II 

Calendar No. 274 

109TH CONGRESS 

1ST SESSION S. 1932 

To provide for reconciliation pursuant to section 202(a) of the concurrent 

resolution on the budget for fiscal year 2006 (H. Con. Res. 95). 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 27, 2005 

Mr. GREGG, from the Committee on the Budget, reported the following 

original bill; which was read twice and placed on the calendar 

A BILL 

To provide for reconciliation pursuant to section 202(a) of 

the concurrent resolution on the budget for fiscal year 

2006 (H. Con. Res. 95). 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Deficit Reduction Om5 nibus Reconciliation Act of 2005’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of contents for this Act is as follows: 
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TITLE I—COMMITTEE ON AGRICULTURE, NUTRITION, AND 

FORESTRY 

Sec. 1001. Short title. 

Subtitle A—Commodity Programs 

Sec. 1101. Reduction of commodity program payments. 

Sec. 1102. Forfeiture penalty for nonrecourse sugar loans. 

Sec. 1103. Cotton competitiveness provisions. 

Sec. 1104. National dairy market loss payments. 

Sec. 1105. Advance direct payments. 

Subtitle B—Conservation 

Sec. 1201. Conservation reserve program. 

Sec. 1202. Conservation security program. 

Sec. 1203. Environmental quality incentives program. 

Subtitle C—Miscellaneous 

Sec. 1301. Initiative for future agriculture and food systems. 

TITLE II—COMMITTEE ON BANKING, HOUSING, AND URBAN 

AFFAIRS 

Subtitle A—Merger of the Deposit Insurance Funds 

Sec. 2001. Short title. 

Sec. 2002. Definitions. 

Sec. 2003. Merger of BIF and SAIF. 

Sec. 2004. Establishment of the Deposit Insurance Fund. 

Sec. 2005. Technical and conforming amendments to the Federal Deposit Insurance Act. 

Sec. 2006. Other technical and conforming amendments. 

Sec. 2007. Effective date. 

Subtitle B—Deposit Insurance Modernization and Improvement 

Sec. 2011. Short title. 

Sec. 2012. Changes to Federal deposit insurance coverage. 

Sec. 2013. Designated reserve ratio. 

Sec. 2014. Assessment credits and dividends. 

Sec. 2015. Assessments-related records retention and statute of limitations. 

Sec. 2016. Increase in fees for late assessment payments. 

Sec. 2017. Regulations required. 

Sec. 2018. Studies of potential changes to the Federal deposit insurance system. 

Sec. 2019. Effective date. 

Subtitle C—FHA Asset Disposition 

Sec. 2021. Short title. 

Sec. 2022. Definitions. 

Sec. 2023. Appropriated funds requirement for below market sales. 

Sec. 2024. Up-front grants. 

Sec. 2025. Authorization of appropriations. 
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TITLE III—COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION 

Sec. 3001. Short title. 

Sec. 3002. Analog spectrum recovery; hard deadline. 

Sec. 3003. Auction of recovered spectrum. 

Sec. 3004. Supplemental license fees. 

Sec. 3005. Digital Transition and Public Safety Fund. 

Sec. 3006. Essential air service program. 

TITLE IV—ENERGY AND NATURAL RESOURCES 

Sec. 401. Oil and gas leasing program. 

TITLE V—COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

Sec. 5001. Technical corrections to SAFETEA–LU. 

TITLE VI—FINANCE 

Sec. 6000. Amendments to Social Security Act. 

Subtitle A—Medicaid 

CHAPTER 1—PAYMENT FOR PRESCRIPTION DRUGS UNDER MEDICAID

Sec. 6001. Pharmacy reimbursement. 

Sec. 6002. Increase in rebates for covered outpatient drugs. 

Sec. 6003. Improved regulation of authorized generic drugs. 

Sec. 6004. Collection of rebates for certain physician administered drugs. 

CHAPTER 2—LONG-TERM CARE UNDER MEDICAID

Sec. 6011. Reform of Medicaid asset transfer rules. 

Sec. 6012. State long-term care partnerships. 

CHAPTER 3—ELIMINATING FRAUD, WASTE, AND ABUSE IN MEDICAID

Sec. 6021. Enhancing third party recovery. 

Sec. 6022. Limitation on use of contingency fee arrangements. 

Sec. 6023. Encouraging the enactment of State False Claims Acts. 

Sec. 6024. Employee education about False Claims Recovery. 

Sec. 6025. Prohibition on restocking and double billing of prescription drugs. 

Sec. 6026. Medicaid Integrity Program. 

CHAPTER 4—STATE FINANCING UNDER MEDICAID

Sec. 6031. Reforms of targeted case management. 

Sec. 6032. Temporary Federal matching payments for Federal assistance. 

Sec. 6033. Managed care organization provider tax reform. 

Sec. 6034. Inclusion of podiatrists as physicians. 

Sec. 6035. DSH allotment for the District of Columbia. 

Sec. 6036. Demonstration project regarding Medicaid reimbursement for stabilization of emergency medical conditions by non-publicly 

owned or operated institutions for mental diseases. 

CHAPTER 5—IMPROVING THE MEDICAID AND STATE CHILDREN’S HEALTH

INSURANCE PROGRAMS
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SUBCHAPTER A—FAMILY OPPORTUNITY ACT

Sec. 6041. Short title of subchapter. 

Sec. 6042. Opportunity for families of disabled children to purchase Medicaid 

coverage for such children. 

Sec. 6043. Demonstration projects regarding home and community-based alternatives to psychiatric residential treatment facilities for children. 

Sec. 6044. Development and support of family-to-family health information centers. 

Sec. 6045. Restoration of Medicaid eligibility for certain SSI beneficiaries. 

SUBCHAPTER B—STATE CHILDREN’S HEALTH INSURANCE PROGRAM

Sec. 6051. Rules for availability, redistribution, and extended availability of allotments for fiscal years 2003, 2004, and 2005. 

Sec. 6052. Authority to use up to 10 percent of fiscal year 2006 and 2007 allotments for outreach. 

Sec. 6053. Prohibition against covering nonpregnant childless adults with 

SCHIP funds. 

Sec. 6054. Continued authority for qualifying States to use certain funds for 

Medicaid expenditures. 

Sec. 6055. Grants to promote innovative outreach and enrollment under Medicaid and SCHIP. 

SUBCHAPTER C—MONEY FOLLOWS THE PERSON REBALANCING

DEMONSTRATION

Sec. 6061. Money Follows the Person Rebalancing Demonstration. 

CHAPTER 6—OPTION FOR HURRICANE KATRINA DISASTER STATES TO

DELAY APPLICATION

Sec. 6071. Option for Hurricane Katrina disaster States to delay application. 

Subtitle B—Medicare 

Sec. 6101. Improvements to the Medicare-dependent hospital (MDH) program. 

Sec. 6102. Reduction in payments to skilled nursing facilities for bad debt. 

Sec. 6103. Two-year extension of the 50 percent compliance threshold used to 

determine whether a hospital or unit of a hospital is an inpatient rehabilitation facility under the Medicare program. 

Sec. 6104. Prohibition on physician self referrals to physician owned, limited 

service hospitals. 

Sec. 6105. Minimum update for physicians’ services for 2006. 

Sec. 6106. One-year extension of hold harmless provisions for small rural hospitals and sole community hospitals under the prospective payment system for hospital outpatient department services. 

Sec. 6107. Update to the composite rate component of the basic case-mix adjusted prospective payment system for dialysis services. 

Sec. 6108. One-year extension of moratorium on therapy caps. 

Sec. 6109. Transfer of title of certain DME to patient after 13-month rental. 

Sec. 6110. Establishment of Medicare value-based purchasing programs. 

Sec. 6111. Phase-out of risk adjustment budget neutrality in determining the 

amount of payments to Medicare Advantage organizations. 

Sec. 6112. Elimination of Medicare Advantage regional plan stabilization fund. 

Sec. 6113. Rural PACE provider grant program. 
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Sec. 6114. Waiver of part B late enrollment penalty for certain international 

volunteers. 

Sec. 6115. Delivery of services at Federally qualified health centers. 

TITLE VII—COMMITTEE ON HEALTH, EDUCATION, LABOR, AND 

PENSIONS 

Subtitle A—Education Provisions 

CHAPTER 1—EDUCATION

Sec. 7101. Provisional grant assistance program. 

Sec. 7102. National smart grants. 

Sec. 7103. Loan limits. 

Sec. 7104. Plus loan interest rates and zero special allowance payment. 

Sec. 7105. Reduction of lender insurance reimbursement rates. 

Sec. 7106. Guaranty agency origination fee. 

Sec. 7107. Deferment of student loans for military service. 

Sec. 7108. Recovery through consolidation. 

Sec. 7109. Single holder rule. 

Sec. 7110. Default reduction program. 

Sec. 7111. Requirements for disbursements of student loans. 

Sec. 7112. Special insurance and reinsurance rules. 

Sec. 7113. School as lender moratorium. 

Sec. 7114. Permanent reduction of special allowance payments for loans from 

the proceeds of tax exempt issues. 

Sec. 7115. Special allowances. 

Sec. 7116. Origination fee. 

Sec. 7117. Income contingent repayment for public sector employees. 

Sec. 7118. Family contribution for dependent students. 

Sec. 7119. Family contribution for independent students without dependents 

other than a spouse. 

Sec. 7120. Family contribution for independent students with dependents other 

than a spouse. 

Sec. 7121. Regulations; updated tables. 

Sec. 7122. Simplified need test and automatic zero improvements. 

Sec. 7123. Loan forgiveness for teachers. 

Sec. 7124. Effective date. 

CHAPTER 2—HURRICANE KATRINA HIGHER EDUCATION RECOVERY

Sec. 7151. Short title. 

Sec. 7152. Definitions. 

Sec. 7153. Waiver authority and modifications to certain provisions of the 

Higher Education Act of 1965. 

Sec. 7154. General waiver authority and required consultation. 

Sec. 7155. Notice of waivers, modifications, or extensions. 

Sec. 7156. Regulatory requirements inapplicable. 

Sec. 7157. Department of Education Inspector General audit and report. 

Sec. 7158. Sunset provision. 

Subtitle B—Pension Benefit Guaranty Corporation Premiums 

Sec. 7201. Amendments to the Employee Retirement Income Security Act of 

1974. 

Subtitle C—Higher Education Reauthorization 
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CHAPTER 1—SHORT TITLE; REFERENCES; GENERAL EFFECTIVE DATE

Sec. 7301. Short title. 

Sec. 7302. References. 

Sec. 7303. General effective date. 

CHAPTER 2—GENERAL PROVISIONS

Sec. 7311. Additional definitions. 

Sec. 7312. General definition of institution of higher education. 

Sec. 7313. Definition of institution of higher education for purposes of title IV 

programs. 

Sec. 7314. Protection of student speech and association rights. 

Sec. 7315. National advisory committee on institutional quality and integrity. 

Sec. 7316. Drug and alcohol abuse prevention. 

Sec. 7317. Prior rights and obligations. 

Sec. 7318. Cost of higher education. 

Sec. 7319. Performance-based organization for the delivery of Federal student 

financial assistance. 

Sec. 7320. Procurement flexibility. 

CHAPTER 3—TEACHER QUALITY ENHANCEMENT

Sec. 7331. Teacher quality enhancement grants for States and partnerships. 

CHAPTER 4—INSTITUTIONAL AID

Sec. 7341. Program purpose. 

Sec. 7342. Definitions; eligibility. 

Sec. 7343. American Indian tribally controlled colleges and universities. 

Sec. 7344. Alaska Native and Native Hawaiian-serving institutions. 

Sec. 7345. Native American-serving, nontribal institutions. 

Sec. 7346. Part B definitions. 

Sec. 7347. Grants to institutions. 

Sec. 7348. Allotments to institutions. 

Sec. 7349. Professional or graduate institutions. 

Sec. 7350. Authorization of appropriations. 

Sec. 7351. Technical corrections. 

CHAPTER 5—STUDENT ASSISTANCE

SUBCHAPTER A—GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF

HIGHER EDUCATION

Sec. 7361. Federal Pell Grants. 

Sec. 7362. Federal TRIO Programs. 

Sec. 7363. Gaining Early Awareness and Readiness for Undergraduate Programs. 

Sec. 7364. Academic Achievement Incentive Scholarships. 

Sec. 7365. Federal Supplemental Educational Opportunity Grants. 

Sec. 7366. Leveraging Educational Assistance Partnership Program. 

Sec. 7367. Special programs for students whose families are engaged in migrant and seasonal farmwork. 

Sec. 7368. Robert C. Byrd Honors Scholarship Program. 

Sec. 7369. Child care access means parents in school. 

Sec. 7370. Learning anytime anywhere partnerships. 
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SUBCHAPTER B—FEDERAL FAMILY EDUCATION LOAN PROGRAM

Sec. 7381. Extension of authorities. 

Sec. 7382. Federal payments to reduce student interest costs. 

Sec. 7383. Federal consolidation loans. 

Sec. 7384. Default reduction program. 

Sec. 7385. Requirements for disbursement of student loans. 

Sec. 7386. Reports to credit bureaus and institutions of higher education. 

Sec. 7387. Common forms and formats. 

Sec. 7388. Student loan information by eligible borrowers. 

Sec. 7389. Consumer education information. 

Sec. 7390. Definition of eligible lender. 

Sec. 7390A. Repayment by the Secretary of loans of bankrupt, deceased, or disabled borrowers; treatment of borrowers attending schools that 

fail to provide a refund, attending closed schools, or falsely certified as eligible to borrow. 

SUBCHAPTER C—FEDERAL WORK-STUDY PROGRAMS

Sec. 7391. Authorization of appropriations. 

Sec. 7392. Allowance for books and supplies. 

Sec. 7393. Grants for Federal work-study programs. 

Sec. 7394. Job location and development programs. 

Sec. 7395. Work colleges. 

SUBCHAPTER D—WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

Sec. 7401. Funds for administrative expenses. 

SUBCHAPTER E—FEDERAL PERKINS LOANS

Sec. 7411. Program authority. 

Sec. 7412. Terms of loans. 

Sec. 7413. Cancellation of loans for certain public service. 

Sec. 7414. Federal capital contribution recovery. 

SUBCHAPTER F—NEED ANALYSIS

Sec. 7421. Cost of attendance. 

Sec. 7422. Discretion of student financial aid administrators. 

Sec. 7423. Definitions. 

SUBCHAPTER G—GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE

Sec. 7431. Definitions. 

Sec. 7432. Compliance calendar. 

Sec. 7433. Forms and regulations. 

Sec. 7434. Student eligibility. 

Sec. 7435. Statute of limitations and State court judgments. 

Sec. 7436. Institutional refunds. 

Sec. 7437. Institutional and financial assistance for students. 

Sec. 7438. National student loan data system. 

Sec. 7439. Early awareness of financial aid eligibility. 

Sec. 7440. College access initiative. 

Sec. 7441. Program participation agreements. 

Sec. 7442. Regulatory relief and improvement. 

Sec. 7443. Transfer of allotments. 

Sec. 7444. Wage garnishment requirement. 

Sec. 7445. Purpose of administrative payments. 
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Sec. 7446. Advisory committee on student financial assistance. 

Sec. 7447. Regional meetings. 

Sec. 7448. Year 2000 requirements at the department. 

SUBCHAPTER H—PROGRAM INTEGRITY

Sec. 7451. Recognition of accrediting agency or association. 

Sec. 7452. Administrative capacity standard. 

Sec. 7453. Program review and data. 

CHAPTER 6—DEVELOPING INSTITUTIONS

Sec. 7501. Definitions. 

Sec. 7502. Authorized activities. 

Sec. 7503. Duration of grant. 

Sec. 7504. Postbaccalaureate opportunities for Hispanic Americans. 

Sec. 7505. Applications. 

Sec. 7506. Cooperative arrangements. 

Sec. 7507. Authorization of appropriations. 

CHAPTER 7—INTERNATIONAL EDUCATION PROGRAMS

Sec. 7601. Findings. 

Sec. 7602. Graduate and undergraduate language and area centers and programs. 

Sec. 7603. Undergraduate international studies and foreign language programs. 

Sec. 7604. Research; studies. 

Sec. 7605. Technological innovation and cooperation for foreign information access. 

Sec. 7606. Selection of certain grant recipients. 

Sec. 7607. American overseas research centers. 

Sec. 7608. Authorization of appropriations for international and foreign language studies. 

Sec. 7609. Centers for international business education. 

Sec. 7610. Education and training programs. 

Sec. 7611. Authorization of appropriations for business and international education programs. 

Sec. 7612. Minority foreign service professional development program. 

Sec. 7613. Institutional development. 

Sec. 7614. Study abroad program. 

Sec. 7615. Advanced degree in international relations. 

Sec. 7616. Internships. 

Sec. 7617. Financial assistance. 

Sec. 7618. Report. 

Sec. 7619. Gifts and donations. 

Sec. 7620. Authorization of appropriations for the institute for international 

public policy. 

Sec. 7621. Definitions. 

Sec. 7622. Assessment and enforcement. 

CHAPTER 8—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

Sec. 7701. Purpose. 

Sec. 7702. Allocation of Jacob K. Javits fellowships. 

Sec. 7703. Stipends. 

Sec. 7704. Authorization of appropriations for the Jacob K. Javits Fellowship 

Program. 
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Sec. 7705. Institutional eligibility under the graduate assistance in areas of national need program. 

Sec. 7706. Awards to graduate students. 

Sec. 7707. Additional assistance for cost of education. 

Sec. 7708. Authorization of appropriations for the graduate assistance in areas 

of national need program. 

Sec. 7709. Authorization of appropriations for the Thurgood Marshall Legal 

Educational Opportunity Program. 

Sec. 7710. Fund for the improvement of postsecondary education. 

Sec. 7711. Special projects. 

Sec. 7712. Authorization of appropriations for the fund for the improvement of 

postsecondary education. 

Sec. 7713. Repeal of the urban community service program. 

Sec. 7714. Grants authorized for demonstration projects to ensure students 

with disabilities receive a quality higher education. 

Sec. 7715. Applications for demonstration projects to ensure students with disabilities receive a quality higher education. 

Sec. 7716. Authorization of appropriations for the demonstration projects to 

ensure students with disabilities receive a quality higher education. 

CHAPTER 9—MISCELLANEOUS

Sec. 7801. Miscellaneous. 

SUBCHAPTER A—EDUCATION OF THE DEAF ACT OF 1986

Sec. 7901. Laurent Clerc National Deaf Education Center. 

Sec. 7902. Agreement with Gallaudet University. 

Sec. 7903. Agreement for the National Technical Institute for the Deaf. 

Sec. 7904. Cultural experiences grants. 

Sec. 7905. Audit. 

Sec. 7906. Reports. 

Sec. 7907. Monitoring, evaluation, and reporting. 

Sec. 7908. Liaison for educational programs. 

Sec. 7909. Federal endowment programs for Gallaudet University and the National Technical Institute for the Deaf. 

Sec. 7910. Oversight and effect of agreements. 

Sec. 7911. International students. 

Sec. 7912. Research priorities. 

Sec. 7913. Authorization of appropriations. 

SUBCHAPTER B—UNITED STATES INSTITUTE OF PEACE ACT

Sec. 7921. United States Institute of Peace Act. 

SUBCHAPTER C—THE HIGHER EDUCATION AMENDMENTS OF 1998

Sec. 7931. Repeals. 

Sec. 7932. Grants to States for workplace and community transition training 

for incarcerated youth offenders. 

SUBCHAPTER D—INDIAN EDUCATION

PART I—TRIBAL COLLEGES AND UNIVERSITIES

Sec. 7941. Reauthorization of the Tribally Controlled College or University Assistance Act of 1978. 
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PART II—NAVAJO HIGHER EDUCATION

Sec. 7945. Short title. 

Sec. 7946. Reauthorization of Navajo Community College Act. 

TITLE VIII—COMMITTEE ON THE JUDICIARY 

Sec. 8001. Recapture of unused visa numbers. 

Sec. 8002. Fees with respect to immigration services for intracompany transferees. 

1 TITLE I—COMMITTEE ON AGRI2 CULTURE, NUTRITION, AND 

3 FORESTRY 

4 SEC. 1001. SHORT TITLE. 

5 This title may be cited as the ‘‘Agricultural Reconcili6 ation Act of 2005’’. 

7 Subtitle A—Commodity Programs 

8 SEC. 1101. REDUCTION OF COMMODITY PROGRAM PAY9 MENTS. 

10 (a) IN GENERAL.—Subtitle F of title I of the Farm 

11 Security and Rural Investment Act of 2002 (7 U.S.C. 

12 7991 et seq.) is amended by adding at the end the fol13 lowing: 

14 ‘‘SEC. 1619. REDUCTION OF COMMODITY PROGRAM PAY15 MENTS. 

16 ‘‘(a) DEFINITION OF COMMODITY PROGRAM PAY17 MENTS.—In this section, the term ‘commodity program 

18 payments’ means— 

19 ‘‘(1) direct payments; 

20 ‘‘(2) counter-cyclical payments; and 
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1 ‘‘(3) payments and benefits associated with the 

2 loan program, including gains from the forfeiture of 

3 any commodity pledged as collateral for loans and 

4 gains from in-kind payments described in section 

5 166 of the Federal Agriculture Improvement and 

6 Reform Act of 1996 (7 U.S.C. 7286), as determined 

7 by the Secretary. 

8 ‘‘(b) REDUCTION.— 

9 ‘‘(1) IN GENERAL.—Notwithstanding any other 

10 provision of this title, for each of the 2006 through 

11 2010 crop years for wheat, corn, grain sorghum, 

12 barley, oats, upland cotton, extra long staple cotton, 

13 rice, soybeans, other oilseeds, wool, mohair, honey, 

14 dry peas, lentils, small chickpeas, unshorn pelts, si15 lage, hay, and peanuts, the Secretary shall reduce 

16 the total amount of commodity program payments 

17 received by the producers on a farm for those com18 modities for that crop year by an amount equal to 

19 2.5 percent of that amount. 

20 ‘‘(2) MILK.—During the period beginning on 

21 October 1, 2005, and ending on September 30, 

22 2007, the Secretary shall reduce the total amount of 

23 payments received by producers pursuant to section 

24 1502 by an amount equal to 2.5 percent of that 

25 amount.’’. 
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1 (b) COMMODITIES.— 

2 (1) IN GENERAL.—Title I of the Farm Security 

3 and Rural Investment Act of 2002 (7 U.S.C. 7901 

4 et seq.), including each amendment made by that 

5 title, is amended by striking ‘‘2007’’ each place it 

6 appears (other than in sections 1104(f), 1304(g), 

7 and 1307(a)(6) and amendments made by this title) 

8 and inserting ‘‘2011’’. 

9 (2) COTTON.—Sections 1204(e)(1) and 1208(a) 

10 of the Farm Security and Rural Investment Act of 

11 2002 (7 U.S.C. 7934(e)(1), 7938(a)) are amended 

12 by striking ‘‘2008’’ each place it appears and insert13 ing ‘‘2012’’. 

14 SEC. 1102. FORFEITURE PENALTY FOR NONRECOURSE 

15 SUGAR LOANS. 

16 Section 156 of the Federal Agriculture Improvement 

17 and Reform Act of 1996 (7 U.S.C. 7272) is amended— 

18 (1) by redesignating subsections (h), (i), and (j) 

19 as subsections (i), (j), and (k), respectively; and 

20 (2) by inserting after subsection (g) the fol21 lowing: 

22 ‘‘(h) FORFEITURE PENALTY.— 

23 ‘‘(1) IN GENERAL.—In the case of each of the 

24 2006 through 2010 crops of sugar beets and sugar25 cane, a penalty shall be assessed on the forfeiture of 
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1 any sugar pledged as collateral for a nonrecourse 

2 loan under this section. 

3 ‘‘(2) AMOUNT.—The penalty for sugarcane and 

4 sugar beets under this subsection shall be 1.2 per5 cent of the loan rate established for sugarcane and 

6 sugar beets under subsections (a) and (b), respec7 tively. 

8 ‘‘(3) EFFECT OF FORFEITURE.—Any payments 

9 owed producers by a processor that forfeits any 

10 sugar pledged as collateral for a nonrecourse loan 

11 shall be reduced in proportion to the loan forfeiture 

12 penalty incurred by the processor. 

13 ‘‘(4) CROPS.—This subsection shall apply only 

14 to the 2006 through 2010 crops of sugar beets and 

15 sugarcane.’’. 

16 SEC. 1103. COTTON COMPETITIVENESS PROVISIONS. 

17 (a) IN GENERAL.—Section 1207 of the Farm Secu18 rity and Rural Investment Act of 2002 (7 U.S.C. 7937) 

19 is amended— 

20 (1) by striking the section heading and insert21 ing the following: ‘‘UPLAND COTTON IMPORT

22 QUOTAS.’’; 

23 (2) by striking subsection (a); 

24 (3) by redesignating subsections (b) and (c) as 

25 subsections (a) and (b), respectively; 
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1 (4) in subsection (a) (as so redesignated)— 

2 (A) in paragraph (1)— 

3 (i) in subparagraph (B), by striking ‘‘, 

4 adjusted for the value of any certificate 

5 issued under subsection (a),’’; and 

6 (ii) in subparagraph (C), by striking 

7 ‘‘, for the value of any certificates issued 

8 under subsection (a)’’; and 

9 (B) in paragraph (4), by striking ‘‘sub10 section (c)’’ and inserting ‘‘subsection (b)’’; and 

11 (5) in subsection (b)(2) (as so redesignated), by 

12 striking ‘‘subsection (b)’’ and inserting ‘‘subsection 

13 (a)’’. 

14 (b) FAIR.—Section 136 of the Federal Agriculture 

15 Improvement and Reform Act of 1996 (7 U.S.C. 7236) 

16 is repealed. 

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

18 this section take effect on August 1, 2006. 

19 SEC. 1104. NATIONAL DAIRY MARKET LOSS PAYMENTS. 

20 (a) AMOUNT.—Section 1502(c) of the Farm Security 

21 and Rural Investment Act of 2002 (7 U.S.C. 7982(c)) is 

22 amended by striking paragraph (3) and inserting the fol23 lowing: 

24 ‘‘(3)(A) during the period beginning on the first 

25 day of the month the producers on a dairy farm 
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1 enter into a contract under this section and ending 

2 on September 30, 2005, 45 percent; and 

3 ‘‘(B) during the period beginning on October 1, 

4 2005, and ending on September 30, 2007, 34 per5 cent.’’. 

6 (b) DURATION.—Section 1502 of the Farm Security 

7 and Rural Investment Act of 2002 (7 U.S.C. 7982) is 

8 amended by striking ‘‘2005’’ each place it appears in sub9 sections (f) and (g)(1) and inserting ‘‘2007’’. 

10 (c) CONFORMING AMENDMENTS.—Section 1502 of 

11 the Farm Security and Rural Investment Act of 2002 (7 

12 U.S.C. 7982) is amended— 

13 (1) in subsection (g)(1), by striking ‘‘and sub14 section (h)’’; and 

15 (2) by striking subsection (h). 

16 SEC. 1105. ADVANCE DIRECT PAYMENTS. 

17 (a) IN GENERAL.—Section 1103(d)(2) of the Farm 

18 Security and Rural Investment Act of 2002 (7 U.S.C. 

19 7913(d)(2)) is amended in the first sentence by striking 

20 ‘‘2007 crops years’’ and inserting ‘‘2005 crop years, up 

21 to 40 percent of the direct payment for a covered com22 modity for the 2006 crop year, and up to 29 percent of 

23 the direct payment for a covered commodity for any of 

24 the 2007 through 2011 crop years,’’. 
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1 (b) PEANUTS.—Section 1303(e)(2) of the Farm Se2 curity and Rural Investment Act of 2002 (7 U.S.C. 

3 7953(e)(2)) is amended in the first sentence by striking 

4 ‘‘2007 crops years’’ and inserting ‘‘2005 crop years, up 

5 to 40 percent of the direct payment for the 2006 crop 

6 year, and up to 29 percent of the direct payment for any 

7 of the 2007 through 2011 crop years,’’. 

8 Subtitle B—Conservation 

9 SEC. 1201. CONSERVATION RESERVE PROGRAM. 

10 (a) IN GENERAL.—Section 1231 of the Food Security 

11 Act of 1985 (16 U.S.C. 3831) is amended— 

12 (1) in subsection (a), by striking ‘‘2007’’ and 

13 inserting ‘‘2011’’; 

14 (2) in subsection (d), by striking ‘‘up’’ and all 

15 that follows through ‘‘years’’ and inserting ‘‘in the 

16 conservation reserve at any 1 time 36,400,000 acres 

17 during the 2002 through 2010 calendar years and 

18 38,300,000 acres in the 2011 calendar year’’; and 

19 (3) in subsection (h)(1)(A), by striking ‘‘2007’’ 

20 and inserting ‘‘2011’’. 

21 (b) FUNDING.—Section 1241(a) of the Food Security 

22 Act of 1985 (16 U.S.C. 3841(a)) is amended— 

23 (1) in the matter before paragraph (1), by 

24 striking ‘‘For’’ and inserting ‘‘Except as otherwise 

25 provided in this subsection, for’’; and 
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1 (2) in paragraph (1), by striking ‘‘The con2 servation’’ and inserting ‘‘For fiscal years 2002 

3 through 2011, the conservation’’. 

4 (c) IMPLEMENTATION.—In implementing the amend5 ments made by this section, the Secretary of Agriculture 

6 shall achieve the new maximum acreage enrollment limit 

7 not later than 2 years after the date of enactment of this 

8 Act without affecting conservation reserve existing con9 tracts. 

10 SEC. 1202. CONSERVATION SECURITY PROGRAM. 

11 (a) IN GENERAL.—Section 1238A(a) of the Food Se12 curity Act of 1985 (16 U.S.C. 3838a(a)) is amended by 

13 striking ‘‘2007’’ and inserting ‘‘2011’’. 

14 (b) FUNDING.—Section 1241(a)(3) of the Food Secu15 rity Act of 1985 (16 U.S.C. 3841(a)(3)) is amended by 

16 striking ‘‘not more than $6,037,000,000’’ and all that fol17 lows through ‘‘2014.’’ and inserting the following: ‘‘not 

18 more than— 

19 ‘‘(A) $1,954,000,000 for the period of fis20 cal years 2006 through 2010; and 

21 ‘‘(B) $5,200,000,000 for the period of fis22 cal years 2006 through 2015.’’. 
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1 SEC. 1203. ENVIRONMENTAL QUALITY INCENTIVES PRO2 GRAM. 

3 (a) IN GENERAL.—Section 1240B(a)(1) of the Food 

4 Security Act of 1985 (16 U.S.C. 3839aa-2(a)(1)) is 

5 amended by striking ‘‘2007’’ and inserting ‘‘2011’’. 

6 (b) LIMITATION ON PAYMENTS.—Section 1240G of 

7 the Food Security Act of 1985 (16 U.S.C. 3839aa-7) is 

8 amended by striking ‘‘2007’’ and inserting ‘‘2011’’. 

9 (c) FUNDING.—Section 1241(a)(6) of the Food Secu10 rity Act of 1985 (16 U.S.C. 3841(a)(6)) is amended by 

11 striking subparagraphs (D) and (E) and inserting the fol12 lowing: 

13 ‘‘(D) $1,017,000,000 in fiscal year 2005; 

14 ‘‘(E) $1,185,000,000 in fiscal year 2006; 

15 ‘‘(F) $1,270,000,000 in each of fiscal 

16 years 2007 through 2010; and 

17 ‘‘(G) $1,300,000,000 in fiscal year 2011.’’. 

18 Subtitle C—Miscellaneous 

19 SEC. 1301. INITIATIVE FOR FUTURE AGRICULTURE AND 

20 FOOD SYSTEMS. 

21 (a) IN GENERAL.—Section 401(b)(3) of the Agricul22 tural Research, Extension, and Education Reform Act of 

23 1998 (7 U.S.C. 7621(b)(3)) is amended— 

24 (1) in subparagraph (C), by striking 

25 ‘‘$160,000,000; and’’ and inserting 

26 ‘‘$104,000,000;’’; 
19 

•S 1932 PCS 

1 (2) by redesignating subparagraph (D) as sub2 paragraph (E); 

3 (3) by inserting after subparagraph (C) the fol4 lowing: 

5 ‘‘(D) on October 1, 2006, and each Octo6 ber 1 thereafter through October 1, 2009, 

7 $130,000,000; and’’; and 

8 (4) in subparagraph (E) (as so redesignated), 

9 by striking ‘‘2006’’ and inserting ‘‘2010’’. 

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

11 subsection (a) take effect on October 1, 2005. 

12 TITLE II—COMMITTEE ON BANK13 ING, HOUSING, AND URBAN 

14 AFFAIRS 

15 Subtitle A—Merger of the Deposit 

16 Insurance Funds 

17 SEC. 2001. SHORT TITLE. 

18 This subtitle may be cited as the ‘‘Safe and Fair De19 posit Insurance Act of 2005’’. 

20 SEC. 2002. DEFINITIONS. 

21 In this subtitle— 

22 (1) the term ‘‘Administration’’ means the Na23 tional Credit Union Administration; 

24 (2) the term ‘‘Board’’ means the Board of Di25 rectors of the Federal Deposit Insurance Corpora-
20 

•S 1932 PCS 

1 tion (other than in connection with the National 

2 Credit Union Administration Board); 

3 (3) the term ‘‘Corporation’’ means the Federal 

4 Deposit Insurance Corporation; 

5 (4) the term ‘‘designated reserve ratio’’ means 

6 the reserve ratio designated by the Board under sec7 tion 7(b)(3) of the Federal Deposit Insurance Act, 

8 as amended by this subtitle; 

9 (5) the terms ‘‘Fund’’ and ‘‘Deposit Insurance 

10 Fund’’ mean the Deposit Insurance Fund estab11 lished under section 11(a)(4) of the Federal Deposit 

12 Insurance Act, as amended by this subtitle; 

13 (6) the terms ‘‘depository institution’’ and ‘‘in14 sured depository institution’’ have the same mean15 ings as in section 3 of the Federal Deposit Insur16 ance Act; and 

17 (7) the term ‘‘reserve ratio’’ means the ratio of 

18 the fund balance of the Deposit Insurance Fund to 

19 aggregate estimated insured deposits held in all in20 sured depository institutions. 

21 SEC. 2003. MERGER OF BIF AND SAIF. 

22 (a) IN GENERAL.— 

23 (1) MERGER.—The Bank Insurance Fund and 

24 the Savings Association Insurance Fund shall be 

25 merged into the Deposit Insurance Fund. 
21 

•S 1932 PCS 

1 (2) DISPOSITION OF ASSETS AND LIABIL2 ITIES.—All assets and liabilities of the Bank Insur3 ance Fund and the Savings Association Insurance 

4 Fund shall be transferred to the Deposit Insurance 

5 Fund. 

6 (3) NO SEPARATE EXISTENCE.—The separate 

7 existence of the Bank Insurance Fund and the Sav8 ings Association Insurance Fund shall cease on the 

9 effective date of the merger thereof under this sec10 tion. 

11 (b) REPEAL OF OUTDATED MERGER PROVISION.— 

12 Section 2704 of the Deposit Insurance Funds Act of 1996 

13 (12 U.S.C. 1821 note) is repealed. 

14 SEC. 2004. ESTABLISHMENT OF THE DEPOSIT INSURANCE 

15 FUND. 

16 (a) IN GENERAL.—Section 11(a)(4) of the Federal 

17 Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is amend18 ed— 

19 (1) by redesignating subparagraph (B) as sub20 paragraph (C); 

21 (2) by striking subparagraph (A) and inserting 

22 the following: 

23 ‘‘(A) ESTABLISHMENT.—There is estab24 lished the Deposit Insurance Fund, which the 

25 Corporation shall— 
22 

•S 1932 PCS 

1 ‘‘(i) maintain and administer; 

2 ‘‘(ii) use to carry out its insurance 

3 purposes, in the manner provided by this 

4 subsection; and 

5 ‘‘(iii) invest in accordance with section 

6 13(a). 

7 ‘‘(B) USES.—The Deposit Insurance Fund 

8 shall be available to the Corporation for use 

9 with respect to Deposit Insurance Fund mem10 bers.’’; 

11 (3) by striking ‘‘(4) GENERAL PROVISIONS RE12 LATING TO FUNDS.—’’ and inserting the following: 

13 ‘‘(4) ESTABLISHMENT OF THE DEPOSIT INSUR14 ANCE FUND.—’’; 

15 (4) in subparagraph (C), as redesignated by 

16 paragraph (1) of this subsection, by striking ‘‘Bank 

17 Insurance Fund and the Savings Association Insur18 ance Fund’’ and inserting ‘‘Deposit Insurance 

19 Fund’’; and 

20 (5) by adding at the end the following: 

21 ‘‘(D) DEPOSITS.—All amounts assessed 

22 against insured depository institutions by the 

23 Corporation shall be deposited in the Deposit 

24 Insurance Fund.’’. 
23 

•S 1932 PCS 

1 (b) MERGER-RELATED AMENDMENTS TO THE FED2 ERAL DEPOSIT INSURANCE ACT.— 

3 (1) DEFINITIONS.—Section 3(y) of the Federal 

4 Deposit Insurance Act (12 U.S.C. 1813(y)) is 

5 amended to read as follows: 

6 ‘‘(y) DEFINITIONS RELATING TO THE DEPOSIT IN7 SURANCE FUND.— 

8 ‘‘(1) DEPOSIT INSURANCE FUND.—The terms 

9 ‘Deposit Insurance Fund’ and ‘Fund’ mean the fund 

10 established under section 11(a)(4).’’. 

11 (2) ASSESSMENTS.—Section 7 of the Federal 

12 Deposit Insurance Act (12 U.S.C. 1817) is amend13 ed— 

14 (A) by striking subsection (l); 

15 (B) by redesignating subsections (m) and 

16 (n) as subsections (l) and (m), respectively; and 

17 (C) in subsection (b), by striking para18 graph (2) and inserting the following: 

19 ‘‘(2) ASSESSMENTS.— 

20 ‘‘(A) IN GENERAL.—Each insured deposi21 tory institution shall pay assessments to the 

22 Corporation in such amounts and at such time 

23 or times as the Board of Directors may require. 
24 

•S 1932 PCS 

1 ‘‘(B) FACTORS TO BE CONSIDERED.—In 

2 setting assessments for insured depository insti3 tutions, the Board of Directors shall consider— 

4 ‘‘(i) the estimated operating expenses 

5 of the Deposit Insurance Fund; 

6 ‘‘(ii) the estimated case resolution ex7 penditures and income of the Deposit In8 surance Fund; 

9 ‘‘(iii) the projected effects of assess10 ments on the earnings and capital of in11 sured depository institutions; 

12 ‘‘(iv) the need to maintain a risk13 based assessment system under paragraph 

14 (1); and 

15 ‘‘(v) any other factors that the Board 

16 of Directors may determine to be appro17 priate. 

18 ‘‘(C) NOTICE OF ASSESSMENTS.—The Cor19 poration shall notify each insured depository in20 stitution of assessments charged to that institu21 tion. 

22 ‘‘(D) NEWLY INSURED INSTITUTIONS.—To 

23 facilitate the administration of this section, the 

24 Board of Directors may waive the requirements 

25 of subsection (c)(1) and subparagraph (A) of 
25 

•S 1932 PCS 

1 this paragraph for any assessment period in 

2 which a depository institution becomes in3 sured.’’. 

4 (3) REPEAL OF SEPARATE FUNDS PROVI5 SIONS.—Section 11(a) of the Federal Deposit Insur6 ance Act (12 U.S.C. 1821(a)) is amended— 

7 (A) by striking paragraphs (5), (6), and 

8 (7); and 

9 (B) by redesignating paragraph (8) as 

10 paragraph (5). 

11 SEC. 2005. TECHNICAL AND CONFORMING AMENDMENTS 

12 TO THE FEDERAL DEPOSIT INSURANCE ACT. 

13 (a) IN GENERAL.—The Federal Deposit Insurance 

14 Act (12 U.S.C. 1811 et seq.) is amended— 

15 (1) in section 3(a)(1) (12 U.S.C. 1813(a)(1)), 

16 by striking subparagraph (B) and inserting the fol17 lowing: 

18 ‘‘(B) includes any former savings associa19 tion.’’; 

20 (2) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), 

21 by striking ‘‘the Bank Insurance Fund or the Sav22 ings Association Insurance Fund;’’ and inserting 

23 ‘‘the Deposit Insurance Fund,’’; 
26 

•S 1932 PCS 

1 (3) in section 5(c)(4), by striking ‘‘deposit in2 surance fund’’ and inserting ‘‘Deposit Insurance 

3 Fund’’; 

4 (4) in section 5(d) (12 U.S.C. 1815(d)), by 

5 striking paragraphs (2) and (3); 

6 (5) in section 5(d)(1) (12 U.S.C. 1815(d)(1))— 

7 (A) in subparagraph (A), by striking ‘‘re8 serve ratios in the Bank Insurance Fund and 

9 the Savings Association Insurance Fund as re10 quired by section 7’’ and inserting ‘‘the reserve 

11 ratio of the Deposit Insurance Fund’’; 

12 (B) by striking subparagraph (B) and in13 serting the following: 

14 ‘‘(2) FEE CREDITED TO THE DEPOSIT INSUR15 ANCE FUND.—The fee paid by the depository insti16 tution under paragraph (1) shall be credited to the 

17 Deposit Insurance Fund.’’; 

18 (C) by striking ‘‘UNINSURED INSTITU19 TIONS.—’’ and all that follows through ‘‘GEN20 ERAL.—’’ and inserting ‘‘UNINSURED INSTITU21 TIONS.—’’; and 

22 (D) by redesignating subparagraph (C) as 

23 paragraph (3) and moving the margin 2 ems to 

24 the left; 

25 (6) in section 5(e) (12 U.S.C. 1815(e))— 
27 

•S 1932 PCS 

1 (A) in paragraph (5)(A), by striking 

2 ‘‘Bank Insurance Fund or the Savings Associa3 tion Insurance Fund’’ and inserting ‘‘Deposit 

4 Insurance Fund’’; 

5 (B) by striking paragraph (6); and 

6 (C) by redesignating paragraphs (7), (8), 

7 and (9) as paragraphs (6), (7), and (8), respec8 tively; 

9 (7) in section 6(5) (12 U.S.C. 1816(5)), by 

10 striking ‘‘Bank Insurance Fund or the Savings As11 sociation Insurance Fund’’ and inserting ‘‘Deposit 

12 Insurance Fund’’; 

13 (8) in section 7(a)(3) (12 U.S.C. 1817(a)(3))— 

14 (A) by striking ‘‘in July’’; and 

15 (B) by striking ‘‘in January’’; 

16 (9) in section 7(b) (12 U.S.C. 1817(b))— 

17 (A) in paragraph (1)— 

18 (i) in subparagraph (B)(ii), by strik19 ing ‘‘institution’s semiannual assessment’’ 

20 and inserting ‘‘assessments for that insti21 tution under subsection (b)’’; and 

22 (ii) in subparagraph (C)— 

23 (I) by striking ‘‘a depository in24 stitution’s semiannual assessment’’ 

25 and inserting ‘‘assessments for a de-
28 

•S 1932 PCS 

1 pository institution under subsection 

2 (b)’’; and 

3 (II) by striking ‘‘deposit insur4 ance fund’’ each place that term ap5 pears and inserting ‘‘Deposit Insur6 ance Fund’’; 

7 (B) in paragraph (1)(D), by striking ‘‘each 

8 deposit insurance fund’’ and inserting ‘‘the De9 posit Insurance Fund’’; 

10 (C) by striking paragraph (4) and redesig11 nating paragraphs (5) through (7) as para12 graphs (4) through (6), respectively; 

13 (D) in paragraph (5), as so redesignated— 

14 (i) by striking ‘‘any such assessment’’ 

15 and inserting ‘‘any such assessment is nec16 essary’’; 

17 (ii) by striking subparagraph (B); 

18 (iii) in subparagraph (A)— 

19 (I) by striking ‘‘(A) is nec20 essary—’’; 

21 (II) by striking ‘‘Bank Insurance 

22 Fund members’’ and inserting ‘‘in23 sured depository institutions’’; and 

24 (III) by redesignating clauses (i), 

25 (ii), and (iii) as subparagraphs (A), 
29 

•S 1932 PCS 

1 (B), and (C), respectively, and moving 

2 the margins 2 ems to the left; and 

3 (iv) in subparagraph (C) (as redesig4 nated)— 

5 (I) by inserting ‘‘that’’ before 

6 ‘‘the Corporation’’; and 

7 (II) by striking ‘‘; and’’ and in8 serting a period; and 

9 (E) in paragraph (6), as so redesignated, 

10 by striking ‘‘semiannual assessment’’ and in11 serting ‘‘assessment under subsection (b)’’; 

12 (10) in section 7(c) (12 U.S.C. 1817(c))— 

13 (A) in paragraph (1), by striking ‘‘institu14 tion’s semiannual assessment’’ and inserting 

15 ‘‘assessments for that institution under sub16 section (b)’’; 

17 (B) by striking paragraphs (2) and (3); 

18 and 

19 (C) by redesignating paragraph (4) as 

20 paragraph (2); 

21 (11) in section 7(j)(7)(F) (12 U.S.C. 

22 1817(j)(7)(F)), by striking ‘‘Bank Insurance Fund 

23 or the Savings Association Insurance Fund’’ and in24 serting ‘‘Deposit Insurance Fund’’; 

25 (12) in section 8 (12 U.S.C. 1818)— 
30 

•S 1932 PCS 

1 (A) in subsection (p), by striking ‘‘semi2 annual’’; 

3 (B) in subsection (q), by striking ‘‘semi4 annual’’ and inserting ‘‘assessment’’; and 

5 (C) in subsection (t)(2)(C), by striking 

6 ‘‘deposit insurance fund’’ and inserting ‘‘De7 posit Insurance Fund’’; 

8 (13) in section 11 (12 U.S.C. 1821), by striking 

9 ‘‘deposit insurance fund’’ each place that term ap10 pears and inserting ‘‘Deposit Insurance Fund’’; 

11 (14) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), 

12 by striking ‘‘, except that—’’ and all that follows 

13 through the end of the paragraph and inserting a 

14 period; 

15 (15) in section 11(i)(3) (12 U.S.C. 

16 1821(i)(3))— 

17 (A) by striking subparagraph (B); 

18 (B) by redesignating subparagraph (C) as 

19 subparagraph (B); and 

20 (C) in subparagraph (B) (as redesignated), 

21 by striking ‘‘subparagraphs (A) and (B)’’ and 

22 inserting ‘‘subparagraph (A)’’; 

23 (16) in section 11(p)(2)(B) (12 U.S.C. 

24 1821(p)(2)(B)), by striking ‘‘institution, any’’ and 

25 inserting ‘‘institution, the’’; 
31 

•S 1932 PCS 

1 (17) in section 12(f)(4)(E)(iv) (12 U.S.C. 

2 1822(f)(4)(E)(iv)), by striking ‘‘Federal deposit in3 surance funds’’ and inserting ‘‘the Deposit Insur4 ance Fund, or any predecessor deposit insurance 

5 fund’’; 

6 (18) in section 13 (12 U.S.C. 1823)— 

7 (A) by striking ‘‘deposit insurance fund’’ 

8 each place that term appears and inserting 

9 ‘‘Deposit Insurance Fund’’; 

10 (B) in subsection (a)(1), by striking ‘‘Bank 

11 Insurance Fund, the Savings Association Insur12 ance Fund,’’ and inserting ‘‘Deposit Insurance 

13 Fund’’; 

14 (C) in subsection (c)(4)(E)— 

15 (i) in the subparagraph heading, by 

16 striking ‘‘FUNDS’’ and inserting ‘‘FUND’’; 

17 and 

18 (ii) in clause (i), by striking ‘‘any in19 surance fund’’ and inserting ‘‘the Deposit 

20 Insurance Fund’’; 

21 (D) in subsection (c)(4)(G)(ii)— 

22 (i) by striking ‘‘appropriate insurance 

23 fund’’ and inserting ‘‘Deposit Insurance 

24 Fund’’; 
32 

•S 1932 PCS 

1 (ii) by striking ‘‘the members of the 

2 insurance fund (of which such institution 

3 is a member)’’ and inserting ‘‘insured de4 pository institutions’’; 

5 (iii) by striking ‘‘each member’s’’ and 

6 inserting ‘‘each insured depository institu7 tion’s’’; 

8 (iv) by striking ‘‘the member’s’’ each 

9 place that term appears and inserting ‘‘the 

10 institution’s’’; and 

11 (v) in subclause (II), by striking 

12 ‘‘semiannual’’ and inserting ‘‘applicable as13 sessment’’; 

14 (E) in subsection (c), by striking para15 graph (11); 

16 (F) in subsection (h), by striking ‘‘Bank 

17 Insurance Fund’’ and inserting ‘‘Deposit Insur18 ance Fund’’; 

19 (G) in subsection (k)(4)(B)(i), by striking 

20 ‘‘Savings Association Insurance Fund member’’ 

21 and inserting ‘‘savings association’’; and 

22 (H) in subsection (k)(5)— 

23 (i) in subparagraph (A), by striking 

24 ‘‘Savings Association Insurance Fund 
33 

•S 1932 PCS 

1 members’’ and inserting ‘‘savings associa2 tions’’; 

3 (ii) by striking ‘‘member’s’’ each place 

4 that term appears and inserting ‘‘savings 

5 association’s’’; and 

6 (iii) by striking ‘‘member’’ each place 

7 that term appears and inserting ‘‘savings 

8 association’’; 

9 (19) in section 14(a) (12 U.S.C. 1824(a)), in 

10 the 5th sentence— 

11 (A) by striking ‘‘Bank Insurance Fund or 

12 the Savings Association Insurance Fund’’ and 

13 inserting ‘‘Deposit Insurance Fund’’; and 

14 (B) by striking ‘‘each such fund’’ and in15 serting ‘‘the Deposit Insurance Fund’’; 

16 (20) in section 14(b) (12 U.S.C. 1824(b)), by 

17 striking ‘‘Bank Insurance Fund or Savings Associa18 tion Insurance Fund’’ and inserting ‘‘Deposit Insur19 ance Fund’’; 

20 (21) in section 14(c) (12 U.S.C. 1824(c))— 

21 (A) in paragraph (2)(A), by striking ‘‘(7)’’ 

22 and inserting ‘‘(6)’’; and 

23 (B) by striking paragraph (3); 

24 (22) in section 14(d) (12 U.S.C. 1824(d))— 
34 

•S 1932 PCS 

1 (A) by striking ‘‘Bank Insurance Fund 

2 member’’ each place that term appears and in3 serting ‘‘insured depository institution’’; 

4 (B) by striking ‘‘Bank Insurance Fund 

5 members’’ each place that term appears and in6 serting ‘‘insured depository institutions’’; 

7 (C) by striking ‘‘Bank Insurance Fund’’ 

8 each place that term appears (other than in 

9 connection with a reference to a Bank Insur10 ance Fund member or members) and inserting 

11 ‘‘Deposit Insurance Fund’’; 

12 (D) by striking the subsection heading and 

13 inserting the following: 

14 ‘‘(d) BORROWING FOR THE DEPOSIT INSURANCE

15 FUND FROM INSURED DEPOSITORY INSTITUTIONS.—’’; 

16 (E) in paragraph (3), in the paragraph 

17 heading, by striking ‘‘BIF’’ and inserting ‘‘THE

18 DEPOSIT INSURANCE FUND’’; and 

19 (F) in paragraph (5), in the paragraph 

20 heading, by striking ‘‘BIF MEMBERS’’ and in21 serting ‘‘INSURED DEPOSITORY INSTITUTIONS’’; 

22 (23) in section 14 (12 U.S.C. 1824), by adding 

23 at the end the following: 

24 ‘‘(e) BORROWING FOR THE DEPOSIT INSURANCE

25 FUND FROM FEDERAL HOME LOAN BANKS.— 
35 

•S 1932 PCS 

1 ‘‘(1) IN GENERAL.—The Corporation may bor2 row from the Federal home loan banks, with the 

3 concurrence of the Federal Housing Finance Board, 

4 such funds as the Corporation considers necessary 

5 for the use of the Deposit Insurance Fund. 

6 ‘‘(2) TERMS AND CONDITIONS.—Any loan from 

7 any Federal home loan bank under paragraph (1) to 

8 the Deposit Insurance Fund shall— 

9 ‘‘(A) bear a rate of interest of not less 

10 than the current marginal cost of funds to that 

11 bank, taking into account the maturities in12 volved; 

13 ‘‘(B) be adequately secured, as determined 

14 by the Federal Housing Finance Board; and 

15 ‘‘(C) be a direct liability of the Deposit In16 surance Fund.’’; 

17 (24) in section 15(c)(5) (12 U.S.C. 

18 1825(c)(5))— 

19 (A) by striking ‘‘the Bank Insurance Fund 

20 or Savings Association Insurance Fund, respec21 tively’’ each place that term appears and insert22 ing ‘‘the Deposit Insurance Fund’’; and 

23 (B) in subparagraph (B), by striking ‘‘the 

24 Bank Insurance Fund or the Savings Associa-
36 

•S 1932 PCS 

1 tion Insurance Fund, respectively’’ and insert2 ing ‘‘the Deposit Insurance Fund’’; 

3 (25) in section 17(a) (12 U.S.C. 1827(a))— 

4 (A) in the subsection heading, by striking 

5 ‘‘BIF, SAIF,’’ and inserting ‘‘THE DEPOSIT IN6 SURANCE FUND’’; and 

7 (B) in paragraph (1)— 

8 (i) by striking ‘‘the Bank Insurance 

9 Fund, the Savings Association Insurance 

10 Fund,’’ each place that term appears and 

11 inserting ‘‘the Deposit Insurance Fund’’; 

12 and 

13 (ii) in subparagraph (D), by striking 

14 ‘‘each insurance fund’’ and inserting ‘‘the 

15 Fund’’; 

16 (26) in section 17(d) (12 U.S.C. 1827(d)), by 

17 striking ‘‘, the Bank Insurance Fund, the Savings 

18 Association Insurance Fund,’’ each place that term 

19 appears and inserting ‘‘the Deposit Insurance 

20 Fund’’; 

21 (27) in section 18(m) (12 U.S.C. 1828(m))— 

22 (A) in paragraph (2), in the matter pre23 ceding subparagraph (A), by striking the colon 

24 and inserting a dash; 

25 (B) in paragraph (3)(A)— 
37 

•S 1932 PCS 

1 (i) by striking ‘‘poses a serious threat 

2 to the Savings Association Insurance 

3 Fund’’ and inserting ‘‘of an insured sav4 ings association poses a serious threat to 

5 the Deposit Insurance Fund’’; and 

6 (ii) by striking ‘‘Savings Association 

7 Insurance Fund member’’ and inserting 

8 ‘‘insured savings association’’; and 

9 (C) in paragraph (3)(C), by striking ‘‘Sav10 ings Association Insurance Fund or the Bank 

11 Insurance Fund’’ and inserting ‘‘Deposit Insur12 ance Fund’’; 

13 (28) in section 18(o) (12 U.S.C. 1828(o)), by 

14 striking ‘‘deposit insurance funds’’ and ‘‘deposit in15 surance fund’’ each place those terms appear and in16 serting ‘‘Deposit Insurance Fund’’; 

17 (29) in section 18(p) (12 U.S.C. 1828(p)), by 

18 striking ‘‘deposit insurance funds’’ and inserting 

19 ‘‘Deposit Insurance Fund’’; 

20 (30) in section 24 (12 U.S.C. 1831a)— 

21 (A) in subsections (a)(1) and (d)(1)(A), by 

22 striking ‘‘appropriate deposit insurance fund’’ 

23 each place that term appears and inserting 

24 ‘‘Deposit Insurance Fund’’; 
38 

•S 1932 PCS 

1 (B) in subsection (e)(2)(A), by striking 

2 ‘‘risk to’’ and all that follows through the pe3 riod and inserting ‘‘risk to the Deposit Insur4 ance Fund.’’; and 

5 (C) in subsections (e)(2)(B)(ii) and 

6 (f)(6)(B), by striking ‘‘the insurance fund of 

7 which such bank is a member’’ each place that 

8 term appears and inserting ‘‘the Deposit Insur9 ance Fund’’; 

10 (31) in section 28 (12 U.S.C. 1831e), by strik11 ing ‘‘affected deposit insurance fund’’ each place 

12 that term appears and inserting ‘‘Deposit Insurance 

13 Fund’’; 

14 (32) by striking section 31 (12 U.S.C. 1831h); 

15 (33) in section 36(i)(3) (12 U.S.C. 

16 1831m(i)(3)), by striking ‘‘affected deposit insur17 ance fund’’ and inserting ‘‘Deposit Insurance 

18 Fund’’; 

19 (34) in section 37(a)(1)(C) (12 U.S.C. 

20 1831n(a)(1)(C)), by striking ‘‘insurance funds’’ and 

21 inserting ‘‘Deposit Insurance Fund’’; 

22 (35) in section 38 (12 U.S.C. 1831o), by strik23 ing ‘‘the deposit insurance fund’’ each place that 

24 term appears and inserting ‘‘the Deposit Insurance 

25 Fund’’; 
39 

•S 1932 PCS 

1 (36) in section 38(a) (12 U.S.C. 1831o(a)), in 

2 the subsection heading, by striking ‘‘FUNDS’’ and in3 serting ‘‘FUND’’; 

4 (37) in section 38(k) (12 U.S.C. 1831o(k))— 

5 (A) in paragraph (1), by striking ‘‘a de6 posit insurance fund’’ and inserting ‘‘the De7 posit Insurance Fund’’; 

8 (B) in paragraph (2), by striking ‘‘A de9 posit insurance fund’’ and inserting ‘‘The De10 posit Insurance Fund’’; and 

11 (C) in paragraphs (2)(A) and (3)(B), by 

12 striking ‘‘the deposit insurance fund’s outlays’’ 

13 each place that term appears and inserting ‘‘the 

14 outlays of the Deposit Insurance Fund’’; and 

15 (38) in section 38(o) (12 U.S.C. 1831o(o))— 

16 (A) by striking ‘‘ASSOCIATIONS.—’’ and all 

17 that follows through ‘‘Subsections (e)(2)’’ in 

18 paragraph (2) and inserting ‘‘ASSOCIATIONS.— 

19 Subsections (e)(2)’’; 

20 (B) by redesignating subparagraphs (A), 

21 (B), and (C) as paragraphs (1), (2), and (3), 

22 respectively, and moving the margins 2 ems to 

23 the left; and 

24 (C) in paragraph (1) (as so redesignated), 

25 by redesignating clauses (i) and (ii) as subpara-
40 

•S 1932 PCS 

1 graphs (A) and (B), respectively, and moving 

2 the margins 2 ems to the left. 

3 (b) CONFORMING TRANSFER OF FUNDS.—Any funds 

4 resulting from the application of section 7(d)(2) of the 

5 Federal Deposit Insurance Act prior to its repeal under 

6 subsection (a)(4) of this section shall be deposited into the 

7 general fund of the Deposit Insurance Fund established 

8 pursuant to this subtitle. 

9 SEC. 2006. OTHER TECHNICAL AND CONFORMING AMEND10 MENTS. 

11 (a) SECTION 5136 OF THE REVISED STATUTES.— 

12 The paragraph designated the ‘‘Eleventh’’ of section 5136 

13 of the Revised Statutes of the United States (12 U.S.C. 

14 24) is amended in the 5th sentence, by striking ‘‘affected 

15 deposit insurance fund’’ and inserting ‘‘Deposit Insurance 

16 Fund’’. 

17 (b) INVESTMENTS PROMOTING PUBLIC WELFARE; 

18 LIMITATIONS ON AGGREGATE INVESTMENTS.—The 23d 

19 undesignated paragraph of section 9 of the Federal Re20 serve Act (12 U.S.C. 338a) is amended in the 4th sen21 tence, by striking ‘‘affected deposit insurance fund’’ and 

22 inserting ‘‘Deposit Insurance Fund’’. 

23 (c) ADVANCES TO CRITICALLY UNDERCAPITALIZED

24 DEPOSITORY INSTITUTIONS.—Section 10B(b)(3)(A)(ii) of 

25 the Federal Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is 
41 

•S 1932 PCS 

1 amended by striking ‘‘any deposit insurance fund in’’ and 

2 inserting ‘‘the Deposit Insurance Fund of’’. 

3 (d) AMENDMENTS TO THE BALANCED BUDGET AND

4 EMERGENCY DEFICIT CONTROL ACT OF 1985.—Section 

5 255(g)(1)(A) of the Balanced Budget and Emergency 

6 Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is 

7 amended— 

8 (1) by striking ‘‘Bank Insurance Fund’’ and in9 serting ‘‘Deposit Insurance Fund’’; and 

10 (2) by striking ‘‘Federal Deposit Insurance Cor11 poration, Savings Association Insurance Fund;’’. 

12 (e) AMENDMENTS TO THE FEDERAL HOME LOAN

13 BANK ACT.—The Federal Home Loan Bank Act (12 

14 U.S.C. 1421 et seq.) is amended— 

15 (1) in section 11(k) (12 U.S.C. 1431(k))— 

16 (A) in the subsection heading, by striking 

17 ‘‘SAIF’’ and inserting ‘‘THE DEPOSIT INSUR18 ANCE FUND’’; and 

19 (B) by striking ‘‘Savings Association In20 surance Fund’’ each place that term appears 

21 and inserting ‘‘Deposit Insurance Fund’’; 

22 (2) in section 21 (12 U.S.C. 1441)— 

23 (A) in subsection (f)(2), by striking ‘‘, ex24 cept that’’ and all that follows through the end 

25 of the paragraph and inserting a period; and 
42 

•S 1932 PCS 

1 (B) in subsection (k), by striking para2 graph (4); 

3 (3) in section 21A(b)(4)(B) (12 U.S.C. 

4 1441a(b)(4)(B)), by striking ‘‘affected deposit insur5 ance fund’’ and inserting ‘‘Deposit Insurance 

6 Fund’’; and 

7 (4) in section 21B(k) (12 U.S.C. 1441b(k)) by 

8 inserting before the colon ‘‘, the following definitions 

9 shall apply’’. 

10 (f) AMENDMENTS TO THE HOME OWNERS’ LOAN

11 ACT.—The Home Owners’ Loan Act (12 U.S.C. 1461 et 

12 seq.) is amended— 

13 (1) in section 5 (12 U.S.C. 1464)— 

14 (A) in subsection (c)(6), by striking ‘‘As 

15 used in this subsection—’’ and inserting ‘‘For 

16 purposes of this subsection, the following defini17 tions shall apply:’’; 

18 (B) in subsection (o)(1), by striking ‘‘that 

19 is a Bank Insurance Fund member’’; 

20 (C) in subsection (o)(2)(A), by striking ‘‘a 

21 Bank Insurance Fund member until such time 

22 as it changes its status to a Savings Association 

23 Insurance Fund member’’ and inserting ‘‘in24 sured by the Deposit Insurance Fund’’; 
43 

•S 1932 PCS 

1 (D) in subsection (t)(5)(D)(iii)(II), by 

2 striking ‘‘affected deposit insurance fund’’ and 

3 inserting ‘‘Deposit Insurance Fund’’; 

4 (E) in subsection (t)(7)(C)(i)(I), by strik5 ing ‘‘affected deposit insurance fund’’ and in6 serting ‘‘Deposit Insurance Fund’’; and 

7 (F) in subsection (v)(2)(A)(i), by striking 

8 ‘‘the Savings Association Insurance Fund’’ and 

9 inserting ‘‘or the Deposit Insurance Fund’’; and 

10 (2) in section 10 (12 U.S.C. 1467a)— 

11 (A) in subsection (c)(6)(D), by striking 

12 ‘‘this title’’ and inserting ‘‘this Act’’; 

13 (B) in subsection (e)(1)(B), by striking 

14 ‘‘Savings Association Insurance Fund or Bank 

15 Insurance Fund’’ and inserting ‘‘Deposit Insur16 ance Fund’’; 

17 (C) in subsection (e)(2), by striking ‘‘Sav18 ings Association Insurance Fund or the Bank 

19 Insurance Fund’’ and inserting ‘‘Deposit Insur20 ance Fund’’; 

21 (D) in subsection (e)(4)(B), by striking 

22 ‘‘subsection (1)’’ and inserting ‘‘subsection (l)’’; 

23 (E) in subsection (g)(3)(A), by striking 

24 ‘‘(5) of this section’’ and inserting ‘‘(5) of this 

25 subsection’’; 
44 

•S 1932 PCS 

1 (F) in subsection (i), by redesignating 

2 paragraph (5) as paragraph (4); 

3 (G) in subsection (m)(3), by striking sub4 paragraph (E), and by redesignating subpara5 graphs (F), (G), and (H) as subparagraphs 

6 (E), (F), and (G), respectively; 

7 (H) in subsection (m)(7)(A), by striking 

8 ‘‘during period’’ and inserting ‘‘during the pe9 riod’’; and 

10 (I) in subsection (o)(3)(D), by striking 

11 ‘‘sections 5(s) and (t) of this Act’’ and inserting 

12 ‘‘subsections (s) and (t) of section 5’’. 

13 (g) AMENDMENTS TO THE NATIONAL HOUSING

14 ACT.—The National Housing Act (12 U.S.C. 1701 et 

15 seq.) is amended— 

16 (1) in section 317(b)(1)(B) (12 U.S.C. 

17 1723i(b)(1)(B)), by striking ‘‘Bank Insurance Fund 

18 for banks or through the Savings Association Insur19 ance Fund for savings associations’’ and inserting 

20 ‘‘Deposit Insurance Fund’’; and 

21 (2) in section 536(b)(1)(B)(ii) (12 U.S.C. 

22 1735f–14(b)(1)(B)(ii)), by striking ‘‘Bank Insurance 

23 Fund for banks and through the Savings Association 

24 Insurance Fund for savings associations’’ and insert25 ing ‘‘Deposit Insurance Fund’’. 
45 

•S 1932 PCS 

1 (h) AMENDMENTS TO THE FINANCIAL INSTITUTIONS

2 REFORM, RECOVERY, AND ENFORCEMENT ACT OF

3 1989.—The Financial Institutions Reform, Recovery, and 

4 Enforcement Act of 1989 (12 U.S.C. 1811 note) is 

5 amended— 

6 (1) in section 951(b)(3)(B) (12 U.S.C. 

7 1833a(b)(3)(B)), by striking ‘‘Bank Insurance 

8 Fund, the Savings Association Insurance Fund,’’ 

9 and inserting ‘‘Deposit Insurance Fund (or any 

10 predecessor deposit insurance fund)’’; and 

11 (2) in section 1112(c)(1)(B) (12 U.S.C. 

12 3341(c)(1)(B)), by striking ‘‘Bank Insurance Fund, 

13 the Savings Association Insurance Fund,’’ and in14 serting ‘‘Deposit Insurance Fund’’. 

15 (i) AMENDMENT TO THE BANK HOLDING COMPANY

16 ACT OF 1956.—The Bank Holding Company Act of 1956 

17 (12 U.S.C. 1841 et seq.) is amended— 

18 (1) in section 2(j)(2) (12 U.S.C. 1841(j)(2)), by 

19 striking ‘‘Savings Association Insurance Fund’’ and 

20 inserting ‘‘Deposit Insurance Fund’’; and 

21 (2) in section 3(d)(1)(D)(iii) (12 U.S.C. 

22 1842(d)(1)(D)(iii)), by striking ‘‘appropriate deposit 

23 insurance fund’’ and inserting ‘‘Deposit Insurance 

24 Fund’’. 
46 

•S 1932 PCS 

1 (j) AMENDMENTS TO THE GRAMM-LEACH-BLILEY

2 ACT.—Section 114 of the Gramm-Leach-Bliley Act (12 

3 U.S.C. 1828a) is amended in each of subsection (a)(1)(B), 

4 paragraphs (2)(B) and (4)(B) of subsection (b), and sub5 section (c)(1)(B), by striking ‘‘any Federal deposit insur6 ance fund’’ and inserting ‘‘the Deposit Insurance Fund’’. 

7 SEC. 2007. EFFECTIVE DATE. 

8 (a) IN GENERAL.—Except as otherwise provided in 

9 this subtitle, this subtitle and the amendments made by 

10 this subtitle shall become effective not later than the first 

11 day of the first calendar quarter that begins more than 

12 90 days after the date of enactment of this Act. 

13 (b) EARLIER IMPLEMENTATION.— 

14 (1) CORPORATION DETERMINATION.—If the 

15 Corporation determines that merger of the deposit 

16 insurance funds should occur before the first day of 

17 the first calendar quarter as described in subsection 

18 (a), the Corporation shall— 

19 (A) announce such determination publicly; 

20 and 

21 (B) establish the effective date of the 

22 merger. 

23 (2) EARLIER EFFECTIVE DATE.—On the date 

24 established under paragraph (1)(B), this subtitle 
47 

•S 1932 PCS 

1 and the amendments made by this subtitle shall be2 come effective. 

3 Subtitle B—Deposit Insurance 

4 Modernization and Improvement 

5 SEC. 2011. SHORT TITLE. 

6 This subtitle may be cited as the ‘‘Deposit Insurance 

7 Reform Act of 2005’’. 

8 SEC. 2012. CHANGES TO FEDERAL DEPOSIT INSURANCE 

9 COVERAGE. 

10 (a) INSURED DEPOSITORY INSTITUTIONS.— 

11 (1) IN GENERAL.—Section 11(a)(1) of the Fed12 eral Deposit Insurance Act (12 U.S.C. 1821(a)(1)) 

13 is amended— 

14 (A) by striking subparagraph (B) and in15 serting the following: 

16 ‘‘(B) NET AMOUNT OF INSURED DEPOS17 ITS.—The net amount of deposit insurance pay18 able to any depositor at an insured depository 

19 institution shall not exceed the standard max20 imum deposit insurance amount, as determined 

21 in accordance with subparagraphs (C) through 

22 (M).’’; and 

23 (B) by striking subparagraph (D) and in24 serting the following: 
48 

•S 1932 PCS 

1 ‘‘(D) COVERAGE FOR CERTAIN EMPLOYEE

2 BENEFIT PLAN DEPOSITS.— 

3 ‘‘(i) PASS-THROUGH INSURANCE.— 

4 The Corporation shall provide pass5 through deposit insurance for the deposits 

6 of any employee benefit plan. 

7 ‘‘(ii) PROHIBITION ON ACCEPTANCE

8 OF BENEFIT PLAN DEPOSITS.—An insured 

9 depository institution that is not well cap10 italized or adequately capitalized may not 

11 accept employee benefit plan deposits. 

12 ‘‘(iii) DEFINITIONS.—For purposes of 

13 this subparagraph, the following definitions 

14 shall apply: 

15 ‘‘(I) CAPITAL STANDARDS.—The 

16 terms ‘well capitalized’ and ‘ade17 quately capitalized’ have the same 

18 meanings as in section 38. 

19 ‘‘(II) EMPLOYEE BENEFIT

20 PLAN.—The term ‘employee benefit 

21 plan’ has the same meaning as in 

22 paragraph (5)(B)(ii), and includes any 

23 eligible deferred compensation plan 

24 described in section 457 of the Inter25 nal Revenue Code of 1986. 
49 

•S 1932 PCS 

1 ‘‘(III) PASS-THROUGH DEPOSIT

2 INSURANCE.—The term ‘pass-through 

3 deposit insurance’ means, with respect 

4 to an employee benefit plan, deposit 

5 insurance coverage based on the inter6 est of each participant, in accordance 

7 with regulations issued by the Cor8 poration. 

9 ‘‘(E) STANDARD MAXIMUM DEPOSIT IN10 SURANCE AMOUNT DEFINED.—For purposes of 

11 this paragraph, the term ‘standard maximum 

12 deposit insurance amount’ means, until April 1, 

13 2010, $100,000. 

14 ‘‘(F) DETERMINATION REGARDING INFLA15 TION ADJUSTMENTS.— 

16 ‘‘(i) ADJUSTMENTS TO STANDARD

17 MAXIMUM DEPOSIT INSURANCE AMOUNT.— 

18 Not later than April 1, 2010, and the first 

19 day of each 5-year period thereafter, the 

20 Board of Directors shall determine whether 

21 to increase the standard maximum deposit 

22 insurance amount based on the factors set 

23 forth under subparagraph (G). 

24 ‘‘(ii) ADJUSTMENTS FOR CERTAIN RE25 TIREMENT ACCOUNTS.—Not later than 
50 

•S 1932 PCS 

1 April 1, 2010, and the first day of each 5- 

2 year period thereafter, the Board of Direc3 tors shall determine whether to increase 

4 the amount of insurance available for re5 tirement accounts under paragraph (3), 

6 based on the factors set forth under sub7 paragraph (G). 

8 ‘‘(G) INFLATION ADJUSTMENT CONSIDER9 ATIONS.—In making any determination under 

10 subparagraph (F), the Board of Directors shall 

11 consider— 

12 ‘‘(i) the economic conditions affecting 

13 insured depository institutions; 

14 ‘‘(ii) the overall risk or risks to the 

15 Deposit Insurance Fund; 

16 ‘‘(iii) a demonstrated need by deposi17 tors for the inflation adjustment increase; 

18 ‘‘(iv) the ability of insured depository 

19 institutions to identify and obtain alter20 native funding sources; 

21 ‘‘(v) the ability of insured depository 

22 institutions to meet the credit needs of 

23 their communities; 

24 ‘‘(vi) potential problems affecting in25 sured depository institutions generally or a 
51 

•S 1932 PCS 

1 specific group or type of insured depository 

2 institutions; and 

3 ‘‘(vii) any other factors that the 

4 Board of Directors deems appropriate. 

5 ‘‘(H) INFLATION ADJUSTMENT CALCULA6 TIONS FOR 2010.— 

7 ‘‘(i) CALCULATION FOR STANDARD

8 MAXIMUM DEPOSIT INSURANCE AMOUNT.— 

9 The amount provided for any increase in 

10 the standard maximum deposit insurance 

11 amount shall be, as of April 1, 2010, the 

12 product of— 

13 ‘‘(I) $100,000; and 

14 ‘‘(II) the ratio of the value of the 

15 Personal Consumption Expenditures 

16 Chain-Type Index (or any successor 

17 index thereto), published by the De18 partment of Commerce, for December 

19 31 of the year preceding the year in 

20 which the adjustment is calculated 

21 under this subparagraph, to the value 

22 of such index for December 31 of the 

23 year preceding the effective date of 

24 the Safe and Fair Deposit Insurance 

25 Act of 2005. 
52 

•S 1932 PCS 

1 ‘‘(ii) CALCULATION FOR CERTAIN RE2 TIREMENT ACCOUNTS FOR 2010.—The 

3 amount provided for any increase in the in4 surance for retirement accounts under 

5 paragraph (3) shall be, as of April 1, 

6 2010, the product of— 

7 ‘‘(I) $250,000; and 

8 ‘‘(II) the ratio of the value of the 

9 Personal Consumption Expenditures 

10 Chain-Type Index (or any successor 

11 index thereto), published by the De12 partment of Commerce, for December 

13 31 of the year preceding the year in 

14 which the adjustment is calculated 

15 under this subparagraph, to the value 

16 of such index for December 31 of the 

17 year preceding the effective date of 

18 the Safe and Fair Deposit Insurance 

19 Act of 2005. 

20 ‘‘(I) INFLATION ADJUSTMENT CALCULA21 TIONS AFTER 2010.— 

22 ‘‘(i) CALCULATION FOR THE STAND23 ARD MAXIMUM DEPOSIT INSURANCE

24 AMOUNT.—The amount provided for any 

25 increase in the standard maximum deposit 
53 

•S 1932 PCS 

1 insurance amount shall be, as of the 1st 

2 day of each 5-year period beginning on 

3 April 1, 2015, the product of— 

4 ‘‘(I) the standard maximum de5 posit insurance amount; and 

6 ‘‘(II) the ratio of the value of the 

7 Personal Consumption Expenditures 

8 Chain-Type Index (or any successor 

9 index thereto), published by the De10 partment of Commerce, for December 

11 31 of the year preceding the year in 

12 which the adjustment is calculated 

13 under this subparagraph, to the value 

14 of such index for December 31 of the 

15 6 years prior to the year in which the 

16 adjustment is calculated under this 

17 subparagraph. 

18 ‘‘(ii) CALCULATION FOR CERTAIN RE19 TIREMENT ACCOUNTS.—The amount pro20 vided for any increase in the insurance for 

21 retirement accounts under paragraph (3) 

22 shall be, as of the 1st day of each 5-year 

23 period beginning on April 1, 2015, the 

24 product of— 
54 

•S 1932 PCS 

1 ‘‘(I) the amount available for re2 tirement accounts under paragraph 

3 (3), as adjusted pursuant to subpara4 graph (H) or this subparagraph, as 

5 appropriate; and 

6 ‘‘(II) the ratio of the value of the 

7 Personal Consumption Expenditures 

8 Chain-Type Index (or any successor 

9 index thereto), published by the De10 partment of Commerce, for December 

11 31 of the year preceding the year in 

12 which the adjustment is calculated 

13 under this subparagraph, to the value 

14 of such index for December 31 of the 

15 6 years prior to the year in which the 

16 adjustment is calculated under this 

17 subparagraph. 

18 ‘‘(J) DETERMINATION OF NO INFLATION

19 INCREASES.—If the Board cannot support an 

20 increase under subparagraph (F) after consid21 eration of the factors in subparagraph (G), no 

22 inflation adjustment shall be made until recon23 sideration at the beginning of the next 5-year 

24 period. 
55 

•S 1932 PCS 

1 ‘‘(K) ROUNDING.—If the amount of in2 crease determined for any period is not a mul3 tiple of $10,000, the amount so determined 

4 shall be rounded to the nearest $10,000. 

5 ‘‘(L) PUBLICATION.—Not later than April 

6 1, 2010, and not later than the first day of 

7 each 5-year period thereafter, the Board of Di8 rectors shall publish in the Federal Register the 

9 standard maximum deposit insurance amount 

10 and the amount of deposit insurance coverage 

11 that may be due to any depositor at any in12 sured depository institution during the applica13 ble 5-year period. 

14 ‘‘(M) NO INFLATION ADJUSTMENTS FOR

15 PUBLIC FUNDS.—Subparagraphs (E) through 

16 (L) shall not apply to any deposits of depositors 

17 described in paragraph (2), and the net amount 

18 due to any such depositor at an insured deposi19 tory institution shall not exceed $100,000.’’. 

20 (2) DEPOSIT INSURANCE FOR RETIREMENT AC21 COUNTS.—Section 11(a)(3)(A) of the Federal De22 posit Insurance Act (12 U.S.C. 1821(a)(3)(A)) is 

23 amended— 

24 (A) by striking ‘‘$100,000’’ and inserting 

25 ‘‘$250,000’’; and 
56 

•S 1932 PCS 

1 (B) by inserting before the period at the 

2 end the following: ‘‘which amount shall be sub3 ject to inflation adjustments as provided in 

4 paragraph (1).’’. 

5 (3) TECHNICAL AND CONFORMING AMENDMENT

6 RELATING TO INSURANCE OF TRUST FUNDS.—Sec7 tion 7(i) of the Federal Deposit Insurance Act (12 

8 U.S.C. 1817(i)) is amended in each of paragraphs 

9 (1) and (3), by striking ‘‘$100,000’’ each place it 

10 appears and inserting ‘‘the standard maximum de11 posit insurance amount (as determined under section 

12 11(a)(1))’’. 

13 (4) OTHER TECHNICAL AND CONFORMING

14 AMENDMENTS.—The Federal Deposit Insurance Act 

15 (12 U.S.C. 1811 et seq.) is amended— 

16 (A) in section 11(m)(6) (12 U.S.C. 

17 1821(m)(6)), by striking ‘‘$100,000’’ and in18 serting ‘‘the standard maximum deposit insur19 ance amount (as determined under subsection 

20 (a)(1))’’; 

21 (B) in section 18 (12 U.S.C. 1828), by 

22 striking subsection (a) and inserting the fol23 lowing: 

24 ‘‘(a) INSURANCE LOGO.— 

25 ‘‘(1) INSURED DEPOSITORY INSTITUTIONS.— 
57 

•S 1932 PCS 

1 ‘‘(A) IN GENERAL.—Each insured deposi2 tory institution shall display at each place of 

3 business maintained by that institution a sign 

4 or signs relating to the insurance of the depos5 its of the institution, in accordance with regula6 tions to be prescribed by the Corporation. 

7 ‘‘(B) STATEMENT TO BE INCLUDED.— 

8 Each sign required under subparagraph (A) 

9 shall include a statement that insured deposits 

10 are backed by the full faith and credit of the 

11 United States Government. 

12 ‘‘(2) REGULATIONS.—The Corporation shall 

13 prescribe regulations to carry out this subsection, in14 cluding regulations governing the substance of signs 

15 required by paragraph (1) and the manner of dis16 play or use of such signs. 

17 ‘‘(3) PENALTIES.—For each day that an in18 sured depository institution continues to violate this 

19 subsection or any regulation issued under this sub20 section, it shall be subject to a penalty of not more 

21 than $100, which the Corporation may recover for 

22 its use.’’; and 

23 (C) in section 43(d) (12 U.S.C. 1831t(d)), 

24 by striking ‘‘$100,000’’ and inserting ‘‘the 
58 

•S 1932 PCS 

1 standard maximum deposit insurance amount 

2 (as determined under section 11(a)(1))’’. 

3 (b) INSURED CREDIT UNIONS.— 

4 (1) IN GENERAL.—Section 207(k) of the Fed5 eral Credit Union Act (12 U.S.C. 1787(k)) is 

6 amended— 

7 (A) by striking ‘‘(k)(1)’’ and all that fol8 lows through the end of paragraph (1) and in9 serting the following: 

10 ‘‘(k) INSURED AMOUNTS PAYABLE.— 

11 ‘‘(1) NET INSURED AMOUNT.— 

12 ‘‘(A) IN GENERAL.—Subject to the provi13 sions of paragraph (2), the net amount of share 

14 insurance payable to any member at an insured 

15 credit union shall not exceed the total amount 

16 of the shares or deposits in the name of the 

17 member (after deducting offsets), less any part 

18 thereof which is in excess of the standard max19 imum share insurance amount, as determined 

20 in accordance with this paragraph and para21 graphs (5) and (6), and consistent with actions 

22 taken by the Federal Deposit Insurance Cor23 poration under section 11(a) of the Federal De24 posit Insurance Act. 
59 

•S 1932 PCS 

1 ‘‘(B) AGGREGATION.—Determination of 

2 the net amount of share insurance under sub3 paragraph (A), shall be in accordance with such 

4 regulations as the Board may prescribe, and, in 

5 determining the amount payable to any mem6 ber, there shall be added together all accounts 

7 in the credit union maintained by that member 

8 for that member’s own benefit, either in the 

9 member’s own name or in the names of others. 

10 ‘‘(C) AUTHORITY TO DEFINE THE EXTENT

11 OF COVERAGE.—The Board may define, with 

12 such classifications and exceptions as it may 

13 prescribe, the extent of the share insurance cov14 erage provided for member accounts, including 

15 member accounts in the name of a minor, in 

16 trust, or in joint tenancy.’’; 

17 (B) by adding at the end the following: 

18 ‘‘(4) COVERAGE FOR CERTAIN EMPLOYEE BEN19 EFIT PLAN DEPOSITS.— 

20 ‘‘(A) PASS-THROUGH INSURANCE.—The 

21 Administration shall provide pass-through share 

22 insurance for the deposits or shares of any em23 ployee benefit plan, subject to subparagraph 

24 (B). 
60 

•S 1932 PCS 

1 ‘‘(B) PROHIBITION ON ACCEPTANCE OF

2 DEPOSITS.—An insured credit union that is not 

3 well capitalized or adequately capitalized may 

4 not accept employee benefit plan deposits. 

5 ‘‘(C) DEFINITIONS.—For purposes of this 

6 paragraph, the following definitions shall apply: 

7 ‘‘(i) CAPITAL STANDARDS.—The 

8 terms ‘well capitalized’ and ‘adequately 

9 capitalized’ have the same meanings as in 

10 section 216(c), as added by section 301 of 

11 the Credit Union Membership Access Act 

12 (Public Law 105–219, 112 Stat. 931). 

13 ‘‘(ii) EMPLOYEE BENEFIT PLAN.— 

14 The term ‘employee benefit plan’— 

15 ‘‘(I) has the same meaning as in 

16 section 3(3) of the Employee Retire17 ment Income Security Act of 1974; 

18 ‘‘(II) includes any plan described 

19 in section 401(d) of the Internal Rev20 enue Code of 1986; and 

21 ‘‘(III) includes any eligible de22 ferred compensation plan described in 

23 section 457 of the Internal Revenue 

24 Code of 1986. 
61 

•S 1932 PCS 

1 ‘‘(iii) PASS-THROUGH SHARE INSUR2 ANCE.—The term ‘pass-through share in3 surance’ means, with respect to an em4 ployee benefit plan, insurance coverage 

5 based on the interest of each participant, 

6 in accordance with regulations issued by 

7 the Corporation. 

8 ‘‘(5) STANDARD MAXIMUM SHARE INSURANCE

9 AMOUNT DEFINED.—For purposes of this sub10 section, the term ‘standard maximum share insur11 ance amount’ means, until April 1, 2010, $100,000. 

12 ‘‘(6) DETERMINATIONS REGARDING INFLATION

13 ADJUSTMENTS.— 

14 ‘‘(A) ADJUSTMENTS TO STANDARD MAX15 IMUM SHARE INSURANCE AMOUNT.—Not later 

16 than April 1, 2010, and the first day of each 

17 5-year period thereafter, the Board shall deter18 mine whether to increase the standard max19 imum share insurance amount based on the fac20 tors set forth under paragraph (7). 

21 ‘‘(B) ADJUSTMENT FOR CERTAIN RETIRE22 MENT ACCOUNTS.—Not later than April 1, 

23 2010, and the first day of each 5-year period 

24 thereafter, the Board shall determine whether 

25 to increase the amount of insurance available 
62 

•S 1932 PCS 

1 for retirement accounts under paragraph (3), 

2 based on the factors set forth under paragraph 

3 (7). 

4 ‘‘(7) INFLATION ADJUSTMENT CONSIDER5 ATIONS.—In making any determination under para6 graph (6), the Board shall consider— 

7 ‘‘(A) the economic conditions affecting in8 sured credit unions; 

9 ‘‘(B) the overall risk or risks to the Na10 tional Credit Union Share Insurance Fund; 

11 ‘‘(C) a demonstrated need by members for 

12 the inflation adjustment increase; 

13 ‘‘(D) the ability of insured credit unions to 

14 identify and obtain alternative funding sources; 

15 ‘‘(E) the ability of insured credit unions to 

16 meet the credit needs of their communities; 

17 ‘‘(F) potential problems affecting insured 

18 credit unions generally or a specific group or 

19 type of insured credit unions; and 

20 ‘‘(G) any other factors that the Board 

21 deems appropriate. 

22 ‘‘(8) INFLATION ADJUSTMENT CALCULATIONS

23 FOR 2010.— 

24 ‘‘(A) CALCULATION FOR STANDARD MAX25 IMUM SHARE INSURANCE AMOUNT.—The 
63 

•S 1932 PCS 

1 amount provided for any increase in the stand2 ard maximum share insurance amount shall be, 

3 as of April 1, 2010, the product of— 

4 ‘‘(i) $100,000; and 

5 ‘‘(ii) the ratio of the value of the Per6 sonal Consumption Expenditures Chain7 Type Index (or any successor index there8 to), published by the Department of Com9 merce, for December 31 of the year pre10 ceding the year in which the adjustment is 

11 calculated under this paragraph, to the 

12 value of such index for December 31 of the 

13 year preceding the effective date of the 

14 Safe and Fair Deposit Insurance Act of 

15 2005. 

16 ‘‘(B) CALCULATION FOR CERTAIN RETIRE17 MENT ACCOUNTS FOR 2010.—The amount pro18 vided for any increase in the insurance for re19 tirement accounts under paragraph (3) shall be, 

20 as of April 1, 2010, the product of— 

21 ‘‘(i) $250,000; and 

22 ‘‘(ii) the ratio of the value of the Per23 sonal Consumption Expenditures Chain24 Type Index (or any successor index there25 to), published by the Department of Com-
64 

•S 1932 PCS 

1 merce, for December 31 of the year pre2 ceding the year in which the adjustment is 

3 calculated under this paragraph, to the 

4 value of such index for December 31 of the 

5 year preceding the effective date of the 

6 Safe and Fair Deposit Insurance Act of 

7 2005. 

8 ‘‘(9) INFLATION ADJUSTMENT CALCULATIONS

9 AFTER 2010.— 

10 ‘‘(A) CALCULATION FOR THE STANDARD

11 MAXIMUM SHARE INSURANCE AMOUNT.—The 

12 amount provided for any increase in the stand13 ard maximum share insurance amount shall be, 

14 as of the 1st day of each 5-year period begin15 ning on April 1, 2015, the product of— 

16 ‘‘(i) the standard maximum share in17 surance amount; and 

18 ‘‘(ii) the ratio of the value of the Per19 sonal Consumption Expenditures Chain20 Type Index (or any successor index there21 to), published by the Department of Com22 merce, for December 31 of the year pre23 ceding the year in which the adjustment is 

24 calculated under this paragraph, to the 

25 value of such index for December 31 of the 
65 

•S 1932 PCS 

1 6 years prior to the year in which the ad2 justment is calculated under this para3 graph. 

4 ‘‘(B) CALCULATION FOR CERTAIN RETIRE5 MENT ACCOUNTS.—The amount provided for 

6 any increase in the insurance for retirement ac7 counts under paragraph (3) shall be, as of the 

8 1st day of each 5-year period beginning on 

9 April 1, 2015, the product of— 

10 ‘‘(i) the amount available for retire11 ment accounts under paragraph (3), as ad12 justed pursuant to paragraph (8) or this 

13 paragraph, as appropriate; and 

14 ‘‘(ii) the ratio of the value of the Per15 sonal Consumption Expenditures Chain16 Type Index (or any successor index there17 to), published by the Department of Com18 merce, for December 31 of the year pre19 ceding the year in which the adjustment is 

20 calculated under this paragraph, to the 

21 value of such index for December 31 of the 

22 6 years prior to the year in which the ad23 justment is calculated under this para24 graph. 
66 

•S 1932 PCS 

1 ‘‘(10) DETERMINATION OF NO INFLATION IN2 CREASE.—If the Board cannot support an increase 

3 under paragraph (6) after consideration of the fac4 tors in paragraph (7), no inflation adjustment shall 

5 be made until reconsideration at the beginning of 

6 the next 5-year period. 

7 ‘‘(11) ROUNDING.—If the amount of increase 

8 determined for any period is not a multiple of 

9 $10,000, the amount so determined shall be rounded 

10 to the nearest $10,000. 

11 ‘‘(12) PUBLICATION.—Not later than April 1, 

12 2010, and not later than the first day of each 5-year 

13 period thereafter, the Board shall publish in the 

14 Federal Register the standard maximum share in15 surance amount and the amount of share insurance 

16 coverage that may be due to any depositor at any in17 sured credit union during the applicable 5-year pe18 riod. 

19 ‘‘(13) NO INFLATION ADJUSTMENTS FOR PUB20 LIC FUNDS.—Paragraphs (5) through (12) shall not 

21 apply to any deposits of depositors described in 

22 paragraph (2), and the net amount due to any such 

23 depositor at an insured credit union shall not exceed 

24 $100,000.’’; and 
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1 (C) in paragraph (3), by striking 

2 ‘‘$100,000 per account’’ and inserting the fol3 lowing: ‘‘$250,000 per account, which amount 

4 shall be subject to inflation adjustments as pro5 vided in paragraphs (6) through (12).’’. 

6 (2) TECHNICAL AMENDMENT.—Section 202(h) 

7 of the Federal Credit Union Act (12 U.S.C. 

8 1782(h)) is amended by striking ‘‘207(c)(1)’’ and in9 serting ‘‘207(k)’’. 

10 (c) EFFECTIVE DATE.—Except as otherwise specifi11 cally provided in this section or the amendments made by 

12 this section, this section and such amendments shall be13 come effective on the effective date of the regulations re14 quired under section 2017(a)(2), relating to the implemen15 tation of deposit insurance changes under this section. 

16 SEC. 2013. DESIGNATED RESERVE RATIO. 

17 (a) REPEAL OF RECAPITALIZATION SCHEDULE.— 

18 (1) IN GENERAL.—Section 7(b)(3) of the Fed19 eral Deposit Insurance Act (12 U.S.C. 1817(b)(3)) 

20 is amended to read as follows: 

21 ‘‘(3) DESIGNATED RESERVE RATIO.— 

22 ‘‘(A) ACTION BY THE BOARD.— 

23 ‘‘(i) IN GENERAL.—Before the begin24 ning of each calendar year, the Board of 

25 Directors shall, subject to clause (ii)— 
68 

•S 1932 PCS 

1 ‘‘(I) designate the reserve ratio 

2 applicable to the Deposit Insurance 

3 Fund for that year; and 

4 ‘‘(II) publish the reserve ratio so 

5 designated. 

6 ‘‘(ii) RULEMAKING.—Any change to 

7 the designated reserve ratio for any cal8 endar year shall be made pursuant to sec9 tion 553 of title 5, United States Code. 

10 ‘‘(B) RANGE.—The reserve ratio des11 ignated by the Board of Directors for any 

12 year— 

13 ‘‘(i) may not exceed 1.50 percent; and 

14 ‘‘(ii) may not be less than 1.15 per15 cent. 

16 ‘‘(C) FACTORS.—In designating a reserve 

17 ratio for any year, the Board of Directors 

18 shall— 

19 ‘‘(i) take into account the risk of 

20 losses to the Deposit Insurance Fund in 

21 that year and in future years; 

22 ‘‘(ii) take into account economic con23 ditions generally affecting insured deposi24 tory institutions, to provide for an increase 

25 in the designated reserve ratio during more 
69 

•S 1932 PCS 

1 favorable economic conditions and to pro2 vide for a decrease in the designated re3 serve ratio during less favorable economic 

4 conditions, notwithstanding the increased 

5 risks of loss that may exist during such 

6 less favorable conditions, as determined to 

7 be appropriate by the Board; 

8 ‘‘(iii) seek to prevent sharp swings in 

9 the assessment rates for insured depository 

10 institutions; and 

11 ‘‘(iv) take into account such other fac12 tors as the Board of Directors may deter13 mine to be appropriate, consistent with the 

14 requirements of this subparagraph.’’. 

15 (2) TECHNICAL AND CONFORMING AMEND16 MENTS.—Section 3(y) of the Federal Deposit Insur17 ance Act (12 U.S.C. 1813), as amended by this title, 

18 is amended by adding at the end the following: 

19 ‘‘(2) RESERVE RATIO.—The term ‘reserve ratio’ 

20 means the ratio of the fund balance of the Deposit 

21 Insurance Fund to aggregate estimated insured de22 posits held in all insured depository institutions. 

23 ‘‘(3) DESIGNATED RESERVE RATIO.—The term 

24 ‘designated reserve ratio’ means the reserve ratio 
70 

•S 1932 PCS 

1 designated by the Board of Directors under section 

2 7(b)(3).’’. 

3 (3) EFFECTIVE DATE.—Subject to paragraph 

4 (4), and except as otherwise provided, this sub5 section and the amendments made by this subsection 

6 shall become effective on the effective date of the 

7 regulations required under section 2017(a)(1), relat8 ing to designation of the reserve ratio by the Board. 

9 (4) DESIGNATION OF INITIAL RESERVE RATIO

10 FOR DEPOSIT INSURANCE FUND.—During the period 

11 beginning on the effective date of the merger of the 

12 deposit insurance funds under section 2003, and 

13 ending on the effective date of final regulations des14 ignating the reserve ratio, as required by section 

15 2017(a)(1), the designated reserve ratio of the De16 posit Insurance Fund shall continue to be deter17 mined pursuant to section 7(b)(2)(A)(iv), as in ef18 fect on the day before the effective date of the merg19 er under section 2003. 

20 (b) REQUIREMENTS APPLICABLE TO ANY MODIFICA21 TION OF THE RISK-BASED ASSESSMENT SYSTEM.—Sec22 tion 7(b)(1) of the Federal Deposit Insurance Act (12 

23 U.S.C. 1817(b)(1)) is amended by adding at the end the 

24 following: 
71 

•S 1932 PCS 

1 ‘‘(E) REQUIREMENTS APPLICABLE TO ANY

2 MODIFICATION OF THE RISK-BASED ASSESS3 MENT SYSTEM.— 

4 ‘‘(i) IN GENERAL.—In revising or 

5 modifying the risk-based assessment sys6 tem at any time after the date of enact7 ment of the Deposit Insurance Reform Act 

8 of 2005, the Board of Directors— 

9 ‘‘(I) may not make any change to 

10 the information collected from or re11 quired to be retained by insured de12 pository institutions solely for pur13 poses of the assessment risk classifica14 tion, as defined by regulations of the 

15 Board, if the change would result in 

16 the imposition of an overall greater 

17 regulatory or reporting burden on in18 sured depository institutions than was 

19 the case before that date of enact20 ment; and 

21 ‘‘(II) may implement any such 

22 revision or modification in final form 

23 only after notice and opportunity for 

24 comment. 
72 

•S 1932 PCS 

1 ‘‘(ii) RULE OF CONSTRUCTION.—An 

2 increase in an assessment rate or a revi3 sion of the assessment base shall not be 

4 considered to be a revision or modification 

5 resulting in greater regulatory or reporting 

6 burden for purposes of this subpara7 graph.’’. 

8 SEC. 2014. ASSESSMENT CREDITS AND DIVIDENDS. 

9 (a) IN GENERAL.—Section 7(e)(2) of the Federal De10 posit Insurance Act (12 U.S.C. 1817(e)(2)) is amended 

11 to read as follows: 

12 ‘‘(2) ONE-TIME CREDIT BASED ON TOTAL AS13 SESSMENT BASE AT YEAR-END 1996.— 

14 ‘‘(A) IN GENERAL.—The Board of Direc15 tors shall, by regulation, provide for a credit to 

16 each insured depository institution that was in 

17 existence on December 31, 1996, and that had 

18 paid a deposit insurance assessment prior to 

19 that date (or a successor insured depository in20 stitution), based on the assessment base of the 

21 institution on that date, as compared to the 

22 combined aggregate assessment base of all such 

23 institutions, taking into account such factors as 

24 the Board may determine to be appropriate. 
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•S 1932 PCS 

1 ‘‘(B) CREDIT LIMIT.—The aggregate 

2 amount of credits available under subparagraph 

3 (A) to all insured depository institutions that 

4 are eligible for the credit shall not exceed the 

5 amount that the Corporation could collect if it 

6 imposed an assessment of 9 basis points on the 

7 combined assessment base of the Bank Insur8 ance Fund and the Savings Association Insur9 ance Fund as of December 31, 2001. 

10 ‘‘(C) DEFINITION OF SUCCESSOR.—The 

11 Corporation shall define the term ‘successor’ for 

12 purposes of this paragraph, by regulation, and 

13 may consider, among other factors and as the 

14 Board may deem appropriate, whether and to 

15 what extent, if any, an insured depository insti16 tution that acquires deposits from another in17 sured depository institution may deemed to be 

18 a successor. 

19 ‘‘(D) APPLICATION OF CREDITS.—The 

20 amount of a credit to any insured depository in21 stitution under this paragraph may be applied 

22 by the Corporation to those portions of the as23 sessments under subsection (b) applicable to 

24 that institution which become due for assess-
74 

•S 1932 PCS 

1 ment periods beginning after the effective date 

2 of regulations required by subparagraph (A).’’. 

3 (b) AMENDMENTS TO SECTION 7.—Section 7(e) of 

4 the Federal Deposit Insurance Act (12 U.S.C. 1817(e)) 

5 is amended by adding at the end the following new para6 graphs: 

7 ‘‘(3) DIVIDENDS.— 

8 ‘‘(A) RESERVE RATIO IN EXCESS OF 1.50

9 PERCENT OF ESTIMATED INSURED DEPOSITS.— 

10 The Corporation shall provide cash dividends to 

11 insured depository institutions in accordance 

12 with this paragraph if the reserve ratio of the 

13 Deposit Insurance Fund exceeds the maximum 

14 amount established under subsection 

15 (b)(3)(B)(i), to the extent of that excess 

16 amount. 

17 ‘‘(B) AMOUNT EQUAL TO OR IN EXCESS OF

18 1.40 PERCENT OF ESTIMATED INSURED DEPOS19 ITS AND NOT MORE THAN 1.50 PERCENT.—The 

20 Corporation shall provide cash dividends to in21 sured depository institutions in accordance with 

22 this paragraph if the reserve ratio of the De23 posit Insurance Fund equals or exceeds 1.40 

24 and is not more than 1.50 percent, and that 

25 amount shall equal 50 percent of the amount in 
75 

•S 1932 PCS 

1 excess of the amount required to maintain the 

2 reserve ratio at 1.40 percent of the estimated 

3 insured deposits. 

4 ‘‘(C) FACTORS FOR CONSIDERATION FOR

5 ALLOCATION OF DIVIDENDS.—In implementing 

6 the provisions of this paragraph, and in accord7 ance with its regulations, the Corporation shall 

8 consider— 

9 ‘‘(i) the ratio of the assessment base 

10 of an insured depository institution (in11 cluding any predecessor institution) on De12 cember 31, 1996, to the assessment base 

13 of all eligible insured depository institu14 tions on such date; 

15 ‘‘(ii) the total amount of assessments 

16 paid on or after January 1, 1997, by an 

17 insured depository institution (including 

18 any predecessor institution) to the Deposit 

19 Insurance Fund (and any predecessor de20 posit insurance fund); 

21 ‘‘(iii) that portion of assessments paid 

22 by an insured depository institution (in23 cluding any predecessor institution) that 

24 reflects higher levels of risk assumed by 

25 such institution; and 
76 

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1 ‘‘(iv) such other factors as the Cor2 poration determines appropriate. 

3 ‘‘(D) LIMITATION.—The Board of Direc4 tors may suspend or limit dividends paid under 

5 subparagraph (B) if the Board determines in 

6 writing that— 

7 ‘‘(i) a significant risk of losses to the 

8 Deposit Insurance Fund exists over the 

9 next one-year period; and 

10 ‘‘(ii) it is likely that such losses will be 

11 sufficiently high as to justify a finding by 

12 the Board that the reserve ratio should 

13 temporarily be allowed— 

14 ‘‘(I) to grow without requiring 

15 dividends under subparagraph (B); or 

16 ‘‘(II) to exceed the maximum 

17 amount established under subsection 

18 (b)(3)(B)(i). 

19 ‘‘(E) CONSIDERATIONS.—In making a de20 termination under subparagraph (D), the Board 

21 shall consider— 

22 ‘‘(i) national and regional conditions 

23 and their impact on insured depository in24 stitutions; 
77 

•S 1932 PCS 

1 ‘‘(ii) potential problems affecting in2 sured depository institutions or a specific 

3 group or type of depository institution; 

4 ‘‘(iii) the degree to which the contin5 gent liability of the Corporation for antici6 pated failures of insured institutions ade7 quately addresses concerns over funding 

8 levels in the Deposit Insurance Fund; and 

9 ‘‘(iv) any other factors that the Board 

10 determines are appropriate. 

11 ‘‘(F) REPORT TO CONGRESS.— 

12 ‘‘(i) SUBMISSION.—Any determination 

13 under subparagraph (D) shall be submitted 

14 to the Committee on Banking, Housing, 

15 and Urban Affairs of the Senate and the 

16 Committee on Financial Services of the 

17 House of Representatives, not later than 

18 270 days after making such determination. 

19 ‘‘(ii) CONTENT.—The report sub20 mitted under clause (i) shall include— 

21 ‘‘(I) a detailed explanation for 

22 the determination; and 

23 ‘‘(II) a discussion of the factors 

24 required to be considered under sub25 paragraph (E). 
78 

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1 ‘‘(G) REVIEW OF DETERMINATION.— 

2 ‘‘(i) ANNUAL REVIEW.—A determina3 tion to suspend or limit dividends under 

4 subparagraph (D) shall be reviewed by the 

5 Board of Directors annually. 

6 ‘‘(ii) ACTION BY BOARD.—Based on 

7 each annual review under clause (i), the 

8 Board of Directors shall either renew or 

9 remove a determination to suspend or limit 

10 dividends under subparagraph (D), or shall 

11 make a new determination in accordance 

12 with this paragraph. Unless justified under 

13 the terms of the renewal or new determina14 tion, the Corporation shall be required to 

15 provide cash dividends under subparagraph 

16 (A) or (B), as appropriate. 

17 ‘‘(4) CHALLENGES TO CREDIT OR DIVIDEND

18 AMOUNTS.—The regulations required under this sub19 section shall include provisions allowing an insured 

20 depository institution a reasonable opportunity to 

21 challenge administratively the amount of its credit 

22 or dividend under this subsection. The determination 

23 of the Corporation of the amount of the credit or 

24 dividend following such challenge shall be final, and 

25 not subject to judicial review.’’. 
79 

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

2 this section shall become effective on the effective date of 

3 the regulations required to be issued under section 

4 2017(a)(3), relating to implementation of the one-time as5 sessment credit. 

6 SEC. 2015. ASSESSMENTS-RELATED RECORDS RETENTION 

7 AND STATUTE OF LIMITATIONS. 

8 (a) RECORDS RETENTION.—Paragraph (5) of section 

9 7(b) of the Federal Deposit Insurance Act (12 U.S.C. 

10 1817(b)) is amended to read as follows: 

11 ‘‘(5) RECORDS TO BE MAINTAINED BY INSURED

12 DEPOSITORY INSTITUTION.—Each insured deposi13 tory institution shall maintain all records that the 

14 Corporation may require for verifying the correct15 ness of the institution’s assessments until the later 

16 of— 

17 ‘‘(A) 3 years from the due date of each as18 sessment payment; or 

19 ‘‘(B) the date of the final determination of 

20 any dispute between the insured depository in21 stitution and the Corporation over the amount 

22 of any assessment.’’. 

23 (b) STATUTE OF LIMITATIONS FOR ASSESSMENT AC24 TIONS.—Subsection (g) of section 7 of the Federal Deposit 
80 

•S 1932 PCS 

1 Insurance Act (12 U.S.C. 1817(g)) is amended to read 

2 as follows: 

3 ‘‘(g) STATUTE OF LIMITATIONS FOR ASSESSMENT

4 ACTIONS.—The Corporation, in any court of competent 

5 jurisdiction, shall be entitled to recover from any insured 

6 depository institution the amount of any unpaid assess7 ment lawfully payable by such insured depository institu8 tion. Notwithstanding any other provision in Federal law, 

9 or the law of any State— 

10 ‘‘(1) any action by an insured depository insti11 tution to recover from the Corporation the overpaid 

12 amount of any assessment shall be brought within 3 

13 years after the date the assessment payment was 

14 due, subject to the exception in paragraph (5); 

15 ‘‘(2) any action by the Corporation to recover 

16 from an insured depository institution the underpaid 

17 amount of any assessment shall be brought within 3 

18 years after the date the assessment payment was 

19 due, subject to the exceptions in paragraphs (3) and 

20 (5); 

21 ‘‘(3) if an insured depository institution has 

22 made a false or fraudulent statement with intent to 

23 evade any or all of its assessment, the Corporation 

24 shall have until 3 years after the date of discovery 
81 

•S 1932 PCS 

1 of the false or fraudulent statement in which to 

2 bring an action to recover the underpaid amount; 

3 ‘‘(4) assessment deposit information contained 

4 in records no longer required to be maintained pur5 suant to subsection (b)(5) shall be considered con6 clusive and not subject to change; and 

7 ‘‘(5) any action for the underpaid or overpaid 

8 amount of any assessment that became due prior to 

9 the effective date of this subsection shall be subject 

10 to the statute of limitations for assessments in effect 

11 at the time the assessment became due.’’. 

12 SEC. 2016. INCREASE IN FEES FOR LATE ASSESSMENT PAY13 MENTS. 

14 Subsection (h) of section 18 of the Federal Deposit 

15 Insurance Act (12 U.S.C. 1828(h)) is amended— 

16 (1) by striking ‘‘Any insured depository institu17 tion’’ and inserting ‘‘(1) IN GENERAL.—Any insured 

18 depository institution’’; 

19 (2) in paragraph (1), as redesignated, by strik20 ing ‘‘penalty of not more than $100’’ and inserting 

21 ‘‘penalty in an amount of not more than 1 percent 

22 of the amount of the assessment due’’; and 

23 (3) by inserting new paragraphs (2) and (3) as 

24 follows: 
82 

•S 1932 PCS 

1 ‘‘(2) EXCEPTION FOR SMALL ASSESSMENT

2 AMOUNTS.—Notwithstanding paragraph (1), if the 

3 amount of the assessment for an insured depository 

4 institution is less than $10,000 at the time such in5 stitution fails or refuses to pay the assessment, such 

6 institution shall be subject to a penalty of not more 

7 than $100 for each day that such violation con8 tinues. 

9 ‘‘(3) AUTHORITY TO MODIFY OR REMIT PEN10 ALTY.—The Corporation, in the sole discretion of 

11 the Corporation, may compromise, modify, or remit 

12 any penalty which the Corporation may assess or 

13 has already assessed under paragraph (1) or (2) 

14 upon a finding that good cause prevented the timely 

15 payment of an assessment.’’. 

16 SEC. 2017. REGULATIONS REQUIRED. 

17 (a) IN GENERAL.—Not later than 270 days after the 

18 date of enactment of this Act, the Board shall issue final 

19 regulations, in accordance with section 553 of chapter 5 

20 of title 5, United States Code— 

21 (1) designating the reserve ratio for the Deposit 

22 Insurance Fund, in accordance with section 7(b)(3) 

23 of the Federal Deposit Insurance Act, as amended 

24 by section 2013 of this subtitle, which regulations 
83 

•S 1932 PCS 

1 shall become effective not later than 90 days after 

2 the date of their publication in final form; 

3 (2) implementing changes in deposit insurance 

4 coverage in accordance with the amendments made 

5 by section 2012, which regulations shall become ef6 fective not later than 90 days after the date of their 

7 publication in final form; 

8 (3) implementing the one-time assessment cred9 it to certain insured depository institutions in ac10 cordance with section 7(e)(2) of the Federal Deposit 

11 Insurance Act, as amended by section 2014 of this 

12 subtitle; 

13 (4) establishing the qualifications and proce14 dures under which the Corporation may provide divi15 dends under section 7(e)(3) of the Federal Deposit 

16 Insurance Act, as amended by section 2014 of this 

17 subtitle; and 

18 (5) providing for assessments under section 7 of 

19 the Federal Deposit Insurance Act, as amended by 

20 this subtitle, which regulations shall become effective 

21 on the effective date of the regulations required by 

22 paragraph (3). 

23 (b) SAVINGS CLAUSE.— 

24 (1) IN GENERAL.— 
84 

•S 1932 PCS 

1 (A) CONTINUATION OF EXISTING ASSESS2 MENT REGULATIONS.—Nothing in this title or 

3 the amendments made by this title shall be con4 strued to affect the authority of the Corpora5 tion with regard to the setting or collection of 

6 deposit insurance assessments pursuant to any 

7 regulations in effect prior to the effective date 

8 of any regulations required under subsection 

9 (a). 

10 (B) TREATMENT OF DIF MEMBERS UNDER

11 EXISTING REGULATIONS.—Assessment regula12 tions in effect prior to the date of enactment of 

13 this title shall be read as applying to members 

14 of the Deposit Insurance Fund rather than 

15 members of the Bank Insurance Fund or Sav16 ings Association Insurance Fund, effective on 

17 or after the date on which merger of the deposit 

18 insurance funds becomes effective under title I. 

19 (2) SETTING ASSESSMENTS.—Clause (i) of sec20 tion 7(b)(2)(A) of the Federal Deposit Insurance 

21 Act (12 U.S.C. 1817(b)(2)(A)) is amended by strik22 ing ‘‘necessary—’’ and all that follows through the 

23 period at the end and inserting ‘‘necessary.’’. 
85 

•S 1932 PCS 

1 SEC. 2018. STUDIES OF POTENTIAL CHANGES TO THE FED2 ERAL DEPOSIT INSURANCE SYSTEM. 

3 (a) STUDY AND REPORT BY FDIC AND NCUA.— 

4 (1) STUDY.—The Board of Directors of the 

5 Federal Deposit Insurance Corporation and the Na6 tional Credit Union Administration Board shall each 

7 conduct a study of— 

8 (A) the feasibility of increasing the limit 

9 on deposit insurance for deposits of municipali10 ties and other units of general local govern11 ment, and the potential benefits and the poten12 tial adverse consequences that may result from 

13 any such increase; and 

14 (B) the feasibility of establishing a vol15 untary deposit insurance system for deposits in 

16 excess of the maximum amount of deposit in17 surance for any depositor, and the potential 

18 benefits and the potential adverse consequences 

19 that may result from the establishment of any 

20 such system. 

21 (2) REPORT.—Not later than 1 year after the 

22 date of enactment of this title, the Board of Direc23 tors of the Federal Deposit Insurance Corporation 

24 and the National Credit Union Administration 

25 Board shall each submit a report to the Congress on 

26 the study required under paragraph (1), containing 
86 

•S 1932 PCS 

1 the findings and conclusions of the reporting agency, 

2 together with such recommendations for legislative 

3 or administrative changes as the agency may deter4 mine to be appropriate. 

5 (b) STUDY AND REPORT REGARDING APPROPRIATE

6 RESERVE RATIO.— 

7 (1) STUDY.—The Corporation shall conduct a 

8 study on the feasibility of using alternatives to esti9 mated insured deposits in calculating the reserve 

10 ratio of the Deposit Insurance Fund. 

11 (2) REPORT.—Not later than 1 year after the 

12 date of enactment of this title, the Board shall sub13 mit a report to Congress on the results of the study 

14 required under paragraph (1), together with such 

15 recommendations for legislative or administrative ac16 tions as may be determined to be appropriate. 

17 SEC. 2019. EFFECTIVE DATE. 

18 Except as otherwise specifically provided in this sub19 title, this subtitle and the amendments made by this sub20 title shall become effective on the date of enactment of 

21 this Act. 

22 Subtitle C—FHA Asset Disposition 

23 SEC. 2021. SHORT TITLE. 

24 This subtitle may be cited as the ‘‘FHA Asset Dis25 position Act of 2005’’. 
87 

•S 1932 PCS 

1 SEC. 2022. DEFINITIONS. 

2 For purposes of this subtitle— 

3 (1) the term ‘‘affordability requirement’’ means 

4 any requirement or restriction imposed by the Sec5 retary, at the time of sale, on any multifamily real 

6 property or multifamily loan, including a use restric7 tion, rent restriction, or rehabilitation requirement; 

8 (2) the term ‘‘discount sale’’ means the sale of 

9 multifamily real property in a transaction, including 

10 a negotiated sale, in which the sale price is— 

11 (A) lower than the property market value; 

12 and 

13 (B) set outside of a competitive bidding 

14 process that has no affordability requirements; 

15 (3) the term ‘‘discount loan sale’’ means the 

16 sale of a multifamily loan in a transaction, including 

17 a negotiated sale, in which the sale price is lower 

18 than the loan market value and is set outside of a 

19 competitive bidding process that has no affordability 

20 requirements; 

21 (4) the term ‘‘loan market value’’ means the 

22 value of a multifamily loan, without taking into ac23 count any affordability requirements; 

24 (5) the term ‘‘multifamily real property’’ means 

25 any rental or cooperative housing project of 5 or 

26 more units owned by the Secretary that prior to ac-
88 

•S 1932 PCS 

1 quisition by the Secretary was security for a loan or 

2 loans insured under title II of the National Housing 

3 Act; 

4 (6) the term ‘‘multifamily loan’’ means a loan 

5 held by the Secretary and secured by a multifamily 

6 rental or cooperative housing project of 5 or more 

7 units that was formerly insured under title II of the 

8 National Housing Act; 

9 (7) the term ‘‘property market value’’ means 

10 the value of any multifamily real property for its 

11 current use, without taking into account any afford12 ability requirements; and 

13 (8) the term ‘‘Secretary’’ means the Secretary 

14 of Housing and Urban Development. 

15 SEC. 2023. APPROPRIATED FUNDS REQUIREMENT FOR 

16 BELOW MARKET SALES. 

17 (a) DISPOSITIONS BY SECRETARY.—Notwithstanding 

18 any other provision of law, other than any statutory af19 fordability requirement for the elderly and disabled, dis20 position by the Secretary of any multifamily real property 

21 through a discount sale under section 207(l) or 246 of 

22 the National Housing Act, section 203 of the Housing and 

23 Community Development Amendments of 1978, or section 

24 204 of the Departments of Veterans Affairs and Housing 

25 and Urban Development, and Independent Agencies Ap-
89 

•S 1932 PCS 

1 propriations Act, 1997, shall be subject to the availability 

2 of appropriations to the extent that the property value ex3 ceeds the sale proceeds. If the multifamily real property 

4 is sold for an amount equal to or greater than the property 

5 market value, the transaction is not subject to the avail6 ability of appropriations. 

7 (b) DISCOUNT LOAN SALES.—Notwithstanding any 

8 other provision of law, and in accordance with the Credit 

9 Reform Act of 1990, a discount loan sale under 207(k) 

10 of the National Housing Act, section 203(k) of the Hous11 ing and Community Development Amendments of 1978, 

12 or section 204(a) of the Departments of Veterans Affairs 

13 and Housing and Urban Development, and Independent 

14 Agencies Appropriations Act, 1997, shall be subject to the 

15 availability of appropriations, to the extent that the loan 

16 value exceeds the sale proceeds. If the multifamily loan 

17 is sold for an amount equal to or greater than the loan 

18 market value, then the transaction is not subject to the 

19 availability of appropriations. 

20 (c) LIMITATION.—This section shall not apply to any 

21 transaction that formally commences during the 1-year pe22 riod preceding the date of enactment of this Act. 

23 SEC. 2024. UP-FRONT GRANTS. 

24 (a) VA-HUD.—Section 204(a) of the Departments of 

25 Veterans Affairs and Housing and Urban Development, 
90 

•S 1932 PCS 

1 and Independent Agencies Appropriations Act, 1997 (12 

2 U.S.C. 1715z-11a(a)) is amended by adding at the end 

3 the following: ‘‘A grant provided under this subsection 

4 shall be available only to the extent that appropriations 

5 are made in advance for such purpose, and shall not be 

6 derived from the General Insurance Fund.’’. 

7 (b) OTHER GRANT AUTHORITY.—Section 203(f) of 

8 the Housing and Community Development Amendments 

9 of 1978 (12 U.S.C. 1701z–11(f)) is amended— 

10 (1) by striking paragraph (4); and 

11 (2) by redesignating paragraphs (5) through 

12 (9) as paragraphs (4) through (8), respectively. 

13 (c) LIMITATION.—The amendments made by this sec14 tion shall not apply to any grant in connection with any 

15 transaction that formally commences during the 1-year pe16 riod preceding the date of enactment of this Act. 

17 SEC. 2025. AUTHORIZATION OF APPROPRIATIONS. 

18 There are authorized to be appropriated for fiscal 

19 year 2006, $100,000,000 to carry out this subtitle. 

20 TITLE III—COMMITTEE ON COM21 MERCE, SCIENCE, AND 

22 TRANSPORTATION 

23 SEC. 3001. SHORT TITLE. 

24 This title may be cited as the ‘‘Digital Transition and 

25 Public Safety Act of 2005.’’. 
91 

•S 1932 PCS 

1 SEC. 3002. ANALOG SPECTRUM RECOVERY; HARD DEAD2 LINE. 

3 Section 309(j)(14) of the Communications Act of 

4 1934 (47 U.S.C. 309(j)(14)) is amended— 

5 (1) by striking ‘‘December 31, 2006.’’ in sub6 paragraph (A) and inserting ‘‘April 7, 2009.’’; 

7 (2) by striking subparagraph (B); 

8 (3) by striking ‘‘or (B)’’ in subparagraph 

9 (C)(i)(I); 

10 (4) by striking ‘‘(C)(i),’’ in subparagraph (D) 

11 and inserting ‘‘(B)(i),’’; and 

12 (5) by redesignating subparagraphs (C) and 

13 (D) as subparagraphs (B) and (C), respectively. 

14 SEC. 3003. AUCTION OF RECOVERED SPECTRUM. 

15 (a) AUCTION: DATE, APPLICABLE REQUIRE16 MENTS.—Section 309(j)(15)(C) of the Communications 

17 Act of 1934 (47 U.S.C. 309(j)(15)(C)) is amended by add18 ing at the end the following: 

19 ‘‘(v) ADDITIONAL DEADLINES FOR RE20 COVERED ANALOG SPECTRUM.—Notwith21 standing subparagraph (B), the Commis22 sion shall— 

23 ‘‘(I) conduct the auction of the li24 censes for recovered analog spectrum 

25 commencing January 28, 2008; 
92 

•S 1932 PCS 

1 ‘‘(II) not later than 60 days after 

2 the end of the pleading cycle for long3 form applications for such auction es4 tablished pursuant to part 1 of title 

5 47, Code of Federal Regulations, 

6 grant or deny such long-form applica7 tions and issue the licenses for such 

8 recovered analog spectrum to each 

9 successful bidder whose long-form ap10 plication is granted; and 

11 ‘‘(III) collect and deposit the pro12 ceeds of such auction in the Digital 

13 Transition and Public Safety Fund 

14 established by section 3005 of the 

15 Digital Transition and Public Safety 

16 Act of 2005. 

17 ‘‘(vi) RECOVERED ANALOG SPEC18 TRUM.—For purposes of this subpara19 graph, the term ‘recovered analog spec20 trum’ means spectrum reclaimed from the 

21 analog television service under paragraph 

22 (14), except— 

23 ‘‘(I) spectrum required by section 

24 337 to be made available for public 

25 safety services; and 
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1 ‘‘(II) spectrum auctioned prior to 

2 the date of enactment of the Digital 

3 Transition and Public Safety Act of 

4 2005.’’. 

5 (b) EXTENSION OF AUCTION AUTHORITY.—Para6 graph (11) of section 309(j) of the Communications Act 

7 of 1934 (47 U.S.C. 309(j)(11)) is amended by striking 

8 ‘‘September 30, 2007.’’ and inserting ‘‘September 30, 

9 2009.’’. 

10 SEC. 3004. SUPPLEMENTAL LICENSE FEES. 

11 In addition to any fees assessed under the Commu12 nications Act of 1934 (47 U.S.C. 151 et seq.), the Com13 mission shall assess extraordinary fees for licenses in the 

14 aggregate amount of $10,000,000, which shall be depos15 ited in the Treasury during fiscal year 2006 as offsetting 

16 receipts. 

17 SEC. 3005. DIGITAL TRANSITION AND PUBLIC SAFETY 

18 FUND. 

19 (a) ESTABLISHMENT.—There is established in the 

20 Treasury of the United States a fund called the Digital 

21 Transition and Public Safety Fund. 

22 (b) DEPOSIT OF AUCTION PROCEEDS.—The Com23 mission shall deposit the proceeds of the auction author24 ized by section 309(j)(15)(C)(v) of the Communications 
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1 Act of 1934 (47 U.S.C. 309(j)(15)(C)(v)) in the Fund as 

2 required by item (III) of that section. 

3 (c) PAYMENTS AUTHORIZED.—The Secretary of 

4 Commerce or the Secretary’s designee shall make pay5 ments from the Fund in the following amounts, for the 

6 following programs, and in the following order: 

7 (1) $3,000,000,000 for a program to assist con8 sumers in the purchase of converter boxes that con9 vert a digital television signal to an analog television 

10 signal, and any amounts unexpended or unobligated 

11 at the conclusion of the program shall be used for 

12 the program described in paragraph (3). 

13 (2) $200,000,000 for a program to convert low14 power television stations and television translator 

15 stations from analog to digital, and any amounts un16 expended or unobligated at the conclusion of the 

17 program shall be used for the program described in 

18 paragraph (3). 

19 (3) $1,250,000,000 for a program to facilitate 

20 emergency communications, of which 

21 $1,000,000,000 shall be used for an interoperability 

22 fund and $250,000,000 shall be used to implement 

23 a national alert system, of which $50,000,000 shall 

24 be used for tsunami warning and coastal vulner25 ability programs. 
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1 (4) $250,000,000 for a program to implement 

2 the ENHANCE 911 Act of 2004 (47 U.S.C. 942 

3 note). 

4 (5) $200,000,000 for a program to provide as5 sistance to coastal States and Indian tribes affected 

6 by hurricanes and other coastal disasters. 

7 (d) TRANSFER OF AMOUNT TO TREASURY.—On Oc8 tober 2, 2009, Secretary shall transfer $5,000,000,000 

9 from the Fund to the general fund of the Treasury. 

10 (e) OBLIGATION TIME PERIOD.—The amounts pay11 able from the Fund under subsection (c) shall be obligated 

12 no later than September 14, 2010. 

13 (f) EXCESS PROCEEDS USED FOR DEFICIT REDUC14 TION.—If the proceeds of the auction authorized by sec15 tion 309(j)(15)(C)(v) of the Communications Act of 1934 

16 (47 U.S.C. 309(j)(15)(C)(v)) exceed the sum of the pay17 ments under subsection (c), the transfer under subsection 

18 (d), and any amount made available under section 3006, 

19 the excess in the Fund shall be transferred to and depos20 ited in the general fund of the Treasury as miscellaneous 

21 receipts. 

22 SEC. 3006. ESSENTIAL AIR SERVICE PROGRAM. 

23 (a) IN GENERAL.—If the amount appropriated to 

24 carry out the essential air service program under sub25 chapter II of chapter 417 of title 49, United States Code, 
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1 equals or exceeds $110,000,000 for fiscal year 2006, 

2 2007, 2008, 2009, or 2010, then the Secretary of Com3 merce shall make $15,000,000 available from the Digital 

4 Transition and Public Safety Fund available to the Sec5 retary of Transportation for use in carrying out the essen6 tial air service program for that fiscal year. 

7 (b) APPLICATION WITH OTHER FUNDS.—Amounts 

8 made available under subsection (a) for any fiscal year 

9 shall be in addition to any amounts— 

10 (1) appropriated for that fiscal year; or 

11 (2) derived from fees collected pursuant to sec12 tion 45301(a)(1) of title 49, United States Code, 

13 that are made available for obligation and expendi14 ture to carry out the essential air service program 

15 for that fiscal year. 

16 TITLE IV—ENERGY AND 

17 NATURAL RESOURCES 

18 SEC. 401. OIL AND GAS LEASING PROGRAM. 

19 (a) DEFINITIONS.—In this section: 

20 (1) COASTAL PLAIN.—The term ‘‘Coastal 

21 Plain’’ means the area identified as the Coastal 

22 Plain on the map prepared by the United States Ge23 ological Survey, entitled ‘‘Arctic National Wildlife 

24 Refuge 1002 Coastal Plain Area’’, dated September 
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•S 1932 PCS 

1 2005, and on file with the United States Geological 

2 Survey. 

3 (2) SECRETARY.—The term ‘‘Secretary’’ means 

4 the Secretary of the Interior, acting through the Bu5 reau of Land Management. 

6 (b) PROGRAM.— 

7 (1) IN GENERAL.—Congress— 

8 (A) authorizes the leasing, development, 

9 production, and transportation of oil and gas in 

10 and from the Coastal Plain; and 

11 (B) directs the Secretary to take such ac12 tions as are necessary to— 

13 (i) establish and implement an envi14 ronmentally sound competitive oil and gas 

15 leasing program to carry out the activities 

16 authorized under subparagraph (A); and 

17 (ii) conduct 2 lease sales before Octo18 ber 1, 2010. 

19 (2) ADMINISTRATION.—The Secretary shall ad20 minister this section through regulations, lease 

21 terms, conditions, restrictions, prohibitions, stipula22 tions, and other provisions that ensure the oil and 

23 gas exploration, development, production, and trans24 portation activities on the Coastal Plain are carried 

25 out in a manner that will ensure the receipt of fair 
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1 market value by the public for the mineral resources 

2 to be leased. 

3 (c) 2 LEASE SALES BEFORE FISCAL YEAR 2011.— 

4 (1) IN GENERAL.—In order to enable the Sec5 retary to hold 2 lease sales before October 1, 2010, 

6 this subsection shall apply with respect to the oil 

7 and gas leasing program established by the Sec8 retary pursuant to this section. 

9 (2) PURPOSES.—For purposes of the National 

10 Wildlife Refuge System Administration Act of 1966 

11 (16 U.S.C. 668dd et seq.) and amendments made by 

12 that Act, the oil and gas leasing program and activi13 ties authorized by this section in the Coastal Plain 

14 are deemed to be compatible with the purposes for 

15 which the Arctic National Wildlife Refuge was estab16 lished, and no further findings or decisions are re17 quired to implement this determination of compat18 ibility. 

19 (3) PRELEASE ACTIVITIES.—The Final Legisla20 tive Environmental Impact Statement on the Coastal 

21 Plain dated April 1987 and prepared pursuant to 

22 section 1002 of the Alaska National Interest Lands 

23 Conservation Act (16 U.S.C. 3142) and section 

24 102(2)(C) of the National Environmental Policy Act 

25 of 1969 (42 U.S.C. 4332(2)(C)) is deemed to satisfy 
99 

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1 the requirements under the National Environmental 

2 Policy Act of 1969 (42 U.S.C. 4321 et seq.) that 

3 apply with respect to prelease activities, including 

4 actions authorized to be taken by the Secretary to 

5 develop and promulgate regulations for the establish6 ment of the leasing program authorized by this sec7 tion before the conduct of the first lease sale. 

8 (4) PREFERRED ACTION.— 

9 (A) NONLEASING ALTERNATIVES.—With 

10 respect to any environmental impact statement 

11 prepared by the Secretary under the National 

12 Environmental Policy Act of 1969 (42 U.S.C. 

13 4321 et seq.) with respect to any lease sale con14 ducted under the leasing program authorized by 

15 this section, the Secretary is not required to 

16 identify nonleasing alternative courses of action 

17 or to analyze the environmental effects of those 

18 courses of action. 

19 (B) LEASING ALTERNATIVES.—The Sec20 retary shall only identify a preferred action for 

21 leasing and a single leasing alternative, and 

22 analyze the environmental effects and potential 

23 mitigation measures for the preferred action 

24 and leasing alternative. 
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1 (C) DEADLINE.—The identification and re2 lated analyses required by subparagraph (B) 

3 shall be completed within 18 months after the 

4 date of enactment of this Act. 

5 (D) PUBLIC COMMENTS.—The Secretary 

6 shall only consider public comments that are 

7 filed within 30 days after publication of an en8 vironmental analysis. 

9 (E) COMPLIANCE.—Compliance with this 

10 paragraph satisfies all requirements of section 

11 102(2)(C) of the National Environmental Policy 

12 Act of 1969 (42 U.S.C. 4332(2)(C)) for the 

13 analysis and consideration of the environmental 

14 effects of proposed leasing under this section. 

15 (5) EXPEDITED JUDICIAL REVIEW.— 

16 (A) VENUE; DEADLINE.—Any complaint 

17 seeking judicial review of this section or any ac18 tion of the Secretary under this section shall be 

19 filed in the United States Court of Appeals for 

20 the District of Columbia— 

21 (i) within the 90-day period beginning 

22 on the date of the action being challenged; 

23 or 

24 (ii) in the case of a complaint based 

25 solely on grounds arising after that period, 
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1 within 90 days after the complainant knew 

2 or reasonably should have known of the 

3 grounds for the complaint. 

4 (B) SCOPE.—Judicial review of a decision 

5 of the Secretary to conduct a lease sale under 

6 this section (including the environmental anal7 ysis of the decision) shall be— 

8 (i) limited to whether the Secretary 

9 has complied with this section; and 

10 (ii) based on the administrative record 

11 of that decision. 

12 (d) RECEIPTS.—Notwithstanding any other provision 

13 of law, of the amount of adjusted bonus, rental, and roy14 alty receipts derived from oil and gas leasing and oper15 ations authorized under this section— 

16 (1) 50 percent shall be paid to the State of 

17 Alaska; and 

18 (2) the balance shall be deposited into the 

19 Treasury as miscellaneous receipts. 

20 (e) RIGHTS-OF-WAY.—For purposes of section 

21 1102(4)(A) of the Alaska National Interest Lands Con22 servation Act (16 U.S.C. 3162(4)(A)), any rights-of-way 

23 or easements across the Coastal Plain for the exploration, 

24 development, production, or transportation of oil and gas 
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1 shall be considered to be established incident to the man2 agement of the Coastal Plain under this section. 

3 (f) MAXIMUM SURFACE ACREAGE.—In administering 

4 this section, the Secretary shall ensure that the maximum 

5 quantity of surface acreage covered by production and 

6 support facilities (including airstrips and any area covered 

7 by gravel berms or piers for support of pipelines) does not 

8 exceed 2,000 acres on the Coastal Plain. 

9 TITLE V—COMMITTEE ON ENVI10 RONMENT AND PUBLIC 

11 WORKS 

12 SEC. 5001. TECHNICAL CORRECTIONS TO SAFETEA–LU. 

13 (a)(1) Notwithstanding any other provision of law, 

14 the amount of $639,000,000 described in section 

15 1102(b)(10) of the Safe, Accountable, Flexible, Efficient 

16 Transportation Equity Act: A Legacy for Users (119 Stat. 

17 1144), shall be considered to be— 

18 (A) for fiscal year 2006 only, $631,000,000; 

19 and 

20 (B) for fiscal year 2007 only, $647,000,000. 

21 (2) Notwithstanding any other provision of law, the 

22 amount of $2,639,000,000 described in section 1102(c)(6) 

23 of the Safe, Accountable, Flexible, Efficient Transpor24 tation Equity Act: A Legacy for Users (119 Stat. 1144), 

25 shall be considered to be— 
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1 (A) for fiscal year 2006 only, $2,631,000,000; 

2 and 

3 (B) for fiscal year 2007 only, $2,647,000,000. 

4 (b) Section 4409 of the Safe, Accountable, Flexible, 

5 Efficient Transportation Equity Act: A Legacy for Users 

6 (119 Stat. 1144) is amended— 

7 (1) by striking ‘‘Section’’ and inserting the fol8 lowing: 

9 ‘‘(a) IN GENERAL.—Section’’; and 

10 (2) by adding at the end the following: 

11 ‘‘(b) EFFECTIVE DATE.—The amendments made by 

12 this section shall take effect on December 31, 2008.’’. 

13 TITLE VI—COMMITTEE ON 

14 FINANCE 

15 SEC. 6000. AMENDMENTS TO SOCIAL SECURITY ACT. 

16 (a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex17 cept as otherwise specifically provided, whenever in this 

18 title an amendment is expressed in terms of an amend19 ment to or repeal of a section or other provision, the ref20 erence shall be considered to be made to that section or 

21 other provision of the Social Security Act. 

22 (b) REFERENCES TO THE SECRETARY.—In this title, 

23 the term ‘‘Secretary’’ means the Secretary of Health and 

24 Human Services. 
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1 Subtitle A—Medicaid 

2 CHAPTER 1—PAYMENT FOR 

3 PRESCRIPTION DRUGS UNDER MEDICAID 

4 SEC. 6001. PHARMACY REIMBURSEMENT. 

5 (a) DEFINITION OF AVERAGE MANUFACTURER

6 PRICE.— 

7 (1) IN GENERAL.—Section 1927(k)(1) (42 

8 U.S.C. 1396r–8(k)(1)) is amended— 

9 (A) in the paragraph heading, by striking 

10 ‘‘PRICE’’ and inserting ‘‘PRICE; WEIGHTED AV11 ERAGE MANUFACTURER PRICE’’; 

12 (B) by striking ‘‘The term’’ and inserting 

13 the following: 

14 ‘‘(A) IN GENERAL.—The term’’; and 

15 (C) by adding at the end the following: 

16 ‘‘(B) CALCULATION REQUIREMENTS.—For 

17 purposes of subparagraph (A), the average 

18 manufacturer price shall be calculated accord19 ing to the following: 

20 ‘‘(i) SALES EXEMPTED FROM COM21 PUTATION.—Without regard to— 

22 ‘‘(I) sales exempt from inclusion 

23 in the determination of best price 

24 under subsection (c)(1)(C)(i); 
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1 ‘‘(II) such other sales as the Sec2 retary identifies as sales to an entity 

3 that are merely nominal in amount 

4 under subsection (c)(1)(C)(ii)(III); 

5 and 

6 ‘‘(III) bona fide service fees (as 

7 defined in subparagraph (E)) that are 

8 paid by a manufacturer to an entity, 

9 that represent fair market value for a 

10 bona fide service, and that are not 

11 passed on in whole or in part to a cli12 ent or customer of an entity. 

13 ‘‘(ii) SALE PRICE NET OF DIS14 COUNTS.—By including the following: 

15 ‘‘(I) Cash discounts and volume 

16 discounts. 

17 ‘‘(II) Free goods that are contin18 gent upon any purchase requirement 

19 or agreement. 

20 ‘‘(III) Sales at a nominal price 

21 that are contingent upon any pur22 chase requirement or agreement. 

23 ‘‘(IV) Chargebacks, rebates pro24 vided to a pharmacy (including a mail 

25 order pharmacy but excluding a phar-
106 

•S 1932 PCS 

1 macy benefit manager), or any other 

2 direct or indirect discounts. 

3 ‘‘(V) Any other price concessions, 

4 which may be based on recommenda5 tions of the Inspector General of the 

6 Department of Health and Human 

7 Services, that would result in a reduc8 tion of the cost to the purchaser, but 

9 only if the Secretary provides notice 

10 of the Secretary’s intent to include 

11 such price concessions in accordance 

12 with section 553 of title 5, United 

13 States Code. 

14 ‘‘(C) WEIGHTED AVERAGE MANUFAC15 TURER PRICE.—The term ‘weighted average 

16 manufacturer price’ means, with respect to a 

17 rebate period and multiple source drug, the vol18 ume-weighted average of the average manufac19 turer prices reported under subsection 

20 (b)(3)(A)(i)(I) for all drug products described 

21 in paragraph (7)(A)(i) that are therapeutically 

22 equivalent and bioequivalent forms of the drug, 

23 determined by— 
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1 ‘‘(i) computing the sum of the prod2 ucts (for each National Drug Code as3 signed to such drug products) of— 

4 ‘‘(I) the average manufacturer 

5 price; and 

6 ‘‘(II) the total number of units 

7 reported sold under subsection 

8 (b)(3)(A)(i)(I); and 

9 ‘‘(ii) dividing the sum determined 

10 under clause (i) by the sum of the total 

11 number of units under clause (i)(II) for all 

12 National Drug Codes assigned to such 

13 drug products. 

14 ‘‘(D) LIMITATION ON SALES AT A NOMINAL

15 PRICE.— 

16 ‘‘(i) IN GENERAL.—For purposes of 

17 clauses (i)(II) and (ii)(III) of subpara18 graph (B), only sales by a manufacturer of 

19 covered outpatient drugs that are single 

20 source drugs, innovator multiple source 

21 drugs, or authorized generic drugs at 

22 nominal prices to the following shall be 

23 considered to be sales at a nominal price or 

24 merely nominal in amount: 
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1 ‘‘(I) A covered entity described in 

2 section 340B(a)(4) of the Public 

3 Health Service Act. 

4 ‘‘(II) An intermediate care facil5 ity for the mentally retarded. 

6 ‘‘(III) A State-owned or operated 

7 nursing facility. 

8 ‘‘(IV) Any other facility or entity 

9 that the Secretary determines is a 

10 safety net provider to which sales of 

11 such drugs at a nominal price would 

12 be appropriate based on the following 

13 factors: 

14 ‘‘(aa) The type of facility. 

15 ‘‘(bb) The services provided 

16 by the facility. 

17 ‘‘(cc) The patient population 

18 served by the facility. 

19 ‘‘(dd) The number of other 

20 facilities eligible to purchase at 

21 nominal prices in the same serv22 ice area. 

23 ‘‘(ii) NONAPPLICATION.—Clause (i) 

24 shall not apply with respect to sales by a 

25 manufacturer at a nominal price of covered 
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•S 1932 PCS 

1 outpatient drugs that are single source 

2 drugs, innovator multiple source drugs, or 

3 authorized generic drugs pursuant to a 

4 master agreement under section 8126 of 

5 title 38, United States Code. 

6 ‘‘(E) BONA FIDE SERVICE FEES.—For 

7 purposes of subparagraph (B)(i)(III), the term 

8 ‘bona fide service fees’ means expenses that are 

9 for an itemized service actually performed by an 

10 entity on behalf of a manufacturer that would 

11 have generally been paid for by the manufac12 turer at the same rate had these services been 

13 performed by another entity.’’. 

14 (2) CONFORMING AMENDMENTS.—Section 

15 1927(b)(3)(A)(i) (42 U.S.C. 1396r–8(b)(3)(A)(i)), 

16 as amended by section 6003(a), is amended— 

17 (A) in subclause (I)— 

18 (i) by inserting ‘‘and the total number 

19 of units sold’’ after ‘‘(as defined in sub20 section (k)(1))’’; and 

21 (ii) by striking ‘‘and’’ at the end; 

22 (B) in subclause (II), by adding ‘‘and’’ at 

23 the end; and 

24 (C) by adding at the end the following: 
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1 ‘‘(III) information and data on 

2 any sales that were made during such 

3 period at a nominal price, including, 

4 with respect to each such sale, the 

5 purchaser, the name of the product, 

6 the amount or number of units of the 

7 product sold at a nominal price, and 

8 the nominal price paid;’’. 

9 (3) EFFECTIVE DATE.— 

10 (A) IN GENERAL.—Except as provided in 

11 subparagraph (B), the amendments made by 

12 this subsection shall take effect on January 1, 

13 2006. 

14 (B) EXCEPTION.—Subparagraph (D) of 

15 section 1927(k)(1) of the Social Security Act 

16 (42 U.S.C. 1396r–8(k)(1)) (as added by para17 graph (1)) shall not apply with respect to a con18 tract in effect on the date of enactment of this 

19 Act pursuant to which pharmaceutical products 

20 are or may be available at nominal prices until 

21 the expiration date of such contract, or October 

22 1, 2006, whichever is earlier, and shall apply to 

23 sales made, and rebate periods beginning, on or 

24 after that date. 
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1 (b) UPPER PAYMENT LIMIT FOR INGREDIENT COST

2 OF COVERED OUTPATIENT DRUGS.— 

3 (1) IN GENERAL.—Section 1927(e) (42 U.S.C. 

4 1396r–8(e)) is amended to read as follows: 

5 ‘‘(e) PHARMACY REIMBURSEMENT LIMITS.— 

6 ‘‘(1) UPPER PAYMENT LIMIT FOR INGREDIENT

7 COST OF COVERED OUTPATIENT DRUGS.—No Fed8 eral financial participation shall be available for pay9 ment for the ingredient cost of a covered outpatient 

10 drug that exceeds the upper payment limit for that 

11 drug established under paragraph (2). 

12 ‘‘(2) UPPER PAYMENT LIMIT.— 

13 ‘‘(A) IN GENERAL.—Except as provided in 

14 subparagraphs (B) and (C), the upper payment 

15 limit established under this paragraph for the 

16 ingredient cost of a— 

17 ‘‘(i) single source drug, is 105 percent 

18 of the average manufacturer price for that 

19 drug; and 

20 ‘‘(ii) multiple source drug, is 115 per21 cent of the weighted average manufacturer 

22 price for that drug. 

23 ‘‘(B) EXCEPTION FOR INITIAL SALES PERI24 ODS.— 
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•S 1932 PCS 

1 ‘‘(i) IN GENERAL.—In the case of a 

2 covered outpatient drug during an initial 

3 sales period (not to exceed 2 calendar 

4 quarters) in which data on sales for the 

5 drug is not sufficiently available from the 

6 manufacturer to compute the average man7 ufacturer price or the weighted average 

8 manufacturer price, the Secretary shall es9 tablish the upper payment limit for the in10 gredient cost of such drug to apply only 

11 during such period based on the following: 

12 ‘‘(I) In the case of a single 

13 source drug, such upper payment 

14 limit shall be the wholesale acquisition 

15 cost for the drug. 

16 ‘‘(II) In the case of a first non17 innovator multiple source drug, such 

18 upper payment limit shall be the aver19 age manufacturer price for the single 

20 source drug that is rated as thera21 peutically equivalent and bioequivalent 

22 to such drug, minus 10 percent. 

23 ‘‘(III) In the case of a subse24 quent noninnovator multiple source 

25 drug— 
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•S 1932 PCS 

1 ‘‘(aa) if the Secretary has 

2 sufficient data to determine the 

3 weighted average manufacturer 

4 price for the drug, such upper 

5 payment limit shall be the 

6 weighted average manufacturer 

7 price determined for the thera8 peutically equivalent and bio9 equivalent form of the drug; and 

10 ‘‘(bb) if the Secretary does 

11 not have sufficient data to deter12 mine the weighted average manu13 facturer price for the drug, such 

14 upper payment limit shall be the 

15 average manufacturer price for 

16 the single source drug that is 

17 rated as therapeutically equiva18 lent and bioequivalent to the 

19 drug, minus 10 percent. 

20 ‘‘(ii) DEFINITION OF WHOLESALE AC21 QUISITION COST.—For purposes of clause 

22 (i), the term ‘wholesale acquisition cost’ 

23 means, with respect to a drug or biological, 

24 the manufacturer’s list price for the drug 

25 or biological to wholesalers or direct pur-
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1 chasers in the United States, not including 

2 prompt pay or other discounts, rebates, or 

3 reductions in price, for the most recent 

4 month for which the information is avail5 able, as reported in wholesale price guides 

6 or other publications of drug or biological 

7 pricing data. 

8 ‘‘(C) EXCEPTION FOR CERTAIN INNOVATOR

9 MULTIPLE SOURCE DRUGS.—In the case of an 

10 innovator multiple source drug that a pre11 scribing health care provider determines is nec12 essary for treatment of a condition and that a 

13 noninnovator multiple source drug would not be 

14 as effective for the individual or would have ad15 verse effects for the individual or both, and for 

16 which the provider obtains prior authorization 

17 in accordance with a program described in sub18 section (d)(5), the upper payment limit for the 

19 innovator multiple source drug shall be 105 

20 percent of the average manufacturer price for 

21 such drug. 

22 ‘‘(D) UPDATES; AVAILABILITY OF DATA.— 

23 ‘‘(i) FREQUENCY OF DETERMINA24 TION.—The Secretary shall update the 

25 upper payment limits applicable under this 
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1 paragraph on a quarterly basis, taking into 

2 account the most recent data collected for 

3 purposes of determining such limits and 

4 the Food and Drug Administration’s most 

5 recent publication of ‘Approved Drug 

6 Products with Therapeutic Equivalence 

7 Evaluations’. 

8 ‘‘(ii) COLLECTION OF DATA.— 

9 ‘‘(I) IN GENERAL.—Beginning on 

10 January 1, 2006, the Secretary shall 

11 collect data with respect to the aver12 age manufacturer prices and volume 

13 of sales of covered outpatient drugs 

14 (or, in the case of covered outpatient 

15 drugs that are first marketed after 

16 such date, beginning with the first 

17 quarter during which the drugs are 

18 first marketed). 

19 ‘‘(II) DATA REPORTED FOR PUR20 POSES OF DETERMINING WEIGHTED

21 AVERAGE MANUFACTURER PRICE.— 

22 Insofar as there is a lag in the report23 ing of the information on rebates and 

24 chargebacks so that adequate data are 

25 not available on a timely basis to up-
116 

•S 1932 PCS 

1 date the weighted average manufac2 turer price for a multiple source drug, 

3 the manufacturer of such drug shall 

4 apply a methodology based on a 12- 

5 month rolling average for the manu6 facturer to estimate costs attributable 

7 to rebates and charge backs for such 

8 drug. For years after 2006, the Sec9 retary shall establish a uniform meth10 odology to estimate and apply such 

11 costs. 

12 ‘‘(iii) AVAILABILITY OF DATA TO

13 STATES.—Notwithstanding subsection 

14 (b)(3)(D), beginning with the first quarter 

15 of fiscal year 2006 for which data is avail16 able, and for each fiscal year quarter 

17 thereafter, the Secretary shall make avail18 able to States the most recently reported 

19 average manufacturer prices for single 

20 source drugs and weighted average manu21 facturer prices for multiple source drugs. 

22 ‘‘(E) AUTHORITY TO ENTER CON23 TRACTS.—The Secretary may enter into con24 tracts with appropriate entities to determine av25 erage manufacturer prices, volume, and other 
117 

•S 1932 PCS 

1 data necessary to calculate the upper payment 

2 limit for a covered outpatient drug established 

3 under this subsection and to calculate that pay4 ment limit. 

5 ‘‘(3) STATE USE OF PRICE DATA.— 

6 ‘‘(A) DISTRIBUTION OF DATA.—The Sec7 retary shall devise and implement a means for 

8 electronic distribution of the most recently cal9 culated weighted average manufacturer price 

10 and the average manufacturer price for all cov11 ered outpatient drugs to each State agency des12 ignated under section 1902(a)(5) with responsi13 bility for the administration or supervision of 

14 the administration of the State plan under this 

15 title. 

16 ‘‘(B) AUTHORITY TO ESTABLISH PAYMENT

17 RATES BASED ON DATA.—A State may use the 

18 price data received in accordance with subpara19 graph (A) in establishing payment rates for the 

20 ingredient costs and dispensing fees for covered 

21 outpatient drugs dispensed to individuals eligi22 ble for medical assistance under this title. 

23 ‘‘(4) REASONABLE DISPENSING FEES RE24 QUIRED.— 
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1 ‘‘(A) IN GENERAL.—A State which pro2 vides medical assistance for covered outpatient 

3 drugs shall pay a dispensing fee for each cov4 ered outpatient drug for which Federal finan5 cial participation is available in accordance with 

6 this section in accordance with the following: 

7 ‘‘(i) The dispensing fee for a noninno8 vator multiple source drug shall be greater 

9 than the dispensing fee for an innovator 

10 multiple source drug that is rated as thera11 peutically equivalent and bioequivalent to 

12 such drug. 

13 ‘‘(ii) In establishing such dispensing 

14 fees, the State takes into consideration 

15 such requirements as the Secretary shall, 

16 by regulation, establish, and which shall in17 clude consideration of the following: 

18 ‘‘(I) Any reasonable costs associ19 ated with a pharmacist’s time in 

20 checking for information about an in21 dividual’s coverage or performing 

22 quality assurance activities. 

23 ‘‘(II) Costs associated with— 
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1 ‘‘(aa) the measurement or 

2 mixing of a covered outpatient 

3 drug; 

4 ‘‘(bb) filling the container 

5 for the drug; 

6 ‘‘(cc) physically providing 

7 the completed prescription to an 

8 individual enrolled in the pro9 gram under this title; 

10 ‘‘(dd) delivery; 

11 ‘‘(ee) special packaging; 

12 ‘‘(ff) overhead related to 

13 maintaining the facility and 

14 equipment necessary to operate 

15 the pharmacy, including the sala16 ries of pharmacists and other 

17 pharmacy workers; 

18 ‘‘(gg) geographic factors 

19 that impact operational costs; 

20 ‘‘(hh) patient counseling; 

21 and 

22 ‘‘(ii) the dispensing of drugs 

23 requiring specialty pharmacy care 

24 management services (as deter25 mined by the Secretary in ac-
120 

•S 1932 PCS 

1 cordance with subparagraph 

2 (B)). 

3 ‘‘(B) DETERMINATION OF DRUGS REQUIR4 ING SPECIALTY PHARMACY CARE MANAGEMENT

5 SERVICES.— 

6 ‘‘(i) IN GENERAL.—Not later than 15 

7 months after the date of enactment of the 

8 Deficit Reduction Omnibus Reconciliation 

9 Act of 2005, the Secretary shall establish 

10 a list of covered outpatient drugs which re11 quire specialty pharmacy care management 

12 services that includes only those drugs for 

13 which the Secretary determines that access 

14 by individuals eligible for medical assist15 ance under this title would be seriously im16 paired without the provision of specialty 

17 pharmacy care management services. 

18 ‘‘(ii) SPECIALTY PHARMACY CARE

19 MANAGEMENT SERVICES DEFINED.—For 

20 purposes of this paragraph, the term ‘spe21 cialty pharmacy care management services’ 

22 means services provided in connection with 

23 the dispensing or administration of a cov24 ered outpatient drug which the Secretary 

25 determines requires— 
121 

•S 1932 PCS 

1 ‘‘(I) significant caregiver and 

2 provider contact and education re3 garding the relevant disease state, 

4 prevention, treatment, drug indica5 tions, benefits, risks, complications, 

6 use, pharmacy counseling, and expla7 nation of existing provider guidelines; 

8 ‘‘(II) patient compliance services, 

9 including coordination of provider vis10 its with drug delivery, compliance with 

11 a drug dosing regimen, mailing or 

12 telephone call reminders, compiling 

13 compliance data, and assisting pro14 viders in developing compliance pro15 grams; or 

16 ‘‘(III) tracking services, including 

17 developing referral processes with pro18 viders, screening referrals, and track19 ing patient weight for dosing require20 ments. 

21 ‘‘(iii) QUARTERLY UPDATES.—The 

22 Secretary shall update the list of covered 

23 outpatient drugs requiring specialty phar24 macy management services on a quarterly 

25 basis. 
122 

•S 1932 PCS 

1 (2) CONFORMING AMENDMENTS.— 

2 (A) Section 1927(b)(3)(D)(i) (42 U.S.C. 

3 1396r–8(b)(3)(D)(i)) is amended by inserting 

4 ‘‘(including with respect to the determination of 

5 weighted average manufacturer prices under 

6 subsection (e)(2) and the distribution of weight7 ed average manufacturer prices and average 

8 manufacturer prices for covered outpatient 

9 drugs to States under subsection (e)(3))’’ after 

10 ‘‘this section’’. 

11 (B) Section 1903(i)(10) (42 U.S.C. 

12 1396b(i)(10)) is amended— 

13 (i) in subparagraph (A), by striking 

14 ‘‘and’’ at the end; 

15 (ii) in subparagraph (B), by striking 

16 ‘‘or’’ at the end and inserting ‘‘and’’; and 

17 (iii) by adding at the end the fol18 lowing: 

19 ‘‘(C) with respect to any amount expended for 

20 the ingredient cost of a covered outpatient drug that 

21 exceeds the upper payment limit for that drug estab22 lished under section 1927(e); or’’. 

23 (3) EFFECTIVE DATE.—The amendments made 

24 by this subsection take effect with respect to a State 

25 on the later of— 
123 

•S 1932 PCS 

1 (A) January 1, 2007; or 

2 (B) the date that is 6 months after the 

3 close of the first regular session of the State 

4 legislature that begins after the date of enact5 ment of this Act. 

6 (c) INTERIM UPPER PAYMENT LIMIT.— 

7 (1) IN GENERAL.—With respect to a State pro8 gram under title XIX of the Social Security Act, 

9 during the period that begins on January 1, 2006, 

10 and ends on the effective date applicable to such 

11 State under subsection (b)(3), the Secretary shall— 

12 (A) apply the Federal upper payment limit 

13 established under section 447.332(b) of title 42, 

14 Code of Federal Regulations to the State by 

15 substituting ‘‘125 percent’’ for ‘‘150 percent’’; 

16 and 

17 (B) in the case of covered outpatient drugs 

18 under title XIX of such Act that are marketed 

19 as of July 1, 2005, and are subject to Federal 

20 upper payment limits that apply under section 

21 447.332 of title 42, Code of Federal Regula22 tions, use average wholesale prices, direct 

23 prices, and wholesale acquisition costs for such 

24 drugs that do not exceed such prices and costs 

25 as of such date to determine the Federal upper 
124 

•S 1932 PCS 

1 payment limits that apply under section 

2 447.332 of title 42, Code of Federal Regula3 tions to such drugs during such period. 

4 (2) APPLICATION TO NEW DRUGS.—Paragraph 

5 (1)(A) shall apply to a covered outpatient drug 

6 under title XIX of the Social Security Act that is 

7 first marketed after July 1, 2005, but before Janu8 ary 1, 2007, and is subject to the Federal upper 

9 payment limit established under section 447.332(b) 

10 of title 42, Code of Federal Regulations. 

11 SEC. 6002. INCREASE IN REBATES FOR COVERED OUT12 PATIENT DRUGS. 

13 (a) INCREASE IN BASIC REBATE FOR SINGLE

14 SOURCE DRUGS AND INNOVATOR MULTIPLE SOURCE

15 DRUGS.—Section 1927(c)(1)(B)(i) (42 U.S.C. 1396r– 

16 8(c)(1)(B)(i)) is amended— 

17 (1) in subclause (IV), by striking ‘‘and’’ after 

18 the semicolon; 

19 (2) in subclause (V)— 

20 (A) by inserting ‘‘and before January 1, 

21 2006,’’ after ‘‘1995,’’; and 

22 (B) by striking the period and inserting ‘‘; 

23 and’’; and 

24 (3) by adding at the end the following: 
125 

•S 1932 PCS 

1 ‘‘(VI) after December 31, 2005, 

2 is 17 percent.’’. 

3 (b) INCREASE IN REBATE FOR OTHER DRUGS.—Sec4 tion 1927(c)(3)(B) (42 U.S.C. 1396r–8(c)(3)(B)) is 

5 amended— 

6 (1) in clause (i), by striking ‘‘and’’ at the end; 

7 (2) in clause (ii)— 

8 (A) by inserting ‘‘and before January 1, 

9 2006,’’ after ‘‘December 31, 1993,’’; and 

10 (B) by striking the period at the end and 

11 inserting ‘‘; and’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(iii) after December 31, 2005, is 17 

14 percent.’’. 

15 SEC. 6003. IMPROVED REGULATION OF AUTHORIZED GE16 NERIC DRUGS. 

17 (a) INCLUSION WITH OTHER REPORTED AVERAGE

18 MANUFACTURER AND BEST PRICES.—Section 

19 1927(b)(3)(A) (42 U.S.C. 1396r–8(b)(3)(A)) is amend20 ed— 

21 (1) by striking clause (i) and inserting the fol22 lowing: 

23 ‘‘(i) not later than 30 days after the 

24 last day of each rebate period under the 

25 agreement— 
126 

•S 1932 PCS 

1 ‘‘(I) on the average manufacturer 

2 price (as defined in subsection (k)(1)) 

3 for each covered outpatient drug for 

4 the rebate period under the agreement 

5 (including for each such drug that is 

6 an authorized generic drug or is any 

7 other drug sold under a new drug ap8 plication approved under section 

9 505(c) of the Federal Food, Drug, 

10 and Cosmetic Act); and 

11 ‘‘(II) for each single source drug, 

12 innovator multiple source drug, au13 thorized generic drug, and any other 

14 drug sold under a new drug applica15 tion approved under section 505(c) of 

16 the Federal Food, Drug, and Cos17 metic Act, on the manufacturer’s best 

18 price (as defined in subsection 

19 (c)(1)(C)) for such drug for the rebate 

20 period under the agreement;’’; and 

21 (2) in clause (ii), by inserting ‘‘(including for 

22 such drugs that are authorized generic drugs or are 

23 any other drugs sold under a new drug application 

24 approved under section 505(c) of the Federal Food, 

25 Drug, and Cosmetic Act)’’ after ‘‘drugs’’. 
127 

•S 1932 PCS 

1 (b) CONFORMING AMENDMENTS.—Section 1927 of 

2 such Act (42 U.S.C. 1396r–8) is amended— 

3 (1) in subsection (c)(1)(C)— 

4 (A) in clause (i), in the matter preceding 

5 subclause (I), by striking ‘‘or innovator multiple 

6 source drug of a manufacturer’’ and inserting 

7 ‘‘, innovator multiple source drug, or authorized 

8 generic drug of a manufacturer, or any other 

9 drug of a manufacturer that is sold under a 

10 new drug application approved under section 

11 505(c) of the Federal Food, Drug, and Cos12 metic Act’’; and 

13 (B) in clause (ii)— 

14 (i) in subclause (II), by striking 

15 ‘‘and’’ at the end; 

16 (ii) in subclause (III), by striking the 

17 period at the end and inserting ‘‘; and’’; 

18 and 

19 (iii) by adding at the end the fol20 lowing: 

21 ‘‘(IV) in the case of a manufac22 turer that approves, allows, or other23 wise permits an authorized generic 

24 drug or any other drug of the manu25 facturer to be sold under a new drug 
128 

•S 1932 PCS 

1 application approved under section 

2 505(c) of the Federal Food, Drug, 

3 and Cosmetic Act, shall be inclusive of 

4 the lowest price for such authorized 

5 generic or other drug available from 

6 the manufacturer during the rebate 

7 period to any wholesaler, retailer, pro8 vider, health maintenance organiza9 tion, nonprofit entity, or governmental 

10 entity within the United States, ex11 cluding those prices described in sub12 clauses (I) through (IV) of clause 

13 (i).’’; and 

14 (2) in subsection (k)— 

15 (A) in paragraph (1), as amended by sec16 tion 6001(a)(1)(B), by adding at the end the 

17 following: 

18 ‘‘(F) INCLUSION OF AUTHORIZED GENERIC

19 DRUGS.—In the case of a manufacturer that 

20 approves, allows, or otherwise permits an au21 thorized generic drug or any other drug of the 

22 manufacturer to be sold under a new drug ap23 plication approved under section 505(c) of the 

24 Federal Food, Drug, and Cosmetic Act, such 
129 

•S 1932 PCS 

1 term shall be inclusive of the average price paid 

2 for such authorized generic or other drug.’’; and 

3 (B) by adding at the end the following: 

4 ‘‘(10) AUTHORIZED GENERIC DRUG.—The term 

5 ‘authorized generic drug’ means a listed drug (as 

6 that term is used in section 505(j) of the Federal 

7 Food, Drug, and Cosmetic Act) that— 

8 ‘‘(A) has been approved under section 

9 505(c) of such Act; and 

10 ‘‘(B) is marketed, sold, or distributed di11 rectly or indirectly to the retail class of trade 

12 under a different labeling, packaging (other 

13 than repackaging as the listed drug in blister 

14 packs, unit doses, or similar packaging for use 

15 in institutions), product code, labeler code, 

16 trade name, or trade mark than the listed 

17 drug.’’. 

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

19 this section take effect on January 1, 2006. 

20 SEC. 6004. COLLECTION OF REBATES FOR CERTAIN PHYSI21 CIAN ADMINISTERED DRUGS. 

22 (a) IN GENERAL.—Section 1927(a) (42 U.S.C. 

23 1396r–8(a)) is amended by adding at the end the fol24 lowing: 
130 

•S 1932 PCS 

1 ‘‘(7) REQUIREMENT FOR SUBMISSION OF UTILI2 ZATION DATA FOR CERTAIN PHYSICIAN-ADMINIS3 TERED DRUGS.—In order for payment to be avail4 able under section 1903(a) for a covered outpatient 

5 drug that is physician administered (as determined 

6 by the Secretary), and that is administered on or 

7 after January 1, 2006, the State shall provide for 

8 the submission of such utilization data and coding 

9 (including both J-codes and National Drug Code 

10 numbers) for each such drug as the Secretary may 

11 specify as necessary in order to secure rebates for 

12 payments made under this title.’’. 

13 (b) LIMITATION ON PAYMENT.—Section 1903(i)(10) 

14 (42 U.S.C. 1396b(i)(10)), as amended by section 

15 6001(b)(2)(B), is amended— 

16 (1) in subparagraph (B), by striking ‘‘and’’ at 

17 the end; 

18 (2) in subparagraph (C), by striking ‘‘; or’’ at 

19 the end and inserting ‘‘, and’’; and 

20 (3) by adding at the end the following: 

21 ‘‘(D) with respect to covered outpatient drugs 

22 described in section 1927(a)(7), unless information 

23 with respect to utilization data and coding on such 

24 drugs is submitted in accordance with that section; 

25 or’’. 
131 

•S 1932 PCS 

1 CHAPTER 2—LONG-TERM CARE UNDER 

2 MEDICAID 

3 SEC. 6011. REFORM OF MEDICAID ASSET TRANSFER RULES. 

4 (a) REQUIREMENT TO IMPOSE PARTIAL MONTHS OF

5 INELIGIBILITY.—Section 1917(c)(1)(E) (42 U.S.C. 

6 1396p(c)(1)(E)) is amended by adding at the end the fol7 lowing: 

8 ‘‘(iv) A State shall not round down, or otherwise dis9 regard any fractional period of ineligibility determined 

10 under clause (i) or (ii) with respect to the disposal of as11 sets.’’. 

12 (b) AUTHORITY FOR STATES TO ACCUMULATE MUL13 TIPLE TRANSFERS INTO 1 PENALTY PERIOD.—Section 

14 1917(c)(1) (42 U.S.C. 1396p(c)(1)) is amended by adding 

15 at the end the following: 

16 ‘‘(F) Notwithstanding the preceding provisions of this 

17 paragraph, in the case of an individual (or individual’s 

18 spouse) who disposes of multiple assets in more than 1 

19 month for less than fair market value on or after the appli20 cable look-back date specified in subparagraph (B), a 

21 State may determine the period of ineligibility applicable 

22 to such individual under this paragraph by— 

23 ‘‘(i) treating the total, cumulative uncompen24 sated value of all assets transferred by the individual 

25 (or individual’s spouse) during all months on or 
132 

•S 1932 PCS 

1 after the look-back date specified in subparagraph 

2 (B) as 1 transfer for purposes of clause (i) or (ii) 

3 (as the case may be) of subparagraph (E); and 

4 ‘‘(ii) beginning such period on the earliest date 

5 which would apply under subparagraph (D) to any 

6 of such transfers.’’. 

7 (c) INCLUSION OF TRANSFER OF CERTAIN NOTES

8 AND LOANS ASSETS.—Section 1917(c)(1) (42 U.S.C. 

9 1396p(c)(1)), as amended by subsection (b), is amended 

10 by adding at the end the following: 

11 ‘‘(G) For purposes of this paragraph with respect to 

12 a transfer of assets, the term ‘assets’ includes funds used 

13 to purchase a promissory note, loan, or mortgage unless 

14 such note, loan, or mortgage— 

15 ‘‘(i) has a repayment term that is actuarially 

16 sound (as determined in accordance with actuarial 

17 publications of the Office of the Chief Actuary of the 

18 Social Security Administration); 

19 ‘‘(ii) provides for payments to be made in equal 

20 amounts during the term of the loan, with no defer21 ral and no balloon payments made; and 

22 ‘‘(iii) prohibits the cancellation of the balance 

23 upon the death of the lender. 

24 In the case of a promissory note, loan, or mortgage that 

25 does not satisfy the requirements of clauses (i) through 
133 

•S 1932 PCS 

1 (iii), the value of such note, loan, or mortgage shall be 

2 the outstanding balance due as of the date of the individ3 ual’s application for medical assistance for services de4 scribed in subparagraph (C).’’. 

5 (d) TREATMENT OF ANNUITIES.— 

6 (1) INCLUSION OF TRANSFERS TO PURCHASE

7 BALLOON ANNUITIES.—Section 1917(c)(1) (42 

8 U.S.C. 1396p(c)(1)), as amended by subsection (c), 

9 is amended by adding at the end the following: 

10 ‘‘(H) For purposes of this paragraph with respect to 

11 a transfer of assets, the term ‘assets’ includes an annuity 

12 purchased by or on behalf of an annuitant who has applied 

13 for medical assistance with respect to nursing facility serv14 ices or other long-term care services under this title un15 less— 

16 ‘‘(i) the annuity is— 

17 ‘‘(I) an annuity described in subsection (b) 

18 or (q) of section 408 of the Internal Revenue 

19 Code of 1986; or 

20 ‘‘(II) purchased with proceeds from— 

21 ‘‘(aa) an account or trust described in 

22 subsection (a), (c), (p) of section 408 of 

23 such Code; 
134 

•S 1932 PCS 

1 ‘‘(bb) a simplified employee pension 

2 (within the meaning of section 408(k) of 

3 such Code); or 

4 ‘‘(cc) a Roth IRA described in section 

5 408A of such Code; or 

6 ‘‘(ii) the annuity— 

7 ‘‘(I) is irrevocable and nonassignable; 

8 ‘‘(II) is actuarially sound (as determined in 

9 accordance with actuarial publications of the 

10 Office of the Chief Actuary of the Social Secu11 rity Administration); and 

12 ‘‘(III) provides for payments in equal 

13 amounts during the term of the annuity, with 

14 no deferral and no balloon payments made.’’. 

15 (2) REQUIREMENT FOR STATE TO BE NAMED

16 AS A REMAINDER BENEFICIARY.—Section 1917(c)(1) 

17 (42 U.S.C. 1396p(c)(1)), as amended by paragraph 

18 (1), is amended by adding at the end the following: 

19 ‘‘(I) For purposes of this paragraph, the purchase of 

20 an annuity shall be treated as the disposal of an asset 

21 for less than fair market value unless the State is named 

22 as the remainder beneficiary in the first position for at 

23 least the total amount of medical assistance paid on behalf 

24 of the annuitant under this title or is named as such a 

25 beneficiary in the second position after the community 
135 

•S 1932 PCS 

1 spouse and such spouse does not dispose of any such re2 mainder for less than fair market value.’’. 

3 (3) INCLUSION OF CERTAIN ANNUITIES IN AN

4 ESTATE.—Section 1917(b)(4) (42 U.S.C. 

5 1396p(b)(4)) is amended— 

6 (A) in subparagraph (A), by striking 

7 ‘‘and’’ at the end; 

8 (B) in subparagraph (B), by striking the 

9 period at the end and inserting ‘‘; and’’; and 

10 (C) by adding at the end the following: 

11 ‘‘(C) shall include an annuity unless the annu12 ity was purchased from a financial institution or 

13 other business that sells annuities in the State as 

14 part of its regular business.’’. 

15 (e) INCLUSION OF TRANSFERS TO PURCHASE LIFE

16 ESTATES.—Section 1917(c)(1) (42 U.S.C. 1396p(c)(1)), 

17 as amended by subsection (d)(2), is amended by adding 

18 at the end the following: 

19 ‘‘(J) For purposes of this paragraph with respect to 

20 a transfer of assets, the term ‘assets’ includes the pur21 chase of a life estate interest in another individual’s home 

22 unless the purchaser resides in the home for a period of 

23 at least 1 year after the date of the purchase. 
136 

•S 1932 PCS 

1 (f) PROTECTION AGAINST UNDUE HARDSHIP.—Sec2 tion 1917(c) (42 U.S.C. 1396p(c)) is amended by adding 

3 at the end the following: 

4 ‘‘(6) For purposes of paragraph (2)(D) and sub5 section (d)(5), the procedures established by the State in 

6 accordance with standards specified by the Secretary shall 

7 provide for— 

8 ‘‘(A) notice, before application of the provisions 

9 of paragraph (1) or subsection (d), to an individual 

10 who is an applicant for medical assistance under this 

11 title who would be subject to such a penalty under 

12 such provisions that an undue hardship exception ex13 ists; 

14 ‘‘(B) a timely process before the imposition of 

15 a penalty for determining whether an undue hard16 ship waiver will be granted for the individual; 

17 ‘‘(C) a process under which an adverse deter18 mination can be appealed; and 

19 ‘‘(D) application of criteria that specifies that 

20 an undue hardship exists when application of the 

21 provisions of paragraph (1) or subsection (d) would 

22 deprive the individual of medical care such that the 

23 individual’s health or life would be endangered or 

24 when the application of such provisions would de-
137 

•S 1932 PCS 

1 prive the individual of food, clothing, shelter, or 

2 other necessities of life.’’. 

3 (g) EFFECTIVE DATES.— 

4 (1) IN GENERAL.—Except as provided in para5 graphs (2) and (3), the amendments made by this 

6 section shall apply to payments under title XIX of 

7 the Social Security Act (42 U.S.C. 1396 et seq.) for 

8 calendar quarters beginning on or after the date of 

9 enactment of this Act, without regard to whether or 

10 not final regulations to carry out such amendments 

11 have been promulgated by such date. 

12 (2) EXCEPTIONS.—The amendments made by 

13 this section shall not apply— 

14 (A) to medical assistance provided for serv15 ices furnished before the date of enactment; 

16 (B) with respect to assets disposed of on 

17 or before the date of enactment of this Act; or 

18 (C) with respect to trusts established on or 

19 before the date of enactment of this Act. 

20 (3) EXTENSION OF EFFECTIVE DATE FOR

21 STATE LAW AMENDMENT.—In the case of a State 

22 plan under title XIX of the Social Security Act (42 

23 U.S.C. 1396 et seq.) which the Secretary of Health 

24 and Human Services determines requires State legis25 lation in order for the plan to meet the additional 
138 

•S 1932 PCS 

1 requirements imposed by the amendments made by 

2 a provision of this section, the State plan shall not 

3 be regarded as failing to comply with the require4 ments of such title solely on the basis of its failure 

5 to meet these additional requirements before the 

6 first day of the first calendar quarter beginning 

7 after the close of the first regular session of the 

8 State legislature that begins after the date of the en9 actment of this Act. For purposes of the previous 

10 sentence, in the case of a State that has a 2-year 

11 legislative session, each year of the session is consid12 ered to be a separate regular session of the State 

13 legislature. 

14 SEC. 6012. STATE LONG-TERM CARE PARTNERSHIPS. 

15 (a) EXPANSION OF STATE LONG-TERM CARE PART16 NERSHIPS.— 

17 (1) IN GENERAL.—Section 1917(b)(1)(C)(ii) 

18 (42 U.S.C. 1396p(b)(1)(C)(ii)) is amended to read 

19 as follows: 

20 ‘‘(ii) Clause (i) shall not apply in the case of an 

21 individual who received medical assistance under— 

22 ‘‘(I) a Qualified State Long-Term Care In23 surance Partnership (as defined in paragraph 

24 (5)); or 
139 

•S 1932 PCS 

1 ‘‘(II) under a State plan of a State 

2 which— 

3 ‘‘(aa) had a State plan amendment 

4 approved as of May 14, 1993, which pro5 vided for the disregard of any assets or re6 sources to the extent that payments are 

7 made under a long-term care insurance 

8 policy or because an individual has received 

9 (or is entitled to receive) benefits under a 

10 long-term care insurance policy; and 

11 ‘‘(bb) has a State plan amendment 

12 which satisfies the requirements of sub13 paragraphs (B) through (G) of paragraph 

14 (5) in the case of any long-term care insur15 ance policy sold under such plan amend16 ment on or after the date that is 2 years 

17 after the date of enactment of such para18 graph. 

19 For purposes of this clause and paragraphs (5) and 

20 (6), the term ‘long-term care insurance policy’ in21 cludes a certificate issued under a group insurance 

22 contract.’’. 

23 (2) SATISFACTION OF MINIMUM FEDERAL

24 STANDARDS, TAX QUALIFICATIONS, INFLATION PRO25 TECTION, AND OTHER REQUIREMENTS FOR LONG- 
140 

•S 1932 PCS 

1 TERM CARE INSURANCE PARTNERSHIPS.—Section 

2 1917(b) (42 U.S.C. 1396p(b)) is amended by insert3 ing at the end the following: 

4 ‘‘(5) The term ‘Qualified State Long-Term 

5 Care Insurance Partnership’ means a program of6 fered in a State with an approved State plan amend7 ment that provides for the following: 

8 ‘‘(A) Subject to the limit specified in sub9 paragraph (D), the disregard of any assets or 

10 resources in an amount equal to the amount of 

11 payments made to, or on behalf of, an indi12 vidual who is a beneficiary under any long-term 

13 care insurance policy sold under such plan 

14 amendment. 

15 ‘‘(B) A requirement that the State will 

16 treat benefits paid under any long-term care in17 surance policy sold under a plan amendment of 

18 another State that maintains a Qualified Long19 Term Care Insurance Partnership or is de20 scribed in subsection (b)(1)(C)(ii)(II) the same 

21 as the State treats benefits paid under such a 

22 policy sold under the State’s plan amendment. 

23 ‘‘(C) A requirement that any long-term 

24 care insurance policy sold under such plan 

25 amendment— 
141 

•S 1932 PCS 

1 ‘‘(i) be a qualified long-term care in2 surance contract within the meaning of 

3 section 7702B(b) of the Internal Revenue 

4 Code of 1986; and 

5 ‘‘(ii) meet the requirements described 

6 in paragraph (6). 

7 ‘‘(D) A requirement that any such policy 

8 sold under the State plan amendment shall pro9 vide for— 

10 ‘‘(i) compound annual inflation pro11 tection of at least 5 percent; and 

12 ‘‘(ii) asset protection that does not ex13 ceed $250,000. 

14 The dollar amount specified in the preceding 

15 sentence shall be increased, beginning with 

16 2007, from year to year based on the percent17 age increase in the medical care expenditure 

18 category of the Consumer Price Index for All 

19 Urban Consumers (United States city average), 

20 published by the Bureau of Labor Statistics, 

21 rounded to the nearest $100. 

22 ‘‘(E) A requirement that an insurer may 

23 rescind a long-term care insurance policy sold 

24 under such State plan amendment that has 

25 been in effect for at least 2 years or deny an 
142 

•S 1932 PCS 

1 otherwise valid long-term care insurance claim 

2 under such a policy only upon a showing of mis3 representation that is material to the accept4 ance of coverage, pertains to the claim made, 

5 and could not have been known by the insurer 

6 at the time the policy was sold. 

7 ‘‘(F) A requirement that any individual 

8 who sells such a policy receive training, and 

9 demonstrate evidence of an understanding of, 

10 the policy and how the policy relates to other 

11 public and private coverage of long-term care. 

12 ‘‘(G) A requirement that the issuer of any 

13 such policy report— 

14 ‘‘(i) to the Secretary, such informa15 tion or data as the Secretary may require; 

16 and 

17 ‘‘(ii) to the State, the information or 

18 data reported to the Secretary (if any), the 

19 information or data required under the 

20 minimum reporting requirements developed 

21 under section 6012(b)(2)(B) of the Deficit 

22 Reduction Omnibus Reconciliation Act of 

23 2005, and such additional information or 

24 data as the State may require. 
143 

•S 1932 PCS 

1 For purposes of applying this paragraph, if a long2 term care insurance policy is exchanged for another 

3 such policy, the date coverage became effective 

4 under the first policy shall determine when coverage 

5 first becomes effective. 

6 ‘‘(6)(A) For purposes of subparagraph (C)(ii) 

7 of paragraph (5), the requirements of this paragraph 

8 are met if a long-term care insurance policy sold 

9 under a plan amendment described in that para10 graph meets— 

11 ‘‘(i) MODEL REGULATION.—The following 

12 requirements of the model regulation: 

13 ‘‘(I) Section 6A (relating to guaran14 teed renewal or noncancellability), other 

15 than paragraph (5) thereof, and the re16 quirements of section 6B of the model Act 

17 relating to such section 6A. 

18 ‘‘(II) Section 6B (relating to prohibi19 tions on limitations and exclusions) other 

20 than paragraph (7) thereof. 

21 ‘‘(III) Section 6C (relating to exten22 sion of benefits). 

23 ‘‘(IV) Section 6D (relating to continu24 ation or conversion of coverage). 
144 

•S 1932 PCS 

1 ‘‘(V) Section 6E (relating to dis2 continuance and replacement of policies). 

3 ‘‘(VI) Section 7 (relating to uninten4 tional lapse). 

5 ‘‘(VII) Section 8 (relating to disclo6 sure), other than sections 8F, 8G, 8H, and 

7 8I thereof. 

8 ‘‘(VIII) Section 9 (relating to required 

9 disclosure of rating practices to consumer). 

10 ‘‘(IX) Section 11 (relating to prohibi11 tions against post-claims underwriting). 

12 ‘‘(X) Section 12 (relating to minimum 

13 standards). 

14 ‘‘(XI) Section 14 (relating to applica15 tion forms and replacement coverage). 

16 ‘‘(XII) Section 15 (relating to report17 ing requirements). 

18 ‘‘(XIII) Section 22 (relating to filing 

19 requirements for marketing). 

20 ‘‘(XIV) Section 23 (relating to stand21 ards for marketing), including inaccurate 

22 completion of medical histories, other than 

23 paragraphs (1), (6), and (9) of section 

24 23C. 
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1 ‘‘(XV) Section 25 (relating to prohibi2 tion against preexisting conditions and 

3 probationary periods in replacement poli4 cies or certificates). 

5 ‘‘(XVI) The provisions of section 26 

6 relating to contingent nonforfeiture bene7 fits, if the policyholder declines the offer of 

8 a nonforfeiture provision described in para9 graph (4). 

10 ‘‘(XVII) Section 29 (relating to stand11 ard format outline of coverage). 

12 ‘‘(XVIII) Section 30 (relating to re13 quirement to deliver shopper’s guide). 

14 ‘‘(ii) MODEL ACT.—The following require15 ments of the model Act: 

16 ‘‘(I) Section 6C (relating to pre17 existing conditions). 

18 ‘‘(II) Section 6D (relating to prior 

19 hospitalization). 

20 ‘‘(III) The provisions of section 8 re21 lating to contingent nonforfeiture benefits. 

22 ‘‘(IV) Section 6F (relating to right to 

23 return). 

24 ‘‘(V) Section 6G (relating to outline of 

25 coverage). 
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1 ‘‘(VI) Section 6H (relating to require2 ments for certificates under group plans). 

3 ‘‘(VII) Section 6J (relating to policy 

4 summary). 

5 ‘‘(VIII) Section 6K (relating to 

6 monthly reports on accelerated death bene7 fits). 

8 ‘‘(B) DEFINITIONS.—For purposes of this para9 graph— 

10 ‘‘(i) MODEL PROVISIONS.—The terms 

11 ‘model regulation’ and ‘model Act’ mean the 

12 long-term care insurance model regulation, and 

13 the long-term care insurance model Act, respec14 tively, promulgated by the National Association 

15 of Insurance Commissioners (as adopted as of 

16 October 2000). 

17 ‘‘(ii) COORDINATION.—Any provision of 

18 the model regulation or model Act listed under 

19 clause (i) or (ii) of subparagraph (A) shall be 

20 treated as including any other provision of such 

21 regulation or Act necessary to implement the 

22 provision. 

23 ‘‘(iii) DETERMINATION.—For purposes of 

24 this paragraph, the determination of whether 

25 any requirement of a model regulation or the 
147 

•S 1932 PCS 

1 model Act has been met shall be made by the 

2 Secretary.’’. 

3 (3) EFFECTIVE DATE.—The amendments made 

4 by this subsection take effect on October 1, 2007, 

5 and apply to long-term care insurance policies sold 

6 on or after that date. 

7 (b) DEVELOPMENT OF UNIFORM STANDARDS AND

8 RECOMMENDATIONS.— 

9 (1) IN GENERAL.—Not later than 1 year after 

10 the date of enactment of this Act, the Secretary, in 

11 consultation with the National Association of Insur12 ance Commissioners, issuers of long-term care insur13 ance policies, States with experience with long-term 

14 care insurance partnership plans, other States, and 

15 representatives of consumers of long-term care in16 surance policies shall develop the uniform standards 

17 described in paragraph (2) and submit recommenda18 tions to Congress with respect to the issues identi19 fied in paragraph (3). 

20 (2) UNIFORM STANDARDS.—The uniform 

21 standards described in this paragraph are the fol22 lowing: 

23 (A) RECIPROCITY.—Standards for ensur24 ing that long-term care insurance policies 

25 issued under a State long-term care insurance 
148 

•S 1932 PCS 

1 partnership under section 1917(b)(1)(C)(ii) of 

2 the Social Security Act (42 U.S.C. 

3 1396p(b)(1)(C)(ii)) (as amended by subsection 

4 (a)) are portable to other States with such a 

5 partnership. 

6 (B) MINIMUM REPORTING REQUIRE7 MENTS.—Standards for minimum reporting re8 quirements for issuers of long-term care insur9 ance policies under such State long-term care 

10 insurance partnerships that shall specify the 

11 data and information that each such issuer 

12 shall report to the State with which it has such 

13 a partnership. The requirements developed in 

14 accordance with this subparagraph shall specify 

15 the type and format of the data and informa16 tion to be reported and the frequency with 

17 which such reports are to be made. 

18 (C) SUITABILITY.—Suitability standards 

19 for determining whether a long-term care insur20 ance policy is appropriate for the needs of an 

21 applicant, based on guidance of the National 

22 Association of Insurance Commissioners regard23 ing suitability. 

24 (3) RECOMMENDATIONS.—The recommenda25 tions described in this paragraph are the following: 
149 

•S 1932 PCS 

1 (A) INCONTESTABILITY.—Recommenda2 tions regarding whether the requirements relat3 ing to incontestability for long-term care insur4 ance policies sold under a State long-term care 

5 insurance partnership program under section 

6 1917(b)(1)(C)(ii) of the Social Security Act 

7 should be modified based on guidance of the 

8 National Association of Insurance Commis9 sioners regarding incontestability. 

10 (B) NONFORFEITURE.—Recommendations 

11 regarding whether requirements relating to non12 forfeiture for issuers of long-term care insur13 ance policies under a State long-term care in14 surance partnership program under section 

15 1917(b)(1)(C)(ii) of such Act should be modi16 fied to reflect changes in an insured’s financial 

17 circumstances. 

18 (C) INDEPENDENT CERTIFICATION FOR

19 BENEFITS ASSESSMENT.—Recommendations re20 garding whether uniform standards for requir21 ing benefits assessment evaluations to be con22 ducted by independent entities should be estab23 lished for issuers of long-term care insurance 

24 policies under such a State partnership pro25 gram and, if so, what such standards should be. 
150 

•S 1932 PCS 

1 (D) RATING REQUIREMENTS.—Rec2 ommendations regarding whether uniform 

3 standards for the establishment of, and annual 

4 increases in, premiums for long-term care in5 surance policies sold under such a State part6 nership program should be established and, if 

7 so, what such standards should be. 

8 (E) DISPUTE RESOLUTION.—Rec9 ommendations regarding whether uniform 

10 standards are needed to ensure fair adjudica11 tion of coverage disputes under long-term care 

12 insurance policies sold under such a State part13 nership program and the delivery of the benefits 

14 promised under such policies. 

15 (4) STATE REPORTING REQUIREMENTS.—Noth16 ing in paragraph (2)(B) shall be construed as pro17 hibiting a State from requiring an issuer of a long18 term care insurance policy sold in the State (regard19 less of whether the policy is issued under a State 

20 long-term care insurance partnership under section 

21 1917(b)(1)(C)(ii) of the Social Security Act) to re22 quire the issuer to report information or data to the 

23 State that is in addition to the information or data 

24 required under the minimum reporting requirements 

25 developed under that paragraph. 
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1 (c) ANNUAL REPORTS TO CONGRESS.—The Sec2 retary of Health and Human Services shall annually re3 port to Congress on the long-term care insurance partner4 ships established in accordance with section 

5 1917(b)(1)(C)(ii) of the Social Security Act (42 U.S.C. 

6 1396p(b)(1)(C)(ii)) (as amended by subsection (a)(1)). 

7 Such reports shall include analyses of the extent to which 

8 such partnerships expand or limit access of individuals to 

9 long-term care and the impact of such partnerships on 

10 Federal and State expenditures under the Medicare and 

11 Medicaid programs. 

12 CHAPTER 3—ELIMINATING FRAUD, 

13 WASTE, AND ABUSE IN MEDICAID 

14 SEC. 6021. ENHANCING THIRD PARTY RECOVERY. 

15 (a) CLARIFICATION OF RIGHT OF RECOVERY

16 AGAINST ANY THIRD PARTY LEGALLY RESPONSIBLE FOR

17 PAYMENT OF A CLAIM FOR A HEALTH CARE ITEM OR

18 SERVICE.—Section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) 

19 is amended— 

20 (1) in subparagraph (A), in the matter pre21 ceding clause (i)— 

22 (A) by inserting ‘‘, including self-insured 

23 plans’’ after ‘‘health insurers’’; and 

24 (B) by striking ‘‘and health maintenance 

25 organizations’’ and inserting ‘‘health mainte-
152 

•S 1932 PCS 

1 nance organizations, pharmacy benefit man2 agers, or other parties that are, by statute, con3 tract, or agreement, legally responsible for pay4 ment of a claim for a health care item or serv5 ice’’; and 

6 (2) in subparagraph (G)— 

7 (A) by inserting ‘‘a self-insured plan,’’ 

8 after ‘‘1974,’’; and 

9 (B) by striking ‘‘and a health maintenance 

10 organization’’ and inserting ‘‘a health mainte11 nance organization, a pharmacy benefit man12 ager, or other party that is, by statute, con13 tract, or agreement, legally responsible for pay14 ment of a claim for a health care item or serv15 ice’’. 

16 (b) REQUIREMENT FOR THIRD PARTIES TO PROVIDE

17 THE STATE WITH COVERAGE ELIGIBILITY AND CLAIMS

18 DATA.—Section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) is 

19 amended— 

20 (1) in subparagraph (G), by striking ‘‘and’’ at 

21 the end; 

22 (2) in subparagraph (H), by adding ‘‘and’’ after 

23 the semicolon at the end; and 

24 (3) by inserting after subparagraph (H), the 

25 following: 
153 

•S 1932 PCS 

1 ‘‘(I) that the State shall provide assur2 ances satisfactory to the Secretary that the 

3 State has in effect laws requiring health insur4 ers, including self-insured plans, group health 

5 plans (as defined in section 607(1) of the Em6 ployee Retirement Income Security Act of 

7 1974), service benefit plans, health maintenance 

8 organizations, pharmacy benefit managers, or 

9 other parties that are, by statute, contract, or 

10 agreement, legally responsible for payment of a 

11 claim for a health care item or service, as a 

12 condition of doing business in the State, to— 

13 ‘‘(i) provide eligibility and claims pay14 ment data with respect to an individual 

15 who is eligible for, or is provided, medical 

16 assistance under the State plan, upon the 

17 request of the State; 

18 ‘‘(ii) accept the subrogation of the 

19 State to any right of an individual or other 

20 entity to payment from the party for an 

21 item or service for which payment has been 

22 made under the State plan; 

23 ‘‘(iii) respond to any inquiry by the 

24 State regarding a claim for payment for 

25 any health care item or service submitted 
154 

•S 1932 PCS 

1 not later than 3 years after the date of the 

2 provision of such health care item or serv3 ice; and 

4 ‘‘(iv) agree not to deny a claim sub5 mitted by the State solely on the basis of 

6 the date of submission of the claim;’’. 

7 (c) EFFECTIVE DATE.—Except as provided in section 

8 6026(e), the amendments made by this section take effect 

9 on January 1, 2006. 

10 SEC. 6022. LIMITATION ON USE OF CONTINGENCY FEE AR11 RANGEMENTS. 

12 (a) IN GENERAL.—Section 1903(i) (42 U.S.C. 

13 1396b(i)), as amended by section 104(b) of the QI, TMA, 

14 and Abstinence Programs Extension and Hurricane 

15 Katrina Unemployment Relief Act of 2005 (Public Law 

16 109–91), is amended— 

17 (1) in paragraph (19), by adding ‘‘or’’ at the 

18 end; 

19 (2) by striking the period at the end of para20 graph (21) and inserting ‘‘; or’’; and 

21 (3) by inserting after paragraph (21), the fol22 lowing: 

23 ‘‘(22) with respect to any amount expended in 

24 connection with a contract or agreement (other than 

25 a risk contract under section 1903(m)) between the 
155 

•S 1932 PCS 

1 State agency under section 1902(a)(5) (or any State 

2 or local agency designated by such agency to admin3 ister any portion of the State plan under this title) 

4 and a consultant or other contractor if the terms of 

5 compensation for the consultant or other contractor 

6 do not meet the standards established by the Inspec7 tor General of the Department of Health and 

8 Human Services under section 6022(b) of the Def9 icit Reduction Omnibus Reconciliation Act of 

10 2005.’’. 

11 (b) CONTINGENCY FEE ARRANGEMENT STAND12 ARDS.—Not later than 6 months after the date of enact13 ment of this Act, the Inspector General of the Department 

14 of Health and Human Services shall issue standards for 

15 the terms of compensation of consultants and other indi16 viduals or entities contracting with State agencies (or their 

17 designees) administering State Medicaid plans under title 

18 XIX of the Social Security Act that ensure prudent pur19 chasing and program integrity with respect to Federal 

20 funds. The Inspector General shall annually review and, 

21 as necessary, revise such standards to promptly address 

22 new compensation arrangements that may present a risk 

23 to program integrity under such title. 
156 

•S 1932 PCS 

1 (c) EFFECTIVE DATE.—Except as provided in section 

2 6026(e), the amendments made by subsection (a) take ef3 fect on January 1, 2007. 

4 SEC. 6023. ENCOURAGING THE ENACTMENT OF STATE 

5 FALSE CLAIMS ACTS. 

6 (a) IN GENERAL.—Title XIX (42 U.S.C. 1396 et 

7 seq.) is amended by inserting after section 1908A the fol8 lowing: 

9 ‘‘STATE FALSE CLAIMS ACT REQUIREMENTS FOR

10 INCREASED STATE SHARE OF RECOVERIES

11 ‘‘SEC. 1909. (a) IN GENERAL.—Notwithstanding sec12 tion 1905(b), if a State has in effect a law relating to 

13 false or fraudulent claims that meets the requirements of 

14 subsection (b), the Federal medical assistance percentage 

15 with respect to any amounts recovered under a State ac16 tion brought under such law, shall be decreased by 10 per17 centage points. 

18 ‘‘(b) REQUIREMENTS.—For purposes of subsection 

19 (a), the requirements of this subsection are that the In20 spector General of the Department of Health and Human 

21 Services, in consultation with the Attorney General, deter22 mines that the State has in effect a law that meets the 

23 following requirements: 

24 ‘‘(1) The law establishes liability to the State 

25 for false or fraudulent claims described in section 
157 

•S 1932 PCS 

1 3729 of title 31, United States Code, with respect 

2 to any expenditure described in section 1903(a). 

3 ‘‘(2) The law contains provisions that are at 

4 least as effective in rewarding and facilitating qui 

5 tam actions for false or fraudulent claims as those 

6 described in sections 3730 through 3732 of title 31, 

7 United States Code. 

8 ‘‘(3) The law contains a requirement for filing 

9 an action under seal for 60 days with review by the 

10 State Attorney General. 

11 ‘‘(4) The law contains a civil penalty that is not 

12 less than the amount of the civil penalty authorized 

13 under section 3729 of title 31, United States Code. 

14 ‘‘(5) The law contains provisions that are de15 signed to prevent a windfall recovery for a qui tam 

16 relator in the event that the relator files a Federal 

17 and State action for the same false or fraudulent 

18 claim. 

19 ‘‘(c) DEEMED COMPLIANCE.—A State that, as of 

20 January 1, 2007, has a law in effect that meets the re21 quirements of subsection (b) shall be deemed to be in com22 pliance with such requirements for so long as the law con23 tinues to meet such requirements. 

24 ‘‘(d) NO PRECLUSION OF BROADER LAWS.—Nothing 

25 in this section shall be construed as prohibiting a State 
158 

•S 1932 PCS 

1 that has in effect a law that establishes liability to the 

2 State for false or fraudulent claims described in section 

3 3729 of title 31, United States Code, with respect to pro4 grams in addition to the State program under this title, 

5 or with respect to expenditures in addition to expenditures 

6 described in section 1903(a), from being considered to be 

7 in compliance with the requirements of subsection (a) so 

8 long as the law meets such requirements.’’. 

9 (b) EFFECTIVE DATE.—Except as provided in sec10 tion 6026(e), the amendments made by this section take 

11 effect on January 1, 2007. 

12 SEC. 6024. EMPLOYEE EDUCATION ABOUT FALSE CLAIMS 

13 RECOVERY. 

14 (a) IN GENERAL.—Section 1902(a) (42 U.S.C. 

15 1396a(a)) is amended— 

16 (1) in paragraph (66), by striking ‘‘and’’ at the 

17 end; 

18 (2) in paragraph (67) by striking the period at 

19 the end and inserting ‘‘; and’’; and 

20 (3) by inserting after paragraph (67) the fol21 lowing: 

22 ‘‘(68) provide that any entity that receives or 

23 makes annual payments under the State plan of at 

24 least $1,000,000, as a condition of receiving such 

25 payments, shall— 
159 

•S 1932 PCS 

1 ‘‘(A) establish written policies, procedures, 

2 and protocols for training of all employees of 

3 the entity (including management), and of any 

4 contractor or agent of the entity, that includes 

5 a detailed discussion of the False Claims Act 

6 established under sections 3729 through 3733 

7 of title 31, United States Code, administrative 

8 remedies for false claims and statements estab9 lished under chapter 38 of title 31, United 

10 States Code, any State laws pertaining to civil 

11 or criminal penalties for false claims and state12 ments, and whistleblower protections under 

13 such laws, with respect to the role of such laws 

14 in preventing and detecting fraud, waste, and 

15 abuse in Federal health care programs (as de16 fined in section 1128B(f)); 

17 ‘‘(B) include as part of such written poli18 cies, procedures, and protocols, detailed provi19 sions and training regarding the entity’s poli20 cies and procedures for detecting and pre21 venting fraud, waste, and abuse; 

22 ‘‘(C) include in any employee handbook for 

23 the entity, a specific discussion of the laws de24 scribed in subparagraph (A), the rights of em25 ployees to be protected as whistleblowers, and 
160 

•S 1932 PCS 

1 the entity’s policies and procedures for detect2 ing and preventing fraud, waste, and abuse; 

3 and 

4 ‘‘(D) require mandatory training for all 

5 employees of the entity and of any contractor or 

6 agent of the entity, at the time of hiring, with 

7 respect to the laws described in subparagraph 

8 (A) (including the whistleblower protections 

9 under such laws) and the entity’s policies and 

10 procedures for detecting fraud, waste, and 

11 abuse.’’. 

12 (b) EFFECTIVE DATE.—Except as provided in sec13 tion 6026(e), the amendments made by subsection (a) take 

14 effect on January 1, 2007. 

15 SEC. 6025. PROHIBITION ON RESTOCKING AND DOUBLE 

16 BILLING OF PRESCRIPTION DRUGS. 

17 (a) IN GENERAL.—Section 1903(i)(10) (42 U.S.C. 

18 1396b(i)), as amended by section 6004(b), is amended— 

19 (1) in subparagraph (C), by striking ‘‘and’’ at 

20 the end; 

21 (2) in subparagraph (D), by striking ‘‘; or’’ at 

22 the end and inserting ‘‘, and’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(E) with respect to any amount expended for 

25 reimbursement to a pharmacy under this title for 
161 

•S 1932 PCS 

1 the ingredient cost of a covered outpatient drug for 

2 which the pharmacy has already received payment 

3 under this title (other than with respect to a reason4 able restocking fee for such drug); or’’. 

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

6 subsection (a) take effect on the first day of the first fiscal 

7 year quarter that begins after the date of enactment of 

8 this Act. 

9 SEC. 6026. MEDICAID INTEGRITY PROGRAM. 

10 (a) ESTABLISHMENT OF MEDICAID INTEGRITY PRO11 GRAM; MEDICAID CFO; MEDICAID PROGRAM INTEGRITY

12 OVERSIGHT BOARD.—Title XIX (42 U.S.C. 1396 et seq.) 

13 is amended— 

14 (1) by redesignating section 1936 as section 

15 1938; and 

16 (2) by inserting after section 1935 the fol17 lowing: 

18 ‘‘MEDICAID INTEGRITY PROGRAM

19 ‘‘SEC. 1936. (a) IN GENERAL.—There is hereby es20 tablished the Medicaid Integrity Program (in this section 

21 referred to as the ‘Program’) under which the Secretary 

22 shall promote the integrity of the program under this title 

23 by entering into contracts in accordance with this section 

24 with eligible entities to carry out the activities described 

25 in subsection (b). 
162 

•S 1932 PCS 

1 ‘‘(b) ACTIVITIES DESCRIBED.—The activities de2 scribed in this subsection are as follows: 

3 ‘‘(1) Review of the actions of individuals or en4 tities furnishing items or services (whether on a fee5 for-service, risk, or other basis) for which payment 

6 may be made under a State plan approved under 

7 this title (or under any waiver of such plan approved 

8 under section 1115) to determine whether fraud, 

9 waste, or abuse has occurred, is likely to occur, or 

10 whether such actions have any potential for resulting 

11 in an expenditure of funds under this title in a man12 ner which is not intended under the provisions of 

13 this title. 

14 ‘‘(2) Audit of claims for payment for items or 

15 services furnished, or administrative services ren16 dered, under a State plan under this title, includ17 ing— 

18 ‘‘(A) cost reports; 

19 ‘‘(B) consulting contracts; and 

20 ‘‘(C) risk contracts under section 1903(m). 

21 ‘‘(3) Identification and recovery of overpay22 ments to individuals or entities receiving Federal 

23 funds under this title. 

24 ‘‘(4) Education of providers of services, man25 aged care entities, beneficiaries, and other individ-
163 

•S 1932 PCS 

1 uals with respect to payment integrity and benefit 

2 quality assurance issues. 

3 ‘‘(c) ELIGIBLE ENTITY AND CONTRACTING REQUIRE4 MENTS.— 

5 ‘‘(1) IN GENERAL.—An entity is eligible to 

6 enter into a contract under the Program to carry 

7 out any of the activities described in subsection (b) 

8 if the entity satisfies the requirements of paragraphs 

9 (2) and (3). 

10 ‘‘(2) ELIGIBILITY REQUIREMENTS.—The re11 quirements of this paragraph are the following: 

12 ‘‘(A) The entity has demonstrated capa13 bility to carry out the activities described in 

14 subsection (b). 

15 ‘‘(B) In carrying out such activities, the 

16 entity agrees to cooperate with the Inspector 

17 General of the Department of Health and 

18 Human Services, the Attorney General, and 

19 other law enforcement agencies, as appropriate, 

20 in the investigation and deterrence of fraud and 

21 abuse in relation to this title and in other cases 

22 arising out of such activities. 

23 ‘‘(C) The entity complies with such conflict 

24 of interest standards as are generally applicable 

25 to Federal acquisition and procurement. 
164 

•S 1932 PCS 

1 ‘‘(D) The entity meets such other require2 ments as the Secretary may impose. 

3 ‘‘(3) CONTRACTING REQUIREMENTS.—The enti4 ty has contracted with the Secretary in accordance 

5 with such procedures as the Secretary shall by regu6 lation establish, except that such procedures shall in7 clude the following: 

8 ‘‘(A) Procedures for identifying, evalu9 ating, and resolving organizational conflicts of 

10 interest that are generally applicable to Federal 

11 acquisition and procurement. 

12 ‘‘(B) Competitive procedures to be used— 

13 ‘‘(i) when entering into new contracts 

14 under this section; 

15 ‘‘(ii) when entering into contracts that 

16 may result in the elimination of respon17 sibilities under section 202(b) of the 

18 Health Insurance Portability and Account19 ability Act of 1996; and 

20 ‘‘(iii) at any other time considered ap21 propriate by the Secretary. 

22 ‘‘(C) Procedures under which a contract 

23 under this section may be renewed without re24 gard to any provision of law requiring competi25 tion if the contractor has met or exceeded the 
165 

•S 1932 PCS 

1 performance requirements established in the 

2 current contract. 

3 The Secretary may enter into such contracts without 

4 regard to final rules having been promulgated. 

5 ‘‘(4) LIMITATION ON CONTRACTOR LIABIL6 ITY.—The Secretary shall by regulation provide for 

7 the limitation of a contractor’s liability for actions 

8 taken to carry out a contract under the Program, 

9 and such regulation shall, to the extent the Sec10 retary finds appropriate, employ the same or com11 parable standards and other substantive and proce12 dural provisions as are contained in section 1157. 

13 ‘‘(d) COMPREHENSIVE PLAN FOR PROGRAM INTEG14 RITY.— 

15 ‘‘(1) 5-YEAR PLAN.—With respect to the 5 fis16 cal year period beginning with fiscal year 2006, and 

17 each such 5-fiscal year period that begins thereafter, 

18 the Secretary shall establish a comprehensive plan 

19 for ensuring the integrity of the program established 

20 under this title by combatting fraud, waste, and 

21 abuse. 

22 ‘‘(2) CONSULTATION.—Each 5-fiscal year plan 

23 established under paragraph (1) shall be developed 

24 by the Secretary in consultation with the Attorney 

25 General, the Director of the Federal Bureau of In-
166 

•S 1932 PCS 

1 vestigation, the Comptroller General of the United 

2 States, the Inspector General of the Department of 

3 Health and Human Services, and State officials with 

4 responsibility for controlling provider fraud and 

5 abuse under State plans under this title. 

6 ‘‘(e) APPROPRIATION.— 

7 ‘‘(1) IN GENERAL.—Out of any money in the 

8 Treasury of the United States not otherwise appro9 priated, there are appropriated to carry out the 

10 Medicaid Integrity Program under this section, with11 out further appropriation— 

12 ‘‘(A) for each of fiscal years 2006 through 

13 2008, $50,000,000; and 

14 ‘‘(B) for each fiscal year after fiscal year 

15 2008, $75,000,000. 

16 ‘‘(2) AVAILABILITY.—Amounts appropriated 

17 pursuant to paragraph (1) shall remain available 

18 until expended. 

19 ‘‘(3) ANNUAL REPORT.—Not later than 180 

20 days after the end of each fiscal year (beginning 

21 with fiscal year 2006), the Secretary shall submit a 

22 report to Congress which identifies— 

23 ‘‘(A) the use of funds appropriated pursu24 ant to paragraph (1); and 
167 

•S 1932 PCS 

1 ‘‘(B) the effectiveness of the use of such 

2 funds.’’. 

3 ‘‘MEDICAID CHIEF FINANCIAL OFFICER; MEDICAID

4 PROGRAM INTEGRITY OVERSIGHT BOARD

5 ‘‘SEC. 1937. (a) ESTABLISHMENT OF MEDICAID

6 CFO.— 

7 ‘‘(1) IN GENERAL.—There is established in the 

8 Centers for Medicare & Medicaid Services within the 

9 Office of Financial Management the position of 

10 Medicaid Chief Financial Officer. The Medicaid 

11 Chief Financial Officer shall be appointed by, and 

12 report directly to, the Administrator of such Cen13 ters. The Medicaid Chief Financial Officer may be 

14 removed only for cause. 

15 ‘‘(2) DUTIES AND AUTHORITY.—The duties 

16 and authority of the Medicaid Chief Financial Offi17 cer with respect to the management and expenditure 

18 of Federal funds under this title shall be comparable 

19 to the duties and authority of other Chief Financial 

20 Officers with respect to the management and ex21 penditure of Federal funds under Federal health 

22 care programs (as defined in section 1128B(f)). 

23 ‘‘(b) PROGRAM INTEGRITY OVERSIGHT BOARD.— 

24 The Secretary shall establish a Medicaid Program Integ25 rity Oversight Board. The duties and authority of the 

26 Medicaid Program Integrity Oversight Board shall be 
168 

•S 1932 PCS 

1 comparable to the duties and authority of other oversight 

2 boards established for purposes of Federal health care pro3 grams (as so defined) and shall include responsibility for 

4 identifying vulnerabilities in the State programs estab5 lished under this title and developing strategies for mini6 mizing integrity risks to such programs.’’. 

7 (b) STATE REQUIREMENT TO COOPERATE WITH IN8 TEGRITY PROGRAM EFFORTS.—Section 1902(a) (42 

9 U.S.C. 1396a(a)), as amended by section 6024(a), is 

10 amended— 

11 (1) in paragraph (67), by striking ‘‘and’’ at the 

12 end; 

13 (2) in paragraph (68), by striking the period at 

14 the end and inserting ‘‘; and’’; and 

15 (3) by inserting after paragraph (68), the fol16 lowing: 

17 ‘‘(69) provide that the State must comply with 

18 any requirements determined by the Secretary to be 

19 necessary for carrying out the Medicaid Integrity 

20 Program established under section 1936, or the du21 ties of the Medicaid Chief Financial Officer and the 

22 Medicaid Program Integrity Oversight Board estab23 lished under section 1937.’’. 

24 (c) INCREASED FUNDING FOR MEDICAID FRAUD AND

25 ABUSE CONTROL ACTIVITIES.— 
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•S 1932 PCS 

1 (1) IN GENERAL.—Out of any money in the 

2 Treasury of the United States not otherwise appro3 priated, there are appropriated to the Office of the 

4 Inspector General of the Department of Health and 

5 Human Services, without further appropriation, 

6 $25,000,000 for each of fiscal years 2006 through 

7 2010, for activities of such Office with respect to the 

8 Medicaid program under title XIX of the Social Se9 curity Act (42 U.S.C. 1396 et seq.). 

10 (2) AVAILABILITY; AMOUNTS IN ADDITION TO

11 OTHER AMOUNTS APPROPRIATED FOR SUCH ACTIVI12 TIES.—Amounts appropriated pursuant to para13 graph (1) shall— 

14 (A) remain available until expended; and 

15 (B) be in addition to any other amounts 

16 appropriated or made available to the Office of 

17 the Inspector General of the Department of 

18 Health and Human Services for activities of 

19 such Office with respect to the Medicaid pro20 gram. 

21 (3) ANNUAL REPORT.—Not later than 180 days 

22 after the end of each fiscal year (beginning with fis23 cal year 2006), the Inspector General of the Depart24 ment of Health and Human Services shall submit a 

25 report to Congress which identifies— 
170 

•S 1932 PCS 

1 (A) the use of funds appropriated pursuant 

2 to paragraph (1); and 

3 (B) the effectiveness of the use of such 

4 funds. 

5 (d) INCREASE IN CMS STAFFING DEVOTED TO EN6 SURING MEDICAID PROGRAM INTEGRITY.—The Secretary 

7 shall significantly increase the number of full-time equiva8 lent employees whose duties consist solely of ensuring the 

9 integrity of the Medicaid program established under title 

10 XIX of the Social Security Act by providing effective sup11 port and assistance to States to combat provider fraud 

12 and abuse. 

13 (e) DELAYED EFFECTIVE DATE FOR CHAPTER.—in 

14 the case of a State plan under title XIX of the Social Se15 curity Act which the Secretary determines requires State 

16 legislation in order for the plan to meet the additional re17 quirements imposed by the amendments made by a provi18 sion of this chapter, the State plan shall not be regarded 

19 as failing to comply with the requirements of such Act 

20 solely on the basis of its failure to meet these additional 

21 requirements before the first day of the first calendar 

22 quarter beginning after the close of the first regular ses23 sion of the State legislature that begins after the date of 

24 enactment of this Act. For purposes of the previous sen25 tence, in the case of a State that has a 2-year legislative 
171 

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1 session, each year of the session shall be considered to be 

2 a separate regular session of the State legislature. 

3 CHAPTER 4—STATE FINANCING UNDER 

4 MEDICAID 

5 SEC. 6031. REFORMS OF TARGETED CASE MANAGEMENT. 

6 (a) IN GENERAL.—Section 1915(g) (42 U.S.C. 

7 1396n(g)(2)) is amended by striking paragraph (2) and 

8 inserting the following: 

9 ‘‘(2) For purposes of this subsection: 

10 ‘‘(A)(i) The term ‘case management services’ 

11 means services which will assist individuals eligible 

12 under the plan in gaining access to needed medical, 

13 social, educational, and other services. 

14 ‘‘(ii) Such term includes the following: 

15 ‘‘(I) Assessment of an eligible individual to 

16 determine service needs, including activities 

17 that focus on needs identification, to determine 

18 the need for any medical, educational, social, or 

19 other services. Such assessment activities in20 clude the following: 

21 ‘‘(aa) Taking client history. 

22 ‘‘(bb) Identifying the needs of the in23 dividual, and completing related docu24 mentation. 
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•S 1932 PCS 

1 ‘‘(cc) Gathering information from 

2 other sources such as family members, 

3 medical providers, social workers, and edu4 cators, if necessary, to form a complete as5 sessment of the eligible individual. 

6 ‘‘(II) Development of a specific care plan 

7 based on the information collected through an 

8 assessment, that specifies the goals and actions 

9 to address the medical, social, educational, and 

10 other services needed by the eligible individual, 

11 including activities such as ensuring the active 

12 participation of the eligible individual and work13 ing with the individual (or the individual’s au14 thorized health care decision maker) and others 

15 to develop such goals and identify a course of 

16 action to respond to the assessed needs of the 

17 eligible individual. 

18 ‘‘(III) Referral and related activities to 

19 help an individual obtain needed services, in20 cluding activities that help link eligible individ21 uals with medical, social, educational providers 

22 or other programs and services that are capable 

23 of providing needed services, such as making re24 ferrals to providers for needed services and 

25 scheduling appointments for the individual. 
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1 ‘‘(IV) Monitoring and followup activities, 

2 including activities and contacts that are nec3 essary to ensure the care plan is effectively im4 plemented and adequately addressing the needs 

5 of the eligible individual, and which may be 

6 with the individual, family members, providers, 

7 or other entities and conducted as frequently as 

8 necessary to help determine such matters as— 

9 ‘‘(aa) whether services are being fur10 nished in accordance with an individual’s 

11 care plan; 

12 ‘‘(bb) whether the services in the care 

13 plan are adequate; and 

14 ‘‘(cc) whether there are changes in the 

15 needs or status of the eligible individual, 

16 and if so, making necessary adjustments in 

17 the care plan and service arrangements 

18 with providers. 

19 ‘‘(iii) Such term does not include the direct de20 livery of an underlying medical, educational, social, 

21 or other service to which an eligible individual has 

22 been referred, including, with respect to the direct 

23 delivery of foster care services, services such as (but 

24 not limited to) the following: 
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1 ‘‘(I) Research gathering and completion of 

2 documentation required by the foster care pro3 gram. 

4 ‘‘(II) Assessing adoption placements. 

5 ‘‘(III) Recruiting or interviewing potential 

6 foster care parents. 

7 ‘‘(IV) Serving legal papers. 

8 ‘‘(V) Home investigations. 

9 ‘‘(VI) Providing transportation. 

10 ‘‘(VII) Administering foster care subsidies. 

11 ‘‘(VIII) Making placement arrangements. 

12 ‘‘(B) The term ‘targeted case management serv13 ices’ are case management services that are fur14 nished without regard to the requirements of section 

15 1902(a)(1) and section 1902(a)(10)(B) to specific 

16 classes of individuals or to individuals who reside in 

17 specified areas. 

18 ‘‘(3) With respect to contacts with individuals who 

19 are not eligible for medical assistance under the State plan 

20 or, in the case of targeted case management services, indi21 viduals who are eligible for such assistance but are not 

22 part of the target population specified in the State plan, 

23 such contacts— 

24 ‘‘(A) are considered an allowable case manage25 ment activity, when the purpose of the contact is di-
175 

•S 1932 PCS 

1 rectly related to the management of the eligible indi2 vidual’s care; and 

3 ‘‘(B) are not considered an allowable case man4 agement activity if such contacts relate directly to 

5 the identification and management of the noneligible 

6 or nontargeted individual’s needs and care. 

7 ‘‘(4)(A) In accordance with section 1902(a)(25), Fed8 eral financial participation only is available under this title 

9 for case management services or targeted case manage10 ment services if there are no other third parties liable to 

11 pay for such services, including as reimbursement under 

12 a medical, social, educational, or other program. 

13 ‘‘(B) A State shall allocate the costs of any part of 

14 such services which are reimbursable under another feder15 ally funded program in accordance with OMB Circular A16 87 (or any related or successor guidance or regulations 

17 regarding allocation of costs among federally funded pro18 grams) under an approved cost allocation program.’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 subsection (a) shall take effect on January 1, 2006. 

21 SEC. 6032. TEMPORARY FEDERAL MATCHING PAYMENTS 

22 FOR FEDERAL ASSISTANCE. 

23 (a) 100 PERCENT FEDERAL MATCHING PAYMENTS

24 FOR MEDICAL ASSISTANCE PROVIDED TO SPECIFIED IN25 DIVIDUALS.— 
176 

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1 (1) IN GENERAL.—Notwithstanding section 

2 1905(b) of the Social Security Act (42 U.S.C. 

3 1396d(b)), for items and services furnished during 

4 the period that begins on August 28, 2005, and ends 

5 on May 15, 2006, the Federal medical assistance 

6 percentage for providing medical assistance for such 

7 items and services under a State Medicaid plan to 

8 a specified individual (as defined in subsection (b)), 

9 and for costs directly attributable to all administra10 tive activities that relate to the provision of such 

11 medical assistance, shall be 100 percent. 

12 (2) APPLICATION TO CHILD HEALTH ASSIST13 ANCE.—Notwithstanding section 2105(b) of the So14 cial Security Act (42 U.S.C. 1397ee(b)), for items 

15 and services furnished during the period described in 

16 paragraph (1), the Federal matching rate for pro17 viding child health assistance for such items and 

18 services under a State child health plan to a speci19 fied individual (as so defined), and for costs directly 

20 attributable to all administrative activities that re21 late to the provision of such child health assistance, 

22 shall be 100 percent. 

23 (b) SPECIFIED INDIVIDUAL.— 

24 (1) IN GENERAL.—For purposes of subsection 

25 (a), the term ‘‘specified individual’’ means an indi-
177 

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1 vidual who, on any day during the week preceding 

2 August 28, 2005, had a primary residence in a Lou3 isiana parish described in paragraph (2), a Mis4 sissippi county described in paragraph (3), or an 

5 Alabama county described in paragraph (4). 

6 (2) LOUISIANA PARISHES DESCRIBED.—For 

7 purposes of paragraph (1), the Louisiana parishes 

8 described in this paragraph are the following: 

9 (A) Acadia. 

10 (B) Ascension. 

11 (C) Assumption. 

12 (D) Calcasieu. 

13 (E) Cameron. 

14 (F) East Baton Rouge. 

15 (G) East Feliciana. 

16 (H) Iberia. 

17 (I) Iberville. 

18 (J) Jefferson. 

19 (K) Jefferson Davis. 

20 (L) Lafayette. 

21 (M) Lafourche. 

22 (N) Livingston. 

23 (O) Orleans. 

24 (P) Pointe Coupee. 

25 (Q) Plaquemines. 
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1 (R) St. Bernard. 

2 (S) St. Charles. 

3 (T) St. Helena. 

4 (U) St. James. 

5 (V) St. John. 

6 (W) St. Mary. 

7 (X) St. Martin. 

8 (Y) St. Tammany. 

9 (Z) Tangipahoa. 

10 (AA) Terrebonne. 

11 (BB) Vermilion. 

12 (CC) Washington. 

13 (DD) West Baton Rouge. 

14 (EE) West Feliciana. 

15 (3) MISSISSIPPI COUNTIES DESCRIBED.—For 

16 purposes of paragraph (1), the Mississippi counties 

17 described in this paragraph are the following: 

18 (A) Adams. 

19 (B) Amite. 

20 (C) Attala. 

21 (D) Clairborne. 

22 (E) Choctaw. 

23 (F) Clarke. 

24 (G) Copiah. 

25 (H) Covington. 
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1 (I) Forrest. 

2 (J) Franklin. 

3 (K) George. 

4 (L) Greene. 

5 (M) Hancock. 

6 (N) Harrison. 

7 (O) Hinds. 

8 (P) Jackson. 

9 (Q) Jasper. 

10 (R) Jefferson. 

11 (S) Jefferson Davis. 

12 (T) Jones. 

13 (U) Kemper. 

14 (V) Lamar. 

15 (W) Lauderdale. 

16 (X) Lawrence. 

17 (Y) Leake. 

18 (Z) Lincoln. 

19 (AA) Lowndes. 

20 (BB) Madison. 

21 (CC) Marion. 

22 (DD) Neshoba. 

23 (EE) Newton. 

24 (FF) Noxubee. 

25 (GG) Oktibbeha. 
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1 (HH) Pearl River. 

2 (II) Perry. 

3 (JJ) Pike. 

4 (KK) Rankin. 

5 (LL) Scott. 

6 (MM) Simpson. 

7 (NN) Smith. 

8 (OO) Stone. 

9 (PP) Walthall. 

10 (QQ) Warren. 

11 (RR) Wayne. 

12 (SS) Wilkinson. 

13 (TT) Winston. 

14 (UU) Yazoo. 

15 (4) ALABAMA COUNTIES DESCRIBED.—For pur16 poses of paragraph (1) the Alabama counties de17 scribed in this paragraph are the following: 

18 (A) Baldwin. 

19 (B) Choctaw. 

20 (C) Clarke. 

21 (D) Greene. 

22 (E) Hale. 

23 (F) Marengo. 

24 (G) Mobile. 

25 (H) Pickens. 
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1 (I) Sumter. 

2 (J) Tuscaloosa. 

3 (K) Washington. 

4 (c) FMAP ADJUSTMENT.—Notwithstanding the first 

5 sentence of section 1905(b) of the Social Security Act (42 

6 U.S.C. 1396d(b)), if, for purposes of titles XIX and XXI 

7 of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa 

8 et seq.), the Federal medical assistance percentage deter9 mined for Alaska for fiscal year 2006 or fiscal year 2007 

10 is less than the Federal medical assistance percentage de11 termined for Alaska for fiscal year 2005, the Federal med12 ical assistance percentage determined for Alaska for fiscal 

13 year 2005 shall be substituted for the Federal medical as14 sistance percentage otherwise determined for Alaska for 

15 fiscal year 2006 or fiscal year 2007, as the case may be. 

16 SEC. 6033. MANAGED CARE ORGANIZATION PROVIDER TAX 

17 REFORM. 

18 (a) IN GENERAL.—Section 1903(w)(7)(A)(viii) (42 

19 U.S.C. 1396b(w)(7)(A)(viii)) is amended to read as fol20 lows: 

21 ‘‘(viii) Services of managed care organiza22 tions (including health maintenance organiza23 tions, preferred provider organizations, and 

24 such other similar organizations as the Sec25 retary may specify by regulation).’’. 
182 

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1 (b) EFFECTIVE DATE.— 

2 (1) IN GENERAL.—Except as provided in para3 graph (2), the amendment made by subsection (a) 

4 shall take effect on January 1, 2006. 

5 (2) NONAPPLICATION.—The amendment made 

6 by subsection (a) shall not apply in the case of a 

7 State that, as of December 31, 2005, has in effect 

8 a tax imposed on the class of health care items and 

9 services described in section 1903(w)(7)(A)(viii) of 

10 the Social Security Act (42 U.S.C. 

11 1396b(w)(7)(A)(viii)) (as in effect before the date of 

12 enactment of this Act). 

13 SEC. 6034. INCLUSION OF PODIATRISTS AS PHYSICIANS. 

14 (a) IN GENERAL.—Section 1905(a)(5)(A) (42 U.S.C. 

15 1396d(a)(5)(A)) is amended by striking ‘‘section 

16 1861(r)(1)’’ and inserting ‘‘paragraphs (1) and (3) of sec17 tion 1861(r)’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 subsection (a) shall apply to services furnished on or after 

20 January 1, 2006. 

21 SEC. 6035. DSH ALLOTMENT FOR THE DISTRICT OF COLUM22 BIA. 

23 (a) IN GENERAL.—The table in section 1923(f)(2) 

24 (42 U.S.C. 1396r–4(f)(2)) is amended under each of the 

25 columns for FY 00, FY 01, and FY 02, in the entry for 
183 

•S 1932 PCS 

1 the District of Columbia, by striking ‘‘32’’ and inserting 

2 ‘‘49’’. 

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

4 subsection (a) shall take effect as if enacted on October 

5 1, 2005 and shall apply to expenditures made on or after 

6 that date. 

7 SEC. 6036. DEMONSTRATION PROJECT REGARDING MED8 ICAID REIMBURSEMENT FOR STABILIZATION 

9 OF EMERGENCY MEDICAL CONDITIONS BY 

10 NON-PUBLICLY OWNED OR OPERATED INSTI11 TUTIONS FOR MENTAL DISEASES. 

12 (a) AUTHORITY TO CONDUCT DEMONSTRATION

13 PROJECT.—The Secretary shall establish a demonstration 

14 project under which an eligible State (as defined in sub15 section (b)) shall provide reimbursement under the State 

16 medicaid plan to an institution for mental diseases that 

17 is not publicly owned or operated and that is subject to 

18 the requirements of section 1867 of the Social Security 

19 Act (42 U.S.C, 1395dd) for the provision of medical as20 sistance available under such plan to an individual who— 

21 (1) has attained age 21, but has not attained 

22 age 65; 

23 (2) is eligible for medical assistance under such 

24 plan; and 
184 

•S 1932 PCS 

1 (3) requires such medical assistance to stabilize 

2 an emergency medical condition. 

3 (b) ELIGIBLE STATE DEFINED.— 

4 (1) APPLICATION.—Upon approval of an appli5 cation submitted by a State described in paragraph 

6 (2), the State shall be an eligible State for purposes 

7 of conducting a demonstration project under this 

8 section. 

9 (2) STATE DESCRIBED.—A State described in 

10 this paragraph is each of the following: 

11 (A) Arizona. 

12 (B) Arkansas. 

13 (C) Louisiana. 

14 (D) Maine. 

15 (E) North Dakota. 

16 (F) Wyoming. 

17 (G) Four other States selected by the Sec18 retary to provide geographic diversity on the 

19 basis of the application to conduct a demonstra20 tion project under this section submitted by 

21 such States. 

22 (c) LENGTH OF DEMONSTRATION PROJECT.—The 

23 demonstration project established under this section shall 

24 be conducted for a period of 3 consecutive years. 

25 (d) LIMITATIONS ON FEDERAL FUNDING.— 
185 

•S 1932 PCS 

1 (1) APPROPRIATION.— 

2 (A) IN GENERAL.—Out of any funds in the 

3 Treasury not otherwise appropriated, there is 

4 appropriated to carry out this section, 

5 $30,000,000 for fiscal year 2006. 

6 (B) BUDGET AUTHORITY.—Subparagraph 

7 (A) constitutes budget authority in advance of 

8 appropriations Act and represents the obliga9 tion of the Federal Government to provide for 

10 the payment of the amounts appropriated under 

11 that subparagraph. 

12 (2) 3-YEAR AVAILABILITY.—Funds appro13 priated under paragraph (1) shall remain available 

14 for obligation through December 31, 2008. 

15 (3) LIMITATION ON PAYMENTS.—In no case 

16 may— 

17 (A) the aggregate amount of payments 

18 made by the Secretary to eligible States under 

19 this section exceed $30,000,000; or 

20 (B) payments be provided by the Secretary 

21 under this section after December 31, 2008. 

22 (4) FUNDS ALLOCATED TO STATES.—The Sec23 retary shall allocate funds to eligible States based on 

24 their applications and the availability of funds. 
186 

•S 1932 PCS 

1 (5) PAYMENTS TO STATES.—The Secretary 

2 shall pay to each eligible State, from its allocation 

3 under paragraph (4), an amount each quarter equal 

4 to the Federal medical assistance percentage of ex5 penditures in the quarter for medical assistance de6 scribed in subsection (a). 

7 (e) REPORTS.— 

8 (1) ANNUAL PROGRESS REPORTS.—The Sec9 retary shall submit annual reports to Congress on 

10 the progress of the demonstration project conducted 

11 under this section. 

12 (2) FINAL REPORT AND RECOMMENDATION.— 

13 Not later than March 31, 2009, the Secretary shall 

14 submit to Congress a final report on the demonstra15 tion project conducted under this section that shall 

16 include the following: 

17 (A) A determination as to whether the 

18 demonstration project resulted in increased ac19 cess to inpatient mental health services under 

20 the medicaid program. 

21 (B) An analysis regarding whether the 

22 demonstration project produced a significant re23 duction in the use of higher cost emergency 

24 room visits for individuals eligible for medical 

25 assistance under the medicaid program. 
187 

•S 1932 PCS 

1 (C) An assessment of the impact of the 

2 demonstration project on the costs related to 

3 the provision of inpatient psychiatric care and 

4 services under the medicaid program. 

5 (D) A recommendation regarding whether 

6 the demonstration project should be continued 

7 after December 31, 2008, and expanded on a 

8 national basis. 

9 (f) WAIVER AUTHORITY.— 

10 (1) IN GENERAL.—The Secretary shall waive 

11 the limitation of subdivision (B) following paragraph 

12 (28) of section 1905(a) of the Social Security Act 

13 (42 U.S.C. 1396d(a)) (relating to limitations on pay14 ments for care or services for individuals under 65 

15 years of age who are patients in an institution for 

16 mental diseases) for purposes of carrying out the 

17 demonstration project under this section. 

18 (2) LIMITED OTHER WAIVER AUTHORITY.—The 

19 Secretary may waive other requirements of titles XI 

20 and XIX of the Social Security Act (including the 

21 requirements of sections 1902(a)(1) (relating to 

22 statewideness) and 1902(a)(10)(B) (relating to com23 parability)) only to extent necessary to carry out the 

24 demonstration project under this section. 

25 (g) DEFINITIONS.—In this section: 
188 

•S 1932 PCS 

1 (1) EMERGENCY MEDICAL CONDITION.—The 

2 term ‘‘emergency medical condition’’ has the mean3 ing given that term in section 1867(e)(1) of the So4 cial Security Act (42 U.S.C. 1395dd(e)(1)). 

5 (2) FEDERAL MEDICAL ASSISTANCE PERCENT6 AGE.—The term ‘‘Federal medical assistance per7 centage’’ has the meaning given that term with re8 spect to a State in section 1905(b) of the Social Se9 curity Act (42 U.S.C. 1396d(b)). 

10 (3) INSTITUTION FOR MENTAL DISEASES.—The 

11 term ‘‘institution for mental diseases’’ has the mean12 ing given that term in section 1905(i) of the Social 

13 Security Act (42 U.S.C. 1396d(i)). 

14 (4) MEDICAL ASSISTANCE.—The term ‘‘medical 

15 assistance’’ has the meaning given that term in sec16 tion 1905(a) of the Social Security Act (42 U.S.C. 

17 1396d(a)). 

18 (5) STABILIZE.—The term ‘‘stabilize’’ has the 

19 meaning given that term in section 1867(e)(3)(A) of 

20 the Social Security Act (42 U.S..C 

21 1395dd(e)(3)(A)). 

22 (6) STATE.—The term ‘‘State’’ has the mean23 ing given that term for purposes of title XIX of the 

24 Social Security Act (42 U.S.C. 1396 et seq.). 
189 

•S 1932 PCS 

1 CHAPTER 5—IMPROVING THE MEDICAID 

2 AND STATE CHILDREN’S HEALTH IN3 SURANCE PROGRAMS 

4 Subchapter A—Family Opportunity Act 

5 SEC. 6041. SHORT TITLE OF SUBCHAPTER. 

6 This subchapter may be cited as the ‘‘Family Oppor7 tunity Act of 2005’’ or the ‘‘Dylan Lee James Act’’. 

8 SEC. 6042. OPPORTUNITY FOR FAMILIES OF DISABLED 

9 CHILDREN TO PURCHASE MEDICAID COV10 ERAGE FOR SUCH CHILDREN. 

11 (a) STATE OPTION TO ALLOW FAMILIES OF DIS12 ABLED CHILDREN TO PURCHASE MEDICAID COVERAGE

13 FOR SUCH CHILDREN.— 

14 (1) IN GENERAL.—Section 1902 (42 U.S.C. 

15 1396a) is amended— 

16 (A) in subsection (a)(10)(A)(ii)— 

17 (i) by striking ‘‘or’’ at the end of sub18 clause (XVII); 

19 (ii) by adding ‘‘or’’ at the end of sub20 clause (XVIII); and 

21 (iii) by adding at the end the fol22 lowing new subclause: 

23 ‘‘(XIX) who are disabled children 

24 described in subsection (cc)(1);’’; and 
190 

•S 1932 PCS 

1 (B) by adding at the end the following new 

2 subsection: 

3 ‘‘(cc)(1) Individuals described in this paragraph are 

4 individuals— 

5 ‘‘(A) who are children who have not attained 19 

6 years of age and are born— 

7 ‘‘(i) on or after January 1, 2002 (or, at 

8 the option of a State, on or after an earlier 

9 date), in the case of the second, third, and 

10 fourth quarters of fiscal year 2008; 

11 ‘‘(ii) on or after October 1, 1996 (or, at 

12 the option of a State, on or after an earlier 

13 date), in the case of each quarter of fiscal year 

14 2009; and 

15 ‘‘(iii) after October 1, 1990, in the case of 

16 each quarter of fiscal year 2010 and each quar17 ter of any fiscal year thereafter; 

18 ‘‘(B) who would be considered disabled under 

19 section 1614(a)(3)(C) but for having earnings or 

20 deemed income or resources (as determined under 

21 title XVI for children) that exceed the requirements 

22 for receipt of supplemental security income benefits; 

23 and 
191 

•S 1932 PCS 

1 ‘‘(C) whose family income does not exceed such 

2 income level as the State establishes and does not 

3 exceed— 

4 ‘‘(i) 300 percent of the poverty line (as de5 fined in section 2110(c)(5)) applicable to a fam6 ily of the size involved; or 

7 ‘‘(ii) such higher percent of such poverty 

8 line as a State may establish, except that— 

9 ‘‘(I) any medical assistance provided 

10 to an individual whose family income ex11 ceeds 300 percent of such poverty line may 

12 only be provided with State funds; and 

13 ‘‘(II) no Federal financial participa14 tion shall be provided under section 

15 1903(a) for any medical assistance pro16 vided to such an individual.’’. 

17 (2) INTERACTION WITH EMPLOYER-SPONSORED

18 FAMILY COVERAGE.—Section 1902(cc) (42 U.S.C. 

19 1396a(cc)), as added by paragraph (1)(B), is 

20 amended by adding at the end the following new 

21 paragraph: 

22 ‘‘(2)(A) If an employer of a parent of an individual 

23 described in paragraph (1) offers family coverage under 

24 a group health plan (as defined in section 2791(a) of the 

25 Public Health Service Act), the State shall— 
192 

•S 1932 PCS 

1 ‘‘(i) require such parent to apply for, enroll in, 

2 and pay premiums for such coverage as a condition 

3 of such parent’s child being or remaining eligible for 

4 medical assistance under subsection 

5 (a)(10)(A)(ii)(XIX) if the parent is determined eligi6 ble for such coverage and the employer contributes 

7 at least 50 percent of the total cost of annual pre8 miums for such coverage; and 

9 ‘‘(ii) if such coverage is obtained— 

10 ‘‘(I) subject to paragraph (2) of section 

11 1916(h), reduce the premium imposed by the 

12 State under that section in an amount that rea13 sonably reflects the premium contribution made 

14 by the parent for private coverage on behalf of 

15 a child with a disability; and 

16 ‘‘(II) treat such coverage as a third party 

17 liability under subsection (a)(25). 

18 ‘‘(B) In the case of a parent to which subparagraph 

19 (A) applies, a State, subject to paragraph (1)(C)(ii), may 

20 provide for payment of any portion of the annual premium 

21 for such family coverage that the parent is required to 

22 pay. Any payments made by the State under this subpara23 graph shall be considered, for purposes of section 1903(a), 

24 to be payments for medical assistance.’’. 
193 

•S 1932 PCS 

1 (b) STATE OPTION TO IMPOSE INCOME-RELATED

2 PREMIUMS.—Section 1916 (42 U.S.C. 1396o) is amend3 ed— 

4 (1) in subsection (a), by striking ‘‘subsection 

5 (g)’’ and inserting ‘‘subsections (g) and (h)’’; and 

6 (2) by adding at the end the following new sub7 section: 

8 ‘‘(h)(1) With respect to disabled children provided 

9 medical assistance under section 1902(a)(10)(A)(ii)(XIX), 

10 subject to paragraph (2), a State may (in a uniform man11 ner for such children) require the families of such children 

12 to pay monthly premiums set on a sliding scale based on 

13 family income. 

14 ‘‘(2) A premium requirement imposed under para15 graph (1) may only apply to the extent that— 

16 ‘‘(A) in the case of a disabled child described in 

17 that paragraph whose family income— 

18 ‘‘(i) does not exceed 200 percent of the 

19 poverty line, the aggregate amount of such pre20 mium and any premium that the parent is re21 quired to pay for family coverage under section 

22 1902(cc)(2)(A)(i) and other cost-sharing 

23 charges do not exceed 5 percent of the family’s 

24 income; and 
194 

•S 1932 PCS 

1 ‘‘(ii) exceeds 200, but does not exceed 300, 

2 percent of the poverty line, the aggregate 

3 amount of such premium and any premium that 

4 the parent is required to pay for family cov5 erage under section 1902(cc)(2)(A)(i) and other 

6 cost-sharing charges do not exceed 7.5 percent 

7 of the family’s income; and 

8 ‘‘(B) the requirement is imposed consistent with 

9 section 1902(cc)(2)(A)(ii)(I). 

10 ‘‘(3) A State shall not require prepayment of a pre11 mium imposed pursuant to paragraph (1) and shall not 

12 terminate eligibility of a child under section 

13 1902(a)(10)(A)(ii)(XIX) for medical assistance under this 

14 title on the basis of failure to pay any such premium until 

15 such failure continues for a period of at least 60 days from 

16 the date on which the premium became past due. The 

17 State may waive payment of any such premium in any 

18 case where the State determines that requiring such pay19 ment would create an undue hardship.’’. 

20 (c) CONFORMING AMENDMENTS.—(1) Section 

21 1903(f)(4) (42 U.S.C. 1396b(f)(4)) is amended in the 

22 matter preceding subparagraph (A), by inserting 

23 ‘‘1902(a)(10)(A)(ii)(XIX),’’ after 

24 ‘‘1902(a)(10)(A)(ii)(XVIII),’’. 
195 

•S 1932 PCS 

1 (2) Section 1905(u)(2)(B) (42 U.S.C. 

2 1396d(u)(2)(B)) is amended by adding at the end the fol3 lowing sentence: ‘‘Such term excludes any child eligible for 

4 medical assistance only by reason of section 

5 1902(a)(10)(A)(ii)(XIX).’’. 

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

7 this section shall apply to medical assistance for items and 

8 services furnished on or after January 1, 2008. 

9 SEC. 6043. DEMONSTRATION PROJECTS REGARDING HOME 

10 AND COMMUNITY-BASED ALTERNATIVES TO 

11 PSYCHIATRIC RESIDENTIAL TREATMENT FA12 CILITIES FOR CHILDREN. 

13 (a) IN GENERAL.—The Secretary is authorized to 

14 conduct, during each of fiscal years 2007 through 2011, 

15 demonstration projects (each in the section referred to as 

16 a ‘‘demonstration project’’) in accordance with this section 

17 under which up to 10 States (as defined for purposes of 

18 title XIX of the Social Security Act) are awarded grants, 

19 on a competitive basis, to test the effectiveness in improv20 ing or maintaining a child’s functional level and cost-effec21 tiveness of providing coverage of home and community22 based alternatives to psychiatric residential treatment for 

23 children enrolled in the Medicaid program under title XIX 

24 of such Act. 

25 (b) APPLICATION OF TERMS AND CONDITIONS.— 
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1 (1) IN GENERAL.—Subject to the provisions of 

2 this section, for the purposes of the demonstration 

3 projects, and only with respect to children enrolled 

4 under such demonstration projects, a psychiatric res5 idential treatment facility (as defined in section 

6 483.352 of title 42 of the Code of Federal Regula7 tions) shall be deemed to be a facility specified in 

8 section 1915(c) of the Social Security Act (42 

9 U.S.C. 1396n(c)), and to be included in each ref10 erence in such section 1915(c) to hospitals, nursing 

11 facilities, and intermediate care facilities for the 

12 mentally retarded. 

13 (2) STATE OPTION TO ASSURE CONTINUITY OF

14 MEDICAID COVERAGE.—Upon the termination of a 

15 demonstration project under this section, the State 

16 that conducted the project may elect, only with re17 spect to a child who is enrolled in such project on 

18 the termination date, to continue to provide medical 

19 assistance for coverage of home and community20 based alternatives to psychiatric residential treat21 ment for the child in accordance with section 

22 1915(c) of the Social Security Act (42 U.S.C. 

23 1396n(c)), as modified through the application of 

24 paragraph (1). Expenditures incurred for providing 

25 such medical assistance shall be treated as a home 
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1 and community-based waiver program under section 

2 1915(c) of the Social Security Act (42 U.S.C. 

3 1396n(c)) for purposes of payment under section 

4 1903 of such Act (42 U.S.C. 1396b). 

5 (c) TERMS OF DEMONSTRATION PROJECTS.— 

6 (1) IN GENERAL.—Except as otherwise pro7 vided in this section, a demonstration project shall 

8 be subject to the same terms and conditions as apply 

9 to a waiver under section 1915(c) of the Social Se10 curity Act (42 U.S.C. 1396n(c)), including the waiv11 er of certain requirements under the first sentence 

12 of paragraph (3) of such section but not applying 

13 the second sentence of such paragraph. 

14 (2) BUDGET NEUTRALITY.—In conducting the 

15 demonstration projects under this section, the Sec16 retary shall ensure that the aggregate payments 

17 made by the Secretary under title XIX of the Social 

18 Security Act (42 U.S.C. 1396 et seq.) do not exceed 

19 the amount which the Secretary estimates would 

20 have been paid under that title if the demonstration 

21 projects under this section had not been imple22 mented. 

23 (3) EVALUATION.—The application for a dem24 onstration project shall include an assurance to pro25 vide for such interim and final evaluations of the 
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1 demonstration project by independent third parties, 

2 and for such interim and final reports to the Sec3 retary, as the Secretary may require. 

4 (d) PAYMENTS TO STATES; LIMITATIONS TO SCOPE

5 AND FUNDING.— 

6 (1) IN GENERAL.—Subject to paragraph (2), a 

7 demonstration project approved by the Secretary 

8 under this section shall be treated as a home and 

9 community-based waiver program under section 

10 1915(c) of the Social Security Act (42 U.S.C. 

11 1396n(c)) for purposes of payment under section 

12 1903 of such Act (42 U.S.C. 1396b). 

13 (2) LIMITATION.—In no case may the amount 

14 of payments made by the Secretary under this sec15 tion for State demonstration projects for a fiscal 

16 year exceed the amount available under subsection 

17 (f)(2)(A) for such fiscal year. 

18 (e) SECRETARY’S EVALUATION AND REPORT.—The 

19 Secretary shall conduct an interim and final evaluation of 

20 State demonstration projects under this section and shall 

21 report to the President and Congress the conclusions of 

22 such evaluations within 12 months of completing such 

23 evaluations. 

24 (f) FUNDING.— 
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1 (1) IN GENERAL.—For the purpose of carrying 

2 out this section, there are appropriated, from 

3 amounts in the Treasury not otherwise appropriated, 

4 for fiscal years 2007 through 2011, a total of 

5 $218,000,000, of which— 

6 (A) the amount specified in paragraph (2) 

7 shall be available for each of fiscal years 2007 

8 through 2011; and 

9 (B) a total of $1,000,000 shall be available 

10 to the Secretary for the evaluations and report 

11 under subsection (e). 

12 (2) FISCAL YEAR LIMIT.— 

13 (A) IN GENERAL.—For purposes of para14 graph (1), the amount specified in this para15 graph for a fiscal year is the amount specified 

16 in subparagraph (B) for the fiscal year plus the 

17 difference, if any, between the total amount 

18 available under this paragraph for prior fiscal 

19 years and the total amount previously expended 

20 under paragraph (1)(A) for such prior fiscal 

21 years. 

22 (B) FISCAL YEAR AMOUNTS.—The amount 

23 specified in this subparagraph for— 

24 (i) fiscal year 2007 is $21,000,000; 

25 (ii) fiscal year 2008 is $37,000,000; 
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1 (iii) fiscal year 2009 is $49,000,000; 

2 (iv) fiscal year 2010 is $53,000,000; 

3 and 

4 (v) fiscal year 2011 is $57,000,000. 

5 SEC. 6044. DEVELOPMENT AND SUPPORT OF FAMILY-TO6 FAMILY HEALTH INFORMATION CENTERS. 

7 Section 501 (42 U.S.C. 701) is amended by adding 

8 at the end the following new subsection: 

9 ‘‘(c)(1)(A) For the purpose of enabling the Secretary 

10 (through grants, contracts, or otherwise) to provide for 

11 special projects of regional and national significance for 

12 the development and support of family-to-family health in13 formation centers described in paragraph (2)— 

14 ‘‘(i) there is appropriated to the Secretary, out 

15 of any money in the Treasury not otherwise appro16 priated— 

17 ‘‘(I) $3,000,000 for fiscal year 2007; 

18 ‘‘(II) $4,000,000 for fiscal year 2008; and 

19 ‘‘(III) $5,000,000 for fiscal year 2009; and 

20 ‘‘(ii) there is authorized to be appropriated to 

21 the Secretary, $5,000,000 for each of fiscal years 

22 2010 and 2011. 

23 ‘‘(B) Funds appropriated or authorized to be appro24 priated under subparagraph (A) shall— 
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1 ‘‘(i) be in addition to amounts appropriated 

2 under subsection (a) and retained under section 

3 502(a)(1) for the purpose of carrying out activities 

4 described in subsection (a)(2); and 

5 ‘‘(ii) remain available until expended. 

6 ‘‘(2) The family-to-family health information centers 

7 described in this paragraph are centers that— 

8 ‘‘(A) assist families of children with disabilities 

9 or special health care needs to make informed 

10 choices about health care in order to promote good 

11 treatment decisions, cost-effectiveness, and improved 

12 health outcomes for such children; 

13 ‘‘(B) provide information regarding the health 

14 care needs of, and resources available for, such chil15 dren; 

16 ‘‘(C) identify successful health delivery models 

17 for such children; 

18 ‘‘(D) develop with representatives of health care 

19 providers, managed care organizations, health care 

20 purchasers, and appropriate State agencies, a model 

21 for collaboration between families of such children 

22 and health professionals; 

23 ‘‘(E) provide training and guidance regarding 

24 caring for such children; 
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1 ‘‘(F) conduct outreach activities to the families 

2 of such children, health professionals, schools, and 

3 other appropriate entities and individuals; and 

4 ‘‘(G) are staffed— 

5 ‘‘(i) by such families who have expertise in 

6 Federal and State public and private health 

7 care systems; and 

8 ‘‘(ii) by health professionals. 

9 ‘‘(3) The Secretary shall develop family-to-family 

10 health information centers described in paragraph (2) in 

11 accordance with the following: 

12 ‘‘(A) With respect to fiscal year 2007, such cen13 ters shall be developed in not less than 25 States. 

14 ‘‘(B) With respect to fiscal year 2008, such 

15 centers shall be developed in not less than 40 States. 

16 ‘‘(C) With respect to fiscal year 2009 and each 

17 fiscal year thereafter, such centers shall be developed 

18 in all States. 

19 ‘‘(4) The provisions of this title that are applicable 

20 to the funds made available to the Secretary under section 

21 502(a)(1) apply in the same manner to funds made avail22 able to the Secretary under paragraph (1)(A). 

23 ‘‘(5) For purposes of this subsection, the term ‘State’ 

24 means each of the 50 States and the District of Colum25 bia.’’. 
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1 SEC. 6045. RESTORATION OF MEDICAID ELIGIBILITY FOR 

2 CERTAIN SSI BENEFICIARIES. 

3 (a) IN GENERAL.—Section 1902(a)(10)(A)(i)(II) (42 

4 U.S.C. 1396a(a)(10)(A)(i)(II)) is amended— 

5 (1) by inserting ‘‘(aa)’’ after ‘‘(II)’’; 

6 (2) by striking ‘‘) and’’ and inserting ‘‘and’’; 

7 (3) by striking ‘‘section or who are’’ and insert8 ing ‘‘section), (bb) who are’’; and 

9 (4) by inserting before the comma at the end 

10 the following: ‘‘, or (cc) who are under 21 years of 

11 age and with respect to whom supplemental security 

12 income benefits would be paid under title XVI if 

13 subparagraphs (A) and (B) of section 1611(c)(7) 

14 were applied without regard to the phrase ‘the first 

15 day of the month following’ ’’. 

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

17 subsection (a) shall apply to medical assistance for items 

18 and services furnished on or after the date that is 1 year 

19 after the date of enactment of this Act. 
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1 Subchapter B—State Children’s Health 

2 Insurance Program 

3 SEC. 6051. RULES FOR AVAILABILITY, REDISTRIBUTION, 

4 AND EXTENDED AVAILABILITY OF ALLOT5 MENTS FOR FISCAL YEARS 2003, 2004, AND 

6 2005. 

7 (a) IN GENERAL.—Section 2104 (42 U.S.C. 1397dd) 

8 is amended— 

9 (1) by amending subsection (e) to read as fol10 lows: 

11 ‘‘(e) AVAILABILITY OF AMOUNTS ALLOTTED.— 

12 ‘‘(1) IN GENERAL.—Except as provided in para13 graph (2), amounts allotted to a State pursuant to 

14 this section— 

15 ‘‘(A) for each of fiscal years 1998 through 

16 2003, and for fiscal year 2006 and each fiscal 

17 year thereafter, shall remain available for ex18 penditure by the State through the end of the 

19 second succeeding fiscal year; and 

20 ‘‘(B) for each of fiscal years 2004 and 

21 2005, shall remain available for expenditure by 

22 the State during the initial availability period 

23 (as defined in paragraph (3)(A)). 
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1 ‘‘(2) AVAILABILITY OF REALLOTMENTS, REDIS2 TRIBUTED AMOUNTS, AND EXTENDED AVAIL3 ABILITY.— 

4 ‘‘(A) IN GENERAL.—Amounts reallotted to 

5 a State under subsection (f) shall be available 

6 for expenditure by the State through the end of 

7 the fiscal year in which they are reallotted. 

8 ‘‘(B) AVAILABILITY OF REDISTRIBUTED

9 FUNDS AND EXTENDED AVAILABILITY.— 

10 Amounts redistributed to a State under sub11 section (i)(3) or (j)(3) and unused allotments of 

12 a State extended under subsection (i)(4) or 

13 (j)(4) are available for expenditure by the State 

14 during the redistribution/extension period (as 

15 defined in paragraph (3)(B)). 

16 ‘‘(3) PERIODS DEFINED.—For purposes of this 

17 section: 

18 ‘‘(A) INITIAL AVAILABILITY PERIOD.—The 

19 term ‘initial availability period’ means, with re20 spect to allotments for a fiscal year, the 2-fiscal 

21 year period beginning with that fiscal year. 

22 ‘‘(B) REDISTRIBUTION/EXTENSION PE23 RIOD.—The term ‘redistribution/extension pe24 riod’ means, with respect to allotments for a 
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1 fiscal year, the second year following that fiscal 

2 year.’’; and 

3 (2) by adding at the end the following new sub4 sections: 

5 ‘‘(h) RULE FOR REDISTRIBUTION OF FISCAL YEAR

6 2003 ALLOTMENTS.— 

7 ‘‘(1) COMPUTATION OF UNEXPENDED ALLOT8 MENTS FOR FISCAL YEAR 2003.—The Secretary shall 

9 determine— 

10 ‘‘(A) the amount of each State’s allotment 

11 under this section for fiscal year 2003 that was 

12 not expended by the end of fiscal year 2005; 

13 and 

14 ‘‘(B) the total of the unexpended allot15 ments determined under subparagraph (A). 

16 ‘‘(2) DETERMINATION OF INITIAL PROJECTED

17 SHORTFALLS FOR FISCAL YEAR 2006.—For each 

18 State that receives an allotment for fiscal year 2006 

19 under subsection (b), the Secretary shall determine 

20 the following: 

21 ‘‘(A) FISCAL YEAR 2005 CARRYOVER.—The 

22 amount of the State’s allotment for 2005 that 

23 was not expended in fiscal year 2005. 

24 ‘‘(B) PROJECTED EXPENDITURES FOR FIS25 CAL YEAR 2006.—The estimated expenditures 
207 

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1 for the State as would be reported as quarterly 

2 expenditures under section 2105(a) for quarters 

3 in fiscal year 2006. 

4 ‘‘(C) INITIAL PROJECTED SHORTFALL FOR

5 FISCAL YEAR 2006.—The amount, if any, by 

6 which the projected expenditures determined 

7 under subparagraph (B) for the State for quar8 ters in fiscal year 2006 exceeds the sum of the 

9 following: 

10 ‘‘(i) FISCAL YEAR 2005 CARRYOVER.— 

11 The amount determined under subpara12 graph (A) for the State. 

13 ‘‘(ii) FISCAL YEAR 2006 ALLOT14 MENT.—The amount of the State’s allot15 ment for fiscal year 2006. 

16 ‘‘(D) STATE’S PROPORTION OF AGGREGATE

17 SHORTFALL.—For each State for which there is 

18 an excess determined under subparagraph (C), 

19 the ratio of— 

20 ‘‘(i) the amount of such excess; to 

21 ‘‘(ii) the total of such excesses deter22 mined for all States with such an excess. 

23 ‘‘(3) REDISTRIBUTION OF UNEXPENDED AL24 LOTMENTS FOR FISCAL YEAR 2003.—From the total 

25 of the unexpended allotments for fiscal year 2003 
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1 determined under paragraph (1)(B) the Secretary 

2 shall redistribute under subsection (f) the following: 

3 ‘‘(A) STATES OTHER THAN TERRI4 TORIES.—There shall be redistributed to each 

5 State for which there is an excess determined 

6 under paragraph (2)(C) an amount equal to the 

7 product of the following: 

8 ‘‘(i) STATE REDISTRIBUTION POOL.— 

9 The amount determined under paragraph 

10 (1)(B), reduced by the total amount redis11 tributed under subparagraph (B). 

12 ‘‘(ii) STATE’S SHORTFALL PROPOR13 TION.—The ratio described in paragraph 

14 (2)(D) for that State. 

15 ‘‘(B) TERRITORIES.—There shall be redis16 tributed to each commonwealth or territory de17 scribed in subsection (c)(3) an amount equal to 

18 the product of the following: 

19 ‘‘(i) TERRITORIAL REDISTRIBUTION

20 POOL.—1.05 percent of the amount deter21 mined under paragraph (1)(B). 

22 ‘‘(ii) TERRITORIAL PROPORTION.— 

23 The ratio of— 
209 

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1 ‘‘(I) the allotment for fiscal year 

2 2003 for such commonwealth or terri3 tory under subsection (c), to 

4 ‘‘(II) the total of all such allot5 ments for such fiscal year for such 

6 commonwealths or territories under 

7 such subsection. 

8 ‘‘(4) DETERMINATION OF AMOUNTS.—For pur9 poses of calculating the amounts described in— 

10 ‘‘(A) paragraphs (1) and (2)(A), the Sec11 retary shall use the amounts reported by the 

12 States not later than November 30, 2005, on 

13 Form CMS-64 or Form CMS-21, as the case 

14 may be, as approved by the Secretary; and 

15 ‘‘(B) paragraph (2)(B), the Secretary shall 

16 use the amounts reported by the States not 

17 later than September 30, 2005, on Form CMS18 37 or Form CMS-21B, as the case may be, as 

19 approved by the Secretary. 

20 ‘‘(i) REDISTRIBUTION AND EXTENSION OF AVAIL21 ABILITY OF UNUSED ALLOTMENTS FOR FISCAL YEAR

22 2004.—Notwithstanding subsection (f): 

23 ‘‘(1) COMPUTATION OF UNEXPENDED ALLOT24 MENTS FOR FISCAL YEAR 2004.— 
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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 determine with respect to each State that re3 ceives an allotment for fiscal year 2004 under 

4 subsection (b)— 

5 ‘‘(i) the amount of the State’s allot6 ment for such fiscal year that was not ex7 pended by the end of fiscal year 2005; and 

8 ‘‘(ii) the total of the unexpended allot9 ments determined under clause (i). 

10 ‘‘(B) REDUCTION OF UNEXPENDED AL11 LOTMENT BY NET FISCAL YEAR 2006 SHORT12 FALL.— 

13 ‘‘(i) IN GENERAL.—In the case of a 

14 State described in clause (ii), the Secretary 

15 shall reduce, but not below 0, the amount 

16 determined for the State under subpara17 graph (A)(i) (relating to the State’s unex18 pended allotment for fiscal year 2004) by 

19 the amount of the allotment of the State 

20 for which availability is extended under 

21 paragraph (4)(A). 

22 ‘‘(ii) STATE DESCRIBED.—A State de23 scribed in this clause is a State that meets 

24 the following requirements: 
211 

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1 ‘‘(I) FULLY SPENT FISCAL YEAR

2 2003 ALLOTMENT.—The State’s allot3 ment under this section for fiscal year 

4 2003 was fully expended by the end of 

5 fiscal year 2005. 

6 ‘‘(II) DID NOT FULLY EXPEND

7 FISCAL YEAR 2004 ALLOTMENT BY

8 END OF FISCAL YEAR 2005.—The 

9 State’s allotment under this section 

10 for fiscal year 2004 was not fully ex11 pended by the end of fiscal year 2005. 

12 ‘‘(III) PROJECTED FISCAL YEAR

13 2006 SHORTFALL.—The State has an 

14 excess determined under subsection 

15 (h)(2)(C) (relating to initial projected 

16 fiscal year 2006 shortfall). 

17 ‘‘(C) TOTALS AND RATIOS.—The Secretary 

18 shall determine the following: 

19 ‘‘(i) REDISTRIBUTION POOL.—A redis20 tribution pool equal to the total of the 

21 amounts determined under subparagraph 

22 (A)(i), as reduced (if applicable) under 

23 subparagraph (B)(i). 

24 ‘‘(ii) STATE PROPORTION TOWARD RE25 DISTRIBUTION POOL.—For each State in 
212 

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1 which the amount determined under sub2 paragraph (A)(i) (as reduced, if applicable, 

3 under subparagraph (B)(i)) exceeds 0, the 

4 ratio of— 

5 ‘‘(I) such amount (as so reduced) 

6 for the State; to 

7 ‘‘(II) the total determined under 

8 clause (i). 

9 ‘‘(D) AMOUNT OF UNEXPENDED FISCAL

10 YEAR 2004 ALLOTMENT APPLIED TO REDIS11 TRIBUTIONS.—For each State described in sub12 paragraph (C)(ii), the Secretary shall determine 

13 a redistribution/reduction amount equal to the 

14 product of the following: 

15 ‘‘(i) TOTAL AMOUNT REDISTRIB16 UTED.—The total amount redistributed 

17 under paragraph (3). 

18 ‘‘(ii) STATE’S PROPORTION OF UNEX19 PENDED ALLOTMENTS.—The ratio for the 

20 State determined under subparagraph 

21 (C)(ii). 

22 ‘‘(2) DETERMINATION OF NET PROJECTED

23 SHORTFALLS FOR FISCAL YEAR 2006.—For each 

24 State that has an excess determined under sub25 section (h)(2)(C) (relating to initial projected fiscal 
213 

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1 year 2006 shortfall), the Secretary shall determine 

2 an amount equal to the amount determined under 

3 such subsection, reduced by the sum of— 

4 ‘‘(A) the amount redistributed to the State 

5 under subsection (h)(3)(A), and 

6 ‘‘(B) the amount of funds of the State for 

7 which availability is extended under paragraph 

8 (4)(A). 

9 ‘‘(3) REDISTRIBUTION FROM REDISTRIBUTION

10 POOL.—From the redistribution pool determined 

11 under paragraph (1)(C)(i)— 

12 ‘‘(A) STATES OTHER THAN TERRI13 TORIES.—There shall be redistributed to each 

14 State which has a net projected shortfall under 

15 paragraph (2) an amount determined under 

16 such paragraph for the State. 

17 ‘‘(B) TERRITORIES.—There shall be redis18 tributed to each commonwealth or territory de19 scribed in subsection (c)(3) an amount equal to 

20 the product of the following: 

21 ‘‘(i) TERRITORIAL REDISTRIBUTION

22 POOL.—1.05 percent of the amount of 

23 such unexpended allotments determined 

24 under paragraph (1)(A)(ii). 
214 

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1 ‘‘(ii) TERRITORIAL PROPORTION.— 

2 The ratio of— 

3 ‘‘(I) the allotment under sub4 section (c) for such commonwealth or 

5 territory for fiscal year 2004, to 

6 ‘‘(II) the total of all such allot7 ments for such commonwealths and 

8 territories. 

9 ‘‘(4) EXTENDED AVAILABILITY OF REMAINING

10 UNEXPENDED ALLOTMENTS.— 

11 ‘‘(A) TO MEET NET SHORTFALL FOR FIS12 CAL YEAR 2006.—In the case of a State de13 scribed in paragraph (1)(B)(ii), the Secretary 

14 shall extend the availability of funds from the 

15 State’s allotment for fiscal year 2004 to the ex16 tent that— 

17 ‘‘(i) the amount determined under 

18 subsection (h)(2)(C) (relating to initial 

19 shortfall for fiscal year 2006), exceeds 

20 ‘‘(ii) the amount redistributed to the 

21 State under subsection (h)(3)(A). 

22 ‘‘(B) OTHER EXTENSIONS.—The Secretary 

23 shall extend the availability of funds from allot24 ments for fiscal year 2004 for each State which 

25 has an unexpended allotment for fiscal year 
215 

•S 1932 PCS 

1 2004 determined under paragraph (1)(A) (as 

2 reduced, if applicable, under paragraph (1)(B)) 

3 by an amount equal to the amount (if any) by 

4 which— 

5 ‘‘(i) the amount of such unexpended 

6 allotment (as so reduced) for the State, ex7 ceeds 

8 ‘‘(ii) the redistribution/reduction 

9 amount determined under paragraph 

10 (1)(D) for the State (relating to the por11 tion of the unexpended allotment applied 

12 to redistributions). 

13 ‘‘(5) DETERMINATION OF AMOUNTS.—For pur14 poses of calculating the amounts described in— 

15 ‘‘(A) paragraph (1)(A)(i), the Secretary 

16 shall use the amounts reported by the States 

17 not later than November 30, 2005, on Form 

18 CMS-64 or Form CMS-21, as the case may be, 

19 as approved by the Secretary; and 

20 ‘‘(B) paragraph (1)(B)(i), the Secretary 

21 shall use the amounts reported by the States 

22 not later than September 30, 2005, on Form 

23 CMS-37 or Form CMS-21B, as the case may 

24 be, as approved by the Secretary. 
216 

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1 ‘‘(j) REDISTRIBUTION AND EXTENSION OF AVAIL2 ABILITY OF UNUSED ALLOTMENTS FOR FISCAL YEAR

3 2005.—Notwithstanding subsection (f): 

4 ‘‘(1) COMPUTATION OF UNEXPENDED ALLOT5 MENTS FOR FISCAL YEAR 2005.— 

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

7 determine with respect to each State that re8 ceives an allotment for fiscal year 2005 under 

9 subsection (b)— 

10 ‘‘(i) the amount of the State’s allot11 ment for fiscal year 2005 that was not ex12 pended by the end of fiscal year 2006; and 

13 ‘‘(ii) the total of the unexpended allot14 ments determined under clause (i). 

15 ‘‘(B) REDUCTION OF UNEXPENDED AL16 LOTMENT BY NET FISCAL YEAR 2007 SHORT17 FALL.— 

18 ‘‘(i) IN GENERAL.—In the case of a 

19 State described in clause (ii), the Secretary 

20 shall reduce, but not below 0, the amount 

21 determined for the State under subpara22 graph (A)(i) (relating to the State’s unex23 pended allotment for fiscal year 2005) by 

24 the amount of the allotment of the State 
217 

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1 for which availability is extended under 

2 paragraph (4)(A). 

3 ‘‘(ii) STATE DESCRIBED.—A State de4 scribed in this clause is a State that meets 

5 the following requirements: 

6 ‘‘(I) DID NOT FULLY EXPEND

7 FISCAL YEAR 2005 ALLOTMENT BY

8 END OF FISCAL YEAR 2006.—The 

9 State’s allotment under this section 

10 for fiscal year 2005 was not fully ex11 pended by the end of fiscal year 2006. 

12 ‘‘(II) PROJECTED SHORTFALL

13 FOR FISCAL YEAR 2007.—The State 

14 has an excess determined under para15 graph (2)(C) for fiscal year 2007 (re16 lating to initial projected fiscal year 

17 2007 shortfall). 

18 ‘‘(C) TOTALS AND RATIOS.—The Secretary 

19 shall determine the following: 

20 ‘‘(i) REDISTRIBUTION POOL.—A redis21 tribution pool equal to the total of the 

22 amounts determined under subparagraph 

23 (A)(i), as reduced (if applicable) under 

24 subparagraph (B)(i). 
218 

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1 ‘‘(ii) STATE PROPORTION TOWARD RE2 DISTRIBUTION POOL.—For each State in 

3 which the amount determined under sub4 paragraph (A)(i) (as reduced, if applicable, 

5 under subparagraph (B)(i)) exceeds 0, the 

6 ratio of— 

7 ‘‘(I) such amount (as so reduced) 

8 for the State; to 

9 ‘‘(II) the total determined under 

10 clause (i). 

11 ‘‘(D) AMOUNT OF UNEXPENDED FISCAL

12 YEAR 2005 ALLOTMENT APPLIED TO REDIS13 TRIBUTIONS.—For each State described in sub14 paragraph (C)(ii), the Secretary shall determine 

15 a redistribution/reduction amount equal to the 

16 product of the following: 

17 ‘‘(i) TOTAL AMOUNT REDISTRIB18 UTED.—The total amount redistributed 

19 under paragraph (3). 

20 ‘‘(ii) STATE’S PROPORTION OF UNEX21 PENDED ALLOTMENTS.—The ratio for the 

22 State determined under subparagraph 

23 (C)(ii). 

24 ‘‘(2) DETERMINATION OF INITIAL PROJECTED

25 SHORTFALLS FOR FISCAL YEAR 2007.—For each 
219 

•S 1932 PCS 

1 State that receives an allotment for fiscal year 2007 

2 under subsection (b), the Secretary shall determine 

3 the following: 

4 ‘‘(A) FISCAL YEAR 2006 CARRYOVER.—The 

5 amount of the State’s allotment for fiscal year 

6 2006 that was not expended in fiscal year 2006. 

7 ‘‘(B) PROJECTED EXPENDITURES FOR FIS8 CAL YEAR 2007.—The estimated expenditures 

9 for the State as would be reported as quarterly 

10 expenditures under section 2105(a) for quarters 

11 in fiscal year 2007. 

12 ‘‘(C) INITIAL PROJECTED SHORTFALL FOR

13 FISCAL YEAR 2007.—The amount, if any, by 

14 which the projected expenditures determined 

15 under subparagraph (B) for the State for quar16 ters in fiscal year 2007 exceeds the sum of the 

17 following: 

18 ‘‘(i) FISCAL YEAR 2006 CARRYOVER.— 

19 The amount determined under subpara20 graph (A) for the State. 

21 ‘‘(ii) FISCAL YEAR 2007 ALLOT22 MENT.—The amount of the State’s allot23 ment for fiscal year 2007. 

24 ‘‘(D) DETERMINATION OF NET PROJECTED

25 SHORTFALLS FOR FISCAL YEAR 2007.—For each 
220 

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1 State that has an excess determined under sub2 paragraph (C), the Secretary shall determine an 

3 amount equal to the amount determined under 

4 such subparagraph, reduced by the amount of 

5 funds (if any) of the State for which availability 

6 is extended under paragraph (4)(A). 

7 ‘‘(E) STATE’S PROPORTION OF NET AG8 GREGATE SHORTFALL.—For each State for 

9 which there is a net excess determined under 

10 subparagraph (D), the ratio of— 

11 ‘‘(i) the amount of such net excess; to 

12 ‘‘(ii) the total of such net excesses. 

13 ‘‘(3) REDISTRIBUTION FROM REDISTRIBUTION

14 POOL.—From the redistribution pool determined 

15 under paragraph (1)(C)(i)— 

16 ‘‘(A) STATES OTHER THAN TERRI17 TORIES.—There shall be redistributed to each 

18 State for which there is a net projected short19 fall under paragraph (2)(D) an amount equal 

20 the lesser of the following: 

21 ‘‘(i) NET FISCAL YEAR 2007 SHORT22 FALL.—The amount of the net excess de23 scribed in paragraph (2)(D) for the State. 
221 

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1 ‘‘(ii) PORTION OF UNEXPENDED

2 FUNDS AVAILABLE.—The product of the 

3 following: 

4 ‘‘(I) STATE REDISTRIBUTION

5 POOL.—The amount determined 

6 under paragraph (1)(C)(i), reduced by 

7 the total amount redistributed under 

8 subparagraph (B). 

9 ‘‘(II) STATE’S SHORTFALL PRO10 PORTION.—The ratio described in 

11 paragraph (2)(E) for that State. 

12 ‘‘(B) TERRITORIES.—There shall be redis13 tributed to each commonwealth or territory de14 scribed in subsection (c)(3) an amount equal to 

15 the product of the following: 

16 ‘‘(i) TERRITORIAL REDISTRIBUTION

17 POOL.—1.05 percent of the total amount 

18 of unexpended allotments determined 

19 under paragraph (1)(A)(ii). 

20 ‘‘(ii) TERRITORIAL PROPORTION.— 

21 The ratio of— 

22 ‘‘(I) the allotment under sub23 section (c) for such commonwealth or 

24 territory for fiscal year 2005, to 
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1 ‘‘(II) the total of all such allot2 ments for such commonwealths and 

3 territories. 

4 ‘‘(4) EXTENDED AVAILABILITY OF REMAINING

5 UNEXPENDED ALLOTMENTS.— 

6 ‘‘(A) TO MEET INITIAL PROJECTED

7 SHORTFALL FOR FISCAL YEAR 2007.—In the 

8 case of a State that is described in paragraph 

9 (1)(B)(ii), the Secretary shall extend the avail10 ability of funds from the State’s allotment for 

11 fiscal year 2005 to the extent of the amount de12 scribed in paragraph (2)(C). 

13 ‘‘(B) OTHER EXTENSIONS.—If the redis14 tribution pool amount determined under para15 graph (1)(C)(i) exceeds the total amount redis16 tributed under paragraph (3), the Secretary 

17 shall extend the availability of funds from allot18 ments for fiscal year 2005 for each State which 

19 has an unexpended allotment for that fiscal 

20 year determined under paragraph (1)(A) (as re21 duced, if applicable, under paragraph (1)(B)) 

22 by an amount equal to the amount (if any) by 

23 which— 
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1 ‘‘(i) the amount of the unexpended al2 lotment (as so reduced) for the State, ex3 ceeds 

4 ‘‘(ii) the redistribution/reduction 

5 amount determined under paragraph 

6 (1)(D) for the State (relating to the por7 tion of the unexpended allotment applied 

8 to redistributions). 

9 ‘‘(5) DETERMINATION OF AMOUNTS.—For pur10 poses of calculating the amounts described in— 

11 ‘‘(A) paragraph (1)(A), the Secretary shall 

12 use the amounts reported by the States not 

13 later than November 30, 2006, on Form CMS14 64 or Form CMS-21, as the case may be, as 

15 approved by the Secretary; or 

16 ‘‘(B) paragraph (2), the Secretary shall 

17 use the amounts reported by the States not 

18 later than September 30, 2006, on Form CMS19 37 or Form CMS-21B, as the case may be, as 

20 approved by the Secretary.’’. 

21 (b) USE OF REDISTRIBUTED FUNDS FOR CHILD

22 HEALTH ASSISTANCE FOR TARGETED LOW-INCOME

23 CHILDREN.—Section 2105(a) (42 U.S.C. 1397ee(a)) is 

24 amended— 
224 

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1 (1) in paragraph (1), in the matter preceding 

2 subparagraph (A), by inserting ‘‘or paragraph (3)’’ 

3 after ‘‘subparagraph (B)’’; and 

4 (2) by adding at the end the following: 

5 ‘‘(3) USE OF REDISTRIBUTED FUNDS FOR

6 CHILD HEALTH ASSISTANCE FOR TARGETED LOW-IN7 COME CHILDREN.—For purposes of paragraph (1), 

8 the expenditures described in this paragraph are ex9 penditures that are not expenditures for child health 

10 assistance for targeted low-income children, but only 

11 if such expenditures are from any amounts redistrib12 uted under subparagraphs (A) or (B) of subsection 

13 (h)(3), (i)(3), or (j)(3) of section 2104.’’. 

14 SEC. 6052. AUTHORITY TO USE UP TO 10 PERCENT OF FIS15 CAL YEAR 2006 AND 2007 ALLOTMENTS FOR 

16 OUTREACH. 

17 Section 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is 

18 amended by adding at the end the following: 

19 ‘‘(C) USE OF UP TO 10 PERCENT OF 2006

20 AND 2007 ALLOTMENTS FOR OUTREACH ACTIVI21 TIES.—Notwithstanding subparagraph (A), a 

22 State may use up to 10 percent of the allotment 

23 for the State for fiscal year 2006 and for fiscal 

24 year 2007 for expenditures incurred during the 
225 

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1 respective fiscal year for outreach activities as 

2 provided in section 2102(c)(1) under the plan.’’. 

3 SEC. 6053. PROHIBITION AGAINST COVERING NONPREG4 NANT CHILDLESS ADULTS WITH SCHIP 

5 FUNDS. 

6 (a) PROHIBITION ON USE OF SCHIP FUNDS.—Sec7 tion 2107 (42 U.S.C. 1397gg) is amended by adding at 

8 the end the following: 

9 ‘‘(f) LIMITATION OF WAIVER AUTHORITY.—Notwith10 standing subsection (e)(2)(A) and section 1115(a), on and 

11 after the date of enactment of this subsection, the Sec12 retary may not approve a waiver, experimental, pilot, or 

13 demonstration project that would allow funds made avail14 able under this title to be used to provide child health as15 sistance or other health benefits coverage to a nonpreg16 nant childless adult. For purposes of the preceding sen17 tence, a caretaker relative (as such term is defined for pur18 poses of carrying out section 1931) shall not be considered 

19 a childless adult.’’. 

20 (b) CONFORMING AMENDMENTS.—Section 

21 2105(c)(1) (42 U.S.C. 1397ee(c)(1)) is amended— 

22 (1) by inserting ‘‘and may not include coverage 

23 of a nonpregnant childless adult’’ after ‘‘section 

24 2101)’’; and 
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•S 1932 PCS 

1 (2) by adding at the end the following: ‘‘For 

2 purposes of the preceding sentence, a caretaker rel3 ative (as such term is defined for purposes of car4 rying out section 1931) shall not be considered a 

5 childless adult.’’. 

6 (c) RULE OF CONSTRUCTION.—Nothing in this sec7 tion or the amendments made by this section shall be con8 strued to— 

9 (1) authorize the waiver of any provision of title 

10 XIX or XXI of the Social Security Act (42 U.S.C. 

11 1396 et seq., 1397aa et seq.) that is not otherwise 

12 authorized to be waived under such titles or under 

13 title XI of such Act (42 U.S.C. 1301 et seq.) as of 

14 the date of enactment of this Act; 

15 (2) imply congressional approval of any waiver, 

16 experimental, pilot, or demonstration project affect17 ing funds made available under the State children’s 

18 health insurance program under title XXI of the So19 cial Security Act (42 U.S.C. 1397aa et. seq.) or any 

20 amendment to such a waiver or project that has 

21 been approved as of such date of enactment; or 

22 (3) apply to any waiver, experimental, pilot, or 

23 demonstration project that would allow funds made 

24 available under title XXI of the Social Security Act 

25 (42 U.S.C. 1397aa et seq.) to be used to provide 
227 

•S 1932 PCS 

1 child health assistance or other health benefits cov2 erage to a nonpregnant childless adult that is ap3 proved before the date of enactment of this Act or 

4 to any extension, renewal, or amendment of such a 

5 waiver or project that is approved on or after such 

6 date of enactment. 

7 SEC. 6054. CONTINUED AUTHORITY FOR QUALIFYING 

8 STATES TO USE CERTAIN FUNDS FOR MED9 ICAID EXPENDITURES. 

10 (a) IN GENERAL.—Section 2105(g)(1)(A) (42 U.S.C. 

11 1397ee(g)(1)(A)) is amended by striking ‘‘or 2001’’ and 

12 inserting ‘‘2001, 2004, or 2005’’. 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 subsection (a) shall apply to expenditures made under title 

15 XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 

16 on or after October 1, 2005. 

17 SEC. 6055. GRANTS TO PROMOTE INNOVATIVE OUTREACH 

18 AND ENROLLMENT UNDER MEDICAID AND 

19 SCHIP. 

20 Title XXI (42 U.S.C. 1397aa et seq.) is amended by 

21 adding at the end the following: 

22 ‘‘SEC. 2111. EXPANDED OUTREACH ACTIVITIES. 

23 ‘‘(a) GRANTS TO CONDUCT INNOVATIVE OUTREACH

24 AND ENROLLMENT EFFORTS.— 
228 

•S 1932 PCS 

1 ‘‘(1) IN GENERAL.—The Secretary shall award 

2 grants to eligible entities to— 

3 ‘‘(A) conduct innovative outreach and en4 rollment efforts that are designed to increase 

5 the enrollment and participation of eligible chil6 dren under this title and title XIX; and 

7 ‘‘(B) promote understanding of the impor8 tance of health insurance coverage for prenatal 

9 care and children. 

10 ‘‘(2) PERFORMANCE BONUSES.—The Secretary 

11 may reserve a portion of the funds appropriated 

12 under subsection (g) for a fiscal year for the purpose 

13 of awarding performance bonuses during the suc14 ceeding fiscal year to eligible entities that meet en15 rollment goals or other criteria established by the 

16 Secretary. 

17 ‘‘(b) PRIORITY FOR AWARD OF GRANTS.— 

18 ‘‘(1) IN GENERAL.—In making grants under 

19 subsection (a)(1), the Secretary shall give priority 

20 to— 

21 ‘‘(A) eligible entities that propose to target 

22 geographic areas with high rates of— 

23 ‘‘(i) eligible but unenrolled children, 

24 including such children who reside in rural 

25 areas; or 
229 

•S 1932 PCS 

1 ‘‘(ii) racial and ethnic minorities and 

2 health disparity populations, including 

3 those proposals that address cultural and 

4 linguistic barriers to enrollment; and 

5 ‘‘(B) eligible entities that plan to engage in 

6 outreach efforts with respect to individuals de7 scribed in subparagraph (A) and that are— 

8 ‘‘(i) Federal health safety net organi9 zations; or 

10 ‘‘(ii) faith-based organizations or con11 sortia. 

12 ‘‘(2) 10 PERCENT SET ASIDE FOR OUTREACH

13 TO INDIAN CHILDREN.—An amount equal to 10 per14 cent of the funds appropriated under subsection (g) 

15 for a fiscal year shall be used by the Secretary to 

16 award grants to Indian Health Service providers and 

17 urban Indian organizations receiving funds under 

18 title V of the Indian Health Care Improvement Act 

19 (25 U.S.C. 1651 et seq.) for outreach to, and enroll20 ment of, children who are Indians. 

21 ‘‘(c) APPLICATION.—An eligible entity that desires to 

22 receive a grant under subsection (a)(1) shall submit an 

23 application to the Secretary in such form and manner, and 

24 containing such information, as the Secretary may decide. 

25 Such application shall include— 
230 

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1 ‘‘(1) quality and outcomes performance meas2 ures to evaluate the effectiveness of activities funded 

3 by a grant awarded under this section to ensure that 

4 the activities are meeting their goals; and 

5 ‘‘(2) an assurance that the entity shall— 

6 ‘‘(A) conduct an assessment of the effec7 tiveness of such activities against such perform8 ance measures; and 

9 ‘‘(B) cooperate with the collection and re10 porting of enrollment data and other informa11 tion determined as a result of conducting such 

12 assessments to the Secretary, in such form and 

13 manner as the Secretary shall require. 

14 ‘‘(d) DISSEMINATION OF ENROLLMENT DATA AND

15 INFORMATION DETERMINED FROM EFFECTIVENESS AS16 SESSMENTS; ANNUAL REPORT.—The Secretary shall— 

17 ‘‘(1) disseminate to eligible entities and make 

18 publicly available the enrollment data and informa19 tion collected and reported in accordance with sub20 section (c)(2)(B); and 

21 ‘‘(2) submit an annual report to Congress on 

22 the outreach activities funded by grants awarded 

23 under this section. 

24 ‘‘(e) SUPPLEMENT, NOT SUPPLANT.—Federal funds 

25 awarded under this section shall be used to supplement, 
231 

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1 not supplant, non-Federal funds that are otherwise avail2 able for activities funded under this section. 

3 ‘‘(f) DEFINITIONS.—In this section: 

4 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en5 tity’ means any of the following: 

6 ‘‘(A) A State or local government. 

7 ‘‘(B) A Federal health safety net organiza8 tion. 

9 ‘‘(C) A national, local, or community-based 

10 public or nonprofit private organization. 

11 ‘‘(D) A faith-based organization or con12 sortia, to the extent that a grant awarded to 

13 such an entity is consistent with the require14 ments of section 1955 of the Public Health 

15 Service Act (42 U.S.C. 300x–65) relating to a 

16 grant award to non-governmental entities. 

17 ‘‘(E) An elementary or secondary school. 

18 ‘‘(2) FEDERAL HEALTH SAFETY NET ORGANI19 ZATION.—The term ‘Federal health safety net orga20 nization’ means— 

21 ‘‘(A) an Indian tribe, tribal organization, 

22 or an urban Indian organization receiving funds 

23 under title V of the Indian Health Care Im24 provement Act (25 U.S.C. 1651 et seq.), or an 

25 Indian Health Service provider; 
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1 ‘‘(B) a Federally-qualified health center 

2 (as defined in section 1905(l)(2)(B)); 

3 ‘‘(C) a hospital defined as a dispropor4 tionate share hospital for purposes of section 

5 1923; 

6 ‘‘(D) a covered entity described in section 

7 340B(a)(4) of the Public Health Service Act 

8 (42 U.S.C. 256b(a)(4)); and 

9 ‘‘(E) any other entity or a consortium that 

10 serves children under a federally-funded pro11 gram, including the special supplemental nutri12 tion program for women, infants, and children 

13 (WIC) established under section 17 of the Child 

14 Nutrition Act of 1966 (42 U.S.C. 1786), the 

15 head start and early head start programs under 

16 the Head Start Act (42 U.S.C. 9801 et seq.), 

17 the school lunch program established under the 

18 Richard B. Russell National School Lunch Act, 

19 and an elementary or secondary school. 

20 ‘‘(3) INDIANS; INDIAN TRIBE; TRIBAL ORGANI21 ZATION; URBAN INDIAN ORGANIZATION.—The terms 

22 ‘Indian’, ‘Indian tribe’, ‘tribal organization’, and 

23 ‘urban Indian organization’ have the meanings given 

24 such terms in section 4 of the Indian Health Care 

25 Improvement Act (25 U.S.C. 1603). 
233 

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1 ‘‘(g) APPROPRIATION.—There is appropriated, out of 

2 any money in the Treasury not otherwise appropriated, 

3 $25,000,000 for fiscal year 2007 for the purpose of 

4 awarding grants under this section. Amounts appropriated 

5 and paid under the authority of this section shall— 

6 ‘‘(1) be in addition to amounts appropriated 

7 under section 2104 and paid to States in accordance 

8 with section 2105; and 

9 ‘‘(2) not be subject to the limitation on expendi10 tures described in section 2105(c)(2)(A).’’. 

11 Subchapter C—Money Follows the Person 

12 Rebalancing Demonstration 

13 SEC. 6061. MONEY FOLLOWS THE PERSON REBALANCING 

14 DEMONSTRATION. 

15 (a) PROGRAM PURPOSE AND AUTHORITY.—The Sec16 retary is authorized to award, on a competitive basis, 

17 grants to States in accordance with this section for dem18 onstration projects (each in this section referred to as an 

19 ‘‘MFP demonstration project’’) designed to achieve the 

20 following objectives with respect to institutional and home 

21 and community-based long-term care services under State 

22 Medicaid programs: 

23 (1) REBALANCING.—Increase the use of home 

24 and community-based, rather than institutional, 

25 long-term care services. 
234 

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1 (2) MONEY FOLLOWS THE PERSON.—Eliminate 

2 barriers or mechanisms, whether in the State law, 

3 the State Medicaid plan, the State budget, or other4 wise, that prevent or restrict the flexible use of Med5 icaid funds to enable Medicaid-eligible individuals to 

6 receive support for appropriate and necessary long7 term services in the settings of their choice. 

8 (3) CONTINUITY OF SERVICE.—Increase the 

9 ability of the State Medicaid program to assure con10 tinued provision of home and community-based long11 term care services to eligible individuals who choose 

12 to transition from an institutional to a community 

13 setting. 

14 (4) QUALITY ASSURANCE AND QUALITY IM15 PROVEMENT.—Ensure that procedures are in place 

16 (at least comparable to those required under the 

17 qualified HCB program) to provide quality assur18 ance for eligible individuals receiving Medicaid home 

19 and community-based long-term care services and to 

20 provide for continuous quality improvement in such 

21 services. 

22 (b) DEFINITIONS.—For purposes of this section: 

23 (1) HOME AND COMMUNITY-BASED LONG-TERM

24 CARE SERVICES.—The term ‘‘home and community25 based long-term care services’’ means, with respect 
235 

•S 1932 PCS 

1 to a State Medicaid program, home and community2 based services (including home health and personal 

3 care services) that are provided under the State’s 

4 qualified HCB program or that could be provided 

5 under such a program but are otherwise provided 

6 under the Medicaid program. 

7 (2) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible 

8 individual’’ means, with respect to an MFP dem9 onstration project of a State, an individual in the 

10 State— 

11 (A) who, immediately before beginning 

12 participation in the MFP demonstration 

13 project— 

14 (i) resides (and has resided, for a pe15 riod of not less than 6 months or for such 

16 longer minimum period, not to exceed 2 

17 years, as may be specified by the State) in 

18 an inpatient facility; 

19 (ii) is receiving Medicaid benefits for 

20 inpatient services furnished by such inpa21 tient facility; and 

22 (iii) with respect to whom a deter23 mination has been made that, but for the 

24 provision of home and community-based 

25 long-term care services, the individual 
236 

•S 1932 PCS 

1 would continue to require the level of care 

2 provided in an inpatient facility; and 

3 (B) who resides in a qualified residence be4 ginning on the initial date of participation in 

5 the demonstration project. 

6 (3) INPATIENT FACILITY.—The term ‘‘inpatient 

7 facility’’ means a hospital, nursing facility, or inter8 mediate care facility for the mentally retarded. Such 

9 term includes an institution for mental diseases, but 

10 only, with respect to a State, to the extent medical 

11 assistance is available under the State Medicaid plan 

12 for services provided by such institution. 

13 (4) MEDICAID.—The term ‘‘Medicaid’’ means, 

14 with respect to a State, the State program under 

15 title XIX of the Social Security Act (including any 

16 waiver or demonstration under such title or under 

17 section 1115 of such Act relating to such title). 

18 (5) QUALIFIED HCB PROGRAM.—The term 

19 ‘‘qualified HCB program’’ means a program pro20 viding home and community-based long-term care 

21 services operating under Medicaid, whether or not 

22 operating under waiver authority. 

23 (6) QUALIFIED RESIDENCE.—The term ‘‘quali24 fied residence’’ means, with respect to an eligible in25 dividual— 
237 

•S 1932 PCS 

1 (A) a home owned or leased by the indi2 vidual or the individual’s family member; 

3 (B) an apartment with an individual lease, 

4 with lockable access and egress, and which in5 cludes living, sleeping, bathing, and cooking 

6 areas over which the individual or the individ7 ual’s family has domain and control; and 

8 (C) a residence, in a community-based res9 idential setting, in which no more than 4 unre10 lated individuals reside. 

11 (7) QUALIFIED EXPENDITURES.—The term 

12 ‘‘qualified expenditures’’ means expenditures by the 

13 State under its MFP demonstration project for 

14 home and community-based long-term care services 

15 for an eligible individual participating in the MFP 

16 demonstration project, but only with respect to serv17 ices furnished during the 12-month period beginning 

18 on the date the individual is discharged from an in19 patient facility referred to in paragraph (2)(A)(i). 

20 (8) SELF-DIRECTED SERVICES.—The term 

21 ‘‘self-directed’’ means, with respect to home and 

22 community-based long-term care services for an eli23 gible individual, such services for the individual 

24 which are planned and purchased under the direc25 tion and control of such individual or the individ-
238 

•S 1932 PCS 

1 ual’s authorized representative (as defined by the 

2 Secretary), including the amount, duration, scope, 

3 provider, and location of such services, under the 

4 State Medicaid program consistent with the fol5 lowing requirements: 

6 (A) ASSESSMENT.—There is an assess7 ment of the needs, capabilities, and preferences 

8 of the individual with respect to such services. 

9 (B) SERVICE PLAN.—Based on such as10 sessment, there is developed jointly with such 

11 individual or the individual’s authorized rep12 resentative a plan for such services for such in13 dividual that is approved by the State and 

14 that— 

15 (i) specifies those services, if any, 

16 which the individual or the individual’s au17 thorized representative would be respon18 sible for directing; 

19 (ii) identifies the methods by which 

20 the individual or the individual’s author21 ized representative or an agency designated 

22 by an individual or representative will se23 lect, manage, and dismiss providers of such 

24 services; 
239 

•S 1932 PCS 

1 (iii) specifies the role of family mem2 bers and others whose participation is 

3 sought by the individual or the individual’s 

4 authorized representative with respect to 

5 such services; 

6 (iv) is developed through a person7 centered process that— 

8 (I) is directed by the individual 

9 or the individual’s authorized rep10 resentative; 

11 (II) builds upon the individual’s 

12 capacity to engage in activities that 

13 promote community life and that re14 spects the individual’s preferences, 

15 choices, and abilities; and 

16 (III) involves families, friends, 

17 and professionals as desired or re18 quired by the individual or the indi19 vidual’s authorized representative; 

20 (v) includes appropriate risk manage21 ment techniques that recognize the roles 

22 and sharing of responsibilities in obtaining 

23 services in a self-directed manner and as24 sure the appropriateness of such plan 

25 based upon the resources and capabilities 
240 

•S 1932 PCS 

1 of the individual or the individual’s author2 ized representative; and 

3 (vi) may include an individualized 

4 budget which identifies the dollar value of 

5 the services and supports under the control 

6 and direction of the individual or the indi7 vidual’s authorized representative. 

8 (C) BUDGET PROCESS.—With respect to 

9 individualized budgets described in subpara10 graph (B)(vi), the State application under sub11 section (c)— 

12 (i) describes the method for calcu13 lating the dollar values in such budgets 

14 based on reliable costs and service utiliza15 tion; 

16 (ii) defines a process for making ad17 justments in such dollar values to reflect 

18 changes in individual assessments and 

19 service plans; and 

20 (iii) provides a procedure to evaluate 

21 expenditures under such budgets. 

22 (9) STATE.—The term ‘‘State’’ has the mean23 ing given such term for purposes of title XIX of the 

24 Social Security Act. 
241 

•S 1932 PCS 

1 (c) STATE APPLICATION.—A State seeking approval 

2 of an MFP demonstration project shall submit to the Sec3 retary, at such time and in such format as the Secretary 

4 requires, an application meeting the following require5 ments and containing such additional information, provi6 sions, and assurances, as the Secretary may require: 

7 (1) ASSURANCE OF A PUBLIC DEVELOPMENT

8 PROCESS.—The application contains an assurance 

9 that the State has engaged, and will continue to en10 gage, in a public process for the design, develop11 ment, and evaluation of the MFP demonstration 

12 project that allows for input from eligible individ13 uals, the families of such individuals, authorized rep14 resentatives of such individuals, providers, and other 

15 interested parties. 

16 (2) OPERATION IN CONNECTION WITH QUALI17 FIED HCB PROGRAM TO ASSURE CONTINUITY OF

18 SERVICES.—The State will conduct the MFP dem19 onstration project for eligible individuals in conjunc20 tion with the operation of a qualified HCB program 

21 that is in operation (or approved) in the State for 

22 such individuals in a manner that assures continuity 

23 of Medicaid coverage for such individuals so long as 

24 such individuals continue to be eligible for medical 

25 assistance. 
242 

•S 1932 PCS 

1 (3) DEMONSTRATION PROJECT PERIOD.—The 

2 application shall specify the period of the MFP dem3 onstration project, which shall include at least 2 con4 secutive fiscal years in the 5-fiscal-year period begin5 ning with fiscal year 2009. 

6 (4) SERVICE AREA.—The application shall 

7 specify the service area or areas of the MFP dem8 onstration project, which may be a statewide area or 

9 one or more geographic areas of the State. 

10 (5) TARGETED GROUPS AND NUMBERS OF INDI11 VIDUALS SERVED.—The application shall specify— 

12 (A) the target groups of eligible individuals 

13 to be assisted to transition from an inpatient 

14 facility to a qualified residence during each fis15 cal year of the MFP demonstration project; 

16 (B) the projected numbers of eligible indi17 viduals in each targeted group of eligible indi18 viduals to be so assisted during each such year; 

19 and 

20 (C) the estimated total annual qualified ex21 penditures for each fiscal year of the MFP 

22 demonstration project. 

23 (6) INDIVIDUAL CHOICE, CONTINUITY OF

24 CARE.—The application shall contain assurances 

25 that— 
243 

•S 1932 PCS 

1 (A) each eligible individual or the individ2 ual’s authorized representative will be provided 

3 the opportunity to make an informed choice re4 garding whether to participate in the MFP 

5 demonstration project; 

6 (B) each eligible individual or the individ7 ual’s authorized representative will choose the 

8 qualified residence in which the individual will 

9 reside and the setting in which the individual 

10 will receive home and community-based long11 term care services; 

12 (C) the State will continue to make avail13 able, so long as the State operates its qualified 

14 HCB program consistent with applicable re15 quirements, home and community-based long16 term care services to each individual who com17 pletes participation in the MFP demonstration 

18 project for as long as the individual remains eli19 gible for medical assistance for such services 

20 under such qualified HCB program (including 

21 meeting a requirement relating to requiring a 

22 level of care provided in an inpatient facility 

23 and continuing to require such services). 

24 (7) REBALANCING.—The application shall— 
244 

•S 1932 PCS 

1 (A) provide such information as the Sec2 retary may require concerning the dollar 

3 amounts of State Medicaid expenditures for the 

4 fiscal year, immediately preceding the first fis5 cal year of the State’s MFP demonstration 

6 project, for long-term care services and the per7 centage of such expenditures that were for in8 stitutional long-term care services or were for 

9 home and community-based long-term care 

10 services; 

11 (B)(i) specify the methods to be used by 

12 the State to increase, for each fiscal year dur13 ing the MFP demonstration project, the dollar 

14 amount of such total expenditures for home and 

15 community-based long-term care services and 

16 the percentage of such total expenditures for 

17 long-term care services that are for home and 

18 community-based long-term care services; and 

19 (ii) describe the extent to which the MFP 

20 demonstration project will contribute to accom21 plishment of objectives described in subsection 

22 (a). 

23 (8) MONEY FOLLOWS THE PERSON.—The appli24 cation shall describe the methods to be used by the 

25 State to eliminate any legal, budgetary, or other bar-
245 

•S 1932 PCS 

1 riers to flexibility in the availability of Medicaid 

2 funds to pay for long-term care services for eligible 

3 individuals participating in the project in the appro4 priate settings of their choice, including costs to 

5 transition from an institutional setting to a qualified 

6 residence. 

7 (9) MAINTENANCE OF EFFORT AND COST-EF8 FECTIVENESS.—The application shall contain or be 

9 accompanied by such information and assurances as 

10 may be required to satisfy the Secretary that— 

11 (A) total expenditures under the State 

12 Medicaid program for home and community13 based long-term care services will not be less 

14 for any fiscal year during the MFP demonstra15 tion project than for the greater of such ex16 penditures for— 

17 (i) fiscal year 2005; or 

18 (ii) any succeeding fiscal year before 

19 the first year of the MFP demonstration 

20 project; and 

21 (B) in the case of a qualified HCB pro22 gram operating under a waiver under sub23 section (c) or (d) of section 1915 of the Social 

24 Security Act (42 U.S.C. 1396n), but for the 

25 amount awarded under a grant under this sec-
246 

•S 1932 PCS 

1 tion, the State program would continue to meet 

2 the cost-effectiveness requirements of subsection 

3 (c)(2)(D) of such section or comparable require4 ments under subsection (d)(5) of such section, 

5 respectively. 

6 (10) WAIVER REQUESTS.—The application shall 

7 contain or be accompanied by requests for any modi8 fication or adjustment of waivers of Medicaid re9 quirements described in subsection (d)(3), including 

10 adjustments to the maximum numbers of individuals 

11 included and package of benefits, including one-time 

12 transitional services, provided. 

13 (11) QUALITY ASSURANCE AND QUALITY IM14 PROVEMENT.—The application shall include— 

15 (A) a plan satisfactory to the Secretary for 

16 quality assurance and quality improvement for 

17 home and community-based long-term care 

18 services under the State Medicaid program, in19 cluding a plan to assure the health and welfare 

20 of individuals participating in the MFP dem21 onstration project; and 

22 (B) an assurance that the State will co23 operate in carrying out activities under sub24 section (f) to develop and implement continuous 

25 quality assurance and quality improvement sys-
247 

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1 tems for home and community-based long-term 

2 care services. 

3 (12) OPTIONAL PROGRAM FOR SELF-DIRECTED

4 SERVICES.—If the State elects to provide for any 

5 home and community-based long-term care services 

6 as self-directed services (as defined in subsection 

7 (b)(8)) under the MFP demonstration project, the 

8 application shall provide the following: 

9 (A) MEETING REQUIREMENTS.—A descrip10 tion of how the project will meet the applicable 

11 requirements of such subsection for the provi12 sion of self-directed services. 

13 (B) VOLUNTARY ELECTION.—A description 

14 of how eligible individuals will be provided with 

15 the opportunity to make an informed election to 

16 receive self-directed services under the project 

17 and after the end of the project. 

18 (C) STATE SUPPORT IN SERVICE PLAN DE19 VELOPMENT.—Satisfactory assurances that the 

20 State will provide support to eligible individuals 

21 who self-direct in developing and implementing 

22 their service plans. 

23 (D) OVERSIGHT OF RECEIPT OF SERV24 ICES.—Satisfactory assurances that the State 

25 will provide oversight of eligible individual’s re-
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1 ceipt of such self-directed services, including 

2 steps to assure the quality of services provided 

3 and that the provision of such services are con4 sistent with the service plan under such sub5 section. 

6 Nothing in this section shall be construed as requir7 ing a State to make an election under the project to 

8 provide for home and community-based long-term 

9 care services as self-directed services, or as requiring 

10 an individual to elect to receive self-directed services 

11 under the project. 

12 (13) REPORTS AND EVALUATION.—The applica13 tion shall provide that— 

14 (A) the State will furnish to the Secretary 

15 such reports concerning the MFP demonstra16 tion project, on such timetable, in such uniform 

17 format, and containing such information as the 

18 Secretary may require, as will allow for reliable 

19 comparisons of MFP demonstration projects 

20 across States; and 

21 (B) the State will participate in and co22 operate with the evaluation of the MFP dem23 onstration project. 

24 (d) SECRETARY’S AWARD OF COMPETITIVE

25 GRANTS.— 
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1 (1) IN GENERAL.—The Secretary shall award 

2 grants under this section on a competitive basis to 

3 States selected from among those with applications 

4 meeting the requirements of subsection (c), in ac5 cordance with the provisions of this subsection. 

6 (2) SELECTION AND MODIFICATION OF STATE

7 APPLICATIONS.—In selecting State applications for 

8 the awarding of such a grant, the Secretary— 

9 (A) shall take into consideration the man10 ner in which, and extent to which, the State 

11 proposes to achieve the objectives specified in 

12 subsection (a); 

13 (B) shall seek to achieve an appropriate 

14 national balance in the numbers of eligible indi15 viduals, within different target groups of eligi16 ble individuals, who are assisted to transition to 

17 qualified residences under MFP demonstration 

18 projects, and in the geographic distribution of 

19 States operating MFP demonstration projects; 

20 (C) shall give preference to State applica21 tions proposing— 

22 (i) to provide transition assistance to 

23 eligible individuals within multiple target 

24 groups; and 
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1 (ii) to provide eligible individuals with 

2 the opportunity to receive home and com3 munity-based long-term care services as 

4 self-directed services, as defined in sub5 section (b)(8); and 

6 (D) shall take such objectives into consid7 eration in setting the annual amounts of State 

8 grant awards under this section. 

9 (3) WAIVER AUTHORITY.—The Secretary is au10 thorized to waive the following provisions of title 

11 XIX of the Social Security Act, to the extent nec12 essary to enable a State initiative to meet the re13 quirements and accomplish the purposes of this sec14 tion: 

15 (A) STATEWIDENESS.—Section 

16 1902(a)(1), in order to permit implementation 

17 of a State initiative in a selected area or areas 

18 of the State. 

19 (B) COMPARABILITY.—Section 

20 1902(a)(10)(B), in order to permit a State ini21 tiative to assist a selected category or categories 

22 of individuals described in subsection (b)(2)(A). 

23 (C) INCOME AND RESOURCES ELIGI24 BILITY.—Section 1902(a)(10)(C)(i)(III), in 

25 order to permit a State to apply institutional 
251 

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1 eligibility rules to individuals transitioning to 

2 community-based care. 

3 (D) PROVIDER AGREEMENTS.—Section 

4 1902(a)(27), in order to permit a State to im5 plement self-directed services in a cost-effective 

6 manner. 

7 (4) CONDITIONAL APPROVAL OF OUTYEAR

8 GRANT.—In awarding grants under this section, the 

9 Secretary shall condition the grant for the second 

10 and any subsequent fiscal years of the grant period 

11 on the following: 

12 (A) NUMERICAL BENCHMARKS.—The 

13 State must demonstrate to the satisfaction of 

14 the Secretary that it is meeting numerical 

15 benchmarks specified in the grant agreement 

16 for— 

17 (i) increasing State Medicaid support 

18 for home and community-based long-term 

19 care services under subsection (c)(5); and 

20 (ii) numbers of eligible individuals as21 sisted to transition to qualified residences. 

22 (B) QUALITY OF CARE.—The State must 

23 demonstrate to the satisfaction of the Secretary 

24 that it is meeting the requirements under sub-
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•S 1932 PCS 

1 section (c)(11) to assure the health and welfare 

2 of MFP demonstration project participants. 

3 (e) PAYMENTS TO STATES; CARRYOVER OF UNUSED

4 GRANT AMOUNTS.— 

5 (1) PAYMENTS.—For each calendar quarter in 

6 a fiscal year during the period a State is awarded 

7 a grant under subsection (d), the Secretary shall pay 

8 to the State from its grant award for such fiscal 

9 year an amount equal to the lesser of— 

10 (A) 90 percent of the amount of qualified 

11 expenditures made during such quarter; or 

12 (B) the total amount remaining in such 

13 grant award for such fiscal year (taking into 

14 account the application of paragraph (2)). 

15 (2) CARRYOVER OF UNUSED AMOUNTS.—Any 

16 portion of a State grant award for a fiscal year 

17 under this section remaining at the end of such fis18 cal year shall remain available to the State for the 

19 next 4 fiscal years, subject to paragraph (3). 

20 (3) REAWARDING OF CERTAIN UNUSED

21 AMOUNTS.—In the case of a State that the Sec22 retary determines pursuant to subsection (d)(4) has 

23 failed to meet the conditions for continuation of a 

24 MFP demonstration project under this section in a 

25 succeeding year or years, the Secretary shall rescind 
253 

•S 1932 PCS 

1 the grant awards for such succeeding year or years, 

2 together with any unspent portion of an award for 

3 prior years, and shall add such amounts to the ap4 propriation for the immediately succeeding fiscal 

5 year for grants under this section. 

6 (4) PREVENTING DUPLICATION OF PAYMENT.— 

7 The payment under a MFP demonstration project 

8 with respect to qualified expenditures shall be in lieu 

9 of any payment with respect to such expenditures 

10 that could otherwise be paid under Medicaid, includ11 ing under section 1903(a) of the Social Security Act. 

12 Nothing in the previous sentence shall be construed 

13 as preventing the payment under Medicaid for such 

14 expenditures in a grant year after amounts available 

15 to pay for such expenditures under the MFP dem16 onstration project have been exhausted. 

17 (f) QUALITY ASSURANCE AND IMPROVEMENT; TECH18 NICAL ASSISTANCE; OVERSIGHT.— 

19 (1) IN GENERAL.—The Secretary, either di20 rectly or by grant or contract, shall provide for tech21 nical assistance to, and oversight of, States for pur22 poses of upgrading quality assurance and quality im23 provement systems under Medicaid home and com24 munity-based waivers, including— 
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•S 1932 PCS 

1 (A) dissemination of information on prom2 ising practices; 

3 (B) guidance on system design elements 

4 addressing the unique needs of participating 

5 beneficiaries; 

6 (C) ongoing consultation on quality, in7 cluding assistance in developing necessary tools, 

8 resources, and monitoring systems; and 

9 (D) guidance on remedying programmatic 

10 and systemic problems. 

11 (2) FUNDING.—From the amounts appro12 priated under subsection (h)(1) for the portion of 

13 fiscal year 2009 that begins on January 1, 2009, 

14 and ends on September 30, 2009, and for fiscal year 

15 2010, not more than $2,400,000 shall be available 

16 to the Secretary to carry out this subsection during 

17 the period that begins on January 1, 2009, and ends 

18 on September 30, 2013. 

19 (g) RESEARCH AND EVALUATION.— 

20 (1) IN GENERAL.—The Secretary, directly or 

21 through grant or contract, shall provide for research 

22 on, and a national evaluation of, the program under 

23 this section, including assistance to the Secretary in 

24 preparing the final report required under paragraph 

25 (2). The evaluation shall include an analysis of pro-
255 

•S 1932 PCS 

1 jected and actual savings related to the transition of 

2 individuals to qualified residences in each State con3 ducting an MFP demonstration project. 

4 (2) FINAL REPORT.—The Secretary shall make 

5 a final report to the President and Congress, not 

6 later than September 30, 2013, reflecting the eval7 uation described in paragraph (1) and providing 

8 findings and conclusions on the conduct and effec9 tiveness of MFP demonstration projects. 

10 (3) FUNDING.—From the amounts appro11 priated under subsection (h)(1) for each of fiscal 

12 years 2010 through 2013, not more than $1,100,000 

13 per year shall be available to the Secretary to carry 

14 out this subsection. 

15 (h) APPROPRIATIONS.— 

16 (1) IN GENERAL.—There are appropriated, 

17 from any funds in the Treasury not otherwise appro18 priated, for grants to carry out this section— 

19 (A) $250,000,000 for the portion of fiscal 

20 year 2009 beginning on January 1, 2009, and 

21 ending on September 30, 2009; 

22 (B) $300,000,000 for fiscal year 2010; 

23 (C) $350,000,000 for fiscal year 2011; 

24 (D) $400,000,000 for fiscal year 2012; 

25 and 
256 

•S 1932 PCS 

1 (E) $450,000,000 for fiscal year 2013. 

2 (2) AVAILABILITY.—Amounts made available 

3 under paragraph (1) for a fiscal year shall remain 

4 available for the awarding of grants to States by not 

5 later than September 30, 2013. 

6 CHAPTER 6—OPTION FOR HURRICANE 

7 KATRINA DISASTER STATES TO DELAY 

8 APPLICATION 

9 SEC. 6071. OPTION FOR HURRICANE KATRINA DISASTER 

10 STATES TO DELAY APPLICATION. 

11 Notwithstanding any provision of this subtitle, or any 

12 amendment made by this subtitle, the State of Louisiana, 

13 Mississippi, or Alabama may elect to not have the provi14 sions of this subtitle, or of any amendment made by this 

15 subtitle, apply with respect to the State during any period 

16 for which a major disaster declared in accordance with 

17 section 401 of the Robert T. Stafford Disaster Relief and 

18 Emergency Assistance Act (42 U.S.C. 5170) with respect 

19 to a parish, in the case of Louisiana, or a county, in the 

20 case of Mississippi or Alabama, as a result of Hurricane 

21 Katrina is in effect. 

22 Subtitle B—Medicare 

23 SEC. 6101. IMPROVEMENTS TO THE MEDICARE-DEPENDENT 

24 HOSPITAL (MDH) PROGRAM. 

25 (a) 5-YEAR EXTENSION.— 
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1 (1) EXTENSION OF PAYMENT METHOD2 OLOGY.—Section 1886(d)(5)(G) (42 U.S.C. 

3 1395ww(d)(5)(G)) is amended— 

4 (A) in clause (i), by striking ‘‘October 1, 

5 2006’’ and inserting ‘‘October 1, 2011’’; and 

6 (B) in clause (ii)(II)— 

7 (i) by striking ‘‘October 1, 2006’’ and 

8 inserting ‘‘October 1, 2011’’; and 

9 (ii) by inserting ‘‘or for discharges in 

10 the fiscal year’’ after ‘‘for the cost report11 ing period’’. 

12 (2) CONFORMING AMENDMENTS.— 

13 (A) EXTENSION OF TARGET AMOUNT.— 

14 Section 1886(b)(3)(D) (42 U.S.C. 

15 1395ww(b)(3)(D)) is amended— 

16 (i) in the matter preceding clause 

17 (i)— 

18 (I) by striking ‘‘beginning’’ and 

19 inserting ‘‘occurring’’; and 

20 (II) by striking ‘‘October 1, 

21 2006’’ and inserting ‘‘October 1, 

22 2011’’; and 

23 (ii) in clause (iv), by striking 

24 ‘‘through fiscal year 2005’’ and inserting 

25 ‘‘through fiscal year 2011’’. 
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1 (B) PERMITTING HOSPITALS TO DECLINE

2 RECLASSIFICATION.—Section 13501(e)(2) of 

3 the Omnibus Budget Reconciliation Act of 1993 

4 (42 U.S.C. 1395ww note) is amended by strik5 ing ‘‘through fiscal year 2005’’ and inserting 

6 ‘‘through fiscal year 2011’’. 

7 (b) OPTION TO USE OF 2002 AS BASE YEAR.—Sec8 tion 1886(b)(3) (42 U.S.C. 1395ww(b)(3)) is amended— 

9 (1) in subparagraph (D), by inserting ‘‘subject 

10 to subparagraph (K),’’ after ‘‘(d)(5)(G)),’’; and 

11 (2) by adding at the end the following new sub12 paragraph: 

13 ‘‘(K)(i) With respect to discharges occurring on or 

14 after October 1, 2006, in the case of a medicare-depend15 ent, small rural hospital, for purposes of applying sub16 paragraph (D)— 

17 ‘‘(I) there shall be substituted for the base cost 

18 reporting period described in subparagraph (D)(i) 

19 the 12-month cost reporting period beginning during 

20 fiscal year 2002; and 

21 ‘‘(II) any reference in such subparagraph to the 

22 ‘first cost reporting period’ described in such sub23 paragraph is deemed a reference to the first cost re24 porting period beginning on or after October 1, 

25 2006. 
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•S 1932 PCS 

1 ‘‘(ii) This subparagraph shall only apply to a hospital 

2 if the substitution described in clause (i)(I) results in an 

3 increase in the target amount under subparagraph (D) for 

4 the hospital.’’. 

5 (c) ENHANCED PAYMENT FOR AMOUNT BY WHICH

6 THE TARGET EXCEEDS THE PPS RATE.—Section 

7 1886(d)(5)(G)(ii)(II) (42 U.S.C. 

8 1395ww(d)(5)(G)(iv)(II)) is amended by inserting ‘‘(or 75 

9 percent in the case of discharges occurring on or after Oc10 tober 1, 2006)’’ after ‘‘50 percent’’. 

11 (d) ENHANCED DISPROPORTIONATE SHARE HOS12 PITAL (DSH) TREATMENT FOR MEDICARE DEPENDENT

13 HOSPITALS.—Section 1886(d)(5)(F)(xiv)(II) (42 U.S.C. 

14 1395ww(d)(5)(F)(xiv)(II)) is amended by inserting ‘‘or, in 

15 the case of discharges occurring on or after October 1, 

16 2006, as a medicare-dependent, small rural hospital under 

17 subparagraph (G)(iv)’’ before the period at the end. 

18 SEC. 6102. REDUCTION IN PAYMENTS TO SKILLED NURSING 

19 FACILITIES FOR BAD DEBT. 

20 (a) IN GENERAL.—Section 1861(v)(1) (42 U.S.C. 

21 1395x(v)(1)) is amended by adding at the end the fol22 lowing new subparagraph: 

23 ‘‘(V) In determining such reasonable costs for skilled 

24 nursing facilities with respect to services furnished on or 

25 after October 1, 2005, the amount of bad debts otherwise 
260 

•S 1932 PCS 

1 treated as allowed costs which are attributable to the 

2 deductibles and coinsurance amounts under this title shall 

3 be reduced by 30 percent of such amount otherwise allow4 able.’’. 

5 (b) TECHNICAL AMENDMENT.—Section 

6 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is amended by 

7 striking ‘‘section 1833(t)(5)(B)’’ and inserting ‘‘section 

8 1833(t)(8)(B)’’. 

9 SEC. 6103. TWO-YEAR EXTENSION OF THE 50 PERCENT COM10 PLIANCE THRESHOLD USED TO DETERMINE 

11 WHETHER A HOSPITAL OR UNIT OF A HOS12 PITAL IS AN INPATIENT REHABILITATION FA13 CILITY UNDER THE MEDICARE PROGRAM. 

14 (a) EXTENSION.— 

15 (1) IN GENERAL.—Effective as if enacted on 

16 June 30, 2005, notwithstanding section 

17 412.23(b)(2) of title 42, Code of Federal Regula18 tions, during the period beginning on July 1, 2005, 

19 and ending on June 30, 2007, the Secretary of 

20 Health and Human Services shall not— 

21 (A) require a compliance rate, pursuant to 

22 the criterion (commonly known as the ‘‘75 per23 cent rule’’) that is used to determine whether a 

24 hospital or unit of a hospital is an inpatient re25 habilitation facility (as defined in the rule pub-
261 

•S 1932 PCS 

1 lished in the Federal Register on May 7, 2004, 

2 entitled ‘‘Medicare Program; Final Rule; 

3 Changes to the Criteria for Being Classified as 

4 an Inpatient Rehabilitation Facility’’ (69 Fed. 

5 Reg. 25752)), that is greater than the 50 per6 cent compliance threshold that became effective 

7 on July 1, 2004; or 

8 (B) change the designation of an inpatient 

9 rehabilitation facility that is in compliance with 

10 such 50 percent threshold. 

11 (2) RETROACTIVE STATUS AS AN INPATIENT

12 REHABILITATION FACILITY; PAYMENTS; EXPEDITED

13 REVIEW.—The Secretary of Health and Human 

14 Services shall establish procedures for— 

15 (A) making any necessary retroactive ad16 justment to restore the status of a facility as an 

17 inpatient rehabilitation facility as a result of 

18 subsection (a); and 

19 (B) making any necessary payments to in20 patient rehabilitation facilities based on such 

21 adjustment for discharges occurring on or after 

22 July 1, 2005, and before the date of enactment 

23 of this Act. 

24 (b) SPECIAL RULE.—In the case of a hospital or unit 

25 of a hospital that failed to meet the 50 percent compliance 
262 

•S 1932 PCS 

1 threshold described in subsection (a)(1)(A) with respect 

2 to the first cost reporting period of the hospital or unit 

3 that began on or after July 1, 2004, the following rules 

4 shall apply: 

5 (1) Such hospital or unit shall be deemed to 

6 meet such 50 percent threshold for purposes of sub7 section (a). 

8 (2) The Secretary shall examine all the claims 

9 of the hospital or unit under title XVIII of the So10 cial Security Act submitted during the 6-month pe11 riod beginning after the end of such first cost re12 porting period. 

13 (3) If the Secretary determines after such re14 view that the hospital or unit is still not in compli15 ance with such 50 percent compliance threshold— 

16 (A) the deemed status of the hospital or 

17 unit under paragraph (1) shall be revoked ret18 roactive to the beginning of such 6-month pe19 riod; and 

20 (B) the Secretary shall provide for the col21 lection of any necessary overpayments by rea22 son of the revocation under subparagraph (A). 

23 (c) STUDY AND REPORT BY THE HHS INSPECTOR

24 GENERAL.— 

25 (1) STUDY.— 
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•S 1932 PCS 

1 (A) IN GENERAL.—The Inspector General 

2 of the Department of Health and Human Serv3 ices shall conduct a study of hospitals and units 

4 of hospitals that— 

5 (i) are designated as inpatient reha6 bilitation facilities under title XVIII of the 

7 Social Security Act; and 

8 (ii) would not be so designated if this 

9 section had not been enacted because the 

10 hospital or unit has a compliance rate that 

11 is greater than the 50 percent compliance 

12 threshold described in subsection (a)(1)(A) 

13 but is less than the 60 percent compliance 

14 threshold that would have become effective 

15 on July 1, 2005, but for this section. 

16 (B) REQUIREMENT.—In conducting the 

17 study under subparagraph (A), the Inspector 

18 General shall analyze the types of patients the 

19 hospitals and units are treating and issues re20 lating to the medical conditions of such patients 

21 that do not meet the medical requirements for 

22 determining compliance with such threshold. 

23 (2) REPORT.—Not later than January 1, 2007, 

24 the Inspector General shall submit to Congress and 

25 the Secretary a report on the study conducted under 
264 

•S 1932 PCS 

1 paragraph (1), together with such recommendations 

2 as the Inspector General determines appropriate. 

3 (d) REHABILITATION ADVISORY COUNCIL.— 

4 (1) ESTABLISHMENT.—The Secretary shall es5 tablish an advisory council to be known as the ‘‘Re6 habilitation Advisory Council’’. 

7 (2) MEMBERSHIP.—The membership of the Re8 habilitation Advisory Council shall include— 

9 (A) physicians; 

10 (B) Medicare beneficiaries; 

11 (C) representatives of inpatient rehabilita12 tion facilities; and 

13 (D) representatives of other entities and 

14 practitioners that provide rehabilitative care in 

15 settings other than in such facilities, such as 

16 skilled nursing facilities. 

17 (3) DUTIES.— 

18 (A) ADVICE AND RECOMMENDATIONS.— 

19 The Rehabilitation Advisory Council shall pro20 vide advice and recommendations to Congress 

21 and the Secretary concerning the coverage of 

22 rehabilitation services under the Medicare pro23 gram, including the appropriate medical criteria 

24 for determining the appropriateness of inpatient 

25 rehabilitation facility admissions. 
265 

•S 1932 PCS 

1 (B) PERIODIC REPORTS.—The Rehabilita2 tion Advisory Council shall provide Congress 

3 and the Secretary with periodic reports that 

4 summarize— 

5 (i) the Council’s activities; and 

6 (ii) any recommendations for legisla7 tion or administrative action the Council 

8 considers to be appropriate. 

9 (4) TERMINATION.—The Rehabilitation 

10 Advisory Council shall terminate on September 

11 30, 2010. 

12 SEC. 6104. PROHIBITION ON PHYSICIAN SELF REFERRALS 

13 TO PHYSICIAN OWNED, LIMITED SERVICE 

14 HOSPITALS. 

15 (a) PROHIBITION.—Section 1877(d) (42 U.S.C. 

16 1395nn(d)) is amended in each of paragraphs (2)(B) and 

17 (3)(B) by striking ‘‘effective for the 18-month period be18 ginning on the date of enactment of the Medicare Pre19 scription Drug, Improvement, and Modernization Act of 

20 2003’’ and inserting ‘‘on and after December 8, 2003’’. 

21 (b) REVISIONS TO THE REQUIREMENTS TO QUALIFY

22 FOR THE EXCEPTION TO THE DEFINITION OF SPECIALTY

23 HOSPITAL.—Section 1877(h)(7)(B) (42 U.S.C. 

24 1395nn(h)(7)(B)) is amended— 
266 

•S 1932 PCS 

1 (1) by redesignating clauses (iii), (iv), and (v) 

2 as clauses (vi), (vii), and (viii), respectively; 

3 (2) by inserting after clause (ii) the following 

4 new clauses: 

5 ‘‘(iii) for which the percent of invest6 ment in the hospital by physician investors 

7 at any time on or after June 8, 2005, is 

8 no greater than the percent of such invest9 ment by physician investors as of such 

10 date; 

11 ‘‘(iv) for which the percent of invest12 ment in the hospital by any physician in13 vestor at any time on or after June 8, 

14 2005, is no greater than the percent of 

15 such investment by such physician as of 

16 such date; 

17 ‘‘(v) for which the number of oper18 ating rooms at the hospital at any time on 

19 or after June 8, 2005, is no greater than 

20 the number of such rooms as of such 

21 date;’’; and 

22 (3) by striking clause (vii), as so redesignated, 

23 and inserting the following: 

24 ‘‘(vii) for which— 
267 

•S 1932 PCS 

1 ‘‘(I) during the period beginning 

2 on December 8, 2003, and ending on 

3 June 7, 2005, any increase in the 

4 number of beds occurs only in the fa5 cilities on the main campus of the 

6 hospital and does not exceed 50 per7 cent of the number of beds in the hos8 pital as of November 18, 2003, or 5 

9 beds, whichever is greater; and 

10 ‘‘(II) the number of beds at the 

11 hospital at any time on or after June 

12 8, 2005, is no greater than the num13 ber of such beds as of such date; 

14 and’’. 

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

16 this section shall take effect on June 8, 2005. 

17 SEC. 6105. MINIMUM UPDATE FOR PHYSICIANS’ SERVICES 

18 FOR 2006. 

19 (a) MINIMUM UPDATE FOR 2006.—Section 1848(d) 

20 (42 U.S.C. 1395w–4(d)), as amended by section 6110(c), 

21 is amended by adding at the end the following new para22 graph: 

23 ‘‘(7) UPDATE FOR 2006.—The update to the 

24 single conversion factor established in paragraph 

25 (1)(C) for 2006 shall be not less than 1 percent.’’. 
268 

•S 1932 PCS 

1 (b) CONFORMING AMENDMENT.—Section 

2 1848(d)(4)(B) (42 U.S.C. 1395w–4(d)(4)(B)) is amended, 

3 in the matter preceding clause (i), by striking ‘‘paragraph 

4 (5)’’ and inserting ‘‘paragraphs (5) and (7)’’. 

5 (c) NOT TREATED AS CHANGE IN LAW AND REGULA6 TION IN SUSTAINABLE GROWTH RATE DETERMINA7 TION.—The amendments made by this section shall not 

8 be treated as a change in law for purposes of applying 

9 section 1848(f)(2)(D) of the Social Security Act (42 

10 U.S.C. 1395w–4(f)(2)(D)). 

11 SEC. 6106. ONE-YEAR EXTENSION OF HOLD HARMLESS PRO12 VISIONS FOR SMALL RURAL HOSPITALS AND 

13 SOLE COMMUNITY HOSPITALS UNDER THE 

14 PROSPECTIVE PAYMENT SYSTEM FOR HOS15 PITAL OUTPATIENT DEPARTMENT SERVICES. 

16 Section 1833(t)(7)(D)(i) (42 U.S.C. 

17 1395l(t)(7)(D)(i)) is amended by striking ‘‘January 1, 

18 2006’’ and inserting ‘‘January 1, 2007’’. 

19 SEC. 6107. UPDATE TO THE COMPOSITE RATE COMPONENT 

20 OF THE BASIC CASE-MIX ADJUSTED PRO21 SPECTIVE PAYMENT SYSTEM FOR DIALYSIS 

22 SERVICES. 

23 Section 1881(b)(12) (42 U.S.C. 1395rr(b)(12)) is 

24 amended— 
269 

•S 1932 PCS 

1 (1) in subparagraph (F), in the flush matter at 

2 the end, by striking ‘‘Nothing’’ and inserting ‘‘Ex3 cept as provided in subparagraph (G), nothing’’; 

4 (2) by redesignating subparagraph (G) as sub5 paragraph (H); and 

6 (3) by inserting after subparagraph (F) the fol7 lowing new subparagraph: 

8 ‘‘(G) The Secretary shall increase the amount of the 

9 composite rate component of the basic case-mix adjusted 

10 system under subparagraph (B) for dialysis services fur11 nished on or after January 1, 2006, by 1.6 percent above 

12 the amount of such composite rate component for such 

13 services furnished on December 31, 2005.’’. 

14 SEC. 6108. ONE-YEAR EXTENSION OF MORATORIUM ON 

15 THERAPY CAPS. 

16 Section 1833(g)(4) (42 U.S.C. 1395l(g)(4)) is 

17 amended by striking ‘‘and 2005’’ and inserting ‘‘2005, 

18 and 2006’’. 

19 SEC. 6109. TRANSFER OF TITLE OF CERTAIN DME TO PA20 TIENT AFTER 13-MONTH RENTAL. 

21 (a) IN GENERAL.—Section 1834(a)(7)(A) (42 U.S.C. 

22 1395m(a)(7)(A)) is amended to read as follows: 

23 ‘‘(A) PAYMENT.—In the case of an item of 

24 durable medical equipment not described in 
270 

•S 1932 PCS 

1 paragraphs (2) through (6), the following rules 

2 shall apply: 

3 ‘‘(i) RENTAL.— 

4 ‘‘(I) IN GENERAL.—Payment for 

5 the item shall be made on a monthly 

6 basis for the rental of the item during 

7 the period of medical need (but pay8 ments under this clause may not ex9 tend over a period of continuous use 

10 (as determined by the Secretary) of 

11 longer than 13 months). 

12 ‘‘(II) PAYMENT AMOUNT.—Sub13 ject to subparagraph (B), the amount 

14 recognized for the item— 

15 ‘‘(aa) for each of the first 3 

16 months of such period is 10 per17 cent of the purchase price recog18 nized under paragraph (8) with 

19 respect to the item; and 

20 ‘‘(bb) for each of the re21 maining months of such period is 

22 7.5 percent of such purchase 

23 price. 

24 ‘‘(ii) OWNERSHIP AFTER RENTAL.— 
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•S 1932 PCS 

1 ‘‘(I) TRANSFER OF TITLE.—On 

2 the first day that begins after the 

3 13th continuous month during which 

4 payment is made for the rental of an 

5 item under clause (i), the supplier of 

6 the item shall transfer title to the 

7 item to the individual. 

8 ‘‘(II) MAINTENANCE AND SERV9 ICING.—After the supplier transfers 

10 title to the item under subclause (I), 

11 maintenance and servicing payments 

12 shall, if the Secretary determines such 

13 payments are reasonable and nec14 essary, be made (for parts and labor 

15 not covered by the supplier’s or manu16 facturer’s warranty, as determined by 

17 the Secretary to be appropriate for 

18 the particular type of durable medical 

19 equipment), and such payments shall 

20 be in an amount determined to be ap21 propriate by the Secretary.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 subsection (a) shall apply to items furnished for which the 

24 first rental month occurs on or after January 1, 2006. 
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1 SEC. 6110. ESTABLISHMENT OF MEDICARE VALUE-BASED 

2 PURCHASING PROGRAMS. 

3 (a) IN GENERAL.—Title XVIII (42 U.S.C. 1395 et 

4 seq.) is amended— 

5 (1) by redesignating part E as part F; and 

6 (2) by inserting after part D the following new 

7 part: 

8 ‘‘PART E—VALUE-BASED PURCHASING

9 ‘‘QUALITY MEASUREMENT SYSTEMS FOR VALUE-BASED

10 PURCHASING PROGRAMS

11 ‘‘SEC. 1860E–1. (a) ESTABLISHMENT.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall develop 

13 quality measurement systems in accordance with 

14 subsections (b), (c), (d), and (e), for purposes of 

15 providing value-based payments to— 

16 ‘‘(A) hospitals pursuant to section 1860E– 

17 2; 

18 ‘‘(B) physicians and practitioners pursuant 

19 to section 1860E–3; 

20 ‘‘(C) plans pursuant to section 1860E–4; 

21 ‘‘(D) end stage renal disease providers and 

22 facilities pursuant to section 1860E–5; and 

23 ‘‘(E) home health agencies pursuant to 

24 section 1860E–6. 
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1 ‘‘(2) QUALITY.—The systems developed under 

2 paragraph (1) shall measure the quality of the care 

3 furnished by the provider involved. 

4 ‘‘(3) HIGH QUALITY HEALTH CARE DEFINED.— 

5 In this part, the term ‘high quality health care’ 

6 means health care that is safe, effective, patient-cen7 tered, timely, equitable, efficient, necessary, and ap8 propriate. 

9 ‘‘(b) REQUIREMENTS FOR SYSTEMS.—Under each 

10 quality measurement system described in subsection 

11 (a)(1), the Secretary shall do the following: 

12 ‘‘(1) MEASURES.— 

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graph (B), the Secretary shall select measures 

15 of quality to be used by the Secretary under 

16 each system. 

17 ‘‘(B) REQUIREMENTS.—In selecting the 

18 measures to be used under each system pursu19 ant to subparagraph (A), the Secretary shall, to 

20 the extent feasible and practicable, ensure 

21 that— 

22 ‘‘(i) such measures are evidence23 based, reliable and valid, actionable, and 

24 reasonable to collect and report; 
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1 ‘‘(ii) measures of process, structure, 

2 outcomes, and beneficiary experience of 

3 care are included; 

4 ‘‘(iii) except for the system that is 

5 used to provide value-based payments to 

6 physicians and practitioners under section 

7 1860E–3, measures of efficiency (where ef8 ficiency is improved quality care through 

9 the effective use of resources) are included; 

10 ‘‘(iv) measures of overuse and 

11 underuse of health care items and services 

12 are included; 

13 ‘‘(v)(I) at least 1 measure of health 

14 information technology infrastructure that 

15 enables the provision of high quality health 

16 care and facilitates the exchange of health 

17 information, such as the use of 1 or more 

18 elements of a qualified health information 

19 system (as defined in subparagraph (E)), 

20 is included during the first year each sys21 tem is implemented; and 

22 ‘‘(II) additional measures of health in23 formation technology infrastructure are in24 cluded in subsequent years; 
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1 ‘‘(vi) in the case of the system that is 

2 used to provide value-based payments to 

3 hospitals under section 1860E–2, by not 

4 later than January 1, 2008, at least 5 

5 measures that take into account the unique 

6 characteristics of small hospitals located in 

7 rural areas and frontier areas are included; 

8 and 

9 ‘‘(vii) measures that assess the quality 

10 of care furnished to frail individuals over 

11 the age of 75 and to individuals with mul12 tiple complex chronic conditions are in13 cluded. 

14 ‘‘(C) REQUIREMENT FOR COLLECTION OF

15 DATA ON A MEASURE FOR 1 YEAR PRIOR TO

16 USE UNDER THE SYSTEMS.—Data on any 

17 measure selected by the Secretary under sub18 paragraph (A) must be collected by the Sec19 retary for at least a 12-month period before 

20 such measure may be used to determine wheth21 er a provider receives a value-based payment 

22 under a program described in subsection (a)(1). 

23 ‘‘(D) AUTHORITY TO VARY MEASURES.— 

24 The Secretary may vary the measures selected 

25 under subparagraph (A) by the entity or indi-
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1 vidual involved based on factors such as the 

2 type of, the size of, and the scope and volume 

3 of services provided by, the entity or individual. 

4 If the Secretary varies the measures for pro5 viders under the preceding sentence, the Sec6 retary shall ensure that such measures are 

7 aligned to promote coordinated quality of care 

8 across provider settings. 

9 ‘‘(E) QUALIFIED HEALTH INFORMATION

10 SYSTEM DEFINED.—For purposes of subpara11 graph (B)(iv)(I), the term ‘qualified health in12 formation system’ means a computerized sys13 tem (including hardware, software, and train14 ing) that— 

15 ‘‘(i) protects the privacy and security 

16 of health information and properly 

17 encrypts such health information; 

18 ‘‘(ii) maintains and provides access to 

19 patients’ health records in an electronic 

20 format; 

21 ‘‘(iii) incorporates decision support 

22 software to reduce medical errors and en23 hance health care quality; 
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1 ‘‘(iv) is consistent with data standards 

2 and certification processes recommended 

3 by the Secretary; 

4 ‘‘(v) allows for the reporting of quality 

5 measures; and 

6 ‘‘(vi) includes other features deter7 mined appropriate by the Secretary. 

8 ‘‘(2) WEIGHTS OF MEASURES.—The Secretary 

9 shall assign weights to the measures used by the 

10 Secretary under each system. If the Secretary deter11 mines appropriate, in assigning the weights under 

12 the preceding sentence, some measures may be 

13 weighted more heavily than other measures. 

14 ‘‘(3) RISK ADJUSTMENT.—The Secretary shall 

15 establish procedures, as appropriate, to control for 

16 differences in beneficiary health status and bene17 ficiary characteristics. To the extent feasible, such 

18 procedures may be based on existing models for con19 trolling for such differences. 

20 ‘‘(4) MAINTENANCE.— 

21 ‘‘(A) IN GENERAL.—The Secretary shall, 

22 as determined appropriate, but not more often 

23 than once each 12-month period, review and re24 vise each system, including through— 
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1 ‘‘(i) the refinement of measures under 

2 the systems and the retirement of existing 

3 outdated measures under the system; 

4 ‘‘(ii) the refinement of the weights as5 signed to measures under the system; and 

6 ‘‘(iii) the refinement of the risk ad7 justment procedures established pursuant 

8 to paragraph (3) under the system. 

9 ‘‘(B) REVISION SHALL ALLOW FOR COM10 PARISON OF DATA.—Each revision under sub11 paragraph (A) of a quality measurement system 

12 shall allow for the comparison of data from one 

13 year to the next for purposes of providing 

14 value-based payments under the programs de15 scribed in subsection (a)(1). 

16 ‘‘(5) USE OF MOST RECENT QUALITY DATA.— 

17 ‘‘(A) IN GENERAL.—Except as provided in 

18 subparagraph (B), the Secretary shall use the 

19 most recent quality data with respect to the 

20 provider involved that is available to the Sec21 retary. 

22 ‘‘(B) INSUFFICIENT DATA DUE TO LOW

23 VOLUME.—If the Secretary determines that 

24 there is insufficient data with respect to a 

25 measure or measures because of a low number 
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1 of services provided, the Secretary may aggre2 gate data across more than 1 fiscal or calendar 

3 year, as the case may be. 

4 ‘‘(c) REQUIREMENTS FOR DEVELOPING AND RE5 VIEWING AND REVISING THE SYSTEMS.—In developing 

6 and reviewing and revising each quality measurement sys7 tem under this section, the Secretary shall— 

8 ‘‘(1) consult with, and take into account the 

9 recommendations of, the entity that the Secretary 

10 has an arrangement with under subsection (e); 

11 ‘‘(2) consult with provider-based groups, clinical 

12 specialty societies, and certification boards; 

13 ‘‘(3) take into account existing quality measure14 ment systems that have been developed through a 

15 rigorous process of validation and with the involve16 ment of entities and persons described in subsection 

17 (e)(2)(B); and 

18 ‘‘(4) take into account— 

19 ‘‘(A) each of the reports by the Medicare 

20 Payment Advisory Commission that are re21 quired under section 1860E–3(a)(1); 

22 ‘‘(B) the results of appropriate studies, re23 ports, and demonstration programs; and 

24 ‘‘(C) the report by the Institute of Medi25 cine of the National Academy of Sciences under 
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1 section 238(b) of the Medicare Prescription 

2 Drug, Improvement, and Modernization Act of 

3 2003 (Public Law 108–173). 

4 ‘‘(d) REQUIREMENTS FOR IMPLEMENTING THE SYS5 TEMS.—In implementing each quality measurement sys6 tem under this section, the Secretary shall consult with 

7 entities— 

8 ‘‘(1) that have joined together to develop strate9 gies for quality measurement and reporting, includ10 ing the feasibility of collecting and reporting mean11 ingful data on quality measures; and 

12 ‘‘(2) that involve representatives of health care 

13 providers, health plans, consumers, employers, pur14 chasers, quality experts, government agencies, and 

15 other individuals and groups that are interested in 

16 quality of care. 

17 ‘‘(e) ARRANGEMENT WITH AN ENTITY TO PROVIDE

18 ADVICE AND RECOMMENDATIONS.— 

19 ‘‘(1) ARRANGEMENT.—On and after July 1, 

20 2006, the Secretary shall have in place an arrange21 ment with an entity that meets the requirements de22 scribed in paragraph (2) under which such entity 

23 provides the Secretary with advice on, and rec24 ommendations with respect to, the development and 

25 review and revision of the quality measurement sys-
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1 tems under this section, including the assigning of 

2 weights to the measures under subsection (b)(2). 

3 ‘‘(2) REQUIREMENTS DESCRIBED.—The re4 quirements described in this paragraph are the fol5 lowing: 

6 ‘‘(A) The entity is a private nonprofit enti7 ty governed by an executive director and a 

8 board. 

9 ‘‘(B) The members of the entity include 

10 representatives of— 

11 ‘‘(i)(I) health plans and providers re12 ceiving reimbursement under this title for 

13 the provision of items and services, includ14 ing health plans and providers with experi15 ence in the care of the frail elderly and in16 dividuals with multiple complex chronic 

17 conditions; or 

18 ‘‘(II) groups representing such health 

19 plans and providers; 

20 ‘‘(ii) groups representing individuals 

21 receiving benefits under this title; 

22 ‘‘(iii) purchasers and employers or 

23 groups representing purchasers or employ24 ers; 
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1 ‘‘(iv) organizations that focus on qual2 ity improvement as well as the measure3 ment and reporting of quality measures; 

4 ‘‘(vi) organizations that certify and li5 cense such providers; 

6 ‘‘(vi) State government health pro7 grams; 

8 ‘‘(vii) persons skilled in the conduct 

9 and interpretation of biomedical, health 

10 services, and health economics research 

11 and with expertise in outcomes and effec12 tiveness research and technology assess13 ment; and 

14 ‘‘(viii) persons or entities involved in 

15 the development and establishment of 

16 standards and certification for health in17 formation technology systems and clinical 

18 data. 

19 ‘‘(C) The membership of the entity is rep20 resentative of individuals with experience 

21 with— 

22 ‘‘(i) urban health care issues; 

23 ‘‘(ii) safety net health care issues; and 

24 ‘‘(iii) rural and frontier health care 

25 issues. 
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1 ‘‘(D) The entity does not charge a fee for 

2 membership for participation in the work of the 

3 entity related to the arrangement with the Sec4 retary under paragraph (1). If the entity does 

5 require a fee for membership for participation 

6 in other functions of the entity, there shall be 

7 no linkage between such fee and participation 

8 in the work of the entity related to such ar9 rangement with the Secretary. 

10 ‘‘(E) The entity— 

11 ‘‘(i) permits members described in 

12 subparagraph (B) to vote on matters of 

13 the entity related to the arrangement with 

14 the Secretary under paragraph (1); and 

15 ‘‘(ii) ensures that such members have 

16 an equal vote on such matters. 

17 ‘‘(F) With respect to matters related to the 

18 arrangement with the Secretary under para19 graph (1), the entity conducts its business in an 

20 open and transparent manner and provides the 

21 opportunity for public comment. 

22 ‘‘(G) The entity operates as a voluntary 

23 consensus standards setting organization as de24 fined for purposes of section 12(d) of the Na25 tional Technology Transfer and Advancement 
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1 Act of 1995 (Public Law 104–113) and Office 

2 of Management and Budget Revised Circular 

3 A–119 (published in the Federal Register on 

4 February 10, 1998). 

5 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— 

6 For the purpose of carrying out the provisions of 

7 this subsection, there are authorized to be appro8 priated— 

9 ‘‘(A) for each of the fiscal years 2006 and 

10 2007, $3,000,000; and 

11 ‘‘(B) for fiscal year 2008 and each subse12 quent fiscal year, an amount equal to the sum 

13 of— 

14 ‘‘(i) $3,000,000; and 

15 ‘‘(ii) such amount multiplied by the 

16 percentage (if any) by which the average of 

17 the Consumer Price Index for all urban 

18 consumers (United States city average) for 

19 the 12-month period ending with June of 

20 the calendar year in which such fiscal year 

21 begins exceeds such average for the 12- 

22 month period ending with June 2006. 

23 ‘‘PPS HOSPITAL VALUE-BASED PURCHASING PROGRAM

24 ‘‘SEC. 1860E–2. (a) PROGRAM.— 

25 ‘‘(1) IN GENERAL.—The Secretary shall estab26 lish a program under which value-based payments 
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1 are provided each fiscal year to hospitals that dem2 onstrate the provision of high quality health care to 

3 individuals who are entitled to benefits under part A 

4 and are inpatients of the hospital. 

5 ‘‘(2) PROGRAM TO BEGIN IN FISCAL YEAR

6 2007.—The Secretary shall establish the program 

7 under this section so that value-based payments de8 scribed in subsection (b) are made with respect to 

9 fiscal year 2007 and each subsequent fiscal year. 

10 ‘‘(3) APPLICABILITY OF PROGRAM TO HOS11 PITALS.—For purposes of this section, the term 

12 ‘hospital’ means a subsection (d) hospital (as defined 

13 in section 1886(d)(1)(B)). 

14 ‘‘(b) VALUE-BASED PAYMENTS.— 

15 ‘‘(1) IN GENERAL.—Subject to paragraph (4), 

16 the Secretary shall make a value-based payment to 

17 a hospital with respect to a fiscal year if the Sec18 retary determines that the quality of the care pro19 vided in that year to individuals who are entitled to 

20 benefits under part A and are inpatients of the hos21 pital— 

22 ‘‘(A) has substantially improved (as deter23 mined by the Secretary) over the prior year; or 

24 ‘‘(B) exceeds a threshold established by the 

25 Secretary. 
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1 ‘‘(2) USE OF SYSTEM.—In determining which 

2 hospitals qualify for a value-based payment under 

3 paragraph (1), the Secretary shall use the quality 

4 measurement system developed for this section pur5 suant to section 1860E–1(a). 

6 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

7 AND ALLOCATION OF AWARDS.— 

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

9 determine— 

10 ‘‘(i) the amount of a value-based pay11 ment under paragraph (1) provided to a 

12 hospital; and 

13 ‘‘(ii) subject to subparagraph (B), the 

14 allocation of the total amount available 

15 under subsection (d) for value-based pay16 ments for any fiscal year between pay17 ments with respect to hospitals that meet 

18 the requirement under subparagraph (A) 

19 of paragraph (1) and hospitals that meet 

20 the requirement under subparagraph (B) 

21 of such paragraph. 

22 ‘‘(B) REQUIREMENTS REGARDING THE

23 AMOUNT OF FUNDING AVAILABLE FOR VALUE24 BASED PAYMENTS FOR HOSPITALS EXCEEDING
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1 A THRESHOLD.—The Secretary shall ensure 

2 that— 

3 ‘‘(i) a majority of the total amount 

4 available under subsection (d) for value5 based payments for any fiscal year is pro6 vided to hospitals that are receiving such 

7 payments because they meet the require8 ment under paragraph (1)(B); and 

9 ‘‘(ii) with respect to fiscal year 2008 

10 and each subsequent fiscal year, the per11 centage of the total amount available 

12 under subsection (d) for value-based pay13 ments for any fiscal year that is used to 

14 make payments to hospitals that meet such 

15 requirement is greater than such percent16 age in the previous fiscal year. 

17 ‘‘(4) REQUIREMENTS.— 

18 ‘‘(A) REQUIRED SUBMISSION OF DATA.— 

19 In order for a hospital to be eligible for a value20 based payment for a fiscal year, the hospital 

21 must have complied with the requirements 

22 under section 1886(b)(3)(B)(viii)(II) with re23 spect to that fiscal year. 

24 ‘‘(B) ATTESTATION REGARDING DATA.—In 

25 order for a hospital to be eligible for a value- 
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1 based payment for a fiscal year, the hospital 

2 must have provided the Secretary (under proce3 dures established by the Secretary) with an at4 testation that the data submitted under section 

5 1886(b)(3)(B)(viii)(II) for the fiscal year is 

6 complete and accurate. 

7 ‘‘(5) TOTAL AMOUNT OF VALUE-BASED PAY8 MENTS EQUAL TO TOTAL AMOUNT OF AVAILABLE

9 FUNDING.—The Secretary shall establish payment 

10 amounts under paragraph (3)(A) so that, as esti11 mated by the Secretary, the total amount of value12 based payments made in a fiscal year under para13 graph (1) is equal to the total amount available 

14 under subsection (d) for such payments for the year. 

15 ‘‘(6) PAYMENT METHODS AND TIMING OF PAY16 MENTS.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), the payment of value-based pay19 ments under paragraph (1) shall be based on 

20 such a method as the Secretary determines ap21 propriate. 

22 ‘‘(B) TIMING.—The Secretary shall ensure 

23 that value-based payments under paragraph (1) 

24 with respect to a fiscal year are made by not 

25 later than the close of the following fiscal year. 
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1 ‘‘(c) DESCRIPTION OF HOW HOSPITALS WOULD

2 HAVE FARED UNDER PROGRAM.—Not later than Janu3 ary 1, 2007, the Secretary shall provide each hospital with 

4 a description of the Secretary’s estimate of how payments 

5 to the hospital under this title would have been affected 

6 with respect to items and services furnished during a pe7 riod, as determined by the Secretary, if the program under 

8 this section (and the amendments made by paragraphs (1) 

9 and (2) of section 6110(b) of the Deficit Reduction Omni10 bus Reconciliation Act of 2005) had been in effect with 

11 respect to that period. 

12 ‘‘(d) FUNDING.— 

13 ‘‘(1) AMOUNT.—The amount available for 

14 value-based payments under this section with respect 

15 to a fiscal year shall be equal to the amount of the 

16 reduction in expenditures under the Federal Hos17 pital Insurance Trust Fund under section 1817 in 

18 the year as a result of the amendments made by sec19 tion 6110(b)(2) of the Deficit Reduction Omnibus 

20 Reconciliation Act of 2005, as estimated by the Sec21 retary. 

22 ‘‘(2) PAYMENTS FROM TRUST FUND.—Pay23 ments to hospitals under this section shall be made 

24 from the Federal Hospital Insurance Trust Fund. 
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1 ‘‘PHYSICIAN AND PRACTITIONER VALUE-BASED

2 PURCHASING PROGRAM

3 ‘‘SEC. 1860E–3. (a) PROGRAM.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall estab5 lish a program under which value-based payments 

6 are provided each year to physicians and practi7 tioners that demonstrate the provision of high qual8 ity health care to individuals enrolled under part B 

9 and the Medicare Payment Advisory Commission 

10 shall (A) conduct a study, and submit to Congress 

11 and the Secretary an initial report by not later than 

12 March 1, 2008, and a final report by not later than 

13 June 1, 2012, on how the Medicare value-based pur14 chasing programs under this part will impact Medi15 care beneficiaries, Medicare providers, and Medicare 

16 financing, including how such programs will impact 

17 the access of such beneficiaries to items and services 

18 under this title, the volume and utilization of such 

19 items and services, and low-volume providers; and 

20 (B) conduct a study, and submit to Congress and 

21 the Secretary a report by not later than March 1, 

22 2007, on the advisability and feasibility of estab23 lishing a value-based purchasing program under the 

24 this title for critical access hospitals (as defined in 

25 section 1861(mm)(1)); and (C) conduct a study, and 
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1 submit to Congress and the Secretary a report by 

2 not later than June 1, 2007, on the advisability and 

3 feasibility of including renal dialysis facilities de4 scribed in subsection (a)(3)(A) of section 1860E–5 

5 in the value-based purchasing program under such 

6 section 1860E–5 or establishing a value-based pur7 chasing program under this title for such facilities; 

8 (D) taking into account the results to date of the 

9 demonstration of bundled case-mix adjusted pay10 ment system for ESRD services under section 

11 623(e) of the Medicare Prescription Drug, Improve12 ment, and Modernization Act of 2003, conduct a 

13 study, and submit to Congress and the Secretary a 

14 report by not later than June 1, 2008, on the imple15 mentation of the ESRD provider and facility value16 based purchasing program under section 1860E–5, 

17 including issues for the Secretary to consider in op18 erating the ESRD provider and facility value-based 

19 purchasing program and recommendations on such 

20 issues; and (E) conduct a study, and submit to Con21 gress and the Secretary a report by not later than 

22 June 1, 2007, on the advisability and feasibility of 

23 establishing a value-based purchasing program 

24 under this title for skilled nursing facilities (as de25 fined in section 1819(a)). 
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1 ‘‘(2) PROGRAM TO BEGIN IN 2009.—The Sec2 retary shall establish the program under this section 

3 so that value-based payments described in subsection 

4 (b) are made with respect to 2009 and each subse5 quent year. 

6 ‘‘(3) DEFINITION OF PHYSICIAN AND PRACTI7 TIONER.—In this section: 

8 ‘‘(A) PHYSICIAN.—The term ‘physician’ 

9 has the meaning given that term in section 

10 1861(r). 

11 ‘‘(B) PRACTITIONER.—The term ‘practi12 tioner’ means— 

13 ‘‘(i) a practitioner described in section 

14 1842(b)(18)(C); 

15 ‘‘(ii) a physical therapist (as described 

16 in section 1861(p)); 

17 ‘‘(iii) an occupational therapist (as so 

18 described); and 

19 ‘‘(iv) a qualified speech-language pa20 thologist (as defined in section 

21 1861(ll)(3)(A)). 

22 ‘‘(4) IDENTIFICATION OF PHYSICIANS AND

23 PRACTITIONERS.—For purposes of applying this sec24 tion and paragraphs (4)(G) and (6) of section 

25 1848(d), the Secretary shall establish procedures for 
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1 the identification of physicians and practitioners, 

2 such as through physician or practitioner billing 

3 units or other units, provider identification numbers, 

4 taxpayer identification numbers, the National Pro5 vider Identifier, and unique physician identifier 

6 numbers. 

7 ‘‘(b) VALUE-BASED PAYMENTS.— 

8 ‘‘(1) IN GENERAL.—Subject to paragraph (4), 

9 the Secretary shall make a value-based payment to 

10 a physician or a practitioner with respect to a year 

11 if the Secretary determines that both the quality of 

12 the care and the efficiency of the care provided in 

13 that year by the physician or practitioner to individ14 uals enrolled under part B— 

15 ‘‘(A) has substantially improved (as deter16 mined by the Secretary) over the prior year; or 

17 ‘‘(B) exceeds a threshold established by the 

18 Secretary. 

19 ‘‘(2) USE OF SYSTEMS AND DATA.— 

20 ‘‘(A) IN GENERAL.—In determining which 

21 physicians and practitioners qualify for a value22 based payment under paragraph (1), the Sec23 retary shall use— 

24 ‘‘(i) the quality measurement system 

25 developed for this section pursuant to sec-
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1 tion 1860E–1(a) with respect to the qual2 ity of the care provided by the physician or 

3 practitioner; and 

4 ‘‘(ii) the comparative utilization sys5 tem developed under subsection (c) with 

6 respect to the efficiency and appropriate7 ness of such care. 

8 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

9 AND ALLOCATION OF AWARDS.— 

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

11 determine— 

12 ‘‘(i) the amount of a value-based pay13 ment under paragraph (1) provided to a 

14 physician or a practitioner; and 

15 ‘‘(ii) subject to subparagraph (B), the 

16 allocation of the total amount available 

17 under subsection (e) for value-based pay18 ments for any year between payments with 

19 respect to physicians and practitioners that 

20 meet the requirement under subparagraph 

21 (A) of paragraph (1) and physicians and 

22 practitioners that meet the requirement 

23 under subparagraph (B) of such para24 graph. 
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1 ‘‘(B) REQUIREMENTS REGARDING THE

2 AMOUNT OF FUNDING AVAILABLE FOR VALUE3 BASED PAYMENTS FOR PHYSICIANS AND PRAC4 TITIONERS EXCEEDING A THRESHOLD.—The 

5 Secretary shall ensure that— 

6 ‘‘(i) a majority of the total amount 

7 available under subsection (e) for value8 based payments for any year is provided to 

9 physicians and practitioners that are re10 ceiving such payments because they meet 

11 the requirement under paragraph (1)(B); 

12 and 

13 ‘‘(ii) with respect to 2010 and each 

14 subsequent year, the percentage of the 

15 total amount available under subsection (e) 

16 for value-based payments for any year that 

17 is used to make payments to physicians 

18 and practitioners that meet such require19 ment is greater than such percentage in 

20 the previous year. 

21 ‘‘(4) REQUIREMENTS.— 

22 ‘‘(A) REQUIRED SUBMISSION OF DATA.— 

23 In order for a physician or a practitioner to be 

24 eligible for a value-based payment for a year, 

25 the physician or practitioner must have com-
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1 plied with the requirements under section 

2 1848(d)(6)(B)(ii) with respect to that year. 

3 ‘‘(B) ATTESTATION REGARDING DATA.—In 

4 order for a physician or a practitioner to be eli5 gible for a value-based payment for a year, the 

6 physician or practitioner must have provided 

7 the Secretary (under procedures established by 

8 the Secretary) with an attestation that the data 

9 submitted under section 1848(d)(6)(B)(ii) with 

10 respect to that year is complete and accurate. 

11 ‘‘(5) TOTAL AMOUNT OF VALUE-BASED PAY12 MENTS EQUAL TO TOTAL AMOUNT OF AVAILABLE

13 FUNDING.—The Secretary shall establish payment 

14 amounts under paragraph (3)(A) so that, as esti15 mated by the Secretary, the total amount of value16 based payments made in a year under paragraph (1) 

17 is equal to the total amount available under sub18 section (e) for such payments for the year. 

19 ‘‘(6) PAYMENT METHODS AND TIMING OF PAY20 MENTS.— 

21 ‘‘(A) IN GENERAL.—Subject to subpara22 graph (B), the payment of value-based pay23 ments under paragraph (1) shall be based on 

24 such a method as the Secretary determines ap25 propriate. 
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1 ‘‘(B) TIMING.—The Secretary shall ensure 

2 that value-based payments under paragraph (1) 

3 with respect to a year are made by not later 

4 than December 31 of the subsequent year. 

5 ‘‘(c) COMPARATIVE UTILIZATION SYSTEM.— 

6 ‘‘(1) DEVELOPMENT.—The Secretary, in con7 sultation with relevant stakeholders, shall develop a 

8 comparative utilization system for purposes of pro9 viding value-based payments under subsection (b). 

10 ‘‘(2) MEASURES OF EFFICIENCY AND APPRO11 PRIATENESS OF CARE.—The comparative utilization 

12 system developed under paragraph (1) shall measure 

13 the efficiency and appropriateness of the care pro14 vided by a physician or practitioner. 

15 ‘‘(3) REQUIREMENTS FOR SYSTEM.—Under the 

16 comparative utilization system described in para17 graph (1), the Secretary shall do the following: 

18 ‘‘(A) MEASURES.—The Secretary shall se19 lect measures of efficiency appropriateness to 

20 be used by the Secretary under the system. The 

21 Secretary may vary the measures selected under 

22 the preceding sentence by the type or specialty 

23 of the physician or practitioner. If the Secretary 

24 varies the measures for providers under the pre25 ceding sentence, the Secretary shall ensure that 
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1 such measures are aligned to promote coordi2 nated quality of care across provider settings. 

3 ‘‘(B) USE OF CLAIMS DATA FOR UTILIZA4 TION PATTERNS.— 

5 ‘‘(i) REVIEW OF CLAIMS DATA.—The 

6 Secretary shall review claims data with re7 spect to services furnished or ordered by 

8 physicians and practitioners. 

9 ‘‘(ii) USE OF MOST RECENT CLAIMS

10 DATA.—The Secretary shall use the most 

11 recent claims data with respect to the phy12 sician or practitioner that is available to 

13 the Secretary. 

14 ‘‘(C) RISK ADJUSTMENT.—The Secretary 

15 shall establish procedures, as appropriate, to 

16 control for differences in beneficiary health sta17 tus and beneficiary characteristics. 

18 ‘‘(4) ANNUAL REPORTS.—Beginning in 2007, 

19 the Secretary shall provide physicians and practi20 tioners with annual reports on the utilization of 

21 items and services under this title based upon the 

22 review of claims data under paragraph (3)(B). With 

23 respect to reports provided in 2007 and 2008, such 

24 reports are confidential and the Secretary shall not 

25 make such reports available to the public. 
299 

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1 ‘‘(d) DESCRIPTION OF HOW PHYSICIANS AND PRAC2 TITIONERS WOULD HAVE FARED UNDER PROGRAM.— 

3 Not later than March 1, 2009, the Secretary shall provide 

4 each physician and practitioner with a description of the 

5 Secretary’s estimate of how payments to the physician or 

6 practitioner under this title would have been affected with 

7 respect to items and services furnished during a period, 

8 as determined by the Secretary, if the program under this 

9 section (and the amendments made by paragraphs (1) and 

10 (2) of section 6110(c) of the Deficit Reduction Omnibus 

11 Reconciliation Act of 2005) had been in effect with respect 

12 to that period. 

13 ‘‘(e) FUNDING.— 

14 ‘‘(1) AMOUNT.—The amount available for 

15 value-based payments under this section with respect 

16 to a year shall be equal to the amount of the reduc17 tion in expenditures under the Federal Supple18 mentary Medical Insurance Trust Fund under sec19 tion 1841 in the year as a result of the amendments 

20 made by section 6110(c)(2) of the Deficit Reduction 

21 Omnibus Reconciliation Act of 2005, as estimated 

22 by the Secretary. 

23 ‘‘(2) PAYMENTS FROM TRUST FUND.—Pay24 ments to physicians and practitioners under this sec-
300 

•S 1932 PCS 

1 tion shall be made from the Federal Supplementary 

2 Medical Insurance Trust Fund. 

3 ‘‘PLAN VALUE-BASED PURCHASING PROGRAM

4 ‘‘SEC. 1860E–4. (a) PROGRAM.— 

5 ‘‘(1) IN GENERAL.—The Secretary shall estab6 lish a program under which value-based payments 

7 are provided each year to Medicare Advantage orga8 nizations offering Medicare Advantage plans under 

9 part C that demonstrate the provision of high qual10 ity health care to enrollees under the plan. 

11 ‘‘(2) PROGRAM TO BEGIN IN 2009.—The Sec12 retary shall establish the program under this section 

13 so that value-based payments under subsection (b) 

14 are made with respect to 2009 and each subsequent 

15 year. 

16 ‘‘(3) DEFINITIONS OF MEDICARE ADVANTAGE

17 ORGANIZATION AND PLAN.— 

18 ‘‘(A) IN GENERAL.—In this section: 

19 ‘‘(i) MEDICARE ADVANTAGE ORGANI20 ZATION.—The term ‘Medicare Advantage 

21 organization’ has the meaning given such 

22 term in section 1859(a)(1). 

23 ‘‘(ii) MEDICARE ADVANTAGE PLAN.— 

24 The term ‘Medicare Advantage plan’ has 

25 the meaning given such term in section 

26 1859(b)(1). 
301 

•S 1932 PCS 

1 ‘‘(B) APPLICABILITY OF PROGRAM TO

2 MEDICARE ADVANTAGE REGIONAL AND LOCAL

3 PLANS.—For purposes of this section, the term 

4 ‘Medicare Advantage plan’ shall include both 

5 Medicare Advantage regional plans (as defined 

6 in section 1859(b)(4)) and Medicare Advantage 

7 local plans (as defined in section 1859(b)(5)). 

8 ‘‘(C) APPLICABILITY OF PROGRAM TO REA9 SONABLE COST CONTRACTS.—Except for para10 graphs (5) and (6) of subsection (b), for pur11 poses of this section, the terms— 

12 ‘‘(i) ‘Medicare Advantage organiza13 tion’ and ‘organization’ include an organi14 zation that is providing benefits under a 

15 reasonable cost reimbursement contract 

16 under section 1876(h); and 

17 ‘‘(ii) ‘Medicare Advantage plan’ and 

18 ‘plan’ include such a contract. 

19 ‘‘(b) VALUE-BASED PAYMENTS.— 

20 ‘‘(1) IN GENERAL.—Subject to paragraph (4), 

21 the Secretary shall make value-based payments to 

22 Medicare Advantage organizations with respect to 

23 each Medicare Advantage plan offered by the organi24 zation during a year if the Secretary determines that 

25 the quality of the care provided under the plan— 
302 

•S 1932 PCS 

1 ‘‘(A) has substantially improved (as deter2 mined by the Secretary) over the prior year; or 

3 ‘‘(B) exceeds a threshold established by the 

4 Secretary. 

5 ‘‘(2) USE OF SYSTEM.—In determining which 

6 organizations offering Medicare Advantage plans 

7 qualify for a value-based payment under paragraph 

8 (1), the Secretary shall— 

9 ‘‘(A) use the quality measurement system 

10 developed for this section pursuant to section 

11 1860E–1(a); and 

12 ‘‘(B) ensure that awards are based on data 

13 from a full 12-month period (or 24-month pe14 riod in the case of an award described in para15 graph (1)(A)), such periods determined without 

16 regard to calendar year periods. 

17 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

18 AND ALLOCATION OF AWARDS.— 

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

20 determine— 

21 ‘‘(i) the amount of a value-based pay22 ment under paragraph (1) provided to an 

23 organization with respect to a plan; and 

24 ‘‘(ii) subject to subparagraph (B), the 

25 allocation of the total amount available 
303 

•S 1932 PCS 

1 under subsection (d) for value-based pay2 ments for any year between payments with 

3 respect to plans that meet the requirement 

4 under subparagraph (A) of paragraph (1) 

5 and plans that meet the requirement under 

6 subparagraph (B) of such paragraph. 

7 ‘‘(B) REQUIREMENT REGARDING THE

8 AMOUNT OF FUNDING AVAILABLE FOR VALUE9 BASED PAYMENTS FOR PLANS EXCEEDING A

10 THRESHOLD.—The Secretary shall ensure 

11 that— 

12 ‘‘(i) a majority of the total amount 

13 available under subsection (d) for value14 based payments for any year is provided to 

15 organizations, with respect to plans offered 

16 by such organizations, that are receiving 

17 such payments because they meet the re18 quirement under paragraph (1)(B); and 

19 ‘‘(ii) with respect to 2010 and each 

20 subsequent year, the percentage of the 

21 total amount available under subsection (d) 

22 for value-based payments for any year that 

23 is used to make payments to organizations, 

24 with respect to plans offered by such orga25 nizations, that meet such requirement is 
304 

•S 1932 PCS 

1 greater than such percentage in the pre2 vious year. 

3 ‘‘(4) USE OF PAYMENTS.—Value-based pay4 ments received under this section may only be used 

5 for the following purposes: 

6 ‘‘(A) To invest in quality improvement pro7 grams operated by the organization with respect 

8 to the plan. 

9 ‘‘(B) To enhance beneficiary benefits under 

10 the plan. 

11 ‘‘(5) REQUIRED SUBMISSION OF DATA.—In 

12 order for an organization to be eligible for a value13 based payment for a year with respect to a Medicare 

14 Advantage plan or a reasonable cost contract, the 

15 organization must have provided for the collection, 

16 analysis, and reporting of data pursuant to sections 

17 1852(e)(3) (or submitted the data under section 

18 1876(h)(6) in the case of a reasonable cost contract) 

19 with respect to the plan or contract for the 2 years 

20 preceding that year. 

21 ‘‘(6) NO EFFECT ON MEDICARE ADVANTAGE

22 PLAN BIDS.—In order for a Medicare Advantage or23 ganization to be eligible for a value-based payment 

24 for a year with respect to a Medicare Advantage 

25 plan, the organization must have provided the Sec-
305 

•S 1932 PCS 

1 retary with an attestation that the program under 

2 this section, including the payment adjustments 

3 made by reason of the amendments made by section 

4 6110(d)(2)(A) of the Deficit Reduction Omnibus 

5 Reconciliation Act of 2005, had no effect on the in6 tegrity and actuarial soundness of the bid submitted 

7 under section 1854 for the plan for the year. 

8 ‘‘(7) TOTAL AMOUNT OF VALUE-BASED PAY9 MENTS EQUAL TO TOTAL AMOUNT OF REDUCTION IN

10 PAYMENTS.—The Secretary shall establish payment 

11 amounts under paragraph (3)(A) so that, as esti12 mated by the Secretary, the total amount of value13 based payments made in a year under paragraph (1) 

14 is equal to the total amount available under sub15 section (d) for such payments for the year. 

16 ‘‘(8) PAYMENT METHODS AND TIMING OF PAY17 MENTS.— 

18 ‘‘(A) IN GENERAL.—Subject to subpara19 graph (B), the payment of value-based pay20 ments under paragraph (1) shall be based on 

21 such a method as the Secretary determines ap22 propriate. 

23 ‘‘(B) TIMING.—The Secretary shall ensure 

24 that value-based payments under paragraph (1) 
306 

•S 1932 PCS 

1 with respect to a year are made by not later 

2 than March 1 of the subsequent year. 

3 ‘‘(c) DESCRIPTION OF HOW PLANS WOULD HAVE

4 FARED UNDER PROGRAM.—Not later than March 1, 

5 2009, the Secretary shall provide each Medicare Advan6 tage organization offering a Medicare Advantage plan with 

7 a description of the Secretary’s estimate of how payments 

8 under this title to such organization with respect to the 

9 plan for a period, as determined by the Secretary, would 

10 have been affected if the program under this section (and 

11 the amendments made by section 6110(d) of the Deficit 

12 Reduction Omnibus Reconciliation Act of 2005) had been 

13 in effect with respect to that period. 

14 ‘‘(d) FUNDING.— 

15 ‘‘(1) AMOUNT.—The amount available for 

16 value-based payments under this section with respect 

17 to a year shall be equal to the amount of the reduc18 tion in expenditures under the Federal Hospital In19 surance Trust Fund under section 1817 and the 

20 Federal Supplementary Medical Insurance Trust 

21 Fund under section 1841 in the year as a result of 

22 the amendments made by section 6110(d)(2) of the 

23 Deficit Reduction Omnibus Reconciliation Act of 

24 2005, as estimated by the Secretary. 
307 

•S 1932 PCS 

1 ‘‘(2) PAYMENTS FROM TRUST FUNDS.—Pay2 ments to organizations under this section shall be 

3 made from the Federal Hospital Insurance Trust 

4 Fund and the Federal Supplementary Medical In5 surance Trust Fund in the same proportion as pay6 ments to Medicare Advantage organizations are 

7 made from such Trust Funds under the first sen8 tence of section 1853(f). 

9 ‘‘ESRD PROVIDER AND FACILITY VALUE-BASED

10 PURCHASING PROGRAM

11 ‘‘SEC. 1860E–5. (a) PROGRAM.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall estab13 lish a program under which value-based payments 

14 are provided each year to providers of services and 

15 renal dialysis facilities that— 

16 ‘‘(A) provide items and services to individ17 uals with end stage renal disease who are en18 rolled under part B; and 

19 ‘‘(B) demonstrate the provision of high 

20 quality health care to such individuals. 

21 ‘‘(2) PROGRAM TO BEGIN IN 2007.—The Sec22 retary shall establish the program under this section 

23 so that value-based payments described in subsection 

24 (b) are made with respect to 2007 and each subse25 quent year. 

26 ‘‘(3) EXCLUSIONS FROM PROGRAM.— 
308 

•S 1932 PCS 

1 ‘‘(A) PEDIATRIC FACILITIES.—Any renal 

2 dialysis facility at least 50 percent of whose pa3 tients are individuals under 18 years of age 

4 shall not be included in the program under this 

5 section. 

6 ‘‘(B) PROVIDERS AND FACILITIES CUR7 RENTLY PARTICIPATING IN BUNDLED CASE-MIX

8 DEMONSTRATION NOT INCLUDED IN PRO9 GRAM.—Any provider of services or renal dialy10 sis facility that is currently participating in the 

11 bundled case-mix adjusted payment system for 

12 ESRD services demonstration project under 

13 section 623(e) of the Medicare Prescription 

14 Drug, Improvement, and Modernization Act of 

15 2003 (Public Law 108–173) shall not be in16 cluded in the program under this section, but 

17 only for so long as the provider or facility is so 

18 participating. 

19 ‘‘(b) VALUE-BASED PAYMENTS.— 

20 ‘‘(1) IN GENERAL.—Subject to paragraph (4), 

21 the Secretary shall make a value-based payment to 

22 a provider of services or a renal dialysis facility with 

23 respect to a year if the Secretary determines that 

24 the quality of the care provided in that year by the 
309 

•S 1932 PCS 

1 provider or facility to individuals with end stage 

2 renal disease who are enrolled under part B— 

3 ‘‘(A) has substantially improved (as deter4 mined by the Secretary) over the prior year; or 

5 ‘‘(B) exceeds a threshold established by the 

6 Secretary. 

7 ‘‘(2) USE OF SYSTEM.—In determining which 

8 providers of services and renal dialysis facilities 

9 qualify for a value-based payment under paragraph 

10 (1), the Secretary shall use the quality measurement 

11 system developed for this section pursuant to section 

12 1860E–1(a). 

13 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

14 AND ALLOCATION OF AWARDS.— 

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

16 determine— 

17 ‘‘(i) the amount of a value-based pay18 ment under paragraph (1) provided to a 

19 provider of services or a renal dialysis fa20 cility; and 

21 ‘‘(ii) subject to subparagraphs (B) 

22 and (C), the allocation of the total amount 

23 available under subsection (c) for value24 based payments for any year between pay25 ments with respect to providers and facili-
310 

•S 1932 PCS 

1 ties that meet the requirement under sub2 paragraph (A) of paragraph (1) and pro3 viders and facilities that meet the require4 ment under subparagraph (B) of such 

5 paragraph. 

6 ‘‘(B) REQUIREMENT REGARDING AMOUNT

7 OF FUNDING AVAILABLE FOR VALUE-BASED

8 PAYMENTS FOR PROVIDERS AND FACILITIES

9 EXCEEDING A THRESHOLD.—The Secretary 

10 shall ensure that— 

11 ‘‘(i) a majority of the total amount 

12 available under subsection (c) for value13 based payments for any year is provided to 

14 providers of services and renal dialysis fa15 cilities that are receiving such payments 

16 because they meet the requirement under 

17 paragraph (1)(B); and 

18 ‘‘(ii) with respect to 2009 and each 

19 subsequent year, the percentage of the 

20 total amount available under subsection (c) 

21 for value-based payments for any year that 

22 is used to make payments to providers and 

23 facilities that meet such requirement is 

24 greater than such percentage in the pre25 vious year. 
311 

•S 1932 PCS 

1 ‘‘(C) ONLY VALUE-BASED PAYMENTS FOR

2 PROVIDERS AND FACILITIES EXCEEDING A

3 THRESHOLD IN 2007.—With respect to 2007, 

4 the entire amount available under subsection (c) 

5 for value-based payments for that year shall be 

6 used to make payments to providers of services 

7 and renal dialysis facilities that meet the re8 quirement under paragraph (1)(B). 

9 ‘‘(4) REQUIREMENTS.— 

10 ‘‘(A) REQUIRED SUBMISSION OF DATA.— 

11 ‘‘(i) IN GENERAL.—In order for a pro12 vider of services or a renal dialysis facility 

13 to be eligible for a value-based payment for 

14 a year, the provider or facility must have 

15 provided for the submission of data in ac16 cordance with clause (ii) with respect to 

17 that year. 

18 ‘‘(ii) SUBMISSION OF DATA.—For 

19 2007 and each subsequent year, each pro20 vider of services and renal dialysis facility 

21 that receives payments under paragraph 

22 (12) shall submit to the Secretary such 

23 data that the Secretary determines is ap24 propriate for the measurement of health 

25 outcomes and other indices of quality, in-
312 

•S 1932 PCS 

1 cluding data necessary for the operation of 

2 the program under this section. Such data 

3 shall be submitted in a form and manner, 

4 and at a time, specified by the Secretary 

5 for purposes of this clause. 

6 ‘‘(iii) AVAILABILITY TO THE PUB7 LIC.—The Secretary shall establish proce8 dures for making data submitted under 

9 clause (ii) available to the public in a clear 

10 and understandable form. Such procedures 

11 shall ensure that a provider or facility has 

12 the opportunity to review the data that is 

13 to be made public with respect to the pro14 vider or facility prior to such data being 

15 made public. 

16 ‘‘(B) ATTESTATION REGARDING DATA.—In 

17 order for a provider of services or a renal dialy18 sis facility to be eligible for a value-based pay19 ment for a year, the provider or facility must 

20 have provided the Secretary (under procedures 

21 established by the Secretary) with an attesta22 tion that the data submitted under subpara23 graph (A)(ii) for the year is complete and accu24 rate. 
313 

•S 1932 PCS 

1 ‘‘(5) TOTAL AMOUNT OF VALUE-BASED PAY2 MENTS EQUAL TO TOTAL AMOUNT OF AVAILABLE

3 FUNDING.—The Secretary shall establish payment 

4 amounts under paragraph (3)(A) so that, as esti5 mated by the Secretary, the total amount of value6 based payments made in a year under paragraph (1) 

7 is equal to the total amount available under sub8 section (c) for such payments for the year. 

9 ‘‘(6) PAYMENT METHODS AND TIMING OF PAY10 MENTS.— 

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (B), the payment of value-based pay13 ments under paragraph (1) shall be based on 

14 such a method as the Secretary determines ap15 propriate. 

16 ‘‘(B) TIMING.—The Secretary shall ensure 

17 that value-based payments under paragraph (1) 

18 with respect to a year are made by not later 

19 than December 31 of the subsequent year. 

20 ‘‘(c) FUNDING.— 

21 ‘‘(1) AMOUNT.—The amount available for 

22 value-based payments under this section with respect 

23 to a year shall be equal to the amount of the reduc24 tion in expenditures under the Federal Supple25 mentary Medical Insurance Trust Fund under sec-
314 

•S 1932 PCS 

1 tion 1841 in the year by reason of the application 

2 of section 1881(b)(12)(G), as estimated by the Sec3 retary. 

4 ‘‘(2) PAYMENTS FROM TRUST FUND.—Pay5 ments to providers of services and renal dialysis fa6 cilities under this section shall be made from the 

7 Federal Supplementary Medical Insurance Trust 

8 Fund. 

9 ‘‘HOME HEALTH AGENCY VALUE-BASED PURCHASING

10 PROGRAM

11 ‘‘SEC. 1860E–6. (a) PROGRAM.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall estab13 lish a program under which value-based payments 

14 are provided each year to home health agencies that 

15 demonstrate the provision of high quality health care 

16 to individuals entitled to benefits under part A or 

17 enrolled under part B. 

18 ‘‘(2) PROGRAM TO BEGIN IN 2008.—The Sec19 retary shall establish the program under this section 

20 so that value-based payments described in subsection 

21 (b) are made with respect to 2008 and each subse22 quent year. 

23 ‘‘(3) HOME HEALTH AGENCY DEFINED.—In 

24 this section, the term ‘‘home health agency’’ has the 

25 meaning given that term in section 1861(o). 

26 ‘‘(b) VALUE-BASED PAYMENTS.— 
315 

•S 1932 PCS 

1 ‘‘(1) IN GENERAL.—Subject to paragraph (4), 

2 the Secretary shall make a value-based payment to 

3 a home health agency with respect to a year if the 

4 Secretary determines that the quality of the care 

5 provided in that year by the agency to individuals 

6 entitled to benefits under part A or enrolled under 

7 part B— 

8 ‘‘(A) has substantially improved (as deter9 mined by the Secretary) over the prior year; or 

10 ‘‘(B) exceeds a threshold established by the 

11 Secretary. 

12 ‘‘(2) USE OF SYSTEM.—In determining which 

13 home health agencies qualify for a value-based pay14 ment under paragraph (1), the Secretary shall use 

15 the quality measurement system developed for this 

16 section pursuant to section 1860E–1(a). 

17 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

18 AND ALLOCATION OF AWARDS.— 

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

20 determine— 

21 ‘‘(i) the amount of a value-based pay22 ment under paragraph (1) provided to a 

23 home health agency; and 

24 ‘‘(ii) subject to subparagraph (B), the 

25 allocation of the total amount available 
316 

•S 1932 PCS 

1 under subsection (d) for value-based pay2 ments for any year between payments with 

3 respect to agencies that meet the require4 ment under subparagraph (A) of para5 graph (1) and agencies that meet the re6 quirement under subparagraph (B) of such 

7 paragraph. 

8 ‘‘(B) REQUIREMENTS REGARDING THE

9 AMOUNT OF FUNDING AVAILABLE FOR VALUE10 BASED PAYMENTS FOR AGENCIES EXCEEDING A

11 THRESHOLD.—The Secretary shall ensure 

12 that— 

13 ‘‘(i) a majority of the total amount 

14 available under subsection (d) for value15 based payments for any year is provided to 

16 home health agencies that are receiving 

17 such payments because they meet the re18 quirement under paragraph (1)(B); and 

19 ‘‘(ii) with respect to 2009 and each 

20 subsequent year, the percentage of the 

21 total amount available under subsection (d) 

22 for value-based payments for any year that 

23 is used to make payments to agencies that 

24 meet such requirement is greater than 

25 such percentage in the previous year. 
317 

•S 1932 PCS 

1 ‘‘(4) REQUIREMENTS.— 

2 ‘‘(A) REQUIRED SUBMISSION OF DATA.— 

3 In order for a home health agency to be eligible 

4 for a value-based payment for a year, the agen5 cy must have complied with the requirements 

6 under section 1895(b)(3)(B)(v)(II) with respect 

7 to that year. 

8 ‘‘(B) ATTESTATION REGARDING DATA.—In 

9 order for a home health agency to be eligible for 

10 a value-based payment for a year, the agency 

11 must have provided the Secretary (under proce12 dures established by the Secretary) with an at13 testation that the data submitted under section 

14 1895(b)(3)(B)(v)(II) with respect to that year 

15 is complete and accurate. 

16 ‘‘(5) TOTAL AMOUNT OF VALUE-BASED PAY17 MENTS EQUAL TO TOTAL AMOUNT OF AVAILABLE

18 FUNDING.—The Secretary shall establish payment 

19 amounts under paragraph (3)(A) so that, as esti20 mated by the Secretary, the total amount of value21 based payments made in a year under paragraph (1) 

22 is equal to the total amount available under sub23 section (d) for such payments for the year. 

24 ‘‘(6) PAYMENT METHODS AND TIMING OF PAY25 MENTS.— 
318 

•S 1932 PCS 

1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), the payment of value-based pay3 ments under paragraph (1) shall be based on 

4 such a method as the Secretary determines ap5 propriate. 

6 ‘‘(B) TIMING.—The Secretary shall ensure 

7 that value-based payments under paragraph (1) 

8 with respect to a year are made by not later 

9 than December 31 of the subsequent year. 

10 ‘‘(c) DESCRIPTION OF HOW AGENCIES WOULD HAVE

11 FARED UNDER PROGRAM.—Not later than January 1, 

12 2008, the Secretary shall provide each home health agency 

13 with a description of the Secretary’s estimate of how pay14 ments to the agency under this title would have been af15 fected with respect to items and services furnished during 

16 a period, as determined by the Secretary, if the program 

17 under this section (and the amendments made by section 

18 6110(f) of the Deficit Reduction Omnibus Reconciliation 

19 Act of 2005) had been in effect with respect to that period. 

20 ‘‘(d) FUNDING.— 

21 ‘‘(1) AMOUNT.—The amount available for 

22 value-based payments under this section with respect 

23 to a year shall be equal to the amount of the reduc24 tion in expenditures under the Federal Hospital In25 surance Trust Fund under section 1817 and Federal 
319 

•S 1932 PCS 

1 Supplementary Medical Insurance Trust Fund under 

2 section 1841 in the year as a result of the applica3 tion of section 1895(b)(3)(D), as estimated by the 

4 Secretary. 

5 ‘‘(2) PAYMENTS FROM TRUST FUND.—Pay6 ments to home health agencies under this section 

7 shall be made from the Federal Hospital Insurance 

8 Trust Fund and Federal Supplementary Medical In9 surance Trust Fund, in the same proportion as pay10 ments for home health services are made from such 

11 trust funds.’’. 

12 (b) HOSPITALS.— 

13 (1) VOLUNTARY SUBMISSION OF HOSPITAL

14 QUALITY DATA.— 

15 (A) UPDATE FOR HOSPITALS THAT SUB16 MIT QUALITY DATA.—Section 1886(b)(3)(B) 

17 (42 U.S.C. 1395ww(b)(3)(B)) is amended— 

18 (i) in clause (vii)— 

19 (I) in subclause (I), by striking 

20 ‘‘for each of fiscal years 2005 through 

21 2007’’ and inserting ‘‘for fiscal years 

22 2005 and 2006’’; and 

23 (II) in subclause (II), by striking 

24 ‘‘Each’’ and inserting ‘‘For fiscal 

25 years 2005 and 2006, each’’; and 
320 

•S 1932 PCS 

1 (ii) by adding at the end the following 

2 new clause: 

3 ‘‘(viii)(I) For purposes of clause 

4 (i)(XX), for fiscal year 2007 and each sub5 sequent fiscal year, in the case of a sub6 section (d) hospital that does not submit 

7 data in accordance with subclause (II) with 

8 respect to such a fiscal year, the applicable 

9 percentage increase under such clause for 

10 such fiscal year shall be reduced by 2 per11 centage points. Such reduction shall apply 

12 only with respect to the fiscal year in13 volved, and the Secretary shall not take 

14 into account such reduction in computing 

15 the applicable percentage increase under 

16 clause (i)(XX) for a subsequent fiscal year. 

17 ‘‘(II) For fiscal year 2007 and each 

18 subsequent fiscal year, each subsection (d) 

19 hospital shall submit to the Secretary such 

20 data that the Secretary determines is ap21 propriate for the measurement of health 

22 care quality, including data necessary for 

23 the operation of the PPS hospital value24 based purchasing program under section 

25 1860E–2. Such data shall be submitted in 
321 

•S 1932 PCS 

1 a form and manner, and at a time, speci2 fied by the Secretary for purposes of this 

3 clause. 

4 ‘‘(III) The Secretary shall establish 

5 procedures for making data submitted 

6 under subclause (II) available to the public 

7 in a clear and understandable form. Such 

8 procedures shall ensure that a subsection 

9 (d) hospital has the opportunity to review 

10 the data that is to be made public with re11 spect to the hospital prior to such data 

12 being made public.’’. 

13 (B) CONFORMING AMENDMENTS.—Section 

14 1886(b)(3)(B)(i) (42 U.S.C. 

15 1395ww(b)(3)(B)(i)) is amended— 

16 (i) in subclause (XIX), by striking 

17 ‘‘2007’’ and inserting ‘‘2006’’; and 

18 (ii) in subclause (XX)— 

19 (I) by striking ‘‘2008’’ and in20 serting ‘‘2007’’; and 

21 (II) by inserting ‘‘subject to 

22 clause (viii),’’ after ‘‘fiscal year,’’. 

23 (2) REDUCTION IN PAYMENTS IN ORDER TO

24 FUND PROGRAM.— 
322 

•S 1932 PCS 

1 (A) REDUCTION IN PAYMENTS.—Section 

2 1886(d)(5)(A) (42 U.S.C. 1395ww(d)(5)(A)) is 

3 amended— 

4 (i) in clause (iv), by striking ‘‘5 per5 cent nor more than 6 percent’’ and insert6 ing ‘‘the applicable lower percent nor more 

7 than the applicable upper percent’’; and 

8 (ii) by adding at the end the following 

9 new clause: 

10 ‘‘(vii) For purposes of clause (iv)— 

11 ‘‘(I) for fiscal years prior to 2007, the ‘lower 

12 percent’ is 5.0 percent and the ‘upper percent’ is 6.0 

13 percent; 

14 ‘‘(II) for fiscal year 2007, the ‘lower percent’ is 

15 4.0 percent and the ‘upper percent’ is 5.0 percent; 

16 ‘‘(III) for fiscal year 2008, the ‘lower percent’ 

17 is 3.75 percent and the ‘upper percent’ is 4.75 per18 cent; 

19 ‘‘(IV) for fiscal year 2009, the ‘lower percent’ 

20 is 3.5 percent and the ‘upper percent’ is 4.5 percent; 

21 ‘‘(V) for fiscal year 2010, the ‘lower percent’ is 

22 3.25 percent and the ‘upper percent’ is 4.25 percent; 

23 and 
323 

•S 1932 PCS 

1 ‘‘(VI) for fiscal year 2011 and each subsequent 

2 fiscal year, the ‘lower percent’ is 3.0 percent and the 

3 ‘upper percent’ is 4.0 percent.’’. 

4 (B) CONTINUATION OF CURRENT LEVEL

5 OF REDUCTIONS TO THE AVERAGE STANDARD6 IZED AMOUNT.—Section 1886(d)(3)(B) (42 

7 U.S.C. 1395ww(d)(3)(B)) is amended to read 

8 as follows: 

9 ‘‘(B) REDUCING FOR VALUE OF OUTLIER PAY10 MENTS AND FOR FUNDING OF HOSPITAL VALUE11 BASED PURCHASING PROGRAM.— 

12 ‘‘(i) IN GENERAL.—The Secretary shall re13 duce each of the average standardized amounts 

14 determined under subparagraph (A) by a factor 

15 equal to a fraction— 

16 ‘‘(I) the numerator of which is the 

17 sum of— 

18 ‘‘(aa) the additional payments 

19 described in paragraph (5)(A) (relat20 ing to outlier payments); and 

21 ‘‘(bb) the applicable percent of 

22 the total payments projected or esti23 mated to be made based on DRG pro24 spective payment rates for discharges 

25 in that year; and 
324 

•S 1932 PCS 

1 ‘‘(II) the denominator of which is the 

2 total payments projected or estimated to 

3 be made based on DRG prospective pay4 ment rates for discharges in that year. 

5 ‘‘(ii) APPLICABLE PERCENT.—For pur6 poses of clause (i)(I)(bb), the term ‘applicable 

7 percent’ means— 

8 ‘‘(I) for fiscal years prior to fiscal 

9 year 2007, 0 percent; 

10 ‘‘(II) for fiscal year 2007, 1.0 percent; 

11 ‘‘(III) for fiscal year 2008, 1.25 per12 cent; 

13 ‘‘(IV) for fiscal year 2009, 1.5 per14 cent; 

15 ‘‘(V) for fiscal year 2010, 1.75 per16 cent; and 

17 ‘‘(VI) for fiscal year 2011 and each 

18 subsequent year, 2.0 percent.’’. 

19 (3) VALUE-BASED PURCHASING DEMONSTRA20 TION PROGRAM FOR CRITICAL ACCESS HOSPITALS.— 

21 (A) ESTABLISHMENT.—Not later than 6 

22 months after the date of enactment of this Act, 

23 the Secretary shall establish a 2-year dem24 onstration program under which the Secretary 

25 establishes a value-based purchasing program 
325 

•S 1932 PCS 

1 under the Medicare program under title XVIII 

2 of the Social Security Act for critical access 

3 hospitals (as defined in section 1861(mm)(1) of 

4 such Act (42 U.S.C. 1395x(mm)(1)) in order to 

5 test innovative methods of measuring and re6 warding quality health care furnished by such 

7 hospitals. 

8 (B) SITES.—The Secretary shall conduct 

9 the demonstration program at 6 critical access 

10 hospitals. The Secretary shall ensure that such 

11 hospitals are representative of the spectrum of 

12 such hospitals that participate in the Medicare 

13 program. 

14 (C) WAIVER AUTHORITY.—The Secretary 

15 may waive such requirements of titles XI and 

16 XVIII of the Social Security Act as may be nec17 essary to carry out the demonstration program. 

18 (D) FUNDING.—The Secretary shall pro19 vide for the transfer from the Federal Hospital 

20 Insurance Trust Fund under section 1817 of 

21 the Social Security Act (42 U.S.C. 1395i) of 

22 such funds as are necessary for the costs of car23 rying out the demonstration program. 

24 (E) REPORT.—Not later than 6 months 

25 after the demonstration program is completed, 
326 

•S 1932 PCS 

1 the Secretary shall submit to Congress a report 

2 on the demonstration program together with 

3 recommendations on the establishment of a per4 manent value-based purchasing program under 

5 the Medicare program for critical access hos6 pitals and recommendations for such other leg7 islation or administrative action as the Sec8 retary determines appropriate. 

9 (c) PHYSICIANS AND PRACTITIONERS.— 

10 (1) VOLUNTARY SUBMISSION OF PHYSICIAN

11 AND PRACTITIONER QUALITY DATA.— 

12 (A) UPDATE FOR PHYSICIANS AND PRACTI13 TIONERS THAT SUBMIT QUALITY DATA.—Sec14 tion 1848(d)(4) (42 U.S.C. 1395w–4(d)(4)) is 

15 amended by adding at the end the following 

16 new subparagraph: 

17 ‘‘(G) ADJUSTMENT IF QUALITY DATA NOT

18 SUBMITTED.— 

19 ‘‘(i) ADJUSTMENT.—For 2007 and 

20 each subsequent year, in the case of serv21 ices furnished by a physician or a practi22 tioner (as defined in section 1860E– 

23 3(a)(3)) that does not submit data in ac24 cordance with clause (ii) with respect to 

25 such a year, the update otherwise deter-
327 

•S 1932 PCS 

1 mined under subparagraph (A) shall be re2 duced by 2 percentage points. Such reduc3 tion shall apply only with respect to the 

4 year involved, and the Secretary shall not 

5 take into account such reduction in com6 puting the conversion factor for a subse7 quent year. 

8 ‘‘(ii) SUBMISSION OF QUALITY

9 DATA.—For 2007 and each subsequent 

10 year, each physician and practitioner (as 

11 defined in section 1860E–3(a)(3)) shall 

12 submit to the Secretary such data that the 

13 Secretary determines is appropriate for the 

14 measurement of health outcomes and other 

15 indices of quality, including data necessary 

16 for the operation of the physician and 

17 practitioner value-based purchasing pro18 gram under section 1860E–3. Such data 

19 shall be submitted in a form and manner, 

20 and at a time, specified by the Secretary 

21 for purposes of this subparagraph. 

22 ‘‘(iii) AVAILABLE TO THE PUBLIC.— 

23 ‘‘(I) IN GENERAL.—Subject to 

24 subclauses (II) and (III), the Sec25 retary shall establish procedures for 
328 

•S 1932 PCS 

1 making data submitted under clause 

2 (ii), with respect to items and services 

3 furnished on or after January 1, 

4 2008, available to the public in 3 

5 phases as follows: 

6 ‘‘(aa) PHASE I.—During 

7 phase I, the Secretary shall make 

8 available to the public the iden9 tity of physicians and practi10 tioners that are submitting such 

11 data. 

12 ‘‘(bb) PHASE II.—During 

13 phase II, the Secretary shall 

14 make available to the public the 

15 identity of physicians and practi16 tioners that are receiving a value17 based payment under section 

18 1860E–3. 

19 ‘‘(cc) PHASE III.—During 

20 phase III, the Secretary shall 

21 make data submitted under 

22 clause (ii) available to the public 

23 in a clear and understandable 

24 form. 
329 

•S 1932 PCS 

1 ‘‘(II) REVIEW.—The procedures 

2 established under subclause (I) shall 

3 ensure that a physician or practitioner 

4 has the opportunity to review the data 

5 that is to be made public with respect 

6 to the physician or practitioner under 

7 subclause (I)(cc) prior to such data 

8 being made public. 

9 ‘‘(III) EXCEPTIONS.—The Sec10 retary shall establish exceptions to the 

11 requirement for making data available 

12 to the public under subclause (I). In 

13 providing for such exceptions, the Sec14 retary shall take into account the size 

15 and specialty representation of the 

16 practice involved.’’. 

17 (B) CONFORMING AMENDMENT.—Section 

18 1848(d)(4)(A) (42 U.S.C. 1395w–4(d)(4)(A)) is 

19 amended, in the matter preceding clause (i), by 

20 striking ‘‘subparagraph (F)’’ and inserting 

21 ‘‘subparagraphs (F) and (G)’’. 

22 (2) REDUCTION IN CONVERSION FACTOR FOR

23 PHYSICIANS AND PRACTITIONERS THAT SUBMIT

24 QUALITY DATA IN ORDER TO FUND PROGRAM.— 
330 

•S 1932 PCS 

1 (A) IN GENERAL.—Section 1848(d) (42 

2 U.S.C. 1395w–4(d)) is amended by adding at 

3 the end the following new paragraph: 

4 ‘‘(6) REDUCTION IN CONVERSION FACTOR FOR

5 PHYSICIANS AND PRACTITIONERS IN ORDER TO

6 FUND VALUE-BASED PURCHASING PROGRAM.— 

7 ‘‘(A) IN GENERAL.—For 2009 and each 

8 subsequent year, the single conversion factor 

9 otherwise applicable under this subsection to 

10 services furnished in the year by a physician or 

11 a practitioner (as defined in section 1860E– 

12 3(a)(3)) that complies with the requirements 

13 under paragraph (4)(G)(ii) for the year (deter14 mined after application of the update under 

15 paragraph (4)) shall be reduced by the applica16 ble percent. 

17 ‘‘(B) APPLICABLE PERCENT.—For pur18 poses of subparagraph (A), the term ‘applicable 

19 percent’ means— 

20 ‘‘(i) for 2009, 1.0 percent; 

21 ‘‘(ii) for 2010, 1.25 percent; 

22 ‘‘(iii) for 2011, 1.5 percent; 

23 ‘‘(iv) for 2012, 1.75 percent; and 

24 ‘‘(v) for 2013 and each subsequent 

25 year, 2.0 percent.’’. 
331 

•S 1932 PCS 

1 (B) CONFORMING AMENDMENT.—Section 

2 1848(d)(1)(A) (42 U.S.C. 1395w–4(d)(1)(A)) is 

3 amended by striking ‘‘The conversion factor’’ 

4 and inserting ‘‘Subject to paragraph (6), the 

5 conversion factor’’. 

6 (d) PLANS.— 

7 (1) SUBMISSION OF QUALITY DATA.— 

8 (A) MEDICARE ADVANTAGE ORGANIZA9 TIONS.—Section 1852(e) (42 U.S.C. 1395w– 

10 22(e)), as amended by section 722 of the Medi11 care Prescription Drug, Improvement, and 

12 Modernization Act of 2003 (Public Law 108– 

13 173; 117 Stat. 2347), is amended— 

14 (i) in paragraph (1), by striking ‘‘an 

15 MA private fee-for-service plan or’’; and 

16 (ii) in paragraph (3)— 

17 (I) in subparagraph (A)— 

18 (aa) in clause (i), by adding 

19 at the end the following new sen20 tence: ‘‘Such data shall include 

21 data necessary for the operation 

22 of the plan value-based pur23 chasing program under section 

24 1860E–4.’’; 
332 

•S 1932 PCS 

1 (bb) by redesignating clause 

2 (iv) as clause (vi); and 

3 (cc) by inserting after clause 

4 (iii) the following new clauses: 

5 ‘‘(iv) APPLICATION TO MA PRIVATE

6 FEE-FOR-SERVICE PLANS.—The Secretary 

7 shall establish as appropriate by regulation 

8 requirements for the collection, analysis, 

9 and reporting of data that permits the 

10 measurement of health outcomes and other 

11 indices of quality for MA organizations 

12 with respect to MA private fee-for-service 

13 plans.’’. 

14 ‘‘(v) AVAILABILITY TO THE PUBLIC.— 

15 The Secretary shall establish procedures 

16 for making data reported under this sub17 paragraph available to the public in a clear 

18 and understandable form. Such procedures 

19 shall ensure that an MA organization has 

20 the opportunity to review the data that is 

21 to be made public with respect to the plan 

22 offered by the organization prior to such 

23 data being made public.’’; and 

24 (II) in subparagraph (B)— 
333 

•S 1932 PCS 

1 (aa) in clause (i), by striking 

2 ‘‘The’’ and inserting ‘‘Subject to 

3 clause (ii), the’’; and 

4 (bb) by striking clause (ii) 

5 and inserting the following new 

6 clause: 

7 ‘‘(ii) CHANGES IN TYPES OF DATA.— 

8 Subject to clause (iii), the Secretary may 

9 only change the types of data that are re10 quired to be submitted under subpara11 graph (A) after submitting to Congress a 

12 report on the reasons for such changes 

13 that was prepared— 

14 ‘‘(I) in the case of data necessary 

15 for the operation of the plan value16 based purchasing program under sec17 tion 1860E–4, after the requirements 

18 under subsections (c) and (d) of sec19 tion 1860E–1 have been complied 

20 with; and 

21 ‘‘(II) in the case of any other 

22 data, in consultation with MA organi23 zations and private accrediting bod24 ies.’’. 
334 

•S 1932 PCS 

1 (B) ELIGIBLE ENTITIES WITH REASON2 ABLE COST CONTRACTS.—Section 1876(h) (42 

3 U.S.C. 1395mm(h)) is amended by adding at 

4 the end the following new paragraph: 

5 ‘‘(6)(A) With respect to plan years beginning on or 

6 after January 1, 2006, an eligible entity with a reasonable 

7 cost reimbursement contract under this subsection shall 

8 submit to the Secretary such data that the Secretary de9 termines is appropriate for the measurement of health out10 comes and other indices of quality, including data nec11 essary for the operation of the plan value-based pur12 chasing program under section 1860E–4. Such data shall 

13 be submitted in a form and manner, and at a time, speci14 fied by the Secretary for purposes of this subparagraph. 

15 ‘‘(B) The Secretary shall establish procedures for 

16 making data reported under subparagraph (A) available 

17 to the public in a clear and understandable form. Such 

18 procedures shall ensure that an eligible entity has the op19 portunity to review the data that is to be made public with 

20 respect to the contract prior to such data being made pub21 lic.’’. 

22 (C) EFFECTIVE DATE.—The amendments 

23 made by this subsection shall apply to plan 

24 years beginning on or after January 1, 2006. 
335 

•S 1932 PCS 

1 (D) SENSE OF THE SENATE.—It is the 

2 sense of the Senate that, in establishing the 

3 timeframes for Medicare Advantage organiza4 tions and entities with a reasonable cost reim5 bursement contract under section 1876(h) of 

6 the Social Security Act (42 U.S.C. 1395mm(h)) 

7 to report quality data under sections 1852(e)(3) 

8 and 1876(h)(6), respectively, of such Act, as 

9 added by this section, the Secretary should take 

10 into account other timeframes for reporting 

11 quality data that such organizations and enti12 ties are subject to under other Federal and 

13 State programs and in the commercial market. 

14 (2) REDUCTION IN PAYMENTS TO ORGANIZA15 TIONS IN ORDER TO FUND PROGRAM.— 

16 (A) MEDICARE ADVANTAGE PAYMENTS.— 

17 (i) IN GENERAL.—Section 1853(a)(1) 

18 (42 U.S.C. 1395w–23(a)(1)), as amended 

19 by section 222(e) of the Medicare Prescrip20 tion Drug, Improvement, and Moderniza21 tion Act of 2003 (Public Law 108–173; 

22 117 Stat. 2200), is amended— 

23 (I) in clauses (i) and (ii) of sub24 paragraph (B), by inserting ‘‘and, for 

25 2009 and each subsequent year, ex-
336 

•S 1932 PCS 

1 cept in the case of an MSA plan or an 

2 MA plan for which there was no con3 tract under section 1857 during either 

4 of the preceding 2 years, reduced by 

5 the applicable percent (as defined in 

6 subparagraph (I))’’ after ‘‘(G)’’; and 

7 (II) by adding at the end the fol8 lowing new subparagraph: 

9 ‘‘(I) APPLICABLE PERCENT.—For pur10 poses of clauses (i) and (ii) of subparagraph 

11 (B), the term ‘applicable percent’ means— 

12 ‘‘(i) for 2009, 1.0 percent; 

13 ‘‘(ii) for 2010, 1.25 percent; 

14 ‘‘(iii) for 2011, 1.5 percent; 

15 ‘‘(iv) for 2012, 1.75 percent; and 

16 ‘‘(v) for 2013 and each subsequent 

17 year, 2.0 percent.’’. 

18 (iii) REDUCTIONS IN PAYMENTS DO

19 NOT AFFECT THE REBATE FOR BIDS

20 BELOW THE BENCHMARK.—The amend21 ments made by subparagraph (A) shall not 

22 be construed to have any effect on— 

23 (I) the determination of whether 

24 a Medicare Advantage plan has aver25 age per capita monthly savings de-
337 

•S 1932 PCS 

1 scribed in paragraph (3)(C) or (4)(C) 

2 of section 1854(b) of the Social Secu3 rity Act (42 U.S.C. 1395w–24(b)); or 

4 (II) the amount of such savings. 

5 (A) REASONABLE COST CONTRACT PAY6 MENTS.—Section 1876(h) (42 U.S.C. 

7 1395mm(h)), as amended by subsection (a)(2), 

8 is amended by adding at the end the following 

9 new paragraph: 

10 ‘‘(7) Notwithstanding the preceding provisions of this 

11 subsection, the Secretary shall reduce each payment to an 

12 eligible organization under this subsection with respect to 

13 benefits provided on or after January 1, 2009, by an 

14 amount equal to the applicable percent (as defined in sec15 tion 1853(a)(1)(I)) of the payment amount.’’. 

16 (3) REQUIREMENT FOR REPORTING ON USE OF

17 VALUE-BASED PAYMENTS.— 

18 (A) MA PLANS.—Section 1854(a) (42 

19 U.S.C. 1395w–24(a)), as amended by section 

20 222(a) of the Medicare Prescription Drug, Im21 provement, and Modernization Act of 2003 

22 (Public Law 108–173; 117 Stat. 2193), is 

23 amended— 
338 

•S 1932 PCS 

1 (i) in paragraph (1)(A)(i), by striking 

2 ‘‘or (6)(A)’’ and inserting ‘‘(6)(A), or (7)’’; 

3 and 

4 (ii) by adding at the end the fol5 lowing: 

6 ‘‘(7) SUBMISSION OF INFORMATION OF HOW

7 VALUE-BASED PAYMENTS WILL BE USED.—For an 

8 MA plan for a plan year beginning on or after Janu9 ary 1, 2011, the information described in this para10 graph is a description of how the organization offer11 ing the plan will use any value-based payments that 

12 the organization received under section 1860E–4 

13 with respect to the plan for the year preceding the 

14 year in which such information is submitted.’’. 

15 (B) REASONABLE COST CONTRACTS.—Sec16 tion 1876(h) (42 U.S.C. 1395mm(h)), as 

17 amended by subsection (c)(2), is amended by 

18 adding at the end the following new paragraph: 

19 ‘‘(8) Not later than July 1 of each year (beginning 

20 in 2010), any eligible entity with a reasonable cost reim21 bursement contract under this subsection that received a 

22 value-based payment under section 1860E–4 with respect 

23 to the contract for the preceding year shall submit to the 

24 Secretary a report containing a description of how the or25 ganization will use such payments under the contract.’’. 
339 

•S 1932 PCS 

1 (e) ESRD PROVIDERS AND FACILITIES.— 

2 (1) VOLUNTARY SUBMISSION OF QUALITY

3 DATA.—Section 1881(b) (42 U.S.C. 1395rr(b)) is 

4 amended by adding at the end the following new 

5 paragraph: 

6 ‘‘(14) By not later than July 31, 2006, the Sec7 retary shall establish procedures under which pro8 viders of services and renal dialysis facilities that re9 ceive payments under paragraph (12) or (13) may 

10 submit to the Secretary data that permits the meas11 urement of health outcomes and other indices of 

12 quality.’’. 

13 (2) REDUCTION IN CASE-MIX ADJUSTED PRO14 SPECTIVE PAYMENT AMOUNT IN ORDER TO FUND

15 PROGRAM.—Section 1881(b)(12) (42 U.S.C. 

16 1395rr(b)(12)) is amended— 

17 (A) by redesignating subparagraph (G) as 

18 subparagraph (H); and 

19 (B) by inserting after subparagraph (F) 

20 the following new subparagraph: 

21 ‘‘(G)(i) In the case of any payment made under 

22 this paragraph for an item or service furnished on 

23 or after January 1, 2007, such payment shall be re24 duced by the applicable percent. The preceding sen25 tence shall not apply to a payment for an item or 
340 

•S 1932 PCS 

1 service furnished by a provider of services or a renal 

2 dialysis facility that is excluded from the program 

3 under section 1860E–5 by reason of subsection 

4 (a)(3) of such section at the time the item or service 

5 is furnished. 

6 ‘‘(ii) For purposes of clause (i), the term ‘appli7 cable percent’ means— 

8 ‘‘(I) for 2007, 1.0 percent; 

9 ‘‘(II) for 2008, 1.25 percent; 

10 ‘‘(III) for 2009, 1.5 percent; 

11 ‘‘(IV) for 2010, 1.75 percent; and 

12 ‘‘(V) for 2011 and each subsequent year, 

13 2.0 percent.’’. 

14 (3) VALUE-BASED PURCHASING UNDER THE

15 DEMONSTRATION OF BUNDLED CASE-MIX ADJUSTED

16 PAYMENT SYSTEM FOR ESRD SERVICES.—Section 

17 623(e) of the Medicare Prescription Drug, Improve18 ment, and Modernization Act of 2003 (42 U.S.C. 

19 1395rr note) is amended by adding at the end the 

20 following new paragraph: 

21 ‘‘(7) VALUE-BASED PURCHASING PROGRAM.— 

22 As part of the demonstration project under this sub23 section, the Secretary shall, beginning January 1, 

24 2007, implement a value-based purchasing program 

25 for providers and facilities participating in the dem-
341 

•S 1932 PCS 

1 onstration project. The Secretary shall implement 

2 such value-based purchasing program in a similar 

3 manner as the ESRD provider and facility value4 based purchasing program is implemented under 

5 section 1860E–5 of the Social Security Act, includ6 ing the funding of such program.’’. 

7 (f) HOME HEALTH AGENCIES.— 

8 (1) UPDATE FOR HOME HEALTH AGENCIES

9 THAT SUBMIT QUALITY DATA.—Section 

10 1895(b)(3)(B) (42 U.S.C.fff(b)(3)(B)) is amended— 

11 (A) in clause (ii)(IV), by inserting ‘‘subject 

12 to clause (v),’’ after ‘‘subsequent year,’’; and 

13 (B) by adding at the end the following new 

14 clause: 

15 ‘‘(v) ADJUSTMENT IF QUALITY DATA

16 NOT SUBMITTED.— 

17 ‘‘(I) ADJUSTMENT.—For pur18 poses of clause (ii)(IV), for 2007 and 

19 each subsequent year, in the case of a 

20 home health agency that does not sub21 mit data in accordance with subclause 

22 (II) with respect to such a year, the 

23 home health market basket percentage 

24 increase applicable under such clause 

25 for such year shall be reduced by 2 
342 

•S 1932 PCS 

1 percentage points. Such reduction 

2 shall apply only with respect to the 

3 year involved, and the Secretary shall 

4 not take into account such reduction 

5 in computing the prospective payment 

6 amount under this section for a subse7 quent year. 

8 ‘‘(II) SUBMISSION OF QUALITY

9 DATA.—For 2007 and each subse10 quent year, each home health agency 

11 shall submit to the Secretary such 

12 data that the Secretary determines is 

13 appropriate for the measurement of 

14 health care quality, including data 

15 necessary for the operation of the 

16 home health agency value-based pur17 chasing program under section 

18 1860E–6. Such data shall be sub19 mitted in a form and manner, and at 

20 a time, specified by the Secretary for 

21 purposes of this clause. 

22 ‘‘(III) PUBLIC AVAILABILITY OF

23 DATA SUBMITTED.—The Secretary 

24 shall establish procedures for making 

25 data submitted under subclause (II) 
343 

•S 1932 PCS 

1 available to the public in a clear and 

2 understandable form. Such procedures 

3 shall ensure that a home health agen4 cy has the opportunity to review the 

5 data that is to be made public with 

6 respect to the agency prior to such 

7 data being made public.’’. 

8 (2) REDUCTION IN STANDARD PROSPECTIVE

9 PAYMENT AMOUNT FOR AGENCIES THAT SUBMIT

10 QUALITY DATA IN ORDER TO FUND PROGRAM.—Sec11 tion 1895(b)(3) (42 U.S.C. 1395fff(b)(3)) is amend12 ed by adding at the end the following new subpara13 graph: 

14 ‘‘(D) REDUCTION IN ORDER TO FUND

15 VALUE-BASED PURCHASING PROGRAM.— 

16 ‘‘(i) IN GENERAL.—For 2008 and 

17 each subsequent year, in the case of a 

18 home health agency that complies with the 

19 submission requirements under section 

20 1895(b)(3)(B)(v)(II) for the year, the 

21 standard prospective payment amount (or 

22 amounts) otherwise applicable under this 

23 paragraph for the year shall be reduced by 

24 the applicable percent. 
344 

•S 1932 PCS 

1 ‘‘(ii) APPLICABLE PERCENT.—For 

2 purposes of clause (i), the term ‘applicable 

3 percent’ means— 

4 ‘‘(I) for 2008, 1.0 percent; 

5 ‘‘(II) for 2009, 1.25 percent; 

6 ‘‘(III) for 2010, 1.5 percent; 

7 ‘‘(IV) for 2011, 1.75 percent; 

8 and 

9 ‘‘(V) for 2012 and each subse10 quent year, 2.0 percent.’’. 

11 (g) SKILLED NURSING FACILITIES.— 

12 (1) REQUIREMENT FOR SKILLED NURSING FA13 CILITIES TO REPORT FUNCTIONAL CAPACITY OF

14 MEDICARE RESIDENTS UPON ADMISSION AND DIS15 CHARGE.—Section 1819(b) (42 U.S.C. 1395i–3(b)) 

16 is amended by adding at the end the following new 

17 paragraph: 

18 ‘‘(9) REPORTING FUNCTIONAL CAPACITY AT AD19 MISSION AND DISCHARGE.— 

20 ‘‘(A) IN GENERAL.—On and after October 

21 1, 2006, a skilled nursing facility must submit 

22 a report to the Secretary on the functional ca23 pacity of each resident who is entitled to bene24 fits under this part at the time of— 
345 

•S 1932 PCS 

1 ‘‘(i) the admission of such resident; 

2 and 

3 ‘‘(ii) the discharge of such resident. 

4 ‘‘(B) TIMEFRAME.—A report required 

5 under subparagraph (A) shall be submitted 

6 within 10 days of the admission or discharge, 

7 as the case may be.’’. 

8 (2) VOLUNTARY SUBMISSION OF SKILLED

9 NURSING FACILITY QUALITY DATA.—Section 

10 1888(e)(4)(E) (42 U.S.C. 1395yy(e)(4)(E)) is 

11 amended— 

12 (A) in clause (ii)(IV), by inserting ‘‘subject 

13 to clause (iii),’’ after ‘‘subsequent fiscal year,’’; 

14 and 

15 (B) by adding at the end the following new 

16 clause: 

17 ‘‘(iii) ADJUSTMENT IF QUALITY DATA

18 NOT SUBMITTED.— 

19 ‘‘(I) ADJUSTMENT.—For pur20 poses of clause (ii)(IV), for fiscal year 

21 2009 and each subsequent fiscal year, 

22 in the case of a skilled nursing facility 

23 that does not submit data in accord24 ance with subclause (II) with respect 

25 to such a fiscal year, the skilled nurs-
346 

•S 1932 PCS 

1 ing facility market basket percentage 

2 change applicable under such clause 

3 for such fiscal year shall be reduced 

4 by 2 percentage points. Such reduc5 tion shall apply only with respect to 

6 the fiscal year involved, and the Sec7 retary shall not take into account 

8 such reduction in computing the Fed9 eral per diem rate under this section 

10 for a subsequent fiscal year. 

11 ‘‘(II) SUBMISSION OF QUALITY

12 DATA.—For fiscal year 2008 and each 

13 subsequent fiscal year, each skilled 

14 nursing facility shall submit to the 

15 Secretary such data that the Sec16 retary determines, after conducting a 

17 study in consultation with the entities 

18 described in subsections (c)(1), (c)(2), 

19 and (d) of section 1860E–1, is appro20 priate for the measurement of health 

21 outcomes and other indices of quality. 

22 Such data shall be submitted in a 

23 form and manner, and at a time, 

24 specified by the Secretary for pur25 poses of this clause. 
347 

•S 1932 PCS 

1 ‘‘(III) PUBLIC AVAILABILITY OF

2 DATA SUBMITTED.—The Secretary 

3 shall establish procedures for making 

4 data submitted under subclause (II) 

5 available to the public in a clear and 

6 understandable form. Such procedures 

7 shall ensure that a facility has the op8 portunity to review the data that is to 

9 be made public with respect to the fa10 cility prior to such data being made 

11 public.’’. 

12 (h) CONFORMING REFERENCES TO PREVIOUS PART

13 E.—Any reference in law (in effect before the date of the 

14 enactment of this Act) to part E of title XVIII of the So15 cial Security Act is deemed a reference to part F of such 

16 title (as in effect after such date). 

17 SEC. 6111. PHASE-OUT OF RISK ADJUSTMENT BUDGET NEU18 TRALITY IN DETERMINING THE AMOUNT OF 

19 PAYMENTS TO MEDICARE ADVANTAGE ORGA20 NIZATIONS. 

21 (a) IN GENERAL.—Section 1853 (42 U.S.C. 1395w– 

22 23) is amended— 

23 (1) in subsection (j)(1)— 

24 (A) in subparagraph (A)— 
348 

•S 1932 PCS 

1 (i) by inserting ‘‘(or, beginning with 

2007, 1 2 ⁄12 of the applicable amount deter3 mined under subsection (k)(1))’’ after 

4 ‘‘1853(c)(1)’’; and 

5 (ii) by inserting ‘‘(for years before 

6 2007)’’ after ‘‘adjusted as appropriate’’; 

7 (B) in subparagraph (B), by inserting 

8 ‘‘(for years before 2007)’’ after ‘‘adjusted as 

9 appropriate’’; and 

10 (2) by adding at the end the following new sub11 section: 

12 ‘‘(k) DETERMINATION OF APPLICABLE AMOUNT FOR

13 PURPOSES OF CALCULATING THE BENCHMARK

14 AMOUNTS.— 

15 ‘‘(1) APPLICABLE AMOUNT DEFINED.—For 

16 purposes of subsection (j), subject to paragraph (2), 

17 the term ‘applicable amount’ means for an area— 

18 ‘‘(A) for 2007— 

19 ‘‘(i) if such year is not specified under 

20 subsection (c)(1)(D)(ii), an amount equal 

21 to the amount specified in subsection 

22 (c)(1)(C) for the area for 2006— 

23 ‘‘(I) first adjusted by the re24 scaling factor for 2006 for the area 

25 (as made available by the Secretary in 
349 

•S 1932 PCS 

1 the announcement of the rates on 

2 April 4, 2005, under subsection 

3 (b)(1), but excluding any national ad4 justment factors for coding intensity 

5 and risk adjustment budget neutrality 

6 that were included in such factor); 

7 and 

8 ‘‘(II) then increased by the na9 tional per capita MA growth percent10 age, described in subsection (c)(6) for 

11 that succeeding year, but not taking 

12 into account any adjustment under 

13 subparagraph (C) of such subsection 

14 for a year before 2004; 

15 ‘‘(ii) if such year is specified under 

16 subsection (c)(1)(D)(ii), an amount equal 

17 to the greater of— 

18 ‘‘(I) the amount determined 

19 under clause (i) for the area for the 

20 year; or 

21 ‘‘(II) the amount specified in 

22 subsection (c)(1)(D) for the area for 

23 the year; and 

24 ‘‘(B) for a subsequent year— 
350 

•S 1932 PCS 

1 ‘‘(i) if such year is not specified under 

2 subsection (c)(1)(D)(ii), an amount equal 

3 to the amount determined under this para4 graph for the area for the previous year, 

5 increased by the national per capita MA 

6 growth percentage, described in subsection 

7 (c)(6) for that succeeding year, but not 

8 taking into account any adjustment under 

9 subparagraph (C) of such subsection for a 

10 year before 2004; and 

11 ‘‘(ii) if such year is specified under 

12 subsection (c)(1)(D)(ii), an amount equal 

13 to the greater of— 

14 ‘‘(I) the amount determined 

15 under clause (i) for the area for the 

16 year; or 

17 ‘‘(II) the amount specified in 

18 subsection (c)(1)(D) for the area for 

19 the year. 

20 ‘‘(2) ADJUSTMENT.— 

21 ‘‘(A) IN GENERAL.—Except as provided in 

22 subparagraph (D), in the case of 2007 through 

23 2010, the applicable amount determined under 

24 paragraph (1) shall be increased by a factor 

25 equal to 1 plus the product of— 
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1 ‘‘(i) the percent determined under 

2 subparagraph (B) for the year; and 

3 ‘‘(ii) the applicable percent for the 

4 year under subparagraph (C). 

5 ‘‘(B) PERCENT DETERMINED.— 

6 ‘‘(i) IN GENERAL.—For purposes of 

7 subparagraph (A)(i), subject to clause (ii), 

8 the percent determined under this subpara9 graph for a year is a percent equal to a 

10 fraction— 

11 ‘‘(I) the numerator of which is an 

12 amount equal to— 

13 ‘‘(aa) the Secretary’s esti14 mate of the total payments that 

15 would have been made under this 

16 part in the year if all the month17 ly payment amounts for all MA 

plans were equal to 1 18 ⁄12 of the 

19 annual MA capitation rate under 

20 subsection (c)(1) for the area and 

21 year; minus 

22 ‘‘(bb) the Secretary’s esti23 mate of the total payments that 

24 would have been made under this 

25 part in the year if all the month-
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1 ly payment amounts for all MA 

plans were equal to 1 2 ⁄12 of the 

3 MA area-specific non-drug 

4 monthly benchmark amount 

5 under subsection (j) for the area 

6 and year; and 

7 ‘‘(II) the denominator of which is 

8 equal to the total amount estimated 

9 for the year under subclause (I)(bb). 

10 ‘‘(ii) REQUIREMENTS.—In estimating 

11 the amounts under clause (i), the Sec12 retary— 

13 ‘‘(I) shall— 

14 ‘‘(aa) use a complete set of 

15 the most recent and representa16 tive Medicare Advantage risk 

17 scores under subsection (a)(3) 

18 that are available from the risk 

19 adjustment model announced for 

20 the year; 

21 ‘‘(bb) adjust the risk scores 

22 to reflect changes in treatment 

23 and coding practices in the fee24 for-service sector; 
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1 ‘‘(cc) adjust the risk scores 

2 for differences in coding patterns 

3 between Medicare Advantage 

4 plans and providers under part A 

5 and B to the extent that the Sec6 retary has identified such dif7 ferences; 

8 ‘‘(dd) as necessary, adjust 

9 the risk scores for late data sub10 mitted by Medicare Advantage 

11 organizations; 

12 ‘‘(ee) as necessary, adjust 

13 the risk scores for lagged cohorts; 

14 and 

15 ‘‘(ff) as necessary, adjust 

16 the risk scores for changes in en17 rollment in Medicare Advantage 

18 plans during the year; and 

19 ‘‘(II) may take into account the 

20 estimated health risk of enrollees in 

21 preferred provider organization plans 

22 (including MA regional plans) for the 

23 year. 

24 In order to make the adjustment required 

25 under item (cc) and to ensure payment ac-
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1 curacy, the Secretary shall conduct an 

2 analysis of the differences described in 

3 such item. The Secretary shall complete 

4 such analysis by a date necessary to ensure 

5 that the results of such analysis are incor6 porated into the payment rates for a year 

7 not later than 2008. In conducting such 

8 analysis, the Secretary shall use data sub9 mitted with respect to 2004 and subse10 quent years, as available. 

11 ‘‘(C) APPLICABLE PERCENT.—For pur12 poses of subparagraph (A)(ii), the term ‘appli13 cable percent’ means— 

14 ‘‘(i) for 2007, 55 percent; 

15 ‘‘(ii) for 2008, 40 percent; 

16 ‘‘(iii) for 2009, 25 percent; and 

17 ‘‘(iv) for 2010, 5 percent. 

18 ‘‘(D) TERMINATION OF ADJUSTMENT.— 

19 The Secretary shall not make any adjustment 

20 under subparagraph (A) in a year if the 

21 amount estimated under subparagraph 

22 (B)(i)(I)(bb) for the year is equal to or greater 

23 than the amount estimated under subparagraph 

24 (B)(i)(I)(aa) for the year. 

25 ‘‘(3) NO ADDITIONAL ADJUSTMENTS.— 
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1 ‘‘(A) IN GENERAL.—Except for the adjust2 ment provided for in paragraph (2), the Sec3 retary may not make any adjustment to the ap4 plicable amount determined in paragraph (1) 

5 for any year. 

6 ‘‘(B) RULE OF CONSTRUCTION.—Nothing 

7 in this subsection shall be construed to limit the 

8 authority of the Secretary to risk adjust the 

9 amount under subsection (c)(1)(D) pursuant to 

10 clause (i) of such subsection.’’. 

11 (b) REFINEMENTS TO HEALTH STATUS ADJUST12 MENT.—Section 1853(a)(1)(C) (42 U.S.C. 1395w–23) is 

13 amended by inserting after the first sentence the following 

14 new sentence: ‘‘In applying such adjustment for health 

15 status to such payment amounts, the Secretary shall en16 sure that such adjustment reflects changes in treatment 

17 and coding practices in the fee-for-service sector and re18 flects differences in coding patterns between Medicare Ad19 vantage plans and providers under part A and B to the 

20 extent that the Secretary has identified such differences.’’. 

21 SEC. 6112. ELIMINATION OF MEDICARE ADVANTAGE RE22 GIONAL PLAN STABILIZATION FUND. 

23 (a) ELIMINATION.— 

24 (1) IN GENERAL.—Subsection (e) of section 

25 1858 (42 U.S.C. 1395w–27a) is repealed. 
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1 (2) CONFORMING AMENDMENT.—Section 

2 1858(f)(1) (42 U.S.C. 1395w–27a(f)(1)) is amended 

3 by striking ‘‘subject to subsection (e),’’. 

4 (3) EFFECTIVE DATE.—The amendments made 

5 by this subsection shall take effect as if included in 

6 the enactment of section 221(c) of the Medicare Pre7 scription Drug, Improvement, and Modernization 

8 Act of 2003 (Public Law 108–173; 117 Stat. 2181). 

9 (b) TIMEFRAME FOR PART A AND B PAYMENTS.— 

10 Notwithstanding sections 1816(c) and 1842(c)(2) of the 

11 Social Security Act or any other provision of law— 

12 (1) any payment from the Federal Hospital In13 surance Trust Fund under section 1817 of the So14 cial Security Act (42 U.S.C. 1395i) or from the Fed15 eral Supplementary Medical Insurance Trust Fund 

16 under section 1841 of such Act (42 U.S.C. 1395t) 

17 for claims submitted under part A or B of title 

18 XVIII of such Act for items and services furnished 

19 under such part A or B, respectively, that would 

20 otherwise be payable during the period beginning on 

21 September 22, 2006, and ending on September 30, 

22 2006, shall be paid on the first business day of Oc23 tober 2006; and 
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1 (2) no interest or late penalty shall be paid to 

2 an entity or individual for any delay in a payment 

3 by reason of the application of paragraph (1). 

4 SEC. 6113. RURAL PACE PROVIDER GRANT PROGRAM. 

5 (a) DEFINITIONS.—In this section: 

6 (1) CMS.—The term ‘‘CMS’’ means the Cen7 ters for Medicare & Medicaid Services. 

8 (2) ELIGIBLE PARTICIPANT.—The term ‘‘eligi9 ble participant’’ means a PACE program eligible in10 dividual (as defined in sections 1894(a)(5) and 

11 1934(a)(5) of the Social Security Act (42 U.S.C. 

12 1395eee(a)(5); 1396u–4(a)(5))). 

13 (3) PACE PROGRAM.—The term ‘‘PACE pro14 gram’’ has the meaning given that term in sections 

15 1894(a)(2) and 1934(a)(2) of the Social Security 

16 Act (42 U.S.C. 1395eee(a)(2); 1396u–4(a)(2)). 

17 (4) PACE PROVIDER.—The term ‘‘PACE pro18 vider’’ has the meaning given that term in section 

19 1894(a)(3) or 1934(a)(3) of the Social Security Act 

20 (42 U.S.C. 1395eee(a)(3); 1396u–4(a)(3)). 

21 (5) RURAL AREA.—The term ‘‘rural area’’ has 

22 the meaning given that term in section 

23 1886(d)(2)(D) of the Social Security Act (42 U.S.C. 

24 1395ww(d)(2)(D)). 
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1 (6) RURAL PACE PILOT SITE.—The term ‘‘rural 

2 PACE pilot site’’ means a PACE provider that has 

3 been approved to provide services in a geographic 

4 service area that is, in whole or in part, a rural area, 

5 and that has received a site development grant 

6 under this section. 

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

8 the Secretary of Health and Human Services. 

9 (b) SITE DEVELOPMENT GRANTS AND TECHNICAL

10 ASSISTANCE PROGRAM.— 

11 (1) SITE DEVELOPMENT GRANTS.— 

12 (A) IN GENERAL.—The Secretary shall es13 tablish a process and criteria to award site de14 velopment grants to qualified PACE providers 

15 that have been approved to serve a geographic 

16 service area that is, in whole or in part, a rural 

17 area. 

18 (B) AMOUNT PER AWARD.—A site develop19 ment grant awarded under subparagraph (A) to 

20 any individual rural PACE pilot site shall not 

21 exceed $750,000. 

22 (C) NUMBER OF AWARDS.—Not more than 

23 15 rural PACE pilot sites shall be awarded a 

24 site development grant under subparagraph 

25 (A). 
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1 (D) USE OF FUNDS.—Funds made avail2 able under a site development grant awarded 

3 under subparagraph (A) may be used for the 

4 following expenses only to the extent such ex5 penses are incurred in relation to establishing 

6 or delivering PACE program services in a rural 

7 area: 

8 (i) Feasibility analysis and planning. 

9 (ii) Interdisciplinary team develop10 ment. 

11 (iii) Development of a provider net12 work, including contract development. 

13 (iv) Development or adaptation of 

14 claims processing systems. 

15 (v) Preparation of special education 

16 and outreach efforts required for the 

17 PACE program. 

18 (vi) Development of expense reporting 

19 required for calculation of outlier payments 

20 or reconciliation processes. 

21 (vii) Development of any special qual22 ity of care or patient satisfaction data col23 lection efforts. 

24 (viii) Establishment of a working cap25 ital fund to sustain fixed administrative, 
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1 facility, or other fixed costs until the pro2 vider reaches sufficient enrollment size. 

3 (ix) Startup and development costs in4 curred prior to the approval of the rural 

5 PACE pilot site’s PACE provider applica6 tion by CMS. 

7 (x) Any other efforts determined by 

8 the rural PACE pilot site to be critical to 

9 its successful startup, as approved by the 

10 Secretary. 

11 (E) APPROPRIATION.— 

12 (i) IN GENERAL.—Out of funds in the 

13 Treasury not otherwise appropriated, there 

14 are appropriated to the Secretary to carry 

15 out this subsection for the period of fiscal 

16 years 2006 through 2007, $7,500,000. 

17 (ii) AVAILABILITY.—Funds appro18 priated under clause (i) shall remain avail19 able for expenditure through fiscal year 

20 2010. 

21 (2) TECHNICAL ASSISTANCE PROGRAM.—The 

22 Secretary shall establish a technical assistance pro23 gram to provide— 
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1 (A) outreach and education to State agen2 cies and provider organizations interested in es3 tablishing PACE programs in rural areas; and 

4 (B) technical assistance necessary to sup5 port rural PACE pilot sites. 

6 (c) COST OUTLIER PROTECTION FOR RURAL PACE

7 PILOT SITES.— 

8 (1) ESTABLISHMENT OF FUND FOR REIM9 BURSEMENT OF OUTLIER COSTS.— 

10 (A) IN GENERAL.—Notwithstanding any 

11 other provision of law, the Secretary shall es12 tablish an outlier fund to reimburse rural 

13 PACE pilot sites for outlier costs (as defined in 

14 subparagraph (B)) incurred for eligible partici15 pants who reside in a rural area in accordance 

16 with the expense payment specified in subpara17 graph (C). 

18 (B) OUTLIER COSTS DEFINED.— 

19 (i) IN GENERAL.—In subparagraph 

20 (A), the term ‘‘outlier costs’’ means the in21 patient and related physician and ancillary 

22 costs in excess of $50,000 incurred within 

23 a given 12-month period for an eligible 

24 participant who resides in a rural area. 
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1 (ii) INCLUSION IN ONLY 1 PERIOD.— 

2 Outlier costs may not be included in more 

3 than one 12-month period for purposes of 

4 calculating an outlier expense payment 

5 under subparagraph (C). 

6 (C) OUTLIER EXPENSE PAYMENT.— 

7 (i) PAYMENT FOR OUTLIER COSTS.— 

8 Subject to clause (ii), in the case of a rural 

9 PACE pilot site that has incurred outlier 

10 costs for an eligible participant, the rural 

11 PACE pilot site shall receive an outlier ex12 pense payment equal to 80 percent of such 

13 costs. 

14 (ii) LIMITATIONS.— 

15 (I) COSTS INCURRED PER ELIGI16 BLE PARTICIPANT.—The total amount 

17 of outlier expense payments made 

18 under clause (i) to a rural PACE pilot 

19 site for outlier costs incurred with re20 spect to an eligible participant shall 

21 not exceed $100,000 for the 12-month 

22 period used to calculate the payment. 

23 (II) COSTS INCURRED PER PRO24 VIDER.—No rural PACE pilot site 

25 may receive more than $500,000 in 
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1 total outlier expense payments in a 

2 12-month period. 

3 (III) LIMITATION OF OUTLIER

4 COST REIMBURSEMENT PERIOD.—A 

5 rural PACE pilot site shall only re6 ceive outlier expense payments under 

7 this subparagraph with respect to 

8 outlier costs incurred during the first 

9 3 years of the site’s operation. 

10 (D) REQUIREMENT TO ACCESS RISK RE11 SERVES PRIOR TO PAYMENT.—A rural PACE 

12 pilot site shall access and exhaust any risk re13 serves held or arranged for the provider (other 

14 than revenue or reserves maintained to satisfy 

15 the requirements of section 460.80(c) of title 

16 42, Code of Federal Regulations) and any 

17 working capital established through a site devel18 opment grant awarded under subsection (b)(1), 

19 prior to receiving any payment from the outlier 

20 fund. 

21 (E) APPROPRIATION.— 

22 (i) IN GENERAL.—Out of funds in the 

23 Treasury not otherwise appropriated, there 

24 are appropriated to the Secretary to carry 
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1 out this subsection for the period of fiscal 

2 years 2006 through 2007, $10,000,000. 

3 (ii) AVAILABILITY.—Funds appro4 priated under clause (i) shall remain avail5 able for expenditure through fiscal year 

6 2010. 

7 (d) EVALUATION OF PACE PROVIDERS SERVING

8 RURAL SERVICE AREAS.—Not later than 60 months after 

9 the date of enactment of this Act, the Secretary shall sub10 mit a report to Congress containing an evaluation of the 

11 experience of rural PACE pilot sites. 

12 (e) AMOUNTS IN ADDITION TO PAYMENTS UNDER

13 SOCIAL SECURITY ACT.—Any amounts paid under the au14 thority of this section to a PACE provider shall be in addi15 tion to payments made to the provider under section 1894 

16 or 1934 of the Social Security Act (42 U.S.C. 1395eee; 

17 1396u–4). 

18 SEC. 6114. WAIVER OF PART B LATE ENROLLMENT PEN19 ALTY FOR CERTAIN INTERNATIONAL VOLUN20 TEERS. 

21 (a) IN GENERAL.— 

22 (1) WAIVER OF PENALTY.—Section 1839(b)(42 

23 U.S.C. 1395r(b)) is amended in the second sentence 

24 by inserting the following before the period at the 

25 end: ‘‘or months for which the individual can dem-
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1 onstrate that the individual was an individual de2 scribed in section 1837(k)(3)’’. 

3 (2) SPECIAL ENROLLMENT PERIOD.— 

4 (A) IN GENERAL.—Section 1837 (42 

5 U.S.C. 1395p) is amended by adding at the end 

6 the following new subsection: 

7 ‘‘(k)(1) In the case of an individual who— 

8 ‘‘(A) at the time the individual first satisfies 

9 paragraph (1) or (2) of section 1836, is described in 

10 paragraph (3), and has elected not to enroll (or to 

11 be deemed enrolled) under this section during the in12 dividual’s initial enrollment period; or 

13 ‘‘(B) has terminated enrollment under this sec14 tion during a month in which the individual is de15 scribed in paragraph (3), 

16 there shall be a special enrollment period described in 

17 paragraph (2). 

18 ‘‘(2) The special enrollment period referred to in 

19 paragraph (1) is the 6-month period beginning on the first 

20 day of the month which includes the date that the indi21 vidual is no longer described in paragraph (3). 

22 ‘‘(3) For purposes of paragraph (1), an individual de23 scribed in this paragraph is an individual that is serving 

24 as a volunteer outside of the United States through a pro25 gram— 
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1 ‘‘(A) that covers at least a 12-month period; 

2 and 

3 ‘‘(B) that is sponsored by an organization de4 scribed in section 501(c)(3) of the Internal Revenue 

5 Code of 1986 and exempt from taxation under sec6 tion 501(a) of such Code.’’. 

7 (B) COVERAGE PERIOD.—Section 1838 

8 (42 U.S.C. 1395q) is amended by adding at the 

9 end the following new subsection: 

10 ‘‘(f) Notwithstanding subsection (a), in the case of 

11 an individual who enrolls during a special enrollment pe12 riod pursuant to section 1837(k), the coverage period shall 

13 begin on the first day of the month following the month 

14 in which the individual so enrolls.’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 subsection (a)(1) shall apply to months beginning with 

17 January 2007 and the amendments made by subsection 

18 (a)(2) shall take effect on January 1, 2007. 

19 SEC. 6115. DELIVERY OF SERVICES AT FEDERALLY QUALI20 FIED HEALTH CENTERS. 

21 (a) COVERAGE.— 

22 (1) IN GENERAL.—Section 1861(aa)(3) (42 

23 U.S.C. 1395x(aa)(3)) is amended— 
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1 (A) in subparagraph (A), by striking ‘‘, 

2 and’’ and inserting ‘‘and services described in 

3 subsections (qq) and (vv); and’’; 

4 (B) in subparagraph (B), by striking ‘‘sec5 tions 329, 330, and 340’’ and inserting ‘‘section 

6 330’’; and 

7 (C) in the flush matter at the end, by in8 serting ‘‘by the center or by a health care pro9 fessional under contract with the center’’ after 

10 ‘‘outpatient of a Federally qualified health cen11 ter’’. 

12 (2) CONSOLIDATED BILLING.—The first sen13 tence of section 1842(b)(6)(F) (42 U.S.C. 

14 1395u(b)(6)(F)) is amended— 

15 (A) by striking ‘‘and (G)’’ and inserting 

16 ‘‘(G)’’; and 

17 (B) by inserting before the period at the 

18 end the following: ‘‘, and (H) in the case of 

19 services described in section 1861(aa)(3) that 

20 are furnished by a health care professional 

21 under contract with a Federally qualified health 

22 center, payment shall be made to the center’’. 

23 (b) TECHNICAL CORRECTIONS.—Clauses (i) and 

24 (ii)(II) of section 1861(aa)(4)(A) (42 U.S.C. 
368 

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1 1395x(aa)(4)(A)) are each amended by striking ‘‘(other 

2 than subsection (h))’’. 

3 (c) EFFECTIVE DATES.—The amendments made by 

4 this section shall apply to services furnished on or after 

5 January 1, 2006. 

6 TITLE VII—COMMITTEE ON 

7 HEALTH, EDUCATION, LABOR, 

8 AND PENSIONS 

9 Subtitle A—Education Provisions 

10 CHAPTER 1—EDUCATION 

11 SEC. 7101. PROVISIONAL GRANT ASSISTANCE PROGRAM. 

12 (a) AMENDMENT.—Subpart 1 of part A of title IV 

13 of the Higher Education Act of 1965 (20 U.S.C. 1070a) 

14 is amended by adding at the end the following: 

15 ‘‘SEC. 401A. PROVISIONAL GRANT ASSISTANCE PROGRAM. 

16 ‘‘(a) GRANTS.— 

17 ‘‘(1) IN GENERAL.—From amounts appro18 priated under subsection (e) for a fiscal year and 

19 subject to subsection (b), the Secretary shall award 

20 grants to students (which shall be known as 

21 ‘ProGAP awards’) in the same manner as the Sec22 retary awards grants to students under section 401, 

23 except that— 

24 ‘‘(A) at the beginning of each award year, 

25 the Secretary shall establish a maximum and 
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1 minimum award level based on amounts made 

2 available under subsection (e); 

3 ‘‘(B) the Secretary shall only award grants 

4 under this section to students eligible for a 

5 grant under section 401 for the award year; 

6 and 

7 ‘‘(C) when determining eligibility for the 

8 awards, the Secretary shall consider only those 

9 students who are eligible for a grant under sec10 tion 401, as of June 30 of the award year for 

11 which the determination is made. 

12 ‘‘(2) STUDENTS WITH THE GREATEST NEED.— 

13 The Secretary shall ensure grants are awarded 

14 under this section to students with the greatest need 

15 as determined in accordance with section 471. 

16 ‘‘(b) COST OF ATTENDANCE LIMITATION.—A grant 

17 awarded under this section for an award year shall be 

18 awarded in an amount that does not exceed— 

19 ‘‘(1) the student’s cost of attendance for the 

20 award year; less 

21 ‘‘(2) an amount equal to the expected family 

22 contribution for that student for the award year. 

23 ‘‘(c) SUPPLEMENT NOT SUPPLANT.—Grants award24 ed from funds made available under subsection (e) shall 
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1 be used to supplement, and not supplant, other Federal, 

2 State, or institutional grant funds. 

3 ‘‘(d) USE OF EXCESS FUNDS.— 

4 ‘‘(1) 15 PERCENT OR LESS.—If, at the end of 

5 a fiscal year, the funds available for making grant 

6 payments under this section exceed the amount nec7 essary to make the grant payments required under 

8 this section to eligible students by 15 percent or less, 

9 then all of the excess funds shall remain available 

10 for making grant payments under this section dur11 ing the next succeeding fiscal year. 

12 ‘‘(2) MORE THAN 15 PERCENT.—If, at the end 

13 of a fiscal year, the funds available for making grant 

14 payments under this section exceed the amount nec15 essary to make the grant payments required under 

16 this section to eligible students by more than 15 per17 cent, then all of such funds shall remain available 

18 for making such grant payments but grant payments 

19 may be made under this paragraph only with respect 

20 to awards for that fiscal year.’’. 

21 ‘‘(e) AUTHORIZATION AND APPROPRIATION OF

22 FUNDS.—There are authorized to be appropriated, and 

23 there are appropriated, out of any money in the Treasury 

24 not otherwise appropriated, for the Department of Edu25 cation to carry out this section and section 401B— 
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1 ‘‘(1) $1,897,000,000 for fiscal year 2006; 

2 ‘‘(2) $1,901,000,000 for fiscal year 2007; 

3 ‘‘(3) $1,899,000,000 for fiscal year 2008; 

4 ‘‘(4) $1,898,000,000 for fiscal year 2009; and 

5 ‘‘(5) $1,897,000,000 for fiscal year 2010. 

6 ‘‘(f) SUNSET PROVISION.—This section shall be effec7 tive with respect to amounts appropriated for fiscal year 

8 2006 and each of the 4 succeeding fiscal years.’’. 

9 (b) SENSE OF THE SENATE.—It is the sense of the 

10 Senate that the amounts appropriated to carry out sec11 tions 401A and 401B of the Higher Education Act of 

12 1965 are the result of the savings generated by the 

13 amendments made by this chapter. 

14 SEC. 7102. NATIONAL SMART GRANTS. 

15 Subpart 1 of part A of title IV of the Higher Edu16 cation Act of 1965 (20 U.S.C. 1070a) is further amended 

17 by adding after section 401A (as added by section 7101): 

18 ‘‘SEC. 401B. NATIONAL SMART GRANTS. 

19 ‘‘(a) FINDINGS.—Congress makes the following find20 ings: 

21 ‘‘(1) If the United States is to remain a world 

22 leader in the global economy, its college students 

23 must have the training they need to compete for the 

24 best jobs of the 21st century. 
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1 (2) The United States intelligence community 

2 faces major shortages in foreign languages critical to 

3 national security, and will also require major incen4 tives to fill projected workforce needs. 

5 ‘‘(3) Increasingly, the best jobs of the 21st cen6 tury will require baccalaureate degrees in the 

7 sciences, mathematics, technology, engineering, and 

8 foreign languages critical to national security, or be 

9 generated by people who have such degrees. 

10 ‘‘(4) Congress should establish a National 

11 Science and Mathematics Access to Retain Talent 

12 (SMART) grant program to meet the goals de13 scribed in paragraphs (1) through (3). 

14 ‘‘(b) PURPOSE.—The purpose of this section is to in15 crease the number of postsecondary students from low-in16 come backgrounds who are enrolled in studies leading to 

17 baccalaureate degrees in physical, life, or computer 

18 sciences, mathematics, technology, engineering, and for19 eign languages critical to national security. 

20 ‘‘(c) GRANTS AUTHORIZED.—From amounts appro21 priated under section 401A(c) for a fiscal year, the Sec22 retary shall award grants to eligible students to assist the 

23 eligible students in paying their college education ex24 penses. 
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1 ‘‘(d) DESIGNATION.—A grant under this section shall 

2 be known as a ‘National Science and Mathematics Access 

3 to Retain Talent Grant’ or a ‘National SMART Grant’. 

4 ‘‘(e) DEFINITION OF ELIGIBLE STUDENT.—In this 

5 section the term ‘eligible student’ means a student who, 

6 for the academic year for which the determination is 

7 made— 

8 ‘‘(1) is eligible for a Federal Pell Grant; and 

9 ‘‘(2) is in the student’s 3rd or 4th year at an 

10 institution of higher education majoring in— 

11 ‘‘(A) mathematics, science, technology, or 

12 engineering (as determined by the Secretary 

13 pursuant to regulations); or 

14 ‘‘(B) a foreign language that the Sec15 retary, in consultation with the Director of Na16 tional Intelligence, determines is critical to the 

17 national security of the United States. 

18 ‘‘(f) GRANT AMOUNT.—The Secretary shall award a 

19 grant under this section in an amount that does not exceed 

20 $1,500 for an academic year. 

21 ‘‘(g) FUNDING RULE.—The Secretary shall use not 

22 more than $450,000,000 of the funds appropriated under 

23 section 401A(c) for each of the fiscal years 2006 through 

24 2010 to carry out this section. 
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1 ‘‘(h) UNOBLIGATED FUNDS AVAILABLE FOR FED2 ERAL GRANT ASSISTANCE.—The Secretary shall make 

3 any funds made available under subsection (g) for a fiscal 

4 year that remain unobligated at the end of the fiscal year 

5 available to carry out section 401A. 

6 ‘‘(i) MATCHING ASSISTANCE.—An institution of 

7 higher education may, from funds provided from private 

8 sources, provide additional assistance to a student receiv9 ing a grant under this section, except that the total assist10 ance provided under this title to a student shall not exceed 

11 the student’s cost of attendance.’’. 

12 SEC. 7103. LOAN LIMITS. 

13 (a) FEDERAL INSURANCE LIMITS.—Section 

14 425(a)(1)(A) of the Higher Education Act of 1965 (20 

15 U.S.C. 1075(a)(1)(A)) is amended— 

16 (1) in clause (i)(I), by striking ‘‘$2,625’’ and 

17 inserting ‘‘$3,500’’; and 

18 (2) in clause (ii)(I), by striking ‘‘$3,500’’ and 

19 inserting ‘‘$4,500’’. 

20 (b) GUARANTEE LIMITS.—Section 428(b)(1)(A) of 

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

22 1078(b)(1)(A)) is amended— 

23 (1) in clause (i)(I), by striking ‘‘$2,625’’ and 

24 inserting ‘‘$3,500’’; and 
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1 (2) in clause (ii)(I), by striking ‘‘$3,500’’ and 

2 inserting ‘‘$4,500’’. 

3 (c) FEDERAL PLUS LOANS.—Section 428B of the 

4 Higher Education Act of 1965 (20 U.S.C. 1078–2) is 

5 amended— 

6 (1) in subsection (a)(1)— 

7 (A) in the matter preceding subparagraph 

8 (A), by striking ‘‘Parents’’ and inserting ‘‘A 

9 graduate or professional student or the par10 ents’’; 

11 (B) in subparagraph (A), by striking ‘‘the 

12 parents’’ and inserting ‘‘the graduate or profes13 sional student or the parents’’; and 

14 (C) in subparagraph (B), by striking ‘‘the 

15 parents’’ and inserting ‘‘the graduate or profes16 sional student or the parents’’; 

17 (2) in subsection (b), by striking ‘‘any parent’’ 

18 and inserting ‘‘any graduate or professional student 

19 or any parent’’; 

20 (3) in subsection (c)(2), by striking ‘‘parent’’ 

21 and inserting ‘‘graduate or professional student or 

22 parent’’; and 

23 (4) in subsection (d)(1), by striking ‘‘the par24 ent’’ and inserting ‘‘the graduate or professional stu25 dent or the parent’’. 
376 

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1 (d) UNSUBSIDIZED STAFFORD LOANS FOR GRAD2 UATE OR PROFESSIONAL STUDENTS.—Section 

3 428H(d)(2) of the Higher Education Act of 1965 (20 

4 U.S.C. 1078–8(d)(2)) is amended— 

5 (1) in subparagraph (C), by striking ‘‘$10,000’’ 

6 and inserting ‘‘$12,000’’; and 

7 (2) in subparagraph (D)— 

8 (A) in clause (i), by striking ‘‘$5,000’’ and 

9 inserting ‘‘$7,000’’; and 

10 (B) in clause (ii), by striking ‘‘$5,000’’ 

11 and inserting ‘‘$7,000’’. 

12 SEC. 7104. PLUS LOAN INTEREST RATES AND ZERO SPE13 CIAL ALLOWANCE PAYMENT. 

14 (a) PLUS LOANS.—Section 427A(l)(2) of the Higher 

15 Education Act of 1965 (20 U.S.C. 1077a(l)(2)) is amend16 ed by striking ‘‘7.9 percent’’ and inserting ‘‘8.5 percent’’. 

17 (b) CONFORMING AMENDMENTS FOR SPECIAL AL18 LOWANCES.— 

19 (1) AMENDMENTS.—Subparagraph (I) of sec20 tion 438(b)(2) of the Higher Education Act of 1965 

21 (20 U.S.C. 1087–1(b)(2)) is amended— 

22 (A) in clause (iv), by striking ‘‘, subject to 

23 clause (vi) of this subparagraph’’; 
377 

•S 1932 PCS 

1 (B) in clause (v), by striking ‘‘July 1, 

2 2006’’ each place it appears and inserting 

3 ‘‘April 1, 2006’’; and 

4 (C) by striking clauses (vi) and (vii) and 

5 inserting the following: 

6 ‘‘(vi) RECAPTURE OF EXCESS INTER7 EST.— 

8 ‘‘(I) EXCESS CREDITED.—With 

9 respect to a loan on which the applica10 ble interest rate is determined under 

11 subsection (k) or (l) of section 427A 

12 and for which the first disbursement 

13 of principal is made on or after April 

14 1, 2006, if the applicable interest rate 

15 for any 3-month period exceeds the 

16 special allowance support level appli17 cable to such loan under this subpara18 graph for such period, then an adjust19 ment shall be made by calculating the 

20 excess interest in the amount com21 puted under subclause (II) of this 

22 clause, and by crediting the excess in23 terest to the Government not less 

24 often than annually. 
378 

•S 1932 PCS 

1 ‘‘(II) CALCULATION OF EX2 CESS.—The amount of any adjust3 ment of interest on a loan to be made 

4 under this subsection for any quarter 

5 shall be equal to— 

6 ‘‘(aa) the applicable interest 

7 rate minus the special allowance 

8 support level determined under 

9 this subparagraph; multiplied by 

10 ‘‘(bb) the average daily prin11 cipal balance of the loan (not in12 cluding unearned interest added 

13 to principal) during such cal14 endar quarter; divided by 

15 ‘‘(cc) four. 

16 ‘‘(III) SPECIAL ALLOWANCE SUP17 PORT LEVEL.—For purposes of this 

18 clause, the term ‘special allowance 

19 support level’ means, for any loan, a 

20 number expressed as a percentage 

21 equal to the sum of the rates deter22 mined under subclauses (I) and (III) 

23 of clause (i), and applying any substi24 tution rules applicable to such loan 
379 

•S 1932 PCS 

1 under clauses (ii), (iii), and (iv) in de2 termining such sum.’’. 

3 (2) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall not apply with respect to 

5 any special allowance payment made under section 

6 438 of the Higher Education Act of 1965 (20 U.S.C 

7 1087–1) before April 1, 2006. 

8 SEC. 7105. REDUCTION OF LENDER INSURANCE REIM9 BURSEMENT RATES. 

10 (a) AMENDMENT.—Subparagraph (G) of section 

11 428(b)(1) of the Higher Education Act of 1965 (20 

12 U.S.C. 1078(b)(1)) is amended to read as follows: 

13 ‘‘(G) insures 97 percent of the unpaid 

14 principal of loans insured under the program;’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 subsection (a) shall apply with respect to any loan made, 

17 insured, or guaranteed under part B of title IV of the 

18 Higher Education Act of 1965 (20 U.S.C. 1071 et seq.) 

19 for which the first disbursement is made on or after Janu20 ary 1, 2006. 

21 SEC. 7106. GUARANTY AGENCY ORIGINATION FEE. 

22 (a) AMENDMENT.—Section 428(b)(1)(H) of the 

23 Higher Education Act of 1965 (20 U.S.C. 1078(b)(1)(H)) 

24 is amended to read as follows: 
380 

•S 1932 PCS 

1 ‘‘(H) provides for the collection, and the 

2 deposit in the Federal Fund established under 

3 section 422A(a), of a guaranty agency origina4 tion fee of 1.0 percent of each disbursement of 

5 the proceeds of the loan, which fee may be pro6 vided from funds in the guaranty agency’s oper7 ating fund under section 422B or from other 

8 non-Federal funds;’’. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 subsection (a) shall be effective with respect to any loan 

11 disbursed under part B of title IV of the Higher Edu12 cation Act of 1965 on or after April 1, 2006. 

13 SEC. 7107. DEFERMENT OF STUDENT LOANS FOR MILITARY 

14 SERVICE. 

15 (a) FEDERAL FAMILY EDUCATION LOANS.—Section 

16 428(b)(1)(M) of the Higher Education Act of 1965 (20 

17 U.S.C. 1078(b)(1)(M)) is amended— 

18 (1) by striking ‘‘or’’ at the end of clause (ii); 

19 (2) by redesignating clause (iii) as clause (iv); 

20 and 

21 (3) by inserting after clause (ii) the following 

22 new clause: 

23 ‘‘(iii) not in excess of 3 years during 

24 which the borrower— 
381 

•S 1932 PCS 

1 ‘‘(I) is serving on active duty 

2 during a war or other military oper3 ation or national emergency; or 

4 ‘‘(II) is performing qualifying 

5 National Guard duty during a war or 

6 other military operation or national 

7 emergency; or’’. 

8 (b) DIRECT LOANS.—Section 455(f)(2) of the Higher 

9 Education Act of 1965 (20 U.S.C. 1087e(f)(2)) is amend10 ed— 

11 (1) by redesignating subparagraph (C) as sub12 paragraph (D); and 

13 (2) by inserting after subparagraph (B) the fol14 lowing new subparagraph: 

15 ‘‘(C) not in excess of 3 years during which 

16 the borrower— 

17 ‘‘(i) is serving on active duty during a 

18 war or other military operation or national 

19 emergency; or 

20 ‘‘(ii) is performing qualifying National 

21 Guard duty during a war or other military 

22 operation or national emergency; or’’. 

23 (c) PERKINS LOANS.—Section 464(c)(2)(A) of the 

24 Higher Education Act of 1965 (20 U.S.C. 

25 1087dd(c)(2)(A)) is amended— 
382 

•S 1932 PCS 

1 (1) by redesignating clauses (iii) and (iv) as 

2 clauses (iv) and (v), respectively; and 

3 (2) by inserting after clause (ii) the following 

4 new clause: 

5 ‘‘(iii) not in excess of 3 years during 

6 which the borrower— 

7 ‘‘(I) is serving on active duty 

8 during a war or other military oper9 ation or national emergency; or 

10 ‘‘(II) is performing qualifying 

11 National Guard duty during a war or 

12 other military operation or national 

13 emergency;’’. 

14 (d) DEFINITIONS.—Section 481 of the Higher Edu15 cation Act of 1965 (20 U.S.C. 1088) is amended by add16 ing at the end the following new subsection: 

17 ‘‘(d) DEFINITIONS FOR MILITARY DEFERMENTS.— 

18 For purposes of parts B, D, and E of this title: 

19 ‘‘(1) ACTIVE DUTY.—The term ‘active duty’ has 

20 the meaning given such term in section 101(d)(1) of 

21 title 10, United States Code, except that such term 

22 does not include active duty for training or attend23 ance at a service school. 

24 ‘‘(2) MILITARY OPERATION.—The term ‘mili25 tary operation’ means a contingency operation as 
383 

•S 1932 PCS 

1 such term is defined in section 101(a)(13) of title 

2 10, United States Code. 

3 ‘‘(3) NATIONAL EMERGENCY.—The term ‘na4 tional emergency’ means the national emergency by 

5 reason of certain terrorist attacks declared by the 

6 President on September 14, 2001, or subsequent na7 tional emergencies declared by the President by rea8 son of terrorist attacks. 

9 ‘‘(4) SERVING ON ACTIVE DUTY.—The term 

10 ‘serving on active duty during a war or other mili11 tary operation or national emergency’ means service 

12 by an individual who is— 

13 ‘‘(A) a Reserve of an Armed Force ordered 

14 to active duty under section 12301(a), 

15 12301(g), 12302, 12304, or 12306 of title 10, 

16 United States Code, or any retired member of 

17 an Armed Force ordered to active duty under 

18 section 688 of such title, for service in connec19 tion with a war or other military operation or 

20 national emergency, regardless of the location 

21 at which such active duty service is performed; 

22 and 

23 ‘‘(B) any other member of an Armed Force 

24 on active duty in connection with such emer25 gency or subsequent actions or conditions who 
384 

•S 1932 PCS 

1 has been assigned to a duty station at a loca2 tion other than the location at which such mem3 ber is normally assigned. 

4 ‘‘(5) QUALIFYING NATIONAL GUARD DUTY.— 

5 The term ‘qualifying National Guard duty during a 

6 war or other military operation or national emer7 gency’ means service as a member of the National 

8 Guard on full-time National Guard duty (as defined 

9 in section 101(d)(5) of title 10, United States Code) 

10 under a call to active service authorized by the 

11 President or the Secretary of Defense for a period 

12 of more than 30 consecutive days under section 

13 502(f) of title 32, United States Code, in connection 

14 with a war, other military operation, or a national 

15 emergency declared by the President and supported 

16 by Federal funds.’’. 

17 (e) RULE OF CONSTRUCTION.—Nothing in the 

18 amendments made by this section shall be construed to 

19 authorize any refunding of any repayment of a loan. 

20 (f) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply with respect to loans for which the 

22 first disbursement is made on or after July 1, 2001. 

23 SEC. 7108. RECOVERY THROUGH CONSOLIDATION. 

24 Section 428(c) of the Higher Education Act of 1965 

25 (20 U.S.C 1078(c)) is amended— 
385 

•S 1932 PCS 

1 (1) in paragraph (2)(A)— 

2 (A) by inserting ‘‘(i)’’ after ‘‘including’’; 

3 and 

4 (B) by inserting before the semicolon at 

5 the end the following: ‘‘and (ii) requirements es6 tablishing procedures to preclude consolidation 

7 lending from being an excessive proportion of 

8 guaranty agency recoveries on defaulted loans 

9 under this part’’; 

10 (2) in paragraph (2)(D), by striking ‘‘para11 graph (6)’’ and inserting ‘‘paragraph (6)(A)’’; and 

12 (3) in paragraph (6)— 

13 (A) by inserting ‘‘(A)’’ before ‘‘For the 

14 purposes of paragraph (2)(D),’’; 

15 (B) by redesignating subparagraphs (A) 

16 and (B) as clauses (i) and (ii), respectively; and 

17 (C) by adding at the end the following new 

18 subparagraphs: 

19 ‘‘(B) GUARANTY AGENCY OBLIGATIONS.—A 

20 guaranty agency shall— 

21 ‘‘(i) on or after October 1, 2006— 

22 ‘‘(I) not charge the borrower collec23 tion costs in an amount in excess of 18.5 

24 percent of the outstanding principal and 

25 interest of a defaulted loan that is paid off 
386 

•S 1932 PCS 

1 through consolidation by the borrower 

2 under this title; and 

3 ‘‘(II) remit to the Secretary a portion 

4 of the collection charge under subclause (I) 

5 equal to 8.5 percent of the outstanding 

6 principal and interest of such defaulted 

7 loan; and 

8 ‘‘(ii) on and after October 1, 2009, remit 

9 to the Secretary the entire amount charged 

10 under clause (i)(I) with respect to each de11 faulted loan that is paid off with excess consoli12 dation proceeds. 

13 ‘‘(C) EXCESS CONSOLIDATION PRO14 CEEDS.—For purposes of subparagraph (B), 

15 the term ‘excess consolidation proceeds’ means, 

16 with respect to any guaranty agency for any 

17 Federal fiscal year beginning on or after Octo18 ber 1, 2009, the proceeds of consolidation of de19 faulted loans under this title that exceed 45 

20 percent of the agency’s total collections on de21 faulted loans in such Federal fiscal year.’’. 

22 SEC. 7109. SINGLE HOLDER RULE. 

23 Subparagraph (A) of section 428C(b)(1) of the High24 er Education Act of 1965 (20 U.S.C. 1078–3(b)(1)) is 
387 

•S 1932 PCS 

1 amended by striking ‘‘and (i)’’ and all that follows through 

2 ‘‘so selected for consolidation)’’. 

3 SEC. 7110. DEFAULT REDUCTION PROGRAM. 

4 Section 428F(a)(1) of the Higher Education Act of 

5 1965 (20 U.S.C. 1078-6(a)(1)) is amended— 

6 (1) in subparagraph (A), by striking ‘‘consecu7 tive payments for 12 months’’ and inserting ‘‘9 pay8 ments made within 20 days of the due date during 

9 10 consecutive months’’; 

10 (2) by redesignating subparagraph (C) as sub11 paragraph (D); and 

12 (3) by inserting after subparagraph (B) the fol13 lowing new subparagraph: 

14 ‘‘(C) A guaranty agency may charge the 

15 borrower and retain collection costs in an 

16 amount not to exceed 18.5 percent of the out17 standing principal and interest at the time of 

18 sale of a loan rehabilitated under subparagraph 

19 (A).’’. 

20 SEC. 7111. REQUIREMENTS FOR DISBURSEMENTS OF STU21 DENT LOANS. 

22 Section 428G of the Higher Education Act of 1965 

23 (20 U.S.C. 1078–7) is amended— 

24 (1) in subsection (a)(3), by adding at the end 

25 the following: ‘‘Notwithstanding section 422(d) of 
388 

•S 1932 PCS 

1 the Higher Education Amendments of 1998, this 

2 paragraph shall be effective beginning on the date of 

3 enactment of the Higher Education Amendments of 

4 2005.’’; and 

5 (2) in subsection (b)(1), by adding at the end 

6 the following: ‘‘Notwithstanding section 422(d) of 

7 the Higher Education Amendments of 1998, the sec8 ond sentence of this paragraph shall be effective be9 ginning on the date of enactment of the Higher 

10 Education Amendments of 2005.’’. 

11 SEC. 7112. SPECIAL INSURANCE AND REINSURANCE RULES. 

12 (a) REPEAL.—Section 428I of the Higher Education 

13 Act of 1965 (20 U.S.C. 1078–9) is repealed. 

14 (b) CONFORMING AMENDMENTS.—Part A of title IV 

15 of the Higher Education Act of 1965 (20 U.S.C.1070 et 

16 seq.) is amended— 

17 (1) in section 428(c)(1)— 

18 (A) by striking subparagraph (D); and 

19 (B) by redesignating subparagraphs (E) 

20 and (F) as subparagraphs (D) and (E), respec21 tively; and 

22 (2) in section 438(b)(5), by striking the matter 

23 following subparagraph (B). 
389 

•S 1932 PCS 

1 SEC. 7113. SCHOOL AS LENDER MORATORIUM. 

2 Section 435(d)(2) of the Higher Education Act of 

3 1965 (20 U.S.C. 1085(d)(2)) is amended— 

4 (1) in subparagraph (E), by striking ‘‘and’’ 

5 after the semicolon; and 

6 (2) by inserting before the matter following 

7 subparagraph (F) (as amended by section 7390) the 

8 following: 

9 ‘‘(G) shall have met the requirements of 

10 subparagraphs (A) through (F), and made 

11 loans under this part, on or before August 31, 

12 2005; 

13 ‘‘(H) shall hold each loan the eligible insti14 tution makes under this part to a student en15 rolled at the eligible institution until the stu16 dent enters into a grace period described in sec17 tion 427(a)(2)(B) or 428(b)(7); 

18 ‘‘(I) shall use the proceeds from the sale of 

19 a loan made under this part, for need based 

20 grant aid programs, except that such pro21 ceeds— 

22 ‘‘(i) shall not be used to provide a 

23 grant to a student for an academic year in 

24 an amount that is more than the student’s 

25 cost of attendance for the academic year; 

26 and 
390 

•S 1932 PCS 

1 ‘‘(ii) shall supplement and not sup2 plant other Federal, State, and institu3 tional grant aid; and 

4 ‘‘(J) shall not be a foundation or alumni 

5 organization;’’. 

6 SEC. 7114. PERMANENT REDUCTION OF SPECIAL ALLOW7 ANCE PAYMENTS FOR LOANS FROM THE PRO8 CEEDS OF TAX EXEMPT ISSUES. 

9 (a) TECHNICAL CLARIFICATION.—The matter pre10 ceding paragraph (1) of section 2 of the Taxpayer-Teacher 

11 Protection Act of 2004 (Public Law 108–409; 118 Stat. 

12 2299) is amended by inserting ‘‘of the Higher Education 

13 Act of 1965’’ after ‘‘Section 438(b)(2)(B)’’. The amend14 ment made by the preceding sentence shall be effective as 

15 if enacted on October 30, 2004. 

16 (b) AMENDMENT.—Section 438(b)(2)(B) of the 

17 Higher Education Act of 1965 (20 U.S.C. 1087– 

18 1(b)(2)(B)) is amended— 

19 (1) in clause (iv), by striking ‘‘and before Janu20 ary 1, 2006,’’; and 

21 (2) in clause (v)(II)— 

22 (A) in item (aa), by striking ‘‘and before 

23 January 1, 2006,’’; 

24 (B) in item (bb), by striking ‘‘and before 

25 January 1, 2006,’’; and 
391 

•S 1932 PCS 

1 (C) in item (cc), by striking ‘‘and before 

2 January 1, 2006,’’. 

3 SEC. 7115. SPECIAL ALLOWANCES. 

4 (a) ORIGINATION FEES.—Paragraph (2) of section 

5 438(c) of the Higher Education Act of 1965 (20 U.S.C. 

6 1087–1(c)) is amended— 

7 (1) by striking the designation and heading of 

8 such paragraph and inserting the following: 

9 ‘‘(2) AMOUNT OF ORIGINATION FEES.— 

10 ‘‘(A) IN GENERAL.—’’; and 

11 (2) by adding at the end the following new sub12 paragraph: 

13 ‘‘(B) SUBSEQUENT REDUCTIONS.—Sub14 paragraph (A) shall be applied to loans made 

15 under this part (other than loans made under 

16 sections 428C and 439(o)) by substituting ‘2.50 

17 percent’ for ‘3.0 percent’ with respect to loans 

18 for which the first disbursement of principal is 

19 made on or after July 1, 2007.’’. 

20 (b) LOAN FEES FROM LENDERS.— 

21 (1) AMENDMENT.—Paragraph (2) of section 

22 438(d)(2) of the Higher Education Act of 1965 (20 

23 U.S.C. 1087–1(d)) is amended to read as follows: 

24 ‘‘(2) AMOUNT OF LOAN FEES.— 
392 

•S 1932 PCS 

1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), with respect to any loan 

3 made under this part for which the first dis4 bursement was made on or after October 1, 

5 1993, the amount of the loan fee that shall be 

6 deducted under paragraph (1) shall be equal to 

7 0.50 percent of the principal amount of the 

8 loan. 

9 ‘‘(B) CONSOLIDATION LOANS.—With re10 spect to any loan made under section 428C on 

11 or after April 1, 2006, the amount of the loan 

12 fee that shall be deducted under paragraph (1) 

13 shall be equal to 1.0 percent of the principal 

14 amount of the loan.’’. 

15 (2) EFFECTIVE DATE.—The amendment made 

16 by paragraph (1) shall apply with respect to any 

17 loan made, insured, or guaranteed under part B of 

18 title IV of the Higher Education Act of 1965 (20 

19 U.S.C. 1071 et seq.) for which the first disburse20 ment is made on or after April 1, 2006. 

21 SEC. 7116. ORIGINATION FEE. 

22 Section 455(c) of the Higher Education Act of 1965 

23 (20 U.S.C. 1087e(c)) is amended— 

24 (1) by striking ‘‘shall’’ and inserting ‘‘is author25 ized to’’; and 
393 

•S 1932 PCS 

1 (2) by striking ‘‘4.0 percent of the principal 

2 amount of loan’’ and inserting ‘‘not less than 1 per3 cent and not more than 3 percent of the principal 

4 amount of the loan, except that the Secretary shall 

5 charge the borrower of a Federal Direct PLUS Loan 

6 an origination fee of 4.0 percent of the principal 

7 amount of the loan. Beginning on July 1, 2007, the 

8 preceding sentence shall be applied by substituting 

9 ‘2.5 percent’ for ‘3 percent’ ’’. 

10 SEC. 7117. INCOME CONTINGENT REPAYMENT FOR PUBLIC 

11 SECTOR EMPLOYEES. 

12 Section 455(e) of the Higher Education Act of 1965 

13 (20 U.S.C. 1087e(e)) is amended by adding at the end 

14 the following: 

15 ‘‘(7) REPAYMENT PLAN FOR PUBLIC SECTOR

16 EMPLOYEES.— 

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

18 forgive the balance due on any loan made under 

19 this part or section 428C(b)(5) for a bor20 rower— 

21 ‘‘(i) who has made 120 payments on 

22 such loan pursuant to income contingent 

23 repayment; and 

24 ‘‘(ii) who is employed, and was em25 ployed for the 10-year period in which the 
394 

•S 1932 PCS 

1 borrower made the 120 payments de2 scribed in clause (i), in a public sector job. 

3 ‘‘(B) PUBLIC SECTOR JOB.—In this para4 graph, the term ‘public sector job’ means a full5 time job in emergency management, govern6 ment, public safety, law enforcement, public 

7 health, education (including early childhood 

8 education), or public interest legal services (in9 cluding prosecution or public defense). 

10 ‘‘(8) RETURN TO STANDARD REPAYMENT.—A 

11 borrower who is repaying a loan made under this 

12 part pursuant to income contingent repayment may 

13 choose, at any time, to terminate repayment pursu14 ant to income contingent repayment and repay such 

15 loan under the standard repayment plan.’’. 

16 SEC. 7118. FAMILY CONTRIBUTION FOR DEPENDENT STU17 DENTS. 

18 (a) AMENDMENTS.—Section 475 of the Higher Edu19 cation Act of 1965 (20 U.S.C. 1087oo) is amended— 

20 (1) in subsection (g)(2)(D), by striking 

21 ‘‘$2,200’’ and inserting ‘‘$3,000’’; and 

22 (2) in subsection (h), by striking ‘‘35’’ and in23 serting ‘‘20’’. 

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

25 subsection (a) shall apply with respect to determinations 
395 

•S 1932 PCS 

1 of need for periods of enrollment beginning on or after 

2 July 1, 2007. 

3 SEC. 7119. FAMILY CONTRIBUTION FOR INDEPENDENT STU4 DENTS WITHOUT DEPENDENTS OTHER THAN 

5 A SPOUSE. 

6 (a) AMENDMENTS.—Section 476 of the Higher Edu7 cation Act of 1965 (20 U.S.C.1087pp) is amended— 

8 (1) in subsection (b)(1)(A)(iv)— 

9 (A) in subclause (I), by striking ‘‘$5,000’’ 

10 and inserting ‘‘$6,050’’; 

11 (B) in subclause (II), by striking ‘‘$5,000’’ 

12 and inserting ‘‘$6,050’’; and 

13 (C) in subclause (III), by striking 

14 ‘‘$8,000’’ and inserting ‘‘$9,700’’; and 

15 (2) in subsection (c)(4), by striking ‘‘35’’ and 

16 inserting ‘‘20’’. 

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

18 subsection (a) shall apply with respect to determinations 

19 of need for periods of enrollment beginning on or after 

20 July 1, 2007. 
396 

•S 1932 PCS 

1 SEC. 7120. FAMILY CONTRIBUTION FOR INDEPENDENT STU2 DENTS WITH DEPENDENTS OTHER THAN A 

3 SPOUSE. 

4 (a) AMENDMENT.—Section 477(c)(4) of the Higher 

5 Education Act of 1965 (20 U.S.C. 1087qq(c)(4)) is 

6 amended by striking ‘‘12’’ and inserting ‘‘7’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 subsection (a) shall apply with respect to determinations 

9 of need for periods of enrollment beginning on or after 

10 July 1, 2007. 

11 SEC. 7121. REGULATIONS; UPDATED TABLES. 

12 Section 478(b) of the Higher Education Act of 1965 

13 (20 U.S.C. 1087rr(b)) is amended— 

14 (1) in paragraph (1), by adding at the end the 

15 following: ‘‘For the 2007–2008 academic year, the 

16 Secretary shall revise the tables in accordance with 

17 this paragraph, except that the Secretary shall in18 crease the amounts contained in the table in section 

19 477(b)(4) by a percentage equal to the greater of 

20 the estimated percentage increase in the Consumer 

21 Price Index (as determined under the preceding sen22 tence) or 5 percent.’’; and 

23 (2) in paragraph (2), by striking ‘‘2000–2001’’ 

24 and inserting ‘‘2007–2008’’. 
397 

•S 1932 PCS 

1 SEC. 7122. SIMPLIFIED NEED TEST AND AUTOMATIC ZERO 

2 IMPROVEMENTS. 

3 (a) AMENDMENTS.—Section 479 of the Higher Edu4 cation Act of 1965 (20 U.S.C. 1087ss) is amended— 

5 (1) in subsection (b)— 

6 (A) in paragraph (1)— 

7 (i) in subparagraph (A), by striking 

8 clause (i) and inserting the following: 

9 ‘‘(i) the student’s parents— 

10 ‘‘(I) file, or are eligible to file, a 

11 form described in paragraph (3); 

12 ‘‘(II) certify that the parents are 

13 not required to file a Federal income 

14 tax return; or 

15 ‘‘(III) received, or the student re16 ceived, benefits at some time during 

17 the previous 12-month period under a 

18 means-tested Federal benefit program 

19 as defined under subsection (d); and’’; 

20 and 

21 (ii) in subparagraph (B), by striking 

22 clause (i) and inserting the following: 

23 ‘‘(i) the student (and the student’s 

24 spouse, if any)— 

25 ‘‘(I) files, or is eligible to 1 file, 

26 a form described in paragraph (3); 
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•S 1932 PCS 

1 ‘‘(II) certifies that the student 

2 (and the student’s spouse, if any) is 

3 not required to file a Federal income 

4 tax return; or 

5 ‘‘(III) received benefits at some 

6 time during the previous 12-month 

7 period under a means-tested Federal 

8 benefit program as defined under sub9 section (d); and’’; and 

10 (B) in the matter preceding subparagraph 

11 (A) of paragraph (3), by striking ‘‘A student or 

12 family files a form described in this subsection, 

13 or subsection (c), as the case maybe, if the stu14 dent or family, respectively, files’’ and inserting 

15 ‘‘In the case of an independent student, the stu16 dent, or in the case of a dependent student, the 

17 family, files a form described in this subsection, 

18 or subsection (c), as the case may be, if the stu19 dent or family, as appropriate, files’’; 

20 (2) in subsection (c)— 

21 (A) in paragraph (1)— 

22 (i) by striking subparagraph (A) and 

23 inserting the following: 

24 ‘‘(A) the student’s parents— 
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•S 1932 PCS 

1 ‘‘(i) file, or are eligible to file, a form 

2 described in subsection (b)(3); 

3 ‘‘(ii) certify that the parents are not 

4 required to file a Federal income tax re5 turn; or 

6 ‘‘(iii) received, or the student received, 

7 benefits at some time during the previous 

8 12-month period under a means-tested 

9 Federal benefit program as defined under 

10 subsection (d); and’’; and 

11 (ii) by striking subparagraph (B) and 

12 inserting the following: 

13 ‘‘(B) the sum of the adjusted gross income 

14 of the parents is less than or equal to $20,000; 

15 or’’; and 

16 (B) in paragraph (2)— 

17 (i) by striking subparagraph (A) and 

18 inserting the following: 

19 ‘‘(A) the student (and the student’s 

20 spouse, if any)— 

21 ‘‘(i) files, or is eligible to file, a form 

22 described in subsection (b)(3); 

23 ‘‘(ii) certifies that the student (and 

24 the student’s spouse, if any) is not re-
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1 quired to file a Federal income tax return; 

2 or 

3 ‘‘(iii) received benefits at some time 

4 during the previous 12-month period under 

5 a means-tested Federal benefit program as 

6 defined under subsection (d); and’’; and 

7 (ii) by striking subparagraph (B) and 

8 inserting the following: 

9 ‘‘(B) the sum of the adjusted gross income 

10 of the student and spouse (if appropriate) is 

11 less than or equal to $20,000.’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(d) DEFINITIONS.—In this section: 

14 ‘‘(1) MEANS-TESTED FEDERAL BENEFIT PRO15 GRAM.—In this section, the term ‘‘means-tested 

16 Federal benefit program’’ means a mandatory 

17 spending program of the Federal Government, other 

18 than a program under this title, in which eligibility 

19 for the program’s benefits, or the amount of such 

20 benefits, are determined on the basis of income or 

21 resources of the individual or family seeking the ben22 efit, and may include such programs as— 

23 ‘‘(A) the supplemental security income pro24 gram under title XVI of the Social Security Act 

25 (42 U.S.C. 1381 et seq.); 
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1 ‘‘(B) the food stamp program under the 

2 Food Stamp Act of 1977 (7 U.S.C. 2011 et 

3 seq.); 

4 ‘‘(C) the free and reduced price school 

5 lunch program established under the Richard 

6 B. Russell National School Lunch Act (42 

7 U.S.C. 1751 et seq.); 

8 ‘‘(D) the program of block grants for 

9 States for temporary assistance for needy fami10 lies established under part A of title IV of the 

11 Social Security Act (42 U.S.C. 601 et seq.); 

12 ‘‘(E) the special supplemental nutrition 

13 program for women, infants, and children es14 tablished by section 17 of the Child Nutrition 

15 Act of 1966 (42 U.S.C. 1786); and 

16 ‘‘(F) other programs identified by the Sec17 retary.’’. 

18 (b) EVALUATION OF SIMPLIFIED NEEDS TEST.— 

19 (1) ELIGIBILITY GUIDELINES.—The Secretary 

20 of Education shall regularly evaluate the impact of 

21 the eligibility guidelines in subsections (b)(1)(A)(i), 

22 (b)(1)(B)(i), (c)(1)(A), and (c)(2)(A) of section 479 

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

24 1087ss(b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A), and 

25 (c)(2)(A)). 
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1 (2) MEANS-TESTED FEDERAL BENEFIT PRO2 GRAM.—For each 3-year period, the Secretary of 

3 Education shall evaluate the impact of including the 

4 receipt of benefits by a student or parent under a 

5 means-tested Federal benefit program (as defined in 

6 section 479(d) of the Higher Education Act of 1965 

7 (20 U.S.C. 1087ss(d)) as a factor in determining eli8 gibility under subsections (b) and (c) of section 479 

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

10 1087ss(b) and (c)). 

11 SEC. 7123. LOAN FORGIVENESS FOR TEACHERS. 

12 Section 3(b)(3) of the Taxpayer-Teacher Protection 

13 Act of 2004 (20 U.S.C. 1078–10 note) is amended by 

14 striking ‘‘, and before October 1, 2005’’. 

15 SEC. 7124. EFFECTIVE DATE. 

16 Except as otherwise provided in this chapter or the 

17 amendments made by this chapter, the amendments made 

18 by this chapter shall take effect on July 1, 2006. 

19 CHAPTER 2—HURRICANE KATRINA 

20 HIGHER EDUCATION RECOVERY 

21 SEC. 7151. SHORT TITLE. 

22 This chapter may be cited as the ‘‘Hurricane Katrina 

23 Higher Education Recovery Act’’. 

24 SEC. 7152. DEFINITIONS. 

25 In this chapter: 
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1 (1) AFFECTED BORROWER.—The term ‘‘af2 fected borrower’’ means an individual who— 

3 (A) was in repayment, but not in 

4 deferment, on a loan made, insured, or guaran5 teed under part B, D, or E of the Higher Edu6 cation Act of 1965 (20 U.S.C. 1071 et seq., 

7 1087a et seq., 1087aa et seq.) on August 22, 

8 2005, or enters or entered repayment after Au9 gust 22, 2005 and before June 30, 2006; and 

10 (B)(i) lives or lived, as of August 22, 

11 2005, in a county or parish of Alabama, Lou12 isiana, or Mississippi— 

13 (I) in which a major disaster has been 

14 declared in accordance with section 401 of 

15 the Robert T. Stafford Disaster Relief and 

16 Emergency Assistance Act (42 U.S.C. 

17 5170) as a result of Hurricane Katrina; 

18 and 

19 (II) which the President has deter20 mined warrants individual assistance from 

21 the Federal Government; or 

22 (ii) worked, as of August 22, 2005, in a 

23 county or parish described in clause (i). 

24 (2) AFFECTED INSTITUTION.— 
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1 (A) IN GENERAL.—The term ‘‘affected in2 stitution’’ means an institution of higher edu3 cation, as defined in section 101 or 102 of the 

4 Higher Education Act of 1965 (20 U.S.C. 

5 1001, 1002), that— 

6 (i) is located in an area in which a 

7 major disaster has been declared in accord8 ance with section 401 of the Robert T. 

9 Stafford Disaster Relief and Emergency 

10 Assistance Act due to the effects of Hurri11 cane Katrina; and 

12 (ii) is impacted by Hurricane Katrina. 

13 (B) LENGTH OF TIME.—In determining 

14 eligibility for assistance under this chapter, the 

15 Secretary, using consistent, objective criteria, 

16 shall determine the time period for which an in17 stitution of higher education is an affected in18 stitution. 

19 (C) SPECIAL RULE.—An organizational 

20 unit of an affected institution that is not im21 pacted by Hurricane Katrina shall not be con22 sidered as part of such affected institution for 

23 purposes of receiving assistance under this 

24 chapter. 
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1 (3) AFFECTED STUDENT.—The term ‘‘affected 

2 student’’ means a student who was enrolled on Au3 gust 29, 2005 in an affected institution. 

4 (4) DISTANCE EDUCATION.— 

5 (A) IN GENERAL.—The term ‘‘distance 

6 education’’ means a course or program that 

7 uses 1 or more of the technologies described in 

8 subparagraph (B) to— 

9 (i) deliver instruction to students who 

10 are separated from the instructor; and 

11 (ii) support regular and substantive 

12 interaction between the students and the 

13 instructor, either synchronously or asyn14 chronously. 

15 (B) INCLUSIONS.—For the purposes of 

16 subparagraph (A), the technologies used may 

17 include— 

18 (i) the Internet; 

19 (ii) one-way and two-way trans20 missions through open broadcast, closed 

21 circuit, cable, microwave, broadband lines, 

22 fiber optics, satellite, or wireless commu23 nications devices; 

24 (iii) audio conferencing; or 
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1 (iv) video cassette, DVDs, and CD2 ROMs, provided that they are used in a 

3 course in conjunction with the technologies 

4 listed in clauses (i) through (iii). 

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

6 the Secretary of Education. 

7 SEC. 7153. WAIVER AUTHORITY AND MODIFICATIONS TO 

8 CERTAIN PROVISIONS OF THE HIGHER EDU9 CATION ACT OF 1965. 

10 (a) WAIVER OF INSTITUTIONAL REPAYMENT.—Not11 withstanding any other provision of law, including require12 ments related to cash management, an affected institution 

13 shall not be required to return any funds received by the 

14 affected institution for, or on behalf of, its students under 

15 subparts 1 and 3 of part A and parts B, C, D, and E 

16 of title IV of the Higher Education Act of 1965 (20 U.S.C. 

17 1070, 1070b et seq., 1071 et seq., 1087a et seq., 1087aa 

18 et seq., 42 U.S.C. 2751 et seq.) during the 2005–2006 

19 academic year. 

20 (b) WAIVER OF STUDENT RETURN OF ASSIST21 ANCE.—Notwithstanding any other provision of law, an 

22 affected student who, as of the date of enactment of this 

23 Act, received assistance under subpart 1 or 3 of part A 

24 or parts B, C, D, or E of title IV of the Higher Education 

25 Act of 1965 for attendance at an affected institution of 
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1 higher education during the 2005–2006 academic year, 

2 shall not be required to return such assistance. 

3 (c) AFFECTED STUDENTS WHO DO NOT ENROLL IN

4 ANOTHER INSTITUTION AND BORROWERS IN GRACE PE5 RIODS OR DEFERMENT.—With respect to a loan made, in6 sured, or guaranteed under part B, D, or E of title IV 

7 of the Higher Education Act of 1965 (20 U.S.C. 1071 

8 et seq., 1087a et seq., 1087aa et seq.)— 

9 (1) an affected student who does not enroll in 

10 another institution of higher education shall be re11 tained in in-school status during the period begin12 ning on August 22, 2005, and ending on June 30, 

13 2006; and 

14 (2) a borrower in a grace period or in 

15 deferment as of August 22, 2005 who satisfies the 

16 requirement described in clause (i) or clause (ii) of 

17 section 201(1)(B) shall be retained in such status, 

18 without documentation or action by the borrower, 

19 until June 30, 2006. 

20 (d) DISCHARGE OR CANCELLATION OF LOANS.—The 

21 Secretary shall— 

22 (1) discharge all loan amounts under parts B 

23 and D of title IV of the Higher Education Act of 

24 1965 (20 U.S.C. 1071 et seq., 1087a et seq.) dis25 bursed to, or on behalf of, an affected student for 
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1 attendance at an affected institution of higher edu2 cation during the 2005–2006 academic year; 

3 (2) reimburse lenders for the purpose of dis4 charging any loan amounts disbursed to, or on be5 half of, a student under part B of title IV of the 

6 Higher Education Act of 1965 (20 U.S.C. 1071 et 

7 seq.), for attendance at an affected institution of 

8 higher education during the 2005–2006 academic 

9 year; and 

10 (3) cancel any loan under part E of title IV of 

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

12 1087aa et seq.) disbursed to a student for attend13 ance at an affected institution of higher education 

14 during the 2005–2006 academic year. 

15 (e) AGGREGATE AND ANNUAL LIMITS.—In the case 

16 of an affected student, any grant or loan assistance under 

17 title IV of the Higher Education Act of 1965 (20 U.S.C. 

18 1070 et seq.) that such student received, or was to have 

19 received, for a program of study at an affected institution 

20 of higher education during the 2005–2006 academic year 

21 shall not count against such student’s annual or aggregate 

22 grant or loan limits for receipt of aid under such title. 

23 (f) FORBEARANCE.—Notwithstanding the provisions 

24 of part B, D, or E of title IV of the Higher Education 

25 Act of 1965 (20 U.S.C. 1071 et seq., 1087a et seq., 
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1 1087aa et seq.), a lender, the Secretary, or an institution 

2 of higher education is authorized to provide not more than 

3 1 year of forbearance to an affected borrower without doc4 umentation. 

5 (g) PROFESSIONAL JUDGMENT.—A financial aid ad6 ministrator shall be considered to be making an adjust7 ment in accordance with section 479A(a) of the Higher 

8 Education Act of 1965 (20 U.S.C. 1087tt(a)) if the finan9 cial aid administrator makes the adjustment with respect 

10 to the calculation of the expected student or parent con11 tribution (or both) for an affected student, or for a stu12 dent or a parent who resides or resided on August 22, 

13 2005, or was employed on August 22, 2005, in an area 

14 in which a major disaster has been declared in accordance 

15 with section 401 of the Robert T. Stafford Disaster Relief 

16 and Emergency Assistance Act due to the effects of Hurri17 cane Katrina. The financial aid administrator shall ade18 quately document the need for the adjustment. 

19 (h) MODIFICATION OF PART A OF TITLE II GRANTS

20 AUTHORIZED.—The Secretary is authorized to approve 

21 modifications to the requirements for Teacher Quality En22 hancement Grants for States and Partnerships under part 

23 A of title II of the Higher Education Act of 1965 (20 

24 U.S.C. 1021 et seq.), at the request of the grantee— 
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1 (1) to assist States and local educational agen2 cies to recruit and retain highly qualified teachers in 

3 a school district located in an area in which a major 

4 disaster has been declared in accordance with section 

5 401 of the Robert T. Stafford Disaster Relief and 

6 Emergency Assistance Act due to the effects of Hur7 ricane Katrina; and 

8 (2) to assist institutions of higher education, as 

9 defined in section 101 of such Act (20 U.S.C. 1001), 

10 located in such area to recruit and retain faculty 

11 necessary to prepare teachers and provide profes12 sional development. 

13 (i) WAIVER AUTHORITY TO MODIFY AUTHORIZED

14 USES OF TRIO, GEAR-UP, PART A OR B OF TITLE III, 

15 AND OTHER GRANTS.—The Secretary is authorized to 

16 modify the required and allowable uses of funds under 

17 chapters 1 and 2 of subpart 2 of part A of title IV of 

18 the Higher Education Act of 1965 (20 U.S.C. 1070a et 

19 seq., 1070a–21 et seq.), under part A or B of title III 

20 (20 U.S.C. 1057 et seq., 1060 et seq.), and under any 

21 other competitive grant program, at the request of an af22 fected institution or other grantee, with respect to affected 

23 institutions and other grantees located in an area in which 

24 a major disaster has been declared in accordance with sec25 tion 401 of the Robert T. Stafford Disaster Relief and 
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1 Emergency Assistance Act due to the effects of Hurricane 

2 Katrina. 

3 (j) AUTHORITY TO EXTEND OR WAIVE REPORTING

4 REQUIREMENTS UNDER SECTION 131(a).—The Secretary 

5 is authorized to extend reporting deadlines or waive re6 porting requirements under section 131(a) of the Higher 

7 Education Act of 1965 (20 U.S.C. 1015(a)) for an af8 fected institution. 

9 (k) DISTANCE EDUCATION.—The Secretary may 

10 waive the restrictions of subparagraphs (A) and (B) of 

11 section 102(a)(3) of the Higher Education Act of 1965 

12 (20 U.S.C. 1002(a)(3)(A) and (B)) with respect to an in13 stitution of higher education, other than a foreign institu14 tion, that offers education or training programs through 

15 distance education and is otherwise eligible to participate 

16 in programs authorized under title IV of such Act (20 

17 U.S.C. 1070 et seq.), if such institution exceeds such re18 strictions described in such subparagraphs due to the en19 rollment of affected students. 

20 SEC. 7154. GENERAL WAIVER AUTHORITY AND REQUIRED 

21 CONSULTATION. 

22 (a) WAIVER AUTHORITY.— 

23 (1) IN GENERAL.—Notwithstanding any other 

24 provision of law, the Secretary may waive or modify 

25 any statutory provision of the Higher Education Act 
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1 of 1965 (20 U.S.C. 1001 et seq.) or any regulation 

2 implementing such Act as the Secretary determines 

3 necessary in connection with a major disaster that 

4 has been declared in accordance with section 401 of 

5 the Robert T. Stafford Disaster Relief and Emer6 gency Assistance Act due to the effects of Hurricane 

7 Katrina. 

8 (2) ACTIONS AUTHORIZED.—In carrying out 

9 paragraph (1), the Secretary is authorized to waive 

10 or modify any provision described in paragraph (1) 

11 as the Secretary determines necessary to ensure 

12 that— 

13 (A) administrative requirements placed on 

14 affected students, affected borrowers, institu15 tions of higher education, lenders, guaranty 

16 agencies and grantees are minimized to the ex17 tent possible without impairing the integrity of 

18 the higher education programs under the High19 er Education Act of 1965, to ease the burden 

20 on such participants; or 

21 (B) institutions of higher education, lend22 ers, guaranty agencies, and other entities par23 ticipating in the student financial assistance 

24 programs under title IV of the Higher Edu25 cation Act of 1965 (20 U.S.C. 1070 et seq.), 
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1 that serve an area in which a major disaster 

2 has been declared in accordance with section 

3 401 of the Robert T. Stafford Disaster Relief 

4 and Emergency Assistance Act due to the ef5 fects of Hurricane Katrina, may be granted 

6 temporary relief from requirements that are 

7 rendered infeasible or unreasonable due to the 

8 effects of Hurricane Katrina, including due dili9 gence requirements and reporting deadlines. 

10 (b) CONSTRUCTION.—Nothing in this section shall be 

11 construed to allow the Secretary to waive or modify any 

12 applicable statutory or regulatory requirements prohib13 iting discrimination in a program or activity, or in employ14 ment or contracting, under existing law (in existence on 

15 the date of the Secretary’s action). 

16 (c) CONSULTATION.—Prior to granting any waiver or 

17 modification under this section, the Secretary shall consult 

18 with the Committee on Health, Education, Labor, and 

19 Pensions and the Committee on Appropriations of the 

20 Senate and the Committee on Education and the Work21 force and the Committee on Appropriations of the House 

22 of Representatives with respect to waivers or modifications 

23 under this section. 
414 

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1 SEC. 7155. NOTICE OF WAIVERS, MODIFICATIONS, OR EX2 TENSIONS. 

3 Notwithstanding section 437 of the General Edu4 cation Provisions Act (20 U.S.C. 1232) and section 553 

5 of title 5, United States Code, the Secretary shall make 

6 publicly available the waivers, modifications, or extensions 

7 granted under section 7153 or 7154. 

8 SEC. 7156. REGULATORY REQUIREMENTS INAPPLICABLE. 

9 Sections 482(c) and 492 of the Higher Education Act 

10 of 1965 (20 U.S.C. 1089(c), 1098a), section 437 of the 

11 General Education Provisions Act (20 U.S.C. 1232), and 

12 section 553 of title 5, United States Code, shall not apply 

13 to this chapter. 

14 SEC. 7157. DEPARTMENT OF EDUCATION INSPECTOR GEN15 ERAL AUDIT AND REPORT. 

16 (a) IN GENERAL.—The Inspector General of the De17 partment of Education (referred to in this section as the 

18 ‘‘Inspector General’’) shall conduct an audit and investiga19 tion of each program carried out by the Department of 

20 Education that includes response and recovery activities 

21 related to Hurricane Katrina. 

22 (b) WEEKLY REPORT.—Not less frequently than once 

23 a week, the Inspector General shall provide a report to 

24 the Committee on Health, Education, Labor, and Pen25 sions and the Committee on Appropriations of the Senate 

26 and the Committee on Education and the Workforce and 
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1 the Committee on Appropriations of the House of Rep2 resentatives listing the audits and investigations initiated 

3 pursuant to subsection (a). 

4 (c) STATUS REPORT.—Not later than 6 months after 

5 the date of enactment of this Act, and biannually there6 after until the audits and investigations described in sub7 section (a) are complete, the Inspector General shall re8 port to the Committee on Health, Education, Labor, and 

9 Pensions and the Committee on Appropriations of the 

10 Senate and the Committee on Education and the Work11 force and the Committee on Appropriations of the House 

12 of Representatives on the full status of the activities of 

13 the Inspector General under this section. 

14 (d) COOPERATIVE VENTURES.—In carrying out this 

15 section, the Inspector General is encouraged to enter into 

16 cooperative ventures with Inspectors General of other Fed17 eral agencies. 

18 SEC. 7158. SUNSET PROVISION. 

19 Except as otherwise provided in this chapter, the pro20 visions of this chapter shall be effective for the period be21 ginning on the date of enactment of this Act and ending 

22 on September 30, 2006. 
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1 Subtitle B—Pension Benefit 

2 Guaranty Corporation Premiums 

3 SEC. 7201. AMENDMENTS TO THE EMPLOYEE RETIREMENT 

4 INCOME SECURITY ACT OF 1974. 

5 (a) FLAT-RATE PREMIUMS.— 

6 (1) SINGLE-EMPLOYER PLANS.—Section 

7 4006(a)(3)(A)(i) of the Employee Retirement In8 come Security Act of 1974 (29 U.S.C. 

9 1306(a)(3)(A)(i)) is amended to read as follows: 

10 ‘‘(i) in the case of a single-employer plan, an 

11 amount equal to— 

12 ‘‘(I) for plan years beginning after Decem13 ber 31, 1990, and before January 1, 2006, $19, 

14 or 

15 ‘‘(II) except as provided in subparagraph 

16 (F), for plan years beginning after December 

17 31, 2005, $46.75, 

18 plus the additional premium (if any) determined 

19 under subparagraph (E) for each individual who is 

20 a participant in such plan during the plan year;’’. 

21 (2) MULTIEMPLOYER PLANS.—Section 

22 4006(a)(3)(A) of such Act (29 U.S.C. 

23 1306(a)(3)(A)) is amended— 

24 (A) in clause (iii), by— 
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1 (i) inserting ‘‘and before January 1, 

2 2006,’’ after ‘‘Act of 1980,’’; and 

3 (ii) striking the period at the end and 

4 inserting ‘‘, or’’; and 

5 (B) by adding at the end the following: 

6 ‘‘(iv) in the case of a multiemployer 

7 plan an amount equal to the following for 

8 each individual who is a participant in 

9 such plan during the applicable plan year: 

10 ‘‘(I) $8.00 for plan years begin11 ning in 2006. 

12 ‘‘(II) For plan years after De13 cember 31, 2006, the amount deter14 mined under subparagraph (G). 

15 (3) INDEXING OF FLAT-RATE PREMIUMS.— 

16 (A) SINGLE-EMPLOYER PREMIUMS.—Sec17 tion 4006(a)(3) of such Act (29 U.S.C. 

18 1306(a)(3)), as amended by this Act, is amend19 ed by adding at the end the following: 

20 ‘‘(F) INDEXING OF SINGLE-EMPLOYER

21 FLAT-RATE PREMIUMS.— 

22 ‘‘(i) IN GENERAL.—In the case of any 

23 plan year beginning after 2006, the ad24 justed amount under clause (ii) shall be 

25 substituted for the dollar amount under 
418 

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1 clause (i)(II) of subparagraph (A), if such 

2 adjusted amount is greater than such dol3 lar amount. 

4 ‘‘(ii) ADJUSTED AMOUNT.—The ad5 justed amount for the dollar amount in 

6 clause (i)(II) of subparagraph (A) for any 

7 plan year is the product derived by multi8 plying such dollar amount by the ratio 

9 of— 

10 ‘‘(I) the national average wage 

11 index (as defined in section 209(k)(1) 

12 of the Social Security Act) for the 

13 first of the 2 calendar years preceding 

14 the calendar year in which the plan 

15 year begins, to 

16 ‘‘(II) the national average wage 

17 index (as so defined) for 2004. 

18 If the amount determined under this 

19 clause is not a multiple of $1, such product 

20 shall be rounded to the nearest multiple of 

21 $1.’’. 

22 (B) MULTIEMPLOYER PREMIUMS—Section 

23 4006(a)(3) of such Act (29 U.S.C. 1306(a)(3)), 

24 as amended by this Act, is amended by adding 

25 at the end the following: 
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1 ‘‘(G) INDEXING OF MULTIEMPLOYER

2 FLAT-RATE PREMIUMS.—The amount deter3 mined under this subparagraph is the product 

4 derived by multiplying $8.00 by the ratio of— 

5 ‘‘(i) the national average wage index 

6 (as defined in section 209(k)(1) of the So7 cial Security Act) for the first of the 2 cal8 endar years preceding the calendar year in 

9 which the plan year begins, to 

10 ‘‘(ii) the national average wage index 

11 (as defined in subparagraph (F)) for 2004. 

12 If the amount determined under this clause is 

13 not a multiple of $1, such product shall be 

14 rounded to the nearest multiple of $1.’’. 

15 (b) PREMIUM RATE FOR CERTAIN TERMINATED SIN16 GLE-EMPLOYER PLANS.—Section 4006(a) of such Act (29 

17 U.S.C. 1306(a)) is amended by adding at the end the fol18 lowing: 

19 ‘‘(7) PREMIUM RATE FOR CERTAIN TERMI20 NATED SINGLE-EMPLOYER PLANS.— 

21 ‘‘(A) IN GENERAL.—If there is a termi22 nation of a single-employer plan under clause 

23 (ii) or (iii) of section 4041(c)(2)(B) or section 

24 4042, there shall be payable to the corporation, 

25 with respect to each applicable 12-month pe-
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1 riod, a premium at a rate equal to $1,250 mul2 tiplied by the number of individuals who were 

3 participants in the plan immediately before the 

4 termination date. Such premium shall be in ad5 dition to any other premium under this section. 

6 ‘‘(B) SPECIAL RULE FOR PLANS TERMI7 NATED IN BANKRUPTCY REORGANIZATION.— 

8 Subparagraph (A) shall not apply to a single9 employer plan terminated under section 

10 4041(c)(2)(B)(ii) or under section 4042 during 

11 pendency of any bankruptcy reorganization pro12 ceeding under chapter 11 of title 11, United 

13 States Code, (or under any similar law of a 

14 State or political subdivision of a State) until 

15 the plan sponsor emerges from bankruptcy. 

16 ‘‘(C) APPLICABLE 12-MONTH PERIOD.— 

17 For purposes of subparagraph (A)— 

18 ‘‘(i) IN GENERAL.—The term ‘applica19 ble 12-month period’ means— 

20 ‘‘(I) the 12-month period begin21 ning with the first month following 

22 the month in which the termination 

23 date occurs, and 
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1 ‘‘(II) each of the first two 12- 

2 month periods immediately following 

3 the period described in subclause (I). 

4 ‘‘(ii) PLANS TERMINATED IN BANK5 RUPTCY REORGANIZATION.—In the case of 

6 a plan described under subparagraph (B), 

7 the 12-month period described in clause 

8 (i)(I) shall be the 12-month period begin9 ning with the first month following the 

10 month which includes the date the plan 

11 sponsor emerges from bankruptcy. 

12 ‘‘(D) COORDINATION WITH SECTION

13 4007.—For purposes of section 4007— 

14 ‘‘(i) premiums under this paragraph 

15 shall be due within 30 days after the be16 ginning of any applicable 12-month period, 

17 ‘‘(ii) the fifth sentence of section 

18 4007(a) shall not apply, and 

19 ‘‘(iii) the designated payor under sec20 tion 4007(e)(1)(A) shall be the contrib21 uting sponsor immediately before the ter22 mination date.’’. 

23 (c) CONFORMING AMENDMENT.—Section 

24 4006(a)(3)(B) of such Act (29 U.S.C. 1306(a)(3)(B)) is 
422 

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1 amended by striking ‘‘subparagraph (A)(iii)’’ and insert2 ing ‘‘clause (iii) or (iv) of subparagraph (A)’’. 

3 (d) EFFECTIVE DATES.— 

4 (1) IN GENERAL.—The amendments made by 

5 this section shall apply to plan years beginning after 

6 December 31, 2005. 

7 (2) SPECIAL RULE FOR PLANS TERMINATED IN

8 BANKRUPTCY.—The amendment made by subsection 

9 (b) shall not apply to a termination of a single-em10 ployer plan that is terminated during the pendency 

11 of any bankruptcy reorganization proceeding under 

12 chapter 11 of title 11, United States Code (or under 

13 any similar law of a State or political subdivision of 

14 a State), if the proceeding is pursuant to a bank15 ruptcy filing occurring before October 18, 2005. 

16 (3) SPECIAL RULE IF SUBSEQUENT SAVINGS

17 ENACTED.—The amendments made by this section 

18 shall not take effect if, after the date of enactment 

19 of this Act and before January 1, 2006, a Federal 

20 law is enacted which— 

21 (A) provides for decreases in Federal out22 lays which in the aggregate are not less than 

23 the decreases in Federal outlays by reason of 

24 the amendments made by this section; and 
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1 (B) specifically provides that such de2 creases are to be in lieu of the decreases in 

3 Federal outlays by reason of the amendments 

4 made by this section. 

5 Subtitle C—Higher Education 

6 Reauthorization 

7 CHAPTER 1—SHORT TITLE; REFERENCES; 

8 GENERAL EFFECTIVE DATE 

9 SEC. 7301. SHORT TITLE. 

10 (a) SHORT TITLE.—This subtitle may be cited as the 

11 ‘‘Higher Education Amendments of 2005’’. 

12 SEC. 7302. REFERENCES. 

13 Except as otherwise expressly provided, whenever in 

14 this subtitle an amendment or repeal is expressed in terms 

15 of an amendment to, or repeal of, a section or other provi16 sion, the reference shall be considered to be made to a 

17 section or other provision of the Higher Education Act of 

18 1965 (20 U.S.C. 1001 et seq.). 

19 SEC. 7303. GENERAL EFFECTIVE DATE. 

20 Except as otherwise provided in this subtitle or the 

21 amendments made by this subtitle, the amendments made 

22 by this subtitle shall take effect on July 1, 2006. 
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1 CHAPTER 2—GENERAL PROVISIONS 

2 SEC. 7311. ADDITIONAL DEFINITIONS. 

3 (a) AMENDMENT.—Section 103 (20 U.S.C. 1003) is 

4 amended— 

5 (1) by redesignating paragraphs (1) through 

6 (16) as paragraphs (2) through (17), respectively; 

7 and 

8 (2) by inserting before paragraph (2) (as redes9 ignated by paragraph (1)) the following: 

10 ‘‘(1) AUTHORIZING COMMITTEES.—The term 

11 ‘authorizing committees’ means the Committee on 

12 Health, Education, Labor, and Pensions of the Sen13 ate and the Committee on Education and the Work14 force of the House of Representatives.’’. 

15 (b) CONFORMING AMENDMENTS.—The Act (20 

16 U.S.C. 1001 et seq.) is amended— 

17 (1) in section 131(a)(3)(B) (20 U.S.C. 

18 1015(a)(3)(B)), by striking ‘‘Committee on Labor 

19 and Human Resources of the Senate and the Com20 mittee on Education and the Workforce of the 

21 House of Representatives’’ and inserting ‘‘author22 izing committees’’; 

23 (2) in section 141(d)(4)(B) (20 U.S.C. 

24 1018(d)(4)(B)), by striking ‘‘Committee on Edu25 cation and the Workforce of the House of Rep-
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1 resentatives and the Committee on Labor and 

2 Human Resources of the Senate’’ and inserting ‘‘au3 thorizing committees’’; 

4 (3) in section 207(c)(1) (20 U.S.C. 1027(c)(1)), 

5 by striking ‘‘Committee on Labor and Human Re6 sources of the Senate and the Committee on Edu7 cation and the Workforce of the House of Rep8 resentatives’’ and inserting ‘‘authorizing commit9 tees’’; 

10 (4) in section 401(f)(3) (20 U.S.C. 

11 1070a(f)(3)), by striking ‘‘to the Committee on Ap12 propriations’’ and all that follows through ‘‘House of 

13 Representatives’’ and inserting ‘‘to the Committee 

14 on Appropriations of the Senate, the Committee on 

15 Appropriations of the House of Representatives, and 

16 the authorizing committees’’; 

17 (5) in section 428 (20 U.S.C. 1078)— 

18 (A) in subsection (c)(9)(K), by striking 

19 ‘‘House Committee on Education and the 

20 Workforce and the Senate Committee on Labor 

21 and Human Resources’’ and inserting ‘‘author22 izing committees’’; 

23 (B) in the matter following paragraph (2) 

24 of subsection (g), by striking ‘‘Committee on 

25 Labor and Human Resources of the Senate and 
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1 the Committee on Education and the Workforce 

2 of the House of Representatives’’ and inserting 

3 ‘‘authorizing committees’’; and 

4 (C) in subsection (n)(4), ‘‘Committee on 

5 Education and the Workforce of the House of 

6 Representatives and the Committee on Labor 

7 and Human Resources of the Senate’’ and in8 serting ‘‘authorizing committees’’; 

9 (6) in section 428A (20 U.S.C. 1078–1)— 

10 (A) in the matter preceding subparagraph 

11 (A) of subsection (a)(4), by striking ‘‘Com12 mittee on Labor and Human Resources of the 

13 Senate and the Committee on Education and 

14 the Workforce of the House of Representatives’’ 

15 and inserting ‘‘authorizing committees’’; and 

16 (B) in subsection (c)— 

17 (i) in the matter preceding subpara18 graph (A) of paragraph (2), by striking 

19 ‘‘Chairperson’’ and all that follows through 

20 ‘‘House of Representatives’’ and inserting 

21 ‘‘Chairpersons and Ranking Members of 

22 the authorizing committees’’; 

23 (ii) in paragraph (3), by striking 

24 ‘‘Chairperson’’ and all that follows through 

25 ‘‘House of Representatives’’ and inserting 
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1 ‘‘Chairpersons and Ranking Members of 

2 the authorizing committees’’; and 

3 (iii) in paragraph (5), by striking 

4 ‘‘Chairperson’’ and all that follows through 

5 ‘‘House of Representatives’’ and inserting 

6 ‘‘Chairpersons and Ranking Members of 

7 the authorizing committees’’; 

8 (7) in section 432 (20 U.S.C. 1082)— 

9 (A) in subsection (f)(1)(C), by striking 

10 ‘‘the Committee on Education and the Work11 force of the House of Representatives or the 

12 Committee on Labor and Human Resources of 

13 the Senate’’ and inserting ‘‘either of the author14 izing committees’’; and 

15 (B) in the matter following subparagraph 

16 (D) of subsection (n)(3), by striking ‘‘Com17 mittee on Education and the Workforce of the 

18 House of Representatives and the Committee 

19 on Labor and Human Resources of the Senate’’ 

20 and inserting ‘‘authorizing committees’’; 

21 (8) in section 437(c)(1) (20 U.S.C. 1087(c)(1)), 

22 by striking ‘‘Committee on Education and the Work23 force of the House of Representatives and the Com24 mittee on Labor and Human Resources of the Sen25 ate’’ and inserting ‘‘authorizing committees’’; 
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•S 1932 PCS 

1 (9) in section 439 (20 U.S.C. 1087–2)— 

2 (A) in subsection (d)(1)(E)(iii), by striking 

3 ‘‘advise the Chairman’’ and all that follows 

4 through ‘‘House of Representatives’’ and insert5 ing ‘‘advise the Chairpersons and Ranking 

6 Members of the authorizing committees’’; 

7 (B) in subsection (r)— 

8 (i) in paragraph (3), by striking ‘‘in9 form the Chairman’’ and all that follows 

10 through ‘‘House of Representatives,’’ and 

11 inserting ‘‘inform the Chairpersons and 

12 Ranking Members of the authorizing com13 mittees’’; 

14 (ii) in paragraph (5)(B), by striking 

15 ‘‘plan, to the Chairman’’ and all that fol16 lows through ‘‘Education and Labor’’ and 

17 inserting ‘‘plan, to the Chairpersons and 

18 Ranking Members of the authorizing com19 mittees’’; 

20 (iii) in paragraph (6)(B)— 

21 (I) by striking ‘‘plan, to the 

22 Chairman’’ and all that follows 

23 through ‘‘House of Representatives’’ 

24 and inserting ‘‘plan, to the Chair-
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1 persons and Ranking Members of the 

2 authorizing committees’’; and 

3 (II) by striking ‘‘Chairmen and 

4 ranking minority members of such 

5 Committees’’ and inserting ‘‘Chair6 persons and Ranking Members of the 

7 authorizing committees’’; 

8 (iv) in paragraph (8)(C), by striking 

9 ‘‘implemented to the Chairman’’ and all 

10 that follows through ‘‘House of Represent11 atives, and’’ and inserting ‘‘implemented to 

12 the Chairpersons and Ranking Members of 

13 the authorizing committees, and to’’; and 

14 (v) in the matter preceding subpara15 graph (A) of paragraph (10), by striking 

16 ‘‘days to the Chairman’’ and all that fol17 lows through ‘‘Education and Labor’’ and 

18 inserting ‘‘days to the Chairpersons and 

19 Ranking Members of the authorizing com20 mittees’’; and 

21 (C) in subsection (s)(2)— 

22 (i) in the matter preceding clause (i) 

23 of subparagraph (A), by striking ‘‘Treas24 ury and to the Chairman’’ and all that fol25 lows through ‘‘House of Representatives’’ 
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1 and inserting ‘‘Treasury and to the Chair2 persons and Ranking Members of the au3 thorizing committees’’; and 

4 (ii) in subparagraph (B), by striking 

5 ‘‘Treasury and to the Chairman’’ and all 

6 that follows through ‘‘House of Represent7 atives’’ and inserting ‘‘Treasury and to the 

8 Chairpersons and Ranking Members of the 

9 authorizing committees’’; 

10 (10) in section 455(b)(8)(B) (20 U.S.C. 

11 1087e(b)(8)(B)), by striking ‘‘Committee on Labor 

12 and Human Resources of the Senate and the Com13 mittee on Education and the Workforce of the 

14 House of Representatives’’ and inserting ‘‘author15 izing committees’’; 

16 (11) in section 482(d) (20 U.S.C. 1089(d)), by 

17 striking ‘‘Committee on Labor and Human Re18 sources of the Senate and the Committee on Edu19 cation and Labor of the House of Representatives’’ 

20 and inserting ‘‘authorizing committees’’; 

21 (12) in section 483(c) (20 U.S.C. 1090(c)), by 

22 striking ‘‘Committee on Labor and Human Re23 sources of the Senate and the Committee on Edu24 cation and the Workforce of the House of Rep-
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1 resentatives’’ and inserting ‘‘authorizing commit2 tees’’; 

3 (13) in section 485 (20 U.S.C. 1092)— 

4 (A) in subsection (f)(5)(A), by striking 

5 ‘‘Committee on Education and the Workforce of 

6 the House of Representatives and the Com7 mittee on Labor and Human Resources of the 

8 Senate’’ and inserting ‘‘authorizing commit9 tees’’; and 

10 (B) in subsection (g)(4)(B), by striking 

11 ‘‘Committee on Education and the Workforce of 

12 the House of Representatives and the Com13 mittee on Labor and Human Resources of the 

14 Senate’’ and inserting ‘‘authorizing commit15 tees’’; 

16 (14) in section 486 (20 U.S.C. 1093)— 

17 (A) in subsection (e), by striking ‘‘Com18 mittee on Labor and Human Resources of the 

19 Senate and the Committee on Education and 

20 the Workforce of the House of Representatives’’ 

21 and inserting ‘‘authorizing committees’’; and 

22 (B) in subsection (f)(3)— 

23 (i) in the matter preceding clause (i) 

24 of subparagraph (A), by striking ‘‘Com25 mittee on Labor and Human Resources of 
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1 the Senate and the Committee on Edu2 cation and the Workforce of the House of 

3 Representatives’’ and inserting ‘‘author4 izing committees’’; and 

5 (ii) in the matter preceding clause (i) 

6 of subparagraph (B), by striking ‘‘Com7 mittee on Labor and Human Resources of 

8 the Senate and the Committee on Edu9 cation and the Workforce of the House of 

10 Representatives’’ and inserting ‘‘author11 izing committees’’; 

12 (15) in section 487A(a)(5) (20 U.S.C. 

13 1094a(a)(5)), by striking ‘‘Committee on Labor and 

14 Human Resources of the Senate and the Committee 

15 on Education and the Workforce of the House of 

16 Representatives’’ and inserting ‘‘authorizing commit17 tees’’; and 

18 (16) in section 498B(d) (20 U.S.C. 1099c– 

19 2(d))— 

20 (A) in paragraph (1), by striking ‘‘Com21 mittee on Labor and Human Resources of the 

22 Senate and the Committee on Education and 

23 the Workforce of the House of Representatives’’ 

24 and inserting ‘‘authorizing committees’’; and 
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1 (B) in paragraph (2), by striking ‘‘Com2 mittee on Labor and Human Resources of the 

3 Senate and the Committee on Education and 

4 the Workforce of the House of Representatives’’ 

5 and inserting ‘‘authorizing committees’’. 

6 SEC. 7312. GENERAL DEFINITION OF INSTITUTION OF 

7 HIGHER EDUCATION. 

8 Section 101 (20 U.S.C. 1001) is amended— 

9 (1) in subsection (a)(3), by inserting ‘‘, or 

10 awards a degree that is acceptable for admission to 

11 a graduate or professional degree program, subject 

12 to the review and approval by the Secretary’’ after 

13 ‘‘such a degree’’; and 

14 (2) by striking subsection (b)(2) and inserting 

15 the following: 

16 ‘‘(2) a public or nonprofit private educational 

17 institution in any State that, in lieu of the require18 ment in subsection (a)(1), admits as regular stu19 dents persons— 

20 ‘‘(A) who meet the requirements of section 

21 484(d)(3); 

22 ‘‘(B) who are beyond the age of compul23 sory school attendance in the State in which the 

24 institution is located; or 
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1 ‘‘(C) who are dually or concurrently en2 rolled in such institution and a secondary 

3 school.’’. 

4 SEC. 7313. DEFINITION OF INSTITUTION OF HIGHER EDU5 CATION FOR PURPOSES OF TITLE IV PRO6 GRAMS. 

7 Section 102 (20 U.S.C. 1002) is amended— 

8 (1) in subsection (a)— 

9 (A) by striking paragraph (2)(A)(i) and in10 serting the following: 

11 ‘‘(i) in the case of a graduate medical 

12 school located outside the United States— 

13 ‘‘(I) at least 60 percent of those 

14 enrolled in, and at least 60 percent of 

15 the graduates of, the graduate med16 ical school outside the United States 

17 were not persons described in section 

18 484(a)(5) in the year preceding the 

19 year for which a student is seeking a 

20 loan under part B of title IV; and 

21 ‘‘(II) at least 60 percent of the 

22 individuals who were students or 

23 graduates of the graduate medical 

24 school outside the United States or 

25 Canada (both nationals of the United 
435 

•S 1932 PCS 

1 States and others) taking the exami2 nations administered by the Edu3 cational Commission for Foreign Med4 ical Graduates received a passing 

5 score in the year preceding the year 

6 for which a student is seeking a loan 

7 under part B of title IV; or’’; 

8 (B) by striking paragraph (3) and insert9 ing the following: 

10 ‘‘(3) LIMITATIONS BASED ON ENROLLMENT.— 

11 An institution shall not be considered to meet the 

12 definition of an institution of higher education in 

13 paragraph (1) if such institution— 

14 ‘‘(A) has a student enrollment in which 

15 more than 25 percent of the students are incar16 cerated, except that the Secretary may waive 

17 the limitation contained in this subparagraph 

18 for a nonprofit institution that provides a 2- or 

19 4-year program of instruction (or both) for 

20 which the institution awards a bachelor’s de21 gree, or an associate’s degree or a postsec22 ondary diploma, respectively; or 

23 ‘‘(B) has a student enrollment in which 

24 more than 50 percent of the students do not 

25 have a secondary school diploma or its recog-
436 

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1 nized equivalent, and does not provide a 2- or 

2 4-year program of instruction (or both) for 

3 which the institution awards a bachelor’s degree 

4 or an associate’s degree, respectively, except 

5 that the Secretary may waive the limitation 

6 contained in this subparagraph if a nonprofit 

7 institution demonstrates to the satisfaction of 

8 the Secretary that the institution exceeds such 

9 limitation because the institution serves, 

10 through contracts with Federal, State, or local 

11 government agencies, significant numbers of 

12 students who do not have a secondary school di13 ploma or its recognized equivalent.’’; 

14 (C) by redesignating paragraphs (4), (5), 

15 and (6), as paragraphs (5), (6), and (7), re16 spectively; and 

17 (D) by inserting after paragraph (3) the 

18 following: 

19 ‘‘(4) LIMITATIONS BASED ON MODE OF DELIV20 ERY.— 

21 ‘‘(A) IN GENERAL.—An institution shall 

22 not be considered to meet the definition of an 

23 institution of higher education in paragraph (1) 

24 if such institution— 
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1 ‘‘(i) offers more than 50 percent of 

2 such institution’s courses by correspond3 ence, unless the institution is an institution 

4 that meets the definition in section 3(3)(C) 

5 of the Carl D. Perkins Vocational and 

6 Technical Education Act of 1998; or 

7 ‘‘(ii) enrolls 50 percent or more of the 

8 institution’s students in correspondence 

9 courses, unless the institution is an institu10 tion that meets the definition in such sec11 tion 3(3)(C), except that the Secretary, at 

12 the request of such institution, may waive 

13 the applicability of this subparagraph to 

14 such institution for good cause, as deter15 mined by the Secretary in the case of an 

16 institution of higher education that pro17 vides a 2- or 4-year program of instruction 

18 (or both) for which the institution awards 

19 an associate or baccalaureate degree, re20 spectively. 

21 ‘‘(B) DISTANCE EDUCATION PROGRAM ELI22 GIBILITY.—Notwithstanding subparagraph (A), 

23 an institution of higher education, other than a 

24 foreign institution, that offers education or 

25 training programs principally through distance 
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1 education shall be considered to meet the defini2 tion of an institution of higher education in 

3 paragraph (1) if such institution— 

4 ‘‘(i) has been evaluated and deter5 mined (before or after the date of enact6 ment of the Higher Education Amend7 ments of 2005) to have the capability to 

8 effectively deliver distance education pro9 grams by an accrediting agency or associa10 tion that— 

11 ‘‘(I) is recognized by the Sec12 retary under title IV; and 

13 ‘‘(II) has evaluation of distance 

14 education programs within the scope 

15 of its recognition, as described in sec16 tion 496(n)(3); 

17 ‘‘(ii) is otherwise eligible to participate 

18 in programs authorized under title IV; 

19 ‘‘(iii) has not had its participation in 

20 programs under title IV suspended or ter21 minated within the previous 5 years; 

22 ‘‘(iv) has not had, or failed to resolve, 

23 an audit finding or program review finding 

24 under this Act during the 2 years pre25 ceding the year for which the determina-
439 

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1 tion is made that, following any appeal to 

2 the Secretary, resulted in the institution 

3 being required to repay an amount that is 

4 equal to or greater than 25 percent of the 

5 total funds the institution received under 

6 the programs authorized under title IV for 

7 the most recent award year; and 

8 ‘‘(v) has met the requirements of sec9 tion 487(d), if applicable. 

10 ‘‘(C) DEFINITION.— 

11 ‘‘(i) IN GENERAL.—In this Act, except 

12 as otherwise provided, the term ‘distance 

13 education’ means a course or program that 

14 uses 1 or more of the technologies de15 scribed in clause (ii) to— 

16 ‘‘(I) deliver instruction to stu17 dents who are separated from the in18 structor; and 

19 ‘‘(II) support regular and sub20 stantive interaction between the stu21 dents and the instructor, either syn22 chronously or asynchronously. 

23 ‘‘(ii) INCLUSIONS.—For the purposes 

24 of clause (i), the technologies used may in25 clude— 
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1 ‘‘(I) the Internet; 

2 ‘‘(II) one-way and two-way trans3 missions through open broadcast, 

4 closed circuit, cable, microwave, 

5 broadband lines, fiber optics, satellite, 

6 or wireless communications devices; 

7 ‘‘(III) audio conferencing; or 

8 ‘‘(IV) video cassette, DVDs, and 

9 CD-ROMs, provided that they are 

10 used in a course in conjunction with 

11 the technologies listed in subclauses 

12 (I) through (III).’’; and 

13 (2) in subsection (b)(1)— 

14 (A) in subparagraph (D), by inserting 

15 ‘‘and’’ after the semicolon; 

16 (B) in subparagraph (E), by striking ‘‘; 

17 and’’ and inserting a period; and 

18 (C) by striking subparagraph (F). 

19 SEC. 7314. PROTECTION OF STUDENT SPEECH AND ASSO20 CIATION RIGHTS. 

21 Section 112 (20 U.S.C. 1011a) is amended— 

22 (1) in subsection (a)— 

23 (A) by inserting ‘‘(1)’’ before ‘‘It is the 

24 sense’’; and 

25 (B) by adding at the end the following: 
441 

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1 ‘‘(2) It is the sense of Congress that— 

2 ‘‘(A) the diversity of institutions and edu3 cational missions is one of the key strengths of 

4 American higher education; 

5 ‘‘(B) individual colleges and universities have 

6 different missions and each institution should design 

7 its academic program in accordance with its edu8 cational goals; 

9 ‘‘(C) within the context of institutional mission, 

10 a college should facilitate the free and open ex11 change of ideas; 

12 ‘‘(D) students should not be intimated, har13 assed, discouraged from speaking out, or discrimi14 nated against; 

15 ‘‘(E) students should be treated equally and 

16 fairly; and 

17 ‘‘(F) nothing in this paragraph shall be con18 strued to modify, change, or infringe upon any con19 stitutionally protected religious liberty, freedom, ex20 pression, or association.’’; and 

21 (2) in subsection (b)(1), by inserting ‘‘, pro22 vided that the imposition of such sanction is done 

23 objectively and fairly’’ after ‘‘higher education’’. 
442 

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1 SEC. 7315. NATIONAL ADVISORY COMMITTEE ON INSTITU2 TIONAL QUALITY AND INTEGRITY. 

3 Section 114(g) (20 U.S.C. 1011c(g)) is amended by 

4 striking ‘‘September 30, 2004’’ and inserting ‘‘September 

5 30, 2011’’. 

6 SEC. 7316. DRUG AND ALCOHOL ABUSE PREVENTION. 

7 Section 120 (20 U.S.C. 1011i) is amended by striking 

8 subsections (e) and (f) and inserting the following: 

9 ‘‘(e) GRANTS DIRECTED AT REDUCING HIGHER

10 EDUCATION DRUG AND ALCOHOL ABUSE.— 

11 ‘‘(1) AUTHORIZATION OF PROGRAM.—The Sec12 retary may award grants to eligible entities to enable 

13 the entities to reduce the rate of drug use, underage 

14 alcohol use, and binge drinking among students at 

15 institutions of higher education. 

16 ‘‘(2) APPLICATIONS.—An eligible entity that de17 sires to receive a grant under this subsection shall 

18 submit an application to the Secretary at such time, 

19 in such manner, and accompanied by such informa20 tion as the Secretary may require. Each application 

21 shall include— 

22 ‘‘(A) a description of how the eligible enti23 ty will work to enhance an existing, or where 

24 none exists to build a, statewide coalition; 

25 ‘‘(B) a description of how the eligible enti26 ty will target underage students in the State; 
443 

•S 1932 PCS 

1 ‘‘(C) a description of how the eligible enti2 ty intends to ensure that the statewide coalition 

3 is actually implementing the purpose described 

4 in paragraph (1) and moving toward the 

5 achievement indicators described in paragraph 

6 (4); 

7 ‘‘(D) a list of the members of the statewide 

8 coalition or interested parties involved in the 

9 work of the eligible entity; 

10 ‘‘(E) a description of how the eligible enti11 ty intends to work with State agencies on sub12 stance abuse prevention and education; 

13 ‘‘(F) the anticipated impact of funds pro14 vided under this subsection in reducing the 

15 rates of drug abuse and underage alcohol use; 

16 ‘‘(G) outreach strategies, including ways in 

17 which the eligible entity proposes to— 

18 ‘‘(i) reach out to students; 

19 ‘‘(ii) promote the purpose described in 

20 paragraph (1); 

21 ‘‘(iii) address the range of needs of 

22 the students and the surrounding commu23 nities; and 
444 

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1 ‘‘(iv) address community norms for 

2 underage students regarding drug and al3 cohol use; and 

4 ‘‘(H) such additional information as re5 quired by the Secretary. 

6 ‘‘(3) USES OF FUNDS.—Each eligible entity 

7 that receives a grant under this subsection shall use 

8 the grant funds to carry out the activities described 

9 in such entity’s application submitted pursuant to 

10 paragraph (2). 

11 ‘‘(4) ACCOUNTABILITY.—On the date on which 

12 the Secretary first publishes a notice in the Federal 

13 Register soliciting applications for grants under this 

14 subsection, the Secretary shall include in the notice 

15 achievement indicators for the program authorized 

16 under this subsection. The achievement indicators 

17 shall be designed— 

18 ‘‘(A) to measure the impact that the state19 wide coalitions assisted under this subsection 

20 are having on the institutions of higher edu21 cation and the surrounding communities, in22 cluding changes in the number of alcohol and 

23 drug-related abuse incidents of any kind (in24 cluding violations, physical assaults, sexual as25 saults, reports of intimidation, disruptions of 
445 

•S 1932 PCS 

1 school functions, disruptions of student studies, 

2 mental health referrals, illnesses, or deaths); 

3 ‘‘(B) to measure the quality and accessi4 bility of the programs or information offered by 

5 the statewide coalitions; and 

6 ‘‘(C) to provide such other measures of 

7 program impact as the Secretary determines 

8 appropriate. 

9 ‘‘(5) SUPPLEMENT NOT SUPPLANT.—Grant 

10 funds provided under this subsection shall be used to 

11 supplement, and not supplant, Federal and non-Fed12 eral funds available for carrying out the activities 

13 described in this subsection. 

14 ‘‘(6) DEFINITIONS.—In this subsection: 

15 ‘‘(A) ELIGIBLE ENTITY.—The term ‘eligi16 ble entity’ means a State, an institution of 

17 higher education as defined in section 102, or 

18 a nonprofit entity. 

19 ‘‘(B) INSTITUTION OF HIGHER EDU20 CATION.—The term ‘institution of higher edu21 cation’ has the meaning given the term in sec22 tion 101(a). 

23 ‘‘(C) STATE.—The term ‘State’ means 

24 each of the 50 States, the District of Columbia, 

25 and the Commonwealth of Puerto Rico. 
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1 ‘‘(D) STATEWIDE COALITION.—The term 

2 ‘statewide coalition’ means a coalition that— 

3 ‘‘(i) includes— 

4 ‘‘(I) institutions of higher edu5 cation within a State; and 

6 ‘‘(II) a nonprofit group, a com7 munity anti-drug or underage drink8 ing prevention coalition, or another 

9 substance abuse prevention group 

10 within a State; and 

11 ‘‘(ii) works toward lowering alcohol 

12 abuse rates by targeting underage students 

13 at institutions of higher education through14 out the State and in the surrounding com15 munities. 

16 ‘‘(E) SURROUNDING COMMUNITY.—The 

17 term ‘surrounding community’ means the com18 munity— 

19 ‘‘(i) that surrounds an institution of 

20 higher education participating in a state21 wide coalition; 

22 ‘‘(ii) where the students from the in23 stitution of higher education take part in 

24 the community; and 
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1 ‘‘(iii) where students from the institu2 tion of higher education live in off-campus 

3 housing. 

4 ‘‘(7) ADMINISTRATIVE EXPENSES.—Not more 

5 than 5 percent of a grant awarded under this sub6 section may be expended for administrative ex7 penses. 

8 ‘‘(8) AUTHORIZATION OF APPROPRIATIONS.— 

9 There are authorized to be appropriated to carry out 

10 this subsection such sums as may be necessary for 

11 fiscal year 2006 and each of the 5 succeeding fiscal 

12 years.’’. 

13 SEC. 7317. PRIOR RIGHTS AND OBLIGATIONS. 

14 Section 121(a) (20 U.S.C. 1011j(a)) is amended— 

15 (1) in paragraph (1), by striking ‘‘1999’’ and 

16 inserting ‘‘2006’’; and 

17 (2) in paragraph (2), by striking ‘‘1999’’ and 

18 inserting ‘‘2006’’. 

19 SEC. 7318. COST OF HIGHER EDUCATION. 

20 Section 131 (20 U.S.C. 1015) is amended— 

21 (1) by striking subsection (b) and inserting the 

22 following: 

23 ‘‘(b) COLLEGE CONSUMER INFORMATION.— 

24 ‘‘(1) IN GENERAL.—The Secretary shall make 

25 available to the public the information described in 
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1 paragraph (2), in a form that enables the public to 

2 compare the information among institutions of high3 er education. Such information shall be made avail4 able for each of the categories described in para5 graph (3) and updated annually. 

6 ‘‘(2) INFORMATION.—The information de7 scribed in this paragraph is the following: 

8 ‘‘(A) Tuition and fees for a first-time, full9 time undergraduate student. 

10 ‘‘(B) Cost of attendance for a first-time, 

11 full-time undergraduate student. 

12 ‘‘(C) The average annual cost of attend13 ance for a first-time, full-time undergraduate 

14 student for the preceding periods of 5 and 10 

15 academic years preceding the year for which the 

16 information is made available under this sub17 section, or if data are not available for such 

18 academic years, data for as many of such aca19 demic years as are available. 

20 ‘‘(D) The percentage of full-time under21 graduate students receiving financial assistance, 

22 including— 

23 ‘‘(i) Federal grants; 

24 ‘‘(ii) State and local grants; 

25 ‘‘(iii) institutional grants; and 
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1 ‘‘(iv) loans to students. 

2 ‘‘(E) The average amount of financial aid 

3 received by students from sources described in 

4 clauses (i) through (iv) of subparagraph (D). 

5 ‘‘(F) Graduation rates, as described in sec6 tion 485(a)(1)(L). 

7 ‘‘(G) A ranking of the dollar and percent8 age increases in tuition and fees for all institu9 tions of higher education for which data are 

10 available in each of the categories described in 

11 paragraph (3). 

12 ‘‘(3) CATEGORIES.—The categories described in 

13 this paragraph are as follows: 

14 ‘‘(A) All institutions of higher education. 

15 ‘‘(B) 4-year public, degree-granting, insti16 tutions of higher education. 

17 ‘‘(C) 2-year public, degree-granting, insti18 tutions of higher education. 

19 ‘‘(D) 4-year, nonprofit, private, degree20 granting institutions of higher education. 

21 ‘‘(E) 2-year, nonprofit, private, degree22 granting institutions of higher education. 

23 ‘‘(F) 4-year, for-profit, private, degree24 granting institutions of higher education. 
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1 ‘‘(G) 2-year, for-profit, private, degree2 granting institutions of higher education. 

3 ‘‘(H) Less than 2-year, for-profit, private 

4 institutions of higher education. 

5 ‘‘(4) STANDARD DEFINITIONS.—In carrying out 

6 this section, the Secretary shall use the standard 

7 definitions developed under subsection (a)(3).’’; and 

8 (2) in subsection (c)— 

9 (A) in paragraph (1), by inserting ‘‘be con10 ducted on an annual basis and’’ after ‘‘Such 

11 study shall’’; 

12 (B) in paragraph (2)— 

13 (i) in subparagraph (B), by striking 

14 ‘‘and’’ after the semicolon; 

15 (ii) in subparagraph (C), by striking 

16 the period and inserting a semicolon; and 

17 (iii) by adding at the end the fol18 lowing: 

19 ‘‘(D) the average cost of attending an in20 stitution of higher education, disaggregated by 

21 category, as described in subsection (b)(3); 

22 ‘‘(E) the average annual cost of attending 

23 an institution of higher education for the peri24 ods of 5 and 10 academic years preceding the 

25 year for which the study is conducted (or if 
451 

•S 1932 PCS 

1 data are not available for such academic years, 

2 data for as many of such academic years as are 

3 available), disaggregated by category, as de4 scribed in subsection (b)(3); and 

5 ‘‘(F) the assistance provided to institutions 

6 of higher education by each State.’’; 

7 (C) in paragraph (3)— 

8 (i) in the paragraph heading, by strik9 ing ‘‘FINAL’’ and inserting ‘‘ANNUAL’’; 

10 (ii) by striking ‘‘a report’’ and insert11 ing ‘‘an annual report’’; and 

12 (iii) by striking ‘‘not later than Sep13 tember 30, 2002’’ and inserting ‘‘and the 

14 public’’; and 

15 (D) by striking paragraph (4) and insert16 ing the following: 

17 ‘‘(4) HIGHER EDUCATION COST INDEX.—The 

18 Bureau of Labor Statistics, in consultation with the 

19 Commissioner of Education Statistics, shall develop 

20 a higher education cost index that tracks inflation 

21 changes in the relevant costs associated with higher 

22 education.’’. 
452 

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1 SEC. 7319. PERFORMANCE-BASED ORGANIZATION FOR THE 

2 DELIVERY OF FEDERAL STUDENT FINANCIAL 

3 ASSISTANCE. 

4 Section 141 (20 U.S.C. 1018) is amended— 

5 (1) in subsection (a)— 

6 (A) in paragraph (1), by striking ‘‘oper7 ational’’ and inserting ‘‘administrative and 

8 oversight’’; and 

9 (B) in paragraph (2)(D), by striking ‘‘of 

10 the operational functions’’ and inserting ‘‘and 

11 administration’’; 

12 (2) in subsection (b)— 

13 (A) in paragraph (1)— 

14 (i) in subparagraph (A), by striking 

15 ‘‘the information systems administered by 

16 the PBO, and other functions performed 

17 by the PBO’’ and inserting ‘‘the Federal 

18 student financial assistance programs au19 thorized under title IV’’; and 

20 (ii) by striking subparagraph (C) and 

21 inserting the following: 

22 ‘‘(C) assist the Chief Operating Officer in 

23 identifying goals for— 

24 ‘‘(i) the administration of the systems 

25 used to administer the Federal student fi-
453 

•S 1932 PCS 

1 nancial assistance programs authorized 

2 under title IV; and 

3 ‘‘(ii) the updating of such systems to 

4 current technology.’’; and 

5 (B) in paragraph (2)— 

6 (i) in the matter preceding subpara7 graph (A), by striking ‘‘administration of 

8 the information and financial systems that 

9 support’’ and inserting ‘‘the administration 

10 of Federal’’; 

11 (ii) in subparagraph (A)— 

12 (I) in the matter preceding clause 

13 (i), by striking ‘‘of the delivery system 

14 for Federal student assistance’’ and 

15 inserting ‘‘for the Federal student as16 sistance programs authorized under 

17 title IV’’; 

18 (II) by striking clauses (i) and 

19 (ii) and inserting the following: 

20 ‘‘(i) the collection, processing, and 

21 transmission of data to students, institu22 tions, lenders, State agencies, and other 

23 authorized parties; 

24 ‘‘(ii) the design and technical speci25 fications for software development and pro-
454 

•S 1932 PCS 

1 curement for systems supporting the stu2 dent financial assistance programs author3 ized under title IV;’’; 

4 (III) in clause (iii), by striking 

5 ‘‘delivery’’ and inserting ‘‘administra6 tion’’; 

7 (IV) in clause (iv)— 

8 (aa) by inserting ‘‘the’’ after 

9 ‘‘supporting’’; and 

10 (bb) by striking ‘‘and’’ after 

11 the semicolon; 

12 (V) in clause (v), by striking 

13 ‘‘systems that support those pro14 grams.’’ and inserting ‘‘the adminis15 tration of the Federal student assist16 ance programs authorized under title 

17 IV; and’’; and 

18 (VI) by adding at the end the fol19 lowing: 

20 ‘‘(vi) ensuring the integrity of the stu21 dent assistance programs authorized under 

22 title IV.’’; and 

23 (iii) in subparagraph (B), by striking 

24 ‘‘operations and services’’ and inserting 

25 ‘‘activities and functions’’; and 
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•S 1932 PCS 

1 (3) in subsection (c)— 

2 (A) in paragraph (1)(C)— 

3 (i) in clause (iii), by striking ‘‘infor4 mation and delivery’’; and 

5 (ii) in clause (iv)— 

6 (I) by striking ‘‘Developing an’’ 

7 and inserting ‘‘Developing’’; and 

8 (II) by striking ‘‘delivery and in9 formation system’’ and inserting ‘‘sys10 tems’’; 

11 (B) in paragraph (2)— 

12 (i) in subparagraph (A), by inserting 

13 ‘‘the’’ after ‘‘PBO and’’; and 

14 (ii) in subparagraph (B), by striking 

15 ‘‘Officer’’ and inserting ‘‘Officers’’; and 

16 (C) in paragraph (3), by inserting ‘‘stu17 dents,’’ after ‘‘consult with’’; 

18 (4) in subsection (d)— 

19 (A) in paragraph (1), by striking the sec20 ond sentence; and 

21 (B) in paragraph (5)— 

22 (i) in subparagraph (B), by striking 

23 ‘‘paragraph (2)’’ and inserting ‘‘paragraph 

24 (4)’’; and 
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•S 1932 PCS 

1 (ii) in subparagraph (C), by striking 

2 ‘‘this’’; 

3 (5) in subsection (f)— 

4 (A) in paragraph (2), by striking ‘‘to bor5 rowers’’ and inserting ‘‘to students, bor6 rowers,’’; and 

7 (B) in paragraph (3)(A), by striking 

8 ‘‘(1)(A)’’ and inserting ‘‘(1)’’; 

9 (6) in subsection (g)(3), by striking ‘‘not more 

10 than 25’’; 

11 (7) in subsection (h), by striking ‘‘organiza12 tional effectiveness’’ and inserting ‘‘effectiveness’’; 

13 (8) by striking subsection (i); 

14 (9) by redesignating subsection (j) as sub15 section (i); and 

16 (10) in subsection (i) (as redesignated by para17 graph (9)), by striking ‘‘, including transition costs’’. 

18 SEC. 7320. PROCUREMENT FLEXIBILITY. 

19 Section 142 (20 U.S.C. 1018a) is amended— 

20 (1) in subsection (b)— 

21 (A) in paragraph (1)— 

22 (i) by striking ‘‘for information sys23 tems supporting the programs authorized 

24 under title IV’’; and 
457 

•S 1932 PCS 

1 (ii) by striking ‘‘and’’ after the semi2 colon; 

3 (B) in paragraph (2), by striking the pe4 riod at the end and inserting ‘‘; and’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(3) through the Chief Operating Officer— 

7 ‘‘(A) to the maximum extent practicable, 

8 utilize procurement systems that streamline op9 erations, improve internal controls, and enhance 

10 management; and 

11 ‘‘(B) assess the efficiency of such systems 

12 and assess such systems’ ability to meet PBO 

13 requirements.’’; 

14 (2) by striking subsection (c)(2) and inserting 

15 the following: 

16 ‘‘(2) FEE FOR SERVICE ARRANGEMENTS.—The 

17 Chief Operating Officer shall, when appropriate and 

18 consistent with the purposes of the PBO, acquire 

19 services related to the functions set forth in section 

20 141(b)(2) from any entity that has the capability 

21 and capacity to meet the requirements set by the 

22 PBO. The Chief Operating Officer is authorized to 

23 pay fees that are equivalent to those paid by other 

24 entities to an organization that provides services 
458 

•S 1932 PCS 

1 that meet the requirements of the PBO, as deter2 mined by the Chief Operating Officer.’’; 

3 (3) in subsection (d)(2)(B), by striking ‘‘on 

4 Federal Government contracts’’; 

5 (4) in subsection (g)— 

6 (A) in paragraph (4)(A)— 

7 (i) in the subparagraph heading, by 

8 striking ‘‘SOLE SOURCE.—’’ and inserting 

9 ‘‘SINGLE-SOURCE BASIS.—’’; and 

10 (ii) by striking ‘‘sole-source’’ and in11 serting ‘‘single-source’’; and 

12 (B) in paragraph (7), by striking ‘‘sole13 source’’ and inserting ‘‘single-source’’; 

14 (5) in subsection (h)(2)(A), by striking ‘‘sole15 source’’ and inserting ‘‘single-source’’; and 

16 (6) in subsection (l), by striking paragraph (3) 

17 and inserting the following: 

18 ‘‘(3) SINGLE-SOURCE BASIS.—The term ‘single19 source basis’, with respect to an award of a contract, 

20 means that the contract is awarded to a source after 

21 soliciting an offer or offers from, and negotiating 

22 with, only such source (although such source is not 

23 the only source in the marketplace capable of meet24 ing the need) because such source is the most advan25 tageous source for purposes of the award.’’. 
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1 CHAPTER 3—TEACHER QUALITY 

2 ENHANCEMENT 

3 SEC. 7331. TEACHER QUALITY ENHANCEMENT GRANTS FOR 

4 STATES AND PARTNERSHIPS. 

5 Part A of title II (20 U.S.C. 1021 et seq.) is amended 

6 to read as follows: 

7 ‘‘PART A—TEACHER QUALITY ENHANCEMENT 

8 GRANTS FOR STATES AND PARTNERSHIPS 

9 ‘‘SEC. 201. PURPOSES; DEFINITIONS. 

10 ‘‘(a) PURPOSES.—The purposes of this part are to— 

11 ‘‘(1) improve student achievement; 

12 ‘‘(2) improve the quality of the current and fu13 ture teaching force by improving the preparation of 

14 prospective teachers and enhancing professional de15 velopment activities; 

16 ‘‘(3) hold institutions of higher education ac17 countable for preparing highly qualified teachers; 

18 and 

19 ‘‘(4) recruit qualified individuals, including mi20 norities and individuals from other occupations, into 

21 the teaching force. 

22 ‘‘(b) DEFINITIONS.—In this part: 

23 ‘‘(1) ARTS AND SCIENCES.—The term ‘arts and 

24 sciences’ means— 
460 

•S 1932 PCS 

1 ‘‘(A) when referring to an organizational 

2 unit of an institution of higher education, any 

3 academic unit that offers 1 or more academic 

4 majors in disciplines or content areas cor5 responding to the academic subject areas in 

6 which teachers provide instruction; and 

7 ‘‘(B) when referring to a specific academic 

8 subject area, the disciplines or content areas in 

9 which academic majors are offered by the arts 

10 and sciences organizational unit. 

11 ‘‘(2) CHILDREN FROM LOW-INCOME FAMI12 LIES.—The term ‘children from low-income families’ 

13 means children as described in section 1124(c)(1)(A) 

14 of the Elementary and Secondary Education Act of 

15 1965. 

16 ‘‘(3) EARLY CHILDHOOD EDUCATION PRO17 GRAM.—The term ‘early childhood education pro18 gram’ means a Head Start program or an Early 

19 Head Start program carried out under the Head 

20 Start Act (42 U.S.C. 9831 et seq.), a State licensed 

21 or regulated child care program or school, or a State 

22 prekindergarten program that serves children from 

23 birth through kindergarten and that addresses the 

24 children’s cognitive (including language, early lit-
461 

•S 1932 PCS 

1 eracy, and pre-numeracy), social, emotional, and 

2 physical development. 

3 ‘‘(4) EARLY CHILDHOOD EDUCATOR.—The 

4 term ‘early childhood educator’ means an individual 

5 with primary responsibility for the education of chil6 dren in an early childhood education program. 

7 ‘‘(5) EDUCATIONAL SERVICE AGENCY.—The 

8 term ‘educational service agency’ has the meaning 

9 given such term in section 9101 of the Elementary 

10 and Secondary Education Act of 1965. 

11 ‘‘(6) EXEMPLARY TEACHER.—The term ‘exem12 plary teacher’ has the meaning given such term in 

13 section 9101 of the Elementary and Secondary Edu14 cation Act of 1965. 

15 ‘‘(7) HIGH-NEED LOCAL EDUCATIONAL AGEN16 CY.—The term ‘high-need local educational agency’ 

17 means a local educational agency or educational 

18 service agency— 

19 ‘‘(A)(i) that serves not fewer than 10,000 

20 children from low-income families; 

21 ‘‘(ii) for which not less than 20 percent of 

22 the children served by the agency are children 

23 from low-income families; or 

24 ‘‘(iii) with a total of less than 600 students 

25 in average daily attendance at the schools that 
462 

•S 1932 PCS 

1 are served by the agency and all of whose 

2 schools are designated with a school locale code 

3 of 7 or 8, as determined by the Secretary; and 

4 ‘‘(B)(i) for which there is a high percent5 age of teachers not teaching in the academic 

6 subject areas or grade levels in which the teach7 ers were trained to teach; or 

8 ‘‘(ii) for which there is a high teacher 

9 turnover rate or a high percentage of teachers 

10 with emergency, provisional, or temporary cer11 tification or licensure. 

12 ‘‘(8) HIGHLY QUALIFIED.—The term ‘highly 

13 qualified’ has the meaning given such term in sec14 tion 9101 of the Elementary and Secondary Edu15 cation Act of 1965 and, with respect to special edu16 cation teachers, in section 602 of the Individuals 

17 with Disabilities Education Act. 

18 ‘‘(9) PROFESSIONAL DEVELOPMENT.—The 

19 term ‘professional development’ has the meaning 

20 given such term in section 9101 of the Elementary 

21 and Secondary Education Act of 1965. 

22 ‘‘(10) SCIENTIFICALLY BASED READING RE23 SEARCH.—The term ‘scientifically based reading re24 search’ has the meaning given such term in section 
463 

•S 1932 PCS 

1 1208 of the Elementary and Secondary Education 

2 Act of 1965. 

3 ‘‘(11) SCIENTIFICALLY BASED RESEARCH.— 

4 The term ‘scientifically based research’ has the 

5 meaning given such term in section 9101 of the Ele6 mentary and Secondary Education Act of 1965. 

7 ‘‘(12) TEACHER MENTORING.—The term 

8 ‘teacher mentoring’ means mentoring of teachers 

9 through an established or implemented program— 

10 ‘‘(A) that includes qualifications for men11 tors; 

12 ‘‘(B) that provides training for mentors; 

13 ‘‘(C) that provides regular and ongoing op14 portunities for mentors and mentees to observe 

15 each other’s teaching methods in classroom set16 tings during the school day; 

17 ‘‘(D) in which the mentoring is provided by 

18 a colleague who teaches in the same field, 

19 grade, or subject as the mentee; and 

20 ‘‘(E) that includes— 

21 ‘‘(i) common planning time or regu22 larly scheduled collaboration with teachers 

23 in the teachers’ same field, grade, or sub24 ject area; and 
464 

•S 1932 PCS 

1 ‘‘(ii) additional professional develop2 ment opportunities. 

3 ‘‘(13) TEACHING SKILLS.—The term ‘teaching 

4 skills’ means the ability to— 

5 ‘‘(A) increase student achievement; 

6 ‘‘(B) effectively convey and explain aca7 demic subject matter; 

8 ‘‘(C) employ strategies that— 

9 ‘‘(i) are based on scientifically based 

10 research; 

11 ‘‘(ii) are specific to academic subject 

12 matter; and 

13 ‘‘(iii) focus on identification and tai14 loring of academic instruction to students’ 

15 specific learning needs, particularly stu16 dents with disabilities, students who are 

17 limited English proficient, and students 

18 who are gifted and talented; 

19 ‘‘(D) conduct ongoing assessment of stu20 dent learning; 

21 ‘‘(E) effectively manage a classroom; 

22 ‘‘(F) communicate and work with parents 

23 and guardians, and involve parents and guard24 ians in their children’s education; and 
465 

•S 1932 PCS 

1 ‘‘(G) in the case of an early childhood edu2 cator, use age appropriate strategies and prac3 tices for children in early childhood education 

4 programs. 

5 ‘‘SEC. 202. STATE GRANTS. 

6 ‘‘(a) IN GENERAL.—From amounts made available 

7 under section 209(a)(1) for a fiscal year, the Secretary 

8 is authorized to award grants under this section, on a 

9 competitive basis, to eligible States to enable the eligible 

10 States to carry out the activities described in subsections 

11 (d) and (e). 

12 ‘‘(b) ELIGIBLE STATE.— 

13 ‘‘(1) DEFINITION.—In this part, the term ‘eligi14 ble State’ means— 

15 ‘‘(A) the Governor of a State; or 

16 ‘‘(B) in the case of a State for which the 

17 constitution or law of such State designates an18 other individual, entity, or agency in the State 

19 to be responsible for teacher certification or li20 censure and preparation activity, such indi21 vidual, entity, or agency. 

22 ‘‘(2) CONSULTATION.—The Governor or the in23 dividual, entity, or agency designated under para24 graph (1)(B) shall consult with the Governor, State 

25 board of education, State educational agency, State 
466 

•S 1932 PCS 

1 agency for higher education, or other applicable 

2 State entities (including the State agency responsible 

3 for early childhood education), as appropriate, with 

4 respect to the activities assisted under this section, 

5 including the development of the grant application 

6 and implementation of the activities. 

7 ‘‘(3) CONSTRUCTION.—Nothing in this sub8 section shall be construed to negate or supersede the 

9 legal authority under State law of any State agency, 

10 State entity, or State public official over programs 

11 that are under the jurisdiction of the agency, entity, 

12 or official. 

13 ‘‘(c) APPLICATION.—To be eligible to receive a grant 

14 under this section, an eligible State shall submit an appli15 cation to the Secretary that— 

16 ‘‘(1) meets the requirement of this section; 

17 ‘‘(2) demonstrates that the eligible State is in 

18 full compliance with— 

19 ‘‘(A) sections 206(b) and 207; and 

20 ‘‘(B) if applicable, sections 207(b) and 

21 208, as such sections were in effect on the day 

22 before the date of enactment of the Higher 

23 Education Amendments of 2005; 
467 

•S 1932 PCS 

1 ‘‘(3) includes a description of how the eligible 

2 State intends to use funds provided under this sec3 tion; 

4 ‘‘(4) includes measurable objectives for the use 

5 of the funds provided under this section; 

6 ‘‘(5) describes how funded activities will— 

7 ‘‘(A) reduce shortages, if any, of— 

8 ‘‘(i) highly qualified general and spe9 cial education teachers, including in low-in10 come urban and rural areas and in high11 need academic subject areas; and 

12 ‘‘(ii) fully competent early childhood 

13 educators; and 

14 ‘‘(B) be consistent with State, local, and 

15 other education reform activities that promote 

16 effective teaching skills and student academic 

17 achievement and consistent with State early 

18 learning standards for early childhood education 

19 programs, including how funded activities will 

20 support carrying out the applicable require21 ments of the eligible State under sections 1111 

22 and 1119 of the Elementary and Secondary 

23 Education Act of 1965, and section 612(a)(14) 

24 of the Individuals with Disabilities Education 

25 Act; 
468 

•S 1932 PCS 

1 ‘‘(6) contains an assurance that the eligible 

2 State will carry out each of the intended uses of 

3 grant funds described in paragraph (3); 

4 ‘‘(7) describes the eligible State’s— 

5 ‘‘(A) current capacity to measure the effec6 tiveness of teacher preparation programs and 

7 professional development activities within the 

8 State using available statewide data; 

9 ‘‘(B) activities to enhance or expand the 

10 integration of existing data systems to better 

11 measure the effectiveness of teacher preparation 

12 programs and professional development activi13 ties within the State; or 

14 ‘‘(C) if such data systems do not exist, 

15 plans for the development of an integrated 

16 statewide data system to measure the effective17 ness of teacher preparation programs and pro18 fessional development activities within the State 

19 using available statewide data; and 

20 ‘‘(8) contains such other information and assur21 ances as the Secretary may require. 

22 ‘‘(d) REQUIRED USES OF FUNDS.—An eligible State 

23 that receives a grant under this section shall use the grant 

24 funds to reform teacher preparation requirements, to co25 ordinate with State activities under section 2113(c) of the 
469 

•S 1932 PCS 

1 Elementary and Secondary Education Act of 1965 and 

2 subsections (a) and (b) of section 654 of the Individuals 

3 with Disabilities Education Act, and to ensure that cur4 rent and prospective teachers are highly qualified, by car5 rying out each of the following activities: 

6 ‘‘(1) REFORMS.—Ensuring that all teacher 

7 preparation programs in the State are preparing 

8 current or prospective teachers to become highly 

9 qualified, to understand scientifically based research 

10 and its applicability, and to use technology effec11 tively, including use of instructional techniques to 

12 improve student academic achievement, by assisting 

13 such programs— 

14 ‘‘(A) in retraining faculty; 

15 ‘‘(B) in designing (or redesigning) teacher 

16 preparation programs so that such programs— 

17 ‘‘(i) are based on rigorous academic 

18 content and scientifically based research 

19 (including scientifically based reading re20 search), and aligned with challenging State 

21 academic content standards; 

22 ‘‘(ii) promote effective teaching skills; 

23 and 

24 ‘‘(iii) promote understanding of effec25 tive instructional strategies for students 
470 

•S 1932 PCS 

1 with special needs, including students with 

2 disabilities, students who are limited 

3 English proficient, and students who are 

4 gifted and talented; 

5 ‘‘(C) in ensuring collaboration with depart6 ments, programs, or units outside of the teach7 er preparation program in relevant academic 

8 content areas to ensure a successful combina9 tion of training in both teaching and such con10 tent; 

11 ‘‘(D) in developing high-quality, rigorous 

12 clinical experiences (that include student teach13 ing experience) in which students participate 

14 while enrolled in a teacher preparation pro15 gram, lasting not less than 1 term, through dis16 semination of best practices, technical assist17 ance, or other relevant activities; and 

18 ‘‘(E) in collecting and using data, in col19 laboration with institutions of higher education, 

20 schools, and local educational agencies, on 

21 teacher retention rates, by school, to evaluate 

22 and strengthen the effectiveness of the State’s 

23 teacher support system. 
471 

•S 1932 PCS 

1 ‘‘(2) CERTIFICATION OR LICENSURE REQUIRE2 MENTS.—Reforming teacher certification or licen3 sure requirements to ensure that— 

4 ‘‘(A) teachers have the academic content 

5 knowledge and teaching skills in the academic 

6 subject areas that the teachers teach that are 

7 necessary to help students meet challenging 

8 State student academic achievement standards, 

9 as required under section 1111(b)(1) of the El10 ementary and Secondary Education Act of 

11 1965; 

12 ‘‘(B) such requirements are aligned with 

13 challenging State academic content standards, 

14 as required under section 1111(b)(1) of the El15 ementary and Secondary Education Act of 

16 1965; 

17 ‘‘(C) teacher certification and licensure as18 sessments are— 

19 ‘‘(i) used for purposes for which such 

20 assessments are valid and reliable; 

21 ‘‘(ii) consistent with relevant, profes22 sional, and technical standards; and 

23 ‘‘(iii) aligned with the reporting re24 quirements of sections 205 and 206; and 
472 

•S 1932 PCS 

1 ‘‘(D) such requirements for high-need aca2 demic subject areas (such as reading, mathe3 matics, science, and foreign language, including 

4 less commonly taught languages) and high-need 

5 areas (such as special education, language in6 struction educational programs, and early child7 hood education) exist and reflect qualifications 

8 to help students meet high standards, which 

9 may include the development of a State test for 

10 such areas. 

11 ‘‘(3) EVALUATION.— 

12 ‘‘(A) ANNUAL EVALUATION.—An eligible 

13 State that receives a grant under this section 

14 shall evaluate annually the effectiveness of 

15 teacher preparation programs and professional 

16 development activities within the State. To the 

17 extent practicable, such evaluation shall exam18 ine— 

19 ‘‘(i) teachers’ contributions to improv20 ing student academic achievement, as 

21 measured by State academic assessments 

22 required under section 1111(b)(3) of the 

23 Elementary and Secondary Education Act 

24 of 1965; and 
473 

•S 1932 PCS 

1 ‘‘(ii) teacher mastery of the academic 

2 subject matter the teachers teach. 

3 ‘‘(B) PUBLIC REPORTING.—The eligible 

4 State shall make the information described in 

5 subparagraph (A) widely available through pub6 lic means, such as posting on the Internet, dis7 tribution to the media, and distribution through 

8 public agencies, except such reporting shall not 

9 be made in a case in which the reporting of the 

10 data would reveal personally identifiable infor11 mation about a teacher or student. 

12 ‘‘(C) BETTER MEASUREMENT OF EFFEC13 TIVENESS.— 

14 ‘‘(i) IN GENERAL.—An eligible State 

15 that receives a grant under this section 

16 and does not have the capacity to measure 

17 the effectiveness of teacher preparation 

18 programs and professional development ac19 tivities within the State using available 

20 statewide data, shall use a portion of funds 

21 received under this section to enhance or 

22 expand the integration of existing data sys23 tems, as described in subsection (c)(7)(B), 

24 or develop an integrated statewide data 

25 system, as described in subsection 
474 

•S 1932 PCS 

1 (c)(7)(C), to better measure and provide 

2 information that will improve the effective3 ness of teacher preparation programs on 

4 student learning and achievement, and the 

5 impact of pre-service and ongoing profes6 sional development on teacher placement 

7 and retention. 

8 ‘‘(ii) TECHNICAL QUALITY; STUDENT

9 PRIVACY; FUNDS FROM OTHER SOURCES.— 

10 In carrying out clause (i), the eligible State 

11 shall ensure— 

12 ‘‘(I) the technical quality of the 

13 data system to maximize the validity, 

14 reliability, and accessibility of the 

15 data; 

16 ‘‘(II) that student privacy is pro17 tected and that individually identifi18 able information about students, their 

19 achievements, and their families re20 mains confidential, in accordance with 

21 the Family Educational Rights and 

22 Privacy Act of 1974; and 

23 ‘‘(III) that funds provided under 

24 this section are used to supplement 

25 State efforts to enhance or expand the 
475 

•S 1932 PCS 

1 integration of existing data systems or 

2 to develop an integrated statewide 

3 data system. 

4 ‘‘(e) ALLOWABLE USES OF FUNDS.—An eligible 

5 State that receives a grant under this section may use the 

6 grant funds to reform teacher preparation requirements, 

7 to coordinate with State activities under section 2113(c) 

8 of the Elementary and Secondary Education Act of 1965 

9 and subsections (a) and (b) of section 654 of the Individ10 uals with Disabilities Education Act, and to ensure that 

11 current and future teachers are highly qualified, by car12 rying out any of the following activities: 

13 ‘‘(1) ALTERNATIVES TO TRADITIONAL PREPA14 RATION FOR TEACHING AND STATE CERTIFICATION

15 OR LICENSURE.—Providing prospective teachers 

16 with alternative routes to State certification or licen17 sure and alternative route programs to become high18 ly qualified teachers through— 

19 ‘‘(A) innovative approaches that reduce un20 necessary barriers to State certification or licen21 sure while producing highly qualified teachers; 

22 ‘‘(B) a selective means for admitting indi23 viduals into such programs that includes pas24 sage of State approved teacher examinations in 

25 appropriate subject areas; 
476 

•S 1932 PCS 

1 ‘‘(C) programs that help prospective teach2 ers develop effective teaching skills and strate3 gies through knowledge of research-based infor4 mation on the learning process and learning 

5 practices; 

6 ‘‘(D) programs that provide support to 

7 teachers during the teachers’ initial years in the 

8 profession; and 

9 ‘‘(E) alternative routes to State certifi10 cation or licensure of teachers for qualified indi11 viduals, including mid-career professionals from 

12 other occupations, paraprofessionals, former 

13 military personnel, and recent college graduates 

14 with records of academic distinction. 

15 ‘‘(2) INNOVATIVE PROGRAMS.—Planning and 

16 implementing innovative programs to enhance the 

17 ability of institutions of higher education, including 

18 charter colleges of education, or university and local 

19 educational agency partnership schools, to prepare 

20 highly qualified teachers, which programs shall— 

21 ‘‘(A) permit flexibility in the manner in 

22 which the institution of higher education meets 

23 State requirements as long as graduates, during 

24 the graduates’ initial years in the profession, in25 crease student academic achievement; 
477 

•S 1932 PCS 

1 ‘‘(B) provide a description in the applica2 tion of long-term data gathered from teachers’ 

3 performance over multiple years in the class4 room regarding the teachers’ ability to increase 

5 student academic achievement; 

6 ‘‘(C) ensure high-quality preparation of 

7 teachers from underrepresented groups; 

8 ‘‘(D) create performance measures that 

9 can be used to document the effectiveness of in10 novative methods for preparing highly qualified 

11 teachers; and 

12 ‘‘(E) develop frameworks for exemplary in13 duction programs informed by research and 

14 best practices. 

15 ‘‘(3) TEACHER RECRUITMENT AND RETEN16 TION.—Undertaking activities that develop and im17 plement effective mechanisms to ensure that local 

18 educational agencies and schools are able to recruit 

19 and retain highly qualified teachers, which may in20 clude the following activities: 

21 ‘‘(A) PERFORMANCE BASED COMPENSA22 TION.—Assisting local educational agencies in 

23 developing— 

24 ‘‘(i) performance systems that reward 

25 teachers who increase student academic 
478 

•S 1932 PCS 

1 achievement and take on additional respon2 sibilities, such as teacher mentoring and 

3 serving as master teachers; and 

4 ‘‘(ii) strategies that provide differen5 tial and bonus pay in high-need local edu6 cational agencies to recruit and retain— 

7 ‘‘(I) principals; 

8 ‘‘(II) highly qualified teachers 

9 who teach in high-need academic sub10 ject areas (such as reading, mathe11 matics, science, and foreign language, 

12 including less commonly taught lan13 guages); 

14 ‘‘(III) highly qualified teachers 

15 who teach in schools identified for 

16 school improvement under section 

17 1116(b) of the Elementary and Sec18 ondary Education Act of 1965; 

19 ‘‘(IV) highly qualified special 

20 education teachers; 

21 ‘‘(V) highly qualified teachers 

22 specializing in teaching children who 

23 are limited English proficient; and 
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•S 1932 PCS 

1 ‘‘(VI) highly qualified teachers in 

2 low-income urban and rural schools or 

3 districts. 

4 ‘‘(B) ADDITIONAL MECHANISMS.—Devel5 oping and implementing effective mechanisms 

6 to ensure that local educational agencies and 

7 schools are able to— 

8 ‘‘(i) address needs identified with re9 spect to— 

10 ‘‘(I) underrepresented groups; 

11 ‘‘(II) high-need academic subject 

12 areas (such as reading, mathematics, 

13 science, and foreign language, includ14 ing less commonly taught languages); 

15 ‘‘(III) high-need areas (such as 

16 special education, language instruc17 tion educational programs for limited 

18 English proficient students, and early 

19 childhood education); 

20 ‘‘(IV) high-need communities, 

21 such as rural and urban areas; and 

22 ‘‘(V) high-need schools, including 

23 schools with high rates of teacher 

24 turnover; 
480 

•S 1932 PCS 

1 ‘‘(ii) offer teacher mentoring for new 

2 teachers during such teachers’ initial years 

3 of teaching; and 

4 ‘‘(iii) provide access to ongoing profes5 sional development and innovative training 

6 opportunities for teachers and administra7 tors. 

8 ‘‘(C) TEACHER ADVANCEMENT.—Assisting 

9 local educational agencies in developing teacher 

10 advancement and retention initiatives that pro11 mote professional growth and emphasize mul12 tiple career paths (such as paths to becoming a 

13 highly qualified mentor teacher or exemplary 

14 teacher) and pay differentiation. 

15 ‘‘(D) RECRUIT QUALIFIED PROFES16 SIONALS.—Developing recruitment programs or 

17 assisting local educational agencies in— 

18 ‘‘(i) recruiting qualified professionals 

19 from other fields, including highly qualified 

20 paraprofessionals (as defined in section 

21 2102 of the Elementary and Secondary 

22 Education Act of 1965); and 

23 ‘‘(ii) providing such professionals with 

24 alternative routes to teacher certification 

25 or licensure. 
481 

•S 1932 PCS 

1 ‘‘(E) UNDERREPRESENTED POPU2 LATIONS.—Providing increased opportunities 

3 for minorities, individuals with disabilities, and 

4 other individuals underrepresented in the teach5 ing profession to become highly qualified teach6 ers. 

7 ‘‘(F) RURAL EDUCATION RECRUITMENT

8 AND RETENTION PROGRAMS.—Making grants to 

9 rural school districts, or a consortia of rural 

10 school districts, to implement— 

11 ‘‘(i) teacher recruitment strategies, 

12 which may include tuition assistance, stu13 dent loan forgiveness, housing assistance, 

14 bonus pay, and other effective approaches; 

15 ‘‘(ii) teacher retention strategies, such 

16 as mentoring programs and ongoing oppor17 tunities for professional growth and ad18 vancement; and 

19 ‘‘(iii) partnerships with institutions of 

20 higher education designed to— 

21 ‘‘(I) prepare beginning teachers 

22 to teach; and 

23 ‘‘(II) assist teachers (including 

24 teachers who teach multiple subjects) 

25 to become highly qualified. 
482 

•S 1932 PCS 

1 ‘‘(4) TEACHER SCHOLARSHIPS AND SUPPORT.— 

2 Providing— 

3 ‘‘(A) scholarships to help students, such as 

4 individuals who have been accepted by, or who 

5 are enrolled in, a program of undergraduate 

6 education or initial teacher preparation at an 

7 institution of higher education, pay the costs of 

8 tuition, room, board, and other expenses of 

9 completing a teacher preparation program, if— 

10 ‘‘(i) the Secretary establishes such re11 quirements as the Secretary determines 

12 necessary to ensure that recipients of 

13 scholarships under this section who com14 plete teacher preparation programs— 

15 ‘‘(I) subsequently teach in an 

16 early childhood education program or 

17 a high-need local educational agency 

18 for a period of time equivalent to the 

19 period of time for which the recipient 

20 received scholarship assistance, plus 

21 an additional 1 year; or 

22 ‘‘(II) repay the amount of the 

23 scholarship if the recipient does not 

24 teach as described in subclause (I); 

25 and 
483 

•S 1932 PCS 

1 ‘‘(ii) the eligible State provides an as2 surance that the eligible State will recruit 

3 minority students to become highly quali4 fied teachers; 

5 ‘‘(B) support services, if needed, to enable 

6 scholarship recipients to complete postsecondary 

7 education programs, or to move from a career 

8 outside of the field of education into a teaching 

9 career; and 

10 ‘‘(C) follow-up services to former scholar11 ship recipients during the recipients’ initial 

12 years of teaching. 

13 ‘‘(5) TEACHER REMOVAL.—Developing and im14 plementing effective mechanisms to ensure that local 

15 educational agencies and schools are able to expedi16 tiously remove incompetent or unqualified teachers 

17 consistent with procedures to ensure due process for 

18 the teachers. 

19 ‘‘(6) TEACHER EFFECTIVENESS.—Developing— 

20 ‘‘(A) systems to measure the effectiveness 

21 of teacher preparation programs and profes22 sional development programs; and 

23 ‘‘(B) strategies to document gains in stu24 dent academic achievement or increases in 

25 teacher mastery of the academic subject matter 
484 

•S 1932 PCS 

1 the teachers teach, as a result of such pro2 grams. 

3 ‘‘(7) EARLY CHILDHOOD EDUCATORS.—Devel4 oping strategies to improve and expand teacher 

5 preparation programs for early childhood educators 

6 to teach in early childhood education programs. 

7 ‘‘(8) PROFESSIONAL DEVELOPMENT.—Devel8 oping and enhancing high-quality professional devel9 opment, instructional materials, and relevant edu10 cational materials. 

11 ‘‘(9) TECHNOLOGY.—Assisting teachers to use 

12 technology effectively, including use for instructional 

13 techniques and the collection, management, and 

14 analysis of data to improve teaching, learning, and 

15 decision making for the purpose of increasing stu16 dent academic achievement. 

17 ‘‘(10) AREAS OF INSTRUCTIONAL SHORTAGE.— 

18 Increasing the number of— 

19 ‘‘(A) teachers in the classroom providing 

20 instruction in high-need academic subject areas 

21 (such as reading, mathematics, science, and for22 eign language, including less commonly taught 

23 languages) and high-need areas (such as special 

24 education, language instruction educational pro-
485 

•S 1932 PCS 

1 grams for limited English proficient students, 

2 and early childhood education); and 

3 ‘‘(B) special education faculty dedicated to 

4 preparing highly qualified special education 

5 teachers at institutions of higher education. 

6 ‘‘(11) TECHNICAL ASSISTANCE.—Providing 

7 technical assistance to low-performing programs of 

8 teacher preparation within institutions of higher 

9 education identified under section 207(a). 

10 ‘‘(12) EVALUATION SUPPORT.—Performing 

11 data collection, evaluation, and reporting to meet the 

12 requirements of subsection (d)(3). 

13 ‘‘(13) PROFESSIONAL ADVANCEMENT.—Devel14 oping a professional advancement system to— 

15 ‘‘(A) initiate or enhance a system in which 

16 highly qualified teachers who pursue advanced 

17 licensure levels are required to demonstrate in18 creased competencies and undertake increased 

19 responsibilities for increased compensation as 

20 the teachers progress through levels established 

21 by the State; or 

22 ‘‘(B) provide opportunities for professional 

23 growth, including through— 

24 ‘‘(i) a nationally recognized advance 

25 credentialing system; or 
486 

•S 1932 PCS 

1 ‘‘(ii) special certification in advanced 

2 placement or international baccalaureate 

3 content, teaching gifted and talented stu4 dents, and pedagogy. 

5 ‘‘(f) SUPPLEMENT, NOT SUPPLANT.—Funds made 

6 available under this section shall be used to supplement, 

7 and not supplant, other Federal, State, and local funds 

8 that would otherwise be expended to carry out activities 

9 under this section. 

10 ‘‘SEC. 203. PARTNERSHIP GRANTS. 

11 ‘‘(a) GRANTS.—From amounts made available under 

12 section 209(a)(2) for a fiscal year, the Secretary is author13 ized to award grants under this section, on a competitive 

14 basis, to eligible partnerships to enable the eligible part15 nerships to carry out the activities described in subsections 

16 (e) and (f). 

17 ‘‘(b) DEFINITIONS.— 

18 ‘‘(1) ELIGIBLE PARTNERSHIP.— 

19 ‘‘(A) IN GENERAL.—In this part, the term 

20 ‘eligible partnership’ means an entity that shall 

21 include— 

22 ‘‘(i) a partner institution; 

23 ‘‘(ii) a school of arts and sciences; 
487 

•S 1932 PCS 

1 ‘‘(iii) a high-need local educational 

2 agency and a school or a consortium of 

3 schools served by the agency; and 

4 ‘‘(iv) at least 1 individual or entity de5 scribed in subparagraph (B). 

6 ‘‘(B) ADDITIONAL INDIVIDUALS AND ENTI7 TIES.—In this part, the term ‘eligible partner8 ship’ means an entity that shall include at least 

9 1 of the following: 

10 ‘‘(i) A Governor. 

11 ‘‘(ii) A State educational agency. 

12 ‘‘(iii) A State board of education. 

13 ‘‘(iv) A State agency for higher edu14 cation. 

15 ‘‘(v) A school or department within 

16 the partner institution focusing on edu17 cation, psychology, human development, or 

18 a department with comparable expertise in 

19 the disciplines of teaching, learning, and 

20 child and adolescent development. 

21 ‘‘(vi) An institution of higher edu22 cation or a department within such institu23 tion, not described in subparagraph (A). 

24 ‘‘(vii) A public charter school. 
488 

•S 1932 PCS 

1 ‘‘(viii) A public or private elementary 

2 school or secondary school. 

3 ‘‘(ix) A public or private nonprofit 

4 educational organization. 

5 ‘‘(x) A business. 

6 ‘‘(xi) A science-, mathematics-, or 

7 technology-oriented entity. 

8 ‘‘(xii) An early childhood education 

9 program. 

10 ‘‘(xiii) A teacher organization. 

11 ‘‘(xiv) An educational service agency. 

12 ‘‘(xv) A consortium of local edu13 cational agencies. 

14 ‘‘(xvi) A nonprofit telecommunications 

15 entity. 

16 ‘‘(2) PARTNER INSTITUTION.—In this section, 

17 the term ‘partner institution’ means an institution of 

18 higher education, which may include a 2-year insti19 tution of higher education offering a dual program 

20 with a 4-year institution of higher education, that 

21 has a teacher preparation program— 

22 ‘‘(A) whose graduates exhibit strong per23 formance on State-determined qualifying assess24 ments for new teachers through— 
489 

•S 1932 PCS 

1 ‘‘(i) demonstrating that 80 percent or 

2 more of the graduates of the program who 

3 intend to enter the field of teaching have 

4 passed all of the applicable State qualifica5 tion assessments for new teachers, which 

6 shall include an assessment of each pro7 spective teacher’s subject matter knowledge 

8 in the content area in which the teacher in9 tends to teach; or 

10 ‘‘(ii) being ranked among the highest11 performing teacher preparation programs 

12 in the State as determined by the State— 

13 ‘‘(I) using criteria consistent with 

14 the requirements for the State report 

15 card under section 206(b); and 

16 ‘‘(II) using the State report card 

17 on teacher preparation required under 

18 section 206(b), after the first publica19 tion of such report card and for every 

20 year thereafter; or 

21 ‘‘(B) that requires all the students of the 

22 program to meet high academic standards and 

23 participate in intensive clinical experience, 

24 and— 
490 

•S 1932 PCS 

1 ‘‘(i) in the case of secondary school 

2 candidates, to successfully complete— 

3 ‘‘(I) a major or its equivalent in 

4 coursework in the academic subject 

5 area in which the candidate intends to 

6 teach; or 

7 ‘‘(II) a related major in the aca8 demic subject area in which the can9 didate intends to teach; 

10 ‘‘(ii) in the case of elementary school 

11 candidates, to successfully complete— 

12 ‘‘(I) an academic major or its 

13 equivalent in coursework in the arts 

14 and sciences; or 

15 ‘‘(II) a major in elementary edu16 cation with a significant amount of 

17 coursework in the arts and sciences; 

18 and 

19 ‘‘(iii) in the case of early childhood 

20 educators, to become fully competent and 

21 meet degree requirements, as established 

22 by the State. 

23 ‘‘(c) APPLICATION.—Each eligible partnership desir24 ing a grant under this section shall submit an application 

25 to the Secretary at such time, in such manner, and accom-
491 

•S 1932 PCS 

1 panied by such information as the Secretary may require. 

2 Each such application shall contain— 

3 ‘‘(1) a needs assessment of all the partners with 

4 respect to the preparation, induction, and profes5 sional development of early childhood educators, 

6 general and special education teachers, and prin7 cipals; 

8 ‘‘(2) a description of the extent to which the 

9 teacher preparation program of the eligible partner10 ship prepares new teachers with effective teaching 

11 skills; 

12 ‘‘(3) a description of how the eligible partner13 ship will coordinate with other teacher preparation 

14 or professional development programs, including 

15 those funded under the Elementary and Secondary 

16 Education Act of 1965 and the Individuals with Dis17 abilities Education Act, and how the activities of the 

18 eligible partnership will be consistent with State, 

19 local, and other education reform activities that pro20 mote student achievement; 

21 ‘‘(4) a resource assessment that describes the 

22 resources available to the eligible partnership, the in23 tended use of the grant funds (including a descrip24 tion of how the grant funds will be fairly distrib25 uted), and the commitment of the resources of the 
492 

•S 1932 PCS 

1 eligible partnership to the activities assisted under 

2 this part, including financial support, faculty partici3 pation, time commitments, and continuation of the 

4 activities when the grant period ends; 

5 ‘‘(5) a description of— 

6 ‘‘(A) how the eligible partnership will meet 

7 the purposes of this part; 

8 ‘‘(B) how the eligible partnership will carry 

9 out the activities required under subsection (e) 

10 and any permissible activities under subsection 

11 (f); 

12 ‘‘(C) the eligible partnership’s evaluation 

13 plan pursuant to section 205(b); 

14 ‘‘(D) how the eligible partnership will align 

15 the teacher preparation program with the chal16 lenging student academic achievement stand17 ards, State early learning standards for early 

18 childhood education programs (where applica19 ble), and challenging academic content stand20 ards, established by the State in which the 

21 partnership is located; 

22 ‘‘(E) how faculty of the teacher prepara23 tion program at the partner institution will 

24 serve, over the period of the grant, with highly 

25 qualified teachers in the classrooms of the high- 
493 

•S 1932 PCS 

1 need local educational agency included in the el2 igible partnership; 

3 ‘‘(F) how the eligible partnership will en4 sure that teachers, principals, and superintend5 ents in all schools (including private schools, as 

6 appropriate) located in the geographic areas 

7 served by an eligible partnership under this sec8 tion are provided information about the activi9 ties carried out with funds under this section, 

10 including through electronic means; 

11 ‘‘(G) how the eligible partnership will de12 sign, implement, or enhance the clinical pro13 gram component, including promoting close su14 pervision of student teachers by faculty of the 

15 teacher preparation program and mentor teach16 ers while in the program and during the stu17 dent teachers’ initial years of teaching if hired 

18 by schools included in the eligible partnership; 

19 ‘‘(H) how the eligible partnership will de20 velop or enhance an induction program that in21 cludes high-quality professional development to 

22 support new teachers during the teachers’ ini23 tial years of teaching that includes teacher 

24 mentoring and collaborating with teachers in 

25 the same grade, department, or field; and 
494 

•S 1932 PCS 

1 ‘‘(I) how the eligible partnership will col2 lect, analyze, use, and disseminate data on the 

3 retention of all teachers in schools located in 

4 the geographic areas served by the eligible part5 nership to evaluate the effectiveness of its 

6 teacher support system; and 

7 ‘‘(6) an assurance that the eligible partnership 

8 will carry out each of the activities described in 

9 paragraph (5). 

10 ‘‘(d) CONSULTATION.— 

11 ‘‘(1) IN GENERAL.—Members of an eligible 

12 partnership that receives a grant under this section 

13 shall engage in regular consultation throughout the 

14 development and implementation of programs and 

15 activities under this section. 

16 ‘‘(2) REGULAR COMMUNICATION.—To ensure 

17 timely and meaningful consultation, regular commu18 nication shall occur among all members of the eligi19 ble partnership, including the high-need local edu20 cational agency. Such communication shall continue 

21 throughout the implementation of the grant and the 

22 assessment of programs and activities under this 

23 section. 

24 ‘‘(3) WRITTEN CONSENT.—The Secretary may 

25 approve changes in grant activities only if a written 
495 

•S 1932 PCS 

1 consent signed by all members of the eligible part2 nership is submitted to the Secretary. 

3 ‘‘(e) REQUIRED USES OF FUNDS.—An eligible part4 nership that receives a grant under this section shall use 

5 the grant funds to carry out each of the following activi6 ties: 

7 ‘‘(1) REFORMS.—Ensuring that each teacher 

8 preparation program and each early childhood edu9 cator preparation program, where applicable, of the 

10 eligible partnership that is assisted under this sec11 tion addresses the needs identified in the needs as12 sessment of the partnership and is preparing current 

13 or prospective teachers to be highly qualified, and, 

14 where applicable, early childhood educators to be 

15 fully competent, to understand scientifically based 

16 research and its applicability, and to use technology 

17 effectively, including use of instructional techniques 

18 to improve student academic achievement, and in the 

19 case of early childhood educators, techniques to im20 prove children’s cognitive, social, emotional, and 

21 physical development, by assisting such programs— 

22 ‘‘(A) in retraining faculty; 

23 ‘‘(B) in designing (or redesigning) teacher 

24 preparation programs so that such programs— 
496 

•S 1932 PCS 

1 ‘‘(i) are based on rigorous academic 

2 content and scientifically based research 

3 (including scientifically based reading re4 search), and aligned with challenging State 

5 academic content standards, as required 

6 under section 1111(b)(1) of the Elemen7 tary and Secondary Education Act of 

8 1965, and for early childhood educators, 

9 aligned with State early learning stand10 ards; 

11 ‘‘(ii) promote effective teaching skills; 

12 ‘‘(iii) promote understanding of effec13 tive instructional strategies for students 

14 with special needs, including students with 

15 disabilities, students who are limited 

16 English proficient, students who are gifted 

17 and talented, and children in early child18 hood education programs; and 

19 ‘‘(iv) promote high-quality mathe20 matics, science, and foreign language in21 struction, where applicable; 

22 ‘‘(C) in ensuring collaboration with depart23 ments, programs, or units outside of the teach24 er preparation program in all academic content 
497 

•S 1932 PCS 

1 areas to ensure a successful combination of 

2 training in both teaching and such content; and 

3 ‘‘(D) in developing high-quality, rigorous 

4 clinical experiences, lasting not less than 1 

5 term, through dissemination of best practices, 

6 technical assistance, or other relevant activities. 

7 ‘‘(2) CLINICAL EXPERIENCE AND INTER8 ACTION.—Improving sustained and high-quality 

9 preservice clinical experiences, including— 

10 ‘‘(A) providing teacher mentoring; and 

11 ‘‘(B) substantially increasing interaction 

12 between faculty at institutions of higher edu13 cation and new and experienced teachers, prin14 cipals, and other administrators at elementary 

15 schools or secondary schools, and providing sup16 port, including preparation time and release 

17 time, for such interaction. 

18 ‘‘(3) SUPPORT PROGRAMS FOR NEW TEACH19 ERS.—Creating a program to support new teachers 

20 during the initial years of teaching (for not less than 

21 1 year and not more than 3 years). Such program 

22 shall promote effective teaching skills and may in23 clude the following components: 
498 

•S 1932 PCS 

1 ‘‘(A) Development of skills in educational 

2 interventions based on scientifically based re3 search. 

4 ‘‘(B) Development of knowledge of scientif5 ically based research on teaching and learning. 

6 ‘‘(C) Inclusion of faculty who model the in7 tegration of research and practice in the class8 room. 

9 ‘‘(D) Opportunities for— 

10 ‘‘(i) high-quality teacher mentoring; 

11 and 

12 ‘‘(ii) additional professional develop13 ment, dissemination of evidence-based re14 search on educational practices, and pro15 fessional development activities. 

16 ‘‘(E) Interdisciplinary collaboration among 

17 exemplary teachers, faculty, researchers, and 

18 other staff who prepare new teachers in the 

19 learning process and the assessment of learn20 ing. 

21 ‘‘(f) ALLOWABLE USES OF FUNDS.—An eligible part22 nership that receives a grant under this section may use 

23 the grant funds to carry out any of the following activities 

24 that address the needs identified in the needs assessment: 
499 

•S 1932 PCS 

1 ‘‘(1) ALTERNATIVES TO TRADITIONAL PREPA2 RATION FOR TEACHING AND STATE CERTIFICATION

3 OR LICENSURE.—The activity described in section 

4 202(e)(1). 

5 ‘‘(2) DISSEMINATION AND COORDINATION.— 

6 Broadly disseminating information on effective prac7 tices used by the eligible partnership, and coordi8 nating with the recruitment and training activities of 

9 the Governor, State board of education, State agen10 cy for higher education, State agency responsible for 

11 early childhood education, and State educational 

12 agency, as appropriate. 

13 ‘‘(3) INNOVATIVE PROGRAMS.—Developing in14 novative programs designed to provide graduates of 

15 programs funded under this title with opportunities 

16 to continue their education through supports and op17 portunities to improve instructional practices in the 

18 initial years of teaching, including the following: 

19 ‘‘(A) INTERNSHIPS.— 

20 ‘‘(i) TEACHER PREPARATION EN21 HANCEMENT INTERNSHIP.—Developing a 

22 1-year paid internship program for stu23 dents who have completed an initial teach24 er preparation program, or alternative 

25 routes to State certification or licensure 
500 

•S 1932 PCS 

1 program, to enable such students to de2 velop the skills and experience necessary 

3 for success in teaching, including providing 

4 intensive clinical training and combining 

5 in-service instruction in teacher methods 

6 and assessments with classroom observa7 tions, experiences, and practices. Such in8 terns shall have a reduced teaching load 

9 and a mentor for assistance in the class10 room. 

11 ‘‘(ii) MID-CAREER PROFESSIONAL IN12 TERNSHIPS.—Developing a 1-year paid in13 ternship program for mid-career profes14 sionals from other occupations, former 

15 military personnel, and recent college grad16 uates from fields other than teacher prepa17 ration with records of academic distinction 

18 to enable such individuals to develop the 

19 skills and experience necessary for success 

20 in teaching, including providing intensive 

21 clinical training and combining in-service 

22 instruction in teacher methods and assess23 ments with classroom observations, experi24 ences, and practices. Such interns shall 
501 

•S 1932 PCS 

1 have a reduced teaching load and a mentor 

2 for assistance in the classroom. 

3 ‘‘(B) RESIDENCY PROGRAMS FOR NEW

4 TEACHERS.—Supporting teachers in a residency 

5 program that provides an induction period for 

6 all new general education and special education 

7 teachers that includes— 

8 ‘‘(i) a forum for information sharing 

9 among prospective teachers, teachers, prin10 cipals, administrators, and participating 

11 faculty in the partner institution; and 

12 ‘‘(ii) the application of scientifically 

13 based research on teaching and learning 

14 generated by entities such as the Institute 

15 of Education Sciences, and the National 

16 Research Council of the National Acad17 emies. 

18 ‘‘(C) PATHWAYS FOR PARAPROFESSIONALS

19 TO ENTER TEACHING.—Creating intensive pro20 grams to provide the coursework and clinical 

21 experiences needed by highly qualified para22 professionals, as defined in section 2102 of the 

23 Elementary and Secondary Education Act of 

24 1965, to qualify for State teacher certification 

25 or licensure to become highly qualified teachers. 
502 

•S 1932 PCS 

1 ‘‘(4) MANAGERIAL AND LEADERSHIP SKILLS.— 

2 Developing and implementing proven mechanisms to 

3 provide principals and superintendents with effective 

4 managerial, leadership, curricula, and instructional 

5 skills that result in increased student academic 

6 achievement. 

7 ‘‘(5) TEACHER SCHOLARSHIPS AND SUPPORT.— 

8 Providing— 

9 ‘‘(A) scholarships to help students, such as 

10 individuals who have been accepted by, or who 

11 are enrolled in, a program of undergraduate 

12 education at an institution of higher education, 

13 pay the costs of tuition, room, board, and other 

14 expenses of completing a teacher preparation 

15 program, if— 

16 ‘‘(i) the Secretary establishes such re17 quirements as the Secretary determines 

18 necessary to ensure that recipients of 

19 scholarships under this paragraph who 

20 complete teacher preparation programs— 

21 ‘‘(I) subsequently teach in a 

22 high-need local educational agency for 

23 a period of time equivalent to the pe24 riod of time for which the recipient re-
503 

•S 1932 PCS 

1 ceived the scholarship assistance, plus 

2 an additional 1 year; or 

3 ‘‘(II) repay the amount of the 

4 scholarship if the recipient does not 

5 teach as described in subclause (I); 

6 and 

7 ‘‘(ii) the eligible partnership provides 

8 an assurance that the eligible partnership 

9 will recruit minority students to become 

10 highly qualified teachers; 

11 ‘‘(B) support services, if needed, to enable 

12 scholarship recipients to complete postsecondary 

13 education programs, or to transition from a ca14 reer outside of the field of education into a 

15 teaching career; and 

16 ‘‘(C) follow-up services for former scholar17 ship recipients during the recipients’ initial 

18 years of teaching. 

19 ‘‘(6) COORDINATION WITH COMMUNITY COL20 LEGES.— 

21 ‘‘(A) TEACHER PREPARATION PRO22 GRAMS.—Coordinating with 2-year institutions 

23 of higher education to implement teacher prepa24 ration programs, including through distance 
504 

•S 1932 PCS 

1 learning, for the purposes of allowing prospec2 tive teachers— 

3 ‘‘(i) to obtain a bachelor’s degree and 

4 State certification or licensure; and 

5 ‘‘(ii) to become highly qualified teach6 ers. 

7 ‘‘(B) PROFESSIONAL DEVELOPMENT.—Co8 ordinating with 2-year institutions of higher 

9 education to provide professional development 

10 that— 

11 ‘‘(i) improves the academic content 

12 knowledge of teachers in the academic sub13 ject areas in which the teachers are cer14 tified or licensed to teach, or in which the 

15 teachers are working toward certification 

16 or licensure to teach; and 

17 ‘‘(ii) promotes effective teaching skills. 

18 ‘‘(7) CLINICAL EXPERIENCE IN SCIENCE, MATH19 EMATICS, AND TECHNOLOGY.—Creating opportuni20 ties for clinical experience and training for teachers 

21 and prospective teachers through participation with 

22 professionals in business, research, and work envi23 ronments in areas relating to science, mathematics, 

24 and technology, including opportunities for using 

25 laboratory equipment. 
505 

•S 1932 PCS 

1 ‘‘(8) PROFESSIONAL DEVELOPMENT.—Creating 

2 opportunities for enhanced and ongoing professional 

3 development for experienced general education and 

4 special education teachers, early childhood edu5 cators, principals, administrators, and faculty. 

6 ‘‘(9) TECHNOLOGY.—The activity described in 

7 section 202(e)(9). 

8 ‘‘(10) AREAS OF INSTRUCTIONAL SHORTAGE.— 

9 Increasing the number of— 

10 ‘‘(A) teachers in the classroom providing 

11 instruction in high-need academic subject areas 

12 (such as reading, mathematics, science, and for13 eign language, including less commonly taught 

14 languages), and high-need areas (such as spe15 cial education, language instruction educational 

16 programs for limited English proficient stu17 dents, and early childhood education); 

18 ‘‘(B) special education faculty dedicated to 

19 preparing highly qualified special education 

20 teachers at institutions of higher education; and 

21 ‘‘(C) faculty at institutions of higher edu22 cation with expertise in instruction of students 

23 who are limited English proficient. 

24 ‘‘(11) IMPROVING INSTRUCTION.—Improving 

25 instruction by— 
506 

•S 1932 PCS 

1 ‘‘(A) improving understanding and instruc2 tion in core academic subjects and other, spe3 cialized courses, such as geography, American 

4 history and government, and world history; and 

5 ‘‘(B) creating externships for teachers and 

6 prospective teachers for field experience and 

7 training through participation in business, re8 search, and work environments in high-need 

9 academic subject areas (such as reading, math10 ematics, science, and foreign language, includ11 ing less commonly taught languages) and high12 need areas (such as special education, language 

13 instruction educational programs for limited 

14 English proficient students, and early childhood 

15 education). 

16 ‘‘(12) GRADUATE PROGRAMS.—Developing, in 

17 collaboration with departments, programs, or units 

18 of both academic content and teacher education 

19 within a partner institution, master’s degree pro20 grams that meet the demonstrated needs of teachers 

21 in the high-need local educational agency partici22 pating in the eligible partnership for content exper23 tise and teaching skills. 

24 ‘‘(13) LITERACY TEACHER TRAINING.—Estab25 lishing and implementing a program that strength-
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1 ens content knowledge and teaching skills of sec2 ondary school teachers in literacy that— 

3 ‘‘(A) provides teacher training and sti4 pends for literacy coaches who train classroom 

5 teachers to implement literacy programs; 

6 ‘‘(B) develops or redesigns rigorous re7 search-based curricula that are aligned with 

8 challenging State academic content standards, 

9 as required under section 1111(b)(1) of the El10 ementary and Secondary Education Act of 

11 1965, and with postsecondary standards for 

12 reading and writing; 

13 ‘‘(C) provides training and stipends for 

14 teachers to tutor students with intense individ15 ualized reading, writing, and subject matter in16 struction during or beyond the school day; 

17 ‘‘(D) provides opportunities for teachers to 

18 plan and assess instruction with other teachers, 

19 school leaders, and faculty at institutions of 

20 higher education; and 

21 ‘‘(E) establishes an evaluation and ac22 countability plan for activities conducted under 

23 this paragraph to measure the impact of such 

24 activities. 
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1 ‘‘(g) CONSTRUCTION.—Nothing in this section shall 

2 be construed to prohibit an eligible partnership from using 

3 grant funds to coordinate with the activities of eligible 

4 partnerships in other States or on a regional basis through 

5 Governors, State boards of education, State educational 

6 agencies, State agencies responsible for early childhood 

7 education, local educational agencies, or State agencies for 

8 higher education. 

9 ‘‘(h) SUPPLEMENT, NOT SUPPLANT.—Funds made 

10 available under this section shall be used to supplement, 

11 and not supplant, other Federal, State, and local funds 

12 that would otherwise be expended to carry out activities 

13 under this section. 

14 ‘‘SEC. 204. ADMINISTRATIVE PROVISIONS. 

15 ‘‘(a) DURATION; NUMBER OF AWARDS; PAY16 MENTS.— 

17 ‘‘(1) DURATION.— 

18 ‘‘(A) ELIGIBLE STATES.—Grants awarded 

19 to eligible States under this part shall be 

20 awarded for a period not to exceed 3 years. 

21 ‘‘(B) ELIGIBLE PARTNERSHIPS.—Grants 

22 awarded to eligible partnerships under this part 

23 shall be awarded for a period of 5 years. 

24 ‘‘(2) NUMBER OF AWARDS.—An eligible part25 nership may not receive more than 1 grant during 
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•S 1932 PCS 

1 a 5-year period. Nothing in this title shall be con2 strued to prohibit an individual member, that can 

3 demonstrate need, of an eligible partnership that re4 ceives a grant under this title from entering into an5 other eligible partnership consisting of new members 

6 and receiving a grant with such other eligible part7 nership before the 5-year period described in the 

8 preceding sentence applicable to the eligible partner9 ship with which the individual member has first 

10 partnered has expired. 

11 ‘‘(3) PAYMENTS.—The Secretary shall make 

12 annual payments of grant funds awarded under this 

13 part. 

14 ‘‘(b) PEER REVIEW.— 

15 ‘‘(1) PANEL.—The Secretary shall provide the 

16 applications submitted under this part to a peer re17 view panel for evaluation. With respect to each ap18 plication, the peer review panel shall initially rec19 ommend the application for funding or for dis20 approval. 

21 ‘‘(2) PRIORITY.—In recommending applications 

22 to the Secretary for funding under this part, the 

23 panel shall— 

24 ‘‘(A) with respect to grants under section 

25 202, give priority to eligible States— 
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1 ‘‘(i) that have innovative reforms to 

2 hold institutions of higher education with 

3 teacher preparation programs accountable 

4 for preparing teachers to become highly 

5 qualified and have effective teaching skills; 

6 ‘‘(ii) that have innovative efforts 

7 aimed at reducing the shortage of highly 

8 qualified general and special education 

9 teachers, including in low-income urban 

10 and rural areas and in high-need academic 

11 subject areas (such as reading, mathe12 matics, science, and foreign language, in13 cluding less commonly taught languages); 

14 and 

15 ‘‘(iii) whose awards promote an equi16 table geographic distribution of grants 

17 among rural and urban areas; and 

18 ‘‘(B) with respect to grants under section 

19 203, give priority— 

20 ‘‘(i) to applications from broad-based 

21 eligible partnerships that involve busi22 nesses and community organizations; and 

23 ‘‘(ii) to eligible partnerships so that 

24 the awards promote an equitable geo-
511 

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1 graphic distribution of grants among rural 

2 and urban areas. 

3 ‘‘(3) SECRETARIAL SELECTION.—The Secretary 

4 shall determine, based on the peer review process, 

5 which applications shall receive funding and the 

6 amounts of the grants. In determining grant 

7 amounts, the Secretary shall take into account the 

8 total amount of funds available for all grants under 

9 this part and the types of activities proposed to be 

10 carried out. 

11 ‘‘(c) MATCHING REQUIREMENTS.— 

12 ‘‘(1) STATE GRANTS.—Each eligible State re13 ceiving a grant under section 202 shall provide, from 

14 non-Federal sources, an amount equal to 50 percent 

15 of the amount of the grant (in cash or in kind) to 

16 carry out the activities supported by the grant. 

17 ‘‘(2) PARTNERSHIP GRANTS.—Each eligible 

18 partnership receiving a grant under section 203 

19 shall provide, from non-Federal sources (in cash or 

20 in kind), an amount equal to 25 percent of the 

21 amount of the grant for the first year of the grant, 

22 35 percent of the amount of the grant for the second 

23 year of the grant, and 50 percent of the amount of 

24 the grant for each succeeding year of the grant. 
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1 ‘‘(d) LIMITATION ON ADMINISTRATIVE EXPENSES.— 

2 An eligible State or eligible partnership that receives a 

3 grant under this part may use not more than 2 percent 

4 of the grant funds for purposes of administering the grant. 

5 ‘‘(e) ADDITIONAL ACTIVITIES.—The Secretary shall 

6 use funds repaid pursuant to section 202(e)(4)(A)(i)(II) 

7 or section 203(f)(5)(A)(i)(II) to carry out additional ac8 tivities under section 202 or 203, respectively. 

9 ‘‘SEC. 205. ACCOUNTABILITY AND EVALUATION. 

10 ‘‘(a) STATE GRANT ACCOUNTABILITY REPORT.—An 

11 eligible State that receives a grant under section 202 shall 

12 submit an annual accountability report to the Secretary 

13 and the authorizing committees. Such report shall include 

14 a description of the degree to which the eligible State, in 

15 using funds provided under such section, has made 

16 progress in meeting the purposes of this part and substan17 tial progress in meeting the following goals, as applicable: 

18 ‘‘(1) STUDENT ACADEMIC ACHIEVEMENT.—In19 creasing student academic achievement for all stu20 dents as defined by the eligible State. 

21 ‘‘(2) RAISING STANDARDS.—Raising the State 

22 academic standards required to enter the teaching 

23 profession as a highly qualified teacher, and where 

24 applicable, as a fully competent early childhood edu25 cator. 
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1 ‘‘(3) INITIAL CERTIFICATION OR LICENSURE.— 

2 Improving the pass rates and scaled scores for initial 

3 State teacher certification or licensure, or increasing 

4 the numbers of qualified individuals being certified 

5 or licensed as teachers through alternative routes to 

6 State certification or licensure programs. 

7 ‘‘(4) PERCENTAGE OF HIGHLY QUALIFIED

8 TEACHERS.—Providing data on the progress of the 

9 State towards meeting the highly qualified teacher 

10 requirements under section 1119(a)(2) of the Ele11 mentary and Secondary Education Act of 1965. 

12 ‘‘(5) DECREASING TEACHER SHORTAGES.—De13 creasing shortages of— 

14 ‘‘(A) highly qualified teachers in— 

15 ‘‘(i) low-income urban and rural 

16 areas; 

17 ‘‘(ii) high-need academic subject areas 

18 (such as reading, mathematics, science, 

19 and foreign language, including less com20 monly taught languages); 

21 ‘‘(iii) special education; and 

22 ‘‘(iv) high-need areas (such as special 

23 education, language instruction educational 

24 programs for limited English proficient 
514 

•S 1932 PCS 

1 students, and early childhood education); 

2 and 

3 ‘‘(B) fully competent early childhood edu4 cators. 

5 ‘‘(6) INCREASING OPPORTUNITIES FOR PROFES6 SIONAL DEVELOPMENT.—Increasing opportunities 

7 for enhanced and ongoing professional development 

8 that— 

9 ‘‘(A) improves the academic content knowl10 edge of teachers in the academic subject areas 

11 in which the teachers are certified or licensed to 

12 teach or in which the teachers are working to13 ward certification or licensure to teach; and 

14 ‘‘(B) promotes effective teaching skills. 

15 ‘‘(b) ELIGIBLE PARTNERSHIP EVALUATION.—Each 

16 eligible partnership submitting an application for a grant 

17 under section 203 shall establish and include in such ap18 plication, an evaluation plan that includes strong perform19 ance objectives. The plan shall include objectives and 

20 measures for increasing— 

21 ‘‘(1) student achievement for all students as 

22 measured by the eligible partnership; 

23 ‘‘(2) teacher retention in the first 3 years of a 

24 teacher’s career; 
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1 ‘‘(3) improvement in the pass rates and scaled 

2 scores for initial State certification or licensure of 

3 teachers; 

4 ‘‘(4) the percentage of highly qualified teachers 

5 hired by the high-need local educational agency par6 ticipating in the eligible partnership; and 

7 ‘‘(5) the percentage of— 

8 ‘‘(A) highly qualified teachers among 

9 underrepresented groups, in high-need academic 

10 subject areas (such as reading, mathematics, 

11 science, and foreign language, including less 

12 commonly taught languages), in high-need 

13 areas (such as special education, language in14 struction educational programs for limited 

15 English proficient students, and early childhood 

16 education), and in high-need schools; 

17 ‘‘(B) elementary school, middle school, and 

18 secondary school classes taught by teachers who 

19 are highly qualified; 

20 ‘‘(C) early childhood education program 

21 classes taught by providers who are fully com22 petent; and 

23 ‘‘(D) highly qualified special education 

24 teachers. 

25 ‘‘(c) REVOCATION OF GRANT.— 
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1 ‘‘(1) ELIGIBLE STATES.—If the Secretary de2 termines that an eligible State is not making sub3 stantial progress in meeting the purposes, goals, ob4 jectives, and measures, as appropriate, by the end of 

5 the second year of a grant under this part, then the 

6 grant payment shall not be made for the third year 

7 of the grant. 

8 ‘‘(2) ELIGIBLE PARTNERSHIPS.—If the Sec9 retary determines that an eligible partnership is not 

10 making substantial progress in meeting the pur11 poses, goals, objectives, and measures, as appro12 priate, by the end of the third year of a grant under 

13 this part, then the grant payments shall not be made 

14 for any succeeding year of the grant. 

15 ‘‘(d) EVALUATION AND DISSEMINATION.—The Sec16 retary shall evaluate the activities funded under this part 

17 and report the Secretary’s findings regarding the activities 

18 to the authorizing committees. The Secretary shall broadly 

19 disseminate— 

20 ‘‘(1) successful practices developed by eligible 

21 States and eligible partnerships under this part; and 

22 ‘‘(2) information regarding such practices that 

23 were found to be ineffective. 
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1 ‘‘SEC. 206. ACCOUNTABILITY FOR PROGRAMS THAT PRE2 PARE TEACHERS. 

3 ‘‘(a) INSTITUTIONAL AND PROGRAM REPORT CARDS

4 ON THE QUALITY OF TEACHER PREPARATION.— 

5 ‘‘(1) REPORT CARD.—Each institution of higher 

6 education that conducts a traditional teacher prepa7 ration program or alternative routes to State certifi8 cation or licensure program and that enrolls stu9 dents receiving Federal assistance under this Act 

10 shall report annually to the State and the general 

11 public, in a uniform and comprehensible manner 

12 that conforms with the definitions and methods es13 tablished by the Secretary, both for traditional 

14 teacher preparation programs and alternative routes 

15 to State certification or licensure programs, the fol16 lowing information: 

17 ‘‘(A) PASS RATES AND SCALED SCORES.— 

18 For the most recent year for which the informa19 tion is available for those students who took the 

20 assessments and are enrolled in the traditional 

21 teacher preparation program or alternative 

22 routes to State certification or licensure pro23 gram, and for those who have taken the assess24 ments and have completed the traditional teach25 er preparation program or alternative routes to 

26 State certification or licensure program during 
518 

•S 1932 PCS 

1 the 2-year period preceding such year, for each 

2 of the assessments used for teacher certification 

3 or licensure by the State in which the program 

4 is located— 

5 ‘‘(i) the percentage of students who 

6 have completed 100 percent of the nonclin7 ical coursework and taken the assessment 

8 who pass such assessment; 

9 ‘‘(ii) the percentage of all such stu10 dents who passed each such assessment; 

11 ‘‘(iii) the percentage of students tak12 ing an assessment who completed the 

13 teacher preparation program after enroll14 ing in the program, which shall be made 

15 available widely and publicly by the State; 

16 ‘‘(iv) the average scaled score for all 

17 students who took each such assessment; 

18 ‘‘(v) a comparison of the program’s 

19 pass rates with the average pass rates for 

20 programs in the State; and 

21 ‘‘(vi) a comparison of the program’s 

22 average scaled scores with the average 

23 scaled scores for programs in the State. 

24 ‘‘(B) PROGRAM INFORMATION.—The cri25 teria for admission into the program, the num-
519 

•S 1932 PCS 

1 ber of students in the program (disaggregated 

2 by race and gender), the average number of 

3 hours of supervised clinical experience required 

4 for those in the program, the number of full5 time equivalent faculty and students in the su6 pervised clinical experience, and the total num7 ber of students who have been certified or li8 censed as teachers, disaggregated by subject 

9 and area of certification or licensure. 

10 ‘‘(C) STATEMENT.—In States that require 

11 approval or accreditation of teacher preparation 

12 programs, a statement of whether the institu13 tion’s program is so approved or accredited, 

14 and by whom. 

15 ‘‘(D) DESIGNATION AS LOW-PER16 FORMING.—Whether the program has been des17 ignated as low-performing by the State under 

18 section 207(a). 

19 ‘‘(E) USE OF TECHNOLOGY.—A descrip20 tion of the activities that prepare teachers to ef21 fectively integrate technology into curricula and 

22 instruction and effectively use technology to col23 lect, manage, and analyze data in order to im24 prove teaching, learning, and decision making 
520 

•S 1932 PCS 

1 for the purpose of increasing student academic 

2 achievement. 

3 ‘‘(2) REPORT.—Each eligible partnership re4 ceiving a grant under section 203 shall report annu5 ally on the progress of the eligible partnership to6 ward meeting the purposes of this part and the ob7 jectives and measures described in section 205(b). 

8 ‘‘(3) FINES.—The Secretary may impose a fine 

9 not to exceed $25,000 on an institution of higher 

10 education for failure to provide the information de11 scribed in this subsection in a timely or accurate 

12 manner. 

13 ‘‘(4) SPECIAL RULE.—In the case of an institu14 tion of higher education that conducts a traditional 

15 teacher preparation program or alternative routes to 

16 State certification or licensure program and has 

17 fewer than 10 scores reported on any single initial 

18 teacher certification or licensure assessment during 

19 an academic year, the institution shall collect and 

20 publish information, as required under paragraph 

21 (1)(A), with respect to an average pass rate and 

22 scaled score on each State certification or licensure 

23 assessment taken over a 3-year period. 

24 ‘‘(b) STATE REPORT CARD ON THE QUALITY OF

25 TEACHER PREPARATION.— 
521 

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1 ‘‘(1) IN GENERAL.—Each State that receives 

2 funds under this Act shall provide to the Secretary, 

3 annually, in a uniform and comprehensible manner 

4 that conforms with the definitions and methods es5 tablished by the Secretary, a State report card on 

6 the quality of teacher preparation in the State, both 

7 for traditional teacher preparation programs and for 

8 alternative routes to State certification or licensure 

9 programs, which shall include not less than the fol10 lowing: 

11 ‘‘(A) A description of reliability and valid12 ity of the teacher certification and licensure as13 sessments, and any other certification and licen14 sure requirements, used by the State. 

15 ‘‘(B) The standards and criteria that pro16 spective teachers must meet in order to attain 

17 initial teacher certification or licensure and to 

18 be certified or licensed to teach particular aca19 demic subject areas or in particular grades 

20 within the State. 

21 ‘‘(C) A description of how the assessments 

22 and requirements described in subparagraph 

23 (A) are aligned with the State’s challenging 

24 academic content standards required under sec25 tion 1111(b)(1) of the Elementary and Sec-
522 

•S 1932 PCS 

1 ondary Education Act of 1965 and State early 

2 learning standards for early childhood education 

3 programs. 

4 ‘‘(D) For each of the assessments used by 

5 the State for teacher certification or licensure— 

6 ‘‘(i) for each institution of higher edu7 cation located in the State and each entity 

8 located in the State that offers an alter9 native route for teacher certification or li10 censure, the percentage of students at such 

11 institution or entity who have completed 

12 100 percent of the nonclinical coursework 

13 and taken the assessment who pass such 

14 assessment; 

15 ‘‘(ii) the percentage of all such stu16 dents at all such institutions taking the as17 sessment who pass such assessment; and 

18 ‘‘(iii) the percentage of students tak19 ing an assessment who completed the 

20 teacher preparation program after enroll21 ing in the program, which shall be made 

22 available widely and publicly by the State. 

23 ‘‘(E) A description of alternative routes to 

24 State certification or licensure in the State (in25 cluding any such routes operated by entities 
523 

•S 1932 PCS 

1 that are not institutions of higher education), if 

2 any, including, for each of the assessments used 

3 by the State for teacher certification or licen4 sure— 

5 ‘‘(i) the percentage of individuals par6 ticipating in such routes, or who have com7 pleted such routes during the 2-year period 

8 preceding the date of the determination, 

9 who passed each such assessment; and 

10 ‘‘(ii) the average scaled score of indi11 viduals participating in such routes, or who 

12 have completed such routes during the pe13 riod preceding the date of the determina14 tion, who took each such assessment. 

15 ‘‘(F) A description of the State’s criteria 

16 for assessing the performance of teacher prepa17 ration programs within institutions of higher 

18 education in the State. Such criteria shall in19 clude indicators of the academic content knowl20 edge and teaching skills of students enrolled in 

21 such programs. 

22 ‘‘(G) For each teacher preparation pro23 gram in the State, the criteria for admission 

24 into the program, the number of students in the 

25 program, disaggregated by race and gender (ex-
524 

•S 1932 PCS 

1 cept that such disaggregation shall not be re2 quired in a case in which the number of stu3 dents in a category is insufficient to yield sta4 tistically reliable information or the results 

5 would reveal personally identifiable information 

6 about an individual student), the average num7 ber of hours of supervised clinical experience re8 quired for those in the program, and the num9 ber of full-time equivalent faculty, adjunct fac10 ulty, and students in supervised clinical experi11 ence. 

12 ‘‘(H) For the State as a whole, and for 

13 each teacher preparation program in the State, 

14 the number of teachers prepared, in the aggre15 gate and reported separately by— 

16 ‘‘(i) area of certification or licensure; 

17 ‘‘(ii) academic major; and 

18 ‘‘(iii) subject area for which the teach19 er has been prepared to teach. 

20 ‘‘(I) Using the data generated under sub21 paragraphs (G) and (H), a description of the 

22 extent to which teacher preparation programs 

23 are helping to address shortages of highly quali24 fied teachers, by area of certification or licen25 sure, subject, and specialty, in the State’s pub-
525 

•S 1932 PCS 

1 lic schools, including those areas described in 

2 section 205(a)(5). 

3 ‘‘(J) A description of the activities that 

4 prepare teachers to effectively integrate tech5 nology into curricula and instruction and effec6 tively use technology to collect, manage, and 

7 analyze data in order to improve teaching, 

8 learning, and decision making for the purpose 

9 of increasing student academic achievement. 

10 ‘‘(2) PROHIBITION AGAINST CREATING A NA11 TIONAL LIST.—The Secretary shall not create a na12 tional list or ranking of States, institutions, or 

13 schools using the scaled scores provided under this 

14 subsection. 

15 ‘‘(c) REPORT OF THE SECRETARY ON THE QUALITY

16 OF TEACHER PREPARATION.— 

17 ‘‘(1) REPORT CARD.—The Secretary shall pro18 vide to Congress, and publish and make widely avail19 able, a report card on teacher qualifications and 

20 preparation in the United States, including all the 

21 information reported in subparagraphs (A) through 

22 (J) of subsection (b)(1). Such report shall identify 

23 States for which eligible States and eligible partner24 ships received a grant under this part. Such report 
526 

•S 1932 PCS 

1 shall be so provided, published, and made available 

2 annually. 

3 ‘‘(2) REPORT TO CONGRESS.—The Secretary 

4 shall prepare and submit a report to Congress that 

5 contains the following: 

6 ‘‘(A) A comparison of States’ efforts to im7 prove the quality of the current and future 

8 teaching force. 

9 ‘‘(B) A comparison of eligible partnerships’ 

10 efforts to improve the quality of the current 

11 and future teaching force. 

12 ‘‘(C) The national mean and median scaled 

13 scores and pass rate on any standardized test 

14 that is used in more than 1 State for teacher 

15 certification or licensure. 

16 ‘‘(3) SPECIAL RULE.—In the case of a teacher 

17 preparation program with fewer than 10 scores re18 ported on any single initial teacher certification or li19 censure assessment during an academic year, the 

20 Secretary shall collect and publish information, and 

21 make publicly available, with respect to an average 

22 pass rate and scaled score on each State certification 

23 or licensure assessment taken over a 3-year period. 

24 ‘‘(d) COORDINATION.—The Secretary, to the extent 

25 practicable, shall coordinate the information collected and 
527 

•S 1932 PCS 

1 published under this part among States for individuals 

2 who took State teacher certification or licensure assess3 ments in a State other than the State in which the indi4 vidual received the individual’s most recent degree. 

5 ‘‘SEC. 207. STATE FUNCTIONS. 

6 ‘‘(a) STATE ASSESSMENT.—In order to receive funds 

7 under this Act, a State shall have in place a procedure 

8 to identify and assist, through the provision of technical 

9 assistance, low-performing programs of teacher prepara10 tion. Such State shall provide the Secretary an annual list 

11 of such low-performing teacher preparation programs that 

12 includes an identification of those programs at risk of 

13 being placed on such list. Such levels of performance shall 

14 be determined solely by the State and may include criteria 

15 based on information collected pursuant to this part. Such 

16 assessment shall be described in the report under section 

17 206(b). 

18 ‘‘(b) TERMINATION OF ELIGIBILITY.—Any program 

19 of teacher preparation from which the State has with20 drawn the State’s approval, or terminated the State’s fi21 nancial support, due to the low performance of the pro22 gram based upon the State assessment described in sub23 section (a)— 
528 

•S 1932 PCS 

1 ‘‘(1) shall be ineligible for any funding for pro2 fessional development activities awarded by the De3 partment; 

4 ‘‘(2) shall not be permitted to accept or enroll 

5 any student that receives aid under title IV in the 

6 institution’s teacher preparation program; and 

7 ‘‘(3) shall provide transitional support, includ8 ing remedial services if necessary, for students en9 rolled at the institution at the time of termination 

10 of financial support or withdrawal of approval. 

11 ‘‘(c) NEGOTIATED RULEMAKING.—If the Secretary 

12 develops any regulations implementing subsection (b)(2), 

13 the Secretary shall submit such proposed regulations to 

14 a negotiated rulemaking process, which shall include rep15 resentatives of States, institutions of higher education, 

16 and educational and student organizations. 

17 ‘‘(d) APPLICATION OF THE REQUIREMENTS.—The 

18 requirements of this section shall apply to both traditional 

19 teacher preparation programs and alternative routes to 

20 State certification and licensure programs. 

21 ‘‘SEC. 208. GENERAL PROVISIONS. 

22 ‘‘(a) METHODS.—In complying with sections 206 and 

23 207, the Secretary shall ensure that States and institu24 tions of higher education use fair and equitable methods 
529 

•S 1932 PCS 

1 in reporting and that the reporting methods do not allow 

2 identification of individuals. 

3 ‘‘(b) SPECIAL RULE.—For each State that does not 

4 use content assessments as a means of ensuring that all 

5 teachers teaching in core academic subjects within the 

6 State are highly qualified not later than the end of the 

7 2005-2006 school year, as required under section 1119 of 

8 the Elementary and Secondary Education Act of 1965, 

9 and that each person employed as a special education 

10 teacher in the State who teaches elementary school, middle 

11 school, or secondary school is highly qualified by such 

12 deadline, as required under section 612(a)(14)(C) of the 

13 Individuals with Disabilities Education Act,— 

14 ‘‘(1) the Secretary shall, to the extent prac15 ticable, collect data comparable to the data required 

16 under this part from States, local educational agen17 cies, institutions of higher education, or other enti18 ties that administer such assessments to teachers or 

19 prospective teachers; and 

20 ‘‘(2) notwithstanding any other provision of this 

21 part, the Secretary shall use such data to carry out 

22 requirements of this part related to assessments, 

23 pass rates, and scaled scores. 

24 ‘‘(c) LIMITATIONS.— 
530 

•S 1932 PCS 

1 ‘‘(1) FEDERAL CONTROL PROHIBITED.—Noth2 ing in this title shall be construed to permit, allow, 

3 encourage, or authorize any Federal control over any 

4 aspect of any private, religious, or home school, 

5 whether or not a home school is treated as a private 

6 school or home school under State law. This section 

7 shall not be construed to prohibit private, religious, 

8 or home schools from participation in programs or 

9 services under this title. 

10 ‘‘(2) NO CHANGE IN STATE CONTROL ENCOUR11 AGED OR REQUIRED.—Nothing in this title shall be 

12 construed to encourage or require any change in a 

13 State’s treatment of any private, religious, or home 

14 school, whether or not a home school is treated as 

15 a private school or home school under State law. 

16 ‘‘(3) NATIONAL SYSTEM OF TEACHER CERTIFI17 CATION OR LICENSURE PROHIBITED.—Nothing in 

18 this title shall be construed to permit, allow, encour19 age, or authorize the Secretary to establish or sup20 port any national system of teacher certification or 

21 licensure. 

22 ‘‘(d) RELEASE OF INFORMATION TO TEACHER PREP23 ARATION PROGRAMS.— 

24 ‘‘(1) IN GENERAL.—For the purpose of improv25 ing teacher preparation programs, a State edu-
531 

•S 1932 PCS 

1 cational agency shall provide to a teacher prepara2 tion program, upon the request of the teacher prepa3 ration program, any and all pertinent education-re4 lated information that— 

5 ‘‘(A) may enable the teacher preparation 

6 program to evaluate the effectiveness of the 

7 program’s graduates or the program itself; and 

8 ‘‘(B) is possessed, controlled, or accessible 

9 by the State educational agency. 

10 ‘‘(2) CONTENT OF INFORMATION.—The infor11 mation described in paragraph (1)— 

12 ‘‘(A) shall include an identification of spe13 cific individuals who graduated from the teach14 er preparation program to enable the teacher 

15 preparation program to evaluate the informa16 tion provided to the program from the State 

17 educational agency with the program’s own 

18 data about the specific courses taken by, and 

19 field experiences of, the individual graduates; 

20 and 

21 ‘‘(B) may include— 

22 ‘‘(i) kindergarten through grade 12 

23 academic achievement and demographic 

24 data, without revealing personally identifi25 able information about an individual stu-
532 

•S 1932 PCS 

1 dent, for students who have been taught by 

2 graduates of the teacher preparation pro3 gram; and 

4 ‘‘(ii) teacher effectiveness evaluations 

5 for teachers who graduated from the teach6 er preparation program. 

7 ‘‘SEC. 209. AUTHORIZATION OF APPROPRIATIONS. 

8 ‘‘(a) IN GENERAL.—There are authorized to be ap9 propriated to carry out this part such sums as may be 

10 necessary for fiscal year 2006 and each of the 5 suc11 ceeding fiscal years, of which— 

12 ‘‘(1) 50 percent shall be available for each fiscal 

13 year to award grants under section 202; and 

14 ‘‘(2) 50 percent shall be available for each fiscal 

15 year to award grants under section 203. 

16 ‘‘(b) SPECIAL RULE.—If the Secretary determines 

17 that there is an insufficient number of meritorious appli18 cations for grants under section 202 or 203 to justify 

19 awarding the full amount described in paragraph (1) or 

20 (2) of subsection (a), respectively, the Secretary may, after 

21 funding the meritorious applications, use the remaining 

22 funds for grants under the other such section.’’. 

23 CHAPTER 4—INSTITUTIONAL AID 

24 SEC. 7341. PROGRAM PURPOSE. 

25 Section 311 (20 U.S.C. 1057) is amended— 
533 

•S 1932 PCS 

1 (1) in subsection (b)— 

2 (A) in paragraph (1), by striking ‘‘351’’ 

3 and inserting ‘‘391’’; and 

4 (B) in paragraph (3)(F), by inserting ‘‘, 

5 including services that will assist in the edu6 cation of special populations’’ before the period; 

7 and 

8 (2) in subsection (c)— 

9 (A) in paragraph (6), by inserting ‘‘, in10 cluding innovative, customized, remedial edu11 cation and English language instruction courses 

12 designed to help retain students and move the 

13 students rapidly into core courses and through 

14 program completion’’ before the period; 

15 (B) by redesignating paragraphs (7) 

16 through (12) as paragraphs (8) through (13), 

17 respectively; 

18 (C) by inserting after paragraph (6) the 

19 following: 

20 ‘‘(7) Education or counseling services designed 

21 to improve the financial literacy and economic lit22 eracy of students or the students’ parents.’’; and 

23 (D) in the matter preceding subparagraph 

24 (A) of paragraph (13) (as redesignated by sub-
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•S 1932 PCS 

1 paragraph (B)), by striking ‘‘subsection (c)’’ 

2 and inserting ‘‘subsection (b) and section 391’’. 

3 SEC. 7342. DEFINITIONS; ELIGIBILITY. 

4 Section 312 (20 U.S.C. 1058) is amended— 

5 (1) in subsection (b)(1)(A), by striking ‘‘sub6 section (c) of this section’’ and inserting ‘‘subsection 

7 (d)’’; and 

8 (2) in subsection (d)(2), by striking ‘‘subdivi9 sion’’ and inserting ‘‘paragraph’’. 

10 SEC. 7343. AMERICAN INDIAN TRIBALLY CONTROLLED COL11 LEGES AND UNIVERSITIES. 

12 Section 316 (20 U.S.C. 1059c) is amended— 

13 (1) by striking subsection (b)(3) and inserting 

14 the following: 

15 ‘‘(3) TRIBAL COLLEGE OR UNIVERSITY.—The 

16 term ‘Tribal College or University’ means an institu17 tion that— 

18 ‘‘(A) qualifies for funding under the Trib19 ally Controlled College or University Assistance 

20 Act of 1978 (25 U.S.C. 1801 et seq.) or the 

21 Navajo Community College Assistance Act of 

22 1978 (25 U.S.C. 640a note); or 

23 ‘‘(B) is cited in section 532 of the Equity 

24 in Educational Land-Grant Status Act of 1994 

25 (7 U.S.C. 301 note).’’; 
535 

•S 1932 PCS 

1 (2) in subsection (c)(2)— 

2 (A) in subparagraph (B), by inserting be3 fore the semicolon at the end the following: 

4 ‘‘and the acquisition of real property adjacent 

5 to the campus of the institution’’; 

6 (B) by redesignating subparagraphs (G), 

7 (H), (I), (J), (K), and (L) as subparagraphs 

8 (H), (I), (J), (K), (L), and (N), respectively; 

9 (C) by inserting after subparagraph (F) 

10 the following: 

11 ‘‘(G) education or counseling services de12 signed to improve the financial literacy and eco13 nomic literacy of students or parents of stu14 dents;’’; 

15 (D) in subparagraph (L) (as redesignated 

16 by subparagraph (B)), by striking ‘‘and’’ after 

17 the semicolon; 

18 (E) by inserting after subparagraph (L) 

19 (as redesignated by subparagraph (B)) the fol20 lowing: 

21 ‘‘(M) developing or improving facilities for 

22 Internet use or other distance learning aca23 demic instruction capabilities; and’’; and 

24 (F) in subparagraph (N) (as redesignated 

25 by subparagraph (B)), by striking ‘‘subpara-
536 

•S 1932 PCS 

1 graphs (A) through (K)’’ and inserting ‘‘sub2 paragraphs (A) through (M)’’; and 

3 (3) by striking subsection (d) and inserting the 

4 following: 

5 ‘‘(d) APPLICATION, PLAN, AND ALLOCATION.— 

6 ‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligi7 ble to receive assistance under this section, a Tribal 

8 College or University shall be an eligible institution 

9 under section 312(b). 

10 ‘‘(2) APPLICATION.— 

11 ‘‘(A) IN GENERAL.—A Tribal College or 

12 University desiring to receive assistance under 

13 this section shall submit an application to the 

14 Secretary at such time, and in such manner, as 

15 the Secretary may reasonably require. 

16 ‘‘(B) STREAMLINED PROCESS.—The Sec17 retary shall establish application requirements 

18 in such a manner as to simplify and streamline 

19 the process for applying for grants. 

20 ‘‘(3) ALLOCATIONS TO INSTITUTIONS.— 

21 ‘‘(A) CONSTRUCTION GRANTS.— 

22 ‘‘(i) IN GENERAL.—Of the amount ap23 propriated to carry out this section for any 

24 fiscal year, the Secretary may reserve 30 

25 percent for the purpose of awarding 1-year 
537 

•S 1932 PCS 

1 grants of not less than $1,000,000 to ad2 dress construction, maintenance, and ren3 ovation needs at eligible institutions. 

4 ‘‘(ii) PREFERENCE.—In providing 

5 grants under clause (i), the Secretary shall 

6 give preference to eligible institutions that 

7 have not yet received an award under this 

8 section. 

9 ‘‘(B) ALLOTMENT OF REMAINING

10 FUNDS.— 

11 ‘‘(i) IN GENERAL.—Except as pro12 vided in clause (ii), the Secretary shall dis13 tribute the remaining funds appropriated 

14 for any fiscal year to each eligible institu15 tion as follows: 

16 ‘‘(I) 60 percent of the remaining 

17 appropriated funds shall be distrib18 uted among the eligible Tribal Col19 leges and Universities on a pro rata 

20 basis, based on the respective Indian 

21 student counts (as defined in section 

22 2(a) of the Tribally Controlled College 

23 or University Assistance Act of 1978 

24 (25 U.S.C. 1801(a)) of the Tribal 

25 Colleges and Universities; and 
538 

•S 1932 PCS 

1 ‘‘(II) the remaining 40 percent 

2 shall be distributed in equal shares to 

3 the eligible Tribal Colleges and Uni4 versities. 

5 ‘‘(ii) MINIMUM GRANT.—The amount 

6 distributed to a Tribal College or Univer7 sity under clause (i) shall not be less than 

8 $500,000. 

9 ‘‘(4) SPECIAL RULES.— 

10 ‘‘(A) CONCURRENT FUNDING.—For the 

11 purposes of this part, no Tribal College or Uni12 versity that is eligible for and receives funds 

13 under this section shall concurrently receive 

14 funds under other provisions of this part or 

15 part B. 

16 ‘‘(B) EXEMPTION.—Section 313(d) shall 

17 not apply to institutions that are eligible to re18 ceive funds under this section.’’. 

19 SEC. 7344. ALASKA NATIVE AND NATIVE HAWAIIAN-SERV20 ING INSTITUTIONS. 

21 Section 317(c)(2) (20 U.S.C. 1059d(c)(2)) is amend22 ed— 

23 (1) in subparagraph (G), by striking ‘‘and’’ 

24 after the semicolon; 
539 

•S 1932 PCS 

1 (2) in subparagraph (H), by striking the period 

2 and inserting ‘‘; and’’; and 

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

4 ‘‘(I) education or counseling services de5 signed to improve the financial literacy and eco6 nomic literacy of students or the students’ par7 ents.’’. 

8 SEC. 7345. NATIVE AMERICAN-SERVING, NONTRIBAL INSTI9 TUTIONS. 

10 (a) GRANT PROGRAM AUTHORIZED.—Part A of title 

11 III (20 U.S.C. 1057 et seq.) is amended by adding at the 

12 end the following: 

13 ‘‘SEC. 318. NATIVE AMERICAN-SERVING, NONTRIBAL INSTI14 TUTIONS. 

15 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall 

16 provide grants and related assistance to Native American17 serving, nontribal institutions to enable such institutions 

18 to improve and expand their capacity to serve Native 

19 Americans. 

20 ‘‘(b) DEFINITIONS.—In this section: 

21 ‘‘(1) NATIVE AMERICAN.—The term ‘Native 

22 American’ means an individual who is of a tribe, 

23 people, or culture that is indigenous to the United 

24 States. 
540 

•S 1932 PCS 

1 ‘‘(2) NATIVE AMERICAN-SERVING, NONTRIBAL

2 INSTITUTION.—The term ‘Native American-serving, 

3 nontribal institution’ means an institution of higher 

4 education that, at the time of application— 

5 ‘‘(A) has an enrollment of undergraduate 

6 students that is not less than 10 percent Native 

7 American students; and 

8 ‘‘(B) is not a Tribal College or University 

9 (as defined in section 316). 

10 ‘‘(c) AUTHORIZED ACTIVITIES.— 

11 ‘‘(1) TYPES OF ACTIVITIES AUTHORIZED.— 

12 Grants awarded under this section shall be used by 

13 Native American-serving, nontribal institutions to 

14 assist such institutions to plan, develop, undertake, 

15 and carry out activities to improve and expand such 

16 institutions’ capacity to serve Native Americans. 

17 ‘‘(2) EXAMPLES OF AUTHORIZED ACTIVITIES.— 

18 Such programs may include— 

19 ‘‘(A) the purchase, rental, or lease of sci20 entific or laboratory equipment for educational 

21 purposes, including instructional and research 

22 purposes; 

23 ‘‘(B) renovation and improvement in class24 room, library, laboratory, and other instruc25 tional facilities; 
541 

•S 1932 PCS 

1 ‘‘(C) support of faculty exchanges, and fac2 ulty development and faculty fellowships to as3 sist faculty in attaining advanced degrees in the 

4 faculty’s field of instruction; 

5 ‘‘(D) curriculum development and aca6 demic instruction; 

7 ‘‘(E) the purchase of library books, peri8 odicals, microfilm, and other educational mate9 rials; 

10 ‘‘(F) funds and administrative manage11 ment, and acquisition of equipment for use in 

12 strengthening funds management; 

13 ‘‘(G) the joint use of facilities such as lab14 oratories and libraries; and 

15 ‘‘(H) academic tutoring and counseling 

16 programs and student support services. 

17 ‘‘(d) APPLICATION PROCESS.— 

18 ‘‘(1) INSTITUTIONAL ELIGIBILITY.—A Native 

19 American-serving, nontribal institution desiring to 

20 receive assistance under this section shall submit to 

21 the Secretary such enrollment data as may be nec22 essary to demonstrate that the institution is a Na23 tive American-serving, nontribal institution, along 

24 with such other information and data as the Sec25 retary may by regulation require. 
542 

•S 1932 PCS 

1 ‘‘(2) APPLICATIONS.— 

2 ‘‘(A) PERMISSION TO SUBMIT APPLICA3 TIONS.—Any institution that is determined by 

4 the Secretary to be a Native American-serving, 

5 nontribal institution may submit an application 

6 for assistance under this section to the Sec7 retary. 

8 ‘‘(B) SIMPLIFIED AND STREAMLINED FOR9 MAT.—The Secretary shall, to the extent pos10 sible, prescribe a simplified and streamlined for11 mat for applications under this section that 

12 takes into account the limited number of insti13 tutions that are eligible for assistance under 

14 this section. 

15 ‘‘(C) CONTENT.—An application submitted 

16 under subparagraph (A) shall include— 

17 ‘‘(i) a 5-year plan for improving the 

18 assistance provided by the Native Amer19 ican-serving, nontribal institution to Native 

20 Americans; and 

21 ‘‘(ii) such other information and as22 surances as the Secretary may require. 

23 ‘‘(3) SPECIAL RULES.— 

24 ‘‘(A) ELIGIBILITY.—No Native American25 serving, nontribal institution that receives funds 
543 

•S 1932 PCS 

1 under this section shall concurrently receive 

2 funds under other provisions of this part or 

3 part B. 

4 ‘‘(B) EXEMPTION.—Section 313(d) shall 

5 not apply to institutions that are eligible to re6 ceive funds under this section. 

7 ‘‘(C) DISTRIBUTION.—In awarding grants 

8 under this section, the Secretary shall, to the 

9 extent possible and consistent with the competi10 tive process under which such grants are 

11 awarded, ensure maximum and equitable dis12 tribution among all eligible institutions.’’. 

13 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

14 399 (20 U.S.C. 1068h) is amended by adding at the end 

15 the following: 

16 ‘‘(c) MINIMUM GRANT AMOUNT.—The minimum 

17 amount of a grant under this title shall be $200,000.’’. 

18 SEC. 7346. PART B DEFINITIONS. 

19 Section 322(4) (20 U.S.C. 1061(4)) is amended by 

20 inserting ‘‘, in consultation with the Commissioner for 

21 Education Statistics’’ before ‘‘and the Commissioner’’. 

22 SEC. 7347. GRANTS TO INSTITUTIONS. 

23 Section 323(a) (20 U.S.C. 1062(a)) is amended— 

24 (1) in the matter preceding paragraph (1), by 

25 striking ‘‘360(a)(2)’’ and inserting ‘‘399(a)(2)’’; 
544 

•S 1932 PCS 

1 (2) by redesignating paragraphs (7) through 

2 (12) as paragraphs (8) through (13), respectively; 

3 and 

4 (3) by inserting after paragraph (6) the fol5 lowing: 

6 ‘‘(7) Education or counseling services designed 

7 to improve the financial literacy and economic lit8 eracy of students or the students’ parents.’’. 

9 SEC. 7348. ALLOTMENTS TO INSTITUTIONS. 

10 Section 324 (20 U.S.C. 1063) is amended by adding 

11 at the end the following: 

12 ‘‘(h) SPECIAL RULE ON ELIGIBILITY.—Notwith13 standing any other provision of this section, a part B insti14 tution shall not receive an allotment under this section un15 less the part B institution provides, on an annual basis, 

16 data indicating that the part B institution— 

17 ‘‘(1) enrolled Federal Pell Grant recipients in 

18 the preceding academic year; 

19 ‘‘(2) in the preceding academic year, has grad20 uated students from a program of academic study 

21 that is licensed or accredited by a nationally recog22 nized accrediting agency or association recognized by 

23 the Secretary pursuant to part H of title IV where 

24 appropriate; and 
545 

•S 1932 PCS 

1 ‘‘(3) where appropriate, has graduated students 

2 who, within the past 5 years, enrolled in graduate or 

3 professional school.’’. 

4 SEC. 7349. PROFESSIONAL OR GRADUATE INSTITUTIONS. 

5 Section 326 (20 U.S.C. 1063b) is amended— 

6 (1) in subsection (c)— 

7 (A) in paragraph (2), by inserting ‘‘, and 

8 for the acquisition and development of real 

9 property that is adjacent to the campus for 

10 such construction, maintenance, renovation, or 

11 improvement’’ after ‘‘services’’; 

12 (B) by redesignating paragraphs (5) 

13 through (7) as paragraphs (7) through (9), re14 spectively; 

15 (C) by inserting after paragraph (4) the 

16 following: 

17 ‘‘(5) tutoring, counseling, and student service 

18 programs designed to improve academic success; 

19 ‘‘(6) education or counseling services designed 

20 to improve the financial literacy and economic lit21 eracy of students or the students’ parents;’’; 

22 (D) in paragraph (7) (as redesignated by 

23 subparagraph (B)), by striking ‘‘establish or 

24 improve’’ and inserting ‘‘establishing or improv25 ing’’; 
546 

•S 1932 PCS 

1 (E) in paragraph (8) (as redesignated by 

2 subparagraph (B))— 

3 (i) by striking ‘‘assist’’ and inserting 

4 ‘‘assisting’’; and 

5 (ii) by striking ‘‘and’’ after the semi6 colon; 

7 (F) in paragraph (9) (as redesignated by 

8 subparagraph (B)), by striking the period and 

9 inserting ‘‘; and’’; and 

10 (G) by adding at the end the following: 

11 ‘‘(10) other activities proposed in the applica12 tion submitted under subsection (d) that— 

13 ‘‘(A) contribute to carrying out the pur14 poses of this part; and 

15 ‘‘(B) are approved by the Secretary as part 

16 of the review and acceptance of such applica17 tion.’’; 

18 (2) in subsection (e)— 

19 (A) in paragraph (1)— 

20 (i) by inserting a colon after ‘‘the fol21 lowing’’; 

22 (ii) in subparagraph (Q), by striking 

23 ‘‘and’’ at the end; 

24 (iii) in subparagraph (R), by striking 

25 the period and inserting a semicolon; and 
547 

•S 1932 PCS 

1 (iv) by adding at the end the fol2 lowing: 

3 ‘‘(S) Alabama State University qualified 

4 graduate program; 

5 ‘‘(T) Coppin State University qualified 

6 graduate program; and 

7 ‘‘(U) Prairie View A & M University quali8 fied graduate program.’’; 

9 (B) in paragraph (2), by inserting ‘‘in law 

10 or’’ after ‘‘instruction’’; and 

11 (C) in paragraph (3)— 

12 (i) by striking ‘‘1998’’ and inserting 

13 ‘‘2006’’; and 

14 (ii) by striking ‘‘(Q) and (R)’’ and in15 serting ‘‘(S), (T), and (U)’’; 

16 (3) in subsection (f)— 

17 (A) in paragraph (1), by striking ‘‘(P)’’ 

18 and inserting ‘‘(R)’’; and 

19 (B) in paragraph (3)— 

20 (i) by striking subparagraphs (A) and 

21 (B) and inserting the following: 

22 ‘‘(A) The amount of non-Federal funds for 

23 the fiscal year for which the determination is 

24 made that the institution or program listed in 

25 subsection (e)— 
548 

•S 1932 PCS 

1 ‘‘(i) allocates from institutional re2 sources; 

3 ‘‘(ii) secures from non-Federal 

4 sources, including amounts appropriated 

5 by the State and amounts from the private 

6 sector; and 

7 ‘‘(iii) will utilize to match Federal 

8 funds awarded for the fiscal year for which 

9 the determination is made under this sec10 tion to the institution or program. 

11 ‘‘(B) The number of students enrolled in 

12 the qualified graduate programs of the eligible 

13 institution or program, for which the institution 

14 or program received and allocated funding 

15 under this section in the preceding year.’’; 

16 (ii) in subparagraph (C), by striking 

17 ‘‘(or the equivalent) enrolled in the eligible 

18 professional or graduate school’’ and all 

19 that follows through the period and insert20 ing ‘‘enrolled in the qualified programs or 

21 institutions listed in paragraph (1).’’; 

22 (iii) in subparagraph (D)— 

23 (I) by striking ‘‘students’’ and in24 serting ‘‘Black American students or 

25 minority students’’; and 
549 

•S 1932 PCS 

1 (II) by striking ‘‘institution’’ and 

2 inserting ‘‘institution or program’’; 

3 and 

4 (iv) by striking subparagraph (E) and 

5 inserting the following: 

6 ‘‘(E) The percentage that the total number 

7 of Black American students and minority stu8 dents who receive their first professional, mas9 ter’s, or doctoral degrees from the institution or 

10 program in the academic year preceding the 

11 academic year for which the determination is 

12 made, represents of the total number of Black 

13 American students and minority students in the 

14 United States who receive their first profes15 sional, master’s, or doctoral degrees in the pro16 fessions or disciplines related to the course of 

17 study at such institution or program, respec18 tively, in the preceding academic year.’’; and 

19 (4) in subsection (g), by striking ‘‘1998’’ and 

20 inserting ‘‘2006’’. 

21 SEC. 7350. AUTHORIZATION OF APPROPRIATIONS. 

22 Subsection (a) of section 399 (20 U.S.C. 1068h) is 

23 amended to read as follows: 

24 ‘‘(a) AUTHORIZATIONS.— 
550 

•S 1932 PCS 

1 ‘‘(1) PART A.—(A) There are authorized to be 

2 appropriated to carry out part A (other than section 

3 316) such sums as may be necessary for fiscal year 

4 2006 and each of the 5 succeeding fiscal years. 

5 ‘‘(B) There are authorized to be appropriated 

6 to carry out section 316 such sums as may be nec7 essary for fiscal year 2006 and each of the 5 suc8 ceeding fiscal years. 

9 ‘‘(C) There are authorized to be appropriated to 

10 carry out section 317 such sums as may be nec11 essary for fiscal year 2006 and each of the 5 suc12 ceeding fiscal years. 

13 ‘‘(D) There are authorized to be appropriated 

14 to carry out section 318 such sums as may be nec15 essary for fiscal year 2006 and each of the 5 suc16 ceeding fiscal years. 

17 ‘‘(2) PART B.—(A) There are authorized to be 

18 appropriated to carry out part B (other than section 

19 326) such sums as may be necessary for fiscal year 

20 2006 and each of the 5 succeeding fiscal years. 

21 ‘‘(B) There are authorized to be appropriated 

22 to carry out section 326 such sums as may be nec23 essary for fiscal year 2006 and each of the 5 suc24 ceeding fiscal years. 
551 

•S 1932 PCS 

1 ‘‘(3) PART C.—There are authorized to be ap2 propriated to carry out part C such sums as may be 

3 necessary for fiscal year 2006 and each of the 5 suc4 ceeding fiscal years. 

5 ‘‘(4) PART D.—(A) There are authorized to be 

6 appropriated to carry out part D (other than section 

7 345(7), but including section 347) such sums as 

8 may be necessary for fiscal year 2006 and each of 

9 the 5 succeeding fiscal years. 

10 ‘‘(B) There are authorized to be appropriated 

11 to carry out section 345(7) such sums as may be 

12 necessary for fiscal year 2006 and each of the 5 suc13 ceeding fiscal years. 

14 ‘‘(5) PART E.—There are authorized to be ap15 propriated to carry out part E such sums as may be 

16 necessary for fiscal year 2006 and each of the 5 suc17 ceeding fiscal years.’’. 

18 SEC. 7351. TECHNICAL CORRECTIONS. 

19 Title III (20 U.S.C. 1051 et seq.) is further amend20 ed— 

21 (1) in section 342(5)(C) (20 U.S.C. 

22 1066a(5)(C)), by striking ‘‘,,’’ and inserting ‘‘,’’; 

23 (2) in section 343(e) (20 U.S.C. 1066b(e)), by 

24 inserting ‘‘SALE OF QUALIFIED BONDS.—’’ before 

25 ‘‘Notwithstanding’’; 
552 

•S 1932 PCS 

1 (3) in the matter preceding clause (i) of section 

2 365(9)(A) (20 U.S.C. 1067k(9)(A)), by striking 

3 ‘‘support’’ and inserting ‘‘supports’’; 

4 (4) in section 391(b)(7)(E) (20 U.S.C. 

5 1068(b)(7)(E)), by striking ‘‘subparagraph (E)’’ and 

6 inserting ‘‘subparagraph (D)’’; 

7 (5) in the matter preceding subparagraph (A) 

8 of section 392(b)(2) (20 U.S.C. 1068a(b)(2)), by 

9 striking ‘‘eligible institutions under part A institu10 tions’’ and inserting ‘‘eligible institutions under part 

11 A’’; and 

12 (6) in the matter preceding paragraph (1) of 

13 section 396 (20 U.S.C. 1068e), by striking ‘‘360’’ 

14 and inserting ‘‘399’’. 

15 CHAPTER 5—STUDENT ASSISTANCE 

16 Subchapter A—Grants to Students in Attend17 ance at Institutions of Higher Education 

18 SEC. 7361. FEDERAL PELL GRANTS. 

19 Section 401 (20 U.S.C. 1070a) is amended— 

20 (1) in subsection (a)(1)— 

21 (A) in the first sentence, by striking 

22 ‘‘2004’’ and inserting ‘‘2012’’; and 

23 (B) in the second sentence, by striking ‘‘,,’’ 

24 and inserting ‘‘,’’; 

25 (2) in subsection (b)— 
553 

•S 1932 PCS 

1 (A) by striking paragraph (2)(A) and in2 serting the following: 

3 ‘‘(2)(A) the amount of the Federal Pell Grant for a 

4 student eligible under this part shall be— 

5 ‘‘(i) $5,100 for academic year 2006–2007; 

6 ‘‘(ii) $5,400 for academic year 2007–2008; 

7 ‘‘(iii) $5,700 for academic year 2008–2009; 

8 ‘‘(iv) $6,000 for academic year 2009–2010; and 

9 ‘‘(v) $6,300 for academic year 2010–2011, 

10 less an amount equal to the amount determined to be the 

11 expected family contribution with respect to that student 

12 for that year.’’; 

13 (B) by striking paragraph (3); 

14 (C) by redesignating paragraphs (4) 

15 through (8) as paragraphs (3) through (7), re16 spectively; 

17 (D) in paragraph (4) (as redesignated by 

18 subparagraph (C)), by striking ‘‘$400, except’’ 

19 and all that follows through the period and in20 serting ‘‘10 percent of the maximum basic 

21 grant level specified in the appropriate Appro22 priation Act for such academic year, except that 

23 a student who is eligible for a Federal Pell 

24 Grant in an amount that is equal to or greater 

25 than 5 percent of such level but less than 10 
554 

•S 1932 PCS 

1 percent of such level shall be awarded a Federal 

2 Pell grant in the amount of 10 percent of such 

3 level.’’; and 

4 (E) by striking paragraph (5) (as redesig5 nated by subparagraph (C)) and inserting the 

6 following: 

7 ‘‘(5) In the case of a student who is enrolled, on at 

8 least a half-time basis and for a period of more than 1 

9 academic year in a 2-year or 4-year program of instruction 

10 for which an institution of higher education awards an as11 sociate or baccalaureate degree, the Secretary shall allow 

12 such student to receive not more than 2 Federal Pell 

13 Grants during a single award year to permit such student 

14 to accelerate the student’s progress toward a degree by 

15 attending additional sessions. In the case of a student re16 ceiving more than 1 Federal Pell Grant in a single award 

17 year, the total amount of Federal Pell Grants awarded to 

18 such student for the award year may exceed the maximum 

19 basic grant level specified in the appropriate Appropria20 tion Act for such award year.’’; and 

21 (3) in subsection (c), by adding at the end the 

22 following: 

23 ‘‘(5) The period of time during which a student may 

24 receive Federal Pell Grants shall not exceed 18 semesters, 
555 

•S 1932 PCS 

1 or an equivalent period of time as determined by the Sec2 retary pursuant to regulations, which period shall— 

3 ‘‘(A) be determined without regard to whether 

4 the student is enrolled on a full-time basis during 

5 any portion of the period of time; and 

6 ‘‘(B) include any period of time for which the 

7 student received a Federal Pell Grant prior to the 

8 date of enactment of the Higher Education Amend9 ments of 2005.’’. 

10 SEC. 7362. FEDERAL TRIO PROGRAMS. 

11 (a) PROGRAM AUTHORITY; AUTHORIZATION OF AP12 PROPRIATIONS.—Section 402A (20 U.S.C. 1070a–11) is 

13 amended— 

14 (1) in subsection (b)— 

15 (A) in paragraph (2)— 

16 (i) in the matter preceding subpara17 graph (A), by striking ‘‘4’’ and inserting 

18 ‘‘5’’; 

19 (ii) by striking subparagraph (A); and 

20 (iii) by redesignating subparagraphs 

21 (B) and (C) as subparagraphs (A) and 

22 (B), respectively; and 

23 (B) by striking paragraph (3) and insert24 ing the following: 
556 

•S 1932 PCS 

1 ‘‘(3) MINIMUM GRANTS.—Unless the institution 

2 or agency requests a smaller amount, an individual 

3 grant authorized under this chapter shall be award4 ed in an amount that is not less than $200,000, ex5 cept that an individual grant authorized under sec6 tion 402G shall be awarded in an amount that is not 

7 less than $170,000.’’; 

8 (2) in subsection (c)— 

9 (A) in paragraph (2), by striking ‘‘service 

10 delivery’’ and inserting ‘‘high quality service de11 livery, as determined under subsection (f),’’; 

12 (B) in paragraph (3)(B), by striking ‘‘is 

13 not required to’’ and inserting ‘‘shall not’’; and 

14 (C) in paragraph (5), by striking ‘‘cam15 puses’’ and inserting ‘‘different campuses’’; 

16 (3) in subsection (e), by striking ‘‘(g)(2)’’ each 

17 place the term occurs and inserting ‘‘(h)(4)’’; 

18 (4) by redesignating subsections (f) and (g) as 

19 subsections (g) and (h), respectively; 

20 (5) by inserting after subsection (e) the fol21 lowing: 

22 ‘‘(f) OUTCOME CRITERIA.— 

23 ‘‘(1) IN GENERAL.—The Secretary, by regula24 tion, shall establish outcome criteria for measuring, 

25 annually and for longer periods, the quality and ef-
557 

•S 1932 PCS 

1 fectiveness of programs authorized under this chap2 ter. 

3 ‘‘(2) USE FOR PRIOR EXPERIENCE DETERMINA4 TION.—The outcome criteria under paragraph (1) 

5 shall be used to evaluate the programs provided by 

6 a recipient of a grant under this chapter, and the 

7 Secretary shall determine an eligible entity’s prior 

8 experience of high quality service delivery, as re9 quired in subsection (c)(2), based on the outcome 

10 criteria. 

11 ‘‘(3) CONSIDERATION OF RELEVANT DATA.— 

12 The outcome criteria under this subsection shall 

13 take into account data pertaining to secondary 

14 school completion, postsecondary education enroll15 ment, and postsecondary education completion for 

16 low-income students, first generation college stu17 dents, and individuals with disabilities, in the schools 

18 and institutions of higher education served by the 

19 program to be evaluated. 

20 ‘‘(4) CONTENTS OF OUTCOME CRITERIA.—The 

21 outcome criteria shall include the following: 

22 ‘‘(A) For programs authorized under sec23 tion 402B, whether the eligible entity met or 

24 exceeded the entity’s objectives established in 
558 

•S 1932 PCS 

1 the entity’s application for such program re2 garding— 

3 ‘‘(i) the delivery of service to a total 

4 number of students served by the program; 

5 ‘‘(ii) the continued secondary school 

6 enrollment of such students; 

7 ‘‘(iii) the graduation of such students 

8 from secondary school; and 

9 ‘‘(iv) the enrollment of such students 

10 in an institution of higher education. 

11 ‘‘(B) For programs authorized under sec12 tion 402C, whether the eligible entity met or ex13 ceeded its objectives for such program regard14 ing— 

15 ‘‘(i) the delivery of service to a total 

16 number of students served by the program, 

17 as agreed upon by the entity and the Sec18 retary for the period; 

19 ‘‘(ii) such students’ school perform20 ance, as measured by the grade point aver21 age, or its equivalent; 

22 ‘‘(iii) such students’ academic per23 formance, as measured by standardized 

24 tests, including tests required by the stu25 dents’ State; 
559 

•S 1932 PCS 

1 ‘‘(iv) the retention in, and graduation 

2 from, secondary school of such students; 

3 and 

4 ‘‘(v) the enrollment of such students 

5 in an institution of higher education. 

6 ‘‘(C) For programs authorized under sec7 tion 402D— 

8 ‘‘(i) whether the eligible entity met or 

9 exceeded the entity’s objectives regarding 

10 the retention in postsecondary education of 

11 the students served by the program; 

12 ‘‘(ii)(I) in the case of an entity that is 

13 an institution of higher education offering 

14 a baccalaureate degree, the extent to which 

15 the entity met or exceeded the entity’s ob16 jectives regarding such students’ comple17 tion of the degree programs in which such 

18 students were enrolled; or 

19 ‘‘(II) in the case of an entity that is 

20 an institution of higher education that does 

21 not offer a baccalaureate degree, the extent 

22 to which the entity met or exceeded the en23 tity’s objectives regarding— 

24 ‘‘(aa) the completion of a degree 

25 or certificate by such students; and 
560 

•S 1932 PCS 

1 ‘‘(bb) the transfer of such stu2 dents to institutions of higher edu3 cation that offer baccalaureate de4 grees; 

5 ‘‘(iii) whether the entity met or ex6 ceeded the entity’s objectives regarding the 

7 delivery of service to a total number of stu8 dents, as agreed upon by the entity and 

9 the Secretary for the period; and 

10 ‘‘(iv) whether the applicant met or ex11 ceeded the entity’s objectives regarding 

12 such students remaining in good academic 

13 standing. 

14 ‘‘(D) For programs authorized under sec15 tion 402E, whether the entity met or exceeded 

16 the entity’s objectives for such program regard17 ing— 

18 ‘‘(i) the delivery of service to a total 

19 number of students, as agreed upon by the 

20 entity and the Secretary for the period; 

21 ‘‘(ii) the provision of appropriate 

22 scholarly and research activities for the 

23 students served by the program; 
561 

•S 1932 PCS 

1 ‘‘(iii) the acceptance and enrollment 

2 of such students in graduate programs; 

3 and 

4 ‘‘(iv) the attainment of doctoral de5 grees by former program participants. 

6 ‘‘(E) For programs authorized under sec7 tion 402F, whether the entity met or exceeded 

8 the entity’s objectives for such program regard9 ing— 

10 ‘‘(i) the enrollment of students with11 out a secondary school diploma or its rec12 ognized equivalent, who were served by the 

13 program, in programs leading to such di14 ploma or equivalent; 

15 ‘‘(ii) the enrollment of secondary 

16 school graduates who were served by the 

17 program in programs of postsecondary 

18 education; 

19 ‘‘(iii) the delivery of service to a total 

20 number of students, as agreed upon by the 

21 entity and the Secretary for the period; 

22 and 

23 ‘‘(iv) the provision of assistance to 

24 students served by the program in com-
562 

•S 1932 PCS 

1 pleting financial aid applications and col2 lege admission applications.’’; 

3 (6) in subsection (g) (as redesignated by para4 graph (4))— 

5 (A) in the first sentence, by striking 

6 ‘‘$700,000,000 for fiscal year 1999’’ and all 

7 that follows through the period and inserting 

8 ‘‘such sums as may be necessary for fiscal year 

9 2006 and each of the 5 succeeding fiscal 

10 years.’’; and 

11 (B) by striking the fourth sentence; and 

12 (7) in subsection (h) (as redesignated by para13 graph (4))— 

14 (A) by redesignating paragraphs (1) 

15 through (4) as paragraphs (3) through (6), re16 spectively; 

17 (B) by inserting before paragraph (3) (as 

18 redesignated by subparagraph (A)) the fol19 lowing: 

20 ‘‘(1) DIFFERENT CAMPUS.—The term ‘different 

21 campus’ means a site of an institution of higher edu22 cation that— 

23 ‘‘(A) is geographically apart from the main 

24 campus of the institution; 

25 ‘‘(B) is permanent in nature; and 
563 

•S 1932 PCS 

1 ‘‘(C) offers courses in educational pro2 grams leading to a degree, certificate, or other 

3 recognized educational credential. 

4 ‘‘(2) DIFFERENT POPULATION.—The term ‘dif5 ferent population’ means a group of individuals, with 

6 respect to whom an eligible entity desires to serve 

7 through an application for a grant under this chap8 ter, that— 

9 ‘‘(A) is separate and distinct from any 

10 other population that the entity has applied for 

11 a grant under this chapter to serve; or 

12 ‘‘(B) while sharing some of the same needs 

13 as another population that the eligible entity 

14 has applied for a grant under this chapter to 

15 serve, has distinct needs for specialized serv16 ices.’’; 

17 (C) in paragraph (5) (as redesignated by 

18 subparagraph (A))— 

19 (i) in subparagraph (A), by striking 

20 ‘‘or’’ after the semicolon; 

21 (ii) in subparagraph (B), by striking 

22 the period at the end and inserting ‘‘; or’’; 

23 and 

24 (iii) by adding at the end the fol25 lowing: 
564 

•S 1932 PCS 

1 ‘‘(C) was a member of a reserve component 

2 of the Armed Forces called to active duty for a 

3 period of more than 180 days.’’; and 

4 (D) in paragraph (6), by striking ‘‘sub5 paragraph (A) or (B) of paragraph (3)’’ and in6 serting ‘‘subparagraph (A), (B), or (C) of para7 graph (5)’’. 

8 (b) TALENT SEARCH.—Section 402B (20 U.S.C. 

9 1070a–12) is amended— 

10 (1) in subsection (a)— 

11 (A) in paragraph (1), by striking ‘‘to iden12 tify qualified youths with potential for edu13 cation at the postsecondary level and to encour14 age such youths’’ and inserting ‘‘to encourage 

15 eligible youths’’; 

16 (B) in paragraph (2), by inserting ‘‘, and 

17 facilitate the application for,’’ after ‘‘the avail18 ability of’’; and 

19 (C) in paragraph (3), by striking ‘‘, but 

20 who have the ability to complete such programs, 

21 to reenter’’ and inserting ‘‘to enter or reenter, 

22 and complete’’; 

23 (2) by redesignating subsection (c) as sub24 section (d); 
565 

•S 1932 PCS 

1 (3) by striking subsection (b) and inserting the 

2 following: 

3 ‘‘(b) REQUIRED SERVICES.—Any project assisted 

4 under this section shall provide— 

5 ‘‘(1) academic tutoring, or connections to high 

6 quality academic tutoring services, to enable stu7 dents to complete secondary or postsecondary 

8 courses, which may include instruction in reading, 

9 writing, study skills, mathematics, science, and other 

10 subjects; 

11 ‘‘(2) advice and assistance in secondary course 

12 selection and, if applicable, initial postsecondary 

13 course selection; 

14 ‘‘(3) assistance in preparing for college entrance 

15 examinations and completing college admission ap16 plications; 

17 ‘‘(4)(A) information on both the full range of 

18 Federal student financial aid programs (including 

19 Federal Pell Grant awards and loan forgiveness) and 

20 resources for locating public and private scholar21 ships; and 

22 ‘‘(B) assistance in completing financial aid ap23 plications, including the Free Application for Fed24 eral Student Aid described in section 483(a); 

25 ‘‘(5) guidance on and assistance in— 
566 

•S 1932 PCS 

1 ‘‘(A) secondary school reentry; 

2 ‘‘(B) alternative education programs for 

3 secondary school dropouts that lead to the re4 ceipt of a regular secondary school diploma; 

5 ‘‘(C) entry into general educational devel6 opment (GED) programs; or 

7 ‘‘(D) postsecondary education; and 

8 ‘‘(6) education or counseling services designed 

9 to improve the financial literacy and economic lit10 eracy of students or their parents, including finan11 cial planning for postsecondary education. 

12 ‘‘(c) PERMISSIBLE SERVICES.—Any project assisted 

13 under this section may provide services such as— 

14 ‘‘(1) personal and career counseling or activi15 ties; 

16 ‘‘(2) information and activities designed to ac17 quaint youths with the range of career options avail18 able to the youths; 

19 ‘‘(3) exposure to the campuses of institutions of 

20 higher education, as well as cultural events, aca21 demic programs, and other sites or activities not 

22 usually available to disadvantaged youth; 

23 ‘‘(4) workshops and counseling for families of 

24 students served; 
567 

•S 1932 PCS 

1 ‘‘(5) mentoring programs involving elementary 

2 or secondary school teachers or counselors, faculty 

3 members at institutions of higher education, stu4 dents, or any combination of such persons; and 

5 ‘‘(6) programs and activities as described in 

6 subsection (b) or paragraphs (1) through (5) of this 

7 subsection that are specially designed for students 

8 who are limited English proficient, students with 

9 disabilities, students who are homeless children and 

10 youths (as such term is defined in section 725 of the 

11 McKinney-Vento Homeless Assistance Act (42 

12 U.S.C. 11434a)), or students who are in foster care 

13 or are aging out of the foster care system.’’; and 

14 (4) in the matter preceding paragraph (1) of 

15 subsection (d) (as redesignated by paragraph (2)), 

16 by striking ‘‘talent search projects under this chap17 ter’’ and inserting ‘‘projects under this section’’. 

18 (c) UPWARD BOUND.—Section 402C (20 U.S.C. 

19 1070a–13) is amended— 

20 (1) by striking subsection (b) and inserting the 

21 following: 

22 ‘‘(b) REQUIRED SERVICES.—Any project assisted 

23 under this section shall provide— 

24 ‘‘(1) academic tutoring to enable students to 

25 complete secondary or postsecondary courses, which 
568 

•S 1932 PCS 

1 may include instruction in reading, writing, study 

2 skills, mathematics, science, and other subjects; 

3 ‘‘(2) advice and assistance in secondary and 

4 postsecondary course selection; 

5 ‘‘(3) assistance in preparing for college entrance 

6 examinations and completing college admission ap7 plications; 

8 ‘‘(4)(A) information on both the full range of 

9 Federal student financial aid programs (including 

10 Federal Pell Grant awards and loan forgiveness) and 

11 resources for locating public and private scholar12 ships; and 

13 ‘‘(B) assistance in completing financial aid ap14 plications, including the Free Application for Fed15 eral Student Aid described in section 483(a); 

16 ‘‘(5) guidance on and assistance in— 

17 ‘‘(A) secondary school reentry; 

18 ‘‘(B) alternative education programs for 

19 secondary school dropouts that lead to the re20 ceipt of a regular secondary school diploma; 

21 ‘‘(C) entry into general educational devel22 opment (GED) programs; or 

23 ‘‘(D) postsecondary education; and 

24 ‘‘(6) education or counseling services designed 

25 to improve the financial literacy and economic lit-
569 

•S 1932 PCS 

1 eracy of students, including financial planning for 

2 postsecondary education.’’; 

3 (2) in subsection (c)— 

4 (A) in the subsection heading, by striking 

5 ‘‘REQUIRED SERVICES’’ and inserting ‘‘ADDI6 TIONAL REQUIRED SERVICES FOR MULTIPLE7 YEAR GRANT RECIPIENTS’’; and 

8 (B) by striking ‘‘upward bound project as9 sisted under this chapter’’ and inserting 

10 ‘‘project assisted under this section’’; 

11 (3) by redesignating subsections (d) and (e) as 

12 subsections (e) and (f), respectively; 

13 (4) by inserting after subsection (c) the fol14 lowing: 

15 ‘‘(d) PERMISSIBLE SERVICES.—Any project assisted 

16 under this section may provide such services as— 

17 ‘‘(1) exposure to cultural events, academic pro18 grams, and other activities not usually available to 

19 disadvantaged youth; 

20 ‘‘(2) information, activities and instruction de21 signed to acquaint youths participating in the 

22 project with the range of career options available to 

23 the youths; 

24 ‘‘(3) on-campus residential programs; 
570 

•S 1932 PCS 

1 ‘‘(4) mentoring programs involving elementary 

2 school or secondary school teachers or counselors, 

3 faculty members at institutions of higher education, 

4 students, or any combination of such persons; 

5 ‘‘(5) work-study positions where youth partici6 pating in the project are exposed to careers requir7 ing a postsecondary degree; 

8 ‘‘(6) special services to enable veterans to make 

9 the transition to postsecondary education; and 

10 ‘‘(7) programs and activities as described in 

11 subsection (b), subsection (c), or paragraphs (1) 

12 through (6) of this subsection that are specially de13 signed for students who are limited English pro14 ficient, students with disabilities, students who are 

15 homeless children and youths (as such term is de16 fined in section 725 of the McKinney-Vento Home17 less Assistance Act (42 U.S.C. 11434a)), or students 

18 who are in foster care or are aging out of the foster 

19 care system.’’; 

20 (5) in the matter preceding paragraph (1) of 

21 subsection (e) (as redesignated by paragraph (3)), 

22 by striking ‘‘upward bound projects under this chap23 ter’’ and inserting ‘‘projects under this section’’; and 

24 (6) in subsection (f) (as redesignated by para25 graph (3))— 
571 

•S 1932 PCS 

1 (A) by striking ‘‘during June, July, and 

2 August’’ each place the term occurs and insert3 ing ‘‘during the summer school recess, for a pe4 riod not to exceed 3 months’’; and 

5 (B) by striking ‘‘(b)(10)’’ and inserting 

6 ‘‘(d)(5)’’. 

7 (d) STUDENT SUPPORT SERVICES.—Section 402D 

8 (20 U.S.C. 1070a–14) is amended— 

9 (1) in subsection (a)— 

10 (A) in paragraph (2), by striking ‘‘and’’ 

11 after the semicolon; 

12 (B) by striking paragraph (3) and insert13 ing the following: 

14 ‘‘(3) to foster an institutional climate sup15 portive of the success of low-income and first gen16 eration college students, students with disabilities, 

17 students who are limited English proficient, students 

18 who are homeless children and youths (as such term 

19 is defined in section 725 of the McKinney-Vento 

20 Homeless Assistance Act (42 U.S.C. 11434a)), and 

21 students who are in foster care or are aging out of 

22 the foster care system.’’; and 

23 (C) by adding at the end the following: 

24 ‘‘(4) to improve the financial literacy and eco25 nomic literacy of students, including— 
572 

•S 1932 PCS 

1 ‘‘(A) basic personal income, household 

2 money management, and financial planning 

3 skills; and 

4 ‘‘(B) basic economic decisionmaking 

5 skills.’’; 

6 (2) by redesignating subsections (c) and (d) as 

7 subsections (d) and (e); 

8 (3) by striking subsection (b) and inserting the 

9 following: 

10 ‘‘(b) REQUIRED SERVICES.—A project assisted under 

11 this section shall provide— 

12 ‘‘(1) academic tutoring to enable students to 

13 complete postsecondary courses, which may include 

14 instruction in reading, writing, study skills, mathe15 matics, science, and other subjects; 

16 ‘‘(2) advice and assistance in postsecondary 

17 course selection; 

18 ‘‘(3)(A) information on both the full range of 

19 Federal student financial aid programs (including 

20 Federal Pell Grant awards and loan forgiveness) and 

21 resources for locating public and private scholar22 ships; and 

23 ‘‘(B) assistance in completing financial aid ap24 plications, including the Free Application for Fed25 eral Student Aid described in section 483(a); 
573 

•S 1932 PCS 

1 ‘‘(4) education or counseling services designed 

2 to improve the financial literacy and economic lit3 eracy of students, including financial planning for 

4 postsecondary education; 

5 ‘‘(5) activities designed to assist students par6 ticipating in the project in securing college admis7 sion and financial assistance for enrollment in grad8 uate and professional programs; and 

9 ‘‘(6) activities designed to assist students en10 rolled in 2-year institutions of higher education in 

11 securing admission and financial assistance for en12 rollment in a 4-year program of postsecondary edu13 cation. 

14 ‘‘(c) PERMISSIBLE SERVICES.—A project assisted 

15 under this section may provide services such as— 

16 ‘‘(1) consistent, individualized personal, career, 

17 and academic counseling, provided by assigned coun18 selors; 

19 ‘‘(2) information, activities, and instruction de20 signed to acquaint youths participating in the 

21 project with the range of career options available to 

22 the students; 

23 ‘‘(3) exposure to cultural events and academic 

24 programs not usually available to disadvantaged stu25 dents; 
574 

•S 1932 PCS 

1 ‘‘(4) activities designed to acquaint students 

2 participating in the project with the range of career 

3 options available to the students; 

4 ‘‘(5) mentoring programs involving faculty or 

5 upper class students, or a combination thereof; 

6 ‘‘(6) securing temporary housing during breaks 

7 in the academic year for students who are homeless 

8 children and youths (as such term is defined in sec9 tion 725 of the McKinney-Vento Homeless Assist10 ance Act (42 U.S.C. 11434a)) or were formerly 

11 homeless children and youths and students who are 

12 in foster care or are aging out of the foster care sys13 tem; and 

14 ‘‘(7) programs and activities as described in 

15 subsection (b) or paragraphs (1) through (5) of this 

16 subsection that are specially designed for students 

17 who are limited English proficient, students with 

18 disabilities, students who are homeless children and 

19 youths (as such term is defined in section 725 of the 

20 McKinney-Vento Homeless Assistance Act (42 

21 U.S.C. 11434a)) or were formerly homeless children 

22 and youths, or students who are in foster care or are 

23 aging out of the foster care system.’’; 
575 

•S 1932 PCS 

1 (4) in subsection (d)(1) (as redesignated by 

2 paragraph (2)), by striking ‘‘subsection (b)’’ and in3 serting ‘‘subsection (c)’’; and 

4 (5) in the matter preceding paragraph (1) of 

5 subsection (e) (as redesignated by paragraph (2)), 

6 by striking ‘‘student support services projects under 

7 this chapter’’ and inserting ‘‘projects under this sec8 tion’’. 

9 (e) POSTBACCALAUREATE ACHIEVEMENT PROGRAM

10 AUTHORITY.—Section 402E (20 U.S.C. 1070a–15) is 

11 amended— 

12 (1) in subsection (b)— 

13 (A) in the subsection heading, by inserting 

14 ‘‘REQUIRED’’ before ‘‘SERVICES’’; 

15 (B) in the matter preceding paragraph (1), 

16 by striking ‘‘A postbaccalaureate achievement 

17 project assisted under this section may provide 

18 services such as—’’ and inserting ‘‘A project as19 sisted under this section shall provide—’’; 

20 (C) in paragraph (5), by inserting ‘‘and’’ 

21 after the semicolon; 

22 (D) in paragraph (6), by striking the semi23 colon and inserting a period; and 

24 (E) by striking paragraphs (7) and (8); 
576 

•S 1932 PCS 

1 (2) by redesignating subsections (c) through (f) 

2 as subsections (d) through (g), respectively; 

3 (3) by inserting after subsection (b) the fol4 lowing: 

5 ‘‘(c) PERMISSIBLE SERVICES.—A project assisted 

6 under this section may provide services such as— 

7 ‘‘(1) education or counseling services designed 

8 to improve the financial literacy and economic lit9 eracy of students or their parents, including finan10 cial planning for postsecondary education; 

11 ‘‘(2) mentoring programs involving faculty 

12 members at institutions of higher education, stu13 dents, or any combination of such persons; and 

14 ‘‘(3) exposure to cultural events and academic 

15 programs not usually available to disadvantaged stu16 dents.’’; 

17 (4) in the matter preceding paragraph (1) of 

18 subsection (d) (as redesignated by paragraph (2)), 

19 by striking ‘‘postbaccalaureate achievement’’; 

20 (5) in the matter preceding paragraph (1) of 

21 subsection (f) (as redesignated by paragraph (2)), by 

22 striking ‘‘postbaccalaureate achievement project’’ 

23 and inserting ‘‘project under this section’’; and 

24 (6) in subsection (g) (as redesignated by para25 graph (2))— 
577 

•S 1932 PCS 

1 (A) by striking ‘‘402A(f)’’ and inserting 

2 ‘‘402A(g)’’; and 

3 (B) by striking ‘‘1993 through 1997’’ and 

4 inserting ‘‘2006 through 2010’’. 

5 (f) EDUCATIONAL OPPORTUNITY CENTERS.—Section 

6 402F (20 U.S.C. 1070a–16) is amended— 

7 (1) in subsection (a)— 

8 (A) in paragraph (1), by striking ‘‘and’’ 

9 after the semicolon; 

10 (B) in paragraph (2), by striking the pe11 riod at the end and inserting ‘‘; and’’; and 

12 (C) by adding at the end the following: 

13 ‘‘(3) to improve the financial literacy and eco14 nomic literacy of students, including— 

15 ‘‘(A) basic personal income, household 

16 money management, and financial planning 

17 skills; and 

18 ‘‘(B) basic economic decisionmaking 

19 skills.’’; and 

20 (2) in subsection (b)— 

21 (A) by redesignating paragraphs (5) 

22 through (10) as paragraphs (6) through (11), 

23 respectively; 

24 (B) by inserting after paragraph (4) the 

25 following: 
578 

•S 1932 PCS 

1 ‘‘(5) education or counseling services designed 

2 to improve the financial literacy and economic lit3 eracy of students;’’; 

4 (C) by striking paragraph (7) (as redesig5 nated by subparagraph (A)) and inserting the 

6 following: 

7 ‘‘(7) individualized personal, career, and aca8 demic counseling;’’; and 

9 (D) by striking paragraph (11) (as redesig10 nated by subparagraph (A)) and inserting the 

11 following: 

12 ‘‘(11) programs and activities as described in 

13 paragraphs (1) through (10) that are specially de14 signed for students who are limited English pro15 ficient, students with disabilities, or students who 

16 are homeless children and youths (as such term is 

17 defined in section 725 of the McKinney-Vento 

18 Homeless Assistance Act (42 U.S.C. 11434a)), or 

19 programs and activities for students who are in fos20 ter care or are aging out of the foster care system.’’. 

21 (g) STAFF DEVELOPMENT ACTIVITIES.—Section 

22 402G(b)(3) (20 U.S.C. 1070a–17(b)(3)) is amended by in23 serting ‘‘, including strategies for recruiting and serving 

24 students who are homeless children and youths (as such 

25 term is defined in section 725 of the McKinney-Vento 
579 

•S 1932 PCS 

1 Homeless Assistance Act (42 U.S.C. 11434a)) and stu2 dents who are in foster care or are aging out of the foster 

3 care system’’ before the period at the end. 

4 (h) REPORTS, EVALUATIONS, AND GRANTS FOR

5 PROJECT IMPROVEMENT AND DISSEMINATION.—Section 

6 402H (20 U.S.C. 1070a–18) is amended— 

7 (1) by striking the section heading and insert8 ing ‘‘REPORTS, EVALUATIONS, AND GRANTS

9 FOR PROJECT IMPROVEMENT AND DISSEMINA10 TION.’’; 

11 (2) by redesignating subsections (a) through (c) 

12 as subsections (b) through (d), respectively; and 

13 (3) by inserting before subsection (b) (as redes14 ignated by paragraph (2)) the following: 

15 ‘‘(a) REPORT TO CONGRESS.—At least once every 2- 

16 year period, the Secretary shall prepare and submit to 

17 Congress a report on the outcomes achieved by the pro18 grams authorized under this chapter. Such report shall in19 clude a statement for the preceding fiscal year speci20 fying— 

21 ‘‘(1) the number of grants awarded during each 

22 fiscal year, and the number of individuals served by 

23 the programs carried out under such grants; 
580 

•S 1932 PCS 

1 ‘‘(2) the number of entities that received grants 

2 during the fiscal year, including the number of enti3 ties that— 

4 ‘‘(A) received a grant to carry out a pro5 gram under this chapter for the fiscal year; and 

6 ‘‘(B) had not received funding for that 

7 particular program during the previous grant 

8 cycle; 

9 ‘‘(3) a comparison of the number and percent10 age of grant awards made to entities described in 

11 paragraph (2), with the number of such entities 

12 funded through discretionary grant competitions 

13 conducted by the Secretary under this chapter in the 

14 3 grant cycles preceding the fiscal year; 

15 ‘‘(4) information on the number of individuals 

16 served in each program authorized under this chap17 ter; and 

18 ‘‘(5) information on the outcomes achieved by 

19 each program authorized under this chapter, includ20 ing the outcome criteria described in section 402A(f) 

21 for each program.’’. 
581 

•S 1932 PCS 

1 SEC. 7363. GAINING EARLY AWARENESS AND READINESS 

2 FOR UNDERGRADUATE PROGRAMS. 

3 (a) EARLY INTERVENTION AND COLLEGE AWARE4 NESS PROGRAM AUTHORIZED.—Section 404A (20 U.S.C. 

5 1070a–21) is amended— 

6 (1) by striking subsection (a) and inserting the 

7 following: 

8 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary is au9 thorized, in accordance with the requirements of this chap10 ter, to establish a program that encourages eligible entities 

11 to provide support to eligible low-income students to assist 

12 the students in obtaining a secondary school diploma (or 

13 its recognized equivalent) and to prepare for and succeed 

14 in postsecondary education, by providing— 

15 ‘‘(1) financial assistance, academic support, ad16 ditional counseling, mentoring, outreach, and sup17 portive services to middle school and secondary 

18 school students to reduce— 

19 ‘‘(A) the risk of such students dropping 

20 out of school; or 

21 ‘‘(B) the need for remedial education for 

22 such students at the postsecondary level; and 

23 ‘‘(2) information to students and their parents 

24 about the advantages of obtaining a postsecondary 

25 education and the college financing options for the 

26 students and their parents.’’; 
582 

•S 1932 PCS 

1 (2) by striking subsection (b)(2)(A) and insert2 ing the following: 

3 ‘‘(A) give priority to eligible entities that 

4 have a prior, demonstrated commitment to 

5 early intervention leading to college access 

6 through collaboration and replication of suc7 cessful strategies;’’; and 

8 (3) by striking subsection (c)(2) and inserting 

9 the following: 

10 ‘‘(2) a partnership— 

11 ‘‘(A) consisting of— 

12 ‘‘(i) 1 or more local educational agen13 cies; and 

14 ‘‘(ii) 1 or more degree granting insti15 tutions of higher education; and 

16 ‘‘(B) which may include not less than 2 

17 other community organizations or entities, such 

18 as businesses, professional organizations, State 

19 agencies, institutions or agencies sponsoring 

20 programs authorized under subpart 4, or other 

21 public or private agencies or organizations.’’. 

22 (b) REQUIREMENTS.—Section 404B (20 U.S.C. 

23 1070a–22) is amended— 

24 (1) by striking subsection (a) and inserting the 

25 following:— 
583 

•S 1932 PCS 

1 ‘‘(a) FUNDING RULES.— 

2 ‘‘(1) DISTRIBUTION.—In awarding grants from 

3 the amount appropriated under section 404G for a 

4 fiscal year, the Secretary shall take into consider5 ation— 

6 ‘‘(A) the geographic distribution of such 

7 awards; and 

8 ‘‘(B) the distribution of such awards be9 tween urban and rural applicants. 

10 ‘‘(2) SPECIAL RULE.—The Secretary shall an11 nually reevaluate the distribution of funds described 

12 in paragraph (1) based on number, quality, and 

13 promise of the applications.’’; 

14 (2) by striking subsections (b), (e), and (f); 

15 (3) by redesignating subsections (c), (d), and 

16 (g) as subsections (b), (c), and (d), respectively; and 

17 (4) by adding at the end the following: 

18 ‘‘(e) SUPPLEMENT, NOT SUPPLANT.—Grant funds 

19 awarded under this chapter shall be used to supplement, 

20 and not supplant, other Federal, State, and local funds 

21 that would otherwise be expended to carry out activities 

22 assisted under this chapter.’’. 

23 (c) APPLICATION.—Section 404C (20 U.S.C. 1070a– 

24 23) is amended— 
584 

•S 1932 PCS 

1 (1) in the section heading, by striking ‘‘ELIGI2 BLE ENTITY PLANS’’ and inserting ‘‘APPLICA3 TIONS’’; 

4 (2) in subsection (a)— 

5 (A) in the subsection heading, by striking 

6 ‘‘PLAN’’ and inserting ‘‘APPLICATION’’; 

7 (B) in paragraph (1)— 

8 (i) by striking ‘‘a plan’’ and inserting 

9 ‘‘an application’’; and 

10 (ii) by striking the second sentence; 

11 and 

12 (C) by striking paragraph (2) and insert13 ing the following: 

14 ‘‘(2) CONTENTS.—Each application submitted 

15 pursuant to paragraph (1) shall be in such form, 

16 contain or be accompanied by such information or 

17 assurances, and be submitted at such time as the 

18 Secretary may require. Each such application shall, 

19 at a minimum— 

20 ‘‘(A) describe the activities for which as21 sistance under this chapter is sought, including 

22 how the eligible entity will carry out the re23 quired activities described in section 404D(a); 

24 ‘‘(B) describe how the eligible agency will 

25 meet the requirements of section 404E; 
585 

•S 1932 PCS 

1 ‘‘(C) provide assurances that adequate ad2 ministrative and support staff will be respon3 sible for coordinating the activities described in 

4 section 404D; 

5 ‘‘(D) ensure that activities assisted under 

6 this chapter will not displace an employee or 

7 eliminate a position at a school assisted under 

8 this chapter, including a partial displacement 

9 such as a reduction in hours, wages or employ10 ment benefits; 

11 ‘‘(E) describe, in the case of an eligible en12 tity described in section 404A(c)(2), how the el13 igible entity will define the cohorts of the stu14 dents served by the eligible entity pursuant to 

15 section 404B(d), and how the eligible entity will 

16 serve the cohort through grade 12, including— 

17 ‘‘(i) how vacancies in the program 

18 under this chapter will be filled; and 

19 ‘‘(ii) how the eligible entity will serve 

20 students attending different secondary 

21 schools; 

22 ‘‘(F) describe how the eligible entity will 

23 coordinate programs with other existing Fed24 eral, State, or local programs to avoid duplica-
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1 tion and maximize the number of students 

2 served; 

3 ‘‘(G) provide such additional assurances as 

4 the Secretary determines necessary to ensure 

5 compliance with the requirements of this chap6 ter; and 

7 ‘‘(H) provide information about the activi8 ties that will be carried out by the eligible enti9 ty to support systemic changes from which fu10 ture cohorts of students will benefit.’’; 

11 (3) in the matter preceding subparagraph (A) 

12 of subsection (b)(1)— 

13 (A) by striking ‘‘a plan’’ and inserting ‘‘an 

14 application’’; and 

15 (B) by striking ‘‘such plan’’ and inserting 

16 ‘‘such application’’; and 

17 (4) in subsection (c)(1), by striking the semi18 colon at the end and inserting ‘‘including— 

19 ‘‘(A) the amount contributed to a student 

20 scholarship fund established under section 

21 404E; and 

22 ‘‘(B) the amount of the costs of admin23 istering the scholarship program under section 

24 404E;’’. 
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1 (d) ACTIVITIES.—Section 404D (20 U.S.C. 1070a– 

2 24) is amended to read as follows: 

3 ‘‘SEC. 404D. ACTIVITIES. 

4 ‘‘(a) REQUIRED ACTIVITIES.—Each eligible entity re5 ceiving a grant under this chapter shall carry out the fol6 lowing: 

7 ‘‘(1) Provide information regarding financial 

8 aid for postsecondary education to participating stu9 dents in the cohort described in subsection 

10 404B(d)(1)(A). 

11 ‘‘(2) Encourage student enrollment in rigorous 

12 and challenging curricula and coursework, in order 

13 to reduce the need for remedial coursework at the 

14 postsecondary level. 

15 ‘‘(3) Support activities designed to improve the 

16 number of participating students who— 

17 ‘‘(A) obtain a secondary school diploma; 

18 and 

19 ‘‘(B) complete applications for and enroll 

20 in a program of postsecondary education. 

21 ‘‘(4) In the case of an eligible entity described 

22 in section 404A(c)(1), provide for the scholarships 

23 described in section 404E. 

24 ‘‘(b) OPTIONAL ACTIVITIES FOR STATES AND PART25 NERSHIPS.—An eligible entity that receives a grant under 
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1 this chapter may use grant funds to carry out 1 or more 

2 of the following activities: 

3 ‘‘(1) Providing tutoring and supporting men4 tors, including adults or former participants of a 

5 program under this chapter, for eligible students. 

6 ‘‘(2) Conducting outreach activities to recruit 

7 priority students described in subsection (d) to par8 ticipate in program activities. 

9 ‘‘(3) Providing supportive services to eligible 

10 students. 

11 ‘‘(4) Supporting the development or implemen12 tation of rigorous academic curricula, which may in13 clude college preparatory, Advanced Placement, or 

14 International Baccalaureate programs, and providing 

15 participating students access to rigorous core 

16 courses that reflect challenging State academic 

17 standards. 

18 ‘‘(5) Supporting dual or concurrent enrollment 

19 programs between the secondary school and institu20 tion of higher education partners of an eligible entity 

21 described in section 404A(c)(2), and other activities 

22 that support participating students in— 

23 ‘‘(A) meeting challenging academic stand24 ards; 
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•S 1932 PCS 

1 ‘‘(B) successfully applying for postsec2 ondary education; 

3 ‘‘(C) successfully applying for student fi4 nancial aid; and 

5 ‘‘(D) developing graduation and career 

6 plans. 

7 ‘‘(6) Providing support for scholarships de8 scribed in section 404E. 

9 ‘‘(7) Introducing eligible students to institutions 

10 of higher education, through trips and school-based 

11 sessions. 

12 ‘‘(8) Providing an intensive extended school 

13 day, school year, or summer program that offers— 

14 ‘‘(A) additional academic classes; or 

15 ‘‘(B) assistance with college admission ap16 plications. 

17 ‘‘(9) Providing other activities designed to en18 sure secondary school completion and postsecondary 

19 education enrollment of at-risk children, such as— 

20 ‘‘(A) the identification of at-risk children; 

21 ‘‘(B) after-school and summer tutoring; 

22 ‘‘(C) assistance to at-risk children in ob23 taining summer jobs; 

24 ‘‘(D) academic counseling; 

25 ‘‘(E) volunteer and parent involvement; 
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•S 1932 PCS 

1 ‘‘(F) encouraging former or current par2 ticipants of a program under this chapter to 

3 serve as peer counselors; 

4 ‘‘(G) skills assessments; 

5 ‘‘(H) personal counseling; 

6 ‘‘(I) family counseling and home visits; 

7 ‘‘(J) staff development; and 

8 ‘‘(K) programs and activities described in 

9 this subsection that are specially designed for 

10 students who are limited English proficient. 

11 ‘‘(10) Enabling eligible students to enroll in Ad12 vanced Placement or International Baccalaureate 

13 courses, or college entrance examination preparation 

14 courses. 

15 ‘‘(11) Providing services to eligible students in 

16 the participating cohort described in section 

17 404B(d)(1)(A), through the first year of attendance 

18 at an institution of higher education. 

19 ‘‘(c) ADDITIONAL OPTIONAL ACTIVITIES FOR

20 STATES.—In addition to the required activities described 

21 in subsection (a) and the optional activities described in 

22 subsection (b), an eligible entity described in section 

23 404A(c)(1) receiving funds under this chapter may use 

24 grant funds to carry out 1 or more of the following activi25 ties: 
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•S 1932 PCS 

1 ‘‘(1) Providing technical assistance to— 

2 ‘‘(A) middle schools or secondary schools 

3 that are located within the State; or 

4 ‘‘(B) partnerships described in section 

5 404A(c)(2) that are located within the State. 

6 ‘‘(2) Providing professional development oppor7 tunities to individuals working with eligible cohorts 

8 of students described in section 404B(d)(1)(A). 

9 ‘‘(3) Providing strategies and activities that 

10 align efforts in the State to prepare eligible students 

11 for attending and succeeding in postsecondary edu12 cation, which may include the development of grad13 uation and career plans. 

14 ‘‘(4) Disseminating information on the use of 

15 scientifically based research and best practices to 

16 improve services for eligible students. 

17 ‘‘(5)(A) Disseminating information on effective 

18 coursework and support services that assist students 

19 in obtaining the goals described in subparagraph 

20 (B)(ii). 

21 ‘‘(B) Identifying and disseminating information 

22 on best practices with respect to— 

23 ‘‘(i) increasing parental involvement; and 

24 ‘‘(ii) preparing students, including students 

25 with disabilities and students who are limited 
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•S 1932 PCS 

1 English proficient, to succeed academically in, 

2 and prepare financially for, postsecondary edu3 cation. 

4 ‘‘(6) Working to align State academic standards 

5 and curricula with the expectations of postsecondary 

6 institutions and employers. 

7 ‘‘(7) Developing alternatives to traditional sec8 ondary school that give students a head start on at9 taining a recognized postsecondary credential (in10 cluding an industry certificate, an apprenticeship, or 

11 an associate’s or a bachelor’s degree), including 

12 school designs that give students early exposure to 

13 college-level courses and experiences and allow stu14 dents to earn transferable college credits or an asso15 ciate’s degree at the same time as a secondary 

16 school diploma. 

17 ‘‘(8) Creating community college programs for 

18 drop-outs that are personalized drop-out recovery 

19 programs that allow drop-outs to complete a regular 

20 secondary school diploma and begin college-level 

21 work. 

22 ‘‘(d) PRIORITY STUDENTS.—For eligible entities not 

23 using a cohort approach, the eligible entity shall treat as 

24 priority students any student in middle or secondary 

25 school who is eligible— 
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•S 1932 PCS 

1 ‘‘(1) to be counted under section 1124(c) of the 

2 Elementary and Secondary Education Act of 1965; 

3 ‘‘(2) for free or reduced price meals under the 

4 Richard B. Russell National School Lunch Act; 

5 ‘‘(3) for assistance under a State program 

6 funded under part A or E of title IV of the Social 

7 Security Act (42 U.S.C. 601 et seq., 670 et seq.); 

8 or 

9 ‘‘(4) for assistance under subtitle B of title VII 

10 of the McKinney-Vento Homeless Assistance Act (42 

11 U.S.C. 11431 et seq.). 

12 ‘‘(e) ALLOWABLE PROVIDERS.—In the case of eligible 

13 entities described in section 404A(c)(1), the activities re14 quired by this section may be provided by service providers 

15 such as community-based organizations, schools, institu16 tions of higher education, public and private agencies, 

17 nonprofit and philanthropic organizations, businesses, in18 stitutions and agencies sponsoring programs authorized 

19 under subpart 4, and other organizations the State deter20 mines appropriate.’’. 

21 (e) SCHOLARSHIP COMPONENT.—Section 404E (20 

22 U.S.C. 1070a–25) is amended— 

23 (1) by striking subsections (e) and (f); 

24 (2) by redesignating subsections (b), (c), and 

25 (d) as subsections (d), (f), and (g), respectively; 
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•S 1932 PCS 

1 (3) by inserting after subsection (a) the fol2 lowing: 

3 ‘‘(b) LIMITATION.— 

4 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

5 each eligible entity described in section 404A(c)(1) 

6 that receives a grant under this chapter shall use 

7 not less than 25 percent and not more than 50 per8 cent of the grant funds for activities described in 

9 section 404D(c), with the remainder of such funds 

10 to be used for a scholarship program under this sec11 tion. 

12 ‘‘(2) EXCEPTION.—Notwithstanding paragraph 

13 (1), the Secretary may allow an eligible entity to use 

14 more than 50 percent of grant funds received under 

15 this chapter for such activities, if the eligible entity 

16 demonstrates that the eligible entity has another 

17 means of providing the students with the financial 

18 assistance described in this section and describes 

19 such means in the application submitted under sec20 tion 404C. 

21 ‘‘(c) NOTIFICATION OF ELIGIBILITY.—Each eligible 

22 entity providing scholarships under this section shall pro23 vide information on the eligibility requirements for the 

24 scholarships to all participating students upon the stu-
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•S 1932 PCS 

1 dents’ entry into the programs assisted under this chap2 ter.’’; 

3 (4) in subsection (d) (as redesignated by para4 graph (2)), by striking ‘‘the lesser of’’ and all that 

5 follows through the period at the end of paragraph 

6 (2) and inserting ‘‘the minimum Federal Pell Grant 

7 award under section 401 for such award year.’’; 

8 (5) by inserting after subsection (d) (as redesig9 nated by paragraph (2) and amended by paragraph 

10 (4)) the following: 

11 ‘‘(e) PORTABILITY OF ASSISTANCE.— 

12 ‘‘(1) IN GENERAL.—Each eligible entity de13 scribed in section 404A(c)(1) that receives a grant 

14 under this chapter shall create or organize a trust 

15 for each cohort described in section 404B(d)(1)(A) 

16 for which the grant is sought in the application sub17 mitted by the entity, which trust shall be an amount 

18 that is not less than the minimum scholarship 

19 amount described in subsection (d), multiplied by 

20 the number of students participating in the cohort. 

21 ‘‘(2) REQUIREMENT FOR PORTABILITY.—Funds 

22 contributed to the trust for a cohort shall be avail23 able to a student in the cohort when the student 

24 has— 
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•S 1932 PCS 

1 ‘‘(A) completed a secondary school di2 ploma, its recognized equivalent, or other recog3 nized alternative standard for individuals with 

4 disabilities; and 

5 ‘‘(B) enrolled in an institution of higher 

6 education. 

7 ‘‘(3) QUALIFIED EDUCATIONAL EXPENSES.— 

8 Funds available to an eligible student from a trust 

9 may be used for— 

10 ‘‘(A) tuition, fees, books, supplies, and 

11 equipment required for the enrollment or at12 tendance of the eligible student at an institution 

13 of higher education; and 

14 ‘‘(B) in the case of an eligible student with 

15 special needs, expenses for special needs serv16 ices which are incurred in connection with such 

17 enrollment or attendance. 

18 ‘‘(4) RETURN OF FUNDS.— 

19 ‘‘(A) REDISTRIBUTION.— 

20 ‘‘(i) IN GENERAL.—Trust funds that 

21 are not used by an eligible student within 

22 6 years of the student’s scheduled comple23 tion of secondary school may be redistrib24 uted by the eligible entity to other eligible 

25 students. 
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•S 1932 PCS 

1 ‘‘(ii) RETURN OF EXCESS TO THE

2 SECRETARY.—If, after meeting the require3 ments of paragraph (1) and, if applicable, 

4 redistributing excess funds in accordance 

5 with clause (i), an eligible entity has funds 

6 remaining, the eligible entity shall return 

7 excess funds to the Secretary for distribu8 tion to other grantees under this chapter. 

9 ‘‘(B) NONPARTICIPATING ENTITY.—Not10 withstanding subparagraph (A), in the case of 

11 an eligible entity described in section 

12 404A(c)(1)(A) that does not receive assistance 

13 under this subpart for 6 fiscal years, the eligi14 ble entity shall return any trust funds not 

15 awarded or obligated to eligible students to the 

16 Secretary for distribution to other grantees 

17 under this chapter.’’; and 

18 (6) in subsection (g) (as redesignated by para19 graph (2))— 

20 (A) in paragraph (2), by striking ‘‘1993’’ 

21 and inserting ‘‘2000’’; and 

22 (B) in paragraph (4), by striking ‘‘early 

23 intervention component required under section 

24 404D’’ and inserting ‘‘activities required under 

25 section 404D(a)’’. 
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1 (f) REPEAL OF 21ST CENTURY SCHOLAR CERTIFI2 CATES.—Chapter 2 of subpart 2 of part A of title IV (20 

3 U.S.C. 1070a–21 et seq.) is further amended— 

4 (1) by striking section 404F; and 

5 (2) by redesignating sections 404G and 404H 

6 as sections 404F and 404G, respectively. 

7 (g) AUTHORIZATION OF APPROPRIATIONS.—Section 

8 404G (as redesignated by subsection (f)) (20 U.S.C. 

9 1070a–28) is amended by striking ‘‘$200,000,000 for fis10 cal year 1999’’ and all that follows through the period and 

11 inserting ‘‘such sums as may be necessary for fiscal year 

12 2006 and each of the 5 succeeding fiscal years.’’. 

13 (h) CONFORMING AMENDMENTS.—Chapter 2 of sub14 part 2 of part A of title IV (20 U.S.C. 1070a–21 et seq.) 

15 is further amended— 

16 (1) in section 404A(b)(1), by striking ‘‘404H’’ 

17 and inserting ‘‘404G’’; 

18 (2) in section 404B(a)(1), by striking ‘‘404H’’ 

19 and inserting ‘‘404G’’; and 

20 (3) in section 404F(c) (as redesignated by sub21 section (f)(2)), by striking ‘‘404H’’ and inserting 

22 ‘‘404G’’. 
599 

•S 1932 PCS 

1 SEC. 7364. ACADEMIC ACHIEVEMENT INCENTIVE SCHOLAR2 SHIPS. 

3 Chapter 3 of subpart 2 of part A of title IV (20 

4 U.S.C. 1070a-31 et seq.) is repealed. 

5 SEC. 7365. FEDERAL SUPPLEMENTAL EDUCATIONAL OP6 PORTUNITY GRANTS. 

7 (a) APPROPRIATIONS AUTHORIZED.—Section 

8 413A(b)(1) (20 U.S.C. 1070b(b)(1)) is amended by strik9 ing ‘‘$675,000,000 for fiscal year 1999’’ and all that fol10 lows through the period and inserting ‘‘such sums as may 

11 be necessary for fiscal year 2006 and each of the 5 suc12 ceeding fiscal years.’’. 

13 (b) ALLOCATION OF FUNDS.— 

14 (1) ALLOCATION OF FUNDS.—Section 413D 

15 (20 U.S.C. 1070b–3) is amended— 

16 (A) by striking subsection (a)(4); and 

17 (B) in subsection (c)(3)(D), by striking 

18 ‘‘$450’’ and inserting ‘‘$600’’. 

19 (2) TECHNICAL CORRECTION.—Section 

20 413D(a)(1) (20 U.S.C. 1070b–3(a)(1)) is amended 

21 by striking ‘‘such institution’’ and all that follows 

22 through the period and inserting ‘‘such institution 

23 received under subsections (a) and (b) of this section 

24 for fiscal year 1999 (as such subsections were in ef25 fect with respect to allocations for such fiscal 

26 year).’’. 
600 

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1 SEC. 7366. LEVERAGING EDUCATIONAL ASSISTANCE PART2 NERSHIP PROGRAM. 

3 (a) APPROPRIATIONS AUTHORIZED.—Section 

4 415A(b)(1) (20 U.S.C. 1070c(b)(1)) is amended to read 

5 as follows: 

6 ‘‘(1) IN GENERAL.—There are authorized to be 

7 appropriated to carry out this subpart such sums as 

8 may be necessary for fiscal year 2006 and each of 

9 the 5 succeeding fiscal years.’’. 

10 (b) APPLICATIONS.—Section 415C(b) (20 U.S.C. 

11 1070c–2(b)) is amended— 

12 (1) in the matter preceding subparagraph (A) 

13 of paragraph (2), by striking ‘‘not in excess of 

14 $5,000 per academic year’’ and inserting ‘‘not to ex15 ceed the lesser of $12,500 or the student’s cost of 

16 attendance per academic year’’; and 

17 (2) by striking paragraph (10) and inserting 

18 the following: 

19 ‘‘(10) provides notification to eligible students 

20 that such grants are— 

21 ‘‘(A) Leveraging Educational Assistance 

22 Partnership grants; and 

23 ‘‘(B) funded by the Federal Government, 

24 the State, and other contributing partners.’’. 
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•S 1932 PCS 

1 (c) GRANTS FOR ACCESS AND PERSISTENCE.—Sec2 tion 415E (20 U.S.C. 1070c–3a) is amended to read as 

3 follows: 

4 ‘‘SEC. 415E. GRANTS FOR ACCESS AND PERSISTENCE. 

5 ‘‘(a) PURPOSE.—It is the purpose of this section to 

6 expand college access and increase college persistence by 

7 making allotments to States to enable the States to— 

8 ‘‘(1) expand and enhance partnerships with in9 stitutions of higher education, early information and 

10 intervention, mentoring, or outreach programs, pri11 vate corporations, philanthropic organizations, and 

12 other interested parties in order to— 

13 ‘‘(A) carry out activities under this section; 

14 and 

15 ‘‘(B) provide coordination and cohesion 

16 among Federal, State, and local governmental 

17 and private efforts that provide financial assist18 ance to help low-income students attend an in19 stitution of higher education; 

20 ‘‘(2) provide need-based grants for access and 

21 persistence to eligible low-income students; 

22 ‘‘(3) provide early notification to low-income 

23 students of the students’ eligibility for financial aid; 

24 and 
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•S 1932 PCS 

1 ‘‘(4) encourage increased participation in early 

2 information and intervention, mentoring, or outreach 

3 programs. 

4 ‘‘(b) ALLOTMENTS TO STATES.— 

5 ‘‘(1) IN GENERAL.— 

6 ‘‘(A) AUTHORIZATION.—From sums re7 served under section 415A(b)(2) for each fiscal 

8 year, the Secretary shall make an allotment to 

9 each State that submits an application for an 

10 allotment in accordance with subsection (c) to 

11 enable the State to pay the Federal share, as 

12 described in paragraph (2), of the cost of car13 rying out the activities under subsection (d). 

14 ‘‘(B) DETERMINATION OF ALLOTMENT.— 

15 In making allotments under subparagraph (A), 

16 the Secretary shall consider the following: 

17 ‘‘(i) CONTINUATION OF AWARD.—If a 

18 State continues to meet the specifications 

19 established in such State’s application 

20 under subsection (c), the Secretary shall 

21 make an allotment to such State that is 

22 not less than the allotment made to such 

23 State for the previous fiscal year. 

24 ‘‘(ii) PRIORITY.—The Secretary shall 

25 give priority in making allotments to 
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•S 1932 PCS 

1 States that meet the requirements de2 scribed in paragraph (2)(A)(ii). 

3 ‘‘(2) FEDERAL SHARE.— 

4 ‘‘(A) IN GENERAL.—The Federal share 

5 under this section shall be determined in ac6 cordance with the following: 

7 ‘‘(i) If a State applies for an allot8 ment under this section in partnership 

9 with— 

10 ‘‘(I) any number of degree grant11 ing institutions of higher education in 

12 the State whose combined full-time 

13 enrollment represents less than a ma14 jority of all students attending institu15 tions of higher education in the State; 

16 and 

17 ‘‘(II)(aa) philanthropic organiza18 tions that are located in, or that pro19 vide funding in, the State; or 

20 ‘‘(bb) private corporations that 

21 are located in, or that do business in, 

22 the State, 

23 then the Federal share of the cost of car24 rying out the activities under subsection 

25 (d) shall be equal to 50 percent. 
604 

•S 1932 PCS 

1 ‘‘(ii) If a State applies for an allot2 ment under this section in partnership 

3 with— 

4 ‘‘(I) any number of degree grant5 ing institutions of higher education in 

6 the State whose combined full-time 

7 enrollment represents a majority of all 

8 students attending institutions of 

9 higher education in the State; and 

10 ‘‘(II)(aa) philanthropic organiza11 tions that are located in, or that pro12 vide funding in, the State; or 

13 ‘‘(bb) private corporations that 

14 are located in, or that do business in, 

15 the State, 

16 then the Federal share of the cost of car17 rying out the activities under subsection 

18 (d) shall be equal to 57 percent. 

19 ‘‘(B) NON-FEDERAL SHARE.— 

20 ‘‘(i) IN GENERAL.—The non-Federal 

21 share under this section may be provided 

22 in cash or in kind, fully evaluated and in 

23 accordance with this subparagraph. 

24 ‘‘(ii) IN KIND CONTRIBUTION.—For 

25 the purpose of calculating the non-Federal 
605 

•S 1932 PCS 

1 share under this section, an in kind con2 tribution is a non-cash award that has 

3 monetary value, such as provision of room 

4 and board and transportation passes, and 

5 that helps a student meet the cost of at6 tendance. 

7 ‘‘(iii) EFFECT ON NEED ANALYSIS.— 

8 For the purpose of calculating a student’s 

9 need in accordance with part F of this 

10 title, an in-kind contribution described in 

11 clause (ii) shall not be considered an asset 

12 or income. 

13 ‘‘(c) APPLICATION FOR ALLOTMENT.— 

14 ‘‘(1) IN GENERAL.— 

15 ‘‘(A) SUBMISSION.—A State that desires 

16 to receive an allotment under this section on be17 half of a partnership described in paragraph (3) 

18 shall submit an application to the Secretary at 

19 such time, in such manner, and containing such 

20 information as the Secretary may require. 

21 ‘‘(B) CONTENT.—An application submitted 

22 under subparagraph (A) shall include the fol23 lowing: 

24 ‘‘(i) A description of the State’s plan 

25 for using the allotted funds. 
606 

•S 1932 PCS 

1 ‘‘(ii) Assurances that the State will 

2 provide the non-Federal share from State, 

3 institutional, philanthropic, or private 

4 funds, of not less than the required share 

5 of the cost of carrying out the activities 

6 under subsection (d), as determined under 

7 subsection (b), in accordance with the fol8 lowing: 

9 ‘‘(I) The State shall specify the 

10 methods by which non-Federal share 

11 funds will be paid and include provi12 sions designed to ensure that funds 

13 provided under this section will be 

14 used to supplement, and not supplant, 

15 Federal and non-Federal funds avail16 able for carrying out the activities 

17 under this title. 

18 ‘‘(II) A State that uses non-Fed19 eral funds to create or expand existing 

20 partnerships with nonprofit organiza21 tions or community-based organiza22 tions in which such organizations 

23 match State funds for student schol24 arships, may apply such matching 

25 funds from such organizations toward 
607 

•S 1932 PCS 

1 fulfilling the State’s non-Federal 

2 share obligation under this clause. 

3 ‘‘(iii) Assurances that early informa4 tion and intervention, mentoring, or out5 reach programs exist within the State or 

6 that there is a plan to make such pro7 grams widely available. 

8 ‘‘(iv) A description of the organiza9 tional structure that the State has in place 

10 to administer the activities under sub11 section (d), including a description of the 

12 system the State will use to track the par13 ticipation of students who receive grants 

14 under this section to degree completion. 

15 ‘‘(v) Assurances that the State has a 

16 method in place, such as acceptance of the 

17 automatic zero expected family contribu18 tion determination described in section 

19 479, to identify eligible low-income stu20 dents and award State grant aid to such 

21 students. 

22 ‘‘(vi) Assurances that the State will 

23 provide notification to eligible low-income 

24 students that grants under this section 

25 are— 
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•S 1932 PCS 

1 ‘‘(I) Leveraging Educational As2 sistance Partnership Grants; and 

3 ‘‘(II) funded by the Federal Gov4 ernment, the State, and other contrib5 uting partners. 

6 ‘‘(2) STATE AGENCY.—The State agency that 

7 submits an application for a State under section 

8 415C(a) shall be the same State agency that sub9 mits an application under paragraph (1) for such 

10 State. 

11 ‘‘(3) PARTNERSHIP.—In applying for an allot12 ment under this section, the State agency shall apply 

13 for the allotment in partnership with— 

14 ‘‘(A) not less than 1 public and 1 private 

15 degree granting institution of higher education 

16 that are located in the State, if applicable; 

17 ‘‘(B) new or existing early information and 

18 intervention, mentoring, or outreach programs 

19 located in the State; and 

20 ‘‘(C) not less than 1— 

21 ‘‘(i) philanthropic organization located 

22 in, or that provides funding in, the State; 

23 or 

24 ‘‘(ii) private corporation located in, or 

25 that does business in, the State. 
609 

•S 1932 PCS 

1 ‘‘(4) ROLES OF PARTNERS.— 

2 ‘‘(A) STATE AGENCY.—A State agency 

3 that is in a partnership receiving an allotment 

4 under this section— 

5 ‘‘(i) shall— 

6 ‘‘(I) serve as the primary admin7 istrative unit for the partnership; 

8 ‘‘(II) provide or coordinate non9 Federal share funds, and coordinate 

10 activities among partners; 

11 ‘‘(III) encourage each institution 

12 of higher education in the State to 

13 participate in the partnership; 

14 ‘‘(IV) make determinations and 

15 early notifications of assistance as de16 scribed under subsection (d)(2); and 

17 ‘‘(V) annually report to the Sec18 retary on the partnership’s progress 

19 in meeting the purpose of this section; 

20 and 

21 ‘‘(ii) may provide early information 

22 and intervention, mentoring, or outreach 

23 programs. 

24 ‘‘(B) DEGREE GRANTING INSTITUTIONS OF

25 HIGHER EDUCATION.—A degree granting insti-
610 

•S 1932 PCS 

1 tution of higher education that is in a partner2 ship receiving an allotment under this section— 

3 ‘‘(i) shall— 

4 ‘‘(I) recruit and admit partici5 pating qualified students and provide 

6 such additional institutional grant aid 

7 to participating students as agreed to 

8 with the State agency; 

9 ‘‘(II) provide support services to 

10 students who receive grants for access 

11 and persistence under this section and 

12 are enrolled at such institution; and 

13 ‘‘(III) assist the State in the 

14 identification of eligible students and 

15 the dissemination of early notifica16 tions of assistance as agreed to with 

17 the State agency; and 

18 ‘‘(ii) may provide funding for early in19 formation and intervention, mentoring, or 

20 outreach programs or provide such services 

21 directly. 

22 ‘‘(C) PROGRAMS.—An early information 

23 and intervention, mentoring, or outreach pro24 gram that is in a partnership receiving an allot25 ment under this section shall provide direct 
611 

•S 1932 PCS 

1 services, support, and information to partici2 pating students. 

3 ‘‘(D) PHILANTHROPIC ORGANIZATION OR

4 PRIVATE CORPORATION.—A philanthropic orga5 nization or private corporation that is in a part6 nership receiving an allotment under this sec7 tion shall provide funds for grants for access 

8 and persistence for participating students, or 

9 provide funds or support for early information 

10 and intervention, mentoring, or outreach pro11 grams. 

12 ‘‘(d) AUTHORIZED ACTIVITIES.— 

13 ‘‘(1) IN GENERAL.— 

14 ‘‘(A) ESTABLISHMENT OF PARTNER15 SHIP.—Each State receiving an allotment under 

16 this section shall use the funds to establish a 

17 partnership to award grants for access and per18 sistence to eligible low-income students in order 

19 to increase the amount of financial assistance 

20 such students receive under this subpart for un21 dergraduate education expenses. 

22 ‘‘(B) AMOUNT OF GRANTS.— 

23 ‘‘(i) PARTNERSHIPS WITH INSTITU24 TIONS SERVING LESS THAN A MAJORITY

25 OF STUDENTS IN THE STATE.— 
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1 ‘‘(I) IN GENERAL.—In the case 

2 where a State receiving an allotment 

3 under this section is in a partnership 

4 described in subsection (b)(2)(A)(i), 

5 the amount of a grant for access and 

6 persistence awarded by such State 

7 shall be not less than the amount that 

8 is equal to the average undergraduate 

9 tuition and mandatory fees at 4-year 

10 public institutions of higher education 

11 in the State where the student resides 

12 (less any other Federal or State spon13 sored grant amount, work study 

14 amount, and scholarship amount re15 ceived by the student), and such 

16 amount shall be used toward the cost 

17 of attendance at an institution of 

18 higher education located in the State. 

19 ‘‘(II) COST OF ATTENDANCE.—A 

20 State that has a program, apart from 

21 the partnership under this section, of 

22 providing eligible low-income students 

23 with grants that are equal to the aver24 age undergraduate tuition and man25 datory fees at 4-year public institu-
613 

•S 1932 PCS 

1 tions of higher education in the State, 

2 may increase the amount of grants for 

3 access and persistence awarded by 

4 such State up to an amount that is 

5 equal to the average cost of attend6 ance at 4-year public institutions of 

7 higher education in the State (less 

8 any other Federal or State sponsored 

9 grant amount, work study amount, 

10 and scholarship amount received by 

11 the student). 

12 ‘‘(ii) PARTNERSHIPS WITH INSTITU13 TIONS SERVING THE MAJORITY OF STU14 DENTS IN THE STATE.—In the case where 

15 a State receiving an allotment under this 

16 section is in a partnership described in 

17 subsection (b)(2)(A)(ii), the amount of a 

18 grant for access and persistence awarded 

19 by such State shall be not more than an 

20 amount that is equal to the average cost of 

21 attendance at 4-year public institutions of 

22 higher education in the State where the 

23 student resides (less any other Federal or 

24 State sponsored grant amount, college 

25 work study amount, and scholarship 
614 

•S 1932 PCS 

1 amount received by the student), and such 

2 amount shall be used by the student to at3 tend an institution of higher education lo4 cated in the State. 

5 ‘‘(C) SPECIAL RULES.— 

6 ‘‘(i) PARTNERSHIP INSTITUTIONS.—A 

7 State receiving an allotment under this 

8 section may restrict the use of grants for 

9 access and persistence under this section 

10 by awarding the grants only to students 

11 attending institutions of higher education 

12 that are participating in the partnership. 

13 ‘‘(ii) OUT-OF-STATE INSTITUTIONS.— 

14 If a State provides grants through another 

15 program under this subpart to students at16 tending institutions of higher education lo17 cated in another State, such agreement 

18 may also apply to grants awarded under 

19 this section. 

20 ‘‘(2) EARLY NOTIFICATION.— 

21 ‘‘(A) IN GENERAL.—Each State receiving 

22 an allotment under this section shall annually 

23 notify low-income students, such as students 

24 who are eligible to receive a free lunch under 

25 the school lunch program established under the 
615 

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1 Richard B. Russell National School Lunch Act, 

2 in grade 7 through grade 12 in the State, of 

3 the students’ potential eligibility for student fi4 nancial assistance, including a grant for access 

5 and persistence, to attend an institution of 

6 higher education. 

7 ‘‘(B) CONTENT OF NOTICE.—The notifica8 tion under subparagraph (A)— 

9 ‘‘(i) shall include— 

10 ‘‘(I) information about early in11 formation and intervention, men12 toring, or outreach programs available 

13 to the student; 

14 ‘‘(II) information that a stu15 dent’s candidacy for a grant for ac16 cess and persistence is enhanced 

17 through participation in an early in18 formation and intervention, men19 toring, or outreach program; 

20 ‘‘(III) an explanation that stu21 dent and family eligibility and partici22 pation in other Federal means-tested 

23 programs may indicate eligibility for a 

24 grant for access and persistence and 

25 other student aid programs; 
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1 ‘‘(IV) a nonbinding estimation of 

2 the total amount of financial aid a 

3 low-income student with a similar in4 come level may expect to receive, in5 cluding an estimation of the amount 

6 of a grant for access and persistence 

7 and an estimation of the amount of 

8 grants, loans, and all other available 

9 types of aid from the major Federal 

10 and State financial aid programs; 

11 ‘‘(V) an explanation that in order 

12 to be eligible for a grant for access 

13 and persistence, at a minimum, a stu14 dent shall— 

15 ‘‘(aa) meet the requirement 

16 under paragraph (3); 

17 ‘‘(bb) graduate from sec18 ondary school; and 

19 ‘‘(cc) enroll at an institution 

20 of higher education that is a 

21 partner in the partnership or 

22 qualifies under subsection 

23 (d)(1)(C)(ii); 

24 ‘‘(VI) information on any addi25 tional requirements (such as a student 
617 

•S 1932 PCS 

1 pledge detailing student responsibil2 ities) that the State may impose for 

3 receipt of a grant for access and per4 sistence under this section; and 

5 ‘‘(VII) instructions on how to 

6 apply for a grant for access and per7 sistence and an explanation that a 

8 student is required to file a Free Ap9 plication for Federal Student Aid au10 thorized under section 483(a) to be el11 igible for such grant and assistance 

12 from other Federal and State finan13 cial aid programs; and 

14 ‘‘(ii) may include a disclaimer that 

15 grant awards for access and persistence 

16 are contingent upon— 

17 ‘‘(I) a determination of the stu18 dent’s financial eligibility at the time 

19 of the student’s enrollment at an in20 stitution of higher education that is a 

21 partner in the partnership or qualifies 

22 under subsection (d)(1)(C)(ii); 

23 ‘‘(II) annual Federal and State 

24 appropriations; and 
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•S 1932 PCS 

1 ‘‘(III) other aid received by the 

2 student at the time of the student’s 

3 enrollment at such institution of high4 er education. 

5 ‘‘(3) ELIGIBILITY.—In determining which stu6 dents are eligible to receive grants for access and 

7 persistence, the State shall ensure that each such 

8 student meets not less than 1 of the following: 

9 ‘‘(A) Meets not less than 2 of the following 

10 criteria, with priority given to students meeting 

11 all of the following criteria: 

12 ‘‘(i) Has an expected family contribu13 tion equal to zero (as described in section 

14 479) or a comparable alternative based 

15 upon the State’s approved criteria in sec16 tion 415C(b)(4). 

17 ‘‘(ii) Has qualified for a free lunch, or 

18 at the State’s discretion a reduced price 

19 lunch, under the school lunch program es20 tablished under the Richard B. Russell Na21 tional School Lunch Act. 

22 ‘‘(iii) Qualifies for the State’s max23 imum undergraduate award, as authorized 

24 under section 415C(b). 
619 

•S 1932 PCS 

1 ‘‘(iv) Is participating in, or has par2 ticipated in, a Federal, State, institutional, 

3 or community early information and inter4 vention, mentoring, or outreach program, 

5 as recognized by the State agency admin6 istering activities under this section. 

7 ‘‘(B) Is receiving, or has received, a grant 

8 for access and persistence under this section, in 

9 accordance with paragraph (5). 

10 ‘‘(4) GRANT AWARD.—Once a student, includ11 ing those students who have received early notifica12 tion under paragraph (2) from the State, applies for 

13 admission to an institution that is a partner in the 

14 partnership, files a Free Application for Federal 

15 Student Aid and any related existing State form, 

16 and is determined eligible by the State under para17 graph (3), the State shall— 

18 ‘‘(A) issue the student a preliminary award 

19 certificate for a grant for access and persistence 

20 with tentative award amounts; and 

21 ‘‘(B) inform the student that payment of 

22 the grant for access and persistence award 

23 amounts is subject to certification of enrollment 

24 and award eligibility by the institution of higher 

25 education. 
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•S 1932 PCS 

1 ‘‘(5) DURATION OF AWARD.—An eligible stu2 dent that receives a grant for access and persistence 

3 under this section shall receive such grant award for 

4 each year of such student’s undergraduate education 

5 in which the student remains eligible for assistance 

6 under this title, including pursuant to section 

7 484(c), and remains financially eligible as deter8 mined by the State, except that the State may im9 pose reasonable time limits to degree completion. 

10 ‘‘(e) USE OF FUNDS FOR ADMINISTRATIVE COSTS

11 PROHIBITED.—A State that receives an allotment under 

12 this section shall not use any of the allotted funds to pay 

13 administrative costs associated with any of the authorized 

14 activities described in subsection (d). 

15 ‘‘(f) STATUTORY AND REGULATORY RELIEF FOR IN16 STITUTIONS OF HIGHER EDUCATION.—The Secretary 

17 may grant, upon the request of an institution of higher 

18 education that is in a partnership described in subsection 

19 (b)(2)(A)(ii) and that receives an allotment under this sec20 tion, a waiver for such institution from statutory or regu21 latory requirements that inhibit the ability of the institu22 tion to successfully and efficiently participate in the activi23 ties of the partnership. 
621 

•S 1932 PCS 

1 ‘‘(g) APPLICABILITY RULE.—The provisions of this 

2 subpart which are not inconsistent with this section shall 

3 apply to the program authorized by this section. 

4 ‘‘(h) MAINTENANCE OF EFFORT REQUIREMENT.— 

5 Each State receiving an allotment under this section for 

6 a fiscal year shall provide the Secretary with an assurance 

7 that the aggregate amount expended per student or the 

8 aggregate expenditures by the State, from funds derived 

9 from non-Federal sources, for the authorized activities de10 scribed in subsection (d) for the preceding fiscal year were 

11 not less than the amount expended per student or the ag12 gregate expenditure by the State for the activities for the 

13 second preceding fiscal year. 

14 ‘‘(i) SPECIAL RULE.—Notwithstanding subsection 

15 (h), for purposes of determining a State’s share of the cost 

16 of the authorized activities described in subsection (d), the 

17 State shall consider only those expenditures from non18 Federal sources that exceed the State’s total expenditures 

19 for need-based grants, scholarships, and work-study as20 sistance for fiscal year 1999 (including any such assist21 ance provided under this subpart). 

22 ‘‘(j) CONTINUATION AND TRANSITION.—For the 2- 

23 year period that begins on the date of enactment of the 

24 Higher Education Amendments of 2005, the Secretary 

25 shall continue to award grants under section 415E of the 
622 

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1 Higher Education Act of 1965 as such section existed on 

2 the day before the date of enactment of such Act to States 

3 that choose to apply for grants under such predecessor 

4 section. 

5 ‘‘(k) REPORTS.—Not later than 3 years after the 

6 date of enactment of the Higher Education Amendments 

7 of 2005 and annually thereafter, the Secretary shall sub8 mit a report describing the activities and the impact of 

9 the partnerships under this section to the authorizing 

10 committees.’’. 

11 SEC. 7367. SPECIAL PROGRAMS FOR STUDENTS WHOSE 

12 FAMILIES ARE ENGAGED IN MIGRANT AND 

13 SEASONAL FARMWORK. 

14 Section 418A (20 U.S.C. 1070d–2) is amended— 

15 (1) in subsection (a), by adding ‘‘(including 

16 providing outreach and technical assistance)’’ after 

17 ‘‘maintain and expand’’; 

18 (2) in subsection (b)— 

19 (A) in paragraph (1)(B)(i), by striking 

20 ‘‘parents’’ and inserting ‘‘immediate family’’; 

21 (B) in paragraph (3)(B), by inserting ‘‘(in22 cluding preparation for college entrance exami23 nations)’’ after ‘‘college program’’; 

24 (C) in paragraph (5), by striking ‘‘weekly’’; 
623 

•S 1932 PCS 

1 (D) in paragraph (7), by striking ‘‘and’’ 

2 after the semicolon; 

3 (E) in paragraph (8), by striking the pe4 riod at the end and inserting ‘‘; and’’; and 

5 (F) by adding at the end the following: 

6 ‘‘(9) other activities to improve persistence and 

7 retention in postsecondary education.’’; 

8 (3) in subsection (c)— 

9 (A) in paragraph (1)— 

10 (i) in subparagraph (B)— 

11 (I) in the matter preceding clause 

12 (i), by inserting ‘‘to improve place13 ment, persistence, and retention in 

14 postsecondary education’’ after ‘‘serv15 ices’’; and 

16 (II) in clause (i), by striking 

17 ‘‘and career’’ and inserting ‘‘career, 

18 and economic education or personal fi19 nance’’; 

20 (ii) in subparagraph (E), by striking 

21 ‘‘and’’ after the semicolon; 

22 (iii) by redesignating subparagraph 

23 (F) as subparagraph (G); and 

24 (iv) by inserting after subparagraph 

25 (E) the following: 
624 

•S 1932 PCS 

1 ‘‘(F) internships; and’’; and 

2 (B) in paragraph (2)— 

3 (i) in subparagraph (A), by striking 

4 ‘‘and’’ after the semicolon; 

5 (ii) in subparagraph (B), by striking 

6 the period at the end and inserting ‘‘, and 

7 coordinating such services, assistance, and 

8 aid with other non-program services, as9 sistance, and aid, including services, assist10 ance, and aid provided by community11 based organizations, which may include 

12 mentoring and guidance; and’’; and 

13 (iii) by adding at the end the fol14 lowing: 

15 ‘‘(C) for students attending 2-year institu16 tions of higher education, encouraging the stu17 dents to transfer to 4-year institutions of higher 

18 education, where appropriate, and monitoring 

19 the rate of transfer of such students.’’; 

20 (4) in subsection (e), by striking ‘‘section 

21 402A(c)(1)’’ and inserting ‘‘section 402A(c)(2)’’; 

22 (5) in subsection (f)— 

23 (A) in paragraph (1), by striking 

24 ‘‘$150,000’’ and inserting ‘‘$180,000’’; and 
625 

•S 1932 PCS 

1 (B) in paragraph (2), by striking 

2 ‘‘$150,000’’ and inserting ‘‘$180,000’’; and 

3 (6) in subsection (h)— 

4 (A) in paragraph (1), by striking 

5 ‘‘$15,000,000 for fiscal year 1999’’ and all that 

6 follows through the period and inserting ‘‘such 

7 sums as may be necessary for fiscal year 2006 

8 and each of the 5 succeeding fiscal years.’’; and 

9 (B) in paragraph (2), by striking 

10 ‘‘$5,000,000 for fiscal year 1999’’ and all that 

11 follows through the period and inserting ‘‘such 

12 sums as may be necessary for fiscal year 2006 

13 and each of the 5 succeeding fiscal years.’’. 

14 SEC. 7368. ROBERT C. BYRD HONORS SCHOLARSHIP PRO15 GRAM. 

16 (a) ELIGIBILITY OF SCHOLARS.—Section 419F(a) 

17 (20 U.S.C. 1070d–36(a)) is amended by inserting ‘‘(or a 

18 home school, whether treated as a home school or a private 

19 school under State law)’’ after ‘‘private or public sec20 ondary school’’. 

21 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

22 419K (20 U.S.C. 1070d–41) is amended by striking 

23 ‘‘$45,000,000 for fiscal year 1999’’ and all that follows 

24 through the period and inserting ‘‘such sums as may be 
626 

•S 1932 PCS 

1 necessary for fiscal year 2006 and each of the 5 suc2 ceeding fiscal years.’’. 

3 SEC. 7369. CHILD CARE ACCESS MEANS PARENTS IN 

4 SCHOOL. 

5 (a) MINIMUM GRANT.—Section 419N(b)(2)(B) (20 

6 U.S.C. 1070e(b)(2)(B)) is amended— 

7 (1) by striking ‘‘A grant’’ and inserting the fol8 lowing: 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clause (ii), a grant’’; and 

11 (2) by adding at the end the following: 

12 ‘‘(ii) INCREASE TRIGGER.—For any 

13 fiscal year for which the amount appro14 priated under the authority of subsection 

15 (g) is equal to or greater than 

16 $20,000,000, a grant under this section 

17 shall be awarded in an amount that is not 

18 less than $30,000.’’. 

19 (b) DEFINITION OF LOW-INCOME STUDENT.—Para20 graph (7) of section 419N(b) (20 U.S.C. 1070e(b)) is 

21 amended to read as follows: 

22 ‘‘(7) DEFINITION OF LOW-INCOME STUDENT.— 

23 For the purpose of this section, the term ‘low-income 

24 student’ means a student who— 
627 

•S 1932 PCS 

1 ‘‘(A) is eligible to receive a Federal Pell 

2 Grant for the fiscal year for which the deter3 mination is made; or 

4 ‘‘(B) would otherwise be eligible to receive 

5 a Federal Pell Grant for the fiscal year for 

6 which the determination is made, except that 

7 the student fails to meet the requirements of— 

8 ‘‘(i) section 401(c)(1) because the stu9 dent is enrolled in a graduate or first pro10 fessional course of study; or 

11 ‘‘(ii) section 484(a)(5) because the 

12 student is in the United States for a tem13 porary purpose.’’. 

14 (c) AUTHORIZATION OF APPROPRIATIONS.—Section 

15 419N(g) (20 U.S.C. 1070e(g)) is amended by striking 

16 ‘‘$45,000,000 for fiscal year 1999’’ and all that follows 

17 through the period and inserting ‘‘such sums as may be 

18 necessary for fiscal year 2006 and each of the 5 suc19 ceeding fiscal years.’’. 

20 SEC. 7370. LEARNING ANYTIME ANYWHERE PARTNERSHIPS. 

21 Subpart 8 of part A of title IV (20 U.S.C. 1070f et 

22 seq.) is repealed. 
628 

•S 1932 PCS 

1 Subchapter B—Federal Family Education 

2 Loan Program 

3 SEC. 7381. EXTENSION OF AUTHORITIES. 

4 (a) FEDERAL INSURANCE LIMITATIONS.—Section 

5 424(a) (20 U.S.C. 1074(a)) is amended— 

6 (1) by striking ‘‘2004’’ and inserting ‘‘2012’’; 

7 and 

8 (2) by striking ‘‘2008’’ and inserting ‘‘2016’’. 

9 (b) GUARANTEED LOANS.—Section 428(a)(5) (20 

10 U.S.C. 1078(a)(5)) is amended— 

11 (1) by striking ‘‘2004’’ and inserting ‘‘2012’’; 

12 and 

13 (2) by striking ‘‘2008’’ and inserting ‘‘2016’’. 

14 (3) CONSOLIDATION LOANS.—Section 428C(e) 

15 (20 U.S.C. 1078–3(e)) is amended by striking 

16 ‘‘2004’’ and inserting ‘‘2012’’. 

17 SEC. 7382. FEDERAL PAYMENTS TO REDUCE STUDENT IN18 TEREST COSTS. 

19 Section 428 (20 U.S.C. 1078) is amended— 

20 (1) in subsection (b)(1)— 

21 (A) in subparagraph (N)— 

22 (i) in clause (i), by striking ‘‘or’’ after 

23 the semicolon; and 

24 (ii) by striking clause (ii) and insert25 ing the following: 
629 

•S 1932 PCS 

1 ‘‘(ii) in the case of a student who is 

2 studying outside the United States in a 

3 program of study abroad that is approved 

4 for credit by the home institution at which 

5 such student is enrolled, and only after 

6 verification of the student’s enrollment by 

7 the lender or guaranty agency, are, at the 

8 request of the student, disbursed directly 

9 to the student by the means described in 

10 clause (i), unless such student requests 

11 that the check be endorsed, or the funds 

12 transfer be authorized, pursuant to an au13 thorized power-of-attorney; or 

14 ‘‘(iii) in the case of a student who is 

15 studying outside the United States in a 

16 program of study at an eligible foreign in17 stitution, are, at the request of the foreign 

18 institution, disbursed directly to the stu19 dent, only after verification of the stu20 dent’s enrollment by the lender or guar21 anty agency by the means described in 

22 clause (i);’’; and 

23 (B) in subparagraph (Y)(i)(III), by insert24 ing ‘‘, except that, if requested by an institution 

25 of higher education, the lender shall confirm 
630 

•S 1932 PCS 

1 such status through use of the National Stu2 dent Loan Data System’’ before the semicolon; 

3 and 

4 (2) in subsection (c)(2)(H)(i), by striking 

5 ‘‘preclaims’’ and inserting ‘‘default aversion’’. 

6 SEC. 7383. FEDERAL CONSOLIDATION LOANS. 

7 Section 428C(b)(1) (20 U.S.C. 1078–3(b)(1)) is 

8 amended— 

9 (1) in subparagraph (E), by striking ‘‘and’’ 

10 after the semicolon; 

11 (2) by redesignating subparagraph (F) as sub12 paragraph (G); and 

13 (3) by inserting after subparagraph (E) the fol14 lowing: 

15 ‘‘(F) that the lender will disclose, in a 

16 clear and conspicuous manner, to borrowers 

17 who consolidate loans made under part E of 

18 this title— 

19 ‘‘(i) that once the borrower adds the 

20 borrower’s Federal Perkins Loan to a Fed21 eral Consolidation Loan, the borrower will 

22 lose all interest-free periods that would 

23 have been available, such as those periods 

24 when no interest accrues on the Federal 

25 Perkins Loan while the borrower is en-
631 

•S 1932 PCS 

1 rolled in school at least half-time, during 

2 the grace period, and during periods when 

3 the borrower’s student loan repayments 

4 are deferred; 

5 ‘‘(ii) that the borrower will no longer 

6 be eligible for loan forgiveness of Federal 

7 Perkins Loans under any provision of sec8 tion 465; and 

9 ‘‘(iii) the occupations described in sec10 tion 465(a)(2), individually and in detail, 

11 for which the borrower will lose eligibility 

12 for Federal Perkins Loan forgiveness; 

13 and’’. 

14 SEC. 7384. DEFAULT REDUCTION PROGRAM. 

15 Section 428F (20 U.S.C. 1078–6) is amended by 

16 adding at the end the following: 

17 ‘‘(c) FINANCIAL AND ECONOMIC LITERACY.—Where 

18 appropriate as determined by the institution of higher edu19 cation in which a borrower is enrolled, each program de20 scribed in subsection (b) shall include making available fi21 nancial and economic education materials for the bor22 rower, including making the materials available before, 

23 during, or after rehabilitation of a loan.’’. 
632 

•S 1932 PCS 

1 SEC. 7385. REQUIREMENTS FOR DISBURSEMENT OF STU2 DENT LOANS. 

3 Section 428G(e) (20 U.S.C. 1078–7(e)) is amended 

4 by striking ‘‘, made to a student to cover the cost of at5 tendance at an eligible institution outside the United 

6 States’’. 

7 SEC. 7386. REPORTS TO CREDIT BUREAUS AND INSTITU8 TIONS OF HIGHER EDUCATION. 

9 Section 430A(a) (20 U.S.C. 1080a(a)) is amended— 

10 (1) in the first sentence, by striking ‘‘with cred11 it bureau organizations’’ and inserting ‘‘with each 

12 consumer reporting agency that compiles and main13 tains files on consumers on a nationwide basis (as 

14 defined in section 603(p) of the Fair Credit Report15 ing Act (15 U.S.C. 1681a(p))’’; 

16 (2) by redesignating paragraphs (1), (2), and 

17 (3) as paragraphs (2), (4), and (5), respectively; 

18 (3) by inserting before paragraph (2) (as redes19 ignated by paragraph (2)), the following: 

20 ‘‘(1) the type of loan made, insured, or guaran21 teed under this title;’’; 

22 (4) by inserting after paragraph (2) (as redesig23 nated by paragraph (2)), the following: 

24 ‘‘(3) information concerning the repayment sta25 tus of the loan, which information shall be included 

26 in the file of the borrower, except that nothing in 
633 

•S 1932 PCS 

1 this subsection shall be construed to affect any oth2 erwise applicable provision of the Fair Credit Re3 porting Act (15 U.S.C. 1681 et seq.)’’; 

4 (5) in paragraph (4) (as redesignated by para5 graph (2)), by striking ‘‘and’’ after the semicolon; 

6 (6) in paragraph (5) (as redesignated by para7 graph (2)), by striking the period and inserting ‘‘; 

8 and’’; and 

9 (7) by adding at the end the following: 

10 ‘‘(6) any other information required to be re11 ported by Federal law.’’. 

12 SEC. 7387. COMMON FORMS AND FORMATS. 

13 Section 432(m)(1)(D)(i) (20 U.S.C. 

14 1082(m)(1)(D)(i)) is amended by adding at the end the 

15 following: ‘‘Unless otherwise notified by the Secretary, 

16 each institution of higher education that participates in 

17 the program under this part or part D may use a master 

18 promissory note for loans under this part and part D.’’. 

19 SEC. 7388. STUDENT LOAN INFORMATION BY ELIGIBLE 

20 BORROWERS. 

21 Section 433 (20 U.S.C. 1083) is amended by adding 

22 at the end the following: 

23 ‘‘(f) BORROWER INFORMATION AND PRIVACY.—Each 

24 entity participating in a program under this part that is 

25 subject to subtitle A of title V of the Gramm-Leach-Bliley 
634 

•S 1932 PCS 

1 Act (15 U.S.C. 6801 et seq.) shall only use, release, dis2 close, sell, transfer, or give student information, including 

3 the name, address, social security number, or amount bor4 rowed by a borrower or a borrower’s parent, in accordance 

5 with the provisions of such subtitle. 

6 ‘‘(g) LOAN BENEFIT DISCLOSURES.— 

7 ‘‘(1) IN GENERAL.—Each eligible lender, hold8 er, or servicer of a loan made, insured, or guaran9 teed under this part shall provide the borrower with 

10 information on the loan benefit repayment options 

11 the lender, holder, or servicer offer, including infor12 mation on reductions in interest rates— 

13 ‘‘(A) by repaying the loan by automatic 

14 payroll or checking account deduction; 

15 ‘‘(B) by completing a program of on-time 

16 repayment; and 

17 ‘‘(C) under any other interest rate reduc18 tion program. 

19 ‘‘(2) INFORMATION.—Such borrower informa20 tion shall include— 

21 ‘‘(A) any limitations on such options; 

22 ‘‘(B) explicit information on the reasons a 

23 borrower may lose eligibility for such an option; 
635 

•S 1932 PCS 

1 ‘‘(C) examples of the impact the interest 

2 rate reductions will have on a borrower’s time 

3 for repayment and amount of repayment; 

4 ‘‘(D) upon the request of the borrower, the 

5 effect the reductions in interest rates will have 

6 with respect to the borrower’s payoff amount 

7 and time for repayment; and 

8 ‘‘(E) information on borrower recertifi9 cation requirements.’’. 

10 SEC. 7389. CONSUMER EDUCATION INFORMATION. 

11 Part B of title IV (20 U.S.C. 1071 et seq.) is amend12 ed by inserting after section 433 (20 U.S.C. 1083) the 

13 following: 

14 ‘‘SEC. 433A. CONSUMER EDUCATION INFORMATION. 

15 ‘‘Each guaranty agency participating in a program 

16 under this part working with the institutions of higher 

17 education served by such guaranty agency (or in the case 

18 of an institution of higher education that provides loans 

19 exclusively through part D, the institution working with 

20 a guaranty agency or with the Secretary) shall develop and 

21 make available a quality educational program and mate22 rials to provide training for students in budgeting and fi23 nancial management, including debt management and 

24 other aspects of financial literacy, such as the cost of using 

25 very high interest loans to pay for postsecondary edu-
636 

•S 1932 PCS 

1 cation, particularly as budgeting and financial manage2 ment relates to student loan programs authorized by this 

3 title. Nothing in this section shall be construed to prohibit 

4 a guaranty agency from using an existing program or ex5 isting materials to meet the requirement of this section. 

6 The activities described in this section shall be considered 

7 default reduction activities for the purposes of section 

8 422.’’. 

9 SEC. 7390. DEFINITION OF ELIGIBLE LENDER. 

10 Section 435(d)(2) (20 U.S.C. 1085(d)(2)) is amended 

11 by striking subparagraph (F) and inserting the following: 

12 ‘‘(F) shall use the proceeds from special al13 lowance payments, interest payments from bor14 rowers, proceeds from the sale of a loan made, 

15 insured, or guaranteed under this part, and all 

16 other proceeds related to such a loan that are 

17 furnished to the eligible institution or any enti18 ty affiliated (directly or indirectly) with the eli19 gible institution, for need based grant pro20 grams, except that such payments and proceeds 

21 may be used for reasonable reimbursement for 

22 direct administrative expenses;’’. 
637 

•S 1932 PCS 

1 SEC. 7390A. REPAYMENT BY THE SECRETARY OF LOANS OF 

2 BANKRUPT, DECEASED, OR DISABLED BOR3 ROWERS; TREATMENT OF BORROWERS AT4 TENDING SCHOOLS THAT FAIL TO PROVIDE A 

5 REFUND, ATTENDING CLOSED SCHOOLS, OR 

6 FALSELY CERTIFIED AS ELIGIBLE TO BOR7 ROW. 

8 Section 437 (20 U.S.C. 1087) is amended— 

9 (1) in the section heading, by striking 

10 ‘‘CLOSED SCHOOLS OR FALSELY CERTIFIED AS

11 ELIGIBLE TO BORROW’’ and inserting ‘‘SCHOOLS

12 THAT FAIL TO PROVIDE A REFUND, ATTEND13 ING CLOSED SCHOOLS, OR FALSELY CERTIFIED

14 AS ELIGIBLE TO BORROW’’; and 

15 (2) in the first sentence of subsection (c)(1), by 

16 inserting ‘‘or was falsely certified as a result of a 

17 crime of identity theft’’ after ‘‘falsely certified by the 

18 eligible institution’’. 

19 Subchapter C—Federal Work-Study 

20 Programs 

21 SEC. 7391. AUTHORIZATION OF APPROPRIATIONS. 

22 Section 441(b) (42 U.S.C. 2751(b)) is amended by 

23 striking ‘‘$1,000,000 for fiscal year 1999’’ and all that 

24 follows through the period and inserting ‘‘such sums as 

25 may be necessary for fiscal year 2006 and each of the 5 

26 succeeding fiscal years.’’. 
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1 SEC. 7392. ALLOWANCE FOR BOOKS AND SUPPLIES. 

2 Section 442(c)(4)(D) (42 U.S.C. 2752(c)(4)(D)) is 

3 amended by striking ‘‘$450’’ and inserting ‘‘$600’’. 

4 SEC. 7393. GRANTS FOR FEDERAL WORK-STUDY PRO5 GRAMS. 

6 Section 443(b)(2) (42 U.S.C. 2753(b)(2)) is amend7 ed— 

8 (1) by striking subparagraph (A); 

9 (2) by redesignating subparagraphs (B) and 

10 (C) as subparagraphs (A) and (B), respectively; and 

11 (3) in subparagraph (A) (as redesignated by 

12 paragraph (2)), by striking ‘‘this subparagraph if’’ 

13 and all that follows through ‘‘institution;’’ and in14 serting ‘‘this subparagraph if— 

15 ‘‘(i) the Secretary determines that en16 forcing this subparagraph would cause 

17 hardship for students at the institution; or 

18 ‘‘(ii) the institution certifies to the 

19 Secretary that 15 percent or more of its 

20 total full-time enrollment participates in 

21 community service activities described in 

22 section 441(c) or tutoring and literacy ac23 tivities described in subsection (d) of this 

24 section;’’. 
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1 SEC. 7394. JOB LOCATION AND DEVELOPMENT PROGRAMS. 

2 Section 446(a)(1) (42 U.S.C. 2756(a)(1)) is amended 

3 by striking ‘‘$50,000’’ and inserting ‘‘$75,000’’. 

4 SEC. 7395. WORK COLLEGES. 

5 Section 448 (42 U.S.C. 2756b) is amended— 

6 (1) in subsection (b)— 

7 (A) in paragraph (1), by striking ‘‘under 

8 subsection (f)’’ and inserting ‘‘for this section 

9 under section 441(b)’’; and 

10 (B) in paragraph (2)— 

11 (i) in the matter preceding subpara12 graph (A), by striking ‘‘pursuant to sub13 section (f)’’ and inserting ‘‘for this section 

14 under section 441(b)’’; 

15 (ii) by redesignating subparagraphs 

16 (C) through (F) as subparagraphs (D) 

17 through (G), respectively; and 

18 (iii) by inserting after subparagraph 

19 (B) the following: 

20 ‘‘(C) support existing and new model stu21 dent volunteer community service projects asso22 ciated with local institutions of higher edu23 cation, such as operating drop-in resource cen24 ters that are staffed by students and that link 

25 people in need with the resources and opportu26 nities necessary to become self-sufficient;’’; 
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1 (2) in subsection (c), by striking ‘‘by subsection 

2 (f) to use funds under subsection (b)(1)’’ and insert3 ing ‘‘for this section under section 441(b) or to use 

4 funds under subsection (b)(1),’’; and 

5 (4) by striking subsection (f). 

6 Subchapter D—William D. Ford Federal 

7 Direct Loan Program 

8 SEC. 7401. FUNDS FOR ADMINISTRATIVE EXPENSES. 

9 Section 458 (20 U.S.C. 1087h) is amended— 

10 (1) in subsection (a)(1), in the matter following 

11 subparagraph (B), by striking ‘‘$617,000,000’’ and 

12 all that follows through the period and inserting 

13 ‘‘$904,000,000 in fiscal year 2006, $943,000,000 in 

14 fiscal year 2007, $983,000,000 in fiscal year 2008, 

15 $1,023,000,000 in fiscal year 2009, $1,064,000,000 

16 in fiscal year 2010, and $1,106,000,000 in fiscal 

17 year 2011.’’; and 

18 (2) in subsection (c)(1), by striking subpara19 graphs (A) through (E) and inserting the following: 

20 ‘‘(A) for fiscal year 2006, shall not exceed 

21 $271,000,000; 

22 ‘‘(B) for fiscal year 2007, shall not exceed 

23 $293,000,000; 

24 ‘‘(C) for fiscal year 2008, shall not exceed 

25 $315,000,000; 
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1 ‘‘(D) for fiscal year 2009, shall not exceed 

2 $336,000,000; 

3 ‘‘(E) for fiscal year 2010, shall not exceed 

4 $356,000,000; and 

5 ‘‘(F) for fiscal year 2011, shall not exceed 

6 $378,000,000.’’. 

7 Subchapter E—Federal Perkins Loans 

8 SEC. 7411. PROGRAM AUTHORITY. 

9 Section 461(b) (20 U.S.C. 1087aa(b)) is amended— 

10 (1) in paragraph (1), by striking 

11 ‘‘$250,000,000 for fiscal year 1999’’ and all that 

12 follows through the period and inserting ‘‘such sums 

13 as may be necessary for fiscal year 2006 and each 

14 of the 5 succeeding fiscal years.’’; and 

15 (2) in paragraph (2),— 

16 (A) by striking ‘‘fiscal year 2003’’ and in17 serting ‘‘fiscal year 2012’’; and 

18 (B) by striking ‘‘October 1, 2003’’ and in19 serting ‘‘October 1, 2012’’. 

20 SEC. 7412. TERMS OF LOANS. 

21 Section 464 (20 U.S.C. 1087dd) is amended— 

22 (1) in subsection (b)(1), by striking ‘‘for an ad23 ditional loan under this part’’ and inserting ‘‘for ad24 ditional aid under this title’’; and 

25 (2) in subsection (e), by striking ‘‘written’’. 
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1 SEC. 7413. CANCELLATION OF LOANS FOR CERTAIN PUBLIC 

2 SERVICE. 

3 Section 465(a) (20 U.S.C. 1087ee(a)) is amended— 

4 (1) in paragraph ( 2)— 

5 (A) in subparagraph (B), by striking 

6 ‘‘Head Start Act which’’ and inserting ‘‘Head 

7 Start Act, or in a prekindergarten or child care 

8 program that is licensed or regulated by the 

9 State, that’’; 

10 (B) in subparagraph (H), by striking ‘‘or’’ 

11 after the semicolon; 

12 (C) in subparagraph (I), by striking the 

13 period and inserting a semicolon; and 

14 (D) by inserting before the matter fol15 lowing subparagraph (I) (as amended by sub16 paragraph (C)) the following: 

17 ‘‘(J) as a full-time faculty member at a Tribal 

18 College or University, as that term is defined in sec19 tion 316; 

20 ‘‘(K) as a librarian, if the librarian has a mas21 ter’s degree in library science and is employed in— 

22 ‘‘(i) an elementary school or secondary 

23 school that is eligible for assistance under title 

24 I of the Elementary and Secondary Education 

25 Act of 1965; or 
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1 ‘‘(ii) a public library that serves a geo2 graphic area that contains 1 or more schools el3 igible for assistance under title I of the Elemen4 tary and Secondary Education Act of 1965; or 

5 ‘‘(L) as a full-time speech language therapist, if 

6 the therapist has a master’s degree and is working 

7 exclusively with schools that are eligible for assist8 ance under title I of the Elementary and Secondary 

9 Education Act of 1965.’’; and 

10 (2) in paragraph (3)(A)(i), by striking ‘‘or (I)’’ 

11 and inserting ‘‘(I), (J), (K), or (L)’’. 

12 SEC. 7414. FEDERAL CAPITAL CONTRIBUTION RECOVERY. 

13 Section 466 (20 U.S.C. 1087ff) is amended— 

14 (1) in subsection (a)— 

15 (A) by striking ‘‘2003’’ each place it ap16 pears and inserting ‘‘2011’’; and 

17 (B) by striking ‘‘2004’’ and inserting 

18 ‘‘2012’’; and 

19 (2) in subsection (c), by striking ‘‘2004’’ and 

20 inserting ‘‘2012’’. 

21 Subchapter F—Need Analysis 

22 SEC. 7421. COST OF ATTENDANCE. 

23 Section 472 (20 U.S.C. 1087ll) is amended— 

24 (1) by striking paragraph (4) and inserting the 

25 following: 
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1 ‘‘(4) for less than half-time students (as deter2 mined by the institution), tuition and fees and an al3 lowance for only— 

4 ‘‘(A) books, supplies, and transportation 

5 (as determined by the institution); 

6 ‘‘(B) dependent care expenses (determined 

7 in accordance with paragraph (8)); and 

8 ‘‘(C) room and board costs (determined in 

9 accordance with paragraph (3)), except that a 

10 student may receive an allowance for such costs 

11 under this subparagraph for not more than 3 

12 semesters or the equivalent, of which not more 

13 than 2 semesters or the equivalent may be con14 secutive;’’; 

15 (2) in paragraph (11), by striking ‘‘and’’ after 

16 the semicolon; 

17 (3) in paragraph (12), by striking the period 

18 and inserting ‘‘; and’’; and 

19 (4) by adding at the end the following: 

20 ‘‘(13) at the option of the institution, for a stu21 dent in a program requiring professional licensure or 

22 certification, the one time cost of obtaining the first 

23 professional credentials (as determined by the insti24 tution).’’. 
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1 SEC. 7422. DISCRETION OF STUDENT FINANCIAL AID AD2 MINISTRATORS. 

3 The third sentence of section 479A(a) (20 U.S.C. 

4 1087tt(a)) is amended— 

5 (1) by inserting ‘‘or an independent student’’ 

6 after ‘‘family member’’; and 

7 (2) by inserting ‘‘a change in housing status 

8 that results in homelessness,’’ after ‘‘under section 

9 487,’’. 

10 SEC. 7423. DEFINITIONS. 

11 (a) DEFINITIONS.—Section 480 (20 U.S.C. 1087vv) 

12 is amended— 

13 (1) in subsection (f)— 

14 (A) in paragraph (1), by inserting ‘‘quali15 fied education benefits (except as provided in 

16 paragraph (3)),’’ after ‘‘tax shelters,’’; and 

17 (B) by adding at the end the following: 

18 ‘‘(3) A qualified education benefit shall not be consid19 ered an asset of a student for purposes of section 475. 

20 ‘‘(4) In determining the value of assets in a deter21 mination of need under this title (other than for subpart 

22 4 of part A), the value of a qualified education benefit 

23 shall be— 

24 ‘‘(A) the refund value of any tuition credits or 

25 certificates purchased under a qualified education 

26 benefit; and 
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1 ‘‘(B) in the case of a program in which con2 tributions are made to an account that is established 

3 for the purpose of meeting the qualified higher edu4 cation expenses of the designated beneficiary of the 

5 account, the current balance of such account. 

6 ‘‘(5) In this subsection: 

7 ‘‘(A) QUALIFIED EDUCATION BENEFIT.—The 

8 term ‘qualified education benefit’ means— 

9 ‘‘(i) a qualified tuition program (as defined 

10 in section 529(b)(1)(A) of the Internal Revenue 

11 Code of 1986) or other prepaid tuition plan of12 fered by a State; and 

13 ‘‘(ii) a Coverdell education savings account 

14 (as defined in section 530(b)(1) of the Internal 

15 Revenue Code of 1986). 

16 ‘‘(B) QUALIFIED HIGHER EDUCATION EX17 PENSES.—The term ‘qualified higher education ex18 penses’ has the meaning given the term in section 

19 529(e) of the Internal Revenue Code of 1986.’’; and 

20 (2) in subsection (j)— 

21 (A) in the subsection heading, by striking 

22 ‘‘; TUITION PREPAYMENT PLANS’’; 

23 (B) by striking paragraph (2); 

24 (C) by redesignating paragraph (3) as 

25 paragraph (2); and 
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1 (D) by inserting after paragraph (2) (as 

2 redesignated by subparagraph (C)) the fol3 lowing paragraph: 

4 ‘‘(3) Notwithstanding paragraph (1) and section 472, 

5 assistance not received under this title may be excluded 

6 from both estimated financial assistance and cost of at7 tendance, if that assistance is designated by the State pro8 viding that assistance to offset a specific component of the 

9 cost of attendance. If that assistance is excluded from esti10 mated financial assistance or cost of attendance, that as11 sistance shall be excluded from both calculations.’’. 

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

13 this section shall apply with respect to determinations of 

14 need under part F of title IV for academic years beginning 

15 on or after July 1, 2006. 

16 Subchapter G—General Provisions Relating 

17 to Student Assistance 

18 SEC. 7431. DEFINITIONS. 

19 Section 481 (20 U.S.C. 1088) is amended— 

20 (1) in the second sentence of subsection (a)(2), 

21 by inserting ‘‘and that measures program length in 

22 credit hours or clock hours’’ after ‘‘baccalaureate de23 gree’’; and 

24 (2) in subsection (b), by adding at the end the 

25 following: 
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1 ‘‘(3) For purposes of this title, the term ‘eligible pro2 gram’ includes an instructional program that utilizes di3 rect assessment of student learning or recognizes the di4 rect assessment of student learning by others, if such as5 sessment is consistent with the accreditation of the institu6 tion or program utilizing the results of the assessment, 

7 in lieu of credit hours or clock hours as the measure of 

8 student learning. In the case of a program being deter9 mined eligible for the first time under this paragraph, such 

10 determination shall be made by the Secretary before such 

11 program is considered to be an eligible program.’’. 

12 SEC. 7432. COMPLIANCE CALENDAR. 

13 Section 482 (20 U.S.C. 1089) is amended by adding 

14 at the end the following: 

15 ‘‘(a) COMPLIANCE CALENDAR.—Prior to the begin16 ning of each award year, the Secretary shall provide to 

17 institutions of higher education a list of all the reports 

18 and disclosures required under this Act. The list shall in19 clude— 

20 ‘‘(1) the date each report or disclosure is re21 quired to be completed and to be submitted, made 

22 available, or disseminated; 

23 ‘‘(2) the required recipients of each report or 

24 disclosure; 
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1 ‘‘(3) any required method for transmittal or 

2 dissemination of each report or disclosure; 

3 ‘‘(4) a description of the content of each report 

4 or disclosure sufficient to allow the institution to 

5 identify the appropriate individuals to be assigned 

6 the responsibility for such report or disclosure; 

7 ‘‘(5) references to the statutory authority, ap8 plicable regulations, and current guidance issued by 

9 the Secretary regarding each report or disclosure; 

10 and 

11 ‘‘(6) any other information which is pertinent to 

12 the content or distribution of the report or disclo13 sure.’’. 

14 SEC. 7433. FORMS AND REGULATIONS. 

15 Section 483 (20 U.S.C. 1090) is amended— 

16 (1) by striking subsections (a) and (b), and in17 serting the following: 

18 ‘‘(a) COMMON FINANCIAL AID FORM DEVELOPMENT

19 AND PROCESSING.— 

20 ‘‘(1) IN GENERAL.—The Secretary, in coopera21 tion with representatives of agencies and organiza22 tions involved in student financial assistance, shall 

23 produce, distribute, and process free of charge com24 mon financial reporting forms as described in this 

25 subsection to be used to determine the need and eli-
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1 gibility of a student for financial assistance under 

2 parts A through E of this title (other than under 

3 subpart 4 of part A). The forms shall be made avail4 able to applicants in both paper and electronic for5 mats and shall be referred to (except as otherwise 

6 provided in this subsection) as the ‘Free Application 

7 for Federal Student Aid’, or ‘FAFSA’. 

8 ‘‘(2) PAPER FORMAT.— 

9 ‘‘(A) IN GENERAL.—Subject to subpara10 graph (C), the Secretary shall produce, dis11 tribute, and process common forms in paper 

12 format to meet the requirements of paragraph 

13 (1). The Secretary shall develop a common 

14 paper form for applicants who do not meet the 

15 requirements of or do not wish to use the proc16 ess described in subparagraph (B). 

17 ‘‘(B) EZ FAFSA.— 

18 ‘‘(i) IN GENERAL.—The Secretary 

19 shall develop and use a simplified paper 

20 application form, to be known as the ‘EZ 

21 FAFSA’, to be used for applicants meeting 

22 the requirements under section 479(c). 

23 ‘‘(ii) REDUCED DATA REQUIRE24 MENTS.—The EZ FAFSA shall permit an 

25 applicant to submit for purposes of deter-
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1 mining financial need and eligibility, only 

2 the data elements required to make a de3 termination of student eligibility and 

4 whether the applicant meets the require5 ments of section 479(c). 

6 ‘‘(iii) STATE DATA.—The Secretary 

7 shall include on the EZ FAFSA such data 

8 items as may be necessary to award State 

9 financial assistance, as provided under 

10 paragraph (5), except the Secretary shall 

11 not include a State’s data if that State 

12 does not permit its applicants for State as13 sistance to use the EZ FAFSA. 

14 ‘‘(iv) FREE AVAILABILITY AND PROC15 ESSING.—The provisions of paragraph (6) 

16 shall apply to the EZ FAFSA, and the 

17 data collected by means of the EZ FAFSA 

18 shall be available to institutions of higher 

19 education, guaranty agencies, and States 

20 in accordance with paragraph (9). 

21 ‘‘(v) TESTING.—The Secretary shall 

22 conduct appropriate field testing on the 

23 EZ FAFSA. 
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1 ‘‘(C) PHASING OUT THE FULL PAPER

2 FORM FOR STUDENTS WHO DO NOT MEET THE

3 REQUIREMENTS OF THE EZ FAFSA.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 shall make all efforts to encourage all ap6 plicants to utilize the electronic forms de7 scribed in paragraph (3). 

8 ‘‘(ii) PHASEOUT OF FULL PAPER

9 FAFSA.—Not later than 5 years after the 

10 date of enactment of the Higher Education 

11 Amendments of 2005, to the extent prac12 ticable, the Secretary shall phase out the 

13 printing of the long paper form created 

14 under subparagraph (A) and used by appli15 cants who do not meet the requirements of 

16 the EZ FAFSA described in subparagraph 

17 (B). 

18 ‘‘(iii) AVAILABILITY OF FULL PAPER

19 FAFSA.— 

20 ‘‘(I) IN GENERAL.—Both prior to 

21 and after the phaseout described in 

22 clause (ii), the Secretary shall main23 tain on the Internet printable versions 

24 of the paper forms described in sub25 paragraphs (A) and (B). 
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1 ‘‘(II) ACCESSIBILITY.—The 

2 printable versions described in sub3 clause (I) shall be made easily acces4 sible and downloadable to students on 

5 the same Web site used to provide 

6 students with the common electronic 

7 forms described in paragraph (3). 

8 ‘‘(III) SUBMISSION OF FORMS.— 

9 The Secretary shall conduct a study 

10 to determine the feasibility of using 

11 downloaded forms to ensure sufficient 

12 quality to meet the processing require13 ments of this section. Following the 

14 completion of the study, the Secretary 

15 shall enable, to the extent practicable, 

16 students to submit a form described 

17 in this clause that is downloaded from 

18 the Internet and printed, in order to 

19 meet the filing requirements of this 

20 section and to receive financial assist21 ance under this title. 

22 ‘‘(iv) USE OF SAVINGS.— 

23 ‘‘(I) IN GENERAL.—The Sec24 retary shall utilize any realized sav25 ings accrued by phasing out the full 
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1 paper FAFSA and moving more appli2 cants to the common electronic forms, 

3 to improve access to the electronic 

4 forms for applicants meeting the re5 quirements of section 479(c). 

6 ‘‘(II) REPORT.—The Secretary 

7 shall report annually to the author8 izing committees on— 

9 ‘‘(aa) the steps taken to im10 prove access to the common elec11 tronic forms for applicants meet12 ing the requirements of section 

13 479(c); and 

14 ‘‘(bb) the phaseout of the 

15 long common paper form de16 scribed in subparagraph (A). 

17 ‘‘(3) ELECTRONIC FORMAT.— 

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

19 produce, distribute, and process common forms 

20 in electronic format and make such forms avail21 able through a broadly accessible website to 

22 meet the requirements of paragraph (1). The 

23 Secretary shall develop common electronic 

24 forms for applicants who do not meet the re25 quirements of subparagraph (B). The Secretary 
655 

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1 shall include on the common electronic forms 

2 space for information that needs to be sub3 mitted from the applicant to be eligible for 

4 State financial assistance, as provided under 

5 paragraph (5), except the Secretary shall not 

6 require applicants to complete data required by 

7 any State other than the applicant’s State of 

8 residence. The Secretary shall use all available 

9 technology to ensure that a student using a 

10 common electronic form answers only the min11 imum number of questions necessary. 

12 ‘‘(B) SIMPLIFIED ELECTRONIC APPLICA13 TIONS.— 

14 ‘‘(i) IN GENERAL.—The Secretary 

15 shall develop and use a simplified elec16 tronic application form to be used by appli17 cants meeting the requirements of section 

18 479(c) and an additional, separate sim19 plified electronic application form to be 

20 used by applicants meeting the require21 ments under section 479(b). 

22 ‘‘(ii) REDUCED DATA REQUIRE23 MENTS.—The simplified electronic applica24 tion forms shall permit an applicant to 

25 submit for purposes of determining finan-
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1 cial need and eligibility, only the data ele2 ments required to make a determination of 

3 student eligibility and whether the appli4 cant meets the requirements of subsection 

5 (b) or (c) of section 479. 

6 ‘‘(iii) STATE DATA.—The Secretary 

7 shall include on the simplified electronic 

8 application forms such data items as may 

9 be necessary to award State financial as10 sistance, as provided under paragraph (5), 

11 except the Secretary shall not require ap12 plicants to complete data required by any 

13 State other than the applicant’s State of 

14 residence and shall not include a State’s 

15 data if such State does not permit its ap16 plicants for State assistance to use the 

17 simplified electronic application form de18 scribed in this subparagraph. 

19 ‘‘(iv) FREE AVAILABILITY AND PROC20 ESSING.—The provisions of paragraph (6) 

21 shall apply to the simplified electronic ap22 plication forms, and the data collected by 

23 means of the simplified electronic applica24 tion forms shall be available to institutions 

25 of higher education, guaranty agencies, 
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1 and States in accordance with paragraph 

2 (9). 

3 ‘‘(v) TESTING.—The Secretary shall 

4 conduct appropriate field testing on the 

5 forms developed under this subparagraph. 

6 ‘‘(C) USE OF FORMS.—Nothing in this 

7 subsection shall be construed to prohibit the use 

8 of the forms developed by the Secretary pursu9 ant to this paragraph by an eligible institution, 

10 eligible lender, a guaranty agency, a State 

11 grant agency, a private computer software pro12 vider, a consortium of such entities, or such 

13 other entity as the Secretary may designate. 

14 Data collected by the forms shall be used only 

15 for the application, award, and administration 

16 of aid awarded under this title, State aid, or aid 

17 awarded by eligible institutions or such entities 

18 as the Secretary may designate. No data col19 lected by such electronic version of the forms 

20 shall be used for making final aid awards under 

21 this title until such data have been processed by 

22 the Secretary or a contractor or designee of the 

23 Secretary, except as may be permitted under 

24 this title. 
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1 ‘‘(D) PRIVACY.—The Secretary shall en2 sure that data collection under this paragraph 

3 complies with section 552a of title 5, United 

4 States Code, and that any entity using the elec5 tronic version of the forms developed by the 

6 Secretary pursuant to this paragraph shall 

7 maintain reasonable and appropriate adminis8 trative, technical, and physical safeguards to 

9 ensure the integrity and confidentiality of the 

10 information, and to protect against security 

11 threats, or unauthorized uses or disclosures of 

12 the information provided on the electronic 

13 version of the forms. 

14 ‘‘(E) SIGNATURE.—Notwithstanding any 

15 other provision of this Act, the Secretary may 

16 permit an electronic form under this paragraph 

17 to be submitted without a signature, if a signa18 ture is subsequently submitted by the applicant 

19 or if the applicant uses a personal identification 

20 number provided by the Secretary under sub21 paragraph (F). 

22 ‘‘(F) PERSONAL IDENTIFICATION NUM23 BERS AUTHORIZED.—The Secretary is author24 ized to assign to applicants personal identifica25 tion numbers— 
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1 ‘‘(i) to enable the applicants to use 

2 such numbers as a signature for purposes 

3 of completing a form under this paragraph; 

4 and 

5 ‘‘(ii) for any purpose determined by 

6 the Secretary to enable the Secretary to 

7 carry out this title. 

8 ‘‘(4) STREAMLINED REAPPLICATION PROC9 ESS.— 

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

11 develop streamlined reapplication forms and 

12 processes, including both paper and electronic 

13 reapplication processes, consistent with the re14 quirements of this subsection, for an applicant 

15 who applies for financial assistance under this 

16 title in the next succeeding academic year sub17 sequent to an academic year in which such ap18 plicant applied for financial assistance under 

19 this title. 

20 ‘‘(B) MECHANISMS FOR REAPPLICATION.— 

21 The Secretary shall develop appropriate mecha22 nisms to support reapplication. 

23 ‘‘(C) IDENTIFICATION OF UPDATED

24 DATA.—The Secretary shall determine, in co25 operation with States, institutions of higher 
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1 education, and agencies and organizations in2 volved in student financial assistance, the data 

3 elements that can be updated from the previous 

4 academic year’s application. 

5 ‘‘(D) REDUCED DATA AUTHORIZED.— 

6 Nothing in this title shall be construed as lim7 iting the authority of the Secretary to reduce 

8 the number of data elements required of re9 applicants. 

10 ‘‘(E) ZERO FAMILY CONTRIBUTION.—Ap11 plicants determined to have a zero family con12 tribution pursuant to section 479(c) shall not 

13 be required to provide any financial data in a 

14 replication form, except that which is necessary 

15 to determine eligibility under such section. 

16 ‘‘(5) STATE REQUIREMENTS.— 

17 ‘‘(A) IN GENERAL.—Except as provided in 

18 paragraphs (2)(B)(iii), (3)(A), and (3)(B)(iii), 

19 the Secretary shall include on the forms devel20 oped under this subsection, such State-specific 

21 data items as the Secretary determines are nec22 essary to meet State requirements for need23 based State aid. Such items shall be selected in 

24 consultation with State agencies in order to as25 sist in the awarding of State financial assist-
661 

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1 ance in accordance with the terms of this sub2 section, except as provided in paragraphs 

3 (2)(B)(iii), (3)(A), and (3)(B)(iii). The number 

4 of such data items shall not be less than the 

5 number included on the form for the 2005– 

6 2006 award year unless a State notifies the 

7 Secretary that the State no longer requires 

8 those data items for the distribution of State 

9 need-based aid. 

10 ‘‘(B) ANNUAL REVIEW.—The Secretary 

11 shall conduct an annual review process to deter12 mine which data items the States require to 

13 award need-based State aid. 

14 ‘‘(C) ENCOURAGE USE OF FORMS.—The 

15 Secretary shall encourage States to take such 

16 steps as are necessary to encourage the use of 

17 simplified application forms, including those de18 scribed in paragraphs (2)(B) and (3)(B), for 

19 applicants who meet the requirements of sub20 section (b) or (c) of section 479. 

21 ‘‘(D) FEDERAL REGISTER NOTICE.—The 

22 Secretary shall publish, on an annual basis, a 

23 notice in the Federal Register requiring States 

24 to inform the Secretary— 
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1 ‘‘(i) if the State plans to use the 

2 FAFSA to collect data to determine eligi3 bility for State need-based financial aid; 

4 ‘‘(ii) of the State-specific data that 

5 the State requires for delivery of State 

6 need-based financial aid; and 

7 ‘‘(iii) if the State agency is unable to 

8 permit applicants to utilize the simplified 

9 application forms described in paragraph 

10 (2)(B) or (3)(B). 

11 ‘‘(E) STATE NOTIFICATION TO THE SEC12 RETARY.— 

13 ‘‘(i) IN GENERAL.—Each State agency 

14 shall notify the Secretary— 

15 ‘‘(I) whether the State permits 

16 an applicant to file a form described 

17 in paragraph (2)(B) or (3)(B) for 

18 purposes of determining eligibility for 

19 State need-based financial aid; and 

20 ‘‘(II) of the State-specific data 

21 that the State requires for delivery of 

22 State need-based financial aid. 

23 ‘‘(ii) ACCEPTANCE OF FORMS.—If a 

24 State does not permit an applicant to file 

25 a form described in paragraph (2)(B) or 
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1 (3)(B) for purposes of determining eligi2 bility for State need-based financial aid, 

3 then the State shall notify the Secretary if 

4 it is not permitted to do so because of 

5 State law or agency policy. The notification 

6 shall include an acknowledgment that 

7 State-specific questions will not be included 

8 on a form described in paragraph (2)(B) 

9 or (3)(B). 

10 ‘‘(iii) LACK OF NOTIFICATION BY THE

11 STATE.—If a State does not notify the 

12 Secretary pursuant to clause (i), the Sec13 retary shall— 

14 ‘‘(I) permit residents of that 

15 State to complete simplified applica16 tion forms under paragraphs (2)(B) 

17 and (3)(B); and 

18 ‘‘(II) not require any resident of 

19 such State to complete any data pre20 viously required by that State under 

21 this section. 

22 ‘‘(F) RESTRICTION.—The Secretary shall 

23 not require applicants to complete any financial 

24 or non-financial data that are not required by 

25 the applicant’s State, except as may be required 
664 

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1 for applicants who use the paper forms de2 scribed in subparagraphs (A) and (B) of para3 graph (2). 

4 ‘‘(6) CHARGES TO STUDENTS AND PARENTS

5 FOR USE OF FORMS PROHIBITED.—The common fi6 nancial reporting forms prescribed by the Secretary 

7 under this subsection shall be produced, distributed, 

8 and processed by the Secretary, and no parent or 

9 student shall be charged a fee by the Secretary, a 

10 contractor, a third-party servicer or private software 

11 provider, or any other public or private entity for the 

12 collection, processing, or delivery of financial aid 

13 through the use of such forms. The need and eligi14 bility of a student for financial assistance under 

15 parts A through E (other than under subpart 4 of 

16 part A) may be determined only by using a form de17 veloped by the Secretary pursuant to this subsection. 

18 No student may receive financial assistance under 

19 parts A through E (other than under subpart 4 of 

20 part A), except by use of a form developed by the 

21 Secretary pursuant to this subsection. No data col22 lected on a paper or electronic form or other docu23 ment that the Secretary determines was created to 

24 replace a form prescribed under this subsection and 

25 therefore violates the integrity of a simplified and 
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1 free financial aid application process and for which 

2 a fee is charged shall be used to complete the form 

3 prescribed under this subsection. No person, com4 mercial entity, or other entity shall request, obtain, 

5 or utilize an applicant’s personal identification num6 ber assigned under paragraph (3)(F) for purposes of 

7 submitting an application on an applicant’s behalf. 

8 ‘‘(7) APPLICATION PROCESSING CYCLE.—The 

9 Secretary shall— 

10 ‘‘(A) enable students to submit forms cre11 ated under this subsection in order to meet the 

12 filing requirements of this section and in order 

13 to receive financial assistance from programs 

14 under this title; and 

15 ‘‘(B) enable students to submit forms cre16 ated under this subsection and initiate the proc17 essing of such forms under this subsection, as 

18 early as practicable prior to January 1 of the 

19 student’s planned year of enrollment. 

20 ‘‘(8) EARLY ESTIMATES.—The Secretary shall 

21 permit an applicant to complete a form described in 

22 this subsection in the years prior to enrollment in 

23 order to obtain from the Secretary a nonbinding es24 timate of the applicant’s expected family contribu25 tion, as defined in section 473. Such applicant shall 
666 

•S 1932 PCS 

1 be permitted to update information submitted on a 

2 form described in this subsection using the process 

3 required under paragraph (4). 

4 ‘‘(9) DISTRIBUTION OF DATA.—Institutions of 

5 higher education, guaranty agencies, and States 

6 shall receive, without charge, the data collected by 

7 the Secretary using the form developed pursuant to 

8 this subsection for the purposes of processing loan 

9 applications and determining need and eligibility for 

10 institutional and State financial aid awards. Entities 

11 designated by institutions of higher education, guar12 anty agencies, or States to receive such data shall be 

13 subject to all the requirements of this section, unless 

14 such requirements are waived by the Secretary. 

15 ‘‘(10) THIRD PARTY SERVICERS AND PRIVATE

16 SOFTWARE PROVIDERS.—To the extent practicable 

17 and in a timely manner, the Secretary shall provide, 

18 to private organizations and consortia that develop 

19 software used by institutions of higher education for 

20 the administration of funds under this title, all the 

21 necessary specifications that the organizations and 

22 consortia must meet for the software the organiza23 tions and consortia develop, produce, and distribute 

24 (including any diskette, modem, or network commu25 nications) which are so used. The specifications shall 
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1 contain record layouts for required data. The Sec2 retary shall develop in advance of each processing 

3 cycle an annual schedule for providing such speci4 fications. The Secretary, to the extent practicable, 

5 shall use means of providing such specifications, in6 cluding conferences and other meetings, outreach, 

7 and technical support mechanisms (such as training 

8 and printed reference materials). The Secretary 

9 shall, from time to time, solicit from such organiza10 tions and consortia means of improving the support 

11 provided by the Secretary. 

12 ‘‘(11) PARENT’S SOCIAL SECURITY NUMBER

13 AND BIRTH DATE.—The Secretary is authorized to 

14 include on the form developed under this subsection 

15 space for the social security number and birth date 

16 of parents of dependent students seeking financial 

17 assistance under this title.’’; 

18 (2) by redesignating subsections (c) through (e) 

19 as subsections (b) through (d), respectively; 

20 (3) in subsection (c) (as redesignated by para21 graph (2)), by striking ‘‘that is authorized’’ and all 

22 that follows through the period at the end and in23 serting ‘‘or other appropriate provider of technical 

24 assistance and information on postsecondary edu25 cational services that is authorized under section 
668 

•S 1932 PCS 

1 663(a) of the Individuals with Disabilities Education 

2 Act. Not later than 2 years after the date of enact3 ment of the Higher Education Amendments of 2005, 

4 the Secretary shall test and implement, to the extent 

5 practicable, a toll-free telephone based system to 

6 permit applicants who meet the requirements of 

7 479(c) to submit an application over such system.’’; 

8 and 

9 (4) by striking subsection (d) (as redesignated 

10 by paragraph (2)) and inserting the following: 

11 ‘‘(d) ASSISTANCE IN PREPARATION OF FINANCIAL

12 AID APPLICATION.— 

13 ‘‘(1) PREPARATION AUTHORIZED.—Notwith14 standing any provision of this Act, an applicant may 

15 use a preparer for consultative or preparation serv16 ices for the completion of the common financial re17 porting forms described in subsection (a) if the pre18 parer satisfies the requirements of this subsection. 

19 ‘‘(2) PREPARER IDENTIFICATION.—Any com20 mon financial reporting form required to be made 

21 under this title shall include the name, signature, 

22 address or employer’s address, social security num23 ber or employer identification number, and organiza24 tional affiliation of the preparer of such common fi25 nancial reporting form. 
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1 ‘‘(3) ADDITIONAL REQUIREMENTS.—A preparer 

2 that provides consultative or preparation services 

3 pursuant to this subsection shall— 

4 ‘‘(A) clearly inform individuals upon initial 

5 contact (including advertising in clear and con6 spicuous language on the website of the pre7 parer, including by providing a link directly to 

8 the website described in subsection (a)(3), if the 

9 preparer provides such services through a 

10 website) that the common financial reporting 

11 forms that are required to determine eligibility 

12 for financial assistance under parts A through 

13 E (other than subpart 4 of part A) may be 

14 completed for free via paper or electronic forms 

15 provided by the Secretary; 

16 ‘‘(B) refrain from producing or dissemi17 nating any form other than the forms produced 

18 by the Secretary under subsection (a); and 

19 ‘‘(C) not charge any fee to any individual 

20 seeking such services who meets the require21 ments of subsection (b) or (c) of section 479. 

22 ‘‘(4) SPECIAL RULE.—Nothing in this Act shall 

23 be construed to limit preparers of the common finan24 cial reporting forms required to be made under this 

25 title who meet the requirements of this subsection 
670 

•S 1932 PCS 

1 from collecting source information from a student or 

2 parent, including Internal Revenue Service tax 

3 forms, in providing consultative and preparation 

4 services in completing the forms.’’. 

5 SEC. 7434. STUDENT ELIGIBILITY. 

6 Section 484 (20 U.S.C. 1091) is amended— 

7 (1) in subsection (d), by adding at the end the 

8 following: 

9 ‘‘(4) The student shall be determined by the in10 stitution of higher education as having the ability to 

11 benefit from the education or training offered by the 

12 institution of higher education, upon satisfactory 

13 completion of 6 credit hours or the equivalent 

14 coursework that are applicable toward a degree or 

15 certificate offered by the institution of higher edu16 cation.’’; 

17 (2) by striking subsection (l) and inserting the 

18 following: 

19 ‘‘(l) COURSES OFFERED THROUGH DISTANCE EDU20 CATION.— 

21 ‘‘(1) RELATION TO CORRESPONDENCE

22 COURSES.— 

23 ‘‘(A) IN GENERAL.—A student enrolled in 

24 a course of instruction at an institution of high25 er education that is offered principally through 
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•S 1932 PCS 

1 distance education and leads to a recognized 

2 certificate, or associate, baccalaureate, or grad3 uate degree, conferred by such institution, shall 

4 not be considered to be enrolled in correspond5 ence courses. 

6 ‘‘(B) EXCEPTION.—An institution of high7 er education referred to in subparagraph (A) 

8 shall not include an institution or school de9 scribed in section 3(3)(C) of the Carl D. Per10 kins Vocational and Technical Education Act of 

11 1998. 

12 ‘‘(2) RESTRICTION OR REDUCTIONS OF FINAN13 CIAL AID.—A student’s eligibility to receive grants, 

14 loans, or work assistance under this title shall be re15 duced if a financial aid officer determines under the 

16 discretionary authority provided in section 479A 

17 that distance education results in a substantially re18 duced cost of attendance to such student. 

19 ‘‘(3) SPECIAL RULE.—For award years prior to 

20 the date of enactment of this subsection, the Sec21 retary shall not take any compliance, disallowance, 

22 penalty, or other action against a student or an eli23 gible institution when such action arises out of such 

24 institution’s prior award of student assistance under 

25 this title if the institution demonstrates to the satis-
672 

•S 1932 PCS 

1 faction of the Secretary that its course of instruction 

2 would have been in conformance with the require3 ments of this subsection. 

4 ‘‘(4) DEFINITION.—In this subsection, the term 

5 ‘distance education’ has the meaning given the term 

6 in section 102.’’; and 

7 (3) in subsection (r)— 

8 (A) in the matter preceding the table, by 

9 inserting ‘‘of a controlled substance, while such 

10 student is enrolled in an institution of higher 

11 education and receiving financial assistance 

12 under this title,’’ after ‘‘the possession’’; 

13 (B) in the column heading of the first 

14 table, by inserting ‘‘while the student is 

15 enrolled in an institution of higher 

16 education and receiving financial as17 sistance under this title’’ after ‘‘posses18 sion of a controlled substance’’; and 

19 (C) by redesignating paragraph (3) as 

20 paragraph (4); and 

21 (D) by inserting after paragraph (2) the 

22 following: 

23 ‘‘(2) INTERACTION WITH FAFSA.—The Sec24 retary shall not require a student to provide infor25 mation regarding the student’s possession of a con-
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•S 1932 PCS 

1 trolled substance on the Free Application for Fed2 eral Student Aid described in section 483(a).’’. 

3 SEC. 7435. STATUTE OF LIMITATIONS AND STATE COURT 

4 JUDGMENTS. 

5 Section 484A (20 U.S.C. 1091a) is amended— 

6 (1) in subsection (b)— 

7 (A) in paragraph (1), by striking ‘‘and’’ 

8 after the semicolon; 

9 (B) in paragraph (2), by striking the pe10 riod and inserting ‘‘; and’’; and 

11 (C) by adding at the end the following: 

12 ‘‘(3) in collecting any obligation arising from a 

13 loan made under part E of this title, an institution 

14 of higher education that has an agreement with the 

15 Secretary pursuant to section 463(a) shall not be 

16 subject to a defense raised by any borrower based on 

17 a claim of infancy.’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(d) SPECIAL RULE.—This section shall not apply in 

20 the case of a student who is deceased or to a deceased 

21 student’s estate or the estate of such student’s family. If 

22 a student is deceased, then the student’s estate or the es23 tate of the student’s family shall not be required to repay 

24 any financial assistance under this title , including interest 
674 

•S 1932 PCS 

1 paid on the student’s behalf, collection costs, or other 

2 charges specified in this title.’’. 

3 SEC. 7436. INSTITUTIONAL REFUNDS. 

4 Section 484B (20 U.S.C. 1091B) is amended— 

5 (1) in subsection (a)— 

6 (A) in the matter preceding clause (i) of 

7 paragraph (2)(A), by striking ‘‘a leave of’’ and 

8 inserting ‘‘1 or more leaves of’’; and 

9 (B) in paragraph (3)(C)(i), by striking 

10 ‘‘grant or loan assistance under this title’’ and 

11 inserting ‘‘grant assistance under subparts 1 

12 and 3 of part A, or loan assistance under parts 

13 B, D, and E,’’; 

14 (2) in subsection (b), by adding at the end the 

15 following: 

16 ‘‘(4) TIME FRAME.—Not later than 45 days 

17 after the date of an institution’s determination that 

18 a student withdrew from the institution, the institu19 tion shall— 

20 ‘‘(A) return the amount required under 

21 paragraph (1); 

22 ‘‘(B) notify the student of the applicable 

23 requirements regarding the overpayment of 

24 grant and loan assistance and 
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•S 1932 PCS 

1 ‘‘(C) notify the student of the student’s eli2 gibility for post-withdrawal disbursements.’’; 

3 (3) in subsection (c)(2), by striking ‘‘may deter4 mine the appropriate withdrawal date.’’ and insert5 ing ‘‘may determine— 

6 (A) the appropriate withdrawal date; and 

7 ‘‘(B) that the requirements of this section 

8 do not apply to the student.’’; and 

9 (4) in subsection (d)(2), by striking ‘‘clock 

10 hours—’’ and all that follows through the period and 

11 inserting ‘‘clock hours scheduled to be completed by 

12 the student in that period as of the day the student 

13 withdrew.’’. 

14 SEC. 7437. INSTITUTIONAL AND FINANCIAL ASSISTANCE 

15 FOR STUDENTS. 

16 Section 485 (20 U.S.C. 1092) is amended— 

17 (1) in subsection (a)— 

18 (A) in paragraph (1)— 

19 (i) in subparagraph (N), by striking 

20 ‘‘and’’ after the semicolon; 

21 (ii) in subparagraph (O), by striking the period 

22 and inserting a semicolon; and 

23 (iii) by adding at the end the fol24 lowing: 
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1 ‘‘(P) student body diversity at the institution, 

2 including information on the percentage of enrolled, 

3 full-time students who are— 

4 ‘‘(i) male; 

5 ‘‘(ii) female; 

6 ‘‘(iii) from a low-income background; and 

7 ‘‘(iv) a self-identified member of a major 

8 racial or ethnic group; 

9 ‘‘(Q) the placement in employment of, and 

10 types of employment obtained by, graduates of 

11 the institution’s degree or certificate programs, 

12 gathered from such sources as alumni surveys, 

13 student satisfaction surveys, the National Sur14 vey of Student Engagement, the Community 

15 College Survey of Student Engagement, State 

16 data systems, or other relevant sources; and 

17 ‘‘(R) the types of graduate and profes18 sional education in which graduates of the insti19 tution’s 4-year degree programs enrolled, gath20 ered from such sources as alumni surveys, stu21 dent satisfaction surveys, the National Survey 

22 of Student Engagement, State data systems, or 

23 other relevant sources.’’; 

24 (B) by striking paragraph (4) and insert25 ing the following: 
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•S 1932 PCS 

1 ‘‘(4) For purposes of this section, institutions 

2 may— 

3 ‘‘(A) exclude from the information dis4 closed in accordance with subparagraph (L) of 

5 paragraph (1) the completion or graduation 

6 rates of students who leave school to serve in 

7 the Armed Forces, on official church missions, 

8 or with a recognized foreign aid service of the 

9 Federal Government; or 

10 ‘‘(B) in cases where the students described 

11 in subparagraph (A) represent 20 percent or 

12 more of the certificate- or degree-seeking, full13 time, undergraduate students at the institution, 

14 the institution may recalculate the completion 

15 or graduation rates of such students by exclud16 ing from the calculation described in paragraph 

17 (3) the time period such students were not en18 rolled due to their service in the Armed Forces, 

19 on official church missions, or with a recognized 

20 foreign aid service of the Federal Govern21 ment.’’; and 

22 (C) by adding at the end the following: 

23 ‘‘(7) The information disclosed under subparagraph 

24 (L) of paragraph (1), or reported under subsection (e), 

25 shall include information disaggregated by gender, by each 
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1 major racial and ethnic subgroup, and by low-income 

2 background status as measured by Federal Pell Grant eli3 gibility, if the number of students in such subgroup or 

4 with such status is sufficient to yield statistically reliable 

5 information and reporting would not reveal personally 

6 identifiable information about an individual student. If 

7 such number is not sufficient for such purposes, then the 

8 institution shall note that the institution enrolled too few 

9 of such students to so disclose or report with confidence 

10 and confidentiality.’’; 

11 (2) in subsection (b), by adding at the end the 

12 following: 

13 ‘‘(3) Each eligible institution shall, during the 

14 exit interview required by this subsection, provide to 

15 a borrower of a loan made under part B, D, or E 

16 a clear and conspicuous notice describing the general 

17 effects of using a consolidation loan to discharge the 

18 borrower’s student loans, including— 

19 ‘‘(A) the effects of consolidation on total 

20 interest to be paid, fees to be paid, and length 

21 of repayment; 

22 ‘‘(B) the effects of consolidation on a bor23 rower’s underlying loan benefits, including loan 

24 forgiveness, cancellation, and deferment; 
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1 ‘‘(C) the ability for the borrower to prepay 

2 the loan, pay on a shorter schedule, and to 

3 change repayment plans, and that borrower 

4 benefit programs may vary among different 

5 loan holders; 

6 ‘‘(D) the tax benefits for which the bor7 rower may be eligible; and 

8 ‘‘(E) the consequences of default.’’; 

9 (3) in subsection (d)(2)— 

10 (A) by inserting ‘‘grant assistance, as well 

11 as State’’ after ‘‘describing State’’; and 

12 (B) by inserting ‘‘and other means, includ13 ing through the Internet’’ before the period at 

14 the end; 

15 (4) in subsection (e), by striking paragraph (3) 

16 and inserting the following: 

17 ‘‘(3) For purposes of this subsection, institu18 tions may— 

19 ‘‘(A) exclude from the reporting require20 ments under paragraphs (1) and (2) the com21 pletion or graduation rates of students and stu22 dent athletes who leave school to serve in the 

23 Armed Forces, on official church missions, or 

24 with a recognized foreign aid service of the Fed25 eral Government; or 
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1 ‘‘(B) in cases where the students described 

2 in subparagraph (A) represent 20 percent or 

3 more of the certificate- or degree-seeking, full4 time, undergraduate students at the institution, 

5 the institution may calculate the completion or 

6 graduation rates of such students by excluding 

7 from the calculations described in paragraph 

8 (1) the time period such students were not en9 rolled due to their service in the Armed Forces, 

10 on official church missions, or with a recognized 

11 foreign aid service of the Federal Govern12 ment.’’; 

13 (5) in the matter preceding subparagraph (A) 

14 of subsection (f)(1), by inserting ‘‘, other than a for15 eign institution of higher education,’’ after ‘‘under 

16 this title’’; and 

17 (6) by adding at the end the following: 

18 ‘‘(h) TRANSFER OF CREDIT POLICIES.— 

19 ‘‘(1) DISCLOSURE.—Each institution of higher 

20 education participating in any program under this 

21 title shall publicly disclose in a readable and com22 prehensible manner the institution’s transfer of cred23 it policies which shall include a statement of the in24 stitution’s current transfer of credit policies that in25 cludes, at a minimum— 
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1 ‘‘(A) a statement that transfer of credit 

2 shall not be denied solely on the basis of the 

3 agency or association that accredited such other 

4 institution of higher education, if that agency 

5 or association is recognized by the Secretary 

6 pursuant to section 496 to be a reliable author7 ity as to the quality of the education or training 

8 offered; 

9 ‘‘(B) a list of institutions of higher edu10 cation with which the institution has established 

11 an articulation agreement; and 

12 ‘‘(C) the percentage of students at the in13 stitution who successfully transfer academic 

14 credits, updated on an annual basis. 

15 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

16 this subsection shall be construed to— 

17 ‘‘(A) authorize an officer or employee of 

18 the Department to exercise any direction, su19 pervision, or control over the curriculum, pro20 gram of instruction, administration, or per21 sonnel of any institution of higher education, or 

22 over any accrediting agency or association; 

23 ‘‘(B) limit the application of the General 

24 Education Provisions Act; or 
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1 ‘‘(C) create any legally enforceable right on 

2 the part of a student to require an institution 

3 of higher education to accept a transfer of cred4 it from another institution.’’. 

5 SEC. 7438. NATIONAL STUDENT LOAN DATA SYSTEM. 

6 Section 485B(a) (20 U.S.C. 1092b(a)) is amended— 

7 (1) by redesignating paragraphs (6) through 

8 (10) as paragraphs (7) through (11), respectively; 

9 (2) in paragraph (5) (as added by Public Law 

10 101–610), by striking ‘‘effectiveness.’’ and inserting 

11 ‘‘effectiveness;’’; and 

12 (3) by redesignating paragraph (5) (as added 

13 by Public Law 101–234) as paragraph (6). 

14 SEC. 7439. EARLY AWARENESS OF FINANCIAL AID ELIGI15 BILITY. 

16 Part G of title IV (20 U.S.C. 1088 et seq.) is amend17 ed by inserting after section 485C (20 U.S.C. 1092c) the 

18 following: 

19 ‘‘SEC. 485D. EARLY AWARENESS OF FINANCIAL AID ELIGI20 BILITY. 

21 ‘‘(a) IN GENERAL.—The Secretary shall implement, 

22 in cooperation with States, institutions of higher edu23 cation, secondary schools, middle schools, early interven24 tion and outreach programs under this title, other agen25 cies and organizations involved in student financial assist-
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•S 1932 PCS 

1 ance and college access, public libraries, community cen2 ters, employers, and businesses, a comprehensive system 

3 of early financial aid information in order to provide stu4 dents and families with early information about financial 

5 aid and early estimates of such students’ eligibility for fi6 nancial aid from multiple sources. Such system shall in7 clude the activities described in subsections (b) and (c). 

8 ‘‘(b) COMMUNICATION OF AVAILABILITY OF AID AND

9 AID ELIGIBILITY.— 

10 ‘‘(1) STUDENTS WHO RECEIVE BENEFITS.—The 

11 Secretary shall— 

12 ‘‘(A) make special efforts to notify stu13 dents who receive or are eligible to receive bene14 fits under Federal means-tested benefit pro15 grams (including the school lunch program es16 tablished under the Richard B. Russell National 

17 School Lunch Act (42 U.S.C. 1751 et seq.), the 

18 food stamp program under the Food Stamp Act 

19 of 1977 (7 U.S.C. 2011 et seq.), and other such 

20 programs as determined by the Secretary) of 

21 such students’ potential eligibility for a max22 imum Federal Pell Grant under subpart 1 of 

23 part A; and 

24 ‘‘(B) disseminate such informational mate25 rials as the Secretary determines necessary. 
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1 ‘‘(2) MIDDLE SCHOOL STUDENTS.—The Sec2 retary, in cooperation with States, institutions of 

3 higher education, other organizations involved in col4 lege access and student financial aid, middle schools, 

5 and programs under this title that serve middle 

6 school students, shall make special efforts to notify 

7 students and their parents of the availability of fi8 nancial aid under this title and, in accordance with 

9 subsection (c), shall provide nonbinding estimates of 

10 grant and loan aid that an individual may be eligible 

11 for under this title upon completion of an applica12 tion form under section 483(a). The Secretary shall 

13 ensure that such information is as accurate as pos14 sible and that such information is provided in an 

15 age-appropriate format using dissemination mecha16 nisms suitable for students in middle school. 

17 ‘‘(3) SECONDARY SCHOOL STUDENTS.—The 

18 Secretary, in cooperation with States, institutions of 

19 higher education, other organizations involved in col20 lege access and student financial aid, secondary 

21 schools, and programs under this title that serve sec22 ondary school students, shall make special efforts to 

23 notify students in secondary school and their par24 ents, as early as possible but not later than such 

25 students’ junior year of secondary school, of the 
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1 availability of financial aid under this title and, in 

2 accordance with subsection (c), shall provide non3 binding estimates of the amounts of grant and loan 

4 aid that an individual may be eligible for under this 

5 title upon completion of an application form under 

6 section 483(a). The Secretary shall ensure that such 

7 information is as accurate as possible and that such 

8 information is provided in an age-appropriate format 

9 using dissemination mechanisms suitable for stu10 dents in secondary school. 

11 ‘‘(4) ADULT LEARNERS.—The Secretary, in co12 operation with States, institutions of higher edu13 cation, other organizations involved in college access 

14 and student financial aid, employers, workforce in15 vestment boards and public libraries, shall make spe16 cial efforts to provide individuals who would qualify 

17 as independent students, as defined in section 

18 480(d), with information regarding the availability 

19 of financial aid under this title and, in accordance 

20 with subsection (c), with nonbinding estimates of the 

21 amounts of grant and loan aid that an individual 

22 may be eligible for under this title upon completion 

23 of an application form under section 483(a). The 

24 Secretary shall ensure that such information— 

25 ‘‘(A) is as accurate as possible; 
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1 ‘‘(B) includes specific information regard2 ing the availability of financial aid for students 

3 qualified as independent students, as defined in 

4 section 480(d); and 

5 ‘‘(C) uses dissemination mechanisms suit6 able for adult learners. 

7 ‘‘(5) PUBLIC AWARENESS CAMPAIGN.—Not 

8 later than 2 years after the date of enactment of the 

9 Higher Education Amendments of 2005, the Sec10 retary, in coordination with States, institutions of 

11 higher education, early intervention and outreach 

12 programs under this title, other agencies and organi13 zations involved in student financial aid, local edu14 cational agencies, public libraries, community cen15 ters, businesses, employers, employment services, 

16 workforce investment boards, and movie theaters, 

17 shall implement a public awareness campaign in 

18 order to increase national awareness regarding the 

19 availability of financial aid under this title. The pub20 lic awareness campaign shall disseminate accurate 

21 information regarding the availability of financial 

22 aid under this title and shall be implemented, to the 

23 extent practicable, using a variety of media, includ24 ing print, television, radio and the Internet. The 

25 Secretary shall design and implement the public 
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1 awareness campaign based upon relevant inde2 pendent research and the information and dissemi3 nation strategies found most effective in imple4 menting paragraphs (1) through (4). 

5 ‘‘(c) AVAILABILITY OF NONBINDING ESTIMATES OF

6 FEDERAL FINANCIAL AID ELIGIBILITY.— 

7 ‘‘(1) IN GENERAL.—The Secretary, in coopera8 tion with States, institutions of higher education, 

9 and other agencies and organizations involved in stu10 dent financial aid, shall provide, via a printed form 

11 and the Internet or other electronic means, the capa12 bility for individuals to determine easily, by entering 

13 relevant data, nonbinding estimates of amounts of 

14 grant and loan aid an individual may be eligible for 

15 under this title upon completion and processing of 

16 an application and enrollment in an institution of 

17 higher education. 

18 ‘‘(2) DATA ELEMENTS.—The Secretary, in co19 operation with States, institutions of higher edu20 cation, and other agencies and organizations in21 volved in student financial aid, shall determine the 

22 data elements that are necessary to create a sim23 plified form that individuals can use to obtain easily 

24 nonbinding estimates of the amounts of grant and 
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1 loan aid an individual may be eligible for under this 

2 title. 

3 ‘‘(3) QUALIFICATION TO USE SIMPLIFIED AP4 PLICATION.—The capability provided under this 

5 paragraph shall include the capability to determine 

6 whether the individual is eligible to submit a sim7 plified application form under paragraph (2)(B) or 

8 (3)(B) of section 483(a).’’. 

9 SEC. 7440. COLLEGE ACCESS INITIATIVE. 

10 Part G of title IV (20 U.S.C. 1088 et seq.) is further 

11 amended by inserting after section 485D (as added by sec12 tion 7439) the following: 

13 ‘‘SEC. 485E. COLLEGE ACCESS INITIATIVE. 

14 ‘‘(a) STATE-BY-STATE INFORMATION.—The Sec15 retary shall direct each guaranty agency with which the 

16 Secretary has an agreement under section 428(c) to pro17 vide to the Secretary the information necessary for the de18 velopment of Internet Web links and access for students 

19 and families to a comprehensive listing of the postsec20 ondary education opportunities programs, publications, 

21 Internet Web sites, and other services available in the 

22 States for which such agency serves as the designated 

23 guarantor. 

24 ‘‘(b) GUARANTY AGENCY ACTIVITIES.— 
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1 ‘‘(1) PLAN AND ACTIVITY REQUIRED.—Each 

2 guaranty agency with which the Secretary has an 

3 agreement under section 428(c) shall develop a plan, 

4 and undertake the activity, necessary to gather the 

5 information required under subsection (a) and to 

6 make such information available to the public and to 

7 the Secretary in a form and manner prescribed by 

8 the Secretary. 

9 ‘‘(2) ACTIVITIES.—Each guaranty agency shall 

10 undertake such activities as are necessary to pro11 mote access to postsecondary education for students 

12 through providing information on college planning, 

13 career preparation, and paying for college. The guar14 anty agency shall publicize such information and co15 ordinate such activities with other entities that pro16 vide or distribute such information in the States for 

17 which such guaranty agency serves as the designated 

18 guarantor. 

19 ‘‘(3) FUNDING.—The activities required by this 

20 section may be funded from the guaranty agency’s 

21 Operating Fund established pursuant to section 

22 422B and to the extent funds remain, from earnings 

23 on the restricted account established pursuant to 

24 section 422(h)(4). 
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1 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in 

2 this subsection shall require a guaranty agency to 

3 duplicate any efforts currently underway that meet 

4 the requirements of this subsection. 

5 ‘‘(c) ACCESS TO INFORMATION.— 

6 ‘‘(1) SECRETARY’S RESPONSIBILITY.—The Sec7 retary shall ensure the availability of the information 

8 provided, by the guaranty agencies in accordance 

9 with this section, to students, parents, and other in10 terested individuals, through Web links or other 

11 methods prescribed by the Secretary. 

12 ‘‘(2) GUARANTY AGENCY RESPONSIBILITY.— 

13 The guaranty agencies shall ensure that the infor14 mation required by this section is available without 

15 charge in printed format for students and parents 

16 requesting such information. 

17 ‘‘(3) PUBLICITY.—Not later than 270 days 

18 after the date of enactment of the Higher Education 

19 Amendments Act of 2005, the Secretary and guar20 anty agencies shall publicize the availability of the 

21 information required by this section, with special 

22 emphasis on ensuring that populations that are tra23 ditionally underrepresented in postsecondary edu24 cation are made aware of the availability of such in25 formation.’’. 
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1 SEC. 7441. PROGRAM PARTICIPATION AGREEMENTS. 

2 Section 487 (20 U.S.C. 1094) is amended— 

3 (1) in subsection (a)— 

4 (A) in paragraph (23), by adding at the 

5 end the following: 

6 ‘‘(D) An institution shall be considered in 

7 compliance with the requirements of subpara8 graph (A) for any student to whom the institu9 tion electronically transmits a message con10 taining a voter registration form acceptable for 

11 use in the State in which the institution is lo12 cated, or an Internet address where such a 

13 form can be downloaded, if such information is 

14 in an electronic message devoted solely to voter 

15 registration.’’; and 

16 (B) by adding at the end the following: 

17 ‘‘(24) The institution will, as calculated in ac18 cordance with subsection (g)(1), have not less than 

19 10 percent of its revenues from sources other than 

20 funds provided under this title, or will be subject to 

21 the sanctions described in subsection (g)(2).’’; 

22 (2) in subsection (c)(1)(A)(i), by inserting ‘‘, 

23 except that the Secretary may modify the require24 ments of this clause with regard to an institution 

25 outside the United States’’ before the semicolon at 

26 the end; 
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1 (3) by redesignating subsections (d) and (e) as 

2 subsection (e) and (f), respectively; 

3 (4) by inserting after subsection (c) the fol4 lowing: 

5 ‘‘(d) INSTITUTIONAL REQUIREMENTS FOR TEACH6 OUTS.— 

7 ‘‘(1) IN GENERAL.—In the event the Secretary 

8 initiates the limitation, suspension, or termination of 

9 the participation of an institution of higher edu10 cation in any program under this title under the au11 thority of subsection (c)(1)(F) or initiates an emer12 gency action for termination under the authority of 

13 subsection (c)(1)(G) and its prescribed regulations, 

14 the Secretary shall require that institution to pre15 pare a teach-out plan for submission to the institu16 tion’s accrediting agency or association in compli17 ance with section 496(c)(4), the Secretary’s regula18 tions on teach-out plans, and the standards of the 

19 institution’s accrediting agency or association. 

20 ‘‘(2) TEACH-OUT PLAN DEFINED.—In this sub21 section, the term ‘teach-out plan’ means a written 

22 plan that provides for the equitable treatment of stu23 dents if an institution of higher education ceases to 

24 operate before all students have completed their pro25 gram of study, and may include, if required by the 
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1 institution’s accrediting agency or association, an 

2 agreement between institutions for such a teach-out 

3 plan.’’; and 

4 (5) by adding at the end the following: 

5 ‘‘(g) IMPLEMENTATION OF NONTITLE IV REVENUE

6 REQUIREMENT.— 

7 ‘‘(1) CALCULATION.—In carrying out sub8 section (a)(24), an institution shall use the cash 

9 basis of accounting and count the following funds as 

10 from sources of funds other than funds provided 

11 under this title: 

12 ‘‘(A) Funds used by students from sources 

13 other than funds received under this title to pay 

14 tuition, fees, and other institutional charges to 

15 the institution, provided the institution can rea16 sonably demonstrate that such funds were used 

17 for such purposes. 

18 ‘‘(B) Funds used by the institution to sat19 isfy matching-fund requirements for programs 

20 under this title. 

21 ‘‘(C) Funds used by a student from sav22 ings plans for educational expenses established 

23 by or on behalf of the student and which qualify 

24 for special tax treatment under the Internal 

25 Revenue Code of 1986. 
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1 ‘‘(D) Funds paid by a student, or on be2 half of a student by a party other than the in3 stitution, to the institution for an education or 

4 training program that is not eligible for funds 

5 under this title, provided that the program is 

6 approved or licensed by the appropriate State 

7 agency or an accrediting agency recognized by 

8 the Secretary. 

9 ‘‘(E) Funds generated by the institution 

10 from institutional activities that are necessary 

11 for the education and training of the institu12 tion’s students, if such activities are— 

13 ‘‘(i) conducted on campus or at a fa14 cility under the control of the institution; 

15 ‘‘(ii) performed under the supervision 

16 of a member of the institution’s faculty; 

17 and 

18 ‘‘(iii) required to be performed by all 

19 students in a specific educational program 

20 at the institution. 

21 ‘‘(F) Institutional aid, as follows: 

22 ‘‘(i) In the case of loans made by the 

23 institution, only the amount of loan repay24 ments received by the institution during 
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1 the fiscal year for which the determination 

2 is made. 

3 ‘‘(ii) In the case of scholarships pro4 vided by the institution, only those scholar5 ship funds provided by the institution that 

6 are— 

7 ‘‘(I) in the form of monetary aid 

8 based upon the academic achieve9 ments or financial need of students; 

10 and 

11 ‘‘(II) disbursed during the fiscal 

12 year for which the determination is 

13 made from an established restricted 

14 account and only to the extent that 

15 the funds in that account represent 

16 designated funds from an outside 

17 source or income earned on those 

18 funds. 

19 ‘‘(iii) In the case of tuition discounts, 

20 only those tuition discounts based upon the 

21 academic achievement or financial need of 

22 students. 

23 ‘‘(2) SANCTIONS.— 

24 ‘‘(A) FAILURE TO MEET REQUIREMENT

25 FOR 1 YEAR.—In addition to such other means 
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1 of enforcing the requirements of this title as 

2 may be available to the Secretary, if an institu3 tion fails to meet the requirements of sub4 section (a)(24) in any year, the Secretary may 

5 impose 1 or both of the following sanctions on 

6 the institution: 

7 ‘‘(i) Place the institution on provi8 sional certification in accordance with sec9 tion 498(h) until the institution dem10 onstrates, to the satisfaction of the Sec11 retary, that it is in compliance with sub12 section (a)(24). 

13 ‘‘(ii) Require such other increased 

14 monitoring and reporting requirements as 

15 the Secretary determines necessary until 

16 the institution demonstrates, to the satis17 faction of the Secretary, that it is in com18 pliance with subsection (a)(24). 

19 ‘‘(B) FAILURE TO MEET REQUIREMENT

20 FOR 2YEARS.—An institution that fails to meet 

21 the requirements of subsection (a)(24) for 2 

22 consecutive years shall be ineligible to partici23 pate in the programs authorized under this 

24 title. 
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1 ‘‘(3) PUBLIC AVAILABILITY OF INFORMATION.— 

2 The Secretary shall make publicly available, through 

3 the means described in subsection (b) of section 131, 

4 any institution that fails to meet the requirements of 

5 subsection (a)(24) in any year as an institution that 

6 is failing to meet the minimum non-Federal source 

7 of revenue requirements of such subsection 

8 (a)(24).’’. 

9 SEC. 7442. REGULATORY RELIEF AND IMPROVEMENT. 

10 Section 487A(b) (20 U.S.C. 1094a(b)) is amended— 

11 (1) in paragraph (1)– 

12 (A) by striking ‘‘1998’’ and inserting 

13 ‘‘2005’’ ; and 

14 (B) by striking ‘‘1999’’ and inserting 

15 ‘‘2006’’; and 

16 (2) by striking the matter preceding paragraph 

17 (2)(A) and inserting the following: 

18 ‘‘(2) REPORT.—The Secretary shall review and 

19 evaluate the experience of institutions participating 

20 as experimental sites and shall, on a biennial basis, 

21 submit a report based on the review and evaluation 

22 to the authorizing committees. Such report shall in23 clude—’’; and 

24 (3) in paragraph (3)— 

25 (A) in subparagraph (A)— 
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1 (i) by striking ‘‘Upon the submission 

2 of the report required by paragraph (2), 

3 the’’ and inserting ‘‘The’’; and 

4 (ii) by inserting ‘‘periodically’’ after 

5 ‘‘authorized to’’; 

6 (B) by striking subparagraph (B); 

7 (C) by redesignating subparagraph (C) as 

8 subparagraph (B); and 

9 (D) in subparagraph (B) (as redesignated 

10 by subparagraph (C))— 

11 (i) by inserting ‘‘, including require12 ments related to the award process and 

13 disbursement of student financial aid (such 

14 as innovative delivery systems for modular 

15 or compressed courses, or other innovative 

16 systems), verification of student financial 

17 aid application data, entrance and exit 

18 interviews, or other management proce19 dures or processes as determined in the ne20 gotiated rulemaking process under section 

21 492,’’ after ‘‘requirements in this title’’; 

22 and 

23 (ii) by inserting ‘‘(other than an 

24 award rule related to an experiment in 
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1 modular or compressed schedules)’’ after 

2 ‘‘award rules’’; and 

3 (iii) by inserting ‘‘unless the waiver of 

4 such provisions is authorized by another 

5 provision under this title’’ before the pe6 riod at the end. 

7 SEC. 7443. TRANSFER OF ALLOTMENTS. 

8 Section 488 (20 U.S.C. 1095) is amended in the first 

9 sentence— 

10 (1) in paragraph (1), by striking ‘‘and’’ after 

11 the semicolon; 

12 (2) in paragraph (2), by striking ‘‘413D.’’ and 

13 inserting ‘‘413D; and’’; and 

14 (3) by adding at the end ‘‘(3) transfer 25 per15 cent of the institution’s allotment under section 

16 413D to the institution’s allotment under section 

17 442.’’. 

18 SEC. 7444. WAGE GARNISHMENT REQUIREMENT. 

19 Section 488A(a)(1) (20 U.S.C. 1095a(a)(1)) is 

20 amended by striking ‘‘10 percent’’ and inserting ‘‘15 per21 cent’’. 

22 SEC. 7445. PURPOSE OF ADMINISTRATIVE PAYMENTS. 

23 Section 489(b) (20 U.S.C. 1096(b)) is amended by 

24 striking ‘‘offsetting the administrative costs of’’ and in25 serting ‘‘administering’’. 
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1 SEC. 7446. ADVISORY COMMITTEE ON STUDENT FINANCIAL 

2 ASSISTANCE. 

3 Section 491 (20 U.S.C. 1098) is amended— 

4 (1) in subsection (a)(2)— 

5 (A) in subparagraph (B), by striking 

6 ‘‘and’’ after the semicolon; 

7 (B) in subparagraph (C), by striking the 

8 period and inserting a semicolon; and 

9 (C) by adding at the end the following: 

10 ‘‘(D) to provide knowledge and under11 standing of early intervention programs, and to 

12 make recommendations that will result in early 

13 awareness by low- and moderate-income stu14 dents and families— 

15 ‘‘(i) of their eligibility for assistance 

16 under this title; and 

17 ‘‘(ii) to the extent practicable, of their 

18 eligibility for other forms of State and in19 stitutional need-based student assistance; 

20 and 

21 ‘‘(E) to make recommendations that will 

22 expand and improve partnerships among the 

23 Federal Government, States, institutions of 

24 higher education, and private entities to in25 crease the awareness and the total amount of 
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1 need-based student assistance available to low2 and moderate-income students.’’; 

3 (2) in subsection (c), by adding at the end the 

4 following: 

5 ‘‘(3) The appointment of a member under subpara6 graph (A) or (B) of paragraph (1) shall be effective upon 

7 confirmation of the member by the Senate and publication 

8 of such appointment in the Congressional Record.’’. 

9 (3) in subsection (d)(6), by striking ‘‘, but 

10 nothing’’ and all that follows through ‘‘or analyses’’; 

11 (4) in subsection (j)— 

12 (A) in paragraph (1)— 

13 (i) by inserting ‘‘and simplification’’ 

14 after ‘‘modernization’’ each place the term 

15 appears; and 

16 (ii) by striking ‘‘including’’ and all 

17 that follows through ‘‘Department,’’; and 

18 (B) by striking paragraphs (4) and (5) and 

19 inserting the following: 

20 ‘‘(4) conduct a review and analysis of regula21 tions in accordance with subsection (l); and 

22 ‘‘(5) conduct a study in accordance with sub23 section (m).’’; 

24 (5) in subsection (k), by striking ‘‘2004’’ and 

25 inserting ‘‘2010’’; and 
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1 (6) by adding at the end the following: 

2 ‘‘(l) REVIEW AND ANALYSIS OF REGULATIONS.— 

3 ‘‘(1) RECOMMENDATIONS.—The Advisory Com4 mittee shall make recommendations to the Secretary 

5 and Congress for consideration of future legislative 

6 action regarding redundant or outdated regulations 

7 under this title, consistent with the Secretary’s re8 quirements under section 498B. 

9 ‘‘(2) REVIEW AND ANALYSIS OF REGULA10 TIONS.—The Advisory Committee shall conduct a re11 view and analysis of the regulations issued under 

12 this title that are in effect at the time of the review 

13 and that apply to the operations or activities of par14 ticipants in the programs assisted under this title. 

15 The review and analysis may include a determina16 tion of whether the regulation is duplicative, is no 

17 longer necessary, is inconsistent with other Federal 

18 requirements, or is overly burdensome. In con19 ducting the review, the Advisory Committee shall 

20 pay specific attention to evaluating ways in which 

21 regulations under this title affecting institutions of 

22 higher education (other than institutions described 

23 in section 102(a)(1)(C)), that have received in each 

24 of the 2 most recent award years prior to the date 

25 of enactment of the Higher Education Amendments 
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1 of 2005 less than $200,000 in funds through this 

2 title, may be improved, streamlined, or eliminated. 

3 ‘‘(3) CONSULTATION.— 

4 ‘‘(A) IN GENERAL.—In carrying out the 

5 review and analysis under paragraph (2), the 

6 Advisory Committee shall consult with the Sec7 retary, relevant representatives of institutions 

8 of higher education, and individuals who have 

9 expertise and experience with the regulations 

10 issued under this title, in accordance with sub11 paragraph (B). 

12 ‘‘(B) REVIEW PANELS.—The Advisory 

13 Committee shall convene not less than 2 review 

14 panels of representatives of the groups involved 

15 in student financial assistance programs under 

16 this title who have experience and expertise in 

17 the regulations issued under this title to review 

18 the regulations under this title, and to provide 

19 recommendations to the Advisory Committee 

20 with respect to the review and analysis under 

21 paragraph (2). The panels shall be made up of 

22 experts in areas such as the operations of the 

23 financial assistance programs, the institutional 

24 eligibility requirements for the financial assist25 ance programs, regulations not directly related 
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1 to the operations or the institutional eligibility 

2 requirements of the financial assistance pro3 grams, and regulations for dissemination of in4 formation to students about the financial assist5 ance programs. 

6 ‘‘(4) REPORTS TO CONGRESS.—The Advisory 

7 Committee shall submit, not later than 2 years after 

8 the completion of the negotiated rulemaking process 

9 required under section 492 resulting from the 

10 amendments to this Act made by the Higher Edu11 cation Amendments of 2005, a report to the author12 izing committees and the Secretary detailing the ex13 pert panels’ findings and recommendations with re14 spect to the review and analysis under paragraph 

15 (2). 

16 ‘‘(5) ADDITIONAL SUPPORT.—The Secretary 

17 and the Inspector General of the Department shall 

18 provide such assistance and resources to the Advi19 sory Committee as the Secretary and Inspector Gen20 eral determine are necessary to conduct the review 

21 required by this subsection. 

22 ‘‘(m) STUDY OF INNOVATIVE PATHWAYS TO BACCA23 LAUREATE DEGREE ATTAINMENT.— 

24 ‘‘(1) STUDY REQUIRED.—The Advisory Com25 mittee shall conduct a study of the feasibility of in-
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1 creasing baccalaureate degree attainment rates by 

2 reducing the costs and financial barriers to attaining 

3 a baccalaureate degree through innovative programs. 

4 ‘‘(2) SCOPE OF STUDY.—The Advisory Com5 mittee shall examine new and existing programs that 

6 promote baccalaureate degree attainment through 

7 innovative ways, such as dual or concurrent enroll8 ment programs, changes made to the Federal Pell 

9 Grant program, simplification of the needs analysis 

10 process, compressed or modular scheduling, articula11 tion agreements, and programs that allow 2-year in12 stitutions of higher education to offer baccalaureate 

13 degrees. 

14 ‘‘(3) REQUIRED ASPECTS OF THE STUDY.—In 

15 performing the study described in this subsection, 

16 the Advisory Committee shall examine the following 

17 aspects of such innovative programs: 

18 ‘‘(A) The impact of such programs on bac19 calaureate attainment rates. 

20 ‘‘(B) The degree to which a student’s total 

21 cost of attaining a baccalaureate degree can be 

22 reduced by such programs. 

23 ‘‘(C) The ways in which low- and mod24 erate-income students can be specifically tar25 geted by such programs. 
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1 ‘‘(D) The ways in which nontraditional 

2 students can be specifically targeted by such 

3 programs. 

4 ‘‘(E) The cost-effectiveness for the Federal 

5 Government, States, and institutions of higher 

6 education to implement such programs. 

7 ‘‘(4) CONSULTATION.— 

8 ‘‘(A) IN GENERAL.—In performing the 

9 study described in this subsection the Advisory 

10 Committee shall consult with a broad range of 

11 interested parties in higher education, including 

12 parents, students, appropriate representatives 

13 of secondary schools and institutions of higher 

14 education, appropriate State administrators, ad15 ministrators of dual enrollment programs, and 

16 appropriate officials from the Department. 

17 ‘‘(B) CONGRESSIONAL CONSULTATION.— 

18 The Advisory Committee shall consult on a reg19 ular basis with the authorizing committees in 

20 carrying out the study required by this section. 

21 ‘‘(5) REPORTS TO CONGRESS.— 

22 ‘‘(A) INTERIM REPORT.—The Advisory 

23 Committee shall prepare and submit to the au24 thorizing committees and the Secretary 1 in25 terim report, not later than 1 year after the 
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1 date of enactment of the Higher Education 

2 Amendments of 2005, describing the progress 

3 that has been made in conducting the study re4 quired by this subsection and any preliminary 

5 findings on the topics identified under para6 graph (2). 

7 ‘‘(B) FINAL REPORT.—The Advisory Com8 mittee shall, not later than 3 years after the 

9 date of enactment of the Higher Education 

10 Amendments of 2005, prepare and submit to 

11 the authorizing committees and the Secretary a 

12 final report on the study, including rec13 ommendations for legislative, regulatory, and 

14 administrative changes based on findings re15 lated to the topics identified under paragraph 

16 (2).’’. 

17 SEC. 7447. REGIONAL MEETINGS. 

18 Section 492(a)(1) (20 U.S.C. 1098a(a)(1)) is amend19 ed by inserting ‘‘State student grant agencies,’’ after ‘‘in20 stitutions of higher education,’’. 

21 SEC. 7448. YEAR 2000 REQUIREMENTS AT THE DEPART22 MENT. 

23 (a) REPEAL.—Section 493A (20 U.S.C. 1098c) is re24 pealed. 
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1 (b) REDESIGNATION.—Section 493B (20 U.S.C. 

2 1098d) is redesignated as section 493A. 

3 Subchapter H—Program Integrity 

4 SEC. 7451. RECOGNITION OF ACCREDITING AGENCY OR AS5 SOCIATION. 

6 Section 496 (200 U.S.C. 1099b) is amended— 

7 (1) in subsection (a)— 

8 (A) by striking paragraph (4) and insert9 ing the following: 

10 ‘‘(4)(A) such agency or association consistently 

11 applies and enforces standards that respect the stat12 ed mission of the institution of higher education, in13 cluding religious missions, and that ensure that the 

14 courses or programs of instruction, training, or 

15 study offered by the institution of higher education, 

16 including distance education courses or programs, 

17 are of sufficient quality to achieve, for the duration 

18 of the accreditation period, the stated objective for 

19 which the courses or the programs are offered; and 

20 ‘‘(B) if such agency or association has or seeks 

21 to include within its scope of recognition the evalua22 tion of the quality of institutions or programs offer23 ing distance education, such agency or association 

24 shall, in addition to meeting the other requirements 

25 of this subpart, demonstrate to the Secretary that— 
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1 ‘‘(i) the agency or association’s standards 

2 effectively address the quality of an institution’s 

3 distance education in the areas identified in sec4 tion 496(a)(5), except that the agency or asso5 ciation shall not be required to have separate 

6 standards, procedures or policies for the evalua7 tion of distance education institutions or pro8 grams in order to meet the requirements of this 

9 subparagraph; and 

10 ‘‘(ii) the agency or association requires an 

11 institution that offers distance education to 

12 have processes through which the institution es13 tablishes that the student who registers in a 

14 distance education course or program is the 

15 same student who participates, completes and 

16 receives the academic credit;’’; 

17 (B) in paragraph (5), by striking subpara18 graph (A) and inserting the following: 

19 ‘‘(A) success with respect to student 

20 achievement in relation to the institution’s mis21 sion, including— 

22 ‘‘(i) consideration of student academic 

23 achievement as determined by the institu24 tion; 

25 ‘‘(ii) student retention; 
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1 ‘‘(iii) course and program completion; 

2 ‘‘(iv) as appropriate, State licensing 

3 examinations; 

4 ‘‘(v) as appropriate, job placement 

5 rates or enrollment in graduate or profes6 sional programs; and 

7 ‘‘(vi) as appropriate, other student 

8 performance information selected by the 

9 institution, particularly that information 

10 used by the institution to evaluate or 

11 strengthen its programs;’’; 

12 (C) by striking paragraph (6) and insert13 ing the following: 

14 ‘‘(6) such an agency or association shall estab15 lish and apply review procedures throughout the ac16 crediting process, including evaluation and with17 drawal proceedings which comply with due process 

18 procedures that provide for— 

19 ‘‘(A) adequate specification of require20 ments and deficiencies at the institution of 

21 higher education or program examined; 

22 ‘‘(B) an opportunity for a written response 

23 by any such institution to be included, prior to 

24 final action, in the evaluation and withdrawal 

25 proceedings; 
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1 ‘‘(C) upon the written request of an insti2 tution, an opportunity for the institution to ap3 peal any adverse action, including denial, with4 drawal, suspension, or termination of accredita5 tion, or placement on probation of an institu6 tion, at a hearing prior to such action becoming 

7 final, before an appeals panel that— 

8 ‘‘(i) shall not include current members 

9 of the agency or association’s underlying 

10 decision-making body that made the ad11 verse decision; and 

12 ‘‘(ii) is subject to a conflict of interest 

13 policy; and 

14 ‘‘(D) the right to representation by counsel 

15 for such an institution during an appeal of the 

16 adverse action;’’; and 

17 (D) by striking paragraph (8) and insert18 ing the following: 

19 ‘‘(8) such agency or association shall make 

20 available to the public and the State licensing or au21 thorizing agency, and submit to the Secretary, a 

22 summary of agency or association actions, includ23 ing— 

24 ‘‘(A) the award of accreditation or re25 accreditation of an institution; 
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1 ‘‘(B) final denial, withdrawal, suspension, 

2 or termination of accreditation, or placement on 

3 probation of an institution, and any findings 

4 made in connection with the action taken, to5 gether with the official comments of the af6 fected institution; and 

7 ‘‘(C) any other adverse action taken with 

8 respect to an institution.’’; and 

9 (2) in subsection (c)— 

10 (A) in paragraph (1), by inserting ‘‘, in11 cluding those regarding distance education’’ 

12 after ‘‘their responsibilities’’; 

13 (B) by redesignating paragraphs (2) 

14 through (6) as paragraphs (5) through (9); 

15 (C) by inserting after paragraph (1) (as 

16 amended by subparagraph (A)) the following: 

17 ‘‘(2) ensures that the agency or association’s 

18 on-site evaluation for accreditation or reaccreditation 

19 includes review of the Federally required information 

20 the institution or program provides its current and 

21 prospective students; 

22 ‘‘(3) monitors the growth of programs at insti23 tutions that are experiencing significant enrollment 

24 growth; 
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1 ‘‘(4) requires an institution to submit a teach2 out plan for approval to the accrediting agency upon 

3 the occurrence of any of the following events: 

4 ‘‘(A) The Department notifies the accred5 iting agency of an action against the institution 

6 pursuant to section 487(d). 

7 ‘‘(B) The accrediting agency acts to with8 draw, terminate, or suspend the accreditation of 

9 an institution. 

10 ‘‘(C) The institution notifies the accred11 iting agency that the institution intends to 

12 cease operations.’’; 

13 (D) in paragraph (8) (as redesignated by 

14 subparagraph (B)), by striking ‘‘and’’ after the 

15 semicolon; 

16 (E) in subparagraph (9) (as redesignated 

17 by subparagraph (B)), by striking the period 

18 and inserting ‘‘; and’’; and 

19 (F) by adding at the end the following: 

20 ‘‘(10) confirms, as a part of the agency or asso21 ciation’s review for accreditation or reaccreditation, 

22 that the institution has transfer of credit policies— 

23 ‘‘(A) that are publicly disclosed; 

24 ‘‘(B) that do not deny transfer of credit 

25 based solely on the accreditation of the sending 
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1 institution, if the agency or association accred2 iting the sending institution is recognized by 

3 the Secretary pursuant to this section; and 

4 ‘‘(C) in which acceptance or denial of 

5 transfer of credit is decided according to cri6 teria established in guidelines developed by the 

7 institution’s admissions committee.’’. 

8 SEC. 7452. ADMINISTRATIVE CAPACITY STANDARD. 

9 Section 498 (20 U.S.C. 1099c) is amended— 

10 (1) in subsection (d)(1)(B), by inserting ‘‘and’’ 

11 after the semicolon; and 

12 (2) by adding at the end the following: 

13 ‘‘(k) TREATMENT OF TEACH-OUTS AT ADDITIONAL

14 LOCATIONS.— 

15 ‘‘(1) IN GENERAL.—A location of a closed insti16 tution of higher education shall be eligible as an ad17 ditional location of an eligible institution of higher 

18 education, as defined pursuant to regulations of the 

19 Secretary, for the purposes of a teach-out, if such 

20 teach-out has been approved by the institution’s ac21 crediting agency. 

22 ‘‘(2) SPECIAL RULE.—An institution of higher 

23 education that conducts a teach-out through the es24 tablishment of an additional location described in 

25 paragraph (1) shall be permitted to establish a per-
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1 manent additional location at a closed institution 

2 and shall not be required— 

3 ‘‘(A) to meet the requirements of sections 

4 102(b)(1)(E) and 102(c)(1)(C) for such addi5 tional location; or 

6 ‘‘(B) to assume the liabilities of the closed 

7 institution.’’. 

8 SEC. 7453. PROGRAM REVIEW AND DATA. 

9 Section 498A(b) (20 U.S.C. 1099c–1(b)) is amend10 ed— 

11 (1) in paragraph (4), by striking ‘‘and’’ after 

12 the semicolon; 

13 (2) in paragraph (5) by striking the period and 

14 inserting a semicolon; and 

15 (3) by adding at the end the following: 

16 ‘‘(6) provide to an institution of higher edu17 cation an adequate opportunity to review and re18 spond to any program review report and relevant 

19 materials related to the report before any final pro20 gram review is reached; 

21 ‘‘(7) review and take into consideration an in22 stitution of higher education’s response in any final 

23 program review; and 

24 ‘‘(8) maintain and preserve at all times the con25 fidentiality of any program review report until the 
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•S 1932 PCS 

1 requirements of paragraphs (6) and (7) are met, and 

2 until a final program review is issued, other than to 

3 the extent required to comply with paragraph (5), 

4 except that the Secretary shall promptly disclose any 

5 and all program review reports to the institution of 

6 higher education under review.’’. 

7 CHAPTER 6—DEVELOPING INSTITUTIONS 

8 SEC. 7501. DEFINITIONS. 

9 Section 502(a) (20 U.S.C. 1101a(a)) is amended— 

10 (1) in paragraph (5)— 

11 (A) in subparagraph (A), by inserting 

12 ‘‘and’’ after the semicolon; 

13 (B) in subparagraph (B), by striking ‘‘; 

14 and’’ and inserting a period; and 

15 (C) by striking subparagraph (C); and 

16 (2) by striking paragraph (7). 

17 SEC. 7502. AUTHORIZED ACTIVITIES. 

18 Section 503(b) (20 U.S.C. 1101b(b)) is amended— 

19 (1) by redesignating paragraphs (6) through 

20 (14) as paragraphs (8) through (16), respectively; 

21 (2) in paragraph (5), by inserting ‘‘, including 

22 innovative, customized remedial education and 

23 English language instruction courses designed to 

24 help retain students and move the students rapidly 
717 

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1 into core courses and through program completion’’ 

2 before the period at the end; and 

3 (3) by inserting after paragraph (5) the fol4 lowing: 

5 ‘‘(6) Education or counseling services designed 

6 to improve the financial literacy and economic lit7 eracy of students or the students’ parents. 

8 ‘‘(7) Articulation agreements and student sup9 port programs designed to facilitate the transfer 

10 from 2-year to 4-year institutions.’’. 

11 SEC. 7503. DURATION OF GRANT. 

12 Section 504(a) (20 U.S.C. 1101c(a)) is amended to 

13 read as follows: 

14 ‘‘(a) AWARD PERIOD.—The Secretary may award a 

15 grant to a Hispanic-serving institution under this title for 

16 5 years.’’. 

17 SEC. 7504. POSTBACCALAUREATE OPPORTUNITIES FOR 

18 HISPANIC AMERICANS. 

19 (a) ESTABLISHMENT OF PROGRAM.—Title V (20 

20 U.S.C. 1101 et seq.) is amended— 

21 (1) by redesignating part B as part C; 

22 (2) by redesignating sections 511 through 518 

23 as sections 521 through 528, respectively; and 

24 (3) by inserting after section 505 the following: 
718 

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1 ‘‘PART B—PROMOTING POSTBACCALAUREATE 

2 OPPORTUNITIES FOR HISPANIC AMERICANS 

3 ‘‘SEC. 511. PROGRAM AUTHORITY AND ELIGIBILITY. 

4 ‘‘(a) PROGRAM AUTHORIZED.—Subject to the avail5 ability of funds appropriated to carry out this part, the 

6 Secretary shall award grants, on a competitive basis, to 

7 eligible institutions to enable the eligible institutions to 

8 carry out the authorized activities described in section 

9 512. 

10 ‘‘(b) ELIGIBILITY.—For the purposes of this part, an 

11 ‘eligible institution’ means an institution of higher edu12 cation that— 

13 ‘‘(1) is a Hispanic-serving institution (as de14 fined in section 502); and 

15 ‘‘(2) offers a postbaccalaureate certificate or de16 gree granting program. 

17 ‘‘SEC. 512. AUTHORIZED ACTIVITIES. 

18 ‘‘Grants awarded under this part shall be used for 

19 1 or more of the following activities: 

20 ‘‘(1) Purchase, rental, or lease of scientific or 

21 laboratory equipment for educational purposes, in22 cluding instructional and research purposes. 

23 ‘‘(2) Construction, maintenance, renovation, 

24 and improvement in classroom, library, laboratory, 

25 and other instructional facilities, including purchase 
719 

•S 1932 PCS 

1 or rental of telecommunications technology equip2 ment or services. 

3 ‘‘(3) Purchase of library books, periodicals, 

4 technical and other scientific journals, microfilm, 

5 microfiche, and other educational materials, includ6 ing telecommunications program materials. 

7 ‘‘(4) Support for needy postbaccalaureate stu8 dents, including outreach, academic support services, 

9 mentoring, scholarships, fellowships, and other fi10 nancial assistance, to permit the enrollment of such 

11 students in postbaccalaureate certificate and degree 

12 granting programs. 

13 ‘‘(5) Support of faculty exchanges, faculty de14 velopment, faculty research, curriculum development, 

15 and academic instruction. 

16 ‘‘(6) Creating or improving facilities for Inter17 net or other distance learning academic instruction 

18 capabilities, including purchase or rental of tele19 communications technology equipment or services. 

20 ‘‘(7) Collaboration with other institutions of 

21 higher education to expand postbaccalaureate certifi22 cate and degree offerings. 

23 ‘‘(8) Other activities proposed in the application 

24 submitted pursuant to section 513 that are approved 
720 

•S 1932 PCS 

1 by the Secretary as part of the review and accept2 ance of such application. 

3 ‘‘SEC. 513. APPLICATION AND DURATION. 

4 ‘‘(a) APPLICATION.—Any eligible institution may 

5 apply for a grant under this part by submitting an applica6 tion to the Secretary at such time and in such manner 

7 as the Secretary may require. Such application shall dem8 onstrate how the grant funds will be used to improve 

9 postbaccalaureate education opportunities for Hispanic 

10 and low-income students and will lead to such students’ 

11 greater financial independence. 

12 ‘‘(b) DURATION.—Grants under this part shall be 

13 awarded for a period not to exceed 5 years. 

14 ‘‘(c) LIMITATION.—The Secretary may not award 

15 more than 1 grant under this part in any fiscal year to 

16 any Hispanic-serving institution.’’. 

17 SEC. 7505. APPLICATIONS. 

18 Section 521(b)(1)(A) (as redesignated by section 

19 7504(a)(2)) (20 U.S.C. 1103(b)(1)(A)) is amended by 

20 striking ‘‘subsection (b)’’ and inserting ‘‘subsection (c)’’. 

21 SEC. 7506. COOPERATIVE ARRANGEMENTS. 

22 Section 524(a) (as redesignated by section 

23 7504(a)(2)) (20 U.S.C. 1103c(a)) is amended by striking 

24 ‘‘section 503’’ and inserting ‘‘sections 503 and 512’’. 
721 

•S 1932 PCS 

1 SEC. 7507. AUTHORIZATION OF APPROPRIATIONS. 

2 Section 528(a) (as redesignated by section 

3 7504(a)(2)) (20 U.S.C. 1103g(a)) is amended— 

4 (1) by inserting ‘‘part A of’’ after ‘‘carry out’’; 

5 (2) by striking ‘‘$62,500,000 for fiscal year 

6 1999’’ and all that follows through the period and 

7 inserting ‘‘such sums as may be necessary for fiscal 

8 year 2006 and each of the 5 succeeding fiscal 

9 years.’’; 

10 (3) by striking ‘‘(a) AUTHORIZATIONS.—There 

11 are’’ and inserting the following: 

12 ‘‘(a) AUTHORIZATIONS.— 

13 ‘‘(1) PART A.—There are’’; and 

14 (4) by adding at the end the following: 

15 ‘‘(2) PART B.—There are authorized to be ap16 propriated to carry out part B of this title such 

17 sums as may be necessary for fiscal year 2006 and 

18 each of the 5 succeeding fiscal years.’’. 

19 CHAPTER 7—INTERNATIONAL EDUCATION 

20 PROGRAMS 

21 SEC. 7601. FINDINGS. 

22 Section 601 (20 U.S.C. 1121) is amended— 

23 (1) in the section heading, by striking ‘‘AND

24 PURPOSES’’ and inserting ‘‘; PURPOSES; CON25 SULTATION; SURVEY’’ 
722 

•S 1932 PCS 

1 (2) in subsection (a)(3), by striking ‘‘post-Cold 

2 War’’; 

3 (3) in subsection (b)(1)(D), by inserting ‘‘, in4 cluding through linkages with overseas institutions’’ 

5 before the semicolon; and 

6 (4) by adding at the end the following: 

7 ‘‘(c) CONSULTATION.—The Secretary shall, prior to 

8 requesting applications for funding under this title during 

9 each grant cycle, consult with and receive recommenda10 tions regarding national need for expertise in foreign lan11 guages and world regions from the head official, or a des12 ignee of such head official, of the National Security Coun13 cil, the Department of Homeland Security, the Depart14 ment of Defense, the Department of State, the Federal 

15 Bureau of Investigation, the Department of Labor, and 

16 the Department of Commerce, the Director of National 

17 Intelligence, and other relevant agencies. These entities 

18 shall provide information to the Secretary regarding how 

19 the entities utilize expertise and resources provided by 

20 grantees under this title. The Secretary shall take into ac21 count such recommendations and information when re22 questing applications for funding under this title, and 

23 shall make available to applicants a list of areas identified 

24 as areas of national need. 
723 

•S 1932 PCS 

1 ‘‘(d) SURVEY.—The Secretary shall assist grantees in 

2 developing a survey to administer to students who have 

3 participated in programs under this title to determine 

4 postparticipation placement. All grantees, where applica5 ble, shall administer such survey not less often than annu6 ally and report such data to the Secretary.’’. 

7 SEC. 7602. GRADUATE AND UNDERGRADUATE LANGUAGE 

8 AND AREA CENTERS AND PROGRAMS. 

9 Section 602 (20 U.S.C. 1122) is amended— 

10 (1) in subsection (a)— 

11 (A) in paragraph (2)— 

12 (i) in subparagraph (G), by striking 

13 ‘‘and’’ after the semicolon; 

14 (ii) in subparagraph (H), by striking 

15 the period and inserting ‘‘; and’’; and 

16 (iii) by adding at the end the fol17 lowing: 

18 ‘‘(I) support for instructors of the less 

19 commonly taught languages.’’; and 

20 (B) in paragraph (4)— 

21 (i) by redesignating subparagraphs 

22 (C) through (E) as subparagraphs (D) 

23 through (F), respectively; 

24 (ii) by inserting after subparagraph 

25 (B) the following: 
724 

•S 1932 PCS 

1 ‘‘(C) Programs of linkage or outreach be2 tween or among— 

3 ‘‘(i) foreign language, area studies, or 

4 other international fields; and 

5 ‘‘(ii) State educational agencies or 

6 local educational agencies.’’; and 

7 (iii) in subparagraph (F) (as redesig8 nated by clause (i)), by striking ‘‘and (D)’’ 

9 and inserting ‘‘(D), and (E)’’; 

10 (2) in subsection (b)— 

11 (A) in the subsection heading, by striking 

12 ‘‘GRADUATE’’; and 

13 (B) by striking paragraph (2) and insert14 ing the following: 

15 ‘‘(2) ELIGIBLE STUDENTS.—A student receiv16 ing a stipend described in paragraph (1) shall be en17 gaged— 

18 ‘‘(A) in an instructional program with stat19 ed performance goals for functional foreign lan20 guage use or in a program developing such per21 formance goals, in combination with area stud22 ies, international studies, or the international 

23 aspects of a professional studies program; and 
725 

•S 1932 PCS 

1 ‘‘(B)(i) in the case of an undergraduate 

2 student, in the intermediate or advanced study 

3 of a less commonly taught language; or 

4 ‘‘(ii) in the case of a graduate student, in 

5 graduate study in connection with a program 

6 described in subparagraph (A), including— 

7 ‘‘(I) predissertation level study; 

8 ‘‘(II) preparation for dissertation re9 search; 

10 ‘‘(III) dissertation research abroad; or 

11 ‘‘(IV) dissertation writing.’’; 

12 (3) by striking subsection (d) and inserting the 

13 following: 

14 ‘‘(d) ALLOWANCES.— 

15 ‘‘(1) GRADUATE LEVEL RECIPIENTS.—A sti16 pend awarded to a graduate level recipient may in17 clude allowances for dependents and for travel for 

18 research and study in the United States and abroad. 

19 ‘‘(2) UNDERGRADUATE LEVEL RECIPIENTS.—A 

20 stipend awarded to an undergraduate level recipient 

21 may include an allowance for educational programs 

22 in the United States or educational programs abroad 

23 that— 

24 ‘‘(A) are closely linked to the overall goals 

25 of the recipient’s course of study; and 
726 

•S 1932 PCS 

1 ‘‘(B) have the purpose of promoting for2 eign language fluency and knowledge of foreign 

3 cultures.’’; and 

4 (4) by adding at the end the following: 

5 ‘‘(e) APPLICATION.—Each institution or combination 

6 of institutions desiring a grant under this section shall 

7 submit an application to the Secretary at such time, in 

8 such manner, and accompanied by such information and 

9 assurances as the Secretary may require. Each application 

10 shall include an explanation of how the activities funded 

11 by the grant will reflect diverse perspectives and a wide 

12 range of views and generate debate on world regions and 

13 international affairs. Each application shall also describe 

14 how the applicant will address disputes regarding whether 

15 activities funded under the application reflect diverse per16 spectives and a wide range of views. Each application shall 

17 also include a description of how the applicant will encour18 age government service in areas of national need as identi19 fied by the Secretary.’’. 

20 SEC. 7603. UNDERGRADUATE INTERNATIONAL STUDIES 

21 AND FOREIGN LANGUAGE PROGRAMS. 

22 Section 604 (20 U.S.C. 1124) is amended— 

23 (1) in subsection (a)— 

24 (A) in paragraph (2)— 
727 

•S 1932 PCS 

1 (i) by redesignating subparagraphs (I) 

2 through (M) as subparagraphs (J) through 

3 (N), respectively; and 

4 (ii) by inserting after subparagraph 

5 (H) the following: 

6 ‘‘(I) providing subgrants to undergraduate 

7 students for educational programs abroad 

8 that— 

9 ‘‘(i) are closely linked to the overall 

10 goals of the program for which the grant 

11 is awarded; and 

12 ‘‘(ii) have the purpose of promoting 

13 foreign language fluency and knowledge of 

14 foreign cultures;’’; and 

15 (B) in paragraph (7)— 

16 (i) in subparagraph (C), by striking 

17 ‘‘and’’ after the semicolon; 

18 (ii) in subparagraph (D), by striking 

19 the period at the end and inserting a semi20 colon; and 

21 (iii) by adding at the end the fol22 lowing: 

23 ‘‘(E) an explanation of how the activities 

24 funded by the grant will reflect diverse perspec25 tives and a wide range of views and generate 
728 

•S 1932 PCS 

1 debate on world regions and international af2 fairs, where applicable; 

3 ‘‘(F) a description of how the applicant 

4 will address disputes regarding whether the ac5 tivities funded under the application reflect di6 verse perspectives and a wide range of views; 

7 and 

8 ‘‘(G) a description of how the applicant 

9 will encourage government service in areas of 

10 national need as identified by the Secretary.’’; 

11 and 

12 (2) in subsection (c)— 

13 (A) by striking ‘‘FUNDING SUPPORT.—The 

14 Secretary’’ and inserting ‘‘FUNDING RULES.— 

15 ‘‘(1) THE SECRETARY.—The Secretary’’; 

16 (B) by striking ‘‘10’’ and inserting ‘‘20’’; 

17 and 

18 (C) by adding at the end the following: 

19 ‘‘(2) GRANTEES.—Of the total amount of grant 

20 funds awarded to a grantee under this section, the 

21 grantee may use not more than 10 percent of such 

22 funds for the activity described in subsection 

23 (a)(2)(I).’’. 

24 SEC. 7604. RESEARCH; STUDIES. 

25 Section 605(a) (20 U.S.C. 1125(a)) is amended— 
729 

•S 1932 PCS 

1 (1) in paragraph (8), by striking ‘‘and’’ after 

2 the semicolon; 

3 (2) in paragraph (9), by striking the period and 

4 inserting a semicolon; and 

5 (3) by adding at the end the following: 

6 ‘‘(10) evaluation of the extent to which pro7 grams assisted under this title reflect diverse per8 spectives and a wide range of views and generate de9 bate on world regions and international affairs; 

10 ‘‘(11) the systematic collection, analysis, and 

11 dissemination of data that contribute to achieving 

12 the purposes of this part; and 

13 ‘‘(12) support for programs or activities to 

14 make data collected, analyzed, or disseminated under 

15 this section publicly available and easy to under16 stand.’’. 

17 SEC. 7605. TECHNOLOGICAL INNOVATION AND COOPERA18 TION FOR FOREIGN INFORMATION ACCESS. 

19 Section 606 (20 U.S.C. 1126) is amended— 

20 (1) in subsection (a)— 

21 (A) by striking ‘‘new electronic tech22 nologies’’ and insert ‘‘electronic technologies’’; 

23 (B) by inserting ‘‘from foreign sources’’ 

24 after ‘‘disseminate information’’; 
730 

•S 1932 PCS 

1 (C) by striking ‘‘AUTHORITY.—The Sec2 retary’’ and insert ‘‘AUTHORITY.— 

3 ‘‘(1) IN GENERAL.—The Secretary’’; and 

4 (D) by adding at the end the following: 

5 ‘‘(2) PARTNERSHIPS WITH NOT-FOR-PROFIT

6 EDUCATIONAL ORGANIZATIONS.—The Secretary may 

7 award grants under this section to carry out the ac8 tivities authorized under this section to the fol9 lowing: 

10 ‘‘(A) An institution of higher education. 

11 ‘‘(B) A public or nonprofit private library. 

12 ‘‘(C) A consortium of an institution of 

13 higher education and 1 or more of the fol14 lowing: 

15 ‘‘(i) Another institution of higher edu16 cation. 

17 ‘‘(ii) A library. 

18 ‘‘(iii) A not-for-profit educational or19 ganization.’’; 

20 (2) in subsection (b)— 

21 (A) in paragraph (1), by striking ‘‘to facili22 tate access to’’ and inserting ‘‘to acquire, facili23 tate access to,’’; 

24 (B) in paragraph (2), by inserting ‘‘or 

25 standards for’’ after ‘‘means of’’; 
731 

•S 1932 PCS 

1 (C) in paragraph (6), by striking ‘‘and’’ 

2 after the semicolon; 

3 (D) in paragraph (7), by striking the pe4 riod and inserting a semicolon; and 

5 (E) by adding at the end the following: 

6 ‘‘(8) to establish linkages to facilitate carrying 

7 out the activities described in this subsection be8 tween— 

9 ‘‘(A) the institutions of higher education, 

10 libraries, and consortia receiving grants under 

11 this section; and 

12 ‘‘(B) institutions of higher education, not13 for-profit educational organizations, and librar14 ies overseas; and 

15 ‘‘(9) to carry out other activities that the Sec16 retary determines are consistent with the purpose of 

17 the grants or contracts awarded under this section.’’; 

18 and 

19 (3) in subsection (c), by striking ‘‘institution or 

20 consortium’’ and inserting ‘‘institution of higher 

21 education, library, or consortium’’. 

22 SEC. 7606. SELECTION OF CERTAIN GRANT RECIPIENTS. 

23 Section 607 (20 U.S.C. 1127) is amended— 

24 (1) in subsection (a), by striking ‘‘evaluates the 

25 applications for comprehensive and undergraduate 
732 

•S 1932 PCS 

1 language and area centers and programs.’’ and in2 serting ‘‘evaluates— 

3 ‘‘(1) the applications for comprehensive foreign 

4 language and area or international studies centers 

5 and programs; and 

6 ‘‘(2) the applications for undergraduate foreign 

7 language and area or international studies centers 

8 and programs.’’; and 

9 (2) in subsection (b), by adding at the end the 

10 following: ‘‘The Secretary shall also consider an ap11 plicant’s record of sending students into public serv12 ice and an applicant’s stated efforts to increase the 

13 number of students that go into public service.’’. 

14 SEC. 7607. AMERICAN OVERSEAS RESEARCH CENTERS. 

15 Section 609 (20 U.S.C. 1128a) is amended by adding 

16 at the end the following: 

17 ‘‘(e) APPLICATION.—Each center desiring a grant 

18 under this section shall submit an application to the Sec19 retary at such time, in such manner, and accompanied by 

20 such information and assurances as the Secretary may re21 quire. Each application shall include how the activities 

22 funded by the grant will reflect diverse perspectives and 

23 a wide range of views and generate debate on world re24 gions and international affairs, where applicable. Each ap25 plication shall also describe how the applicant will address 
733 

•S 1932 PCS 

1 disputes regarding whether the activities funded under the 

2 application reflect diverse perspectives and a wide range 

3 of views.’’. 

4 SEC. 7608. AUTHORIZATION OF APPROPRIATIONS FOR 

5 INTERNATIONAL AND FOREIGN LANGUAGE 

6 STUDIES. 

7 Section 610 (20 U.S.C. 1128b) is amended by strik8 ing ‘‘$80,000,000 for fiscal year 1999’’ and all that fol9 lows through the period and inserting ‘‘such sums as may 

10 be necessary for fiscal year 2006 and each of the 5 suc11 ceeding fiscal years.’’. 

12 SEC. 7609. CENTERS FOR INTERNATIONAL BUSINESS EDU13 CATION. 

14 Section 612(f) (20 U.S.C. 1130–1(f)) is amended— 

15 (1) in paragraph (3), by striking ‘‘and’’ after 

16 the semicolon; 

17 (2) in paragraph (4), by striking the period at 

18 the end and inserting ‘‘; and’’; and 

19 (3) by adding at the end the following: 

20 ‘‘(5) assurances that activities funded by the 

21 grant will reflect diverse perspectives and a wide 

22 range of views and generate debate on world regions 

23 and international affairs, where applicable.’’. 
734 

•S 1932 PCS 

1 SEC. 7610. EDUCATION AND TRAINING PROGRAMS. 

2 Section 613(c) (20 U.S.C. 1130a(c)) is amended by 

3 adding at the end the following: ‘‘Each such application 

4 shall include an assurance that, where applicable, the ac5 tivities funded by the grant will reflect diverse perspectives 

6 and a wide range of views on world regions and inter7 national affairs.’’. 

8 SEC. 7611. AUTHORIZATION OF APPROPRIATIONS FOR 

9 BUSINESS AND INTERNATIONAL EDUCATION 

10 PROGRAMS. 

11 Section 614 (20 U.S.C. 1130b) is amended— 

12 (1) in subsection (a), by striking ‘‘$11,000,000 

13 for fiscal year 1999’’ and all that follows through 

14 ‘‘fiscal years’’ and inserting ‘‘such sums as may be 

15 necessary for fiscal year 2006 and each of the 5 suc16 ceeding fiscal years’’; and 

17 (2) in subsection (b), by striking ‘‘$7,000,000 

18 for fiscal year 1999’’ and all that follows through 

19 ‘‘fiscal years,’’ and inserting ‘‘such sums as may be 

20 necessary for fiscal year 2006 and each of the 5 suc21 ceeding fiscal years’’. 

22 SEC. 7612. MINORITY FOREIGN SERVICE PROFESSIONAL 

23 DEVELOPMENT PROGRAM. 

24 Section 621 (20 U.S.C. 1131) is amended— 

25 (1) in subsection (c), by adding at the end the 

26 following: ‘‘Each application shall include a descrip-
735 

•S 1932 PCS 

1 tion of how the activities funded by the grant will re2 flect diverse perspectives and a wide range of views 

3 on world regions and international affairs, where ap4 plicable.’’; and 

5 (2) in subsection (e)— 

6 (A) by striking ‘‘MATCH REQUIRED.—The 

7 eligible’’ and inserting ‘‘MATCHING FUNDS.— 

8 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

9 the eligible’’; and 

10 (B) by adding at the end the following: 

11 ‘‘(2) WAIVER.—The Secretary may waive the 

12 requirement of paragraph (1) for an eligible recipi13 ent if the Secretary determines such waiver is appro14 priate.’’. 

15 SEC. 7613. INSTITUTIONAL DEVELOPMENT. 

16 Section 622 (20 U.S.C. 1131–1) is amended— 

17 (1) in subsection (a)— 

18 (A) by striking ‘‘Tribally Controlled Col19 leges or Universities’’ and inserting ‘‘tribally 

20 controlled colleges or universities’’; and 

21 (B) by striking ‘‘international affairs pro22 grams.’’ and inserting ‘‘international affairs, 

23 international business, and foreign language 

24 study programs, including the teaching of for25 eign languages, at such colleges, universities, 
736 

•S 1932 PCS 

1 and institutions, respectively, through increased 

2 collaboration with institutions of higher edu3 cation that receive funding under this title.’’; 

4 and 

5 (2) in subsection (c)— 

6 (A) by striking paragraphs (1) and (3); 

7 and 

8 (B) by redesignating paragraphs (2) and 

9 (4) as paragraphs (1) and (2), respectively. 

10 SEC. 7614. STUDY ABROAD PROGRAM. 

11 Section 623(a) (20 U.S.C. 1131a(a)) is amended— 

12 (1) by striking ‘‘as defined in section 322 of 

13 this Act’’; and 

14 (2) by striking ‘‘tribally controlled Indian com15 munity colleges as defined in the Tribally Controlled 

16 Community College Assistance Act of 1978’’ and in17 serting ‘‘tribally controlled colleges or universities’’. 

18 SEC. 7615. ADVANCED DEGREE IN INTERNATIONAL RELA19 TIONS. 

20 Section 624 (20 U.S.C. 1131b) is amended— 

21 (1) in the section heading, by striking ‘‘MAS22 TERS’’ and inserting ‘‘ADVANCED’’; 

23 (2) in the first sentence, by inserting ‘‘, and in 

24 exceptional circumstances, a doctoral degree,’’ after 

25 ‘‘masters degree’’; 
737 

•S 1932 PCS 

1 (3) in the second sentence, by striking ‘‘masters 

2 degree’’ and inserting ‘‘advanced degree’’; and 

3 (4) in the fourth sentence, by striking ‘‘United 

4 States’’ and inserting ‘‘United States.’’. 

5 SEC. 7616. INTERNSHIPS. 

6 Section 625 (20 U.S.C. 1131c) is amended— 

7 (1) in subsection (a)— 

8 (A) by striking ‘‘as defined in section 322 

9 of this Act’’; 

10 (B) by striking ‘‘tribally controlled Indian 

11 community colleges as defined in the Tribally 

12 Controlled Community College Assistance Act 

13 of 1978’’ and inserting ‘‘tribally controlled col14 leges or universities’’; 

15 (C) by striking ‘‘an international’’ and in16 serting ‘‘international,’’; and 

17 (D) by striking ‘‘the United States Infor18 mation Agency’’ and inserting ‘‘the Department 

19 of State’’; and 

20 (2) in subsection (c)(1)— 

21 (A) in subparagraph (E), by inserting 

22 ‘‘and’’ after the semicolon; 

23 (B) in subparagraph (F), by striking ‘‘; 

24 and’’ and inserting a period; and 

25 (C) by striking subparagraph (G). 
738 

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1 SEC. 7617. FINANCIAL ASSISTANCE. 

2 Part C of title VI (20 U.S.C. 1131 et seq.) is further 

3 amended— 

4 (1) by redesignating sections 626, 627, and 628 

5 as sections 627, 628, and 629, respectively; and 

6 (2) by inserting after section 625 the following: 

7 ‘‘SEC. 626. FINANCIAL ASSISTANCE. 

8 ‘‘(a) AUTHORITY.—The Institute may provide finan9 cial assistance, in the form of summer stipends described 

10 in subsection (b) and Ralph Bunche scholarship assistance 

11 described in subsection (c), to needy students to facilitate 

12 the participation of the students in the Institute’s pro13 grams under this part. 

14 ‘‘(b) SUMMER STIPENDS.— 

15 ‘‘(1) REQUIREMENTS.—A student receiving a 

16 summer stipend under this section shall use such sti17 pend to defray the student’s cost of participation in 

18 a summer institute program funded under this part, 

19 including the costs of travel, living, and educational 

20 expenses necessary for the student’s participation in 

21 such program. 

22 ‘‘(2) AMOUNT.—A summer stipend awarded to 

23 a student under this section shall not exceed $3,000 

24 per summer. 

25 ‘‘(c) RALPH BUNCHE SCHOLARSHIP.— 
739 

•S 1932 PCS 

1 ‘‘(1) REQUIREMENTS.—A student receiving a 

2 Ralph Bunche scholarship under this section— 

3 ‘‘(A) shall be a full-time student at an in4 stitution of higher education who is accepted 

5 into a program funded under this part; and 

6 ‘‘(B) shall use such scholarship to pay 

7 costs related to the cost of attendance, as de8 fined in section 472, at the institution of higher 

9 education in which the student is enrolled. 

10 ‘‘(2) AMOUNT AND DURATION.—A Ralph 

11 Bunche scholarship awarded to a student under this 

12 section shall not exceed $5,000 per academic year.’’. 

13 SEC. 7618. REPORT. 

14 Section 627 (as redesignated by section 7617(1)) (20 

15 U.S.C. 1131d) is amended by striking ‘‘annually’’ and in16 serting ‘‘biennially’’. 

17 SEC. 7619. GIFTS AND DONATIONS. 

18 Section 628 (as redesignated by section 7617(1)) (20 

19 U.S.C. 1131e) is amended by striking ‘‘annual report de20 scribed in section 626’’ and inserting ‘‘biennial report de21 scribed in section 627’’. 
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1 SEC. 7620. AUTHORIZATION OF APPROPRIATIONS FOR THE 

2 INSTITUTE FOR INTERNATIONAL PUBLIC 

3 POLICY. 

4 Section 629 (as redesignated by section 7617(1)) (20 

5 U.S.C. 1131f) is amended by striking ‘‘$10,000,000 for 

6 fiscal year 1999’’ and all that follows through the period 

7 and inserting ‘‘such sums as may be necessary for fiscal 

8 year 2006 and each of the 5 succeeding fiscal years.’’. 

9 SEC. 7621. DEFINITIONS. 

10 Section 631 (20 U.S.C. 1132) is amended— 

11 (1) by redesignating paragraphs (2), (3), (4), 

12 (5), (6), (7), (8), and (9), as paragraphs (8), (5), 

13 (9), (2), (11), (3), (7), and (4), respectively; 

14 (2) in paragraph (2), as redesignated by para15 graph (1), by striking ‘‘comprehensive language and 

16 area center’’ and inserting ‘‘comprehensive foreign 

17 language and area or international studies center’’; 

18 (3) in paragraph (11), as redesignated by para19 graph (1), by striking ‘‘undergraduate language and 

20 area center’’ and inserting ‘‘undergraduate foreign 

21 language and area or international studies center’’; 

22 (4) in paragraph (3), as redesignated by para23 graph (1), by striking the first occurrence of the 

24 term ‘‘critical languages’’ and inserting ‘‘critical for25 eign languages’’; 
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1 (5) in paragraph (7), as redesignated by para2 graph (1), by striking ‘‘and’’ after the semicolon; 

3 (6) in paragraph (4), as redesignated by para4 graph (1), by striking the period at the end and in5 serting a semicolon; 

6 (7) by inserting after paragraph (5), as redesig7 nated by paragraph (1), the following: 

8 ‘‘(6) the term ‘historically Black college and 

9 university’ has the meaning given the term ‘part B 

10 institution’ in section 322;’’; and 

11 (8) by inserting after paragraph (9), as redesig12 nated by paragraph (1), the following: 

13 ‘‘(10) the term ‘tribally controlled college or 

14 university’ has the meaning given the term in sec15 tion 2 of the Tribally Controlled College or Univer16 sity Assistance Act of 1978 (25 U.S.C. 1801); and’’. 

17 SEC. 7622. ASSESSMENT AND ENFORCEMENT. 

18 Part D of title VI (20 U.S.C. 1132) is amended by 

19 adding at the end the following: 

20 ‘‘SEC. 632. ASSESSMENT; ENFORCEMENT; RULE OF CON21 STRUCTION. 

22 ‘‘(a) IN GENERAL.—The Secretary is authorized to 

23 assess and ensure compliance with all the conditions and 

24 terms of grants provided under this title. If a complaint 

25 regarding activities funded under this title is not resolved 
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1 under the process outlined in the relevant grantee’s appli2 cation, and such complaint is filed with the Department, 

3 the Secretary shall be notified, and is authorized, when 

4 circumstances warrant, to immediately suspend future 

5 funding for the grant pending resolution of such dispute. 

6 Such resolution shall not exceed 60 days. The Secretary 

7 shall take the outcomes of such complaints into account 

8 when determining the renewal of grants. 

9 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in this title 

10 shall be construed to authorize the Secretary to mandate, 

11 direct, or control an institution of higher education’s spe12 cific instructional content, curriculum, or program of in13 struction. 

14 ‘‘SEC. 633. EVALUATION, OUTREACH, AND INFORMATION. 

15 ‘‘The Secretary may use not more than 1 percent of 

16 the funds made available under this title to carry out pro17 gram evaluation, national outreach, and information dis18 semination activities relating to the programs authorized 

19 under this title.’’. 

20 CHAPTER 8—GRADUATE AND POSTSEC21 ONDARY IMPROVEMENT PROGRAMS 

22 SEC. 7701. PURPOSE. 

23 Section 700(1)(B)(i) (20 U.S.C. 1133(1)(B)(i)) is 

24 amended by inserting ‘‘, including those areas critical to 

25 United States national and homeland security needs such 
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1 as mathematics, science, and engineering’’ before the 

2 semicolon at the end. 

3 SEC. 7702. ALLOCATION OF JACOB K. JAVITS FELLOW4 SHIPS. 

5 Section 702(a)(1) (20 U.S.C. 1134a(a)(1)) is amend6 ed to read as follows: 

7 ‘‘(1) APPOINTMENT.— 

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

9 appoint a Jacob K. Javits Fellows Program 

10 Fellowship Board (referred to in this subpart as 

11 the ‘Board’) consisting of 9 individuals rep12 resentative of both public and private institu13 tions of higher education who are especially 

14 qualified to serve on the Board. 

15 ‘‘(B) QUALIFICATIONS.—In making ap16 pointments under subparagraph (A), the Sec17 retary shall— 

18 ‘‘(i) give due consideration to the ap19 pointment of individuals who are highly re20 spected in the academic community; 

21 ‘‘(ii) assure that individuals appointed 

22 to the Board are broadly representative of 

23 a range of disciplines in graduate edu24 cation in arts, humanities, and social 

25 sciences; 
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1 ‘‘(iii) appoint members to represent 

2 the various geographic regions of the 

3 United States; and 

4 ‘‘(iv) include representatives from mi5 nority institutions, as defined in section 

6 365.’’. 

7 SEC. 7703. STIPENDS. 

8 Section 703(a) (20 U.S.C. 1134b(a)) is amended by 

9 striking ‘‘graduate fellowships’’ and inserting ‘‘Graduate 

10 Research Fellowship Program’’. 

11 SEC. 7704. AUTHORIZATION OF APPROPRIATIONS FOR THE 

12 JACOB K. JAVITS FELLOWSHIP PROGRAM. 

13 Section 705 (20 U.S.C. 1134d) is amended by strik14 ing ‘‘$30,000,000 for fiscal year 1999’’ and all that fol15 lows through the period and inserting ‘‘such sums as may 

16 be necessary for fiscal year 2006 and each of the 5 suc17 ceeding fiscal years to carry out this subpart.’’. 

18 SEC. 7705. INSTITUTIONAL ELIGIBILITY UNDER THE GRAD19 UATE ASSISTANCE IN AREAS OF NATIONAL 

20 NEED PROGRAM. 

21 Section 712(b) (20 U.S.C. 1135a(b)) is amended to 

22 read as follows: 

23 ‘‘(b) DESIGNATION OF AREAS OF NATIONAL

24 NEED.—After consultation with appropriate Federal and 

25 nonprofit agencies and organizations, including the Na-
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1 tional Science Foundation, the Department of Defense, 

2 the Department of Homeland Security, the National Acad3 emy of Sciences, and the Bureau of Labor Statistics, the 

4 Secretary shall designate areas of national need. In mak5 ing such designations, the Secretary shall take into consid6 eration— 

7 ‘‘(1) the extent to which the interest in the area 

8 is compelling; 

9 ‘‘(2) the extent to which other Federal pro10 grams support postbaccalaureate study in the area 

11 concerned; 

12 ‘‘(3) an assessment of how the program may 

13 achieve the most significant impact with available re14 sources; and 

15 ‘‘(4) an assessment of current and future pro16 fessional workforce needs of the United States.’’. 

17 SEC. 7706. AWARDS TO GRADUATE STUDENTS. 

18 Section 714 (20 U.S.C. 1135c) is amended— 

19 (1) in subsection (b)— 

20 (A) by striking ‘‘1999–2000’’ and inserting 

21 ‘‘2006–2007’’; and 

22 (B) by striking ‘‘graduate fellowships’’ and 

23 inserting ‘‘Graduate Research Fellowship Pro24 gram’’; and 

25 (2) in subsection (c)— 
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1 (A) by striking ‘‘716(a)’’ and inserting 

2 ‘‘715(a)’’; and 

3 (B) by striking ‘‘714(b)(2)’’ and inserting 

4 ‘‘713(b)(2)’’. 

5 SEC. 7707. ADDITIONAL ASSISTANCE FOR COST OF EDU6 CATION. 

7 Section 715(a)(1) (20 U.S.C. 1135d(a)(1)) is amend8 ed— 

9 (1) by striking ‘‘1999–2000’’ and inserting 

10 ‘‘2006–2007’’; and 

11 (2) by striking ‘‘1998–1999’’ and inserting 

12 ‘‘2005–2006’’. 

13 SEC. 7708. AUTHORIZATION OF APPROPRIATIONS FOR THE 

14 GRADUATE ASSISTANCE IN AREAS OF NA15 TIONAL NEED PROGRAM. 

16 Section 716 (20 U.S.C. 1135e) is amended by strik17 ing ‘‘$35,000,000 for fiscal year 1999’’ and all that fol18 lows through the period and inserting ‘‘such sums as may 

19 be necessary for fiscal year 2006 and each of the 5 suc20 ceeding fiscal years to carry out this subpart.’’. 

21 SEC. 7709. AUTHORIZATION OF APPROPRIATIONS FOR THE 

22 THURGOOD MARSHALL LEGAL EDUCATIONAL 

23 OPPORTUNITY PROGRAM. 

24 Section 721(h) (20 U.S.C. 1136(h)) is amended by 

25 striking ‘‘$5,000,000 for fiscal year 1999’’ and all that 
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1 follows through the period and inserting ‘‘such sums as 

2 may be necessary for fiscal year 2006 and each of the 5 

3 succeeding fiscal years.’’. 

4 SEC. 7710. FUND FOR THE IMPROVEMENT OF POSTSEC5 ONDARY EDUCATION. 

6 Section 741(a) (20 U.S.C. 1138(a)) is amended— 

7 (1) by striking paragraph (3) and inserting the 

8 following: 

9 ‘‘(3) the establishment and continuation of in10 stitutions, programs, consortia, collaborations, and 

11 other joint efforts based on the technology of com12 munications, including those efforts that utilize dis13 tance education and technological advancements to 

14 educate and train postsecondary students (including 

15 health professionals serving medically underserved 

16 populations);’’; 

17 (2) in paragraph (7), by striking ‘‘and’’ after 

18 the semicolon; 

19 (3) in paragraph (8), by striking the period at 

20 the end and inserting a semicolon; and 

21 (4) by adding at the end the following: 

22 ‘‘(9) the introduction of reforms in remedial 

23 education, including English language instruction, to 

24 customize remedial courses to student goals and help 
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1 students progress rapidly from remedial courses into 

2 core courses and through program completion; 

3 ‘‘(10) the creation of consortia that join diverse 

4 institutions of higher education for the purpose of 

5 integrating curricular and co-curricular interdiscipli6 nary study; and 

7 ‘‘(11) providing support and assistance to pro8 grams implementing integrated education reform 

9 services in order to improve secondary school grad10 uation and college attendance and completion rates 

11 for disadvantaged students.’’. 

12 SEC. 7711. SPECIAL PROJECTS. 

13 Section 744(c) (20 U.S.C. 1138c) is amended to read 

14 as follows: 

15 ‘‘(c) AREAS OF NATIONAL NEED.—Areas of national 

16 need shall include, at a minimum, the following: 

17 ‘‘(1) Institutional restructuring to improve 

18 learning and promote productivity, efficiency, quality 

19 improvement, and cost and price control. 

20 ‘‘(2) Improvements in academic instruction and 

21 student learning, including efforts designed to assess 

22 the learning gains made by postsecondary students. 

23 ‘‘(3) Articulation between 2- and 4-year institu24 tions of higher education, including developing inno25 vative methods for ensuring the successful transfer 
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1 of students from 2- to 4-year institutions of higher 

2 education. 

3 ‘‘(4) Development, evaluation and dissemination 

4 of model programs, including model core curricula 

5 that— 

6 ‘‘(A) provide students with a broad and in7 tegrated knowledge base; 

8 ‘‘(B) include, at a minimum, broad survey 

9 courses in English literature, American and 

10 world history, American political institutions, 

11 economics, philosophy, college-level mathe12 matics, and the natural sciences; and 

13 ‘‘(C) include sufficient study of a foreign 

14 language to lead to reading and writing com15 petency in the foreign language. 

16 ‘‘(5) International cooperation and student ex17 changes among postsecondary educational institu18 tions.’’. 

19 SEC. 7712. AUTHORIZATION OF APPROPRIATIONS FOR THE 

20 FUND FOR THE IMPROVEMENT OF POSTSEC21 ONDARY EDUCATION. 

22 Section 745 (20 U.S.C. 1138d) is amended by strik23 ing ‘‘$30,000,000 for fiscal year 1999’’ and all that fol24 lows through the period and inserting ‘‘such sums as may 
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1 be necessary for fiscal year 2006 and each of the 5 suc2 ceeding fiscal years.’’. 

3 SEC. 7713. REPEAL OF THE URBAN COMMUNITY SERVICE 

4 PROGRAM. 

5 Part C of title VII (20 U.S.C. 1139 et seq.) is re6 pealed. 

7 SEC. 7714. GRANTS AUTHORIZED FOR DEMONSTRATION 

8 PROJECTS TO ENSURE STUDENTS WITH DIS9 ABILITIES RECEIVE A QUALITY HIGHER EDU10 CATION. 

11 Section 762 (20 U.S.C. 1140a) is amended— 

12 (1) in subsection (b)— 

13 (A) in paragraph (2)— 

14 (i) in subparagraph (A), by striking 

15 ‘‘to teach students with disabilities’’ and 

16 inserting ‘‘to teach and meet the academic 

17 and programmatic needs of students with 

18 disabilities in order to improve retention 

19 and completion of postsecondary edu20 cation’’; 

21 (ii) by redesignating subparagraphs 

22 (B) and (C) as subparagraphs (C) and 

23 (F), respectively; 

24 (iii) by inserting after subparagraph 

25 (A) the following: 
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1 ‘‘(B) EFFECTIVE TRANSITION PRAC2 TICES.—The development of innovative and ef3 fective teaching methods and strategies to en4 sure the successful transition of students with 

5 disabilities from secondary school to postsec6 ondary education.’’; 

7 (iv) in subparagraph (C), as redesig8 nated by clause (ii), by striking the period 

9 at the end and inserting ‘‘, including data 

10 on the postsecondary education of and im11 pact on subsequent employment of stu12 dents with disabilities. Such research, in13 formation, and data shall be made publicly 

14 available and accessible.’’; 

15 (v) by inserting after subparagraph 

16 (C), as redesignated by clause (ii), the fol17 lowing: 

18 ‘‘(D) DISTANCE LEARNING.—The develop19 ment of innovative and effective teaching meth20 ods and strategies to provide faculty and ad21 ministrators with the ability to provide acces22 sible distance education programs or classes 

23 that would enhance access of students with dis24 abilities to higher education, including the use 
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1 of accessible curriculum and electronic commu2 nication for instruction and advisement. 

3 ‘‘(E) DISABILITY CAREER PATHWAYS.— 

4 Training and providing support to secondary 

5 and postsecondary staff to encourage interest 

6 in, enhance awareness and understanding of, 

7 provide educational opportunities in, teach prac8 tical skills related to, and offer work-based op9 portunities in, disability related fields, among 

10 students, including students with disabilities. 

11 Such training and support may include devel12 oping means to offer students credit-bearing, 

13 college-level coursework, and career and edu14 cational counseling.’’; and 

15 (vi) by adding at the end the fol16 lowing: 

17 ‘‘(G) ACCESSIBILITY OF EDUCATION.— 

18 Making postsecondary education more acces19 sible to students with disabilities through cur20 riculum development.’’; and 

21 (B) in paragraph (3), by striking ‘‘sub22 paragraphs (A) through (C)’’ and inserting 

23 ‘‘subparagraphs (A) through (G)’’; and 

24 (2) by adding at the end the following: 
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1 ‘‘(d) REPORT.—The Secretary shall prepare and dis2 seminate a report reviewing the activities of the dem3 onstration projects authorized under this part and pro4 viding guidance and recommendations on how successful 

5 projects can be replicated.’’. 

6 SEC. 7715. APPLICATIONS FOR DEMONSTRATION PROJECTS 

7 TO ENSURE STUDENTS WITH DISABILITIES 

8 RECEIVE A QUALITY HIGHER EDUCATION. 

9 Section 763 (20 U.S.C. 1140b) is amended— 

10 (1) by striking paragraph (1) and inserting the 

11 following: 

12 ‘‘(1) a description of how such institution plans 

13 to address the activities allowed under this part;’’; 

14 (2) in paragraph (2), by striking ‘‘and’’ after 

15 the semicolon; 

16 (3) in paragraph (3), by striking the period at 

17 the end and inserting ‘‘; and’’; and 

18 (4) by adding at the end the following: 

19 ‘‘(4) a description of the extent to which the in20 stitution will work to replicate the research based 

21 and best practices of institutions of higher education 

22 with demonstrated success in serving students with 

23 disabilities.’’. 
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1 SEC. 7716. AUTHORIZATION OF APPROPRIATIONS FOR THE 

2 DEMONSTRATION PROJECTS TO ENSURE 

3 STUDENTS WITH DISABILITIES RECEIVE A 

4 QUALITY HIGHER EDUCATION. 

5 Section 765 (20 U.S.C. 1140d) is amended by strik6 ing ‘‘$10,000,000 for fiscal year 1999’’ and all that fol7 lows through the period and inserting ‘‘such sums as may 

8 be necessary for fiscal year 2006 and each of the 5 suc9 ceeding fiscal years.’’. 

10 CHAPTER 9—MISCELLANEOUS 

11 SEC. 7801. MISCELLANEOUS. 

12 The Act (20 U.S.C. 1001 et seq.) is amended by add13 ing at the end the following: 

14 ‘‘TITLE VIII—MISCELLANEOUS 

15 ‘‘PART A—MATHEMATICS AND SCIENCE 

16 SCHOLARS PROGRAM 

17 ‘‘SEC. 811. MATHEMATICS AND SCIENCE SCHOLARS PRO18 GRAM. 

19 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary is au20 thorized to award grants to States, on a competitive basis, 

21 to enable the States to award eligible students, who com22 plete a rigorous secondary school curriculum in mathe23 matics and science, scholarships for undergraduate study. 

24 ‘‘(b) ELIGIBLE STUDENTS.—A student is eligible for 

25 a scholarship under this section if the student is a full26 time undergraduate student in the student’s first and sec-
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1 ond year of study who has completed a rigorous secondary 

2 school curriculum in mathematics and science. 

3 ‘‘(c) RIGOROUS CURRICULUM.—Each participating 

4 State shall determine the requirements for a rigorous sec5 ondary school curriculum in mathematics and science de6 scribed in subsection (b). 

7 ‘‘(d) PRIORITY FOR SCHOLARSHIPS.—The Governor 

8 of a State may set a priority for awarding scholarships 

9 under this section for particular eligible students, such as 

10 students attending schools in high-need areas, students 

11 who are from groups underrepresented in the fields of 

12 mathematics, science, and engineering, students served by 

13 local educational agencies that do not meet or exceed State 

14 standards in mathematics and science, or students with 

15 regional or geographic needs as determined appropriate by 

16 the Governor. 

17 ‘‘(e) AMOUNT AND DURATION OF SCHOLARSHIP.— 

18 The Secretary shall award a grant under this section— 

19 ‘‘(1) in an amount that does not exceed $1,000; 

20 and 

21 ‘‘(2) for not more than 2 years of under22 graduate study. 

23 ‘‘(f) MATCHING REQUIREMENT.—In order to receive 

24 a grant under this section, a State shall provide matching 

25 funds for the scholarships awarded under this section in 
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1 an amount equal to 50 percent of the Federal funds re2 ceived. 

3 ‘‘(g) AUTHORIZATION.—There are authorized to be 

4 appropriated to carry out this section such sums as may 

5 be necessary for fiscal year 2006 and each of the 5 suc6 ceeding fiscal years. 

7 ‘‘PART B—POSTSECONDARY EDUCATION 

8 ASSESSMENT 

9 ‘‘SEC. 821. POSTSECONDARY EDUCATION ASSESSMENT. 

10 ‘‘(a) CONTRACT FOR ASSESSMENT.—The Secretary 

11 shall enter into a contract, with an independent, bipartisan 

12 organization with specific expertise in public administra13 tion and financial management, to carry out an inde14 pendent assessment of the cost factors associated with the 

15 cost of tuition at institutions of higher education. 

16 ‘‘(b) TIMEFRAME.—The Secretary shall enter into 

17 the contract described in subsection (a) not later than 90 

18 days after the date of enactment of the Higher Education 

19 Amendments of 2005. 

20 ‘‘(c) MATTERS ASSESSED.—The assessment de21 scribed in subsection (a) shall— 

22 ‘‘(1) examine the key elements driving the cost 

23 factors associated with the cost of tuition at institu24 tions of higher education during academic year 2000 

25 and succeeding academic years; 
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1 ‘‘(2) identify and evaluate measures being used 

2 to control postsecondary education costs; 

3 ‘‘(3) identify and evaluate effective measures 

4 that may be utilized to control postsecondary edu5 cation costs in the future; and 

6 ‘‘(4) identify systemic approaches to monitor 

7 future postsecondary education cost trends and post8 secondary education cost control mechanisms. 

9 ‘‘PART C—JOB SKILL TRAINING IN HIGH-GROWTH 

10 OCCUPATIONS OR INDUSTRIES 

11 ‘‘SEC. 831. JOB SKILL TRAINING IN HIGH-GROWTH OCCUPA12 TIONS OR INDUSTRIES. 

13 ‘‘(a) GRANTS AUTHORIZED.—The Secretary is au14 thorized to award grants, on a competitive basis, to eligible 

15 partnerships to enable the eligible partnerships to provide 

16 relevant job skill training in high-growth industries or oc17 cupations. 

18 ‘‘(b) DEFINITIONS.—In this section: 

19 ‘‘(1) ELIGIBLE PARTNERSHIP.—The term ‘eligi20 ble partnership’ means a partnership— 

21 ‘‘(A) between an institution of higher edu22 cation and a local board (as such term is de23 fined in section 101 of the Workforce Invest24 ment Act of 1998); or 
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1 ‘‘(B) if an institution of higher education 

2 is located within a State that does not operate 

3 local boards, between the institution of higher 

4 education and a State board (as such term is 

5 defined in section 101 of the Workforce Invest6 ment Act of 1998). 

7 ‘‘(2) NONTRADITIONAL STUDENT.—The term 

8 ‘nontraditional student’ means a student who— 

9 ‘‘(A) is independent, as defined in section 

10 480(d); 

11 ‘‘(B) attends an institution of higher edu12 cation— 

13 ‘‘(i) on less than a full-time basis; 

14 ‘‘(ii) via evening, weekend, modular, 

15 or compressed courses; or 

16 ‘‘(iii) via distance learning methods; 

17 or 

18 ‘‘(C) has delayed enrollment at an institu19 tion of higher education. 

20 ‘‘(3) INSTITUTION OF HIGHER EDUCATION.— 

21 The term ‘institution of higher education’ means an 

22 institution of higher education, as defined in section 

23 101(b), that offers a 1- or 2-year program of study 

24 leading to a degree or certificate. 

25 ‘‘(c) APPLICATION.— 
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1 ‘‘(1) IN GENERAL.—Each eligible partnership 

2 that desires a grant under this section shall submit 

3 an application to the Secretary at such time, in such 

4 manner, and accompanied by such additional infor5 mation as the Secretary may require. 

6 ‘‘(2) CONTENTS.—Each application submitted 

7 under paragraph (1) shall include a description of— 

8 ‘‘(A) how the eligible partnership, through 

9 the institution of higher education, will provide 

10 relevant job skill training for students to enter 

11 high-growth occupations or industries; 

12 ‘‘(B) local high-growth occupations or in13 dustries; and 

14 ‘‘(C) the need for qualified workers to meet 

15 the local demand of high-growth occupations or 

16 industries. 

17 ‘‘(d) AWARD BASIS.—In awarding grants under this 

18 section, the Secretary shall— 

19 ‘‘(1) ensure an equitable distribution of grant 

20 funds under this section among urban and rural 

21 areas of the United States; and 

22 ‘‘(2) take into consideration the capability of 

23 the institution of higher education— 
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1 ‘‘(A) to offer relevant, high quality instruc2 tion and job skill training for students entering 

3 a high-growth occupation or industry; 

4 ‘‘(B) to involve the local business commu5 nity and to place graduates in the community 

6 in employment in high-growth occupations or 

7 industries; 

8 ‘‘(C) to provide secondary students with 

9 dual-enrollment or concurrent enrollment op10 tions; 

11 ‘‘(D) to serve nontraditional or low-income 

12 students, or adult or displaced workers; and 

13 ‘‘(E) to serve students from rural or re14 mote communities. 

15 ‘‘(e) USE OF FUNDS.—Grant funds provided under 

16 this section may be used— 

17 ‘‘(1) to expand or create academic programs or 

18 programs of training that provide relevant job skill 

19 training for high-growth occupations or industries; 

20 ‘‘(2) to purchase equipment which will facilitate 

21 the development of academic programs or programs 

22 of training that provide training for high-growth oc23 cupations or industries; 

24 ‘‘(3) to support outreach efforts that enable 

25 students to attend institutions of higher education 
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1 with academic programs or programs of training fo2 cused on high-growth occupations or industries; 

3 ‘‘(4) to expand or create programs for distance, 

4 evening, weekend, modular, or compressed learning 

5 opportunities that provide relevant job skill training 

6 in high-growth occupations or industries; 

7 ‘‘(5) to build partnerships with local businesses 

8 in high-growth occupations or industries; 

9 ‘‘(6) to support curriculum development related 

10 to entrepreneurial training; and 

11 ‘‘(7) for other uses that the Secretary deter12 mines to be consistent with the intent of this section. 

13 ‘‘(f) REQUIREMENTS.— 

14 ‘‘(1) FISCAL AGENT.—For the purpose of this 

15 section, the institution of higher education in an eli16 gible partnership shall serve as the fiscal agent and 

17 grant recipient for the eligible partnership. 

18 ‘‘(2) DURATION.—The Secretary shall award 

19 grants under this section for periods that may not 

20 exceed 5 years. 

21 ‘‘(3) SUPPLEMENT, NOT SUPPLANT.—Funds 

22 made available under this section shall be used to 

23 supplement and not supplant other Federal, State, 

24 and local funds available to the eligible partnership 
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1 for carrying out the activities described in subsection 

2 (e). 

3 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

4 are authorized to be appropriated to carry out this part 

5 such sums as may be necessary for fiscal year 2006 and 

6 each of the 5 succeeding fiscal years. 

7 ‘‘PART D—GRANT PROGRAM TO INCREASE STU8 DENT RETENTION AND PROMOTE ARTICULA9 TION AGREEMENTS 

10 ‘‘SEC. 841. GRANT PROGRAM TO INCREASE STUDENT RE11 TENTION AND PROMOTE ARTICULATION 

12 AGREEMENTS. 

13 ‘‘(a) AUTHORIZATION OF PROGRAM.—The Secretary 

14 shall award grants, on a competitive basis, to eligible insti15 tutions to enable the institutions to— 

16 ‘‘(1) focus on increasing traditional and non17 traditional student retention at such institutions; 

18 and 

19 ‘‘(2) promote articulation agreements among 

20 different institutions that will increase the likelihood 

21 of progression of students at such institutions to 

22 baccalaureate degrees. 

23 ‘‘(b) DEFINITION OF ELIGIBLE INSTITUTION.—In 

24 this section, the term ‘eligible institution’ means an insti25 tution of higher education (as defined in section 101(a)) 
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1 where not less than 40 percent of such institution’s stu2 dent body receives financial aid under subpart 1 of part 

3 A of title IV. 

4 ‘‘(c) APPLICATION.—An eligible institution that de5 sires a grant under this section shall submit an application 

6 to the Secretary at such time, in such manner, and con7 taining such information as the Secretary may require, in8 cluding the number of students proposed to be served and 

9 a description of the services that will be provided. 

10 ‘‘(d) MANDATORY ACTIVITIES.—An eligible institu11 tion that receives a grant under this section shall use the 

12 grant funds to carry out each of the following: 

13 ‘‘(1) Offering counseling and advisement serv14 ices to help students adapt to postsecondary edu15 cation and select appropriate coursework. 

16 ‘‘(2) Making mentors available to students who 

17 are at risk for not completing a degree. 

18 ‘‘(3) Providing detailed assistance to students 

19 who request help in understanding— 

20 ‘‘(A) the options for financing their edu21 cation, including information on grants, loans, 

22 and loan repayment programs; 

23 ‘‘(B) the process of applying for financial 

24 assistance; 
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1 ‘‘(C) the outcome of their financial assist2 ance application; and 

3 ‘‘(D) any unanticipated problems related to 

4 financing their education that arise. 

5 ‘‘(4) Offering tutoring to students at risk of 

6 dropping out of school with any course or subject. 

7 ‘‘(5) Designing and implementing innovative 

8 ways to improve retention in and completion of 

9 courses, such as enrolling students in cohorts, pro10 viding counseling, or creating bridge programs that 

11 customize courses to the needs of special population 

12 students. 

13 ‘‘(6) Conducting outreach activities so that all 

14 students know that these services are available and 

15 are aware of how to access the services. 

16 ‘‘(7) Creating articulation agreements to pro17 mote smooth transition from two year to four year 

18 programs. 

19 ‘‘(8) Making services listed in paragraphs (1) 

20 through (5) available in students’ native languages, 

21 if it is not English, if the percentage of students 

22 needing translation services in a specific language 

23 exceeds 5 percent. 
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1 ‘‘(e) PERMISSIBLE ACTIVITIES.—An eligible institu2 tion that receives a grant under this section may use grant 

3 funds to carry out any of the following activities: 

4 ‘‘(1) Designing innovative course schedules to 

5 meet the needs of working adults, such as online, 

6 modular, compressed, or other alternative methods. 

7 ‘‘(2) Offering childcare during the hours when 

8 students have class or are studying. 

9 ‘‘(3) Providing transportation assistance to stu10 dents that helps such students manage their sched11 ules. 

12 ‘‘(4) Partnering with local businesses to create 

13 flexible work-hour programs so that students can 

14 balance work and school. 

15 ‘‘(5) Offering time management or financial lit16 eracy seminars to help students improve their man17 agement skills. 

18 ‘‘(6) Improving professional development to 

19 align instruction with innovative program designs. 

20 ‘‘(7) Any other activities the Secretary believes 

21 will promote retention of students attending eligible 

22 institutions. 

23 ‘‘(f) TECHNICAL ASSISTANCE.—The Secretary may 

24 enter into a contract with a private entity to provide such 
766 

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1 technical assistance to grantees under this section as the 

2 Secretary determines appropriate. 

3 ‘‘(g) EVALUATION.—The Secretary shall conduct an 

4 evaluation of program impacts under the demonstration 

5 program, and shall disseminate to the public the findings 

6 from the evaluation and information on best practices. 

7 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

8 is authorized to be appropriated to carry out this and such 

9 sums as may be necessary for fiscal year 2006 and each 

10 of the 5 succeeding fiscal years. 

11 ‘‘PART E—AMERICAN HISTORY FOR FREEDOM 

12 ‘‘SEC. 851. AMERICAN HISTORY FOR FREEDOM. 

13 ‘‘(a) GRANTS AUTHORIZED.—The Secretary is au14 thorized to award 3-year grants, on a competitive basis, 

15 to eligible institutions to establish or strengthen postsec16 ondary academic programs or centers that promote and 

17 impart knowledge of— 

18 ‘‘(1) traditional American history; 

19 ‘‘(2) the history and nature of, and threats to, 

20 free institutions; or 

21 ‘‘(3) the history and achievements of Western 

22 civilization. 

23 ‘‘(b) DEFINITIONS.—In this section: 
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1 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi2 ble institution’ means an institution of higher edu3 cation as defined in section 101. 

4 ‘‘(2) FREE INSTITUTION.—The term ‘free insti5 tution’ means an institution that emerged out of 

6 Western civilization, such as democracy, constitu7 tional government, individual rights, market econom8 ics, religious freedom and religious tolerance, and 

9 freedom of thought and inquiry. 

10 ‘‘(3) TRADITIONAL AMERICAN HISTORY.—The 

11 term ‘traditional American history’ means— 

12 ‘‘(A) the significant constitutional, polit13 ical, intellectual, economic, and foreign policy 

14 trends and issues that have shaped the course 

15 of American history; and 

16 ‘‘(B) the key episodes, turning points, and 

17 leading figures involved in the constitutional, 

18 political, intellectual, diplomatic, and economic 

19 history of the United States. 

20 ‘‘(c) APPLICATION.— 

21 ‘‘(1) IN GENERAL.—Each eligible institution 

22 that desires a grant under this part shall submit an 

23 application to the Secretary at such time, in such 

24 manner, and accompanied by such additional infor25 mation as the Secretary may require. 
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1 ‘‘(2) CONTENTS.—Each application submitted 

2 under subsection (a) shall include a description of — 

3 ‘‘(A) how funds made available under this 

4 part will be used for the activities set forth 

5 under subsection (e), including how such activi6 ties will increase knowledge with respect to tra7 ditional American history, free institutions, or 

8 Western civilization; 

9 ‘‘(B) how the eligible institution will ensure 

10 that information about the activities funded 

11 under this part is widely disseminated pursuant 

12 to subsection (e)(1)(B); 

13 ‘‘(C) any activities to be undertaken pursu14 ant to subsection (e)(2)(A), including identifica15 tion of entities intended to participate; 

16 ‘‘(D) how funds made available under this 

17 part shall be used to supplement and not sup18 plant non-Federal funds available for the activi19 ties described in subsection (e); and 

20 ‘‘(E) such fiscal controls and accounting 

21 procedures as may be necessary to ensure prop22 er disbursement of and accounting for funding 

23 made available to the eligible institution under 

24 this part. 
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1 ‘‘(d) AWARD BASIS.—In awarding grants under this 

2 part, the Secretary shall take into consideration the capa3 bility of the eligible institution to— 

4 ‘‘(1) increase access to quality programming 

5 that expands knowledge of traditional American his6 tory, free institutions, or Western civilization; 

7 ‘‘(2) involve personnel with strong expertise in 

8 traditional American history, free institutions, or 

9 Western civilization; and 

10 ‘‘(3) sustain the activities funded under this 

11 part after the grant has expired. 

12 ‘‘(e) USE OF FUNDS.— 

13 ‘‘(1) REQUIRED USE OF FUNDS.—Funds pro14 vided under this part shall be used to— 

15 ‘‘(A) establish or strengthen academic pro16 grams or centers focused on traditional Amer17 ican history, free institutions, or Western civili18 zation, which may include— 

19 ‘‘(i) design and implementation of 

20 programs of study, courses, lecture series, 

21 seminars, and symposia; 

22 ‘‘(ii) development, publication, and 

23 dissemination of instructional materials; 

24 ‘‘(iii) research; 
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1 ‘‘(iv) support for faculty teaching in 

2 undergraduate and, if applicable, graduate 

3 programs; 

4 ‘‘(v) support for graduate and post5 graduate fellowships, if applicable; or 

6 ‘‘(vi) teacher preparation initiatives 

7 that stress content mastery regarding tra8 ditional American history, free institutions, 

9 or Western civilization; and 

10 ‘‘(B) conduct outreach activities to ensure 

11 that information about the activities funded 

12 under this part is widely disseminated— 

13 ‘‘(i) to undergraduate students (in14 cluding students enrolled in teacher edu15 cation programs, if applicable); 

16 ‘‘(ii) to graduate students (including 

17 students enrolled in teacher education pro18 grams), if applicable; 

19 ‘‘(iii) to faculty; 

20 ‘‘(iv) to local educational agencies; 

21 and 

22 ‘‘(v) within the local community. 

23 ‘‘(2) ALLOWABLE USES OF FUNDS.—Funds 

24 provided under this part may be used to support— 

25 ‘‘(A) collaboration with entities such as— 
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1 ‘‘(i) local educational agencies, for the 

2 purpose of providing elementary, middle 

3 and secondary school teachers an oppor4 tunity to enhance their knowledge of tradi5 tional American history, free institutions, 

6 or Western civilization; and 

7 ‘‘(ii) nonprofit organizations whose 

8 mission is consistent with the purpose of 

9 this part, such as academic organizations, 

10 museums, and libraries, for assistance in 

11 carrying out activities described under sub12 section (a); and 

13 ‘‘(B) other activities that meet the pur14 poses of this part. 

15 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—For the 

16 purpose of carrying out this part, there are authorized to 

17 be appropriated such sums as may be necessary for fiscal 

18 year 2006 and each of the 5 succeeding fiscal years. 

19 ‘‘PART F—TEACH FOR AMERICA 

20 ‘‘SEC. 861. TEACH FOR AMERICA. 

21 ‘‘(a) DEFINITIONS.— 

22 ‘‘(1) IN GENERAL.—The terms ‘highly quali23 fied’, ‘local educational agency’, and ‘Secretary’ have 

24 the meanings given the terms in section 9101 of the 
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1 Elementary and Secondary Education Act of 1965 

2 (20 U.S.C. 7801). 

3 ‘‘(2) GRANTEE.—The term ‘grantee’ means 

4 Teach For America, Inc. 

5 ‘‘(3) HIGH NEED.—The term ‘high need’, when 

6 used with respect to a local educational agency, 

7 means a local educational agency experiencing a 

8 shortage of highly qualified teachers. 

9 ‘‘(b) GRANTS AUTHORIZED.—The Secretary is au10 thorized to award a grant to Teach For America, Inc., 

11 the national teacher corps of outstanding recent college 

12 graduates who commit to teach for 2 years in underserved 

13 communities in the United States, to implement and ex14 pand its program of recruiting, selecting, training, and 

15 supporting new teachers. 

16 ‘‘(c) REQUIREMENTS.—In carrying out the grant pro17 gram under subsection (b), the Secretary shall enter into 

18 an agreement with the grantee under which the grantee 

19 agrees to use the grant funds provided under this sec20 tion— 

21 ‘‘(1) to provide highly qualified teachers to high 

22 need local educational agencies in urban and rural 

23 communities; 

24 ‘‘(2) to pay the cost of recruiting, selecting, 

25 training, and supporting new teachers; and 
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1 ‘‘(3) to serve a substantial number and percent2 age of underserved students. 

3 ‘‘(d) AUTHORIZED ACTIVITIES.— 

4 ‘‘(1) IN GENERAL.—Grant funds provided 

5 under this section shall be used by the grantee to 

6 carry out each of the following activities: 

7 ‘‘(A) Recruiting and selecting teachers 

8 through a highly selective national process. 

9 ‘‘(B) Providing preservice training to the 

10 teachers through a rigorous summer institute 

11 that includes hands-on teaching experience and 

12 significant exposure to education coursework 

13 and theory. 

14 ‘‘(C) Placing the teachers in schools and 

15 positions designated by partner local edu16 cational agencies as high need placements serv17 ing underserved students. 

18 ‘‘(D) Providing ongoing professional devel19 opment activities for the teachers’ first 2 years 

20 in the classroom, including regular classroom 

21 observations and feedback, and ongoing train22 ing and support. 

23 ‘‘(2) LIMITATION.—The grantee shall use all 

24 grant funds received under this section to support 

25 activities related directly to the recruitment, selec-
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1 tion, training, and support of teachers as described 

2 in subsection (a). 

3 ‘‘(e) REPORTS AND EVALUATIONS.— 

4 ‘‘(1) ANNUAL REPORT.—The grantee shall pro5 vide to the Secretary an annual report that in6 cludes— 

7 ‘‘(A) data on the number and quality of 

8 the teachers provided to local educational agen9 cies through a grant under this section; 

10 ‘‘(B) an externally conducted analysis of 

11 the satisfaction of local educational agencies 

12 and principals with the teachers so provided; 

13 and 

14 ‘‘(C) comprehensive data on the back15 ground of the teachers chosen, the training the 

16 teachers received, the placement sites of the 

17 teachers, the professional development of the 

18 teachers, and the retention of the teachers. 

19 ‘‘(2) STUDY.— 

20 ‘‘(A) IN GENERAL.—From funds appro21 priated under subsection (f), the Secretary shall 

22 provide for a study that examines the achieve23 ment levels of the students taught by the teach24 ers assisted under this section. 
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1 ‘‘(B) ACHIEVEMENT GAINS COMPARED.— 

2 The study shall compare, within the same 

3 schools, the achievement gains made by stu4 dents taught by teachers who are assisted 

5 under this section with the achievement gains 

6 made by students taught by teachers who are 

7 not assisted under this section. 

8 ‘‘(3) REQUIREMENTS.—The Secretary shall 

9 provide for such a study not less than once every 3 

10 years, and each such study shall include multiple 

11 placement sites and multiple schools within place12 ment sites. 

13 ‘‘(4) PEER REVIEW STANDARDS.—Each such 

14 study shall meet the peer review standards of the 

15 education research community. 

16 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.— 

17 ‘‘(1) IN GENERAL.—There are authorized to be 

18 appropriated to carry out this section such sums as 

19 may be necessary for fiscal year 2006 and each of 

20 the 5 succeeding fiscal years. 

21 ‘‘(2) LIMITATION.—The grantee shall not use 

22 more than 25 percent of Federal funds from any 

23 source for administrative costs. 
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1 ‘‘PART G—PATSY T. MINK FELLOWSHIP PROGRAM 

2 ‘‘SEC. 871. PATSY T. MINK FELLOWSHIP PROGRAM. 

3 ‘‘(a) PURPOSE.— 

4 ‘‘(1) IN GENERAL.—It is the purpose of this 

5 section to provide, through eligible institutions, a 

6 program of fellowship awards to assist highly quali7 fied minorities and women to acquire the doctoral 

8 degree, or highest possible degree available, in aca9 demic areas in which such individuals are underrep10 resented for the purpose of enabling such individuals 

11 to enter the higher education professoriate. 

12 ‘‘(2) DESIGNATION.—Each recipient of a fellow13 ship award from an eligible institution receiving a 

14 grant under this section shall be known as a ‘Patsy 

15 T. Mink Graduate Fellow’. 

16 ‘‘(b) DEFINITIONS.—In this section, the term ‘eligible 

17 institution’ means an institution of higher education, or 

18 a consortium of such institutions, that offers a program 

19 of postbaccalaureate study leading to a graduate degree. 

20 ‘‘(c) PROGRAM AUTHORIZED.— 

21 ‘‘(1) GRANTS BY SECRETARY.— 

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

23 award grants to eligible institutions to enable 

24 such institutions to make fellowship awards to 

25 individuals in accordance with the provisions of 

26 this section. 
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1 ‘‘(B) PRIORITY CONSIDERATION.—In 

2 awarding grants under this section, the Sec3 retary shall consider the eligible institution’s 

4 prior experience in producing doctoral degree, 

5 or highest possible degree available, holders who 

6 are minorities and women, and shall give pri7 ority consideration in making grants under this 

8 section to those eligible institutions with a dem9 onstrated record of producing minorities and 

10 women who have earned such degrees. 

11 ‘‘(2) APPLICATIONS.— 

12 ‘‘(A) IN GENERAL.—An eligible institution 

13 that desires a grant under this section shall 

14 submit an application to the Secretary at such 

15 time, in such manner, and containing such in16 formation as the Secretary may require. 

17 ‘‘(B) APPLICATIONS MADE ON BEHALF.— 

18 ‘‘(i) IN GENERAL.—The following en19 tities may submit an application on behalf 

20 of an eligible institution: 

21 ‘‘(I) A graduate school or depart22 ment of such institution. 

23 ‘‘(II) A graduate school or de24 partment of such institution in col-
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1 laboration with an undergraduate col2 lege or university of such institution. 

3 ‘‘(III) An organizational unit 

4 within such institution that offers a 

5 program of postbaccalaureate study 

6 leading to a graduate degree, includ7 ing an interdisciplinary or an inter8 departmental program. 

9 ‘‘(IV) A nonprofit organization 

10 with a demonstrated record of helping 

11 minorities and women earn 

12 postbaccalaureate degrees. 

13 ‘‘(ii) NONPROFIT ORGANIZATIONS.— 

14 Nothing in this paragraph shall be con15 strued to permit the Secretary to award a 

16 grant under this section to an entity other 

17 than an eligible institution. 

18 ‘‘(3) SELECTION OF APPLICATIONS.—In award19 ing grants under subsection (a), the Secretary 

20 shall— 

21 ‘‘(A) take into account— 

22 ‘‘(i) the number and distribution of 

23 minority and female faculty nationally; 
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1 ‘‘(ii) the current and projected need 

2 for highly trained individuals in all areas 

3 of the higher education professoriate; and 

4 ‘‘(iii) the present and projected need 

5 for highly trained individuals in academic 

6 career fields in which minorities and 

7 women are underrepresented in the higher 

8 education professoriate; and 

9 ‘‘(B) consider the need to prepare a large 

10 number of minorities and women generally in 

11 academic career fields of high national priority, 

12 especially in areas in which such individuals are 

13 traditionally underrepresented in college and 

14 university faculties, such as mathematics, 

15 science, technology, and engineering. 

16 ‘‘(4) DISTRIBUTION AND AMOUNTS OF

17 GRANTS.— 

18 ‘‘(A) EQUITABLE DISTRIBUTION.—In 

19 awarding grants under this section, the Sec20 retary shall, to the maximum extent feasible, 

21 ensure an equitable geographic distribution of 

22 awards and an equitable distribution among 

23 public and independent eligible institutions that 

24 apply for grants under this section and that 
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1 demonstrate an ability to achieve the purpose of 

2 this section. 

3 ‘‘(B) SPECIAL RULE.—To the maximum 

4 extent practicable, the Secretary shall use not 

5 less than 30 percent of the amount appro6 priated pursuant to subsection (f) to award 

7 grants to eligible institutions that— 

8 ‘‘(i) are eligible for assistance under 

9 title III or title V; or 

10 ‘‘(ii) have formed a consortium that 

11 includes both non-minority serving institu12 tions and minority serving institutions. 

13 ‘‘(C) ALLOCATION.—In awarding grants 

14 under this section, the Secretary shall allocate 

15 appropriate funds to those eligible institutions 

16 whose applications indicate an ability to signifi17 cantly increase the numbers of minorities and 

18 women entering the higher education professo19 riate and that commit institutional resources to 

20 the attainment of the purpose of this section. 

21 ‘‘(D) NUMBER OF FELLOWSHIP

22 AWARDS.—An eligible institution that receives a 

23 grant under this section shall make not less 

24 than 15 fellowship awards. 
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1 ‘‘(E) REALLOTMENT.—If the Secretary de2 termines that an eligible institution awarded a 

3 grant under this section is unable to use all of 

4 the grant funds awarded to the institution, the 

5 Secretary shall reallot, on such date during 

6 each fiscal year as the Secretary may fix, the 

7 unused funds to other eligible institutions that 

8 demonstrate that such institutions can use any 

9 reallocated grant funds to make fellowship 

10 awards to individuals under this section. 

11 ‘‘(5) INSTITUTIONAL ALLOWANCE.— 

12 ‘‘(A) IN GENERAL.— 

13 ‘‘(i) NUMBER OF ALLOWANCES.—In 

14 awarding grants under this section, the 

15 Secretary shall pay to each eligible institu16 tion awarded a grant, for each individual 

17 awarded a fellowship by such institution 

18 under this section, an institutional allow19 ance. 

20 ‘‘(ii) AMOUNT.—Except as provided in 

21 paragraph (3), an institutional allowance 

22 shall be in an amount equal to, for aca23 demic year 2006-2007 and succeeding aca24 demic years, the amount of institutional al25 lowance made to an institution of higher 
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1 education under section 715 for such aca2 demic year. 

3 ‘‘(B) USE OF FUNDS.—Institutional allow4 ances may be expended in the discretion of the 

5 eligible institution and may be used to provide, 

6 except as prohibited under paragraph (4), aca7 demic support and career transition services for 

8 individuals awarded fellowships by such institu9 tion. 

10 ‘‘(C) REDUCTION.—The institutional al11 lowance paid under paragraph (1) shall be re12 duced by the amount the eligible institution 

13 charges and collects from a fellowship recipient 

14 for tuition and other expenses as part of the re15 cipient’s instructional program. 

16 ‘‘(D) USE FOR OVERHEAD PROHIBITED.— 

17 Funds made available under this section may 

18 not be used for general operational overhead of 

19 the academic department or institution receiv20 ing funds under this section. 

21 ‘‘(d) FELLOWSHIP RECIPIENTS.— 

22 ‘‘(1) AUTHORIZATION.—An eligible institution 

23 that receives a grant under this section shall use the 

24 grant funds to make fellowship awards to minorities 

25 and women who are enrolled at such institution in 
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1 a doctoral degree, or highest possible degree avail2 able, program and— 

3 ‘‘(A) intend to pursue a career in instruc4 tion at— 

5 ‘‘(i) an institution of higher education 

6 (as the term is defined in section 101); 

7 ‘‘(ii) an institution of higher education 

8 (as the term is defined in section 

9 102(a)(1)); 

10 ‘‘(iii) an institution of higher edu11 cation outside the United States (as the 

12 term is described in section 102(a)(2)); or 

13 ‘‘(iv) a proprietary institution of high14 er education (as the term is defined in sec15 tion 102(b)); and 

16 ‘‘(B) sign an agreement with the Secretary 

17 agreeing— 

18 ‘‘(i) to begin employment at an insti19 tution described in paragraph (1) not later 

20 than 3 years after receiving the doctoral 

21 degree or highest possible degree available, 

22 which 3-year period may be extended by 

23 the Secretary for extraordinary cir24 cumstances; and 
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•S 1932 PCS 

1 ‘‘(ii) to be employed by such institu2 tion for 1 year for each year of fellowship 

3 assistance received under this section. 

4 ‘‘(2) FAILURE TO COMPLY.—If an individual 

5 who receives a fellowship award under this section 

6 fails to comply with the agreement signed pursuant 

7 to subsection (a)(2), then the Secretary shall do 1 

8 or both of the following: 

9 ‘‘(A) Require the individual to repay all or 

10 the applicable portion of the total fellowship 

11 amount awarded to the individual by converting 

12 the balance due to a loan at the interest rate 

13 applicable to loans made under part B of title 

14 IV. 

15 ‘‘(B) Impose a fine or penalty in an 

16 amount to be determined by the Secretary. 

17 ‘‘(3) WAIVER AND MODIFICATION.— 

18 ‘‘(A) REGULATIONS.—The Secretary shall 

19 promulgate regulations setting forth criteria to 

20 be considered in granting a waiver for the serv21 ice requirement under subsection (a)(2). 

22 ‘‘(B) CONTENT.—The criteria under para23 graph (1) shall include whether compliance with 

24 the service requirement by the fellowship recipi25 ent would be— 
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1 ‘‘(i) inequitable and represent an ex2 traordinary hardship; or 

3 ‘‘(ii) deemed impossible because the 

4 individual is permanently and totally dis5 abled at the time of the waiver request. 

6 ‘‘(4) AMOUNT OF FELLOWSHIP AWARDS.—Fel7 lowship awards under this section shall consist of a 

8 stipend in an amount equal to the level of support 

9 provided to the National Science Foundation grad10 uate fellows, except that such stipend shall be ad11 justed as necessary so as not to exceed the fellow’s 

12 tuition and fees or demonstrated need (as deter13 mined by the institution of higher education where 

14 the graduate student is enrolled), whichever is great15 er. 

16 ‘‘(5) ACADEMIC PROGRESS REQUIRED.—An in17 dividual student shall not be eligible to receive a fel18 lowship award— 

19 ‘‘(A) except during periods in which such 

20 student is enrolled, and such student is main21 taining satisfactory academic progress in, and 

22 devoting essentially full time to, study or re23 search in the pursuit of the degree for which 

24 the fellowship support was awarded; and 
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1 ‘‘(B) if the student is engaged in gainful 

2 employment, other than part-time employment 

3 in teaching, research, or similar activity deter4 mined by the eligible institution to be consistent 

5 with and supportive of the student’s progress 

6 toward the appropriate degree. 

7 ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec8 tion shall be construed to require an eligible institution 

9 that receives a grant under this section— 

10 ‘‘(1) to grant a preference or to differentially 

11 treat any applicant for a faculty position as a result 

12 of the institution’s participation in the program 

13 under this section; or 

14 ‘‘(2) to hire a Patsy T. Mink Fellow who com15 pletes this program and seeks employment at such 

16 institution. 

17 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 

18 is authorized to be appropriated to carry out this section 

19 such sums as may be necessary for fiscal year 2006 for 

20 each of the 5 succeeding fiscal years. 
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1 ‘‘PART H—STUDY ON COLLEGE ENROLLMENT BY 

2 SECONDARY SCHOOLS 

3 ‘‘SEC. 881. STUDY ON COLLEGE ENROLLMENT BY SEC4 ONDARY SCHOOLS. 

5 ‘‘The Secretary shall contract with a not-for-profit or6 ganization, with demonstrated expertise in increasing col7 lege enrollment rates in low-income communities nation8 wide, to make publicly available year-to-year college enroll9 ment rate trends by secondary schools, in full compliance 

10 with the Family Educational Rights and Privacy Act of 

11 1974 (FERPA).’’. 

12 CHAPTER 10—AMENDMENTS TO OTHER 

13 LAWS 

14 Subchapter A—Education of the Deaf Act of 

15 1986 

16 SEC. 7901. LAURENT CLERC NATIONAL DEAF EDUCATION 

17 CENTER. 

18 Section 104 of the Education of the Deaf Act of 1986 

19 (20 U.S.C. 4304) is amended— 

20 (1) by striking the heading and inserting 

21 ‘‘LAURENT CLERC NATIONAL DEAF EDUCATION

22 CENTER’’; 

23 (2) in subsection (a)(1)(A), by inserting ‘‘the 

24 Laurent Clerc National Deaf Education Center (re25 ferred to in this section as the ‘Clerc Center’) to 

26 carry out’’ after ‘‘maintain and operate’’; and 
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•S 1932 PCS 

1 (3) in subsection (b)— 

2 (A) in the matter preceding subparagraph 

3 (A) of paragraph (1), by striking ‘‘elementary 

4 and secondary education programs’’ and insert5 ing ‘‘Clerc Center’’; 

6 (B) in paragraph (2), by striking ‘‘elemen7 tary and secondary education programs’’ and 

8 inserting ‘‘Clerc Center’’; and 

9 (C) by adding at the end the following: 

10 ‘‘(5) The University, for purposes of the elementary 

11 and secondary education programs carried out at the Clerc 

12 Center, shall— 

13 ‘‘(A)(i) select challenging academic content 

14 standards, challenging student academic achieve15 ment standards, and academic assessments of a 

16 State, adopted and implemented, as appropriate, 

17 pursuant to paragraphs (1) and (3) of section 

18 1111(b) of the Elementary and Secondary Edu19 cation Act of 1965 (20 U.S.C. 6311(b)(1) and (3)) 

20 and approved by the Secretary; and 

21 ‘‘(ii) implement such standards and assess22 ments for such programs by not later than the be23 ginning of the 2008–2009 academic year; 

24 ‘‘(B) annually determine whether such pro25 grams at the Clerc Center are making adequate 
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1 yearly progress, as determined according to the defi2 nition of adequate yearly progress defined (pursuant 

3 to section 1111(b)(2)(C) of such Act (20 U.S.C. 

4 6311(b)(2)(C))) by the State that has adopted and 

5 implemented the standards and assessments selected 

6 under subparagraph (A)(i); and 

7 ‘‘(C) publicly report the results of the academic 

8 assessments implemented under subparagraph (A) 

9 and whether the programs at the Clerc Center are 

10 making adequate yearly progress, as determined 

11 under subparagraph (B).’’. 

12 SEC. 7902. AGREEMENT WITH GALLAUDET UNIVERSITY. 

13 Section 105(b)(4) of the Education of the Deaf Act 

14 of 1986 (20 U.S.C. 4305(b)(4)) is amended— 

15 (1) by striking ‘‘the Act of March 3, 1931 (40 

16 U.S.C. 276a–276a–5) commonly referred to as the 

17 Davis-Bacon Act’’ and inserting ‘‘subchapter IV of 

18 chapter 31 of title 40, United States Code, com19 monly referred to as the Davis-Bacon Act’’; and 

20 (2) by striking ‘‘section 2 of the Act of June 

21 13, 1934 (40 U.S.C. 276c)’’ and inserting ‘‘section 

22 3145 of title 40, United States Code’’. 
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1 SEC. 7903. AGREEMENT FOR THE NATIONAL TECHNICAL IN2 STITUTE FOR THE DEAF. 

3 Section 112 of the Education of the Deaf Act of 1986 

4 (20 U.S.C. 4332) is amended— 

5 (1) in subsection (a)— 

6 (A) in paragraph (1)— 

7 (i) in the first sentence— 

8 (I) by striking ‘‘an institution of 

9 higher education’’ and inserting ‘‘the 

10 Rochester Institute of Technology, 

11 Rochester, New York’’; and 

12 (II) by striking ‘‘of a’’ and in13 serting ‘‘of the’’; and 

14 (ii) by striking the second sentence; 

15 (B) by redesignating paragraph (2) as 

16 paragraph (3); and 

17 (C) by inserting after paragraph (1) the 

18 following: 

19 ‘‘(2) Notwithstanding the requirement under 

20 paragraph (1), if the Secretary or the Rochester In21 stitute of Technology terminates the agreement 

22 under paragraph (1), the Secretary shall consider 

23 proposals from other institutions of higher education 

24 and enter into an agreement with 1 of such institu25 tions for the establishment and operation of a Na26 tional Technical Institution for the Deaf.’’; and 
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•S 1932 PCS 

1 (2) in subsection (b)— 

2 (A) in paragraph (3), by striking ‘‘Com3 mittee on Education and Labor of the House of 

4 Representatives and to the Committee on Labor 

5 and Human Resources of the Senate’’ and in6 serting ‘‘Committee on Education and the 

7 Workforce of the House of Representatives and 

8 to the Committee on Health, Education, Labor, 

9 and Pensions of the Senate’’; and 

10 (B) in paragraph (5)— 

11 (i) by striking ‘‘the Act of March 3, 

12 1931 (40 U.S.C. 276a–276a–5) commonly 

13 referred to as the Davis-Bacon Act’’ and 

14 inserting ‘‘subchapter IV of chapter 31 of 

15 title 40, United States Code, commonly re16 ferred to as the Davis-Bacon Act’’; and 

17 (ii) by striking ‘‘section 2 of the Act 

18 of June 13, 1934 (40 U.S.C. 276c)’’ and 

19 inserting ‘‘section 3145 of title 40, United 

20 States Code’’. 

21 SEC. 7904. CULTURAL EXPERIENCES GRANTS. 

22 (a) CULTURAL EXPERIENCES GRANTS.—Title I of 

23 the Education of the Deaf Act of 1986 (20 U.S.C. 4301 

24 et seq.) is amended by adding at the end the following: 
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1 ‘‘PART C—OTHER PROGRAMS 

2 ‘‘SEC. 121. CULTURAL EXPERIENCES GRANTS. 

3 ‘‘(a) IN GENERAL.—The Secretary shall, on a com4 petitive basis, make grants to, and enter into contracts 

5 and cooperative agreements with, eligible entities to sup6 port the activities described in subsection (b). 

7 ‘‘(b) ACTIVITIES.—In carrying out this section, the 

8 Secretary shall support activities providing cultural experi9 ences, through appropriate nonprofit organizations with a 

10 demonstrated proficiency in providing such activities, 

11 that— 

12 ‘‘(1) enrich the lives of deaf and hard-of-hear13 ing children and adults; 

14 ‘‘(2) increase public awareness and under15 standing of deafness and of the artistic and intellec16 tual achievements of deaf and hard-of-hearing per17 sons; or 

18 ‘‘(3) promote the integration of hearing, deaf, 

19 and hard-of-hearing persons through shared cul20 tural, educational, and social experiences. 

21 ‘‘(c) APPLICATIONS.—An eligible entity that desires 

22 to receive a grant, or enter into a contract or cooperative 

23 agreement, under this section shall submit an application 

24 to the Secretary at such time, in such manner, and con25 taining such information as the Secretary may require. 
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1 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out this section 

3 such sums as may be necessary for fiscal year 2006 and 

4 each of the 5 succeeding fiscal years.’’. 

5 (b) CONFORMING AMENDMENT.—The title heading 

6 of title I of the Education of the Deaf Act of 1986 (20 

7 U.S.C. 4301 et seq.) is amended by adding at the end 

8 ‘‘; OTHER PROGRAMS’’. 

9 SEC. 7905. AUDIT. 

10 Section 203 of the Education of the Deaf Act of 1986 

11 (20 U.S.C. 4353) is amended— 

12 (1) in subsection (b)— 

13 (A) in paragraph (1), by striking the sec14 ond sentence and inserting the following: ‘‘The 

15 institution of higher education that the Sec16 retary has an agreement with under section 112 

17 shall have an annual independent financial and 

18 compliance audit made of NTID programs and 

19 activities. The audit shall follow the cycle of the 

20 Federal fiscal year.’’; 

21 (B) in paragraph (2), by striking ‘‘sec22 tions’’ and all that follows through the period 

23 and inserting ‘‘sections 102(b), 105(b)(4), 

24 112(b)(5), 203(c), 207(b)(2), subsections (c) 
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1 through (f) of section 207, and subsections (b) 

2 and (c) of section 209.’’; and 

3 (C) in paragraph (3), by inserting ‘‘and 

4 the Committee on Education and the Workforce 

5 of the House of Representatives and the Com6 mittee on Health, Education, Labor, and Pen7 sions of the Senate’’ after ‘‘Secretary’’; and 

8 (2) in subsection (c)(2)(A), by striking ‘‘Com9 mittee on Education and Labor of the House of 

10 Representatives and the Committee on Labor and 

11 Human Resources of the Senate’’ and inserting 

12 ‘‘Committee on Education and the Workforce of the 

13 House of Representatives and the Committee on 

14 Health, Education, Labor, and Pensions of the Sen15 ate’’. 

16 SEC. 7906. REPORTS. 

17 Section 204 of the Education of the Deaf Act of 1986 

18 (20 U.S.C. 4354) is amended— 

19 (1) in the matter preceding paragraph (1), by 

20 striking ‘‘Committee on Education and Labor of the 

21 House of Representatives and the Committee on 

22 Labor and Human Resources of the Senate’’ and in23 serting ‘‘Committee on Education and the Workforce 

24 of the House of Representatives and the Committee 
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1 on Health, Education, Labor, and Pensions of the 

2 Senate’’; 

3 (2) in paragraph (1), by striking ‘‘pre4 paratory,’’; 

5 (3) in paragraph (2)(C), by striking ‘‘upon 

6 graduation/completion’’ and inserting ‘‘on the date 

7 that is 1 year after the date of graduation or com8 pletion’’; and 

9 (4) in paragraph (3)(B), by striking ‘‘of the in10 stitution of higher education’’ and all that follows 

11 through the period and inserting ‘‘of NTID pro12 grams and activities.’’. 

13 SEC. 7907. MONITORING, EVALUATION, AND REPORTING. 

14 Section 205 of the Education of the Deaf Act of 1986 

15 (20 U.S.C. 4355) is amended— 

16 (1) in subsection (b), by striking ‘‘The Sec17 retary, as part of the annual report required under 

18 section 426 of the Department of Education Organi19 zation Act, shall include a description of’’ and in20 serting ‘‘The Secretary shall annually transmit infor21 mation to Congress on’’; and 

22 (2) in subsection (c), by striking ‘‘fiscal years 

23 1998 through 2003’’ and inserting ‘‘fiscal years 

24 2006 through 2010’’. 
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1 SEC. 7908. LIAISON FOR EDUCATIONAL PROGRAMS. 

2 Section 206(a) of the Education of the Deaf Act of 

3 1986 (20 U.S.C. 4356(a)) is amended by striking ‘‘Not 

4 later than 30 days after the date of enactment of this Act, 

5 the’’ and inserting ‘‘The’’. 

6 SEC. 7909. FEDERAL ENDOWMENT PROGRAMS FOR GAL7 LAUDET UNIVERSITY AND THE NATIONAL 

8 TECHNICAL INSTITUTE FOR THE DEAF. 

9 Section 207(h) of the Education of the Deaf Act of 

10 1986 (20 U.S.C. 4357(h)) is amended by striking ‘‘fiscal 

11 years 1998 through 2003’’ each place it appears and in12 serting ‘‘fiscal years 2006 through 2010’’. 

13 SEC. 7910. OVERSIGHT AND EFFECT OF AGREEMENTS. 

14 Section 208(a) of the Education of the Deaf Act of 

15 1986 (20 U.S.C. 4359(a)) is amended by striking ‘‘Com16 mittee on Labor and Human Resources of the Senate and 

17 the Committee on Education and the Workforce of the 

18 House of Representatives’’ and inserting ‘‘Committee on 

19 Education and the Workforce of the House of Representa20 tives and the Committee on Health, Education, Labor, 

21 and Pensions of the Senate’’. 

22 SEC. 7911. INTERNATIONAL STUDENTS. 

23 Section 209 of the Education of the Deaf Act of 1986 

24 (20 U.S.C. 4359a) is amended— 

25 (1) in subsection (a)— 
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1 (A) by striking ‘‘preparatory, under2 graduate,’’ and inserting ‘‘undergraduate’’; 

3 (B) by striking ‘‘Effective with’’ and in4 serting the following: 

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2), effective with’’; and 

7 (C) by adding at the end the following: 

8 ‘‘(2) DISTANCE LEARNING.—International stu9 dents who participate in distance learning courses 

10 that are at NTID or the University and who are re11 siding outside of the United States shall— 

12 ‘‘(A) not be counted as international stu13 dents for purposes of the cap on international 

14 students under paragraph (1), except that in 

15 any school year no United States citizen who 

16 applies to participate in distance learning 

17 courses that are at the University or NTID 

18 shall be denied participation in such courses be19 cause of the participation of an international 

20 student in such courses; and 

21 ‘‘(B) not be charged a tuition surcharge, 

22 as described in subsection (b).’’; and 

23 (2) by striking subsections (b), (c), and (d), and 

24 inserting the following: 
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1 ‘‘(b) TUITION SURCHARGE.—Except as provided in 

2 subsections (a)(2)(B) and (c), the tuition for postsec3 ondary international students enrolled in the University 

4 (including undergraduate and graduate students) or 

5 NTID shall include, for academic year 2007–2008 and 

6 any succeeding academic year, a surcharge of— 

7 ‘‘(1) 100 percent for a postsecondary inter8 national student from a non-developing country; and 

9 ‘‘(2) 50 percent for a postsecondary inter10 national student from a developing country. 

11 ‘‘(c) REDUCTION OF SURCHARGE.— 

12 ‘‘(1) IN GENERAL.—Beginning with the aca13 demic year 2007–2008, the University or NTID may 

14 reduce the surcharge— 

15 ‘‘(A) under subsection (b)(1) to 50 percent 

16 if— 

17 ‘‘(i) a student described under sub18 section (b)(1) demonstrates need; and 

19 ‘‘(ii) such student has made a good 

20 faith effort to secure aid through such stu21 dent’s government or other sources; and 

22 ‘‘(B) under subsection (b)(2) to 25 percent 

23 if— 

24 ‘‘(i) a student described under sub25 section (b)(2) demonstrates need; and 
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•S 1932 PCS 

1 ‘‘(ii) such student has made a good 

2 faith effort to secure aid through such stu3 dent’s government or other sources. 

4 ‘‘(2) DEVELOPMENT OF SLIDING SCALE.—The 

5 University and NTID shall develop a sliding scale 

6 model that— 

7 ‘‘(A) will be used to determine the amount 

8 of a tuition surcharge reduction pursuant to 

9 paragraph (1); and 

10 ‘‘(B) shall be approved by the Secretary. 

11 ‘‘(d) DEFINITION.—In this section, the term ‘devel12 oping country’ means a country with a per-capita income 

13 of not more than $4,825, measured in 1999 United States 

14 dollars, as adjusted by the Secretary to reflect inflation 

15 since 1999.’’. 

16 SEC. 7912. RESEARCH PRIORITIES. 

17 Section 210(b) of the Education of the Deaf Act of 

18 1986 (20 U.S.C. 4359b(b)) is amended by striking ‘‘Com19 mittee on Labor and Human Resources of the Senate’’ 

20 and inserting ‘‘Committee on Health, Education, Labor, 

21 and Pensions of the Senate’’. 

22 SEC. 7913. AUTHORIZATION OF APPROPRIATIONS. 

23 Section 212 of the Education of the Deaf Act of 1986 

24 (20 U.S.C. 4360a) is amended— 
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1 (1) in subsection (a), in the matter preceding 

2 paragraph (1), by striking ‘‘fiscal years 1998 

3 through 2003’’ and inserting ‘‘fiscal years 2006 

4 through 2011’’; and 

5 (2) in subsection (b), by striking ‘‘fiscal years 

6 1998 through 2003’’ and inserting ‘‘fiscal years 

7 2006 through 2011’’. 

8 Subchapter B—United States Institute of 

9 Peace Act 

10 SEC. 7921. UNITED STATES INSTITUTE OF PEACE ACT. 

11 (a) POWERS AND DUTIES.—Section 1705(b)(3) of 

12 the United States Institute of Peace Act (22 U.S.C. 

13 4604(b)(3)) is amended by striking ‘‘the Arms Control 

14 and Disarmament Agency,’’. 

15 (b) BOARD OF DIRECTORS.—Section 1706 of the 

16 United States Institute of Peace Act (22 U.S.C. 4605) 

17 is amended— 

18 (1) by striking ‘‘(b)(5)’’ each place the term ap19 pears and inserting ‘‘(b)(4)’’; and 

20 (2) in subsection (e), by adding at the end the 

21 following: 

22 ‘‘(5) The term of a member of the Board shall 

23 not commence until the member is confirmed by the 

24 Senate and sworn in as a member of the Board.’’. 
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1 (c) FUNDING.—Section 1710 of the United States In2 stitute of Peace Act (22 U.S.C. 4609) is amended by add3 ing at the end the following: 

4 ‘‘(d) EXTENSION.—Any authorization of appropria5 tions made for the purposes of carrying out this title shall 

6 be extended in the same manner as applicable programs 

7 are extended under section 422 of the General Education 

8 Provisions Act.’’. 

9 Subchapter C—The Higher Education 

10 Amendments of 1998 

11 SEC. 7931. REPEALS. 

12 The following provisions of title VIII of the Higher 

13 Education Amendments of 1998 (Public Law 105–244) 

14 are repealed: 

15 (1) Part A. 

16 (2) Part C (20 U.S.C. 1070 note). 

17 (3) Part F (20 U.S.C. 1862 note). 

18 (4) Part J. 

19 (5) Section 861. 

20 (6) Section 863. 

21 SEC. 7932. GRANTS TO STATES FOR WORKPLACE AND COM22 MUNITY TRANSITION TRAINING FOR INCAR23 CERATED YOUTH OFFENDERS. 

24 Section 821(b) of the Higher Education Amendment 

25 of 1988 is amended by striking ‘‘25’’ and inserting ‘‘35’’. 
802 

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1 Subchapter D—Indian Education 

2 PART I—TRIBAL COLLEGES AND UNIVERSITIES 

3 SEC. 7941. REAUTHORIZATION OF THE TRIBALLY CON4 TROLLED COLLEGE OR UNIVERSITY ASSIST5 ANCE ACT OF 1978. 

6 (a) CLARIFICATION OF THE DEFINITION OF NA7 TIONAL INDIAN ORGANIZATION.—Section 2(a)(6) of the 

8 Tribally Controlled College or University Assistance Act 

9 of 1978 (25 U.S.C. 1801(a)(6)) is amended by striking 

10 ‘‘in the field of Indian education’’ and inserting ‘‘in the 

11 fields of tribally controlled colleges and universities and 

12 Indian higher education’’. 

13 (b) INDIAN STUDENT COUNT.—Section 2(a) of the 

14 Tribally Controlled College or University Assistance Act 

15 (25 U.S.C. 1801(a)) is amended— 

16 (1) by redesignating paragraphs (7) and (8) as 

17 paragraphs (8) and (9), respectively; and 

18 (2) by inserting after paragraph (6) the fol19 lowing: 

20 ‘‘(7) ‘Indian student’ means a student who is— 

21 ‘‘(A) a member of an Indian tribe; or 

22 ‘‘(B) a biological child of a member of an 

23 Indian tribe, living or deceased;’’. 

24 (c) CONTINUING EDUCATION.—Section 2(b) of the 

25 Tribally Controlled College or University Assistance Act 
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1 (25 U.S.C. 1801(b)) is amended by striking paragraph (5) 

2 and inserting the following: 

3 ‘‘(5) DETERMINATION OF CREDITS.—Eligible 

4 credits earned in a continuing education program— 

5 ‘‘(A) shall be determined as 1 credit for 

6 every 10 contact hours in the case of an institu7 tion on a quarter system, or 15 contact hours 

8 in the case of an institution on a semester sys9 tem, of participation in an organized continuing 

10 education experience under responsible sponsor11 ship, capable direction, and qualified instruc12 tion, as described in the criteria established by 

13 the International Association for Continuing 

14 Education and Training; and 

15 ‘‘(B) shall be limited to 10 percent of the 

16 Indian student count of a tribally controlled col17 lege or university.’’. 

18 (d) ACCREDITATION REQUIREMENT.—Section 103 of 

19 the Tribally Controlled College or University Assistance 

20 Act (25 U.S.C. 1804) is amended— 

21 (1) in paragraph (2), by striking ‘‘and’’ at the 

22 end; 

23 (2) in paragraph (3), by striking the period at 

24 the end and inserting ‘‘; and’’; and 
804 

•S 1932 PCS 

1 (3) by inserting after paragraph (3), the fol2 lowing: 

3 ‘‘(4)(A) is accredited by a nationally recognized 

4 accrediting agency or association determined by the 

5 Secretary of Education to be a reliable authority 

6 with regard to the quality of training offered; or 

7 ‘‘(B) is, according to such an agency or associa8 tion, making reasonable progress toward accredita9 tion.’’. 

10 (e) TECHNICAL ASSISTANCE CONTRACT AWARDS.— 

11 Section 105 of the Tribally Controlled College or Univer12 sity Assistance Act (25 U.S.C. 1805) is amended in the 

13 second sentence by striking ‘‘In the awarding of contracts 

14 for technical assistance, preference shall be given’’ and in15 serting ‘‘The Secretary shall direct that contracts for tech16 nical assistance be awarded’’. 

17 (f) TITLE I REAUTHORIZATION.—Section 110(a) of 

18 the Tribally Controlled College or University Assistance 

19 Act of 1978 (25 U.S.C. 1810(a)) is amended— 

20 (1) in paragraphs (1), (2), (3), and (4), by 

21 striking ‘‘1999’’ and inserting ‘‘2006’’; 

22 (2) in paragraphs (1), (2), and (3), by striking 

23 ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’; 
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1 (3) in paragraph (2), by striking 

2 ‘‘$40,000,000’’ and inserting ‘‘such sums as may be 

3 necessary’’; 

4 (4) in paragraph (3), by striking 

5 ‘‘$10,000,000’’ and inserting ‘‘such sums as may be 

6 necessary’’; and 

7 (5) in paragraph (4), by striking ‘‘succeeding 

8 4’’ and inserting ‘‘5 succeeding’’. 

9 (g) TITLE III REAUTHORIZATION.—Section 306(a) 

10 of the Tribally Controlled College or University Assistance 

11 Act of 1978 (25 U.S.C. 1836(a)) is amended— 

12 (1) by striking ‘‘1999’’ and inserting ‘‘2006’’; 

13 and 

14 (2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 

15 succeeding’’. 

16 (h) TITLE IV REAUTHORIZATION.—Section 403 of 

17 the Tribal Economic Development and Technology Re18 lated Education Assistance Act of 1990 (25 U.S.C. 1852) 

19 is amended— 

20 (1) by striking ‘‘$2,000,000 for fiscal year 

21 1999’’ and inserting ‘‘such sums as may be nec22 essary for fiscal year 2006’’; and 

23 (2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 

24 succeeding’’. 
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1 PART II—NAVAJO HIGHER EDUCATION 

2 SEC. 7945. SHORT TITLE. 

3 This part may be cited as the ‘‘Navajo Nation Higher 

4 Education Act of 2005’’. 

5 SEC. 7946. REAUTHORIZATION OF NAVAJO COMMUNITY 

6 COLLEGE ACT. 

7 (a) PURPOSE.—Section 2 of the Navajo Community 

8 College Act (25 U.S.C. 640a) is amended— 

9 (1) by striking ‘‘Navajo Tribe of Indians’’ and 

10 inserting ‘‘Navajo Nation’’; and 

11 (2) by striking ‘‘the Navajo Community Col12 lege’’ and inserting ‘‘Dine ́ College’’. 

13 (b) GRANTS.—Section 3 of the Navajo Community 

14 College Act (25 U.S.C. 640b) is amended— 

15 (1) in the first sentence— 

16 (A) by inserting ‘‘the’’ before ‘‘Interior’’; 

17 (B) by striking ‘‘Navajo Tribe of Indians’’ 

18 and inserting ‘‘Navajo Nation’’; and 

19 (C) by striking ‘‘the Navajo Community 

20 College’’ and inserting ‘‘Dine ́ College’’; and 

21 (2) in the second sentence— 

22 (A) by striking ‘‘Navajo Tribe’’ and insert23 ing ‘‘Navajo Nation’’; and 

24 (B) by striking ‘‘Navajo Indians’’ and in25 serting ‘‘Navajo people’’. 
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1 (c) STUDY OF FACILITIES NEEDS.—Section 4 of the 

2 Navajo Community College Act (25 U.S.C. 640c) is 

3 amended— 

4 (1) in subsection (a)— 

5 (A) in the first sentence— 

6 (i) by striking ‘‘the Navajo Commu7 nity College’’ and inserting ‘‘Dine ́ College’’; 

8 and 

9 (ii) by striking ‘‘August 1, 1979’’ and 

10 inserting ‘‘October 31, 2009’’; and 

11 (B) in the second sentence, by striking 

12 ‘‘Navajo Tribe’’ and inserting ‘‘Navajo Nation’’; 

13 (2) in subsection (b), by striking ‘‘the date of 

14 enactment of the Tribally Controlled Community 

15 College Assistance Act of 1978’’ and inserting ‘‘Oc16 tober 1, 2006’’; and 

17 (3) in subsection (c), in the first sentence, by 

18 striking ‘‘the Navajo Community College’’ and in19 serting ‘‘Dine ́ College’’. 

20 (d) AUTHORIZATION OF APPROPRIATIONS.—Section 

21 5 of the Navajo Community College Act (25 U.S.C. 640c– 

22 1) is amended— 

23 (1) in subsection (a)— 

24 (A) in paragraph (1), by striking 

25 ‘‘$2,000,000’’ and all that follows through the 
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1 end of the paragraph and inserting ‘‘such sums 

2 as are necessary for fiscal years 2006 through 

3 2011.’’; and 

4 (B) by adding at the end the following: 

5 ‘‘(3) Sums described in paragraph (2) shall be used 

6 to provide grants for construction activities, including the 

7 construction of buildings, water and sewer facilities, roads, 

8 information technology and telecommunications infra9 structure, classrooms, and external structures (such as 

10 walkways).’’; 

11 (2) in subsection (b)(1)— 

12 (A) in the matter preceding subparagraph 

13 (A)— 

14 (i) by striking ‘‘the Navajo Commu15 nity College’’ and inserting ‘‘Dine ́ College’’; 

16 and 

17 (ii) by striking ‘‘, for each fiscal year’’ 

18 and all that follows through ‘‘for—’’ and 

19 inserting ‘‘such sums as are necessary for 

20 fiscal years 2006 through 2011 to pay the 

21 cost of—’’; 

22 (B) in subparagraph (A)— 

23 (i) by striking ‘‘college’’ and inserting 

24 ‘‘College’’; 
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1 (ii) in clauses (i) and (iii), by striking 

2 the commas at the ends of the clauses and 

3 inserting semicolons; and 

4 (iii) in clause (ii), by striking ‘‘, and’’ 

5 at the end and inserting ‘‘; and’’; 

6 (C) in subparagraph (B), by striking the 

7 comma at the end and inserting a semicolon; 

8 (D) in subparagraph (C), by striking ‘‘, 

9 and’’ at the end and inserting a semicolon; 

10 (E) in subparagraph (D), by striking the 

11 period at the end and inserting ‘‘; and’’; and 

12 (F) by adding at the end the following: 

13 ‘‘(E) improving and expanding the College, 

14 including by providing, for the Navajo people 

15 and others in the community of the College— 

16 ‘‘(i) higher education programs; 

17 ‘‘(ii) vocational and technical edu18 cation; 

19 ‘‘(iii) activities relating to the preser20 vation and protection of the Navajo lan21 guage, philosophy, and culture; 

22 ‘‘(iv) employment and training oppor23 tunities; 

24 ‘‘(v) economic development and com25 munity outreach; and 
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1 ‘‘(vi) a safe learning, working, and liv2 ing environment.’’; and 

3 (3) in subsection (c), by striking ‘‘the Navajo 

4 Community College’’ and inserting ‘‘Dine ́ College’’. 

5 (e) EFFECT ON OTHER LAWS.—Section 6 of the 

6 Navajo Community College Act (25 U.S.C. 640c–2) is 

7 amended— 

8 (1) by striking ‘‘the Navajo Community Col9 lege’’ each place it appears and inserting ‘‘Dine ́ Col10 lege’’; and 

11 (2) in subsection (b), by striking ‘‘college’’ and 

12 inserting ‘‘College’’. 

13 (f) PAYMENTS; INTEREST.—Section 7 of the Navajo 

14 Community College Act (25 U.S.C. 640c–3) is amended 

15 by striking ‘‘the Navajo Community College’’ each place 

16 it appears and inserting ‘‘Dine ́ College’’. 

17 TITLE VIII—COMMITTEE ON THE 

18 JUDICIARY 

19 SEC. 8001. RECAPTURE OF UNUSED VISA NUMBERS. 

20 (a) RECAPTURE OF UNUSED EMPLOYMENT-BASED

21 IMMIGRANT VISAS.—Section 201(d) of the Immigration 

22 and Nationality Act (8 U.S.C. 1151(d)) is amended— 

23 (1) in paragraph (2)(C)— 

24 (A) by striking ‘‘is the difference’’ and in25 serting ‘‘is the sum of— 
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1 ‘‘(i) the difference’’; and 

2 (B) by striking the period at the end and 

3 inserting the following: ‘‘; and 

4 ‘‘(ii) the lesser of— 

5 ‘‘(I) the number of immigrant 

6 visas that were available in any pre7 vious fiscal year to employment-based 

8 immigrants (and their family mem9 bers accompanying or following to join 

10 under section 203(d)) and that were 

11 not issued for that fiscal year or for 

12 any subsequent fiscal year, excluding 

13 those immigrant visas reserved for 

14 employment-based immigrants for an 

15 occupation listed in schedule A of sec16 tion 656.5 of title 20, Code of Federal 

17 Regulations; and 

18 ‘‘(II) 90,000.’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(3) Immigrant visas issued on or after October 

21 1, 2004, to spouses and children of employment22 based immigrants shall not be counted against the 

23 numerical limitation set forth in paragraph (1).’’. 
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1 (b) SUPPLEMENTAL PETITION FEE.—Section 

2 204(a)(1) of the Immigration and Nationality Act (8 

3 U.S.C. 1154(a)(1)) is amended— 

4 (1) in subparagraph (E), by adding at the end 

5 the following: ‘‘Such petition shall be accompanied 

6 by a supplemental petition fee in the amount of 

7 $500.’’; and 

8 (2) in subparagraph (F), by adding at the end 

9 the following: ‘‘Such petition shall be accompanied 

10 by a supplemental petition fee in the amount of 

11 $500.’’. 

12 (c) ADJUSTMENT OF STATUS.— 

13 (1) IN GENERAL.—Section 245(a) of the Immi14 gration and Nationality Act (8 U.S.C. 1255(a)) is 

15 amended to read as follows: 

16 ‘‘(a)(1) The status of an alien who was inspected and 

17 admitted or paroled into the United States or the status 

18 of any other alien having an approved petition for classi19 fication under subparagraph (A)(iii), (A)(iv), (B)(ii), or 

20 (B)(iii) of section 204(a)(1) may be adjusted by the Sec21 retary of Homeland Security or the Attorney General, in 

22 the discretion of the Secretary or Attorney General, and 

23 under such regulations as the Secretary or Attorney Gen24 eral may prescribe, to that of an alien lawfully admitted 

25 for permanent residence if— 
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1 ‘‘(A) the alien makes an application for such 

2 adjustment; 

3 ‘‘(B) the alien is eligible to receive an immi4 grant visa and is admissible to the United States for 

5 permanent residence; and 

6 ‘‘(C) an immigrant visa is immediately available 

7 to the alien at the time the application is filed. 

8 ‘‘(2) If a supplemental petition fee is paid for any 

9 petition under subparagraph (E) or (F) of section 

10 204(a)(1), an application under paragraph (1) of this sub11 section on behalf of an alien beneficiary of such petition 

12 (including a spouse or child who is accompanying or fol13 lowing to join the principal beneficiary) may be filed with14 out regard to the limitation set forth in paragraph (1)(C). 

15 An application for adjustment of status filed under this 

16 paragraph may not be approved until such time as an im17 migrant visa becomes available.’’. 

18 (2) PENDING APPLICATIONS.—An alien on 

19 whose behalf a petition was pending under subpara20 graph (E) or (F) of section 204(a)(1) of the Immi21 gration and Nationality Act (8 U.S.C. 1154(a)(1)), 

22 on the date of enactment of this Act may, upon the 

23 payment of the supplemental petition fee set forth in 

24 such section, apply for adjustment of status under 

25 this subsection without regard to the limitation set 
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1 forth in section 245(a)(1)(C) of the Immigration and 

2 Nationality Act (8 U.S.C. 1255(a)(1)(C)), as amend3 ed by paragraph (1). 

4 (d) RECAPTURE OF UNUSED H–1B VISA NUM5 BERS.—Section 214(g) of the Immigration and Nation6 ality Act (8 U.S.C. 1184(g)) is amended— 

7 (1) by redesignating paragraphs (9) through 

8 (11) as paragraphs (10) through (12), respectively; 

9 and 

10 (2) by inserting after paragraph (8) the fol11 lowing: 

12 ‘‘(9)(A) If the numerical limitation in para13 graph (1)(A) for fiscal year 2006 or a subsequent 

14 fiscal year has been reached, such numerical limita15 tion shall be supplemented in a number equal to the 

16 lesser of— 

17 ‘‘(i) the cumulative total number of visas 

18 that were available in all prior fiscal years sub19 sequent to fiscal year 1991, and not issued for 

20 each such fiscal year or any subsequent fiscal 

21 year; and 

22 ‘‘(ii) 30,000. 

23 ‘‘(B) Any petition filed after the numerical limi24 tation set forth in paragraph (1)(A) has been 

25 reached for that fiscal year, and seeking an H–1B 
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1 visa number recaptured under subparagraph (A) of 

2 this paragraph, shall be accompanied by an H-1B 

3 recapture fee in the amount of $500.’’. 

4 (e) CONFORMING AMENDMENT.—Section 286(m) of 

5 the Immigration and Nationality Act (8 U.S.C. 1356(m)) 

6 is amended by inserting ‘‘, including those fees provided 

7 for in subparagraphs (E) and (F) of section 204(a)(1) and 

8 subsections (c)(15) and (g)(9)(B) of section 214,’’ after 

9 ‘‘all adjudication fees’’. 

10 (f) EXPENDITURE LIMITATION.—Amounts collected 

11 under subparagraphs (E) and (F) of section 204(a)(1) 

12 and subsections (c)(15) and (g)(9)(B) of section 214 of 

13 the Immigration and Nationality Act, as amended by this 

14 Act, may not be expended unless specifically appropriated 

15 by an Act of Congress. 

16 SEC. 8002. FEES WITH RESPECT TO IMMIGRATION SERV17 ICES FOR INTRACOMPANY TRANSFEREES. 

18 Section 214(c) of the Immigration and Nationality 

19 Act (8 U.S.C. 1184(c)) is amended by adding at the end 

20 the following: 

21 ‘‘(15)(A) The Secretary of State shall impose a fee 

22 on an employer when an alien files an application abroad 

23 for a visa authorizing initial admission to the United 

24 States as a nonimmigrant described in section 

25 101(a)(15)(L) in order to be employed by the employer, 
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1 if the alien is covered under a blanket petition described 

2 in paragraph (2)(A). 

3 ‘‘(B) The Secretary of Homeland Security shall im4 pose a fee on an employer filing a petition under para5 graph (1) initially to grant an alien nonimmigrant status 

6 described in section 101(a)(15)(L) or to extend for the 

7 first time the stay of an alien having such status. 

8 ‘‘(C) The amount of the fee imposed under subpara9 graph (A) or (B) shall be $750. 

10 ‘‘(D) The fees imposed under subparagraphs (A) and 

11 (B) shall only apply to principal aliens and not to spouses 

12 or children who are accompanying or following to join such 

13 principal aliens. 

14 ‘‘(E)(i) An employer may not require an alien who 

15 is the beneficiary of the visa or petition for which a fee 

16 is imposed under this paragraph to reimburse, or other17 wise compensate, the employer for part or all of the cost 

18 of such fee. 

19 ‘‘(ii) Section 274A(g)(2) shall apply to a violation of 

20 clause (i) in the same manner as it applies to a violation 

21 of section 274A(g)(1).’’. 

Calendar No. 274 

109TH CONGRESS 

1ST SESSION S. 1932 

A BILL 

To provide for reconciliation pursuant to section 

for fiscal year 2006 (H. Con. Res. 95). 202(a) of the concurrent resolution on the budget 

OCTOBER 27, 2005 

Read twice and placed on the calendar