor (referred to in this subtitle as the ``Director'') shall carry 
out the administration of the Awards and Certificates pursuant to the 
terms of this subtitle.
    (b) Board.--
            (1) Appointment.--The Director shall establish and appoint 
        the members of a Board of Global Worker Fairness (referred to 
        in this subtitle as the ``Board''), consisting of 1 expert from 
        each of the following fields:
                    (A) Business.
                    (B) Human rights.
                    (C) Government.
                    (D) Academia.
                    (E) Labor.
            (2) Terms.--Members of the Board shall serve for a single 
        term of 3 years.
            (3) Duties.--The Board shall advise the Director on the 
        administration of the Awards. The Board shall, by a \3/5\ vote 
        of the Board, recommend multinational companies to receive 
        Awards.

SEC. 4307. CRITERIA FOR ELIGIBILITY.

    (a) Eligibility.--To be eligible to receive an Award under this 
section, a multinational company--
            (1) shall submit an application to the Director at such 
        time, in such manner, and containing--
                    (A) documentation and evidence demonstrating that 
                the criteria specified in paragraphs (2) through (5) 
                are satisfied;
                    (B) documentation of the number of workers employed 
                by the company, to assist the Director in making the 
                classification described in subsection (b); and
                    (C) such information as the Director may require, 
                in application specifications established and 
                disseminated by the Director;
            (2) shall consent to a rigorous evaluation and audit of the 
        company's labor practices;
            (3) shall be in compliance with the labor standards set 
        forth in each trade agreement to which the nation in which the 
        company employs workers is a party;
            (4) shall be in compliance with the International Labour 
        Organization's core labor standards, including standards 
        pertaining to child labor, collective bargaining, prison and 
        compulsory labor, safety, and wages; and
            (5) shall verify that, in each labor market in which the 
        company employs workers, the company pays wages and provides 
        benefits, as defined by the National Compensation Survey, above 
        the median level for like occupations in that market.
    (b) Classification.--An applicant under subsection (a) shall be 
classified as--
            (1) a small employer of foreign labor of the company 
        employs not more than 100 workers in foreign countries;
            (2) a medium employer of foreign labor if the company 
        employs not less than 101 and not more than 1000 workers in 
        foreign countries; or
            (3) a large employer of foreign labor if the company 
        employs not less than 1001 workers in foreign countries.
    (c) Documentation and Evidence.--All information submitted in an 
application described in subsection (a) shall be subject to 
verification through an audit authorized in subsection (a)(2). If the 
Director finds that an applicant has knowingly provided false 
information in such an application for a particular year the Director 
shall disqualify the applicant from consideration for an Award for that 
year and the 2 subsequent years.
    (d) Selection of Applicants To Receive Awards and Certificates.--
            (1) Awards.--The Secretary or the President shall confer an 
        Award on an applicant only if the applicant qualifies for an 
        Award under subsection (a) and only after reviewing the 
        recommendations of the Board under section 4306(b).
            (2) Certificates.--The Secretary or the President shall 
        confer a Certificate on an applicant that qualifies for an 
        Award under subsection (a) but is not selected to receive an 
        Award under paragraph (1).

SEC. 4308. REPORTING REQUIREMENTS.

    (a) Information to Applicants.--The Director shall ensure that all 
applicants under section 4307(a) receive the complete results of their 
audits under section 4307(a) as well as detailed explanations of 
decisions regarding their applications. The Director shall also 
provide, to all applicants and to other appropriate groups, information 
about the Awards made to successful applicants.
    (b) Report to Congress.--Not later than 3 years after the date of 
enactment of this subtitle, the Director shall prepare and submit to 
the President and the appropriate committees of Congress, a report on 
the progress made through, and the findings and conclusions resulting 
from, activities conducted pursuant to this subtitle, along with 
recommendations for possible modifications of the subtitle.

        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.

    (a) In General.--Section 246 of the Trade Act of 1974 (19 U.S.C. 
2318) is amended to read as follows:

``SEC. 246. WAGE INSURANCE FOR DISPLACED WORKERS.

    ``(a) In General.--
            ``(1) Establishment.--The Secretary shall establish a wage 
        insurance program for displaced workers that provides the 
        benefits described in paragraph (2).
            ``(2) Benefits.
                    ``(A) Payments.--A State shall use the funds 
                provided to the State under section 241 to pay, for a 
                period not to exceed 2 years, to a worker described in 
                paragraph (3)(B), 50 percent of the difference 
                between--
                            ``(i) the wages received by the worker from 
                        reemployment; and
                            ``(ii) the wages received by the worker at 
                        the time of separation.
                    ``(B) Health insurance.--A worker described in 
                paragraph (3)(B) participating in the program 
                established under paragraph (1) is eligible to receive, 
                for a period not to exceed 2 years, a credit for health 
                insurance costs under section 35 of the Internal 
                Revenue Code of 1986.
            ``(3) Eligibility.--
                    ``(A) Firm eligibility.--
                            ``(i) In general.--The Secretary shall 
                        provide the opportunity for a group of workers 
                        on whose behalf a petition is filed under 
                        section 221 to request that the group of 
                        workers be certified for the wage insurance 
                        program under this section at the time the 
                        petition is filed.
                            ``(ii) Criteria.--In determining whether to 
                        certify a group of workers as eligible for the 
                        wage insurance program, the Secretary shall 
                        consider the following criteria:
                                    ``(I) Whether the workers in the 
                                workers' firm possess skills that are 
                                not easily transferable.
                                    ``(II) The competitive conditions 
                                within the workers' industry.
                            ``(iii) Deadline.--The Secretary shall 
                        determine whether the workers in the group are 
                        eligible for the wage insurance program by the 
                        date specified in section 223(a).
                    ``(B) Individual eligibility.--A worker in the 
                group that the Secretary has certified as eligible for 
                the wage insurance program may elect to receive 
                benefits under the wage insurance program if the 
                worker--
                            ``(i) is covered by a certification under 
                        subchapter A of this chapter;
                            ``(ii) obtains reemployment not more than 
                        26 weeks after the date of separation from the 
                        adversely affected employment; and
                            ``(iii) is at least 50 years of age;
                            ``(iv) is employed on a full-time basis as 
                        defined by State law in the State in which the 
                        worker is employed; and
                            ``(v) does not return to the employment 
                        from which the worker was separated.
            ``(4) Total amount of payments.--The payments described in 
        paragraph (2)(A) made to a worker may not exceed $20,000 per 
        worker during the 2-year eligibility period.
    ``(b) Limitation on Other Benefits.--
            ``(1) In general.--Except as provided in paragraph (2) and 
        subsection (a)(2)(B), if a worker is receiving payments 
        pursuant to the program established under subsection (a)(1), 
        the worker shall not be eligible to receive any other benefits 
        under this title.
            ``(2) Training services.--Notwithstanding subsection 
        (a)(1)(A) of section 236, a worker who is receiving payments 
        pursuant to the program established under subsection (a)(1) is 
        eligible to receive training under section 236 if the Secretary 
        determines that--
                    ``(A) the provision of such training, consistent 
                with the worker's full-time employment, will assist the 
                worker in securing more suitable employment; and
                    ``(B) the other requirements under subsection 
                (a)(1) of section 236 are met.''.
    (b) Conforming Amendment.--The table of contents for title II of 
the Trade Act of 1974 is amended by striking the item relating to 
section 246 and inserting the following:

        ``Sec. 246. Wage insurance for displaced workers.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to workers certified as eligible for adjustment 
        assistance under chapter 2 of title II of the Trade Act of 1974 
        on or after the date of the enactment of this Act.
            (2) Increased total amount of payments and training 
        services for individuals currently receiving payments.--
        Subsections (a)(4) and (b)(2) of section 246 of the Trade Act 
        of 1974 (19 U.S.C. 2318), as amended by subsection (a), shall 
        apply with respect to a worker receiving payments under the 
        program under such section 246 on the day before the date of 
        the enactment of this Act for the duration of such worker's 
        eligibility period under such program.

SEC. 5102. IMPROVEMENT OF THE AFFORDABILITY OF THE CREDIT FOR HEALTH 
              INSURANCE COSTS.

    (a) Improvement of Affordability.--
            (1) In General.--Section 35(a) of the Internal Revenue Code 
        of 1986 (relating to credit for health insurance costs of 
        eligible individuals) is amended to read as follows:
    ``(a) Amount of Credit.--
            ``(1) In general.--In the case of an individual, there 
        shall be allowed as a credit against the tax imposed by 
        subtitle A an amount equal to the greater of--
                    ``(A) 95 percent of the amount paid by the taxpayer 
                for coverage of the taxpayer and qualifying family 
                members under qualified health insurance for eligible 
                coverage months beginning in the taxable year; and
                    ``(B) an amount equal to the excess of--
                            ``(i) the amount paid by the taxpayer for 
                        coverage of the taxpayer and qualifying family 
                        members under qualified health insurance for 
                        eligible coverage months beginning in the 
                        taxable year, over
                            ``(ii) an amount equal to 5 percent of the 
                        taxpayer's certified income (as determined 
                        under subsection (g)(9)) for such taxable 
                        year.''.
            (2) Conforming amendment.--Section 7527(b) of such Code 
        (relating to advance payment of credit for health insurance 
        costs of eligible individuals) is amended by striking ``65 
        percent of the amount'' and all that follows through the period 
        at the end and inserting ``the amount determined under section 
        35(a) for such taxable year.''.
    (b) Determination of Certified Income.--Section 35(g) of such Code 
(relating to special rules), is amended--
            (1) by redesignating paragraph (9) as paragraph (10), and
            (2) by inserting after paragraph (8) the following new 
        paragraph:
            ``(9) Certified income.--
                    ``(A) In general.--The Secretary shall enter into 
                agreements with States to determine an individual's 
                certified income for purposes of subsection 
                (a)(1)(B)(ii) for any taxable year.
                    ``(B) Requirements.--An agreement under 
                subparagraph (A) with a State shall--
                            ``(i) permit an individual to complete an 
                        application for certification of income for a 
                        taxable year (in such form and manner as the 
                        Secretary shall determine) and to submit the 
                        application to the State,
                            ``(ii) require the State to determine the 
                        individual's income for the taxable year on the 
                        basis of the individual's monthly family income 
                        as of the month preceding the month in which 
                        the application is submitted, and
                            ``(iii) require the State to issue a 
                        certification of income to the individual upon 
                        receipt of an application under clause (i), 
                        which shall apply for purposes of determining 
                        the taxpayer's certified income for purposes of 
                        subsection (a)(1)(B)(ii) for the taxable year 
                        unless the State determines upon completion of 
                        the processing of the application that the 
                        certification is erroneous.
                    ``(C) Notification of change in income.--An 
                individual issued a certification of income shall 
                notify the State of any substantial change in income 
                that applies for at least 60 days and the taxpayer's 
                certified income for the taxable year shall be adjusted 
                accordingly. An individual who fails to so notify the 
                State shall remit the difference (if any) between the 
                amount described in subsection (a)(1)(A) for the 
                taxable year and the amount described in subsection 
                (a)(1)(B), plus interest at the underpayment rate 
                established under section 6621.''.
    (c) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 2005.

SEC. 5103. 100 PERCENT CREDIT AND PAYMENT FOR MONTHLY PREMIUMS PAID 
              PRIOR TO CERTIFICATION OF ELIGIBILITY FOR THE CREDIT.

    (a) In General.--Subsection (a) of section 35 of the Internal 
Revenue Code of 1986, as amended by section 5102(a)(1), is amended by 
adding at the end the following new paragraph:
            ``(2) 100 percent credit for months prior to issuance of 
        eligibility certificate.--The amount allowed as a credit 
        against the tax imposed by subtitle A shall be equal to 100 
        percent in the case of the taxpayer's first eligible coverage 
        months occurring prior to the issuance of a qualified health 
        insurance costs credit eligibility certificate.''.
    (b) Payment for Premiums Due Prior to Certification of Eligibility 
for the Credit.--Section 7527 of the Internal Revenue Code of 1986 
(relating to advance payment of credit for health insurance costs of 
eligible individuals) is amended by adding at the end the following new 
subsection:
    ``(e) Payment for Premiums Due Prior to Issuance of Certificate.--
The program established under subsection (a) shall provide--
            ``(1) that the Secretary shall make payments on behalf of a 
        certified individual of an amount equal to 100 percent of the 
        premiums for coverage of the taxpayer and qualifying family 
        members under qualified health insurance for eligible coverage 
        months (as defined in section 35(b)) occurring prior to the 
        issuance of a qualified health insurance costs credit 
        eligibility certificate; and
            ``(2) that any payments made under paragraph (1) shall not 
        be included in the gross income of the taxpayer on whose behalf 
        such payments were made.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to months beginning after the date of the enactment of this Act 
in taxable years ending after such date.

SEC. 5104. ELIGIBILITY FOR CERTAIN PENSION PLAN RECIPIENTS; PRESUMPTIVE 
              ELIGIBILITY.

    (a) Eligibility for Certain Pension Plan Recipients.--Subsection 
(c) of section 35 of the Internal Revenue Code of 1986 is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period and 
                inserting ``, and''; and
                    (C) by adding at the end the following:
                    ``(D) an eligible multiemployer pension 
                participant.''; and
            (2) by adding at the end the following new paragraph:
            ``(5) Eligible multiemployer pension recipient.--The term 
        `eligible multiemployer pension recipient' means, with respect 
        to any month, any individual--
                    ``(A) who has attained age 55 as of the first day 
                of such month,
                    ``(B) who is receiving a benefit from a 
                multiemployer plan (as defined in section 3(37)(A) of 
                the Employee Retirement Income Security Act of 1974), 
                and
                    ``(C) whose former employer has withdrawn from such 
                multiemployer plan pursuant to section 4203(a) of such 
                Act.''.
    (b) Presumptive Eligibility for Petitioners for Trade Adjustment 
Assistance.--Subsection (c) of section 35 of the Internal Revenue Code 
of 1986, as amended by subsection (a), is amended by adding at the end 
the following new paragraph:
            ``(6) Presumptive status as a taa recipient.--The term 
        `eligible individual' shall include any individual who is 
        covered by a petition filed with the Secretary of Labor under 
        section 221 of the Trade Act of 1974. This paragraph shall 
        apply to any individual only with respect to months which--
                    ``(A) end after the date that such petition is so 
                filed, and
                    ``(B) begin before the earlier of--
                            ``(i) the 90th day after the date of filing 
                        of such petition, or
                            ``(ii) the date on which the Secretary of 
                        Labor makes a final determination with respect 
                        to such petition.''.
    (c) Conforming Amendments.--
            (1) Paragraph (1) of section 7527(d) of such Code is 
        amended by striking ``or an eligible alternative TAA recipient 
        (as defined in section 35(c)(3))'' and inserting ``, an 
        eligible alternative TAA recipient (as defined in section 
        35(c)(3)), an eligible multiemployer pension recipient (as 
        defined in section 35(c)(5), or an individual who is an 
        eligible individual by reason of section 35(c)(6)''.
            (2) Section 173(f)(4) of the Workforce Investment Act of 
        1998 (29 U.S.C. 2918(f)(4)) is amended--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end; and
                    (B) by inserting after subparagraph (C), the 
                following new subparagraphs:
                    ``(D) an eligible multiemployer pension recipient 
                (as defined in section 35(c)(5) of the Internal Revenue 
                Code of 1986), and
                    ``(E) an individual who is an eligible individual 
                by reason of section 35(c)(6) of the Internal Revenue 
                Code of 1986,''.
    (d) Technical Amendment Clarifying Eligibility of Certain Displaced 
Workers Receiving a Benefit Under a Defined Benefit Pension Plan.--The 
first sentence of section 35(c)(2) of the Internal Revenue Code of 1986 
is amended by inserting before the period the following: ``, and shall 
include any such individual who would be eligible to receive such an 
allowance but for the fact that the individual is receiving a benefit 
under a defined benefit plan (as defined in section 3(35) of the 
Employee Retirement Income Security Act of 1974).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to months beginning after the date of the enactment of this Act 
in taxable years ending after such date.

SEC. 5105. CLARIFICATION OF 3-MONTH CREDITABLE COVERAGE REQUIREMENT.

    (a) In General.--Clause (i) of section 35(e)(2)(B) of the Internal 
Revenue Code of 1986 (defining qualifying individual) is amended by 
inserting ``(prior to the employment separation necessary to attain the 
status of an eligible individual)'' after ``9801(c)''.
    (b) Conforming Amendment.--Section 173(f)(2)(B)(ii)(I) of the 
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)(2)(B)(ii)(I)) is 
amended by inserting ``(prior to the employment separation necessary to 
attain the status of an eligible individual)'' after ``1986''.
    (c) Effective Date.--The amendments made by this section shall 
apply to months beginning after the date of the enactment of this Act 
in taxable years ending after such date.

SEC. 5106. TAA PRE-CERTIFICATION PERIOD RULE FOR PURPOSES OF 
              DETERMINING WHETHER THERE IS A 63-DAY LAPSE IN CREDITABLE 
              COVERAGE.

    (a) ERISA Amendment.--Section 701(c)(2) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1181(c)(2)) is amended by adding 
at the end the following new subparagraph:
                    ``(C) TAA-eligible individuals.--
                            ``(i) TAA pre-certification period rule.--
                        In the case of a TAA-eligible individual, the 
                        period beginning on the date the individual has 
                        a TAA-related loss of coverage and ending on 
                        the date that is 5 days after the postmark date 
                        of the notice by the Secretary (or by any 
                        person or entity designated by the Secretary) 
                        that the individual is eligible for a qualified 
                        health insurance costs credit eligibility 
                        certificate for purposes of section 7527 of the 
                        Internal Revenue Code of 1986 shall not be 
                        taken into account in determining the 
                        continuous period under subparagraph (A).
                            ``(ii) Definitions.--The terms `TAA-
                        eligible individual', and `TAA-related loss of 
                        coverage' have the meanings given such terms in 
                        section 605(b)(4).''.
    (b) PHSA Amendment.--Section 2701(c)(2) of the Public Health 
Service Act (42 U.S.C. 300gg(c)(2)) is amended by adding at the end the 
following new subparagraph:
                    ``(C) TAA-eligible individuals.--
                            ``(i) TAA pre-certification period rule.--
                        In the case of a TAA-eligible individual, the 
                        period beginning on the date the individual has 
                        a TAA-related loss of coverage and ending on 
                        the date that is 5 days after the postmark date 
                        of the notice by the Secretary (or by any 
                        person or entity designated by the Secretary) 
                        that the individual is eligible for a qualified 
                        health insurance costs credit eligibility 
                        certificate for purposes of section 7527 of the 
                        Internal Revenue Code of 1986 shall not be 
                        taken into account in determining the 
                        continuous period under subparagraph (A).
                            ``(ii) Definitions.--The terms `TAA-
                        eligible individual', and `TAA-related loss of 
                        coverage' have the meanings given such terms in 
                        section 2205(b)(4).''.
    (c) IRC Amendment.--Section 9801(c)(2) of the Internal Revenue Code 
of 1986 (relating to not counting periods before significant breaks in 
creditable coverage) is amended by adding at the end the following new 
subparagraph:
                    ``(D) TAA-eligible individuals.--
                            ``(i) TAA pre-certification period rule.--
                        In the case of a TAA-eligible individual, the 
                        period beginning on the date the individual has 
                        a TAA-related loss of coverage and ending on 
                        the date which is 5 days after the postmark 
                        date of the notice by the Secretary (or by any 
                        person or entity designated by the Secretary) 
                        that the individual is eligible for a qualified 
                        health insurance costs credit eligibility 
                        certificate for purposes of section 7527 shall 
                        not be taken into account in determining the 
                        continuous period under subparagraph (A).
                            ``(ii) Definitions.--The terms `TAA-
                        eligible individual', and `TAA-related loss of 
                        coverage' have the meanings given such terms in 
                        section 4980B(f)(5)(C)(iv).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to months beginning after the date of the enactment of this Act 
in taxable years ending after such date.

SEC. 5107. CONTINUED QUALIFICATION OF FAMILY MEMBERS AFTER CERTAIN 
              EVENTS.

    (a) In General.--Subsection (g) of section 35 of the Internal 
Revenue Code of 1986, as amended by section 5102(b), is amended by 
redesignating paragraph (10) as paragraph (11) and inserting after 
paragraph (9) the following new paragraph:
            ``(10) Continued qualification of family members after 
        certain events.--
                    ``(A) Eligible individual becomes medicare 
                eligible.--In the case of a month which would be an 
                eligible coverage month with respect to an eligible 
                individual but for subsection (f)(2)(A), such month 
                shall be treated as an eligible coverage month with 
                respect to any qualifying family member of such 
                eligible individual (but not with respect to such 
                eligible individual).
                    ``(B) Divorce.--In the case of a month which would 
                be an eligible coverage month with respect to a former 
                spouse of a taxpayer but for the finalization of a 
                divorce between the spouse and the taxpayer that occurs 
                during the period in which the taxpayer is an eligible 
                individual, such month shall be treated as an eligible 
                coverage month with respect to such former spouse.
                    ``(C) Death.--In the case of a month which would be 
                an eligible coverage month with respect to an eligible 
                individual but for the death of such individual, such 
                month shall be treated as an eligible coverage month 
                with respect to any qualifying family of such eligible 
                individual.''.
    (b) Conforming Amendment.--Section 173(f) of the Workforce 
Investment Act of 1998 (29 U.S.C. 2918(f)) is amended by adding at the 
end the following:
            ``(8) Continued qualification of family members after 
        certain events.--
                    ``(A) Eligible individual becomes medicare 
                eligible.--In the case of a month which would be an 
                eligible coverage month with respect to an eligible 
                individual but for paragraph (7)(B)(i), such month 
                shall be treated as an eligible coverage month with 
                respect to any qualifying family member of such 
                eligible individual (but not with respect to such 
                eligible individual).
                    ``(B) Divorce.--In the case of a month which would 
                be an eligible coverage month with respect to a former 
                spouse of a taxpayer but for the finalization of a 
                divorce between the spouse and the taxpayer that occurs 
                during the period in which the taxpayer is an eligible 
                individual, such month shall be treated as an eligible 
                coverage month with respect to such former spouse.
                    ``(C) Death.--In the case of a month which would be 
                an eligible coverage month with respect to an eligible 
                individual but for the death of such individual, such 
                month shall be treated as an eligible coverage month 
                with respect to any qualifying family of such eligible 
                individual.
                    ``(D) Definition.--In this paragraph, the term 
                `eligible coverage month' means any month if--
                            ``(i) as of the first day of such month, 
                        the taxpayer involved--
                                    ``(I) is an eligible individual;
                                    ``(II) is covered by qualified 
                                health insurance, the premium for which 
                                is paid by the taxpayer;
                                    ``(III) does not have other 
                                specified coverage; and
                                    ``(IV) is not imprisoned under 
                                Federal, State, or local authority; and
                            ``(ii) such month begins more than 90 days 
                        after the date of the enactment of the Trade 
                        Act of 2002.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to months beginning after the date of the enactment of this Act 
in taxable years ending after such date.

SEC. 5108. OFFERING OF NATIONAL FALLBACK COVERAGE.

    (a) Offering of National Fallback Coverage.--
            (1) In General.--The Director of the Office of Personnel 
        Management jointly with the Secretary of the Treasury shall 
        establish a program under which eligible individuals (as 
        defined in section 35(c) of the Internal Revenue Code of 1986) 
        are offered enrollment under health benefit plans that are made 
        available under FEHBP.
            (2) Terms and conditions.--The terms and conditions of 
        health benefits plans under paragraph (1) shall be the same as 
        the terms and coverage offered under FEHBP, except that the 
        premium charged for such health benefit plans offered under 
        such paragraph--
                    (A) shall be equal to the full premium (including 
                both employer and beneficiary share) charged for such 
                coverage determined in the same manner, subject to 
                subparagraph (B), it is determined for full-time 
                employees; and
                    (B) shall be determined for the pool of individuals 
                covered under this subsection, separately from the pool 
                of individuals otherwise covered under FEHBP.
            (3) Study.--The Director of the Office of Personnel 
        Management jointly with the Secretary of the Treasury shall 
        conduct a study of the impact of the offering of health benefit 
        plans under this subsection on the terms and conditions, 
        including premiums, for health benefit plans offered under 
        FEHBP and shall submit to Congress, not later than 2 years 
        after the date of the enactment of this Act, a report on such 
        study. Such report may contain such recommendations regarding 
        the establishment of separate risk pools for individuals 
        covered under FEHBP and eligible individuals covered this 
        subsection as may be appropriate to protect the interests of 
        individuals covered under FEHBP.
            (4) FEHBP defined.--For purposes of this subsection, the 
        term ``FEHBP'' means the Federal Employees Health Benefits 
        Program offered under chapter 89 of title 5, United States 
        Code.
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 35(e) of the Internal Revenue 
        Code of 1986 is amended by inserting after subparagraph (J) the 
        following new subparagraph:
                    ``(K) Coverage under a health benefits plan offered 
                under section 5108(a)(1) of Right Time to Reinvest in 
                America's Competitiveness and Knowledge Act.''.
            (2) Section 173(f)(2)(A) of the Workforce Investment Act of 
        1998 (29 U.S.C. 2918(f)(2)(A)) is amended by inserting after 
        clause (x) the following new clause:
                            ``(xi) Coverage under a health benefits 
                        plan offered under section 5108(a)(1) of Right 
                        Time to Reinvest in America's Competitiveness 
                        and Knowledge Act.''.

SEC. 5109. ADDITIONAL REQUIREMENTS FOR INDIVIDUAL HEALTH INSURANCE 
              COSTS.

    (a) In General.--Subparagraph (A) of section 35(e)(2) of the 
Internal Revenue Code of 1986 is amended by striking ``subparagraphs 
(B) through (H) of paragraph (1)'' and inserting ``paragraph (1) (other 
than subparagraphs (A), (I), and (K) thereof)''.
    (b) Rating System Requirement.--Subparagraph (J) of section 
35(e)(1) of such Code is amended by adding at the end the following: 
``For purposes of this subparagraph and clauses (ii), (iii), and (iv) 
of subparagraph (F), such term does not include any insurance unless 
the premiums for such insurance are restricted based on a community 
rating system (determined other than on the basis of age).''.
    (c) Clarification of Congressional Intent to Limit Use of 
Individual Health Insurance Coverage Option.--Section 35(e)(1)(J) 
(relating to qualified health insurance) is amended in the matter 
preceding clause (i), by inserting ``, but only'' after ``coverage 
under individual health insurance''.
    (d) Conforming Amendments.--Section 173(f)(2) of the Workforce 
Investment Act of 1998 (29 U.S.C. 2918(f)(2)) is amended--
            (1) in subparagraph (A)(x)--
                    (A) in the matter preceding subclause (I), by 
                inserting ``, but only'' after ``under individual 
                health insurance'' the first place it appears; and
                    (B) by adding at the end the following: ``For 
                purposes of this clause, such term does not include any 
                insurance unless the premiums for such insurance are 
                restricted based on a community rating system 
                (determined other than on the basis of age).''; and
            (2) in subparagraph (B)(i), by striking ``clauses (ii) 
        through (viii) of subparagraph (A)'' and inserting 
        ``subparagraph (A) (other than clauses (i), (x), and (xi) of 
        such subparagraph)''.

SEC. 5110. ALIGNMENT OF COBRA COVERAGE WITH TAA PERIOD FOR TAA-ELIGIBLE 
              INDIVIDUALS.

    (a) ERISA.--Section 605(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1165(b)) is amended--
            (1) in the subsection heading, by inserting ``and 
        Coverage'' after ``Election''; and
            (2) in paragraph (2)--
                    (A) in the paragraph heading, by inserting ``and 
                period'' after ``Commencement'';
                    (B) by striking ``and shall'' and inserting ``, 
                shall''; and
                    (C) by inserting ``, and in no event shall the 
                maximum period required under section 602(2)(A) be less 
                than the period during which the individual is a TAA-
                eligible individual'' before the period at the end.
    (b) Internal Revenue Code of 1986.--Section 4980B(f)(5)(C) of the 
Internal Revenue Code of 1986 is amended--
            (1) in the subparagraph heading, by inserting ``and 
        coverage'' after ``election''; and
            (2) in clause (ii)--
                    (A) in the clause heading, by inserting ``and 
                period'' after ``Commencement'';
                    (B) by striking ``and shall'' and inserting ``, 
                shall''; and
                    (C) by inserting ``, and in no event shall the 
                maximum period required under paragraph (2)(B)(i) be 
                less than the period during which the individual is a 
                TAA-eligible individual'' before the period at the end.
    (c) Public Health Service Act.--Section 2205(b) of the Public 
Health Service Act (42 U.S.C. 300bb-5(b)) is amended--
            (1) in the subsection heading, by inserting ``and 
        Coverage'' after ``Election''; and
            (2) in paragraph (2)--
                    (A) in the paragraph heading, by inserting ``and 
                period'' after ``Commencement'';
                    (B) by striking ``and shall'' and inserting ``, 
                shall''; and
                    (C) by inserting ``, and in no event shall the 
                maximum period required under section 2202(2)(A) be 
                less than the period during which the individual is a 
                TAA-eligible individual'' before the period at the end.

SEC. 5111. NOTICE REQUIREMENTS.

    Section 7527 of the Internal Revenue Code of 1986 (relating to 
advance payment of credit for health insurance costs of eligible 
individuals), as amended by section 5103(b), is amended by adding at 
the end the following new subsection:
    ``(f) Inclusion of Certain Information.--The notice by the 
Secretary (or by any person or entity designated by the Secretary) that 
an individual is eligible for a qualified health insurance costs credit 
eligibility certificate shall include--
            ``(1) the name, address, and telephone number of the State 
        office or offices responsible for determining that the 
        individual is eligible for such certificate and for providing 
        the individual with assistance with enrollment in qualified 
        health insurance (as defined in section 35(e)),
            ``(2) a list of the coverage options that are treated as 
        qualified health insurance (as so defined) by the State in 
        which the individual resides, and
            ``(3) in the case of a TAA-eligible individual (as defined 
        in section 4980B(f)(5)(C)(iv)(II)), a statement informing the 
        individual that the individual has 63 days from the date that 
        is 5 days after the postmark date of such notice to enroll in 
        such insurance without a lapse in creditable coverage (as 
        defined in section 9801(c)).''.

SEC. 5112. ANNUAL REPORT ON ENHANCED TAA BENEFITS.

    Not later than October 1 of each year (beginning in 2007) the 
Secretary of the Treasury, after consultation with the Secretary of 
Labor, shall report to the Committee on Finance and the Committee on 
Health, Education, Labor, and Pensions of the Senate and the Committee 
on Ways and Means and the Committee on Education and the Workforce of 
the House of Representatives the following information with respect to 
the most recent taxable year ending before such date:
            (1) The total number of participants utilizing the health 
        insurance tax credit under section 35 of the Internal Revenue 
        Code of 1986, including a measurement of such participants 
        identified--
                    (A) by State, and
                    (B) by coverage under COBRA continuation provisions 
                (as defined in section 9832(d)(1) of such Code) and by 
                non-COBRA coverage (further identified by group and 
                individual market).
            (2) The range of monthly health insurance premiums offered 
        and the average and median monthly health insurance premiums 
        offered to TAA-eligible individuals (as defined in section 
        4980B(f)(5)(C)(iv)(II) of such Code) under COBRA continuation 
        provisions (as defined in section 9832(d)(1) of such Code), 
        State-based continuation coverage provided under a State law 
        that requires such coverage, and each category of coverage 
        described in section 35(e)(1) of such Code, identified by State 
        and by the actuarial value of such coverage and the specific 
        benefits provided and cost-sharing imposed under such coverage.
            (3) The number of States applying for and receiving 
        national emergency grants under section 173(f) of the Workforce 
        Investment Act of 1998 (29 U.S.C. 2918(f)) and the time 
        necessary for application approval of such grants.
            (4) The cost of administering the health credit program 
        under section 35 of such Code, by function, including the cost 
        of subcontractors.

SEC. 5113. EXTENSION OF NATIONAL EMERGENCY GRANTS.

    (a) In General.--Section 173(f) of the Workforce Investment Act of 
1998 (29 U.S.C. 2918(f)) is amended--
            (1) by striking paragraph (1) and inserting the following 
        new paragraph:
            ``(1) Use of funds.--
                    ``(A) Health insurance coverage for eligible 
                individuals in order to obtain qualified health 
                insurance that has guaranteed issue and other consumer 
                protections.--Funds made available to a State or entity 
                under paragraph (4)(A) of subsection (a) shall be used 
                to provide an eligible individual and such individual's 
                qualifying family members with health insurance 
                coverage for the 3-month period that immediately 
                precedes the first eligible coverage month (as defined 
                in section 35(b) of the Internal Revenue Code of 1986) 
                in which such eligible individual and such individual's 
                qualifying family members are covered by qualified 
                health insurance that meets the requirements described 
                in clauses (i) through (iv) of section 35(e)(2)(A) of 
                the Internal Revenue Code of 1986 (or such longer 
                minimum period as is necessary in order for such 
                eligible individual and such individual's qualifying 
                family members to be covered by qualified health 
                insurance that meets such requirements).
                    ``(B) Additional uses.--Funds made available to a 
                State or entity under paragraph (4)(A) of subsection 
                (a) may be used by the State or entity for the 
                following:
                            ``(i) Health insurance coverage.--To assist 
                        an eligible individual and such individual's 
                        qualifying family members with enrolling in 
                        health insurance coverage and qualified health 
                        insurance or paying premiums for such coverage 
                        or insurance.
                            ``(ii) Administrative expenses and start-up 
                        expenses to establish group health plan 
                        coverage options for qualified health 
                        insurance.--To pay the administrative expenses 
                        related to the enrollment of eligible 
                        individuals and such individuals' qualifying 
                        family members in health insurance coverage and 
                        qualified health insurance, including expenses 
                        incurred for--
                                    ``(I) eligibility verification 
                                activities;
                                    ``(II) the notification of eligible 
                                individuals of available health 
                                insurance and qualified health 
                                insurance options;
                                    ``(III) processing qualified health 
                                insurance costs credit eligibility 
                                certificates provided for under section 
                                7527 of the Internal Revenue Code of 
                                1986;
                                    ``(IV) providing assistance to 
                                eligible individuals in enrolling in 
                                health insurance coverage and qualified 
                                health insurance;
                                    ``(V) the development or 
                                installation of necessary data 
                                management systems; and
                                    ``(VI) any other activities 
                                determined appropriate by the 
                                Secretary, including start-up costs and 
                                ongoing administrative expenses, in 
                                order for the State to treat the 
                                coverage described in subparagraph (C), 
                                (D), (E), or (F)(i) of section 35(e)(1) 
                                of the Internal Revenue Code of 1986, 
                                or, only if the coverage is under a 
                                group health plan, the coverage 
                                described in subparagraph (F)(ii), 
                                (F)(iii), (F)(iv), (G), or (H) of such 
                                section, as qualified health insurance 
                                under that section.
                            ``(iii) Outreach.--To pay for outreach to 
                        eligible individuals to inform such individuals 
                        of available health insurance and qualified 
                        health insurance options, including outreach 
                        consisting of notice to eligible individuals of 
                        such options made available after the date of 
                        the enactment of this clause and direct 
                        assistance to help potentially eligible 
                        individuals and such individual's qualifying 
                        family members qualify and remain eligible for 
                        the credit established under section 35 of the 
                        Internal Revenue Code of 1986 and advance 
                        payment of such credit under section 7527 of 
                        such Code.
                            ``(iv) Bridge funding.--To assist 
                        potentially eligible individuals to purchase 
                        qualified health insurance coverage prior to 
                        issuance of a qualified health insurance costs 
                        credit eligibility certificate under section 
                        7527 of the Internal Revenue Code of 1986 and 
                        commencement of advance payment, and receipt of 
                        expedited payment, under subsections (a) and 
                        (e), respectively, of that section.
                    ``(C) Rule of construction.--The inclusion of a 
                permitted use under this paragraph shall not be 
                construed as prohibiting a similar use of funds 
                permitted under subsection (g).''; and
            (2) by striking paragraph (2) and inserting the following 
        new paragraph:
            ``(2) Qualified health insurance.--For purposes of this 
        subsection and subsection (g), the term `qualified health 
        insurance' has the meaning given that term in section 35(e) of 
        the Internal Revenue Code of 1986.''.
    (b) Funding.--Section 174(c)(1) of the Workforce Investment Act of 
1998 (29 U.S.C. 2919(c)(1)) is amended--
            (1) in the paragraph heading, by striking ``Authorization 
        and appropriation for fiscal year 2002'' and inserting 
        ``Appropriations''; and
            (2) by striking subparagraph (A) and inserting the 
        following new subparagraph:
                    ``(A) to carry out subsection (a)(4)(A) of section 
                173--
                            ``(i) $10,000,000 for fiscal year 2002; and
                            ``(ii) $300,000,000 for the period of 
                        fiscal years 2007 through 2009; and''.
    (c) Report Regarding Failure To Comply With Requirements for 
Expedited Approval Procedures.--Section 173(f) of the Workforce 
Investment Act of 1998 (29 U.S.C. 2918(f)), as amended by section 
5107(b), is amended by adding at the end the following new paragraph:
            ``(9) Report for failure to comply with requirements for 
        expedited approval procedures.--If the Secretary fails to make 
        the notification required under clause (i) of paragraph (3)(A) 
        within the 15-day period required under that clause, or fails 
        to provide the technical assistance required under clause (ii) 
        of such paragraph within a timely manner so that a State or 
        entity may submit an approved application within 2 months of 
        the date on which the State or entity's previous application 
        was disapproved, the Secretary shall submit a report to 
        Congress explaining such failure.''.
    (d) Technical Amendment.--Effective as if included in the enactment 
of the Trade Act of 2002 (Public Law 107-210; 116 Stat. 933), 
subsection (f) of section 203 of that Act is repealed.

        Subtitle B--Modernization of Trade Adjustment Assistance

                  CHAPTER 1--SERVICE WORKERS AND FIRMS

SEC. 5211. SHORT TITLE.

    This chapter may be cited as the ``Trade Adjustment Assistance 
Equity for Service Workers Act of 2006''.

SEC. 5212. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE TO SERVICES SECTOR.

    (a) Adjustment Assistance for Workers.--Section 221(a)(1)(A) of the 
Trade Act of 1974 (19 U.S.C. 2271(a)(1)(A)) is amended by striking 
``agricultural firm)'' and inserting ``agricultural firm, and workers 
in a service sector firm or subdivision of a service sector firm or 
public agency)''.
    (b) Group Eligibility Requirements.--Section 222 of the Trade Act 
of 1974 (19 U.S.C. 2272) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``agricultural firm)'' and inserting 
                ``agricultural firm, and workers in a service sector 
                firm or subdivision of a service sector firm or public 
                agency)'';
                    (B) in paragraph (1), by inserting ``or public 
                agency'' after ``of the firm''; and
                    (C) in paragraph (2)--
                            (i) in subparagraph (A)(ii), by striking 
                        ``like or directly competitive with articles 
                        produced'' and inserting ``or services like or 
                        directly competitive with articles produced or 
                        services provided''; and
                            (ii) by striking subparagraph (B) and 
                        inserting the following:
            ``(B)(i) there has been a shift, by such workers' firm, 
        subdivision, or public agency to a foreign country, of 
        production of articles, or in provision of services, like or 
        directly competitive with articles which are produced, or 
        services which are provided, by such firm, subdivision, or 
        public agency; or
            ``(ii) such workers' firm, subdivision, or public agency 
        has obtained or is likely to obtain such services from a 
        foreign country.'';
            (2) in subsection (b)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``agricultural firm)'' and inserting 
                ``agricultural firm, and workers in a service sector 
                firm or subdivision of a service sector firm or public 
                agency)'';
                    (B) in paragraph (2), by inserting ``or service'' 
                after ``related to the article''; and
                    (C) in paragraph (3)(A), by inserting ``or 
                services'' after ``component parts'';
            (3) in subsection (c)--
                    (A) in paragraph (3)--
                            (i) by inserting ``or services'' after 
                        ``value-added production processes'';
                            (ii) by striking ``assembly or finishing'' 
                        and inserting ``assembly, finishing, or 
                        testing'';
                            (iii) by inserting ``or services'' after 
                        ``for articles''; and
                            (iv) by inserting ``(or subdivision)'' 
                        after ``such other firm''; and
                    (B) in paragraph (4)--
                            (i) by striking ``for articles'' and 
                        inserting ``, or services, used in the 
                        production of articles or in the provision of 
                        services''; and
                            (ii) by inserting ``(or subdivision)'' 
                        after ``such other firm''; and
            (4) by adding at the end the following new subsection:
    ``(d) Basis for Secretary's Determinations.--
            ``(1) Increased imports.--For purposes of subsection 
        (a)(2)(A)(ii), the Secretary may determine that increased 
        imports of like or directly competitive articles or services 
        exist if the workers' firm or subdivision or customers of the 
        workers' firm or subdivision accounting for not less than 20 
        percent of the sales of the workers' firm or subdivision 
        certify to the Secretary that they are obtaining such articles 
        or services from a foreign country.
            ``(2) Obtaining services abroad.--For purposes of 
        subsection (a)(2)(B)(ii), the Secretary may determine that the 
        workers' firm, subdivision, or public agency has obtained or is 
        likely to obtain like or directly competitive services from a 
        firm in a foreign country based on a certification thereof from 
        the workers' firm, subdivision, or public agency.
            ``(3) Authority of the secretary.--The Secretary may obtain 
        the certifications under paragraphs (1) and (2) through 
        questionnaires or in such other manner as the Secretary 
        determines is appropriate.''.
    (c) Training.--Section 236(a)(2)(A) of the Trade Act of 1974 (19 
U.S.C. 2296(a)(2)(A)) is amended by striking ``for any fiscal year 
shall not exceed $220,000,000.'' and inserting ``shall not exceed--
            ``(i) $440,000,000 in fiscal year 2007;
            ``(ii) $484,000,000 in fiscal year 2008;
            ``(iii) $528,000,000 in fiscal year 2009;
            ``(iv) $572,000,000 in fiscal year 2010;
            ``(v) $616,000,000 in fiscal year 2011; and
            ``(vi) $660,000,000 in fiscal year 2012.''.
    (d) Definitions.--Section 247 of the Trade Act of 1974 (19 U.S.C. 
2319) is amended--
            (1) in paragraph (1)--
                    (A) by inserting ``or public agency'' after ``of a 
                firm''; and
                    (B) by inserting ``or public agency'' after ``or 
                subdivision'';
            (2) in paragraph (2)(B), by inserting ``or public agency'' 
        after ``the firm'';
            (3) by redesignating paragraphs (8) through (17) as 
        paragraphs (9) through (18), respectively; and
            (4) by inserting after paragraph (6) the following:
            ``(7) The term `public agency' means a department or agency 
        of a State or local government or of the Federal Government.
            ``(8) The term `service sector firm' means an entity 
        engaged in the business of providing services.''.
    (e) Technical Amendment.--Section 245(a) of the Trade Act of 1974 
(19 U.S.C. 2317(a)) is amended by striking ``, other than subchapter 
D''.

SEC. 5213. TRADE ADJUSTMENT ASSISTANCE FOR FIRMS AND INDUSTRIES.

    (a) Firms.--
            (1) Assistance.--Section 251 of the Trade Act of 1974 (19 
        U.S.C. 2341) is amended--
                    (A) in subsection (a), by inserting ``or service 
                sector firm'' after ``(including any agricultural 
                firm'';
                    (B) in subsection (c)(1)--
                            (i) in the matter preceding subparagraph 
                        (A), by inserting ``or service sector firm'' 
                        after ``(including any agricultural firm'';
                            (ii) in subparagraph (B)(ii), by inserting 
                        ``or service'' after ``of an article''; and
                            (iii) in subparagraph (C), by striking 
                        ``articles like or directly competitive with 
                        articles which are produced'' and inserting 
                        ``articles or services like or directly 
                        competitive with articles or services which are 
                        produced or provided''; and
                    (C) by adding at the end the following:
    ``(e) Basis for Secretary Determination.--
            ``(1) Increased imports.--For purposes of subsection 
        (c)(1)(C), the Secretary may determine that increases of 
        imports of like or directly competitive articles or services 
        exist if customers accounting for not less than 20 percent of 
        the sales of the workers' firm certify to the Secretary that 
        they are obtaining such articles or services from a foreign 
        country.
            ``(2) Authority of the secretary.--The Secretary may obtain 
        the certifications under paragraph (1) through questionnaires 
        or in such other manner as the Secretary determines is 
        appropriate. The Secretary may exercise the authority under 
        section 249 in carrying out this subsection.''.
            (2) Authorization of appropriations.--Section 256(b) of the 
        Trade Act of 1974 (19 U.S.C. 2346(b)) is amended to read as 
        follows:
    ``(b) There are authorized to be appropriated to the Secretary 
$16,000,000 for each of the fiscal years 2003 through 2005, and 
$32,000,000 for each of the fiscal years 2006 and 2007 to carry out the 
Secretary's functions under this chapter in connection with furnishing 
adjustment assistance to firms. Amounts appropriated under this 
subsection shall remain available until expended.''.
            (3) Definitions.--Section 261 of the Trade Act of 1974 (19 
        U.S.C. 2351) is amended to read as follows:

``SEC. 261. DEFINITIONS.

    ``For purposes of this chapter:
            ``(1) Firm.--The term `firm' includes an individual 
        proprietorship, partnership, joint venture, association, 
        corporation (including a development corporation), business 
        trust, cooperative, trustee in bankruptcy, and receiver under 
        decree of any court. A firm, together with any predecessor or 
        successor firm, or any affiliated firm controlled or 
        substantially beneficially owned by substantially the same 
        persons, may be considered a single firm where necessary to 
        prevent unjustifiable benefits.
            ``(2) Service sector firm.--The term `service sector firm' 
        means a firm engaged in the business of providing services.''.
    (b) Industries.--Section 265(a) of the Trade Act of 1974 (19 U.S.C. 
2355(a)) is amended by inserting ``or service'' after ``new product''.

SEC. 5214. MONITORING AND REPORTING.

    Section 282 of the Trade Act of 1974 (19 U.S.C. 2393) is amended--
            (1) in the first sentence--
                    (A) by striking ``The Secretary'' and inserting 
                ``(a) Monitoring Programs.--The Secretary'';
                    (B) by inserting ``and services'' after ``imports 
                of articles'';
                    (C) by inserting ``and domestic provision of 
                services'' after ``domestic production'';
                    (D) by inserting ``or providing services'' after 
                ``producing articles''; and
                    (E) by inserting ``, or provision of services,'' 
                after ``changes in production''; and
            (2) by adding at the end the following:
    ``(b) Collection of Data and Reports on Services Sector.--
            ``(1) Secretary of labor.--Not later than 3 months after 
        the date of the enactment of the Trade Adjustment Assistance 
        Equity for Service Workers Act of 2006, the Secretary of Labor 
        shall implement a system to collect data on adversely affected 
        service workers that includes the number of workers by State, 
        industry, and cause of dislocation of each worker.
            ``(2) Secretary of commerce.--Not later than 6 months after 
        such date of enactment, the Secretary of Commerce shall, in 
        consultation with the Secretary of Labor, conduct a study and 
        report to the Congress on ways to improve the timeliness and 
        coverage of data on trade in services, including methods to 
        identify increased imports due to the relocation of United 
        States firms to foreign countries, and increased imports due to 
        United States firms obtaining services from firms in foreign 
        countries.''.

SEC. 5215. EFFECTIVE DATE.

    The amendments made by this chapter shall take effect on the date 
of the enactment of this Act.

CHAPTER 2--EXPANDING TRADE ADJUSTMENT ASSISTANCE TO COVER ALL COUNTRIES

SEC. 5221. SHORT TITLE.

    This chapter may be cited as the ``Workers Equity Act''.

SEC. 5222. SHIFTS IN PRODUCTION.

    (a) In General.--Section 222(a)(2)(B)(ii)(II) of the Trade Act of 
1974 (19 U.S.C. 2272(a)(2)(B)(ii)(II)) is amended by inserting before 
the semicolon the following: ``or a country to which the United States 
has extended permanent normal trade relations''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

 CHAPTER 3--EXPANDING TRADE ADJUSTMENT ASSISTANCE TO COVER COMMUNITIES

SEC. 5231. PURPOSE.

    The purpose of this chapter is to assist communities with economic 
adjustment through the integration of political and economic 
organizations, the coordination of Federal, State, and local resources, 
the creation of community-based development strategies, and the 
provision of economic transition assistance.

SEC. 5232. TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES.

    Chapter 4 of title II of the Trade Act of 1974 (19 U.S.C. 2371 et 
seq.) is amended to read as follows:

               ``CHAPTER 4--COMMUNITY ECONOMIC ADJUSTMENT

``SEC. 271. DEFINITIONS.

    ``In this chapter:
            ``(1) Civilian labor force.--The term `civilian labor 
        force' has the meaning given that term in regulations 
        prescribed by the Secretary of Labor.
            ``(2) Community.--The term `community' means a county or 
        equivalent political subdivision of a State.
                    ``(A) Rural community.--The term `rural community' 
                means a community that has a rural-urban continuum code 
                of 4 through 9.
                    ``(B) Urban community.--The term `urban community' 
                means a community that has a rural-urban continuum code 
                of 0 through 3.
            ``(3) Community economic development coordinating 
        committee.--The term `Community Economic Development 
        Coordinating Committee' means a community group established 
        under section 274 that consists of major groups significantly 
        affected by an increase in imports or a shift in production, 
        including local, regional, tribal, and State governments, 
        regional councils of governments and economic development, and 
        business, labor, education, health, religious, and other 
        community-based organizations.
            ``(4) Director.--The term `Director' means the Director of 
        the Office of Community Trade Adjustment.
            ``(5) Eligible community.--The term `eligible community' 
        means a community certified under section 273 as eligible for 
        assistance under this chapter.
            ``(6) Job loss.--The term `job loss' means the total or 
        partial separation of an individual, as those terms are defined 
        in section 221.
            ``(7) Office.--The term `Office' means the Office of 
        Community Trade Adjustment established under section 272.
            ``(8) Rural-urban continuum code.--The term `rural-urban 
        continuum code' means a code assigned to a community according 
        to the rural-urban continuum code system, as defined by the 
Economic Research Service of the Department of Agriculture.
            ``(9) Secretary.--The term `Secretary' means the Secretary 
        of Commerce.

``SEC. 272. OFFICE OF COMMUNITY TRADE ADJUSTMENT.

    ``(a) Establishment.--Within 6 months of the date of the enactment 
of the Right Time to Reinvest in America's Competitiveness and 
Knowledge Act, there shall be established in the Economic Development 
Administration of the Department of Commerce an Office of Community 
Trade Adjustment.
    ``(b) Personnel.--The Office shall be headed by a Director, and 
shall have such staff as may be necessary to carry out the 
responsibilities described in this chapter.
    ``(c) Coordination of Federal Response.--The Office shall--
            ``(1) provide leadership, support, and coordination for a 
        comprehensive management program to address economic 
        dislocation in eligible communities;
            ``(2) establish an easily accessible, one-stop 
        clearinghouse for States and eligible communities to obtain 
        information regarding economic development assistance available 
        under Federal law;
            ``(3) coordinate the Federal response to an eligible 
        community--
                    ``(A) by identifying all Federal, State, and local 
                resources that are available to assist the eligible 
                community in recovering from economic distress;
                    ``(B) by ensuring that all Federal agencies 
                offering assistance to an eligible community do so in a 
                targeted, integrated manner that ensures that an 
                eligible community has access to all available Federal 
                assistance;
                    ``(C) by assuring timely consultation and 
                cooperation between Federal, State, and regional 
                officials concerning community economic adjustment;
                    ``(D) by identifying and strengthening existing 
                agency mechanisms designed to assist communities in 
                economic adjustment and workforce reemployment;
                    ``(E) by applying consistent policies, practices, 
                and procedures in the administration of Federal 
                programs that are used to assist communities adversely 
                impacted by an increase in imports or a shift in 
                production;
                    ``(F) by creating, maintaining, and using a uniform 
                economic database to analyze community adjustment 
                activities; and
                    ``(G) by assigning a community economic adjustment 
                advisor to work with each eligible community;
            ``(4) provide comprehensive technical assistance to any 
        eligible community in the efforts of that community to--
                    ``(A) identify serious economic problems in the 
                community that result from an increase in imports or 
                shift in production;
                    ``(B) integrate the major groups and organizations 
                significantly affected by the economic adjustment;
                    ``(C) organize a Community Economic Development 
                Coordinating Committee;
                    ``(D) access Federal, State, and local resources 
                designed to assist in economic development and trade 
                adjustment assistance;
                    ``(E) diversify and strengthen the community 
                economy; and
                    ``(F) develop a community-based strategic plan to 
                address workforce dislocation and economic development;
            ``(5) establish specific criteria for submission and 
        evaluation of a strategic plan submitted under section 276(d);
            ``(6) administer the grant programs established under 
        sections 276 and 277; and
            ``(7) establish an interagency Trade Adjustment Assistance 
        Working Group, consisting of the representatives of any Federal 
        department or agency with responsibility for economic 
        adjustment assistance, including the Department of Agriculture, 
        the Department of Defense, the Department of Education, the 
        Department of Labor, the Department of Housing and Urban 
        Development, the Department of Health and Human Services, the 
        Small Business Administration, the Department of the Treasury, 
        the Department of Commerce, the Office of the United States 
        Trade Representative, and the National Economic Council.
    ``(d) Working Group.--The working group established under 
subsection (c)(7) shall examine other options for addressing trade 
impacts on communities, such as:
            ``(1) Seeking legislative language directing the Foreign 
        Trade Zone (`FTZ') Board to expedite consideration of FTZ 
        applications from communities or businesses that have been 
        found eligible for trade adjustment assistance.
            ``(2) Seeking legislative language to make new markets tax 
        credits available in communities impacted by trade.
            ``(3) Seeking legislative language to make work opportunity 
        tax credits available for hiring unemployed workers who are 
        certified eligible for trade adjustment assistance.
            ``(4) Examining ways to assist trade impacted rural 
        communities and industries take advantage of the Department of 
        Agriculture's rural development program.

``SEC. 273. NOTIFICATION AND CERTIFICATION AS AN ELIGIBLE COMMUNITY.

    ``(a) Notification.--The Secretary of Labor, not later than 15 days 
after making a determination that a group of workers is eligible for 
trade adjustment assistance under section 231, shall notify the 
Governor of the State in which the community in which the worker's firm 
is located and the Director, of the Secretary's determination.
    ``(b) Certification.--Not later than 30 days after notification by 
the Secretary of Labor described in subsection (a), the Director shall 
certify as eligible for assistance under this chapter a community in 
which 1 of the following conditions applies:
            ``(1) Number of job losses.--The Director shall certify 
        that a community is eligible for assistance under this chapter 
        if--
                    ``(A) in an urban community, at least 500 workers 
                have been certified for assistance under section 231 in 
                the most recent 36-month period preceding the date of 
                certification under this section for which data are 
                available; or
                    ``(B) in a rural community, at least 300 workers 
                have been certified for assistance under section 231 in 
                the most recent 36-month period preceding the date of 
                certification under this section for which data are 
                available.
            ``(2) Percent of workforce unemployed.--The Director shall 
        certify that a community is eligible for assistance under this 
        chapter if the unemployment rate for the community is at least 
        1 percent greater than the national unemployment rate for the 
        most recent 12-month period for which data are available.
    ``(c) Notification to Eligible Communities.--Not later than 15 days 
after the Director certifies a community as eligible under subsection 
(b), the Director shall notify the community--
            ``(1) of its determination under subsection (b);
            ``(2) of the provisions of this chapter;
            ``(3) how to access the clearinghouse established under 
        section 272(c)(2); and
            ``(4) how to obtain technical assistance provided under 
        section 272(c)(4).

``SEC. 274. COMMUNITY ECONOMIC DEVELOPMENT COORDINATING COMMITTEE.

    ``(a) Establishment.--In order to apply for and receive benefits 
under this chapter, an eligible community shall establish a Community 
Economic Development Coordinating Committee certified by the Director 
as meeting the requirements of subsection (b)(1).
    ``(b) Composition of the Committee.--
            ``(1) Local participation.--The Community Economic 
        Development Coordinating Committee established by an eligible 
        community under subsection (a) shall include representatives of 
        those groups significantly affected by economic dislocation, 
        such as local, regional, tribal, and State governments, 
        regional councils of governments and economic development, 
        business, labor, education, health organizations, religious, 
        and other community-based groups providing assistance to 
        workers, their families, and communities.
            ``(2) Federal participation.--Pursuant to section 
        275(b)(3), the community economic adjustment advisor, assigned 
        by the Director to assist an eligible community, shall serve as 
        an ex officio member of the Community Economic Development 
        Coordinating Committee, and shall arrange for participation by 
        representatives of other Federal agencies on that Committee as 
        necessary.
            ``(3) Existing organization.--An eligible community may 
        designate an existing organization in that community as the 
        Community Economic Development Coordinating Committee if that 
        organization meets the requirements of paragraph (1) for the 
        purposes of this chapter.
    ``(c) Duties.--The Community Economic Development Coordinating 
Committee shall--
            ``(1) ascertain the severity of the community economic 
        adjustment required as a result of the increase in imports or 
        shift in production;
            ``(2) assess the capacity of the community to respond to 
        the required economic adjustment and the needs of the community 
        as it undertakes economic adjustment, taking into consideration 
        such factors as the number of jobs lost, the size of the 
        community, the diversity of industries, the skills of the labor 
        force, the condition of the current labor market, the 
        availability of financial resources, the quality and 
        availability of educational facilities, the adequacy and 
        availability of public services, and the existence of a basic 
        and advanced infrastructure in the community;
            ``(3) facilitate a dialogue between concerned interests in 
        the community, represent the impacted community, and ensure all 
        interests in the community work collaboratively toward 
        collective goals without duplication of effort or resources;
            ``(4) oversee the development of a strategic plan for 
        community economic development, taking into consideration the 
        factors mentioned under paragraph (2), and consistent with the 
        criteria established by the Secretary for the strategic plan 
        developed under section 276;
            ``(5) create an executive council of members of the 
        Community Economic Development Coordinating Committee, which 
        shall include representatives of labor, employers, and 
        community organizations, to promote the strategic plan within 
        the community and ensure coordination and cooperation among all 
        stakeholders;
            ``(6) apply for any grant, loan, or loan guarantee 
        available under Federal law to develop or implement the 
        strategic plan, and be an eligible recipient for funding for 
        economic adjustment for that community; and
            ``(7) assess the impact on public services in the community 
        as a result of economic dislocation.

``SEC. 275. COMMUNITY ECONOMIC ADJUSTMENT ADVISORS.

    ``(a) In General.--Pursuant to section 272(c)(3)(G), the Director 
shall assign a community economic adjustment advisor to each eligible 
community.
    ``(b) Duties.--The community economic adjustment advisor shall--
            ``(1) provide technical assistance to the eligible 
        community, assist in the development and implementation of a 
        strategic plan, including applying for any grant available 
        under this or any other Federal law to develop or implement 
        that plan;
            ``(2) at the local and regional level, coordinate the 
        response of all Federal agencies offering assistance to the 
        eligible community;
            ``(3) serve as an ex officio member of the Community 
        Economic Development Coordinating Committee established by an 
        eligible community under section 274;
            ``(4) act as liaison between the Community Economic 
        Development Coordinating Committee established by the eligible 
        community and all other Federal agencies that offer assistance 
        to eligible communities, including the Department of 
        Agriculture, the Department of Defense, the Department of 
        Education, the Department of Labor, the Department of 
Housing and Urban Development, the Department of Health and Human 
Services, the Small Business Administration, the Department of the 
Treasury, the National Economic Council, and other offices or agencies 
of the Department of Commerce;
            ``(5) report regularly to the Director regarding the 
        progress of development activities in the community to which 
        the community economic adjustment advisor is assigned; and
            ``(6) perform other duties as directed by the Secretary or 
        the Director.

``SEC. 276. STRATEGIC PLANS.

    ``(a) In General.--With the assistance of the community economic 
adjustment advisor, an eligible community may develop a strategic plan 
for community economic adjustment and diversification.
    ``(b) Requirements for Strategic Plan.--A strategic plan shall 
contain, at a minimum, the following:
            ``(1) A description and justification of the capacity for 
        economic adjustment, including the method of financing to be 
        used, the anticipated management structure of the Community 
        Economic Development Coordinating Committee, and the commitment 
        of the community to the strategic plan over the long term.
            ``(2) A description of, and a plan to accomplish, the 
        projects to be undertaken by the eligible community.
            ``(3) A description of how the plan and the projects to be 
        undertaken by the eligible community will lead to job creation 
        and job retention in the community.
            ``(4) A description of any alternative development plans 
        that were considered, particularly less costly alternatives, 
        and why those plans were rejected in favor of the proposed 
        plan.
            ``(5) A description of any additional steps the eligible 
        community will take to achieve economic adjustment and 
        diversification, including how the plan and the projects will 
        contribute to establishing or maintaining a level of public 
        services necessary to attract and retain economic investment.
            ``(6) A description and justification for the cost and 
        timing of proposed basic and advanced infrastructure 
        improvements in the eligible community.
            ``(7) A description of the occupational and workforce 
        conditions in the eligible community, including but not limited 
        to existing levels of workforce skills and competencies, and 
        educational programs available for workforce training and 
        future employment needs.
            ``(8) A description of how the plan will adapt to changing 
        markets, business cycles, and other variables.
            ``(9) A graduation strategy through which the eligible 
        community demonstrates that the community will terminate the 
        need for Federal assistance.
            ``(10) A description of the ways in which the community 
        will support labor-management partnerships.
            ``(11) A description of the strategies that will be used to 
        support a level of public service needed to attract and retain 
        investment.
            ``(12) A description of ways in which the community will 
        support labor-management partnerships.
            ``(13) A description of the strategies that will be used to 
        support a level of public service needed to retain and attract 
        investment.
    ``(c) Grants To Develop Strategic Plans.--
            ``(1) In general.--The Director, upon receipt of an 
        application from a Community Economic Development Coordinating 
        Committee on behalf of an eligible community, shall award a 
        grant to that community to be used to develop the strategic 
        plan.
            ``(2) Amount.--The amount of a grant made under paragraph 
        (1) shall be determined by the Secretary, but may not exceed 
        $50,000 to each community.
            ``(3) Limit.--Each community can only receive 1 grant under 
        this subsection for the purpose of developing a strategic plan 
        in any 5-year period.
    ``(d) Submission of Plan.--A strategic plan developed under 
subsection (a) shall be submitted to the Director for evaluation and 
approval.

``SEC. 277. GRANTS FOR ECONOMIC DEVELOPMENT.

    ``The Director, upon receipt of an application from the Community 
Economic Development Coordinating Committee on behalf of an eligible 
community, may award a grant to that community to carry out any project 
or program included in the strategic plan approved under section 276(d) 
that--
            ``(1) will be located in, or will create or preserve high-
        wage jobs, in that eligible community;
            ``(2) implements the strategy of that eligible community to 
        create high-wage jobs in sectors that are expected to expand, 
        including projects that--
                    ``(A) encourage industries to locate in that 
                eligible community, if such funds are not used to 
                encourage the relocation of any employer in a manner 
                that causes the dislocation of employees of that 
                employer at another facility in the United States;
                    ``(B) leverage resources to create or improve 
                Internet or telecommunications capabilities to make the 
                community more attractive for business;
                    ``(C) establish a funding pool for job creation 
                through entrepreneurial activities;
                    ``(D) assist existing firms in that community to 
                restructure or retool to become more competitive in 
                world markets and prevent job loss; or
                    ``(E) assist the community in acquiring the 
                resources and providing the level of public services 
                necessary to meet the objectives set out in the 
                strategic plan;
            ``(3) gives priority to community efforts that support 
        labor-management partnerships and regional and sectoral 
        strategies for skill development and job creation; and
            ``(4) assists and supports a level of public service needed 
        to attract and retain investment.

``SEC. 278. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to the Department of 
Commerce, for the period beginning on October 1, 2006 and ending 
September 30, 2016 such sums as may be necessary to carry out the 
purposes of this chapter.

``SEC. 279. GENERAL PROVISIONS.

    ``(a) Report by the Director.--Not later than 6 months after the 
date of the enactment of the Right Time to Reinvest in America's 
Competitiveness and Knowledge Act, and annually thereafter, the 
Director shall submit to the Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of Representatives a report 
regarding the programs established under this chapter.
    ``(b) Regulations.--The Secretary shall prescribe such regulations 
as are necessary to carry out the provisions of this chapter.
    ``(c) Supplement Not Supplant.--Funds appropriated under this 
chapter shall be used to supplement and not supplant other Federal, 
State, and local public funds expended to provide economic development 
assistance for communities.''.

SEC. 5233. TERMINATION.

    Section 285(b) of the Trade Act of 1974 (19 U.S.C. 2271 note) is 
amended by adding at the end the following:
            ``(3) Assistance for communities.--Technical assistance and 
        other payments may not be provided under chapter 4 after 
        September 30, 2016.''.

SEC. 5234. CONFORMING AMENDMENTS.

    The table of contents for chapter 4 of title II of the 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.''.

                   CHAPTER 4--AGREEMENTS WITH STATES

SEC. 5241. AGREEMENTS WITH STATES.

    Section 239(a) of the Trade Act of 1974 (19 U.S.C. 2311(a)) is 
amended by striking ``and (4)'' and inserting ``(4) will use personnel 
standards on a merit basis in the administration of services and 
payment of benefits to adversely affected workers under this chapter, 
and (5)''.

          TITLE VI--MODERNIZATION OF LABOR AND EMPLOYMENT LAWS

           Subtitle A--Protecting Workers' Right To Organize

SEC. 6101. SHORT TITLE.

    This subtitle may be cited as the ``Employee Free Choice Act''.

SEC. 6102. STREAMLINING UNION CERTIFICATION.

    (a) In General.--Section 9(c) of the National Labor Relations Act 
(29 U.S.C. 159(c)) is amended by adding at the end the following:
    ``(6) Notwithstanding any other provision of this section, whenever 
a petition shall have been filed by an employee or group of employees 
or any individual or labor organization acting in their behalf alleging 
that a majority of employees in a unit appropriate for the purposes of 
collective bargaining wish to be represented by an individual or labor 
organization for such purposes, the Board shall investigate the 
petition. If the Board finds that a majority of the employees in a unit 
appropriate for bargaining has signed authorizations designating the 
individual or labor organization specified in the petition as their 
bargaining representative and that no other individual or labor 
organization is currently certified or recognized as the exclusive 
representative of any of the employees in the unit, the Board shall not 
direct an election but shall certify the individual or labor 
organization as the representative described in subsection (a).
    ``(7) The Board shall develop guidelines and procedures for the 
designation by employees of a bargaining representative in the manner 
described in paragraph (6). Such guidelines and procedures shall 
include--
            ``(A) model collective bargaining authorization language 
        that may be used for purposes of making the designations 
        described in paragraph (6); and
            ``(B) procedures to be used by the Board to establish the 
        authenticity of signed authorizations designating bargaining 
        representatives.''.
    (b) Conforming Amendments.--
            (1) National labor relations board.--Section 3(b) of the 
        National Labor Relations Act (29 U.S.C. 153(b)) is amended, in 
        the second sentence--
                    (A) by striking ``and to'' and inserting ``to''; 
                and
                    (B) by striking ``and certify the results 
                thereof,'' and inserting ``, and to issue 
                certifications as provided for in that section,''.
            (2) Unfair labor practices.--Section 8(b) of the National 
        Labor Relations Act (29 U.S.C. 158(b)) is amended--
                    (A) in paragraph (7)(B), by striking ``, or'' and 
                inserting ``or a petition has been filed under section 
                9(c)(6), or''; and
                    (B) in paragraph (7)(C), by striking ``when such a 
                petition has been filed'' and inserting ``when such a 
                petition other than a petition under section 9(c)(6) 
                has been filed''.

SEC. 6103. FACILITATING INITIAL COLLECTIVE BARGAINING AGREEMENTS.

    Section 8 of the National Labor Relations Act (29 U.S.C. 158) is 
amended by adding at the end the following:
    ``(h) Whenever collective bargaining is for the purpose of 
establishing an initial agreement following certification or 
recognition, the provisions of subsection (d) shall be modified as 
follows:
            ``(1) Not later than 10 days after receiving a written 
        request for collective bargaining from an individual or labor 
        organization that has been newly organized or certified as a 
        representative as defined in section 9(a), or within such 
        further period as the parties agree upon, the parties shall 
        meet and commence to bargain collectively and shall make every 
        reasonable effort to conclude and sign a collective bargaining 
        agreement.
            ``(2) If after the expiration of the 90-day period 
        beginning on the date on which bargaining is commenced, or such 
        additional period as the parties may agree upon, the parties 
        have failed to reach an agreement, either party may notify the 
        Federal Mediation and Conciliation Service of the existence of 
        a dispute and request mediation. Whenever such a request is 
        received, it shall be the duty of the Service promptly to put 
itself in communication with the parties and to use its best efforts, 
by mediation and conciliation, to bring them to agreement.
            ``(3) If after the expiration of the 30-day period 
        beginning on the date on which the request for mediation is 
        made under paragraph (2), or such additional period as the 
        parties may agree upon, the Service is not able to bring the 
        parties to agreement by conciliation, the Service shall refer 
        the dispute to an arbitration board established in accordance 
        with such regulations as may be prescribed by the Service. The 
        arbitration panel shall render a decision settling the dispute 
        and such decision shall be binding upon the parties for a 
        period of 2 years, unless amended during such period by written 
        consent of the parties.''.

SEC. 6104. STRENGTHENING ENFORCEMENT.

    (a) Injunctions Against Unfair Labor Practices During Organizing 
Drives.--
            (1) In general.--Section 10(l) of the National Labor 
        Relations Act (29 U.S.C. 160(l)) is amended--
            (1) in the second sentence, by striking ``If, after such'' 
        and inserting the following:
    ``(2) If, after such''; and
            (2) by striking the first sentence and inserting the 
        following:
    ``(1) Whenever it is charged--
            ``(A) that any employer--
                    ``(i) discharged or otherwise discriminated against 
                an employee in violation of subsection (a)(3) of 
                section 8;
                    ``(ii) threatened to discharge or to otherwise 
                discriminate against an employee in violation of 
                subsection (a)(1) of section 8; or
                    ``(iii) engaged in any other unfair labor practice 
                within the meaning of subsection (a)(1) that 
                significantly interferes with, restrains, or coerces 
                employees in the exercise of the rights guaranteed in 
                section 7;
        while employees of that employer were seeking representation by 
        a labor organization or during the period after a labor 
        organization was recognized as a representative defined in 
        section 9(a) until the first collective bargaining contract is 
        entered into between the employer and the representative; or
            ``(B) that any person has engaged in an unfair labor 
        practice within the meaning of subparagraph (A), (B), or (C) of 
        section 8(b)(4), section 8(e), or section 8(b)(7);
the preliminary investigation of such charge shall be made forthwith 
and given priority over all other cases except cases of like character 
in the office where it is filed or to which it is referred.''.
            (2) Conforming amendment.--Section 10(m) of the National 
        Labor Relations (29 U.S.C. 160(m)) is amended by inserting 
        ``under circumstances not subject to section 10(l)'' after 
        ``section 8''.
    (b) Remedies for Violations.--
            (1) Backpay.--Section 10(c) of the National Labor Relations 
        Act (29 U.S.C. 160(c)) is amended by striking ``And provided 
        further,'' and inserting ``Provided further, That if the Board 
        finds that an employer has discriminated against an employee in 
        violation of subsection (a)(3) of section 8 while employees of 
        the employer were seeking representation by a labor 
        organization, or during the period after a labor organization 
        was recognized as a representative defined in subsection (a) of 
        section 9 until the first collective bargaining contract was 
        entered into between the employer and the representative, the 
        Board in such order shall award the employee back pay and, in 
        addition, 2 times that amount as liquidated damages: Provided 
        further,''.
            (2) Civil penalties.--Section 12 of the National Labor 
        Relations Act (29 U.S.C. 162) is amended--
                    (A) by striking ``Any'' and inserting ``(a) Any''; 
                and
                    (B) by adding at the end the following:
    ``(b) Any employer who willfully or repeatedly commits any unfair 
labor practice within the meaning of subsection (a)(1) or (a)(3) of 
section 8 while employees of the employer are seeking representation by 
a labor organization or during the period after a labor organization 
has been recognized as a representative defined in subsection (a) of 
section 9 until the first collective bargaining contract is entered 
into between the employer and the representative shall, in addition to 
any make-whole remedy ordered, be subject to a civil penalty of not to 
exceed $20,000 for each violation. In determining the amount of any 
penalty under this section, the Board shall consider the gravity of the 
unfair labor practice and the impact of the unfair labor practice on 
the charging party, on other persons seeking to exercise rights 
guaranteed by this Act, or on the public interest.''.

              Subtitle B--Raising the Federal Minimum Wage

SEC. 6201. SHORT TITLE.

    This subtitle may be cited as the ``Fair Minimum Wage Act of 
2006''.

SEC. 6202. MINIMUM WAGE.

    (a) In General.--Section 6(a)(1) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:
            ``(1) except as otherwise provided in this section, not 
        less than--
                    ``(A) $5.85 an hour, beginning on the 60th day 
                after the date of enactment of the Fair Minimum Wage 
                Act of 2006;
                    ``(B) $6.55 an hour, beginning 12 months after that 
                60th day; and
                    ``(C) $7.25 an hour, beginning 24 months after that 
                60th day;''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect 60 days after the date of enactment of this Act.

SEC. 6203. APPLICABILITY OF MINIMUM WAGE TO THE COMMONWEALTH OF THE 
              NORTHERN MARIANA ISLANDS.

    (a) In General.--Section 6 of the Fair Labor Standards Act of 1938 
(29 U.S.C. 206) shall apply to the Commonwealth of the Northern Mariana 
Islands.
    (b) Transition.--Notwithstanding subsection (a), the minimum wage 
applicable to the Commonwealth of the Northern Mariana Islands under 
section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
206(a)(1)) shall be--
            (1) $3.55 an hour, beginning on the 60th day after the date 
        of enactment of this Act; and
            (2) increased by $0.50 an hour (or such lesser amount as 
        may be necessary to equal the minimum wage under such section 
        6(a)(1)), beginning 6 months after the date of enactment of 
        this Act and every 6 months thereafter until the minimum wage 
        applicable to the Commonwealth of the Northern Mariana Islands 
        under this subsection is equal to the minimum wage set forth in 
        such section.

          Subtitle C--Modernization of Unemployment Insurance

      CHAPTER 1--IMPROVEMENTS IN REGULAR UNEMPLOYMENT COMPENSATION

SEC. 6311. PART-TIME AND LOW-WAGE WORKERS.

    Section 3304(a) of the Internal Revenue Code of 1986 (relating to 
requirements for State unemployment compensation laws) is amended--
            (1) in paragraph (18), by striking ``and'' at the end;
            (2) by redesignating paragraph (19) as paragraph (21); and
            (3) by inserting after paragraph (18) the following new 
        paragraphs:
            ``(19) in the case of an individual who is not eligible for 
        regular compensation under the State law because such 
        individual does not meet requirements relating to availability 
        for work, active search for work, or refusal to accept work, 
        because such individual is seeking, or is available for, less 
        than full-time work, compensation is not denied by such State 
        to an otherwise eligible individual who seeks less than full-
        time work or fails to accept full-time work;
            ``(20) in the case of an individual who is not eligible for 
        regular compensation under the State law because of the use of 
        a definition of base period that does not count wages earned in 
        the most recently completed calendar quarter, eligibility for 
        compensation is determined by applying a base period ending at 
        the close of the most recently completed calendar quarter; 
        and''.

SEC. 6312. NO REDUCTION IN UNEMPLOYMENT COMPENSATION AS A RESULT OF 
              PENSION ROLLOVERS.

    (a) In General.--Section 3304(a) of the Internal Revenue Code of 
1986 (relating to requirements for State unemployment compensation 
laws) is amended by adding at the end the following new flush sentence:
``Compensation shall not be reduced under paragraph (15) for any 
pension, retirement or retired pay, annuity, or similar payment which 
is not includible in gross income of the individual for the taxable 
year in which paid because it was part of a rollover distribution.''

  CHAPTER 2--IMPROVEMENTS TO THE FEDERAL-STATE EXTENDED UNEMPLOYMENT 
                          COMPENSATION PROGRAM

SEC. 6321. LOWERING OF EXTENDED BENEFIT ``ON'' INDICATOR.

    (a) Regular Triggers.--Section 203(d) of the Federal-State Extended 
Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) is 
amended--
            (1) in paragraph (1)(B), by striking ``5 per centum'' and 
        inserting ``4 percent''; and
            (2) in the matter following paragraph (2), by striking 
        ``the figure `5' contained in subparagraph (B) thereof were 
        `6';'' and inserting ``the figure `4' contained in subparagraph 
        (B) thereof were `5';''.
    (b) Additional Trigger.--Section 203(f)(1) of the Federal-State 
Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) is 
amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``Effective with respect to compensation for weeks of 
        unemployment beginning after March 6, 1993, the State may by 
        law provide that for purposes of beginning or ending any 
        extended benefit period under this section'' and inserting 
        ``Each State shall by law provide that for purposes of 
        beginning or ending any extended benefit period under this 
        section''; and
            (2) in subparagraph (A)(i), by striking ``6.5'' and 
        inserting ``6''.
    (c) High Unemployment Period Trigger.--Section 202(b)(3)(B) of the 
Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 
3304 note) is amended by striking ``substituting `8 percent' for `6.5 
percent'.'' and inserting ``substituting `7.5 percent' for `6 
percent'.''
    (d) Conforming and Technical Amendments.--
            (1) The matter following paragraph (2) of section 203(d) of 
        the Federal-State Extended Unemployment Compensation Act of 
        1970 (26 U.S.C. 3304 note) is amended by striking ``Effective 
        with respect to compensation for weeks of unemployment 
        beginning after March 30, 1977 (or, if later, the date 
        established pursuant to State law), the State'' and inserting 
        ``A State''.
            (2) Section 207 of the Federal-State Extended Unemployment 
        Compensation Act of 1970 (26 U.S.C. 3304 note) is repealed.
            (3) The heading of subsection (f) of section 203 of the 
        Federal-State Extended Unemployment Compensation Act of 1970 
        (26 U.S.C. 3304 note) is amended to read as follows:

                        ``Additional Trigger''.

SEC. 6322. REVISION OF DEFINITION OF RATE OF INSURED UNEMPLOYMENT.

    (a) In General.--Section 203(e)(1) of the Federal-State Extended 
Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) is amended 
by adding at the end the following new paragraph:
            ``(3) Notwithstanding paragraph (1), the term `rate of 
        insured unemployment' shall have the meaning given that term 
        under paragraph (1), except that each individual exhausting the 
        right of such individual to regular compensation during the 
        most recent 3 calendar months for which data are available 
        before the close of the period for which such rate is being 
        determined shall be taken into account as if each such 
        individual was filing a claim for regular compensation for each 
        week during the period for which such rate is being 
        determined.''.

SEC. 6323. REPEAL OF CERTAIN STATE LAW EXTENDED BENEFIT REQUIREMENTS.

    (a) In General.--Section 202 of the Federal-State Extended 
Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) is 
amended--
            (1) in subsection (a), by striking paragraphs (3) through 
        (7); and
            (2) by striking subsection (c).
    (b) Conforming Amendment.--Paragraph (4) of section 231(a) of the 
Trade Act of 1974 (19 U.S.C. 2291(a)(4)) is repealed.

                       CHAPTER 3--EFFECTIVE DATE

SEC. 6331. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by this subtitle shall apply in the case of 
compensation paid for weeks beginning on or after the expiration of 180 
days from the date of enactment of this Act.
    (b) Extension of Effective Date for State Law Amendment.--
            (1) In general.--If the Secretary of Labor identifies a 
        State as requiring a change to its statutes or regulations in 
        order to comply with the amendments made by this subtitle, such 
        amendments shall apply in the case of compensation paid for 
        weeks beginning after the earlier of--
                    (A) the date the State changes its statutes or 
                regulations in order to comply with such amendments; or
                    (B) the end of the first session of the State 
                legislature which begins after the date of enactment of 
                this Act or which began prior to such date and remained 
                in session for at least 25 calendar days after such 
                date;
                except that in no case shall such amendments apply 
                before the date that is 180 days after the date of 
                enactment of this Act.
            (2) Session defined.--In this subsection, the term 
        ``session'' means a regular, special, budget, or other session 
        of a State legislature.
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