In the House of Representatives, U. S.,

November 18 (legislative day, November 17), 2005.

Resolved, That the bill from the Senate (S. 1932) entitled ‘‘An Act to provide for reconciliation pursuant to section 

202(a) of the concurrent resolution on the budget for fiscal 

year 2006 (H. Con. Res. 95)’’, do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Deficit Reduction Act 

3 of 2005’’. 

4 SEC. 2. TABLE OF TITLES. 

5 The table of titles is as follows:
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TITLE I—COMMITTEE ON AGRICULTURE 

TITLE II—COMMITTEE ON EDUCATION AND THE WORKFORCE 

TITLE III—COMMITTEE ON ENERGY AND COMMERCE 

TITLE IV—COMMITTEE ON FINANCIAL SERVICES 

TITLE V—COMMITTEE ON THE JUDICIARY 

TITLE VI—COMMITTEE ON RESOURCES 

TITLE VII—COMMITTEE ON TRANSPORTATION AND 

INFRASTRUCTURE 

TITLE VIII—COMMITTEE ON WAYS AND MEANS

1 TITLE I—COMMITTEE ON 

2 AGRICULTURE 

3 SECTION 1001. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This title may be cited as the ‘‘Ag5 ricultural Reconciliation Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of this 

7 title is as follows:

Sec. 1001. Short title; table of contents. 

Subtitle A—Commodity Programs 

Sec. 1101. Percentage reduction in amount of direct payments for covered commodities and peanuts. 

Sec. 1102. Reduction in percentage of direct payment amount authorized to be 

paid in advance. 

Sec. 1103. Cotton competitiveness provisions. 

Subtitle B—Conservation 

Sec. 1201. Limitations on use of Commodity Credit Corporation funds to carry 

out watershed rehabilitation program. 

Sec. 1202. Conservation security program. 

Sec. 1203. Limitations on use of Commodity Credit Corporation funds to carry 

out agricultural management assistance program. 

Subtitle C—Energy 

Sec. 1301. Termination of use of Commodity Credit Corporation funds to carry 

out renewable energy systems and energy efficiency improvements program. 
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Subtitle D—Rural Development 

Sec. 1401. Enhanced access to broadband telecommunications services in rural 

areas. 

Sec. 1402. Value-added agricultural product market development grants. 

Sec. 1403. Rural business investment program. 

Sec. 1404. Rural business strategic investment grants. 

Sec. 1405. Rural firefighters and emergency personnel grants. 

Subtitle E—Research 

Sec. 1501. Initiative for Future Food and Agriculture Systems. 

Subtitle F—Nutrition 

Sec. 1601. Eligible households. 

Sec. 1602. Availability of commodities for the emergency food assistance program. 

Sec. 1603. Residency requirement. 

Sec. 1604. Disaster food stamp program.

1 Subtitle A—Commodity Programs 

2 SEC. 1101. PERCENTAGE REDUCTION IN AMOUNT OF DI3 RECT PAYMENTS FOR COVERED COMMOD4 ITIES AND PEANUTS. 

5 (a) COVERED COMMODITIES.—Section 1103 of the 

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

7 7913) is amended—

8 (1) in subsection (c), by striking ‘‘The amount’’ 

9 and inserting ‘‘Except as provided in subsection (e), 

10 the amount’’; and 

11 (2) by adding at the end the following new sub12 section: 

13 ‘‘(e) DIRECT PAYMENT AMOUNT REDUCTION.—Not14 withstanding subsection (c), for the 2006 and 2007 crop 

15 years (and the 2008 and 2009 crop years if direct payments 

16 are provided under this section for those crop years), the 

17 Secretary shall reduce the total amount of the direct pay-
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1 ment to be paid to the producers on a farm for a covered 

2 commodity for the crop year concerned by an amount equal 

3 to 1 percent of the direct payment amount otherwise deter4 mined for that farm for that covered commodity for that 

5 crop year. No reduction shall be made under the authority 

6 of this subsection if direct payments are made for the 2010 

7 or any subsequent crop year of a covered commodity.’’. 

8 (b) PEANUTS.—Section 1303 of such Act (7 U.S.C. 

9 7953) is amended—

10 (1) in subsection (d), by striking ‘‘The amount’’ 

11 and inserting ‘‘Except as provided in subsection (f), 

12 the amount’’; and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(f) DIRECT PAYMENT AMOUNT REDUCTION.—Not16 withstanding subsection (d), for the 2006 and 2007 crops 

17 of peanuts (and the 2008 and 2009 crops of peanuts if di18 rect payments are provided under this section for those 

19 crops), the Secretary shall reduce the total amount of the 

20 direct payment to be paid to the producers on a farm for 

21 that crop of peanuts by an amount equal to 1 percent of 

22 the direct payment amount otherwise determined for that 

23 farm for that crop of peanuts. No reduction shall be made 

24 under the authority of this subsection if direct payments 

25 are made for the 2010 or any subsequent crop of peanuts.’’. 
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1 SEC. 1102. REDUCTION IN PERCENTAGE OF DIRECT PAY2 MENT AMOUNT AUTHORIZED TO BE PAID IN 

3 ADVANCE. 

4 (a) COVERED COMMODITIES.—Section 1103(d)(2) of 

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

6 U.S.C. 7913(d)(2)) is amended in the first sentence by strik7 ing ‘‘2007 crop years’’ and inserting ‘‘2005 crop years and 

8 up to 40 percent of the direct payment for a covered com9 modity for each of the 2006 and 2007 crop years’’. 

10 (b) PEANUTS.—Section 1303(e)(2) of such Act (7 

11 U.S.C. 7953(e)(2)) is amended in the first sentence by strik12 ing ‘‘2007 crop years’’ and inserting ‘‘2005 crop years and 

13 up to 40 percent of the direct payment for each of the 2006 

14 and 2007 crop years’’. 

15 SEC. 1103. COTTON COMPETITIVENESS PROVISIONS. 

16 (a) REPEAL OF AUTHORITY TO ISSUE COTTON USER

17 MARKETING CERTIFICATES.—Section 1207 of the Farm Se18 curity and Rural Investment Act of 2002 (7 U.S.C. 7937) 

19 is amended—

20 (1) by striking the section heading and inserting 

21 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; 

26 (4) in subsection (a), as so redesignated—
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1 (A) in paragraph (1)—

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

3 adjusted for the value of any certificate 

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

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

6 ‘‘, for the value of any certificates issued 

7 under subsection (a)’’; and 

8 (B) in paragraph (4), by striking ‘‘sub9 section (c)’’ and inserting ‘‘subsection (b)’’; and 

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

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

12 (a)’’. 

13 (b) CONFORMING AMENDMENT.—Section 136 of the 

14 Federal Agriculture Improvement and Reform Act of 1996 

15 (7 U.S.C. 7236) is repealed. 

16 (c) EFFECTIVE DATE.—The amendments made by this 

17 section take effect on August 1, 2006. 

18 Subtitle B—Conservation 

19 SEC. 1201. LIMITATIONS ON USE OF COMMODITY CREDIT 

20 CORPORATION FUNDS TO CARRY OUT WATER21 SHED REHABILITATION PROGRAM. 

22 (a) FISCAL YEAR 2007 FUNDING.—Subparagraph (E) 

23 of section 14(h)(1) of the Watershed Protection and Flood 

24 Prevention Act (16 U.S.C. 1012(h)(1)) is amended by strik25 ing ‘‘$65,000,000’’ and inserting ‘‘$50,000,000’’. 
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1 (b) TERMINATION OF MULTI-YEAR AVAILABILITY OF

2 FUNDS.—Such section is further amended by striking ‘‘, to 

3 remain available until expended’’ in the matter preceding 

4 subparagraph (A). 

5 (c) RESCISSION OF UNOBLIGATED PRIOR-YEAR

6 FUNDS.—Funds previously made available under such sec7 tion for a fiscal year and unobligated as of September 30, 

8 2006, are hereby rescinded effective on that date. 

9 SEC. 1202. CONSERVATION SECURITY PROGRAM. 

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

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

12 (1) in the matter before paragraph (1), by strik13 ing ‘‘For’’ and inserting ‘‘Except as otherwise pro14 vided in this subsection, for’’; and 

15 (2) in paragraph (3), by striking ‘‘not more than 

16 $6,037,000,000’’ and all that follows through ‘‘2014.’’ 

17 and inserting the following: 

18 ‘‘not more than—

19 ‘‘(A) $2,213,000,000 for the period of fiscal 

20 years 2006 through 2010; and 

21 ‘‘(B) $5,729,000,000 for the period of fiscal 

22 years 2006 through 2015.’’. 

23 (b) DURATION.—Section 1238A(a) of such Act (16 

24 U.S.C. 3838a(a)) is amended by striking ‘‘2007’’ and in25 serting ‘‘2011’’. 
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1 SEC. 1203. LIMITATIONS ON USE OF COMMODITY CREDIT 

2 CORPORATION FUNDS TO CARRY OUT AGRI3 CULTURAL MANAGEMENT ASSISTANCE PRO4 GRAM. 

5 Section 524(b)(4)(B) of the Federal Crop Insurance 

6 Act (7 U.S.C. 1524(b)(4)(B)) is amended—

7 (1) in clause (i), by inserting before the period 

8 at the end the following: ‘‘, except fiscal years 2007 

9 through 2010’’; and 

10 (2) in clauses (ii) and (iii), by striking ‘‘2007’’ 

11 both places it appears and inserting ‘‘2006’’. 

12 Subtitle C—Energy 

13 SEC. 1301. TERMINATION OF USE OF COMMODITY CREDIT 

14 CORPORATION FUNDS TO CARRY OUT RE15 NEWABLE ENERGY SYSTEMS AND ENERGY EF16 FICIENCY IMPROVEMENTS PROGRAM. 

17 Section 9006(f) of the Farm Security and Rural In18 vestment Act of 2002 (7 U.S.C. 8106(f)) is amended by 

19 striking ‘‘2007’’ and inserting ‘‘2006’’. 

20 Subtitle D—Rural Development 

21 SEC. 1401. ENHANCED ACCESS TO BROADBAND TELE22 COMMUNICATIONS SERVICES IN RURAL 

23 AREAS. 

24 (a) TERMINATION OF FISCAL YEAR 2007 FUNDING.—

25 Subparagraph (B) of section 601(j)(1) of the Rural Elec26 trification Act of 1936 (7 U.S.C. 950bb(j)(1)) is amended 
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1 by striking ‘‘for each of fiscal years 2006 and 2007’’ and 

2 inserting ‘‘for fiscal year 2006’’. 

3 (b) TERMINATION OF MULTI-YEAR AVAILABILITY OF

4 FUNDS.—Such section is further amended by striking ‘‘, to 

5 remain available until expended’’ both places it appears. 

6 (c) RESCISSION OF UNOBLIGATED PRIOR-YEAR

7 FUNDS.—Funds previously made available under such sec8 tion for a fiscal year and unobligated as of September 30, 

9 2006, are hereby rescinded effective on that date. 

10 SEC. 1402. VALUE-ADDED AGRICULTURAL PRODUCT MAR11 KET DEVELOPMENT GRANTS. 

12 (a) TERMINATION OF FISCAL YEAR 2007 FUNDING.—

13 Section 231(b)(4) of the Agricultural Risk Protection Act 

14 of 2000 (Public Law 106–224; 7 U.S.C. 1621 note) is 

15 amended by striking ‘‘October 1, 2006’’ and inserting ‘‘Oc16 tober 1, 2005’’. 

17 (b) TERMINATION OF MULTI-YEAR AVAILABILITY OF

18 FUNDS.—Such section is further amended by striking ‘‘, to 

19 remain available until expended’’. 

20 (c) RESCISSION OF UNOBLIGATED PRIOR-YEAR

21 FUNDS.—Funds previously made available under such sec22 tion for a fiscal year and unobligated as of September 30, 

23 2006, are hereby rescinded effective on that date. 
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1 SEC. 1403. RURAL BUSINESS INVESTMENT PROGRAM. 

2 (a) TERMINATION OF FISCAL YEAR 2007 AND SUBSE3 QUENT FUNDING.—Subsection (a)(1) of section 384S of the 

4 Consolidated Farm and Rural Development Act (7 U.S.C. 

5 2009cc–18) is amended by inserting after ‘‘necessary’’ the 

6 following: ‘‘through fiscal year 2006’’. 

7 (b) TERMINATION OF MULTI-YEAR AVAILABILITY OF

8 FUNDS.—Such section is further amended—

9 (1) by striking ‘‘(a) IN GENERAL.—’’; and 

10 (2) by striking subsection (b). 

11 (c) RESCISSION OF UNOBLIGATED PRIOR-YEAR

12 FUNDS.—Funds previously made available under such sec13 tion and unobligated as of September 30, 2006, are hereby 

14 rescinded effective on that date. 

15 SEC. 1404. RURAL BUSINESS STRATEGIC INVESTMENT 

16 GRANTS. 

17 (a) TERMINATION OF MULTI-YEAR AVAILABILITY OF

18 FUNDS.—Subsection (a) of section 385E of the Consolidated 

19 Farm and Rural Development Act (7 U.S.C. 2009dd–4) is 

20 amended by striking ‘‘, to remain available until ex21 pended,’’. 

22 (b) RESCISSION OF UNOBLIGATED PRIOR-YEAR

23 FUNDS.—Funds previously made available under such sec24 tion and unobligated as of September 30, 2006, are hereby 

25 rescinded effective on that date. 
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1 SEC. 1405. RURAL FIREFIGHTERS AND EMERGENCY PER2 SONNEL GRANTS. 

3 (a) TERMINATION OF FISCAL YEAR 2007 FUNDING.—

4 Section 6405(c) of the Farm Security and Rural Investment 

5 Act of 2002 (7 U.S.C. 2655(c)) is amended by striking 

6 ‘‘2007’’ and inserting ‘‘2006’’. 

7 (b) TERMINATION OF MULTI-YEAR AVAILABILITY OF

8 FUNDS.—Such section is further amended by striking ‘‘, to 

9 remain available until expended’’. 

10 (c) RESCISSION OF UNOBLIGATED PRIOR-YEAR

11 FUNDS.—Funds previously made available under such sec12 tion for a fiscal year and unobligated as of September 30, 

13 2006, are hereby rescinded effective on that date. 

14 Subtitle E—Research 

15 SEC. 1501. INITIATIVE FOR FUTURE FOOD AND AGRI16 CULTURE SYSTEMS. 

17 (a) TERMINATION OF FISCAL YEAR 2007, 2008, AND

18 2009 TRANSFERS.—Subsection (b)(3)(D) of section 401 of 

19 the Agricultural Research, Extension, and Education Re20 form Act of 1998 (7 U.S.C. 7621) is amended by striking 

21 ‘‘2006’’ and inserting ‘‘2009’’. 

22 (b) TERMINATION OF MULTI-YEAR AVAILABILITY OF

23 FISCAL YEAR 2006 FUNDS.—Paragraph (6) of subsection 

24 (f) of such section is amended to read as follows: 

25 ‘‘(6) AVAILABILITY OF FUNDS.—
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1 ‘‘(A) TWO-YEAR AVAILABILITY.—Except as 

2 provided in subparagraph (B), funds for grants 

3 under this section shall be available to the Sec4 retary for obligation for a 2-year period begin5 ning on the date of the transfer of the funds 

6 under subsection (b). 

7 ‘‘(B) EXCEPTION FOR FISCAL YEAR 2006

8 TRANSFER.—In the case of the funds required to 

9 be transferred by subsection (b)(3)(C), the funds 

10 shall be available to the Secretary for obligation 

11 for the 1-year period beginning on October 1, 

12 2005.’’. 

13 Subtitle F—Nutrition 

14 SEC. 1601. ELIGIBLE HOUSEHOLDS. 

15 (a) ELIGIBLE HOUSEHOLDS.—The Food Stamp Act of 

16 1977 (7 U.S.C. 2011 et seq.) is amended—

17 (1) in section 5—

18 (A) in the 2d sentence of subsection (a); and 

19 (B) in subsection (j); 

20 by striking ‘‘receives benefits’’ each place it appears 

21 and inserting ‘‘in fiscal years 2006 through 2010 re22 ceives cash assistance, and in any other fiscal year re23 ceives benefits,’’; 

24 (2) in section 5(a) by adding at the end the fol25 lowing: 
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1 ‘‘Notwithstanding any other provisions of this Act except 

2 sections 6(b), 6(d)(2), and 6(g) and section 3(i)(4), house3 holds in which each member receives substantial and ongo4 ing noncash benefits under a State program funded under 

5 part A of title IV of the Social Security Act (42 U.S.C. 

6 601 et seq.) provided for purposes of shelter, utilities, child 

7 care, health care, transportation, or job training, and that 

8 have a monthly income that does not exceed (before the ex9 clusions and deductions provided for in subsections (d) and 

10 (e)) 150 percent of the poverty line, as defined in section 

11 673(2) of the Community Services Block Grant Act (42 

12 U.S.C. 9902(2)), for the forty-eight contiguous States and 

13 the District of Columbia, Alaska, Hawaii, the Virgin Is14 lands of the United States, and Guam, respectively, shall 

15 be eligible to participate in the food stamp program.’’; and 

16 (3) in section 5(j) by adding at the end the fol17 lowing: 

18 ‘‘Notwithstanding subsections (a) through (i), a State agen19 cy shall consider a member of a household in which each 

20 household member receives substantial and ongoing noncash 

21 benefits under a State program funded under part A of title 

22 IV of the Social Security Act (42 U.S.C. 601 et seq.) pro23 vided for purposes of shelter, utilities, child care, health 

24 care, transportation, or job training, and which has a 

25 monthly income that does not exceed (before the exclusions 
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1 and deductions provided for in subsections (d) and (e)) 150 

2 percent of the poverty line, as defined in section 673(2) of 

3 the Community Services Block Grant Act (42 U.S.C. 

4 9902(2)), for the forty-eight contiguous States and the Dis5 trict of Columbia, Alaska, Hawaii, the Virgin Islands of 

6 the United States, and Guam, respectively, to have satisfied 

7 the resource limitations prescribed under subsection (g).’’. 

8 (b) EXTENSIONS.—The Food Stamp Act of 1977 (7 

9 U.S.C. 2011 et seq.) is amended in—

10 (1) section 11(t)(1); 

11 (2) section 16—

12 (A) in subparagraphs (A)(vii) and (E)(i) of 

13 subsection (h)(1); and 

14 (B) in subparagraphs (A) and (B)(ii) of 

15 subsection (k)(3); 

16 (3) section 17(b)(1)(B)(vi); 

17 (4) section 18(a); and 

18 (5) section 19(a)(2)(A)(ii); 

19 by striking ‘‘2007’’ each place it appears and inserting 

20 ‘‘2011’’. 

21 (c) CERTIFICATION FOR SCHOOL LUNCH PROGRAM.—

22 Section 9 of the Richard B. Russell National School Lunch 

23 Act (42 U.S.C. 1758) is amended—

24 (1) in subsection (b)(12)—

25 (A) in subparagraph (A)—
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1 (i) in clause (v), by striking ‘‘; or’’ and 

2 inserting a semicolon; 

3 (ii) in clause (vi), by striking the pe4 riod and inserting ‘‘; or’’; and 

5 (iii) by adding at the end the following 

6 new clause: 

7 ‘‘(vii) a member of a household in 

8 which each member receives or is eligible to 

9 receive non-cash or in-kind benefits under a 

10 State program funded under part A of title 

11 IV of the Social Security Act (42 U.S.C. 

12 601 et seq.), and requires participants to 

13 have a gross monthly income at or below 

14 200 percent of the Federal poverty level.’’; 

15 and 

16 (B) in subparagraph (B), by striking ‘‘or 

17 assistance’’ and inserting ‘‘, benefits, or assist18 ance’’; and 

19 (2) in subsection (d)(2)—

20 (A) in subparagraph (D), by striking ‘‘; or’’ 

21 and inserting a semicolon; 

22 (B) in subparagraph (E), by striking the 

23 period and inserting ‘‘; or’’; and 

24 (C) by adding at the end the following: 
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1 ‘‘(F) documentation has been provided to 

2 the local educational agency showing that the 

3 household is one in which each member receives 

4 or is eligible to receive non-cash or in-kind bene5 fits under a State program funded under part A 

6 of title IV of the Social Security Act (42 U.S.C. 

7 601 et seq.), and requires participants to have a 

8 gross monthly income at or below 200 percent of 

9 the Federal poverty level.’’. 

10 SEC. 1602. AVAILABILITY OF COMMODITIES FOR THE EMER11 GENCY FOOD ASSISTANCE PROGRAM. 

12 Section 27(a) of the Food Stamp Act of 1977 (7 U.S.C. 

13 2036(a)) is amended—

14 (1) by striking ‘‘2007,’’ and inserting ‘‘2005 and 

15 for each of the fiscal years 2007 through 2011’’; 

16 (2) by inserting ‘‘, and for fiscal year 2006 the 

17 Secretary shall purchase $152,000,000,’’ before ‘‘of a 

18 variety’’; and 

19 (3) by adding at the end the following: 

20 ‘‘Of the funds used to purchase commodities in accordance 

21 with this subsection for fiscal year 2006, $12,000,000 shall 

22 be used to purchase commodities for distribution to States 

23 that received a Presidential designation of a major disaster 

24 under the Robert T. Stafford Disaster Relief and Emer25 gency Assistance Act (42 U.S.C. 5121–5206) as a result of 
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1 Hurricane Katrina or Hurricane Rita and States contig2 uous to those States.’’. 

3 SEC. 1603. RESIDENCY REQUIREMENT. 

4 Section 402(a)(2)(L) of the Personal Responsibility 

5 and Work Opportunity Reconciliation Act of 1996 (8 

6 U.S.C. 1612(a)(2)(L)) is amended by striking ‘‘for a period 

7 of 5 years or more beginning’’ and inserting the following: 

8 ‘‘for a period—

9 ‘‘(1) effective until September 30, 2010—

10 ‘‘(A) for an alien—

11 ‘‘(i)(I) who is 60 years of age or older; 

12 or 

13 ‘‘(II) with respect to whom—

14 ‘‘(aa) an application for natu15 ralization under Immigration and Na16 tionality Act is approved; or 

17 ‘‘(bb) such application is pending 

18 under such Act and no previous appli19 cation for naturalization has been re20 jected under such Act; and 

21 ‘‘(ii) who is a member of a household 

22 that receives food stamp benefits; 

23 as of the date of the enactment of the Agricul24 tural Reconciliation Act of 2005, of 5 years or 

25 more; and 
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1 ‘‘(B) for an alien with respect to whom sub2 paragraph (A) does not apply, of 7 years or 

3 more; and 

4 ‘‘(2) effective beginning on October 1, 2010, of 5 

5 years or more; 

6 beginning’’. 

7 SEC. 1604. DISASTER FOOD STAMP PROGRAM. 

8 Notwithstanding section 16(a) of the Food Stamp Act 

9 of 1977 (7 U.S.C. 2025(a)), the Secretary of Agriculture 

10 is authorized, at the discretion of the Secretary, to pay to 

11 State agencies 100 percent of the administrative costs in12 curred in the certification of, and issuance of benefits to, 

13 applicant households that become eligible to receive food 

14 stamp benefits under the disaster food stamp program eligi15 bility standards in effect during the Presidentially declared 

16 emergency in response to Hurricane Katrina or Hurricane 

17 Rita.

18 TITLE II—COMMITTEE ON EDU19 CATION AND THE WORK20 FORCE 

21 SECTION 2000. TABLE OF CONTENTS. 

22 The table of contents of this title is as follows:

TITLE II—COMMITTEE ON EDUCATION AND THE WORKFORCE 

Sec. 2000. Table of contents. 
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Subtitle A—Welfare Reform 

PART 1—SHORT TITLE; REFERENCES

Sec. 2001. Short title. 

Sec. 2002. References. 

PART 2—TANF 

Sec. 2011. Universal engagement and family self-sufficiency plan requirements. 

Sec. 2012. Work participation requirements. 

Sec. 2013. Work-related performance improvement. 

Sec. 2014. Report on coordination. 

Sec. 2015. Fatherhood program. 

Sec. 2016. State option to make TANF programs mandatory partners with onestop employment training centers. 

Sec. 2017. Sense of the Congress. 

Sec. 2018. Prohibition on offshoring. 

PART 3—CHILD CARE

Sec. 2021. Short title. 

Sec. 2022. Goals. 

Sec. 2023. Authorization of appropriations. 

Sec. 2024. Application and plan. 

Sec. 2025. Activities to improve the quality of child care. 

Sec. 2026. Reports and audits. 

Sec. 2027. Report by Secretary. 

Sec. 2028. Definitions. 

Sec. 2029. Waiver authority to expand the availability of services under Child 

Care and Development Block Grant Act of 1990. 

PART 4—STATE AND LOCAL FLEXIBILITY

Sec. 2041. Program coordination demonstration projects. 

PART 5—EFFECTIVE DATE

Sec. 2051. Effective date. 

Subtitle B—Higher Education 

Sec. 2101. Short title. 

PART 1—AMENDMENTS TO THE HIGHER EDUCATION ACT OF 1965

Sec. 2111. References; effective date. 

Sec. 2112. Modification of 50/50 Rule. 

Sec. 2113. Reauthorization of Federal Family Education Loan Program. 

Sec. 2114. Loan limits. 

Sec. 2115. Interest rates and special allowances. 

Sec. 2116. Additional loan terms and conditions. 

Sec. 2117. Consolidation loan changes. 

Sec. 2118. Deferment of student loans for military service. 

Sec. 2119. Loan forgiveness for service in areas of national need. 

Sec. 2120. Unsubsidized Stafford loans. 

Sec. 2121. Elimination of termination dates from Taxpayer-Teacher Protection 

Act of 2004. 
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Sec. 2122. Loan fees from lenders. 

Sec. 2123. Additional administrative provisions. 

Sec. 2124. Funds for administrative expenses. 

Sec. 2125. Significantly simplifying the student aid application process. 

Sec. 2126. Additional need analysis amendments. 

Sec. 2127. Definition of eligible program. 

Sec. 2128. Distance education. 

Sec. 2129. Student eligibility. 

Sec. 2130. Institutional refunds. 

Sec. 2131. College access initiative. 

Sec. 2132. Cancellation of Student Loan Indebtedness For Survivors of Victims 

of the September 11, 2001, Attacks. 

Sec. 2133. Independent evaluation of distance education programs. 

Sec. 2134. Disbursement of student loans. 

PART 2—HIGHER EDUCATION RELIEF

Sec. 2141. References. 

Sec. 2142. Waivers and modifications. 

Sec. 2143. Cancellation of institutional repayment by colleges and universities affected by a Gulf hurricane disaster. 

Sec. 2144. Cancellation of student loans for cancelled enrollment periods. 

Sec. 2145. Temporary deferment of student loan repayment. 

Sec. 2146. No affect on grant and loan limits. 

Sec. 2147. Teacher loan relief. 

Sec. 2148. Expanding information dissemination regarding eligibility for Pell 

Grants. 

Sec. 2149. Procedures. 

Sec. 2150. Termination of authority. 

Sec. 2151. Definitions. 

Subtitle C—Pensions 

Sec. 2201. Increases in PBGC premiums.

1 Subtitle A—Welfare Reform 

2 PART 1—SHORT TITLE; REFERENCES 

3 SEC. 2001. SHORT TITLE. 

4 This subtitle may be cited as the ‘‘Personal Responsi5 bility, Work, and Family Promotion Act of 2005’’. 

6 SEC. 2002. REFERENCES. 

7 Except as otherwise expressly provided, wherever in 

8 this subtitle an amendment or repeal is expressed in terms 

9 of an amendment to, or repeal of, a section or other provi10 sion, the amendment or repeal shall be considered to be 
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1 made to a section or other provision of the Social Security 

2 Act. 

3 PART 2—TANF 

4 SEC. 2011. UNIVERSAL ENGAGEMENT AND FAMILY SELF5 SUFFICIENCY PLAN REQUIREMENTS. 

6 (a) MODIFICATION OF STATE PLAN REQUIREMENTS.—

7 Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended 

8 by striking clauses (ii) and (iii) and inserting the following: 

9 ‘‘(ii) Require a parent or caretaker re10 ceiving assistance under the program to en11 gage in work or alternative self-sufficiency 

12 activities (as defined by the State), con13 sistent with section 407(e)(2). 

14 ‘‘(iii) Require families receiving assist15 ance under the program to engage in activi16 ties in accordance with family self-suffi17 ciency plans developed pursuant to section 

18 408(b).’’. 

19 (b) ESTABLISHMENT OF FAMILY SELF-SUFFICIENCY

20 PLANS.—

21 (1) IN GENERAL.—Section 408(b) (42 U.S.C. 

22 608(b)) is amended to read as follows: 

23 ‘‘(b) FAMILY SELF-SUFFICIENCY PLANS.—

24 ‘‘(1) IN GENERAL.—A State to which a grant is 

25 made under section 403 shall—
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1 ‘‘(A) assess, in the manner deemed appro2 priate by the State, the skills, prior work experi3 ence, and employability of each work-eligible in4 dividual (as defined in section 407(b)(2)(C)) re5 ceiving assistance under the State program fund6 ed under this part; 

7 ‘‘(B) establish for each family that includes 

8 such an individual, in consultation as the State 

9 deems appropriate with the individual, a self10 sufficiency plan that specifies appropriate activi11 ties described in the State plan submitted pursu12 ant to section 402, including direct work activi13 ties as appropriate designed to assist the family 

14 in achieving their maximum degree of self-suffi15 ciency, and that provides for the ongoing partici16 pation of the individual in the activities; 

17 ‘‘(C) require, at a minimum, each such in18 dividual to participate in activities in accord19 ance with the self-sufficiency plan; 

20 ‘‘(D) monitor the participation of each such 

21 individual in the activities specified in the self22 sufficiency plan, and regularly review the 

23 progress of the family toward self-sufficiency; 
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1 ‘‘(E) upon such a review, revise the self-suf2 ficiency plan and activities as the State deems 

3 appropriate. 

4 ‘‘(2) TIMING.—The State shall comply with 

5 paragraph (1) with respect to a family—

6 ‘‘(A) in the case of a family that, as of Oc7 tober 1, 2005, is not receiving assistance from 

8 the State program funded under this part, not 

9 later than 60 days after the family first receives 

10 assistance on the basis of the most recent appli11 cation for the assistance; or 

12 ‘‘(B) in the case of a family that, as of such 

13 date, is receiving the assistance, not later than 

14 12 months after the date of enactment of this 

15 subsection. 

16 ‘‘(3) STATE DISCRETION.—A State shall have 

17 sole discretion, consistent with section 407, to define 

18 and design activities for families for purposes of this 

19 subsection, to develop methods for monitoring and re20 viewing progress pursuant to this subsection, and to 

21 make modifications to the plan as the State deems 

22 appropriate to assist the individual in increasing 

23 their degree of self-sufficiency. 

24 ‘‘(4) RULE OF INTERPRETATION.—Nothing in 

25 this part shall preclude a State from--
24

•S 1932 EAH 

1 ‘‘(A) requiring participation in work and 

2 any other activities the State deems appropriate 

3 for helping families achieve self-sufficiency and 

4 improving child well-being; or 

5 ‘‘(B) using job search or other appropriate 

6 job readiness or work activities to assess the em7 ployability of individuals and to determine ap8 propriate future engagement activities.’’. 

9 (2) PENALTY FOR FAILURE TO ESTABLISH FAM10 ILY SELF-SUFFICIENCY PLAN.—Section 409(a)(3) (42 

11 U.S.C. 609(a)(3)) is amended—

12 (A) in the paragraph heading, by inserting 

13 ‘‘OR ESTABLISH FAMILY SELF-SUFFICIENCY

14 PLAN’’ after ‘‘RATES’’; and 

15 (B) in subparagraph (A), by inserting ‘‘or 

16 408(b)’’ after ‘‘407(a)’’. 

17 SEC. 2012. WORK PARTICIPATION REQUIREMENTS. 

18 (a) ELIMINATION OF SEPARATE PARTICIPATION RATE

19 REQUIREMENTS FOR 2-PARENT FAMILIES.—

20 (1) Section 407 (42 U.S.C. 607) is amended in 

21 each of subsections (a) and (b) by striking paragraph 

22 (2). 

23 (2) Section 407(b)(4) (42 U.S.C. 607(b)(4)) is 

24 amended by striking ‘‘paragraphs (1)(B) and (2)(B)’’ 

25 and inserting ‘‘paragraph (1)(B)’’. 
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1 (3) Section 407(c)(1) (42 U.S.C. 607(c)(1)) is 

2 amended by striking subparagraph (B). 

3 (4) Section 407(c)(2)(D) (42 U.S.C. 

4 607(c)(2)(D)) is amended by striking ‘‘paragraphs 

5 (1)(B)(i) and (2)(B) of subsection (b)’’ and inserting 

6 ‘‘subsection (b)(1)(B)(i)’’. 

7 (b) WORK PARTICIPATION REQUIREMENTS.—Section 

8 407 (42 U.S.C. 607) is amended by striking all that pre9 cedes subsection (b)(3) and inserting the following: 

10 ‘‘SEC. 407. WORK PARTICIPATION REQUIREMENTS. 

11 ‘‘(a) PARTICIPATION RATE REQUIREMENTS.—A State 

12 to which a grant is made under section 403 for a fiscal 

13 year shall achieve a minimum participation rate equal to 

14 not less than—

15 ‘‘(1) 50 percent for fiscal year 2006; 

16 ‘‘(2) 55 percent for fiscal year 2007; 

17 ‘‘(3) 60 percent for fiscal year 2008; 

18 ‘‘(4) 65 percent for fiscal year 2009; and 

19 ‘‘(5) 70 percent for fiscal year 2010 and each 

20 succeeding fiscal year. 

21 ‘‘(b) CALCULATION OF PARTICIPATION RATES.—

22 ‘‘(1) AVERAGE MONTHLY RATE.—For purposes of 

23 subsection (a), the participation rate of a State for a 

24 fiscal year is the average of the participation rates of 

25 the State for each month in the fiscal year. 
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1 ‘‘(2) MONTHLY PARTICIPATION RATES; INCORPO2 RATION OF 40-HOUR WORK WEEK STANDARD.—

3 ‘‘(A) IN GENERAL.—For purposes of para4 graph (1), the participation rate of a State for 

5 a month is—

6 ‘‘(i) the total number of countable 

7 hours (as defined in subsection (c)) with re8 spect to the counted families for the State 

9 for the month; divided by 

10 ‘‘(ii) 160 multiplied by the number of 

11 counted families for the State for the month. 

12 ‘‘(B) COUNTED FAMILIES DEFINED.—

13 ‘‘(i) IN GENERAL.—In subparagraph 

14 (A), the term ‘counted family’ means, with 

15 respect to a State and a month, a family 

16 that includes a work-eligible individual and 

17 that receives assistance in the month under 

18 the State program funded under this part, 

19 subject to clause (ii). 

20 ‘‘(ii) STATE OPTION TO EXCLUDE CER21 TAIN FAMILIES.—At the option of a State, 

22 the term ‘counted family’ shall not in23 clude—

24 ‘‘(I) a family in the first month 

25 for which the family receives assistance 
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•S 1932 EAH 

1 from a State program funded under 

2 this part on the basis of the most re3 cent application for such assistance; 

4 ‘‘(II) on a case-by-case basis, a 

5 family in which the youngest child has 

6 not attained 12 months of age; or 

7 ‘‘(III) a family that is subject to 

8 a sanction under this part or part D, 

9 but that has not been subject to such a 

10 sanction for more than 3 months 

11 (whether or not consecutive) in the pre12 ceding 12-month period. 

13 ‘‘(iii) STATE OPTION TO INCLUDE INDI14 VIDUALS RECEIVING ASSISTANCE UNDER A

15 TRIBAL FAMILY ASSISTANCE PLAN OR TRIB16 AL WORK PROGRAM.—At the option of a 

17 State, the term ‘counted family’ may in18 clude families in the State that are receiv19 ing assistance under a tribal family assist20 ance plan approved under section 412 or 

21 under a tribal work program to which 

22 funds are provided under this part. 

23 ‘‘(C) WORK-ELIGIBLE INDIVIDUAL DE24 FINED.—In this section, the term ‘work-eligible 

25 individual’ means an individual—
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1 ‘‘(i) who is married or a single head of 

2 household; and 

3 ‘‘(ii) whose needs are (or, but for sanc4 tions under this part or part D, would be) 

5 included in determining the amount of cash 

6 assistance to be provided to the family 

7 under the State program funded under this 

8 part.’’. 

9 (c) RECALIBRATION OF CASELOAD REDUCTION CRED10 IT.—

11 (1) IN GENERAL.—Section 407(b)(3)(A)(ii) (42 

12 U.S.C. 607(b)(3)(A)(ii)) is amended to read as fol13 lows: 

14 ‘‘(ii) the average monthly number of 

15 families that received assistance under the 

16 State program funded under this part dur17 ing the base year.’’. 

18 (2) CONFORMING AMENDMENT.—Section 

19 407(b)(3)(B) (42 U.S.C. 607(b)(3)(B)) is amended by 

20 striking ‘‘and eligibility criteria’’ and all that follows 

21 through the close parenthesis and inserting ‘‘and the 

22 eligibility criteria in effect during the then applicable 

23 base year’’. 
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1 (3) BASE YEAR DEFINED.—Section 407(b)(3) (42 

2 U.S.C. 607(b)(3)) is amended by adding at the end 

3 the following: 

4 ‘‘(C) BASE YEAR DEFINED.—In this para5 graph, the term ‘base year’ means, with respect 

6 to a fiscal year—

7 ‘‘(i) if the fiscal year is fiscal year 

8 2006, fiscal year 1996; 

9 ‘‘(ii) if the fiscal year is fiscal year 

10 2007, fiscal year 1998; 

11 ‘‘(iii) if the fiscal year is fiscal year 

12 2008, fiscal year 2001; or 

13 ‘‘(iv) if the fiscal year is fiscal year 

14 2009 or any succeeding fiscal year, the then 

15 4th preceding fiscal year.’’. 

16 (d) SUPERACHIEVER CREDIT.—Section 407(b) (42 

17 U.S.C. 607(b)) is amended by striking paragraphs (4) and 

18 (5) and inserting the following: 

19 ‘‘(4) SUPERACHIEVER CREDIT.—

20 ‘‘(A) IN GENERAL.—The participation rate, 

21 determined under paragraphs (1) and (2) of this 

22 subsection, of a superachiever State for a fiscal 

23 year shall be increased by the lesser of—

24 ‘‘(i) the amount (if any) of the super25 achiever credit applicable to the State; or 
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1 ‘‘(ii) the number of percentage points 

2 (if any) by which the minimum participa3 tion rate required by subsection (a) for the 

4 fiscal year exceeds 50 percent. 

5 ‘‘(B) SUPERACHIEVER STATE.—For pur6 poses of subparagraph (A), a State is a super7 achiever State if the State caseload for fiscal 

8 year 2001 has declined by at least 60 percent 

9 from the State caseload for fiscal year 1995. 

10 ‘‘(C) AMOUNT OF CREDIT.—The super11 achiever credit applicable to a State is the num12 ber of percentage points (if any) by which the de13 cline referred to in subparagraph (B) exceeds 60 

14 percent. 

15 ‘‘(D) DEFINITIONS.—In this paragraph: 

16 ‘‘(i) STATE CASELOAD FOR FISCAL

17 YEAR 2001.—The term ‘State caseload for 

18 fiscal year 2001’ means the average monthly 

19 number of families that received assistance 

20 during fiscal year 2001 under the State 

21 program funded under this part. 

22 ‘‘(ii) STATE CASELOAD FOR FISCAL

23 YEAR 1995.—The term ‘State caseload for 

24 fiscal year 1995’ means the average monthly 

25 number of families that received aid under 
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1 the State plan approved under part A (as 

2 in effect on September 30, 1995) during fis3 cal year 1995.’’. 

4 (e) COUNTABLE HOURS.—Section 407 (42 U.S.C. 607) 

5 is amended by striking subsections (c) and (d) and insert6 ing the following: 

7 ‘‘(c) COUNTABLE HOURS.—

8 ‘‘(1) DEFINITION.—In subsection (b)(2), the term 

9 ‘countable hours’ means, with respect to a family for 

10 a month, the total number of hours in the month in 

11 which any member of the family who is a work-eligi12 ble individual is engaged in a direct work activity or 

13 other activities specified by the State (excluding an 

14 activity that does not address a purpose specified in 

15 section 401(a)), subject to the other provisions of this 

16 subsection. 

17 ‘‘(2) LIMITATIONS.—Subject to such regulations 

18 as the Secretary may prescribe: 

19 ‘‘(A) MINIMUM WEEKLY AVERAGE OF 24

20 HOURS OF DIRECT WORK ACTIVITIES RE21 QUIRED.—If the work-eligible individuals in a 

22 family are engaged in a direct work activity for 

23 an average total of fewer than 24 hours per week 

24 in a month, then the number of countable hours 
32

•S 1932 EAH 

1 with respect to the family for the month shall be 

2 zero. 

3 ‘‘(B) MAXIMUM WEEKLY AVERAGE OF 16

4 HOURS OF OTHER ACTIVITIES.—An average of 

5 not more than 16 hours per week of activities 

6 specified by the State (subject to the exclusion de7 scribed in paragraph (1)) may be considered 

8 countable hours in a month with respect to a 

9 family. 

10 ‘‘(3) SPECIAL RULES.—For purposes of para11 graph (1): 

12 ‘‘(A) PARTICIPATION IN QUALIFIED ACTIVI13 TIES.—

14 ‘‘(i) IN GENERAL.—If, with the ap15 proval of the State, the work-eligible indi16 viduals in a family are engaged in 1 or 

17 more qualified activities for an average 

18 total of at least 24 hours per week in a 

19 month, then all such engagement in the 

20 month shall be considered engagement in a 

21 direct work activity, subject to clause (iii). 

22 ‘‘(ii) QUALIFIED ACTIVITY DEFINED.—

23 The term ‘qualified activity’ means an ac24 tivity specified by the State (subject to the 

25 exclusion described in paragraph (1)) that 
33

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1 meets such standards and criteria as the 

2 State may specify, including—

3 ‘‘(I) substance abuse counseling or 

4 treatment; 

5 ‘‘(II) rehabilitation treatment and 

6 services; 

7 ‘‘(III) work-related education or 

8 training directed at enabling the fam9 ily member to work; 

10 ‘‘(IV) job search or job readiness 

11 assistance; and 

12 ‘‘(V) any other activity that ad13 dresses a purpose specified in section 

14 401(a). 

15 ‘‘(iii) LIMITATION.—

16 ‘‘(I) IN GENERAL.—Except as pro17 vided in subclause (II), clause (i) shall 

18 not apply to a family for more than 3 

19 months in any period of 24 consecutive 

20 months. 

21 ‘‘(II) SPECIAL RULE APPLICABLE

22 TO EDUCATION AND TRAINING.—A 

23 State may, on a case-by-case basis, 

24 apply clause (i) to a work-eligible indi25 vidual so that participation by the in-
34

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1 dividual in education or training, if 

2 needed to permit the individual to 

3 complete a certificate program or other 

4 work-related education or training di5 rected at enabling the individual to fill 

6 a known job need in a local area, may 

7 be considered countable hours with re8 spect to the family of the individual for 

9 not more than 4 months in any period 

10 of 24 consecutive months. 

11 ‘‘(B) SCHOOL ATTENDANCE BY TEEN HEAD

12 OF HOUSEHOLD.—The work-eligible members of 

13 a family shall be considered to be engaged in a 

14 direct work activity for an average of 40 hours 

15 per week in a month if the family includes an 

16 individual who is married, or is a single head 

17 of household, who has not attained 20 years of 

18 age, and the individual—

19 ‘‘(i) maintains satisfactory attendance 

20 at secondary school or the equivalent in the 

21 month; or 

22 ‘‘(ii) participates in education directly 

23 related to employment for an average of at 

24 least 20 hours per week in the month. 
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1 ‘‘(C) PARENTAL PARTICIPATION IN

2 SCHOOLS.—Each work-eligible individual in a 

3 family shall make verified visits at least twice 

4 per school year to the school of each of the indi5 vidual’s minor dependent children required to 

6 attend school under the law of the State in which 

7 the minor children reside, during the period in 

8 which the family receives assistance under the 

9 program funded under this part. Hours spent in 

10 such activity may be specified by the State as 

11 countable hours for purposes of paragraph 

12 (2)(B). 

13 ‘‘(d) DIRECT WORK ACTIVITY.—In this section, the 

14 term ‘direct work activity’ means—

15 ‘‘(1) unsubsidized employment; 

16 ‘‘(2) subsidized private sector employment; 

17 ‘‘(3) subsidized public sector employment; 

18 ‘‘(4) on-the-job training; 

19 ‘‘(5) supervised work experience; or 

20 ‘‘(6) supervised community service.’’. 

21 (f) PENALTIES AGAINST INDIVIDUALS.—Section 

22 407(e)(1) (42 U.S.C. 607(e)(1)) is amended to read as fol23 lows: 

24 ‘‘(1) REDUCTION OR TERMINATION OF ASSIST25 ANCE.—
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•S 1932 EAH 

1 ‘‘(A) IN GENERAL.—Except as provided in 

2 paragraph (2), if an individual in a family re3 ceiving assistance under a State program funded 

4 under this part fails to engage in activities re5 quired in accordance with this section, or other 

6 activities required by the State under the pro7 gram, and the family does not otherwise engage 

8 in activities in accordance with the self-suffi9 ciency plan established for the family pursuant 

10 to section 408(b), the State shall—

11 ‘‘(i) if the failure is partial or persists 

12 for not more than 1 month—

13 ‘‘(I) reduce the amount of assist14 ance otherwise payable to the family 

15 pro rata (or more, at the option of the 

16 State) with respect to any period dur17 ing a month in which the failure oc18 curs; or 

19 ‘‘(II) terminate all assistance to 

20 the family, subject to such good cause 

21 exceptions as the State may establish; 

22 or 

23 ‘‘(ii) if the failure is total and persists 

24 for at least 2 consecutive months, terminate 

25 all cash payments to the family including 
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1 qualified State expenditures (as defined in 

2 section 409(a)(7)(B)(i)) for at least 1 month 

3 and thereafter until the State determines 

4 that the individual has resumed full par5 ticipation in the activities, subject to such 

6 good cause exceptions as the State may es7 tablish. 

8 ‘‘(B) SPECIAL RULE.—

9 ‘‘(i) IN GENERAL.—In the event of a 

10 conflict between a requirement of clause 

11 (i)(II) or (ii) of subparagraph (A) and a re12 quirement of a State constitution, or of a 

13 State statute that, before 1966, obligated 

14 local government to provide assistance to 

15 needy parents and children, the State con16 stitutional or statutory requirement shall 

17 control. 

18 ‘‘(ii) LIMITATION.—Clause (i) of this 

19 subparagraph shall not apply after the 1-

20 year period that begins with the date of the 

21 enactment of this subparagraph.’’. 

22 (g) CONFORMING AMENDMENTS.—

23 (1) Section 407(f) (42 U.S.C. 607(f)) is amended 

24 in each of paragraphs (1) and (2) by striking ‘‘work 
38

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1 activity described in subsection (d)’’ and inserting 

2 ‘‘direct work activity’’. 

3 (2) The heading of section 409(a)(14) (42 U.S.C. 

4 609(a)(14)) is amended by inserting ‘‘OR REFUSING

5 TO ENGAGE IN ACTIVITIES UNDER A FAMILY SELF6 SUFFICIENCY PLAN’’ after ‘‘WORK’’. 

7 SEC. 2013. WORK-RELATED PERFORMANCE IMPROVEMENT. 

8 (a) STATE PLANS.—Section 402(a)(1) (42 U.S.C. 

9 602(a)) is amended—

10 (1) in subparagraph (A), by adding at the end 

11 the following: 

12 ‘‘(vii) The document shall—

13 ‘‘(I) describe how the State will 

14 pursue ending dependence of needy 

15 families on government benefits and re16 ducing poverty by promoting job prep17 aration and work; 

18 ‘‘(II) include specific, numerical, 

19 and measurable performance objectives 

20 for accomplishing subclause (I); and 

21 ‘‘(III) describe the methodology 

22 that the State will use to measure 

23 State performance in relation to each 

24 such objective. 
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1 ‘‘(viii) Describe any strategies and 

2 programs the State may be undertaking to 

3 address—

4 ‘‘(I) employment retention and 

5 advancement for recipients of assist6 ance under the program, including 

7 placement into high-demand jobs, and 

8 whether the jobs are identified using 

9 labor market information; 

10 ‘‘(II) services for struggling and 

11 noncompliant families, and for clients 

12 with special problems; and 

13 ‘‘(III) program integration, in14 cluding the extent to which employ15 ment and training services under the 

16 program are provided through the One17 Stop delivery system created under the 

18 Workforce Investment Act of 1998, and 

19 the extent to which former recipients of 

20 such assistance have access to addi21 tional core, intensive, or training serv22 ices funded through such Act.’’; and 

23 (2) in subparagraph (B), by striking clause (iv). 
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•S 1932 EAH 

1 (b) REPORT ON ANNUAL PERFORMANCE IMPROVE2 MENT.—Section 411 (42 U.S.C. 611) is amended by adding 

3 at the end the following: 

4 ‘‘(c) ANNUAL REPORT ON PERFORMANCE IMPROVE5 MENT.—Beginning with fiscal year 2007, not later than 

6 January 1 of each fiscal year, each eligible State shall sub7 mit to the Secretary a report on achievement and improve8 ment during the preceding fiscal year under the numerical 

9 performance goals and measures under the State program 

10 funded under this part with respect to the matter described 

11 in section 402(a)(1)(A)(vii).’’. 

12 (c) ANNUAL RANKING OF STATES.—Section 413(d)(1) 

13 (42 U.S.C. 613(d)(1)) is amended by striking ‘‘long-term 

14 private sector jobs,’’ and inserting ‘‘private sector jobs, the 

15 success of the recipients in retaining employment, the abil16 ity of the recipients to increase their wages,’’. 

17 (d) PERFORMANCE IMPROVEMENT.—Section 413 (42 

18 U.S.C. 613) is amended by adding at the end the following: 

19 ‘‘(k) PERFORMANCE IMPROVEMENT.—The Secretary, 

20 in consultation with States, shall develop uniform perform21 ance measures designed to assess the degree of effectiveness, 

22 and the degree of improvement, of State programs funded 

23 under this part in accomplishing the work-related purposes 

24 of this part.’’. 
41

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1 SEC. 2014. REPORT ON COORDINATION. 

2 Not later than 6 months after the date of the enactment 

3 of this Act, the Secretary of Health and Human Services 

4 and the Secretary of Labor shall jointly submit a report 

5 to the Congress describing common or conflicting data ele6 ments, definitions, performance measures, and reporting re7 quirements in the Workforce Investment Act of 1998 and 

8 part A of title IV of the Social Security Act, and, to the 

9 degree each Secretary deems appropriate, at the discretion 

10 of either Secretary, any other program administered by the 

11 respective Secretary, to allow greater coordination between 

12 the welfare and workforce development systems. 

13 SEC. 2015. FATHERHOOD PROGRAM. 

14 (a) SHORT TITLE.—This section may be cited as the 

15 ‘‘Promotion and Support of Responsible Fatherhood and 

16 Healthy Marriage Act of 2005’’. 

17 (b) FATHERHOOD PROGRAM.—

18 (1) IN GENERAL.—Title I of the Personal Re19 sponsibility and Work Opportunity Reconciliation 

20 Act of 1996 (Public Law 104–193) is amended by 

21 adding at the end the following: 

22 ‘‘SEC. 117. FATHERHOOD PROGRAM. 

23 ‘‘(a) IN GENERAL.—Title IV (42 U.S.C. 601–679b) is 

24 amended by inserting after part B the following: 
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1 ‘PART C—FATHERHOOD PROGRAM 

2 ‘SEC. 441. FINDINGS AND PURPOSES. 

3 ‘(a) FINDINGS.—The Congress finds that there is sub4 stantial evidence strongly indicating the urgent need to pro5 mote and support involved, committed, and responsible fa6 therhood, and to encourage and support healthy marriages 

7 between parents raising children, including data dem8 onstrating the following: 

9 ‘(1) In approximately 84 percent of cases where 

10 a parent is absent, that parent is the father. 

11 ‘(2) If current trends continue, half of all chil12 dren born today will live apart from one of their par13 ents, usually their father, at some point before they 

14 turn 18. 

15 ‘(3) Where families (whether intact or with a 

16 parent absent) are living in poverty, a significant 

17 factor is the father’s lack of job skills. 

18 ‘(4) Committed and responsible fathering during 

19 infancy and early childhood contributes to the devel20 opment of emotional security, curiosity, and math 

21 and verbal skills. 

22 ‘(5) An estimated 19,400,000 children (27 per23 cent) live apart from their biological father. 

24 ‘(6) Forty percent of children under age 18 not 

25 living with their biological father had not seen their 
43

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1 father even once in the last 12 months, according to 

2 national survey data. 

3 ‘(b) PURPOSES.—The purposes of this part are: 

4 ‘(1) To provide for projects and activities by 

5 public entities and by nonprofit community entities, 

6 including religious organizations, designed to test 

7 promising approaches to accomplishing the following 

8 objectives: 

9 ‘(A) Promoting responsible, caring, and ef10 fective parenting through counseling, mentoring, 

11 and parenting education, dissemination of edu12 cational materials and information on parenting 

13 skills, encouragement of positive father involve14 ment, including the positive involvement of non15 resident fathers, and other methods. 

16 ‘(B) Enhancing the abilities and commit17 ment of unemployed or low-income fathers to 

18 provide material support for their families and 

19 to avoid or leave welfare programs by assisting 

20 them to take full advantage of education, job 

21 training, and job search programs, to improve 

22 work habits and work skills, to secure career ad23 vancement by activities such as outreach and in24 formation dissemination, coordination, as appro25 priate, with employment services and job train-
44

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1 ing programs, including the One-Stop delivery 

2 system established under title I of the Workforce 

3 Investment Act of 1998, encouragement and sup4 port of timely payment of current child support 

5 and regular payment toward past due child sup6 port obligations in appropriate cases, and other 

7 methods. 

8 ‘(C) Improving fathers’ ability to effectively 

9 manage family business affairs by means such as 

10 education, counseling, and mentoring in matters 

11 including household management, budgeting, 

12 banking, and handling of financial transactions, 

13 time management, and home maintenance. 

14 ‘(D) Encouraging and supporting healthy 

15 marriages and married fatherhood through such 

16 activities as premarital education, including the 

17 use of premarital inventories, marriage prepara18 tion programs, skills-based marriage education 

19 programs, marital therapy, couples counseling, 

20 divorce education and reduction programs, di21 vorce mediation and counseling, relationship 

22 skills enhancement programs, including those de23 signed to reduce child abuse and domestic vio24 lence, and dissemination of information about 
45

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1 the benefits of marriage for both parents and 

2 children. 

3 ‘(2) Through the projects and activities described 

4 in paragraph (1), to improve outcomes for children 

5 with respect to measures such as increased family in6 come and economic security, improved school per7 formance, better health, improved emotional and be8 havioral stability and social adjustment, and reduced 

9 risk of delinquency, crime, substance abuse, child 

10 abuse and neglect, teen sexual activity, and teen sui11 cide. 

12 ‘(3) To evaluate the effectiveness of various ap13 proaches and to disseminate findings concerning out14 comes and other information in order to encourage 

15 and facilitate the replication of effective approaches to 

16 accomplishing these objectives. 

17 ‘SEC. 442. DEFINITIONS. 

18 ‘In this part, the terms ‘‘Indian tribe’’ and ‘‘tribal or19 ganization’’ have the meanings given them in subsections 

20 (e) and (l), respectively, of section 4 of the Indian Self-De21 termination and Education Assistance Act. 

22 ‘SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS. 

23 ‘(a) IN GENERAL.—The Secretary may make grants 

24 for fiscal years 2006 through 2010 to public and nonprofit 

25 community entities, including religious organizations, and 
46

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1 to Indian tribes and tribal organizations, for demonstration 

2 service projects and activities designed to test the effective3 ness of various approaches to accomplish the objectives spec4 ified in section 441(b)(1). 

5 ‘(b) ELIGIBILITY CRITERIA FOR FULL SERVICE

6 GRANTS.—In order to be eligible for a grant under this sec7 tion, except as specified in subsection (c), an entity shall 

8 submit an application to the Secretary containing the fol9 lowing: 

10 ‘(1) PROJECT DESCRIPTION.—A statement in11 cluding—

12 ‘(A) a description of the project and how it 

13 will be carried out, including the geographical 

14 area to be covered and the number and charac15 teristics of clients to be served, and how it will 

16 address each of the 4 objectives specified in sec17 tion 441(b)(1); and 

18 ‘(B) a description of the methods to be used 

19 by the entity or its contractor to assess the extent 

20 to which the project was successful in accom21 plishing its specific objectives and the general ob22 jectives specified in section 441(b)(1). 

23 ‘(2) EXPERIENCE AND QUALIFICATIONS.—A dem24 onstration of ability to carry out the project, by 

25 means such as demonstration of experience in success-
47

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1 fully carrying out projects of similar design and 

2 scope, and such other information as the Secretary 

3 may find necessary to demonstrate the entity’s capac4 ity to carry out the project, including the entity’s 

5 ability to provide the non-Federal share of project re6 sources. 

7 ‘(3) ADDRESSING CHILD ABUSE AND NEGLECT

8 AND DOMESTIC VIOLENCE.—A description of how the 

9 entity will assess for the presence of, and intervene to 

10 resolve, domestic violence and child abuse and neglect, 

11 including how the entity will coordinate with State 

12 and local child protective service and domestic vio13 lence programs. 

14 ‘(4) ADDRESSING CONCERNS RELATING TO SUB15 STANCE ABUSE AND SEXUAL ACTIVITY.—A commit16 ment to make available to each individual partici17 pating in the project education about alcohol, tobacco, 

18 and other drugs, and about the health risks associated 

19 with abusing such substances, and information about 

20 diseases and conditions transmitted through substance 

21 abuse and sexual contact, including HIV/AIDS, and 

22 to coordinate with providers of services addressing 

23 such problems, as appropriate. 

24 ‘(5) COORDINATION WITH SPECIFIED PRO25 GRAMS.—An undertaking to coordinate, as appro-
48

•S 1932 EAH 

1 priate, with State and local entities responsible for 

2 the programs under parts A, B, and D of this title, 

3 including programs under title I of the Workforce In4 vestment Act of 1998 (including the One-Stop delivery 

5 system), and such other programs as the Secretary 

6 may require. 

7 ‘(6) RECORDS, REPORTS, AND AUDITS.—An 

8 agreement to maintain such records, make such re9 ports, and cooperate with such reviews or audits as 

10 the Secretary may find necessary for purposes of over11 sight of project activities and expenditures. 

12 ‘(7) SELF-INITIATED EVALUATION.—If the entity 

13 elects to contract for independent evaluation of the 

14 project (part or all of the cost of which may be paid 

15 for using grant funds), a commitment to submit to 

16 the Secretary a copy of the evaluation report within 

17 30 days after completion of the report and not more 

18 than 1 year after completion of the project. 

19 ‘(8) COOPERATION WITH SECRETARY’S OVER20 SIGHT AND EVALUATION.—An agreement to cooperate 

21 with the Secretary’s evaluation of projects assisted 

22 under this section, by means including random as23 signment of clients to service recipient and control 

24 groups, if determined by the Secretary to be appro25 priate, and affording the Secretary access to the 
49

•S 1932 EAH 

1 project and to project-related records and documents, 

2 staff, and clients. 

3 ‘(c) ELIGIBILITY CRITERIA FOR LIMITED PURPOSE

4 GRANTS.—In order to be eligible for a grant under this sec5 tion in an amount under $25,000 per fiscal year, an entity 

6 shall submit an application to the Secretary containing the 

7 following: 

8 ‘(1) PROJECT DESCRIPTION.—A description of 

9 the project and how it will be carried out, including 

10 the number and characteristics of clients to be served, 

11 the proposed duration of the project, and how it will 

12 address at least 1 of the 4 objectives specified in sec13 tion 441(b)(1). 

14 ‘(2) QUALIFICATIONS.—Such information as the 

15 Secretary may require as to the capacity of the entity 

16 to carry out the project, including any previous expe17 rience with similar activities. 

18 ‘(3) COORDINATION WITH RELATED PRO19 GRAMS.—As required by the Secretary in appropriate 

20 cases, an undertaking to coordinate and cooperate 

21 with State and local entities responsible for specific 

22 programs relating to the objectives of the project in23 cluding, as appropriate, jobs programs and programs 

24 serving children and families. 
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1 ‘(4) RECORDS, REPORTS, AND AUDITS.—An 

2 agreement to maintain such records, make such re3 ports, and cooperate with such reviews or audits as 

4 the Secretary may find necessary for purposes of over5 sight of project activities and expenditures. 

6 ‘(5) COOPERATION WITH SECRETARY’S OVER7 SIGHT AND EVALUATION.—An agreement to cooperate 

8 with the Secretary’s evaluation of projects assisted 

9 under this section, by means including affording the 

10 Secretary access to the project and to project-related 

11 records and documents, staff, and clients. 

12 ‘(d) CONSIDERATIONS IN AWARDING GRANTS.—

13 ‘(1) DIVERSITY OF PROJECTS.—In awarding 

14 grants under this section, the Secretary shall seek to 

15 achieve a balance among entities of differing sizes, en16 tities in differing geographic areas, entities in urban 

17 and in rural areas, and entities employing differing 

18 methods of achieving the purposes of this section, in19 cluding working with the State agency responsible for 

20 the administration of part D to help fathers satisfy 

21 child support arrearage obligations. 

22 ‘(2) PREFERENCE FOR PROJECTS SERVING LOW23 INCOME FATHERS.—In awarding grants under this 

24 section, the Secretary may give preference to applica-
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•S 1932 EAH 

1 tions for projects in which a majority of the clients 

2 to be served are low-income fathers. 

3 ‘(e) FEDERAL SHARE.—

4 ‘(1) IN GENERAL.—Grants for a project under 

5 this section for a fiscal year shall be available for a 

6 share of the cost of such project in such fiscal year 

7 equal to—

8 ‘(A) up to 80 percent (or up to 90 percent, 

9 if the entity demonstrates to the Secretary’s sat10 isfaction circumstances limiting the entity’s abil11 ity to secure non-Federal resources) in the case 

12 of a project under subsection (b); and 

13 ‘(B) up to 100 percent, in the case of a 

14 project under subsection (c). 

15 ‘(2) NON-FEDERAL SHARE.—The non-Federal 

16 share may be in cash or in kind. In determining the 

17 amount of the non-Federal share, the Secretary may 

18 attribute fair market value to goods, services, and fa19 cilities contributed from non-Federal sources. 

20 ‘SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION 

21 PROJECTS. 

22 ‘(a) IN GENERAL.—The Secretary may make grants 

23 under this section for fiscal years 2006 through 2010 to eli24 gible entities (as specified in subsection (b)) for 2 multicity, 

25 multistate projects demonstrating approaches to achieving 
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•S 1932 EAH 

1 the objectives specified in section 441(b)(1). One of the 

2 projects shall test the use of married couples to deliver pro3 gram services. 

4 ‘(b) ELIGIBLE ENTITIES.—An entity eligible for a 

5 grant under this section must be a national nonprofit fa6 therhood promotion organization that meets the following 

7 requirements: 

8 ‘(1) EXPERIENCE WITH FATHERHOOD PRO9 GRAMS.—The organization must have substantial ex10 perience in designing and successfully conducting 

11 programs that meet the purposes described in section 

12 441. 

13 ‘(2) EXPERIENCE WITH MULTICITY, MULTISTATE

14 PROGRAMS AND GOVERNMENT COORDINATION.—The 

15 organization must have experience in simultaneously 

16 conducting such programs in more than 1 major met17 ropolitan area in more than 1 State and in coordi18 nating such programs, where appropriate, with State 

19 and local government agencies and private, nonprofit 

20 agencies (including community-based and religious 

21 organizations), including State or local agencies re22 sponsible for child support enforcement and workforce 

23 development. 
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1 ‘(c) APPLICATION REQUIREMENTS.—In order to be eli2 gible for a grant under this section, an entity must submit 

3 to the Secretary an application that includes the following: 

4 ‘(1) QUALIFICATIONS.—

5 ‘(A) ELIGIBLE ENTITY.—A demonstration 

6 that the entity meets the requirements of sub7 section (b). 

8 ‘(B) OTHER.—Such other information as 

9 the Secretary may find necessary to demonstrate 

10 the entity’s capacity to carry out the project, in11 cluding the entity’s ability to provide the non12 Federal share of project resources. 

13 ‘(2) PROJECT DESCRIPTION.—A description of 

14 and commitments concerning the project design, in15 cluding the following: 

16 ‘(A) IN GENERAL.—A detailed description of 

17 the proposed project design and how it will be 

18 carried out, which shall—

19 ‘(i) provide for the project to be con20 ducted in at least 3 major metropolitan 

21 areas; 

22 ‘(ii) state how it will address each of 

23 the 4 objectives specified in section 

24 441(b)(1); 
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•S 1932 EAH 

1 ‘(iii) demonstrate that there is a suffi2 cient number of potential clients to allow 

3 for the random selection of individuals to 

4 participate in the project and for compari5 sons with appropriate control groups com6 posed of individuals who have not partici7 pated in such projects; and 

8 ‘(iv) demonstrate that the project is de9 signed to direct a majority of project re10 sources to activities serving low-income fa11 thers (but the project need not make services 

12 available on a means-tested basis). 

13 ‘(B) OVERSIGHT, EVALUATION, AND AD14 JUSTMENT COMPONENT.—An agreement that the 

15 entity—

16 ‘(i) in consultation with the evaluator 

17 selected pursuant to section 446, and as re18 quired by the Secretary, will modify the 

19 project design, initially and (if necessary) 

20 subsequently throughout the duration of the 

21 project, in order to facilitate ongoing and 

22 final oversight and evaluation of project op23 eration and outcomes (by means including, 

24 to the maximum extent feasible, random as25 signment of clients to service recipient and 
55

•S 1932 EAH 

1 control groups), and to provide for mid2 course adjustments in project design indi3 cated by interim evaluations; 

4 ‘(ii) will submit to the Secretary re5 vised descriptions of the project design as 

6 modified in accordance with clause (i); and 

7 ‘(iii) will cooperate fully with the Sec8 retary’s ongoing oversight and ongoing and 

9 final evaluation of the project, by means in10 cluding affording the Secretary access to the 

11 project and to project-related records and 

12 documents, staff, and clients. 

13 ‘(3) ADDRESSING CHILD ABUSE AND NEGLECT

14 AND DOMESTIC VIOLENCE.—A description of how the 

15 entity will assess for the presence of, and intervene to 

16 resolve, domestic violence and child abuse and neglect, 

17 including how the entity will coordinate with State 

18 and local child protective service and domestic vio19 lence programs. 

20 ‘(4) ADDRESSING CONCERNS RELATING TO SUB21 STANCE ABUSE AND SEXUAL ACTIVITY.—A commit22 ment to make available to each individual partici23 pating in the project education about alcohol, tobacco, 

24 and other drugs, and about the health risks associated 

25 with abusing such substances, and information about 
56

•S 1932 EAH 

1 diseases and conditions transmitted through substance 

2 abuse and sexual contact, including HIV/AIDS, and 

3 to coordinate with providers of services addressing 

4 such problems, as appropriate. 

5 ‘(5) COORDINATION WITH SPECIFIED PRO6 GRAMS.—An undertaking to coordinate, as appro7 priate, with State and local entities responsible for 

8 the programs funded under parts A, B, and D of this 

9 title, programs under title I of the Workforce Invest10 ment Act of 1998 (including the One-Stop delivery 

11 system), and such other programs as the Secretary 

12 may require. 

13 ‘(6) RECORDS, REPORTS, AND AUDITS.—An 

14 agreement to maintain such records, make such re15 ports, and cooperate with such reviews or audits (in 

16 addition to those required under the preceding provi17 sions of paragraph (2)) as the Secretary may find 

18 necessary for purposes of oversight of project activities 

19 and expenditures. 

20 ‘(d) FEDERAL SHARE.—

21 ‘(1) IN GENERAL.—Grants for a project under 

22 this section for a fiscal year shall be available for up 

23 to 80 percent of the cost of such project in such fiscal 

24 year. 
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1 ‘(2) NON-FEDERAL SHARE.—The non-Federal 

2 share may be in cash or in kind. In determining the 

3 amount of the non-Federal share, the Secretary may 

4 attribute fair market value to goods, services, and fa5 cilities contributed from non-Federal sources. 

6 ‘SEC. 445. ECONOMIC INCENTIVE DEMONSTRATION 

7 PROJECTS. 

8 ‘(a) IN GENERAL.—The Secretary may make grants 

9 under this section for fiscal years 2006 through 2010 to eli10 gible entities (as specified in subsection (b)) for two to five 

11 projects demonstrating approaches to achieving the objec12 tives specified in section 441(b)(1). Drawing on the success 

13 of economic-incentive programs in demonstrating strong 

14 employment effects for low-income mothers, projects shall 

15 test the use of economic incentives combined with a com16 prehensive approach to addressing employment barriers to 

17 encourage non-custodial parents to enter the workforce and 

18 to contribute financially and emotionally to their children. 

19 The Secretary may make grants based on the level of inno20 vation, comprehensiveness, and likelihood to achieve the 

21 goal of increased employment by the applicant. 

22 ‘(b) ELIGIBLE ENTITIES.—An entity eligible for a 

23 grant under this section must be a national nonprofit fa24 therhood promotion organization that meets the following 

25 requirements: 
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•S 1932 EAH 

1 ‘(1) EXPERIENCE WITH FATHERHOOD PRO2 GRAMS.—The organization must have substantial ex3 perience in designing and successfully conducting 

4 programs that meet the purposes described in section 

5 441. 

6 ‘(2) EXPERIENCE ADDRESSING MULTIPLE BAR7 RIERS TO EMPLOYMENT.—The organization must 

8 have experience in conducting such programs and in 

9 coordinating such programs, where appropriate, with 

10 State and local government agencies and private, 

11 nonprofit agencies (including community-based and 

12 religious organizations), including State or local 

13 agencies responsible for child support enforcement and 

14 workforce development. 

15 ‘(3) NEGOTIATED AGREEMENTS WITH STATE AND

16 LOCAL AGENCIES FOR APPROPRIATE POLICY CHANGES

17 TO ADDRESS BARRIERS TO EMPLOYMENT.—The orga18 nization must have agreements in place with State 

19 and local government agencies, including State or 

20 local agencies responsible for child support enforce21 ment and workforce development, to incorporate ap22 propriate policy changes proposed to address barriers 

23 to employment. 
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1 ‘(c) APPLICATION REQUIREMENTS.—In order to be eli2 gible for a grant under this section, an entity must submit 

3 to the Secretary an application that includes the following: 

4 ‘(1) QUALIFICATIONS.—

5 ‘(A) ELIGIBLE ENTITY.—A demonstration 

6 that the entity meets the requirements of sub7 section (b). 

8 ‘(B) OTHER.—Such other information as 

9 the Secretary may find necessary to demonstrate 

10 the entity’s capacity to carry out the project, in11 cluding the entity’s ability to provide the non12 Federal share of project resources. 

13 ‘(2) PROJECT DESCRIPTION.—A description of 

14 and commitments concerning the project design, in15 cluding the following: 

16 ‘(A) IN GENERAL.—A detailed description of 

17 the proposed project design and how the project 

18 will be carried out, which shall—

19 ‘(i) state how the project will address 

20 each of the 4 objectives specified in section 

21 441(b)(1); 

22 ‘(ii) state how the project will address 

23 employment barriers across programs (such 

24 as child support, criminal justice, and 

25 workforce development programs) using both 
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1 sanctions and compliance along with mone2 tary incentives for obtaining employment, 

3 with earning subsidies contingent upon 

4 work and child support payment; 

5 ‘(iii) demonstrate that there is a suffi6 cient number of potential clients to allow 

7 for the random selection of individuals to 

8 participate in the project and for compari9 sons with appropriate control groups com10 posed of individuals who have not partici11 pated in such projects; and 

12 ‘(iv) demonstrate that the project is de13 signed to direct a majority of project re14 sources to activities serving low-income fa15 thers (but the project need not make services 

16 available on a means-tested basis). 

17 ‘(B) OVERSIGHT, EVALUATION, AND AD18 JUSTMENT COMPONENT.—An agreement that the 

19 entity—

20 ‘(i) in consultation with the evaluator 

21 selected pursuant to section 446, and as re22 quired by the Secretary, will modify the 

23 project design, initially and (if necessary) 

24 subsequently throughout the duration of the 

25 project, in order to facilitate ongoing and 
61

•S 1932 EAH 

1 final oversight and evaluation of project op2 eration and outcomes (by means including, 

3 to the maximum extent feasible, random as4 signment of clients to service recipient and 

5 control groups), and to provide for mid6 course adjustments in project design indi7 cated by interim evaluations; 

8 ‘(ii) will submit to the Secretary re9 vised descriptions of the project design as 

10 modified in accordance with clause (i); and 

11 ‘(iii) will cooperate fully with the Sec12 retary’s ongoing oversight and ongoing and 

13 final evaluation of the project, by means in14 cluding affording the Secretary access to the 

15 project and to project-related records and 

16 documents, staff, and clients. 

17 ‘(3) ADDRESSING CHILD ABUSE AND NEGLECT

18 AND DOMESTIC VIOLENCE.—A description of how the 

19 entity will assess for the presence of, and intervene to 

20 resolve, domestic violence and child abuse and neglect, 

21 including how the entity will coordinate with State 

22 and local child protective service and domestic vio23 lence programs. 

24 ‘(4) ADDRESSING CONCERNS RELATING TO SUB25 STANCE ABUSE AND SEXUAL ACTIVITY.—A commit-
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1 ment to make available to each individual partici2 pating in the project education about alcohol, tobacco, 

3 and other drugs, and about the health risks associated 

4 with abusing such substances, and information about 

5 diseases and conditions transmitted through substance 

6 abuse and sexual contact, including HIV/AIDS, and 

7 to coordinate with providers of services addressing 

8 such problems, as appropriate. 

9 ‘(5) COORDINATION WITH SPECIFIED PRO10 GRAMS.—An undertaking to coordinate, as appro11 priate, with State and local entities responsible for 

12 the programs funded under parts A, B, and D of this 

13 title, programs under title I of the Workforce Invest14 ment Act of 1998 (including the One-Stop delivery 

15 system), and such other programs as the Secretary 

16 may require. 

17 ‘(6) RECORDS, REPORTS, AND AUDITS.—An 

18 agreement to maintain such records, make such re19 ports, and cooperate with such reviews or audits (in 

20 addition to those required under the preceding provi21 sions of paragraph (2)) as the Secretary may find 

22 necessary for purposes of oversight of project activities 

23 and expenditures. 

24 ‘(d) FEDERAL SHARE.—
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1 ‘(1) IN GENERAL.—Grants for a project under 

2 this section for a fiscal year shall be available for up 

3 to 80 percent of the cost of such project in such fiscal 

4 year. 

5 ‘(2) NON-FEDERAL SHARE.—The non-Federal 

6 share may be in cash or in kind. In determining the 

7 amount of the non-Federal share, the Secretary may 

8 attribute fair market value to goods, services, and fa9 cilities contributed from non-Federal sources. 

10 ‘SEC. 446. EVALUATION. 

11 ‘(a) IN GENERAL.—The Secretary, directly or by con12 tract or cooperative agreement, shall evaluate the effective13 ness of service projects funded under sections 443 and 444 

14 from the standpoint of the purposes specified in section 

15 441(b)(1). 

16 ‘(b) EVALUATION METHODOLOGY.—Evaluations under 

17 this section shall—

18 ‘(1) include, to the maximum extent feasible, 

19 random assignment of clients to service delivery and 

20 control groups and other appropriate comparisons of 

21 groups of individuals receiving and not receiving 

22 services; 

23 ‘(2) describe and measure the effectiveness of the 

24 projects in achieving their specific project goals; and 
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1 ‘(3) describe and assess, as appropriate, the im2 pact of such projects on marriage, parenting, domestic 

3 violence, child abuse and neglect, money management, 

4 employment and earnings, payment of child support, 

5 and child well-being, health, and education. 

6 ‘(c) EVALUATION REPORTS.—The Secretary shall pub7 lish the following reports on the results of the evaluation: 

8 ‘(1) An implementation evaluation report cov9 ering the first 24 months of the activities under this 

10 part to be completed by 36 months after initiation of 

11 such activities. 

12 ‘(2) A final report on the evaluation to be com13 pleted by September 30, 2013. 

14 ‘SEC. 447. PROJECTS OF NATIONAL SIGNIFICANCE. 

15 ‘The Secretary is authorized, by grant, contract, or co16 operative agreement, to carry out projects and activities of 

17 national significance relating to fatherhood promotion, in18 cluding—

19 ‘(1) COLLECTION AND DISSEMINATION OF INFOR20 MATION.—Assisting States, communities, and private 

21 entities, including religious organizations, in efforts 

22 to promote and support marriage and responsible fa23 therhood by collecting, evaluating, developing, and 

24 making available (through the Internet and by other 

25 means) to all interested parties information regarding 
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1 approaches to accomplishing the objectives specified in 

2 section 441(b)(1). 

3 ‘(2) MEDIA CAMPAIGN.—Developing, promoting, 

4 and distributing to interested States, local govern5 ments, public agencies, and private nonprofit organi6 zations, including charitable and religious organiza7 tions, a media campaign that promotes and encour8 ages involved, committed, and responsible fatherhood 

9 and married fatherhood. 

10 ‘(3) TECHNICAL ASSISTANCE.—Providing tech11 nical assistance, including consultation and training, 

12 to public and private entities, including community 

13 organizations and faith-based organizations, in the 

14 implementation of local fatherhood promotion pro15 grams. 

16 ‘(4) RESEARCH.—Conducting research related to 

17 the purposes of this part. 

18 ‘SEC. 448. NONDISCRIMINATION. 

19 ‘The projects and activities assisted under this part 

20 shall be available on the same basis to all fathers and ex21 pectant fathers able to benefit from such projects and activi22 ties, including married and unmarried fathers and custo23 dial and noncustodial fathers, with particular attention to 

24 low-income fathers, and to mothers and expectant mothers 

25 on the same basis as to fathers. 
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1 ‘SEC. 449. AUTHORIZATION OF APPROPRIATIONS; RESERVA2 TION FOR CERTAIN PURPOSE. 

3 ‘(a) AUTHORIZATION.—There are authorized to be ap4 propriated $20,000,000 for each of fiscal years 2006 through 

5 2010 to carry out the provisions of this part. 

6 ‘(b) RESERVATION.—Of the amount appropriated 

7 under this section for each fiscal year, not more than 35 

8 percent shall be available for the costs of the multicity, 

9 multicounty, multistate demonstration projects under sec10 tion 444, the economic incentives demonstration projects 

11 under section 445, evaluations under section 446, and 

12 projects of national significance under section 447, with not 

13 less than $5,000,000 allocated to the economic incentives 

14 demonstration project under section 445.’. 

15 ‘‘(b) INAPPLICABILITY OF EFFECTIVE DATE PROVI16 SIONS.—Section 116 shall not apply to the amendment 

17 made by subsection (a) of this section.’’. 

18 (2) CLERICAL AMENDMENT.—Section 2 of such 

19 Act is amended in the table of contents by inserting 

20 after the item relating to section 116 the following 

21 new item:

‘‘Sec. 117. Fatherhood program.’’.
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1 SEC. 2016. STATE OPTION TO MAKE TANF PROGRAMS MAN2 DATORY PARTNERS WITH ONE-STOP EMPLOY3 MENT TRAINING CENTERS. 

4 Section 408 (42 U.S.C. 608) is amended by adding 

5 at the end the following: 

6 ‘‘(h) STATE OPTION TO MAKE TANF PROGRAMS MAN7 DATORY PARTNERS WITH ONE-STOP EMPLOYMENT TRAIN8 ING CENTERS.—For purposes of section 121(b) of the Work9 force Investment Act of 1998, a State program funded under 

10 part A of title IV of the Social Security Act shall be consid11 ered a program referred to in paragraph (1)(B) of such sec12 tion, unless, after the date of the enactment of this sub13 section, the Governor of the State notifies the Secretaries 

14 of Health and Human Services and Labor in writing of 

15 the decision of the Governor not to make the State program 

16 a mandatory partner.’’. 

17 SEC. 2017. SENSE OF THE CONGRESS. 

18 It is the sense of the Congress that a State welfare19 to-work program should include a mentoring program. 

20 SEC. 2018. PROHIBITION ON OFFSHORING. 

21 Section 408(a) (42 U.S.C. 608(a)) is amended by add22 ing at the end the following: 

23 ‘‘(12) PROHIBITION ON OFFSHORING.—A State 

24 to which a grant is made under section 403 shall not 

25 use any part of the grant—
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1 ‘‘(A) to enter into a contract with an entity 

2 that, directly or through a subcontractor, pro3 vides any service, activity or function described 

4 under this part at a location outside the United 

5 States; or 

6 ‘‘(B) to reduce employment in the United 

7 States through use of 1 or more employees out8 side the United States.’’. 

9 PART 3—CHILD CARE 

10 SEC. 2021. SHORT TITLE. 

11 This part may be cited as the ‘‘Caring for Children 

12 Act of 2005’’. 

13 SEC. 2022. GOALS. 

14 (a) GOALS.—Section 658A(b) of the Child Care and 

15 Development Block Grant Act of 1990 (42 U.S.C. 9801 note) 

16 is amended—

17 (1) in paragraph (3) by striking ‘‘encourage’’ 

18 and inserting ‘‘assist’’, 

19 (2) by amending paragraph (4) to read as fol20 lows: 

21 ‘‘(4) to assist States to provide child care to low22 income parents;’’, 

23 (3) by redesignating paragraph (5) as para24 graph (7), and 
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1 (4) by inserting after paragraph (4) the fol2 lowing: 

3 ‘‘(5) to encourage States to improve the quality 

4 of child care available to families; 

5 ‘‘(6) to promote school readiness by encouraging 

6 the exposure of young children in child care to nur7 turing environments and developmentally-appropriate 

8 activities, including activities to foster early cognitive 

9 and literacy development; and’’. 

10 (b) CONFORMING AMENDMENT.—Section 

11 658E(c)(3)(B) of the Child Care and Development Block 

12 Grant Act of 1990 (42 U.S.C. 9858c(c)(3)(B)) is amended 

13 by striking ‘‘through (5)’’ and inserting ‘‘through (7)’’. 

14 SEC. 2023. AUTHORIZATION OF APPROPRIATIONS. 

15 Section 658B of the Child Care and Development Block 

16 Grant Act of 1990 (42 U.S.C. 9858) is amended—

17 (1) by striking ‘‘is’’ and inserting ‘‘are’’, and 

18 (2) by striking ‘‘$1,000,000,000 for each of the 

19 fiscal years 1996 through 2002’’ and inserting 

20 ‘‘$2,300,000,000 for fiscal year 2006, $2,500,000,000 

21 for fiscal year 2007, $2,700,000,000 for fiscal year 

22 2008, $2,900,000,000 for fiscal year 2009, and 

23 $3,100,000,000 for fiscal year 2010’’. 
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1 SEC. 2024. APPLICATION AND PLAN. 

2 Section 658E(c)(2) of the Child Care and Development 

3 Block Grant Act of 1990 (42 U.S.C. 9858C(c)(2)) is amend4 ed—

5 (1) by amending subparagraph (D) to read as 

6 follows: 

7 ‘‘(D) CONSUMER AND CHILD CARE PRO8 VIDER EDUCATION INFORMATION.—

9 ‘‘(i) CERTIFICATION.—Certify that the 

10 State will collect and disseminate, through 

11 resource and referral services and other 

12 means as determined by the State, to par13 ents of eligible children, child care pro14 viders, and the general public, information 

15 regarding—

16 ‘‘(I) the promotion of informed 

17 child care choices, including informa18 tion about the quality and availability 

19 of child care services; 

20 ‘‘(II) research and best practices 

21 on children’s development, including 

22 early cognitive development; 

23 ‘‘(III) the availability of assist24 ance to obtain child care services; and 

25 ‘‘(IV) other programs for which 

26 families that receive child care services 
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1 for which financial assistance is pro2 vided under this subchapter may be el3 igible, including the food stamp pro4 gram, the WIC program under section 

5 17 of the Child Nutrition Act of 1966, 

6 the child and adult care food program 

7 under section 17 of the Richard B. 

8 Russell National School Lunch Act, 

9 Head Start programs, Early Head 

10 Start programs, services and activities 

11 under section 619 and part C of the 

12 Individuals with Disabilities Edu13 cation Act, and the medicaid and 

14 SCHIP programs under titles XIX and 

15 XXI of the Social Security Act. 

16 ‘‘(ii) INFORMATION.—Information pro17 vided to parents shall be in plain language 

18 and, to the extent practicable, be in a lan19 guage that such parents can understand.’’, 

20 and 

21 (2) by inserting after subparagraph (H) the fol22 lowing: 

23 ‘‘(I) COORDINATION WITH OTHER EARLY

24 CHILD CARE SERVICES AND EARLY CHILDHOOD

25 EDUCATION PROGRAMS.—Demonstrate how the 
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1 State is coordinating child care services provided 

2 under this subchapter with Head Start pro3 grams, Early Head Start programs, Early 

4 Reading First, Even Start, Ready-To-Learn Tel5 evision, services and activities under section 619 

6 and part C of the Individuals with Disabilities 

7 Education Act, State pre-kindergarten programs, 

8 and other early childhood education programs to 

9 expand accessibility to and continuity of care 

10 and early education consistent with the goals of 

11 this Act, without displacing services provided by 

12 the current early care and education delivery 

13 system. 

14 ‘‘(J) PUBLIC-PRIVATE PARTNERSHIPS.—

15 Demonstrate how the State encourages partner16 ships with private and other public entities to le17 verage existing service delivery systems of early 

18 childhood education and increase the supply and 

19 quality of child care services. 

20 ‘‘(K) CHILD CARE SERVICE QUALITY.—

21 ‘‘(i) CERTIFICATION.—For each fiscal 

22 year after fiscal year 2006, certify that dur23 ing the then preceding fiscal year the State 

24 was in compliance with section 658G and 

25 describe how funds were used to comply 
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1 with such section during such preceding fis2 cal year. 

3 ‘‘(ii) STRATEGY.—For each fiscal year 

4 after fiscal year 2006, contain an outline of 

5 the strategy the State will implement dur6 ing such fiscal year for which the State 

7 plan is submitted, to address the quality of 

8 child care services in the State available 

9 from eligible child care providers, and in10 clude in such strategy—

11 ‘‘(I) a statement specifying how 

12 the State will address the activities de13 scribed in paragraphs (1), (2), and (3) 

14 of section 658G; 

15 ‘‘(II) a description of measures for 

16 evaluating the quality improvements 

17 generated by the activities listed in 

18 each of such paragraphs that the State 

19 will use to evaluate its progress in im20 proving the quality of such child care 

21 services; 

22 ‘‘(III) a list of State-developed 

23 child care service quality targets for 

24 such fiscal year quantified on the basis 

25 of such measures; and 
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1 ‘‘(IV) for each fiscal year after fis2 cal year 2006, a report on the progress 

3 made to achieve such targets during 

4 the then preceding fiscal year. 

5 ‘‘(iii) RULE OF CONSTRUCTION.—Noth6 ing in this subparagraph shall be construed 

7 to require that the State apply measures for 

8 evaluating quality to specific types of child 

9 care providers. 

10 ‘‘(L) ACCESS TO CARE FOR CERTAIN POPU11 LATIONS.—Demonstrate how the State is ad12 dressing the child care needs of parents eligible 

13 for child care services for which financial assist14 ance is provided under this subchapter who have 

15 children with special needs, are limited English 

16 proficient, work nontraditional hours, or require 

17 child care services for infants or toddlers.’’. 

18 SEC. 2025. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD 

19 CARE. 

20 Section 658G of the Child Care and Development Block 

21 Grant Act of 1990 (42 U.S.C. 9858e) is amended to read 

22 as follows: 
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1 ‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF 

2 CHILD CARE SERVICES. 

3 ‘‘A State that receives funds to carry out this sub4 chapter for a fiscal year, shall use not less than 6 percent 

5 of the amount of such funds for activities provided through 

6 resource and referral services and other means, that are de7 signed to improve the quality of child care services in the 

8 State available from eligible child care providers. Such ac9 tivities include—

10 ‘‘(1) programs that provide training, education, 

11 and other professional development activities to en12 hance the skills of the child care workforce, including 

13 training opportunities for caregivers in informal care 

14 settings; 

15 ‘‘(2) activities within child care settings to en16 hance early learning for young children, to promote 

17 early literacy, and to foster school readiness; 

18 ‘‘(3) initiatives to increase the retention and 

19 compensation of child care providers, including tiered 

20 reimbursement rates for providers that meet quality 

21 standards as defined by the State; or 

22 ‘‘(4) other activities deemed by the State to im23 prove the quality of child care services provided in 

24 such State.’’. 
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1 SEC. 2026. REPORTS AND AUDITS. 

2 Section 658K(a)(1)(B)(iii) of the Child Care and De3 velopment Block Grant Act of 1990 (42 U.S.C. 

4 9858i(a)(1)(B)(iii)) is amended by inserting ‘‘ethnicity, 

5 primary language,’’ after ‘‘race,’’. 

6 SEC. 2027. REPORT BY SECRETARY. 

7 Section 658L of the Child Care and Development Block 

8 Grant Act of 1990 (42 U.S.C. 9858j) is amended to read 

9 as follows: 

10 ‘‘SEC. 658L. REPORT BY SECRETARY. 

11 ‘‘(a) REPORT REQUIRED.—Not later than October 1, 

12 2007, and biennially thereafter, the Secretary shall prepare 

13 and submit to the Committee on Education and the Work14 force of the House of Representatives and the Committee 

15 on Health, Education, Labor and Pensions of the Senate 

16 a report that contains the following: 

17 ‘‘(1) A summary and analysis of the data and 

18 information provided to the Secretary in the State re19 ports submitted under section 658K. 

20 ‘‘(2) Aggregated statistics on the supply of, de21 mand for, and quality of child care, early education, 

22 and non-school-hours programs. 

23 ‘‘(3) An assessment, and where appropriate, rec24 ommendations for the Congress concerning efforts that 

25 should be undertaken to improve the access of the pub-
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1 lic to quality and affordable child care in the United 

2 States. 

3 ‘‘(b) COLLECTION OF INFORMATION.—The Secretary 

4 may utilize the national child care data system available 

5 through resource and referral organizations at the local, 

6 State, and national level to collect the information required 

7 by subsection (a)(2).’’. 

8 SEC. 2028. DEFINITIONS. 

9 (a) ELIGIBLE CHILDREN.—Section 658P(4)(B) of the 

10 Child Care and Development Block Grant Act of 1990 (42 

11 U.S.C. 9858N(4)(B)) is amended by striking ‘‘85 percent 

12 of the State median income’’ and inserting ‘‘income levels 

13 as established by the State, prioritized by need,’’. 

14 (b) LIMITED ENGLISH PROFICIENT.—Section 658P of 

15 the Child Care and Development Block Grant Act of 1990 

16 (42 U.S.C. 9858n) is amended—

17 (1) by redesignating paragraph (9) as para18 graph (10); and 

19 (2) by inserting after paragraph (8) the fol20 lowing: 

21 ‘‘(9) LIMITED ENGLISH PROFICIENT.—The term 

22 ‘limited English proficient’ means with respect to an 

23 individual, that such individual— 

24 ‘‘(A)(i) was not born in the United States 

25 or has a native language that is not English; 
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1 ‘‘(ii)(I) is a Native American, an Alaska 

2 Native, or a native resident of a territory or pos3 session of the United States; and 

4 ‘‘(II) comes from an environment in which 

5 a language that is not English has had a signifi6 cant impact on such individual’s level of English 

7 language proficiency; or 

8 ‘‘(iii) is migratory, has a native language 

9 that is not English, and comes from an environ10 ment in which a language that is not English is 

11 dominant; and 

12 ‘‘(B) has difficultly in speaking or under13 standing the English language to an extent that 

14 may be sufficient to deny such individual—

15 ‘‘(i) the ability to successfully achieve 

16 in classrooms in which the language of in17 struction is English; or 

18 ‘‘(ii) the opportunity to fully partici19 pate in society.’’. 

20 SEC. 2029. WAIVER AUTHORITY TO EXPAND THE AVAIL21 ABILITY OF SERVICES UNDER CHILD CARE 

22 AND DEVELOPMENT BLOCK GRANT ACT OF 

23 1990. 

24 (a) WAIVER AUTHORITY.—For such period up to June 

25 30, 2006, and to such extent as the Secretary considers to 
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1 be appropriate, the Secretary of Health and Human Service 

2 may waive or modify, for any affected State, and any State 

3 serving significant numbers of individuals adversely af4 fected by a Gulf hurricane disaster, provisions of the Child 

5 Care and Development Block Grant Act of 1990 (42 U.S.C. 

6 9858 et seq.)—

7 (1) relating to Federal income limitations on eli8 gibility to receive child care services for which assist9 ance is provided under such Act, 

10 (2) relating to work requirements applicable to 

11 eligibility to receive child care services for which as12 sistance is provided under such Act, 

13 (3) relating to limitations on the use of funds 

14 under section 658G of the Child Care and Develop15 ment Block Grant Act of 1990, and 

16 (4) preventing children designated as evacuees 

17 from receiving priority for child care services pro18 vided under such Act, except that children residing in 

19 a State and currently receiving services should not 

20 lose such services in order to accommodate evacuee 

21 children, 

22 for purposes of easing State fiscal burdens and providing 

23 child care services to children orphaned, or of families dis24 placed, as a result of a Gulf hurricane disaster. 

25 (b) DEFINITIONS.—For purposes of this section: 
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1 (1) AFFECTED STATE.—The term ‘‘affected 

2 State’’ means the State of Alabama, Florida, Lou3 isiana, Mississippi, or Texas. 

4 (2) GULF HURRICANE DISASTER.—The term 

5 ‘‘Gulf hurricane disaster’’ means a major disaster 

6 that the President declared to exist, in accordance 

7 with section 401 of the Robert T. Stafford Disaster 

8 Relief and Emergency Assistance Act, and that was 

9 caused by Hurricane Katrina or Hurricane Rita. 

10 (3) INDIVIDUAL ADVERSELY AFFECTED BY A

11 GULF HURRICANE DISASTER.—The term ‘‘individual 

12 adversely affected by a Gulf hurricane disaster’’ 

13 means an individual who, on August 29, 2005, was 

14 living, working, or attending school in an area in 

15 which the President has declared to exist a Gulf hur16 ricane disaster. 

17 PART 4—STATE AND LOCAL FLEXIBILITY 

18 SEC. 2041. PROGRAM COORDINATION DEMONSTRATION 

19 PROJECTS. 

20 (a) PURPOSE.—The purpose of this section is to estab21 lish a program of demonstration projects in a State or por22 tion of a State to coordinate multiple public assistance, 

23 workforce development, and other programs, for the purpose 

24 of supporting working individuals and families, helping 

25 families escape welfare dependency, promoting child well-
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1 being, or helping build stronger families, using innovative 

2 approaches to strengthen service systems and provide more 

3 coordinated and effective service delivery. 

4 (b) DEFINITIONS.—In this section: 

5 (1) ADMINISTERING SECRETARY.—The term ‘‘ad6 ministering Secretary’’ means, with respect to a 

7 qualified program, the head of the Federal agency re8 sponsible for administering the program. 

9 (2) QUALIFIED PROGRAM.—The term ‘‘qualified 

10 program’’ means—

11 (A) activities funded under title I of the 

12 Workforce Investment Act of 1998, except subtitle 

13 C of such title; 

14 (B) a demonstration project authorized 

15 under section 505 of the Family Support Act of 

16 1988; 

17 (C) activities funded under the Wagner18 Peyser Act; 

19 (D) activities funded under the Adult Edu20 cation and Family Literacy Act; or 

21 (E) activities funded under the Child Care 

22 and Development Block Grant Act of 1990; 

23 (c) APPLICATION REQUIREMENTS.—The head of a 

24 State entity or of a sub-State entity administering 2 or 

25 more qualified programs proposed to be included in a dem-
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1 onstration project under this section shall (or, if the project 

2 is proposed to include qualified programs administered by 

3 2 or more such entities, the heads of the administering enti4 ties (each of whom shall be considered an applicant for pur5 poses of this section) shall jointly) submit to the admin6 istering Secretary of each such program an application that 

7 contains the following: 

8 (1) PROGRAMS INCLUDED.—A statement identi9 fying each qualified program to be included in the 

10 project, and describing how the purposes of each such 

11 program will be achieved by the project. 

12 (2) POPULATION SERVED.—A statement identi13 fying the population to be served by the project and 

14 specifying the eligibility criteria to be used. 

15 (3) DESCRIPTION AND JUSTIFICATION.—A de16 tailed description of the project, including—

17 (A) a description of how the project is ex18 pected to improve or enhance achievement of the 

19 purposes of the programs to be included in the 

20 project, from the standpoint of quality, of cost21 effectiveness, or of both; and 

22 (B) a description of the performance objec23 tives for the project, including any proposed 

24 modifications to the performance measures and 

25 reporting requirements used in the programs. 
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1 (4) WAIVERS REQUESTED.—A description of the 

2 statutory and regulatory requirements with respect to 

3 which a waiver is requested in order to carry out the 

4 project, and a justification of the need for each such 

5 waiver. 

6 (5) COST NEUTRALITY.—Such information and 

7 assurances as necessary to establish to the satisfaction 

8 of the administering Secretary, in consultation with 

9 the Director of the Office of Management and Budget, 

10 that the proposed project is reasonably expected to 

11 meet the applicable cost neutrality requirements of 

12 subsection (d)(4). 

13 (6) EVALUATION AND REPORTS.—An assurance 

14 that the applicant will conduct ongoing and final 

15 evaluations of the project, and make interim and 

16 final reports to the administering Secretary, at such 

17 times and in such manner as the administering Sec18 retary may require. 

19 (7) OTHER INFORMATION AND ASSURANCES.—

20 Such other information and assurances as the admin21 istering Secretary may require. 

22 (d) APPROVAL OF APPLICATIONS.—

23 (1) IN GENERAL.—The administering Secretary 

24 with respect to a qualified program that is identified 

25 in an application submitted pursuant to subsection 
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1 (c) may approve the application and, except as pro2 vided in paragraph (2), waive any requirement ap3 plicable to the program, to the extent consistent with 

4 this section and necessary and appropriate for the 

5 conduct of the demonstration project proposed in the 

6 application, if the administering Secretary deter7 mines that the project—

8 (A) has a reasonable likelihood of achieving 

9 the objectives of the programs to be included in 

10 the project; 

11 (B) may reasonably be expected to meet the 

12 applicable cost neutrality requirements of para13 graph (4), as determined by the Director of the 

14 Office of Management and Budget; and 

15 (C) includes the coordination of 2 or more 

16 qualified programs. 

17 (2) PROVISIONS EXCLUDED FROM WAIVER AU18 THORITY.—A waiver shall not be granted under para19 graph (1)—

20 (A) with respect to any provision of law re21 lating to—

22 (i) civil rights or prohibition of dis23 crimination; 

24 (ii) purposes or goals of any program; 
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1 (iii) maintenance of effort require2 ments; 

3 (iv) health or safety; 

4 (v) labor standards under the Fair 

5 Labor Standards Act of 1938; or 

6 (vi) environmental protection; 

7 (B) with respect to section 241(a) of the 

8 Adult Education and Family Literacy Act; 

9 (C) in the case of a program under the 

10 Workforce Investment Act, with respect to any 

11 requirement the waiver of which would violate 

12 section 189(i)(4)(A)(i) of such Act; 

13 (D) with respect to any requirement that a 

14 State pass through to a sub-State entity part or 

15 all of an amount paid to the State; 

16 (E) if the waiver would waive any funding 

17 restriction or limitation provided in an appro18 priations Act, or would have the effect of trans19 ferring appropriated funds from 1 appropria20 tions account to another; or 

21 (F) except as otherwise provided by statute, 

22 if the waiver would waive any funding restric23 tion applicable to a program authorized under 

24 an Act which is not an appropriations Act (but 

25 not including program requirements such as ap-
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1 plication procedures, performance standards, re2 porting requirements, or eligibility standards), 

3 or would have the effect of transferring funds 

4 from a program for which there is direct spend5 ing (as defined in section 250(c)(8) of the Bal6 anced Budget and Emergency Deficit Control 

7 Act of 1985) to another program. 

8 (3) AGREEMENT OF EACH ADMINISTERING SEC9 RETARY REQUIRED.—

10 (A) IN GENERAL.—An applicant may not 

11 conduct a demonstration project under this sec12 tion unless each administering Secretary with 

13 respect to any program proposed to be included 

14 in the project has approved the application to 

15 conduct the project. 

16 (B) AGREEMENT WITH RESPECT TO FUND17 ING AND IMPLEMENTATION.—Before approving 

18 an application to conduct a demonstration 

19 project under this section, an administering Sec20 retary shall have in place an agreement with the 

21 applicant with respect to the payment of funds 

22 and responsibilities required of the admin23 istering Secretary with respect to the project. 

24 (4) COST-NEUTRALITY REQUIREMENT.—
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1 (A) GENERAL RULE.—Notwithstanding any 

2 other provision of law (except subparagraph 

3 (B)), the total of the amounts that may be paid 

4 by the Federal Government for a fiscal year with 

5 respect to the programs in the State in which an 

6 entity conducting a demonstration project under 

7 this section is located that are affected by the 

8 project shall not exceed the estimated total 

9 amount that the Federal Government would have 

10 paid for the fiscal year with respect to the pro11 grams if the project had not been conducted, as 

12 determined by the Director of the Office of Man13 agement and Budget. 

14 (B) SPECIAL RULE.—If an applicant sub15 mits to the Director of the Office of Management 

16 and Budget a request to apply the rules of this 

17 subparagraph to the programs in the State in 

18 which the applicant is located that are affected 

19 by a demonstration project proposed in an ap20 plication submitted by the applicant pursuant to 

21 this section, during such period of not more than 

22 5 consecutive fiscal years in which the project is 

23 in effect, and the Director determines, on the 

24 basis of supporting information provided by the 

25 applicant, to grant the request, then, notwith-
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1 standing any other provision of law, the total of 

2 the amounts that may be paid by the Federal 

3 Government for the period with respect to the 

4 programs shall not exceed the estimated total 

5 amount that the Federal Government would have 

6 paid for the period with respect to the programs 

7 if the project had not been conducted. 

8 (5) 90-DAY APPROVAL DEADLINE.—

9 (A) IN GENERAL.—If an administering Sec10 retary receives an application to conduct a dem11 onstration project under this section and does 

12 not disapprove the application within 90 days 

13 after the receipt, then—

14 (i) the administering Secretary is 

15 deemed to have approved the application for 

16 such period as is requested in the applica17 tion, except to the extent inconsistent with 

18 subsection (e); and 

19 (ii) any waiver requested in the appli20 cation which applies to a qualified program 

21 that is identified in the application and is 

22 administered by the administering Sec23 retary is deemed to be granted, except to the 

24 extent inconsistent with paragraph (2) or 

25 (4) of this subsection. 
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1 (B) DEADLINE EXTENDED IF ADDITIONAL

2 INFORMATION IS SOUGHT.—The 90-day period 

3 referred to in subparagraph (A) shall not include 

4 any period that begins with the date the Sec5 retary requests the applicant to provide addi6 tional information with respect to the applica7 tion and ends with the date the additional infor8 mation is provided. 

9 (e) DURATION OF PROJECTS.—A demonstration 

10 project under this section may be approved for a term of 

11 not more than 5 years. 

12 (f) REPORTS TO CONGRESS.—

13 (1) REPORT ON DISPOSITION OF APPLICA14 TIONS.—Within 90 days after an administering Sec15 retary receives an application submitted pursuant to 

16 this section, the administering Secretary shall submit 

17 to each Committee of the Congress which has jurisdic18 tion over a qualified program identified in the appli19 cation notice of the receipt, a description of the deci20 sion of the administering Secretary with respect to 

21 the application, and the reasons for approving or dis22 approving the application. 

23 (2) REPORTS ON PROJECTS.—Each admin24 istering Secretary shall provide annually to the Con-
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1 gress a report concerning demonstration projects ap2 proved under this section, including—

3 (A) the projects approved for each appli4 cant; 

5 (B) the number of waivers granted under 

6 this section, and the specific statutory provisions 

7 waived; 

8 (C) how well each project for which a waiv9 er is granted is improving or enhancing pro10 gram achievement from the standpoint of qual11 ity, cost-effectiveness, or both; 

12 (D) how well each project for which a waiv13 er is granted is meeting the performance objec14 tives specified in subsection (c)(3)(B); 

15 (E) how each project for which a waiver is 

16 granted is conforming with the cost-neutrality 

17 requirements of subsection (d)(4); and 

18 (F) to the extent the administering Sec19 retary deems appropriate, recommendations for 

20 modification of programs based on outcomes of 

21 the projects. 

22 PART 5—EFFECTIVE DATE 

23 SEC. 2051. EFFECTIVE DATE. 

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

25 this subtitle, this subtitle and the amendments made by this 
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1 subtitle shall take effect on the date of the enactment of this 

2 Act. 

3 (b) EXCEPTION.—In the case of a State plan under 

4 part A of title IV of the Social Security Act which the Sec5 retary determines requires State legislation in order for the 

6 plan to meet the additional requirements imposed by the 

7 amendments made by this subtitle, the effective date of the 

8 amendments imposing the additional requirements shall be 

9 3 months after the first day of the first calendar quarter 

10 beginning after the close of the first regular session of the 

11 State legislature that begins after the date of the enactment 

12 of this Act. For purposes of the preceding sentence, in the 

13 case of a State that has a 2-year legislative session, each 

14 year of the session shall be considered to be a separate reg15 ular session of the State legislature. 

16 Subtitle B—Higher Education 

17 SEC. 2101. SHORT TITLE. 

18 This subtitle may be cited as the ‘‘Higher Education 

19 Budget Reconciliation Act of 2005’’. 

20 PART 1—AMENDMENTS TO THE HIGHER 

21 EDUCATION ACT OF 1965

22 SEC. 2111. REFERENCES; EFFECTIVE DATE. 

23 (a) REFERENCES.—Except as otherwise expressly pro24 vided, whenever in this part an amendment or repeal is 

25 expressed in terms of an amendment to, or repeal of, a sec-
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1 tion or other provision, the reference shall be considered to 

2 be made to a section or other provision of the Higher Edu3 cation Act of 1965 (20 U.S.C. 1001 et seq.). 

4 (b) EFFECTIVE DATE.—Except as otherwise provided 

5 in this part, the amendments made by this part shall be 

6 effective on the date of enactment of this Act. 

7 SEC. 2112. MODIFICATION OF 50/50 RULE. 

8 Section 102(a)(3) (20 U.S.C. 1002(a)(3)) is amend9 ed—

10 (1) in subparagraph (A), by inserting ‘‘(exclud11 ing courses offered by telecommunications as defined 

12 in section 484(l)(4))’’ after ‘‘courses by correspond13 ence’’; and 

14 (2) in subparagraph (B), by inserting ‘‘(exclud15 ing courses offered by telecommunications as defined 

16 in section 484(l)(4))’’ after ‘‘correspondence courses’’. 

17 SEC. 2113. REAUTHORIZATION OF FEDERAL FAMILY EDU18 CATION LOAN PROGRAM. 

19 (a) AUTHORIZATION OF APPROPRIATIONS.—Section 

20 421(b)(5) (20 U.S.C. 1071(b)(5)) is amended by striking 

21 ‘‘an administrative cost allowance’’ and inserting ‘‘a loan 

22 processing and issuance fee’’. 

23 (b) EXTENSION OF AUTHORITY.—

24 (1) FEDERAL INSURANCE LIMITATIONS.—Section 

25 424(a) (20 U.S.C. 1074(a)) is amended—
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1 (A) by striking ‘‘2004’’ and inserting 

2 ‘‘2012’’; and 

3 (B) by striking ‘‘2008’’ and inserting 

4 ‘‘2016’’. 

5 (2) GUARANTEED LOANS.—Section 428(a)(5) (20 

6 U.S.C. 1078(a)(5)) is amended—

7 (A) by striking ‘‘2004’’ and inserting 

8 ‘‘2012’’; and 

9 (B) by striking ‘‘2008’’ and inserting 

10 ‘‘2016’’. 

11 (3) CONSOLIDATION LOANS.—Section 428C(e) 

12 (20 U.S.C. 1078–3(e)) is amended by striking ‘‘2004’’ 

13 and inserting ‘‘2012’’. 

14 SEC. 2114. LOAN LIMITS. 

15 (a) FEDERAL INSURANCE LIMITS.—Section 

16 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is amended—

17 (1) in clause (i)(I), by striking ‘‘$2,625’’ and in18 serting ‘‘$3,500’’; and 

19 (2) in clause (ii)(I), by striking ‘‘$3,500’’ and 

20 inserting ‘‘$4,500’’. 

21 (b) GUARANTEE LIMITS.—Section 428(b)(1)(A) (20 

22 U.S.C. 1078(b)(1)(A)) is amended—

23 (1) in clause (i)(I), by striking ‘‘$2,625’’ and in24 serting ‘‘$3,500’’; and 
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1 (2) in clause (ii)(I), by striking ‘‘$3,500’’ and 

2 inserting ‘‘$4,500’’. 

3 (c) COUNTING OF CONSOLIDATION LOANS AGAINST

4 LIMITS.—Section 428C(a)(3)(B) (20 U.S.C. 1078–

5 3(a)(3)(B)) is amended by adding at the end the following 

6 new clause: 

7 ‘‘(ii) Loans made under this section shall, to the 

8 extent used to pay off the outstanding principal bal9 ance on loans made under this title, excluding cap10 italized interest, be counted against the applicable 

11 limitations on aggregate indebtedness contained in 

12 sections 425(a)(2), 428(b)(1)(B), 428H(d), 455, and 

13 464(a)(2)(B).’’. 

14 (d) EFFECTIVE DATE.—The amendments made by this 

15 section shall apply with respect to any loan made, insured, 

16 or guaranteed under part B or part D of title IV of the 

17 Higher Education Act of 1965 for which the first disburse18 ment of principal is made on or after July 1, 2007. 

19 SEC. 2115. INTEREST RATES AND SPECIAL ALLOWANCES. 

20 (a) FFEL INTEREST RATES.—Section 427A (20 

21 U.S.C. 1077a(k)) is amended—

22 (1) in subsection (k)—

23 (A) by striking ‘‘, AND BEFORE JULY 1, 

24 2006’’ in the heading of such subsection; and 
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1 (B) by striking ‘‘, and before July 1, 2006,’’ 

2 each place it appears in paragraphs (1), (2), 

3 and (3); 

4 (2) by striking subsection (l); and 

5 (3) by redesignating subsections (m) and (n) as 

6 subsections (l) and (m), respectively. 

7 (b) DIRECT LOAN INTEREST RATES.—Section 455(b) 

8 (20 U.S.C. 1087e(b)) is amended—

9 (1) in paragraph (6)—

10 (A) by striking ‘‘, AND BEFORE JULY 1, 

11 2006’’ in the heading of such paragraph; and 

12 (B) by striking ‘‘, and before July 1, 2006,’’ 

13 each place it appears in subparagraphs (A), (B), 

14 and (C); 

15 (2) by striking paragraph (7); and 

16 (3) by redesignating paragraphs (8) and (9) as 

17 paragraphs (7) and (8), respectively. 

18 (c) CONSOLIDATION LOAN INTEREST RATES.—

19 (1) FFEL LOANS.—Section 427A(k) (20 U.S.C. 

20 1077a(k)) is further amended—

21 (A) in the heading of paragraph (4), by in22 serting ‘‘BEFORE JULY 1, 2006’’ after ‘‘LOANS’’; 

23 (B) by redesignating paragraph (5) as 

24 paragraph (6); and 
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1 (C) by inserting after paragraph (4) the fol2 lowing: 

3 ‘‘(5) CONSOLIDATION LOANS ON OR AFTER JULY

4 1, 2006.—

5 ‘‘(A) BORROWER ELECTION.—With respect 

6 to any consolidation loan under section 428C for 

7 which the application is received by an eligible 

8 lender on or after July 1, 2006, the applicable 

9 rate of interest shall, at the election of the bor10 rower at the time of application for the loan, be 

11 either at the rate determined under subpara12 graph (B) or the rate determined under subpara13 graph (C). 

14 ‘‘(B) VARIABLE RATE.—Except as provided 

15 in subparagraph (D), the rate determined under 

16 this subparagraph shall, during any 12-month 

17 period beginning on July 1 and ending on June 

18 30, be determined on the preceding June 1 and, 

19 for such 12-month period, not be more than—

20 ‘‘(i) the bond equivalent rate of 91-day 

21 Treasury bills auctioned at the final auc22 tion held prior to such June 1; plus 

23 ‘‘(ii) 2.3 percent, 

24 except that such rate shall not exceed 8.25 per25 cent. 
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1 ‘‘(C) FIXED RATE.—Except as provided in 

2 subparagraph (D), the rate determined under 

3 this subparagraph shall be determined for the 

4 duration of the term of the loan on the July 1 

5 that is or precedes the date on which the applica6 tion is received by an eligible lender, and shall 

7 be, for such duration, not more than—

8 ‘‘(i) the bond equivalent rate of 91-day 

9 Treasury bills auctioned at the final auc10 tion held prior to the June 1 immediately 

11 preceding such July 1; plus 

12 ‘‘(ii) 3.3 percent, 

13 except that such rate shall not exceed 8.25 per14 cent. 

15 ‘‘(D) CONSOLIDATION OF PLUS LOANS.—In 

16 the case of any such consolidation loan that is 

17 used to repay loans each of which was made 

18 under section 428B or was a Federal Direct 

19 PLUS Loan (or both), the rates determined 

20 under clauses (B) and (C) shall be determined—

21 ‘‘(i) by substituting ‘3.1 percent’ for 

22 ‘2.3 percent’; 

23 ‘‘(ii) by substituting ‘4.1 percent’ for 

24 ‘3.3 percent’; and 
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1 ‘‘(iii) by substituting ‘9.0 percent’ for 

2 ‘8.25 percent’.’’. 

3 (2) DIRECT LOANS.—Section 455(b)(6) (20 

4 U.S.C. 1087e(b)(6)) is further amended—

5 (A) in the heading of subparagraph (D), by 

6 inserting ‘‘BEFORE JULY 1, 2006’’ after ‘‘LOANS’’

7 (B) by redesignating subparagraph (E) as 

8 subparagraph (F); and 

9 (C) by inserting after subparagraph (D) the 

10 following: 

11 ‘‘(E) CONSOLIDATION LOANS ON OR AFTER

12 JULY 1, 2006.—

13 ‘‘(i) BORROWER ELECTION.—Notwith14 standing the preceding paragraphs of this 

15 subsection, with respect to any Federal Di16 rect Consolidation Loan for which the ap17 plication is received by the Secretary on or 

18 after July 1, 2006, the applicable rate of in19 terest shall, at the election of the borrower 

20 at the time of application for the loan, be 

21 either at the rate determined under clause 

22 (ii) or the rate determined under clause 

23 (iii). 

24 ‘‘(ii) VARIABLE RATE.—Except as pro25 vided in clause (iv), the rate determined 
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1 under this clause shall, during any 12-

2 month period beginning on July 1 and end3 ing on June 30, be determined on the pre4 ceding June 1 and, for such 12-month pe5 riod, be equal to—

6 ‘‘(I) the bond equivalent rate of 

7 91-day Treasury bills auctioned at the 

8 final auction held prior to such June 

9 1; plus 

10 ‘‘(II) 2.3 percent, 

11 except that such rate shall not exceed 8.25 

12 percent. 

13 ‘‘(iii) FIXED RATE.—Except as pro14 vided in clause (iv), the rate determined 

15 under this clause shall be determined for the 

16 duration of the term of the loan on the July 

17 1 that is or precedes the date on which the 

18 application is received by the Secretary, 

19 and shall be, for such duration, equal to—

20 ‘‘(I) the bond equivalent rate of 

21 91-day Treasury bills auctioned at the 

22 final auction held prior to the June 1 

23 immediately preceding such July 1; 

24 plus 

25 ‘‘(II) 3.3 percent, 
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1 except that such rate shall not exceed 8.25 

2 percent. 

3 ‘‘(iv) CONSOLIDATION OF PLUS

4 LOANS.—In the case of any such Federal 

5 Direct Consolidation Loan that is used to 

6 repay loans each of which was made under 

7 section 428B or was a Federal Direct 

8 PLUS Loan (or both), the rates determined 

9 under clauses (ii) and (iii) shall be deter10 mined—

11 ‘‘(I) by substituting ‘3.1 percent’ 

12 for ‘2.3 percent’; 

13 ‘‘(II) by substituting ‘4.1 percent’ 

14 for ‘3.3 percent’; and 

15 ‘‘(III) by substituting ‘9.0 percent’ 

16 for ‘8.25 percent’.’’. 

17 (d) CONSOLIDATION LOAN CONFORMING AMEND18 MENT.—Section 428C(c)(1)(A)(ii) (20 U.S.C. 1078–

19 3(c)(1)(A)(ii)) is amended by striking ‘‘section 427A(l)(3)’’ 

20 and inserting ‘‘section 427A(k)(5)’’. 

21 (e) CONFORMING AMENDMENTS FOR SPECIAL ALLOW22 ANCES.—

23 (1) AMENDMENT.—Subparagraph (I) of section 

24 438(b)(2) (20 U.S.C. 1087–1(b)(2)) is amended—
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1 (A) by striking clause (ii) and inserting the 

2 following: 

3 ‘‘(ii) IN SCHOOL AND GRACE PE4 RIOD.—In the case of any loan for which 

5 the first disbursement is made on or after 

6 January 1, 2000, and for which the appli7 cable interest rate is described in section 

8 427A(k)(2), clause (i)(III) of this subpara9 graph shall be applied by substituting ‘1.74 

10 percent’ for ‘2.34 percent’.’’; 

11 (B) in clause (iii), 

12 (i) by striking ‘‘or (l)(2)’’; and 

13 (ii) by striking ‘‘, subject to clause (v) 

14 of this subparagraph’’; 

15 (C) in clause (iv)—

16 (i) by striking ‘‘or (l)(3)’’ and insert17 ing ‘‘or (k)(5)’’; and 

18 (ii) by striking ‘‘, subject to clause (vi) 

19 of this subparagraph’’; and 

20 (D) by striking clauses (v), (vi), and (vii) 

21 and inserting the following: 

22 ‘‘(v) RECAPTURE OF EXCESS INTER23 EST.—

24 ‘‘(I) EXCESS CREDITED.—With 

25 respect to a loan on which the applica-
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1 ble interest rate is determined under 

2 section 427A(k) and for which the first 

3 disbursement of principal is made on 

4 or after July 1, 2006, if the applicable 

5 interest rate for any 3-month period 

6 exceeds the special allowance support 

7 level applicable to such loan under this 

8 subparagraph for such period, then an 

9 adjustment shall be made by calcu10 lating the excess interest in the amount 

11 computed under subclause (II) of this 

12 clause, and by crediting the excess in13 terest to the Government not less often 

14 than annually. 

15 ‘‘(II) CALCULATION OF EXCESS.—

16 The amount of any adjustment of in17 terest on a loan to be made under this 

18 subsection for any quarter shall be 

19 equal to—

20 ‘‘(aa) the applicable interest 

21 rate minus the special allowance 

22 support level determined under 

23 this subparagraph; multiplied by 

24 ‘‘(bb) the average daily prin25 cipal balance of the loan (not in-
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•S 1932 EAH 

1 cluding unearned interest added 

2 to principal) during such cal3 endar quarter; divided by 

4 ‘‘(cc) four. 

5 ‘‘(III) SPECIAL ALLOWANCE SUP6 PORT LEVEL.—For purposes of this 

7 clause, the term ‘special allowance sup8 port level’ means, for any loan, a num9 ber expressed as a percentage equal to 

10 the sum of the rates determined under 

11 subclauses (I) and (III) of clause (i), 

12 and applying any substitution rules 

13 applicable to such loan under clauses 

14 (ii), (iii), and (iv) in determining such 

15 sum.’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection shall not apply with respect to any 

18 special allowance payment made under section 438 of 

19 the Higher Education Act of 1965 (20 U.S.C 1087–

20 1) before July 1, 2006. 

21 SEC. 2116. ADDITIONAL LOAN TERMS AND CONDITIONS. 

22 (a) FEDERAL DEFAULT FEES.—

23 (1) IN GENERAL.—Subparagraph (H) of section 

24 428(b)(1) (20 U.S.C. 1078(b)(1)(H)) is amended to 

25 read as follows: 
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•S 1932 EAH 

1 ‘‘(H) provides—

2 ‘‘(i) for loans for which the first dis3 bursement of principal is made before July, 

4 1, 2006, for the collection of a single insur5 ance premium equal to not more than 1.0 

6 percent of the principal amount of the loan, 

7 by deduction proportionately from each in8 stallment payment of the proceeds of the 

9 loan to the borrower, and ensures that the 

10 proceeds of the premium will not be used for 

11 incentive payments to lenders; or 

12 ‘‘(ii) for loans for which the first dis13 bursement of principal is made on or after 

14 July 1, 2006, for the collection and deposit 

15 into the Federal Student Loan Reserve 

16 Fund under section 422A of a Federal de17 fault fee of 1.0 percent of the principal 

18 amount of such loan, which shall be de19 ducted proportionately from each install20 ment payment of the proceeds of the loan to 

21 the borrower prior to payment to the bor22 rower, and ensures that the proceeds of the 

23 Federal default fee will not be used for in24 centive payments to lenders;’’. 
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1 (2) UNSUBSIDIZED LOANS.—Section 428H(h) 

2 (20 U.S.C. 1078–8(h)) is amended by adding at the 

3 end the following new sentence: ‘‘Effective for loans 

4 for which the first disbursement of principal is made 

5 on or after July 1, 2006, in lieu of the insurance pre6 mium authorized under the preceding sentence, each 

7 State or nonprofit private institution or organization 

8 having an agreement with the Secretary under section 

9 428(b)(1) shall collect and deposit into the Federal 

10 Student Loan Reserve Fund under section 422A a 

11 Federal default fee of 1.0 percent of the principal 

12 amount of the loan, obtained by deduction propor13 tionately from each installment payment of the pro14 ceeds of the loan to the borrower. The Federal default 

15 fee shall not be used for incentive payments to lend16 ers.’’. 

17 (3) VOLUNTARY FLEXIBLE AGREEMENTS.—Sec18 tion 428A(a)(1) (20 U.S.C. 1078–1(a)(1)) is amend19 ed—

20 (A) by striking ‘‘or’’ at the end of subpara21 graph (A); 

22 (B) by striking the period at the end of sub23 paragraph (B) and inserting ‘‘; or’’; and 

24 (C) by adding at the end the following new 

25 subparagraph: 
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1 ‘‘(C) the Federal default fee required by sec2 tion 428(b)(1)(H) and the second sentence of sec3 tion 428H(h).’’. 

4 (b) DISBURSEMENT.—Section 428(b)(1)(N) (20 U.S.C. 

5 1078(b)(1)(N)) is amended—

6 (1) in clause (i), by inserting ‘‘(including an eli7 gible foreign institution, except as provided in clause 

8 (ii))’’ after ‘‘institution’’; and 

9 (2) in clause (ii), by striking ‘‘or at an eligible 

10 foreign institution’’. 

11 (c) REPAYMENT PLANS.—

12 (1) FFEL LOANS.—Section 428(b)(9)(A) (20 

13 U.S.C. 1078(b)(9)(A)) is amended—

14 (A) by inserting before the semicolon at the 

15 end of clause (ii) the following: ‘‘, and the Sec16 retary may not restrict the proportions or ratios 

17 by which such payments may be graduated with 

18 the informed agreement of the borrower’’; 

19 (B) by striking ‘‘and’’ at the end of clause 

20 (iii); 

21 (C) by redesignating clause (iv) as clause 

22 (v); and 

23 (D) by inserting after clause (iii) the fol24 lowing new clause: 
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1 ‘‘(iv) a delayed repayment plan under 

2 which the borrower makes scheduled pay3 ments for not more than 2 years that are 

4 annually not less than the amount of inter5 est due or $600, whichever is greater, and 

6 then makes payments in accordance with 

7 clause (i), (ii), or (iii); and’’. 

8 (2) DIRECT LOANS.—Section 455(d)(1) (20 

9 U.S.C. 1087e(d)(1)) is amended—

10 (A) by redesignating subparagraph (D) as 

11 subparagraph (E); and 

12 (B) by striking subparagraphs (A), (B), 

13 and (C) and inserting the following: 

14 ‘‘(A) a standard repayment plan, consistent 

15 with subsection (a)(1) of this section and with 

16 section 428(b)(9)(A)(i); 

17 ‘‘(B) a graduated repayment plan, con18 sistent with section 428(b)(9)(A)(ii); 

19 ‘‘(C) an extended repayment plan, con20 sistent with section 428(b)(9)(A)(v), except that 

21 the borrower shall annually repay a minimum 

22 amount determined by the Secretary in accord23 ance with section 428(b)(1)(L); 

24 ‘‘(D) a delayed repayment plan under 

25 which the borrower makes scheduled payments 
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1 for not more than 2 years that are annually not 

2 less than the amount of interest due or $600, 

3 whichever is greater, and then makes payments 

4 in accordance with subparagraph (A), (B), or 

5 (C); and’’. 

6 (d) ORIGINATION FEES.—

7 (1) FFEL PROGRAM.—Paragraph (2) of section 

8 438(c) (20 U.S.C. 1087–1(c)) is amended—

9 (A) by striking the designation and heading 

10 of such paragraph and inserting the following: 

11 ‘‘(2) AMOUNT OF ORIGINATION FEES.—

12 ‘‘(A) IN GENERAL.—’’; and 

13 (B) by adding at the end the following new 

14 subparagraph: 

15 ‘‘(B) SUBSEQUENT REDUCTIONS.—Subpara16 graph (A) shall be applied to loans made under 

17 this part (other than loans made under sections 

18 428C and 439(o))—

19 ‘‘(i) by substituting ‘2.0 percent’ for 

20 ‘3.0 percent’ with respect to loans for which 

21 the first disbursement of principal is made 

22 on or after July 1, 2006, and before July 1, 

23 2007; 

24 ‘‘(ii) by substituting ‘1.5 percent’ for 

25 ‘3.0 percent’ with respect to loans for which 
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1 the first disbursement of principal is made 

2 on or after July 1, 2007, and before July 1, 

3 2008; 

4 ‘‘(iii) by substituting ‘1.0 percent’ for 

5 ‘3.0 percent’ with respect to loans for which 

6 the first disbursement of principal is made 

7 on or after July 1, 2008, and before July 1, 

8 2009; 

9 ‘‘(iv) by substituting ‘0.5 percent’ for 

10 ‘3.0 percent’ with respect to loans for which 

11 the first disbursement of principal is made 

12 on or after July 1, 2009, and before July 1, 

13 2010; and 

14 ‘‘(v) by substituting ‘0.0 percent’ for 

15 ‘3.0 percent’ with respect to loans for which 

16 the first disbursement of principal is made 

17 on or after July 1, 2010.’’. 

18 (2) DIRECT LOAN PROGRAM.—Subsection (c) of 

19 section 455 (20 U.S.C. 1087e(c)) is amended to read 

20 as follows: 

21 ‘‘(c) LOAN FEE.—

22 ‘‘(1) IN GENERAL.—The Secretary shall charge 

23 the borrower of a loan made under this part an origi24 nation fee of 4.0 percent of the principal amount of 

25 loan. 
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1 ‘‘(2) SUBSEQUENT REDUCTION.—Paragraph (1) 

2 shall be applied to loans made under this part, other 

3 than Federal Direct Consolidation loans and Federal 

4 Direct PLUS loans—

5 ‘‘(A) by substituting ‘not more or less than 

6 3.0 percent’ for ‘4.0 percent’ with respect to loans 

7 for which the first disbursement of principal is 

8 made on or after July 1, 2006, and before July 

9 1, 2007; 

10 ‘‘(B) by substituting ‘not more or less than 

11 2.5 percent’ for ‘4.0 percent’ with respect to loans 

12 for which the first disbursement of principal is 

13 made on or after July 1, 2007, and before July 

14 1, 2008; 

15 ‘‘(C) by substituting ‘not more or less than 

16 2.0 percent’ for ‘4.0 percent’ with respect to loans 

17 for which the first disbursement of principal is 

18 made on or after July 1, 2008, and before July 

19 1, 2009; 

20 ‘‘(D) by substituting ‘not more or less than 

21 1.5 percent’ for ‘4.0 percent’ with respect to loans 

22 for which the first disbursement of principal is 

23 made on or after July 1, 2009, and before July 

24 1, 2010; and 
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1 ‘‘(E) by substituting ‘not more or less than 

2 1.0 percent’ for ‘4.0 percent’ with respect to loans 

3 for which the first disbursement of principal is 

4 made on or after July 1, 2010. 

5 ‘‘(3) WAIVERS AND REPAYMENT INCENTIVES PRO6 HIBITED.—Beginning with loans made on or after 

7 July 1, 2006, the Secretary is prohibited—

8 ‘‘(A) from waiving any amount of the loan 

9 fee prescribed under this section as part of a re10 payment incentive in section 455(b)(7); and 

11 ‘‘(B) from providing any repayment incen12 tive before the borrower enters repayment.’’. 

13 (e) CONSOLIDATION LOAN OFFSET CHARGE.—

14 (1) FFEL CONSOLIDATION LOANS.—Section 

15 438(c) (20 U.S.C. 1087–1(c)) is further amended—

16 (A) in paragraph (1)(A), by inserting after 

17 ‘‘paragraph (2) of this subsection’’ the following: 

18 ‘‘and the amount the lender is authorized to col19 lect as a consolidation loan offset charge in ac20 cordance with paragraph (9) of this subsection’’; 

21 (B) in paragraph (1)(B)—

22 (i) by inserting ‘‘and the consolidation 

23 loan offset charge’’ after ‘‘origination fee’’; 

24 and 
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1 (ii) by inserting ‘‘and consolidation 

2 loan offset charges’’ after ‘‘origination fees’’; 

3 (C) in paragraphs (3) and (4), by inserting 

4 ‘‘and consolidation loan offset charge’’ after 

5 ‘‘origination fee’’ each place it appears; 

6 (D) in paragraph (5)—

7 (i) by inserting ‘‘or consolidation loan 

8 offset charge’’ after ‘‘origination fee’’; and 

9 (ii) by inserting ‘‘or consolidation loan 

10 offset charges’’ after ‘‘origination fees’’; 

11 (E) in paragraph (7)—

12 (i) by inserting ‘‘and consolidation 

13 loan offset charges’’ after ‘‘origination fees’’; 

14 and 

15 (ii) by striking ‘‘428A or’’; and 

16 (F) by adding at the end the following new 

17 paragraph: 

18 ‘‘(9) CONSOLIDATION LOAN OFFSET CHARGE.—

19 For any loan under section 428C, the lender is au20 thorized to collect a consolidation loan offset charge in 

21 an amount not to exceed 1.0 percent of the principal 

22 amount of the loan. Such amount may be added to 

23 the principal amount of the loan for repayment by 

24 the borrower.’’. 
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1 (2) DIRECT LOANS.—Section 455(c) (20 U.S.C. 

2 1087e(c)), as amended by subsection (d)(2) of this sec3 tion, is further amended by adding at the end the fol4 lowing new paragraph: 

5 ‘‘(4) CONSOLIDATION LOAN OFFSET CHARGES.—

6 For any Federal Direct Consolidation Loan, the Sec7 retary shall collect a consolidation loan offset charge 

8 in an amount not more or less than 1.0 percent of the 

9 principal amount of the loan. Such amount may be 

10 added to the principal amount of the loan for repay11 ment by the borrower. Such amount is not subject to 

12 the requirements of paragraph (3) of this subsection.’’. 

13 SEC. 2117. CONSOLIDATION LOAN CHANGES. 

14 (a) CROSS-CONSOLIDATION BETWEEN PROGRAMS.—

15 Section 428C (20 U.S.C. 1078–3) is amended—

16 (1) in subsection (a)(3)(B)(i)—

17 (A) by inserting ‘‘or under section 455(g)’’ 

18 after ‘‘under this section’’ both places it appears; 

19 (B) by inserting ‘‘under both sections’’ after 

20 ‘‘terminates’’

21 (C) by striking ‘‘and’’ at the end of sub22 clause (III); 

23 (D) by striking the period at the end of sub24 clause (IV) and inserting ‘‘; and’’; and 
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1 (E) by adding at the end the following new 

2 subclause: 

3 ‘‘(V) an individual may obtain a subse4 quent consolidation loan under section 455(g) 

5 only for the purposes of obtaining an income 

6 contingent repayment plan, and only if the loan 

7 has been submitted to the guaranty agency for 

8 default aversion.’’; and 

9 (2) in subsection (b)(5), by striking the first sen10 tence and inserting the following: ‘‘In the event that 

11 a lender with an agreement under subsection (a)(1) of 

12 this section denies a consolidation loan application 

13 submitted to it by an eligible borrower under this sec14 tion, or denies an application submitted to it by such 

15 a borrower for a consolidation loan with income-sen16 sitive repayment terms, the Secretary shall offer any 

17 such borrower who applies for it, a Federal Direct 

18 Consolidation loan. The Secretary shall offer such a 

19 loan to a borrower who has defaulted, for the purpose 

20 of resolving the default.’’. 

21 (b) REPEAL OF IN-SCHOOL CONSOLIDATION.—

22 (1) DEFINITION OF REPAYMENT PERIOD.—Sec23 tion 428(b)(7)(A) (20 U.S.C. 1078(b)(7)(A)) is 

24 amended by striking ‘‘shall begin—’’ and all that fol25 lows through ‘‘earlier date.’’ and inserting the fol-
115

•S 1932 EAH 

1 lowing: ‘‘shall begin the day after 6 months after the 

2 date the student ceases to carry at least one-half the 

3 normal full-time academic workload (as determined 

4 by the institution).’’. 

5 (2) CONFORMING CHANGE TO ELIGIBLE BOR6 ROWER DEFINITION.—Section 428C(a)(3)(A)(ii)(I) 

7 (20 U.S.C. 1078–3(a)(3)(A)(ii)(I)) is amended by in8 serting ‘‘as determined under section 428(b)(7)(A)’’ 

9 after ‘‘repayment status’’. 

10 (c) INTEREST PAYMENT REBATE FEE.—Section 

11 428C(f)(2) (20 U.S.C. 1078–2(f)(2)) is amended—

12 (1) by striking ‘‘SPECIAL RULE.—’’ and insert13 ing ‘‘SPECIAL RULES.—(A)’’; and 

14 (2) by adding at the end the following new sub15 paragraph: 

16 ‘‘(B) For consolidation loans based on applica17 tions received on or after July 1, 2006, if 90 percent 

18 or more of the total principal and accrued unpaid in19 terest outstanding on the loans held, directly or indi20 rectly, by any holder is comprised of principal and 

21 accrued unpaid interest owed on consolidation loans, 

22 the rebate described in paragraph (1) for such holder 

23 shall be equal to 1.30 percent of the principal plus ac24 crued unpaid interest on such loans.’’. 
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1 (d) ADDITIONAL AMENDMENTS.—Section 428C (20 

2 U.S.C. 1078–3) is amended—

3 (1) in subsection (a)(3), by striking subpara4 graph (C); and 

5 (2) in subsection (b)(1)—

6 (A) by striking everything after ‘‘under this 

7 section’’ the first place it appears in subpara8 graph (A) and inserting the following: ‘‘and that, 

9 if all the borrower’s loans under this part are 

10 held by a single holder, the borrower has notified 

11 such holder that the borrower is seeking to obtain 

12 a consolidation loan under this section;’’; 

13 (B) by striking ‘‘(i) which’’ and all that fol14 lows through ‘‘and (ii)’’ in subparagraph (C); 

15 (C) by striking ‘‘and’’ at the end of sub16 paragraph (E); 

17 (D) by redesignating subparagraph (F) as 

18 subparagraph (G); and 

19 (E) by inserting after subparagraph (E) the 

20 following new subparagraph: 

21 ‘‘(F) that the lender of the consolidation 

22 loan shall, upon application for such loan, pro23 vide the borrower with a clear and conspicuous 

24 notice of at least the following information: 
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1 ‘‘(i) the effects of consolidation on total 

2 interest to be paid, fees to be paid, and 

3 length of repayment; 

4 ‘‘(ii) the effects of consolidation on a 

5 borrower’s underlying loan benefits, includ6 ing loan forgiveness, cancellation, 

7 deferment, and reduced interest rates on 

8 those underlying loans; 

9 ‘‘(iii) the ability of the borrower to 

10 prepay the loan, pay on a shorter schedule, 

11 and to change repayment plans; 

12 ‘‘(iv) that borrower benefit programs 

13 may vary among different loan holders, and 

14 a description of how the borrower benefits 

15 may vary among different loan holders; 

16 ‘‘(v) the tax benefits for which bor17 rowers may be eligible; 

18 ‘‘(vi) the consequences of default; and 

19 ‘‘(vii) that by making the application 

20 the applicant is not obligated to agree to 

21 take the consolidation loan; and’’. 

22 (e) EFFECTIVE DATE FOR SINGLE HOLDER AMEND23 MENT.—The amendment made by subsection (d)(2)(A) shall 

24 apply with respect to any loan made under section 428C 

25 of the Higher Education Act of 1965 (20 U.S.C. 1078–3) 
118

•S 1932 EAH 

1 for which the application is received by an eligible lender 

2 on or after July 1, 2006. 

3 (f) CONFORMING AMENDMENTS TO DIRECT LOAN PRO4 GRAM.—Section 455 (20 U.S.C. 1087e) is amended 

5 (1) in subsection (a)(1) by inserting ‘‘428C,’’ 

6 after ‘‘428B,’’; 

7 (2) in subsection (a)(2)—

8 (A) by striking ‘‘and’’ at the end of sub9 paragraph (B); 

10 (B) by redesignating subparagraph (C) as 

11 subparagraph (D); and 

12 (C) by inserting after subparagraph (B) the 

13 following: 

14 ‘‘(C) section 428C shall be known as ‘Fed15 eral Direct Consolidation Loans’; and ’’; and 

16 (3) in subsection (g)—

17 (A) by striking the second sentence; and 

18 (B) by adding at the end the following new 

19 sentences: ‘‘To be eligible for a consolidation loan 

20 under this part, a borrower must meet the eligi21 bility criteria set forth in section 428C(a)(3). 

22 The Secretary, upon application for such a loan, 

23 shall comply with the requirements applicable to 

24 a lender under section 428C(b)(1)(F).’’. 
119

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1 SEC. 2118. DEFERMENT OF STUDENT LOANS FOR MILITARY 

2 SERVICE. 

3 (a) FEDERAL FAMILY EDUCATION LOANS.—Section 

4 428(b)(1)(M) (20 U.S.C. 1078(b)(1)(M)) is amended—

5 (1) by striking ‘‘or’’ at the end of clause (ii); 

6 (2) by redesignating clause (iii) as clause (iv); 

7 and 

8 (3) by inserting after clause (ii) the following 

9 new clause: 

10 ‘‘(iii) not in excess of 3 years during 

11 which the borrower—

12 ‘‘(I) is serving on active duty dur13 ing a war or other military operation 

14 or national emergency; or 

15 ‘‘(II) is performing qualifying 

16 National Guard duty during a war or 

17 other military operation or national 

18 emergency; or’’. 

19 (b) DIRECT LOANS.—Section 455(f)(2) (20 U.S.C. 

20 1087e(f)(2)) is amended—

21 (1) by redesignating subparagraph (C) as sub22 paragraph (D); and 

23 (2) by inserting after subparagraph (B) the fol24 lowing new subparagraph: 

25 ‘‘(C) not in excess of 3 years during which 

26 the borrower—
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1 ‘‘(i) is serving on active duty during a 

2 war or other military operation or national 

3 emergency; or 

4 ‘‘(ii) is performing qualifying National 

5 Guard duty during a war or other military 

6 operation or national emergency; or’’. 

7 (c) PERKINS LOANS.—Section 464(c)(2)(A) (20 U.S.C. 

8 1087dd(c)(2)(A)) is amended—

9 (1) by redesignating clauses (iii) and (iv) as 

10 clauses (iv) and (v), respectively; and 

11 (2) by inserting after clause (ii) the following 

12 new clause: 

13 ‘‘(iii) not in excess of 3 years during which the 

14 borrower—

15 ‘‘(I) is serving on active duty during a war 

16 or other military operation or national emer17 gency; or 

18 ‘‘(II) is performing qualifying National 

19 Guard duty during a war or other military op20 eration or national emergency;’’. 

21 (d) DEFINITIONS.—Section 481 (20 U.S.C. 1088) is 

22 amended by adding at the end the following new subsection: 

23 ‘‘(d) DEFINITIONS FOR MILITARY DEFERMENTS.—For 

24 purposes of parts B, D, and E of this title: 
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1 ‘‘(1) ACTIVE DUTY.—The term ‘active duty’ has 

2 the meaning given such term in section 101(d)(1) of 

3 title 10, United States Code, except that such term 

4 does not include active duty for training or attend5 ance at a service school. 

6 ‘‘(2) MILITARY OPERATION.—The term ‘military 

7 operation’ means a contingency operation as such 

8 term is defined in section 101(a)(13) of title 10, 

9 United States Code. 

10 ‘‘(3) NATIONAL EMERGENCY.—The term ‘na11 tional emergency’ means the national emergency by 

12 reason of certain terrorist attacks declared by the 

13 President on September 14, 2001, or subsequent na14 tional emergencies declared by the President by rea15 son of terrorist attacks. 

16 ‘‘(4) SERVING ON ACTIVE DUTY.—The term ‘serv17 ing on active duty during a war or other military op18 eration or national emergency’ means service by an 

19 individual who is—

20 ‘‘(A) a Reserve of an Armed Force ordered 

21 to active duty under section 12301(a), 12301(g), 

22 12302, 12304, or 12306 of title 10, United States 

23 Code, or any retired member of an Armed Force 

24 ordered to active duty under section 688 of such 

25 title, for service in connection with a war or 
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1 other military operation or national emergency, 

2 regardless of the location at which such active 

3 duty service is performed; and 

4 ‘‘(B) any other member of an Armed Force 

5 on active duty in connection with such emer6 gency or subsequent actions or conditions who 

7 has been assigned to a duty station at a location 

8 other than the location at which such member is 

9 normally assigned. 

10 ‘‘(5) QUALIFYING NATIONAL GUARD DUTY.—The 

11 term ‘qualifying National Guard duty during a war 

12 or other military operation or national emergency’ 

13 means service as a member of the National Guard on 

14 full-time National Guard duty (as defined in section 

15 101(d)(5) of title 10, United States Code) under a call 

16 to active service authorized by the President or the 

17 Secretary of Defense for a period of more than 30 

18 consecutive days under section 502(f) of title 32, 

19 United States Code, in connection with a war, other 

20 military operation, or a national emergency declared 

21 by the President and supported by Federal funds.’’. 

22 (e) RULE OF CONSTRUCTION.—Nothing in the amend23 ments made by this section shall be construed to authorize 

24 any refunding of any repayment of a loan. 
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1 (f) EFFECTIVE DATE.—The amendments made by this 

2 section shall apply with respect to loans for which the first 

3 disbursement is made on or after July 1, 1993, to an indi4 vidual who is a new borrower (within the meaning of sec5 tion 103 of the Higher Education Act of 1965 (20 U.S.C. 

6 1003)) on or after such date. 

7 SEC. 2119. LOAN FORGIVENESS FOR SERVICE IN AREAS OF 

8 NATIONAL NEED. 

9 Section 428K (20 U.S.C. 1078–11) is amended to read 

10 as follows: 

11 ‘‘SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF 

12 NATIONAL NEED. 

13 ‘‘(a) PURPOSES.—The purposes of this section are—

14 ‘‘(1) to encourage highly trained individuals to 

15 enter and continue in service in areas of national 

16 need; and 

17 ‘‘(2) to reduce the burden of student debt for 

18 Americans who dedicate their careers to service in 

19 areas of national need. 

20 ‘‘(b) PROGRAM AUTHORIZED.—

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

22 to carry out a program of assuming the obligation to 

23 repay, pursuant to subsections (c)(2) and (d), a 

24 qualified loan amount for a loan made, insured, or 

25 guaranteed under this part or part D (other than 
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1 loans made under section 428B and 428C and com2 parable loans made under part D), for any new bor3 rower after the date of enactment of the Higher Edu4 cation Budget Reconciliation Act of 2005, who—

5 ‘‘(A) has been employed full-time for at 

6 least 5 consecutive complete school, academic, or 

7 calendar years, as appropriate, in an area of na8 tional need described in subsection (c); and 

9 ‘‘(B) is not in default on a loan for which 

10 the borrower seeks forgiveness. 

11 ‘‘(2) AWARD BASIS.—Loan repayment under this 

12 section shall be on a first-come, first-served basis pur13 suant to the designation under subsection (c) and sub14 ject to the availability of appropriations. 

15 ‘‘(3) REGULATIONS.—The Secretary is author16 ized to issue such regulations as may be necessary to 

17 carry out the provisions of this section. 

18 ‘‘(c) AREAS OF NATIONAL NEED.—

19 ‘‘(1) STATUTORY CATEGORIES.—For purposes of 

20 this section, an individual shall be treated as em21 ployed in an area of national need if the individual 

22 is employed full-time and is any of the following: 

23 ‘‘(A) EARLY CHILDHOOD EDUCATORS.—An 

24 individual who is employed as an early child25 hood educator in an eligible preschool program 
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1 or child care facility in a low-income commu2 nity, and who is involved directly in the care, 

3 development and education of infants, toddlers, 

4 or young children through age five. 

5 ‘‘(B) NURSES.—An individual who is em6 ployed—

7 ‘‘(i) as a nurse in a clinical setting; or 

8 ‘‘(ii) as a member of the nursing fac9 ulty at an accredited school of nursing (as 

10 those terms are defined in section 801 of the 

11 Public Health Service Act (42 U.S.C. 296)). 

12 ‘‘(C) FOREIGN LANGUAGE SPECIALISTS.—

13 An individual who has obtained a baccalaureate 

14 degree in a critical foreign language and is em15 ployed—

16 ‘‘(i) in an elementary or secondary 

17 school as a teacher of a critical foreign lan18 guage; or 

19 ‘‘(ii) in an agency of the United States 

20 Government in a position that regularly re21 quires the use of such critical foreign lan22 guage. 

23 ‘‘(D) LIBRARIANS.—An individual who is 

24 employed as a librarian in—
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1 ‘‘(i) a public library that serves a geo2 graphic area within which the public 

3 schools have a combined average of 30 per4 cent or more of their total student enroll5 ments composed of children counted under 

6 section 1113(a)(5) of the Elementary and 

7 Secondary Education Act of 1965; or 

8 ‘‘(ii) an elementary or secondary school 

9 which is in the school district of a local edu10 cational agency which is eligible in such 

11 year for assistance pursuant to title I of the 

12 Elementary and Secondary Education Act 

13 of 1965, and which for the purpose of this 

14 paragraph and for that year has been deter15 mined by the Secretary (pursuant to regula16 tions and after consultation with the State 

17 educational agency of the State in which the 

18 school is located) to be a school in which the 

19 enrollment of children counted under section 

20 1113(a)(5) of the Elementary and Sec21 ondary Education Act of 1965 exceeds 30 

22 percent of the total enrollment of that 

23 school. 
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1 ‘‘(E) HIGHLY QUALIFIED TEACHERS: BILIN2 GUAL EDUCATION AND LOW-INCOME COMMU3 NITIES.—An individual who—

4 ‘‘(i) is highly qualified as such term is 

5 defined in section 9101 of the Elementary 

6 and Secondary Education Act of 1965; and 

7 ‘‘(ii)(I) is employed as a teacher of bi8 lingual education; or 

9 ‘‘(II) is employed as a teacher for serv10 ice in a public or nonprofit private elemen11 tary or secondary school which is in the 

12 school district of a local educational agency 

13 which is eligible in such year for assistance 

14 pursuant to title I of the Elementary and 

15 Secondary Education Act of 1965, and 

16 which for the purpose of this paragraph and 

17 for that year has been determined by the 

18 Secretary (pursuant to regulations and 

19 after consultation with the State edu20 cational agency of the State in which the 

21 school is located) to be a school in which the 

22 enrollment of children counted under section 

23 1113(a)(5) of the Elementary and Sec24 ondary Education Act of 1965 exceeds 40 
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1 percent of the total enrollment of that 

2 school. 

3 ‘‘(F) FIRST RESPONDERS IN LOW-INCOME

4 COMMUNITIES.—An individual who—

5 ‘‘(i) is employed as a firefighter, police 

6 officer, or emergency medical technician; 

7 and 

8 ‘‘(ii) serves as such in a low-income 

9 community. 

10 ‘‘(G) CHILD WELFARE WORKERS.—An indi11 vidual who—

12 ‘‘(i) has obtained a degree in social 

13 work or a related field with a focus on serv14 ing children and families; and 

15 ‘‘(ii) is employed in public or private 

16 child welfare services. 

17 ‘‘(H) SPEECH-LANGUAGE PATHOLOGISTS.—

18 An individual who is a speech-language patholo19 gist, who is employed in an eligible preschool 

20 program or an elementary or secondary school, 

21 and who has, at a minimum, a graduate degree 

22 in speech-language pathology, or communication 

23 sciences and disorders. 

24 ‘‘(I) ADDITIONAL AREAS OF NATIONAL

25 NEED.—An individual who is employed in an 
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1 area designated by the Secretary under para2 graph (2) and has completed a baccalaureate or 

3 advanced degree related to such area. 

4 ‘‘(2) DESIGNATION OF ADDITIONAL AREAS OF NA5 TIONAL NEED.—After consultation with appropriate 

6 Federal, State, and community-based agencies and 

7 organizations, the Secretary shall designate addi8 tional areas of national need in which an individual 

9 may be employed full-time to be eligible for loan re10 payment under this section. In making such designa11 tions, the Secretary shall take into account the extent 

12 to which—

13 ‘‘(A) the national interest in the area is 

14 compelling; 

15 ‘‘(B) the area suffers from a critical lack of 

16 qualified personnel; and 

17 ‘‘(C) other Federal programs support the 

18 area concerned. 

19 ‘‘(d) QUALIFIED LOAN AMOUNT.—Subject to the avail20 ability of appropriations, the Secretary shall repay not 

21 more than $5,000 in the aggregate of the loan obligation 

22 on a loan made under section 428 or 428H that is out23 standing after the completion of the fifth consecutive school, 

24 academic, or calendar year, as appropriate, described in 

25 subsection (b)(1). 
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1 ‘‘(e) CONSTRUCTION.—Nothing in this section shall be 

2 construed to authorize the refunding of any repayment of 

3 a loan made under section 428 or 428H. 

4 ‘‘(f) INELIGIBILITY OF NATIONAL SERVICE AWARD RE5 CIPIENTS.—No student borrower may, for the same service, 

6 receive a benefit under both this section and subtitle D of 

7 title I of the National and Community Service Act of 1990 

8 (42 U.S.C. 12601 et seq.). 

9 ‘‘(g) INELIGIBILITY FOR DOUBLE BENEFITS.—No bor10 rower may receive a reduction of loan obligations under 

11 both this section and section 428J or 460. 

12 ‘‘(h) DEFINITIONS.—In this section 

13 ‘‘(1) CHILD CARE FACILITY.—The term ‘child 

14 care facility’ means a facility, including a home, 

15 that—

16 ‘‘(A) provides for the education and care of 

17 children from birth through age 5; and 

18 ‘‘(B) meets any applicable State or local 

19 government licensing, certification, approval, or 

20 registration requirements. 

21 ‘‘(2) CRITICAL FOREIGN LANGUAGE.—The term 

22 ‘critical foreign language’ includes the languages of 

23 Arabic, Korean, Japanese, Chinese, Pashto, Persian24 Farsi, Serbian-Croatian, Russian, Portuguese, and 

25 any other language identified by the Secretary of 
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1 Education, in consultation with the Defense Lan2 guage Institute, the Foreign Service Institute, and the 

3 National Security Education Program, as a critical 

4 foreign language need. 

5 ‘‘(3) EARLY CHILDHOOD EDUCATOR.—The term 

6 ‘early childhood educator’ means an early childhood 

7 educator employed in an eligible preschool program 

8 who has completed a baccalaureate or advanced de9 gree in early childhood development, early childhood 

10 education, or in a field related to early childhood edu11 cation. 

12 ‘‘(4) ELIGIBLE PRESCHOOL PROGRAM.—The 

13 term ‘eligible preschool program’ means a program 

14 that provides for the care, development, and education 

15 of infants, toddlers, or young children through age 5, 

16 meets any applicable State or local government li17 censing, certification, approval, and registration re18 quirements, and is operated by—

19 ‘‘(A) a public or private school that may be 

20 supported, sponsored, supervised, or adminis21 tered by a local educational agency; 

22 ‘‘(B) a Head Start agency serving as a 

23 grantee designated under the Head Start Act (42 

24 U.S.C. 9831 et seq.); 
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1 ‘‘(C) a nonprofit or community based orga2 nization; or 

3 ‘‘(D) a child care program, including a 

4 home. 

5 ‘‘(5) LOW-INCOME COMMUNITY.—In this sub6 section, the term ‘low-income community’ means a 

7 community in which 70 percent of households earn 

8 less than 85 percent of the State median household in9 come. 

10 ‘‘(6) NURSE.—The term ‘nurse’ means a nurse 

11 who meets all of the following: 

12 ‘‘(A) The nurse graduated from—

13 ‘‘(i) an accredited school of nursing (as 

14 those terms are defined in section 801 of the 

15 Public Health Service Act (42 U.S.C. 296)); 

16 ‘‘(ii) a nursing center; or 

17 ‘‘(iii) an academic health center that 

18 provides nurse training. 

19 ‘‘(B) The nurse holds a valid and unre20 stricted license to practice nursing in the State 

21 in which the nurse practices in a clinical setting. 

22 ‘‘(C) The nurse holds one or more of the fol23 lowing: 

24 ‘‘(i) A graduate degree in nursing, or 

25 an equivalent degree. 
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1 ‘‘(ii) A nursing degree from a collegiate 

2 school of nursing (as defined in section 801 

3 of the Public Health Service Act (42 U.S.C. 

4 296)). 

5 ‘‘(iii) A nursing degree from an asso6 ciate degree school of nursing (as defined in 

7 section 801 of the Public Health Service Act 

8 (42 U.S.C. 296)). 

9 ‘‘(iv) A nursing degree from a diploma 

10 school of nursing (as defined in section 801 

11 of the Public Health Service Act (42 U.S.C. 

12 296)). 

13 ‘‘(7) SPEECH-LANGUAGE PATHOLOGIST.—The 

14 term ‘speech-language pathologist’ means a speech15 language pathologist who meets all of the following: 

16 ‘‘(A) the speech-language pathologist has re17 ceived, at a minimum, a graduate degree in 

18 speech-language pathology or communication 

19 sciences and disorders from an institution of 

20 higher education accredited by an agency or as21 sociation recognized by the Secretary pursuant 

22 to section 496(a) of this Act; and 

23 ‘‘(B) the speech-language pathologist meets 

24 or exceeds the qualifications described in section 
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1 1861(ll)(3) of the Social Security Act (42 U.S.C. 

2 1395x(3)). 

3 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There are 

4 authorized to be appropriated to carry out this section such 

5 sums as may be necessary for fiscal year 2006 and such 

6 sums as may be necessary for each of the 5 succeeding fiscal 

7 years.’’. 

8 SEC. 2120. UNSUBSIDIZED STAFFORD LOANS. 

9 (a) AMENDMENT.—Section 428H(d)(2)(C) (20 U.S.C. 

10 1078–8(d)(2)(C)) is amended by striking ‘‘$10,000’’ and in11 serting ‘‘$12,000’’. 

12 (b) EFFECTIVE DATE.—The amendment made by sub13 section (a) shall apply to loans for which the first disburse14 ment of principal is made on or after July 1, 2007. 

15 SEC. 2121. ELIMINATION OF TERMINATION DATES FROM 

16 TAXPAYER-TEACHER PROTECTION ACT OF 

17 2004. 

18 (a) EXTENSION OF LIMITATIONS ON SPECIAL ALLOW19 ANCE FOR LOANS FROM THE PROCEEDS OF TAX EXEMPT

20 ISSUES.—Section 438(b)(2)(B) (20 U.S.C. 1087–

21 1(b)(2)(B)) is amended—

22 (1) in clause (iv), by striking ‘‘and before Janu23 ary 1, 2006,’’; and 

24 (2) in clause (v)(II)—
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1 (A) by striking ‘‘and before January 1, 

2 2006,’’ each place it appears in divisions (aa) 

3 and (bb); and 

4 (B) by striking ‘‘, and before January 1, 

5 2006’’ in division (cc). 

6 (b) ADDITIONAL LIMITATION ON SPECIAL ALLOWANCE

7 FOR LOANS FROM THE PROCEEDS OF TAX EXEMPT

8 ISSUES.—Section 438(b)(2)(B) (20 U.S.C 1087–1(b)(2)(B)) 

9 is further amended by adding at the end thereof the fol10 lowing new clause: 

11 ‘‘(vi) Notwithstanding clauses (i), (ii), and (v), 

12 the quarterly rate of the special allowance shall be the 

13 rate determined under subparagraph (A), (E), (F), 

14 (G), (H), or (I) of this paragraph, as the case may 

15 be, for a holder of loans—

16 ‘‘(I) that were made or purchased on or 

17 after October 1, 2005; or 

18 ‘‘(II) that were not earning a quarterly rate 

19 of special allowance determined under clauses (i) 

20 or (ii) of subparagraph (B) of this paragraph 

21 (20 U.S.C. 1087–1(b)(2)(b)) as of October 1, 

22 2005.’’. 

23 (c) ELIMINATION OF EFFECTIVE DATE LIMITATION ON

24 HIGHER TEACHER LOAN FORGIVENESS BENEFITS.—Para25 graph (3) of section 3(b) of the Taxpayer-Teacher Protection 
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1 Act of 2004 (20 U.S.C. 1078–10 note) is amended by strik2 ing ‘‘, and before October 1, 2005’’. 

3 (d) ADDITIONAL CHANGES TO TEACHER LOAN FOR4 GIVENESS PROVISIONS.—

5 (1) FFEL PROVISIONS.—Section 428J (20 

6 U.S.C. 1078–10) is amended—

7 (A) in subsection (b)(1)(B), by inserting 

8 after ‘‘1965’’ the following: ‘‘, or meets the re9 quirements of subsection (g)(3)’’; 

10 (B) in subsection (c)(3)—

11 (i) by striking ‘‘and’’ at the end of sub12 paragraph (A); 

13 (ii) by striking the period at the end of 

14 subparagraph (B) and inserting ‘‘; and’’; 

15 and 

16 (iii) by inserting after subparagraph 

17 (B) the following new subparagraph: 

18 ‘‘(C) an elementary or secondary school 

19 teacher who primarily teaches reading—

20 ‘‘(i) who meets the requirements of sub21 section (b); 

22 ‘‘(ii) who has obtained a separate read23 ing instruction credential from the State in 

24 which the teacher is employed; and 
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1 ‘‘(iii) who is certified by the chief ad2 ministrative officer of the public or non3 profit private elementary or secondary 

4 school in which the borrower is employed to 

5 teach reading—

6 ‘‘(I) as being proficient in teach7 ing the essential components of reading 

8 instruction as defined in section 1208 

9 of the Elementary and Secondary Edu10 cation Act of 1965; and 

11 ‘‘(II) as having such credential.’’; 

12 and 

13 (C) in subsection (g), by adding at the end 

14 the following new paragraph: 

15 ‘‘(3) PRIVATE SCHOOL TEACHERS.—An indi16 vidual who is employed as a teacher in a private 

17 school and is exempt from State certification require18 ments (unless otherwise applicable under State law), 

19 may, in lieu of the requirement of subsection 

20 (a)(1)(B), have such employment treated as quali21 fying employment under this section if such indi22 vidual is permitted to and does satisfy rigorous sub23 ject knowledge and skills tests by taking competency 

24 tests in the applicable grade levels and subject areas. 

25 For such purposes, the competency tests taken by such 
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1 a private school teacher must be recognized by 5 or 

2 more States for the purpose of fulfilling the highly 

3 qualified teacher requirements under section 9101 of 

4 the Elementary and Secondary Education Act of 

5 1965, and the score achieved by such teacher on each 

6 test must equal or exceed the average passing score of 

7 those 5 States.’’. 

8 (2) DIRECT LOAN PROVISIONS.—Section 460 (20 

9 U.S.C. 1087j) is amended—

10 (A) in subsection (b)(1)(A)(ii), by inserting 

11 after ‘‘1965’’ the following: ‘‘, or meets the re12 quirements of subsection (g)(3)’’; 

13 (B) in subsection (c)(3)—

14 (i) by striking ‘‘and’’ at the end of sub15 paragraph (A); 

16 (ii) by striking the period at the end of 

17 subparagraph (B) and inserting ‘‘; and’’; 

18 and 

19 (iii) by inserting after subparagraph 

20 (B) the following new subparagraph: 

21 ‘‘(C) an elementary or secondary school 

22 teacher who primarily teaches reading—

23 ‘‘(i) who meets the requirements of sub24 section (b); 
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1 ‘‘(ii) who has obtained a separate read2 ing instruction credential from the State in 

3 which the teacher is employed; and 

4 ‘‘(iii) who is certified by the chief ad5 ministrative officer of the public or non6 profit private elementary or secondary 

7 school in which the borrower is employed to 

8 teach reading—

9 ‘‘(I) as being proficient in teach10 ing the essential components of reading 

11 instruction as defined in section 1208 

12 of the Elementary and Secondary Edu13 cation Act of 1965; and 

14 ‘‘(II) as having such credential.’’; 

15 and 

16 (C) in subsection (g), by adding at the end 

17 the following new paragraph: 

18 ‘‘(3) PRIVATE SCHOOL TEACHERS.—An indi19 vidual who is employed as a teacher in a private 

20 school and is exempt from State certification require21 ments (unless otherwise applicable under State law), 

22 may, in lieu of the requirement of subsection 

23 (a)(1)(A)(ii), have such employment treated as quali24 fying employment under this section if such indi25 vidual is permitted to and does satisfy rigorous sub-
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1 ject knowledge and skills tests by taking competency 

2 tests in the applicable grade levels and subject areas. 

3 For such purposes, the competency tests taken by such 

4 a private school teacher must be recognized by 5 or 

5 more States for the purpose of fulfilling the highly 

6 qualified teacher requirements under section 9101 of 

7 the Elementary and Secondary Education Act of 

8 1965, and the score achieved by such teacher on each 

9 test must equal or exceed the average passing score of 

10 those 5 States.’’. 

11 SEC. 2122. LOAN FEES FROM LENDERS. 

12 Section 438(d)(2) (20 U.S.C. 1087–1(d)(2)) is amend13 ed to read as follows: 

14 ‘‘(2) AMOUNT OF LOAN FEES.—The amount of 

15 the loan fee which shall be deducted under paragraph 

16 (1) shall be equal to—

17 ‘‘(A) 0.50 percent of the principal amount 

18 of the loan with respect to any loan under this 

19 part for which the first disbursement was made 

20 on or after October 1, 1993, and before July 1, 

21 2006; and 

22 ‘‘(B) 1.0 percent of the principal amount of 

23 the loan with respect to any loan under this part 

24 for which the first disbursement was made on or 

25 after July 1, 2006.’’. 
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1 SEC. 2123. ADDITIONAL ADMINISTRATIVE PROVISIONS. 

2 (a) TREATMENT OF EXEMPT CLAIMS.—

3 (1) INSURANCE COVERAGE.—Section 

4 428(b)(1)(G) (20 U.S.C. 1078(b)(1)(G)) is amended 

5 by inserting before the semicolon at the end the fol6 lowing: ‘‘and 100 percent of the unpaid principal 

7 amount of exempt claims as defined in subsection 

8 (c)(1)(G)’’. 

9 (2) TREATMENT.—Section 428(c)(1) (20 U.S.C. 

10 1078(c)(1)) is amended—

11 (A) by redesignating subparagraph (G) as 

12 subparagraph (H), and moving such subpara13 graph 2 em spaces to the left; and 

14 (B) by inserting after subparagraph (F) the 

15 following new subparagraph: 

16 ‘‘(G)(i) Notwithstanding any other provisions of 

17 this section, in the case of exempt claims, the Sec18 retary shall apply the provisions of—

19 ‘‘(I) the fourth sentence of subparagraph (A) 

20 by substituting ‘100 percent’ for ‘95 percent’; 

21 ‘‘(II) subparagraph (B)(i) by substituting 

22 ‘100 percent’ for ‘85 percent’; and 

23 ‘‘(III) subparagraph (B)(ii) by substituting 

24 ‘100 percent’ for ‘75 percent’. 

25 ‘‘(ii) For purposes of clause (i) of this subpara26 graph, the term ‘exempt claims’ means claims with 
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1 respect to loans for which it is determined that the 

2 borrower (or the student on whose behalf a parent has 

3 borrowed), without the lender’s or the institution’s 

4 knowledge at the time the loan was made, provided 

5 false or erroneous information or took actions that 

6 caused the borrower or the student to be ineligible for 

7 all or a portion of the loan or for interest benefits 

8 thereon.’’. 

9 (b) REDUCTION OF INSURANCE PERCENTAGE.—

10 (1) INSURANCE PERCENTAGE REDUCTION.—Sec11 tion 428(b)(1)(G) as amended by subsection (a)(1) is 

12 further amended by inserting after the matter inserted 

13 by such subsection the following: ‘‘, except, for any 

14 loan for which the first disbursement of principal is 

15 made on or after July 1, 2006, the preceding provi16 sions of this subparagraph shall be applied by sub17 stituting ‘96 percent’ for ‘98 percent’ ’’. 

18 (2) INCREASE INSURANCE FOR EXCEPTIONAL

19 PERFORMANCE.—Section 428I (20 U.S.C. 1078–9) is 

20 amended to read as follows: 

21 ‘‘SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES 

22 FOR EXCEPTIONAL PERFORMANCE. 

23 ‘‘(a) DESIGNATION OF LENDERS AND SERVICERS.—

24 ‘‘(1) IN GENERAL.—Whenever the Secretary de25 termines that an eligible lender or servicer meets the 
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1 performance measures required by paragraph (2), the 

2 Secretary shall designate that eligible lender or 

3 servicer, as the case may be, for exceptional perform4 ance. The Secretary shall notify each appropriate 

5 guaranty agency of the eligible lenders and servicers 

6 designated under this section. 

7 ‘‘(2) PERFORMANCE MEASURES.—

8 ‘‘(A) In determining whether to award a 

9 lender or servicer the exceptional performance 

10 designation, the Secretary shall require that the 

11 lender or servicer be performing at or above the 

12 95 percentile of the industry, and demonstrate 

13 improved performance against the lender’s or 

14 servicer’s average of the last 3 years on the fac15 tors described in subparagraph (B). 

16 ‘‘(B) The factors on which the Secretary 

17 shall require improvement shall include—

18 ‘‘(i) delinquency rates; 

19 ‘‘(ii) the rate at which delinquent ac20 counts are restored to good standing; 

21 ‘‘(iii) default rates; 

22 ‘‘(iv) the rate of rejected claims; and 

23 ‘‘(v) any other such measures as deter24 mined by the Secretary. 
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1 ‘‘(C) In addition, the Secretary shall not 

2 make any award of such a designation unless the 

3 consequence of the designation is cost-neutral to 

4 the Federal Government. 

5 ‘‘(3) ADDITIONAL INFORMATION ON LENDERS

6 AND SERVICERS.—Each appropriate guaranty agency 

7 shall provide the Secretary with such other informa8 tion in its possession regarding an eligible lender or 

9 servicer desiring designation as may relate to the Sec10 retary’s determination under paragraph (1), includ11 ing but not limited to any information suggesting 

12 that the application of a lender or servicer for des13 ignation should not be approved. 

14 ‘‘(4) DETERMINATIONS BY THE SECRETARY.—

15 ‘‘(A) The Secretary shall designate an eligi16 ble lender or servicer for exceptional performance 

17 if the eligible lender or servicer meets the per18 formance measures required by paragraph (2). 

19 ‘‘(B) The Secretary shall make the deter20 mination under paragraph (1) based upon the 

21 documentation submitted by the eligible lender or 

22 servicer as specified in regulation, such other in23 formation as provided by any guaranty agency 

24 under paragraph (3), and any information in 

25 the possession of the Secretary or submitted by 
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1 any other agency or office of the Federal Govern2 ment. 

3 ‘‘(C) The Secretary shall inform the eligible 

4 lender or servicer and the appropriate guaranty 

5 agency that its application for designation as an 

6 exceptional performance lender or servicer has 

7 been approved or disapproved. 

8 ‘‘(5) TRANSITION.—

9 ‘‘(A) Any eligible lender or servicer des10 ignated for exceptional performance as of the day 

11 before the date of enactment of the Higher Edu12 cation Budget Reconciliation Act of 2005 shall 

13 continue to be so designated, and subject to the 

14 requirements of this section as in effect on that 

15 day (including revocation), until the perform16 ance standards described in paragraph (2) are 

17 established. 

18 ‘‘(B) The Secretary shall not designate any 

19 additional eligible lenders or servicers for excep20 tional performance until those performance 

21 standards are established. 

22 ‘‘(b) PAYMENT TO LENDERS AND SERVICERS.—A 

23 guaranty agency shall pay, to each eligible lender or 

24 servicer (as agent for an eligible lender) designated under 

25 subsection (a), 98 percent of the unpaid principal and in-
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1 terest of all loans for which claims are submitted for pay2 ment by that eligible lender or servicer for the one-year pe3 riod following the receipt by the guaranty agency of the no4 tification of designation under this section, or until the 

5 guaranty agency receives notice from the Secretary that the 

6 designation of the lender or servicer under subsection (a)(2) 

7 has been revoked. 

8 ‘‘(c) REVOCATION AUTHORITY.—

9 ‘‘(1) The Secretary shall revoke the designation 

10 of a lender or a servicer under subsection (a) if the 

11 Secretary determines that the lender or servicer has 

12 failed to meet the performance standards required by 

13 subsection (a)(2). 

14 ‘‘(2) Notwithstanding any other provision of this 

15 section, a designation under subsection (a) may be re16 voked at any time by the Secretary, in the Secretary’s 

17 discretion, if the Secretary determines that the eligible 

18 lender or servicer has failed to meet the criteria and 

19 performance standards established by the Secretary in 

20 regulation, or if the Secretary believes the lender or 

21 servicer may have engaged in fraud in securing des22 ignation under subsection (a), or is failing to service 

23 loans in accordance with program regulations. 

24 ‘‘(d) DOCUMENTATION.—Nothing in this section shall 

25 restrict or limit the authority of guaranty agencies to re-
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1 quire the submission of claims documentation evidencing 

2 servicing performed on loans, except that the guaranty 

3 agency may not require greater documentation than that 

4 required for lenders and servicers not designated under sub5 section (a). 

6 ‘‘(e) SPECIAL RULE.—Reimbursements made by the 

7 Secretary on loans submitted for claim by an eligible lender 

8 or loan servicer designated for exceptional performance 

9 under this section shall not be subject to additional review 

10 by the Secretary or repurchase by the guaranty agency for 

11 any reason other than a determination by the Secretary 

12 that the eligible lender or loan servicer engaged in fraud 

13 or other purposeful misconduct in obtaining designation for 

14 exceptional performance. 

15 ‘‘(f) LIMITATION.—Nothing in this section shall be con16 strued to affect the processing of claims on student loans 

17 of eligible lenders not subject to this section. 

18 ‘‘(g) CLAIMS.—A lender or servicer designated under 

19 subsection (a) failing to service loans or otherwise comply 

20 with applicable program regulations shall be considered in 

21 violation of section 3729 of title 31, United States Code. 

22 ‘‘(h) TERMINATION.—The Secretary may terminate the 

23 designation of lenders and servicers under this section if 

24 he determines that termination would be in the fiscal inter25 est of the United States. 
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1 ‘‘(i) DEFINITIONS.—As used in this section—

2 ‘‘(1) the term ‘eligible loan’ means a loan made, 

3 insured, or guaranteed under this part; and 

4 ‘‘(2) the term ‘servicer’ means an entity servicing 

5 and collecting student loans that—

6 ‘‘(A) has substantial experience in servicing 

7 and collecting consumer loans or student loans; 

8 ‘‘(B) has an independent financial audit 

9 annually which is furnished to the Secretary and 

10 any other parties designated by the Secretary; 

11 ‘‘(C) has business systems which are capable 

12 of meeting the requirements of this part; 

13 ‘‘(D) has adequate personnel who are knowl14 edgeable about the student loan programs author15 ized by this part; and 

16 ‘‘(E) does not have any owner, majority 

17 shareholder, director, or officer of the entity who 

18 has been convicted of a felony.’’. 

19 (3) EFFECTIVE DATE OF AMENDMENTS.—The 

20 amendments made by this subsection shall apply with 

21 respect to loans for which the first disbursement of 

22 principal is made on or after July 1, 2006. 

23 (c) DOCUMENTATION OF FORBEARANCE AGREE24 MENTS.—Section 428(c) (20 U.S.C. 1078(c)) is further 

25 amended—
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1 (1) in paragraph (3)(A)(i)—

2 (A) by striking ‘‘in writing’’; and 

3 (B) by inserting ‘‘and documented in ac4 cordance with paragraph (10)’’ after ‘‘approval 

5 of the insurer’’; and 

6 (2) by adding at the end the following new para7 graph: 

8 ‘‘(10) DOCUMENTATION OF FORBEARANCE

9 AGREEMENTS.—For the purposes of paragraph (3), 

10 the terms of forbearance agreed to by the parties shall 

11 be documented by confirming the agreement of the 

12 borrower by notice to the borrower from the lender, 

13 and by recording the terms in the borrower’s file.’’. 

14 (d) CONSOLIDATION OF DEFAULTED LOANS.—Section 

15 428(c) (20 U.S.C. 1078(c)) is further amended—

16 (1) in paragraph (2)(A)—

17 (A) by inserting ‘‘(i)’’ after ‘‘including’’; 

18 and 

19 (B) by inserting before the semicolon at the 

20 end the following: ‘‘and (ii) requirements estab21 lishing procedures to preclude consolidation lend22 ing from being an excessive proportion of guar23 anty agency recoveries on defaulted loans under 

24 this part’’; 
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1 (2) in paragraph (2)(D), by striking ‘‘paragraph 

2 (6)’’ and inserting ‘‘paragraph (6)(A)’’; and 

3 (3) in paragraph (6)—

4 (A) by inserting ‘‘(A)’’ before ‘‘For the pur5 pose of paragraph (2)(D),’’; 

6 (B) by redesignating subparagraphs (A) 

7 and (B) as clauses (i) and (ii), respectively; and 

8 (C) by adding at the end the following new 

9 subparagraphs: 

10 ‘‘(B) A guaranty agency shall—

11 ‘‘(i) on or after October 1, 2006—

12 ‘‘(I) not charge the borrower collection 

13 costs in an amount in excess of 18.5 percent 

14 of the outstanding principal and interest of 

15 a defaulted loan that is paid off through 

16 consolidation by the borrower under this 

17 title; and 

18 ‘‘(II) remit to the Secretary a portion 

19 of the collection charge under subclause (I) 

20 equal to 8.5 percent of the outstanding prin21 cipal and interest of such defaulted loan; 

22 and 

23 ‘‘(ii) on and after October 1, 2009, remit to 

24 the Secretary the entire amount charged under 

25 clause (i)(I) with respect to each defaulted loan 
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1 that is paid off with excess consolidation pro2 ceeds. 

3 ‘‘(C) For purposes of subparagraph (B), the term 

4 ‘excess consolidation proceeds’ means, with respect to 

5 any guaranty agency for any Federal fiscal year be6 ginning on or after October 1, 2009, the proceeds of 

7 consolidation of defaulted loans under this title that 

8 exceed 45 percent of the agency’s total collections on 

9 defaulted loans in such Federal fiscal year.’’. 

10 (e) COLLECTION RETENTION PERCENTAGES.—Clause 

11 (ii) of section 428(c)(6)(B) (20 U.S.C. 1078(c)(6)(B)), as 

12 redesignated by subsection (d)(3) of this section, is amended 

13 to read as follows: 

14 ‘‘(ii) an amount equal to 24 percent of such 

15 payments for use in accordance with section 

16 422B, except that—

17 ‘‘(I) beginning on October 1, 2003, and 

18 ending on October 1, 2006, this clause shall 

19 be applied by substituting ‘23 percent’ for 

20 ‘24 percent’; and 

21 ‘‘(II) beginning on October 1, 2006, 

22 this clause shall be applied by substituting 

23 ‘20 percent’ for ‘24 percent’.’’. 

24 (f) VOLUNTARY FLEXIBLE AGREEMENTS.—Section 

25 428A (20 U.S.C. 1078–1) is amended—
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1 (1) in subsection (a)(1)(B), by striking ‘‘unless 

2 the Secretary’’ and all that follows through ‘‘des3 ignated guarantor’’; 

4 (2) by striking paragraph (2) of subsection (a); 

5 (3) in paragraph (4)(B) of subsection (a), by 

6 striking ‘‘and any waivers provided to other guaranty 

7 agencies under paragraph (2)’’; 

8 (4) by redesignating paragraphs (3) and (4) of 

9 subsection (a) as paragraphs (2) and (3), respectively; 

10 and 

11 (5) by striking paragraph (3) of subsection (c) 

12 and inserting the following: 

13 ‘‘(3) NOTICE TO INTERESTED PARTIES.—Once 

14 the Secretary reaches a tentative agreement in prin15 ciple under this section, the Secretary shall publish in 

16 the Federal Register a notice that invites interested 

17 parties to comment on the proposed agreement. The 

18 notice shall state how to obtain a copy of the tentative 

19 agreement in principle and shall give interested par20 ties no less than 30 days to provide comments. The 

21 Secretary may consider such comments prior to pro22 viding the notices pursuant to paragraph (2).’’. 

23 (g) FRAUD: REPAYMENT REQUIRED.—Section 

24 428B(a)(1) (20 U.S.C. 1078–2(a)(1)) is amended—
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1 (1) by striking ‘‘and’’ at the end of subpara2 graph (A); 

3 (2) by redesignating subparagraph (B) as sub4 paragraph (C); and 

5 (3) by inserting after subparagraph (A) the fol6 lowing new subparagraph: 

7 ‘‘(B) in the case of a parent who has been 

8 convicted of, or has pled nolo contendere or 

9 guilty to, a crime involving fraud in obtaining 

10 funds under this title, such parent has completed 

11 the repayment of such funds to the Secretary, or 

12 to the holder in the case of a loan under this title 

13 obtained by fraud; and’’. 

14 (h) DEFAULT REDUCTION PROGRAM.—Section 

15 428F(a)(1) (20 U.S.C. 1078–6(a)(1)) is amended— 

16 (1) in subparagraph (A), by striking ‘‘consecu17 tive payments for 12 months’’ and inserting ‘‘9 pay18 ments made within 20 days of the due date during 

19 10 consecutive months’’; 

20 (2) by redesignating subparagraph (C) as sub21 paragraph (D); and 

22 (3) by inserting after subparagraph (B) the fol23 lowing new subparagraph: 

24 ‘‘(C) A guaranty agency may charge the 

25 borrower and retain collection costs in an 
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1 amount not to exceed 18.5 percent of the out2 standing principal and interest at the time of 

3 sale of a loan rehabilitated under subparagraph 

4 (A).’’. 

5 (i) FINANCIAL AND ECONOMIC LITERACY.—

6 (1) DEFAULT REDUCTION PROGRAM.—Section 

7 428F is further amended by adding at the end the fol8 lowing: 

9 ‘‘(c) FINANCIAL AND ECONOMIC LITERACY.—Where 

10 appropriate, each program described under subsection (b) 

11 shall include making financial and economic education ma12 terials available to the borrower.’’. 

13 (2) PROGRAM ASSISTANCE FOR BORROWERS.—

14 Section 432(k)(1) (20 U.S.C. 1082(k)(1)) is amended 

15 by striking ‘‘and offering’’ and all that follows 

16 through the period and inserting ‘‘, offering loan re17 payment matching provisions as part of employee 

18 benefit packages, and providing employees with finan19 cial and economic education and counseling.’’. 

20 (j) CREDIT BUREAU ORGANIZATION AGREEMENTS.—

21 Section 430A(a) (20 U.S.C. 1080a(a)) is amended by strik22 ing ‘‘agreements with credit bureau organizations’’ and in23 serting ‘‘an agreement with each national credit bureau or24 ganization (as described in section 603(p) of the Fair Credit 

25 Reporting Act)’’. 
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1 (k) UNIFORM ADMINISTRATIVE AND CLAIMS PROCE2 DURE.—Section 432(l)(1)(H) (20 U.S.C. 1082(l)(1)(H)) is 

3 amended by inserting ‘‘and anticipated graduation date’’ 

4 after ‘‘status change’’. 

5 (l) DEFAULT REDUCTION MANAGEMENT.—Section 432 

6 is further amended—

7 (1) by striking subsection (n); and 

8 (2) by redesignating subsections (o) and (p) as 

9 subsections (n) and (o), respectively. 

10 (m) SCHOOLS AS LENDERS.—Paragraph (2) of section 

11 435(d) (20 U.S.C. 1085(d)(2)) is amended to read as fol12 lows: 

13 ‘‘(2) REQUIREMENTS FOR ELIGIBLE INSTITU14 TIONS.—

15 ‘‘(A) IN GENERAL.—To be an eligible lender 

16 under this part, an eligible institution—

17 ‘‘(i) shall employ at least one person 

18 whose full-time responsibilities are limited 

19 to the administration of programs of finan20 cial aid for students attending such institu21 tion; 

22 ‘‘(ii) shall not be a home study school; 

23 ‘‘(iii) shall not—

24 ‘‘(I) make a loan to any under25 graduate student; 
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1 ‘‘(II) make a loan other than a 

2 loan under section 428 or 428H to a 

3 graduate or professional student; or 

4 ‘‘(III) make a loan to a borrower 

5 who is not enrolled at that institution; 

6 ‘‘(iv) shall award any contract for fi7 nancing, servicing, or administration of 

8 loans under this title on a competitive basis; 

9 ‘‘(v) shall offer loans that carry an 

10 origination fee or an interest rate, or both, 

11 that are less than such fee or rate author12 ized under the provisions of this title; 

13 ‘‘(vi) shall not have a cohort default 

14 rate (as defined in section 435(m)) greater 

15 than 10 percent; 

16 ‘‘(vii) shall, for any year for which the 

17 institution engages in activities as an eligi18 ble lender, provide for a compliance audit 

19 conducted in accordance with section 

20 428(b)(1)(U)(iii)(I), and the regulations 

21 thereunder, and submit the results of such 

22 audit to the Secretary; and 

23 ‘‘(viii) shall use any proceeds from spe24 cial allowance payments and interest pay25 ments from borrowers, interest subsidies re-
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1 ceived from the Department of Education, 

2 and any proceeds from the sale or other dis3 position of loans, for need-based grant pro4 grams. 

5 ‘‘(B) ADMINISTRATIVE EXPENSES.—An eli6 gible lender under subparagraph (A) shall be 

7 permitted to use a portion of the proceeds de8 scribed in subparagraph (A)(viii) for reasonable 

9 and direct administrative expenses. 

10 ‘‘(C) SUPPLEMENT, NOT SUPPLANT.—An el11 igible lender under subparagraph (A) shall en12 sure that the proceeds described in subparagraph 

13 (A)(viii) are used to supplement, and not to sup14 plant, non-Federal funds that would otherwise be 

15 used for need-based grant programs.’’. 

16 (n) DISABILITY DETERMINATIONS.—Section 437(a) 

17 (20 U.S.C. 1087(a)) is amended by adding at the end the 

18 following new sentence: ‘‘In making such determination of 

19 permanent and total disability, the Secretary shall not re20 quire a borrower who has been certified as permanently and 

21 totally disabled by the Department of Veterans Affairs or 

22 the Social Security Administration to present further docu23 mentation of disability for purposes of this title.’’. 

24 (o) TREATMENT OF FALSELY CERTIFIED BOR25 ROWERS.—Section 437(c)(1) (20 U.S.C. 1087(c)(1)) is 
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1 amended by inserting ‘‘or parent’s eligibility’’ after ‘‘such 

2 student’s eligibility’’. 

3 (p) PERFECTION OF SECURITY INTERESTS.—Section 

4 439(d) (20 U.S.C. 1087–2(d)) is amended—

5 (1) by striking paragraph (3); and 

6 (2) by redesignating paragraphs (4) and (5) as 

7 paragraphs (3) and (4), respectively. 

8 (q) ADDITIONAL TECHNICAL AMENDMENTS.—

9 (1) Section 428(a)(2)(A) (20 U.S.C. 

10 1078(a)(2)(A)) is amended—

11 (A) by striking ‘‘and’’ at the end of sub12 clause (II) of clause (i); and 

13 (B) by moving the margin of clause (iii) 

14 two ems to the left. 

15 (2) Section 428(a)(3)(A)(v) (20 U.S.C. 

16 1078(a)(3)(A)(v)) is amended—

17 (A) by striking ‘‘or’’ at the end of subclause 

18 (I); 

19 (B) by striking the period at the end of sub20 clause (II) and inserting ‘‘; or’’; and 

21 (C) by adding after subclause (II) the fol22 lowing new subclause: 

23 ‘‘(III) in the case of a loan disbursed 

24 through an escrow agent, 3 days before the first 

25 disbursement of the loan.’’. 
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1 (3) Section 428(c)(1)(A) (20 U.S.C. 

2 1078(c)(1)(A)) is amended by striking ‘‘45 days’’ in 

3 the last sentence and inserting ‘‘30 days’’. 

4 (4) Section 428(i)(1) (20 U.S.C. 1078(i)(1)) is 

5 amended by striking ‘‘21 days’’ in the third sentence 

6 and inserting ‘‘10 days’’. 

7 (5) Section 428G(e) (20 U.S.C. 1078–7(e)) is 

8 amended by striking ‘‘, made to a student to cover the 

9 cost of attendance at an eligible institution outside 

10 the United States,’’. 

11 (6) Section 428H(e) (20 U.S.C. 1078–8(e)) is 

12 amended by striking paragraph (6) and inserting the 

13 following: 

14 ‘‘(6) TIME LIMITS ON BILLING INTEREST.—A 

15 lender may not receive interest on a loan under this 

16 section from a borrower for any period that precedes 

17 the dates described in section 428(a)(3)(A)(v).’’. 

18 (7) Section 432(m)(1)(B) (20 U.S.C. 

19 1082(m)(1)(B)) is amended—

20 (A) in clause (i), by inserting ‘‘and’’ after 

21 the semicolon at the end; and 

22 (B) in clause (ii), by striking ‘‘; and’’ and 

23 inserting a period. 

24 (8) Section 438(b)(4)(B) (20 U.S.C. 1087–

25 1(b)(4)(B)) is amended by striking ‘‘shall be com-
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1 puted’’ and all that follows through ‘‘to the loan’’ and 

2 inserting ‘‘described in subparagraph (A) shall be 

3 computed using the interest rate described in section 

4 3902(a) of title 31, United States Code,’’. 

5 SEC. 2124. FUNDS FOR ADMINISTRATIVE EXPENSES. 

6 Section 458 is amended to read as follows: 

7 ‘‘SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES. 

8 ‘‘(a) ADMINISTRATIVE EXPENSES.—

9 ‘‘(1) MANDATORY FUNDS FOR FISCAL YEAR

10 2006.—For fiscal year 2006, there shall be available to 

11 the Secretary, from funds not otherwise appropriated, 

12 funds to be obligated for—

13 ‘‘(A) administrative costs under this part 

14 and part B, including the costs of the direct stu15 dent loan programs under this part; and 

16 ‘‘(B) account maintenance fees payable to 

17 guaranty agencies under part B and calculated 

18 in accordance with subsections (b) and (c), 

19 not to exceed (from such funds not otherwise appro20 priated) $820,000,000 in fiscal year 2006. 

21 ‘‘(2) AUTHORIZATION FOR ADMINISTRATIVE

22 COSTS BEGINNING IN FISCAL YEAR 2007.—For each of 

23 the fiscal years 2007 through 2011, there are author24 ized to be appropriated such sums as may be nec25 essary for administrative costs under this part and 
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1 part B, including the costs of the direct student loan 

2 programs under this part. 

3 ‘‘(3) CONTINUING MANDATORY FUNDS FOR AC4 COUNT MAINTENANCE FEES.—For each of the fiscal 

5 years 2007 through 2011, there shall be available to 

6 the Secretary, from funds not otherwise appropriated, 

7 funds to be obligated for account maintenance fees 

8 payable to guaranty agencies under part B and cal9 culated in accordance with subsection (b). 

10 ‘‘(4) ACCOUNT MAINTENANCE FEES.—Account 

11 maintenance fees under paragraph (3) shall be paid 

12 quarterly and deposited in the Agency Operating 

13 Fund established under section 422B. 

14 ‘‘(5) CARRYOVER.—The Secretary may carry 

15 over funds made available under this section to a sub16 sequent fiscal year. 

17 ‘‘(b) CALCULATION BASIS.—Account maintenance fees 

18 payable to guaranty agencies under subsection (a)(3) shall 

19 not exceed the basis of 0.10 percent of the original principal 

20 amount of outstanding loans on which insurance was issued 

21 under part B. 

22 ‘‘(c) BUDGET JUSTIFICATION.—No funds may be ex23 pended under this section unless the Secretary includes in 

24 the Department of Education’s annual budget justification 

25 to Congress a detailed description of the specific activities 
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1 for which the funds made available by this section have been 

2 used in the prior and current years (if applicable), the ac3 tivities and costs planned for the budget year, and the pro4 jection of activities and costs for each remaining year for 

5 which administrative expenses under this section are made 

6 available.’’. 

7 SEC. 2125. SIGNIFICANTLY SIMPLIFYING THE STUDENT AID 

8 APPLICATION PROCESS. 

9 (a) EXPANDING THE AUTO-ZERO AND FURTHER SIM10 PLIFYING THE SIMPLIFIED NEEDS TEST.—

11 (1) SIMPLIFIED NEEDS TEST.—Section 479 (20 

12 U.S.C. 1087ss) is amended—

13 (A) in subsection (b)—

14 (i) in paragraph (1)—

15 (I) by striking clause (i) of sub16 paragraph (A) and inserting the fol17 lowing: 

18 ‘‘(i) the student’s parents file, or are el19 igible to file, a form described in paragraph 

20 (3) or certify that they are not required to 

21 file an income tax return, and the student 

22 files, or is eligible to file, such a form or 

23 certifies that the student is not required to 

24 file an income tax return, or the student’s 

25 parents, or the student, received benefits at 
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1 some time during the previous 12-month pe2 riod under a means-tested Federal benefit 

3 program as defined under subsection (d); 

4 and’’; and 

5 (II) by striking clause (i) of sub6 paragraph (B) and inserting the fol7 lowing: 

8 ‘‘(i) the student (and the student’s 

9 spouse, if any) files, or is eligible to file, a 

10 form described in paragraph (3) or certifies 

11 that the student (and the student’s spouse, if 

12 any) is not required to file an income tax 

13 return, or the student (and the student’s 

14 spouse, if any) received benefits at some 

15 time during the previous 12-month period 

16 under a means-tested Federal benefit pro17 gram as defined under subsection (d); and’’; 

18 and 

19 (ii) in paragraph (3), by striking ‘‘A 

20 student or family files a form described in 

21 this subsection, or subsection (c), as the case 

22 may be, if the student or family, respec23 tively, files’’ and inserting ‘‘In the case of 

24 an independent student, the student, or in 

25 the case of a dependent student, the parent, 
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1 files a form described in this subsection, or 

2 subsection (c), as the case may be, if the stu3 dent or parent, as appropriate, files’’; 

4 (B) in subsection (c)—

5 (i) in paragraph (1), by striking sub6 paragraph (A) and inserting the following: 

7 ‘‘(A) the student’s parents file, or are eligi8 ble to file, a form described in subsection (b)(3) 

9 or certify that they are not required to file an 

10 income tax return, and the student files, or is el11 igible to file, such a form or certifies that the stu12 dent is not required to file an income tax return, 

13 or the student’s parents, or the student, received 

14 benefits at some time during the previous 12-

15 month period under a means-tested Federal ben16 efit program as defined in subsection (d); and’’; 

17 and 

18 (ii) in paragraph (2), by striking sub19 paragraph (A) and inserting the following: 

20 ‘‘(A) the student (and the student’s spouse, 

21 if any) files, or is eligible to file, a form de22 scribed in subsection (b)(3) or certifies that the 

23 student (and the student’s spouse, if any) is not 

24 required to file an income tax return, or the stu25 dent (and the student’s spouse, if any) received 
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1 benefits at some time during the previous 12-

2 month period under a means-tested Federal ben3 efit program as defined in subsection (d); and’’; 

4 and 

5 (C) by adding at the end the following new 

6 subsections: 

7 ‘‘(d) DEFINITION OF MEANS-TESTED FEDERAL BEN8 EFIT PROGRAM.—For the purposes of this section, the term 

9 ‘means-tested Federal benefit program’ means a mandatory 

10 spending program of the Federal Government, other than 

11 a program under this title, in which eligibility for the pro12 gram’s benefits, or the amount of such benefits, or both, are 

13 determined on the basis of income or resources of the indi14 vidual or family seeking the benefit, and may include such 

15 programs as the supplemental security income program 

16 under title XVI of the Social Security Act, the food stamp 

17 program under the Food Stamp Act of 1977, the free and 

18 reduced price school lunch program established under the 

19 Richard B. Russell National School Lunch Act, the tem20 porary assistance to needy families program established 

21 under part A of title IV of the Social Security Act, and 

22 the women, infants and children program established under 

23 Section 17 of the Child Nutrition Act of 1966, and other 

24 programs identified by the Secretary. 
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1 ‘‘(e) REPORTING REQUIREMENTS.—The Secretary 

2 shall regularly evaluate the impact of the eligibility guide3 lines in subsections (b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A) and 

4 (c)(2)(A) of this section. In particular, the Secretary shall 

5 evaluate whether using receipt of benefits under a means6 tested Federal benefit program (as defined in subsection (d)) 

7 for eligibility continues to target the Simplified Needs Test, 

8 to the greatest extent possible, for use by low- and moderate9 income students and their families.’’. 

10 (b) IMPROVEMENTS TO PAPER AND ELECTRONIC

11 FORMS.—

12 (1) COMMON FINANCIAL AID FORM DEVELOPMENT

13 AND PROCESSING.—Section 483(a) (20 U.S.C. 

14 1090(a)) is amended—

15 (A) by striking paragraphs (1), (2), and 

16 (5); 

17 (B) by redesignating paragraphs (3), (4), 

18 (6), and (7), as paragraphs (9), (10), (11), and 

19 (12), respectively; 

20 (C) by inserting before paragraph (9), as 

21 redesignated by subparagraph (B), the following: 

22 ‘‘(1) IN GENERAL.—The Secretary, in coopera23 tion with representatives of agencies and organiza24 tions involved in student financial assistance, shall 

25 produce, distribute, and process free of charge com-
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1 mon financial reporting forms as described in this 

2 subsection to be used for application and reapplica3 tion to determine the need and eligibility of a student 

4 for financial assistance under parts A through E 

5 (other than subpart 4 of part A). These forms shall 

6 be made available to applicants in both paper and 

7 electronic formats and shall be referred to as the ‘Free 

8 Application for Federal Student Aid’ or the ‘FAFSA’ 

9 . 

10 ‘‘(2) EARLY ESTIMATES.—

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

12 permit applicants to complete such forms as de13 scribed in this subsection in the 4 years prior to 

14 enrollment in order to obtain a non-binding esti15 mate of the family contribution, as defined in 

16 section 473. The estimate shall clearly and con17 spicuously indicate that it is only an estimate of 

18 family contribution, and may not reflect the ac19 tual family contribution of the applicant that 

20 shall be used to determine the grant, loan, or 

21 work assistance that the applicant may receive 

22 under this title when enrolled in a program of 

23 postsecondary education. Such applicants shall 

24 be permitted to update information submitted on 
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1 forms described in this subsection using the proc2 ess required under paragraph (5)(A). 

3 ‘‘(B) EVALUATION.—Two years after the 

4 early estimates are implemented under this 

5 paragraph and from data gathered from the 

6 early estimates, the Secretary shall evaluate the 

7 differences between initial, non-binding early es8 timates and the final financial aid award made 

9 available under this title. 

10 ‘‘(C) REPORT.—The Secretary shall provide 

11 a report to the authorizing committees on the re12 sults of the evaluation. 

13 ‘‘(3) PAPER FORMAT.—

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

15 produce, distribute, and process common forms 

16 in paper format to meet the requirements of 

17 paragraph (1). The Secretary shall develop a 

18 common paper form for applicants who do not 

19 meet the requirements of subparagraph (B). 

20 ‘‘(B) EZ FAFSA.—

21 ‘‘(i) IN GENERAL.—The Secretary shall 

22 develop and use a simplified paper applica23 tion form, to be known as the ‘EZ FAFSA’, 

24 to be used for applicants meeting the re25 quirements of section 479(c). 
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1 ‘‘(ii) REDUCED DATA REQUIRE2 MENTS.—The form under this subparagraph 

3 shall permit an applicant to submit, for fi4 nancial assistance purposes, only the data 

5 elements required to make a determination 

6 of whether the applicant meets the require7 ments under section 479(c). 

8 ‘‘(iii) STATE DATA.—The Secretary 

9 shall include on the form under this sub10 paragraph such data items as may be nec11 essary to award State financial assistance, 

12 as provided under paragraph (6), except 

13 that the Secretary shall not include a 

14 State’s data if that State does not permit 

15 its applicants for State assistance to use the 

16 form under this subparagraph. 

17 ‘‘(iv) FREE AVAILABILITY AND PROC18 ESSING.—The provisions of paragraph (7) 

19 shall apply to the form under this subpara20 graph, and the data collected by means of 

21 the form under this subparagraph shall be 

22 available to institutions of higher education, 

23 guaranty agencies, and States in accord24 ance with paragraph (9). 
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1 ‘‘(v) TESTING.—The Secretary shall 

2 conduct appropriate field testing on the 

3 form under this subparagraph. 

4 ‘‘(C) PROMOTING THE USE OF ELECTRONIC

5 FAFSA.—

6 ‘‘(i) IN GENERAL.—The Secretary 

7 shall—

8 ‘‘(I) develop a form that uses skip 

9 logic to simplify the application proc10 ess for applicants; and 

11 ‘‘(II) make all efforts to encourage 

12 applicants to utilize the electronic 

13 forms described in paragraph (4). 

14 ‘‘(ii) MAINTENANCE OF THE FAFSA IN

15 A PRINTABLE ELECTRONIC FILE.—The Sec16 retary shall maintain a version of the paper 

17 forms described in subparagraphs (A) and 

18 (B) in a printable electronic file that is eas19 ily portable. The printable electronic file 

20 will be made easily accessible and 

21 downloadable to students on the same 

22 website used to provide students with the 

23 electronic application forms described in 

24 paragraph (4) of this subsection. The Sec25 retary shall enable students to submit a 
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1 form created under this subparagraph that 

2 is downloaded and printed from an elec3 tronic file format in order to meet the filing 

4 requirements of this section and in order to 

5 receive aid from programs under this title. 

6 ‘‘(iii) REPORTING REQUIREMENT.—

7 The Secretary shall report annually to Con8 gress on the impact of the digital divide on 

9 students completing applications for title IV 

10 aid described under this paragraph and 

11 paragraph (4). The Secretary will also re12 port on the steps taken to eliminate the dig13 ital divide and phase out the paper form 

14 described in subparagraph (A) of this para15 graph. The Secretary’s report will specifi16 cally address the impact of the digital di17 vide on the following student populations: 

18 dependent students, independent students 

19 without dependents, and independent stu20 dents with dependents other than a spouse. 

21 ‘‘(4) ELECTRONIC FORMAT.—

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

23 produce, distribute, and process common forms 

24 in electronic format to meet the requirements of 

25 paragraph (1). The Secretary shall develop com-
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1 mon electronic forms for applicants who do not 

2 meet the requirements of subparagraph (C) of 

3 this paragraph. 

4 ‘‘(B) STATE DATA.—The Secretary shall in5 clude on the common electronic forms space for 

6 information that needs to be submitted from the 

7 applicant to be eligible for State financial assist8 ance, as provided under paragraph (6), except 

9 the Secretary shall not require applicants to 

10 complete data required by any State other than 

11 the applicant’s State of residence. 

12 ‘‘(C) SIMPLIFIED APPLICATIONS: FAFSA ON

13 THE WEB.—

14 ‘‘(i) IN GENERAL.—The Secretary shall 

15 develop and use a simplified electronic ap16 plication form to be used by applicants 

17 meeting the requirements under subsection 

18 (c) of section 479 and an additional, sepa19 rate simplified electronic application form 

20 to be used by applicants meeting the re21 quirements under subsection (b) of section 

22 479. 

23 ‘‘(ii) REDUCED DATA REQUIRE24 MENTS.—The simplified electronic applica25 tion forms shall permit an applicant to sub-
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1 mit for financial assistance purposes only 

2 the data elements required to make a deter3 mination of whether the applicant meets the 

4 requirements under subsection (b) or (c) of 

5 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 assist10 ance, as provided under paragraph (6), ex11 cept that the Secretary shall not require ap12 plicants to complete data required by any 

13 State other than the applicant’s State of 

14 residence. 

15 ‘‘(iv) AVAILABILITY AND PROC16 ESSING.—The data collected by means of the 

17 simplified electronic application forms shall 

18 be available to institutions of higher edu19 cation, guaranty agencies, and States in ac20 cordance with paragraph (9). 

21 ‘‘(v) TESTING.—The Secretary shall 

22 conduct appropriate field testing on the 

23 forms developed under this subparagraph. 

24 ‘‘(D) USE OF FORMS.—Nothing in this sub25 section shall be construed to prohibit the use of 
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1 the forms developed by the Secretary pursuant to 

2 this paragraph by an eligible institution, eligible 

3 lender, guaranty agency, State grant agency, 

4 private computer software provider, a consor5 tium thereof, or such other entities as the Sec6 retary may designate. 

7 ‘‘(E) PRIVACY.—The Secretary shall ensure 

8 that data collection under this paragraph com9 plies with section 552a of title 5, United States 

10 Code, and that any entity using the electronic 

11 version of the forms developed by the Secretary 

12 pursuant to this paragraph shall maintain rea13 sonable and appropriate administrative, tech14 nical, and physical safeguards to ensure the in15 tegrity and confidentiality of the information, 

16 and to protect against security threats, or unau17 thorized uses or disclosures of the information 

18 provided on the electronic version of the forms. 

19 Data collected by such electronic version of the 

20 forms shall be used only for the application, 

21 award, and administration of aid awarded 

22 under this title, State aid, or aid awarded by el23 igible institutions or such entities as the Sec24 retary may designate. No data collected by such 

25 electronic version of the forms shall be used for 
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1 making final aid awards under this title until 

2 such data have been processed by the Secretary 

3 or a contractor or designee of the Secretary, and 

4 an expected family contribution has been cal5 culated by the Secretary, except as may be per6 mitted under this title. 

7 ‘‘(F) SIGNATURE.—Notwithstanding any 

8 other provision of this Act, the Secretary may 

9 permit an electronic form under this paragraph 

10 to be submitted with an electronic signature. 

11 ‘‘(5) STREAMLINING.—

12 ‘‘(A) STREAMLINED REAPPLICATION PROC13 ESS.—

14 ‘‘(i) IN GENERAL.—The Secretary shall 

15 develop streamlined reapplication forms 

16 and processes, including both paper and 

17 electronic reapplication processes, consistent 

18 with the requirements of this subsection, for 

19 an applicant who applies for financial as20 sistance under this title—

21 ‘‘(I) in the academic year suc22 ceeding the year in which such appli23 cant first applied for financial assist24 ance under this title; or 
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1 ‘‘(II) in any succeeding academic 

2 years. 

3 ‘‘(ii) MECHANISMS FOR REAPPLICA4 TION.—The Secretary shall develop appro5 priate mechanisms to support reapplica6 tion. 

7 ‘‘(iii) IDENTIFICATION OF UPDATED

8 DATA.—The Secretary shall determine, in 

9 cooperation with States, institutions of 

10 higher education, agencies, and organiza11 tions involved in student financial assist12 ance, the data elements that can be updated 

13 from the previous academic year’s applica14 tion. 

15 ‘‘(iv) REDUCED DATA AUTHORIZED.—

16 Nothing in this title shall be construed as 

17 limiting the authority of the Secretary to 

18 reduce the number of data elements required 

19 of reapplicants. 

20 ‘‘(v) ZERO FAMILY CONTRIBUTION.—

21 Applicants determined to have a zero family 

22 contribution pursuant to section 479(c) 

23 shall not be required to provide any finan24 cial data in a reapplication form, except 
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1 that which is necessary to determine eligi2 bility under such section. 

3 ‘‘(B) REDUCTION OF DATA ELEMENTS.—

4 ‘‘(i) REDUCTION ENCOURAGED.—Of the 

5 number of data elements on the FAFSA on 

6 the date of enactment of the Higher Edu7 cation Budget Reconciliation Act of 2005 

8 (including questions on the FAFSA for the 

9 purposes described in paragraph (6)), the 

10 Secretary, in cooperation with representa11 tives of agencies and organizations involved 

12 in student financial assistance, shall con13 tinue to reduce the number of such data ele14 ments following the date of enactment. Re15 ductions of data elements under paragraph 

16 (3)(B), (4)(C), or (5)(A)(iv) shall not be 

17 counted towards the reduction referred to in 

18 this paragraph unless those data elements 

19 are reduced for all applicants. 

20 ‘‘(ii) REPORT.—The Secretary shall 

21 annually report to the House of Representa22 tives and the Senate on the progress made 

23 of reducing data elements. 

24 ‘‘(6) STATE REQUIREMENTS.—
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1 ‘‘(A) IN GENERAL.—The Secretary shall in2 clude on the forms developed under this sub3 section, such State-specific data items as the Sec4 retary determines are necessary to meet State re5 quirements for State need-based financial aid 

6 under section 415C, except as provided in para7 graphs (3)(B)(iii) and (4)(C)(iii) of this sub8 section. Such items shall be selected in consulta9 tion with State agencies in order to assist in the 

10 awarding of State financial assistance in accord11 ance with the terms of this subsection, except as 

12 provided in paragraphs (3)(B)(iii) and 

13 (4)(C)(iii) of this subsection. The number of such 

14 data items shall not be less than the number in15 cluded on the form on October 7, 1998, unless a 

16 State notifies the Secretary that the State no 

17 longer requires those data items for the distribu18 tion of State need-based financial aid. 

19 ‘‘(B) ANNUAL REVIEW.—The Secretary shall 

20 conduct an annual review process to determine 

21 which forms and data items the States require to 

22 award State need-based financial aid and other 

23 application requirements that the States may 

24 impose. 
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1 ‘‘(C) STATE USE OF SIMPLIFIED FORMS.—

2 The Secretary shall encourage States to take such 

3 steps as necessary to encourage the use of sim4 plified application forms, including those de5 scribed in paragraphs (3)(B) and (4)(C), to meet 

6 the requirements under subsection (b) or (c) of 

7 section 479. 

8 ‘‘(D) FEDERAL REGISTER NOTICE.—The 

9 Secretary shall publish on an annual basis a no10 tice in the Federal Register requiring State agen11 cies to inform the Secretary—

12 ‘‘(i) if the State agency is unable to 

13 permit applicants to utilize the simplified 

14 application forms described in paragraphs 

15 (3)(B) and (4)(C); and 

16 ‘‘(ii) of the State-specific data that the 

17 State agency requires for delivery of State 

18 need-based financial aid. 

19 ‘‘(E) STATE NOTIFICATION TO THE SEC20 RETARY.—

21 ‘‘(i) IN GENERAL.—Each State agency 

22 shall notify the Secretary—

23 ‘‘(I) whether the State permits an 

24 applicant to file a form described in 

25 paragraph (3)(B) or paragraph (4)(C) 
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1 of this subsection for purposes of deter2 mining eligibility for State need-based 

3 financial aid; and 

4 ‘‘(II) the State-specific data that 

5 the State agency requires for delivery 

6 of State need-based financial aid. 

7 ‘‘(ii) ACCEPTANCE OF FORMS.—In the 

8 event that a State does not permit an appli9 cant to file a form described in paragraph 

10 (3)(B) or paragraph (4)(C) of this sub11 section for purposes of determining eligi12 bility for State need-based financial aid—

13 ‘‘(I) the State shall notify the Sec14 retary if the State is not permitted to 

15 do so because of either State law or be16 cause of agency policy; and 

17 ‘‘(II) the notification under sub18 clause (I) shall include an estimate of 

19 the program cost to permit applicants 

20 to complete simplified application 

21 forms under paragraphs (3)(B) and 

22 paragraph (4)(C) of this subsection. 

23 ‘‘(iii) LACK OF NOTIFICATION BY THE

24 STATE.—If a State does not notify the Sec-
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1 retary pursuant to clause (i), the Secretary 

2 shall—

3 ‘‘(I) permit residents of that State 

4 to complete simplified application 

5 forms under paragraphs (3)(B) and 

6 paragraph (4)(C) of this subsection; 

7 and 

8 ‘‘(II) not require any resident of 

9 that State to complete any data pre10 viously required by that State under 

11 this section. 

12 ‘‘(7) CHARGES TO STUDENTS AND PARENTS FOR

13 USE OF FORMS PROHIBITED.—

14 ‘‘(A) FEES PROHIBITED.—The FAFSA, in 

15 whatever form (including the EZ–FAFSA, 

16 paper, electronic, simplified, or reapplication), 

17 shall be produced, distributed, and processed by 

18 the Secretary and no parent or student shall be 

19 charged a fee by any entity for the collection, 

20 processing, or delivery of financial aid through 

21 the use of the FAFSA. The need and eligibility 

22 of a student for financial assistance under parts 

23 A through E of this title (other than under sub24 part 4 of part A) may only be determined by 

25 using the FAFSA developed by the Secretary 
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1 pursuant to this subsection. No student may re2 ceive assistance under parts A through E of this 

3 title (other than under subpart 4 of part A), ex4 cept by use of the FAFSA developed by the Sec5 retary pursuant to this subsection. No data col6 lected on a form, worksheet, or other document 

7 for which a fee is charged shall be used to com8 plete the FAFSA. 

9 ‘‘(B) NOTICE.—Any entity that provides to 

10 students or parents, or charges students or par11 ents for, any value-added services with respect to 

12 or in connection with the FAFSA, such as com13 pletion of the FAFSA, submission of the FAFSA, 

14 or tracking of the FAFSA for a student, shall 

15 provide to students and parents clear and con16 spicuous notice that—

17 ‘‘(i) the FAFSA is a free Federal stu18 dent aid application; 

19 ‘‘(ii) the FAFSA can be completed 

20 without professional assistance; and 

21 ‘‘(iii) includes the current Internet ad22 dress for the FAFSA on the Department’s 

23 web site. 

24 ‘‘(8) APPLICATION PROCESSING CYCLE.—The 

25 Secretary shall enable students to submit a form cre-
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1 ated under this subsection in order to meet the filing 

2 requirements of this section and in order to receive 

3 aid from programs under this title and shall initiate 

4 the processing of applications under this subsection as 

5 early as practicable prior to January 1 of the stu6 dent’s planned year of enrollment.’’. 

7 (2) MASTER CALENDAR.—Section 482(a)(1)(B) 

8 (20 U.S.C. 1089) is amended to read as follows: 

9 ‘‘(B) by March 1: proposed modifications, 

10 updates, and notices pursuant to sections 478, 

11 479(c)(2)(C), and 483(a)(6) published in the 

12 Federal Register;’’. 

13 (c) INCREASING ACCESS TO TECHNOLOGY.—Section 

14 483 (20 U.S.C. 1090) is further amended by adding at the 

15 end the following: 

16 ‘‘(f) ADDRESSING THE DIGITAL DIVIDE.—The Sec17 retary shall utilize savings accrued by moving more appli18 cants to the electronic forms described in subsection (a)(4) 

19 to improve access to the electronic forms described in sub20 section (a)(4) for applicants meeting the requirements of 

21 section 479(c).’’. 

22 (d) EXPANDING THE DEFINITION OF AN INDEPENDENT

23 STUDENT.—Section 480(d) (20 U.S.C.1087vv(d)) is amend24 ed by striking paragraph (2) and inserting the following: 
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1 ‘‘(2) is an orphan, in foster care, or a ward of 

2 the court, or was in foster care or a ward of the court 

3 until the individual reached the age of 18;’’. 

4 SEC. 2126. ADDITIONAL NEED ANALYSIS AMENDMENTS. 

5 (a) INCOME PROTECTION ALLOWANCE FOR DEPEND6 ENT STUDENTS.——

7 (1) AMENDMENT.—Section 475(g)(2)(D) (20 

8 U.S.C. 1087oo(g)(2)(D)) is amended by striking 

9 ‘‘$2,200’’ and inserting ‘‘$3,000’’. 

10 (2) CONFORMING AMENDMENT.—Section 478(b) 

11 (20 U.S.C. 1087rr(b)) is amended by adding at the 

12 end the following new paragraph: 

13 ‘‘(3) REVISED AMOUNTS AFTER INCREASE.—Not14 withstanding paragraph (2), for each academic year 

15 after academic year 2006–2007, the Secretary shall 

16 publish in the Federal Register a revised income pro17 tection allowance for the purpose of section 

18 475(g)(2)(D). Such revised allowance shall be devel19 oped by increasing the dollar amount contained in 

20 such section by a percentage equal to the estimated 

21 percentage increase in the Consumer Price Index (as 

22 determined by the Secretary) between December 2005 

23 and the December next preceding the beginning of 

24 such academic year, and rounding the result to the 

25 nearest $10.’’. 
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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply with respect to deter3 minations of need for periods of enrollment beginning 

4 on or after July 1, 2006. 

5 (b) EMPLOYMENT EXPENSE ALLOWANCE.—Section 

6 478(h) (20 U.S.C. 1087rr(h)) is amended—

7 (1) by striking ‘‘476(b)(4)(B),’’; and 

8 (2) by striking ‘‘meals away from home, apparel 

9 and upkeep, transportation, and housekeeping serv10 ices’’ and inserting ‘‘food away from home, apparel, 

11 transportation, and household furnishings and oper12 ations’’. 

13 (c) DISCRETION OF STUDENT FINANCIAL AID ADMIN14 ISTRATORS.—Section 479A(a) (20 U.S.C. 1087tt(a)) is 

15 amended—

16 (1) by striking ‘‘(a) IN GENERAL.—’’ and insert17 ing the following: 

18 ‘‘(a) AUTHORITY TO MAKE ADJUSTMENTS.—

19 ‘‘(1) ADJUSTMENTS FOR SPECIAL CIR20 CUMSTANCES.—’’; 

21 (2) by inserting before ‘‘Special circumstances 

22 may’’ the following: 

23 ‘‘(2) SPECIAL CIRCUMSTANCES DEFINED.—’’; 

24 (3) by inserting ‘‘a student’s status as a ward of 

25 the court at any time prior to attaining 18 years of 
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1 age, a student’s status as an individual who was 

2 adopted at or after age 13, a student’s status as a 

3 homeless or unaccompanied youth (as defined in sec4 tion 725 of the McKinney-Vento Homeless Assistance 

5 Act),’’ after ‘‘487,’’; 

6 (4) by inserting before ‘‘Adequate documenta7 tion’’ the following: 

8 ‘‘(3) DOCUMENTATION AND USE OF SUPPLE9 MENTARY INFORMATION.—’’; and 

10 (5) by inserting before ‘‘No student’’ the fol11 lowing: 

12 ‘‘(4) FEES FOR SUPPLEMENTARY INFORMATION

13 PROHIBITED.—’’. 

14 (d) TREATING ACTIVE DUTY MEMBERS OF THE

15 ARMED FORCES AS INDEPENDENT STUDENTS.—Section 

16 480(d)(3) (20 U.S.C. 1087vv(d)(3)) is amended by inserting 

17 before the semicolon at the end the following: ‘‘or is cur18 rently serving on active duty in the Armed Forces for other 

19 than training purposes’’. 

20 (e) EXCLUDABLE INCOME.—Section 480(e) (20 U.S.C. 

21 1087vv(e)) is amended—

22 (1) by striking ‘‘and’’ at the end of paragraph 

23 (3); 

24 (2) by striking the period at the end of para25 graph (4) and inserting ‘‘; and’’; and 
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1 (3) by adding at the end the following new para2 graph: 

3 ‘‘(5) any part of any distribution from a quali4 fied tuition program established under section 529 of 

5 the Internal Revenue Code of 1986 that is not includ6 able in gross income under such section 529.’’. 

7 (f) TREATMENT OF SAVINGS PLANS.—

8 (1) AMENDMENT.—Section 480(f) (20 U.S.C. 

9 1087vv(f)) is amended—

10 (A) in paragraph (1), by inserting ‘‘quali11 fied tuition programs established under section 

12 529 of the Internal Revenue Code of 1986 (26 

13 U.S.C. 529), except as provided in paragraph 

14 (2),’’ after ‘‘tax shelters,’’; 

15 (B) by redesignating paragraph (2) as 

16 paragraph (3); and 

17 (C) by inserting after paragraph (1) the fol18 lowing new paragraph: 

19 ‘‘(2) A qualified tuition program shall not be consid20 ered an asset of a dependent student under section 475 of 

21 this part. The value of a qualified tuition program for pur22 poses of determining the assets of parents or independent 

23 students shall be—

24 ‘‘(A) the refund value of any tuition credits or 

25 certificates purchased under section 529 of the Inter-
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1 nal Revenue Code of 1986 (26 U.S.C. 529) on behalf 

2 of a beneficiary; or 

3 ‘‘(B) the current balance of any account which 

4 is established under such section for the purpose of 

5 meeting the qualified higher education expenses of the 

6 designated beneficiary of the account.’’. 

7 (2) CONFORMING AMENDMENT.—Section 480(j) 

8 (20 U.S.C. 1087vv(j)) is amended—

9 (A) by striking ‘‘; TUITION PREPAYMENT

10 PLANS’’ in the heading of such subsection; 

11 (B) by striking paragraph (2); 

12 (C) in paragraph (3), by inserting ‘‘, or a 

13 distribution that is not includable in gross in14 come under section 529 of such Code,’’ after 

15 ‘‘1986’’; and 

16 (D) by redesignating paragraph (3) as 

17 paragraph (2). 

18 (g) TREATMENT OF FAMILY OWNERSHIP OF SMALL

19 BUSINESSES.—Section 480(f)(3) of the Higher Education 

20 Act of 1965 (20 U.S.C. 1087vv(f)(3)), as redesignated by 

21 subsection (f) of this section, is amended—

22 (1) in subparagraph (A), by striking ‘‘or’’; 

23 (2) in subparagraph (B), by striking the period 

24 at the end and inserting ‘‘; or’’; and 
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1 (3) by adding at the end the following new sub2 paragraph: 

3 ‘‘(C) a small business with not more than 100 

4 full-time or full-time equivalent employees (or any 

5 part of such a small business) that is owned and con6 trolled by the family.’’. 

7 (h) DESIGNATED ASSISTANCE.—Section 480(j) (20 

8 U.S.C. 1087vv(j)) is amended by adding after paragraph 

9 (2) (as redesignated by subsection (f)(2)(D) of this section) 

10 the following new paragraph: 

11 ‘‘(3) Notwithstanding paragraph (1) and section 472, 

12 assistance not received under this title may be excluded 

13 from both estimated financial assistance and cost of attend14 ance, if that assistance is provided by a State and is des15 ignated by such State to offset a specific component of the 

16 cost of attendance. If that assistance is excluded from either 

17 estimated financial assistance or cost of attendance, it shall 

18 be excluded from both.’’. 

19 SEC. 2127. DEFINITION OF ELIGIBLE PROGRAM. 

20 Section 481(b) (20 U.S.C. 1088(b)) is amended by add21 ing at the end the following new paragraph: 

22 ‘‘(3) For purposes of this title, an eligible program in23 cludes an instructional program that utilizes direct assess24 ment of student learning, or recognizes the direct assessment 

25 of student learning, in lieu of credit hours or clock hours 
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1 as the measure of student learning. In the case of a program 

2 being determined eligible for the first time under this para3 graph, such determination shall be made by the Secretary 

4 before such program is considered to be eligible. The Sec5 retary shall provide an annual report to Congress identi6 fying the programs made eligible under this paragraph.’’. 

7 SEC. 2128. DISTANCE EDUCATION. 

8 (a) DISTANCE EDUCATION: ELIGIBLE PROGRAM.—

9 Section 481(b) (20 U.S.C. 1088(b)) is amended by adding 

10 after paragraph (3) (as added by section 2127 of this Act) 

11 the following new paragraph: 

12 ‘‘(4) An otherwise eligible program that is offered in 

13 whole or in part through telecommunications is eligible for 

14 the purposes of this title if the program is offered by an 

15 institution, other than a foreign institution, that has been 

16 evaluated and determined (before or after the date of enact17 ment of this paragraph) to have the capability to effectively 

18 deliver distance education programs by an accrediting 

19 agency or association that—

20 ‘‘(A) is recognized by the Secretary under sub21 part 2 of Part H; and 

22 ‘‘(B) has evaluation of distance education pro23 grams within the scope of its recognition, as described 

24 in section 496(n)(3).’’. 
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1 (b) CORRESPONDENCE COURSES.—Section 484(l)(1) 

2 (20 U.S.C. 1091(l)(1)) is amended—

3 (1) in subparagraph (A)—

4 (A) by striking ‘‘for a program of study of 

5 1 year or longer’’; and 

6 (B) by striking ‘‘unless the total’’ and all 

7 that follows through ‘‘courses at the institution’’; 

8 and 

9 (2) by amending subparagraph (B) to read as 

10 follows: 

11 ‘‘(B) EXCEPTION.—Subparagraph (A) does 

12 not apply to an institution or school described in 

13 section 3(3)(C) of the Carl D. Perkins Vocational 

14 and Technical Education Act of 1998.’’. 

15 SEC. 2129. STUDENT ELIGIBILITY. 

16 (a) FRAUD: REPAYMENT REQUIRED.—Section 484(a) 

17 (20 U.S.C. 1091(a)) is amended—

18 (1) by striking the period at the end of para19 graph (5) and inserting ‘‘; and’’; and 

20 (2) by adding at the end the following new para21 graph: 

22 ‘‘(6) if the student has been convicted of, or has 

23 pled nolo contendere or guilty to, a crime involving 

24 fraud in obtaining funds under this title, have com25 pleted the repayment of such funds to the Secretary, 
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1 or to the holder in the case of a loan under this title 

2 obtained by fraud.’’. 

3 (b) TECHNICAL AMENDMENT.—Section 484(b)(5) (20 

4 U.S.C. 1091(b)(5)) is amended by inserting ‘‘or parent (on 

5 behalf of a student)’’ after ‘‘student’’. 

6 (c) LOAN INELIGIBILITY BASED ON INVOLUNTARY

7 CIVIL COMMITMENT FOR SEXUAL OFFENSES.—Section 

8 484(b)(5) (20 U.S.C. 1091(b)(5)) is further amended by in9 serting before the period the following: ‘‘, and no student 

10 who is subject to an involuntary civil commitment upon 

11 completion of a period of incarceration for a sexual offense 

12 (as determined under regulations of the Secretary) is eligi13 ble to receive a loan under this title’’. 

14 (d) FREELY ASSOCIATED STATES.—Section 484(j) (20 

15 U.S.C. 1091(j)) is amended by inserting ‘‘and shall be eligi16 ble only for assistance under subpart 1 of part A there17 after,’’ after ‘‘part C,’’. 

18 (e) VERIFICATION OF INCOME DATE.—Paragraph (1) 

19 of section 484(q) (20 U.S.C. 1091(q)) is amended to read 

20 as follows: 

21 ‘‘(1) CONFIRMATION WITH IRS.—The Secretary 

22 of Education, in cooperation with the Secretary of the 

23 Treasury, is authorized to confirm with the Internal 

24 Revenue Service the information specified in section 

25 6103(l)(13) of the Internal Revenue Code of 1986 re-
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1 ported by applicants (including parents) under this 

2 title on their Federal income tax returns for the pur3 pose of verifying the information reported by appli4 cants on student financial aid applications.’’. 

5 (f) SUSPENSION OF ELIGIBILITY FOR DRUG OF6 FENSES.—Section 484(r)(1) (20 U.S.C. 1091(r)(1)) is 

7 amended by striking everything preceding the table and in8 serting the following: 

9 ‘‘(1) IN GENERAL.—A student who is convicted 

10 of any offense under any Federal or State law involv11 ing the possession or sale of a controlled substance for 

12 conduct that occurred during a period of enrollment 

13 for which the student was receiving any grant, loan, 

14 or work assistance under this title shall not be eligible 

15 to receive any grant, loan, or work assistance under 

16 this title from the date of that conviction for the pe17 riod of time specified in the following table:’’. 

18 SEC. 2130. INSTITUTIONAL REFUNDS. 

19 Section 484B (20 U.S.C. 1091b) is amended—

20 (1) in subsection (a)(1), by inserting ‘‘subpart 4 

21 of part A or’’ after ‘‘received under’’; 

22 (2) in subsection (a)(2), by striking ‘‘takes a 

23 leave’’ and by inserting ‘‘takes one or more leaves’’; 
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1 (3) in subsection (a)(3)(B)(ii), by inserting ‘‘(as 

2 determined in accordance with subsection (d))’’ after 

3 ‘‘student has completed’’; 

4 (4) in subsection (a)(4), by amending subpara5 graph (A) to read as follows: 

6 ‘‘(A) IN GENERAL.—After determining the 

7 eligibility of the student for a late disbursement 

8 or post-withdrawal disbursement (as required in 

9 regulations prescribed by the Secretary), the in10 stitution of higher education shall contact the 

11 borrower and obtain confirmation that the loan 

12 funds are still required by the borrower. In mak13 ing such contact, the institution shall explain to 

14 the borrower the borrower’s obligation to repay 

15 the funds following any such disbursement. The 

16 institution shall document in the borrower’s file 

17 the result of such contact and the final deter18 mination made concerning such disbursement.’’; 

19 (5) in subsection (b)(1), by inserting ‘‘no later 

20 than 45 days from the determination of withdrawal’’ 

21 after ‘‘return’’; 

22 (6) in subsection (b)(2), by amending subpara23 graph (C) to read as follows: 

24 ‘‘(C) GRANT OVERPAYMENT REQUIRE25 MENTS.—
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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 subparagraphs (A) and (B), a student shall 

3 only be required to return grant assistance 

4 in the amount (if any) by which—

5 ‘‘(I) the amount to be returned by 

6 the student (as determined under sub7 paragraphs (A) and (B)), exceeds 

8 ‘‘(II) 50 percent of the total grant 

9 assistance received by the student 

10 under this title for the payment period 

11 or period of enrollment. 

12 ‘‘(ii) MINIMUM.—A student shall not 

13 be required to return amounts of $50 or 

14 less.’’; and 

15 (7) in subsection (d), by striking ‘‘(a)(3)(B)(i)’’ 

16 and inserting ‘‘(a)(3)(B)’’. 

17 SEC. 2131. COLLEGE ACCESS INITIATIVE. 

18 Part G is further amended by inserting after section 

19 485C (20 U.S.C. 1092c) the following new section: 

20 ‘‘SEC. 485D. COLLEGE ACCESS INITIATIVE. 

21 ‘‘(a) STATE-BY-STATE INFORMATION.—The Secretary 

22 shall direct each guaranty agency with which the Secretary 

23 has an agreement under section 428(c) to provide to the 

24 Secretary the information necessary for the development of 

25 web links and access for students and families to a com-
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1 prehensive listing of the postsecondary education opportuni2 ties, programs, publications, Internet Web sites, and other 

3 services available in the States for which such agency serves 

4 as the designated guarantor. 

5 ‘‘(b) GUARANTY AGENCY ACTIVITIES.—

6 ‘‘(1) PLAN AND ACTIVITY REQUIRED.—Each 

7 guaranty agency with which the Secretary has an 

8 agreement under section 428(c) shall develop a plan 

9 and undertake the activity necessary to gather the in10 formation required under subsection (a) and to make 

11 such information available to the public and to the 

12 Secretary in a form and manner as prescribed by the 

13 Secretary. 

14 ‘‘(2) ACTIVITIES.—Each guaranty agency shall 

15 undertake such activities as are necessary to promote 

16 access to postsecondary education for students through 

17 providing information on college planning, career 

18 preparation, and paying for college. The guaranty 

19 agency shall publicize such information and coordi20 nate such activities with other entities that either pro21 vide or distribute such information in the States for 

22 which such guaranty agency serves as the designated 

23 guarantor. 

24 ‘‘(3) FUNDING.—The activities required by this 

25 section may be funded from the guaranty agency’s op-
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1 erating account established pursuant to section 422B 

2 and, to the extent funds remain, from earnings on the 

3 restricted account established pursuant to section 

4 422(h)(4). 

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 with 

9 this section to students, parents, and other interested 

10 individuals, through web links or other methods pre11 scribed by the Secretary. 

12 ‘‘(2) GUARANTY AGENCY RESPONSIBILITY.—The 

13 guaranty agencies shall ensure that the information 

14 required by this section is available without charge in 

15 printed format for students and parents requesting 

16 such information. 

17 ‘‘(3) PUBLICITY.—Within 270 days after the date 

18 of enactment of the Higher Education Budget Rec19 onciliation Act of 2005, the Secretary and guaranty 

20 agencies shall publicize the availability of the infor21 mation required by this section, with special empha22 sis on ensuring that populations that are tradition23 ally underrepresented in postsecondary education are 

24 made aware of the availability of such information.’’. 
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1 SEC. 2132. CANCELLATION OF STUDENT LOAN INDEBTED2 NESS FOR SURVIVORS OF VICTIMS OF THE 

3 SEPTEMBER 11, 2001, ATTACKS. 

4 (a) DEFINITIONS.—For purposes of this section: 

5 (1) ELIGIBLE PUBLIC SERVANT.—The term ‘‘eli6 gible public servant’’ means an individual who, as de7 termined in accordance with regulations of the Sec8 retary—

9 (A) served as a police officer, firefighter, 

10 other safety or rescue personnel, or as a member 

11 of the Armed Forces; and 

12 (B) died (or dies) or became (or becomes) 

13 permanently and totally disabled due to injuries 

14 suffered in the terrorist attacks on September 11, 

15 2001. 

16 (2) ELIGIBLE VICTIM.—The term ‘‘eligible vic17 tim’’ means an individual who, as determined in ac18 cordance with regulations of the Secretary, died (or 

19 dies) or became (or becomes) permanently and totally 

20 disabled due to injuries suffered in the terrorist at21 tacks on September 11, 2001. 

22 (3) ELIGIBLE PARENT.—The term ‘‘eligible par23 ent’’ means the parent of an eligible victim if—

24 (A) the parent owes a Federal student loan 

25 that is a consolidation loan that was used to 
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1 repay a PLUS loan incurred on behalf of such 

2 eligible victim; or 

3 (B) the parent owes a Federal student loan 

4 that is a PLUS loan incurred on behalf of an el5 igible victim. 

6 (4) SECRETARY.—The term ‘‘Secretary’’ means 

7 the Secretary of Education. 

8 (5) FEDERAL STUDENT LOAN.—The term ‘‘Fed9 eral student loan’’ means any loan made, insured, or 

10 guaranteed under part B, D, or E of title IV of the 

11 Higher Education Act of 1965. 

12 (b) RELIEF FROM INDEBTEDNESS.—

13 (1) IN GENERAL.—The Secretary shall provide 

14 for the discharge or cancellation of—

15 (A) the Federal student loan indebtedness of 

16 the spouse of an eligible public servant, as deter17 mined in accordance with regulations of the Sec18 retary, including any consolidation loan that 

19 was used jointly by the eligible public servant 

20 and his or her spouse to repay the Federal stu21 dent loans of the spouse and the eligible public 

22 servant; 

23 (B) the portion incurred on behalf of the eli24 gible victim (other than an eligible public serv25 ant), of a Federal student loan that is a consoli-
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1 dation loan that was used jointly by the eligible 

2 victim and his or her spouse, as determined in 

3 accordance with regulations of the Secretary, to 

4 repay the Federal student loans of the eligible 

5 victim and his or her spouse; 

6 (C) the portion of the consolidation loan in7 debtedness of an eligible parent that was in8 curred on behalf of an eligible victim; and 

9 (D) the PLUS loan indebtedness of an eligi10 ble parent that was incurred on behalf of an eli11 gible victim. 

12 (2) METHOD OF DISCHARGE OR CANCELLA13 TION.—A loan required to be discharged or canceled 

14 under paragraph (1) shall be discharged or canceled 

15 by the method used under section 437(a), 455(a)(1), 

16 or 464(c)(1)(F) of the Higher Education Act of 1965 

17 (20 U.S.C. 1087(a), 1087e(a)(1), 1087dd(c)(1)(F)), 

18 whichever is applicable to such loan. 

19 (c) FACILITATION OF CLAIMS.—The Secretary shall—

20 (1) establish procedures for the filing of applica21 tions for discharge or cancellation under this section 

22 by regulations that shall be prescribed and published 

23 within 90 days after the date of enactment of this Act 

24 and without regard to the requirements of section 553 

25 of title 5, United States Code; and 
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1 (2) take such actions as may be necessary to 

2 publicize the availability of discharge or cancellation 

3 of Federal student loan indebtedness under this sec4 tion. 

5 (d) AVAILABILITY OF FUNDS FOR PAYMENTS.—Funds 

6 available for the purposes of making payments to lenders 

7 in accordance with section 437(a) for the discharge of in8 debtedness of deceased or disabled individuals shall be avail9 able for making payments under section 437(a) to lenders 

10 of loans as required by this section. 

11 (e) APPLICABLE TO OUTSTANDING DEBT.—The provi12 sions of this section shall be applied to discharge or cancel 

13 only Federal student loans (including consolidation loans) 

14 on which amounts were owed on September 11, 2001. Noth15 ing in this section shall be construed to authorize any re16 funding of any repayment of a loan. 

17 SEC. 2133. INDEPENDENT EVALUATION OF DISTANCE EDU18 CATION PROGRAMS. 

19 (a) INDEPENDENT EVALUATION.—The Secretary of 

20 Education shall enter into an agreement with the National 

21 Academy of Sciences to conduct a scientifically correct and 

22 statistically valid evaluation of the quality of distance edu23 cation programs, as compared to campus-based education 

24 programs, at institutions of higher education. Such evalua25 tion shall include—
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1 (1) identification of the elements by which the 

2 quality of distance education, as compared to cam3 pus-based education, can be assessed, including ele4 ments such as subject matter, interactivity, and stu5 dent outcomes; 

6 (2) identification of distance and campus-based 

7 education program success, with respect to student 

8 achievement, in relation to the mission of the institu9 tion of higher education; and 

10 (3) identification of the types of students (in11 cluding classification of types of students based on 

12 student age) who most benefit from distance education 

13 programs, the types of students who most benefit from 

14 campus-based education programs, and the types of 

15 students who do not benefit from distance education 

16 programs, by assessing elements including access to 

17 higher education, job placement rates, undergraduate 

18 graduation rates, and graduate and professional de19 gree attainment rates. 

20 (b) SCOPE.—The National Academy of Sciences shall 

21 select for participation in the evaluation under subsection 

22 (a) a diverse group of institutions of higher education with 

23 respect to size, mission, and geographic distribution. 

24 (c) INTERIM AND FINAL REPORTS.—The agreement 

25 under subsection (a) shall require that the National Acad-
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1 emy of Sciences submit to the Secretary of Education, the 

2 Committee on Health, Education, Labor and Pensions of 

3 the Senate, and the Committee on Education and the Work4 force of the House of Representatives—

5 (1) an interim report regarding the evaluation 

6 under subsection (a) not later than December 31, 

7 2007; and 

8 (2) a final report regarding such evaluation not 

9 later than December 31, 2009. 

10 SEC. 2134. DISBURSEMENT OF STUDENT LOANS. 

11 Section 422(d) of the Higher Education Amendments 

12 of 1998 (Public Law 105–244; 112 Stat. 1696) is amended 

13 by adding at the end the following new sentence: ‘‘Such 

14 amendments shall also be effective on and after July 1, 

15 2006.’’. 

16 PART 2—HIGHER EDUCATION RELIEF 

17 SEC. 2141. REFERENCES. 

18 References in this part to ‘‘the Act’’ are references to 

19 the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.). 

20 SEC. 2142. WAIVERS AND MODIFICATIONS. 

21 Notwithstanding any other provision of law, unless en22 acted with specific reference to this section, the Secretary 

23 of Education is authorized to waive or modify any statu24 tory or regulatory provision applicable to the student finan25 cial assistance programs under title IV of the Act, or any 
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1 student or institutional eligibility provisions in the Act, as 

2 the Secretary of Education deems necessary in connection 

3 with a Gulf hurricane disaster to ensure that—

4 (1) the calculation of expected family contribu5 tion under section 474 of the Act used in the deter6 mination of need for student financial assistance 

7 under title IV of the Act for any affected student (and 

8 the determination of such need for his or her family, 

9 if applicable), is modified to reflect any changes in 

10 the financial condition of such affected student and 

11 his or her family resulting from a Gulf hurricane dis12 aster; and 

13 (2) institutions of higher education, systems of 

14 institutions, or consortia of institutions that are lo15 cated in an area affected by a Gulf hurricane dis16 aster, or that are serving affected students, are eligi17 ble, notwithstanding section 486(d) of the Act, to 

18 apply for participation in the distance education 

19 demonstration program under section 486 of the Act, 

20 except that the Secretary of Education shall include 

21 in reports under section 486(f) of the Act an identi22 fication of those institutions, systems, and consortia 

23 that were granted participation in the demonstration 

24 program due to a Gulf hurricane disaster. 
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1 SEC. 2143. CANCELLATION OF INSTITUTIONAL REPAYMENT 

2 BY COLLEGES AND UNIVERSITIES AFFECTED 

3 BY A GULF HURRICANE DISASTER. 

4 Notwithstanding any provision of title IV of the Act 

5 or any regulation issued thereunder, the Secretary of Edu6 cation shall cancel any obligation of an affected institution 

7 to return or repay any funds the institution received before 

8 the date of enactment of this Act for, or on behalf of, its 

9 students under subpart 1 or 3 of part A or parts B, C, 

10 D, or E of title IV of the Act for any cancelled enrollment 

11 period. 

12 SEC. 2144. CANCELLATION OF STUDENT LOANS FOR CAN13 CELLED ENROLLMENT PERIODS. 

14 (a) LOAN FORGIVENESS AUTHORIZED.—Notwith15 standing any provision of title IV of the Act, the Secretary 

16 shall discharge all loan amounts under parts B and D of 

17 title IV of the Act, and cancel any loan made under part 

18 E of such title, disbursed to, or on behalf of, an affected 

19 student for a cancelled enrollment period. 

20 (b) REIMBURSEMENT.—The Secretary of Education 

21 shall—

22 (1) reimburse each affected institution for any 

23 amounts discharged under subsection (a) with respect 

24 to a loan under part E of title IV of the Act in the 

25 same manner as is required by section 465(b) of the 
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1 Act with respect to a loan cancelled under section 

2 465(a) of the Act; and 

3 (2) reimburse lenders for the purpose of dis4 charging any loan amounts disbursed to, or on behalf 

5 of, an affected student under part B of title IV of the 

6 Act for a cancelled enrollment period. 

7 (c) LIMITATION ON CONSOLIDATION LOANS.—A loan 

8 amount for a loan made under section 428C of the Act or 

9 a Federal Direct Consolidation Loan may be eligible for 

10 discharge under this section only to the extent that such 

11 loan amount was used to repay a loan to an affected student 

12 for a cancelled enrollment period. 

13 (d) CONSTRUCTION.—Nothing in this section shall be 

14 construed to authorize any refunding of any repayment of 

15 a loan. 

16 SEC. 2145. TEMPORARY DEFERMENT OF STUDENT LOAN RE17 PAYMENT. 

18 An affected individual who is a borrower of a qualified 

19 student loan or a qualified parent loan shall be granted 

20 a deferment, not in excess of 6 months, during which peri21 odic installments of principal need not be paid, and inter22 est—

23 (1) shall accrue and be paid by the Secretary, in 

24 the case of a loan made under section 428, 428B, 

25 428C, or 428H of the Act; 
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1 (2) shall accrue and be paid by the Secretary to 

2 the Perkins loan fund held by the institution of higher 

3 education that made the loan, in the case of a loan 

4 made under part E of title IV of the Act; and 

5 (3) shall not accrue, in the case of a Federal Di6 rect Loan made under part D of such title. 

7 SEC. 2146. NO AFFECT ON GRANT AND LOAN LIMITS. 

8 Notwithstanding any provision of title IV of the Act 

9 or any regulation issued thereunder, no grant or loan funds 

10 received by an affected student under title IV of the Act 

11 for a cancelled enrollment period shall be counted against 

12 such affected student’s annual or aggregate grant or loan 

13 limits for the receipt of grants or loans under that title. 

14 SEC. 2147. TEACHER LOAN RELIEF. 

15 The Secretary of Education may waive the require16 ment of sections 428J(b)(1) and 460(b)(1)(A) of the Higher 

17 Education Act of 1965 that the 5 years of qualifying service 

18 be consecutive academic years for any teacher whose em19 ployment was interrupted if—

20 (1) the teacher was employed in qualifying serv21 ice, at the time of a Gulf hurricane disaster, in a 

22 school located in an area affected by a Gulf hurricane 

23 disaster; and 

24 (2) the teacher resumes qualifying service not 

25 later than the beginning of academic year 2006–2007 
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1 in that school or any other school in which employ2 ment is qualifying service under such section. 

3 SEC. 2148. EXPANDING INFORMATION DISSEMINATION RE4 GARDING ELIGIBILITY FOR PELL GRANTS. 

5 (a) IN GENERAL.—The Secretary of Education shall 

6 make special efforts, in conjunction with State efforts, to 

7 notify affected students and if applicable, their parents, who 

8 qualify for means-tested Federal benefit programs, of their 

9 potential eligibility for a maximum Pell Grant, and shall 

10 disseminate such informational materials as the Secretary 

11 of Education deems appropriate. 

12 (b) MEANS-TESTED FEDERAL BENEFIT PROGRAM.—

13 For the purpose of this section, the term ‘‘means-tested Fed14 eral benefit program’’ means a mandatory spending pro15 gram of the Federal Government, other than a program 

16 under the Act, in which eligibility for the program’s bene17 fits, or the amount of such benefits, or both, are determined 

18 on the basis of income or resources of the individual or fam19 ily seeking the benefit, and may include such programs as 

20 the supplemental security income program under title XVI 

21 of the Social Security Act, the food stamp program under 

22 the Food Stamp Act of 1977, the free and reduced price 

23 school lunch program established under the Richard B. Rus24 sell National School Lunch Act, the temporary assistance 

25 to needy families program established under part A of title 
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1 IV of the Social Security Act, and the women, infants, and 

2 children program established under section 17 of the Child 

3 Nutrition Act of 1966, and other programs identified by 

4 the Secretary of Education. 

5 SEC. 2149. PROCEDURES. 

6 (a) DEADLINES AND PROCEDURES.—Sections 482(c) 

7 and 492 of the Act (20 U.S.C. 1089(c), 1098a) shall not 

8 apply to any waivers, modifications, or actions initiated 

9 by the Secretary of Education under this part. 

10 (b) CASE-BY-CASE BASIS.—The Secretary of Edu11 cation is not required to exercise any waiver or modifica12 tion authority under this part on a case-by-case basis. 

13 SEC. 2150. TERMINATION OF AUTHORITY. 

14 The authority of the Secretary of Education to issue 

15 waivers or modifications under this part shall expire at the 

16 conclusion of the 2005–2006 academic year, but the expira17 tion of such authority shall not affect the continuing valid18 ity of any such waivers or modifications after such aca19 demic year. 

20 SEC. 2151. DEFINITIONS. 

21 For the purposes of this part, the following terms have 

22 the following meanings: 

23 (1) AFFECTED INDIVIDUAL.—The term ‘‘affected 

24 individual’’ means an individual who has applied for 
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1 or received student financial assistance under title IV 

2 of the Higher Education Act of 1965, and—

3 (A) who is an affected student; or 

4 (B) whose primary place of employment or 

5 residency was, as of August 29, 2005, in an area 

6 affected by a Gulf hurricane disaster. 

7 (2) AFFECTED INSTITUTION.—The term ‘‘affected 

8 institution’’ means an institution of higher education 

9 that—

10 (A) is located in an area affected by a Gulf 

11 hurricane disaster; and 

12 (B) has temporarily ceased operations as a 

13 consequence of a Gulf hurricane disaster, as de14 termined by the Secretary of Education. 

15 (3) AFFECTED STATE.—The term ‘‘affected 

16 State’’ means the State of Alabama, Florida, Lou17 isiana, Mississippi, or Texas. 

18 (4) AFFECTED STUDENT.—The term ‘‘affected 

19 student’’ means an individual who has applied for or 

20 received student financial assistance under title IV of 

21 the Higher Education Act of 1965, and who—

22 (A) was enrolled or accepted for enrollment, 

23 as of August 29, 2005, at an institution of high24 er education in an area affected by a Gulf hurri25 cane disaster; 
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1 (B) was a dependent student enrolled or ac2 cepted for enrollment at an institution of higher 

3 education that is not in an area affected by a 

4 Gulf hurricane disaster, but whose parents re5 sided or were employed, as of August 29, 2005, 

6 in an area affected by a Gulf hurricane disaster; 

7 or 

8 (C) was enrolled or accepted for enrollment 

9 at an institution of higher education, as of Au10 gust 29, 2005, and whose attendance was inter11 rupted because of a Gulf hurricane disaster. 

12 (5) AREA AFFECTED BY A GULF HURRICANE DIS13 ASTER.—The term ‘‘area affected by a Gulf hurricane 

14 disaster’’ means a county or parish, in an affected 

15 State, that has been designated by the Federal Emer16 gency Management Agency for disaster assistance for 

17 individuals and households as a result of Hurricane 

18 Katrina or Hurricane Rita. 

19 (6) CANCELLED ENROLLMENT PERIOD.—The 

20 term ‘‘cancelled enrollment period’’ means any period 

21 of enrollment at an affected institution during the 

22 academic year 2005. 

23 (7) GULF HURRICANE DISASTER.—The term 

24 ‘‘Gulf hurricane disaster’’ means a major disaster 

25 that the President declared to exist, in accordance 
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1 with section 401 of the Robert T. Stafford Disaster 

2 Relief and Emergency Assistance Act, and that was 

3 caused by Hurricane Katrina or Hurricane Rita. 

4 (8) INSTITUTION OF HIGHER EDUCATION.—The 

5 term ‘‘institution of higher education’’ has the mean6 ing given such term in section 102 of the Higher Edu7 cation Act of 1965, except that the term does not in8 clude institutions under subsection (a)(1)(C) of that 

9 section. 

10 (9) QUALIFIED STUDENT LOAN.—The term 

11 ‘‘qualified student loan’’ means any loan made, in12 sured, or guaranteed under part B, D, or E of title 

13 IV of the Higher Education Act of 1965, other than 

14 a loan under section 428B of such title or a Federal 

15 Direct Plus loan. 

16 (10) QUALIFIED PARENT LOAN.—The term 

17 ‘‘qualified parent loan’’ means a loan made under 

18 section 428B of title IV of the Higher Education Act 

19 of 1965 or a Federal Direct Plus loan. 

20 Subtitle C—Pensions 

21 SEC. 2201. INCREASES IN PBGC PREMIUMS. 

22 (a) FLAT-RATE PREMIUMS.—Clause (i) of section 

23 4006(a)(3)(A) of the Employee Retirement Income Security 

24 Act of 1974 (29 U.S.C. 1306(a)(3)(A)) is amended by strik25 ing ‘‘$19’’ and inserting ‘‘$30’’. 
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1 (b) ADJUSTMENT FOR INFLATION.—Paragraph (3) of 

2 section 4006(a) of such Act (29 U.S.C. 1306(a)) is amended 

3 by adding at the end the following new subparagraph: 

4 ‘‘(F) For each plan year beginning after 2006, there 

5 shall be substituted for the $30 dollar amount in subpara6 graph (A)(i) the amount equal to the product derived by 

7 multiplying the premium rate, as in effect under this para8 graph immediately prior to such plan year for basic bene9 fits guaranteed by the corporation under section 4022 for 

10 single-employer plans, by the ratio of—

11 ‘‘(i) the national average wage index (as defined 

12 in section 209(k)(1) of the Social Security Act) for the 

13 first of the 2 calendar years preceding the calendar 

14 year in which such plan year begins, to 

15 ‘‘(ii) the national average wage index (as so de16 fined) for the first of the 3 calendar years preceding 

17 the calendar year in which the plan year begins, 

18 with such product, if not a multiple of $1, being rounded 

19 to the next higher multiple of $1 where such product is a 

20 multiple of $0.50 but not of $1, and to the nearest multiple 

21 of $1 in any other case.’’. 

22 (c) ADDITIONAL DISCRETIONARY INCREASE.—Para23 graph (3) of section 4006(a) of such Act (as amended by 

24 subsection (b) of this section) is further amended by adding 

25 at the end the following new subparagraph: 
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1 ‘‘(G)(i) The corporation may increase under this sub2 paragraph, effective for plan years commencing with or 

3 during any calendar year after 2006, the premium rate oth4 erwise in effect under this section for basic benefits guaran5 teed by it under section 4022 for single-employer plans if 

6 the corporation determines that such increase is necessary 

7 to achieve actuarial soundness in the plan termination in8 surance program under this title. 

9 ‘‘(ii) The amount of any premium rate described in 

10 clause (i), as increased under this subparagraph for plan 

11 years commencing with or during any calendar year, may 

12 not exceed by more than 20 percent the amount of the pre13 mium rate, in effect under this paragraph for plan years 

14 commencing with or during such calendar year for basic 

15 benefits guaranteed by the corporation under section 4022 

16 for single-employer plans, as determined for plan years 

17 commencing with or during such calendar year without re18 gard to this subparagraph. 

19 ‘‘(iii) The preceding provisions of this subparagraph 

20 shall apply in connection with plan years commencing with 

21 or during any calendar year only if—

22 ‘‘(I) the corporation transmits to each House of 

23 the Congress and to the Comptroller General its pro24 posal for the increase in the premium rate for plan 

25 years commencing with or during such calendar year, 
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1 subject to Congressional review under chapter 8 of 

2 title 5 of the United States Code (relating to Congres3 sional review of agency rulemaking) not later than 

4 120 calendar days after the beginning of the pre5 ceding calendar year, and 

6 ‘‘(II) a joint resolution disapproving such in7 crease has not been enacted as provided in section 802 

8 of such title, within the 60-day period described in 

9 section 802(a) of such title. 

10 The proposal transmitted by the corporation shall include 

11 a description of the methodologies and assumptions used in 

12 formulating its proposal. At the time of the transmittal of 

13 any such proposal to each House of the Congress pursuant 

14 to subclause (I), the corporation shall transmit a copy of 

15 such proposal to the Committee on Education and the 

16 Workforce and the Committee on Ways and Means of the 

17 House of Representatives and the Committee on Health, 

18 Education, Labor, and Pensions and the Committee on Fi19 nance of the Senate. Any such proposal shall, for purposes 

20 of chapter 8 of such title 5, be treated as a rule which is 

21 a major rule.’’. 

22 (d) PREMIUM RATE FOR CERTAIN TERMINATED SIN23 GLE-EMPLOYER PLANS.—Subsection (a) of section 4006 of 

24 such Act (29 U.S.C. 1306) is amended by adding at the 

25 end the following: 
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1 ‘‘(7) PREMIUM RATE FOR CERTAIN TERMINATED SIN2 GLE-EMPLOYER PLANS.—

3 ‘‘(A) IN GENERAL.—If there is a termination of 

4 a single-employer plan under clause (ii) or (iii) of 

5 section 4041(c)(2)(B) or section 4042, there shall be 

6 payable to the corporation, with respect to each appli7 cable 12-month period, a premium at a rate equal to 

8 $1,250 multiplied by the number of individuals who 

9 were participants in the plan immediately before the 

10 termination date. Such premium shall be in addition 

11 to any other premium under this section. 

12 ‘‘(B) SPECIAL RULE FOR PLANS TERMINATED IN

13 BANKRUPTCY REORGANIZATION.—If the plan is termi14 nated under 4041(c)(2)(B)(ii) or under section 4042 

15 and, as of the termination date, a person who is (as 

16 of such date) a contributing sponsor of the plan or a 

17 member of such sponsor’s controlled group has filed or 

18 has had filed against such person a petition seeking 

19 reorganization in a case under title 11 of the United 

20 States Code, or under any similar law of a State or 

21 a political subdivision of a State (or a case described 

22 in section 4041(c)(2)(B)(i) filed by or against such 

23 person has been converted, as of such date, to such a 

24 case in which reorganization is sought), subparagraph 
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1 (A) shall not apply to such plan until the date of the 

2 discharge of such person in such case. 

3 ‘‘(C) APPLICABLE 12-MONTH PERIOD.—For pur4 poses of subparagraph (A)—

5 ‘‘(i) IN GENERAL.—The term ‘applicable 12-

6 month period’ means—

7 ‘‘(I) the 12-month period beginning 

8 with the first month following the month in 

9 which the termination date occurs, and 

10 ‘‘(II) each of the first two 12-month pe11 riods immediately following the period de12 scribed in subclause (I). 

13 ‘‘(ii) PLANS TERMINATED IN BANKRUPTCY

14 REORGANIZATION.—In any case in which the re15 quirements of subparagraph (B) are met in con16 nection with the termination of the plan with re17 spect to 1 or more persons described in such sub18 paragraph, the 12-month period described in 

19 clause (i)(I) shall be the 12-month period begin20 ning with the first month following the month 

21 which includes the earliest date as of which each 

22 such person is discharged in the case described in 

23 such clause in connection with such person. 

24 ‘‘(D) COORDINATION WITH SECTION 4007.—

25 ‘‘(i) Notwithstanding section 4007—
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1 ‘‘(I) premiums under this paragraph 

2 shall be due within 30 days after the begin3 ning of any applicable 12-month period, 

4 and 

5 ‘‘(II) the designated payor shall be the 

6 person who is the contributing sponsor as of 

7 immediately before the termination date. 

8 ‘‘(ii) The fifth sentence of section 4007(a) 

9 shall not apply in connection with premiums de10 termined under this paragraph.’’. 

11 (e) CONFORMING AMENDMENTS.—

12 (1) Section 4006(a)(2) of such Act (29 U.S.C. 

13 1306(a)(2)) is amended, in the matter following sub14 paragraph (E), by inserting ‘‘paragraph (3)(G) of 

15 this subsection or’’ after ‘‘Except as provided in’’. 

16 (2) Section 4006(b)(1) of such Act (29 U.S.C. 

17 1306(b)(1)) is amended by inserting ‘‘or a proposal 

18 for a premium rate increase under subsection 

19 (a)(3)(G)’’ after ‘‘or (E)’’. 

20 (f) EFFECTIVE DATES.—

21 (1) IN GENERAL.—Except as otherwise provided 

22 in this subsection, the amendments made by this sec23 tion shall apply to plan years beginning after Decem24 ber 31, 2005. 
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1 (2) PREMIUM RATE FOR CERTAIN TERMINATED

2 SINGLE-EMPLOYER PLANS.—

3 (A) IN GENERAL.—Except as provided in 

4 subparagraph (B), the amendment made by sub5 section (d) shall apply with respect to termi6 nations for which the termination date occurs on 

7 or after the date of the enactment of this Act. 

8 (B) TREATMENT OF CASES IN BANK9 RUPTCY.—In any case in which the requirements 

10 of subparagraph (B) of section 4007(a)(7) of the 

11 Employee Retirement Income Security Act of 

12 1974 (as added by subsection (d)) are met in 

13 connection with the termination of the plan with 

14 respect to 1 or more persons described in such 

15 subparagraph, the amendment made by sub16 section (d) shall apply with respect to any such 

17 termination described in such subparagraph (B), 

18 notwithstanding subparagraph (A) of this para19 graph, if the case under title 11, United States 

20 Code, or under any similar law of a State or po21 litical subdivision of a State (referred to in such 

22 subparagraph (B)) commenced after October 26, 

23 2005. 

24 (3) SPECIAL RULE IF SUBSEQUENT SAVINGS EN25 ACTED.—The amendments made by this section shall 
220

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1 not take effect if, after the date of enactment of this 

2 Act and before January 1, 2006, a Federal law is en3 acted which—

4 (A) provides for decreases in Federal out5 lays which in the aggregate are less than the de6 creases in Federal outlays by reason of the 

7 amendments made by this section; and 

8 (B) specifically provides that such decreases 

9 are to be in lieu of the decreases in Federal out10 lays by reason of the amendments made by this 

11 section.

12 TITLE III—COMMITTEE ON 

13 ENERGY AND COMMERCE

Subtitle A—Medicaid 

Sec. 3100. Short title of subtitle; rule of construction with regard to Katrina evacuees. 

CHAPTER 1—PAYMENT FOR PRESCRIPTION DRUGS

Sec. 3101. Federal upper limit (FUL). 

Sec. 3102. Collection and submission of utilization data for certain physician administered drugs. 

Sec. 3103. Improved regulation of drugs sold under a new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act. 

Sec. 3104. Children’s hospital participation in section 340B drug discount program. 

Sec. 3105. Improving patient outcomes through greater reliance on science and 

best practices. 

CHAPTER 2—REFORM OF ASSET TRANSFER RULES

Sec. 3111. Lengthening look-back period; change in beginning date for period of 

ineligibility. 

Sec. 3112. Disclosure and treatment of annuities and of large transactions. 

Sec. 3113. Application of ‘‘income-first’’ rule in applying community spouse’s income before assets in providing support of community spouse. 

Sec. 3114. Disqualification for long-term care assistance for individuals with substantial home equity. 
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Sec. 3115. Enforceability of continuing care retirement communities (CCRC) and 

life care community admission contracts. 

CHAPTER 3—FLEXIBILITY IN COST SHARING AND BENEFITS

Sec. 3121. State option for alternative medicaid premiums and cost sharing. 

Sec. 3122. Special rules for cost sharing for prescription drugs. 

Sec. 3123. Emergency room copayments for non-emergency care. 

Sec. 3124. Use of benchmark benefit packages. 

Sec. 3125. State option to establish non-emergency medical transportation program. 

Sec. 3126. Exempting women covered under breast or cervical cancer program. 

CHAPTER 4—EXPANDED ACCESS TO CERTAIN BENEFITS

Sec. 3131. Expanded access to home and community-based services for the elderly 

and disabled. 

Sec. 3132. Optional choice of self-directed personal assistance services (cash and 

counseling). 

Sec. 3133. Expansion of State long-term care partnership program. 

Sec. 3134. Health opportunity accounts. 

CHAPTER 5—OTHER PROVISIONS

Sec. 3141. Increase in medicaid payments to insular areas. 

Sec. 3142. Managed care organization provider tax reform. 

Sec. 3143. Medicaid transformation grants. 

Sec. 3144. Enhancing third party identification and payment. 

Sec. 3145. Improved enforcement of documentation requirements. 

Sec. 3146. Reforms of targeted case management. 

Sec. 3147. Emergency services furnished by non-contract providers for medicaid 

managed care enrollees. 

Sec. 3148. Adjustment in computation of medicaid FMAP to disregard an extraordinary employer pension contribution. 

Subtitle B—Katrina Health Care Relief 

Sec. 3201. Targeted medicaid relief for States affected by Hurricane Katrina. 

Sec. 3202. State high risk health insurance pool funding. 

Sec. 3203. Recomputation of HPSA, MUA, and MUP designations within Hurricane Katrina affected areas. 

Sec. 3204. Waiver of certain requirements applicable to the provision of health 

care in areas impacted by Hurricane Katrina. 

Sec. 3205. FMAP hold harmless for Katrina impact. 

Subtitle C—Katrina and Rita Energy Relief 

Sec. 3301. Hurricanes Katrina and Rita energy relief. 

Subtitle D—Digital Television Transition 

Sec. 3401. Short title. 

Sec. 3402. Findings. 

Sec. 3403. Analog spectrum recovery: hard deadline. 

Sec. 3404. Auction of recovered spectrum. 

Sec. 3405. Digital Television Conversion Fund. 

Sec. 3406. Public Safety Interoperable Communications Fund. 

Sec. 3407. NYC 9/11 Digital Transition Fund. 
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Sec. 3408. Low-power television transition provisions. 

Sec. 3409. Consumer education regarding analog televisions. 

Sec. 3410. Additional provisions. 

Sec. 3411. Deployment of broadband wireless technologies. 

Sec. 3412. Sense of Congress. 

Sec. 3413. Band plan revision required.

1 Subtitle A—Medicaid 

2 SEC. 3100. SHORT TITLE OF SUBTITLE; RULE OF CONSTRUC3 TION WITH REGARD TO KATRINA EVACUEES. 

4 (a) SHORT TITLE.—This subtitle may be cited as the 

5 ‘‘Medicaid Reconciliation Act of 2005’’. 

6 (b) RULE OF CONSTRUCTION WITH REGARD TO

7 KATRINA EVACUEES.—None of the provisions of the fol8 lowing chapters of this subtitle shall apply during the 11-

9 month period beginning September 1, 2005, to individuals 

10 entitled to medical assistance under title XIX of the Social 

11 Security Act by reason of their residence in a parish in 

12 the State of Louisiana, or a county in the State of Mis13 sissippi or Alabama, for which a major disaster has been 

14 declared in accordance with section 401 of the Robert T. 

15 Stafford Disaster Relief and Emergency Assistance Act (42 

16 U.S.C. 5170) as a result of Hurricane Katrina and which 

17 the President has determined, before September 14, 2005, 

18 warrants individual and public assistance from the Federal 

19 Government under such Act. 
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1 CHAPTER 1—PAYMENT FOR 

2 PRESCRIPTION DRUGS 

3 SEC. 3101. FEDERAL UPPER LIMIT (FUL). 

4 (a) IN GENERAL.—Subsection (e) of section 1927 of 

5 the Social Security Act (42 U.S.C. 1396r–8) is amended 

6 to read as follows: 

7 ‘‘(e) PHARMACY REIMBURSEMENT LIMITS.—

8 ‘‘(1) FEDERAL UPPER LIMIT FOR INGREDIENT

9 COST OF COVERED OUTPATIENT DRUGS.—

10 ‘‘(A) IN GENERAL.—Subject to subpara11 graph (B), no Federal financial participation 

12 shall be available for payment for the ingredient 

13 cost of a covered outpatient drug in excess of the 

14 Federal upper limit for that drug established 

15 under paragraph (2). 

16 ‘‘(B) OPTIONAL CARVE OUT.—A State may 

17 elect not to apply subparagraph (A) to payment 

18 for either or both of the following: 

19 ‘‘(i) Drugs dispensed by specialty 

20 pharmacies (such as those dispensing only 

21 immunosuppressive drugs), as defined by 

22 the Secretary. 

23 ‘‘(ii) Drugs administered by a physi24 cian in a physician’s office. 

25 ‘‘(2) FEDERAL UPPER LIMIT.—
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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (D) and subject to paragraph (5), 

3 the Federal upper limit established under this 

4 paragraph for the ingredient cost of a—

5 ‘‘(i) single source drug, is 106 percent 

6 of the RAMP (as defined in subparagraph 

7 (B)(i)) for that drug; and 

8 ‘‘(ii) multiple source drug, is 120 per9 cent of the volume weighted average RAMP 

10 (as determined under subparagraph (C)) for 

11 that drug. 

12 A drug product that is a single source drug and 

13 that becomes a multiple source drug shall con14 tinue to be treated under this subsection as a 

15 single source drug until the Secretary determines 

16 that there are sufficient data to compile the vol17 ume weighted average RAMP for that drug. 

18 ‘‘(B) RAMP AND RELATED PROVISIONS.—

19 For purposes of this subsection: 

20 ‘‘(i) RAMP DEFINED.—The term 

21 ‘RAMP’ means, with respect to a covered 

22 outpatient drug by a manufacturer for a 

23 calendar quarter and subject to clauses (ii) 

24 and (iii), the average price paid to a manu25 facturer for the drug in the United States 
225

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1 in the quarter by wholesalers for drugs dis2 tributed to retail pharmacies, excluding 

3 service fees that are paid by the manufac4 turer to an entity and that represent fair 

5 market value for a bona-fide service pro6 vided by the entity. 

7 ‘‘(ii) SALES EXEMPTED FROM COM8 PUTATION.—The RAMP under clause (i) 

9 shall exclude any of the following: 

10 ‘‘(I) Sales exempt from inclusion 

11 in the determination of best price 

12 under subsection (c)(1)(C)(i). 

13 ‘‘(II) Such other sales as the Sec14 retary identifies as sales to an entity 

15 that are merely nominal in amount 

16 under subsection (c)(1)(C)(ii)(III). 

17 ‘‘(iii) SALE PRICE NET OF DIS18 COUNTS.—In calculating the RAMP under 

19 clause (i), such RAMP shall include any of 

20 the following: 

21 ‘‘(I) Cash discounts and volume 

22 discounts. 

23 ‘‘(II) Free goods that are contin24 gent upon any purchase requirement. 
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1 ‘‘(III) Sales at a nominal price 

2 that are contingent upon any purchase 

3 requirement or agreement. 

4 ‘‘(IV) Chargebacks, rebates (not 

5 including rebates provided under an 

6 agreement under this section), or any 

7 other direct or indirect discounts. 

8 ‘‘(V) Any other price concessions, 

9 which may be based on recommenda10 tions of the Inspector General of the 

11 Department of Health and Human 

12 Services, that would result in a reduc13 tion of the cost to the purchaser. 

14 ‘‘(iv) RETAIL PHARMACY.—For pur15 poses of this subsection, the term ‘retail 

16 pharmacy’ does not include mail-order only 

17 pharmacies or any pharmacy at a nursing 

18 facility or home. 

19 ‘‘(C) VOLUME WEIGHTED AVERAGE RAMP

20 DEFINED.—For purposes of this subsection, for 

21 all drug products included within the same mul22 tiple source drug billing and payment code (or 

23 such other methodology as may be specified by 

24 the Secretary), the volume weighted average 

25 RAMP is the volume weighted average of the 
227

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1 RAMPs reported under subsection (b)(3)(A)(iv) 

2 determined by—

3 ‘‘(i) computing the sum of the products 

4 (for each National Drug Code assigned to 

5 such drug products) of—

6 ‘‘(I) the manufacturer’s RAMP 

7 (as defined in subparagraph (B)); and 

8 ‘‘(II) the total number of units 

9 specified under section 1847A(b)(2) 

10 sold; and 

11 ‘‘(ii) dividing the sum determined 

12 under clause (i) by the sum of the total 

13 number of units under clause (i)(II) for all 

14 National Drug Codes assigned to such drug 

15 products. 

16 ‘‘(D) EXCEPTION FOR INITIAL SALES PERI17 ODS.—

18 ‘‘(i) IN GENERAL.—In the case of a 

19 single source drug during an initial sales 

20 period (not to exceed 2 calendar quarters) 

21 in which data on sales for the drug are not 

22 sufficiently available from the manufacturer 

23 to compute the RAMP or the volume weight24 ed average RAMP under subparagraph (C), 

25 the Federal upper limit for the ingredient 
228

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1 cost of such drug during such period shall 

2 be the wholesale acquisition cost (as defined 

3 in clause (ii)) for the drug. 

4 ‘‘(ii) WHOLESALE ACQUISITION

5 COST.—For purposes of clause (i), the term 

6 ‘wholesale acquisition cost’ means, with re7 spect to a single source drug, the manufac8 turer’s list price for the drug to wholesalers 

9 or direct purchasers in the United States, 

10 not including prompt pay or other dis11 counts, rebates or reductions in price, for 

12 the most recent month for which the infor13 mation is available, as reported in whole14 sale price guides or other publications of 

15 drug or biological pricing data. 

16 ‘‘(E) UPDATES; DATA COLLECTION.—

17 ‘‘(i) FREQUENCY OF DETERMINA18 TION.—The Secretary shall update the Fed19 eral upper limits applicable under this 

20 paragraph on at least a quarterly basis, 

21 taking into account the most recent data 

22 collected for purposes of determining such 

23 limits and the Food and Drug Administra24 tion’s most recent publication of ‘Approved 
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•S 1932 EAH 

1 Drug Products with Therapeutic Equiva2 lence Evaluations’. 

3 ‘‘(ii) COLLECTION OF DATA.—Data on 

4 RAMP is collected under subsection 

5 (b)(3)(A)(iv). 

6 ‘‘(F) AUTHORITY TO ENTER CONTRACTS.—

7 The Secretary may enter into contracts with ap8 propriate entities to determine RAMPs and other 

9 data necessary to calculate the Federal upper 

10 limit for a covered outpatient drug established 

11 under this subsection and to calculate that pay12 ment limit. 

13 ‘‘(3) DISPENSING FEES.—

14 ‘‘(A) IN GENERAL.—A State which provides 

15 medical assistance for covered outpatient drugs 

16 shall pay a dispensing fee for each covered out17 patient drug in accordance with this paragraph. 

18 A State may vary the amount of such dispensing 

19 fees, including taking into account the special 

20 circumstances of pharmacies that are serving 

21 rural or underserved areas or that are sole com22 munity pharmacies, so long as such variation is 

23 consistent with subparagraph (B). 

24 ‘‘(B) DISPENSING FEE PAYMENT FOR MUL25 TIPLE SOURCE DRUGS.—A State shall establish a 
230

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1 dispensing fee under this title for a covered out2 patient drug that is treated as a multiple source 

3 drug under paragraph (2)(A) (whether or not it 

4 may be an innovator multiple source drug) in 

5 an amount that is not less than $8 per prescrip6 tion unit. The Secretary shall define what con7 stitutes a prescription unit for purposes of the 

8 previous sentence. 

9 ‘‘(4) EFFECT ON STATE MAXIMUM ALLOWABLE

10 COST LIMITATIONS.—This section shall not supersede 

11 or affect provisions in effect prior to January 1, 

12 1991, or after December 31, 1994, relating to any 

13 maximum allowable cost limitation established by a 

14 State for payment by the State for covered outpatient 

15 drugs, and rebates shall be made under this section 

16 without regard to whether or not payment by the 

17 State for such drugs is subject to such a limitation or 

18 the amount of such a limitation. 

19 ‘‘(5) EVALUATION OF USE OF RETAIL SURVEY

20 PRICE METHODOLOGY.—

21 ‘‘(A) IN GENERAL.—The Secretary may de22 velop a methodology to set the Federal upper 

23 limit based on the reported retail survey price, 

24 as most recently reported under subparagraph 

25 (C), instead of a percentage of RAMP or volume 
231

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1 weighted average RAMP as described in para2 graph (2). 

3 ‘‘(B) INITIAL APPLICATION.—For 2007, the 

4 Secretary may use this methodology for a limited 

5 number of covered outpatient drugs, including 

6 both single source and multiple source drugs, se7 lected by the Secretary in a manner so as to be 

8 representative of the classes of drugs dispensed 

9 under this title. 

10 ‘‘(C) DETERMINATION OF RETAIL SURVEY

11 PRICE FOR COVERED OUTPATIENT DRUGS.—

12 ‘‘(i) USE OF VENDOR.—The Secretary 

13 may contract services for the determination 

14 of retail survey prices for covered outpatient 

15 drugs that represent a nationwide average 

16 of pharmacy sales costs for such drugs, net 

17 of all discounts and rebates. Such a contract 

18 shall be awarded for a term of 2 years. 

19 ‘‘(ii) USE OF COMPETITIVE BIDDING.—

20 In contracting for such services, the Sec21 retary shall competitively bid for an outside 

22 vendor that has a demonstrated history 

23 in—

24 ‘‘(I) surveying and determining, 

25 on a representative nationwide basis, 
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1 retail prices for ingredient costs of pre2 scription drugs; 

3 ‘‘(II) working with retail phar4 macies, commercial payers, and States 

5 in obtaining and disseminating such 

6 price information; and 

7 ‘‘(III) collecting and reporting 

8 such price information on at least a 

9 monthly basis. 

10 ‘‘(iii) ADDITIONAL PROVISIONS.—A 

11 contract with a vendor under this subpara12 graph shall include such terms and condi13 tions as the Secretary shall specify, includ14 ing the following: 

15 ‘‘(I) The vendor must monitor the 

16 marketplace and report to the Sec17 retary each time there is a new covered 

18 outpatient drug available nationwide. 

19 ‘‘(II) The vendor must update the 

20 Secretary no less often than monthly 

21 on the retail survey prices for multiple 

22 source drugs. 

23 ‘‘(III) The vendor must apply 

24 methods for independently confirming 

25 retail survey prices. 
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1 ‘‘(iv) AVAILABILITY OF INFORMATION

2 TO STATES.—Information on retail survey 

3 prices obtained under this subparagraph, 

4 including applicable information on single 

5 source drugs, shall be provided to States on 

6 an ongoing, timely basis. 

7 ‘‘(D) STATE USE OF RETAIL SURVEY PRICE

8 DATA.—

9 ‘‘(i) DISTRIBUTION OF PRICE DATA.—

10 The Secretary shall devise and implement a 

11 means for electronic distribution to each 

12 State agency designated under section 

13 1902(a)(5) with responsibility for the ad14 ministration or supervision of the adminis15 tration of the State plan under this title of 

16 the retail survey price determined under 

17 this paragraph. 

18 ‘‘(ii) AUTHORITY TO ESTABLISH PAY19 MENT RATES BASED ON DATA.—A State 

20 may use the price data received in accord21 ance with clause (i) in establishing pay22 ment rates for the ingredient costs and dis23 pensing fees for covered outpatient drugs 

24 dispensed to individuals eligible for medical 

25 assistance under this title. 
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1 ‘‘(6) LIMITATION ON JUDICIAL REVIEW.—There 

2 shall be no administrative or judicial review of—

3 ‘‘(A) the Secretary’s determinations of Fed4 eral upper limits, RAMPs, and volume weighted 

5 average RAMPs under this subsection, including 

6 the assignment of National Drug Codes to billing 

7 and payment classes; 

8 ‘‘(B) the Secretary’s disclosure to States of 

9 the average manufacturer prices, RAMPs, vol10 ume weighted average RAMPs, and retail survey 

11 prices; 

12 ‘‘(C) determinations under this subsection 

13 by the Secretary of covered outpatient drugs 

14 which are dispensed by a specialty pharmacy or 

15 administered by a physician in a physician’s of16 fice; 

17 ‘‘(D) the contracting and calculations proc18 ess under this subsection; and 

19 ‘‘(E) the method to allocate rebates, 

20 chargebacks, and other price concessions to a 

21 quarter if specified by the Secretary.’’. 

22 (b) CONFORMING AMENDMENTS.—

23 (1) REPORTING RAMP-RELATED INFORMATION.—

24 Subsection (b)(3)(A) of such section is amended—
235

•S 1932 EAH 

1 (A) by striking ‘‘and’’ at the end of clause 

2 (ii); 

3 (B) by striking the period at the end of 

4 clause (iii) and inserting ‘‘; and’’; and 

5 (C) by inserting after clause (iii) the fol6 lowing new clause: 

7 ‘‘(iv) for calendar quarters beginning on or 

8 after July 1, 2006, in conjunction with reporting 

9 required under clause (i) and by National Drug 

10 Code (including package size)—

11 ‘‘(I) the manufacturer’s RAMP (as de12 fined in subsection (e)(2)(B)(i)) and the 

13 total number of units required to compute 

14 the volume weighted average RAMP under 

15 subsection (e)(2)(C); 

16 ‘‘(II) if required to make payment 

17 under subsection (e)(2)(D), the manufactur18 er’s wholesale acquisition cost, as defined in 

19 clause (ii) of such subsection; and 

20 ‘‘(III) information on those sales that 

21 were made at a nominal price or otherwise 

22 described in subsection (e)(2)(B)(ii)(II); 

23 for all covered outpatient drugs.’’. 

24 (2) DISCLOSURE TO STATES.—Subsection 

25 (b)(3)(D) of such section is amended—
236

•S 1932 EAH 

1 (A) by striking ‘‘and’’ at the end of clause 

2 (ii); 

3 (B) by striking the period at the end of 

4 clause (iii) and inserting ‘‘, and’’; and 

5 (C) by inserting after clause (iii) the fol6 lowing new clause: 

7 ‘‘(iv) to States to carry out this title.’’. 

8 (3) LIMITATIONS ON FEDERAL FINANCIAL PAR9 TICIPATION.—Section 1903(i) of such Act (42 U.S.C. 

10 1396b(i)) is amended—

11 (A) in paragraph (10)(A), by striking 

12 ‘‘and’’ at the end; 

13 (B) in paragraph (10)(B), by striking ‘‘or’’ 

14 at the end and inserting ‘‘and’’; 

15 (C) by adding at the end of paragraph (10) 

16 the following: 

17 ‘‘(C) with respect to any amount expended for 

18 the ingredient cost of a covered outpatient drug that 

19 exceeds the Federal upper limit for that drug estab20 lished and applied under section 1927(e); or’’; and 

21 (D) in paragraph (21), as inserted by sec22 tion 104(b) of Public Law 109–91, by inserting 

23 before the period at the end the following: ‘‘or de24 scribed in subparagraph (B) or (C) of section 

25 1927(d)(2)’’. 
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•S 1932 EAH 

1 (c) EFFECTIVE DATE.—Except as otherwise provided, 

2 the amendments made by this section take effect with respect 

3 to a State on the later of—

4 (1) January 1, 2007; or 

5 (2) the date that is 6 months after the close of 

6 the first regular session of the State legislature that 

7 begins after the date of the enactment of this Act. 

8 (d) GAO STUDY ON DISPENSING FEES, ESTIMATED

9 PAYMENT AMOUNTS, AND PHARMACY ACQUISITION

10 COSTS.—The Comptroller General of the United States 

11 shall conduct a study on the appropriateness in payment 

12 levels to pharmacies for dispensing fees under the medicaid 

13 program, including payment to specialty pharmacies, and 

14 on whether the estimated average payment amounts to 

15 pharmacies for covered outpatient drugs under the medicaid 

16 program after implementation of the amendments made by 

17 this section are below the average prices paid by pharmacies 

18 for acquiring such drugs. Not later than 9 months after the 

19 date of the enactment of this Act, the Comptroller General 

20 shall submit to Congress a report on such study. 

21 (e) SECRETARIAL AUTHORITY TO DELAY IMPLEMEN22 TATION.—The Secretary of Health and Human Services 

23 may delay the implementation of the amendments made by 

24 subsections (a) and (b)(3)(C) for a period of not more than 

25 1 year, if the Comptroller General finds, in the study con-
238

•S 1932 EAH 

1 ducted under subsection (d), that the estimated average pay2 ment amounts to pharmacies for covered outpatient drugs 

3 under the medicaid program after implementation of such 

4 amendments are below the average prices paid by phar5 macies for acquiring such drugs. If the Secretary delays the 

6 implementation of such amendments under this subsection, 

7 the Secretary shall transmit to Congress, prior to the termi8 nation of the period of delay, a report containing specific 

9 recommendations for legislation to establish a more equi10 table payment system. 

11 (f) IG REPORT ON USE OF RAMP AND RETAIL SUR12 VEY PRICES.—Not later than 2 years after the date of the 

13 enactment of this Act, the Inspector General of the Depart14 ment of Health and Human Services shall submit to Con15 gress a report on the appropriateness of using RAMPs and 

16 retail survey prices, rather than the average manufacturer 

17 prices or other price measures, as the basis for establishing 

18 a Federal upper limit for reimbursement for covered out19 patient drugs under the medicaid program. 

20 SEC. 3102. COLLECTION AND SUBMISSION OF UTILIZATION 

21 DATA FOR CERTAIN PHYSICIAN ADMINIS22 TERED DRUGS. 

23 (a) IN GENERAL.—Section 1927(a) of the Social Secu24 rity Act (42 U.S.C. 1396r–8(a)) is amended by adding at 

25 the end the following new paragraph: 
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•S 1932 EAH 

1 ‘‘(7) REQUIREMENT FOR SUBMISSION OF UTILI2 ZATION DATA FOR CERTAIN PHYSICIAN ADMINISTERED

3 DRUGS.—

4 ‘‘(A) SINGLE SOURCE DRUGS.—In order for 

5 payment to be available under section 1903(a) 

6 for a covered outpatient drug that is a single 

7 source drug that is physician administered (as 

8 determined by the Secretary), and that is admin9 istered on or after January 1, 2006, the State 

10 shall provide for the submission of such utiliza11 tion data and coding (such as J-codes and Na12 tional Drug Code numbers) for each such drug as 

13 the Secretary may specify as necessary to iden14 tify the manufacturer of the drug in order to se15 cure rebates under this section for drugs admin16 istered for which payment is made under this 

17 title. 

18 ‘‘(B) MULTIPLE SOURCE DRUGS.—

19 ‘‘(i) IN GENERAL.—Not later than Jan20 uary 1, 2007, the information shall be sub21 mitted under subparagraph (A) using Na22 tional Drug Code codes unless the Secretary 

23 specifies that an alternative coding system 

24 should be used. 
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•S 1932 EAH 

1 ‘‘(ii) IDENTIFICATION OF MOST FRE2 QUENTLY PHYSICIAN ADMINISTERED MUL3 TIPLE SOURCE DRUGS.—Not later than 

4 January 1, 2007, the Secretary shall pub5 lish a list of the 20 physician administered 

6 multiple source drugs that the Secretary de7 termines have the highest dollar volume of 

8 physician administered drugs dispensed 

9 under this title. The Secretary may modify 

10 such list from year to year to reflect changes 

11 in such volume. 

12 ‘‘(iii) REQUIREMENT.—In order for 

13 payment to be available under section 

14 1903(a) for a covered outpatient drug that 

15 is a multiple source drug that is physician 

16 administered (as determined by the Sec17 retary), that is on the list published under 

18 clause (ii), and that is administered on or 

19 after January 1, 2008, the State shall pro20 vide for the submission of such utilization 

21 data and coding (such as J-codes and Na22 tional Drug Code numbers) for each such 

23 drug as the Secretary may specify as nec24 essary to identify the manufacturer of the 
241

•S 1932 EAH 

1 drug in order to secure rebates under this 

2 section. 

3 ‘‘(C) HARDSHIP WAIVER.—The Secretary may 

4 delay the application of subparagraph (A) or (B), or 

5 both, in the case of a State to prevent hardship to 

6 States which require additional time to implement 

7 the reporting system required under the respective 

8 subparagraph.’’. 

9 (b) LIMITATION ON PAYMENT.—Section 1903(i)(10) of 

10 such Act (42 U.S.C. 1396b(i)(10)), as amended by section 

11 3101(b)(3), is amended—

12 (1) by striking ‘‘and’’ at the end of subpara13 graph (B); 

14 (2) by striking ‘‘or’’ at the end of subparagraph 

15 (C) and inserting ‘‘and’’; and 

16 (3) by adding at the end the following new sub17 paragraph: 

18 ‘‘(D) with respect to covered outpatient drugs de19 scribed in section 1927(a)(7), unless information re20 specting utilization data and coding on such drugs 

21 that is required to be submitted under such section is 

22 submitted in accordance with such section; or’’. 
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•S 1932 EAH 

1 SEC. 3103. IMPROVED REGULATION OF DRUGS SOLD UNDER 

2 A NEW DRUG APPLICATION APPROVED 

3 UNDER SECTION 505(c) OF THE FEDERAL 

4 FOOD, DRUG, AND COSMETIC ACT. 

5 (a) INCLUSION WITH OTHER REPORTED AVERAGE

6 MANUFACTURER AND BEST PRICES.—Section 

7 1927(b)(3)(A) of the Social Security Act (42 U.S.C. 1396r–

8 8(b)(3)(A)) is amended—

9 (1) by striking clause (i) and inserting the fol10 lowing: 

11 ‘‘(i) not later than 30 days after the 

12 last day of each rebate period under the 

13 agreement—

14 ‘‘(I) on the average manufacturer 

15 price (as defined in subsection (k)(1)) 

16 for covered outpatient drugs for the re17 bate period under the agreement (in18 cluding for all such drugs that are sold 

19 under a new drug application ap20 proved under section 505(c) of the Fed21 eral Food, Drug, and Cosmetic Act); 

22 and 

23 ‘‘(II) for single source drugs and 

24 innovator multiple source drugs (in25 cluding all such drugs that are sold 

26 under a new drug application ap-
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•S 1932 EAH 

1 proved under section 505(c) of the Fed2 eral Food, Drug, and Cosmetic Act), on 

3 the manufacturer’s best price (as de4 fined in subsection (c)(1)(C)) for such 

5 drugs for the rebate period under the 

6 agreement;’’; and 

7 (2) in clause (ii), by inserting ‘‘(including for 

8 such drugs that are sold under a new drug applica9 tion approved under section 505(c) of the Federal 

10 Food, Drug, and Cosmetic Act)’’ after ‘‘drugs’’. 

11 (b) CONFORMING AMENDMENTS.—Section 1927 of such 

12 Act (42 U.S.C. 1396r–8) is amended—

13 (1) in subsection (c)(1)(C)—

14 (A) in clause (i), in the matter preceding 

15 subclause (I), by inserting after ‘‘or innovator 

16 multiple source drug of a manufacturer’’ the fol17 lowing: ‘‘(including any other such drug of a 

18 manufacturer that is sold under a new drug ap19 plication approved under section 505(c) of the 

20 Federal Food, Drug, and Cosmetic Act)’’; and 

21 (B) in clause (ii)—

22 (i) in subclause (II), by striking ‘‘and’’ 

23 at the end; 
244

•S 1932 EAH 

1 (ii) in subclause (III), by striking the 

2 period at the end and inserting ‘‘; and’’; 

3 and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(IV) in the case of a manufac7 turer that approves, allows, or other8 wise permits any other drug of the 

9 manufacturer to be sold under a new 

10 drug application approved under sec11 tion 505(c) of the Federal Food, Drug, 

12 and Cosmetic Act, shall be inclusive of 

13 the lowest price for such authorized 

14 drug available from the manufacturer 

15 during the rebate period to any whole16 saler, retailer, provider, health mainte17 nance organization, nonprofit entity, 

18 or governmental entity within the 

19 United States, excluding those prices 

20 described in subclauses (I) through 

21 (IV) of clause (i).’’; and 

22 (2) in subsection (k)—

23 (A) in paragraph (1)—

24 (i) by striking ‘‘The term’’ and insert25 ing the following: 
245

•S 1932 EAH 

1 ‘‘(A) IN GENERAL.—The term’’; and 

2 (ii) by adding at the end the following: 

3 ‘‘(B) INCLUSION OF SECTION 505(c) 

4 DRUGS.—In the case of a manufacturer that ap5 proves, allows, or otherwise permits any drug of 

6 the manufacturer to be sold under a new drug 

7 application approved under section 505(c) of the 

8 Federal Food, Drug, and Cosmetic Act, such 

9 term shall be inclusive of the average price paid 

10 for such authorized drug by wholesalers for drugs 

11 distributed to the retail pharmacy class of trade, 

12 after deducting customary prompt pay dis13 counts.’’. 

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

15 section shall take effect on the date of the enactment of this 

16 Act. 

17 SEC. 3104. CHILDREN’S HOSPITAL PARTICIPATION IN SEC18 TION 340B DRUG DISCOUNT PROGRAM. 

19 (a) IN GENERAL.—Section 1927(a)(5)(B) of the Social 

20 Security Act (42 U.S.C. 1396r–8(a)(5)(B)) is amended by 

21 inserting before the period at the end the following: ‘‘and 

22 a children’s hospital described in section 1886(d)(1)(B)(iii) 

23 which meets the requirements of clauses (i) and (iii) of sec24 tion 340B(b)(4)(L) of the Public Health Service Act and 

25 which would meet the requirements of clause (ii) of such 
246

•S 1932 EAH 

1 section if that clause were applied by taking into account 

2 the percentage of care provided by the hospital to patients 

3 eligible for medical assistance under a State plan under this 

4 title’’. 

5 (b) EFFECTIVE DATE.—The amendment made by sub6 section (a) shall apply to drugs purchased on or after the 

7 date of the enactment of this Act. 

8 SEC. 3105. IMPROVING PATIENT OUTCOMES THROUGH 

9 GREATER RELIANCE ON SCIENCE AND BEST 

10 PRACTICES. 

11 (a) IN GENERAL.—Section 1927 of Social Security Act 

12 (42 U.S.C. 1396r–8) is amended—

13 (1) in subsection (d)(5)—

14 (A) in the matter before subparagraph (A), 

15 by striking ‘‘providing for such approval—’’ and 

16 inserting ‘‘providing for such approval meets the 

17 following requirements:’’; 

18 (B) in subparagraph (A)—

19 (i) by inserting ‘‘The system’’ before 

20 ‘‘provides’’; and 

21 (ii) by striking ‘‘; and’’ and inserting 

22 a period; 

23 (C) in subparagraph (B)—

24 (i) by striking ‘‘except’’ and inserting 

25 ‘‘Except’’; and 
247

•S 1932 EAH 

1 (ii) by inserting ‘‘the system’’ before 

2 ‘‘provides’’; and 

3 (D) by adding at the end the following new 

4 subparagraphs: 

5 ‘‘(C) The system provides that an atypical 

6 antipsychotic or antidepressant single source 

7 drug may be placed on a list of drugs subject to 

8 prior authorization only where a drug use review 

9 board has determined, based on the strength of 

10 the scientific evidence and standards of practice, 

11 including assessing peer-reviewed medical lit12 erature, pharmacoeconomic studies, outcomes re13 search data and such other information as the 

14 board determines to be appropriate, that placing 

15 the drug on prior approval or otherwise impos16 ing restrictions on its use is not likely to harm 

17 patients or increase overall medical costs. 

18 ‘‘(D) The system provides that where a re19 sponse is not received to a request for authoriza20 tion of an atypical antipsychotic or 

21 antidepressant drug prescribed within 24 hours 

22 after the prescription is transmitted, payment is 

23 made for a 30 day supply of a medication that 

24 the prescriber certifies is medically necessary.’’; 

25 and 
248

•S 1932 EAH 

1 (2) in subsection (g)(3)(C), by inserting after 

2 clause (iii) the following new clause: 

3 ‘‘(iv) The development and oversight of 

4 prior authorization programs described in 

5 subsection (d)(5).’’. 

6 (b) EFFECTIVE DATE.—The amendments made by sub7 section (a) shall take effect on January 1, 2007. 

8 CHAPTER 2—REFORM OF ASSET 

9 TRANSFER RULES 

10 SEC. 3111. LENGTHENING LOOK-BACK PERIOD; CHANGE IN 

11 BEGINNING DATE FOR PERIOD OF INELIGI12 BILITY. 

13 (a) LENGTHENING LOOK-BACK PERIOD FOR ALL DIS14 POSALS TO 5 YEARS.—Section 1917(c)(1)(B)(i) of the So15 cial Security Act (42 U.S.C. 1396p(c)(1)(B)(i)) is amended 

16 by inserting ‘‘or in the case of any other disposal of assets 

17 made on or after the date of the enactment of the Medicaid 

18 Reconciliation Act of 2005’’ before ‘‘, 60 months’’. 

19 (b) CHANGE IN BEGINNING DATE FOR PERIOD OF IN20 ELIGIBILITY.—Section 1917(c)(1)(D) of such Act (42 U.S.C. 

21 1396p(c)(1)(D)) is amended—

22 (1) by striking ‘‘(D) The date’’ and inserting 

23 ‘‘(D)(i) In the case of a transfer of asset made before 

24 the date of the enactment of the Medicaid Reconcili25 ation Act of 2005, the date’’; and 
249

•S 1932 EAH 

1 (2) by adding at the end the following new 

2 clause: 

3 ‘‘(ii) In the case of a transfer of asset made on or after 

4 the date of the enactment of the Medicaid Reconciliation 

5 Act of 2005, the date specified in this subparagraph is the 

6 first day of a month during or after which assets have been 

7 transferred for less than fair market value, or the date on 

8 which the individual is eligible for medical assistance under 

9 the State plan and is receiving services described in sub10 paragraph (C) but for the application of the penalty period, 

11 whichever is later, and which does not occur during any 

12 other period of ineligibility under this subsection.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by this 

14 section shall apply to transfers made on or after the date 

15 of the enactment of this Act. 

16 (d) AVAILABILITY OF HARDSHIP WAIVERS.—Each 

17 State shall provide for a hardship waiver process in accord18 ance with section 1917(c)(2)(D) of the Social Security Act 

19 (42 U.S.C. 1396p(c)(2)(D))—

20 (1) under which an undue hardship exists when 

21 application of the transfer of assets provision would 

22 deprive the individual—

23 (A) of medical care such that the individ24 ual’s health or life would be endangered; or 
250

•S 1932 EAH 

1 (B) of food, clothing, shelter, or other neces2 sities of life; and 

3 (2) which provides for—

4 (A) notice to recipients that an undue hard5 ship exception exists; 

6 (B) a timely process for determining wheth7 er an undue hardship waiver will be granted; 

8 and 

9 (C) a process under which an adverse deter10 mination can be appealed. 

11 (e) ADDITIONAL PROVISIONS ON HARDSHIP WAIV12 ERS.—

13 (1) APPLICATION BY FACILITY.—Section 

14 1917(c)(2) of the Social Security Act (42 U.S.C. 

15 1396p(c)(2)) is amended—

16 (A) by striking the semicolon at the end of 

17 subparagraph (D) and inserting a period; and 

18 (B) by adding after and below such subpara19 graph the following: 

20 ‘‘The procedures established under subparagraph (D) 

21 shall permit the facility in which the institutionalized 

22 individual is residing to file an undue hardship 

23 waiver application on behalf of the individual with 

24 the consent of the individual or the legal guardian of 

25 the individual.’’. 
251

•S 1932 EAH 

1 (2) AUTHORITY TO MAKE BED HOLD PAYMENTS FOR

2 HARDSHIP APPLICANTS.—Such section is further amended 

3 by adding at the end the following: ‘‘While an application 

4 for an undue hardship waiver is pending under subpara5 graph (D) in the case of an individual who is a resident 

6 of a nursing facility, if the application meets such criteria 

7 as the Secretary specifies, the State may provide for pay8 ments for nursing facility services in order to hold the bed 

9 for the individual at the facility, but not in excess of pay10 ments for 30 days.’’. 

11 SEC. 3112. DISCLOSURE AND TREATMENT OF ANNUITIES 

12 AND OF LARGE TRANSACTIONS. 

13 (a) IN GENERAL.—Section 1917 of the Social Security 

14 Act (42 U.S.C. 1396p) is amended by redesignating sub15 section (e) as subsection (f) and by inserting after subsection 

16 (d) the following new subsection: 

17 ‘‘(e)(1) In order to meet the requirements of this section 

18 for purposes of section 1902(a)(18), a State shall require, 

19 as a condition for the provision of medical assistance for 

20 services described in subsection (c)(1)(C)(i) (relating to 

21 long-term care services) for an individual, the application 

22 of the individual for such assistance (including any recer23 tification of eligibility for such assistance) shall disclose the 

24 following: 
252

•S 1932 EAH 

1 ‘‘(A) A description of any interest the individual 

2 or community spouse has in an annuity (or similar 

3 financial instrument which provides for the conver4 sion of a countable asset to a noncountable asset, as 

5 may be specified by the Secretary), regardless of 

6 whether the annuity is irrevocable or is treated as an 

7 asset. 

8 ‘‘(B) Full information (as specified by the Sec9 retary) concerning any transaction involving the 

10 transfer or disposal of assets during the previous pe11 riod of 60 months, if the transaction exceeded 

12 $100,000, without regard to whether the transfer or 

13 disposal was for fair market value. For purposes of 

14 applying the previous sentence under this subsection, 

15 all transactions of $5,000 or more occurring within 

16 a 12-month period shall be treated as a single trans17 action. The dollar amounts specified in the first and 

18 second sentences of this subparagraph shall be in19 creased, beginning with 2007, from year to year based 

20 on the percentage increase in the consumer price 

21 index for all urban consumers (all items; United 

22 States city average), rounded to the nearest $1,000 in 

23 the case of the first sentence and $100 in the case of 

24 the second sentence. 
253

•S 1932 EAH 

1 Such application or recertification form shall include a 

2 statement that under paragraph (2) the State becomes a 

3 remainder beneficiary under such an annuity or similar 

4 financial instrument by virtue of the provision of such med5 ical assistance. 

6 ‘‘(2)(A) In the case of any annuity in which an insti7 tutionalized individual or community spouse has an inter8 est, if medical assistance is furnished to the individual for 

9 services described in subsection (c)(1)(C)(i), by virtue of the 

10 provision of such assistance the State becomes the remain11 der beneficiary in the first position for the total amount 

12 of such medical assistance paid on behalf of the individual 

13 under this title (or, where there is a community spouse or 

14 minor or disabled child in such first position, in the posi15 tion immediately succeeding the position of such spouse or 

16 child or both). 

17 ‘‘(B) In the case of disclosure concerning an annuity 

18 under paragraph (1)(A), the State shall notify the issuer 

19 of the annuity of the right of the State under subparagraph 

20 (A) as a preferred remainder beneficiary in the annuity 

21 for medical assistance furnished to the individual. Nothing 

22 in this paragraph shall be construed as preventing such an 

23 issuer from notifying persons with any other remainder in24 terest of the State’s remainder interest under subparagraph 

25 (A). 
254

•S 1932 EAH 

1 ‘‘(C) In the case of such an issuer receiving notice 

2 under subparagraph (B), the State may require the issuer 

3 to notify the State when there is a change in the amount 

4 of income or principal being withdrawn from the amount 

5 that was being withdrawn at the time of the most recent 

6 disclosure described in paragraph (1)(A). A State shall take 

7 such information into account in determining the amount 

8 of the State’s obligations for medical assistance or in the 

9 individual’s eligibility for such assistance. 

10 ‘‘(3)(A) For purposes of subsection (c)(1), a trans11 action described in paragraph (1)(B) shall be deemed as 

12 the transfer of an asset for less than fair market value unless 

13 the individual demonstrates to the satisfaction of the State 

14 that the transfer of the asset was for fair market value. 

15 ‘‘(B) The Secretary may provide guidance to States 

16 on categories of arms length transactions (such as the pur17 chase of a commercial annuity) that could be generally 

18 treated as a transfer of asset for fair market value. 

19 ‘‘(4) Nothing in this subsection shall be construed as 

20 preventing a State from denying eligibility for medical as21 sistance for an individual based on the income or resources 

22 derived from an annuity described in paragraph (1)(A).’’. 

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

24 section shall apply to transactions (including the purchase 
255

•S 1932 EAH 

1 of an annuity) occurring on or after the date of the enact2 ment of this Act. 

3 SEC. 3113. APPLICATION OF ‘‘INCOME-FIRST’’ RULE IN AP4 PLYING COMMUNITY SPOUSE’S INCOME BE5 FORE ASSETS IN PROVIDING SUPPORT OF 

6 COMMUNITY SPOUSE. 

7 (a) IN GENERAL.—Section 1924(d) of the Social Secu8 rity Act (42 U.S.C. 1396r–5(d)) is amended by adding at 

9 the end the following new paragraph: 

10 ‘‘(6) APPLICATION OF ‘INCOME FIRST’ RULE FOR

11 FUNDING COMMUNITY SPOUSE MONTHLY INCOME AL12 LOWANCE.—For purposes of this subsection and sub13 section (e), any transfer or allocation made from an 

14 institutionalized spouse to meet the need of a commu15 nity spouse for a community spouse monthly income 

16 allowance under paragraph (1)(B) shall be first made 

17 from income of the institutionalized spouse and then 

18 only when the income is not available from the re19 sources of such institutionalized spouse.’’. 

20 (b) EFFECTIVE DATE.—The amendment made by sub21 section (a) shall apply to transfers and allocations made 

22 on or after the date of the enactment of this Act by individ23 uals who become institutionalized spouses on or after such 

24 date. 
256

•S 1932 EAH 

1 SEC. 3114. DISQUALIFICATION FOR LONG-TERM CARE AS2 SISTANCE FOR INDIVIDUALS WITH SUBSTAN3 TIAL HOME EQUITY. 

4 (a) IN GENERAL.—Section 1917 of the Social Security 

5 Act, as amended by section 3112, is further amended by 

6 redesignating subsection (f) as subsection (g) and by insert7 ing after subsection (e) the following new subsection: 

8 ‘‘(f)(1) Notwithstanding any other provision of this 

9 title, subject to paragraph (2), in determining eligibility of 

10 an individual for medical assistance with respect to nursing 

11 facility services or other long-term care services, the indi12 vidual shall not be eligible for such assistance if the individ13 ual’s equity interest in the individual’s home exceeds 

14 $750,000. The dollar amount specified in the preceding sen15 tence shall be increased, beginning with 2011, from year 

16 to year based on the percentage increase in the consumer 

17 price index for all urban consumers (all items; United 

18 States city average), rounded to the nearest $1,000. 

19 ‘‘(2) Paragraph (1) shall not apply with respect to an 

20 individual if—

21 ‘‘(A) the spouse of such individual, or 

22 ‘‘(B) such individual’s child who is under age 

23 21, or (with respect to States eligible to participate 

24 in the State program established under title XVI) is 

25 blind or permanently and totally disabled, or (with 

26 respect to States which are not eligible to participate 
257

•S 1932 EAH 

1 in such program) is blind or disabled as defined in 

2 section 1614, 

3 is lawfully residing in the individual’s home. 

4 ‘‘(3) Nothing in this subsection shall be construed as 

5 preventing an individual from using a reverse mortgage or 

6 home equity loan to reduce the individual’s total equity in7 terest in the home. 

8 ‘‘(4) The Secretary shall establish a process whereby 

9 paragraph (1) is waived in the case of a demonstrated hard10 ship.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by sub12 section (a) shall apply to individuals who are determined 

13 eligible for medical assistance with respect to nursing facil14 ity services or other long-term care services based on an ap15 plication filed on or after January 1, 2006. 

16 SEC. 3115. ENFORCEABILITY OF CONTINUING CARE RETIRE17 MENT COMMUNITIES (CCRC) AND LIFE CARE 

18 COMMUNITY ADMISSION CONTRACTS. 

19 (a) ADMISSION POLICIES OF NURSING FACILITIES.—

20 Section 1919(c)(5) of the Social Security Act (42 U.S.C. 

21 1396r(c)(5)) is amended—

22 (1) in subparagraph (A)(i)(II), by inserting 

23 ‘‘subject to clause (v),’’ after ‘‘(II)’’; and 

24 (2) by adding at the end of subparagraph (B) 

25 the following new clause: 
258

•S 1932 EAH 

1 ‘‘(v) TREATMENT OF CONTINUING CARE

2 RETIREMENT COMMUNITIES ADMISSION CON3 TRACTS.—Notwithstanding subclause (II) of 

4 subparagraph (A)(i), subject to subsections 

5 (c) and (d) of section 1924, contracts for ad6 mission to a State licensed, registered, cer7 tified, or equivalent continuing care retire8 ment community or life care community, 

9 including services in a nursing facility that 

10 is part of such community, may require 

11 residents to spend on their care resources 

12 declared for the purposes of admission be13 fore applying for medical assistance.’’. 

14 (b) TREATMENT OF ENTRANCE FEES.—Section 1917 

15 of such Act (42 U.S.C. 1396p), as amended by sections 

16 3112(a) and 3114(a), is amended by redesignating sub17 section (g) as subsection (h) and by inserting after sub18 section (f) the following new subsection: 

19 ‘‘(g) TREATMENT OF ENTRANCE FEES OF INDIVIDUALS

20 RESIDING IN CONTINUING CARE RETIREMENT COMMU21 NITIES.—

22 ‘‘(1) IN GENERAL.—For purposes of determining 

23 an individual’s eligibility for, or amount of, benefits 

24 under a State plan under this title, the rules specified 

25 in paragraph (2) shall apply to individuals residing 
259

•S 1932 EAH 

1 in continuing care retirement communities or life 

2 care communities that collect an entrance fee on ad3 mission from such individuals. 

4 ‘‘(2) TREATMENT OF ENTRANCE FEE.—For pur5 poses of this subsection, an individual’s entrance fee 

6 in a continuing care retirement community or life 

7 care community shall be considered a resource avail8 able to the individual to the extent that—

9 ‘‘(A) the individual has the ability to use 

10 the entrance fee, or the contract provides that the 

11 entrance fee may be used, to pay for care should 

12 other resources or income of the individual be in13 sufficient to pay for such care; 

14 ‘‘(B) the individual is eligible for a refund 

15 of any remaining entrance fee when the indi16 vidual dies or terminates the continuing care re17 tirement community or life care community con18 tract and leaves the community; and 

19 ‘‘(C) the entrance fee does not confer an 

20 ownership interest in the continuing care retire21 ment community or life care community. 

22 ‘‘(3) TREATMENT IN RELATION TO SPOUSAL

23 SHARE.—To the extent that an entrance fee is deter24 mined to be an available resource to an individual 

25 applying for medical assistance and the individual 
260

•S 1932 EAH 

1 has a community spouse as defined in section 

2 1924(h), the entrance fee shall be considered in the 

3 computation of spousal share pursuant to section 

4 1924(c).’’. 

5 CHAPTER 3—FLEXIBILITY IN COST 

6 SHARING AND BENEFITS 

7 SEC. 3121. STATE OPTION FOR ALTERNATIVE MEDICAID 

8 PREMIUMS AND COST SHARING. 

9 (a) IN GENERAL.—Title XIX of the Social Security 

10 Act is amended by inserting after section 1916 the following 

11 new section: 

12 ‘‘STATE OPTION FOR ALTERNATIVE PREMIUMS AND COST

13 SHARING

14 ‘‘SEC. 1916A. (a) STATE FLEXIBILITY.—

15 ‘‘(1) IN GENERAL.—Notwithstanding sections 

16 1916 and 1902(a)(10)(B), a State, at its option and 

17 through a State plan amendment, may impose pre18 miums and cost sharing for any group of individuals 

19 (as specified by the State) and for any type of services 

20 (and may vary such premiums and cost sharing 

21 among such groups or types, including through the 

22 use of tiered cost sharing for prescription drugs) con23 sistent with the limitations established under this sec24 tion. Nothing in this section shall be construed as su25 perseding (or preventing the application of) section 

26 1916(g). 
261

•S 1932 EAH 

1 ‘‘(2) DEFINITIONS.—In this section: 

2 ‘‘(A) PREMIUM.—The term ‘premium’ in3 cludes any enrollment fee or similar charge. 

4 ‘‘(B) COST SHARING.—The term ‘cost shar5 ing’ includes any deduction, deductible, copay6 ment, or similar charge. 

7 ‘‘(b) LIMITATIONS ON EXERCISE OF AUTHORITY.—

8 ‘‘(1) INDIVIDUALS WITH FAMILY INCOME BELOW

9 100 PERCENT OF POVERTY LEVEL.—In the case of an 

10 individual whose family income does not exceed 100 

11 percent of the Federal poverty level applicable to a 

12 family of the size involved, subject to subsections 

13 (c)(2) and (e)(2)(A), the limitations otherwise pro14 vided under subsections (a) and (b) of section 1916 

15 shall continue to apply and no premium will be im16 posed under the plan, except that the total annual ag17 gregate amount of cost sharing imposed (including 

18 any increased cost sharing imposed under subsection 

19 (c) or (e)) for all individuals in the family may not 

20 exceed 5 percent of the family income of the family 

21 involved for the year involved. 

22 ‘‘(2) INDIVIDUALS WITH FAMILY INCOME ABOVE

23 100 PERCENT OF POVERTY LEVEL.—In the case of an 

24 individual whose family income exceeds 100 percent 

25 of the Federal poverty level applicable to a family of 
262

•S 1932 EAH 

1 the size involved, the total annual aggregate amount 

2 of premiums and cost sharing imposed (including 

3 any increase and cost sharing imposed under sub4 section (c) or (e)) for all individuals in the family 

5 may not exceed 5 percent of the family income of the 

6 family involved for the year involved. 

7 ‘‘(3) ADDITIONAL LIMITATIONS.—

8 ‘‘(A) PREMIUMS.—No premiums shall be 

9 imposed under this section with respect to the 

10 following: 

11 ‘‘(i) Individuals under 18 years of age 

12 that are required to be provided medical as13 sistance under section 1902(a)(10)(A)(i), 

14 and including individuals with respect to 

15 whom adoption or foster care assistance is 

16 made available under part E of title IV 

17 without regard to age. 

18 ‘‘(ii) Pregnant women. 

19 ‘‘(iii) Any terminally ill individual 

20 who is receiving hospice care (as defined in 

21 section 1905(o)). 

22 ‘‘(iv) Any individual who is an inpa23 tient in a hospital, nursing facility, inter24 mediate care facility for the mentally re25 tarded, or other medical institution, if such 
263

•S 1932 EAH 

1 individual is required, as a condition of re2 ceiving services in such institution under 

3 the State plan, to spend for costs of medical 

4 care all but a minimal amount of the indi5 vidual’s income required for personal needs. 

6 ‘‘(B) COST SHARING.—Subject to the suc7 ceeding provisions of this section, no cost sharing 

8 shall be imposed under this section with respect 

9 to the following: 

10 ‘‘(i) Services furnished to individuals 

11 under 18 years of age that are required to 

12 be provided medical assistance under sec13 tion 1902(a)(10)(A)(i), and including serv14 ices furnished to individuals with respect to 

15 whom adoption or foster care assistance is 

16 made available under part E of title IV 

17 without regard to age. 

18 ‘‘(ii) Preventive services (such as well 

19 baby and well child care and immuniza20 tions) provided to children under 18 years 

21 of age regardless of family income. 

22 ‘‘(iii) Services furnished to pregnant 

23 women, if such services relate to the preg24 nancy or to any other medical condition 

25 which may complicate the pregnancy. 
264

•S 1932 EAH 

1 ‘‘(iv) Services furnished to a termi2 nally ill individual who is receiving hospice 

3 care (as defined in section 1905(o)). 

4 ‘‘(v) Services furnished to any indi5 vidual who is an inpatient in a hospital, 

6 nursing facility, intermediate care facility 

7 for the mentally retarded, or other medical 

8 institution, if such individual is required, 

9 as a condition of receiving services in such 

10 institution under the State plan, to spend 

11 for costs of medical care all but a minimal 

12 amount of the individual’s income required 

13 for personal needs. 

14 ‘‘(vi) Emergency services (as defined 

15 by the Secretary for purposes of section 

16 1916(a)(2)(D)). 

17 ‘‘(vii) Family planning services and 

18 supplies described in section 1905(a)(4)(C). 

19 ‘‘(C) CONSTRUCTION.—Nothing in this 

20 paragraph shall be construed as preventing a 

21 State from exempting additional classes of indi22 viduals from premiums under this section or 

23 from exempting additional individuals or serv24 ices from cost sharing under this section. 
265

•S 1932 EAH 

1 ‘‘(4) INDEXING NOMINAL AMOUNTS.—In apply2 ing section 1916 under paragraph (1) with respect to 

3 cost sharing that is ‘nominal’ in amount, the Sec4 retary shall increase such ‘nominal’ amounts for each 

5 year (beginning with 2006) by the annual percentage 

6 increase in the medical care component of the con7 sumer price index for all urban consumers (U.S. city 

8 average) as rounded up in an appropriate manner. 

9 ‘‘(5) DETERMINATIONS OF FAMILY INCOME.—In 

10 applying this subsection, family income shall be de11 termined in a manner specified by the State for pur12 poses of this subsection, including the use of such dis13 regards as the State may provide. Family income 

14 shall be determined for such period and at such perio15 dicity as the State may provide under this title. 

16 ‘‘(6) POVERTY LINE DEFINED.—For purposes of 

17 this section, the term ‘poverty line’ has the meaning 

18 given such term in section 673(2) of the Community 

19 Services Block Grant Act (42 U.S.C. 9902(2)), includ20 ing any revision required by such section. 

21 ‘‘(7) CONSTRUCTION.—Nothing in this section 

22 shall be construed—

23 ‘‘(A) as preventing a State from further 

24 limiting the premiums and cost sharing imposed 
266

•S 1932 EAH 

1 under this section beyond the limitations pro2 vided under this subsection; 

3 ‘‘(B) as affecting the authority of the Sec4 retary through waiver to modify limitations on 

5 premiums and cost sharing under this sub6 section; or 

7 ‘‘(C) as affecting any such waiver of re8 quirements in effect under this title before the 

9 date of the enactment of this section with regard 

10 to the imposition of premiums and cost sharing. 

11 ‘‘(d) ENFORCEABILITY OF PREMIUMS AND OTHER

12 COST SHARING.—

13 ‘‘(1) PREMIUMS.—Notwithstanding section 

14 1916(c)(3) and section 1902(a)(10)(B), a State may, 

15 at its option, condition the provision of medical as16 sistance for an individual upon prepayment of a pre17 mium authorized to be imposed under this section, or 

18 may terminate eligibility for such medical assistance 

19 on the basis of failure to pay such a premium but 

20 shall not terminate eligibility of an individual for 

21 medical assistance under this title on the basis of fail22 ure to pay any such premium until such failure con23 tinues for a period of not less than 60 days. A State 

24 may apply the previous sentence for some or all 

25 groups of beneficiaries as specified by the State and 
267

•S 1932 EAH 

1 may waive payment of any such premium in any 

2 case where the State determines that requiring such 

3 payment would create an undue hardship. 

4 ‘‘(2) COST SHARING.—Notwithstanding section 

5 1916(e) or any other provision of law, a State may 

6 permit a provider participating under the State plan 

7 to require, as a condition for the provision of care, 

8 items, or services to an individual entitled to medical 

9 assistance under this title for such care, items, or 

10 services, the payment of any cost sharing authorized 

11 to be imposed under this section with respect to such 

12 care, items, or services. Nothing in this paragraph 

13 shall be construed as preventing a provider from re14 ducing or waiving the application of such cost shar15 ing.’’. 

16 (b) CONFORMING AMENDMENT.—Section 1916(f) of 

17 such Act (42 U.S.C. 1396o(f)) is amended by inserting ‘‘and 

18 section 1916A’’ after ‘‘(b)(3)’’. 

19 (c) GAO STUDY OF IMPACT OF PREMIUMS AND COST

20 SHARING.—The Comptroller General of the United States 

21 shall conduct a study on the impact of premiums and cost 

22 sharing under the medicaid program on access to, and utili23 zation of, services. Not later than January 1, 2008, the 

24 Comptroller General shall submit to Congress a report on 

25 such study. 
268

•S 1932 EAH 

1 (d) EFFECTIVE DATE.—The amendments made by this 

2 section shall apply to cost sharing imposed for items and 

3 services furnished on or after January 1, 2006. 

4 SEC. 3122. SPECIAL RULES FOR COST SHARING FOR PRE5 SCRIPTION DRUGS. 

6 (a) IN GENERAL.—Section 1916A of the Social Secu7 rity Act, as inserted by section 3121, is amended by insert8 ing after subsection (b) the following new subsection: 

9 ‘‘(c) SPECIAL RULES FOR COST SHARING FOR PRE10 SCRIPTION DRUGS.—

11 ‘‘(1) IN GENERAL.—In order to encourage bene12 ficiaries to use drugs (in this subsection referred to as 

13 ‘preferred drugs’) identified by the State as the least 

14 (or less) costly effective prescription drugs within a 

15 class of drugs (as defined by the State), with respect 

16 to one or more groups of beneficiaries specified by the 

17 State, subject to paragraphs (2) and (5), the State 

18 may—

19 ‘‘(A) provide an increase in cost sharing 

20 (above the nominal level otherwise permitted 

21 under section 1916 or subsection (b), but subject 

22 to paragraphs (2) and (3)) with respect to drugs 

23 that are not preferred drugs within a class; and 

24 ‘‘(B) waive or reduce the cost sharing other25 wise applicable for preferred drugs within such 
269

•S 1932 EAH 

1 class and shall not apply any such cost sharing 

2 for such preferred drugs for individuals for 

3 whom cost sharing may not otherwise be imposed 

4 under subsection (b)(3)(B). 

5 ‘‘(2) LIMITATIONS.—

6 ‘‘(A) BY INCOME GROUP AS A MULTIPLE OF

7 NOMINAL AMOUNTS.—In no case may the in8 crease in cost sharing under paragraph (1)(A) 

9 with respect to a non-preferred drug exceed, in 

10 the case of an individual whose family income 

11 is—

12 ‘‘(i) below 100 percent of the poverty 

13 line applicable to a family of the size in14 volved, the amount of nominal cost sharing 

15 (as otherwise determined under subsection 

16 (b)); 

17 ‘‘(ii) at least 100 percent, but below 

18 150 percent, of the poverty line applicable 

19 to a family of the size involved, two times 

20 the amount of nominal cost sharing (as oth21 erwise determined under subsection (b)); or 

22 ‘‘(iii) at least 150 percent of the pov23 erty line applicable to a family of the size 

24 involved, three times the amount of nominal 
270

•S 1932 EAH 

1 cost sharing (as otherwise determined under 

2 subsection (b)). 

3 ‘‘(B) LIMITATION TO NOMINAL FOR EXEMPT

4 POPULATIONS.—In the case of an individual who 

5 is otherwise not subject to cost sharing due to the 

6 application of subsection (b)(3), any increase in 

7 cost sharing under paragraph (1)(A) with re8 spect to a non-preferred drug may not exceed a 

9 nominal amount (as otherwise determined under 

10 subsection (b)). 

11 ‘‘(C) CONTINUED APPLICATION OF AGGRE12 GATE CAP.—In addition to the limitations im13 posed under subparagraphs (A) and (B), any in14 crease in cost sharing under paragraph (1)(A) 

15 continues to be subject to the aggregate cap on 

16 cost sharing applied under paragraph (1) or (2) 

17 of subsection (b), as the case may be. 

18 ‘‘(D) TRICARE PHARMACY BENEFIT PRO19 GRAM LIMITATIONS.—In no case may a State—

20 ‘‘(i) treat as a non-preferred drug 

21 under this subsection a drug that is treated 

22 as a preferred drug under the TRICARE 

23 pharmacy benefit program established 

24 under section 1074g of title 10, United 
271

•S 1932 EAH 

1 States Code, as such program is in effect on 

2 the date of the enactment of this section; or 

3 ‘‘(ii) impose cost sharing under this 

4 subsection that exceeds the cost sharing im5 posed under the standards under such phar6 macy benefit program, as such program is 

7 in effect as of the date of the enactment of 

8 this section. 

9 ‘‘(3) WAIVER.—In carrying out paragraph (1), a 

10 State shall provide for the application of cost sharing 

11 levels applicable to a preferred drug in the case of a 

12 drug that is not a preferred drug if the prescribing 

13 physician determines that the preferred drug for 

14 treatment of the same condition either would not be 

15 as effective for the individual or would have adverse 

16 effects for the individual or both. 

17 ‘‘(4) EXCLUSION AUTHORITY.—Nothing in this 

18 subsection shall be construed as preventing a State 

19 from excluding from paragraph (1) specified drugs or 

20 classes of drugs. 

21 ‘‘(5) PRIOR AUTHORIZATION AND APPEALS PROC22 ESS.—A State may not provide for increased cost 

23 sharing under this subsection unless the State has im24 plemented for outpatient prescription drugs a system 
272

•S 1932 EAH 

1 for prior authorization and an appeals process for de2 terminations relating to prior authorization.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by sub4 section (a) shall apply to cost sharing imposed for items 

5 and services furnished on or after October 1, 2006. 

6 SEC. 3123. EMERGENCY ROOM COPAYMENTS FOR NON7 EMERGENCY CARE. 

8 (a) IN GENERAL.—Section 1916A of the Social Secu9 rity Act, as inserted by section 3121 and as amended by 

10 section 3122, is further amended by adding at the end the 

11 following new subsection: 

12 ‘‘(e) STATE OPTION FOR IMPOSING COST SHARING FOR

13 NON-EMERGENCY CARE FURNISHED IN AN HOSPITAL

14 EMERGENCY ROOM.—

15 ‘‘(1) IN GENERAL.—Notwithstanding section 

16 1916 or the previous provisions of this section, but 

17 subject to the limitations of paragraph (2), a State 

18 may, by amendment to its State plan under this title, 

19 impose cost sharing for non-emergency services fur20 nished to an individual (within one or more groups 

21 of individuals specified by the State) in a hospital 

22 emergency department under this subsection if the fol23 lowing conditions are met: 

24 ‘‘(A) ACCESS TO NON-EMERGENCY ROOM

25 PROVIDER.—The individual has actually avail-
273

•S 1932 EAH 

1 able and accessible (as such terms are applied by 

2 the Secretary under section 1916(b)(3)) an alter3 nate non-emergency services provider with re4 spect to such services. 

5 ‘‘(B) NOTICE.—The physician or hospital 

6 must inform the beneficiary after the appro7 priate screening assessment, but before providing 

8 the non-emergency services, of the following: 

9 ‘‘(i) The hospital may require the pay10 ment of the State specified cost sharing be11 fore the service can be provided. 

12 ‘‘(ii) The name and location of an al13 ternate non-emergency services provider (de14 scribed in subparagraph (A)) that is actu15 ally available and accessible (as described 

16 in such subparagraph). 

17 ‘‘(iii) The fact that such alternate pro18 vider can provide the services without the 

19 imposition of the increase in cost sharing 

20 described in clause (i). 

21 ‘‘(iv) The hospital provides a referral 

22 to coordinate scheduling of this treatment. 

23 Nothing in this subsection shall be construed as 

24 preventing a State from applying (or waiving) 
274

•S 1932 EAH 

1 cost sharing otherwise permissible under this sec2 tion to services described in clause (iii). 

3 ‘‘(2) LIMITATIONS.—

4 ‘‘(A) FOR POOREST BENEFICIARIES.—In the 

5 case of an individual described in subsection 

6 (b)(1), the cost sharing imposed under this sub7 section may not exceed twice the amount deter8 mined to be nominal under this section, subject 

9 to the percent of income limitation otherwise ap10 plicable under subsection (b)(1). 

11 ‘‘(B) APPLICATION TO EXEMPT POPU12 LATIONS.—In the case of an individual who is 

13 otherwise not subject to cost sharing under sub14 section (b)(3), a State may impose cost sharing 

15 under paragraph (1) for care in an amount that 

16 does not exceed a nominal amount (as otherwise 

17 determined under subsection (b)) so long as no 

18 cost sharing is imposed to receive such care 

19 through an outpatient department or other alter20 native health care provider in the geographic 

21 area of the hospital emergency department in22 volved. 

23 ‘‘(C) CONTINUED APPLICATION OF AGGRE24 GATE CAP.—In addition to the limitations im25 posed under subparagraphs (A) and (B), any in-
275

•S 1932 EAH 

1 crease in cost sharing under paragraph (1) con2 tinues to be subject to the aggregate cap on cost 

3 sharing applied under paragraph (1) or (2) of 

4 subsection (b), as the case may be. 

5 ‘‘(3) CONSTRUCTION.—Nothing in this section 

6 shall be construed—

7 ‘‘(A) to limit a hospital’s obligations with 

8 respect to screening and stabilizing treatment of 

9 an emergency medical condition under section 

10 1867; or 

11 ‘‘(B) to modify any obligations under either 

12 State or Federal standards relating to the appli13 cation of a prudent-layperson standard with re14 spect to payment or coverage of emergency serv15 ices by any managed care organization. 

16 ‘‘(4) DETERMINATION STANDARD.—No hospital 

17 or physician that makes a determination with respect 

18 to the imposition of cost sharing under this subsection 

19 shall be liable in any civil action or proceeding for 

20 such determination absent a finding by clear and 

21 convincing evidence of gross negligence by the hospital 

22 or physician. The previous sentence shall not affect 

23 any liability under section 1867 or otherwise applica24 ble under State law based upon the provision (or fail25 ure to provide) care. 
276

•S 1932 EAH 

1 ‘‘(5) DEFINITIONS.—For purposes of this sub2 section: 

3 ‘‘(A) NON-EMERGENCY SERVICES.—The 

4 term ‘non-emergency services’ means any care or 

5 services furnished in a emergency department of 

6 a hospital that the physician determines do not 

7 constitute an appropriate medical screening ex8 amination or stabilizing examination and treat9 ment screening required to be provided by the 

10 hospital under section 1867. 

11 ‘‘(B) ALTERNATE NON-EMERGENCY SERV12 ICES PROVIDER.—The term ‘alternative non13 emergency services provider’ means, with respect 

14 to non-emergency services for the diagnosis or 

15 treatment of a condition, a health care provider, 

16 such as a physician’s office, health care clinic, 

17 community health center, hospital outpatient de18 partment, or similar health care provider, that 

19 provides clinically appropriate services for such 

20 diagnosis or treatment of the condition within a 

21 clinically appropriate time of the provision of 

22 such non-emergency services and that is partici23 pating in the program under this title.’’. 

24 (b) GRANT FUNDS FOR ESTABLISHMENT OF ALTER25 NATE NON-EMERGENCY SERVICES PROVIDERS.—Section 
277

•S 1932 EAH 

1 1903 of the Social Security Act (42 U.S.C. 1396b) is 

2 amended by adding at the end the following new subsection: 

3 ‘‘(x) PAYMENTS FOR ESTABLISHMENT OF ALTERNATE

4 NON-EMERGENCY SERVICES PROVIDERS.—

5 ‘‘(1) PAYMENTS.—In addition to the payments 

6 otherwise provided under subsection (a), subject to 

7 paragraph (2), the Secretary shall provide for pay8 ments to States under such subsection for the estab9 lishment of alternate non-emergency service providers 

10 (as defined in section 1916A(f)(5)(B)), or networks of 

11 such providers. 

12 ‘‘(2) LIMITATION.—The total amount of pay13 ments under this subsection shall be equal to, and 

14 shall not exceed, $100,000,000 during the four-year 

15 period beginning with 2006. This subsection con16 stitutes budget authority in advance of appropria17 tions Acts and represents the obligation of the Sec18 retary to provide for the payment of amounts pro19 vided under this subsection. 

20 ‘‘(3) PREFERENCE.—In providing for payments 

21 to States under this subsection, the Secretary shall 

22 provide preference to States that establish, or provide 

23 for, alternate non-emergency services providers or net24 works of such providers that—
278

•S 1932 EAH 

1 ‘‘(A) serve rural or underserved areas where 

2 beneficiaries under this title may not have reg3 ular access to providers of primary care services; 

4 or 

5 ‘‘(B) are in partnership with local commu6 nity hospitals. 

7 ‘‘(4) FORM AND MANNER OF PAYMENT.—Pay8 ment to a State under this subsection shall be made 

9 only upon the filing of such application in such form 

10 and in such manner as the Secretary shall specify. 

11 Payment to a State under this subsection shall be 

12 made in the same manner as other payments under 

13 section 1903(a).’’. 

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

15 section shall apply to non-emergency services furnished on 

16 or after the date of the enactment of this Act. 

17 SEC. 3124. USE OF BENCHMARK BENEFIT PACKAGES. 

18 Title XIX of the Social Security Act is amended by 

19 redesignating section 1936 as section 1937 and by inserting 

20 after section 1935 the following new section: 

21 ‘‘STATE FLEXIBILITY IN BENEFIT PACKAGES

22 ‘‘SEC. 1936. (a) STATE OPTION OF PROVIDING BENCH23 MARK BENEFITS.—

24 ‘‘(1) AUTHORITY.—

25 ‘‘(A) IN GENERAL.—Notwithstanding any 

26 other provision of this title, a State, at its option 
279

•S 1932 EAH 

1 as a State plan amendment, may provide for 

2 medical assistance under this title to individuals 

3 within one or more groups of individuals speci4 fied by the State through enrollment in coverage 

5 that provides—

6 ‘‘(i) benchmark coverage described in 

7 subsection (b)(1) and, for a qualifying child, 

8 benchmark dental coverage as defined in 

9 subparagraph (F); or 

10 ‘‘(ii) benchmark equivalent coverage 

11 described in subsection (b)(2)and, for a 

12 qualifying child, benchmark dental coverage 

13 as defined in subparagraph (F). 

14 ‘‘(B) LIMITATION.—The State may only ex15 ercise the option under subparagraph (A) for eli16 gibility categories that had been established be17 fore the date of the enactment of this section. 

18 ‘‘(C) OPTION OF WRAP-AROUND BENE19 FITS.—In the case of coverage described in sub20 paragraph (A), a State, at its option, may pro21 vide such wrap-around or additional benefits as 

22 the State may specify. 

23 ‘‘(D) TREATMENT AS MEDICAL ASSIST24 ANCE.—Payment of premiums for such coverage 

25 under this subsection shall be treated as payment 
280

•S 1932 EAH 

1 of other insurance premiums described in the 

2 third sentence of section 1905(a). 

3 ‘‘(E) QUALIFYING CHILD DEFINED.—For 

4 purposes of subparagraph (A), the term ‘quali5 fying child’ means a child under 18 years of age 

6 with a family income below 133 percent of the 

7 poverty line applicable to a family of the size in8 volved. 

9 ‘‘(F) BENCHMARK DENTAL COVERAGE.—For 

10 purposes of subparagraph (A), the term ‘bench11 mark dental coverage’ means, with respect to a 

12 State, dental benefits coverage that is equivalent 

13 to or better than the dental coverage offered 

14 under the dental benefit plan that covers the 

15 greatest number of individuals in the State who 

16 are not entitled to medical assistance under this 

17 title. 

18 ‘‘(2) APPLICATION.—

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 subparagraph (B), a State may require that a 

21 full-benefit eligible individual (as defined in sub22 paragraph (C)) within a group obtain benefits 

23 under this title through enrollment in coverage 

24 described in paragraph (1)(A). A State may 
281

•S 1932 EAH 

1 apply the previous sentence to individuals with2 in one or more groups of such individuals. 

3 ‘‘(B) LIMITATION ON APPLICATION.—A 

4 State may not require under subparagraph (A) 

5 an individual to obtain benefits through enroll6 ment described in paragraph (1)(A) if the indi7 vidual is within one of the following categories 

8 of individuals: 

9 ‘‘(i) MANDATORY PREGNANT WOMEN

10 AND CHILDREN.—The individual is a preg11 nant woman or child under 18 years of age 

12 who is required to be covered under the 

13 State plan under section 1902(a)(10)(A)(i). 

14 ‘‘(ii) DUAL ELIGIBLES.—The indi15 vidual is entitled to benefits under any part 

16 of title XVIII. 

17 ‘‘(iii) TERMINALLY ILL HOSPICE PA18 TIENTS.—The individual is terminally ill 

19 and is receiving benefits for hospice care 

20 under this title. 

21 ‘‘(iv) ELIGIBLE ON BASIS OF INSTITU22 TIONALIZATION.—The individual is an in23 patient in a hospital, nursing facility, in24 termediate care facility for the mentally re25 tarded, or other medical institution, and is 
282

•S 1932 EAH 

1 required, as a condition of receiving services 

2 in such institution under the State plan, to 

3 spend for costs of medical care all but a 

4 minimal amount of the individual’s income 

5 required for personal needs. 

6 ‘‘(v) MEDICALLY FRAIL AND SPECIAL

7 MEDICAL NEEDS INDIVIDUALS.—The indi8 vidual is medically frail or otherwise an in9 dividual with special medical needs (as 

10 identified in accordance with regulations of 

11 the Secretary). 

12 ‘‘(vi) BENEFICIARIES QUALIFYING FOR

13 LONG-TERM CARE SERVICES.—The indi14 vidual qualifies based on medical condition 

15 for medical assistance for long-term care 

16 services described in section 1917(c)(1)(C). 

17 ‘‘(C) FULL-BENEFIT ELIGIBLE INDIVID18 UALS.—

19 ‘‘(i) IN GENERAL.—For purposes of 

20 this paragraph, subject to clause (ii), the 

21 term ‘full-benefit eligible individual’ means 

22 for a State for a month an individual who 

23 is determined eligible by the State for med24 ical assistance for all services defined in sec25 tion 1905(a) which are covered under the 
283

•S 1932 EAH 

1 State plan under this title for such month 

2 under section 1902(a)(10)(A) or under any 

3 other category of eligibility for medical as4 sistance for all such services under this title, 

5 as determined by the Secretary. 

6 ‘‘(ii) EXCLUSION OF MEDICALLY NEEDY

7 AND SPEND-DOWN POPULATIONS.—Such 

8 term shall not include an individual deter9 mined to be eligible by the State for medical 

10 assistance under section 1902(a)(10)(C) or 

11 by reason of section 1902(f) or otherwise eli12 gible based on a reduction of income based 

13 on costs incurred for medical or other reme14 dial care. 

15 ‘‘(b) BENCHMARK BENEFIT PACKAGES.—

16 ‘‘(1) IN GENERAL.—For purposes of subsection 

17 (a)(1), each of the following coverage shall be consid18 ered to be benchmark coverage: 

19 ‘‘(A) FEHBP-EQUIVALENT HEALTH INSUR20 ANCE COVERAGE.—The standard Blue Cross/Blue 

21 Shield preferred provider option service benefit 

22 plan, described in and offered under section 

23 8903(1) of title 5, United States Code. 

24 ‘‘(B) STATE EMPLOYEE COVERAGE.—A 

25 health benefits coverage plan that is offered and 
284

•S 1932 EAH 

1 generally available to State employees in the 

2 State involved. 

3 ‘‘(C) COVERAGE OFFERED THROUGH

4 HMO.—The health insurance coverage plan 

5 that—

6 ‘‘(i) is offered by a health maintenance 

7 organization (as defined in section 

8 2791(b)(3) of the Public Health Service 

9 Act), and 

10 ‘‘(ii) has the largest insured commer11 cial, non-medicaid enrollment of covered 

12 lives of such coverage plans offered by such 

13 a health maintenance organization in the 

14 State involved. 

15 ‘‘(2) BENCHMARK-EQUIVALENT COVERAGE.—For 

16 purposes of subsection (a)(1), coverage that meets the 

17 following requirement shall be considered to be bench18 mark-equivalent coverage: 

19 ‘‘(A) INCLUSION OF BASIC SERVICES.—The 

20 coverage includes benefits for items and services 

21 within each of the following categories of basic 

22 services: 

23 ‘‘(i) Inpatient and outpatient hospital 

24 services. 
285

•S 1932 EAH 

1 ‘‘(ii) Physicians’ surgical and medical 

2 services. 

3 ‘‘(iii) Laboratory and x-ray services. 

4 ‘‘(iv) Well-baby and well-child care, in5 cluding age-appropriate immunizations. 

6 ‘‘(v) Other appropriate preventive serv7 ices, as designated by the Secretary. 

8 ‘‘(B) AGGREGATE ACTUARIAL VALUE EQUIV9 ALENT TO BENCHMARK PACKAGE.—The coverage 

10 has an aggregate actuarial value that is at least 

11 actuarially equivalent to one of the benchmark 

12 benefit packages described in paragraph (1). 

13 ‘‘(C) SUBSTANTIAL ACTUARIAL VALUE FOR

14 ADDITIONAL SERVICES INCLUDED IN BENCHMARK

15 PACKAGE.—With respect to each of the following 

16 categories of additional services for which cov17 erage is provided under the benchmark benefit 

18 package used under subparagraph (B), the cov19 erage has an actuarial value that is equal to at 

20 least 75 percent of the actuarial value of the cov21 erage of that category of services in such pack22 age: 

23 ‘‘(i) Coverage of prescription drugs. 

24 ‘‘(ii) Mental health services. 

25 ‘‘(iii) Vision services. 
286

•S 1932 EAH 

1 ‘‘(iv) Hearing services. 

2 ‘‘(3) DETERMINATION OF ACTUARIAL VALUE.—

3 The actuarial value of coverage of benchmark benefit 

4 packages shall be set forth in an actuarial opinion in 

5 an actuarial report that has been prepared—

6 ‘‘(A) by an individual who is a member of 

7 the American Academy of Actuaries; 

8 ‘‘(B) using generally accepted actuarial 

9 principles and methodologies; 

10 ‘‘(C) using a standardized set of utilization 

11 and price factors; 

12 ‘‘(D) using a standardized population that 

13 is representative of the population involved; 

14 ‘‘(E) applying the same principles and fac15 tors in comparing the value of different coverage 

16 (or categories of services); 

17 ‘‘(F) without taking into account any dif18 ferences in coverage based on the method of deliv19 ery or means of cost control or utilization used; 

20 and 

21 ‘‘(G) taking into account the ability of a 

22 State to reduce benefits by taking into account 

23 the increase in actuarial value of benefits cov24 erage offered under this title that results from the 

25 limitations on cost sharing under such coverage. 
287

•S 1932 EAH 

1 The actuary preparing the opinion shall select and 

2 specify in the memorandum the standardized set and 

3 population to be used under subparagraphs (C) and 

4 (D). 

5 ‘‘(4) COVERAGE OF RURAL HEALTH CLINIC AND

6 FQHC SERVICES.—Notwithstanding the previous pro7 visions of this section, a State may not provide for 

8 medical assistance through enrollment of an indi9 vidual with benchmark coverage or benchmark equiva10 lent coverage under this section unless—

11 ‘‘(A) the individual has access, through such 

12 coverage or otherwise, to services described in 

13 subparagraphs (B) and (C) of section 

14 1905(a)(2); and 

15 ‘‘(B) payment for such services is made in 

16 accordance with the requirements of section 

17 1902(bb).’’. 

18 SEC. 3125. STATE OPTION TO ESTABLISH NON-EMERGENCY 

19 MEDICAL TRANSPORTATION PROGRAM. 

20 (a) IN GENERAL.—Section 1902(a) of the Social Secu21 rity Act (42 U.S.C. 1396a(a)) is amended—

22 (1) in paragraph (66), by striking ‘‘and’’ at the 

23 end; 

24 (2) in paragraph (67) by striking the period at 

25 the end and inserting ‘‘; and’’; and 
288

•S 1932 EAH 

1 (3) by inserting after paragraph (67) the fol2 lowing: 

3 ‘‘(68) at the option of the State and notwith4 standing paragraph (10)(B) or (23), provide for the 

5 establishment of a non-emergency medical transpor6 tation brokerage program in order to more cost-effec7 tively provide transportation for individuals eligible 

8 for medical assistance under the State plan who need 

9 access to medical care or services and have no other 

10 means of transportation which—

11 ‘‘(A) may include a wheelchair van, taxi, 

12 stretcher car, bus passes and tickets, secured 

13 transportation, and such other transportation as 

14 the Secretary determines appropriate; and 

15 ‘‘(B) may be conducted under contract with 

16 a broker who—

17 ‘‘(i) is selected through a competitive 

18 bidding process based on the State’s evalua19 tion of the broker’s experience, performance, 

20 references, resources, qualifications, and 

21 costs; 

22 ‘‘(ii) has oversight procedures to mon23 itor beneficiary access and complaints and 

24 ensure that transport personnel are licensed, 

25 qualified, competent, and courteous; 
289

•S 1932 EAH 

1 ‘‘(iii) is subject to regular auditing 

2 and oversight by the State in order to en3 sure the quality of the transportation serv4 ices provided and the adequacy of bene5 ficiary access to medical care and services; 

6 and 

7 ‘‘(iv) complies with such requirements 

8 related to prohibitions on referrals and con9 flict of interest as the Secretary shall estab10 lish (based on the prohibitions on physician 

11 referrals under section 1877 and such other 

12 prohibitions and requirements as the Sec13 retary determines to be appropriate).’’. 

14 (b) EFFECTIVE DATE.—The amendments made by sub15 section (a) take effect on the date of the enactment of this 

16 Act. 

17 (c) IG REPORT ON UTILIZATION.—Not later than Jan18 uary 1, 2007, the Inspector General of the Department of 

19 Health and Human Services shall submit to Congress a re20 port that examines the non-emergency medical transpor21 tation brokerage programs implemented under section 

22 1902(a)(68) of the Social Security Act, as inserted by sub23 section (a). The report shall include findings regarding con24 flicts of interest and improper utilization of transportation 
290

•S 1932 EAH 

1 services under such programs, as well as recommendations 

2 for improvements in such programs. 

3 SEC. 3126. EXEMPTING WOMEN COVERED UNDER BREAST 

4 OR CERVICAL CANCER PROGRAM. 

5 Notwithstanding any other provision of law, none of 

6 provisions of the previous sections of this chapter, or 

7 amendments made by such sections, shall apply to women 

8 who are receiving medical assistance by virtue of the appli9 cation of sections 1902(a)(10)(A)(ii)(XVIII) and 1902(aa) 

10 of the Social Security Act (42 U.S.C. 

11 1396a(a)(10)(A)(ii)(XVIII), 1396a(aa)). 

12 CHAPTER 4—EXPANDED ACCESS TO 

13 CERTAIN BENEFITS 

14 SEC. 3131. EXPANDED ACCESS TO HOME AND COMMUNITY15 BASED SERVICES FOR THE ELDERLY AND DIS16 ABLED. 

17 (a) IN GENERAL.—Section 1905(a) of the Social Secu18 rity Act (42 U.S.C. 1396d(a)) is amended—

19 (1) in paragraph (27), by striking ‘‘and’’ at the 

20 end; 

21 (2) by redesignating paragraph (28) as para22 graph (29); and 

23 (3) by inserting after paragraph (27) the fol24 lowing new paragraph: 
291

•S 1932 EAH 

1 ‘‘(28) subject to section 1902(cc), home and com2 munity-based services (within the scope of services de3 scribed in paragraph (4)(B) of section 1915(c) for 

4 which the Secretary has the authority to approve a 

5 waiver and not including room and board) provided 

6 pursuant to a written plan of care for individuals—

7 ‘‘(A) who are 65 years of age or older, who 

8 are disabled (as defined under the State plan), 

9 who are persons with developmental disabilities 

10 or mental retardation or persons with related 

11 conditions, or who are within a subgroup thereof 

12 under the State plan; 

13 ‘‘(B) with respect to whom there has been a 

14 determination, in the manner described in para15 graph (1) of such section, that but for the provi16 sion of such services the individuals would re17 quire the level of care provided in a hospital, a 

18 nursing facility, or an intermediate care facility 

19 for the mentally retarded the cost of which could 

20 be reimbursed under the State plan; and 

21 ‘‘(C) who qualify for medical assistance 

22 under the eligibility standards in effect in the 

23 State (which may include standards in effect 

24 under an approved waiver) as of the date of the 

25 enactment of this paragraph; and’’. 
292

•S 1932 EAH 

1 (b) CONDITIONS.—Section 1902 of such Act (42 U.S.C. 

2 1396a) is amended by adding at the end the following new 

3 subsection: 

4 ‘‘(cc) PROVISION OF HOME AND COMMUNITY-BASED

5 SERVICES UNDER STATE PLAN.—

6 ‘‘(1) CONDITIONS.—A State may provide home 

7 and community-based services under section 

8 1905(a)(28), other than through a waiver or dem9 onstration project under section 1915 or 1115, only if 

10 the following conditions are met: 

11 ‘‘(A) EXPIRATION OF PREVIOUS WAIVER.—

12 Any State waiver or demonstration project 

13 under either such section with respect to services 

14 for individuals described in such section has ex15 pired. 

16 ‘‘(B) INFORMATION.—The State must mon17 itor and report to the Secretary, in a form and 

18 manner specified by the Secretary and on a 

19 quarterly basis, enrollment and expenditures for 

20 provision of such services under such section. 

21 ‘‘(2) OPTIONS.—Notwithstanding any other pro22 vision of this title, in a State’s provision of services 

23 under section 1905(a)(28)—

24 ‘‘(A) a State is not required to comply with 

25 the requirements of section 1902(a)(1) (relating 
293

•S 1932 EAH 

1 to statewideness), section 1902(a)(10)(B) (relat2 ing to comparability), and section 

3 1902(a)(10)(C)(i)(III) (relating to income and 

4 resource rules applicable in the community); 

5 ‘‘(B) a State may limit the number of indi6 viduals who are eligible for such services and 

7 may establish waiting lists for the receipt of such 

8 services; and 

9 ‘‘(C) a State may limit the amount, dura10 tion, and scope of such services. 

11 Nothing in this section shall be construed as applying 

12 the previous sentence to any items or services other 

13 than home and community-based services provided 

14 under section 1905(a)(28). 

15 ‘‘(3) USE OF ELECTRONIC DATA.—The State 

16 shall permit health care providers to comply with 

17 documentation and data requirements imposed with 

18 respect to home and community-based services 

19 through the maintenance of data in electronic form 

20 rather than in paper form.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by this 

22 section shall apply to home and community-based services 

23 furnished on or after October 1, 2006. 
294

•S 1932 EAH 

1 SEC. 3132. OPTIONAL CHOICE OF SELF-DIRECTED PER2 SONAL ASSISTANCE SERVICES (CASH AND 

3 COUNSELING). 

4 (a) EXEMPTION FROM CERTAIN REQUIREMENTS.—

5 Section 1915 of the Social Security Act (42 U.S.C. 1396n) 

6 is amended by adding at the end the following new sub7 section: 

8 ‘‘(i)(1) A State may provide, as ‘medical assistance’, 

9 payment for part or all of the cost of self-directed personal 

10 assistance services (other than room and board) under the 

11 plan which are provided pursuant to a written plan of care 

12 to individuals with respect to whom there has been a deter13 mination that, but for the provision of such services, the 

14 individuals would require and receive personal care services 

15 under the plan, or home and community-based services pro16 vided pursuant to a waiver under subsection (c). Self-di17 rected personal assistance services may not be provided 

18 under this subsection to individuals who reside in a home 

19 or property that is owned, operated, or controlled by a pro20 vider of services, not related by blood or marriage. 

21 ‘‘(2) The Secretary shall not grant approval for a State 

22 self-directed personal assistance services program under this 

23 section unless the State provides assurances satisfactory to 

24 the Secretary of the following: 

25 ‘‘(A) Necessary safeguards have been taken to 

26 protect the health and welfare of individuals provided 
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•S 1932 EAH 

1 services under the program, and to assure financial 

2 accountability for funds expended with respect to such 

3 services. 

4 ‘‘(B) The State will provide, with respect to in5 dividuals who—

6 ‘‘(i) are entitled to medical assistance for 

7 personal care services under the plan, or receive 

8 home and community-based services under a 

9 waiver granted under subsection (c); 

10 ‘‘(ii) may require self-directed personal as11 sistance services; and 

12 ‘‘(iii) may be eligible for self-directed per13 sonal assistance services, 

14 an evaluation of the need for personal care under the 

15 plan, or personal services under a waiver granted 

16 under subsection (c). 

17 ‘‘(C) Such individuals who are determined to be 

18 likely to require personal care under the plan, or 

19 home and community-based services under a waiver 

20 granted under subsection (c) are informed of the fea21 sible alternatives, if available under the State’s self22 directed personal assistance services program, at the 

23 choice of such individuals, to the provision of personal 

24 care services under the plan, or personal assistance 

25 services under a waiver granted under subsection (c). 
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•S 1932 EAH 

1 ‘‘(D) The State will provide for a support system 

2 that ensures participants in the self-directed personal 

3 assistance services program are appropriately assessed 

4 and counseled prior to enrollment and are able to 

5 manage their budgets. Additional counseling and 

6 management support may be provided at the request 

7 of the participant. 

8 ‘‘(E) The State will provide to the Secretary an 

9 annual report on the number of individuals served 

10 and total expenditures on their behalf in the aggre11 gate. The State shall also provide an evaluation of 

12 overall impact on the health and welfare of partici13 pating individuals compared to non-participants 

14 every three years. 

15 ‘‘(3) A State may provide self-directed personal assist16 ance services under the State plan without regard to the 

17 requirements of section 1902(a)(1) and may limit the popu18 lation eligible to receive these services and limit the number 

19 of persons served without regard to section 1902(a)(10)(B). 

20 ‘‘(4)(A) For purposes of this subsection, the term ‘self21 directed personal assistance services’ means personal care 

22 and related services, or home and community-based services 

23 otherwise available under the plan under this title or sub24 section (c), that are provided to an eligible participant 

25 under a self-directed personal assistance services program 
297

•S 1932 EAH 

1 under this section, under which individuals, within an ap2 proved self-directed services plan and budget, purchase per3 sonal assistance and related services, and permits partici4 pants to hire, fire, supervise, and manage the individuals 

5 providing such services. 

6 ‘‘(B) At the election of the State—

7 ‘‘(i) a participant may choose to use any indi8 vidual capable of providing the assigned tasks includ9 ing legally liable relatives as paid providers of the 

10 services; and 

11 ‘‘(ii) the individual may use the individual’s 

12 budget to acquire items that increase independence or 

13 substitute (such as a microwave oven or an accessi14 bility ramp) for human assistance, to the extent that 

15 expenditures would otherwise be made for the human 

16 assistance. 

17 ‘‘(5) For purpose of this section, the term ‘approved 

18 self-directed services plan and budget’ means, with respect 

19 to a participant, the establishment of a plan and budget 

20 for the provision of self-directed personal assistance services, 

21 consistent with the following requirements: 

22 ‘‘(A) SELF-DIRECTION.—The participant (or in 

23 the case of a participant who is a minor child, the 

24 participant’s parent or guardian, or in the case of an 

25 incapacitated adult, another individual recognized by 
298

•S 1932 EAH 

1 State law to act on behalf of the participant) exercises 

2 choice and control over the budget, planning, and 

3 purchase of self-directed personal assistance services, 

4 including the amount, duration, scope, provider, and 

5 location of service provision. 

6 ‘‘(B) ASSESSMENT OF NEEDS.—There is an as7 sessment of the needs, strengths, and preferences of the 

8 participants for such services. 

9 ‘‘(C) SERVICE PLAN.—A plan for such services 

10 (and supports for such services) for the participant 

11 has been developed and approved by the State based 

12 on such assessment through a person-centered process 

13 that—

14 ‘‘(i) builds upon the participant’s capacity 

15 to engage in activities that promote community 

16 life and that respects the participant’s pref17 erences, choices, and abilities; and 

18 ‘‘(ii) involves families, friends, and profes19 sionals in the planning or delivery of services or 

20 supports as desired or required by the partici21 pant. 

22 ‘‘(D) SERVICE BUDGET.—A budget for such serv23 ices and supports for the participant has been devel24 oped and approved by the State based on such assess25 ment and plan and on a methodology that uses valid, 
299

•S 1932 EAH 

1 reliable cost data, is open to public inspection, and 

2 includes a calculation of the expected cost of such 

3 services if those services were not self-directed. The 

4 budget may not restrict access to other medically nec5 essary care and services furnished under the plan and 

6 approved by the State but not included in the budget. 

7 ‘‘(E) APPLICATION OF QUALITY ASSURANCE AND

8 RISK MANAGEMENT.—There are appropriate quality 

9 assurance and risk management techniques used in 

10 establishing and implementing such plan and budget 

11 that recognize the roles and responsibilities in obtain12 ing services in a self-directed manner and assure the 

13 appropriateness of such plan and budget based upon 

14 the participant’s resources and capabilities. 

15 ‘‘(6) A State may employ a financial management en16 tity to make payments to providers, track costs, and make 

17 reports under the program. Payment for the activities of 

18 the financial management entity shall be at the administra19 tive rate established in section 1903(a).’’. 

20 (b) EFFECTIVE DATE.—The amendment made by sub21 section (a) shall apply to services furnished on or after Jan22 uary 1, 2006. 
300

•S 1932 EAH 

1 SEC. 3133. EXPANSION OF STATE LONG-TERM CARE PART2 NERSHIP PROGRAM. 

3 (a) IN GENERAL.—Section 1917(b)(1)(C) of the Social 

4 Security Act (42 U.S.C. 1396p(b)(1)(C)) is amended—

5 (1) in clause (ii), by inserting ‘‘or which has a 

6 State plan amendment that provides for a qualified 

7 State long-term care insurance partnership (as de8 fined in clause (iii))’’ after ‘‘1993,’’; and 

9 (2) by adding at the end the following new 

10 clauses: 

11 ‘‘(iii) For purposes of this paragraph, the term 

12 ‘qualified State long-term care insurance partnership’ 

13 means an approved State plan amendment under this 

14 title that provides for the disregard of any assets or 

15 resources in an amount equal to the insurance benefit 

16 payments that are made to or on behalf of an indi17 vidual who is a beneficiary under a long-term care 

18 insurance policy (including a certificate issued under 

19 a group insurance contract), if the following require20 ments are met: 

21 ‘‘(I) The policy covers an insured who was 

22 a resident of such State when coverage first be23 came effective under the policy. 

24 ‘‘(II) The policy is a qualified long-term 

25 care insurance policy (as defined in section 

26 7702B(b) of the Internal Revenue Code of 1986) 
301

•S 1932 EAH 

1 issued on or after the first day of the first cal2 endar quarter in which the plan amendment was 

3 submitted to the Secretary. 

4 ‘‘(III) If the policy does not provide some 

5 level of inflation protection, the insured was of6 fered, before the policy was sold, a long-term care 

7 insurance policy that provides some level of in8 flation protection. 

9 ‘‘(IV) The State Medicaid agency under sec10 tion 1902(a)(5) provides information and tech11 nical assistance to the State insurance depart12 ment on the insurance department’s role of as13 suring that any individual who sells a long-term 

14 care insurance policy under the partnership re15 ceives training or demonstrates evidence of an 

16 understanding of such policies and how they re17 late to other public and private coverage of long18 term care. 

19 ‘‘(V) The issuer of the policy provides reg20 ular reports to the Secretary that include, in ac21 cordance with regulations of the Secretary (pro22 mulgated after consultation with the States), no23 tification regarding when all benefits provided 

24 under the policy have been paid and the amount 

25 of such benefits paid, when the policy otherwise 
302

•S 1932 EAH 

1 terminates, and such other information as the 

2 Secretary determines may be appropriate to the 

3 administration of such partnerships. 

4 ‘‘(VI) The State does not impose any re5 quirement affecting the terms or benefits of such 

6 a policy unless the State imposes such require7 ment on long-term care insurance policies with8 out regard to whether the policy is covered under 

9 the partnership or is offered in connection with 

10 such a partnership. 

11 In the case of a long-term care insurance policy 

12 which is exchanged for another such policy, subclause 

13 (I) shall be applied based on the coverage of the first 

14 such policy that was exchanged. 

15 ‘‘(iv) The Secretary—

16 ‘‘(I) as appropriate, shall provide copies of 

17 the reports described in clause (iii)(V) to the 

18 State involved; and 

19 ‘‘(II) shall promote the education of con20 sumers regarding qualified State long-term care 

21 insurance partnerships. 

22 ‘‘(v) The Secretary, in consultation with other 

23 appropriate Federal agencies, issuers of long-term 

24 care insurance, the National Association of Insurance 

25 Commissioners, and State insurance commissioners, 
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•S 1932 EAH 

1 shall develop recommendations for Congress to author2 ize and fund a uniform minimum data set to be re3 ported electronically by all issuers of long-term care 

4 insurance policies under qualified State long-term 

5 care insurance partnerships to a secure, centralized 

6 electronic query and report-generating mechanism 

7 that the State, the Secretary, and other Federal agen8 cies can access.’’. 

9 (b) CONSTRUCTION.—Nothing in the amendments 

10 made by subsection (a) shall be construed as affecting the 

11 treatment of long-term care insurance policies that will be, 

12 are, or were provided under a State plan amendment de13 scribed in section 1917(b)(1)(C)(ii) of the Social Security 

14 Act that was approved as of May 14, 1993. 

15 (c) EFFECTIVE DATE.—A State plan amendment that 

16 provides for a qualified State long-term care insurance 

17 partnership under the amendments made by subsection (a) 

18 may provide that such amendment is effective for long-term 

19 care insurance policies issued on or after a date, specified 

20 in the amendment, that is not earlier than the first day 

21 of the first calendar quarter in which the plan amendment 

22 was submitted to the Secretary of Health and Human Serv23 ices. 

24 (d) STANDARDS FOR RECIPROCAL RECOGNITION

25 AMONG PARTNERSHIP STATES.—In order to permit port-
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•S 1932 EAH 

1 ability in long-term care insurance policies purchased 

2 under State long-term care insurance partnerships, the Sec3 retary of Health and Human Services may develop, in con4 sultation with the States and the National Association of 

5 Insurance Commissioners, uniform standards for reciprocal 

6 recognition of such policies among States with qualified 

7 State long-term care insurance partnerships. 

8 SEC. 3134. HEALTH OPPORTUNITY ACCOUNTS. 

9 Title XIX of the Social Security Act, as amended by 

10 section 3124, is amended—

11 (1) by redesignating section 1937 as section 

12 1938; and 

13 (2) by inserting after section 1936 the following 

14 new section: 

15 ‘‘HEALTH OPPORTUNITY ACCOUNTS

16 ‘‘SEC. 1937. (a) AUTHORITY.—

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

18 provision of this title, the Secretary shall establish a 

19 demonstration program under which States may pro20 vide under their State plans under this title (includ21 ing such a plan operating under a statewide waiver 

22 under section 1115) in accordance with this section 

23 for the provision of alternative benefits consistent 

24 with subsection (c) for eligible population groups in 

25 one or more geographic areas of the State specified by 

26 the State. An amendment under the previous sentence 
305

•S 1932 EAH 

1 is referred to in this section as a ‘State demonstration 

2 program’. 

3 ‘‘(2) INITIAL DEMONSTRATION.—The demonstra4 tion program under this section shall begin on Janu5 ary 1, 2006. During the first 5 years of such pro6 gram, the Secretary shall not approve more than 10 

7 State demonstration programs, with each State dem8 onstration program covering one or more geographic 

9 areas specified by the State. After such 5-year pe10 riod—

11 ‘‘(A) unless the Secretary finds, taking into 

12 account cost-effectiveness, quality of care, and 

13 other criteria that the Secretary specifies, that a 

14 State demonstration program previously imple15 mented has been unsuccessful, such a demonstra16 tion program may be extended or made perma17 nent in the State; and 

18 ‘‘(B) unless the Secretary finds, taking into 

19 account cost-effectiveness, quality of care, and 

20 other criteria that the Secretary specifies, that 

21 all State demonstration programs previously im22 plemented were unsuccessful, other States may 

23 implement State demonstration programs. 
306

•S 1932 EAH 

1 ‘‘(3) APPROVAL.—The Secretary shall not ap2 prove a State demonstration program under para3 graph (1) unless the program includes the following: 

4 ‘‘(A) Creating patient awareness of the high 

5 cost of medical care. 

6 ‘‘(B) Providing incentives to patients to 

7 seek preventive care services. 

8 ‘‘(C) Reducing inappropriate use of health 

9 care services. 

10 ‘‘(D) Enabling patients to take responsi11 bility for health outcomes. 

12 ‘‘(E) Providing enrollment counselors and 

13 ongoing education activities. 

14 ‘‘(F) Providing transactions involving 

15 health opportunity accounts to be conducted elec16 tronically and without cash. 

17 ‘‘(G) Providing access to negotiated pro18 vider payment rates consistent with this section. 

19 Nothing in this section shall be construed as pre20 venting a State demonstration program from pro21 viding incentives for patients obtaining appropriate 

22 preventive care (as defined for purposes of section 

23 223(c)(2)(C) of the Internal Revenue Code of 1986), 

24 such as additional account contributions for an indi25 vidual demonstrating healthy prevention practices. 
307

•S 1932 EAH 

1 ‘‘(4) NO REQUIREMENT FOR STATEWIDENESS.—

2 Nothing in this section or any other provision of law 

3 shall be construed to require that a State must pro4 vide for the implementation of a State demonstration 

5 program on a Statewide basis. 

6 ‘‘(5) REPORTS.—The Secretary shall periodically 

7 submit to Congress reports regarding the success of 

8 State demonstration programs. 

9 ‘‘(b) ELIGIBLE POPULATION GROUPS.—

10 ‘‘(1) IN GENERAL.—A State demonstration pro11 gram under this section shall specify the eligible pop12 ulation groups consistent with paragraphs (2) and 

13 (3). 

14 ‘‘(2) ELIGIBILITY LIMITATIONS DURING INITIAL

15 DEMONSTRATION PERIOD.—During the initial 5 years 

16 of the demonstration program under this section, a 

17 State demonstration program shall not apply to any 

18 of the following individuals: 

19 ‘‘(A) Individuals who are 65 years of age or 

20 older. 

21 ‘‘(B) Individuals who are disabled, regard22 less of whether or not their eligibility for medical 

23 assistance under this title is based on such dis24 ability. 
308

•S 1932 EAH 

1 ‘‘(C) Individuals who are eligible for med2 ical assistance under this title only because they 

3 are (or were within the previous 60 days) preg4 nant. 

5 ‘‘(D) Individuals who have been eligible for 

6 medical assistance for a continuous period of less 

7 than 3 months. 

8 ‘‘(3) ADDITIONAL LIMITATIONS.—A State dem9 onstration program shall not apply to any individual 

10 within a category of individuals described in section 

11 1936(a)(2)(B). 

12 ‘‘(4) LIMITATIONS.—

13 ‘‘(A) STATE OPTION.—This subsection shall 

14 not be construed as preventing a State from fur15 ther limiting eligibility. 

16 ‘‘(B) ON ENROLLEES IN MEDICAID MAN17 AGED CARE ORGANIZATIONS.—Insofar as the 

18 State provides for eligibility of individuals who 

19 are enrolled in medicaid managed care organiza20 tions, such individuals may participate in the 

21 State demonstration program only if the State 

22 provides assurances satisfactory to the Secretary 

23 that the following conditions are met with re24 spect to any such organization: 
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•S 1932 EAH 

1 ‘‘(i) In no case may the number of 

2 such individuals enrolled in the organiza3 tion who participate in the program exceed 

4 5 percent of the total number of individuals 

5 enrolled in such organization. 

6 ‘‘(ii) The proportion of enrollees in the 

7 organization who so participate is not sig8 nificantly disproportionate to the propor9 tion of such enrollees in other such organi10 zations who participate. 

11 ‘‘(iii) The State has provided for an 

12 appropriate adjustment in the per capita 

13 payments to the organization to account for 

14 such participation, taking into account dif15 ferences in the likely use of health services 

16 between enrollees who so participate and en17 rollees who do not so participate. 

18 ‘‘(5) VOLUNTARY PARTICIPATION.—An eligible 

19 individual shall be enrolled in a State demonstration 

20 program only if the individual voluntarily enrolls. 

21 Except in such hardship cases as the Secretary shall 

22 specify, such an enrollment shall be effective for a pe23 riod of 12 months, but may be extended for additional 

24 periods of 12 months each with the consent of the in25 dividual. 
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•S 1932 EAH 

1 ‘‘(c) ALTERNATIVE BENEFITS.—

2 ‘‘(1) IN GENERAL.—The alternative benefits pro3 vided under this section shall consist, consistent with 

4 this subsection, of at least—

5 ‘‘(A) coverage for medical expenses in a 

6 year for items and services for which benefits are 

7 otherwise provided under this title after an an8 nual deductible described in paragraph (2) has 

9 been met; and 

10 ‘‘(B) contribution into a health opportunity 

11 account. 

12 Nothing in subparagraph (A) shall be construed as 

13 preventing a State from providing for coverage of pre14 ventive care (referred to in subsection (a)(3)) within 

15 the alternative benefits without regard to the annual 

16 deductible. 

17 ‘‘(2) ANNUAL DEDUCTIBLE.—The amount of the 

18 annual deductible described in paragraph (1)(A) shall 

19 be at least 100 percent, but no more than 110 percent, 

20 of the annualized amount of contributions to the 

21 health opportunity account under subsection 

22 (d)(2)(A)(i), determined without regard to any limi23 tation described in subsection (d)(2)(C)(i)(II). 

24 ‘‘(3) ACCESS TO NEGOTIATED PROVIDER PAY25 MENT RATES.—
311

•S 1932 EAH 

1 ‘‘(A) FEE-FOR-SERVICE ENROLLEES.—In 

2 the case of an individual who is participating in 

3 a State demonstration program and who is not 

4 enrolled with a medicaid managed care organi5 zation, the State shall provide that the indi6 vidual may obtain demonstration program med7 icaid services from—

8 ‘‘(i) any participating provider under 

9 this title at the same payment rates that 

10 would be applicable to such services if the 

11 deductible described in paragraph (1)(A) 

12 was not applicable; or 

13 ‘‘(ii) any provider at payment rates 

14 that do not exceed 125 percent of the pay15 ment rate that would be applicable to such 

16 services furnished by a participating pro17 vider under this title if the deductible de18 scribed in paragraph (1)(A) was not appli19 cable. 

20 ‘‘(B) TREATMENT UNDER MEDICAID MAN21 AGED CARE PLANS.—In the case of an individual 

22 who is participating in a State demonstration 

23 program and is enrolled with a medicaid man24 aged care organization, the State shall enter into 

25 an arrangement with the organization under 
312

•S 1932 EAH 

1 which the individual may obtain demonstration 

2 program medicaid services from any provider 

3 under such organization at payment rates that 

4 do not exceed the payment rate that would be ap5 plicable to such services if the deductible de6 scribed in paragraph (1)(A) was not applicable. 

7 ‘‘(C) COMPUTATION.—The payment rates 

8 described in subparagraphs (A) and (B) shall be 

9 computed without regard to any cost sharing 

10 that would be otherwise applicable under sections 

11 1916 and 1916A. 

12 ‘‘(D) DEFINITIONS.—For purposes of this 

13 paragraph: 

14 ‘‘(i) The term ‘demonstration program 

15 medicaid services’ means, with respect to an 

16 individual participating in a State dem17 onstration program, services for which the 

18 individual would be provided medical as19 sistance under this title but for the applica20 tion of the deductible described in para21 graph (1)(A). 

22 ‘‘(ii) The term ‘participating provider’ 

23 means—

24 ‘‘(I) with respect to an individual 

25 described in subparagraph (A), a 
313

•S 1932 EAH 

1 health care provider that has entered 

2 into a participation agreement with 

3 the State for the provision of services 

4 to individuals entitled to benefits 

5 under the State plan; or 

6 ‘‘(II) with respect to an indi7 vidual described in subparagraph (B) 

8 who is enrolled in a medicaid managed 

9 care organization, a health care pro10 vider that has entered into an arrange11 ment for the provision of services to en12 rollees of the organization under this 

13 title. 

14 ‘‘(4) NO EFFECT ON SUBSEQUENT BENEFITS.—

15 Except as provided under paragraphs (1) and (2), al16 ternative benefits for an eligible individual shall con17 sist of the benefits otherwise provided to the indi18 vidual, including cost sharing relating to such bene19 fits. 

20 ‘‘(5) OVERRIDING COST SHARING AND COM21 PARABILITY REQUIREMENTS FOR ALTERNATIVE BENE22 FITS.—The provisions of this title relating to cost 

23 sharing for benefits (including sections 1916 and 

24 1916A) shall not apply with respect to benefits to 

25 which the annual deductible under paragraph (1)(A) 
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•S 1932 EAH 

1 applies. The provisions of section 1902(a)(10)(B) (re2 lating to comparability) shall not apply with respect 

3 to the provision of alternative benefits (as described in 

4 this subsection). 

5 ‘‘(6) TREATMENT AS MEDICAL ASSISTANCE.—

6 Subject to subparagraphs (D) and (E) of subsection 

7 (d)(2), payments for alternative benefits under this 

8 section (including contributions into a health oppor9 tunity account) shall be treated as medical assistance 

10 for purposes of section 1903(a). 

11 ‘‘(7) USE OF TIERED DEDUCTIBLE AND COST

12 SHARING.—

13 ‘‘(A) IN GENERAL.—A State—

14 ‘‘(i) may vary the amount of the an15 nual deductible applied under paragraph 

16 (1)(A) based on the income of the family in17 volved so long as it does not favor families 

18 with higher income over those with lower 

19 income; and 

20 ‘‘(ii) may vary the amount of the max21 imum out-of-pocket cost sharing (as defined 

22 in subparagraph (B)) based on the income 

23 of the family involved so long as it does not 

24 favor families with higher income over those 

25 with lower income. 
315

•S 1932 EAH 

1 ‘‘(B) MAXIMUM OUT-OF-POCKET COST SHAR2 ING.—For purposes of subparagraph (A)(ii), the 

3 term ‘maximum out-of-pocket cost sharing’ 

4 means, for an individual or family, the amount 

5 by which the annual deductible level applied 

6 under paragraph (1)(A) to the individual or 

7 family exceeds the balance in the health oppor8 tunity account for the individual or family. 

9 ‘‘(8) CONTRIBUTIONS BY EMPLOYERS.—Nothing 

10 in this section shall be construed as preventing an 

11 employer from providing health benefits coverage con12 sisting of the coverage described in paragraph (1)(A) 

13 to individuals who are provided alternative benefits 

14 under this section. 

15 ‘‘(d) HEALTH OPPORTUNITY ACCOUNT.—

16 ‘‘(1) IN GENERAL.—For purposes of this section, 

17 the term ‘health opportunity account’ means an ac18 count that meets the requirements of this subsection. 

19 ‘‘(2) CONTRIBUTIONS.—

20 ‘‘(A) IN GENERAL.—No contribution may be 

21 made into a health opportunity account except—

22 ‘‘(i) contributions by the State under 

23 this title; and 
316

•S 1932 EAH 

1 ‘‘(ii) contributions by other persons 

2 and entities, such as charitable organiza3 tions. 

4 ‘‘(B) STATE CONTRIBUTION.—A State shall 

5 specify the contribution amount that shall be de6 posited under subparagraph (A)(i) into a health 

7 opportunity account. 

8 ‘‘(C) LIMITATION ON ANNUAL STATE CON9 TRIBUTION PROVIDED AND PERMITTING IMPOSI10 TION OF MAXIMUM ACCOUNT BALANCE.—

11 ‘‘(i) IN GENERAL.—A State—

12 ‘‘(I) may impose limitations on 

13 the maximum contributions that may 

14 be deposited under subparagraph 

15 (A)(i) into a health opportunity ac16 count in a year; 

17 ‘‘(II) may limit contributions into 

18 such an account once the balance in 

19 the account reaches a level specified by 

20 the State; and 

21 ‘‘(III) subject to clauses (ii) and 

22 (iii) and subparagraph (D)(i), may 

23 not provide contributions described in 

24 subparagraph (A)(i) to a health oppor25 tunity account on behalf of an indi-
317

•S 1932 EAH 

1 vidual or family to the extent the 

2 amount of such contributions (includ3 ing both State and Federal shares) ex4 ceeds, on an annual basis, $2,500 for 

5 each individual (or family member) 

6 who is an adult and $1,000 for each 

7 individual (or family member) who is 

8 a child. 

9 ‘‘(ii) INDEXING OF DOLLAR LIMITA10 TIONS.—For each year after 2006, the dol11 lar amounts specified in clause (i)(III) shall 

12 be annually increased by the Secretary by a 

13 percentage that reflects the annual percent14 age increase in the medical care component 

15 of the consumer price index for all urban 

16 consumers. 

17 ‘‘(iii) BUDGET NEUTRAL ADJUST18 MENT.—A State may provide for dollar 

19 limitations in excess of those specified in 

20 clause (i)(III) (as increased under clause 

21 (ii)) for specified individuals if the State 

22 provides assurances satisfactory to the Sec23 retary that contributions otherwise made to 

24 other individuals will be reduced in a man25 ner so as to provide for aggregate contribu-
318

•S 1932 EAH 

1 tions that do not exceed the aggregate con2 tributions that would otherwise be permitted 

3 under this subparagraph. 

4 ‘‘(D) LIMITATIONS ON FEDERAL MATCH5 ING.—

6 ‘‘(i) STATE CONTRIBUTION.—A State 

7 may contribute under subparagraph (A)(i) 

8 amounts to a health opportunity account in 

9 excess of the limitations provided under sub10 paragraph (C)(i)(III), but no Federal fi11 nancial participation shall be provided 

12 under section 1903(a) with respect to con13 tributions in excess of such limitations. 

14 ‘‘(ii) NO FFP FOR PRIVATE CONTRIBU15 TIONS.—No Federal financial participation 

16 shall be provided under section 1903(a) 

17 with respect to any contributions described 

18 in subparagraph (A)(ii) to a health oppor19 tunity account. 

20 ‘‘(E) APPLICATION OF DIFFERENT MATCH21 ING RATES.—The Secretary shall provide a 

22 method under which, for expenditures made from 

23 a health opportunity account for medical care 

24 for which the Federal matching rate under sec25 tion 1903(a) exceeds the Federal medical assist-
319

•S 1932 EAH 

1 ance percentage, a State may obtain payment 

2 under such section at such higher matching rate 

3 for such expenditures. 

4 ‘‘(3) USE.—

5 ‘‘(A) GENERAL USES.—

6 ‘‘(i) IN GENERAL.—Subject to the suc7 ceeding provisions of this paragraph, 

8 amounts in a health opportunity account 

9 may be used for payment of such health 

10 care expenditures as the State specifies. 

11 ‘‘(ii) GENERAL LIMITATION.—In no 

12 case shall such account be used for payment 

13 for health care expenditures that are not 

14 payment of medical care (as defined by sec15 tion 213(d) of the Internal Revenue Code of 

16 1986). 

17 ‘‘(iii) STATE RESTRICTIONS.—In ap18 plying clause (i), a State may restrict pay19 ment for—

20 ‘‘(I) providers of items and serv21 ices to providers that are licensed or 

22 otherwise authorized under State law 

23 to provide the item or service and may 

24 deny payment for such a provider on 

25 the basis that the provider has been 
320

•S 1932 EAH 

1 found, whether with respect to this title 

2 or any other health benefit program, to 

3 have failed to meet quality standards 

4 or to have committed one or more acts 

5 of fraud or abuse; and 

6 ‘‘(II) items and services insofar as 

7 the State finds they are not medically 

8 appropriate or necessary. 

9 ‘‘(iv) ELECTRONIC WITHDRAWALS.—

10 The State demonstration program shall pro11 vide for a method whereby withdrawals may 

12 be made from the account for such purposes 

13 using an electronic system and shall not 

14 permit withdrawals from the account in 

15 cash. 

16 ‘‘(B) MAINTENANCE OF HEALTH OPPOR17 TUNITY ACCOUNT AFTER BECOMING INELIGIBLE

18 FOR PUBLIC BENEFIT.—

19 ‘‘(i) IN GENERAL.—Notwithstanding 

20 any other provision of law, if an account 

21 holder of a health opportunity account be22 comes ineligible for benefits under this title 

23 because of an increase in income or assets—
321

•S 1932 EAH 

1 ‘‘(I) no additional contribution 

2 shall be made into the account under 

3 paragraph (2)(A)(i); 

4 ‘‘(II) subject to clause (iii), the 

5 balance in the account shall be reduced 

6 by 25 percent; and 

7 ‘‘(III) subject to the succeeding 

8 provisions of this subparagraph, the 

9 account shall remain available to the 

10 account holder for withdrawals under 

11 the same terms and conditions as if the 

12 account holder remained eligible for 

13 such benefits. 

14 ‘‘(ii) SPECIAL RULES.—Withdrawals 

15 under this subparagraph from an account—

16 ‘‘(I) shall be available for the pur17 chase of health insurance coverage; and 

18 ‘‘(II) may, subject to clause (iv), 

19 be made available (at the option of the 

20 State) for such additional expenditures 

21 (such as job training and tuition ex22 penses) specified by the State (and ap23 proved by the Secretary) as the State 

24 may specify. 
322

•S 1932 EAH 

1 ‘‘(iii) EXCEPTION FROM 25 PERCENT

2 SAVINGS TO GOVERNMENT FOR PRIVATE

3 CONTRIBUTIONS.—Clause (i)(II) shall not 

4 apply to the portion of the account that is 

5 attributable to contributions described in 

6 paragraph (2)(A)(ii). For purposes of ac7 counting for such contributions, with8 drawals from a health opportunity account 

9 shall first be attributed to contributions de10 scribed in paragraph (2)(A)(i). 

11 ‘‘(iv) CONDITION FOR NON-HEALTH

12 WITHDRAWALS.—No withdrawal may be 

13 made from an account under clause (ii)(II) 

14 unless the accountholder has participated in 

15 the program under this section for at least 

16 1 year. 

17 ‘‘(v) NO REQUIREMENT FOR CONTINU18 ATION OF COVERAGE.—An account holder of 

19 a health opportunity account, after becom20 ing ineligible for medical assistance under 

21 this title, is not required to purchase high22 deductible or other insurance as a condition 

23 of maintaining or using the account. 

24 ‘‘(4) ADMINISTRATION.—A State may coordinate 

25 administration of health opportunity accounts 
323

•S 1932 EAH 

1 through the use of a third party administrator and 

2 reasonable expenditures for the use of such adminis3 trator shall be reimbursable to the State in the same 

4 manner as other administrative expenditures under 

5 section 1903(a)(7). 

6 ‘‘(5) TREATMENT.—Amounts in, or contributed 

7 to, a health opportunity account shall not be counted 

8 as income or assets for purposes of determining eligi9 bility for benefits under this title. 

10 ‘‘(6) UNAUTHORIZED WITHDRAWALS.—A State 

11 may establish procedures—

12 ‘‘(A) to penalize or remove an individual 

13 from the health opportunity account based on 

14 nonqualified withdrawals by the individual from 

15 such an account; and 

16 ‘‘(B) to recoup costs that derive from such 

17 nonqualified withdrawals.’’. 

18 CHAPTER 5—OTHER PROVISIONS 

19 SEC. 3141. INCREASE IN MEDICAID PAYMENTS TO INSULAR 

20 AREAS. 

21 Section 1108(g) of the Social Security Act (42 U.S.C. 

22 1308(g)) is amended—

23 (1) in paragraph (2), by inserting ‘‘and subject 

24 to paragraph (3)’’ after ‘‘subsection (f)’’; and 
324

•S 1932 EAH 

1 (2) by adding at the end the following new para2 graph: 

3 ‘‘(3) FISCAL YEARS 2006 AND 2007 FOR CERTAIN

4 INSULAR AREAS.—The amounts otherwise determined 

5 under this subsection for Puerto Rico, the Virgin Is6 lands, Guam, the Northern Mariana Islands, and 

7 American Samoa for fiscal year 2006 and fiscal year 

8 2007 shall be increased by the following amounts: 

9 ‘‘(A) For Puerto Rico, $12,000,000 for fiscal 

10 year 2006 and $12,000,000 for fiscal year 2007. 

11 ‘‘(B) For the Virgin Islands, $2,500,000 for 

12 fiscal year 2006 and $5,000,000 for fiscal year 

13 2007. 

14 ‘‘(C) For Guam, $2,500,000 for fiscal year 

15 2006 and $5,000,000 for fiscal year 2007. 

16 ‘‘(D) For the Northern Mariana Islands, 

17 $1,000,000 for fiscal year 2006 and $2,000,000 

18 for fiscal year 2007. 

19 ‘‘(E) For American Samoa, $2,000,000 for 

20 fiscal year 2006 and $4,000,000 for fiscal year 

21 2007. 

22 Such amounts shall not be taken into account in ap23 plying paragraph (2) for fiscal year 2007 but shall be 

24 taken into account in applying such paragraph for 

25 fiscal year 2008 and subsequent fiscal years.’’. 
325

•S 1932 EAH 

1 SEC. 3142. MANAGED CARE ORGANIZATION PROVIDER TAX 

2 REFORM. 

3 (a) IN GENERAL.—Section 1903(w)(7)(A)(viii) of the 

4 Social Security Act (42 U.S.C. 1396b(w)(7)(A)(viii)) is 

5 amended to read as follows: 

6 ‘‘(viii) Services of managed care organiza7 tions (including health maintenance organiza8 tions, preferred provider organizations, and such 

9 other similar organizations as the Secretary may 

10 specify by regulation).’’. 

11 (b) EFFECTIVE DATE.—

12 (1) IN GENERAL.—Subject to paragraph (2), the 

13 amendment made by subsection (a) shall be effective 

14 as of the date of the enactment of this Act. 

15 (2) GRANDFATHER.—

16 (A) IN GENERAL.—Subject to subparagraph 

17 (B), in the case of a State that has had approved 

18 as of the date of the enactment of this Act a pro19 vider tax on services described in section 

20 1903(w)(7)(A)(viii) of the Social Security Act, 

21 as amended by subsection (a), such amendment 

22 shall be effective as of October 1, 2008. 

23 (B) TRANSITION RULE FOR FISCAL YEAR

24 2009.—In the case of a State described in sub25 paragraph (A), the amount of any reduction in 

26 payment under subsection (a)(1) of section 1903 
326

•S 1932 EAH 

1 of the Social Security Act (42 U.S.C. 1396b) that 

2 would otherwise be required under subsection (w) 

3 of such section for calendar quarters in fiscal 

4 year 2009 because of the amendment made by 

5 section (a) shall be reduced by one-half. 

6 SEC. 3143. MEDICAID TRANSFORMATION GRANTS. 

7 (a) IN GENERAL.—Section 1903 of the Social Security 

8 Act (42 U.S.C. 1396b), as amended by section 3123, is 

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

10 ‘‘(y) MEDICAID TRANSFORMATION PAYMENTS.—

11 ‘‘(1) IN GENERAL.—In addition to the payments 

12 provided under subsection (a), subject to paragraph 

13 (4), the Secretary shall provide for payments to 

14 States for the adoption of innovative methods to im15 prove the effectiveness and efficiency in providing 

16 medical assistance under this title. 

17 ‘‘(2) PERMISSIBLE USES OF FUNDS.—The fol18 lowing are examples of innovative methods for which 

19 funds provided under this subsection may be used: 

20 ‘‘(A) Methods for reducing patient error 

21 rates through the implementation and use of elec22 tronic health records, electronic clinical decision 

23 support tools, or e-prescribing programs. 
327

•S 1932 EAH 

1 ‘‘(B) Methods for improving rates of collec2 tion from estates of amounts owed under this 

3 title. 

4 ‘‘(C) Methods for reducing waste, fraud, and 

5 abuse under the program under this title, such as 

6 reducing improper payment rates as measured 

7 by annual payment error rate measurement 

8 (PERM) project rates. 

9 ‘‘(D) Implementation of a medication risk 

10 management program as part of a drug use re11 view program under section 1927(g). 

12 ‘‘(E) Methods in reducing, in clinically ap13 propriate ways, expenditures under this title for 

14 covered outpatient drugs, particularly in the cat15 egories of greatest drug utilization, by increasing 

16 the utilization of generic drugs through the use 

17 of education programs and other incentives to 

18 promote greater use of generic drugs. 

19 ‘‘(3) APPLICATION; TERMS AND CONDITIONS.—

20 ‘‘(A) IN GENERAL.—No payments shall be 

21 made to a State under this subsection unless the 

22 State applies to the Secretary for such payments 

23 in a form, manner, and time specified by the 

24 Secretary. 
328

•S 1932 EAH 

1 ‘‘(B) TERMS AND CONDITIONS.—Such pay2 ments are made under such terms and conditions 

3 consistent with this subsection as the Secretary 

4 prescribes. 

5 ‘‘(C) ANNUAL REPORT.—Payment to a 

6 State under this subsection is conditioned on the 

7 State submitting to the Secretary an annual re8 port on the programs supported by such pay9 ment. Such report shall include information 

10 on—

11 ‘‘(A) the specific uses of such payment; 

12 ‘‘(B) an assessment of quality improvements 

13 and clinical outcomes under such programs; and 

14 ‘‘(C) estimates of cost savings resulting from 

15 such programs. 

16 ‘‘(4) FUNDING.—

17 ‘‘(A) LIMITATION ON FUNDS.—The total 

18 amount of payments under this subsection shall 

19 be equal to, and shall not exceed—

20 ‘‘(i) $50,000,000 for fiscal year 2007; 

21 and 

22 ‘‘(ii) $50,000,000 for fiscal year 2008. 

23 This subsection constitutes budget authority in 

24 advance of appropriations Acts and represents 

25 the obligation of the Secretary to provide for the 
329

•S 1932 EAH 

1 payment of amounts provided under this sub2 section. 

3 ‘‘(B) ALLOCATION OF FUNDS.—The Sec4 retary shall specify a method for allocating the 

5 funds made available under this subsection 

6 among States. Such method shall provide pref7 erence for States that design programs that tar8 get health providers that treat significant num9 bers of medicaid beneficiaries. Such method shall 

10 provide that not less than 25 percent of such 

11 funds shall be allocated among States the popu12 lation of which (as determined according to data 

13 collected by the United States Census Bureau) as 

14 of July 1, 2004, was more than 105 percent of 

15 the population of the respective State (as so de16 termined) as of April 1, 2000. 

17 ‘‘(C) FORM AND MANNER OF PAYMENT.—

18 Payment to a State under this subsection shall 

19 be made in the same manner as other payments 

20 under section 1903(a). There is no requirement 

21 for State matching funds to receive payments 

22 under this subsection. 

23 ‘‘(5) MEDICATION RISK MANAGEMENT PRO24 GRAM.—
330

•S 1932 EAH 

1 ‘‘(A) IN GENERAL.—For purposes of this 

2 subsection, the term ‘medication risk manage3 ment program’ means a program for targeted 

4 beneficiaries that ensures that covered outpatient 

5 drugs are appropriately used to optimize thera6 peutic outcomes through improved medication 

7 use and to reduce the risk of adverse events. 

8 ‘‘(B) ELEMENTS.—Such program may in9 clude the following elements: 

10 ‘‘(i) The use of established principles 

11 and standards for drug utilization review 

12 and best practices to analyze prescription 

13 drug claims of targeted beneficiaries and 

14 identify outlier physicians. 

15 ‘‘(ii) On an ongoing basis provide 

16 outlier physicians—

17 ‘‘(I) a comprehensive pharmacy 

18 claims history for each targeted bene19 ficiary under their care; 

20 ‘‘(II) information regarding the 

21 frequency and cost of relapses and hos22 pitalizations of targeted beneficiaries 

23 under the physician’s care; and 

24 ‘‘(III) applicable best practice 

25 guidelines and empirical references. 
331

•S 1932 EAH 

1 ‘‘(iii) Monitor outlier physician’s pre2 scribing, such as failure to refill, dosage 

3 strengths, and provide incentives and infor4 mation to encourage the adoption of best 

5 clinical practices. 

6 ‘‘(C) TARGETED BENEFICIARIES.—For pur7 poses of this paragraph, the term ‘targeted bene8 ficiaries’ means medicaid eligible beneficiaries 

9 who are identified as having high prescription 

10 drug costs and medical costs, such as individuals 

11 with behavioral disorders or multiple chronic 

12 diseases who are taking multiple medications.’’. 

13 SEC. 3144. ENHANCING THIRD PARTY IDENTIFICATION AND 

14 PAYMENT. 

15 (a) CLARIFICATION OF THIRD PARTIES LEGALLY RE16 SPONSIBLE FOR PAYMENT OF A CLAIM FOR A HEALTH

17 CARE ITEM OR SERVICE.—Section 1902(a)(25) of the So18 cial Security Act (42 U.S.C. 1396a(a)(25)) is amended—

19 (1) in subparagraph (A), in the matter preceding 

20 clause (i)—

21 (A) by inserting ‘‘, including self-insured 

22 plans’’ after ‘‘health insurers’’; and 

23 (B) by striking ‘‘and health maintenance 

24 organizations’’ and inserting ‘‘health mainte25 nance organizations, pharmacy benefit man-
332

•S 1932 EAH 

1 agers, or other parties that are, by statute, con2 tract, or agreement, legally responsible for pay3 ment of a claim for a health care item or serv4 ice’’; and 

5 (2) in subparagraph (G)—

6 (A) by inserting ‘‘a self-insured plan,’’ after 

7 ‘‘1974,’’; and 

8 (B) by striking ‘‘and a health maintenance 

9 organization’’ and inserting ‘‘a health mainte10 nance organization, a pharmacy benefit man11 ager, or other party that is, by statute, contract, 

12 or agreement, legally responsible for payment of 

13 a claim for a health care item or service’’. 

14 (b) REQUIREMENT FOR THIRD PARTIES TO PROVIDE

15 THE STATE WITH COVERAGE ELIGIBILITY AND CLAIMS

16 DATA.—Section 1902(a)(25) of such Act (42 U.S.C. 

17 1396a(a)(25)) is amended—

18 (1) in subparagraph (G), by striking ‘‘and’’ at 

19 the end; 

20 (2) in subparagraph (H), by adding ‘‘and’’ after 

21 the semicolon at the end; and 

22 (3) by inserting after subparagraph (H), the fol23 lowing: 

24 ‘‘(I) that the State shall provide assurances 

25 satisfactory to the Secretary that the State has 
333

•S 1932 EAH 

1 in effect laws requiring health insurers, includ2 ing self-insured plans, group health plans (as de3 fined in section 607(1) of the Employee Retire4 ment Income Security Act of 1974), service ben5 efit plans, health maintenance organizations, 

6 pharmacy benefit managers, or other parties that 

7 are, by statute, contract, or agreement, legally re8 sponsible for payment of a claim for a health 

9 care item or service, as a condition of doing 

10 business in the State, to—

11 ‘‘(i) provide eligibility and claims pay12 ment data with respect to an individual 

13 who is eligible for, or is provided, medical 

14 assistance under the State plan, upon the 

15 request of the State; 

16 ‘‘(ii) accept the subrogation of the 

17 State to any right of an individual or other 

18 entity to payment from the party for an 

19 item or service for which payment has been 

20 made under the State plan; 

21 ‘‘(iii) respond to any inquiry by the 

22 State regarding a claim for payment for 

23 any health care item or service submitted 

24 not later than 3 years after the date of the 
334

•S 1932 EAH 

1 provision of such health care item or serv2 ice; and 

3 ‘‘(iv) agree not to deny a claim sub4 mitted by the State solely on the basis of the 

5 date of submission of the claim;’’. 

6 (c) EFFECTIVE DATE.—

7 (1) IN GENERAL.—Except as provided in para8 graph (2), the amendments made by this section take 

9 effect on January 1, 2006. 

10 (2) DELAYED EFFECTIVE DATE.—In the case of 

11 a State plan under title XIX of the Social Security 

12 Act which the Secretary determines requires State leg13 islation in order for the plan to meet the additional 

14 requirements imposed by the amendments made by 

15 this section, the State plan shall not be regarded as 

16 failing to comply with the requirements of such Act 

17 solely on the basis of its failure to meet these addi18 tional requirements before the first day of the first 

19 calendar quarter beginning after the close of the first 

20 regular session of the State legislature that begins 

21 after the date of enactment of this Act. For purposes 

22 of the previous sentence, in the case of a State that 

23 has a 2-year legislative session, each year of the ses24 sion shall be considered to be a separate regular ses25 sion of the State legislature. 
335

•S 1932 EAH 

1 SEC. 3145. IMPROVED ENFORCEMENT OF DOCUMENTATION 

2 REQUIREMENTS. 

3 (a) IN GENERAL.—Section 1903 of the Social Security 

4 Act (42 U.S.C. 1396b) is amended—

5 (1) in subsection (i), as amended by section 104 

6 of Public Law 109–91—

7 (A) by striking the period at the end of 

8 paragraph (21) and inserting ‘‘; or’’; and 

9 (B) by inserting after paragraph (21) the 

10 following new paragraph: 

11 ‘‘(22) with respect to amounts expended for med12 ical assistance for an individual who declares under 

13 section 1137(d)(1)(A) to be a citizen or national of 

14 the United States for purposes of establishing eligi15 bility for benefits under this title, unless the require16 ment of subsection (z) is met.’’; and 

17 (2) by adding at the end, as amended by sections 

18 3123 and 3143, the following new subsection: 

19 ‘‘(z)(1) For purposes of subsection (i)(22), the require20 ment of this subsection is, with respect to an individual 

21 declaring to be a citizen or national of the United States, 

22 that, subject to paragraph (2), there is presented satisfac23 tory documentary evidence of citizenship or nationality (as 

24 defined in paragraph (3)) of the individual. 
336

•S 1932 EAH 

1 ‘‘(2) The requirement of paragraph (1) shall not apply 

2 to an alien who is eligible for medical assistance under this 

3 title—

4 ‘‘(A) and is entitled to or enrolled for benefits 

5 under any part of title XVIII; 

6 ‘‘(B) on the basis of receiving supplemental secu7 rity income benefits under title XVI; or 

8 ‘‘(C) on such other basis as the Secretary may 

9 specify under which satisfactory documentary evi10 dence of citizenship or nationality had been pre11 viously presented. 

12 ‘‘(3)(A) For purposes of this subsection, the term ‘satis13 factory documentary evidence of citizenship or nationality’ 

14 means—

15 ‘‘(i) any document described in subparagraph 

16 (B); or 

17 ‘‘(ii) a document described in subparagraph (C) 

18 and a document described in subparagraph (D). 

19 ‘‘(B) The following are documents described in this 

20 subparagraph: 

21 ‘‘(i) A United State passport. 

22 ‘‘(ii) Form N–550 or N–570 (Certificate of Natu23 ralization). 

24 ‘‘(iii) Form N–560 or N–561 (Certificate of 

25 United States Citizenship). 
337

•S 1932 EAH 

1 ‘‘(iv) Such other document as the Secretary may 

2 specify, by regulation, that provides proof of United 

3 States citizenship or nationality and that provides a 

4 reliable means of documentation of personal identity. 

5 ‘‘(C) The following are documents described in this 

6 subparagraph: 

7 ‘‘(i) A certificate of birth in the United States. 

8 ‘‘(ii) Form FS–545 or Form DS–1350 (Certifi9 cation of Birth Abroad). 

10 ‘‘(iii) Form I–97 (United States Citizen Identi11 fication Card). 

12 ‘‘(iv) Form FS–240 (Report of Birth Abroad of 

13 a Citizen of the United States). 

14 ‘‘(v) Such other document (not described in sub15 paragraph (B)(iv)) as the Secretary may specify that 

16 provides proof of United States citizenship or nation17 ality. 

18 ‘‘(D) The following are documents described in this 

19 subparagraph: 

20 ‘‘(i) Any identity document described in section 

21 274A(b)(1)(D) of the Immigration and Nationality 

22 Act. 

23 ‘‘(ii) Any other documentation of personal iden24 tity of such other type as the Secretary finds, by regu25 lation, provides a reliable means of identification. 
338

•S 1932 EAH 

1 ‘‘(E) A reference in this paragraph to a form includes 

2 a reference to any successor form.’’. 

3 (b) EFFECTIVE DATE.—The amendments made by sub4 section (a) shall apply to determinations of initial eligi5 bility for medical assistance made on or after July 1, 2006, 

6 and to redeterminations of eligibility made on or after such 

7 date in the case of individuals for whom the requirement 

8 of section 1903(z) of the Social Security Act, as added by 

9 such amendments, was not previously met. 

10 SEC. 3146. REFORMS OF TARGETED CASE MANAGEMENT. 

11 (a) IN GENERAL.—Section 1915(g) of the Social Secu12 rity Act (42 U.S.C. 1396n(g)) is amended by striking para13 graph (2) and inserting the following: 

14 ‘‘(2) For purposes of this subsection: 

15 ‘‘(A)(i) The term ‘case management services’ 

16 means services which will assist individuals eligible 

17 under the plan in gaining access to needed medical, 

18 social, educational, and other services. 

19 ‘‘(ii) Such term includes the following: 

20 ‘‘(I) Assessment of an eligible individual to 

21 determine service needs, including activities that 

22 focus on needs identification, to determine the 

23 need for any medical, educational, social, or 

24 other services. Such assessment activities include 

25 the following: 
339

•S 1932 EAH 

1 ‘‘(aa) Taking client history. 

2 ‘‘(bb) Identifying the needs of the indi3 vidual, and completing related documenta4 tion. 

5 ‘‘(cc) Gathering information from other 

6 sources such as family members, medical 

7 providers, social workers, and educators, if 

8 necessary, to form a complete assessment of 

9 the eligible individual. 

10 ‘‘(II) Development of a specific care plan 

11 based on the information collected through an as12 sessment, that specifies the goals and actions to 

13 address the medical, social, educational, and 

14 other services needed by the eligible individual, 

15 including activities such as ensuring the active 

16 participation of the eligible individual and 

17 working with the individual (or the individual’s 

18 authorized health care decision maker) and oth19 ers to develop such goals and identify a course 

20 of action to respond to the assessed needs of the 

21 eligible individual. 

22 ‘‘(III) Referral and related activities to help 

23 an individual obtain needed services, including 

24 activities that help link eligible individuals with 

25 medical, social, educational providers or other 
340

•S 1932 EAH 

1 programs and services that are capable of pro2 viding needed services, such as making referrals 

3 to providers for needed services and scheduling 

4 appointments for the individual. 

5 ‘‘(IV) Monitoring and follow-up activities, 

6 including activities and contacts that are nec7 essary to ensure the care plan is effectively im8 plemented and adequately addressing the needs 

9 of the eligible individual, and which may be 

10 with the individual, family members, providers, 

11 or other entities and conducted as frequently as 

12 necessary to help determine such matters as—

13 ‘‘(aa) whether services are being fur14 nished in accordance with an individual’s 

15 care plan; 

16 ‘‘(bb) whether the services in the care 

17 plan are adequate; and 

18 ‘‘(cc) whether there are changes in the 

19 needs or status of the eligible individual, 

20 and if so, making necessary adjustments in 

21 the care plan and service arrangements 

22 with providers. 

23 ‘‘(iii) Such term does not include the direct de24 livery of an underlying medical, educational, social, 

25 or other service to which an eligible individual has 
341

•S 1932 EAH 

1 been referred, including, with respect to the direct de2 livery of foster care services, services such as (but not 

3 limited to) the following: 

4 ‘‘(I) Research gathering and completion of 

5 documentation required by the foster care pro6 gram. 

7 ‘‘(II) Assessing adoption placements. 

8 ‘‘(III) Recruiting or interviewing potential 

9 foster care parents. 

10 ‘‘(IV) Serving legal papers. 

11 ‘‘(V) Home investigations. 

12 ‘‘(VI) Providing transportation. 

13 ‘‘(VII) Administering foster care subsidies. 

14 ‘‘(VIII) Making placement arrangements. 

15 ‘‘(B) The term ‘targeted case management serv16 ices’ means case management services that are fur17 nished without regard to the requirements of section 

18 1902(a)(1) and section 1902(a)(10)(B) to specific 

19 classes of individuals or to individuals who reside in 

20 specified areas. 

21 ‘‘(3) With respect to contacts with individuals who are 

22 not eligible for medical assistance under the State plan or, 

23 in the case of targeted case management services, individ24 uals who are eligible for such assistance but are not part 
342

•S 1932 EAH 

1 of the target population specified in the State plan, such 

2 contacts—

3 ‘‘(A) are considered an allowable case manage4 ment activity, when the purpose of the contact is di5 rectly related to the management of the eligible indi6 vidual’s care; and 

7 ‘‘(B) are not considered an allowable case man8 agement activity if such contacts relate directly to the 

9 identification and management of the noneligible or 

10 nontargeted individual’s needs and care. 

11 ‘‘(4)(A) In accordance with section 1902(a)(25), Fed12 eral financial participation only is available under this 

13 title for case management services or targeted case manage14 ment services if there are no other third parties liable to 

15 pay for such services, including as reimbursement under a 

16 medical, social, educational, or other program. 

17 ‘‘(B) A State shall allocate the costs of any part of 

18 such services which are reimbursable under another feder19 ally funded program in accordance with OMB Circular A–

20 87 (or any related or successor guidance or regulations re21 garding allocation of costs among federally funded pro22 grams) under an approved cost allocation program.’’. 

23 (b) EFFECTIVE DATE.—The amendment made by sub24 section (a) shall take effect on January 1, 2006. 
343

•S 1932 EAH 

1 SEC. 3147. EMERGENCY SERVICES FURNISHED BY NON-CON2 TRACT PROVIDERS FOR MEDICAID MANAGED 

3 CARE ENROLLEES. 

4 (a) IN GENERAL.—Section 1932(b)(2) of the Social Se5 curity Act (42 U.S.C. 1396u–2(b)(2)) is amended by adding 

6 at the end the following new subparagraph: 

7 ‘‘(D) EMERGENCY SERVICES FURNISHED BY

8 NON-CONTRACT PROVIDERS.—Any provider of 

9 emergency services that does not have in effect a 

10 contract with a medicaid managed care entity 

11 that establishes payment amounts for services 

12 furnished to a beneficiary enrolled in the entity’s 

13 medicaid managed care plan must accept as 

14 payment in full the amounts (less any payments 

15 for indirect costs of medical education and direct 

16 costs of graduate medical education) that it 

17 could collect if the beneficiary received medical 

18 assistance under this title other than through en19 rollment in such an entity.’’. 

20 (b) EFFECTIVE DATE.—The amendment made by sub21 section (a) shall take effect on January 1, 2007. 

22 SEC. 3148. ADJUSTMENT IN COMPUTATION OF MEDICAID 

23 FMAP TO DISREGARD AN EXTRAORDINARY 

24 EMPLOYER PENSION CONTRIBUTION. 

25 (a) IN GENERAL.—Only for purposes of computing the 

26 Federal medical assistance percentage under section 
344

•S 1932 EAH 

1 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) for 

2 a State for a fiscal year (beginning with fiscal year 2006), 

3 any significantly disproportionate employer pension con4 tribution described in subsection (b) shall be disregarded in 

5 computing the per capita income of such State, but shall 

6 not be disregarded in computing the per capita income for 

7 the continental United States (and Alaska) and Hawaii. 

8 (b) SIGNIFICANTLY DISPROPORTIONATE EMPLOYER

9 PENSION CONTRIBUTION.—For purposes of subsection (a), 

10 a significantly disproportionate employer pension contribu11 tion described in this subsection with respect to a State for 

12 a fiscal year is an employer contribution towards pensions 

13 that is allocated to such State for a period if the aggregate 

14 amount so allocated exceeds 50 percent of the total increase 

15 in personal income in that State for the period involved. 

16 Subtitle B—Katrina Health Care 

17 Relief 

18 SEC. 3201. TARGETED MEDICAID RELIEF FOR STATES AF19 FECTED BY HURRICANE KATRINA. 

20 (a) 100 PERCENT FEDERAL MATCHING PAYMENTS

21 FOR MEDICAL ASSISTANCE PROVIDED IN KATRINA IM22 PACTED AREAS.—

23 (1) IN GENERAL.—Notwithstanding section 

24 1905(b) of the Social Security Act (42 U.S.C. 

25 1396d(b)), for items and services furnished during the 
345

•S 1932 EAH 

1 period that begins on August 28, 2005, and ends on 

2 May 15, 2006, the Federal matching rate for pro3 viding medical assistance for such items and services 

4 under a State Medicaid plan to any individual resid5 ing in a Katrina impacted parish or county (as de6 fined in subsection (c)(1)) or to a Katrina Survivor 

7 (as defined in subsection (b)), and for costs directly 

8 attributable to all administrative activities that relate 

9 to the provision of such medical assistance, shall be 

10 100 percent. 

11 (2) APPLICATION TO CHILD HEALTH ASSIST12 ANCE.—Notwithstanding section 2105(b) of the Social 

13 Security Act (42 U.S.C. 1397ee(b)), for items and 

14 services furnished during the period described in 

15 paragraph (1), the Federal matching rate for pro16 viding child health assistance for such items and serv17 ices under a State child health plan under title XXI 

18 of such Act in a Katrina impacted parish or county 

19 or to a Katrina Survivor, and for costs directly at20 tributable to all administrative activities that relate 

21 to the provision of such child health assistance, shall 

22 be 100 percent. 

23 (b) KATRINA SURVIVOR.—For purposes of subsection 

24 (a), the term ‘‘Katrina Survivor’’ means an individual 

25 who, on any day during the week preceding August 28, 
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•S 1932 EAH 

1 2005, had a primary residence in a major disaster parish 

2 or county (as defined in subsection (c)). 

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

4 (1) KATRINA IMPACTED PARISH OR COUNTY.—

5 The term ‘‘Katrina impacted parish or county’’ 

6 means any parish in the State of Louisiana, any 

7 county in the State of Mississippi, and any major 

8 disaster parish or county in the State of Alabama. 

9 (2) MAJOR DISASTER PARISH OR COUNTY.—A 

10 major disaster parish or county is a parish of the 

11 State of Louisiana or a county of the State of Mis12 sissippi or Alabama for which a major disaster has 

13 been declared in accordance with section 401 of the 

14 Robert T. Stafford Disaster Relief and Emergency As15 sistance Act (42 U.S.C. 5170) as a result of Hurri16 cane Katrina and which the President has deter17 mined, as of September 14, 2005, warrants individual 

18 assistance from the Federal Government under such 

19 Act. 

20 SEC. 3202. STATE HIGH RISK HEALTH INSURANCE POOL 

21 FUNDING. 

22 There are hereby authorized and appropriated 

23 $90,000,000 for fiscal year 2006 for grants under subsection 

24 (b)(1) of section 2745 of the Public Health Service Act (42 

25 U.S.C. 300gg-45). The amount so appropriated shall be 
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1 treated as if it had been appropriated under subsection 

2 (c)(2) of such section. 

3 SEC. 3203. RECOMPUTATION OF HPSA, MUA, AND MUP DES4 IGNATIONS WITHIN HURRICANE KATRINA AF5 FECTED AREAS. 

6 (a) IN GENERAL.—For purposes of the Public Health 

7 Service Act (42 U.S.C. 201 et seq.), the Secretary of Health 

8 and Human Services shall conduct a review of all Hurri9 cane Katrina disaster areas and, as appropriate taking 

10 into account the lack of availability of health care providers 

11 and services due to Hurricane Katrina—

12 (1) shall designate such areas as health profes13 sional shortage areas or medically underserved areas; 

14 and 

15 (2) shall designate one of more populations of 

16 each such area as a medically underserved popu17 lation. 

18 (b) HURRICANE KATRINA DISASTER AREA DE19 FINED.—For purposes of this section, the term ‘‘Hurricane 

20 Katrina disaster area’’ means an area for which a major 

21 disaster has been declared in accordance with section 401 

22 of the Robert T. Stafford Disaster Relief and Emergency 

23 Assistance Act (42 U.S.C. 5170) as a result of Hurricane 

24 Katrina and which the President has determined, before 
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1 September 14, 2005, warrants individual and public assist2 ance from the Federal Government under such Act. 

3 SEC. 3204. WAIVER OF CERTAIN REQUIREMENTS APPLICA4 BLE TO THE PROVISION OF HEALTH CARE IN 

5 AREAS IMPACTED BY HURRICANE KATRINA. 

6 (a) ELIGIBLE AREA.—

7 (1) DEFINITION.—In this section, the term ‘‘eli8 gible area’’ means an area identified by the Secretary 

9 of Health and Human Services pursuant to para10 graph (2). 

11 (2) IDENTIFICATION.—Not later than 30 days 

12 after the date of the enactment of this Act, the Sec13 retary of Health and Human Services shall identify 

14 areas that—

15 (A) have been directly impacted by Hurri16 cane Katrina; or 

17 (B) are located in a State which has ab18 sorbed a significant number of Hurricane 

19 Katrina evacuees. 

20 (b) HEALTH CENTERS.—For the purpose of deter21 mining whether an entity located in an eligible area quali22 fies as a health center under section 330 of the Public 

23 Health Service Act (42 U.S.C. 254b): 

24 (1) BOARD COMPOSITION.—
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1 (A) WAIVER.—The Secretary of Health and 

2 Human Services shall waive any requirement 

3 that a majority of the governing board of the en4 tity be consumers of the entity’s health care serv5 ices. 

6 (B) RULE OF CONSTRUCTION.—This para7 graph shall not be construed as requiring the 

8 Secretary of Health and Human Services to 

9 waive a requirement that the governing board of 

10 the entity include representation of the con11 sumers of the entity’s health care services. 

12 (2) MEDICALLY UNDERSERVED POPULATION.—

13 (A) DETERMINATION.—At the request of the 

14 entity, the Secretary of Health and Human 

15 Services shall determine whether, taking into 

16 consideration any change in population associ17 ated with Hurricane Katrina, the entity serves a 

18 medically underserved population (as that term 

19 is defined in section 330(b)(3) of the Public 

20 Health Service Act (42 U.S.C. 254b(b)(3))). 

21 (B) DEADLINE.—The Secretary of Health 

22 and Human Services shall make a determination 

23 under subparagraph (A) not later than 60 days 

24 after the date on which the Secretary receives the 

25 request for the determination. 
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1 (C) RESTRICTION.—The Secretary of Health 

2 and Human Services shall not make any deter3 mination under this paragraph on whether a 

4 population has ceased to qualify as a medically 

5 underserved population under section 330 of the 

6 Public Health Service Act (42 U.S.C. 254b). 

7 (3) REQUIRED PRIMARY HEALTH SERVICES.—

8 The Secretary of Health and Human Services shall 

9 waive any requirement for the entity to provide pri10 mary health services described in clause (iii), (iv), or 

11 (v) of section 330(b)(1) of the Public Health Service 

12 Act (42 U.S.C. 254b(b)(1)). 

13 (c) NATIONAL HEALTH SERVICE CORPS.—Notwith14 standing the provisions of subpart II of part D of title III 

15 of the Public Health Service Act (42 U.S.C. 254d et seq.) 

16 requiring that members of the National Health Service 

17 Corps be assigned to health professional shortage areas, the 

18 Secretary of Health and Human Services may assign mem19 bers of the National Health Service Corps to any eligible 

20 area. 

21 (d) TERMINATION OF AUTHORITY.—The authority 

22 vested by this section in the Secretary of Health and 

23 Human Services and the Secretary of Homeland Security 

24 shall terminate on the date that is 2 years after enactment 

25 of this Act. The Secretary of Health and Human Services 
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1 may not grant any waiver under subsection (b)(1) or (b)(3) 

2 and may not make any assignment of personnel under sub3 section (c), and the Secretary of Homeland Security may 

4 not allow any agreement under subsection (d), for a period 

5 extending beyond such date. 

6 SEC. 3205. FMAP HOLD HARMLESS FOR KATRINA IMPACT. 

7 Notwithstanding any other provision of law, for pur8 poses of titles XIX and XXI of the Social Security Act, the 

9 Secretary of Health and Human Services in computing the 

10 Federal medical assistance percentage under section 

11 1905(b) of such (42 U.S.C. 1396d(b)) for any year after 

12 2006 for a State that the Secretary determines has a signifi13 cant number of evacuees who were evacuated to, and live 

14 in, the State as a result of Hurricane Katrina as of October 

15 1, 2005, the Secretary shall disregard such evacuees (and 

16 income attributable to such evacuees). 

17 Subtitle C—Katrina and Rita 

18 Energy Relief 

19 SEC. 3301. HURRICANES KATRINA AND RITA ENERGY RE20 LIEF. 

21 (a) FINDINGS.—The Congress finds the following: 

22 (1) Hurricanes Katrina and Rita severely dis23 rupted crude oil and natural gas production in the 

24 Gulf of Mexico. The Energy Information Administra25 tion estimates that as a result of these two hurricanes, 
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1 the amount of shut in crude oil production nearly 

2 doubled to almost 1,600,000 barrels per day, and the 

3 amount of natural gas production shut in also dou4 bled to about 8,000,000,000 cubic feet per day. The 

5 hurricanes also initially shut down most of the crude 

6 oil refinery capacity in the Gulf of Mexico region. 

7 These disruptions led to significantly higher prices for 

8 crude oil, refined oil products, and natural gas. 

9 (2) These production and supply disruptions are 

10 expected to lead to significantly higher heating costs 

11 for consumers this winter. The Energy Information 

12 Administration projects an increase in residential 

13 natural gas heating expenditures of 32 percent to 61 

14 percent over last winter, with the Midwest seeing the 

15 largest increase. Winter heating oil expenditures are 

16 projected to increase by 30 percent to 41 percent over 

17 last winter, again with the Midwest seeing the largest 

18 increase. Propane expenditures for home heating are 

19 projected to increase 20 percent to 36 percent over last 

20 winter, with the Midwest seeing the largest projected 

21 increase. Expenditures for home heating using elec22 tricity are expected to increase by 2 percent to 9 per23 cent over last winter, with the South seeing the largest 

24 increase. Overall, average home heating expenditures 

25 this winter are projected to increase about 33 percent, 
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1 assuming a normal winter. These significant in2 creases in home heating costs this winter will particu3 larly harm low-income consumers. The Low-Income 

4 Home Energy Assistance Program is designed to as5 sist these low income consumers in this situation. Ac6 cordingly, Congress seeks a one-time only supplement 

7 to the Low-Income Home Energy Assistance Program 

8 fund to assist low income consumers with the addi9 tional home heating expenditures that they will face 

10 this winter as a result of Hurricanes Katrina and 

11 Rita. 

12 (b) RELIEF.—In addition to amounts otherwise made 

13 available, there shall be directly available to the Secretary 

14 of Health and Human Services for a 1-time only obligation 

15 and expenditure $1,000,000,000 for fiscal year 2006 for al16 location under section 2604(a) through (d) of the Low-In17 come Home Energy Assistance Act of 1981 (42 U.S.C. 

18 8623(a) through (d)), for the sole purpose of providing as19 sistance to offset the anticipated higher energy costs caused 

20 by Hurricane Katrina and Hurricane Rita. 

21 (c) SUNSET.—The provisions of this section shall ter22 minate, be null and void, and have no force and effect what23 soever after September 30, 2006. No monies provided for 

24 under this section shall be available after such date. 
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1 Subtitle D—Digital Television 

2 Transition 

3 SEC. 3401. SHORT TITLE. 

4 This subtitle may be cited as the ‘‘Digital Television 

5 Transition Act of 2005’’. 

6 SEC. 3402. FINDINGS. 

7 The Congress finds the following: 

8 (1) A loophole in current law is stalling the dig9 ital television (DTV) transition and preventing the 

10 return of spectrum for critical public safety and wire11 less broadband uses. 

12 (A) In 1996, to facilitate the DTV transi13 tion, Congress gave each full-power television 

14 broadcaster an extra channel of spectrum to 

15 broadcast in digital format while continuing to 

16 broadcast in analog format on its original chan17 nel. Each broadcaster was supposed to eventually 

18 return either the original or additional channel 

19 and broadcast exclusively in digital format on 

20 the remaining channel. 

21 (B) In 1997, Congress earmarked for public 

22 safety use some of the spectrum the broadcasters 

23 are supposed to return. Congress designated the 

24 rest of the spectrum to be auctioned for advanced 

25 commercial applications, such as wireless 
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1 broadband services. Congress set December 31, 

2 2006, as the deadline for broadcasters to return 

3 the spectrum for public safety and wireless use. 

4 (C) A loophole, however, allows broadcasters 

5 in a market to delay the return of the spectrum 

6 until more than 85 percent of television house7 holds in that market have at least one television 

8 with access to digital broadcast channels using a 

9 digital television receiver, a digital-to-analog 

10 converter box, or cable or satellite service. Ex11 perts forecast it will take many more years to 

12 meet the 85-percent test nationwide. 

13 (2) Eliminating the 85-percent test and setting 

14 a ‘‘hard deadline’’ will close the loophole, making pos15 sible the nationwide clearing necessary to complete 

16 the DTV transition and free the spectrum for public 

17 safety use. 

18 (A) Some police officers, firefighters, and 

19 rescue personnel already have equipment to com20 municate over the spectrum the broadcasters are 

21 supposed to return, and are just awaiting the 

22 turnover. Many more public safety officials can23 not purchase equipment or begin planning with24 out a date certain for the availability of the spec25 trum. 
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1 (B) Five years to the day before September 

2 11, 2001, an advisory committee report to the 

3 Federal Communications Commission (FCC) 

4 noted that public safety officials desperately 

5 needed more spectrum to better communicate 

6 with each other in times of emergency. The 9/11 

7 Commission has specifically recognized the im8 portance of clearing for public safety use the 

9 spectrum at issue here, especially following the 

10 terrorist attacks on the Pentagon and the World 

11 Trade Center. The spectrum is also important 

12 for communications during natural disasters. 

13 (3) The certainty of a nationwide hard deadline 

14 will enable consumers, industry, and government to 

15 take the necessary steps to make the transition as 

16 smooth as possible. 

17 (A) Under existing law, once a market 

18 meets the 85-percent penetration test, the re19 maining 15 percent of households in the market 

20 would lose access to broadcast programming un21 less they obtain a digital television receiver, a 

22 digital-to-analog converter box, or cable or sat23 ellite service. 

24 (B) Determining when the 85-percent test 

25 in current law has been met in a particular 
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1 market would be extremely difficult for the FCC 

2 to accomplish. Moreover, because no one can pre3 dict precisely when any market will meet the 85-

4 percent test, and because different markets will 

5 meet the test at different times, consumers, in6 dustry, and government cannot adequately plan 

7 on a either a local or nationwide basis. 

8 (C) With a hard deadline, government, in9 dustry, and consumer groups can develop con10 crete plans for consumer education. Manufactur11 ers can build large quantities of low-cost digital12 to-analog converter boxes for consumers who wish 

13 to continue using their analog televisions. Clear14 ing the spectrum on a unified, nationwide basis 

15 will also enable the government to maximize the 

16 revenue from the auction. Some of that revenue 

17 can be used to help make the converter boxes 

18 available. 

19 (D) The deadline will have little impact on 

20 most television households. The vast majority of 

21 households already subscribe to cable or satellite 

22 services. Allowing cable and satellite operators to 

23 convert digital broadcasts into an analog24 viewable format will enable their subscribers that 
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1 wish to continue using analog televisions to do 

2 so. 

3 (4) Setting a hard deadline will bring consumers 

4 and the economy the benefits of the DTV transition 

5 faster. 

6 (A) DTV offers sharper and wider pictures, 

7 and CD-quality sound. Even consumers with 

8 analog televisions connected to a converter box or 

9 cable or satellite service will receive better service 

10 than they did before the transition. 

11 (B) Once the transition is complete, broad12 casters can redirect the resources they currently 

13 expend running both analog and digital stations 

14 and focus on programming that capitalizes on 

15 the advanced features of digital transmissions. 

16 Manufacturers can also increase the production 

17 of televisions and other consumer electronics 

18 equipment that takes advantage of these features, 

19 which will also drive down prices. 

20 (C) The cleared spectrum can be used to 

21 bring cutting-edge wireless services to public 

22 safety officials and consumers. This spectrum 

23 travels greater distances at lower costs, and more 

24 easily penetrates buildings and foliage. Con25 sequently, it is ideal to bring mobile broadband 
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1 services not only to urban areas, but to rural 

2 areas as well, which currently have very few 

3 cost-effective broadband options. 

4 (D) The increase in DTV programming, 

5 services, and equipment, and the provision of 

6 products and services that use the cleared spec7 trum, will improve America’s global competitive8 ness and result in significant investment and in9 novation, boosting our economy and fostering 

10 new jobs. 

11 SEC. 3403. ANALOG SPECTRUM RECOVERY: HARD DEAD12 LINE. 

13 (a) AMENDMENTS.—Section 309(j)(14) of the Commu14 nications Act of 1934 (47 U.S.C. 309(j)(14)) is amended—

15 (1) in subparagraph (A), by striking ‘‘December 

16 31, 2006’’ and inserting ‘‘December 31, 2008’’; 

17 (2) by striking subparagraph (B); 

18 (3) in subparagraph (C)(i)(I), by striking ‘‘or 

19 (B)’’; 

20 (4) in subparagraph (D), by striking ‘‘subpara21 graph (C)(i)’’ and inserting ‘‘subparagraph (B)(i)’’; 

22 and 

23 (5) by redesignating subparagraphs (C) and (D) 

24 as subparagraphs (B) and (C), respectively. 

25 (b) IMPLEMENTATION.—
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1 (1) DTV ALLOTMENT TABLE OF IN-CORE CHAN2 NELS FOR FULL-POWER STATIONS.—The Federal 

3 Communications Commission shall—

4 (A) release by December 31, 2006, a report 

5 and order in MB Docket No. 03–15 assigning all 

6 full-power broadcast television stations author7 ized in the digital television service a channel be8 tween channels 2 and 36, inclusive, or 38 and 

9 51, inclusive (between frequencies 54 and 698 

10 megahertz, inclusive); 

11 (B) release by July 31, 2007, any reconsid12 eration of such report and order; and 

13 (C) not adopt any further changes between 

14 July 31, 2007, and January 1, 2009, to the 

15 channels assigned to full-power broadcast tele16 vision stations for the provision of digital tele17 vision service unless doing so is necessary for 

18 reasons of public safety or necessary to prevent 

19 a delay in the end of broadcasting by full-power 

20 stations in the analog television service. 

21 (2) STATUS REPORTS.—Beginning with a report 

22 on January 31, 2006, and ending with a report on 

23 July 31, 2007, the Commission shall submit reports 

24 to the Committee on Energy and Commerce of the 

25 House of Representatives and the Committee on Com-
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1 merce, Science, and Transportation of the Senate 

2 every six months on the status of international co3 ordination with Canada and Mexico of the digital tel4 evision service table of allotments. 

5 (3) TERMINATIONS OF ANALOG LICENSES AND

6 BROADCASTING.—The Federal Communications Com7 mission shall take such actions as are necessary to 

8 terminate all licenses for full-power television stations 

9 in the analog television service and to require the ces10 sation of broadcasting by full-power stations in the 

11 analog television service by January 1, 2009. 

12 (4) ADDITIONAL UNLICENSED SPECTRUM FOR

13 WIRELESS BROADBAND.—The Commission shall, with14 in one year after the date of enactment of this Act, 

15 issue a final order in the matter of Unlicensed Oper16 ation in the TV Broadcast Bands (ET Docket No. 04–

17 186). 

18 (c) TECHNICAL AMENDMENT.—Paragraph (15) of sec19 tion 309(j) of the Communications Act of 1934 (47 U.S.C. 

20 309(j)), as added by section 203(b) of the Commercial Spec21 trum Enhancement Act (Public Law 108–494; 118 Stat. 

22 3993), is redesignated as paragraph (16) of such section. 

23 SEC. 3404. AUCTION OF RECOVERED SPECTRUM. 

24 (a) DEADLINE FOR AUCTION.—Section 309(j)(15)(C) 

25 of the Communications Act of 1934 (47 U.S.C. 
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1 309(j)(15)(C)) is amended by adding at the end the fol2 lowing new clauses: 

3 ‘‘(v) ADDITIONAL DEADLINES FOR RE4 COVERED ANALOG SPECTRUM.—Notwith5 standing subparagraph (B), the Commis6 sion shall conduct the auction of the licenses 

7 for recovered analog spectrum by com8 mencing the bidding not later than January 

9 7, 2008, and shall deposit the proceeds of 

10 such auction in accordance with paragraph 

11 (8)(E)(i) not later than June 30, 2008. 

12 ‘‘(vi) RECOVERED ANALOG SPEC13 TRUM.—For purposes of clause (v), the term 

14 ‘recovered analog spectrum’ means the spec15 trum between channels 52 and 69, inclusive 

16 (between frequencies 698 and 806 mega17 hertz, inclusive) reclaimed from analog tele18 vision service broadcasting under para19 graph (14), other than—

20 ‘‘(I) the spectrum required by sec21 tion 337 to be made available for pub22 lic safety services; and 

23 ‘‘(II) the spectrum auctioned 

24 prior to the date of enactment of the 
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1 Digital Television Transition Act of 

2 2005.’’. 

3 (b) EXTENSION OF AUCTION AUTHORITY.—Paragraph 

4 (11) of section 309(j) of such Act is repealed. 

5 (c) STUDY OF AUCTION AUTHORITY.—

6 (1) INQUIRY AND STUDY REQUIRED.—Within 

7 120 days after the date of enactment of this Act, the 

8 Federal Communications Commission shall initiate 

9 an ongoing inquiry and study—

10 (A) to evaluate the participation of women, 

11 minorities, and small businesses in the auction 

12 process, including the percentage of winning bid13 ders that are women, minorities, and small busi14 nesses; and 

15 (B) to assess the efforts made by the Com16 mission to ensure that women, minorities, and 

17 small businesses are able to successfully partici18 pate in the auction process. 

19 (2) REPORT.—The Commission shall submit a 

20 report to the Congress on the results of the inquiry 

21 and study required by paragraph (1) at least bienni22 ally beginning not later than one year after the date 

23 of enactment of this Act. 
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1 SEC. 3405. DIGITAL TELEVISION CONVERSION FUND. 

2 (a) RESERVATION OF AUCTION PROCEEDS TO ASSIST

3 CONVERSION.—Section 309(j)(8) of the Communications 

4 Act of 1934 (47 U.S.C. 309(j)(8)) is amended—

5 (1) in subparagraph (A), by striking ‘‘subpara6 graph (B) or subparagraph (D)’’ and inserting ‘‘sub7 paragraphs (B), (D), and (E)’’; 

8 (2) in subparagraph (C)(i), by inserting before 

9 the semicolon at the end the following: ‘‘, except as 

10 otherwise provided in subparagraph (E)(i)’’; and 

11 (3) by adding at the end the following new sub12 paragraph: 

13 ‘‘(E) TRANSFER OF REVENUES FOR DIGITAL

14 TELEVISION CONVERSION.—

15 ‘‘(i) PROCEEDS FOR DTV CONVERSION

16 FUND.—Notwithstanding subparagraph (A), 

17 of the proceeds (including deposits and up18 front payments from successful bidders) 

19 from the use of a competitive bidding sys20 tem under this subsection with respect to re21 covered analog spectrum—

22 ‘‘(I) $990,000,000 shall be depos23 ited in a separate fund in the Treasury 

24 to be known as the ‘Digital Television 

25 Conversion Fund’, and be available ex26 clusively to carry out section 159 of the 
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1 National Telecommunications and In2 formation Administration Organiza3 tion Act; 

4 ‘‘(II) $500,000,000 shall be depos5 ited in a separate fund in the Treasury 

6 to be known as the ‘Public Safety 

7 Interoperable Communications Fund’, 

8 and be available exclusively to carry 

9 out section 160 of such Act; 

10 ‘‘(III) $30,000,000 shall be depos11 ited in a separate fund in the Treasury 

12 to be known as the ‘NYC 9/11 Digital 

13 Transition Fund’, and be available ex14 clusively to carry out section 161 of 

15 such Act; 

16 ‘‘(IV) $3,000,000 shall be depos17 ited in a separate fund in the Treasury 

18 to be known as the ‘Low-Power Dig19 ital-to-Analog Conversion Fund’, and 

20 be available exclusively to carry out 

21 section 162 of such Act; and 

22 ‘‘(V) the remainder of such pro23 ceeds shall be deposited in the Treasury 

24 in accordance with chapter 33 of title 

25 31, United States Code. 
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1 ‘‘(ii) RECOVERED ANALOG SPEC2 TRUM.—For purposes of clause (i), the term 

3 ‘recovered analog spectrum’ has the mean4 ing provided in paragraph (15)(C)(vi).’’. 

5 (b) CONVERTER BOX PROGRAM.—Part C of the Na6 tional Telecommunications and Information Administra7 tion Organization Act is amended by adding at the end 

8 the following new section: 

9 ‘‘SEC. 159. DIGITAL-TO-ANALOG CONVERTER BOX PROGRAM. 

10 ‘‘(a) CREATION OF PROGRAM.—The Assistant Sec11 retary—

12 ‘‘(1) shall use the funds available under sub13 section (d) of this section to implement and admin14 ister a program through which households in the 

15 United States may obtain, upon request, up to two 

16 coupons that can be applied toward the purchase of 

17 digital-to-analog converter boxes, subject to the restric18 tions in this section and the regulations created there19 under; and 

20 ‘‘(2) may award one or more contracts (includ21 ing a contract with another Federal agency) for the 

22 administration of some or all of the program. 

23 ‘‘(b) PROGRAM SPECIFICATIONS.—

24 ‘‘(1) FORM OF COUPON REQUEST.—The regula25 tions under this section shall prescribe the contents of 
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1 the coupon request form and the information any 

2 household seeking a coupon shall provide on the form. 

3 The coupon request form shall be required to include 

4 instructions for its use and also describe, at a min5 imum, the requirements and limitations of the pro6 gram, the ways in which the form and the informa7 tion the household provides will be used, and to whom 

8 the form and the information will be disclosed. 

9 ‘‘(2) DISTRIBUTION OF COUPON REQUEST

10 FORMS.—

11 ‘‘(A) PAPER AND ELECTRONIC FORMS.—The 

12 Assistant Secretary shall provide for the dis13 tribution of paper coupon request forms at Gov14 ernment buildings, including post offices. The 

15 Assistant Secretary shall provide for the avail16 ability to households of electronic coupon request 

17 forms, and may permit such forms to be sub18 mitted electronically. 

19 ‘‘(B) ADDITIONAL DISTRIBUTION.—If the 

20 Assistant Secretary determines that doing so 

21 would make the program more successful and 

22 easier for consumers to participate in, paper and 

23 electronic coupon request forms shall also be dis24 tributed by such private entities as the Assistant 

25 Secretary shall specify (such as retailers, manu-
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1 facturers, broadcasters, religious organizations, 

2 and consumer groups) and shall be distributed 

3 in the manner specified by the Assistant Sec4 retary. 

5 ‘‘(3) LIMITATIONS.—

6 ‘‘(A) TWO-PER-HOUSEHOLD MAXIMUM.—A 

7 household may obtain coupons only by making a 

8 request as required by the regulations under this 

9 section. Any request must be made between Jan10 uary 1, 2008, and January 31, 2009, inclusive. 

11 The Assistant Secretary shall ensure that each 

12 requesting household receives no more than two 

13 coupons. 

14 ‘‘(B) NO COMBINATIONS OF COUPONS.—Two 

15 coupons may not be used in combination toward 

16 the purchase of a single digital-to-analog con17 verter box. 

18 ‘‘(C) DURATION.—All coupons shall expire 

19 3 months after issuance. 

20 ‘‘(4) DISTRIBUTION OF COUPONS.—

21 ‘‘(A) Coupons shall be distributed to re22 questing households by mail and each coupon 

23 shall be issued in the name of a member of the 

24 requesting household, and shall include a unique 

25 identification number as well as any other meas-
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1 ures the Assistant Secretary deems necessary to 

2 minimize fraud, counterfeiting, duplication, and 

3 other unauthorized use. 

4 ‘‘(B) Included on or provided with each 

5 coupon shall be, at a minimum, instructions for 

6 the coupon’s use and a description of the cou7 pon’s limitations. 

8 ‘‘(C) The Assistant Secretary shall expend 

9 not more than $160,000,000 on administrative 

10 expenses and shall ensure that the sum of all ad11 ministrative expenses for the program and the 

12 total maximum value of all the coupons re13 deemed, and issued but not expired, does not ex14 ceed $990,000,000. 

15 ‘‘(D) The Assistant Secretary may expend 

16 up to $5,000,000 of the administrative expenses 

17 on the public outreach program required by sec18 tion 330(d)(4) of the Communications Act of 

19 1934 (47 U.S.C. 330(d)(4)). Such funds may be 

20 used for grants to the Association of Public Tele21 vision Stations, in partnership with noncommer22 cial educational television broadcast stations (as 

23 defined section 397(6) of the Communications 

24 Act of 1934 (47 U.S.C. 397(6))) to carry out 

25 such public outreach. 
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1 ‘‘(5) QUALIFYING PURCHASES.—

2 ‘‘(A) QUALIFYING BOX.—The regulations 

3 shall specify methods for determining and identi4 fying the converter boxes that meet the definition 

5 in subsection (g). 

6 ‘‘(B) COUPON VALUE.—The value of each 

7 coupon shall be $40. 

8 ‘‘(6) REDEMPTION OF COUPONS.—No coupon 

9 shall be redeemed except upon submission of reason10 able proof that the individual redeeming the coupon 

11 is the individual named on the coupon, and such ad12 ditional information as is required by the regulations 

13 under this section. In the case of retail distribution 

14 of digital-to-analog converter boxes over the Internet 

15 or by telephone, submission of a valid credit card 

16 number issued in the name of the household member, 

17 the unique identification number on the coupon, the 

18 address of the household, and such other information 

19 as is required by the regulations under this section 

20 shall be reasonable proof of identity, except that the 

21 redemption of coupons over the Internet or by tele22 phone shall be prohibited if the Assistant Secretary 

23 determines that such redemption would be unreason24 ably susceptible to fraud or other abuse. 

25 ‘‘(7) RETAILER CERTIFICATION.—
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1 ‘‘(A) Any retailer desiring to qualify for 

2 coupon reimbursement under this section shall, 

3 in accordance with the regulations under this 

4 section, be required to undergo a certification 

5 process to qualify for participation in the pro6 gram. 

7 ‘‘(B) As part of the certification process, re8 tailers shall be informed of the program’s details 

9 and their rights and obligations, including their 

10 obligations to honor all valid coupons that are 

11 tendered in the authorized manner, and to keep 

12 a reasonable number of eligible converter boxes 

13 in stock. 

14 ‘‘(8) COUPON REIMBURSEMENT AND RETAILER

15 AUDITING.—

16 ‘‘(A) REIMBURSEMENT.—The regulations 

17 under this section shall establish the process by 

18 which retailers may seek and obtain reimburse19 ment for the coupons, and shall include the op20 tion for retailers to seek and obtain reimburse21 ment electronically. 

22 ‘‘(B) AUDITS.—Such regulations shall es23 tablish procedures for the auditing of retailer re24 imbursements. 
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1 ‘‘(9) APPEALS.—The regulations under this sec2 tion shall establish an appeals process for the review 

3 and resolution of complaints—

4 ‘‘(A) by a household alleging that—

5 ‘‘(i) the household was improperly de6 nied a coupon; 

7 ‘‘(ii) a valid coupon properly tendered 

8 was not honored; or 

9 ‘‘(iii) the household was otherwise 

10 harmed by another violation of this section 

11 or such regulations; or 

12 ‘‘(B) by a retailer of digital-to-analog con13 verter boxes alleging that the retailer was im14 properly denied reimbursement for a valid cou15 pon properly tendered and accepted under this 

16 section or such regulations. 

17 All such complaints shall be resolved within 30 days 

18 after receipt of the complaint. 

19 ‘‘(10) ENFORCEMENT.—The regulations under 

20 this section shall provide for the termination of eligi21 bility to participate in the program for retailers or 

22 households that engage in fraud, misrepresentation, or 

23 other misconduct in connection with the program, or 

24 that otherwise violate this section or such regulations. 
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1 ‘‘(11) PROGRESS REPORT.—Beginning with a 

2 report on March 31, 2008, and ending with a report 

3 on June 30, 2009, the Assistant Secretary shall sub4 mit reports to the Committee on Energy and Com5 merce of the House of Representatives and the Com6 mittee on Commerce, Science, and Transportation of 

7 the Senate, every three months summarizing the 

8 progress of coupon distribution and redemption, in9 cluding how many coupons are being distributed and 

10 redeemed, and how quickly. 

11 ‘‘(c) PRIVACY.—The program under this section shall 

12 ensure that personally identifiable information collected in 

13 connection with the program under this section is not used 

14 or shared for any other purpose than as described in this 

15 section, except as otherwise required or authorized by law. 

16 For purposes of this subsection, the term ‘personally identi17 fiable information’ shall have the same meaning as pro18 vided in section 338(i)(2). 

19 ‘‘(d) AVAILABILITY OF FUNDS.—

20 ‘‘(1) IN GENERAL.—From the Digital Television 

21 Conversion Fund established by section 

22 309(j)(8)(E)(i)(I) of the Communications Act of 1934, 

23 there shall be available to carry out this section such 

24 sums as may be necessary for fiscal years 2008 and 

25 2009. Any sums that remain unexpended in the Fund 
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1 at the end of fiscal year 2009 shall revert to and be 

2 deposited in the general fund of the Treasury. 

3 ‘‘(2) CREDIT.—The Assistant Secretary may bor4 row from the Treasury such sums as may be nec5 essary not to exceed $990,000,000 to implement and 

6 administer the program in accordance with this sec7 tion. The Assistant Secretary shall reimburse the 

8 Treasury, without interest, as funds are deposited 

9 into the Digital Television Conversion Fund under 

10 section 309(j)(8)(E) of such Act. 

11 ‘‘(e) ENERGY STANDARDS REQUIRED.—

12 ‘‘(1) STANDARD.—The maximum energy con13 sumption for the passive standby mode of a digital14 to-analog converter box shall be no more than 9 watts. 

15 ‘‘(2) ENFORCEMENT.—The Secretary of Energy 

16 shall enforce the requirements of paragraph (1). Any 

17 converter box that the Secretary of Energy determines 

18 is not in compliance with the requirements of para19 graph (1) shall not be eligible for purchase with as20 sistance made available under this section. 

21 ‘‘(3) PREEMPTION.—No State or any political 

22 subdivision thereof may establish or enforce any law, 

23 rule, regulation, or other provision having the force of 

24 law that regulates the energy output, usage, or con-
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1 sumption standards for a digital-to-analog converter 

2 box. 

3 ‘‘(f) IMPLEMENTATION.—The Secretary of Commerce 

4 shall promulgate, within 9 months after the date of enact5 ment of the Digital Television Transition Act of 2005, such 

6 regulations as are necessary to carry out this section. 

7 ‘‘(g) DEFINITION.—For purposes of this section: 

8 ‘‘(1) DIGITAL-TO-ANALOG CONVERTER BOX.—The 

9 term ‘digital-to-analog converter box’ means a stand10 alone device that does not contain features or func11 tions except those necessary to enable a consumer to 

12 convert any channel broadcast in the digital television 

13 service into a format that the consumer can display 

14 on television receivers designed to receive and display 

15 signals only in the analog television service. 

16 ‘‘(2) HOUSEHOLD.—The term ‘household’ means 

17 the residents at a residential street or rural route ad18 dress, and shall not include a post office box. 

19 ‘‘(3) STANDBY PASSIVE MODE.—The term ‘stand20 by passive mode’ means a low power state the digital21 to-analog converter device enters while connected to a 

22 power source which fulfills not the main function but 

23 can be switched into another mode by means of an in24 ternal or external signal.’’. 
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1 SEC. 3406. PUBLIC SAFETY INTEROPERABLE COMMUNICA2 TIONS FUND. 

3 Part C of the National Telecommunications and Infor4 mation Administration Organization Act is amended by 

5 adding after section 159 (as added by section 3405(b) of 

6 this Act) the following new section: 

7 ‘‘SEC. 160. PUBLIC SAFETY INTEROPERABLE COMMUNICA8 TIONS FUND. 

9 ‘‘(a) PROGRAM AUTHORIZED.—From the funds avail10 able under subsection (f), the Assistant Secretary shall 

11 carry out a grant program to assist public safety agencies 

12 in the acquisition of, deployment of, or training for the use 

13 of interoperable communications systems that utilize, or en14 able interoperability with communications systems that can 

15 utilize, reallocated public safety spectrum for radio commu16 nications. 

17 ‘‘(b) TERMS AND CONDITIONS OF GRANTS.—In order 

18 to obtain a grant under this section, a public safety agency 

19 shall—

20 ‘‘(1) submit an application to the Assistant Sec21 retary at such time, in such form, and containing or 

22 accompanied by such information and assurances as 

23 the Assistant Secretary shall require; 

24 ‘‘(2) agree that, if awarded a grant, the public 

25 safety agency will submit annual reports to the As-
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1 sistant Secretary for the duration of the grant award 

2 period with respect to—

3 ‘‘(A) the expenditure of grant funds; and 

4 ‘‘(B) progress toward acquiring and deploy5 ing interoperable communications systems fund6 ed by the grant; 

7 ‘‘(3) agree to provide, from non-Federal sources, 

8 not less than 20 percent of the costs of acquiring and 

9 deploying the interoperable communications systems 

10 acquired and deployed with funds provided under this 

11 section; and 

12 ‘‘(4) agree to remit to the Assistant Secretary 

13 any grant funds that remain unexpended at the end 

14 of the 3-year period of the grant. 

15 ‘‘(c) DURATION OF GRANT; RECOVERY OF UNUSED

16 FUNDS.—Grants under this section shall be awarded in the 

17 form of a single grant for a period of not more that 3 years. 

18 At the end of 3 years, any grant funds that remain unex19 pended shall be remitted by the grantee to the Assistant Sec20 retary, and, subject to subsection (f)(2), may be awarded 

21 to other eligible grant recipients. At the end of fiscal year 

22 2010, any such reawarded grant funds that remain unex23 pended shall be remitted by the grantee to the Assistant Sec24 retary and may not be reawarded to other grantees. 
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1 ‘‘(d) OVERSIGHT OF EXPENDITURES.—The Assistant 

2 Secretary shall submit to the Committee on Commerce, 

3 Science, and Transportation of the Senate and the Com4 mittee on Energy and Commerce, not later than 6 months 

5 after the first award of a grant under this section and every 

6 6 months thereafter until October 1, 2010, a report—

7 ‘‘(1) identifying, on a State-by-State basis, using 

8 the information submitted under subsection (b)(2), the 

9 results of the program, including an identification, on 

10 a State-by-State basis, of—

11 ‘‘(A) the public safety agencies awarded a 

12 grant; 

13 ‘‘(B) the amount of the grant; 

14 ‘‘(C) the specified use for the grant; and 

15 ‘‘(D) how each such grant was spent; and 

16 ‘‘(2) stating the cumulative total of the amount 

17 of grants awarded, and the balance, if any, remain18 ing in the Public Safety Interoperable Communica19 tions Fund; and 

20 ‘‘(3) in the final such report, stating the amount 

21 in the Fund that reverted to the general fund of the 

22 Treasury. 

23 ‘‘(e) REGULATIONS.—The Secretary is authorized to 

24 prescribe such regulations as are necessary to carry out this 

25 section. 
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1 ‘‘(f) AVAILABILITY OF FUNDS.—

2 ‘‘(1) AVAILABILITY.—From the Public Safety 

3 Interoperable Communications Fund established by 

4 section 309(j)(8)(E)(i)(II) of the Communications Act 

5 of 1934, there shall be available to carry out this sec6 tion such sums as may be necessary for fiscal years 

7 2008, 2009, and 2010. 

8 ‘‘(2) REVERSION.—Any sums that remain unex9 pended in the Fund at the end of fiscal year 2010 

10 shall revert to and be deposited in the general fund 

11 of the Treasury. 

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

13 ‘‘(1) PUBLIC SAFETY AGENCY.—The term ‘public 

14 safety agency’ means any State or local government 

15 entity, or nongovernmental organization authorized 

16 by such entity, whose sole or principal purpose is to 

17 protect the safety of life, health, or property. 

18 ‘‘(2) INTEROPERABLE COMMUNICATIONS SYS19 TEMS.—The term ‘interoperable communications sys20 tems’ means communications systems which enable 

21 public safety agencies to share information amongst 

22 local, State, and Federal public safety agencies in the 

23 same area via voice or data signals. 

24 ‘‘(3) REALLOCATED PUBLIC SAFETY SPEC25 TRUM.—The term ‘reallocated public safety spectrum’ 
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1 means the bands of spectrum located at 764 -776 

2 megahertz and 794–806 megahertz, inclusive.’’. 

3 SEC. 3407. NYC 9/11 DIGITAL TRANSITION FUND. 

4 Part C of the National Telecommunications and Infor5 mation Administration Organization Act is amended by 

6 adding after section 160 (as added by section 3406 of this 

7 Act) the following new section: 

8 ‘‘SEC. 161. NYC 9/11 DIGITAL TRANSITION FUND. 

9 ‘‘(a) FUNDS AVAILABLE.—From the NYC 9/11 Digital 

10 Transition Fund established by section 309(j)(8)(E)(i)(III) 

11 of the Communications Act of 1934, there shall be available 

12 to carry out this section such sums as may be necessary 

13 for fiscal years 2006 through 2008. Any sums that remain 

14 unexpended in the Fund at the end of fiscal year 2008 shall 

15 revert to and be deposited in the general fund of the Treas16 ury. The Assistant Secretary may borrow from the Treasury 

17 such sums as may be necessary not to exceed $30,000,000 

18 to implement and administer the program in accordance 

19 with this section. The Assistant Secretary shall reimburse 

20 the Treasury, without interest, as funds are deposited into 

21 the NYC 9/11 Digital Transition Fund under section 

22 309(j)(8)(E) of such Act. 

23 ‘‘(b) USE OF FUNDS.—The sums available under sub24 section (a) shall be made available by the Assistant Sec25 retary by grant to be used to reimburse the Metropolitan 
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1 Television Alliance for costs incurred in the design and de2 ployment of a temporary digital television broadcast system 

3 to ensure that, until a permanent facility atop the Freedom 

4 Tower is constructed, the members of the Metropolitan Tele5 vision Alliance can provide the New York City area with 

6 an adequate digital television signal as determined by the 

7 Federal Communications Commission. 

8 ‘‘(c) RULE OF CONSTRUCTION.—Nothing in this sec9 tion shall be construed to alter or otherwise affect the Fed10 eral Communications Commission’s authority with respect 

11 to licensing and interference regulation. 

12 ‘‘(d) DEFINITIONS.—For purposes of this section: 

13 ‘‘(1) The term ‘Metropolitan Television Alliance’ 

14 means the organization formed by New York City tel15 evision broadcast station licensees to locate new 

16 shared facilities as a result of the attacks on Sep17 tember 11, 2001 and the loss of use of shared facilities 

18 that housed broadcast equipment. 

19 ‘‘(2) The term ‘New York City area’ means the 

20 five counties comprising New York City and counties 

21 of northern New Jersey in immediate proximity to 

22 New York City (Bergen, Essex, Union and Hudson 

23 Counties) .’’. 
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1 SEC. 3408. LOW-POWER TELEVISION TRANSITION PROVI2 SIONS. 

3 (a) REMOVAL AND RELOCATION.—Section 337(e) of the 

4 Communications Act of 1934 (47 U.S.C. 337(e)) is amend5 ed—

6 (1) in paragraph (1), by striking ‘‘person who’’ 

7 and inserting ‘‘full-power television station licensee 

8 that’’; 

9 (2) in paragraph (2), by striking ‘‘746 mega10 hertz’’ and inserting ‘‘698 megahertz’’; and 

11 (3) by adding at the end the following new para12 graph: 

13 ‘‘(3) CONTINUATION OF LOW-POWER BROAD14 CASTING.—Subject to section 336(f) of the Commu15 nications Act (47 U.S.C. 336(f)), a low-power tele16 vision station, television translator station, or tele17 vision booster station (as defined by Commission reg18 ulations) may operate above 698 megahertz on a sec19 ondary basis in accordance with Commission rules, 

20 including rules governing completion of the digital 

21 television service transition for low-power broad22 casters.’’. 

23 (b) EXEMPTION FROM DEADLINE.—Section 

24 309(j)(14)(A) of such Act (47 U.S.C. 309(j)(14)(A)) is 

25 amended by inserting ‘‘full-power’’ before ‘‘television broad26 cast license’’. 
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1 (c) ADVANCED TELEVISION SERVICES.—Section 

2 336(f)(4) of such Act (47 U.S.C. 336(f)(4)) is amended by 

3 inserting ‘‘or other low-power station’’ after ‘‘television 

4 translator station’’ in the first sentence. 

5 (d) LOW-POWER TELEVISION DIGITAL-TO-ANALOG

6 CONVERSION.—Part C of the National Telecommunications 

7 and Information Administration Organization Act is 

8 amended by adding after section 161 (as added by section 

9 3407 of this Act) the following new section: 

10 ‘‘SEC. 162. LOW-POWER TELEVISION DIGITAL-TO-ANALOG 

11 CONVERSION. 

12 ‘‘(a) CREATION OF PROGRAM.—The Assistant Sec13 retary shall use the funds available under subsection (d) 

14 from the Low-Power Digital-to-Analog Conversion Fund to 

15 implement and administer a program through which each 

16 eligible low-power television station may receive compensa17 tion toward the cost of the purchase of a digital-to-analog 

18 conversion device that enables it to convert the incoming 

19 digital signal of its corresponding full-power television sta20 tion to analog format for transmission on the low-power 

21 television station’s analog channel. An eligible low-power 

22 television station may receive such compensation only if it 

23 submits a request for such compensation on or before De24 cember 31, 2008. 
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1 ‘‘(b) ELIGIBLE STATIONS.—For purposes of this sec2 tion, an eligible low-power television station shall be a low3 power television broadcast station, Class A television sta4 tion, television translator station, or television booster sta5 tion—

6 ‘‘(1) that is itself broadcasting exclusively in 

7 analog format; and 

8 ‘‘(2) that has not purchased a digital-to-analog 

9 conversion device prior to enactment of this section. 

10 ‘‘(c) QUALIFYING DEVICES AND AMOUNTS.—The As11 sistant Secretary—

12 ‘‘(1) may determine the types of digital-to-analog 

13 conversion devices for which an eligible low-power 

14 broadcast television station may receive compensation 

15 under this section; and 

16 ‘‘(2) shall determine the maximum amount of 

17 compensation such a low-power television broadcast 

18 station may receive based on the average cost of such 

19 digital-to-analog conversion devices during the time 

20 period such low-power broadcast television station 

21 purchased the digital-to-analog conversion device, but 

22 in no case shall such compensation exceed $400. 

23 ‘‘(d) FUNDS AVAILABLE.—From the Low-Power Dig24 ital-to-Analog Conversion Fund established by section 

25 309(j)(8)(E)(i)(IV) of the Communications Act of 1934, 
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1 there shall be available to carry out this section such sums 

2 as may be necessary for fiscal years 2008 and 2009. Any 

3 sums that remain unexpended in such Fund at the end of 

4 fiscal year 2009 shall revert to and be deposited in the gen5 eral fund of the Treasury.’’. 

6 (e) REPORT AND ORDER REQUIRED.—The Federal 

7 Communications Commission shall, not later than Decem8 ber 31, 2008, issue a report and order specifying the meth9 ods and schedule by which the Commission will complete 

10 the digital television service transition for low-power broad11 casters. 

12 SEC. 3409. CONSUMER EDUCATION REGARDING ANALOG 

13 TELEVISIONS. 

14 (a) COMMISSION AUTHORITY.—Section 303 of the 

15 Communications Act of 1934 (47 U.S.C. 303) is amended 

16 by adding at the end the following new subsection: 

17 ‘‘(z) Require the consumer education measures speci18 fied in section 330(d) in the case of apparatus designed to 

19 receive television signals that—

20 ‘‘(1) are shipped in interstate commerce or man21 ufactured in the United States; 

22 ‘‘(2) have an integrated display screen or are 

23 sold in a bundle with a display screen; and 

24 ‘‘(3) are not capable of receiving broadcast sig25 nals in the digital television service.’’. 
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1 (b) CONSUMER EDUCATION REQUIREMENTS.—Section 

2 330 of the Communications Act of 1934 (47 U.S.C. 330) 

3 is amended—

4 (1) in subsection (d), by striking ‘‘sections 

5 303(s), 303(u), and 303(x)’’ and inserting ‘‘sub6 sections (s), (u), (x), and (z) of section 303’’; 

7 (2) by redesignating subsection (d) as subsection 

8 (e); and 

9 (3) by inserting after subsection (c) the following 

10 new subsection: 

11 ‘‘(d) CONSUMER EDUCATION REGARDING ANALOG

12 TELEVISION RECEIVERS.—

13 ‘‘(1) REQUIREMENTS FOR MANUFACTURERS.—

14 Any manufacturer of any apparatus described in sec15 tion 303(z) shall—

16 ‘‘(A) place in a conspicuous place on any 

17 such apparatus that such manufacturer ships in 

18 interstate commerce or manufactures in the 

19 United States after 180 days after the date of en20 actment of the Digital Television Transition Act 

21 of 2005, a label containing, in clear and con22 spicuous print, the warning language required 

23 by paragraph (3); and 

24 ‘‘(B) also include after 180 days after the 

25 date of enactment of the Digital Television Tran-
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1 sition Act of 2005, such warning language on the 

2 outside of the retail packaging of such appa3 ratus, in a conspicuous place and in clear and 

4 conspicuous print, in a manner that cannot be 

5 removed. 

6 ‘‘(2) REQUIREMENTS FOR RETAIL DISTRIBU7 TORS.—Any retail distributor shall place conspicu8 ously in the vicinity of each apparatus described in 

9 section 303(z) that such distributor displays for sale 

10 or rent after 45 days after the date of enactment of 

11 the Digital Television Transition Act of 2005, a sign 

12 containing, in clear and conspicuous print, the warn13 ing language required by paragraph (3). In the case 

14 of a retail distributor vending such apparatus via di15 rect mail, catalog, or electronic means, such as dis16 plays on the Internet, the warning language required 

17 by such paragraph shall be prominently displayed, in 

18 clear and conspicuous print, in the vicinity of any 

19 language describing the product. 

20 ‘‘(3) WARNING LANGUAGE.—The warning lan21 guage required by this paragraph shall read as fol22 lows: ‘This television has only an analog broadcast 

23 tuner. After December 31, 2008, television broad24 casters will broadcast only in digital format. You will 

25 then need to connect this television to a digital-to-
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1 analog converter box or cable or satellite service if you 

2 wish to receive broadcast programming. The device, if 

3 any, that a cable or satellite subscriber will need to 

4 connect to an analog television will depend on the 

5 cable or satellite service provider. The television 

6 should continue to work as before, however, with de7 vices such as VCRs, digital video recorders, DVD 

8 players, and video game systems. For more informa9 tion, call the Federal Communications Commission at 

10 1–888–225–5322 (TTY: 1–888–835–5322) or visit the 

11 Commission’s website at: www.fcc.gov.’. 

12 ‘‘(4) COMMISSION AND NTIA OUTREACH.—Begin13 ning within one month after the date of enactment of 

14 the Digital Television Transition Act of 2005, the 

15 Commission and the National Telecommunications 

16 and Information Administration shall engage, either 

17 jointly or separately, in a public outreach program, 

18 including the distribution of materials on their web 

19 sites and in Government buildings, such as post of20 fices, to educate consumers regarding the digital tele21 vision transition. The Commission and the National 

22 Telecommunications and Information Administration 

23 may seek public comment in crafting their public out24 reach program, and may seek the assistance of private 

25 entities, such as broadcasters, manufacturers, retail-
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1 ers, cable and satellite operators, and consumer 

2 groups in administering the public outreach program. 

3 The program shall educate consumers about—

4 ‘‘(A) the deadline for termination of analog 

5 television broadcasting; 

6 ‘‘(B) the options consumers have after such 

7 termination to continue to receive broadcast pro8 gramming; and 

9 ‘‘(C) the converter box program under sec10 tion 159 of the National Telecommunications 

11 and Information Administration Organization 

12 Act. 

13 ‘‘(5) ADDITIONAL DISCLOSURES.—

14 ‘‘(A) ANNOUNCEMENTS AND NOTICES RE15 QUIRED.—From January 1, 2008, through De16 cember 31, 2008—

17 ‘‘(i) each television broadcaster shall 

18 air, at a minimum, two 60-second public 

19 service announcements per day, one during 

20 the 8 to 9 a.m. hour and one during the 8 

21 to 9 p.m. hour; and 

22 ‘‘(ii) each multichannel video program 

23 distributor (as such term is defined in sec24 tion 602 of this Act) shall include a notice 

25 in any periodic bill. 
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1 ‘‘(B) CONTENTS OF ANNOUNCEMENTS AND

2 NOTICES.—The announcements and notices re3 quired by subparagraphs (A)(i) and (A)(ii), re4 spectively, shall state, at a minimum, that: 

5 ‘After December 31, 2008, television broadcasters 

6 will broadcast only in digital format. You will 

7 then no longer be able to receive broadcast pro8 gramming on analog-only televisions unless those 

9 televisions are connected to a digital-to-analog 

10 converter box or a cable or satellite service. The 

11 device, if any, that a cable or satellite subscriber 

12 will need to connect to an analog television will 

13 depend on the cable or satellite service provider. 

14 Analog-only televisions should continue to work 

15 as before, however, with devices such as VCRs, 

16 digital video recorders, DVD players, and video 

17 game systems. You may be eligible for up to two 

18 coupons toward the purchase of up to two con19 verter-boxes. For more information, call the Fed20 eral Communications Commission at 1–888–

21 225–5322 (TTY: 1–888–835–5322) or visit the 

22 Commission’s website at: www.fcc.gov.’. 

23 ‘‘(6) REPORT REQUIRED.—Beginning January 

24 31, 2006, and ending July 31, 2008, the Commission 

25 and the National Telecommunications and Informa-
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1 tion Administration, either jointly or separately, shall 

2 submit reports every six months to the Committee on 

3 Energy and Commerce of the House of Representa4 tives and the Committee on Commerce, Science, and 

5 Transportation of the Senate, on the Commission’s 

6 and such Administration’s consumer education ef7 forts, as well as the consumer education efforts of 

8 broadcasters, cable and satellite operators, consumer 

9 electronics manufacturers, retailers, and consumer 

10 groups. The Commission and such Administration 

11 may solicit public comment in preparing their re12 ports.’’. 

13 (c) PRESERVING AND EXPEDITING TUNER MAN14 DATES.—The Federal Communications Commission—

15 (1) shall, within 30 days after the date of enact16 ment of this Act revise the digital television reception 

17 capability implementation schedule under section 

18 15.117(i) of its regulations (47 CFR 15.117(i)) to re19 quire, in the case of television reception devices that 

20 have, or are sold in a bundle with, display screens 

21 sized 13 to 24 inches, inclusive, that 100 percent of 

22 all such units must include digital television tuners 

23 effective March 1, 2007; and 

24 (2) shall not make any other changes that extend 

25 or otherwise delay the digital television reception ca-
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•S 1932 EAH 

1 pability implementation schedule for television recep2 tion devices that have, or are sold in a bundle with, 

3 display screens. 

4 SEC. 3410. ADDITIONAL PROVISIONS. 

5 (a) DIGITAL-TO-ANALOG CONVERSION.—Section 

6 614(b) of the Communications Act of 1934 (47 U.S.C. 

7 534(b)) is amended by adding at the end the following new 

8 paragraphs: 

9 ‘‘(11) CARRIAGE OF DIGITAL FORMATS.—

10 ‘‘(A) PRIMARY VIDEO STREAM.—With re11 spect to any television station that is transmit12 ting broadcast programming exclusively in the 

13 digital television service in a local market, a 

14 cable operator of a cable system in that market 

15 shall carry the station’s primary video stream 

16 and program-related material in the digital for17 mat transmitted by that station, without mate18 rial degradation, if the licensee for that sta19 tion—

20 ‘‘(i) relies on this section or section 615 

21 to obtain carriage of the primary video 

22 stream and program-related material on 

23 that cable system in that market; and 

24 ‘‘(ii) permits the cable system to carry 

25 without compensation any other program-
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1 ming broadcast by that station that is car2 ried on that system. 

3 ‘‘(B) MULTIPLE FORMATS PERMITTED.—A 

4 cable operator of a cable system may offer the 

5 primary video stream and program-related ma6 terial of a local television station described in 

7 subparagraph (A) in any analog or digital for8 mat or formats, whether or not doing so requires 

9 conversion from the format transmitted by the 

10 local television station, so long as—

11 ‘‘(i) the cable operator offers the pri12 mary video stream and program-related 

13 material in the converted analog or digital 

14 format or formats without material deg15 radation; and 

16 ‘‘(ii) also offers the primary video 

17 stream and program-related material in the 

18 manner or manners required by this para19 graph. 

20 ‘‘(C) TRANSITIONAL CONVERSIONS.—Not21 withstanding the requirement in subparagraph 

22 (A) to carry the primary video stream and pro23 gram-related material in the digital format 

24 transmitted by the local television station, but 
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1 subject to the prohibition on material degrada2 tion, until January 1, 2014—

3 ‘‘(i) a cable operator—

4 ‘‘(I) shall offer the primary video 

5 stream and program-related material 

6 in the format or formats necessary for 

7 such stream and material to be 

8 viewable on analog and digital tele9 visions; and 

10 ‘‘(II) may convert the primary 

11 video stream and program-related ma12 terial to standard-definition digital 

13 format in lieu of offering it in the dig14 ital format transmitted by the local tel15 evision station; 

16 ‘‘(ii) notwithstanding clause (i), a 

17 cable operator of a cable system with an ac18 tivated capacity of 550 megahertz or less—

19 ‘‘(I) shall offer the primary video 

20 stream and program-related material 

21 of the local television station described 

22 in subparagraph (A), converted to an 

23 analog format; and 

24 ‘‘(II) may, but shall not be re25 quired to, offer the primary video 
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1 stream and program-related material 

2 in any digital format or formats. 

3 ‘‘(D) LOCATION AND METHOD OF CONVER4 SION.—

5 ‘‘(i) A cable operator of a cable system 

6 may perform any conversion permitted or 

7 required by this paragraph at any location, 

8 from the cable head-end to the customer 

9 premises, inclusive. 

10 ‘‘(ii) Notwithstanding any other provi11 sion of this Act other than the prohibition 

12 on material degradation, a cable operator 

13 may use switched digital video technology to 

14 accomplish any conversion or transmission 

15 permitted or required by this paragraph. 

16 ‘‘(E) CONVERSIONS NOT TREATED AS DEG17 RADATION.—Any conversion permitted or re18 quired by this paragraph shall not, by itself, be 

19 treated as a material degradation. 

20 ‘‘(F) CARRIAGE OF PROGRAM-RELATED MA21 TERIAL.—The obligation to carry program-re22 lated material under this paragraph is effective 

23 only to the extent technically feasible. 

24 ‘‘(G) DEFINITION OF STANDARD-DEFINITION

25 FORMAT.—For purposes of this paragraph, a 
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1 stream shall be in standard definition digital 

2 format if such stream meets the criteria for such 

3 format as specified in the standard recognized by 

4 the Commission in section 73.682 of its rules (47 

5 CFR 73.682) or a successor regulation.’’. 

6 (b) TIERING.—Clause (iii) of section 623(b)(7)(A) of 

7 such Act (47 U.S.C. 543(b)(7)(A)(iii)) is amended to read 

8 as follows: 

9 ‘‘(iii) Both of the following signals: 

10 ‘‘(I) the primary video stream 

11 and program-related material of any 

12 television broadcast station that is pro13 vided by the cable operator to any sub14 scriber in an analog format, and 

15 ‘‘(II) the primary video stream 

16 and program-related material—

17 ‘‘(aa) of any television 

18 broadcast station that is transmit19 ting exclusively in digital format, 

20 and 

21 ‘‘(bb) that is provided by the 

22 cable operator to any subscriber 

23 in a digital format, 
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1 but excluding a signal that is secondarily 

2 transmitted by a satellite carrier beyond the 

3 local service area of such station.’’. 

4 (c) COMPARABLE TREATMENT OF SATELLITE CAR5 RIERS.—Section 338 of the Communications Act of 1934 

6 (47 U.S.C. 338) is amended—

7 (1) by adding at the end the following new sub8 section: 

9 ‘‘(l) SPECIFIC CARRIAGE OBLIGATIONS AFTER DIG10 ITAL TRANSITION.—

11 ‘‘(1) CARRIAGE OF DIGITAL FORMATS.—With re12 spect to any television station that requests carriage 

13 under this section and that is transmitting broadcast 

14 programming exclusively in the digital television 

15 service in a local market in the contiguous United 

16 States (hereafter in this paragraph referred to as an 

17 eligible requesting station), a satellite carrier car18 rying the digital signal of any other local television 

19 station in that local market shall carry the eligible re20 questing station’s primary video stream and pro21 gram-related material, without material degradation, 

22 if the licensee for that eligible requesting station—

23 ‘‘(A) relies on this section to obtain carriage 

24 of the primary video stream and program-related 
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1 material by that satellite carrier in that market; 

2 and 

3 ‘‘(B) permits the satellite carrier to carry 

4 without compensation any other programming 

5 broadcast by that local station that is carried on 

6 that system. 

7 ‘‘(2) FORMATTING OF PRIMARY VIDEO STREAM.—

8 A satellite carrier must offer the primary video 

9 stream and program-related material of an eligible 

10 requesting station in the digital format transmitted 

11 by the station if the satellite carrier carries the pri12 mary video stream of any other local television sta13 tion in that local market in the same digital format. 

14 ‘‘(3) MULTIPLE FORMATS PERMITTED.—A sat15 ellite carrier may offer the primary video stream and 

16 program-related material of an eligible requesting sta17 tion in any analog or digital format or formats, 

18 whether or not doing so requires conversion from the 

19 format transmitted by that eligible requesting station, 

20 so long as—

21 ‘‘(A) the satellite carrier offers the primary 

22 video stream and program-related material in 

23 the converted analog or digital format or formats 

24 without material degradation; and 
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1 ‘‘(B) also offers the primary video stream 

2 and program-related material in the manner or 

3 manners required by this subsection. 

4 ‘‘(4) TRANSITIONAL CONVERSIONS.—Notwith5 standing any requirement in paragraphs (1) and (2) 

6 to carry the primary video stream and program-re7 lated material in the digital format transmitted by 

8 the local television station, but subject to the prohibi9 tion on material degradation, until January 1, 2014, 

10 a satellite carrier—

11 ‘‘(A) shall offer the primary video stream 

12 and program-related material of any local tele13 vision broadcast station required to be carried 

14 under paragraph (1) in the format necessary for 

15 such stream to be viewable on analog and digital 

16 televisions; and 

17 ‘‘(B) may convert the primary video stream 

18 and program-related material to standard-defi19 nition format in lieu of offering it in the digital 

20 format transmitted by the local television sta21 tion. 

22 ‘‘(5) LOCATION AND METHOD OF CONVERSION.—

23 A satellite carrier may perform any conversion per24 mitted or required by this subsection at any location, 
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•S 1932 EAH 

1 from the local receive facility to the customer prem2 ises, inclusive. 

3 ‘‘(6) CONVERSIONS NOT TREATED AS DEGRADA4 TION.—Any conversion permitted or required by this 

5 subsection shall not, by itself, be treated as a material 

6 degradation. 

7 ‘‘(7) CARRIAGE OF PROGRAM-RELATED MATE8 RIAL.—The obligation to carry program-related mate9 rial under this subsection is effective only to the ex10 tent technically feasible. 

11 ‘‘(8) DEFINITION OF STANDARD-DEFINITION FOR12 MAT.—For purposes of this subsection, a stream shall 

13 be in standard definition digital format if such 

14 stream meets the criteria for such format as specified 

15 in the standard recognized by the Commission in sec16 tion 73.682 of its rules (47 CFR 73.682) or a suc17 cessor regulation.’’; 

18 (2) in subsection (b)(1), by striking ‘‘subsection 

19 (a)’’ and inserting ‘‘subsection (a) or (l)’’; 

20 (3) in subsection (c)(1), by striking ‘‘subsection 

21 (a)(1)’’ and inserting ‘‘subsections (a)(1) and (l)’’; 

22 and 

23 (4) in subsection (c)(2), by striking ‘‘subsection 

24 (a)’’ and inserting ‘‘subsections (a) and (l)’’. 
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•S 1932 EAH 

1 (d) DEADLINE.—The Federal Communications Com2 mission shall revise its regulations to implement the amend3 ments made by this section within one year after the date 

4 of enactment of this Act. 

5 SEC. 3411. DEPLOYMENT OF BROADBAND WIRELESS TECH6 NOLOGIES. 

7 Not later than 45 days after the effective date of this 

8 Act, the Commission shall initiate a rulemaking to assess 

9 the necessity of rechannelizing the spectrum located between 

10 767–773 megahertz and 797–803 megahertz to accommo11 date broadband applications. Such rulemaking shall be 

12 completed within 180 days. 

13 SEC. 3412. SENSE OF CONGRESS. 

14 (a) FINDINGS.—The Congress finds the following: 

15 (1) The wireless communications industry in the 

16 United States is becoming increasingly concentrated: 

17 there are currently no ownership limitations on wire18 less companies, and the five largest wireless carriers 

19 in the United States control nearly 90 percent of 

20 United States wireless subscribership. 

21 (2) Over 90 percent of households receive their 

22 broadband services through either cable or digital sub23 scriber line (DSL) service, and most cable and DSL 

24 providers are heavily concentrated within their geo25 graphic markets. 
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1 (3) Under the Omnibus Budget and Reconcili2 ation Act of 1993, Congress tasked the Federal Com3 munications Commission to promote economic oppor4 tunity by disseminating wireless communications li5 censes among a wide variety of applicants, including 

6 small businesses and rural telephone companies. 

7 (4) Upcoming auctions for the returned analog 

8 broadcast spectrum in the 700 megahertz band that 

9 will be cleared following the transition from analog to 

10 digital broadcast television and Advanced Wireless 

11 Services (AWS) in the 1710–1755 megahertz and 

12 2110–2155 megahertz bands will likely be the last re13 allocation opportunities for commercial wireless com14 munications services and wireless broadband services 

15 in the foreseeable future. 

16 (5) In the near term, wireless broadband presents 

17 the most promising opportunity to provide a third 

18 option (other than cable modem or DSL service) for 

19 broadband Internet access for most consumers, and 

20 the spectrum in the 700 megahertz band is considered 

21 ‘‘beachfront’’ property by telecommunications carriers 

22 because wireless signals at this frequency range pass 

23 easily through buildings, trees, and other interference. 

24 (6) The 700 megahertz band offers a historic op25 portunity to provide the equivalent of a ‘‘third wire’’ 
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1 into the home – an alternative to telephone or cable 

2 broadband access that will create new competition 

3 and incentives for new entrants, innovation, and 

4 broader service offerings. 

5 (b) SENSE OF THE CONGRESS.—It is the sense of the 

6 Congress that the Federal Communications Commission 

7 should disseminate wireless communications licenses con8 sistent with the findings in subsection (a) and do so uti9 lizing its existing authority under section 309(j) of the 

10 Communications Act of 1934, which requires the Commis11 sion to promote the following objectives: 

12 (1) the development and rapid deployment of 

13 new technologies, products, and services for the benefit 

14 of the public, including those residing in rural areas, 

15 without administrative or judicial delays; 

16 (2) promoting economic opportunity and com17 petition and ensuring that new and innovative tech18 nologies are readily accessible to the American people 

19 by avoiding excessive concentration of licenses and by 

20 disseminating licenses among a wide variety of appli21 cants, including small businesses and rural telephone 

22 companies; 

23 (3) recovery for the public of a portion of the 

24 value of the public spectrum resource made available 

25 for commercial use and avoidance of unjust enrich-
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•S 1932 EAH 

1 ment through the methods employed to award uses of 

2 that resource; and 

3 (4) efficient and intensive use of the electro4 magnetic spectrum. 

5 SEC. 3413. BAND PLAN REVISION REQUIRED. 

6 (a) PROCEEDING REQUIRED.—The Federal Commu7 nications Commission shall commence a proceeding no later 

8 than June 1, 2006, to reevaluate the band plan for the auc9 tion of the unauctioned portions of the lower 700 megahertz 

10 band (currently designated as Blocks A, B, and E). 

11 (b) RECONFIGURATION REQUIRED.—The Federal 

12 Communications Commission shall reconfigure the band 

13 plan to license spectrum for Block B of such portion accord14 ing to Cellular Market Areas (i.e., Metropolitan Statistical 

15 Areas (‘‘MSAs’’) and Rural Service Areas (‘‘RSAs’’)) to fa16 cilitate the offering of competitive wireless services by re17 gional and smaller wireless carriers.

18 TITLE IV—COMMITTEE ON 

19 FINANCIAL SERVICES 

20 SECTION 4000. TABLE OF CONTENTS. 

21 The table of contents for this title is as follows:

Sec. 4000. Table of contents. 

Subtitle A—Deposit Insurance Reform 

Sec. 4001. Short title. 

Sec. 4002. Merging the BIF and SAIF. 

Sec. 4003. Increase in deposit insurance coverage. 

Sec. 4004. Setting assessments and repeal of special rules relating to minimum 

assessments and free deposit insurance. 

Sec. 4005. Replacement of fixed designated reserve ratio with reserve range. 
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Sec. 4006. Requirements applicable to the risk-based assessment system. 

Sec. 4007. Refunds, dividends, and credits from Deposit Insurance Fund. 

Sec. 4008. Deposit Insurance Fund restoration plans. 

Sec. 4009. Regulations required. 

Sec. 4010. Studies of FDIC structure and expenses and certain activities and further possible changes to deposit insurance system. 

Sec. 4011. Bi-annual FDIC survey and report on increasing the deposit base by 

encouraging use of depository institutions by the unbanked. 

Sec. 4012. Technical and conforming amendments to the Federal Deposit Insurance Act relating to the merger of the BIF and SAIF. 

Sec. 4013. Other technical and conforming amendments relating to the merger of 

the BIF and SAIF. 

Subtitle B—FHA Asset Disposition 

Sec. 4101. Short title. 

Sec. 4102. Definitions. 

Sec. 4103. Appropriated funds requirement for below market sales. 

Sec. 4104. Up-front grants.

1 Subtitle A—Deposit Insurance 

2 Reform 

3 SEC. 4001. SHORT TITLE. 

4 This subtitle may be cited as the ‘‘Federal Deposit In5 surance Reform Act of 2005’’. 

6 SEC. 4002. MERGING THE BIF AND SAIF. 

7 (a) IN GENERAL.—

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

9 the Savings Association Insurance Fund shall be 

10 merged into the Deposit Insurance Fund. 

11 (2) DISPOSITION OF ASSETS AND LIABILITIES.—

12 All assets and liabilities of the Bank Insurance Fund 

13 and the Savings Association Insurance Fund shall be 

14 transferred to the Deposit Insurance Fund. 

15 (3) NO SEPARATE EXISTENCE.—The separate ex16 istence of the Bank Insurance Fund and the Savings 
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•S 1932 EAH 

1 Association Insurance Fund shall cease on the effec2 tive date of the merger thereof under this section. 

3 (b) REPEAL OF OUTDATED MERGER PROVISION.—Sec4 tion 2704 of the Deposit Insurance Funds Act of 1996 (12 

5 U.S.C. 1821 note) is repealed. 

6 (c) EFFECTIVE DATE.—This section shall take effect 

7 on the first day of the first calendar quarter that begins 

8 after the end of the 90-day period beginning on the date 

9 of the enactment of this Act. 

10 SEC. 4003. INCREASE IN DEPOSIT INSURANCE COVERAGE. 

11 (a) IN GENERAL.—Section 11(a)(1) of the Federal De12 posit Insurance Act (12 U.S.C. 1821(a)(1)) is amended—

13 (1) by striking subparagraph (B) and inserting 

14 the following new subparagraph: 

15 ‘‘(B) NET AMOUNT OF INSURED DEPOSIT.—

16 The net amount due to any depositor at an in17 sured depository institution shall not exceed the 

18 standard maximum deposit insurance amount as 

19 determined in accordance with subparagraphs 

20 (C), (D), (E) and (F) and paragraph (3).’’; and 

21 (2) by adding at the end the following new sub22 paragraphs: 

23 ‘‘(E) STANDARD MAXIMUM DEPOSIT INSUR24 ANCE AMOUNT DEFINED.—For purposes of this 
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•S 1932 EAH 

1 Act, the term ‘standard maximum deposit insur2 ance amount’ means—

3 ‘‘(i) until the effective date of final reg4 ulations prescribed pursuant to section 

5 4009(a)(2) of the Federal Deposit Insurance 

6 Reform Act of 2005, $100,000; and 

7 ‘‘(ii) on and after such effective date, 

8 $130,000, adjusted as provided under sub9 paragraph (F). 

10 ‘‘(F) INFLATION ADJUSTMENT.—

11 ‘‘(i) IN GENERAL.—By April 1 of 

12 2007, and the 1st day of each subsequent 5-

13 year period, the Board of Directors and the 

14 National Credit Union Administration 

15 Board shall jointly prescribe the amount by 

16 which the standard maximum deposit in17 surance amount and the standard max18 imum share insurance amount (as defined 

19 in section 207(k) of the Federal Credit 

20 Union Act) applicable to any depositor at 

21 an insured depository institution shall be 

22 increased by calculating the product of—

23 ‘‘(I) $130,000; and 

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

25 Personal Consumption Expenditures 
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•S 1932 EAH 

1 Chain-Type Index (or any successor 

2 index thereto), published by the De3 partment of Commerce, as of December 

4 31 of the year preceding the year in 

5 which the adjustment is calculated 

6 under this clause, to the value of such 

7 index as of the date this subparagraph 

8 takes effect. 

9 ‘‘(ii) ROUNDING.—If the amount deter10 mined under clause (ii) for any period is 

11 not a multiple of $10,000, the amount so 

12 determined shall be rounded to the nearest 

13 $10,000. 

14 ‘‘(iii) PUBLICATION AND REPORT TO

15 THE CONGRESS.—Not later than April 5 of 

16 any calendar year in which an adjustment 

17 is required to be calculated under clause (i) 

18 to the standard maximum deposit insurance 

19 amount and the standard maximum share 

20 insurance amount under such clause, the 

21 Board of Directors and the National Credit 

22 Union Administration Board shall—

23 ‘‘(I) publish in the Federal Reg24 ister the standard maximum deposit 

25 insurance amount, the standard max-
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1 imum share insurance amount, and 

2 the amount of coverage under para3 graph (3)(A) and section 207(k)(3) of 

4 the Federal Credit Union Act, as so 

5 calculated; and 

6 ‘‘(II) jointly submit a report to 

7 the Congress containing the amounts 

8 described in subclause (I). 

9 ‘‘(iv) 6-MONTH IMPLEMENTATION PE10 RIOD.—Unless an Act of Congress enacted 

11 before July 1 of the calendar year in which 

12 an adjustment is required to be calculated 

13 under clause (i) provides otherwise, the in14 crease in the standard maximum deposit 

15 insurance amount and the standard max16 imum share insurance amount shall take ef17 fect on January 1 of the year immediately 

18 succeeding such calendar year.’’. 

19 (b) COVERAGE FOR CERTAIN EMPLOYEE BENEFIT

20 PLAN DEPOSITS.—Section 11(a)(1)(D) of the Federal De21 posit Insurance Act (12 U.S.C. 1821(a)(1)(D)) is amended 

22 to read as follows: 

23 ‘‘(D) COVERAGE FOR CERTAIN EMPLOYEE

24 BENEFIT PLAN DEPOSITS.—
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1 ‘‘(i) PASS-THROUGH INSURANCE.—The 

2 Corporation shall provide pass-through de3 posit insurance for the deposits of any em4 ployee benefit plan. 

5 ‘‘(ii) PROHIBITION ON ACCEPTANCE OF

6 BENEFIT PLAN DEPOSITS.—An insured de7 pository institution that is not well capital8 ized or adequately capitalized may not ac9 cept employee benefit plan deposits. 

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

11 this subparagraph, the following definitions 

12 shall apply: 

13 ‘‘(I) CAPITAL STANDARDS.—The 

14 terms ‘well capitalized’ and ‘ade15 quately capitalized’ have the same 

16 meanings as in section 38. 

17 ‘‘(II) EMPLOYEE BENEFIT

18 PLAN.—The term ‘employee benefit 

19 plan’ has the same meaning as in 

20 paragraph (8)(B)(ii), and includes any 

21 eligible deferred compensation plan de22 scribed in section 457 of the Internal 

23 Revenue Code of 1986. 

24 ‘‘(III) PASS-THROUGH DEPOSIT

25 INSURANCE.—The term ‘pass-through 
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•S 1932 EAH 

1 deposit insurance’ means, with respect 

2 to an employee benefit plan, deposit 

3 insurance coverage provided on a pro 

4 rata basis to the participants in the 

5 plan, in accordance with the interest of 

6 each participant.’’. 

7 (c) DOUBLING OF DEPOSIT INSURANCE FOR CERTAIN

8 RETIREMENT ACCOUNTS.—Section 11(a)(3)(A) of the Fed9 eral Deposit Insurance Act (12 U.S.C. 1821(a)(3)(A)) is 

10 amended by striking ‘‘$100,000’’ and inserting ‘‘2 times the 

11 standard maximum deposit insurance amount (as deter12 mined under paragraph (1))’’. 

13 (d) INCREASED INSURANCE COVERAGE FOR MUNIC14 IPAL DEPOSITS.—Section 11(a)(2) of the Federal Deposit 

15 Insurance Act (12 U.S.C. 1821(a)(2)) is amended—

16 (1) in subparagraph (A)—

17 (A) by moving the margins of clauses (i) 

18 through (v) 4 ems to the right; 

19 (B) by striking, in the matter following 

20 clause (v), ‘‘such depositor shall’’ and all that 

21 follows through the period; and 

22 (C) by striking the semicolon at the end of 

23 clause (v) and inserting a period; 
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1 (2) by striking ‘‘(2)(A) Notwithstanding’’ and all 

2 that follows through ‘‘a depositor who is—’’ and in3 serting the following: 

4 ‘‘(2) MUNICIPAL DEPOSITORS.—

5 ‘‘(A) IN GENERAL.—Notwithstanding any 

6 limitation in this Act or in any other provision 

7 of law relating to the amount of deposit insur8 ance available to any 1 depositor—

9 ‘‘(i) a municipal depositor shall, for 

10 the purpose of determining the amount of 

11 insured deposits under this subsection, be 

12 deemed to be a depositor separate and dis13 tinct from any other officer, employee, or 

14 agent of the United States or any public 

15 unit referred to in subparagraph (E); and 

16 ‘‘(ii) except as provided in subpara17 graph (B), the deposits of a municipal de18 positor shall be insured in an amount equal 

19 to the standard maximum deposit insurance 

20 amount (as determined under paragraph 

21 (1)). 

22 ‘‘(B) IN-STATE MUNICIPAL DEPOSITORS.—

23 In the case of the deposits of an in-State munic24 ipal depositor described in clause (ii), (iii), (iv), 

25 or (v) of subparagraph (E) at an insured deposi-
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•S 1932 EAH 

1 tory institution, such deposits shall be insured in 

2 an amount not to exceed the lesser of—

3 ‘‘(i) $2,000,000; or 

4 ‘‘(ii) the sum of the standard max5 imum deposit insurance amount and 80 

6 percent of the amount of any deposits in ex7 cess of the standard maximum deposit in8 surance amount. 

9 ‘‘(C) MUNICIPAL DEPOSIT PARITY.—No 

10 State may deny to insured depository institu11 tions within its jurisdiction the authority to ac12 cept deposits insured under this paragraph, or 

13 prohibit the making of such deposits in such in14 stitutions by any in-State municipal depositor. 

15 ‘‘(D) IN-STATE MUNICIPAL DEPOSITOR DE16 FINED.—For purposes of this paragraph, the 

17 term ‘in-State municipal depositor’ means a mu18 nicipal depositor that is located in the same 

19 State as the office or branch of the insured de20 pository institution at which the deposits of that 

21 depositor are held. 

22 ‘‘(E) MUNICIPAL DEPOSITOR.—In this 

23 paragraph, the term ‘municipal depositor’ means 

24 a depositor that is—’’; 
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•S 1932 EAH 

1 (3) by striking ‘‘(B) The’’ and inserting the fol2 lowing: 

3 ‘‘(F) AUTHORITY TO LIMIT DEPOSITS.—

4 The’’; and 

5 (4) by striking ‘‘depositor referred to in subpara6 graph (A) of this paragraph’’ each place such term 

7 appears and inserting ‘‘municipal depositor’’. 

8 (e) TECHNICAL AND CONFORMING AMENDMENT RE9 LATING TO INSURANCE OF TRUST FUNDS.—Paragraphs (1) 

10 and (3) of section 7(i) of the Federal Deposit Insurance Act 

11 (12 U.S.C. 1817(i)) are each amended by striking 

12 ‘‘$100,000’’ and inserting ‘‘the standard maximum deposit 

13 insurance amount (as determined under section 11(a)(1))’’. 

14 (f) OTHER TECHNICAL AND CONFORMING AMEND15 MENTS.—

16 (1) Section 11(m)(6) of the Federal Deposit In17 surance Act (12 U.S.C. 1821(m)(6)) is amended by 

18 striking ‘‘$100,000’’ and inserting ‘‘an amount equal 

19 to the standard maximum deposit insurance 

20 amount’’. 

21 (2) Subsection (a) of section 18 of the Federal 

22 Deposit Insurance Act (12 U.S.C. 1828(a)) is amend23 ed to read as follows: 

24 ‘‘(a) INSURANCE LOGO.—

25 ‘‘(1) INSURED DEPOSITORY INSTITUTIONS.—
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•S 1932 EAH 

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 deposits 

5 of the institution, in accordance with regulations 

6 to be prescribed by the Corporation. 

7 ‘‘(B) STATEMENT TO BE INCLUDED.—Each 

8 sign required under subparagraph (A) shall in9 clude a statement that insured deposits are 

10 backed by the full faith and credit of the United 

11 States Government. 

12 ‘‘(2) REGULATIONS.—The Corporation shall pre13 scribe regulations to carry out this subsection, includ14 ing regulations governing the substance of signs re15 quired by paragraph (1) and the manner of display 

16 or use of such signs. 

17 ‘‘(3) PENALTIES.—For each day that an insured 

18 depository institution continues to violate this sub19 section or any regulation issued under this subsection, 

20 it shall be subject to a penalty of not more than $100, 

21 which the Corporation may recover for its use.’’. 

22 (3) Section 43(d) of the Federal Deposit Insur23 ance Act (12 U.S.C. 1831t(d)) is amended by striking 

24 ‘‘$100,000’’ and inserting ‘‘an amount equal to the 

25 standard maximum deposit insurance amount’’. 
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•S 1932 EAH 

1 (4) Section 6 of the International Banking Act 

2 of 1978 (12 U.S.C. 3104) is amended—

3 (A) by striking ‘‘$100,000’’ each place such 

4 term appears and inserting ‘‘an amount equal to 

5 the standard maximum deposit insurance 

6 amount’’; and 

7 (B) by adding at the end the following new 

8 subsection: 

9 ‘‘(e) STANDARD MAXIMUM DEPOSIT INSURANCE

10 AMOUNT DEFINED.—For purposes of this section, the term 

11 ‘standard maximum deposit insurance amount’ means the 

12 amount of the maximum amount of deposit insurance as 

13 determined under section 11(a)(1) of the Federal Deposit 

14 Insurance Act.’’. 

15 (g) CONFORMING CHANGE TO CREDIT UNION SHARE

16 INSURANCE FUND.—

17 (1) IN GENERAL.—Section 207(k) of the Federal 

18 Credit Union Act (12 U.S.C. 1787(k)) is amended—

19 (A) by striking ‘‘(k)(1)’’ and all that follows 

20 through the end of paragraph (1) and inserting 

21 the following: 

22 ‘‘(k) INSURED AMOUNTS PAYABLE.—

23 ‘‘(1) NET INSURED AMOUNT.—

24 ‘‘(A) IN GENERAL.—Subject to the provi25 sions of paragraph (2), the net amount of share 
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•S 1932 EAH 

1 insurance payable to any member at an insured 

2 credit union shall not exceed the total amount of 

3 the shares or deposits in the name of the member 

4 (after deducting offsets), less any part thereof 

5 which is in excess of the standard maximum 

6 share insurance amount, as determined in ac7 cordance with this paragraph and paragraphs 

8 (5) and (6), and consistently with actions taken 

9 by the Federal Deposit Insurance Corporation 

10 under section 11(a) of the Federal Deposit Insur11 ance Act. 

12 ‘‘(B) AGGREGATION.—Determination of the 

13 net amount of share insurance under subpara14 graph (A), shall be in accordance with such regu15 lations as the Board may prescribe, and, in de16 termining the amount payable to any member, 

17 there shall be added together all accounts in the 

18 credit union maintained by that member for that 

19 member’s own benefit, either in the member’s 

20 own name or in the names of others. 

21 ‘‘(C) AUTHORITY TO DEFINE THE EXTENT

22 OF COVERAGE.—The Board may define, with 

23 such classifications and exceptions as it may 

24 prescribe, the extent of the share insurance cov25 erage provided for member accounts, including 
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•S 1932 EAH 

1 member accounts in the name of a minor, in 

2 trust, or in joint tenancy.’’; 

3 (B) in paragraph (2)—

4 (i) in subparagraph (A)—

5 (I) in clauses (i) through (v), by 

6 moving the margins 4 ems to the right; 

7 (II) in the matter following clause 

8 (v), by striking ‘‘his account’’ and all 

9 that follows through the period; and 

10 (III) by striking the semicolon at 

11 the end of clause (v) and inserting a 

12 period; 

13 (ii) by striking ‘‘(2)(A) Notwith14 standing’’ and all that follows through ‘‘a 

15 depositor or member who is—’’ and insert16 ing the following: 

17 ‘‘(2) MUNICIPAL DEPOSITORS OR MEMBERS.—

18 ‘‘(A) IN GENERAL.—Notwithstanding any 

19 limitation in this Act or in any other provision 

20 of law relating to the amount of insurance avail21 able to any 1 depositor or member, deposits or 

22 shares of a municipal depositor or member shall 

23 be insured in an amount equal to the standard 

24 maximum share insurance amount (as deter-
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•S 1932 EAH 

1 mined under paragraph (5)), except as provided 

2 in subparagraph (B). 

3 ‘‘(B) IN-STATE MUNICIPAL DEPOSITORS.—

4 In the case of the deposits of an in-State munic5 ipal depositor described in clause (ii), (iii), (iv), 

6 or (v) of subparagraph (E) at an insured credit 

7 union, such deposits shall be insured in an 

8 amount equal to the lesser of—

9 ‘‘(i) $2,000,000; or 

10 ‘‘(ii) the sum of the standard max11 imum deposit insurance amount and 80 

12 percent of the amount of any deposits in ex13 cess of the standard maximum deposit in14 surance amount. 

15 ‘‘(C) RULE OF CONSTRUCTION.—No provi16 sion of this paragraph shall be construed as au17 thorizing an insured credit union to accept the 

18 deposits of a municipal depositor in an amount 

19 greater than such credit union is authorized to 

20 accept under any other provision of Federal or 

21 State law. 

22 ‘‘(D) IN-STATE MUNICIPAL DEPOSITOR DE23 FINED.—For purposes of this paragraph, the 

24 term ‘in-State municipal depositor’ means a mu25 nicipal depositor that is located in the same 
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•S 1932 EAH 

1 State as the office or branch of the insured credit 

2 union at which the deposits of that depositor are 

3 held. 

4 ‘‘(E) MUNICIPAL DEPOSITOR.—In this 

5 paragraph, the term ‘municipal depositor’ means 

6 a depositor that is—’’; 

7 (iii) by striking ‘‘(B) The’’ and insert8 ing the following: 

9 ‘‘(F) AUTHORITY TO LIMIT DEPOSITS.—

10 The’’; and 

11 (iv) by striking ‘‘depositor or member 

12 referred to in subparagraph (A)’’ and in13 serting ‘‘municipal depositor or member’’; 

14 and 

15 (C) by adding at the end the following new 

16 paragraphs: 

17 ‘‘(4) COVERAGE FOR CERTAIN EMPLOYEE BEN18 EFIT PLAN DEPOSITS.—

19 ‘‘(A) PASS-THROUGH INSURANCE.—The Ad20 ministration shall provide pass-through share in21 surance for the deposits or shares of any em22 ployee benefit plan. 

23 ‘‘(B) PROHIBITION ON ACCEPTANCE OF DE24 POSITS.—An insured credit union that is not 
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•S 1932 EAH 

1 well capitalized or adequately capitalized may 

2 not accept employee benefit plan deposits. 

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

4 paragraph, the following definitions shall apply: 

5 ‘‘(i) CAPITAL STANDARDS.—The terms 

6 ‘well capitalized’ and ‘adequately capital7 ized’ have the same meanings as in section 

8 216(c). 

9 ‘‘(ii) EMPLOYEE BENEFIT PLAN.—The 

10 term ‘employee benefit plan’—

11 ‘‘(I) has the meaning given to 

12 such term in section 3(3) of the Em13 ployee Retirement Income Security Act 

14 of 1974; 

15 ‘‘(II) includes any plan described 

16 in section 401(d) of the Internal Rev17 enue Code of 1986; and 

18 ‘‘(III) includes any eligible de19 ferred compensation plan described in 

20 section 457 of the Internal Revenue 

21 Code of 1986. 

22 ‘‘(iii) PASS-THROUGH SHARE INSUR23 ANCE.—The term ‘pass-through share insur24 ance’ means, with respect to an employee 

25 benefit plan, insurance coverage provided 
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1 on a pro rata basis to the participants in 

2 the plan, in accordance with the interest of 

3 each participant. 

4 ‘‘(D) RULE OF CONSTRUCTION.—No provi5 sion of this paragraph shall be construed as au6 thorizing an insured credit union to accept the 

7 deposits of an employee benefit plan in an 

8 amount greater than such credit union is author9 ized to accept under any other provision of Fed10 eral or State law. 

11 ‘‘(5) STANDARD MAXIMUM SHARE INSURANCE

12 AMOUNT DEFINED.—For purposes of this Act, the 

13 term ‘standard maximum share insurance amount’ 

14 means—

15 ‘‘(A) until the effective date of final regula16 tions prescribed pursuant to section 4009(a)(2) 

17 of the Federal Deposit Insurance Reform Act of 

18 2005, $100,000; and 

19 ‘‘(B) on and after such effective date, 

20 $130,000, adjusted as provided under section 

21 11(a)(1)(F) of the Federal Deposit Insurance 

22 Act.’’. 

23 (2) DOUBLING OF SHARE INSURANCE FOR CER24 TAIN RETIREMENT ACCOUNTS.—Section 207(k)(3) of 

25 the Federal Credit Union Act (12 U.S.C. 1787(k)(3)) 
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•S 1932 EAH 

1 is amended by striking ‘‘$100,000’’ and inserting ‘‘2 

2 times the standard maximum share insurance 

3 amount (as determined under paragraph (1))’’. 

4 (h) EFFECTIVE DATE.—This section and the amend5 ments made by this section shall take effect on the date the 

6 final regulations required under section 4009(a)(2) take ef7 fect. 

8 SEC. 4004. SETTING ASSESSMENTS AND REPEAL OF SPE9 CIAL RULES RELATING TO MINIMUM ASSESS10 MENTS AND FREE DEPOSIT INSURANCE. 

11 (a) SETTING ASSESSMENTS.—Section 7(b)(2) of the 

12 Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is 

13 amended—

14 (1) by striking subparagraphs (A) and (B) and 

15 inserting the following new subparagraphs: 

16 ‘‘(A) IN GENERAL.—The Board of Directors 

17 shall set assessments for insured depository insti18 tutions in such amounts as the Board of Direc19 tors may determine to be necessary or appro20 priate, subject to subparagraph (D). 

21 ‘‘(B) FACTORS TO BE CONSIDERED.—In set22 ting assessments under subparagraph (A), the 

23 Board of Directors shall consider the following 

24 factors: 
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•S 1932 EAH 

1 ‘‘(i) The estimated operating expenses 

2 of the Deposit Insurance Fund. 

3 ‘‘(ii) The estimated case resolution ex4 penses and income of the Deposit Insurance 

5 Fund. 

6 ‘‘(iii) The projected effects of the pay7 ment of assessments on the capital and 

8 earnings of insured depository institutions. 

9 ‘‘(iv) the risk factors and other factors 

10 taken into account pursuant to paragraph 

11 (1) under the risk-based assessment system, 

12 including the requirement under such para13 graph to maintain a risk-based system. 

14 ‘‘(v) Any other factors the Board of Di15 rectors may determine to be appropriate.’’; 

16 and 

17 (2) by inserting after subparagraph (C) the fol18 lowing new subparagraph: 

19 ‘‘(D) BASE RATE FOR ASSESSMENTS.—

20 ‘‘(i) IN GENERAL.—In setting assess21 ment rates pursuant to subparagraph (A), 

22 the Board of Directors shall establish a base 

23 rate of not more than 1 basis point (exclu24 sive of any credit or dividend) for those in25 sured depository institutions in the lowest-
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•S 1932 EAH 

1 risk category under the risk-based assess2 ment system established pursuant to para3 graph (1). No insured depository institution 

4 shall be barred from the lowest-risk category 

5 solely because of size. 

6 ‘‘(ii) SUSPENSION.—Clause (i) shall 

7 not apply during any period in which the 

8 reserve ratio of the Deposit Insurance Fund 

9 is less than the amount which is equal to 

10 1.15 percent of the aggregate estimated in11 sured deposits.’’. 

12 (b) ASSESSMENT RECORDKEEPING PERIOD SHORT13 ENED.—Paragraph (5) of section 7(b) of the Federal De14 posit Insurance Act (12 U.S.C. 1817(b)) is amended to read 

15 as follows: 

16 ‘‘(5) DEPOSITORY INSTITUTION REQUIRED TO

17 MAINTAIN ASSESSMENT-RELATED RECORDS.—Each 

18 insured depository institution shall maintain all 

19 records that the Corporation may require for 

20 verifying the correctness of any assessment on the in21 sured depository institution under this subsection 

22 until the later of—

23 ‘‘(A) the end of the 3-year period beginning 

24 on the due date of the assessment; or 
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1 ‘‘(B) in the case of a dispute between the in2 sured depository institution and the Corporation 

3 with respect to such assessment, the date of a 

4 final determination of any such dispute.’’. 

5 (c) INCREASE IN FEES FOR LATE ASSESSMENT PAY6 MENTS.—Subsection (h) of section 18 of the Federal Deposit 

7 Insurance Act (12 U.S.C. 1828(h)) is amended to read as 

8 follows: 

9 ‘‘(h) PENALTY FOR FAILURE TO TIMELY PAY ASSESS10 MENTS.—

11 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

12 any insured depository institution which fails or re13 fuses to pay any assessment shall be subject to a pen14 alty in an amount not more than 1 percent of the 

15 amount of the assessment due for each day that such 

16 violation continues. 

17 ‘‘(2) EXCEPTION IN CASE OF DISPUTE.—Para18 graph (1) shall not apply if—

19 ‘‘(A) the failure to pay an assessment is due 

20 to a dispute between the insured depository insti21 tution and the Corporation over the amount of 

22 such assessment; and 

23 ‘‘(B) the insured depository institution de24 posits security satisfactory to the Corporation for 

25 payment upon final determination of the issue. 
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1 ‘‘(3) SPECIAL RULE FOR SMALL ASSESSMENT

2 AMOUNTS.—If the amount of the assessment which an 

3 insured depository institution fails or refuses to pay 

4 is less than $10,000 at the time of such failure or re5 fusal, the amount of any penalty to which such insti6 tution is subject under paragraph (1) shall not exceed 

7 $100 for each day that such violation continues. 

8 ‘‘(4) AUTHORITY TO MODIFY OR REMIT PEN9 ALTY.—The Corporation, in the sole discretion of the 

10 Corporation, may compromise, modify or remit any 

11 penalty which the Corporation may assess or has al12 ready assessed under paragraph (1) upon a finding 

13 that good cause prevented the timely payment of an 

14 assessment.’’. 

15 (d) ASSESSMENTS FOR LIFELINE ACCOUNTS.—

16 (1) IN GENERAL.—Section 232 of the Federal 

17 Deposit Insurance Corporation Improvement Act of 

18 1991 (12 U.S.C. 1834) is amended by striking sub19 section (c). 

20 (2) CLARIFICATION OF RATE APPLICABLE TO DE21 POSITS ATTRIBUTABLE TO LIFELINE ACCOUNTS.—Sec22 tion 7(b)(2)(H) of the Federal Deposit Insurance Act 

23 (12 U.S.C. 1817(b)(2)(H)) is amended by striking ‘‘at 

24 a rate determined in accordance with such Act’’ and 
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•S 1932 EAH 

inserting ‘‘at 1 1 ⁄2 the assessment rate otherwise appli2 cable for such insured depository institution’’. 

3 (3) REGULATIONS.—Section 232(a)(1) of the 

4 Federal Deposit Insurance Corporation Improvement 

5 Act of 1991 (12 U.S.C. 1834(a)(1)) is amended by 

6 striking ‘‘Board of Governors of the Federal Reserve 

7 System, and the’’. 

8 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

9 (1) Paragraph (3) of section 7(a) of the Federal 

10 Deposit Insurance Act (12 U.S.C. 1817(a)(3)) is 

11 amended by striking the 3d sentence and inserting the 

12 following: ‘‘Such reports of condition shall be the 

13 basis for the certified statements to be filed pursuant 

14 to subsection (c).’’. 

15 (2) Subparagraphs (B)(ii) and (C) of section 

16 7(b)(1) of the Federal Deposit Insurance Act (12 

17 U.S.C. 1817(b)(1)) are each amended by striking 

18 ‘‘semiannual’’ where such term appears in each such 

19 subparagraph. 

20 (3) Section 7(b)(2) of the Federal Deposit Insur21 ance Act (12 U.S.C. 1817(b)(2)) is amended—

22 (A) by striking subparagraphs (E), (F), and 

23 (G); 

24 (B) in subparagraph (C), by striking ‘‘semi25 annual’’; and 
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•S 1932 EAH 

1 (C) by redesignating subparagraph (H) (as 

2 amended by subsection (e)(2) of this section) as 

3 subparagraph (E). 

4 (4) Section 7(b) of the Federal Deposit Insurance 

5 Act (12 U.S.C. 1817(b)) is amended by striking para6 graph (4) and redesignating paragraphs (5) (as 

7 amended by subsection (b) of this section), (6), and 

8 (7) as paragraphs (4), (5), and (6) respectively. 

9 (5) Section 7(c) of the Federal Deposit Insurance 

10 Act (12 U.S.C. 1817(c)) is amended—

11 (A) in paragraph (1)(A), by striking ‘‘semi12 annual’’; 

13 (B) in paragraph (2)(A), by striking ‘‘semi14 annual’’; and 

15 (C) in paragraph (3), by striking ‘‘semi16 annual period’’ and inserting ‘‘initial assessment 

17 period’’. 

18 (6) Section 8(p) of the Federal Deposit Insur19 ance Act (12 U.S.C. 1818(p)) is amended by striking 

20 ‘‘semiannual’’. 

21 (7) Section 8(q) of the Federal Deposit Insurance 

22 Act (12 U.S.C. 1818(q)) is amended by striking 

23 ‘‘semiannual period’’ and inserting ‘‘assessment pe24 riod’’. 
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•S 1932 EAH 

1 (8) Section 13(c)(4)(G)(ii)(II) of the Federal De2 posit Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)(II)) 

3 is amended by striking ‘‘semiannual period’’ and in4 serting ‘‘assessment period’’. 

5 (9) Section 232(a) of the Federal Deposit Insur6 ance Corporation Improvement Act of 1991 (12 

7 U.S.C. 1834(a)) is amended—

8 (A) in the matter preceding subparagraph 

9 (A) of paragraph (2), by striking ‘‘the Board 

10 and’’; 

11 (B) in subparagraph (J) of paragraph (2), 

12 by striking ‘‘the Board’’ and inserting ‘‘the Cor13 poration’’; 

14 (C) by striking subparagraph (A) of para15 graph (3) and inserting the following new sub16 paragraph: 

17 ‘‘(A) CORPORATION.—The term ‘Corpora18 tion’ means the Federal Deposit Insurance Cor19 poration.’’; and 

20 (D) in subparagraph (C) of paragraph (3), 

21 by striking ‘‘Board’’ and inserting ‘‘Corpora22 tion’’. 

23 (f) EFFECTIVE DATE.—This section and the amend24 ments made by this section shall take effect on the date that 
431

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1 the final regulations required under section 4009(a)(5) take 

2 effect. 

3 SEC. 4005. REPLACEMENT OF FIXED DESIGNATED RESERVE 

4 RATIO WITH RESERVE RANGE. 

5 (a) IN GENERAL.—Section 7(b)(3) of the Federal De6 posit Insurance Act (12 U.S.C. 1817(b)(3)) is amended to 

7 read as follows: 

8 ‘‘(3) DESIGNATED RESERVE RATIO.—

9 ‘‘(A) ESTABLISHMENT.—

10 ‘‘(i) IN GENERAL.—The Board of Di11 rectors shall designate, by regulation after 

12 notice and opportunity for comment, the re13 serve ratio applicable with respect to the 

14 Deposit Insurance Fund. 

15 ‘‘(ii) NOT LESS THAN ANNUAL REDE16 TERMINATION.—A determination under 

17 clause (i) shall be made by the Board of Di18 rectors at least before the beginning of each 

19 calendar year, for such calendar year, and 

20 at such other times as the Board of Direc21 tors may determine to be appropriate. 

22 ‘‘(B) RANGE.—The reserve ratio designated 

23 by the Board of Directors for any year—

24 ‘‘(i) may not exceed 1.4 percent of esti25 mated insured deposits; and 
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•S 1932 EAH 

1 ‘‘(ii) may not be less than 1.15 percent 

2 of estimated insured deposits. 

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

4 ratio for any year, the Board of Directors 

5 shall—

6 ‘‘(i) take into account the risk of losses 

7 to the Deposit Insurance Fund in such year 

8 and future years, including historic experi9 ence and potential and estimated losses 

10 from insured depository institutions; 

11 ‘‘(ii) take into account economic condi12 tions generally affecting insured depository 

13 institutions so as to allow the designated re14 serve ratio to increase during more favor15 able economic conditions and to decrease 

16 during less favorable economic conditions, 

17 notwithstanding the increased risks of loss 

18 that may exist during such less favorable 

19 conditions, as determined to be appropriate 

20 by the Board of Directors; 

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

22 the assessment rates for insured depository 

23 institutions; and 

24 ‘‘(iv) take into account such other fac25 tors as the Board of Directors may deter-
433

•S 1932 EAH 

1 mine to be appropriate, consistent with the 

2 requirements of this subparagraph. 

3 ‘‘(D) PUBLICATION OF PROPOSED CHANGE

4 IN RATIO.—In soliciting comment on any pro5 posed change in the designated reserve ratio in 

6 accordance with subparagraph (A), the Board of 

7 Directors shall include in the published proposal 

8 a thorough analysis of the data and projections 

9 on which the proposal is based.’’. 

10 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec11 tion 3(y) of the Federal Deposit Insurance Act (12 U.S.C. 

12 1813(y)) is amended—

13 (1) by striking ‘‘(y) The term’’ and inserting(y) 

14 Definitions Relating to Deposit Insurance Fund.—

15 ‘‘(1) DEPOSIT INSURANCE FUND.—The term’’; 

16 and 

17 (2) by inserting after paragraph (1) (as so des18 ignated by paragraph (1) of this subsection) the fol19 lowing new paragraph: 

20 ‘‘(2) DESIGNATED RESERVE RATIO.—The term 

21 ‘designated reserve ratio’ means the reserve ratio des22 ignated by the Board of Directors in accordance with 

23 section 7(b)(3).’’. 

24 (c) EFFECTIVE DATE.—This section and the amend25 ments made by this section shall take effect on the date that 
434

•S 1932 EAH 

1 the final regulations required under section 4009(a)(1) take 

2 effect. 

3 SEC. 4006. REQUIREMENTS APPLICABLE TO THE RISK4 BASED ASSESSMENT SYSTEM. 

5 Section 7(b)(1) of the Federal Deposit Insurance Act 

6 (12 U.S.C. 1817(b)(1)) is amended by adding at the end 

7 the following new subparagraphs: 

8 ‘‘(E) INFORMATION CONCERNING RISK OF

9 LOSS AND ECONOMIC CONDITIONS.—

10 ‘‘(i) SOURCES OF INFORMATION.—For 

11 purposes of determining risk of losses at in12 sured depository institutions and economic 

13 conditions generally affecting depository in14 stitutions, the Corporation shall collect in15 formation, as appropriate, from all sources 

16 the Board of Directors considers appro17 priate, such as reports of condition, inspec18 tion reports, and other information from all 

19 Federal banking agencies, any information 

20 available from State bank supervisors, State 

21 insurance and securities regulators, the Se22 curities and Exchange Commission (includ23 ing information described in section 35), 

24 the Secretary of the Treasury, the Com25 modity Futures Trading Commission, the 
435

•S 1932 EAH 

1 Farm Credit Administration, the Federal 

2 Trade Commission, any Federal reserve 

3 bank or Federal home loan bank, and other 

4 regulators of financial institutions, and any 

5 information available from credit rating en6 tities, and other private economic or busi7 ness analysts. 

8 ‘‘(ii) CONSULTATION WITH FEDERAL

9 BANKING AGENCIES.—

10 ‘‘(I) IN GENERAL.—Except as pro11 vided in subclause (II), in assessing the 

12 risk of loss to the Deposit Insurance 

13 Fund with respect to any insured de14 pository institution, the Corporation 

15 shall consult with the appropriate Fed16 eral banking agency of such institu17 tion. 

18 ‘‘(II) TREATMENT ON AGGREGATE

19 BASIS.—In the case of insured deposi20 tory institutions that are well capital21 ized (as defined in section 38) and, in 

22 the most recent examination, were 

23 found to be well managed, the consulta24 tion under subclause (I) concerning the 

25 assessment of the risk of loss posed by 
436

•S 1932 EAH 

1 such institutions may be made on an 

2 aggregate basis. 

3 ‘‘(iii) RULE OF CONSTRUCTION.—No 

4 provision of this paragraph shall be con5 strued as providing any new authority for 

6 the Corporation to require submission of in7 formation by insured depository institutions 

8 to the Corporation. 

9 ‘‘(F) MODIFICATIONS TO THE RISK-BASED

10 ASSESSMENT SYSTEM ALLOWED ONLY AFTER NO11 TICE AND COMMENT.—In revising or modifying 

12 the risk-based assessment system at any time 

13 after the date of the enactment of the Federal De14 posit Insurance Reform Act of 2005, the Board 

15 of Directors may implement such revisions or 

16 modification in final form only after notice and 

17 opportunity for comment.’’. 

18 SEC. 4007. REFUNDS, DIVIDENDS, AND CREDITS FROM DE19 POSIT INSURANCE FUND. 

20 (a) IN GENERAL.—Subsection (e) of section 7 of the 

21 Federal Deposit Insurance Act (12 U.S.C. 1817(e)) is 

22 amended to read as follows: 

23 ‘‘(e) REFUNDS, DIVIDENDS, AND CREDITS.—

24 ‘‘(1) REFUNDS OF OVERPAYMENTS.—In the case 

25 of any payment of an assessment by an insured de-
437

•S 1932 EAH 

1 pository institution in excess of the amount due to the 

2 Corporation, the Corporation may—

3 ‘‘(A) refund the amount of the excess pay4 ment to the insured depository institution; or 

5 ‘‘(B) credit such excess amount toward the 

6 payment of subsequent assessments until such 

7 credit is exhausted. 

8 ‘‘(2) DIVIDENDS FROM EXCESS AMOUNTS IN DE9 POSIT INSURANCE FUND.—

10 ‘‘(A) RESERVE RATIO IN EXCESS OF 1.4

11 PERCENT OF ESTIMATED INSURED DEPOSITS.—

12 Whenever the reserve ratio of the Deposit Insur13 ance Fund exceeds 1.4 percent of estimated in14 sured deposits, the Corporation shall declare the 

15 amount in the Fund in excess of the amount re16 quired to maintain the reserve ratio at 1.4 per17 cent of estimated insured deposits, as dividends 

18 to be paid to insured depository institutions. 

19 ‘‘(B) RESERVE RATIO EQUAL TO OR IN EX20 CESS OF 1.35 PERCENT OF ESTIMATED INSURED

21 DEPOSITS AND NOT MORE THAN 1.4 PERCENT.—

22 Whenever the reserve ratio of the Deposit Insur23 ance Fund equals or exceeds 1.35 percent of esti24 mated insured deposits and is not more than 1.4 

25 percent of such deposits, the Corporation shall 
438

•S 1932 EAH 

1 declare the amount in the Fund that is equal to 

2 50 percent of the amount in excess of the amount 

3 required to maintain the reserve ratio at 1.35 

4 percent of the estimated insured deposits as divi5 dends to be paid to insured depository institu6 tions. 

7 ‘‘(C) BASIS FOR DISTRIBUTION OF DIVI8 DENDS.—

9 ‘‘(i) IN GENERAL.—Solely for the pur10 poses of dividend distribution under this 

11 paragraph and credit distribution under 

12 paragraph (3)(B), the Corporation shall de13 termine each insured depository institu14 tion’s relative contribution to the Deposit 

15 Insurance Fund (or any predecessor deposit 

16 insurance fund) for calculating such insti17 tution’s share of any dividend or credit de18 clared under this paragraph or paragraph 

19 (3)(B), taking into account the factors de20 scribed in clause (ii). 

21 ‘‘(ii) FACTORS FOR DISTRIBUTION.—In 

22 implementing this paragraph and para23 graph (3)(B) in accordance with regula24 tions, the Corporation shall take into ac25 count the following factors: 
439

•S 1932 EAH 

1 ‘‘(I) The ratio of the assessment 

2 base of an insured depository institu3 tion (including any predecessor) on 

4 December 31, 1996, to the assessment 

5 base of all eligible insured depository 

6 institutions on that date. 

7 ‘‘(II) The total amount of assess8 ments paid on or after January 1, 

9 1997, by an insured depository institu10 tion (including any predecessor) to the 

11 Deposit Insurance Fund (and any 

12 predecessor deposit insurance fund). 

13 ‘‘(III) That portion of assessments 

14 paid by an insured depository institu15 tion (including any predecessor) that 

16 reflects higher levels of risk assumed by 

17 such institution. 

18 ‘‘(IV) Such other factors as the 

19 Corporation may determine to be ap20 propriate. 

21 ‘‘(D) NOTICE AND OPPORTUNITY FOR COM22 MENT.—The Corporation shall prescribe by regu23 lation, after notice and opportunity for com24 ment, the method for the calculation, declaration, 

25 and payment of dividends under this paragraph. 
440

•S 1932 EAH 

1 ‘‘(3) CREDIT POOL.—

2 ‘‘(A) ONE-TIME CREDIT BASED ON TOTAL

3 ASSESSMENT BASE AT YEAR-END 1996.—

4 ‘‘(i) IN GENERAL.—Before the end of 

5 the 270-day period beginning on the date of 

6 the enactment of the Federal Deposit Insur7 ance Reform Act of 2005, the Board of Di8 rectors shall, by regulation, provide for a 

9 credit to each eligible insured depository in10 stitution, based on the assessment base of 

11 the institution (including any predecessor 

12 institution) on December 31, 1996, as com13 pared to the combined aggregate assessment 

14 base of all eligible insured depository insti15 tutions, taking into account such factors as 

16 the Board of Directors may determine to be 

17 appropriate. 

18 ‘‘(ii) CREDIT LIMIT.—The aggregate 

19 amount of credits available under clause (i) 

20 to all eligible insured depository institu21 tions shall equal the amount that the Cor22 poration could collect if the Corporation im23 posed an assessment of 12 basis points on 

24 the combined assessment base of the Bank 

25 Insurance Fund and the Savings Associa-
441

•S 1932 EAH 

1 tion Insurance Fund as of December 31, 

2 2001. 

3 ‘‘(iii) ELIGIBLE INSURED DEPOSITORY

4 INSTITUTION DEFINED.—For purposes of 

5 this paragraph, the term ‘eligible insured 

6 depository institution’ means any insured 

7 depository institution that—

8 ‘‘(I) was in existence on December 

9 31, 1996, and paid a deposit insurance 

10 assessment prior to that date; or 

11 ‘‘(II) is a successor to any insured 

12 depository institution described in sub13 clause (I). 

14 ‘‘(iv) APPLICATION OF CREDITS.—

15 ‘‘(I) IN GENERAL.—The amount of 

16 a credit to any eligible insured deposi17 tory institution under this paragraph 

18 shall be applied by the Corporation, 

19 subject to subsection (b)(3)(E), to the 

20 assessments imposed on such institu21 tion under subsection (b) that become 

22 due for assessment periods beginning 

23 after the effective date of regulations 

24 prescribed under clause (i). 
442

•S 1932 EAH 

1 ‘‘(II) REGULATIONS.—The regula2 tions prescribed under clause (i) shall 

3 establish the qualifications and proce4 dures governing the application of as5 sessment credits pursuant to subclause 

6 (I). 

7 ‘‘(v) LIMITATION ON AMOUNT OF CRED8 IT FOR CERTAIN DEPOSITORY INSTITU9 TIONS.—In the case of an insured deposi10 tory institution that exhibits financial, 

11 operational, or compliance weaknesses rang12 ing from moderately severe to unsatisfac13 tory, or is not adequately capitalized (as de14 fined in section 38) at the beginning of an 

15 assessment period, the amount of any credit 

16 allowed under this paragraph against the 

17 assessment on that depository institution 

18 for such period may not exceed the amount 

19 calculated by applying to that depository 

20 institution the average assessment rate on 

21 all insured depository institutions for such 

22 assessment period. 

23 ‘‘(vi) PREDECESSOR DEFINED.—For 

24 purposes of this paragraph, the term ‘prede25 cessor’, when used with respect to any in-
443

•S 1932 EAH 

1 sured depository institution, includes any 

2 other insured depository institution ac3 quired by or merged with such insured de4 pository institution. 

5 ‘‘(B) ON-GOING CREDIT POOL.—

6 ‘‘(i) IN GENERAL.—In addition to the 

7 credit provided pursuant to subparagraph 

8 (A) and subject to the limitation contained 

9 in clause (v) of such subparagraph, the Cor10 poration shall, by regulation, establish an 

11 on-going system of credits to be applied 

12 against future assessments under subsection 

13 (b)(1) on the same basis as the dividends 

14 provided under paragraph (2)(C). 

15 ‘‘(ii) LIMITATION ON CREDITS UNDER

16 CERTAIN CIRCUMSTANCES.—No credits may 

17 be awarded by the Corporation under this 

18 subparagraph during any period in 

19 which—

20 ‘‘(I) the reserve ratio of the De21 posit Insurance Fund is less than the 

22 designated reserve ratio of such Fund; 

23 or 
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•S 1932 EAH 

1 ‘‘(II) the reserve ratio of the Fund 

2 is less than 1.25 percent of the amount 

3 of estimated insured deposits. 

4 ‘‘(iii) CRITERIA FOR DETERMINA5 TION.—In determining the amounts of any 

6 assessment credits under this subparagraph, 

7 the Board of Directors shall take into ac8 count the factors for designating the reserve 

9 ratio under subsection (b)(3) and the factors 

10 for setting assessments under subsection 

11 (b)(2)(B). 

12 ‘‘(4) ADMINISTRATIVE REVIEW.—

13 ‘‘(A) IN GENERAL.—The regulations pre14 scribed under paragraph (2)(D) and subpara15 graphs (A) and (B) of paragraph (3) shall in16 clude provisions allowing an insured depository 

17 institution a reasonable opportunity to challenge 

18 administratively the amount of the credit or div19 idend determined under paragraph (2) or (3) for 

20 such institution. 

21 ‘‘(B) ADMINISTRATIVE REVIEW.—Any re22 view under subparagraph (A) of any determina23 tion of the Corporation under paragraph (2) or 

24 (3) shall be final and not subject to judicial re25 view.’’. 
445

•S 1932 EAH 

1 (b) DEFINITION OF RESERVE RATIO.—Section 3(y) of 

2 the Federal Deposit Insurance Act (12 U.S.C. 1813(y)) (as 

3 amended by section 4005(b) of this subtitle) is amended by 

4 adding at the end the following new paragraph: 

5 ‘‘(3) RESERVE RATIO.—The term ‘reserve ratio’, 

6 when used with regard to the Deposit Insurance Fund 

7 other than in connection with a reference to the des8 ignated reserve ratio, means the ratio of the net worth 

9 of the Deposit Insurance Fund to the value of the ag10 gregate estimated insured deposits.’’. 

11 SEC. 4008. DEPOSIT INSURANCE FUND RESTORATION 

12 PLANS. 

13 Section 7(b)(3) of the Federal Deposit Insurance Act 

14 (12 U.S.C. 1817(b)(3)) (as amended by section 4005(a) of 

15 this subtitle) is amended by adding at the end the following 

16 new subparagraph: 

17 ‘‘(E) DIF RESTORATION PLANS.—

18 ‘‘(i) IN GENERAL.—Whenever—

19 ‘‘(I) the Corporation projects that 

20 the reserve ratio of the Deposit Insur21 ance Fund will, within 6 months of 

22 such determination, fall below the min23 imum amount specified in subpara24 graph (B)(ii) for the designated reserve 

25 ratio; or 
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•S 1932 EAH 

1 ‘‘(II) the reserve ratio of the De2 posit Insurance Fund actually falls 

3 below the minimum amount specified 

4 in subparagraph (B)(ii) for the des5 ignated reserve ratio without any de6 termination under subclause (I) having 

7 been made, 

8 the Corporation shall establish and imple9 ment a Deposit Insurance Fund restoration 

10 plan within 90 days that meets the require11 ments of clause (ii) and such other condi12 tions as the Corporation determines to be 

13 appropriate. 

14 ‘‘(ii) REQUIREMENTS OF RESTORATION

15 PLAN.—A Deposit Insurance Fund restora16 tion plan meets the requirements of this 

17 clause if the plan provides that the reserve 

18 ratio of the Fund will meet or exceed the 

19 minimum amount specified in subpara20 graph (B)(ii) for the designated reserve 

21 ratio before the end of the 10-year period be22 ginning upon the implementation of the 

23 plan. 

24 ‘‘(iii) RESTRICTION ON ASSESSMENT

25 CREDITS.—As part of any restoration plan 
447

•S 1932 EAH 

1 under this subparagraph, the Corporation 

2 may elect to restrict the application of as3 sessment credits provided under subsection 

4 (e)(3) for any period that the plan is in ef5 fect. 

6 ‘‘(iv) LIMITATION ON RESTRICTION.—

7 Notwithstanding clause (iii), while any res8 toration plan under this subparagraph is in 

9 effect, the Corporation shall apply credits 

10 provided to an insured depository institu11 tion under subsection (e)(3) against any as12 sessment imposed on the institution for any 

13 assessment period in an amount equal to 

14 the lesser of—

15 ‘‘(I) the amount of the assessment; 

16 or 

17 ‘‘(II) the amount equal to 3 basis 

18 points of the institution’s assessment 

19 base. 

20 ‘‘(v) TRANSPARENCY.—Not more than 

21 30 days after the Corporation establishes 

22 and implements a restoration plan under 

23 clause (i), the Corporation shall publish in 

24 the Federal Register a detailed analysis of 
448

•S 1932 EAH 

1 the factors considered and the basis for the 

2 actions taken with regard to the plan.’’. 

3 SEC. 4009. REGULATIONS REQUIRED. 

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

5 date of the enactment of this Act, the Board of Directors 

6 of the Federal Deposit Insurance Corporation shall pre7 scribe final regulations, after notice and opportunity for 

8 comment—

9 (1) designating the reserve ratio for the Deposit 

10 Insurance Fund in accordance with section 7(b)(3) of 

11 the Federal Deposit Insurance Act (as amended by 

12 section 4005 of this subtitle); 

13 (2) implementing increases in deposit insurance 

14 coverage in accordance with the amendments made by 

15 section 4003 of this subtitle; 

16 (3) implementing the dividend requirement 

17 under section 7(e)(2) of the Federal Deposit Insurance 

18 Act (as amended by section 4007 of this subtitle); 

19 (4) implementing the 1-time assessment credit to 

20 certain insured depository institutions in accordance 

21 with section 7(e)(3) of the Federal Deposit Insurance 

22 Act, as amended by section 4007 of this subtitle, in23 cluding the qualifications and procedures under 

24 which the Corporation would apply assessment cred25 its; and 
449

•S 1932 EAH 

1 (5) providing for assessments under section 7(b) 

2 of the Federal Deposit Insurance Act, as amended by 

3 this subtitle. 

4 (b) RULE OF CONSTRUCTION.—No provision of this 

5 subtitle or any amendment made by this subtitle shall be 

6 construed as affecting the authority of the Corporation to 

7 set or collect deposit insurance assessments before the effec8 tive date of the final regulations prescribed under subsection 

9 (a). 

10 SEC. 4010. STUDIES OF FDIC STRUCTURE AND EXPENSES 

11 AND CERTAIN ACTIVITIES AND FURTHER 

12 POSSIBLE CHANGES TO DEPOSIT INSURANCE 

13 SYSTEM. 

14 (a) STUDY BY COMPTROLLER GENERAL.—

15 (1) STUDY REQUIRED.—The Comptroller General 

16 shall conduct a study of the following issues: 

17 (A) The efficiency and effectiveness of the 

18 administration of the prompt corrective action 

19 program under section 38 of the Federal Deposit 

20 Insurance Act by the Federal banking agencies 

21 (as defined in section 3 of such Act), including 

22 the degree of effectiveness of such agencies in 

23 identifying troubled depository institutions and 

24 taking effective action with respect to such insti-
450

•S 1932 EAH 

1 tutions, and the degree of accuracy of the risk as2 sessments made by the Corporation. 

3 (B) The appropriateness of the organiza4 tional structure of the Federal Deposit Insurance 

5 Corporation for the mission of the Corporation 

6 taking into account—

7 (i) the current size and complexity of 

8 the business of insured depository institu9 tions (as such term is defined in section 3 

10 of the Federal Deposit Insurance Act); 

11 (ii) the extent to which the organiza12 tional structure contributes to or reduces 

13 operational inefficiencies that increase oper14 ational costs; and 

15 (iii) the effectiveness of internal con16 trols. 

17 (2) REPORT TO THE CONGRESS.—The Comp18 troller General shall submit a report to the Congress 

19 before the end of the 1-year period beginning on the 

20 date of the enactment of this Act containing the find21 ings and conclusions of the Comptroller General with 

22 respect to the study required under paragraph (1) to23 gether with such recommendations for legislative or 

24 administrative action as the Comptroller General 

25 may determine to be appropriate. 
451

•S 1932 EAH 

1 (b) STUDY OF FURTHER POSSIBLE CHANGES TO DE2 POSIT INSURANCE SYSTEM.—

3 (1) STUDY REQUIRED.—The Board of Directors 

4 of the Federal Deposit Insurance Corporation and the 

5 National Credit Union Administration Board shall 

6 each conduct a study of the following: 

7 (A) The feasibility of establishing a vol8 untary deposit insurance system for deposits in 

9 excess of the maximum amount of deposit insur10 ance for any depositor and the potential benefits 

11 and the potential adverse consequences that may 

12 result from the establishment of any such system. 

13 (B) The feasibility of privatizing all deposit 

14 insurance at insured depository institutions and 

15 insured credit unions. 

16 (2) REPORT.—Before the end of the 1-year pe17 riod beginning on the date of the enactment of this 

18 Act, the Board of Directors of the Federal Deposit In19 surance Corporation and the National Credit Union 

20 Administration Board shall each submit a report to 

21 the Congress on the study required under paragraph 

22 (1) containing the findings and conclusions of the re23 porting agency together with such recommendations 

24 for legislative or administrative changes as the agency 

25 may determine to be appropriate. 
452

•S 1932 EAH 

1 (c) STUDY REGARDING APPROPRIATE DEPOSIT BASE

2 IN DESIGNATING RESERVE RATIO.—

3 (1) STUDY REQUIRED.—The Federal Deposit In4 surance Corporation shall conduct a study of the fea5 sibility of using actual domestic deposits rather than 

6 estimated insured deposits in calculating the reserve 

7 ratio of the Deposit Insurance Fund and designating 

8 a reserve ratio for such Fund. 

9 (2) REPORT.—The Federal Deposit Insurance 

10 Corporation shall submit a report to the Congress be11 fore the end of the 1-year period beginning on the 

12 date of the enactment of this Act containing the find13 ings and conclusions of the Corporation with respect 

14 to the study required under paragraph (1) together 

15 with such recommendations for legislative or adminis16 trative action as the Board of Directors of the Cor17 poration may determine to be appropriate. 

18 (d) STUDY OF RESERVE METHODOLOGY AND AC19 COUNTING FOR LOSS.—

20 (1) STUDY REQUIRED.—The Federal Deposit In21 surance Corporation shall conduct a study of the re22 serve methodology and loss accounting used by the 

23 Corporation during the period beginning on January 

24 1, 1992, and ending December 31, 2004, with respect 

25 to insured depository institutions in a troubled condi-
453

•S 1932 EAH 

1 tion (as defined in the regulations prescribed pursu2 ant to section 32(f) of the Federal Deposit Insurance 

3 Act). The Corporation shall obtain comments on the 

4 design of the study from the Comptroller General. 

5 (2) FACTORS TO BE INCLUDED.—In conducting 

6 the study pursuant to paragraph (1), the Federal De7 posit Insurance Corporation shall—

8 (A) consider the overall effectiveness and ac9 curacy of the methodology used by the Corpora10 tion for establishing and maintaining reserves 

11 and estimating and accounting for losses at in12 sured depository institutions, during the period 

13 described in such paragraph; 

14 (B) consider the appropriateness and reli15 ability of information and criteria used by the 

16 Corporation in determining—

17 (i) whether an insured depository in18 stitution was in a troubled condition; and 

19 (ii) the amount of any loss anticipated 

20 at such institution; 

21 (C) analyze the actual historical loss experi22 ence over the period described in paragraph (1) 

23 and the causes of the exceptionally high rate of 

24 losses experienced by the Corporation in the final 

25 3 years of that period; and 
454

•S 1932 EAH 

1 (D) rate the efforts of the Corporation to re2 duce losses in such 3-year period to minimally 

3 acceptable levels and to historical levels. 

4 (3) REPORT REQUIRED.—The Board of Directors 

5 of the Federal Deposit Insurance Corporation shall 

6 submit a report to the Congress before the end of the 

7 6-month period beginning on the date of the enact8 ment of this Act, containing the findings and conclu9 sions of the Corporation with respect to the study re10 quired under paragraph (1), together with such rec11 ommendations for legislative or administrative action 

12 as the Board of Directors may determine to be appro13 priate. Before submitting the report to Congress, the 

14 Board of Directors shall provide a draft of the report 

15 to the Comptroller General for comment. 

16 SEC. 4011. BI-ANNUAL FDIC SURVEY AND REPORT ON IN17 CREASING THE DEPOSIT BASE BY ENCOUR18 AGING USE OF DEPOSITORY INSTITUTIONS 

19 BY THE UNBANKED. 

20 The Federal Deposit Insurance Act (12 U.S.C. 1811 

21 et seq.) is amended by adding at the end the following new 

22 section: 
455

•S 1932 EAH 

1 ‘‘SEC. 49. BI-ANNUAL FDIC SURVEY AND REPORT ON EN2 COURAGING USE OF DEPOSITORY INSTITU3 TIONS BY THE UNBANKED. 

4 ‘‘(a) SURVEY REQUIRED.—

5 ‘‘(1) IN GENERAL.—The Corporation shall con6 duct a bi-annual survey on efforts by insured deposi7 tory institutions to bring those individuals and fami8 lies who have rarely, if ever, held a checking account, 

9 a savings account or other type of transaction or 

10 check cashing account at an insured depository insti11 tution (hereafter in this section referred to as the 

12 ‘unbanked’) into the conventional finance system. 

13 ‘‘(2) FACTORS AND QUESTIONS TO CONSIDER.—

14 In conducting the survey, the Corporation shall take 

15 the following factors and questions into account: 

16 ‘‘(A) To what extent do insured depository 

17 institutions promote financial education and fi18 nancial literacy outreach? 

19 ‘‘(B) Which financial education efforts ap20 pear to be the most effective in bringing 

21 ‘unbanked’ individuals and families into the 

22 conventional finance system? 

23 ‘‘(C) What efforts are insured institutions 

24 making at converting ‘unbanked’ money order, 

25 wire transfer, and international remittance cus26 tomers into conventional account holders? 
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•S 1932 EAH 

1 ‘‘(D) What cultural, language and identi2 fication issues as well as transaction costs ap3 pear to most prevent ‘unbanked’ individuals 

4 from establishing conventional accounts? 

5 ‘‘(E) What is a fair estimate of the size and 

6 worth of the ‘unbanked’ market in the United 

7 States? 

8 ‘‘(b) REPORTS.—The Chairperson of the Board of Di9 rectors shall submit a bi-annual report to the Committee 

10 on Financial Services of the House of Representatives and 

11 the Committee on Banking, Housing, and Urban Affairs 

12 of the Senate containing the Corporation’s findings and 

13 conclusions with respect to the survey conducted pursuant 

14 to subsection (a), together with such recommendations for 

15 legislative or administrative action as the Chairperson may 

16 determine to be appropriate.’’. 

17 SEC. 4012. TECHNICAL AND CONFORMING AMENDMENTS TO 

18 THE FEDERAL DEPOSIT INSURANCE ACT RE19 LATING TO THE MERGER OF THE BIF AND 

20 SAIF. 

21 (a) IN GENERAL.—The Federal Deposit Insurance Act 

22 (12 U.S.C. 1811 et seq.) is amended—

23 (1) in section 3 (12 U.S.C. 1813)—
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•S 1932 EAH 

1 (A) by striking subparagraph (B) of sub2 section (a)(1) and inserting the following new 

3 subparagraph: 

4 ‘‘(B) includes any former savings associa5 tion.’’; and 

6 (B) by striking paragraph (1) of subsection 

7 (y) (as so designated by section 4005(b) of this 

8 subtitle) and inserting the following new para9 graph: 

10 ‘‘(1) DEPOSIT INSURANCE FUND.—The term ‘De11 posit Insurance Fund’ means the Deposit Insurance 

12 Fund established under section 11(a)(4).’’; 

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

14 striking ‘‘the Bank Insurance Fund or the Savings 

15 Association Insurance Fund,’’ and inserting ‘‘the De16 posit Insurance Fund,’’; 

17 (3) in section 5(c)(4), by striking ‘‘deposit insur18 ance fund’’ and inserting ‘‘Deposit Insurance Fund’’; 

19 (4) in section 5(d) (12 U.S.C. 1815(d)), by strik20 ing paragraphs (2) and (3) (and any funds resulting 

21 from the application of such paragraph (2) prior to 

22 its repeal shall be deposited into the general fund of 

23 the Deposit Insurance Fund); 

24 (5) in section 5(d)(1) (12 U.S.C. 1815(d)(1))—
458

•S 1932 EAH 

1 (A) in subparagraph (A), by striking ‘‘re2 serve ratios in the Bank Insurance Fund and the 

3 Savings Association Insurance Fund as required 

4 by section 7’’ and inserting ‘‘the reserve ratio of 

5 the Deposit Insurance Fund’’; 

6 (B) by striking subparagraph (B) and in7 serting the following: 

8 ‘‘(2) FEE CREDITED TO THE DEPOSIT INSUR9 ANCE FUND.—The fee paid by the depository institu10 tion under paragraph (1) shall be credited to the De11 posit Insurance Fund.’’; 

12 (C) by striking ‘‘(1) UNINSURED INSTI13 TUTIONS.—’’; and 

14 (D) by redesignating subparagraphs (A) 

15 and (C) as paragraphs (1) and (3), respectively, 

16 and moving the left margins 2 ems to the left; 

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

18 (A) in paragraph (5)(A), by striking ‘‘Bank 

19 Insurance Fund or the Savings Association In20 surance Fund’’ and inserting ‘‘Deposit Insurance 

21 Fund’’; 

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

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

24 and (9) as paragraphs (6), (7), and (8), respec25 tively; 
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•S 1932 EAH 

1 (7) in section 6(5) (12 U.S.C. 1816(5)), by strik2 ing ‘‘Bank Insurance Fund or the Savings Associa3 tion Insurance Fund’’ and inserting ‘‘Deposit Insur4 ance Fund’’; 

5 (8) in section 7(b) (12 U.S.C. 1817(b))—

6 (A) in paragraph (1)(C), by striking ‘‘de7 posit insurance fund’’ each place that term ap8 pears and inserting ‘‘Deposit Insurance Fund’’; 

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

10 deposit insurance fund’’ and inserting ‘‘the De11 posit Insurance Fund’’; and 

12 (C) in paragraph (5) (as so redesignated by 

13 section 4004(e)(4) of this subtitle)—

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), 
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•S 1932 EAH 

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

2 the margins 2 ems to the left; and 

3 (iv) in subparagraph (C) (as so redes4 ignated)—

5 (I) by inserting ‘‘that’’ before ‘‘the 

6 Corporation’’; and 

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

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

10 1817(j)(7)(F)), by striking ‘‘Bank Insurance Fund or 

11 the Savings Association Insurance Fund’’ and insert12 ing ‘‘Deposit Insurance Fund’’; 

13 (10) in section 8(t)(2)(C) (12 U.S.C. 

14 1818(t)(2)(C)), by striking ‘‘deposit insurance fund’’ 

15 and inserting ‘‘Deposit Insurance Fund’’; 

16 (11) in section 11 (12 U.S.C. 1821)—

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

18 each place that term appears and inserting ‘‘De19 posit Insurance Fund’’; 

20 (B) by striking paragraph (4) of subsection 

21 (a) and inserting the following new paragraph: 

22 ‘‘(4) DEPOSIT INSURANCE FUND.—

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

25 Corporation shall—
461

•S 1932 EAH 

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 with 

9 respect to insured depository institutions the de10 posits of which are insured by the Deposit Insur11 ance Fund. 

12 ‘‘(C) LIMITATION ON USE.—Notwith13 standing any provision of law other than section 

14 13(c)(4)(G), the Deposit Insurance Fund shall 

15 not be used in any manner to benefit any share16 holder or affiliate (other than an insured deposi17 tory institution that receives assistance in ac18 cordance with the provisions of this Act) of—

19 ‘‘(i) any insured depository institution 

20 for which the Corporation has been ap21 pointed conservator or receiver, in connec22 tion with any type of resolution by the Cor23 poration; 

24 ‘‘(ii) any other insured depository in25 stitution in default or in danger of default, 
462

•S 1932 EAH 

1 in connection with any type of resolution 

2 by the Corporation; or 

3 ‘‘(iii) any insured depository institu4 tion, in connection with the provision of as5 sistance under this section or section 13 

6 with respect to such institution, except that 

7 this clause shall not prohibit any assistance 

8 to any insured depository institution that is 

9 not in default, or that is not in danger of 

10 default, that is acquiring (as defined in sec11 tion 13(f)(8)(B)) another insured depository 

12 institution. 

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

14 against insured depository institutions by the 

15 Corporation shall be deposited into the Deposit 

16 Insurance Fund.’’; 

17 (C) by striking paragraphs (5), (6), and (7) 

18 of subsection (a); and 

19 (D) by redesignating paragraph (8) of sub20 section (a) as paragraph (5); 

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

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

23 through the end of the paragraph and inserting a pe24 riod; 

25 (13) in section 11(i)(3) (12 U.S.C. 1821(i)(3))—
463

•S 1932 EAH 

1 (A) by striking subparagraph (B); 

2 (B) by redesignating subparagraph (C) as 

3 subparagraph (B); and 

4 (C) in subparagraph (B) (as so redesig5 nated), by striking ‘‘subparagraphs (A) and (B)’’ 

6 and inserting ‘‘subparagraph (A)’’; 

7 (14) in section 11(p)(2)(B) (12 U.S.C. 

8 1821(p)(2)(B)), by striking ‘‘institution, any’’ and 

9 inserting ‘‘institution, the’’; 

10 (15) in section 11A(a) (12 U.S.C. 1821a(a))—

11 (A) in paragraph (2), by striking ‘‘LIABIL12 ITIES.—’’ and all that follows through ‘‘Except’’ 

13 and inserting ‘‘LIABILITIES.—Except’’; 

14 (B) by striking paragraph (2)(B); and 

15 (C) in paragraph (3), by striking ‘‘the 

16 Bank Insurance Fund, the Savings Association 

17 Insurance Fund,’’ and inserting ‘‘the Deposit In18 surance Fund’’; 

19 (16) in section 11A(b) (12 U.S.C. 1821a(b)), by 

20 striking paragraph (4); 

21 (17) in section 11A(f) (12 U.S.C. 1821a(f)), by 

22 striking ‘‘Savings Association Insurance Fund’’ and 

23 inserting ‘‘Deposit Insurance Fund’’; 

24 (18) in section 12(f)(4)(E)(iv) (12 U.S.C. 

25 1822(f)(4)(E)(iv)), by striking ‘‘Federal deposit insur-
464

•S 1932 EAH 

1 ance funds’’ and inserting ‘‘the Deposit Insurance 

2 Fund (or any predecessor deposit insurance fund)’’; 

3 (19) in section 13 (12 U.S.C. 1823)—

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

5 each place that term appears and inserting ‘‘De6 posit Insurance Fund’’; 

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

8 Insurance Fund, the Savings Association Insur9 ance Fund,’’ and inserting ‘‘Deposit Insurance 

10 Fund’’; 

11 (C) in subsection (c)(4)(E)—

12 (i) in the subparagraph heading, by 

13 striking ‘‘funds’’ and inserting ‘‘fund’’; and 

14 (ii) in clause (i), by striking ‘‘any in15 surance fund’’ and inserting ‘‘the Deposit 

16 Insurance Fund’’; 

17 (D) in subsection (c)(4)(G)(ii)—

18 (i) by striking ‘‘appropriate insurance 

19 fund’’ and inserting ‘‘Deposit Insurance 

20 Fund’’; 

21 (ii) by striking ‘‘the members of the in22 surance fund (of which such institution is a 

23 member)’’ and inserting ‘‘insured depository 

24 institutions’’; 
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•S 1932 EAH 

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

2 inserting ‘‘each insured depository institu3 tion’s’’; and 

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

5 place that term appears and inserting ‘‘the 

6 institution’s’’; 

7 (E) in subsection (c), by striking paragraph 

8 (11); 

9 (F) in subsection (h), by striking ‘‘Bank In10 surance Fund’’ and inserting ‘‘Deposit Insurance 

11 Fund’’; 

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

13 ‘‘Savings Association Insurance Fund member’’ 

14 and inserting ‘‘savings association’’; and 

15 (H) in subsection (k)(5)(A), by striking 

16 ‘‘Savings Association Insurance Fund members’’ 

17 and inserting ‘‘savings associations’’; 

18 (20) in section 14(a) (12 U.S.C. 1824(a)), in the 

19 5th sentence—

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

21 the Savings Association Insurance Fund’’ and 

22 inserting ‘‘Deposit Insurance Fund’’; and 

23 (B) by striking ‘‘each such fund’’ and in24 serting ‘‘the Deposit Insurance Fund’’; 
466

•S 1932 EAH 

1 (21) in section 14(b) (12 U.S.C. 1824(b)), by 

2 striking ‘‘Bank Insurance Fund or Savings Associa3 tion Insurance Fund’’ and inserting ‘‘Deposit Insur4 ance Fund’’; 

5 (22) in section 14(c) (12 U.S.C. 1824(c)), by 

6 striking paragraph (3); 

7 (23) in section 14(d) (12 U.S.C. 1824(d))—

8 (A) by striking ‘‘Bank Insurance Fund 

9 member’’ each place that term appears and in10 serting ‘‘insured depository institution’’; 

11 (B) by striking ‘‘Bank Insurance Fund 

12 members’’ each place that term appears and in13 serting ‘‘insured depository institutions’’; 

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

15 each place that term appears (other than in con16 nection with a reference to a term amended by 

17 subparagraph (A) or (B) of this paragraph) and 

18 inserting ‘‘Deposit Insurance Fund’’; 

19 (D) by striking the subsection heading and 

20 inserting the following: 

21 ‘‘(d) BORROWING FOR THE DEPOSIT INSURANCE FUND

22 FROM INSURED DEPOSITORY INSTITUTIONS.—’’; 

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

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

25 DEPOSIT INSURANCE FUND’’; and 
467

•S 1932 EAH 

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

2 heading, by striking ‘‘BIF MEMBERS’’ and insert3 ing ‘‘INSURED DEPOSITORY INSTITUTIONS’’; 

4 (24) in section 14 (12 U.S.C. 1824), by adding 

5 at the end the following new subsection: 

6 ‘‘(e) BORROWING FOR THE DEPOSIT INSURANCE FUND

7 FROM FEDERAL HOME LOAN BANKS.—

8 ‘‘(1) IN GENERAL.—The Corporation may bor9 row from the Federal home loan banks, with the con10 currence of the Federal Housing Finance Board, such 

11 funds as the Corporation considers necessary for the 

12 use of the Deposit Insurance Fund. 

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

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

15 the Deposit Insurance Fund shall—

16 ‘‘(A) bear a rate of interest of not less than 

17 the current marginal cost of funds to that bank, 

18 taking into account the maturities involved; 

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

20 by the Federal Housing Finance Board; 

21 ‘‘(C) be a direct liability of the Deposit In22 surance Fund; and 

23 ‘‘(D) be subject to the limitations of section 

24 15(c).’’; 

25 (25) in section 15(c)(5) (12 U.S.C. 1825(c)(5))—
468

•S 1932 EAH 

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

2 or Savings Association Insurance Fund, respec3 tively’’ each place that term appears and insert4 ing ‘‘the Deposit Insurance Fund’’; and 

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

6 Bank Insurance Fund or the Savings Associa7 tion Insurance Fund, respectively’’ and inserting 

8 ‘‘the Deposit Insurance Fund’’; 

9 (26) in section 17(a) (12 U.S.C. 1827(a))—

10 (A) in the subsection heading, by striking 

11 ‘‘BIF, SAIF,’’ and inserting ‘‘THE DEPOSIT IN12 SURANCE FUND’’; and 

13 (B) in paragraph (1)—

14 (i) by striking ‘‘the Bank Insurance 

15 Fund, the Savings Association Insurance 

16 Fund,’’ each place that term appears and 

17 inserting ‘‘the Deposit Insurance Fund’’; 

18 and 

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

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

21 Deposit Insurance Fund’’; 

22 (27) in section 17(d) (12 U.S.C. 1827(d)), by 

23 striking ‘‘, the Bank Insurance Fund, the Savings As24 sociation Insurance Fund,’’ each place that term ap25 pears and inserting ‘‘the Deposit Insurance Fund’’; 
469

•S 1932 EAH 

1 (28) in section 18(m)(3) (12 U.S.C. 

2 1828(m)(3))—

3 (A) by striking ‘‘Savings Association Insur4 ance Fund’’ in the 1st sentence of subparagraph 

5 (A) and inserting ‘‘Deposit Insurance Fund’’; 

6 (B) by striking ‘‘Savings Association Insur7 ance Fund member’’ in the last sentence of sub8 paragraph (A) and inserting ‘‘savings associa9 tion’’; and 

10 (C) by striking ‘‘Savings Association Insur11 ance Fund or the Bank Insurance Fund’’ in sub12 paragraph (C) and inserting ‘‘Deposit Insurance 

13 Fund’’; 

14 (29) in section 18(o) (12 U.S.C. 1828(o)), by 

15 striking ‘‘deposit insurance funds’’ and ‘‘deposit in16 surance fund’’ each place those terms appear and in17 serting ‘‘Deposit Insurance Fund’’; 

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

19 striking ‘‘deposit insurance funds’’ and inserting ‘‘De20 posit Insurance Fund’’; 

21 (31) in section 24 (12 U.S.C. 1831a)—

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

23 striking ‘‘appropriate deposit insurance fund’’ 

24 each place that term appears and inserting ‘‘De25 posit Insurance Fund’’; 
470

•S 1932 EAH 

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

2 ‘‘risk to’’ and all that follows through the period 

3 and inserting ‘‘risk to the Deposit Insurance 

4 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 (32) in section 28 (12 U.S.C. 1831e), by striking 

11 ‘‘affected deposit insurance fund’’ each place that 

12 term appears and inserting ‘‘Deposit Insurance 

13 Fund’’; 

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

15 (34) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)), 

16 by striking ‘‘affected deposit insurance fund’’ and in17 serting ‘‘Deposit Insurance Fund’’; 

18 (35) in section 37(a)(1)(C) (12 U.S.C. 

19 1831n(a)(1)(C)), by striking ‘‘insurance funds’’ and 

20 inserting ‘‘Deposit Insurance Fund’’; 

21 (36) in section 38 (12 U.S.C. 1831o), by striking 

22 ‘‘the deposit insurance fund’’ each place that term ap23 pears and inserting ‘‘the Deposit Insurance Fund’’; 
471

•S 1932 EAH 

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

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

4 (38) 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 Deposit 

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

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

17 all that follows through ‘‘Subsections (e)(2)’’ and 

18 inserting ‘‘ASSOCIATIONS.—Subsections 

19 (e)(2)’’; 

20 (B) by redesignating subparagraphs (A), 

21 (B), and (C) as paragraphs (1), (2), and (3), re22 spectively, and moving the margins 2 ems to the 

23 left; and 

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

25 by redesignating clauses (i) and (ii) as subpara-
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•S 1932 EAH 

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

2 margins 2 ems to the left. 

3 (b) EFFECTIVE DATE.—This section and the amend4 ments made by this section shall take effect on the first day 

5 of the first calendar quarter that begins after the end of 

6 the 90-day period beginning on the date of the enactment 

7 of this Act. 

8 SEC. 4013. OTHER TECHNICAL AND CONFORMING AMEND9 MENTS RELATING TO THE MERGER OF THE 

10 BIF AND SAIF. 

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

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

13 Revised Statutes of the United States (12 U.S.C. 24) is 

14 amended in the 5th sentence, by striking ‘‘affected deposit 

15 insurance fund’’ and inserting ‘‘Deposit Insurance Fund’’. 

16 (b) INVESTMENTS PROMOTING PUBLIC WELFARE; LIM17 ITATIONS ON AGGREGATE INVESTMENTS.—The 23d undes18 ignated paragraph of section 9 of the Federal Reserve Act 

19 (12 U.S.C. 338a) is amended in the 4th sentence, by strik20 ing ‘‘affected deposit insurance fund’’ and inserting ‘‘De21 posit Insurance Fund’’. 

22 (c) ADVANCES TO CRITICALLY UNDERCAPITALIZED

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

24 the Federal Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is 
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•S 1932 EAH 

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 Def6 icit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amend7 ed—

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 (51–

12 4066–0–3–373);’’. 

13 (e) AMENDMENTS TO THE FEDERAL HOME LOAN

14 BANK ACT.—The Federal Home Loan Bank Act (12 U.S.C. 

15 1421 et seq.) is amended—

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

17 (A) in the subsection heading, by striking 

18 ‘‘SAIF’’ and inserting ‘‘THE DEPOSIT INSUR19 ANCE FUND’’; and 

20 (B) by striking ‘‘Savings Association Insur21 ance Fund’’ each place such term appears and 

22 inserting ‘‘Deposit Insurance Fund’’; 

23 (2) in section 21 (12 U.S.C. 1441)—
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•S 1932 EAH 

1 (A) in subsection (f)(2), by striking ‘‘, ex2 cept that’’ and all that follows through the end 

3 of the paragraph and inserting a period; and 

4 (B) in subsection (k), by striking paragraph 

5 (4); 

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

7 1441a(b)(4)(B)), by striking ‘‘affected deposit insur8 ance fund’’ and inserting ‘‘Deposit Insurance Fund’’; 

9 (4) in section 21A(b)(6)(B) (12 U.S.C. 

10 1441a(b)(6)(B))—

11 (A) in the subparagraph heading, by strik12 ing ‘‘SAIF-INSURED BANKS’’ and inserting 

13 ‘‘CHARTER CONVERSIONS’’; and 

14 (B) by striking ‘‘Savings Association Insur15 ance Fund member’’ and inserting ‘‘savings as16 sociation’’; 

17 (5) in section 21A(b)(10)(A)(iv)(II) (12 U.S.C. 

18 1441a(b)(10)(A)(iv)(II)), by striking ‘‘Savings Asso19 ciation Insurance Fund’’ and inserting ‘‘Deposit In20 surance Fund’’; 

21 (6) in section 21A(n)(6)(E)(iv) (12 U.S.C. 

22 1441(n)(6)(E)(iv)), by striking ‘‘Federal deposit in23 surance funds’’ and inserting ‘‘the Deposit Insurance 

24 Fund’’; 

25 (7) in section 21B(e) (12 U.S.C. 1441b(e))—
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•S 1932 EAH 

1 (A) in paragraph (5), by inserting ‘‘as of 

2 the date of funding’’ after ‘‘Savings Association 

3 Insurance Fund members’’ each place that term 

4 appears; and 

5 (B) by striking paragraphs (7) and (8); and 

6 (8) in section 21B(k) (12 U.S.C. 1441b(k))—

7 (A) by inserting before the colon ‘‘, the fol8 lowing definitions shall apply’’; 

9 (B) by striking paragraph (8); and 

10 (C) by redesignating paragraphs (9) and 

11 (10) as paragraphs (8) and (9), respectively. 

12 (f) AMENDMENTS TO THE HOME OWNERS’ LOAN

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

14 seq.) is amended—

15 (1) in section 5 (12 U.S.C. 1464)—

16 (A) in subsection (c)(5)(A), by striking 

17 ‘‘that is a member of the Bank Insurance Fund’’; 

18 (B) in subsection (c)(6), by striking ‘‘As 

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

20 purposes of this subsection, the following defini21 tions shall apply:’’; 

22 (C) in subsection (o)(1), by striking ‘‘that is 

23 a Bank Insurance Fund member’’; 

24 (D) in subsection (o)(2)(A), by striking ‘‘a 

25 Bank Insurance Fund member until such time 
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•S 1932 EAH 

1 as it changes its status to a Savings Association 

2 Insurance Fund member’’ and inserting ‘‘insured 

3 by the Deposit Insurance Fund’’; 

4 (E) in subsection (t)(5)(D)(iii)(II), by strik5 ing ‘‘affected deposit insurance fund’’ and insert6 ing ‘‘Deposit Insurance Fund’’; 

7 (F) in subsection (t)(7)(C)(i)(I), by striking 

8 ‘‘affected deposit insurance fund’’ and inserting 

9 ‘‘Deposit Insurance Fund’’; and 

10 (G) in subsection (v)(2)(A)(i), by striking 

11 ‘‘the Savings Association Insurance Fund’’ and 

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

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

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

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

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

17 ‘‘Savings Association Insurance Fund or Bank 

18 Insurance Fund’’ and inserting ‘‘Deposit Insur19 ance Fund’’; 

20 (C) in subsection (e)(2), by striking ‘‘Sav21 ings Association Insurance Fund or the Bank 

22 Insurance Fund’’ and inserting ‘‘Deposit Insur23 ance Fund’’; 

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

25 ‘‘subsection (1)’’ and inserting ‘‘subsection (l)’’; 
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•S 1932 EAH 

1 (E) in subsection (g)(3)(A), by striking ‘‘(5) 

2 of this section’’ and inserting ‘‘(5) of this sub3 section’’; 

4 (F) in subsection (i), by redesignating para5 graph (5) as paragraph (4); 

6 (G) in subsection (m)(3), by striking sub7 paragraph (E) and by redesignating subpara8 graphs (F), (G), and (H) as subparagraphs (E), 

9 (F), and (G), respectively; 

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

11 ‘‘during period’’ and inserting ‘‘during the pe12 riod’’; and 

13 (I) in subsection (o)(3)(D), by striking ‘‘sec14 tions 5(s) and (t) of this Act’’ and inserting 

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

16 (g) AMENDMENTS TO THE NATIONAL HOUSING ACT.—

17 The National Housing Act (12 U.S.C. 1701 et seq.) is 

18 amended—

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

20 1723i(b)(1)(B)), by striking ‘‘Bank Insurance Fund 

21 for banks or through the Savings Association Insur22 ance Fund for savings associations’’ and inserting 

23 ‘‘Deposit Insurance Fund’’; and 

24 (2) in section 536(b)(1)(B)(ii) (12 U.S.C. 1735f–

25 14(b)(1)(B)(ii)), by striking ‘‘Bank Insurance Fund 
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•S 1932 EAH 

1 for banks and through the Savings Association Insur2 ance Fund for savings associations’’ and inserting 

3 ‘‘Deposit Insurance Fund’’. 

4 (h) AMENDMENTS TO THE FINANCIAL INSTITUTIONS

5 REFORM, RECOVERY, AND ENFORCEMENT ACT OF 1989.—

6 The Financial Institutions Reform, Recovery, and Enforce7 ment Act of 1989 (12 U.S.C. 1811 note) is amended—

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

9 1833a(b)(3)(B)), by inserting ‘‘and after the merger of 

10 such funds, the Deposit Insurance Fund,’’ after ‘‘the 

11 Savings Association Insurance Fund,’’; and 

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

13 3341(c)(1)(B)), by striking ‘‘Bank Insurance Fund, 

14 the Savings Association Insurance Fund,’’ and insert15 ing ‘‘Deposit Insurance Fund’’. 

16 (i) AMENDMENT TO THE BANK HOLDING COMPANY

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

18 (12 U.S.C. 1841 et seq.) is amended—

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

20 striking ‘‘Savings Association Insurance Fund’’ and 

21 inserting ‘‘Deposit Insurance Fund’’; and 

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

23 1842(d)(1)(D)(iii)), by striking ‘‘appropriate deposit 

24 insurance fund’’ and inserting ‘‘Deposit Insurance 

25 Fund’’. 
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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 by striking ‘‘any Federal deposit 

4 insurance fund’’ in subsection (a)(1)(B), paragraphs (2)(B) 

5 and (4)(B) of subsection (b), and subsection (c)(1)(B), each 

6 place that term appears and inserting ‘‘the Deposit Insur7 ance Fund’’. 

8 (k) EFFECTIVE DATE.—This section and the amend9 ments made by this section shall take effect on the first day 

10 of the first calendar quarter that begins after the end of 

11 the 90-day period beginning on the date of the enactment 

12 of this Act. 

13 Subtitle B—FHA Asset Disposition 

14 SEC. 4101. SHORT TITLE. 

15 This subtitle may be cited as the ‘‘FHA Asset Disposi16 tion Act of 2005’’. 

17 SEC. 4102. DEFINITIONS. 

18 For purposes of this subtitle, the following definitions 

19 shall apply: 

20 (1) The term ‘‘affordability requirements’’ means 

21 any requirements or restrictions imposed by the Sec22 retary, at the time of sale, on a multifamily real 

23 property or a multifamily loan, such as use restric24 tions, rent restrictions, and rehabilitation require25 ments. 
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•S 1932 EAH 

1 (2) The term ‘‘discount sale’’ means the sale of 

2 a multifamily real property in a transaction, such as 

3 a negotiated sale, in which the sale price is lower 

4 than the property market value and is set outside of 

5 a competitive bidding process that has no afford6 ability requirements. 

7 (3) The term ‘‘discount loan sale’’ means the sale 

8 of a multifamily loan in a transaction, such as a ne9 gotiated sale, in which the sale price is lower than the 

10 loan market value and is set outside of a competitive 

11 bidding process that has no affordability require12 ments. 

13 (4) The term ‘‘loan market value’’ means the 

14 value of a multifamily loan, without taking into ac15 count any affordability requirements. 

16 (5) The term ‘‘multifamily real property’’ means 

17 any rental or cooperative housing project of 5 or more 

18 units owned by the Secretary that prior to acquisition 

19 by the Secretary was security for a loan or loans in20 sured under title II of the National Housing Act. 

21 (6) The term ‘‘multifamily loan’’ means a loan 

22 held by the Secretary and secured by a multifamily 

23 rental or cooperative housing project of 5 or more 

24 units that was formerly insured under title II of the 

25 National Housing Act. 
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1 (7) The term ‘‘property market value’’ means the 

2 value of a multifamily real property for its current 

3 use, without taking into account any affordability re4 quirements. 

5 (8) The term ‘‘Secretary’’ means the Secretary of 

6 Housing and Urban Development. 

7 SEC. 4103. APPROPRIATED FUNDS REQUIREMENT FOR 

8 BELOW MARKET SALES. 

9 (a) DISCOUNT SALES.—Notwithstanding any other 

10 provision of law, except for affordability requirements for 

11 the elderly and disabled required by statute, disposition by 

12 the Secretary of a multifamily real property during fiscal 

13 years 2006 through 2010 through a discount sale under sec14 tions 207(l) or 246 of the National Housing Act (12 U.S.C. 

15 1713(l), 1715z-11), section 203 of the Housing and Commu16 nity Development Amendments of 1978 (12 U.S.C. 1701z17 11), or section 204 of the Departments of Veterans Affairs 

18 and Housing and Urban Development, and Independent 

19 Agencies Appropriations Act, 1997 (12 U.S.C. 1715z-11a), 

20 shall be subject to the availability of appropriations to the 

21 extent that the property value exceeds the sale proceeds. If 

22 the multifamily real property is sold, during such fiscal 

23 years, for an amount equal to or greater than the property 

24 market value then the transaction is not subject to the avail25 ability of appropriations. 
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1 (b) DISCOUNT LOAN SALES.—Notwithstanding any 

2 other provision of law and in accordance with the Federal 

3 Credit Reform Act of 1990 (2 U.S.C. 661 et seq.), a discount 

4 loan sale during fiscal years 2006 through 2010 under sec5 tion 207(k) of the National Housing Act (12 U.S.C. 

6 1713(k)), section 203(k) of the Housing and Community 

7 Development Amendments of 1978 (12 U.S.C. 1701z-11(k)), 

8 or section 204(a) of the Departments of Veterans Affairs 

9 and Housing and Urban Development, and Independent 

10 Agencies Appropriations Act, 1997 (12 U.S.C. 1715z11 11a(a)), shall be subject to the availability of appropria12 tions to the extent that the loan value exceeds the sale pro13 ceeds. If the multifamily loan is sold, during such fiscal 

14 years, for an amount equal to or greater than the loan mar15 ket value then the transaction is not subject to the avail16 ability of appropriations. 

17 (c) APPLICABILITY.—This section shall not apply to 

18 any transaction that formally commences within one year 

19 prior to the enactment of this section. 

20 SEC. 4104. UP-FRONT GRANTS. 

21 (a) 1997 Act.—Section 204(a) of the Departments of 

22 Veterans Affairs and Housing And Urban Development, 

23 and Independent Agencies Appropriations Act, 1997 (12 

24 U.S.C. 1715z-11a(a))) is amended by adding at the end the 

25 following new sentence: ‘‘A grant provided under this sub-
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1 section during fiscal years 2006 through 2010 shall be 

2 available only to the extent that appropriations are made 

3 in advance for such purposes and shall not be derived from 

4 the General Insurance Fund.’’. 

5 (b) 1978 Act.—Section 203(f)(4) of the Housing and 

6 Community Development Amendments of 1978 (12 USC 

7 1701z-11(f)(4)) is amended by adding at the end the fol8 lowing new sentence: ‘‘This paragraph shall be effective dur9 ing fiscal years 2006 through 2010 only to the extent that 

10 such budget authority is made available for use under this 

11 paragraph in advance in appropriation Acts.’’. 

12 (c) APPLICABILITY.—The amendments made by this 

13 section shall not apply to any transaction that formally 

14 commences within one year prior to the enactment of this 

15 section.

16 TITLE V—COMMITTEE ON 

17 JUDICIARY 

18 SEC. 5001. TABLE OF CONTENTS.

TITLE V—COMMITTEE ON JUDICIARY 

Sec. 5001. Table of contents. 

Subtitle A—Visa Fees 

Sec. 5101. Fees with respect to immigration services for intracompany transferees. 

Subtitle B—Circuit and District Judgeships 

Sec. 5201. Short title. 

Sec. 5202. Circuit judges for the circuit courts of appeals. 

Sec. 5203. District judges for the district courts. 

Sec. 5204. Establishment of Article III court in the Virgin Islands. 

Sec. 5205. Effective date. 
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Subtitle C—Bankruptcy Judgeships 

Sec. 5301. Short title. 

Sec. 5302. Authorization for additional bankruptcy judgeships. 

Sec. 5303. Temporary bankruptcy judgeships. 

Sec. 5304. Conversion of existing temporary bankruptcy judgeships. 

Sec. 5305. General provisions. 

Sec. 5306. Effective date. 

Subtitle D—Ninth Circuit Reorganization 

Sec. 5401. Short title. 

Sec. 5402. Definitions. 

Sec. 5403. Number and composition of circuits. 

Sec. 5404. Number of circuit judges. 

Sec. 5405. Places of circuit court. 

Sec. 5406. Assignment of circuit judges. 

Sec. 5407. Election of assignment by senior judges. 

Sec. 5408. Seniority of judges. 

Sec. 5409. Application to cases. 

Sec. 5410. Temporary assignment of circuit judges among circuits. 

Sec. 5411. Temporary assignment of district judges among circuits. 

Sec. 5412. Administration. 

Sec. 5413. Effective date. 

Subtitle E—Authorization of Appropriations 

Sec. 5501. Authorization of appropriations.

1 Subtitle A—Visa Fees 

2 SEC. 5101. FEES WITH RESPECT TO IMMIGRATION SERVICES 

3 FOR INTRACOMPANY TRANSFEREES. 

4 Section 214(c) of the Immigration and Nationality Act 

5 (8 U.S.C. 1184(c)) is amended by adding at the end the 

6 following: 

7 ‘‘(15)(A) The Secretary of State shall impose a fee on 

8 an employer when an alien files an application abroad for 

9 a visa authorizing initial admission to the United States 

10 as a nonimmigrant described in section 101(a)(15)(L) in 

11 order to be employed by the employer, if the alien is covered 

12 under a blanket petition described in paragraph (2)(A). 
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1 ‘‘(B) The Secretary of Homeland Security shall impose 

2 a fee on an employer filing a petition under paragraph (1) 

3 initially to grant an alien nonimmigrant status described 

4 in section 101(a)(15)(L) or to extend for the first time the 

5 stay of an alien having such status. 

6 ‘‘(C) The amount of the fee imposed under subpara7 graph (A) or (B) shall be $1,500. 

8 ‘‘(D) The fees imposed under subparagraphs (A) and 

9 (B) shall only apply to principal aliens and not to spouses 

10 or children who are accompanying or following to join such 

11 principal aliens. 

12 ‘‘(E) Fees collected under this paragraph shall be de13 posited as offsetting receipts in the Treasury, and shall not 

14 be available for expenditure until appropriated. 

15 ‘‘(F)(i) An employer may not require an alien who 

16 is the beneficiary of the visa or petition for which a fee 

17 is imposed under this paragraph to reimburse, or otherwise 

18 compensate, the employer for part or all of the cost of such 

19 fee. 

20 ‘‘(ii) Section 274A(g)(2) shall apply to a violation of 

21 clause (i) in the same manner as it applies to a violation 

22 of section 274A(g)(1).’’.
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1 Subtitle B—Circuit and District 

2 Judgeships 

3 SEC. 5201. SHORT TITLE. 

4 This subtitle may be cited as the ‘‘Federal Judgeship 

5 Act of 2005’’. 

6 SEC. 5202. CIRCUIT JUDGES FOR THE CIRCUIT COURTS OF 

7 APPEALS. 

8 (a) IN GENERAL.—The President shall appoint, by 

9 and with the advice and consent of the Senate—

10 (1) 1 additional circuit judge for the first circuit 

11 court of appeals; 

12 (2) 2 additional circuit judges for the second cir13 cuit court of appeals; 

14 (3) 1 additional circuit judge for the sixth cir15 cuit court of appeals; and 

16 (4) 5 additional circuit judges for the ninth cir17 cuit court of appeals, whose official duty station shall 

18 be in California. 

19 (b) TEMPORARY JUDGESHIPS.—

20 (1) IN GENERAL.—The President shall appoint, 

21 by and with the advice and consent of the Senate—

22 (A) 1 additional circuit judge for the eighth 

23 circuit court of appeals; and 
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1 (B) 2 additional circuit judges for the ninth 

2 circuit court of appeals, whose official duty sta3 tion shall be in California. 

4 (2) VACANCIES.—

5 (A) EIGHTH CIRCUIT.—The first vacancy in 

6 the office of circuit judge in the eighth circuit 

7 court of appeals, occurring 10 years or more 

8 after the confirmation date of the judge named to 

9 fill the circuit judgeship created in that circuit 

10 by paragraph (1)(A) shall not be filled. 

11 (B) NINTH CIRCUIT.—The first 2 vacancies 

12 in the office of circuit judge in the ninth circuit 

13 court of appeals, occurring 10 years or more 

14 after judges are first confirmed to fill both tem15 porary circuit judgeships created by paragraph 

16 (1)(B) shall not be filled. 

17 (c) TABLE OF JUDGESHIPS.—In order that the table 

18 contained in section 44 of title 28, United States Code, will, 

19 with respect to each judicial circuit, reflect the changes in 

20 the total number of permanent circuit judgeships authorized 

21 under subsection (a) of this section, such table is amended 

22 to read as follows:

Number of 

‘‘Circuits Judges 

District of Columbia .......................................................................... 12

First .................................................................................................... 7

Second ................................................................................................. 15

Third ................................................................................................... 14

Fourth ................................................................................................. 15
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Fifth .................................................................................................... 17

Sixth .................................................................................................... 17

Seventh ................................................................................................ 11

Eighth ................................................................................................. 11

Ninth ................................................................................................... 33

Tenth ................................................................................................... 12

Eleventh .............................................................................................. 12

Federal ................................................................................................ 12.’’.

1 SEC. 5203. DISTRICT JUDGES FOR THE DISTRICT COURTS. 

2 (a) IN GENERAL.—The President shall appoint, by 

3 and with the advice and consent of the Senate—

4 (1) 1 additional district judge for the northern 

5 district of Alabama; 

6 (2) 4 additional district judges for the district of 

7 Arizona; 

8 (3) 3 additional district judges for the northern 

9 district of California; 

10 (4) 4 additional district judges for the eastern 

11 district of California; 

12 (5) 4 additional district judges for the central 

13 district of California; 

14 (6) 1 additional district judge for the southern 

15 district of California; 

16 (7) 1 additional district judge for the district of 

17 Colorado; 

18 (8) 4 additional district judges for the middle 

19 district of Florida; 

20 (9) 3 additional district judges for the southern 

21 district of Florida; 
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1 (10) 1 additional district judge for the district of 

2 Idaho; 

3 (11) 1 additional district judge for the northern 

4 district of Illinois; 

5 (12) 1 additional district judge for the southern 

6 district of Indiana; 

7 (13) 1 additional district judge for the western 

8 district of Missouri; 

9 (14) 1 additional district judge for the district of 

10 Nebraska; 

11 (15) 1 additional district judge for the district of 

12 Nevada; 

13 (16) 1 additional district judge for the district of 

14 New Mexico; 

15 (17) 3 additional district judges for the eastern 

16 district of New York; 

17 (18) 1 additional district judge for the western 

18 district of New York; 

19 (19) 1 additional district judge for the district of 

20 Oregon; 

21 (20) 1 additional district judge for the district of 

22 South Carolina; 

23 (21) 3 additional district judges for the southern 

24 district of Texas; 
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1 (22) 2 additional district judges for the eastern 

2 district of Virginia; and 

3 (23) 1 additional district judge for the western 

4 district of Washington. 

5 (b) TEMPORARY JUDGESHIPS.—

6 (1) IN GENERAL.—The President shall appoint, 

7 by and with the advice and consent of the Senate—

8 (A) 1 additional district judge for the mid9 dle district of Alabama; 

10 (B) 1 additional district judge for the dis11 trict of Arizona; 

12 (C) 1 additional district judge for the 

13 northern district of California; 

14 (D) 1 additional district judge for the dis15 trict of Colorado; 

16 (E) 1 additional district judge for the mid17 dle district of Florida; 

18 (F) 1 additional district judge for the 

19 northern district of Iowa; 

20 (G) 1 additional district judge for the dis21 trict of Minnesota; 

22 (H) 1 additional district judge for the dis23 trict of New Jersey; 

24 (I) 1 additional district judge for the dis25 trict of New Mexico; 
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1 (J) 1 additional district judge for the south2 ern district of Ohio; 

3 (K) 1 additional district judge for the dis4 trict of Oregon; and 

5 (L) 1 additional district judge for the dis6 trict of Utah. 

7 (2) VACANCIES NOT FILLED.—The first vacancy 

8 in the office of district judge in each of the judicial 

9 districts named in paragraph (1) occurring 10 years 

10 or more after the confirmation date of the judge 

11 named to fill the district judgeship created in that 

12 district by paragraph (1) shall not be filled. 

13 (c) EXISTING JUDGESHIPS.—

14 (1) PERMANENT JUDGESHIPS.—The existing 

15 judgeships for the district of Hawaii, the district of 

16 Kansas, and the eastern district of Missouri author17 ized by section 203(c) of the Judicial Improvements 

18 Act of 1990 (Public Law 101–650; 28 U.S.C. 133 

19 note) shall, as of the effective date of this Act, be au20 thorized under section 133 of title 28, United States 

21 Code, and the incumbents in those offices shall hold 

22 the office under section 133 of title 28, United States 

23 Code, as amended by this Act. 

24 (2) EXTENSION OF TEMPORARY JUDGESHIP.—

25 Section 203(c) of the Judicial Improvements Act of 
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1 1990 (Public Law 101–650; 28 U.S.C. 133 note) is 

2 amended in the fifth sentence (relating to the northern 

3 district of Ohio) by striking ‘‘15 years’’ and inserting 

4 ‘‘20 years’’. 

5 (d) TABLE OF JUDGESHIPS.—In order that the table 

6 contained in section 133(a) of title 28, United States Code, 

7 will, with respect to each judicial district, reflect the 

8 changes in the total number of permanent district judge9 ships authorized under subsections (a) and (c) of this sec10 tion, such table is amended to read as follows:

‘‘Districts Judges

‘‘Alabama: 

‘‘Northern ............................................................................................ 8

‘‘Middle ............................................................................................... 3

‘‘Southern ........................................................................................... 3

‘‘Alaska ........................................................................................................ 3

‘‘Arizona ...................................................................................................... 16

‘‘Arkansas: 

‘‘Eastern ............................................................................................. 5

‘‘Western ............................................................................................. 3

‘‘California: 

‘‘Northern ............................................................................................ 17

‘‘Eastern ............................................................................................. 10

‘‘Central .............................................................................................. 31

‘‘Southern ........................................................................................... 14

‘‘Colorado .................................................................................................... 8

‘‘Connecticut ............................................................................................... 8

‘‘Delaware ................................................................................................... 4

‘‘District of Columbia ................................................................................ 15

‘‘Florida: 

‘‘Northern ............................................................................................ 4

‘‘Middle ............................................................................................... 19

‘‘Southern ........................................................................................... 20

‘‘Georgia: 

‘‘Northern ............................................................................................ 11

‘‘Middle ............................................................................................... 4

‘‘Southern ........................................................................................... 3

‘‘Hawaii ...................................................................................................... 4

‘‘Idaho ......................................................................................................... 3

‘‘Illinois: 

‘‘Northern ............................................................................................ 23

‘‘Central .............................................................................................. 4

‘‘Southern ........................................................................................... 4
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‘‘Indiana: 

‘‘Northern ............................................................................................ 5

‘‘Southern ........................................................................................... 6

‘‘Iowa: 

‘‘Northern ............................................................................................ 2

‘‘Southern ........................................................................................... 3

‘‘Kansas ....................................................................................................... 6

‘‘Kentucky: 

‘‘Eastern ............................................................................................. 5

‘‘Western ............................................................................................. 4

‘‘Eastern and Western ....................................................................... 1

‘‘Louisiana: 

‘‘Eastern ............................................................................................. 12

‘‘Middle ............................................................................................... 3

‘‘Western ............................................................................................. 7

‘‘Maine ........................................................................................................ 3

‘‘Maryland .................................................................................................. 10

‘‘Massachusetts ............................................................................................ 13

‘‘Michigan: 

‘‘Eastern ............................................................................................. 15

‘‘Western ............................................................................................. 4

‘‘Minnesota .................................................................................................. 7

‘‘Mississippi: 

‘‘Northern ............................................................................................ 3

‘‘Southern ........................................................................................... 6

‘‘Missouri: 

‘‘Eastern ............................................................................................. 7

‘‘Western ............................................................................................. 6

‘‘Eastern and Western ....................................................................... 2

‘‘Montana .................................................................................................... 3

‘‘Nebraska .................................................................................................... 4

‘‘Nevada ...................................................................................................... 8

‘‘New Hampshire ........................................................................................ 3

‘‘New Jersey ................................................................................................ 17

‘‘New Mexico ............................................................................................... 7

‘‘New York: 

‘‘Northern ............................................................................................ 5

‘‘Southern ........................................................................................... 28

‘‘Eastern ............................................................................................. 18

‘‘Western ............................................................................................. 5

‘‘North Carolina: 

‘‘Eastern ............................................................................................. 4

‘‘Middle ............................................................................................... 4

‘‘Western ............................................................................................. 4

‘‘North Dakota ............................................................................................ 2

‘‘Ohio: 

‘‘Northern ............................................................................................ 11

‘‘Southern ........................................................................................... 8

‘‘Oklahoma: 

‘‘Northern ............................................................................................ 3

‘‘Eastern ............................................................................................. 1

‘‘Western ............................................................................................. 6

‘‘Northern, Eastern, and Western. .................................................... 1

‘‘Oregon ....................................................................................................... 7
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‘‘Pennsylvania: 

‘‘Eastern ............................................................................................. 22

‘‘Middle ............................................................................................... 6

‘‘Western ............................................................................................. 10

‘‘Puerto Rico ............................................................................................... 7

‘‘Rhode Island ............................................................................................. 3

‘‘South Carolina ......................................................................................... 11

‘‘South Dakota ............................................................................................ 3

‘‘Tennessee: 

‘‘Eastern ............................................................................................. 5

‘‘Middle ............................................................................................... 4

‘‘Western ............................................................................................. 5

‘‘Texas: 

‘‘Northern ............................................................................................ 12

‘‘Southern ........................................................................................... 22

‘‘Eastern ............................................................................................. 7

‘‘Western ............................................................................................. 13

‘‘Utah .......................................................................................................... 5

‘‘Vermont ..................................................................................................... 2

‘‘Virginia: 

‘‘Eastern ............................................................................................. 13

‘‘Western ............................................................................................. 4

‘‘Washington: 

‘‘Eastern ............................................................................................. 4

‘‘Western ............................................................................................. 8

‘‘West Virginia: 

‘‘Northern ............................................................................................ 3

‘‘Southern ........................................................................................... 5

‘‘Wisconsin: 

‘‘Eastern ............................................................................................. 5

‘‘Western ............................................................................................. 2

‘‘Wyoming ................................................................................................... 3.’’.

1 SEC. 5204. ESTABLISHMENT OF ARTICLE III COURT IN THE 

2 VIRGIN ISLANDS. 

3 (a) ESTABLISHMENT OF JUDICIAL DISTRICT.—

4 (1) VIRGIN ISLANDS.—Chapter 5 of title 28, 

5 United States Code, is amended by inserting after sec6 tion 126 the following new section: 

7 ‘‘§ 126A. Virgin Islands 

8 ‘‘The Virgin Islands constitutes 1 judicial district com9 prising 2 divisions. 
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1 ‘‘(1) The Saint Croix Division comprises the Is2 land of Saint Croix and adjacent islands and cays. 

3 ‘‘Court for the Saint Croix Division shall be 

4 held at Christiansted. 

5 ‘‘(2) The Saint Thomas and Saint John Divi6 sion comprises the Islands of Saint Thomas and 

7 Saint John and adjacent islands and cays. 

8 ‘‘Court for the Saint Thomas and Saint 

9 John Division shall be held at Charlotte10 Amalie.’’. 

11 (2) TECHNICAL AND CONFORMING AMEND12 MENT.—The table of contents for chapter 5 of title 28, 

13 United States Code, is amended by inserting after the 

14 item relating to section 126 the following:

‘‘126A. Virgin Islands.’’.

15 (b) NUMBER OF JUDGES.—The table contained in sec16 tion 133(a) of title 28, United States Code, is amended by 

17 inserting after the item relating to Vermont the following:

‘‘Virgin Islands ................................................................................................ 2’’.

18 (c) BANKRUPTCY JUDGES.—The table contained in 

19 section 152(a)(2) of title 28, United States Code, is amend20 ed by inserting after the item relating to Vermont the fol21 lowing:

‘‘Virgin Islands ................................................................................................ 0’’.
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1 (d) JUDICIAL CONFERENCES OF CIRCUITS.—Section 

2 333 of title 28, United States Code, is amended in the third 

3 sentence of the first undesignated paragraph—

4 (1) by striking ‘‘, the District Court of the Virgin 

5 Islands,’’; and 

6 (2) by striking ‘‘to the conferences of their respec7 tive circuits’’ and inserting ‘‘to the conference of the 

8 ninth circuit’’. 

9 (e) JUDGES IN TERRITORIES AND POSSESSIONS.—Sec10 tion 373 of title 28, United States Code, is amended—

11 (1) in subsection (a), by striking ‘‘, the District 

12 Court of the Northern Mariana Islands, or the Dis13 trict Court of the Virgin Islands’’ and inserting ‘‘or 

14 the District Court of the Northern Mariana Islands’’; 

15 and 

16 (2) in subsection (e), by striking ‘‘, the District 

17 Court of the Northern Mariana Islands, or the Dis18 trict Court of the Virgin Islands’’ and inserting ‘‘or 

19 the District Court of the Northern Mariana Islands’’. 

20 (f) ANNUITIES FOR SURVIVORS OF CERTAIN JUDICIAL

21 OFFICIALS OF THE UNITED STATES.—Section 376(a) of 

22 title 28, United States Code, is amended—

23 (1) in paragraph (1)(B), by striking ‘‘, the Dis24 trict Court of the Northern Mariana Islands, or the 

25 District Court of the Virgin Islands’’ and inserting 
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1 ‘‘or the District Court of the Northern Mariana Is2 lands’’; and 

3 (2) in paragraph (2)(B), by striking ‘‘, the Dis4 trict Court of the Northern Mariana Islands, or the 

5 District Court of the Virgin Islands’’ and inserting 

6 ‘‘or the District Court of the Northern Mariana Is7 lands’’. 

8 (g) AUTHORITY OF ATTORNEY GENERAL.—Section 

9 526(a)(2) of title 28, United States Code, is amended by 

10 striking ‘‘and of the district court of the Virgin Islands’’. 

11 (h) COURTS DEFINED.—Section 610 of title 28, United 

12 States Code, is amended—

13 (1) by striking ‘‘the United States District Court 

14 for the District of the Canal Zone,’’; and 

15 (2) by striking ‘‘the District Court of the Virgin 

16 Islands,’’. 

17 (i) UNITED STATES MAGISTRATE JUDGES.—Section 

18 631(a) of title 28, United States Code, is amended—

19 (1) in the first sentence, by striking ‘‘the Virgin 

20 Islands, Guam,’’ and inserting ‘‘Guam’’; and 

21 (2) in the second sentence, by striking ‘‘the Vir22 gin Islands, Guam,’’ and inserting ‘‘Guam’’. 

23 (j) COURT REPORTERS.—Section 753(a) of title 28, 

24 United States Code, is amended by striking ‘‘, the United 

25 States District Court for the District of the Canal Zone, 
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•S 1932 EAH 

1 the District Court of Guam, and the District Court of the 

2 Virgin Islands’’ and inserting ‘‘and the District Court of 

3 Guam’’. 

4 (k) FINAL DECISIONS OF DISTRICT COURTS.—Section 

5 1291 of title 28, United States Code, is amended by striking 

6 ‘‘, the United States District Court for the District of the 

7 Canal Zone, the District Court of Guam, and the District 

8 Court of the Virgin Islands,’’ and inserting ‘‘and the Dis9 trict Court of Guam,’’. 

10 (l) INTERLOCUTORY DECISIONS.—Section 1292 of title 

11 28, United States Code, is amended—

12 (1) in subsection (a), by striking ‘‘, the United 

13 States District Court for the District of the Canal 

14 Zone, the District Court of Guam, and the District 

15 Court of the Virgin Islands,’’ and inserting ‘‘and the 

16 District Court of Guam,’’; and 

17 (2) in subsection (d)(4)(A), by striking ‘‘the Dis18 trict Court of the Virgin Islands,’’. 

19 (m) JURISDICTION OF THE UNITED STATES COURT OF

20 APPEALS FOR THE FEDERAL CIRCUIT.—Section 1295(a) of 

21 title 28, United States Code, is amended in paragraphs (1) 

22 and (2)—

23 (1) by striking ‘‘the United States District Court 

24 for the District of the Canal Zone,’’; and 
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1 (2) by striking ‘‘the District Court of the Virgin 

2 Islands,’’. 

3 (n) UNITED STATES AS DEFENDANT.—Section 

4 1346(b)(1) of title 28, United States Code, is amended by 

5 striking ‘‘, together with the United States District Court 

6 for the District of the Canal Zone and the District Court 

7 of the Virgin Islands,’’. 

8 (o) ADEQUATE REPRESENTATION OF DEFENDANTS.—

9 Section 3006A(j) of title 18, United States Code, is amended 

10 by striking ‘‘the District Court of the Virgin Islands,’’. 

11 (p) SAVINGS PROVISIONS.—

12 (1) TENURE OF INCUMBENT JUDGES.—A judge of 

13 the District Court of the Virgin Islands in office on 

14 the effective date of this section shall continue in office 

15 until the expiration of the term for which the judge 

16 was appointed, or until the judge dies, resigns, or is 

17 removed from office, whichever occurs first. When a 

18 vacancy occurs on the court on or after the effective 

19 date of this section, the President, in accordance with 

20 section 133(a) of title 28, United States Code, shall 

21 appoint, by and with the advice and consent of the 

22 Senate, a district judge for the District of the Virgin 

23 Islands. 

24 (2) RETIREMENT RIGHTS AND BENEFITS.—The 

25 amendments made by this section shall not affect the 
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•S 1932 EAH 

1 rights under sections 373 and 376 of title 28, United 

2 States Code, of any judge of the District Court of the 

3 Virgin Islands who retires on or before the effective 

4 date of this section or who continues in office after 

5 that date under paragraph (1) of this subsection. 

6 Service as a judge of the District Court of the Virgin 

7 Islands appointed under section 24 of the Revised Or8 ganic Act of the Virgin Islands (48 U.S.C. 1614) shall 

9 be included in calculating service under sections 371 

10 and 372 of title 28, United States Code, and shall not 

11 be counted for purposes of section 373 of that title, if 

12 the judge is reappointed, after the effective date of this 

13 section, under section 133(a) of title 28, United States 

14 Code, as district judge for the District of the Virgin 

15 Islands. 

16 (q) AMENDMENTS TO REVISED ORGANIC ACT OF THE

17 VIRGIN ISLANDS.—

18 (1) REPEALS.—Sections 24, 25, 26, and 27 of 

19 the Revised Organic Act of the Virgin Islands (48 

20 U.S.C. 1614, 1615, 1616 and 1617) are repealed. 

21 (2) RIGHTS AND PROHIBITIONS.—Section 3 of 

22 the Revised Organic Act of the Virgin Islands (48 

23 U.S.C. 1561) is amended in the 23d undesignated 

24 paragraph—
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•S 1932 EAH 

1 (A) by inserting ‘‘article III;’’ after ‘‘section 

2 9, clauses 2 and 3;’’ and 

3 (B) by striking ‘‘That all offenses against 

4 the laws of the United States’’ and all that fol5 lows through ‘‘section 22(b) of this Act or’’ and 

6 inserting ‘‘That all offenses against the laws of 

7 the Virgin Islands which are prosecuted’’. 

8 (3) JURISDICTION.—Section 21 of the Revised 

9 Organic Act of the Virgin Islands (48 U.S.C. 1611) 

10 is amended to read as follows: 

11 ‘‘SEC. 21. JURISDICTION OF THE COURTS OF THE VIRGIN 

12 ISLANDS. 

13 ‘‘(a) JURISDICTION OF THE COURTS OF THE VIRGIN

14 ISLANDS.—The judicial power of the Virgin Islands shall 

15 be vested in such trial and appellate courts as may have 

16 been or may hereafter be established by local law. The local 

17 courts of the Virgin Islands shall have jurisdiction over all 

18 causes of action in the Virgin Islands over which any court 

19 established by the Constitution and laws of the United 

20 States does not have exclusive jurisdiction. 

21 ‘‘(b) PRACTICE AND PROCEDURE.—The rules gov22 erning the practice and procedure of the courts established 

23 by local law and those prescribing the qualifications and 

24 duties of the judges and officers thereof, oaths and bonds, 
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•S 1932 EAH 

1 and the times and places of holding court shall be governed 

2 by local law or the rules promulgated by those courts.’’. 

3 (4) INCOME TAX MATTERS.—Section 22 of the 

4 Revised Organic Act of the Virgin Islands (48 U.S.C. 

5 1612) is amended to read as follows: 

6 ‘‘SEC. 22. JURISDICTION OVER INCOME TAX MATTERS. 

7 ‘‘The United States District Court for the District of 

8 the Virgin Islands shall have exclusive jurisdiction over all 

9 criminal and civil proceedings in the Virgin Islands with 

10 respect to the income tax laws applicable to the Virgin Is11 lands, except the ancillary laws relating to the income tax 

12 enacted by the legislature of the Virgin Islands. Any act 

13 or failure to act with respect to the income tax laws appli14 cable to the Virgin Islands which would constitute a crimi15 nal offense described in chapter 75 of subtitle F of the Inter16 nal Revenue Code of 1986 shall constitute an offense against 

17 the Government of the Virgin Islands and may be pros18 ecuted in the name of the Government of the Virgin Islands 

19 by the appropriate officers thereof in the United States Dis20 trict Court for the District of the Virgin Islands without 

21 the request or consent of the United States attorney for the 

22 Virgin Islands.’’. 

23 (5) APPELLATE JURISDICTION.—Section 23A of 

24 the Revised Organic Act of the Virgin Islands (48 

25 U.S.C. 1613a) is amended—
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•S 1932 EAH 

1 (A) by striking ‘‘District Court of the Vir2 gin Islands’’ each place it appears and inserting 

3 ‘‘United States District Court for the District of 

4 the Virgin Islands’’; and 

5 (B) in subsection (b), by striking ‘‘pursuant 

6 to section 24(a) of this Act: Provided, That no 

7 more than one of them may be a judge of a court 

8 established by local law.’’ and inserting ‘‘pursu9 ant to chapter 13 of title 28, United States Code, 

10 or a recalled senior judge of the former District 

11 Court of the Virgin Islands. The chief judge of 

12 the United States Court of Appeals for the Third 

13 Circuit may assign to the appellate division a 

14 judge of a court of record of the Virgin Islands, 

15 except that no more than 1 of the judges sitting 

16 in the appellate division at any session may be 

17 a judge of a court established by local law.’’. 

18 (r) ADDITIONAL REFERENCES.—Any reference in any 

19 provision of law to the ‘‘District Court of the Virgin Is20 lands’’ shall, on and after the effective date of this section, 

21 be deemed to be a reference to the United States District 

22 Court for the District of the Virgin Islands. 

23 (s) EFFECTIVE DATE.—This section and the amend24 ments made by this section shall take effect at the end of 

25 the 90-day period beginning on the date of the enactment 
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•S 1932 EAH 

1 of this Act. Any complaint or proceeding pending in the 

2 District Court of the Virgin Islands on the effective date 

3 of this section may be pursued to final determination in 

4 the United States District Court for the District of the Vir5 gin Islands, the United States Court of Appeals for the 

6 Third Circuit, the United States Court of Appeals for the 

7 Federal Circuit, and the Supreme Court of the United 

8 States. 

9 SEC. 5205. EFFECTIVE DATE. 

10 Except as provided in section 5204(s), this subtitle and 

11 the amendments made by this subtitle shall take effect on 

12 the date of the enactment of this Act.

13 Subtitle C—Bankruptcy Judgeships 

14 SEC. 5301. SHORT TITLE. 

15 This subtitle may be cited as the ‘‘Enhanced Bank16 ruptcy Judgeship Act of 2005’’. 

17 SEC. 5302. AUTHORIZATION FOR ADDITIONAL BANKRUPTCY 

18 JUDGESHIPS. 

19 The following judgeships shall be filled in the manner 

20 prescribed in section 152(a)(1) of title 28, United States 

21 Code, for the appointment of bankruptcy judges provided 

22 for in section 152(a)(2) of such title: 

23 (1) 1 additional bankruptcy judgeship for the 

24 eastern and western districts of Arkansas. 
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1 (2) 1 additional bankruptcy judgeship for the 

2 eastern district of California. 

3 (3) 2 additional bankruptcy judgeships for the 

4 middle district of Florida. 

5 (4) 2 additional bankruptcy judgeships for the 

6 northern district of Georgia. 

7 (5) 1 additional bankruptcy judgeship for the 

8 southern district of Georgia. 

9 (6) 1 additional bankruptcy judgeship for the 

10 eastern district of Kentucky. 

11 (7) 1 additional bankruptcy judgeship for the 

12 district of Maryland. 

13 (8) 3 additional bankruptcy judgeships for the 

14 eastern district of Michigan. 

15 (9) 1 additional bankruptcy judgeship for the 

16 southern district of New York. 

17 (10) 1 additional bankruptcy judgeship for the 

18 western district of Pennsylvania. 

19 (11) 1 additional bankruptcy judgeship for the 

20 western district of Tennessee. 

21 (12) 1 additional bankruptcy judgeship for the 

22 eastern district of Texas. 

23 (13) 1 additional bankruptcy judgeship for the 

24 district of Utah. 
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1 SEC. 5303. TEMPORARY BANKRUPTCY JUDGESHIPS. 

2 (a) AUTHORIZATION FOR ADDITIONAL TEMPORARY

3 BANKRUPTCY JUDGESHIPS.—The following judgeships shall 

4 be filled in the manner prescribed in section 152(a)(1) of 

5 title 28, United States Code, for the appointment of bank6 ruptcy judges provided for in section 152(a)(2) of such title: 

7 (1) 1 additional bankruptcy judgeship for the 

8 northern district of Florida. 

9 (2) 2 additional bankruptcy judgeships for the 

10 middle district of Florida. 

11 (3) 1 additional bankruptcy judgeship for the 

12 northern district of Indiana. 

13 (4) 1 additional bankruptcy judgeship for the 

14 northern district of Mississippi. 

15 (5) 1 additional bankruptcy judgeship for the 

16 district of Nevada. 

17 (6) 1 additional bankruptcy judgeship for the 

18 western district of North Carolina. 

19 (7) 1 additional bankruptcy judgeship for the 

20 southern district of Ohio. 

21 (b) VACANCIES.—

22 (1) DISTRICTS WITH SINGLE APPOINTMENTS.—

23 Except as provided in paragraph (2), the first va24 cancy occurring in the office of bankruptcy judge in 

25 each of the judicial districts set forth in subsection 

26 (a)—
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1 (A) occurring 5 years or more after the ap2 pointment date of the bankruptcy judge ap3 pointed under subsection (a) to such office, and 

4 (B) resulting from the death, retirement, 

5 resignation, or removal of a bankruptcy judge, 

6 shall not be filled. 

7 (2) MIDDLE DISTRICT OF FLORIDA.—The 1st 

8 and 2d vacancies in the office of bankruptcy judge in 

9 the middle district of Florida—

10 (A) occurring 5 years or more after the re11 spective 1st and 2d appointment dates of the 

12 bankruptcy judges appointed under subsection 

13 (a)(2), and 

14 (B) resulting from the death, retirement, 

15 resignation, or removal of a bankruptcy judge, 

16 shall not be filled. 

17 (c) ELIGIBILITY FOR SUBSEQUENT APPOINTMENTS.—

18 A judge holding office in any of the districts enumerated 

19 in subsection (a) shall, at the expiration of the term of the 

20 judge (other than by reason of paragraph (1)(B) or (2)(B) 

21 of subsection (b)), be eligible for reappointment as a bank22 ruptcy judge in that district. 
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•S 1932 EAH 

1 SEC. 5304. CONVERSION OF EXISTING TEMPORARY BANK2 RUPTCY JUDGESHIPS. 

3 (a) JUDGESHIPS AUTHORIZED BY PUBLIC LAW 102–

4 361.—The following temporary bankruptcy judgeships au5 thorized by the following paragraphs of section 3(a) of Pub6 lic Law 102–361, as amended by section 307 of Public Law 

7 104–317 (28 U.S.C. 152 note), are converted to permanent 

8 bankruptcy judgeships under section 152(a)(2) of title 28, 

9 United States Code: 

10 (1) The temporary bankruptcy judgeship for the 

11 district of Delaware authorized by paragraph (3). 

12 (2) The temporary bankruptcy judgeship for the 

13 southern district of Illinois authorized by paragraph 

14 (4). 

15 (3) The temporary bankruptcy judgeship for the 

16 district of Puerto Rico authorized by paragraph (7). 

17 (b) JUDGESHIPS AUTHORIZED BY PUBLIC LAW 109–

18 8.—The following temporary bankruptcy judgeships author19 ized by the following subparagraphs of section 1223(b)(1) 

20 of the Bankruptcy Abuse Prevention and Consumer Protec21 tion Act of 2005 (Public Law 109–8), are converted to per22 manent bankruptcy judgeships under section 152(a)(2) of 

23 title 28, United States Code: 

24 (1) The 4 temporary bankruptcy judgeships for 

25 the district of Delaware authorized by subparagraph 

26 (C). 
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1 (2) The temporary bankruptcy judgeship for the 

2 southern district of Georgia authorized by subpara3 graph (E). 

4 (3) One of the 3 temporary bankruptcy judge5 ships for the district of Maryland authorized by sub6 paragraph (F). 

7 (4) The temporary bankruptcy judgeship for the 

8 eastern district of Michigan authorized by subpara9 graph (G). 

10 (5) The temporary bankruptcy judgeship for the 

11 district of New Jersey authorized by subparagraph 

12 (I). 

13 (6) The temporary bankruptcy judgeship for the 

14 northern district of New York authorized by subpara15 graph (K). 

16 (7) The temporary bankruptcy judgeship for the 

17 southern district of New York authorized by subpara18 graph (L). 

19 (8) The temporary bankruptcy judgeship for the 

20 eastern district of North Carolina authorized by sub21 paragraph (M). 

22 (9) The temporary bankruptcy judgeship for the 

23 eastern district of Pennsylvania authorized by sub24 paragraph (N). 
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1 (10) The temporary bankruptcy judgeship for the 

2 district of South Carolina authorized by subpara3 graph (S). 

4 (11) The temporary bankruptcy judgeship for the 

5 western district of Tennessee authorized by subpara6 graph (Q). 

7 SEC. 5305. GENERAL PROVISIONS. 

8 (a) TABLE OF JUDGESHIPS.—In order that the table 

9 contained in section 152(a)(2) of title 28, United States 

10 Code, will, with respect to each judicial district, reflect the 

11 changes in the total number of bankruptcy judgeships au12 thorized under sections 5302 and 5304, such table is amend13 ed to read as follows:

‘‘Districts Judges

‘‘Alabama: 

‘‘Northern ...................... .................................................................... 5

‘‘Middle ....................... ....................................................................... 2

‘‘Southern ..................... ..................................................................... 2

‘‘Alaska ................................... ................................................................... 2

‘‘Arizona .................................. .................................................................. 7

‘‘Arkansas: 

‘‘Eastern and Western ...................... ................................................ 4

‘‘California: 

‘‘Northern....................... ..................................................................... 9

‘‘Eastern........................ ..................................................................... 7

‘‘Central ....................... ...................................................................... 21

‘‘Southern ...................... .................................................................... 4

‘‘Colorado................................... ................................................................. 5

‘‘Connecticut................................ ............................................................... 3

‘‘Delaware................................... ................................................................ 6

‘‘District of Columbia....................... ......................................................... 1

‘‘Florida: 

‘‘Northern....................... ..................................................................... 1

‘‘Middle......................... ...................................................................... 10

‘‘Southern....................... .................................................................... 5

‘‘Georgia: 

‘‘Northern....................... ..................................................................... 10

‘‘Middle......................... ...................................................................... 3

‘‘Southern ...................... .................................................................... 4

‘‘Hawaii..................................... ................................................................. 1
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‘‘Idaho...................................... ................................................................... 2

‘‘Illinois: 

‘‘Northern....................... ..................................................................... 10

‘‘Central........................ ...................................................................... 3

‘‘Southern....................... .................................................................... 2

‘‘Indiana: 

‘‘Northern....................... ..................................................................... 3

‘‘Southern....................... .................................................................... 4

‘‘Iowa: 

‘‘Northern....................... ..................................................................... 2

‘‘Southern....................... .................................................................... 2

‘‘Kansas..................................... .................................................................. 4

‘‘Kentucky: 

‘‘Eastern........................ ..................................................................... 3

‘‘Western........................ ..................................................................... 3

‘‘Louisiana: 

‘‘Eastern........................ ..................................................................... 2

‘‘Middle......................... ...................................................................... 1

‘‘Western........................ ..................................................................... 3

‘‘Maine...................................... .................................................................. 2

‘‘Maryland................................... ............................................................... 6

‘‘Massachusetts.............................. .............................................................. 5

‘‘Michigan: 

‘‘Eastern........................ ..................................................................... 8

‘‘Western........................ ..................................................................... 3

‘‘Minnesota.................................. ................................................................ 4

‘‘Mississippi: 

‘‘Northern....................... ..................................................................... 1

‘‘Southern....................... .................................................................... 2

‘‘Missouri: 

‘‘Eastern........................ ..................................................................... 3

‘‘Western........................ ..................................................................... 3

‘‘Montana.................................... ................................................................ 1

‘‘Nebraska................................... ................................................................. 2

‘‘Nevada..................................... ................................................................. 3

‘‘New Hampshire.............................. .......................................................... 1

‘‘New Jersey................................. ............................................................... 9

‘‘New Mexico................................. .............................................................. 2

‘‘New York: 

‘‘Northern....................... ..................................................................... 3

‘‘Southern....................... .................................................................... 11

‘‘Eastern........................ ..................................................................... 6

‘‘Western........................ ..................................................................... 3

‘‘North Carolina: 

‘‘Eastern........................ ..................................................................... 3

‘‘Middle......................... ...................................................................... 2

‘‘Western........................ ..................................................................... 2

‘‘North Dakota............................... ............................................................. 1

‘‘Ohio: 

‘‘Northern....................... ..................................................................... 8

‘‘Southern....................... .................................................................... 7

‘‘Oklahoma: 

‘‘Northern....................... ..................................................................... 2

‘‘Eastern........................ ..................................................................... 1

‘‘Western........................ ..................................................................... 3
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‘‘Oregon..................................... .................................................................. 5

‘‘Pennsylvania: 

‘‘Eastern........................ ..................................................................... 6

‘‘Middle......................... ...................................................................... 2

‘‘Western........................ ..................................................................... 5

‘‘Puerto Rico................................ ............................................................... 3

‘‘Rhode Island............................... .............................................................. 1

‘‘South Carolina............................. ............................................................ 3

‘‘South Dakota............................... ............................................................. 2

‘‘Tennessee: 

‘‘Eastern........................ ..................................................................... 3

‘‘Middle......................... ...................................................................... 3

‘‘Western........................ ..................................................................... 6

‘‘Texas: 

‘‘Northern....................... ..................................................................... 6

‘‘Eastern........................ ..................................................................... 3

‘‘Southern....................... .................................................................... 6

‘‘Western........................ ..................................................................... 4

‘‘Utah....................................... ................................................................... 4

‘‘Vermont.................................... ................................................................. 1

‘‘Virgin Islands............................. .............................................................. 0

‘‘Virginia: 

‘‘Eastern........................ ..................................................................... 5

‘‘Western........................ ..................................................................... 3

‘‘Washington: 

‘‘Eastern........................ ..................................................................... 2

‘‘Western........................ ..................................................................... 5

‘‘West Virginia: 

‘‘Northern....................... ..................................................................... 1

‘‘Southern....................... .................................................................... 1

‘‘Wisconsin: 

‘‘Eastern........................ ..................................................................... 4

‘‘Western........................ ..................................................................... 2

‘‘Wyoming.................................... ............................................................... 1.’’.

1 (b) SENSE OF CONGRESS.—It is the sense of the Con2 gress that bankruptcy judges in the eastern district of Cali3 fornia should conduct bankruptcy proceedings on a daily 

4 basis in Bakersfield, California.

5 SEC. 5306. EFFECTIVE DATE. 

6 This subtitle and the amendments made by this sub7 title shall take effect on the date of the enactment of this 

8 Act. 
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1 Subtitle D—Ninth Circuit 

2 Reorganization 

3 SEC. 5401. SHORT TITLE. 

4 This subtitle may be cited as the ‘‘Judicial Adminis5 tration and Improvements Act of 2005’’. 

6 SEC. 5402. DEFINITIONS. 

7 In this subtitle: 

8 (1) FORMER NINTH CIRCUIT.—The term ‘‘former 

9 ninth circuit’’ means the ninth judicial circuit of the 

10 United States as in existence on the day before the ef11 fective date of this subtitle. 

12 (2) NEW NINTH CIRCUIT.—The term ‘‘new ninth 

13 circuit’’ means the ninth judicial circuit of the 

14 United States established by the amendment made by 

15 section 5403(2)(A). 

16 (3) TWELFTH CIRCUIT.—The term ‘‘twelfth cir17 cuit’’ means the twelfth judicial circuit of the United 

18 States established by the amendment made by section 

19 5403(2)(B). 

20 SEC. 5403. NUMBER AND COMPOSITION OF CIRCUITS. 

21 Section 41 of title 28, United States Code, is amend22 ed—

23 (1) in the matter preceding the table, by striking 

24 ‘‘thirteen’’ and inserting ‘‘fourteen’’; and 

25 (2) in the table—
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1 (A) by striking the item relating to the 

2 ninth circuit and inserting the following:

‘‘Ninth ............................................... California, Guam, Hawaii, Northern 

Mariana Islands.’’;

3 and 

4 (B) by inserting after the item relating to 

5 the eleventh circuit the following:

‘‘Twelfth ............................................ Alaska, Arizona, Idaho, Montana, Nevada, Oregon, Washington.’’.

6 SEC. 5404. NUMBER OF CIRCUIT JUDGES. 

7 The table contained in section 44(a) of title 28, United 

8 States Code, as amended by section 5202(c) of this Act, is 

9 further amended—

10 (1) by striking the item relating to the ninth cir11 cuit and inserting the following:

‘‘Ninth ............................................................................................................... 19’’;

12 and 

13 (2) by inserting after the item relating to the 

14 eleventh circuit the following:

‘‘Twelfth ............................................................................................................ 14’’.

15 SEC. 5405. PLACES OF CIRCUIT COURT. 

16 The table contained in section 48(a) of title 28, United 

17 States Code, is amended—

18 (1) by striking the item relating to the ninth cir19 cuit and inserting the following:

‘‘Ninth ............................................... Honolulu, Pasadena, San Francisco.’’;

20 and 
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1 (2) by inserting after the item relating to the 

2 eleventh circuit the following:

‘‘Twelfth ............................................ Las Vegas, Missoula, Phoenix, Portland, Seattle.’’.

3 SEC. 5406. ASSIGNMENT OF CIRCUIT JUDGES. 

4 Each circuit judge of the former ninth circuit who is 

5 in regular active service and whose official duty station on 

6 the day before the effective date of this subtitle—

7 (1) is in California, Guam, Hawaii, or the 

8 Northern Mariana Islands shall be a circuit judge of 

9 the new ninth circuit as of such effective date; and 

10 (2) is in Alaska, Arizona, Idaho, Montana, Ne11 vada, Oregon, or Washington shall be a circuit judge 

12 of the twelfth circuit as of such effective date. 

13 SEC. 5407. ELECTION OF ASSIGNMENT BY SENIOR JUDGES. 

14 Each judge who is a senior circuit judge of the former 

15 ninth circuit on the day before the effective date of this sub16 title may elect to be assigned to the new ninth circuit or 

17 the twelfth circuit as of such effective date and shall notify 

18 the Director of the Administrative Office of the United 

19 States Courts of such election. 

20 SEC. 5408. SENIORITY OF JUDGES. 

21 The seniority of each judge—

22 (1) who is assigned under section 5406, or 

23 (2) who elects to be assigned under section 5407, 
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1 shall run from the date of commission of such judge as a 

2 judge of the former ninth circuit.

3 SEC. 5409. APPLICATION TO CASES. 

4 The following apply to any case in which, on the day 

5 before the effective date of this subtitle, an appeal or other 

6 proceeding has been filed with the former ninth circuit:

7 (1) Except as provided in paragraph (3), if the 

8 matter has been submitted for decision, further pro9 ceedings with respect to the matter shall be had in the 

10 same manner and with the same effect as if this sub11 title had not been enacted. 

12 (2) If the matter has not been submitted for deci13 sion, the appeal or proceeding, together with the origi14 nal papers, printed records, and record entries duly 

15 certified, shall, by appropriate orders, be transferred 

16 to the court to which the matter would have been sub17 mitted had this subtitle been in full force and effect 

18 at the time such appeal was taken or other proceeding 

19 commenced, and further proceedings with respect to 

20 the case shall be had in the same manner and with 

21 the same effect as if the appeal or other proceeding 

22 had been filed in such court. 

23 (3) If a petition for rehearing en banc is pend24 ing on or after the effective date of this subtitle, the 

25 petition shall be considered by the court of appeals to 
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1 which it would have been submitted had this subtitle 

2 been in full force and effect at the time that the ap3 peal or other proceeding was filed with the court of 

4 appeals. 

5 SEC. 5410. TEMPORARY ASSIGNMENT OF CIRCUIT JUDGES 

6 AMONG CIRCUITS. 

7 Section 291 of title 28, United States Code, is amended 

8 by adding at the end the following: 

9 ‘‘(c) The chief judge of the Ninth Circuit may, in the 

10 public interest and upon request by the chief judge of the 

11 Twelfth Circuit, designate and assign temporarily any cir12 cuit judge of the Ninth Circuit to act as circuit judge in 

13 the Twelfth Circuit. 

14 ‘‘(d) The chief judge of the Twelfth Circuit may, in 

15 the public interest and upon request by the chief judge of 

16 the Ninth Circuit, designate and assign temporarily any 

17 circuit judge of the Twelfth Circuit to act as circuit judge 

18 in the Ninth Circuit.’’. 

19 SEC. 5411. TEMPORARY ASSIGNMENT OF DISTRICT JUDGES 

20 AMONG CIRCUITS. 

21 Section 292 of title 28, United States Code, is amended 

22 by adding at the end the following: 

23 ‘‘(f) The chief judge of the United States Court of Ap24 peals for the Ninth Circuit may, in the public interest—
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1 ‘‘(1) upon request by the chief judge of the 

2 Twelfth Circuit, designate and assign 1 or more dis3 trict judges within the Ninth Circuit to sit upon the 

4 Court of Appeals of the Twelfth Circuit, or a division 

5 thereof, whenever the business of that court so re6 quires; and 

7 ‘‘(2) designate and assign temporarily any dis8 trict judge within the Ninth Circuit to hold a district 

9 court in any district within the Twelfth Circuit. 

10 ‘‘(g) The chief judge of the United States Court of Ap11 peals for the Twelfth Circuit may in the public interest—

12 ‘‘(1) upon request by the chief judge of the Ninth 

13 Circuit, designate and assign 1 or more district 

14 judges within the Twelfth Circuit to sit upon the 

15 Court of Appeals of the Ninth Circuit, or a division 

16 thereof, whenever the business of that court so re17 quires; and 

18 ‘‘(2) designate and assign temporarily any dis19 trict judge within the Twelfth Circuit to hold a dis20 trict court in any district within the Ninth Circuit. 

21 ‘‘(h) Any designations or assignments under subsection 

22 (f) or (g) shall be in conformity with the rules or orders 

23 of the court of appeals of, or the district within, as applica24 ble, the circuit to which the judge is designated or as25 signed.’’. 
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1 SEC. 5412. ADMINISTRATION. 

2 The court of appeals for the ninth circuit as con3 stituted on the day before the effective date of this subtitle 

4 may take such administrative action as may be required 

5 to carry out this subtitle and the amendments made by this 

6 subtitle. Such court shall cease to exist for administrative 

7 purposes 2 years after the date of the enactment of this Act. 

8 SEC. 5413. EFFECTIVE DATE. 

9 This subtitle and the amendments made by this sub10 title shall take effect no later than December 31, 2006. 

11 Subtitle E—Authorization of 

12 Appropriations 

13 SEC. 5501. AUTHORIZATION OF APPROPRIATIONS. 

14 There are authorized to be appropriated for each of 

15 fiscal years 2006 through 2009 such sums as are necessary 

16 to carry out subtitles B, C, and D of this title, including 

17 such sums as may be necessary to provide appropriate space 

18 and facilities for the judicial positions created by this title. 

19 Funds appropriated pursuant to this section in any fiscal 

20 year shall remain available until expended.

21 TITLE VI—COMMITTEE ON 

22 RESOURCES

Subtitle A—Miscellaneous Amendments Relating to Mining 

Sec. 6101. Fees for recordation and location of mining claims. 

Sec. 6102. Patents for mining or mill site claims. 

Sec. 6103. Mineral examinations for mining on certain lands. 

Sec. 6104. Mineral development lands available for purchase. 
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Sec. 6105. National mining and minerals policy to encourage and promote the 

productive second use of lands. 

Sec. 6106. Regulations. 

Sec. 6107. Protection of national parks and wilderness areas. 

Subtitle B—Disposal of Public Lands 

CHAPTER 1—DISPOSAL OF CERTAIN PUBLIC LANDS IN NEVADA

Sec. 6201. Short title. 

Sec. 6202. Definitions. 

Sec. 6203. Land conveyance. 

Sec. 6204. Disposition of proceeds. 

CHAPTER 2—DISPOSAL OF CERTAIN PUBLIC LANDS IN IDAHO

Sec. 6211. Short title. 

Sec. 6212. Definitions. 

Sec. 6213. Land conveyance. 

Sec. 6214. Disposition of proceeds. 

Subtitle C—Oil shale 

Sec. 6301. Oil shale and tar sands amendments. 

Subtitle D—Sale and Conveyance of Federal Land 

Sec. 6401. Collection of receipts from the sale of Federal lands.

1 Subtitle A—Miscellaneous 

2 Amendments Relating to Mining 

3 SEC. 6101. FEES FOR RECORDATION AND LOCATION OF 

4 MINING CLAIMS. 

5 (a) DIMENSIONS OF MINING CLAIMS.—Section 2320 of 

6 the Revised Statutes (30 U.S.C. 23) is amended by striking 

7 the second and third sentences and inserting the following: 

8 ‘‘A mining claim located after May 10, 1872, whether lo9 cated by one or more persons, and including a claim located 

10 before exposure of the vein or lode, may equal, but shall 

11 not exceed, 1,500 feet in length along the vein or lode, and 

12 shall extend no more than 300 feet on each side of the mid13 dle of the vein at the surface, nor shall any claim be limited 
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1 by any mining regulation to less than 25 feet on each side 

2 of the middle of the vein at the surface, except where adverse 

3 rights existing on May 10, 1872, render such limitation 

4 necessary.’’. 

5 (b) RIGHTS SECURED BY CLAIM MAINTENANCE

6 FEES.—Section 2322 of the Revised Statutes (30 U.S.C. 26) 

7 is amended by inserting ‘‘(a) RIGHTS OF LOCATORS, GEN8 ERALLY.—’’ before the first sentence, and by adding at the 

9 end the following: 

10 ‘‘(b) RIGHTS SECURED BY MAINTENANCE FEES.—

11 Prior to issuance of a patent, timely payment of the claim 

12 maintenance fee secures the rights of the holder of a mining 

13 claim, mill site, or tunnel site, both prior to and after dis14 covery of valuable mineral deposits, to use and occupy pub15 lic lands under the provisions of the general mining law 

16 of the United States (as that term is defined in section 2324 

17 of the Revised Statutes) for mineral prospecting, explo18 ration, development, mining, milling, and processing of 

19 minerals, reclamation of the claimed lands, and uses rea20 sonably incident thereto. Except for the location fee and the 

21 maintenance fees in section 2324 of the Revised Statutes 

22 (30 U.S.C. 28), and the patent prices in sections 2325, 

23 2326, 2333, and 2337 of the Revised Statutes (30 U.S.C. 

24 29, 30, 37, and 42), no other fees or fair market value as25 sessments shall be applied to prospecting, exploration, devel-
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1 opment, mining, processing, or reclamation, and uses rea2 sonably incident thereto.’’. 

3 (c) PATENT REQUIREMENTS.—Section 2325 of the Re4 vised Statutes (30 U.S.C. 29) is amended—

5 (1) in the second sentence by striking ‘‘, or at 

6 any time’’ and inserting ‘‘shall include a processing 

7 fee of $2,500 for the first claim or site, and $50 for 

8 each additional claim contained therein, and at any 

9 time’’; and 

10 (2) in the fourth sentence by inserting ‘‘and if 

11 the applicant has complied with the law of discovery’’ 

12 after ‘‘publication’’. 

13 (d) MINING DISTRICT REGULATIONS BY MINERS.—

14 Section 2324 of the Revised Statutes (30 U.S.C. 28) is 

15 amended to read as follows: 

16 ‘‘SEC. 2324. (a) AUTHORITY TO MAKE REGULA17 TIONS.—The miners of each mining district may make reg18 ulations not in conflict with the laws of the United States, 

19 or with the laws of the State or Territory in which the dis20 trict is situated, governing the location, manner of record21 ing, amount of work necessary to hold possession of a min22 ing claim, subject to the following requirements: 

23 ‘‘(1) The location must be distinctly marked on 

24 the ground so that its boundaries can be readily 

25 traced. 
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1 ‘‘(2) All records of mining claims made after 

2 May 10, 1872, shall contain the name or names of the 

3 locators, the date of the location, and such a descrip4 tion of the claim or claims located by reference to 

5 some natural object or permanent monument as will 

6 identify the claim. 

7 ‘‘(b) RECORDATION OF MINING CLAIMS AND ABANDON8 MENT.—The locator of an unpatented lode or placer mining 

9 claim, mill site, or tunnel site located after October 21, 

10 1976, pursuant to the general mining law of the United 

11 States shall, within 90 days after the date of location of 

12 such claim, file in the office designated by the Secretary 

13 of the Interior a copy of the official record of the notice 

14 of location or certificate of location, including a description 

15 of the location of the mining claim or mill or tunnel site 

16 sufficient to locate the claimed lands on the ground. The 

17 failure to file such instruments as required by this sub18 section is deemed conclusively to constitute an abandonment 

19 of the mining claim, mill site, or tunnel site by the owner. 

20 Such recordation by itself shall not render valid any claim 

21 that would not be otherwise valid under applicable law. 

22 ‘‘(c) LOCATION FEE.—Notwithstanding any other pro23 vision of law, for every mining claim, mill site, or tunnel 

24 site located after the date of the enactment of this subsection 

25 pursuant to the general mining law of the United States, 
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1 the locator shall, at the time the location notice is recorded 

2 pursuant to subsection (b), pay a location fee of $100 per 

3 claim. This fee shall be in addition to the first year’s claim 

4 maintenance fee required by subsection (d). Payment of the 

5 location fee required by this subsection and the maintenance 

6 fee required by subsection (d) secures to the locator the right 

7 to use and occupy the public lands for purposes of the gen8 eral mining law of the United States. 

9 ‘‘(d) SCHEDULE OF CLAIM MAINTENANCE FEES.—(1) 

10 The holder of each unpatented mining claim, mill site, or 

11 tunnel site located pursuant to the general mining law of 

12 the United States on or after the date of the enactment of 

13 this subsection shall pay to the Secretary of the Interior, 

14 on or before September 1 of each year, a claim maintenance 

15 fee per claim. Except as provided in paragraph (2), such 

16 claim maintenance fee shall be paid in the following 

17 amounts: 

18 ‘‘(A) $35 per claim for each of the first through 

19 fifth maintenance years, beginning with the year the 

20 claim was recorded. 

21 ‘‘(B) $70 per claim for each of the sixth through 

22 tenth maintenance years. 

23 ‘‘(C) $125 per claim for each of the eleventh 

24 through fifteenth maintenance years. 
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1 ‘‘(D) $150 per claim for the sixteenth mainte2 nance year and each year thereafter. 

3 ‘‘(2) Notwithstanding any other provision of law, for 

4 each unpatented mining claim located after the date of en5 actment of this subsection pursuant to the general mining 

6 law of the United States from which minerals are produced, 

7 and in lieu of the fee otherwise required by paragraph (1), 

8 the holder shall pay to the Secretary of the Interior an an9 nual maintenance fee of $200 per claim. 

10 ‘‘(3) The holder of each unpatented mining claim, mill 

11 site, or tunnel site located pursuant to the general mining 

12 law of the United States before the date of enactment of 

13 this subsection shall pay to the Secretary of the Interior 

14 for such claim—

15 ‘‘(A) except as provided in subparagraph (B), 

16 the claim maintenance fee that applied before such 

17 date of enactment; or 

18 ‘‘(B) the claim maintenance fee that applies 

19 under paragraph (1) or (2), based on the number of 

20 years since the original location of the claim, if before 

21 the date the payment is due the claim holder—

22 ‘‘(i) notifies the Secretary; and 

23 ‘‘(ii) pays to the Secretary a transfer fee of 

24 $100. 
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1 ‘‘(e) ADJUSTMENT OF CLAIM MAINTENANCE FEES.—

2 Claim maintenance fees under subsection (d) shall not be 

3 subject to adjustment. 

4 ‘‘(f) WORK REQUIREMENT.—(1) The holder of each 

5 unpatented mining claim, mill site, or tunnel site located 

6 pursuant to the general mining law of the United States 

7 after the date of enactment of this subsection, and any hold8 er of a claim that has transferred such claim to the claim 

9 maintenance fee schedule under subsection (d), shall conduct 

10 physical evaluation and development of the claim or of any 

11 contiguous block of claims of which the claim is a part. 

12 Exploration and mining activities conducted pursuant to 

13 a notice, approved plan of operations, or, in the case of 

14 split estate lands, a comparable State or county notice or 

15 approval, demonstrates compliance with this section. 

16 ‘‘(2) If physical evaluation of the claim is not carried 

17 out in accordance with paragraph (1) before the end of the 

18 fifth, tenth, or fifteenth maintenance year (beginning with 

19 the maintenance year in which the claim is filed), respec20 tively, the claim holder shall be required to pay in the next 

21 maintenance year the location fee described in subsection 

22 (c), in addition to the annual claim maintenance fee re23 quired to be paid for the next maintenance year. 

24 ‘‘(g) WAIVER OF CLAIM MAINTENANCE FEE ADJUST25 MENTS AND WORK REQUIREMENT.—If a delay in meeting 
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1 the work requirements under subsection (f) is the result of 

2 pending administrative proceedings, rights-of-way disputes, 

3 or litigation concerning issuance or validity of any permit 

4 or authorization required under Federal, State, or local law 

5 for physical evaluation and development of the claim—

6 ‘‘(1) any increase in the claim maintenance fee 

7 that would otherwise apply under subsection (d) and 

8 the work requirements under subsection (f) shall be 

9 suspended for the claim; and 

10 ‘‘(2) claim maintenance fees required to be paid 

11 each year for the claim shall be the same as the fee 

12 that applied for the year in which the delay first oc13 curred, and no additional location fee will be owed. 

14 ‘‘(h) TIME OF PAYMENT.—The claim maintenance fee 

15 required under subsection (d) for any maintenance year 

16 shall be paid before the commencement of the maintenance 

17 year, except that, for the maintenance year in which the 

18 location is made the locator shall pay the claim mainte19 nance fee and the location fee imposed under subsection (c) 

20 at the time the location notice is recorded with the Bureau 

21 of Land Management. The Director of the Bureau of Land 

22 Management, after consultation with the Governor of Alas23 ka and by not later than 1 year after the date of enactment 

24 of this subsection, may establish a claim maintenance fee 
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1 filing date for Alaska claim holders that is not later than 

2 60 days after September 1. 

3 ‘‘(i) SMALL MINER CLAIM MAINTENANCE FEE.—(1) In 

4 the case of a claim for which the holder certifies in writing 

5 to the Secretary that, on the date the payment of any claim 

6 maintenance fee under this section was due, the claim hold7 er and all related parties held not more than 10 mining 

8 claims, mill sites, or tunnel sites, or any combination there9 of, on public lands—

10 ‘‘(A) the claim maintenance fee shall be $25 

11 per claim per year for the life of the claim or site 

12 held by the claim holder; and 

13 ‘‘(B) subsection (f) shall not apply. 

14 ‘‘(2) In this subsection: 

15 ‘‘(A) With respect to any claim holder, the term 

16 ‘related party’ means—

17 ‘‘(i) the spouse and dependent children (as 

18 defined in section 152 of the Internal Revenue 

19 Code of 1986 (26 U.S.C. 152), as in effect on the 

20 date of the enactment of this paragraph of the 

21 claim holder; and 

22 ‘‘(ii) a person who controls, is controlled by, 

23 or is under common control with the claim hold24 er. 
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1 ‘‘(B) The terms ‘control’, ‘controls’, and ‘con2 trolled’ include actual control, legal control, and the 

3 power to exercise control, through or by common di4 rectors, officers, stockholders, a voting trust, or a hold5 ing company or investment company, or any other 

6 means. 

7 ‘‘(j) FAILURE TO PAY.—(1) Failure to pay a claim 

8 maintenance fee or a location fee for an unpatented mining 

9 claim as required by this section shall subject an 

10 unpatented mining claim, mill site, or tunnel site to for11 feiture by the claim holder as provided in this subsection. 

12 ‘‘(2) The Secretary of the Interior shall provide the 

13 claim holder with notice of the failure and the opportunity 

14 to cure within 45 calendar days after the claim holder’s 

15 receipt of the notice. 

16 ‘‘(3) The claim holder must, within such 45-day pe17 riod, pay twice the amount of maintenance fee that would 

18 otherwise have been required to be timely paid. The Sec19 retary of the Interior shall specify the amount that must 

20 be paid in the notice under paragraph (2). 

21 ‘‘(4) Failure by the claim holder to make a timely and 

22 proper payment in the amount specified in the notice by 

23 the Secretary of the Interior, within 45 days after the claim 

24 holder’s receipt of the notice, shall constitute a forfeiture 
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1 of the mining claim, mill site, or tunnel site by the claim 

2 holder by operation of law. 

3 ‘‘(k) FAILURE OF CO-OWNER TO CONTRIBUTE.—Upon 

4 the failure of any one of several co-owners of a claim to 

5 contribute the co-owner’s proportion of any claim mainte6 nance fee required by this section, the co-owners who have 

7 paid the claim maintenance fee, at the expiration of the 

8 year in which any unpaid amount was due, may give such 

9 delinquent co-owner personal notice in writing or notice by 

10 publication in the newspaper of record for the county in 

11 which the land that is subject to the claim or mill site is 

12 located, at least once a week for 90 days. If at the expiration 

13 of such 90-day period such delinquent co-owner fails or re14 fuses to contribute the co-owner’s proportion of the claim 

15 maintenance fee required by this section, the co-owner’s in16 terest in the claim shall become the property of the other 

17 co-owners who have paid the claim maintenance fee. The 

18 co-owners who have assumed the interest in the claims shall 

19 notify the Secretary of the Interior within 30 days of the 

20 assumption. 

21 ‘‘(l) OIL SHALE CLAIMS SUBJECT TO CLAIM MAINTE22 NANCE FEES UNDER ENERGY POLICY ACT OF 1992.—This 

23 section shall not apply to any oil shale claim for which 

24 a fee is required to be paid under section 2511(e)(2) of the 

25 Energy Policy Act of 1992 (30 U.S.C. 242). 
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1 ‘‘(m) GENERAL MINING LAW OF THE UNITED STATES

2 DEFINED; RULE OF CONSTRUCTION.—(1) In this section 

3 the term ‘general mining law of the United States’ means 

4 the provisions of law codified in chapters 2, 12, 12A, 15, 

5 and 16 of title 30, United States Code, and in sections 161 

6 and 162 of such title. 

7 ‘‘(2) Subsections (b) and (c) shall be construed in ac8 cordance with judicial decisions under section 314 of the 

9 Federal Land Policy and Management Act of 1976, as in 

10 effect before the enactment of those subsections.’’. 

11 (e) CONFORMING AMENDMENTS.—

12 (1) The Federal Land Policy and Management 

13 Act of 1976 is amended—

14 (A) by striking section 314 (43 U.S.C. 

15 1744); 

16 (B) in the table of contents preceding title 

17 I by striking the item relating to section 314; 

18 and 

19 (C) in section 302(a) by striking ‘‘section 

20 314, section 603,’’ and inserting ‘‘section 603’’. 

21 (2) Section 22 of the Alaska Native Claims Set22 tlement Act is amended by striking ‘‘and section 314 

23 of the Federal Land Policy and Management Act of 

24 1976 (43 U.S.C. 1744)’’. 
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1 (3) Section 31(f) of the Mineral Leasing Act (30 

2 U.S.C. 188(f)) is amended by striking ‘‘section 314 of 

3 the Federal Land Policy and Management Act of 

4 1976 (43 U.S.C. 1744)’’ and inserting ‘‘subsections 

5 (b) and (c) of section 2320 of the Revised Statutes (30 

6 U.S.C. 23)’’. 

7 (4) Section 2511(e) of the Energy Policy Act of 

8 1992 (30 U.S.C. 242(e)) is amended by striking the 

9 last sentence. 

10 SEC. 6102. PATENTS FOR MINING OR MILL SITE CLAIMS. 

11 (a) REPEAL OF LIMITATION ON USE OF FUNDS FOR

12 APPLICATIONS FOR PATENT.—Section 408(a) of the De13 partment of the Interior, Environment, and Related Agen14 cies Appropriations Act, 2006 (Public Law 109–54) is re15 pealed. 

16 (b) PAYMENT AMOUNTS.—The Revised Statutes are 

17 amended—

18 (1) in section 2325 (30 U.S.C. 29) by striking 

19 ‘‘five dollars per acre’’ and inserting ‘‘$1,000 per acre 

20 or fair market value, whichever is greater’’; 

21 (2) in section 2326 (30 U.S.C. 30) by striking 

22 ‘‘five dollars per acre’’ and inserting ‘‘$1,000 per acre 

23 or fair market value, whichever is greater;’’; 

24 (3) in section 2333 (30 U.S.C. 37)—
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1 (A) by striking ‘‘five dollars per acre’’ and 

2 inserting ‘‘$1,000 per acre or fair market value, 

3 whichever is greater;’’; and 

4 (B) by striking ‘‘two dollars and fifty cents 

5 per acre’’ and inserting ‘‘$1,000 per acre or fair 

6 market value, whichever is greater’’; 

7 (4) in section 2337 (30 U.S.C. 42)—

8 (A) in subsection (a) by striking ‘‘made at 

9 the same rate’’ and all that follows through the 

10 end of that sentence and inserting ‘‘at the rate 

11 of $1,000 per acre or fair market value, which12 ever is greater.’’; and 

13 (B) in subsection (b) by striking ‘‘made at 

14 the rate’’ and all that follows through the end of 

15 that sentence and inserting ‘‘at the rate of $1,000 

16 per acre or fair market value, whichever is great17 er.’’; and 

18 (5) in section 2325 (30 U.S.C. 29) by adding at 

19 the end the following: ‘‘For purposes of this section 

20 and sections 2326, 2333, and 2337 of the Revised 

21 Statutes, fair market value for the patenting of min22 ing claims or mill sites shall be determined by ap23 praisals prepared by an appraiser certified or quali24 fied under applicable professional criteria or State 

25 law, in accordance with the Uniform Appraisal 
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1 Standards for Federal Land Acquisitions and the 

2 Uniform Standards of Professional Appraisal Prac3 tice, submitted by the applicant for a patent to the 

4 Secretary of the Interior upon application for patent, 

5 that is completed within 120 days prior to submission 

6 of the application for patent.’’. 

7 (c) MINERAL DEVELOPMENT WORK REQUIRE8 MENTS.—Section 2325 of the Revised Statutes (30 U.S.C. 

9 29) is amended—

10 (1) by striking ‘‘five hundred dollars’ ’’ and in11 serting ‘‘$7,500’’; and 

12 (2) by striking ‘‘labor has been expended’’ and 

13 inserting ‘‘mineral development work has been per14 formed’’. 

15 (d) PATENT APPLICANTS IN LIMBO.—If the holder of 

16 an unpatented mining claim or mill site submitted an ap17 plication for a mineral patent and paid the patent service 

18 charges required by regulation at the time the application 

19 was submitted, and the Secretary of the Interior did not 

20 complete all actions to process the application before April 

21 26, 1996, the holder of such claim may, at the holder’s elec22 tion, have such application processed under rules that ap23 plied before the date of the enactment of this Act. 

24 (e) ALTERNATIVE VALUABLE MINERAL DEPOSIT CRI25 TERIA.—Section 2325 of the Revised Statutes is further 
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1 amended by inserting ‘‘(a) MANNER FOR OBTAINING PAT2 ENT, GENERALLY.—’’ before the first sentence, and by add3 ing at the end the following: 

4 ‘‘(b) ALTERNATIVE VALUABLE MINERAL DEPOSIT CRI5 TERIA.—

6 ‘‘(1) CLAIMS SUBJECT TO ONGOING ACTIVI7 TIES.—The holder of an unpatented mining claim or 

8 mill site who is conducting mining activities that 

9 meet the definition of a mine under section 3(h) of the 

10 Federal Mine Safety and Health Act of 1972 (30 

11 U.S.C. 802(h)) and whose activities with respect to 

12 that claim or site are described in section 4 of such 

13 Act (30 U.S.C. 803) may receive a patent for any 

14 unpatented mining claims on which mining activities 

15 are occurring or any mill sites, within the boundaries 

16 of an approved plan of operations or a comparable 

17 State or county approval. Upon confirmation by the 

18 Secretary that minerals being mined are locatable in 

19 accordance with Federal law and that actual sales of 

20 minerals have taken place, all Federal lands within 

21 those boundaries are eligible for patent upon compli22 ance with this section and sections 2327 and 2329 of 

23 the Revised Statutes (30 U.S.C. 34, 35). 

24 ‘‘(2) DISCLOSED CLAIMS AND MILL SITES.—The 

25 holder of an unpatented mining claim or mill site 
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1 whose proven and probable reserves are publicly dis2 closed in compliance with the Securities Act of 1933 

3 (15 U.S.C. 77a) or the Securities Exchange Act of 

4 1934 (15 U.S.C. 78a) may receive a patent for any 

5 such unpatented mining claim containing such re6 serves or for any mill site within the boundaries of 

7 a plan of operations or a comparable State or county 

8 approval for such reserves. All Federal lands within 

9 those boundaries are eligible for patent upon compli10 ance with this section and sections 2327 and 2329 of 

11 the Revised Statutes (30 U.S.C. 34, 35). 

12 ‘‘(c) MINERAL EXAMINATIONS.—

13 ‘‘(1) IN GENERAL.—In order to process patent 

14 applications in a timely and responsible manner, 

15 upon the request of a patent applicant, the Secretary 

16 of the Interior shall allow the applicant to fund a 

17 qualified third-party examiner from a list main18 tained by the Bureau of Land Management to con19 duct a mineral examination of the mining claims or 

20 mill sites contained in a patent application as set 

21 forth in this section and sections 2333 and 2337 of 

22 the Revised Statutes (30 U.S.C. 37, 42). The Bureau 

23 of Land Management shall have the sole responsibility 

24 to maintain the list of qualified third-party exam25 iners. 
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•S 1932 EAH 

1 ‘‘(2) TRAINING.—The Director of the Bureau of 

2 Land Management shall provide training in the con3 duct of mineral examinations to qualified individ4 uals. The Director may charge fees to cover the costs 

5 of the training. 

6 ‘‘(3) QUALIFIED THIRD-PARTY EXAMINER DE7 FINED.—In this subsection the term ‘qualified third8 party examiner’ means a person who is a registered 

9 geologist or registered professional mining engineer li10 censed to practice within the State in which the 

11 claims are located. 

12 ‘‘(d) DISPOSITION OF PROCEEDS.—The gross proceeds 

13 of conveyances of land under this section and sections 2319, 

14 2330, 2332, 2333, and 2337 of the Revised Statutes (30 

15 U.S.C. 22, 36, 37, 38, 42) shall be used as follows: 

16 ‘‘(1) 10 percent shall be deposited into the Fed17 eral Energy and Mineral Resource Professional Devel18 opment Fund. 

19 ‘‘(2) 20 percent shall be available to the Sec20 retary of the Army for use, through the Corps of En21 gineers, for the Restoration of Abandoned Mine Sites 

22 Program and section 560 of the Water Resources De23 velopment Act of 1999. 

24 ‘‘(3) 70 percent shall be deposited into the Gen25 eral Fund of the Treasury. 
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•S 1932 EAH 

1 ‘‘(e) ISSUING PATENTS.—If no adverse claim has been 

2 filed with the register and the receiver of the proper land 

3 office at the expiration of the 60-day period beginning on 

4 the date of publication of the notice that an application 

5 for mineral patent has been filed under section 2325, 2333 

6 and 2337 of the Revised Statutes (30 U.S.C. 29, 37, 42), 

7 the Secretary shall issue the patent not later than 24 

8 months after the date on which the application for patent 

9 was filed. 

10 ‘‘(f) SMALL MINER PATENT ADJUDICATION AND MIN11 ERAL DEVELOPMENT WORK REQUIREMENTS.—The holder 

12 of 10 claims or less who applies for a mineral patent under 

13 this section or a direct purchase under section 2319 of the 

14 Revised Statutes (30 U.S.C. 22) shall pay one-fifth of the 

15 processing fees and perform one-fifth of the mineral develop16 ment work required under this section and section 2319 (30 

17 U.S.C. 22).’’. 

18 SEC. 6103. MINERAL EXAMINATIONS FOR MINING ON CER19 TAIN LANDS. 

20 Section 302 of the Federal Land Policy and Manage21 ment Act of 1976 (43 U.S.C. 1732) is amended by adding 

22 at the end the following: 

23 ‘‘(e) The Secretary shall not require a mineral exam24 ination report, otherwise required to be prepared under reg25 ulations promulgated pursuant to this Act, to approve a 
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•S 1932 EAH 

1 plan of operations under such regulations for mining 

2 claims and mill sites located on withdrawn lands if such 

3 mining claims, mill sites, and blocks of such mining claims 

4 and mill sites are contiguous to patented or unpatented 

5 mining claims or mill sites where mineral development ac6 tivities, including mining, have been conducted as author7 ized by law or regulation.’’. 

8 SEC. 6104. MINERAL DEVELOPMENT LANDS AVAILABLE FOR 

9 PURCHASE. 

10 Section 2319 of the Revised Statutes (30 U.S.C. 22) 

11 is amended—

12 (1) by inserting ‘‘(a) LANDS OPEN TO PUR13 CHASE BY CITIZENS.—’’ before the first sentence; and 

14 (2) by adding at the end the following: 

15 ‘‘(b) AVAILABILITY FOR PURCHASE.—Notwithstanding 

16 any other provision of law and in compliance with sub17 section (c), the Secretary of the Interior shall make mineral 

18 deposits and the lands that contain them, including lands 

19 in which the valuable mineral deposit has been depleted, 

20 available for purchase to facilitate sustainable economic de21 velopment. This subsection shall not apply with respect to 

22 any unit of the National Park System, National Wildlife 

23 Refuge System, National Wild and Scenic Rivers System, 

24 or National Trails System, or to any National Conservation 

25 Area, any National Recreation Area, any National Monu-
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1 ment, or any unit of the National Wilderness Preservation 

2 System. 

3 ‘‘(c) APPLICATION.—The holder of mining claims, mill 

4 sites, and blocks of such mining claims and mill sites con5 tiguous to patented or unpatented mining claims or mill 

6 sites where mineral development activities, including min7 ing, have been conducted as authorized by law or regulation 

8 and on which mineral development work has been per9 formed may apply to purchase Federal lands that are sub10 ject to the claims. The filing of the proper application shall 

11 include such processing fees as are required by section 2325 

12 of the Revised Statutes (30 U.S.C. 29). The applicant or 

13 applicants, or their predecessors must present evidence of 

14 mineral development work performed on the Federal lands 

15 identified and submitted for purchase. Mineral development 

16 work upon aggregation must average not less than $7,500 

17 per mining claim or mill site within the Federal lands 

18 identified and applied for. 

19 ‘‘(d) LAND SURVEYS.—For the purpose of this section, 

20 and notwithstanding section 2334 of the Revised Statutes 

21 (30 U.S.C. 39), land surveys of the Federal lands applied 

22 for shall be paid for by the applicant and shall be completed 

23 either by a land surveyor registered in the State where the 

24 land is situated, or by such a surveyor also designated by 

25 the Bureau of Land Management as a mineral surveyor, 
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•S 1932 EAH 

1 if such mineral surveyors are available, willing, and able 

2 to complete such surveys without delay at a cost comparable 

3 to the charges of ordinary registered land surveyors. 

4 ‘‘(e) DEADLINE FOR CONVEYANCE; PRICE.—Notwith5 standing any other provision of law, and not later than 

6 one year after the date of the approval of any survey re7 quired under subsection (d), the Secretary of the Interior 

8 shall convey to the applicant, in return for a payment of 

9 $1,000 per acre or fair market value, whichever is greater, 

10 all right, title, and interest in and to the Federal land, sub11 ject to valid existing rights and the terms and conditions 

12 of the Act of August 30, 1890 (26 Stat. 391). For purposes 

13 of this subsection, fair market value for mineral develop14 ment lands available for purchase shall be determined by 

15 appraisals prepared by an appraiser certified or qualified 

16 under applicable professional criteria or State law, in ac17 cordance with the Uniform Appraisal Standards for Fed18 eral Land Acquisitions and the Uniform Standards of Pro19 fessional Appraisal Practice, submitted by the applicant to 

20 the Secretary of the Interior upon application for purchase, 

21 that is completed within 120 days prior to submission of 

22 the application. Fair market value for the interest in the 

23 land owned by the United States shall be exclusive of, and 

24 without regard to, the mineral deposits in the land or the 

25 use of such land for mineral activities. 
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•S 1932 EAH 

1 ‘‘(f) ENVIRONMENTAL LIABILITY.—Notwithstanding 

2 any other Federal, State or local law, the United States 

3 shall not be responsible for—

4 ‘‘(1) investigating or disclosing the condition of 

5 any property to be conveyed under this section; and 

6 ‘‘(2) environmental remediation, waste manage7 ment, or environmental compliance activities arising 

8 from its ownership, occupancy, or management of 

9 land and interests therein conveyed under this section 

10 with respect to conditions existing at or on the land 

11 at the time of the conveyance. 

12 ‘‘(g) MINERAL DEVELOPMENT WORK DEFINED.—In 

13 this section the term ‘mineral development work’ means geo14 logic, geochemical or geophysical surveys; road building; ex15 ploration drilling, trenching, and exploratory sampling by 

16 any other means; construction of underground workings for 

17 the purpose of conducting exploration; mine development 

18 work; mineral production from underground or surface 

19 mines; environmental baseline studies; construction of envi20 ronmental protection and monitoring systems; environ21 mental reclamation; construction of power and water dis22 tribution facilities; engineering, metallurgical, geotechnical, 

23 and economic feasibility studies; land surveys; and any 

24 other work reasonably incident to mineral development.’’. 
543

•S 1932 EAH 

1 SEC. 6105. NATIONAL MINING AND MINERALS POLICY TO 

2 ENCOURAGE AND PROMOTE THE PRODUC3 TIVE SECOND USE OF LANDS. 

4 Section 101 of the Mining and Minerals Policy Act 

5 of 1970 (30 U.S.C. 21a) is amended—

6 (1) in the first sentence—

7 (A) in clause (2) by inserting ‘‘including 

8 through remining where appropriate’’ after 

9 ‘‘needs,’’; 

10 (B) in clause (3) by striking ‘‘and’’ after 

11 the comma at the end; and 

12 (C) by striking the period at the end and 

13 inserting the following: ‘‘, and (5) facilitate the 

14 productive second use of lands used for mining 

15 and energy production.’’; 

16 (2) in the second sentence by striking ‘‘oil shale 

17 and uranium’’ and inserting ‘‘oil shale, and ura18 nium, whether located onshore or offshore’’; and 

19 (3) in the third sentence—

20 (A) by striking ‘‘the Secretary of the Inte21 rior’’ and inserting ‘‘the head of each Federal de22 partment and of each independent agency’’; and 

23 (B) by striking ‘‘his’’. 
544

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1 SEC. 6106. REGULATIONS. 

2 The Secretary of the Interior shall issue final regula3 tions implementing this subtitle by not later than 180 days 

4 after the date of the enactment of this Act. 

5 SEC. 6107. PROTECTION OF NATIONAL PARKS AND WILDER6 NESS AREAS. 

7 Subject to valid existing rights, nothing in sections 

8 6202, 6203, 6204, 6205, and 6206 of this subtitle shall be 

9 construed as affecting any lands within the boundary of 

10 any unit of the National Park System, National Wildlife 

11 Refuge System, National Wild and Scenic Rivers System, 

12 or National Trails System, or any National Conservation 

13 Area, any National Recreation Area, any National Monu14 ment, or any unit of the National Wilderness Preservation 

15 System as of the date of the enactment of this Act. 

16 Subtitle B—Disposal of Public 

17 Lands 

18 CHAPTER 1—DISPOSAL OF CERTAIN 

19 PUBLIC LANDS IN NEVADA 

20 SEC. 6201. SHORT TITLE. 

21 This chapter may be cited as the ‘‘Northern Nevada 

22 Sustainable Development in Mining Act’’. 

23 SEC. 6202. DEFINITIONS. 

24 In this chapter: 

25 (1) CLAIMANT.—The term ‘‘Claimant’’ means 

26 Coeur Rochester, Inc. 
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•S 1932 EAH 

1 (2) COUNTY.—The term ‘‘County’’ means Per2 shing County, Nevada. 

3 (3) GENERAL MINING LAW.—The term ‘‘general 

4 mining law’’ means the provisions of law codified in 

5 chapters 2, 12, 12A, 15, and 16 of title 30, United 

6 States Code, and in sections 161 and 162 of such 

7 title. 

8 (4) SECRETARY.—The term ‘‘Secretary’’ means 

9 the Secretary of the Interior. 

10 SEC. 6203. LAND CONVEYANCE. 

11 (a) CONVEYANCE OF LAND.—Notwithstanding any 

12 other provision of law, and not later than 90 days after 

13 the date of the enactment of this Act, the Secretary shall 

14 convey to the Claimant, in return for a payment of $500 

15 per acre, all right, title, and interest, subject to the terms 

16 and conditions of subsection (c), in the approximately 7,000 

17 acres of Federal lands subject to Claimant’s mining claims 

18 maintained under the general mining law and depicted on 

19 the Rochester Sustainable Development Project map on file 

20 with the Committee on Resources of the House of Represent21 atives. 

22 (b) EXEMPTION FROM REVIEW, ETC.—Any convey23 ance of land under this chapter is not subject to review, 

24 consultation, or approval under any other Federal law. 

25 (c) TERMS AND CONDITIONS OF CONVEYANCE.—
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•S 1932 EAH 

1 (1) NO IMPACT ON LEGAL OBLIGATIONS.—Con2 veyance of the lands pursuant to subsection (a) shall 

3 not affect Claimant’s legal obligations to comply with 

4 applicable Federal mine closure or mine land rec5 lamation laws, or with any other applicable Federal 

6 or State requirement relating to closure of the Roch7 ester Mine and use of the land comprising such mine, 

8 including any requirement to prepare any environ9 mental impact statement under the National Envi10 ronmental Policy Act of 1969. Federal reclamation 

11 and closure obligations shall not be construed to re12 quire removal of infrastructure identified by Claim13 ant as being usable by a post-mining land use. 

14 (2) TITLE TO MATERIALS AND MINERALS.—Not15 withstanding any other provision of law, Claimant 

16 shall own and have title to all spent ore, waste rock 

17 and tailings, and other materials located on lands 

18 conveyed pursuant to subsection (a). 

19 (3) VALID EXISTING RIGHTS.—All lands con20 veyed pursuant to subsection (a) shall be subject to 

21 valid existing rights existing as of the date of transfer 

22 of title, and Claimant shall succeed to the rights and 

23 obligations of the United States with respect to any 

24 mining claim, mill site claim, lease, right-of-way, 
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1 permit, or other valid existing right to which the 

2 property is subject. 

3 (4) ENVIRONMENTAL LIABILITY.—Notwith4 standing any other Federal, State or local law, the 

5 United States shall not be responsible for—

6 (A) investigating or disclosing the condition 

7 of any property to be conveyed under this chap8 ter; and 

9 (B) environmental remediation, waste man10 agement, or environmental compliance activities 

11 arising from its ownership, occupancy, or man12 agement of land and interests therein conveyed 

13 under this chapter with respect to conditions ex14 isting at or on the land at the time of the con15 veyance. 

16 SEC. 6204. DISPOSITION OF PROCEEDS. 

17 The gross proceeds of conveyances of land under this 

18 chapter shall be used as follows: 

19 (1) Such sums as are necessary shall be used to 

20 cover 100 percent of the administrative costs, not to 

21 exceed $20,000, incurred by the Nevada State Office 

22 and the Winnemucca Field Office of the Bureau of 

23 Land Management in conducting the conveyance 

24 under this chapter. 
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1 (2) $500,000 shall be paid directly to the State 

2 of Nevada for use in the State’s abandoned mined 

3 land program. 

4 (3) $100,000 shall be paid directly to Pershing 

5 County, Nevada. 

6 (4) Proceeds remaining after the payments pur7 suant to paragraphs (1) through (3) shall be deposited 

8 in the general fund of the Treasury. 

9 CHAPTER 2—DISPOSAL OF CERTAIN 

10 PUBLIC LANDS IN IDAHO 

11 SEC. 6211. SHORT TITLE. 

12 This chapter may be cited as the ‘‘Central Idaho Sus13 tainable Development in Mining Act’’. 

14 SEC. 6212. DEFINITIONS. 

15 In this chapter: 

16 (1) CLAIMANT.—The term ‘‘Claimant’’ means 

17 TDS LLC, an affiliated company of L&W Stone Cor18 poration. 

19 (2) COUNTY.—The term ‘‘County’’ means Custer 

20 County, Idaho. 

21 (3) GENERAL MINING LAW.—The term ‘‘general 

22 mining law’’ means the provisions of law codified in 

23 chapters 2, 12A, 15, and 16 of title 30, United States 

24 Code, and in sections 161 and 162 of such title. 
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1 (4) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of the Interior. 

3 SEC. 6213. LAND CONVEYANCE. 

4 (a) CONVEYANCE OF LAND.—Notwithstanding any 

5 other provision of law, and not later than 90 days after 

6 the date of the enactment of this Act, the Secretary shall 

7 convey to the Claimant, in return for a payment of $1,000 

8 per acre, all right, title, and interest, subject to the terms 

9 and conditions of subsection (c), in the approximately 519.7 

10 acres of Federal lands subject to Claimant’s mining claims 

11 maintained under the general mining law and depicted as 

12 ‘‘proposed land exchange alignment’’ on the Central Idaho 

13 Sustainable Development Project map on file with the Com14 mittee on Resources of the House of Representatives. 

15 (b) EXEMPTION FROM REVIEW, ETC.—Any convey16 ance of land under this chapter is not subject to review, 

17 consultation, or approval under any other Federal law. 

18 (c) TERMS AND CONDITIONS OF CONVEYANCE.—

19 (1) TRANSFER OF FEE TITLE IN FEDERAL

20 LANDS.—Notwithstanding any other provision of law, 

21 full fee title in approximately 519.7 acres of Federal 

22 lands described in subsection (a) shall be transferred 

23 to Claimant as depicted as ‘‘proposed land exchange 

24 alignment’’ on the Central Idaho Sustainable Devel25 opment Project map. 
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•S 1932 EAH 

1 (2) VALID EXISTING RIGHTS.—All lands con2 veyed pursuant to subsection (a) shall be subject to 

3 valid existing rights existing as of the date of transfer 

4 of title, and Claimant shall succeed to the rights and 

5 obligations of the United States with respect to any 

6 mining claim, mill site claim, lease, right-of-way, 

7 permit, or other valid existing right to which the 

8 property is subject. 

9 (3) ENVIRONMENTAL LIABILITY.—Notwith10 standing any other Federal, State, or local law, the 

11 United States shall not be responsible for—

12 (A) investigating or disclosing the condition 

13 of any property to be conveyed under this chap14 ter; and 

15 (B) environmental remediation, waste man16 agement, or environmental compliance activities 

17 arising from its ownership, occupancy, or man18 agement of land and interests therein conveyed 

19 under this chapter with respect to conditions ex20 isting at or on the land at the time of the con21 veyance. 

22 SEC. 6214. DISPOSITION OF PROCEEDS. 

23 Within one year of the completion of the conveyance 

24 under this chapter, the gross proceeds of the conveyance 

25 shall be used as follows: 
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1 (1) Such sums as are necessary shall be used to 

2 cover 100 percent of the administrative costs, not to 

3 exceed $15,000, incurred by the Idaho State Office 

4 and the Challis Field Office of the Bureau of Land 

5 Management in conducting conveyances under this 

6 chapter. 

7 (2) $200,000 shall be paid directly to the State 

8 of Idaho for use in the State Parks program. 

9 (3) $200,000 shall be paid directly to Custer 

10 County, Idaho. 

11 (4) Proceeds remaining after the payments pur12 suant to paragraphs (1) through (3) shall be deposited 

13 in the general fund of the Treasury. 

14 Subtitle C—Oil Shale 

15 SEC. 6301. OIL SHALE AND TAR SANDS AMENDMENTS. 

16 (a) COMMERCIAL LEASING OF OIL SHALE AND TAR

17 SANDS.—Section 369(e) of the Energy Policy Act of 2005 

18 (Public Law 109–58) is amended to read as follows: 

19 ‘‘(e) COMMENCEMENT OF COMMERCIAL LEASING OF

20 OIL SHALE AND TAR SAND.—Not later than 365 days after 

21 publication of the final regulation required by subsection 

22 (d), the Secretary shall hold the first oil shale and tar sands 

23 lease sales under the regulation, offering for lease a min24 imum of 35 percent of the Federal lands that are geologi25 cally prospective for oil shale and tar sands within Colo-
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•S 1932 EAH 

1 rado, Utah, and Wyoming. The environmental impact 

2 statement developed in support of the commercial leasing 

3 program for oil shale and tar sands as required by sub4 section (c) is deemed to provide adequate environmental 

5 analysis for all oil shale and tar sands lease sales conducted 

6 within the first 10 years after promulgation of the regula7 tion, and such sales shall not be subject to further environ8 mental analysis.’’. 

9 (b) REPEAL OF REQUIREMENT TO ESTABLISH PAY10 MENTS.—Section 369(o) of the Energy Policy Act of 2005 

11 (Public Law 109–58; 119 Stat. 728; 42 U.S.C. 15927) is 

12 repealed. 

13 (c) TREATMENT OF REVENUES.—Section 21 of the 

14 Mineral Leasing Act (30 U.S.C. 241) is amended by adding 

15 at the end the following: 

16 ‘‘(e) REVENUES.—

17 ‘‘(1) IN GENERAL.—Notwithstanding the provi18 sions of section 35, all revenues received from and 

19 under an oil shale or tar sands lease shall be disposed 

20 of as provided in this subsection. 

21 ‘‘(2) ROYALTY RATES FOR COMMERCIAL

22 LEASES.—

23 ‘‘(A) INITIAL PRODUCTION.—For the first 

24 10 years after initial production under each oil 

25 shale or tar sands lease issued under the com-
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1 mercial leasing program established under sub2 section (d), the Secretary shall set the royalty 

3 rate at not less than 1 percent nor more than 3 

4 percent of the gross value of production. How5 ever, the initial production period royalty rate 

6 set by the Secretary shall not apply to produc7 tion occurring more than 15 years after the date 

8 of issuance of the lease. 

9 ‘‘(B) SUBSEQUENT PERIODS.—After the pe10 riods of time specified in subparagraph (A), the 

11 Secretary shall set the royalty rate on each oil 

12 shale or tar sands lease issued under the com13 mercial leasing program established under sub14 section (d) at not less than 6 percent nor more 

15 than 9 percent of the gross value of production. 

16 ‘‘(C) REDUCTION.—The Secretary shall re17 duce any royalty otherwise required to be paid 

18 under subparagraphs (A) and (B) under any oil 

19 shale or tar sands lease on a sliding scale based 

20 upon market price, with a 10 percent reduction 

21 if the monthly average price of NYMEX West 

22 Texas Intermediate crude oil at Cushing, Okla23 homa, (WTI) drops below $50 (in 2005 dollars) 

24 for the month in which the production is sold, 

25 and an 80 percent reduction if the monthly aver-
554

•S 1932 EAH 

1 age price of WTI drops below $30 (in 2005 dol2 lars) for the month in which the production is 

3 sold. 

4 ‘‘(3) DISPOSITION OF REVENUES.—

5 ‘‘(A) DEPOSIT.—The Secretary shall deposit 

6 into a separate account in the Treasury all reve7 nues derived from any oil shale or tar sands 

8 lease. 

9 ‘‘(B) ALLOCATIONS TO STATES AND LOCAL

10 POLITICAL SUBDIVISIONS.—The Secretary shall 

11 allocate 50 percent of the revenues deposited into 

12 the account established under subparagraph (A) 

13 to the State within the boundaries of which the 

14 leased lands are located, with a portion of that 

15 to be paid directly by the Secretary to the State’s 

16 local political subdivisions as provided in this 

17 paragraph. 

18 ‘‘(C) TRANSMISSION OF ALLOCATIONS.—

19 ‘‘(i) IN GENERAL.—Not later than the 

20 last business day of the month after the 

21 month in which the revenues were received, 

22 the Secretary shall transmit—

23 ‘‘(I) to each State two-thirds of 

24 such State’s allocations under subpara25 graph (B), and in accordance with 
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1 clauses (ii) and (iii) to certain county2 equivalent and municipal political 

3 subdivisions of such State a total of 

4 one-third of such State’s allocations 

5 under subparagraph (B), together with 

6 all accrued interest thereon; and 

7 ‘‘(II) the remaining balance of 

8 such revenues deposited into the ac9 count that are not allocated under sub10 paragraph (B), together with interest 

11 thereon, shall be transmitted to the 

12 miscellaneous receipts account of the 

13 Treasury, except that until a lease has 

14 been in production for 10 years 80 per15 cent of such remaining balance derived 

16 from a lease shall be paid in accord17 ance with subclause (I). 

18 ‘‘(ii) ALLOCATIONS TO CERTAIN COUN19 TY-EQUIVALENT POLITICAL SUBDIVISIONS.—

20 The Secretary shall under clause (i)(I) 

21 make equitable allocations of the revenues to 

22 county-equivalent political subdivisions that 

23 the Secretary determines are closely associ24 ated with the leasing and production of oil 
556

•S 1932 EAH 

1 shale and tar sands, under a formula that 

2 the Secretary shall determine by regulation. 

3 ‘‘(iii) ALLOCATIONS TO MUNICIPAL PO4 LITICAL SUBDIVISIONS.—The initial alloca5 tion to each county-equivalent political sub6 division under clause (ii) shall be further 

7 allocated to the county-equivalent political 

8 subdivision and any municipal political 

9 subdivisions located partially or wholly 

10 within the boundaries of the county-equiva11 lent political subdivision on an equitable 

12 basis under a formula that the Secretary 

13 shall determine by regulation. 

14 ‘‘(D) INVESTMENT OF DEPOSITS.—The de15 posits in the Treasury account established under 

16 this section shall be invested by the Secretary of 

17 the Treasury in securities backed by the full faith 

18 and credit of the United States having matu19 rities suitable to the needs of the account and 

20 yielding the highest reasonably available interest 

21 rates as determined by the Secretary of the 

22 Treasury. 

23 ‘‘(E) USE OF FUNDS.—A recipient of funds 

24 under this subsection may use the funds for any 

25 lawful purpose as determined by State law. 
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1 Funds allocated under this subsection to States 

2 and local political subdivisions may be used as 

3 matching funds for other Federal programs with4 out limitation. Funds allocated to local political 

5 subdivisions under this subsection may not be 

6 used in calculation of payments to such local po7 litical subdivisions under programs for payments 

8 in lieu of taxes or other similar programs. 

9 ‘‘(F) NO ACCOUNTING REQUIRED.—No re10 cipient of funds under this subsection shall be re11 quired to account to the Federal Government for 

12 the expenditure of such funds, except as otherwise 

13 may be required by law. 

14 ‘‘(4) DEFINITIONS.—In this subsection: 

15 ‘‘(A) COUNTY-EQUIVALENT POLITICAL SUB16 DIVISION.—The term ‘county-equivalent political 

17 subdivision’ means a political jurisdiction imme18 diately below the level of State government, in19 cluding a county, parish, borough in Alaska, 

20 independent municipality not part of a county, 

21 parish, or borough in Alaska, or other equivalent 

22 subdivision of a State. 

23 ‘‘(B) MUNICIPAL POLITICAL SUBDIVISION.—

24 The term ‘municipal political subdivision’ means 

25 a municipality located within and part of a 
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•S 1932 EAH 

1 county, parish, borough in Alaska, or other 

2 equivalent subdivision of a State.’’. 

3 Subtitle D—Sale and Conveyance of 

4 Federal Land 

5 SEC. 6401. COLLECTION OF RECEIPTS FROM THE SALE OF 

6 FEDERAL LANDS. 

7 (a) IN GENERAL.—Notwithstanding any other law, the 

8 Secretary shall make the lands described in subsection (b) 

9 available for immediate sale through a competitive sale 

10 process at fair market value. Requirements under the Na11 tional Environmental Policy Act of 1969 (42 U.S.C. 4321 

12 et seq.) shall not apply to the sale of lands under this sec13 tion. 

14 (b) LANDS DESCRIBED.—The lands referred to in sub15 section (a) are the following: 

16 (1) Poplar Point (Transfer and Conveyance of 

17 Properties in the District of Columbia, Map Number 

18 869/80460, Dated July 2005, p. 28 of 28). 

19 (2) U.S. Reservations 44, 45, 46, 47, 48 and 49 

20 (Map Number 869/80460, Dated July 2005, p. 13 of 

21 28). 

22 (3) U.S. Reservation 251 (Map Number 869/

23 80460, Dated July 2005, p. 14 of 28). 

24 (4) U.S. Reservation 8 (Map Number 869/80460, 

25 Dated July 2005, p. 15 of 28). 
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1 (5) U.S. Reservation 17A (Map Number 869/

2 80460, Dated July 2005, p. 20 of 28). 

3 (6) U.S. Reservation 484 (Map Number 869/

4 80460, Dated July 2005, p. 21 of 28). 

5 (7) U.S. Reservation 721, 722 and 723 (Map 

6 Number 869/80460, Dated July 2005, p. 25 of 28). 

7 (8) Certain land adjacent to Robert F. Kennedy 

8 Stadium Parking Lot (Transfer and Conveyance of 

9 Properties in the District of Columbia, Map Number 

10 869/80460, Dated July 2005, p. 26 of 28). 

11 (9) United States Reservation 243, 244, 245, and 

12 247 (Transfer and Conveyance of Properties in the 

13 District of Columbia, Map Number 869/80460, Dated 

14 July 2005, p. 22 of 28). 

15 The Secretary may retain from sale proceeds and spend 

16 without further appropriation up to $1,000,000 each year 

17 to implement land sales under this subsection, including 

18 hiring contractors and appraisers 

19 (c) POPLAR POINT.—

20 (1) RETENTION OF FUNDS.—The Secretary may 

21 retain $10,000,000 from funds received from the sale 

22 of land under subsection (b)(1) and spend such funds 

23 without further appropriations for the purposes of 

24 complying with subparagraph (2). 
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1 (2) CONTINUITY OF OPERATION.—Before the sale 

2 and development of land referred to in subparagraph 

3 (b)(1), the Secretary shall ensure that the existing fa4 cilities and related properties (including necessary 

5 easements and utilities related thereto) occupied or 

6 otherwise used by the National Park Service are ei7 ther withheld from any sale and remain in operation 

8 at its current location or will be relocated to suitable 

9 replacement facilities along the Anacostia River in 

10 the District of Columbia using funds made available 

11 by subparagraph (c)(1). 

12 (d) CONVEYANCE OF LANDS TO THE DISTRICT OF CO13 LUMBIA.—

14 (1) IN GENERAL.—Notwithstanding any other 

15 law, the Secretary shall immediately convey all right, 

16 title, and interest of the United States in the lands 

17 described in this subsection to the District of Colum18 bia upon enactment of this section. Requirements 

19 under the National Environmental Policy Act (42 

20 U.S.C. 4321 et seq.) shall not apply to the conveyance 

21 of lands under this subsection. 

22 (2) LANDS DESCRIBED.—The lands referred to in 

23 this subsection are as follows: 

24 (A) United States Reservation 128, 129, 

25 130, 298 and 299 (Transfer and Conveyance of 
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1 Properties in the District of Columbia, Map 

2 Number 869/80460, Dated July 2005, p. 23 of 

3 28). 

4 (B) United States Reservation 174 (Map 

5 Number 869/80460, Dated July 2005, p. 27 of 

6 28). 

7 (C) United States Reservation 277A and 

8 277C (Map Number 869/80460, Dated July 

9 2005, p. 16 of 28). 

10 (D) United States Reservation 343D and 

11 343E (Map Number 869/80460, Dated July 

12 2005, p. 24 or 28). 

13 (E) United States Reservation 404 (Map 

14 Number 869/80460, Dated July 2005, p. 12 of 

15 28). 

16 (F) United States Reservation 451 (Map 

17 Number 869/80460, Dated July 2005, p. 11 of 

18 28). 

19 (G) United States Reservation 470 (Trans20 fer and Conveyance of Properties in the District 

21 of Columbia, Map Number 869/80460, Dated 

22 July 2005, p. 17 of 28). 

23 (e) TRANSFER OF ADMINISTRATIVE JURISDICTION

24 OVER CERTAIN PROPERTIES.—
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1 (1) IN GENERAL.—Upon the date of the enact2 ment of this subsection, administrative jurisdiction 

3 over each of the following properties (owned by the 

4 United States and as depicted on listed maps) is here5 by transferred from the District of Columbia to the 

6 United States for administration by the Secretary of 

7 the Interior through the Director of the National Park 

8 Service: 

9 (A) An unimproved portion of Audubon 

10 Terrace Northwest, located east of Linnean Ave11 nue Northwest, that is within U.S. Reservation 

12 402 (Audubon Terrace, NW, Transfer and Con13 veyance of Properties in the District of Colum14 bia, Map Number 869/80460, Dated July 2005, 

15 p. 2 of 28) . 

16 (B) An unimproved portion of Barnaby 

17 Street Northwest, north of Aberfoyle Place North18 west, that abuts U.S. Reservation 545 (Barnaby 

19 Avenue, NW, Map Number 869/80460, Dated 

20 July 2005, p. 3 of 28). 

21 (C) A portion of Canal Street Southwest, 

22 and a portion of V Street Southwest, each which 

23 abuts U.S. Reservation (Canal and V Streets, 

24 SW, Map Number 869/80460, Dated July 2005, 

25 p. 3 of 28). 
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1 (D) Unimproved streets and alleys at Fort 

2 Circle Park located within the boundaries of 

3 U.S. Reservation 497 (Fort Circle Park, Map 

4 Number 869/80460, Dated July 2005, p. 5 of 

5 28)’’. 

6 (E) An unimproved portion of Western Ave7 nue Northwest, north of Oregon Avenue North8 west, that abuts U.S. Reservation 339 (Western 

9 Avenue, NW, Map Number 869/80460, Dated 

10 July 2005, p. 6 of 28). 

11 (F) An unimproved portion of 17th Street 

12 Northwest, south of Shepard Street Northwest, 

13 that abuts U.S. Reservation 339 (17th Street, 

14 NW, Map Number 869/80460, Dated July 2005, 

15 p. 7 of 28). 

16 (G) An unimproved portion of 30th Street 

17 Northwest, north of Broad Branch Road, North18 west, that is within the boundaries of U.S. Res19 ervation 515 (30th Street, NW, Map Number 

20 869/80460, Dated July 2005, p. 8 of 28). 

21 (H) Land over I–395 at Washington Ave22 nue, Southwest (Lands over I–395 at Wash23 ington Avenue, SW, Map Number 869/80460, 

24 Dated July 2005, p. 9 of 28). 
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1 (I) A portion of U.S. Reservation 357 at 

2 Whitehaven Parkway Northwest, previously 

3 transferred to the District of Columbia in con4 junction with the former proposal for a residence 

5 for the Mayor of the District of Columbia (Por6 tion of U.S. Reservation 357, Transfer and Con7 veyance of Properties in the District of Colum8 bia, Map Number 869/80460, Dated July 2005, 

9 p. 10 of 28). 

10 (2) USE OF CERTAIN PROPERTY FOR MEMO11 RIAL.—In the case of the property for which adminis12 trative jurisdiction is transferred under paragraph 

13 (1)(H), the property shall be used as the site for the 

14 establishment of a memorial to honor disabled vet15 erans of the United States Armed Forces authorized 

16 to be established by the Disabled Veterans’ LIFE Me17 morial Foundation by Public Law 106–348 (114 

18 Stat. 1358; 40 U.S.C. 8903 note), except that the Dis19 trict of Columbia shall retain administrative jurisdic20 tion over the subsurface area beneath the site for tun21 nels, walls, footings, and related facilities.
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1 TITLE VII—COMMITTEE ON 

2 TRANSPORTATION AND IN3 FRASTRUCTURE 

4 SEC. 7001. EXTENSION OF VESSEL TONNAGE DUTIES. 

5 (a) EXTENSION OF DUTIES.—Section 36 of the Act en6 titled ‘‘An Act to provide revenue, equalize duties and en7 courage the industries of the United States, and for other 

8 purposes’’, approved August 5, 1909 (36 Stat. 111; 46 

9 U.S.C. App. 121), is amended—

10 (1) by striking ‘‘9 cents per ton’’ and all that fol11 lows through ‘‘2002,’’ the first place it appears and 

12 inserting ‘‘4.5 cents per ton, not to exceed in the ag13 gregate 22.5 cents per ton in any one year, for fiscal 

14 years 2006 through 2010,’’; and 

15 (2) by striking ‘‘27 cents per ton’’ and all that 

16 follows through ‘‘2002,’’ and inserting ‘‘13.5 cents per 

17 ton, not to exceed 67.5 cents per ton per annum, for 

18 fiscal years 2006 through 2010,’’. 

19 (b) CONFORMING AMENDMENT.—The Act entitled ‘‘An 

20 Act concerning tonnage duties on vessels entering otherwise 

21 than by sea’’, approved March 8, 1910 (36 Stat. 234; 46 

22 U.S.C. App. 132), is amended by striking ‘‘9 cents per ton’’ 

23 and all that follows through ‘‘and 2 cents’’ and inserting 

24 ‘‘4.5 cents per ton, not to exceed in the aggregate 22.5 cents 
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1 per ton in any one year, for fiscal years 2006 through 2010, 

2 and 2 cents’’. 

3 (c) OFFSETTING RECEIPTS.—Increased tonnage 

4 charges collected as a result of the amendments made by 

5 subsection (a) shall be deposited in the general fund of the 

6 Treasury as offsetting receipts of the department in which 

7 the Coast Guard is operating and ascribed to Coast Guard 

8 activities related to marine safety, search and rescue, and 

9 aids to navigation.

10 TITLE VIII—COMMITTEE ON 

11 WAYS AND MEANS 

12 SEC. 8001. SHORT TITLE. 

13 This title may be cited as the ‘‘Work, Marriage, and 

14 Family Promotion Reconciliation Act of 2005’’. 

15 SEC. 8002. TABLE OF CONTENTS. 

16 The table of contents of this title is as follows:

Sec. 8001. Short title. 

Sec. 8002. Table of contents. 

Sec. 8003. References. 

Sec. 8004. Findings. 

Subtitle A—TANF 

Sec. 8101. Purposes. 

Sec. 8102. Family assistance grants. 

Sec. 8103. Promotion of family formation and healthy marriage. 

Sec. 8104. Supplemental grant for population increases in certain States. 

Sec. 8105. Elimination of high performance bonus. 

Sec. 8106. Contingency fund. 

Sec. 8107. Use of funds. 

Sec. 8108. Repeal of Federal loan for State welfare programs. 

Sec. 8109. Universal engagement and family self-sufficiency plan requirements. 

Sec. 8110. Work participation requirements. 

Sec. 8111. Maintenance of effort. 

Sec. 8112. Performance improvement. 

Sec. 8113. Data collection and reporting. 

Sec. 8114. Direct funding and administration by Indian tribes. 
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Sec. 8115. Research, evaluations, and national studies. 

Sec. 8116. Study by the Census Bureau. 

Sec. 8117. Definition of assistance. 

Sec. 8118. Technical corrections. 

Sec. 8119. Fatherhood program. 

Sec. 8120. State option to make TANF programs mandatory partners with onestop employment training centers. 

Sec. 8121. Sense of the Congress. 

Sec. 8122. Drug testing of applicants for and recipients of assistance. 

Subtitle B—Child care 

Sec. 8201. Entitlement funding. 

Subtitle C—Child support 

Sec. 8301. Federal matching funds for limited pass through of child support payments to families receiving TANF. 

Sec. 8302. State option to pass through all child support payments to families 

that formerly received TANF. 

Sec. 8303. Mandatory review and adjustment of child support orders for families 

receiving TANF. 

Sec. 8304. Mandatory fee for successful child support collection for family that 

has never received TANF. 

Sec. 8305. Report on undistributed child support payments. 

Sec. 8306. Decrease in amount of child support arrearage triggering passport denial. 

Sec. 8307. Use of tax refund intercept program to collect past-due child support 

on behalf of children who are not minors. 

Sec. 8308. Garnishment of compensation paid to veterans for service-connected 

disabilities in order to enforce child support obligations. 

Sec. 8309. Maintenance of technical assistance funding. 

Sec. 8310. Maintenance of Federal Parent Locator Service funding. 

Sec. 8311. Information comparisons with insurance data. 

Sec. 8312. Tribal access to the Federal Parent Locator Service. 

Sec. 8313. Reimbursement of Secretary’s costs of information comparisons and 

disclosure for enforcement of obligations on Higher Education 

Act loans and grants. 

Sec. 8314. Technical amendment relating to cooperative agreements between 

States and Indian tribes. 

Sec. 8315. State option to use statewide automated data processing and information retrieval system for interstate cases. 

Sec. 8316. Modification of rule requiring assignment of support rights as a condition of receiving TANF. 

Sec. 8317. State option to discontinue certain support assignments. 

Sec. 8318. Technical correction. 

Sec. 8319. Reduction in rate of reimbursement of child support administrative 

expenses. 

Sec. 8320. Incentive payments. 

Subtitle D—Child welfare 

Sec. 8401. Extension of authority to approve demonstration projects. 

Sec. 8402. Elimination of limitation on number of waivers. 

Sec. 8403. Elimination of limitation on number of States that may be granted 

waivers to conduct demonstration projects on same topic. 
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Sec. 8404. Elimination of limitation on number of waivers that may be granted 

to a single State for demonstration projects. 

Sec. 8405. Streamlined process for consideration of amendments to and extensions 

of demonstration projects requiring waivers. 

Sec. 8406. Availability of reports. 

Sec. 8407. Clarification of eligibility for foster care maintenance payments and 

adoption assistance. 

Sec. 8408. Clarification regarding Federal matching of certain administrative 

costs under the foster care maintenance payments program. 

Sec. 8409. Technical correction. 

Sec. 8410. Technical correction. 

Subtitle E—Supplemental security income 

Sec. 8501. Review of State agency blindness and disability determinations. 

Sec. 8502. Payment of certain lump sum benefits in installments under the Supplemental Security Income program. 

Subtitle F—State and local flexibility 

Sec. 8601. Program coordination demonstration projects. 

Subtitle G—Repeal of continued dumping and subsidy offset 

Sec. 8701. Repeal of continued dumping and subsidy offset. 

Subtitle H—Effective date 

Sec. 8801. Effective date.

1 SEC. 8003. REFERENCES. 

2 Except as otherwise expressly provided, wherever in 

3 this title an amendment or repeal is expressed in terms of 

4 an amendment to, or repeal of, a section or other provision, 

5 the amendment or repeal shall be considered to be made 

6 to a section or other provision of the Social Security Act. 

7 SEC. 8004. FINDINGS. 

8 The Congress makes the following findings: 

9 (1) The Temporary Assistance for Needy Fami10 lies (TANF) Program established by the Personal Re11 sponsibility and Work Opportunity Reconciliation 

12 Act of 1996 (Public Law 104–193) has succeeded in 
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1 moving families from welfare to work and reducing 

2 child poverty. 

3 (A) There has been a dramatic increase in 

4 the employment of current and former welfare 

5 recipients. The percentage of working recipients 

6 reached an all-time high in fiscal year 1999 and 

7 continued steady in fiscal years 2000 and 2001. 

8 In fiscal year 2003, 31.3 percent of adult recipi9 ents were counted as meeting the work participa10 tion requirements. All States but one met the 

11 overall participation rate standard in fiscal year 

12 2003, as did the District of Columbia and Puerto 

13 Rico. 

14 (B) Earnings for welfare recipients remain15 ing on the rolls have also increased significantly, 

16 as have earnings for female-headed households. 

17 The increases have been particularly large for the 

18 bottom 2 income quintiles, that is, those women 

19 who are most likely to be former or present wel20 fare recipients. 

21 (C) Welfare dependency has plummeted. As 

22 of June 2004, 1,969,909 families and 4,727,291 

23 individuals were receiving assistance. Accord24 ingly, the number of families in the welfare case25 load and the number of individuals receiving 
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1 cash assistance declined 55 percent and 61 per2 cent, respectively, since the enactment of TANF. 

3 (D) The child poverty rate continued to de4 cline between 1996 and 2003, falling 14 percent 

5 from 20.5 to 17.6 percent. Child poverty rates for 

6 African-American and Hispanic children have 

7 also fallen dramatically during the past 7 years. 

8 (2) As a Nation, we have made substantial 

9 progress in reducing teen pregnancies and births, 

10 slowing increases in nonmarital childbearing, and 

11 improving child support collections and paternity es12 tablishment. 

13 (A) The birth rate to teenagers declined 30 

14 percent from its high in 1991 to 2002. The 2002 

15 teenage birth rate of 43.0 per 1,000 women aged 

16 15–19 is the lowest recorded birth rate for teen17 agers. 

18 (B) During the period from 1991 through 

19 2001, teenage birth rates fell in all States and 

20 the District of Columbia, Puerto Rico, Guam, 

21 and the Virgin Islands. Declines also have 

22 spanned age, racial, and ethnic groups. There 

23 has been success in lowering the birth rate for 

24 both younger and older teens. The birth rate for 

25 those 15–17 years of age has declined 40 percent 
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1 since 1991, and the rate for those 18 and 19 has 

2 declined 23 percent. The rate for African Amer3 ican teens—until recently the highest—has de4 clined the most—42 percent from 1991 through 

5 2002. 

6 (C) Since the enactment of the Personal Re7 sponsibility and Work Opportunity Reconcili8 ation Act of 1996, child support collections with9 in the child support enforcement system have 

10 grown every year, increasing from 

11 $12,000,000,000 in fiscal year 1996 to over 

12 $21,000,000,000 in fiscal year 2003. The number 

13 of paternities established or acknowledged in fis14 cal year 2003 (over 1,500,000) includes a more 

15 than 100 percent increase through in-hospital ac16 knowledgement programs—862,043 in 2003 com17 pared to 324,652 in 1996. Child support collec18 tions were made in nearly 8,000,000 cases in fis19 cal year 2003, significantly more than the al20 most 4,000,000 cases having a collection in 1996. 

21 (3) The Personal Responsibility and Work Op22 portunity Reconciliation Act of 1996 gave States 

23 great flexibility in the use of Federal funds to develop 

24 innovative programs to help families leave welfare 
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1 and begin employment and to encourage the forma2 tion of 2-parent families. 

3 (A) Total Federal and State TANF expendi4 tures in fiscal year 2003 were $26,300,000,000, 

5 up from $25,400,000,000 in fiscal year 2002 and 

6 $22,600,000,000 in fiscal year 1999. This in7 creased spending is attributable to significant 

8 new investments in supportive services in the 

9 TANF program, such as child care and activities 

10 to support work. 

11 (B) Since the welfare reform effort began 

12 there has been a dramatic increase in work par13 ticipation (including employment, community 

14 service, and work experience) among welfare re15 cipients, as well as an unprecedented reduction 

16 in the caseload because recipients have left wel17 fare for work. 

18 (C) States are making policy choices and 

19 investment decisions best suited to the needs of 

20 their citizens. 

21 (i) To expand aid to working families, 

22 almost all States disregard a portion of a 

23 family’s earned income when determining 

24 benefit levels. 
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1 (ii) Most States increased the limits on 

2 countable assets above the former Aid to 

3 Families with Dependent Children (AFDC) 

4 program. Every State has increased the ve5 hicle asset level above the prior AFDC limit 

6 for a family’s primary automobile. 

7 (iii) States are experimenting with 

8 programs to promote marriage and pater9 nal involvement. Over half of the States 

10 have eliminated restrictions on 2-parent 

11 families. Many States use TANF, child sup12 port, or State funds to support community13 based activities to help fathers become more 

14 involved in their children’s lives or strength15 en relationships between mothers and fa16 thers. 

17 (4) However, despite this success, there is still 

18 progress to be made. Policies that support and pro19 mote more work, strengthen families, and enhance 

20 State flexibility are necessary to continue to build on 

21 the success of welfare reform. 

22 (A) Significant numbers of welfare recipi23 ents still are not engaged in employment-related 

24 activities. While all States have met the overall 

25 work participation rates required by law, in an 
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1 average month, only 41 percent of all families 

2 with an adult participated in work activities 

3 that were countable toward the State’s participa4 tion rate. In fiscal year 2003, four jurisdictions 

5 failed to meet the more rigorous 2-parent work 

6 requirements, and 25 jurisdictions (States and 

7 territories) are not subject to the 2-parent re8 quirements, most because they moved their 2-par9 ent cases to separate State programs where they 

10 are not subject to a penalty for failing the 2-par11 ent rates. 

12 (B) In 2002, 34 percent of all births in the 

13 U.S. were to unmarried women. And, with fewer 

14 teens entering marriage, the proportion of births 

15 to unmarried teens has increased dramatically 

16 (80 percent in 2002 versus 30 percent in 1970). 

17 The negative consequences of out-of-wedlock birth 

18 on the mother, the child, the family, and society 

19 are well documented. These include increased 

20 likelihood of welfare dependency, increased risks 

21 of low birth weight, poor cognitive development, 

22 child abuse and neglect, and teen parenthood, 

23 and decreased likelihood of having an intact 

24 marriage during adulthood. 
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1 (C) There has been a dramatic rise in co2 habitation as marriages have declined. It is esti3 mated that 40 percent of children are expected to 

4 live in a cohabiting-parent family at some point 

5 during their childhood. Children in single-parent 

6 households and cohabiting-parent households are 

7 at much higher risk of child abuse than children 

8 in intact married families. 

9 (D) Children who live apart from their bio10 logical fathers, on average, are more likely to be 

11 poor, experience educational, health, emotional, 

12 and psychological problems, be victims of child 

13 abuse, engage in criminal behavior, and become 

14 involved with the juvenile justice system than 

15 their peers who live with their married, biologi16 cal mother and father. A child living with a sin17 gle mother is nearly 5 times as likely to be poor 

18 as a child living in a married-couple family. In 

19 2003, in married-couple families, the child pov20 erty rate was 8.6 percent, and in households 

21 headed by a single mother the poverty rate was 

22 41.7 percent. 

23 (5) Therefore, it is the sense of the Congress that 

24 increasing success in moving families from welfare to 

25 work, as well as in promoting healthy marriage and 
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1 other means of improving child well-being, are very 

2 important Government interests and the policy con3 tained in part A of title IV of the Social Security Act 

4 (as amended by this title) is intended to serve those 

5 ends. 

6 Subtitle A—TANF 

7 SEC. 8101. PURPOSES. 

8 Section 401(a) (42 U.S.C. 601(a)) is amended—

9 (1) in the matter preceding paragraph (1), by 

10 striking ‘‘increase’’ and inserting ‘‘improve child well11 being by increasing’’; 

12 (2) in paragraph (1), by inserting ‘‘and serv13 ices’’ after ‘‘assistance’’; 

14 (3) in paragraph (2), by striking ‘‘parents on 

15 government benefits’’ and inserting ‘‘families on gov16 ernment benefits and reduce poverty’’; and 

17 (4) in paragraph (4), by striking ‘‘two-parent 

18 families’’ and inserting ‘‘healthy, 2-parent married 

19 families, and encourage responsible fatherhood’’. 

20 SEC. 8102. FAMILY ASSISTANCE GRANTS. 

21 (a) EXTENSION OF AUTHORITY.—Section 403(a)(1)(A) 

22 (42 U.S.C. 603(a)(1)(A)) is amended—

23 (1) by striking ‘‘1996, 1997, 1998, 1999, 2000, 

24 2001, 2002, and 2003’’ and inserting ‘‘2006 through 

25 2010’’; and 
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1 (2) by inserting ‘‘payable to the State for the fis2 cal year’’ before the period. 

3 (b) STATE FAMILY ASSISTANCE GRANT.—Section 

4 403(a)(1)(C) (42 U.S.C. 603(a)(1)(C)) is amended by strik5 ing ‘‘fiscal year 2003’’ and inserting ‘‘each of fiscal years 

6 2006 through 2010’’. 

7 (c) MATCHING GRANTS FOR THE TERRITORIES.—Sec8 tion 1108(b)(2) (42 U.S.C. 1308(b)(2)) is amended by strik9 ing ‘‘1997 through 2003’’ and inserting ‘‘2006 through 

10 2010’’. 

11 SEC. 8103. PROMOTION OF FAMILY FORMATION AND 

12 HEALTHY MARRIAGE. 

13 (a) STATE PLANS.—Section 402(a)(1)(A) (42 U.S.C. 

14 602(a)(1)(A)) is amended by adding at the end the fol15 lowing: 

16 ‘‘(vii) Encourage equitable treatment of 

17 married, 2-parent families under the pro18 gram referred to in clause (i).’’. 

19 (b) HEALTHY MARRIAGE PROMOTION GRANTS; RE20 PEAL OF BONUS FOR REDUCTION OF ILLEGITIMACY

21 RATIO.—Section 403(a)(2) (42 U.S.C. 603(a)(2)) is amend22 ed to read as follows: 

23 ‘‘(2) HEALTHY MARRIAGE PROMOTION

24 GRANTS.—
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1 ‘‘(A) AUTHORITY.—The Secretary shall 

2 award competitive grants to States, territories, 

3 and tribal organizations for not more than 50 

4 percent of the cost of developing and imple5 menting innovative programs to promote and 

6 support healthy, married, 2-parent families. 

7 ‘‘(B) HEALTHY MARRIAGE PROMOTION AC8 TIVITIES.—Funds provided under subparagraph 

9 (A) shall be used to support any of the following 

10 programs or activities: 

11 ‘‘(i) Public advertising campaigns on 

12 the value of marriage and the skills needed 

13 to increase marital stability and health. 

14 ‘‘(ii) Education in high schools on the 

15 value of marriage, relationship skills, and 

16 budgeting. 

17 ‘‘(iii) Marriage education, marriage 

18 skills, and relationship skills programs, that 

19 may include parenting skills, financial 

20 management, conflict resolution, and job 

21 and career advancement, for non-married 

22 pregnant women and non-married expect23 ant fathers. 

24 ‘‘(iv) Pre-marital education and mar25 riage skills training for engaged couples and 
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1 for couples or individuals interested in 

2 marriage. 

3 ‘‘(v) Marriage enhancement and mar4 riage skills training programs for married 

5 couples. 

6 ‘‘(vi) Divorce reduction programs that 

7 teach relationship skills. 

8 ‘‘(vii) Marriage mentoring programs 

9 which use married couples as role models 

10 and mentors in at-risk communities. 

11 ‘‘(viii) Programs to reduce the dis12 incentives to marriage in means-tested aid 

13 programs, if offered in conjunction with 

14 any activity described in this subpara15 graph. 

16 ‘‘(C) VOLUNTARY PARTICIPATION.—

17 ‘‘(i) IN GENERAL.—Participation in a 

18 program or activity described in any of 

19 clauses (iii) through (viii) of subparagraph 

20 (B) shall be voluntary. 

21 ‘‘(ii) REQUIREMENTS FOR RECEIPT OF

22 FUNDS.—The Secretary may not award a 

23 grant under this paragraph to an applicant 

24 for the grant, unless—
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1 ‘‘(I) the application for the grant 

2 describes—

3 ‘‘(aa) how the programs or 

4 activities proposed in the applica5 tion will address, as appropriate, 

6 issues of domestic violence; and 

7 ‘‘(bb) what the applicant will 

8 do, to the extent relevant, to en9 sure that participation in the pro10 grams or activities is voluntary, 

11 and to inform potential partici12 pants that their participation is 

13 voluntary; and 

14 ‘‘(II) the applicant agrees that, as 

15 a condition of receipt of the grant, the 

16 applicant will consult with experts in 

17 domestic violence or relevant commu18 nity domestic violence coalitions in de19 veloping the programs and activities 

20 funded with the grant. 

21 ‘‘(D) APPROPRIATION.—Out of any money 

22 in the Treasury of the United States not other23 wise appropriated, there are appropriated for 

24 each of fiscal years 2006 through 2010 

25 $100,000,000 for grants under this paragraph.’’. 
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1 (c) COUNTING OF SPENDING ON NON-ELIGIBLE FAMI2 LIES TO PREVENT AND REDUCE INCIDENCE OF OUT-OF3 WEDLOCK BIRTHS, ENCOURAGE FORMATION AND MAINTE4 NANCE OF HEALTHY, 2-PARENT MARRIED FAMILIES, OR

5 ENCOURAGE RESPONSIBLE FATHERHOOD.—Section 

6 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)) is amended by 

7 adding at the end the following: 

8 ‘‘(V) COUNTING OF SPENDING ON

9 NON-ELIGIBLE FAMILIES TO PREVENT

10 AND REDUCE INCIDENCE OF OUT-OF11 WEDLOCK BIRTHS, ENCOURAGE FORMA12 TION AND MAINTENANCE OF HEALTHY, 

13 2-PARENT MARRIED FAMILIES, OR EN14 COURAGE RESPONSIBLE FATHER15 HOOD.—The term ‘qualified State ex16 penditures’ includes the total expendi17 tures by the State during the fiscal 

18 year under all State programs for a 

19 purpose described in paragraph (3) or 

20 (4) of section 401(a).’’. 

21 SEC. 8104. SUPPLEMENTAL GRANT FOR POPULATION IN22 CREASES IN CERTAIN STATES. 

23 Section 403(a)(3) (42 U.S.C. 603(a)(3)) is amended—

24 (1) in subparagraph (E)—
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1 (A) by striking ‘‘1998, 1999, 2000, and 

2 2001’’ and inserting ‘‘2006 through 2009’’; and 

3 (B) by striking ‘‘, in a total amount not to 

4 exceed $800,000,000’’; 

5 (2) in subparagraph (G), by striking ‘‘2001’’ 

6 and inserting ‘‘2009’’; and 

7 (3) by striking subparagraph (H) and inserting 

8 the following: 

9 ‘‘(H) FURTHER PRESERVATION OF GRANT

10 AMOUNTS.—A State that was a qualifying State 

11 under this paragraph for fiscal year 2004 or any 

12 prior fiscal year shall be entitled to receive from 

13 the Secretary for each of fiscal years 2006 

14 through 2009 a grant in an amount equal to the 

15 amount required to be paid to the State under 

16 this paragraph for the most recent fiscal year for 

17 which the State was a qualifying State.’’. 

18 SEC. 8105. ELIMINATION OF HIGH PERFORMANCE BONUS. 

19 Section 403(a) (42 U.S.C. 603(a)) is amended by strik20 ing paragraph (4). 

21 SEC. 8106. CONTINGENCY FUND. 

22 (a) DEPOSITS INTO FUND.—Section 403(b)(2) (42 

23 U.S.C. 603(b)(2)) is amended—
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•S 1932 EAH 

1 (1) by striking ‘‘1997, 1998, 1999, 2000, 2001, 

2 2002, and 2003’’ and inserting ‘‘2006 through 2010’’; 

3 and 

4 (2) by striking all that follows ‘‘$2,000,000,000’’ 

5 and inserting a period. 

6 (b) GRANTS.—Section 403(b)(3)(C)(ii) (42 U.S.C. 

7 603(b)(3)(C)(ii)) is amended by striking ‘‘fiscal years 1997 

8 through 2006’’ and inserting ‘‘fiscal years 2006 through 

9 2010’’. 

10 (c) DEFINITION OF NEEDY STATE.—Clauses (i) and 

11 (ii) of section 403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are 

12 amended by inserting after ‘‘1996’’ the following: ‘‘and the 

13 Food Stamp Act of 1977 as in effect during the cor14 responding 3-month period in the fiscal year preceding such 

15 most recently concluded 3-month period’’. 

16 (d) ANNUAL RECONCILIATION: FEDERAL MATCHING

17 OF STATE EXPENDITURES ABOVE ‘‘MAINTENANCE OF EF18 FORT’’ LEVEL.—Section 403(b)(6) (42 U.S.C. 603(b)(6)) is 

19 amended—

20 (1) in subparagraph (A)(ii)—

21 (A) by adding ‘‘and’’ at the end of subclause 

22 (I); 

23 (B) by striking ‘‘; and’’ at the end of sub24 clause (II) and inserting a period; and 

25 (C) by striking subclause (III); 
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1 (2) in subparagraph (B)(i)(II), by striking all 

2 that follows ‘‘section 409(a)(7)(B)(iii))’’ and inserting 

3 a period; 

4 (3) by amending subparagraph (B)(ii)(I) to read 

5 as follows: 

6 ‘‘(I) the qualified State expendi7 tures (as defined in section 

8 409(a)(7)(B)(i)) for the fiscal year; 

9 plus’’; and 

10 (4) by striking subparagraph (C). 

11 (e) CONSIDERATION OF CERTAIN CHILD CARE EX12 PENDITURES IN DETERMINING STATE COMPLIANCE WITH

13 CONTINGENCY FUND MAINTENANCE OF EFFORT REQUIRE14 MENT.—Section 409(a)(10) (42 U.S.C. 609(a)(10)) is 

15 amended—

16 (1) by striking ‘‘(other than the expenditures de17 scribed in subclause (I)(bb) of that paragraph)) under 

18 the State program funded under this part’’ and in19 serting a close parenthesis; and 

20 (2) by striking ‘‘excluding any amount expended 

21 by the State for child care under subsection (g) or (i) 

22 of section 402 (as in effect during fiscal year 1994) 

23 for fiscal year 1994,’’. 

24 (f) EFFECTIVE DATE.—The amendments made by sub25 sections (c), (d), and (e) shall take effect on October 1, 2007. 
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1 SEC. 8107. USE OF FUNDS. 

2 (a) GENERAL RULES.—Section 404(a)(2) (42 U.S.C. 

3 604(a)(2)) is amended by striking ‘‘in any manner that’’ 

4 and inserting ‘‘for any purposes or activities for which’’. 

5 (b) TREATMENT OF INTERSTATE IMMIGRANTS.—

6 (1) STATE PLAN PROVISION.—Section 

7 402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)) is amended by 

8 striking clause (i) and redesignating clauses (ii) 

9 through (iv) as clauses (i) through (iii), respectively. 

10 (2) USE OF FUNDS.—Section 404 (42 U.S.C. 

11 604) is amended by striking subsection (c). 

12 (c) INCREASE IN AMOUNT TRANSFERABLE TO CHILD

13 CARE.—Section 404(d)(1) (42 U.S.C. 604(d)(1)) is amend14 ed by striking ‘‘30’’ and inserting ‘‘50’’. 

15 (d) INCREASE IN AMOUNT TRANSFERABLE TO TITLE

16 XX PROGRAMS.—Section 404(d)(2)(B) (42 U.S.C. 

17 604(d)(2)(B)) is amended to read as follows: 

18 ‘‘(B) APPLICABLE PERCENT.—For purposes 

19 of subparagraph (A), the applicable percent is 10 

20 percent for fiscal year 2006 and each succeeding 

21 fiscal year.’’. 

22 (e) CLARIFICATION OF AUTHORITY OF STATES TO USE

23 TANF FUNDS CARRIED OVER FROM PRIOR YEARS TO PRO24 VIDE TANF BENEFITS AND SERVICES.—Section 404(e) (42 

25 U.S.C. 604(e)) is amended to read as follows: 
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•S 1932 EAH 

1 ‘‘(e) AUTHORITY TO CARRYOVER OR RESERVE CER2 TAIN AMOUNTS FOR BENEFITS OR SERVICES OR FOR FU3 TURE CONTINGENCIES.—

4 ‘‘(1) CARRYOVER.—A State or tribe may use a 

5 grant made to the State or tribe under this part for 

6 any fiscal year to provide, without fiscal year limita7 tion, any benefit or service that may be provided 

8 under the State or tribal program funded under this 

9 part. 

10 ‘‘(2) CONTINGENCY RESERVE.—A State or tribe 

11 may designate any portion of a grant made to the 

12 State or tribe under this part as a contingency re13 serve for future needs, and may use any amount so 

14 designated to provide, without fiscal year limitation, 

15 any benefit or service that may be provided under the 

16 State or tribal program funded under this part. If a 

17 State or tribe so designates a portion of such a grant, 

18 the State shall, on an annual basis, include in its re19 port under section 411(a) the amount so designated.’’. 

20 SEC. 8108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE 

21 PROGRAMS. 

22 (a) REPEAL.—Effective as of October 1, 2006, section 

23 406 (42 U.S.C. 606) is repealed. 

24 (b) CONFORMING AMENDMENTS.—
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•S 1932 EAH 

1 (1) Section 409(a) (42 U.S.C. 609(a)) is amend2 ed by striking paragraph (6). 

3 (2) Section 412 (42 U.S.C. 612) is amended by 

4 striking subsection (f) and redesignating subsections 

5 (g) through (i) as subsections (f) through (h), respec6 tively. 

7 (3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is 

8 amended by striking ‘‘406,’’. 

9 SEC. 8109. UNIVERSAL ENGAGEMENT AND FAMILY SELF10 SUFFICIENCY PLAN REQUIREMENTS. 

11 (a) MODIFICATION OF STATE PLAN REQUIREMENTS.—

12 Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended 

13 by striking clauses (ii) and (iii) and inserting the following: 

14 ‘‘(ii) Require a parent or caretaker re15 ceiving assistance under the program to en16 gage in work or alternative self-sufficiency 

17 activities (as defined by the State), con18 sistent with section 407(e)(2). 

19 ‘‘(iii) Require families receiving assist20 ance under the program to engage in activi21 ties in accordance with family self-suffi22 ciency plans developed pursuant to section 

23 408(b).’’. 

24 (b) ESTABLISHMENT OF FAMILY SELF-SUFFICIENCY

25 PLANS.—
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•S 1932 EAH 

1 (1) IN GENERAL.—Section 408(b) (42 U.S.C. 

2 608(b)) is amended to read as follows: 

3 ‘‘(b) FAMILY SELF-SUFFICIENCY PLANS.—

4 ‘‘(1) IN GENERAL.—A State to which a grant is 

5 made under section 403 shall—

6 ‘‘(A) assess, in the manner deemed appro7 priate by the State, the skills, prior work experi8 ence, and employability of each work-eligible in9 dividual (as defined in section 407(b)(2)(C)) re10 ceiving assistance under the State program fund11 ed under this part; 

12 ‘‘(B) establish for each family that includes 

13 such an individual, in consultation as the State 

14 deems appropriate with the individual, a self15 sufficiency plan that specifies appropriate activi16 ties described in the State plan submitted pursu17 ant to section 402, including direct work activi18 ties as appropriate designed to assist the family 

19 in achieving their maximum degree of self-suffi20 ciency, and that provides for the ongoing partici21 pation of the individual in the activities; 

22 ‘‘(C) require, at a minimum, each such in23 dividual to participate in activities in accord24 ance with the self-sufficiency plan; 
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•S 1932 EAH 

1 ‘‘(D) monitor the participation of each such 

2 individual in the activities specified in the self3 sufficiency plan, and regularly review the 

4 progress of the family toward self-sufficiency; 

5 ‘‘(E) upon such a review, revise the self-suf6 ficiency plan and activities as the State deems 

7 appropriate. 

8 ‘‘(2) TIMING.—The State shall comply with 

9 paragraph (1) with respect to a family—

10 ‘‘(A) in the case of a family that, as of Oc11 tober 1, 2005, is not receiving assistance from 

12 the State program funded under this part, not 

13 later than 60 days after the family first receives 

14 assistance on the basis of the most recent appli15 cation for the assistance; or 

16 ‘‘(B) in the case of a family that, as of such 

17 date, is receiving the assistance, not later than 

18 12 months after the date of enactment of this 

19 subsection. 

20 ‘‘(3) STATE DISCRETION.—A State shall have 

21 sole discretion, consistent with section 407, to define 

22 and design activities for families for purposes of this 

23 subsection, to develop methods for monitoring and re24 viewing progress pursuant to this subsection, and to 

25 make modifications to the plan as the State deems 
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1 appropriate to assist the individual in increasing 

2 their degree of self-sufficiency. 

3 ‘‘(4) RULE OF INTERPRETATION.—Nothing in 

4 this part shall preclude a State from—

5 ‘‘(A) requiring participation in work and 

6 any other activities the State deems appropriate 

7 for helping families achieve self-sufficiency and 

8 improving child well-being; or 

9 ‘‘(B) using job search or other appropriate 

10 job readiness or work activities to assess the em11 ployability of individuals and to determine ap12 propriate future engagement activities.’’. 

13 (2) PENALTY FOR FAILURE TO ESTABLISH FAM14 ILY SELF-SUFFICIENCY PLAN.—Section 409(a)(3) (42 

15 U.S.C. 609(a)(3)) is amended—

16 (A) in the paragraph heading, by inserting 

17 ‘‘OR ESTABLISH FAMILY SELF-SUFFICIENCY

18 PLAN’’ after ‘‘RATES’’; and 

19 (B) in subparagraph (A), by inserting ‘‘or 

20 408(b)’’ after ‘‘407(a)’’. 

21 SEC. 8110. WORK PARTICIPATION REQUIREMENTS. 

22 (a) IN GENERAL.—Section 407 (42 U.S.C. 607) is 

23 amended by striking all that precedes subsection (b)(3) and 

24 inserting the following: 
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1 ‘‘SEC. 407. WORK PARTICIPATION REQUIREMENTS. 

2 ‘‘(a) PARTICIPATION RATE REQUIREMENTS.—A State 

3 to which a grant is made under section 403 for a fiscal 

4 year shall achieve a minimum participation rate equal to 

5 not less than—

6 ‘‘(1) 50 percent for fiscal year 2006; 

7 ‘‘(2) 55 percent for fiscal year 2007; 

8 ‘‘(3) 60 percent for fiscal year 2008; 

9 ‘‘(4) 65 percent for fiscal year 2009; and 

10 ‘‘(5) 70 percent for fiscal year 2010 and each 

11 succeeding fiscal year. 

12 ‘‘(b) CALCULATION OF PARTICIPATION RATES.—

13 ‘‘(1) AVERAGE MONTHLY RATE.—For purposes of 

14 subsection (a), the participation rate of a State for a 

15 fiscal year is the average of the participation rates of 

16 the State for each month in the fiscal year. 

17 ‘‘(2) MONTHLY PARTICIPATION RATES; INCORPO18 RATION OF 40-HOUR WORK WEEK STANDARD.—

19 ‘‘(A) IN GENERAL.—For purposes of para20 graph (1), the participation rate of a State for 

21 a month is—

22 ‘‘(i) the total number of countable 

23 hours (as defined in subsection (c)) with re24 spect to the counted families for the State 

25 for the month; divided by 
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1 ‘‘(ii) 160 multiplied by the number of 

2 counted families for the State for the month. 

3 ‘‘(B) COUNTED FAMILIES DEFINED.—

4 ‘‘(i) IN GENERAL.—In subparagraph 

5 (A), the term ‘counted family’ means, with 

6 respect to a State and a month, a family 

7 that includes a work-eligible individual and 

8 that receives assistance in the month under 

9 the State program funded under this part, 

10 subject to clause (ii). 

11 ‘‘(ii) STATE OPTION TO EXCLUDE CER12 TAIN FAMILIES.—At the option of a State, 

13 the term ‘counted family’ shall not in14 clude—

15 ‘‘(I) a family in the first month 

16 for which the family receives assistance 

17 from a State program funded under 

18 this part on the basis of the most re19 cent application for such assistance; 

20 ‘‘(II) on a case-by-case basis, a 

21 family in which the youngest child has 

22 not attained 12 months of age; or 

23 ‘‘(III) a family that is subject to 

24 a sanction under this part or part D, 

25 but that has not been subject to such a 
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1 sanction for more than 3 months 

2 (whether or not consecutive) in the pre3 ceding 12-month period. 

4 ‘‘(iii) STATE OPTION TO INCLUDE INDI5 VIDUALS RECEIVING ASSISTANCE UNDER A

6 TRIBAL FAMILY ASSISTANCE PLAN OR TRIB7 AL WORK PROGRAM.—At the option of a 

8 State, the term ‘counted family’ may in9 clude families in the State that are receiv10 ing assistance under a tribal family assist11 ance plan approved under section 412 or 

12 under a tribal work program to which 

13 funds are provided under this part. 

14 ‘‘(C) WORK-ELIGIBLE INDIVIDUAL DE15 FINED.—In this section, the term ‘work-eligible 

16 individual’ means an individual—

17 ‘‘(i) who is married or a single head of 

18 household; and 

19 ‘‘(ii) whose needs are (or, but for sanc20 tions under this part or part D, would be) 

21 included in determining the amount of cash 

22 assistance to be provided to the family 

23 under the State program funded under this 

24 part.’’. 
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1 (b) RECALIBRATION OF CASELOAD REDUCTION CRED2 IT.—

3 (1) IN GENERAL.—Section 407(b)(3)(A)(ii) (42 

4 U.S.C. 607(b)(3)(A)(ii)) is amended to read as fol5 lows: 

6 ‘‘(ii) the average monthly number of 

7 families that received assistance under the 

8 State program funded under this part dur9 ing the base year.’’. 

10 (2) CONFORMING AMENDMENT.—Section 

11 407(b)(3)(B) (42 U.S.C. 607(b)(3)(B)) is amended by 

12 striking ‘‘and eligibility criteria’’ and all that follows 

13 through the close parenthesis and inserting ‘‘and the 

14 eligibility criteria in effect during the then applicable 

15 base year’’. 

16 (3) BASE YEAR DEFINED.—Section 407(b)(3) (42 

17 U.S.C. 607(b)(3)) is amended by adding at the end 

18 the following: 

19 ‘‘(C) BASE YEAR DEFINED.—In this para20 graph, the term ‘base year’ means, with respect 

21 to a fiscal year—

22 ‘‘(i) if the fiscal year is fiscal year 

23 2006, fiscal year 1996; 

24 ‘‘(ii) if the fiscal year is fiscal year 

25 2007, fiscal year 1998; 
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1 ‘‘(iii) if the fiscal year is fiscal year 

2 2008, fiscal year 2001; or 

3 ‘‘(iv) if the fiscal year is fiscal year 

4 2009 or any succeeding fiscal year, the then 

5 4th preceding fiscal year.’’. 

6 (c) SUPERACHIEVER CREDIT.—Section 407(b) (42 

7 U.S.C. 607(b)) is amended by striking paragraphs (4) and 

8 (5) and inserting the following: 

9 ‘‘(4) SUPERACHIEVER CREDIT.—

10 ‘‘(A) IN GENERAL.—The participation rate, 

11 determined under paragraphs (1) and (2) of this 

12 subsection, of a superachiever State for a fiscal 

13 year shall be increased by the lesser of—

14 ‘‘(i) the amount (if any) of the super15 achiever credit applicable to the State; or 

16 ‘‘(ii) the number of percentage points 

17 (if any) by which the minimum participa18 tion rate required by subsection (a) for the 

19 fiscal year exceeds 50 percent. 

20 ‘‘(B) SUPERACHIEVER STATE.—For pur21 poses of subparagraph (A), a State is a super22 achiever State if the State caseload for fiscal 

23 year 2001 has declined by at least 60 percent 

24 from the State caseload for fiscal year 1995. 
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1 ‘‘(C) AMOUNT OF CREDIT.—The super2 achiever credit applicable to a State is the num3 ber of percentage points (if any) by which the de4 cline referred to in subparagraph (B) exceeds 60 

5 percent. 

6 ‘‘(D) DEFINITIONS.—In this paragraph: 

7 ‘‘(i) STATE CASELOAD FOR FISCAL

8 YEAR 2001.—The term ‘State caseload for 

9 fiscal year 2001’ means the average monthly 

10 number of families that received assistance 

11 during fiscal year 2001 under the State 

12 program funded under this part. 

13 ‘‘(ii) STATE CASELOAD FOR FISCAL

14 YEAR 1995.—The term ‘State caseload for 

15 fiscal year 1995’ means the average monthly 

16 number of families that received aid under 

17 the State plan approved under part A (as 

18 in effect on September 30, 1995) during fis19 cal year 1995.’’. 

20 (d) COUNTABLE HOURS.—Section 407 (42 U.S.C. 607) 

21 is amended by striking subsections (c) and (d) and insert22 ing the following: 

23 ‘‘(c) COUNTABLE HOURS.—

24 ‘‘(1) DEFINITION.—In subsection (b)(2), the term 

25 ‘countable hours’ means, with respect to a family for 
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1 a month, the total number of hours in the month in 

2 which any member of the family who is a work-eligi3 ble individual is engaged in a direct work activity or 

4 other activities specified by the State (excluding an 

5 activity that does not address a purpose specified in 

6 section 401(a)), subject to the other provisions of this 

7 subsection. 

8 ‘‘(2) LIMITATIONS.—Subject to such regulations 

9 as the Secretary may prescribe: 

10 ‘‘(A) MINIMUM WEEKLY AVERAGE OF 24

11 HOURS OF DIRECT WORK ACTIVITIES RE12 QUIRED.—If the work-eligible individuals in a 

13 family are engaged in a direct work activity for 

14 an average total of fewer than 24 hours per week 

15 in a month, then the number of countable hours 

16 with respect to the family for the month shall be 

17 zero. 

18 ‘‘(B) MAXIMUM WEEKLY AVERAGE OF 16

19 HOURS OF OTHER ACTIVITIES.—An average of 

20 not more than 16 hours per week of activities 

21 specified by the State (subject to the exclusion de22 scribed in paragraph (1)) may be considered 

23 countable hours in a month with respect to a 

24 family. 
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1 ‘‘(3) SPECIAL RULES.—For purposes of para2 graph (1): 

3 ‘‘(A) PARTICIPATION IN QUALIFIED ACTIVI4 TIES.—

5 ‘‘(i) IN GENERAL.—If, with the ap6 proval of the State, the work-eligible indi7 viduals in a family are engaged in 1 or 

8 more qualified activities for an average 

9 total of at least 24 hours per week in a 

10 month, then all such engagement in the 

11 month shall be considered engagement in a 

12 direct work activity, subject to clause (iii). 

13 ‘‘(ii) QUALIFIED ACTIVITY DEFINED.—

14 The term ‘qualified activity’ means an ac15 tivity specified by the State (subject to the 

16 exclusion described in paragraph (1)) that 

17 meets such standards and criteria as the 

18 State may specify, including—

19 ‘‘(I) substance abuse counseling or 

20 treatment; 

21 ‘‘(II) rehabilitation treatment and 

22 services; 

23 ‘‘(III) work-related education or 

24 training directed at enabling the fam25 ily member to work; 
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1 ‘‘(IV) job search or job readiness 

2 assistance; and 

3 ‘‘(V) any other activity that ad4 dresses a purpose specified in section 

5 401(a). 

6 ‘‘(iii) LIMITATION.—

7 ‘‘(I) IN GENERAL.—Except as pro8 vided in subclause (II), clause (i) shall 

9 not apply to a family for more than 3 

10 months in any period of 24 consecutive 

11 months. 

12 ‘‘(II) SPECIAL RULE APPLICABLE

13 TO EDUCATION AND TRAINING.—A 

14 State may, on a case-by-case basis, 

15 apply clause (i) to a work-eligible indi16 vidual so that participation by the in17 dividual in education or training, if 

18 needed to permit the individual to 

19 complete a certificate program or other 

20 work-related education or training di21 rected at enabling the individual to fill 

22 a known job need in a local area, may 

23 be considered countable hours with re24 spect to the family of the individual for 
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1 not more than 4 months in any period 

2 of 24 consecutive months. 

3 ‘‘(B) SCHOOL ATTENDANCE BY TEEN HEAD

4 OF HOUSEHOLD.—The work-eligible members of 

5 a family shall be considered to be engaged in a 

6 direct work activity for an average of 40 hours 

7 per week in a month if the family includes an 

8 individual who is married, or is a single head 

9 of household, who has not attained 20 years of 

10 age, and the individual—

11 ‘‘(i) maintains satisfactory attendance 

12 at secondary school or the equivalent in the 

13 month; or 

14 ‘‘(ii) participates in education directly 

15 related to employment for an average of at 

16 least 20 hours per week in the month. 

17 ‘‘(d) DIRECT WORK ACTIVITY.—In this section, the 

18 term ‘direct work activity’ means—

19 ‘‘(1) unsubsidized employment; 

20 ‘‘(2) subsidized private sector employment; 

21 ‘‘(3) subsidized public sector employment; 

22 ‘‘(4) on-the-job training; 

23 ‘‘(5) supervised work experience; or 

24 ‘‘(6) supervised community service.’’. 
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1 (e) PENALTIES AGAINST INDIVIDUALS.—Section 

2 407(e)(1) (42 U.S.C. 607(e)(1)) is amended to read as fol3 lows: 

4 ‘‘(1) REDUCTION OR TERMINATION OF ASSIST5 ANCE.—

6 ‘‘(A) IN GENERAL.—Except as provided in 

7 paragraph (2), if an individual in a family re8 ceiving assistance under a State program funded 

9 under this part fails to engage in activities re10 quired in accordance with this section, or other 

11 activities required by the State under the pro12 gram, and the family does not otherwise engage 

13 in activities in accordance with the self-suffi14 ciency plan established for the family pursuant 

15 to section 408(b), the State shall—

16 ‘‘(i) if the failure is partial or persists 

17 for not more than 1 month—

18 ‘‘(I) reduce the amount of assist19 ance otherwise payable to the family 

20 pro rata (or more, at the option of the 

21 State) with respect to any period dur22 ing a month in which the failure oc23 curs; or 

24 ‘‘(II) terminate all assistance to 

25 the family, subject to such good cause 
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1 exceptions as the State may establish; 

2 or 

3 ‘‘(ii) if the failure is total and persists 

4 for at least 2 consecutive months, terminate 

5 all cash payments to the family including 

6 qualified State expenditures (as defined in 

7 section 409(a)(7)(B)(i)) for at least 1 month 

8 and thereafter until the State determines 

9 that the individual has resumed full par10 ticipation in the activities, subject to such 

11 good cause exceptions as the State may es12 tablish. 

13 ‘‘(B) SPECIAL RULE.—

14 ‘‘(i) IN GENERAL.—In the event of a 

15 conflict between a requirement of clause 

16 (i)(II) or (ii) of subparagraph (A) and a re17 quirement of a State constitution, or of a 

18 State statute that, before 1966, obligated 

19 local government to provide assistance to 

20 needy parents and children, the State con21 stitutional or statutory requirement shall 

22 control. 

23 ‘‘(ii) LIMITATION.—Clause (i) of this 

24 subparagraph shall not apply after the 1-
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1 year period that begins with the date of the 

2 enactment of this subparagraph.’’. 

3 (f) CONFORMING AMENDMENTS.—

4 (1) Section 407(f) (42 U.S.C. 607(f)) is amended 

5 in each of paragraphs (1) and (2) by striking ‘‘work 

6 activity described in subsection (d)’’ and inserting 

7 ‘‘direct work activity’’. 

8 (2) The heading of section 409(a)(14) (42 U.S.C. 

9 609(a)(14)) is amended by inserting ‘‘OR REFUSING

10 TO ENGAGE IN ACTIVITIES UNDER A FAMILY SELF11 SUFFICIENCY PLAN’’ after ‘‘WORK’’. 

12 SEC. 8111. MAINTENANCE OF EFFORT. 

13 (a) IN GENERAL.—Section 409(a)(7) (42 U.S.C. 

14 609(a)(7)) is amended—

15 (1) in subparagraph (A), by striking ‘‘fiscal year 

16 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 

17 2006, or 2007’’ and inserting ‘‘fiscal year 2006, 2007, 

18 2008, 2009, 2010, or 2011’’; and 

19 (2) in subparagraph (B)(ii)—

20 (A) by inserting ‘‘preceding’’ before ‘‘fiscal 

21 year’’; and 

22 (B) by striking ‘‘for fiscal years 1997 

23 through 2006,’’. 

24 (b) STATE SPENDING ON PROMOTING HEALTHY MAR25 RIAGE.—
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1 (1) IN GENERAL.—Section 404 (42 U.S.C. 604) 

2 is amended by adding at the end the following: 

3 ‘‘(l) MARRIAGE PROMOTION.—A State, territory, or 

4 tribal organization to which a grant is made under section 

5 403(a)(2) may use a grant made to the State, territory, or 

6 tribe under any other provision of section 403 for marriage 

7 promotion activities, and the amount of any such grant so 

8 used shall be considered State funds for purposes of section 

9 403(a)(2).’’. 

10 (2) FEDERAL TANF FUNDS USED FOR MARRIAGE

11 PROMOTION DISREGARDED FOR PURPOSES OF MAIN12 TENANCE OF EFFORT REQUIREMENT.—Section 

13 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)), as 

14 amended by section 8103(c) of this Act, is amended 

15 by adding at the end the following: 

16 ‘‘(VI) EXCLUSION OF FEDERAL

17 TANF FUNDS USED FOR MARRIAGE

18 PROMOTION ACTIVITIES.—Such term 

19 does not include the amount of any 

20 grant made to the State under section 

21 403 that is expended for a marriage 

22 promotion activity.’’. 

23 SEC. 8112. PERFORMANCE IMPROVEMENT. 

24 (a) STATE PLANS.—Section 402(a) (42 U.S.C. 602(a)) 

25 is amended—
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1 (1) in paragraph (1)—

2 (A) in subparagraph (A)—

3 (i) by redesignating clause (vi) and 

4 clause (vii) (as added by section 8103(a) of 

5 this Act) as clauses (vii) and (viii), respec6 tively; and 

7 (ii) by striking clause (v) and insert8 ing the following: 

9 ‘‘(v) The document shall—

10 ‘‘(I) describe how the State will 

11 pursue ending dependence of needy 

12 families on government benefits and re13 ducing poverty by promoting job prep14 aration and work; 

15 ‘‘(II) describe how the State will 

16 encourage the formation and mainte17 nance of healthy 2-parent married 

18 families, encourage responsible father19 hood, and prevent and reduce the inci20 dence of out-of-wedlock pregnancies; 

21 ‘‘(III) include specific, numerical, 

22 and measurable performance objectives 

23 for accomplishing subclauses (I) and 

24 (II); and 
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1 ‘‘(IV) describe the methodology 

2 that the State will use to measure 

3 State performance in relation to each 

4 such objective. 

5 ‘‘(vi) Describe any strategies and pro6 grams the State may be undertaking to ad7 dress—

8 ‘‘(I) employment retention and 

9 advancement for recipients of assist10 ance under the program, including 

11 placement into high-demand jobs, and 

12 whether the jobs are identified using 

13 labor market information; 

14 ‘‘(II) efforts to reduce teen preg15 nancy; 

16 ‘‘(III) services for struggling and 

17 noncompliant families, and for clients 

18 with special problems; and 

19 ‘‘(IV) program integration, in20 cluding the extent to which employ21 ment and training services under the 

22 program are provided through the One23 Stop delivery system created under the 

24 Workforce Investment Act of 1998, and 

25 the extent to which former recipients of 
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1 such assistance have access to addi2 tional core, intensive, or training serv3 ices funded through such Act.’’; and 

4 (B) in subparagraph (B), by striking clause 

5 (iii) (as so redesignated by section 8107(b)(1) of 

6 this Act) and inserting the following: 

7 ‘‘(iii) The document shall describe 

8 strategies and programs the State is under9 taking to engage religious organizations in 

10 the provision of services funded under this 

11 part and efforts related to section 104 of the 

12 Personal Responsibility and Work Oppor13 tunity Reconciliation Act of 1996. 

14 ‘‘(iv) The document shall describe 

15 strategies to improve program management 

16 and performance.’’; and 

17 (2) in paragraph (4), by inserting ‘‘and tribal’’ 

18 after ‘‘that local’’. 

19 (b) CONSULTATION WITH STATE REGARDING PLAN

20 AND DESIGN OF TRIBAL PROGRAMS.—Section 412(b)(1) 

21 (42 U.S.C. 612(b)(1)) is amended—

22 (1) by striking ‘‘and’’ at the end of subpara23 graph (E); 

24 (2) by striking the period at the end of subpara25 graph (F) and inserting ‘‘; and’’; and 
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1 (3) by adding at the end the following: 

2 ‘‘(G) provides an assurance that the State 

3 in which the tribe is located has been consulted 

4 regarding the plan and its design.’’. 

5 (c) PERFORMANCE MEASURES.—Section 413 (42 

6 U.S.C. 613) is amended by adding at the end the following: 

7 ‘‘(k) PERFORMANCE IMPROVEMENT.—The Secretary, 

8 in consultation with the States, shall develop uniform per9 formance measures designed to assess the degree of effective10 ness, and the degree of improvement, of State programs 

11 funded under this part in accomplishing the purposes of 

12 this part.’’. 

13 (d) ANNUAL RANKING OF STATES.—Section 413(d)(1) 

14 (42 U.S.C. 613(d)(1)) is amended by striking ‘‘long-term 

15 private sector jobs’’ and inserting ‘‘private sector jobs, the 

16 success of the recipients in retaining employment, the abil17 ity of the recipients to increase their wages’’. 

18 SEC. 8113. DATA COLLECTION AND REPORTING. 

19 (a) CONTENTS OF REPORT.—Section 411(a)(1)(A) (42 

20 U.S.C. 611(a)(1)(A)) is amended—

21 (1) in the matter preceding clause (i), by insert22 ing ‘‘and on families receiving assistance under State 

23 programs funded with other qualified State expendi24 tures (as defined in section 409(a)(7)(B))’’ before the 

25 colon; 
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1 (2) in clause (vii), by inserting ‘‘and minor par2 ent’’ after ‘‘of each adult’’; 

3 (3) in clause (viii), by striking ‘‘and educational 

4 level’’; 

5 (4) in clause (ix), by striking ‘‘, and if the latter 

6 2, the amount received’’; 

7 (5) in clause (x)—

8 (A) by striking ‘‘each type of’’; and 

9 (B) by inserting before the period ‘‘and, if 

10 applicable, the reason for receipt of the assistance 

11 for a total of more than 60 months’’; 

12 (6) in clause (xi), by striking the subclauses and 

13 inserting the following: 

14 ‘‘(I) Subsidized private sector em15 ployment. 

16 ‘‘(II) Unsubsidized employment. 

17 ‘‘(III) Public sector employment, 

18 supervised work experience, or super19 vised community service. 

20 ‘‘(IV) On-the-job training. 

21 ‘‘(V) Job search and placement. 

22 ‘‘(VI) Training. 

23 ‘‘(VII) Education. 

24 ‘‘(VIII) Other activities directed 

25 at the purposes of this part, as speci-
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1 fied in the State plan submitted pursu2 ant to section 402.’’; 

3 (7) in clause (xii), by inserting ‘‘and progress to4 ward universal engagement’’ after ‘‘participation 

5 rates’’; 

6 (8) in clause (xiii), by striking ‘‘type and’’; 

7 (9) in clause (xvi), by striking subclause (II) 

8 and redesignating subclauses (III) through (V) as sub9 clauses (II) through (IV), respectively; and 

10 (10) by adding at the end the following: 

11 ‘‘(xviii) The date the family first re12 ceived assistance from the State program on 

13 the basis of the most recent application for 

14 such assistance. 

15 ‘‘(xix) Whether a self-sufficiency plan 

16 is established for the family in accordance 

17 with section 408(b). 

18 ‘‘(xx) With respect to any child in the 

19 family, the marital status of the parents at 

20 the birth of the child, and if the parents 

21 were not then married, whether the pater22 nity of the child has been established.’’. 

23 (b) USE OF SAMPLES.—Section 411(a)(1)(B) (42 

24 U.S.C. 611(a)(1)(B)) is amended—

25 (1) in clause (i)—
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1 (A) by striking ‘‘a sample’’ and inserting 

2 ‘‘samples’’; and 

3 (B) by inserting before the period ‘‘, except 

4 that the Secretary may designate core data ele5 ments that must be reported on all families’’; 

6 and 

7 (2) in clause (ii), by striking ‘‘funded under this 

8 part’’ and inserting ‘‘described in subparagraph (A)’’. 

9 (c) REPORT ON FAMILIES THAT BECOME INELIGIBLE

10 TO RECEIVE ASSISTANCE.—Section 411(a) (42 U.S.C. 

11 611(a)) is amended—

12 (1) by striking paragraph (5); 

13 (2) by redesignating paragraph (6) as para14 graph (5); and 

15 (3) by inserting after paragraph (5) (as so redes16 ignated) the following: 

17 ‘‘(6) REPORT ON FAMILIES THAT BECOME INELI18 GIBLE TO RECEIVE ASSISTANCE.—The report required 

19 by paragraph (1) for a fiscal quarter shall include for 

20 each month in the quarter the number of families and 

21 total number of individuals that, during the month, 

22 became ineligible to receive assistance under the State 

23 program funded under this part (broken down by the 

24 number of families that become so ineligible due to 

25 earnings, changes in family composition that result 
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1 in increased earnings, sanctions, time limits, or other 

2 specified reasons).’’. 

3 (d) REGULATIONS.—Section 411(a)(7) (42 U.S.C. 

4 611(a)(7)) is amended—

5 (1) by inserting ‘‘and to collect the necessary 

6 data’’ before ‘‘with respect to which reports’’; 

7 (2) by striking ‘‘subsection’’ and inserting ‘‘sec8 tion’’; and 

9 (3) by striking ‘‘in defining the data elements’’ 

10 and all that follows and inserting ‘‘, the National 

11 Governors’ Association, the American Public Human 

12 Services Association, the National Conference of State 

13 Legislatures, and others in defining the data ele14 ments.’’. 

15 (e) ADDITIONAL REPORTS BY STATES.—Section 411 

16 (42 U.S.C. 611) is amended—

17 (1) by redesignating subsection (b) as subsection 

18 (e); and 

19 (2) by inserting after subsection (a) the fol20 lowing: 

21 ‘‘(b) ANNUAL REPORTS ON PROGRAM CHARACTERIS22 TICS.—Not later than 90 days after the end of fiscal year 

23 2006 and each succeeding fiscal year, each eligible State 

24 shall submit to the Secretary a report on the characteristics 

25 of the State program funded under this part and other State 
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1 programs funded with qualified State expenditures (as de2 fined in section 409(a)(7)(B)(i)). The report shall include, 

3 with respect to each such program, the program name, a 

4 description of program activities, the program purpose, the 

5 program eligibility criteria, the sources of program funding, 

6 the number of program beneficiaries, sanction policies, and 

7 any program work requirements. 

8 ‘‘(c) MONTHLY REPORTS ON CASELOAD.—Not later 

9 than 3 months after the end of a calendar month that begins 

10 1 year or more after the enactment of this subsection, each 

11 eligible State shall submit to the Secretary a report on the 

12 number of families and total number of individuals receiv13 ing assistance in the calendar month under the State pro14 gram funded under this part. 

15 ‘‘(d) ANNUAL REPORT ON PERFORMANCE IMPROVE16 MENT.—Beginning with fiscal year 2007, not later than 

17 January 1 of each fiscal year, each eligible State shall sub18 mit to the Secretary a report on achievement and improve19 ment during the preceding fiscal year under the numerical 

20 performance goals and measures under the State program 

21 funded under this part with respect to each of the matters 

22 described in section 402(a)(1)(A)(v).’’. 

23 (f) ANNUAL REPORTS TO CONGRESS BY THE SEC24 RETARY.—Section 411(e), as so redesignated by subsection 

25 (e) of this section, is amended—
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1 (1) in the matter preceding paragraph (1), by 

2 striking ‘‘and each fiscal year thereafter’’ and insert3 ing ‘‘and by July 1 of each fiscal year thereafter’’; 

4 (2) in paragraph (2), by striking ‘‘families ap5 plying for assistance,’’ and by striking the last 

6 comma; and 

7 (3) in paragraph (3), by inserting ‘‘and other 

8 programs funded with qualified State expenditures 

9 (as defined in section 409(a)(7)(B)(i))’’ before the 

10 semicolon. 

11 (g) INCREASED ANALYSIS OF STATE SINGLE AUDIT

12 REPORTS.—Section 411 (42 U.S.C. 611) is amended by 

13 adding at the end the following: 

14 ‘‘(f) INCREASED ANALYSIS OF STATE SINGLE AUDIT

15 REPORTS.—

16 ‘‘(1) IN GENERAL.—Within 3 months after a 

17 State submits to the Secretary a report pursuant to 

18 section 7502(a)(1)(A) of title 31, United States Code, 

19 the Secretary shall analyze the report for the purpose 

20 of identifying the extent and nature of problems re21 lated to the oversight by the State of nongovernmental 

22 entities with respect to contracts entered into by such 

23 entities with the State program funded under this 

24 part, and determining what additional actions may 
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1 be appropriate to help prevent and correct the prob2 lems. 

3 ‘‘(2) INCLUSION OF PROGRAM OVERSIGHT SEC4 TION IN ANNUAL REPORT TO THE CONGRESS.—The 

5 Secretary shall include in each report under sub6 section (e) a section on oversight of State programs 

7 funded under this part, including findings on the ex8 tent and nature of the problems referred to in para9 graph (1), actions taken to resolve the problems, and 

10 to the extent the Secretary deems appropriate make 

11 recommendations on changes needed to resolve the 

12 problems.’’. 

13 SEC. 8114. DIRECT FUNDING AND ADMINISTRATION BY IN14 DIAN TRIBES. 

15 (a) TRIBAL FAMILY ASSISTANCE GRANT.—Section 

16 412(a)(1)(A) (42 U.S.C. 612(a)(1)(A)) is amended by strik17 ing ‘‘1997, 1998, 1999, 2000, 2001, 2002, and 2003’’ and 

18 inserting ‘‘2006 through 2010’’. 

19 (b) GRANTS FOR INDIAN TRIBES THAT RECEIVED

20 JOBS FUNDS.—Section 412(a)(2)(A) (42 U.S.C. 

21 612(a)(2)(A)) is amended by striking ‘‘1997, 1998, 1999, 

22 2000, 2001, 2002, and 2003’’ and inserting ‘‘2006 through 

23 2010’’. 
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1 SEC. 8115. RESEARCH, EVALUATIONS, AND NATIONAL STUD2 IES. 

3 (a) SECRETARY’S FUND FOR RESEARCH, DEMONSTRA4 TIONS, AND TECHNICAL ASSISTANCE.—Section 413 (42 

5 U.S.C. 613), as amended by section 8112(c) of this Act, is 

6 further amended by adding at the end the following: 

7 ‘‘(l) FUNDING FOR RESEARCH, DEMONSTRATIONS, AND

8 TECHNICAL ASSISTANCE.—

9 ‘‘(1) APPROPRIATION.—Out of any money in the 

10 Treasury of the United States not otherwise appro11 priated, there are appropriated $102,000,000 for each 

12 of fiscal years 2006 through 2010, which shall be 

13 available to the Secretary for the purpose of con14 ducting and supporting research and demonstration 

15 projects by public or private entities, and providing 

16 technical assistance to States, Indian tribal organiza17 tions, and such other entities as the Secretary may 

18 specify that are receiving a grant under this part, 

19 which shall be expended primarily on activities de20 scribed in section 403(a)(2)(B), and which shall be in 

21 addition to any other funds made available under 

22 this part. The Secretary may not provide an entity 

23 with funds made available under this paragraph un24 less the entity agrees that, as a condition of receipt 

25 of the funds for a program or activity described in 

26 any of clauses (iii) through (viii) of section 
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1 403(a)(2)(B), the entity will comply with subclauses 

2 (I) and (II) of section 403(a)(2)(C)(ii). 

3 ‘‘(2) SET ASIDE FOR DEMONSTRATION PROJECTS

4 FOR COORDINATION OF PROVISION OF CHILD WEL5 FARE AND TANF SERVICES TO TRIBAL FAMILIES AT

6 RISK OF CHILD ABUSE OR NEGLECT.—

7 ‘‘(A) IN GENERAL.—Of the amounts made 

8 available under paragraph (1) for a fiscal year, 

9 $2,000,000 shall be awarded on a competitive 

10 basis to fund demonstration projects designed to 

11 test the effectiveness of tribal governments or 

12 tribal consortia in coordinating the provision to 

13 tribal families at risk of child abuse or neglect 

14 of child welfare services and services under tribal 

15 programs funded under this part. 

16 ‘‘(B) USE OF FUNDS.—A grant made to 

17 such a project shall be used—

18 ‘‘(i) to improve case management for 

19 families eligible for assistance from such a 

20 tribal program; 

21 ‘‘(ii) for supportive services and assist22 ance to tribal children in out-of-home place23 ments and the tribal families caring for 

24 such children, including families who adopt 

25 such children; and 
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1 ‘‘(iii) for prevention services and as2 sistance to tribal families at risk of child 

3 abuse and neglect. 

4 ‘‘(C) REPORTS.—The Secretary may require 

5 a recipient of funds awarded under this para6 graph to provide the Secretary with such infor7 mation as the Secretary deems relevant to enable 

8 the Secretary to facilitate and oversee the admin9 istration of any project for which funds are pro10 vided under this paragraph.’’. 

11 (b) FUNDING OF STUDIES AND DEMONSTRATIONS.—

12 Section 413(h)(1) (42 U.S.C. 613(h)(1)) is amended in the 

13 matter preceding subparagraph (A) by striking ‘‘1997 

14 through 2002’’ and inserting ‘‘2006 through 2010’’. 

15 (c) REPORT ON ENFORCEMENT OF CERTAIN AFFIDA16 VITS OF SUPPORT AND SPONSOR DEEMING.—Not later than 

17 March 31, 2006, the Secretary of Health and Human Serv18 ices, in consultation with the Attorney General, shall sub19 mit to the Congress a report on the enforcement of affidavits 

20 of support and sponsor deeming as required by section 421, 

21 422, and 432 of the Personal Responsibility and Work Op22 portunity Reconciliation Act of 1996. 

23 (d) REPORT ON COORDINATION.—Not later than 6 

24 months after the date of the enactment of this Act, the Sec25 retary of Health and Human Services and the Secretary 
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1 of Labor shall jointly submit a report to the Congress de2 scribing common or conflicting data elements, definitions, 

3 performance measures, and reporting requirements in the 

4 Workforce Investment Act of 1998 and part A of title IV 

5 of the Social Security Act, and, to the degree each Secretary 

6 deems appropriate, at the discretion of either Secretary, 

7 any other program administered by the respective Sec8 retary, to allow greater coordination between the welfare 

9 and workforce development systems. 

10 SEC. 8116. STUDY BY THE CENSUS BUREAU. 

11 (a) IN GENERAL.—Section 414(a) (42 U.S.C. 614(a)) 

12 is amended to read as follows: 

13 ‘‘(a) IN GENERAL.—The Bureau of the Census shall 

14 implement or enhance a longitudinal survey of program 

15 participation, developed in consultation with the Secretary 

16 and made available to interested parties, to allow for the 

17 assessment of the outcomes of continued welfare reform on 

18 the economic and child well-being of low-income families 

19 with children, including those who received assistance or 

20 services from a State program funded under this part, and, 

21 to the extent possible, shall provide State representative 

22 samples. The content of the survey should include such in23 formation as may be necessary to examine the issues of out24 of-wedlock childbearing, marriage, welfare dependency and 

25 compliance with work requirements, the beginning and end-
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1 ing of spells of assistance, work, earnings and employment 

2 stability, and the well-being of children.’’. 

3 (b) APPROPRIATION.—Section 414(b) (42 U.S.C. 

4 614(b)) is amended—

5 (1) by striking ‘‘1996,’’ and all that follows 

6 through ‘‘2003’’ and inserting ‘‘2006 through 2010’’; 

7 and 

8 (2) by adding at the end the following: ‘‘Funds 

9 appropriated under this subsection shall remain 

10 available through fiscal year 2010 to carry out sub11 section (a).’’. 

12 SEC. 8117. DEFINITION OF ASSISTANCE. 

13 (a) IN GENERAL.—Section 419 (42 U.S.C. 619) is 

14 amended by adding at the end the following: 

15 ‘‘(6) ASSISTANCE.—

16 ‘‘(A) IN GENERAL.—The term ‘assistance’ 

17 means payment, by cash, voucher, or other 

18 means, to or for an individual or family for the 

19 purpose of meeting a subsistence need of the in20 dividual or family (including food, clothing, 

21 shelter, and related items, but not including costs 

22 of transportation or child care). 

23 ‘‘(B) EXCEPTION.—The term ‘assistance’ 

24 does not include a payment described in sub25 paragraph (A) to or for an individual or family 
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1 on a short-term, nonrecurring basis (as defined 

2 by the State in accordance with regulations pre3 scribed by the Secretary).’’. 

4 (b) CONFORMING AMENDMENTS.—

5 (1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is 

6 amended by striking ‘‘assistance’’ and inserting 

7 ‘‘aid’’. 

8 (2) Section 404(f) (42 U.S.C. 604(f)) is amended 

9 by striking ‘‘assistance’’ and inserting ‘‘benefits or 

10 services’’. 

11 (3) Section 408(a)(5)(B)(i) (42 U.S.C. 

12 608(a)(5)(B)(i)) is amended in the heading by strik13 ing ‘‘ASSISTANCE’’ and inserting ‘‘AID’’. 

14 (4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is 

15 amended by striking ‘‘assistance’’ and inserting 

16 ‘‘aid’’. 

17 SEC. 8118. TECHNICAL CORRECTIONS. 

18 (a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended 

19 by inserting a comma after ‘‘appropriate’’. 

20 (b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 

21 611(a)(1)(A)(ii)(III)) is amended by striking the last close 

22 parenthesis. 

23 (c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is 

24 amended by striking ‘‘section’’ and inserting ‘‘sections’’. 
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1 (d)(1) Section 413 (42 U.S.C. 613) is amended by 

2 striking subsection (g) and redesignating subsections (h) 

3 through (j) and subsections (k) and (l) (as added by sections 

4 8112(c) and 8115(a) of this Act, respectively) as subsections 

5 (g) through (k), respectively. 

6 (2) Each of the following provisions is amended by 

7 striking ‘‘413(j)’’ and inserting ‘‘413(i)’’: 

8 (A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 

9 603(a)(5)(A)(ii)(III)). 

10 (B) Section 403(a)(5)(F) (42 U.S.C. 

11 603(a)(5)(F)). 

12 (C) Section 403(a)(5)(G)(ii) (42 U.S.C. 

13 603(a)(5)(G)(ii)). 

14 (D) Section 412(a)(3)(B)(iv) (42 U.S.C. 

15 612(a)(3)(B)(iv)). 

16 SEC. 8119. FATHERHOOD PROGRAM. 

17 (a) SHORT TITLE.—This section may be cited as the 

18 ‘‘Promotion and Support of Responsible Fatherhood and 

19 Healthy Marriage Act of 2005’’. 

20 (b) FATHERHOOD PROGRAM.—

21 (1) IN GENERAL.—Title I of the Personal Re22 sponsibility and Work Opportunity Reconciliation 

23 Act of 1996 (Public Law 104–193) is amended by 

24 adding at the end the following: 
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1 ‘‘SEC. 117. FATHERHOOD PROGRAM. 

2 ‘‘(a) IN GENERAL.—Title IV (42 U.S.C. 601–679b) is 

3 amended by inserting after part B the following: 

4 ‘PART C—FATHERHOOD PROGRAM 

5 ‘SEC. 441. FINDINGS AND PURPOSES. 

6 ‘(a) FINDINGS.—The Congress finds that there is sub7 stantial evidence strongly indicating the urgent need to pro8 mote and support involved, committed, and responsible fa9 therhood, and to encourage and support healthy marriages 

10 between parents raising children, including data dem11 onstrating the following: 

12 ‘(1) In approximately 84 percent of cases where 

13 a parent is absent, that parent is the father. 

14 ‘(2) If current trends continue, half of all chil15 dren born today will live apart from one of their par16 ents, usually their father, at some point before they 

17 turn 18. 

18 ‘(3) Where families (whether intact or with a 

19 parent absent) are living in poverty, a significant 

20 factor is the father’s lack of job skills. 

21 ‘(4) Committed and responsible fathering during 

22 infancy and early childhood contributes to the devel23 opment of emotional security, curiosity, and math 

24 and verbal skills. 

25 ‘(5) An estimated 19,400,000 children (27 per26 cent) live apart from their biological father. 
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1 ‘(6) Forty percent of children under age 18 not 

2 living with their biological father had not seen their 

3 father even once in the last 12 months, according to 

4 national survey data. 

5 ‘(b) PURPOSES.—The purposes of this part are: 

6 ‘(1) To provide for projects and activities by 

7 public entities and by nonprofit community entities, 

8 including religious organizations, designed to test 

9 promising approaches to accomplishing the following 

10 objectives: 

11 ‘(A) Promoting responsible, caring, and ef12 fective parenting through counseling, mentoring, 

13 and parenting education, dissemination of edu14 cational materials and information on parenting 

15 skills, encouragement of positive father involve16 ment, including the positive involvement of non17 resident fathers, and other methods. 

18 ‘(B) Enhancing the abilities and commit19 ment of unemployed or low-income fathers to 

20 provide material support for their families and 

21 to avoid or leave welfare programs by assisting 

22 them to take full advantage of education, job 

23 training, and job search programs, to improve 

24 work habits and work skills, to secure career ad25 vancement by activities such as outreach and in-
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1 formation dissemination, coordination, as appro2 priate, with employment services and job train3 ing programs, including the One-Stop delivery 

4 system established under title I of the Workforce 

5 Investment Act of 1998, encouragement and sup6 port of timely payment of current child support 

7 and regular payment toward past due child sup8 port obligations in appropriate cases, and other 

9 methods. 

10 ‘(C) Improving fathers’ ability to effectively 

11 manage family business affairs by means such as 

12 education, counseling, and mentoring in matters 

13 including household management, budgeting, 

14 banking, and handling of financial transactions, 

15 time management, and home maintenance. 

16 ‘(D) Encouraging and supporting healthy 

17 marriages and married fatherhood through such 

18 activities as premarital education, including the 

19 use of premarital inventories, marriage prepara20 tion programs, skills-based marriage education 

21 programs, marital therapy, couples counseling, 

22 divorce education and reduction programs, di23 vorce mediation and counseling, relationship 

24 skills enhancement programs, including those de25 signed to reduce child abuse and domestic vio-
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1 lence, and dissemination of information about 

2 the benefits of marriage for both parents and 

3 children. 

4 ‘(2) Through the projects and activities described 

5 in paragraph (1), to improve outcomes for children 

6 with respect to measures such as increased family in7 come and economic security, improved school per8 formance, better health, improved emotional and be9 havioral stability and social adjustment, and reduced 

10 risk of delinquency, crime, substance abuse, child 

11 abuse and neglect, teen sexual activity, and teen sui12 cide. 

13 ‘(3) To evaluate the effectiveness of various ap14 proaches and to disseminate findings concerning out15 comes and other information in order to encourage 

16 and facilitate the replication of effective approaches to 

17 accomplishing these objectives. 

18 ‘SEC. 442. DEFINITIONS. 

19 ‘In this part, the terms ‘‘Indian tribe’’ and ‘‘tribal or20 ganization’’ have the meanings given them in subsections 

21 (e) and (l), respectively, of section 4 of the Indian Self-De22 termination and Education Assistance Act. 

23 ‘SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS. 

24 ‘(a) IN GENERAL.—The Secretary may make grants 

25 for fiscal years 2006 through 2010 to public and nonprofit 
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1 community entities, including religious organizations, and 

2 to Indian tribes and tribal organizations, for demonstration 

3 service projects and activities designed to test the effective4 ness of various approaches to accomplish the objectives spec5 ified in section 441(b)(1). 

6 ‘(b) ELIGIBILITY CRITERIA FOR FULL SERVICE

7 GRANTS.—In order to be eligible for a grant under this sec8 tion, except as specified in subsection (c), an entity shall 

9 submit an application to the Secretary containing the fol10 lowing: 

11 ‘(1) PROJECT DESCRIPTION.—A statement in12 cluding—

13 ‘(A) a description of the project and how it 

14 will be carried out, including the geographical 

15 area to be covered and the number and charac16 teristics of clients to be served, and how it will 

17 address each of the 4 objectives specified in sec18 tion 441(b)(1); and 

19 ‘(B) a description of the methods to be used 

20 by the entity or its contractor to assess the extent 

21 to which the project was successful in accom22 plishing its specific objectives and the general ob23 jectives specified in section 441(b)(1). 

24 ‘(2) EXPERIENCE AND QUALIFICATIONS.—A dem25 onstration of ability to carry out the project, by 
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1 means such as demonstration of experience in success2 fully carrying out projects of similar design and 

3 scope, and such other information as the Secretary 

4 may find necessary to demonstrate the entity’s capac5 ity to carry out the project, including the entity’s 

6 ability to provide the non-Federal share of project re7 sources. 

8 ‘(3) ADDRESSING CHILD ABUSE AND NEGLECT

9 AND DOMESTIC VIOLENCE.—A description of how the 

10 entity will assess for the presence of, and intervene to 

11 resolve, domestic violence and child abuse and neglect, 

12 including how the entity will coordinate with State 

13 and local child protective service and domestic vio14 lence programs. 

15 ‘(4) ADDRESSING CONCERNS RELATING TO SUB16 STANCE ABUSE AND SEXUAL ACTIVITY.—A commit17 ment to make available to each individual partici18 pating in the project education about alcohol, tobacco, 

19 and other drugs, and about the health risks associated 

20 with abusing such substances, and information about 

21 diseases and conditions transmitted through substance 

22 abuse and sexual contact, including HIV/AIDS, and 

23 to coordinate with providers of services addressing 

24 such problems, as appropriate. 
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1 ‘(5) COORDINATION WITH SPECIFIED PRO2 GRAMS.—An undertaking to coordinate, as appro3 priate, with State and local entities responsible for 

4 the programs under parts A, B, and D of this title, 

5 including programs under title I of the Workforce In6 vestment Act of 1998 (including the One-Stop delivery 

7 system), and such other programs as the Secretary 

8 may require. 

9 ‘(6) RECORDS, REPORTS, AND AUDITS.—An 

10 agreement to maintain such records, make such re11 ports, and cooperate with such reviews or audits as 

12 the Secretary may find necessary for purposes of over13 sight of project activities and expenditures. 

14 ‘(7) SELF-INITIATED EVALUATION.—If the entity 

15 elects to contract for independent evaluation of the 

16 project (part or all of the cost of which may be paid 

17 for using grant funds), a commitment to submit to 

18 the Secretary a copy of the evaluation report within 

19 30 days after completion of the report and not more 

20 than 1 year after completion of the project. 

21 ‘(8) COOPERATION WITH SECRETARY’S OVER22 SIGHT AND EVALUATION.—An agreement to cooperate 

23 with the Secretary’s evaluation of projects assisted 

24 under this section, by means including random as25 signment of clients to service recipient and control 
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1 groups, if determined by the Secretary to be appro2 priate, and affording the Secretary access to the 

3 project and to project-related records and documents, 

4 staff, and clients. 

5 ‘(c) ELIGIBILITY CRITERIA FOR LIMITED PURPOSE

6 GRANTS.—In order to be eligible for a grant under this sec7 tion in an amount under $25,000 per fiscal year, an entity 

8 shall submit an application to the Secretary containing the 

9 following: 

10 ‘(1) PROJECT DESCRIPTION.—A description of 

11 the project and how it will be carried out, including 

12 the number and characteristics of clients to be served, 

13 the proposed duration of the project, and how it will 

14 address at least 1 of the 4 objectives specified in sec15 tion 441(b)(1). 

16 ‘(2) QUALIFICATIONS.—Such information as the 

17 Secretary may require as to the capacity of the entity 

18 to carry out the project, including any previous expe19 rience with similar activities. 

20 ‘(3) COORDINATION WITH RELATED PRO21 GRAMS.—As required by the Secretary in appropriate 

22 cases, an undertaking to coordinate and cooperate 

23 with State and local entities responsible for specific 

24 programs relating to the objectives of the project in-
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1 cluding, as appropriate, jobs programs and programs 

2 serving children and families. 

3 ‘(4) RECORDS, REPORTS, AND AUDITS.—An 

4 agreement to maintain such records, make such re5 ports, and cooperate with such reviews or audits as 

6 the Secretary may find necessary for purposes of over7 sight of project activities and expenditures. 

8 ‘(5) COOPERATION WITH SECRETARY’S OVER9 SIGHT AND EVALUATION.—An agreement to cooperate 

10 with the Secretary’s evaluation of projects assisted 

11 under this section, by means including affording the 

12 Secretary access to the project and to project-related 

13 records and documents, staff, and clients. 

14 ‘(d) CONSIDERATIONS IN AWARDING GRANTS.—

15 ‘(1) DIVERSITY OF PROJECTS.—In awarding 

16 grants under this section, the Secretary shall seek to 

17 achieve a balance among entities of differing sizes, en18 tities in differing geographic areas, entities in urban 

19 and in rural areas, and entities employing differing 

20 methods of achieving the purposes of this section, in21 cluding working with the State agency responsible for 

22 the administration of part D to help fathers satisfy 

23 child support arrearage obligations. 

24 ‘(2) PREFERENCE FOR PROJECTS SERVING LOW25 INCOME FATHERS.—In awarding grants under this 
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1 section, the Secretary may give preference to applica2 tions for projects in which a majority of the clients 

3 to be served are low-income fathers. 

4 ‘(e) FEDERAL SHARE.—

5 ‘(1) IN GENERAL.—Grants for a project under 

6 this section for a fiscal year shall be available for a 

7 share of the cost of such project in such fiscal year 

8 equal to—

9 ‘(A) up to 80 percent (or up to 90 percent, 

10 if the entity demonstrates to the Secretary’s sat11 isfaction circumstances limiting the entity’s abil12 ity to secure non-Federal resources) in the case 

13 of a project under subsection (b); and 

14 ‘(B) up to 100 percent, in the case of a 

15 project under subsection (c). 

16 ‘(2) NON-FEDERAL SHARE.—The non-Federal 

17 share may be in cash or in kind. In determining the 

18 amount of the non-Federal share, the Secretary may 

19 attribute fair market value to goods, services, and fa20 cilities contributed from non-Federal sources. 

21 ‘SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION 

22 PROJECTS. 

23 ‘(a) IN GENERAL.—The Secretary may make grants 

24 under this section for fiscal years 2006 through 2010 to eli25 gible entities (as specified in subsection (b)) for 2 multicity, 
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1 multistate projects demonstrating approaches to achieving 

2 the objectives specified in section 441(b)(1). One of the 

3 projects shall test the use of married couples to deliver pro4 gram services. 

5 ‘(b) ELIGIBLE ENTITIES.—An entity eligible for a 

6 grant under this section must be a national nonprofit fa7 therhood promotion organization that meets the following 

8 requirements: 

9 ‘(1) EXPERIENCE WITH FATHERHOOD PRO10 GRAMS.—The organization must have substantial ex11 perience in designing and successfully conducting 

12 programs that meet the purposes described in section 

13 441. 

14 ‘(2) EXPERIENCE WITH MULTICITY, MULTISTATE

15 PROGRAMS AND GOVERNMENT COORDINATION.—The 

16 organization must have experience in simultaneously 

17 conducting such programs in more than 1 major met18 ropolitan area in more than 1 State and in coordi19 nating such programs, where appropriate, with State 

20 and local government agencies and private, nonprofit 

21 agencies (including community-based and religious 

22 organizations), including State or local agencies re23 sponsible for child support enforcement and workforce 

24 development. 
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1 ‘(c) APPLICATION REQUIREMENTS.—In order to be eli2 gible for a grant under this section, an entity must submit 

3 to the Secretary an application that includes the following: 

4 ‘(1) QUALIFICATIONS.—

5 ‘(A) ELIGIBLE ENTITY.—A demonstration 

6 that the entity meets the requirements of sub7 section (b). 

8 ‘(B) OTHER.—Such other information as 

9 the Secretary may find necessary to demonstrate 

10 the entity’s capacity to carry out the project, in11 cluding the entity’s ability to provide the non12 Federal share of project resources. 

13 ‘(2) PROJECT DESCRIPTION.—A description of 

14 and commitments concerning the project design, in15 cluding the following: 

16 ‘(A) IN GENERAL.—A detailed description of 

17 the proposed project design and how it will be 

18 carried out, which shall—

19 ‘(i) provide for the project to be con20 ducted in at least 3 major metropolitan 

21 areas; 

22 ‘(ii) state how it will address each of 

23 the 4 objectives specified in section 

24 441(b)(1); 
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1 ‘(iii) demonstrate that there is a suffi2 cient number of potential clients to allow 

3 for the random selection of individuals to 

4 participate in the project and for compari5 sons with appropriate control groups com6 posed of individuals who have not partici7 pated in such projects; and 

8 ‘(iv) demonstrate that the project is de9 signed to direct a majority of project re10 sources to activities serving low-income fa11 thers (but the project need not make services 

12 available on a means-tested basis). 

13 ‘(B) OVERSIGHT, EVALUATION, AND AD14 JUSTMENT COMPONENT.—An agreement that the 

15 entity—

16 ‘(i) in consultation with the evaluator 

17 selected pursuant to section 445, and as re18 quired by the Secretary, will modify the 

19 project design, initially and (if necessary) 

20 subsequently throughout the duration of the 

21 project, in order to facilitate ongoing and 

22 final oversight and evaluation of project op23 eration and outcomes (by means including, 

24 to the maximum extent feasible, random as25 signment of clients to service recipient and 
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1 control groups), and to provide for mid2 course adjustments in project design indi3 cated by interim evaluations; 

4 ‘(ii) will submit to the Secretary re5 vised descriptions of the project design as 

6 modified in accordance with clause (i); and 

7 ‘(iii) will cooperate fully with the Sec8 retary’s ongoing oversight and ongoing and 

9 final evaluation of the project, by means in10 cluding affording the Secretary access to the 

11 project and to project-related records and 

12 documents, staff, and clients. 

13 ‘(3) ADDRESSING CHILD ABUSE AND NEGLECT

14 AND DOMESTIC VIOLENCE.—A description of how the 

15 entity will assess for the presence of, and intervene to 

16 resolve, domestic violence and child abuse and neglect, 

17 including how the entity will coordinate with State 

18 and local child protective service and domestic vio19 lence programs. 

20 ‘(4) ADDRESSING CONCERNS RELATING TO SUB21 STANCE ABUSE AND SEXUAL ACTIVITY.—A commit22 ment to make available to each individual partici23 pating in the project education about alcohol, tobacco, 

24 and other drugs, and about the health risks associated 

25 with abusing such substances, and information about 
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1 diseases and conditions transmitted through substance 

2 abuse and sexual contact, including HIV/AIDS, and 

3 to coordinate with providers of services addressing 

4 such problems, as appropriate. 

5 ‘(5) COORDINATION WITH SPECIFIED PRO6 GRAMS.—An undertaking to coordinate, as appro7 priate, with State and local entities responsible for 

8 the programs funded under parts A, B, and D of this 

9 title, programs under title I of the Workforce Invest10 ment Act of 1998 (including the One-Stop delivery 

11 system), and such other programs as the Secretary 

12 may require. 

13 ‘(6) RECORDS, REPORTS, AND AUDITS.—An 

14 agreement to maintain such records, make such re15 ports, and cooperate with such reviews or audits (in 

16 addition to those required under the preceding provi17 sions of paragraph (2)) as the Secretary may find 

18 necessary for purposes of oversight of project activities 

19 and expenditures. 

20 ‘(d) FEDERAL SHARE.—

21 ‘(1) IN GENERAL.—Grants for a project under 

22 this section for a fiscal year shall be available for up 

23 to 80 percent of the cost of such project in such fiscal 

24 year. 
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1 ‘(2) NON-FEDERAL SHARE.—The non-Federal 

2 share may be in cash or in kind. In determining the 

3 amount of the non-Federal share, the Secretary may 

4 attribute fair market value to goods, services, and fa5 cilities contributed from non-Federal sources. 

6 ‘SEC. 445. EVALUATION. 

7 ‘(a) IN GENERAL.—The Secretary, directly or by con8 tract or cooperative agreement, shall evaluate the effective9 ness of service projects funded under sections 443 and 444 

10 from the standpoint of the purposes specified in section 

11 441(b)(1). 

12 ‘(b) EVALUATION METHODOLOGY.—Evaluations under 

13 this section shall—

14 ‘(1) include, to the maximum extent feasible, 

15 random assignment of clients to service delivery and 

16 control groups and other appropriate comparisons of 

17 groups of individuals receiving and not receiving 

18 services; 

19 ‘(2) describe and measure the effectiveness of the 

20 projects in achieving their specific project goals; and 

21 ‘(3) describe and assess, as appropriate, the im22 pact of such projects on marriage, parenting, domestic 

23 violence, child abuse and neglect, money management, 

24 employment and earnings, payment of child support, 

25 and child well-being, health, and education. 
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1 ‘(c) EVALUATION REPORTS.—The Secretary shall pub2 lish the following reports on the results of the evaluation: 

3 ‘(1) An implementation evaluation report cov4 ering the first 24 months of the activities under this 

5 part to be completed by 36 months after initiation of 

6 such activities. 

7 ‘(2) A final report on the evaluation to be com8 pleted by September 30, 2013. 

9 ‘SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE. 

10 ‘The Secretary is authorized, by grant, contract, or co11 operative agreement, to carry out projects and activities of 

12 national significance relating to fatherhood promotion, in13 cluding—

14 ‘(1) COLLECTION AND DISSEMINATION OF INFOR15 MATION.—Assisting States, communities, and private 

16 entities, including religious organizations, in efforts 

17 to promote and support marriage and responsible fa18 therhood by collecting, evaluating, developing, and 

19 making available (through the Internet and by other 

20 means) to all interested parties information regarding 

21 approaches to accomplishing the objectives specified in 

22 section 441(b)(1). 

23 ‘(2) MEDIA CAMPAIGN.—Developing, promoting, 

24 and distributing to interested States, local govern25 ments, public agencies, and private nonprofit organi-
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1 zations, including charitable and religious organiza2 tions, a media campaign that promotes and encour3 ages involved, committed, and responsible fatherhood 

4 and married fatherhood. 

5 ‘(3) TECHNICAL ASSISTANCE.—Providing tech6 nical assistance, including consultation and training, 

7 to public and private entities, including community 

8 organizations and faith-based organizations, in the 

9 implementation of local fatherhood promotion pro10 grams. 

11 ‘(4) RESEARCH.—Conducting research related to 

12 the purposes of this part. 

13 ‘SEC. 447. NONDISCRIMINATION. 

14 ‘The projects and activities assisted under this part 

15 shall be available on the same basis to all fathers and ex16 pectant fathers able to benefit from such projects and activi17 ties, including married and unmarried fathers and custo18 dial and noncustodial fathers, with particular attention to 

19 low-income fathers, and to mothers and expectant mothers 

20 on the same basis as to fathers. 

21 ‘SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVA22 TION FOR CERTAIN PURPOSE. 

23 ‘(a) AUTHORIZATION.—There are authorized to be ap24 propriated $20,000,000 for each of fiscal years 2006 through 

25 2010 to carry out the provisions of this part. 
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1 ‘(b) RESERVATION.—Of the amount appropriated 

2 under this section for each fiscal year, not more than 15 

3 percent shall be available for the costs of the multicity, 

4 multicounty, multistate demonstration projects under sec5 tion 444, evaluations under section 445, and projects of na6 tional significance under section 446.’. 

7 ‘‘(b) INAPPLICABILITY OF EFFECTIVE DATE PROVI8 SIONS.—Section 116 shall not apply to the amendment 

9 made by subsection (a) of this section.’’. 

10 (2) CLERICAL AMENDMENT.—Section 2 of such 

11 Act is amended in the table of contents by inserting 

12 after the item relating to section 116 the following 

13 new item:

‘‘Sec. 117. Fatherhood program.’’.

14 SEC. 8120. STATE OPTION TO MAKE TANF PROGRAMS MAN15 DATORY PARTNERS WITH ONE-STOP EMPLOY16 MENT TRAINING CENTERS. 

17 Section 408 of the Social Security Act (42 U.S.C. 608) 

18 is amended by adding at the end the following: 

19 ‘‘(h) STATE OPTION TO MAKE TANF PROGRAMS MAN20 DATORY PARTNERS WITH ONE-STOP EMPLOYMENT TRAIN21 ING CENTERS.—For purposes of section 121(b) of the Work22 force Investment Act of 1998, a State program funded under 

23 part A of title IV of the Social Security Act shall be consid24 ered a program referred to in paragraph (1)(B) of such sec25 tion, unless, after the date of the enactment of this sub-
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1 section, the Governor of the State notifies the Secretaries 

2 of Health and Human Services and Labor in writing of 

3 the decision of the Governor not to make the State program 

4 a mandatory partner.’’. 

5 SEC. 8121. SENSE OF THE CONGRESS. 

6 It is the sense of the Congress that a State welfare7 to-work program should include a mentoring program. 

8 SEC. 8122. DRUG TESTING OF APPLICANTS FOR AND RE9 CIPIENTS OF ASSISTANCE. 

10 (a) REQUIREMENT.—Section 408(a) (42 U.S.C. 

11 608(a)) is amended by adding at the end the following: 

12 ‘‘(12) DRUG TESTING REQUIREMENTS.—A State 

13 to which a grant is made under section 403(a) for a 

14 fiscal year shall—

15 ‘‘(A) require an individual who has applied 

16 for, or is a recipient of, assistance from the State 

17 program funded under this part to undergo a 

18 physical test designed to detect the use by the in19 dividual of any controlled substance (as defined 

20 in section 102(6) of the Controlled Substances 

21 Act) if the State has reason to believe that the 

22 person has unlawfully used such a substance re23 cently; 

24 ‘‘(B) if a test administered pursuant to this 

25 paragraph indicates that an individual has so 
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1 used such a substance recently, or if the State 

2 otherwise determines (on the basis of such indi3 cators as the State may establish) that an indi4 vidual is likely to have so used such a substance 

5 recently—

6 ‘‘(i) ensure that the self-sufficiency 

7 plan developed under section 408(b) with 

8 respect to the individual addresses the use of 

9 the substance; 

10 ‘‘(ii) suspend the provision of cash as11 sistance under the program to the family of 

12 the individual until a subsequent such test 

13 indicates that the individual has not been 

14 using the substance; and 

15 ‘‘(iii) require, as a condition of pro16 viding any benefit under the program to the 

17 family of the individual, that the individual 

18 comply with the self-sufficiency plan, in19 cluding the provisions of the plan that ad20 dress the use of the substance, and undergo 

21 additional such tests every 30 or 60 days, 

22 as the State deems appropriate; and 

23 ‘‘(C) terminate for 3 years the participation 

24 in the program of the family of any individual 

25 who tests positive for such use of such a sub-
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1 stance in such number of consecutive tests ad2 ministered pursuant to this paragraph (which 

3 shall be not less than 3 and not more than 6) as 

4 the State deems appropriate.’’. 

5 (b) PENALTY FOR NONCOMPLIANCE.—Section 409(a) 

6 (42 U.S.C. 609(a)) is amended by adding at the end the 

7 following: 

8 ‘‘(15) PENALTY FOR FAILURE TO COMPLY WITH

9 DRUG TESTING REQUIREMENTS.—If the Secretary de10 termines that a State has not complied with section 

11 408(a)(12) during a fiscal year, the Secretary shall 

12 reduce the grant payable to the State under section 

13 403(a)(1) for the immediately succeeding fiscal year 

14 by an amount equal to not less than 5 percent and 

15 not more than 10 percent of the State family assist16 ance grant, as the Secretary deems appropriate based 

17 on the frequency and severity of the noncompliance.’’. 

18 Subtitle B—Child Care 

19 SEC. 8201. ENTITLEMENT FUNDING. 

20 Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended—

21 (1) by striking ‘‘and’’ at the end of subpara22 graph (E); 

23 (2) by striking the period at the end of subpara24 graph (F) and inserting a semicolon; and 

25 (3) by adding at the end the following: 
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1 ‘‘(G) $2,717,000,000 for fiscal year 2006; 

2 ‘‘(H) $2,767,000,000 for fiscal year 2007; 

3 ‘‘(I) $2,817,000,000 for fiscal year 2008; 

4 ‘‘(J) $2,867,000,000 for fiscal year 2009; 

5 and 

6 ‘‘(K) $2,917,000,000 for fiscal year 2010.’’. 

7 Subtitle C—Child Support 

8 SEC. 8301. FEDERAL MATCHING FUNDS FOR LIMITED PASS 

9 THROUGH OF CHILD SUPPORT PAYMENTS TO 

10 FAMILIES RECEIVING TANF. 

11 (a) IN GENERAL.—Section 457(a) (42 U.S.C. 657(a)) 

12 is amended—

13 (1) in paragraph (1)(A), by inserting ‘‘subject to 

14 paragraph (7)’’ before the semicolon; and 

15 (2) by adding at the end the following: 

16 ‘‘(7) FEDERAL MATCHING FUNDS FOR LIMITED

17 PASS THROUGH OF CHILD SUPPORT PAYMENTS TO

18 FAMILIES RECEIVING TANF.—Notwithstanding para19 graph (1), a State shall not be required to pay to the 

20 Federal Government the Federal share of an amount 

21 collected during a month on behalf of a family that 

22 is a recipient of assistance under the State program 

23 funded under part A, to the extent that—

24 ‘‘(A) the State distributes the amount to the 

25 family; 
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1 ‘‘(B) the total of the amounts so distributed 

2 to the family during the month—

3 ‘‘(i) exceeds the amount (if any) that, 

4 as of December 31, 2001, was required 

5 under State law to be distributed to a fam6 ily under paragraph (1)(B); and 

7 ‘‘(ii) does not exceed the greater of—

8 ‘‘(I) $100; or 

9 ‘‘(II) $50 plus the amount de10 scribed in clause (i); and 

11 ‘‘(C) the amount is disregarded in deter12 mining the amount and type of assistance pro13 vided to the family under the State program 

14 funded under part A.’’. 

15 (b) APPLICABILITY.—The amendments made by sub16 section (a) shall apply to amounts distributed on or after 

17 October 1, 2008. 

18 SEC. 8302. STATE OPTION TO PASS THROUGH ALL CHILD 

19 SUPPORT PAYMENTS TO FAMILIES THAT FOR20 MERLY RECEIVED TANF. 

21 (a) IN GENERAL.—Section 457(a) (42 U.S.C. 657(a)), 

22 as amended by section 8301(a) of this Act, is amended—

23 (1) in paragraph (2)(B), in the matter preceding 

24 clause (i), by inserting ‘‘, except as provided in para25 graph (8),’’ after ‘‘shall’’; and 
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1 (2) by adding at the end the following: 

2 ‘‘(8) STATE OPTION TO PASS THROUGH ALL

3 CHILD SUPPORT PAYMENTS TO FAMILIES THAT FOR4 MERLY RECEIVED TANF.—In lieu of applying para5 graph (2) to any family described in paragraph (2), 

6 a State may distribute to the family any amount col7 lected during a month on behalf of the family.’’. 

8 (b) APPLICABILITY.—The amendments made by sub9 section (a) shall apply to amounts distributed on or after 

10 October 1, 2008. 

11 SEC. 8303. MANDATORY REVIEW AND ADJUSTMENT OF 

12 CHILD SUPPORT ORDERS FOR FAMILIES RE13 CEIVING TANF. 

14 (a) IN GENERAL.—Section 466(a)(10)(A)(i) (42 

15 U.S.C. 666(a)(10)(A)(i)) is amended—

16 (1) by striking ‘‘parent, or,’’ and inserting ‘‘par17 ent or’’; and 

18 (2) by striking ‘‘upon the request of the State 

19 agency under the State plan or of either parent,’’. 

20 (b) EFFECTIVE DATE.—The amendments made by sub21 section (a) shall take effect on October 1, 2007. 
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1 SEC. 8304. MANDATORY FEE FOR SUCCESSFUL CHILD SUP2 PORT COLLECTION FOR FAMILY THAT HAS 

3 NEVER RECEIVED TANF. 

4 (a) IN GENERAL.—Section 454(6)(B) (42 U.S.C. 

5 654(6)(B)) is amended—

6 (1) by inserting ‘‘(i)’’ after ‘‘(B)’’; 

7 (2) by redesignating clauses (i) and (ii) as sub8 clauses (I) and (II), respectively; 

9 (3) by adding ‘‘and’’ after the semicolon; and 

10 (4) by adding after and below the end the fol11 lowing new clause: 

12 ‘‘(ii) in the case of an individual who has 

13 never received assistance under a State program 

14 funded under part A and for whom the State has 

15 collected at least $500 of support, the State shall 

16 impose an annual fee of $25 for each case in 

17 which services are furnished, which shall be re18 tained by the State from support collected on be19 half of the individual (but not from the 1st $500 

20 so collected), paid by the individual applying for 

21 the services, recovered from the absent parent, or 

22 paid by the State out of its own funds (the pay23 ment of which from State funds shall not be con24 sidered as an administrative cost of the State for 

25 the operation of the plan, and such fees shall be 

26 considered income to the program);’’. 
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1 (b) CONFORMING AMENDMENT.—Section 457(a)(3) (42 

2 U.S.C. 657(a)(3)) is amended to read as follows: 

3 ‘‘(3) FAMILIES THAT NEVER RECEIVED ASSIST4 ANCE.—In the case of any other family, the State 

5 shall distribute to the family the portion of the 

6 amount so collected that remains after withholding 

7 any fee pursuant to section 454(6)(B)(ii).’’. 

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

9 section shall take effect on October 1, 2006. 

10 SEC. 8305. REPORT ON UNDISTRIBUTED CHILD SUPPORT 

11 PAYMENTS. 

12 Not later than 6 months after the date of the enactment 

13 of this Act, the Secretary of Health and Human Services 

14 shall submit to the Committee on Ways and Means of the 

15 House of Representatives and the Committee on Finance 

16 of the Senate a report on the procedures that the States use 

17 generally to locate custodial parents for whom child support 

18 has been collected but not yet distributed. The report shall 

19 include an estimate of the total amount of undistributed 

20 child support and the average length of time it takes undis21 tributed child support to be distributed. To the extent the 

22 Secretary deems appropriate, the Secretary shall include in 

23 the report recommendations as to whether additional proce24 dures should be established at the State or Federal level to 

25 expedite the payment of undistributed child support. 
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1 SEC. 8306. DECREASE IN AMOUNT OF CHILD SUPPORT AR2 REARAGE TRIGGERING PASSPORT DENIAL. 

3 (a) IN GENERAL.—Section 452(k)(1) (42 U.S.C. 

4 652(k)(1)) is amended by striking ‘‘$5,000’’ and inserting 

5 ‘‘$2,500’’. 

6 (b) CONFORMING AMENDMENT.—Section 454(31) (42 

7 U.S.C. 654(31)) is amended by striking ‘‘$5,000’’ and in8 serting ‘‘$2,500’’. 

9 (c) EFFECTIVE DATE.—The amendments made by this 

10 section shall take effect on October 1, 2006. 

11 SEC. 8307. USE OF TAX REFUND INTERCEPT PROGRAM TO 

12 COLLECT PAST-DUE CHILD SUPPORT ON BE13 HALF OF CHILDREN WHO ARE NOT MINORS. 

14 (a) IN GENERAL.—Section 464 (42 U.S.C. 664) is 

15 amended—

16 (1) in subsection (a)(2)(A), by striking ‘‘(as that 

17 term is defined for purposes of this paragraph under 

18 subsection (c))’’; and 

19 (2) in subsection (c)—

20 (A) in paragraph (1)—

21 (i) by striking ‘‘(1) Except as provided 

22 in paragraph (2), as used in’’ and inserting 

23 ‘‘In’’; and 

24 (ii) by inserting ‘‘(whether or not a 

25 minor)’’ after ‘‘a child’’ each place it ap26 pears; and 
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1 (B) by striking paragraphs (2) and (3). 

2 (b) EFFECTIVE DATE.—The amendments made by sub3 section (a) shall take effect on October 1, 2007. 

4 SEC. 8308. GARNISHMENT OF COMPENSATION PAID TO VET5 ERANS FOR SERVICE-CONNECTED DISABIL6 ITIES IN ORDER TO ENFORCE CHILD SUP7 PORT OBLIGATIONS. 

8 (a) IN GENERAL.—Section 459(h) (42 U.S.C. 659(h)) 

9 is amended—

10 (1) in paragraph (1)(A)(ii)(V), by striking all 

11 that follows ‘‘Armed Forces’’ and inserting a semi12 colon; and 

13 (2) by adding at the end the following: 

14 ‘‘(3) LIMITATIONS WITH RESPECT TO COMPENSA15 TION PAID TO VETERANS FOR SERVICE-CONNECTED

16 DISABILITIES.—Notwithstanding any other provision 

17 of this section: 

18 ‘‘(A) Compensation described in paragraph 

19 (1)(A)(ii)(V) shall not be subject to withholding 

20 pursuant to this section—

21 ‘‘(i) for payment of alimony; or 

22 ‘‘(ii) for payment of child support if 

23 the individual is fewer than 60 days in ar24 rears in payment of the support. 
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1 ‘‘(B) Not more than 50 percent of any pay2 ment of compensation described in paragraph 

3 (1)(A)(ii)(V) may be withheld pursuant to this 

4 section.’’. 

5 (b) EFFECTIVE DATE.—The amendments made by sub6 section (a) shall take effect on October 1, 2007. 

7 SEC. 8309. MAINTENANCE OF TECHNICAL ASSISTANCE 

8 FUNDING. 

9 Section 452(j) (42 U.S.C. 652(j)) is amended by insert10 ing ‘‘or the amount appropriated under this paragraph for 

11 fiscal year 2002, whichever is greater,’’ before ‘‘which shall 

12 be available’’. 

13 SEC. 8310. MAINTENANCE OF FEDERAL PARENT LOCATOR 

14 SERVICE FUNDING. 

15 Section 453(o) (42 U.S.C. 653(o)) is amended—

16 (1) in the 1st sentence, by inserting ‘‘or the 

17 amount appropriated under this paragraph for fiscal 

18 year 2002, whichever is greater,’’ before ‘‘which shall 

19 be available’’; and 

20 (2) in the 2nd sentence, by striking ‘‘for each of 

21 fiscal years 1997 through 2001’’. 

22 SEC. 8311. INFORMATION COMPARISONS WITH INSURANCE 

23 DATA. 

24 (a) DUTIES OF THE SECRETARY.—Section 452 (42 

25 U.S.C. 652) is amended by adding at the end the following: 
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1 ‘‘(m) COMPARISONS WITH INSURANCE INFORMA2 TION.—

3 ‘‘(1) IN GENERAL.—The Secretary, through the 

4 Federal Parent Locator Service, may—

5 ‘‘(A) compare information concerning indi6 viduals owing past-due support with informa7 tion maintained by insurers (or their agents) 

8 concerning insurance claims, settlements, 

9 awards, and payments, and 

10 ‘‘(B) furnish information resulting from 

11 such a comparison to the State agencies respon12 sible for collecting child support from such indi13 viduals. 

14 ‘‘(2) LIABILITY.—An insurer (including any 

15 agent of an insurer) shall not be liable under any 

16 Federal or State law to any person for any disclosure 

17 provided for under this subsection, or for any other 

18 action taken in good faith in accordance with this 

19 subsection.’’. 

20 (b) STATE REIMBURSEMENT OF FEDERAL COSTS.—

21 Section 453(k)(3) (42 U.S.C. 653(k)(3)) is amended by in22 serting ‘‘or section 452(m)’’ after ‘‘this section’’. 
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1 SEC. 8312. TRIBAL ACCESS TO THE FEDERAL PARENT LOCA2 TOR SERVICE. 

3 Section 453(c)(1) (42 U.S.C. 653(c)(1)) is amended by 

4 inserting ‘‘or of any Indian tribe or tribal organization’’ 

5 after ‘‘any agent or attorney of any State’’. 

6 SEC. 8313. REIMBURSEMENT OF SECRETARY’S COSTS OF IN7 FORMATION COMPARISONS AND DISCLOSURE 

8 FOR ENFORCEMENT OF OBLIGATIONS ON 

9 HIGHER EDUCATION ACT LOANS AND 

10 GRANTS. 

11 Section 453(j)(6)(F) (42 U.S.C. 653(j)(6)(F)) is 

12 amended by striking ‘‘additional’’. 

13 SEC. 8314. TECHNICAL AMENDMENT RELATING TO COOPER14 ATIVE AGREEMENTS BETWEEN STATES AND 

15 INDIAN TRIBES. 

16 Section 454(33) (42 U.S.C. 654(33)) is amended by 

17 striking ‘‘that receives funding pursuant to section 428 

18 and’’. 

19 SEC. 8315. STATE OPTION TO USE STATEWIDE AUTOMATED 

20 DATA PROCESSING AND INFORMATION RE21 TRIEVAL SYSTEM FOR INTERSTATE CASES. 

22 Section 466(a)(14)(A)(iii) (42 U.S.C. 

23 666(a)(14)(A)(iii)) is amended by inserting ‘‘(but the as24 sisting State may establish a corresponding case based on 

25 such other State’s request for assistance)’’ before the semi26 colon. 
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1 SEC. 8316. MODIFICATION OF RULE REQUIRING ASSIGN2 MENT OF SUPPORT RIGHTS AS A CONDITION 

3 OF RECEIVING TANF. 

4 (a) IN GENERAL.—Section 408(a)(3) (42 U.S.C. 

5 608(a)(3)) is amended to read as follows: 

6 ‘‘(3) NO ASSISTANCE FOR FAMILIES NOT ASSIGN7 ING CERTAIN SUPPORT RIGHTS TO THE STATE.—

8 ‘‘(A) IN GENERAL.—Subject to subpara9 graph (B), a State to which a grant is made 

10 under section 403 shall require, as a condition of 

11 providing assistance to a family under the State 

12 program funded under this part, that a member 

13 of the family assign to the State any rights the 

14 family member may have (on behalf of the fam15 ily member or of any other person for whom the 

16 family member has applied for or is receiving 

17 such assistance) to—

18 ‘‘(i) support from any other person 

19 which accrues during the period that the 

20 family receives assistance under the pro21 gram; and 

22 ‘‘(ii) at the option of the State, support 

23 from any other person which has accrued 

24 before such period. 

25 ‘‘(B) LIMITATION.—The total amount of 

26 support that may be required to be provided 
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1 with respect to rights assigned to a State by a 

2 family member pursuant to subparagraph (A) 

3 shall not exceed the total amount of assistance 

4 provided by the State to the family.’’. 

5 (b) EFFECTIVE DATE.—The amendment made by sub6 section (a) shall take effect on October 1, 2008. 

7 SEC. 8317. STATE OPTION TO DISCONTINUE CERTAIN SUP8 PORT ASSIGNMENTS. 

9 Section 457(b) (42 U.S.C. 657(b)) is amended by strik10 ing ‘‘shall’’ and inserting ‘‘may’’. 

11 SEC. 8318. TECHNICAL CORRECTION. 

12 The second paragraph (7) of section 453(j) (42 U.S.C. 

13 653(j)) is amended by striking ‘‘(7)’’ and inserting ‘‘(9)’’. 

14 SEC. 8319. REDUCTION IN RATE OF REIMBURSEMENT OF 

15 CHILD SUPPORT ADMINISTRATIVE EX16 PENSES. 

17 Section 455(a)(2) (42 U.S.C. 655(a)(2)) is amended—

18 (1) in subparagraph (B), by striking ‘‘, and’’ 

19 and inserting a semicolon; 

20 (2) in subparagraph (C), by striking ‘‘fiscal year 

21 1990 and each fiscal year thereafter.’’ and inserting 

22 ‘‘fiscal years 1990 through 2006;’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(D) 62 percent for fiscal year 2007; 

25 ‘‘(E) 58 percent for fiscal year 2008; 
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1 ‘‘(F) 54 percent for fiscal year 2009; and 

2 ‘‘(G) 50 percent for fiscal year 2010 and each 

3 fiscal year thereafter.’’. 

4 SEC. 8320. INCENTIVE PAYMENTS. 

5 (a) IN GENERAL.—Section 455(a)(1) (42 U.S.C. 

6 655(a)(1)) is amended by inserting ‘‘from amounts paid to 

7 the State under section 458 or’’ before ‘‘to carry out an 

8 agreement’’. 

9 (b) EFFECTIVE DATE.—The amendment made by sub10 section (a) shall take effect on October 1, 2007. 

11 Subtitle D—Child Welfare 

12 SEC. 8401. EXTENSION OF AUTHORITY TO APPROVE DEM13 ONSTRATION PROJECTS. 

14 Section 1130(a)(2) (42 U.S.C. 1320a–9(a)(2)) is 

15 amended by striking ‘‘2003’’ and inserting ‘‘2010’’. 

16 SEC. 8402. ELIMINATION OF LIMITATION ON NUMBER OF 

17 WAIVERS. 

18 Section 1130(a)(2) (42 U.S.C. 1320a–9(a)(2)) is 

19 amended by striking ‘‘not more than 10’’. 

20 SEC. 8403. ELIMINATION OF LIMITATION ON NUMBER OF 

21 STATES THAT MAY BE GRANTED WAIVERS TO 

22 CONDUCT DEMONSTRATION PROJECTS ON 

23 SAME TOPIC. 

24 Section 1130 (42 U.S.C. 1320a–9) is amended by add25 ing at the end the following: 
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1 ‘‘(h) NO LIMIT ON NUMBER OF STATES THAT MAY BE

2 GRANTED WAIVERS TO CONDUCT SAME OR SIMILAR DEM3 ONSTRATION PROJECTS.—The Secretary shall not refuse to 

4 grant a waiver to a State under this section on the grounds 

5 that a purpose of the waiver or of the demonstration project 

6 for which the waiver is necessary would be the same as or 

7 similar to a purpose of another waiver or project that is 

8 or may be conducted under this section.’’. 

9 SEC. 8404. ELIMINATION OF LIMITATION ON NUMBER OF 

10 WAIVERS THAT MAY BE GRANTED TO A SIN11 GLE STATE FOR DEMONSTRATION PROJECTS. 

12 Section 1130 (42 U.S.C. 1320a–9) is further amended 

13 by adding at the end the following: 

14 ‘‘(i) NO LIMIT ON NUMBER OF WAIVERS GRANTED TO, 

15 OR DEMONSTRATION PROJECTS THAT MAY BE CONDUCTED

16 BY, A SINGLE STATE.—The Secretary shall not impose any 

17 limit on the number of waivers that may be granted to a 

18 State, or the number of demonstration projects that a State 

19 may be authorized to conduct, under this section.’’. 

20 SEC. 8405. STREAMLINED PROCESS FOR CONSIDERATION 

21 OF AMENDMENTS TO AND EXTENSIONS OF 

22 DEMONSTRATION PROJECTS REQUIRING 

23 WAIVERS. 

24 Section 1130 (42 U.S.C. 1320a–9) is further amended 

25 by adding at the end the following: 
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1 ‘‘(j) STREAMLINED PROCESS FOR CONSIDERATION OF

2 AMENDMENTS AND EXTENSIONS.—The Secretary shall de3 velop a streamlined process for consideration of amend4 ments and extensions proposed by States to demonstration 

5 projects conducted under this section.’’. 

6 SEC. 8406. AVAILABILITY OF REPORTS. 

7 Section 1130 (42 U.S.C. 1320a–9) is further amended 

8 by adding at the end the following: 

9 ‘‘(k) AVAILABILITY OF REPORTS.—The Secretary shall 

10 make available to any State or other interested party any 

11 report provided to the Secretary under subsection (f)(2), 

12 and any evaluation or report made by the Secretary with 

13 respect to a demonstration project conducted under this sec14 tion, with a focus on information that may promote best 

15 practices and program improvements.’’. 

16 SEC. 8407. CLARIFICATION OF ELIGIBILITY FOR FOSTER 

17 CARE MAINTENANCE PAYMENTS AND ADOP18 TION ASSISTANCE. 

19 (a) FOSTER CARE MAINTENANCE PAYMENTS.—Section 

20 472(a) (42 U.S.C. 672(a)) is amended to read as follows: 

21 ‘‘(a) IN GENERAL.—

22 ‘‘(1) ELIGIBILITY.—Each State with a plan ap23 proved under this part shall make foster care mainte24 nance payments on behalf of each child who has been 

25 removed from the home of a relative specified in sec-
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1 tion 406(a) (as in effect on July 16, 1996) into foster 

2 care if—

3 ‘‘(A) the removal and foster care placement 

4 met, and the placement continues to meet, the re5 quirements of paragraph (2); and 

6 ‘‘(B) the child, while in the home, would 

7 have met the AFDC eligibility requirement of 

8 paragraph (3). 

9 ‘‘(2) REMOVAL AND FOSTER CARE PLACEMENT

10 REQUIREMENTS.—The removal and foster care place11 ment of a child meet the requirements of this para12 graph if—

13 ‘‘(A) the removal and foster care placement 

14 are in accordance with—

15 ‘‘(i) a voluntary placement agreement 

16 entered into by a parent or legal guardian 

17 of the child who is the relative referred to in 

18 paragraph (1); or 

19 ‘‘(ii) a judicial determination to the ef20 fect that continuation in the home from 

21 which removed would be contrary to the 

22 welfare of the child and that reasonable ef23 forts of the type described in section 

24 471(a)(15) for a child have been made; 
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1 ‘‘(B) the child’s placement and care are the 

2 responsibility of—

3 ‘‘(i) the State agency administering the 

4 State plan approved under section 471; or 

5 ‘‘(ii) any other public agency with 

6 which the State agency administering or su7 pervising the administration of the State 

8 plan has made an agreement which is in ef9 fect; and 

10 ‘‘(C) the child has been placed in a foster 

11 family home or child-care institution. 

12 ‘‘(3) AFDC ELIGIBILITY REQUIREMENT.—

13 ‘‘(A) IN GENERAL.—A child in the home re14 ferred to in paragraph (1) would have met the 

15 AFDC eligibility requirement of this paragraph 

16 if the child—

17 ‘‘(i) would have received aid under the 

18 State plan approved under section 402 (as 

19 in effect on July 16, 1996) in the home, in 

20 or for the month in which the agreement 

21 was entered into or court proceedings lead22 ing to the determination referred to in 

23 paragraph (2)(A)(ii) of this subsection were 

24 initiated; or 
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1 ‘‘(ii)(I) would have received the aid in 

2 the home, in or for the month referred to in 

3 clause (i), if application had been made 

4 therefor; or 

5 ‘‘(II) had been living in the home with6 in 6 months before the month in which the 

7 agreement was entered into or the pro8 ceedings were initiated, and would have re9 ceived the aid in or for such month, if, in 

10 such month, the child had been living in the 

11 home with the relative referred to in para12 graph (1) and application for the aid had 

13 been made. 

14 ‘‘(B) RESOURCES DETERMINATION.—For 

15 purposes of subparagraph (A), in determining 

16 whether a child would have received aid under a 

17 State plan approved under section 402 (as in ef18 fect on July 16, 1996), a child whose resources 

19 (determined pursuant to section 402(a)(7)(B), as 

20 so in effect) have a combined value of not more 

21 than $10,000 shall be considered a child whose 

22 resources have a combined value of not more 

23 than $1,000 (or such lower amount as the State 

24 may determine for purposes of section 

25 402(a)(7)(B)). 
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1 ‘‘(4) ELIGIBILITY OF CERTAIN ALIEN CHIL2 DREN.—Subject to title IV of the Personal Responsi3 bility and Work Opportunity Reconciliation Act of 

4 1996, if the child is an alien disqualified under sec5 tion 245A(h) or 210(f) of the Immigration and Na6 tionality Act from receiving aid under the State plan 

7 approved under section 402 in or for the month in 

8 which the agreement described in paragraph (2)(A)(i) 

9 was entered into or court proceedings leading to the 

10 determination described in paragraph (2)(A)(ii) were 

11 initiated, the child shall be considered to satisfy the 

12 requirements of paragraph (3), with respect to the 

13 month, if the child would have satisfied the require14 ments but for the disqualification.’’. 

15 (b) ADOPTION ASSISTANCE.—Section 473(a)(2) (42 

16 U.S.C. 673(a)(2)) is amended to read as follows: 

17 ‘‘(2)(A) For purposes of paragraph (1)(B)(ii), a child 

18 meets the requirements of this paragraph if the child—

19 ‘‘(i)(I)(aa) was removed from the home of a rel20 ative specified in section 406(a) (as in effect on July 

21 16, 1996) and placed in foster care in accordance 

22 with a voluntary placement agreement with respect to 

23 which Federal payments are provided under section 

24 474 (or section 403, as such section was in effect on 

25 July 16, 1996), or in accordance with a judicial de-
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1 termination to the effect that continuation in the 

2 home would be contrary to the welfare of the child; 

3 and 

4 ‘‘(bb) met the requirements of section 472(a)(3) 

5 with respect to the home referred to in item (aa) of 

6 this subclause; 

7 ‘‘(II) meets all of the requirements of title XVI 

8 with respect to eligibility for supplemental security 

9 income benefits; or 

10 ‘‘(III) is a child whose costs in a foster family 

11 home or child-care institution are covered by the fos12 ter care maintenance payments being made with re13 spect to the minor parent of the child as provided in 

14 section 475(4)(B); and 

15 ‘‘(ii) has been determined by the State, pursuant 

16 to subsection (c) of this section, to be a child with spe17 cial needs. 

18 ‘‘(B) Section 472(a)(4) shall apply for purposes of sub19 paragraph (A) of this paragraph, in any case in which the 

20 child is an alien described in such section. 

21 ‘‘(C) A child shall be treated as meeting the require22 ments of this paragraph for the purpose of paragraph 

23 (1)(B)(ii) if the child—

24 ‘‘(i) meets the requirements of subparagraph 

25 (A)(ii); 
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1 ‘‘(ii) was determined eligible for adoption assist2 ance payments under this part with respect to a prior 

3 adoption; 

4 ‘‘(iii) is available for adoption because—

5 ‘‘(I) the prior adoption has been dissolved, 

6 and the parental rights of the adoptive parents 

7 have been terminated; or 

8 ‘‘(II) the child’s adoptive parents have died; 

9 and 

10 ‘‘(iv) fails to meet the requirements of subpara11 graph (A) but would meet such requirements if—

12 ‘‘(I) the child were treated as if the child 

13 were in the same financial and other cir14 cumstances the child was in the last time the 

15 child was determined eligible for adoption assist16 ance payments under this part; and 

17 ‘‘(II) the prior adoption were treated as 

18 never having occurred.’’. 

19 SEC. 8408. CLARIFICATION REGARDING FEDERAL MATCH20 ING OF CERTAIN ADMINISTRATIVE COSTS 

21 UNDER THE FOSTER CARE MAINTENANCE 

22 PAYMENTS PROGRAM. 

23 (a) ADMINISTRATIVE COSTS RELATING TO UNLI24 CENSED CARE.—Section 472 (42 U.S.C. 672) is amended 

25 by inserting after subsection (h) the following: 
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1 ‘‘(i) ADMINISTRATIVE COSTS ASSOCIATED WITH OTH2 ERWISE ELIGIBLE CHILDREN NOT IN LICENSED FOSTER

3 CARE SETTINGS.—Expenditures by a State that would be 

4 considered administrative expenditures for purposes of sec5 tion 474(a)(3) if made with respect to a child who was re6 siding in a foster family home or child-care institution shall 

7 be so considered with respect to a child not residing in such 

8 a home or institution—

9 ‘‘(1) in the case of a child who has been removed 

10 in accordance with subsection (a) of this section from 

11 the home of a relative specified in section 406(a) (as 

12 in effect on July 16, 1996), only for expenditures—

13 ‘‘(A) with respect to a period of not more 

14 than the lesser of 12 months or the average 

15 length of time it takes for the State to license or 

16 approve a home as a foster home, in which the 

17 child is in the home of a relative and an appli18 cation is pending for licensing or approval of the 

19 home as a foster family home; or 

20 ‘‘(B) with respect to a period of not more 

21 than 1 calendar month when a child moves from 

22 a facility not eligible for payments under this 

23 part into a foster family home or child care in24 stitution licensed or approved by the State; and 
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1 ‘‘(2) in the case of any other child who is poten2 tially eligible for benefits under a State plan ap3 proved under this part and at imminent risk of re4 moval from the home, only if—

5 ‘‘(A) reasonable efforts are being made in 

6 accordance with section 471(a)(15) to prevent the 

7 need for, or if necessary to pursue, removal of the 

8 child from the home; and 

9 ‘‘(B) the State agency has made, not less 

10 often than every 6 months, a determination (or 

11 redetermination) as to whether the child remains 

12 at imminent risk of removal from the home.’’. 

13 (b) CONFORMING AMENDMENT.—Section 474(a)(3) of 

14 such Act (42 U.S.C. 674(a)(3)) is amended by inserting 

15 ‘‘subject to section 472(i)’’ before ‘‘an amount equal to’’. 

16 SEC. 8409. TECHNICAL CORRECTION. 

17 Section 1130(b)(1) (42 U.S.C. 1320a–9(b)(1)) is 

18 amended by striking ‘‘422(b)(9)’’ and inserting 

19 ‘‘422(b)(10)’’. 

20 SEC. 8410. TECHNICAL CORRECTION. 

21 Section 470 (42 U.S.C. 670) is amended by striking 

22 ‘‘June 1, 1995’’ and inserting ‘‘July 16, 1996’’. 
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1 Subtitle E—Supplemental Security 

2 Income 

3 SEC. 8501. REVIEW OF STATE AGENCY BLINDNESS AND DIS4 ABILITY DETERMINATIONS. 

5 Section 1633 (42 U.S.C. 1383b) is amended by adding 

6 at the end the following: 

7 ‘‘(e)(1) The Commissioner of Social Security shall re8 view determinations, made by State agencies pursuant to 

9 subsection (a) in connection with applications for benefits 

10 under this title on the basis of blindness or disability, that 

11 individuals who have attained 18 years of age are blind 

12 or disabled as of a specified onset date. The Commissioner 

13 of Social Security shall review such a determination before 

14 any action is taken to implement the determination. 

15 ‘‘(2)(A) In carrying out paragraph (1), the Commis16 sioner of Social Security shall review—

17 ‘‘(i) at least 20 percent of all determinations re18 ferred to in paragraph (1) that are made in fiscal 

19 year 2006; 

20 ‘‘(ii) at least 40 percent of all such determina21 tions that are made in fiscal year 2007; and 

22 ‘‘(iii) at least 50 percent of all such determina23 tions that are made in fiscal year 2008 or thereafter. 

24 ‘‘(B) In carrying out subparagraph (A), the Commis25 sioner of Social Security shall, to the extent feasible, select 
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1 for review the determinations which the Commissioner of 

2 Social Security identifies as being the most likely to be in3 correct.’’. 

4 SEC. 8502. PAYMENT OF CERTAIN LUMP SUM BENEFITS IN 

5 INSTALLMENTS UNDER THE SUPPLEMENTAL 

6 SECURITY INCOME PROGRAM. 

7 (a) IN GENERAL.—Section 1631(a)(10)(A)(i) (42 

8 U.S.C. 1383(a)(10)(A)(i)) is amended by striking ‘‘12’’ and 

9 inserting ‘‘3’’. 

10 (b) EFFECTIVE DATE.—The amendment made by sub11 section (a) shall take effect 3 months after the date of the 

12 enactment of this Act. 

13 Subtitle F—State and Local 

14 Flexibility 

15 SEC. 8601. PROGRAM COORDINATION DEMONSTRATION 

16 PROJECTS. 

17 (a) PURPOSE.—The purpose of this section is to estab18 lish a program of demonstration projects in a State or por19 tion of a State to coordinate multiple public assistance, 

20 workforce development, and other programs, for the purpose 

21 of supporting working individuals and families, helping 

22 families escape welfare dependency, promoting child well23 being, or helping build stronger families, using innovative 

24 approaches to strengthen service systems and provide more 

25 coordinated and effective service delivery. 
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1 (b) DEFINITIONS.—In this section: 

2 (1) ADMINISTERING SECRETARY.—The term ‘‘ad3 ministering Secretary’’ means, with respect to a 

4 qualified program, the head of the Federal agency re5 sponsible for administering the program. 

6 (2) QUALIFIED PROGRAM.—The term ‘‘qualified 

7 program’’ means—

8 (A) a program under part A of title IV of 

9 the Social Security Act; or 

10 (B) the program under title XX of such Act. 

11 (c) APPLICATION REQUIREMENTS.—The head of a 

12 State entity or of a sub-State entity administering 2 or 

13 more qualified programs proposed to be included in a dem14 onstration project under this section shall (or, if the project 

15 is proposed to include qualified programs administered by 

16 2 or more such entities, the heads of the administering enti17 ties (each of whom shall be considered an applicant for pur18 poses of this section) shall jointly) submit to the admin19 istering Secretary of each such program an application that 

20 contains the following: 

21 (1) PROGRAMS INCLUDED.—A statement identi22 fying each qualified program to be included in the 

23 project, and describing how the purposes of each such 

24 program will be achieved by the project. 
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1 (2) POPULATION SERVED.—A statement identi2 fying the population to be served by the project and 

3 specifying the eligibility criteria to be used. 

4 (3) DESCRIPTION AND JUSTIFICATION.—A de5 tailed description of the project, including—

6 (A) a description of how the project is ex7 pected to improve or enhance achievement of the 

8 purposes of the programs to be included in the 

9 project, from the standpoint of quality, of cost10 effectiveness, or of both; and 

11 (B) a description of the performance objec12 tives for the project, including any proposed 

13 modifications to the performance measures and 

14 reporting requirements used in the programs. 

15 (4) WAIVERS REQUESTED.—A description of the 

16 statutory and regulatory requirements with respect to 

17 which a waiver is requested in order to carry out the 

18 project, and a justification of the need for each such 

19 waiver. 

20 (5) COST NEUTRALITY.—Such information and 

21 assurances as necessary to establish to the satisfaction 

22 of the administering Secretary, in consultation with 

23 the Director of the Office of Management and Budget, 

24 that the proposed project is reasonably expected to 
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1 meet the applicable cost neutrality requirements of 

2 subsection (d)(4). 

3 (6) EVALUATION AND REPORTS.—An assurance 

4 that the applicant will conduct ongoing and final 

5 evaluations of the project, and make interim and 

6 final reports to the administering Secretary, at such 

7 times and in such manner as the administering Sec8 retary may require. 

9 (7) OTHER INFORMATION AND ASSURANCES.—

10 Such other information and assurances as the admin11 istering Secretary may require. 

12 (d) APPROVAL OF APPLICATIONS.—

13 (1) IN GENERAL.—The administering Secretary 

14 with respect to a qualified program that is identified 

15 in an application submitted pursuant to subsection 

16 (c) may approve the application and, except as pro17 vided in paragraph (2), waive any requirement ap18 plicable to the program, to the extent consistent with 

19 this section and necessary and appropriate for the 

20 conduct of the demonstration project proposed in the 

21 application, if the administering Secretary deter22 mines that the project—

23 (A) has a reasonable likelihood of achieving 

24 the objectives of the programs to be included in 

25 the project; 
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1 (B) may reasonably be expected to meet the 

2 applicable cost neutrality requirements of para3 graph (4), as determined by the Director of the 

4 Office of Management and Budget; and 

5 (C) includes the coordination of 2 or more 

6 qualified programs. 

7 (2) PROVISIONS EXCLUDED FROM WAIVER AU8 THORITY.—A waiver shall not be granted under para9 graph (1) with respect to any provision of law relat10 ing to—

11 (A) civil rights or prohibition of discrimi12 nation; 

13 (B) purposes or goals of any program; 

14 (C) maintenance of effort requirements; 

15 (D) health or safety; 

16 (E) labor standards under the Fair Labor 

17 Standards Act of 1938; or 

18 (F) environmental protection; 

19 (3) AGREEMENT OF EACH ADMINISTERING SEC20 RETARY REQUIRED.—

21 (A) IN GENERAL.—An applicant may not 

22 conduct a demonstration project under this sec23 tion unless each administering Secretary with 

24 respect to any program proposed to be included 
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1 in the project has approved the application to 

2 conduct the project. 

3 (B) AGREEMENT WITH RESPECT TO FUND4 ING AND IMPLEMENTATION.—Before approving 

5 an application to conduct a demonstration 

6 project under this section, an administering Sec7 retary shall have in place an agreement with the 

8 applicant with respect to the payment of funds 

9 and responsibilities required of the admin10 istering Secretary with respect to the project. 

11 (4) COST-NEUTRALITY REQUIREMENT.—

12 (A) GENERAL RULE.—Notwithstanding any 

13 other provision of law (except subparagraph 

14 (B)), the total of the amounts that may be paid 

15 by the Federal Government for a fiscal year with 

16 respect to the programs in the State in which an 

17 entity conducting a demonstration project under 

18 this section is located that are affected by the 

19 project shall not exceed the estimated total 

20 amount that the Federal Government would have 

21 paid for the fiscal year with respect to the pro22 grams if the project had not been conducted, as 

23 determined by the Director of the Office of Man24 agement and Budget. 
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1 (B) SPECIAL RULE.—If an applicant sub2 mits to the Director of the Office of Management 

3 and Budget a request to apply the rules of this 

4 subparagraph to the programs in the State in 

5 which the applicant is located that are affected 

6 by a demonstration project proposed in an ap7 plication submitted by the applicant pursuant to 

8 this section, during such period of not more than 

9 5 consecutive fiscal years in which the project is 

10 in effect, and the Director determines, on the 

11 basis of supporting information provided by the 

12 applicant, to grant the request, then, notwith13 standing any other provision of law, the total of 

14 the amounts that may be paid by the Federal 

15 Government for the period with respect to the 

16 programs shall not exceed the estimated total 

17 amount that the Federal Government would have 

18 paid for the period with respect to the programs 

19 if the project had not been conducted. 

20 (5) 90-DAY APPROVAL DEADLINE.—

21 (A) IN GENERAL.—If an administering Sec22 retary receives an application to conduct a dem23 onstration project under this section and does 

24 not disapprove the application within 90 days 

25 after the receipt, then—
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1 (i) the administering Secretary is 

2 deemed to have approved the application for 

3 such period as is requested in the applica4 tion, except to the extent inconsistent with 

5 subsection (e); and 

6 (ii) any waiver requested in the appli7 cation which applies to a qualified program 

8 that is identified in the application and is 

9 administered by the administering Sec10 retary is deemed to be granted, except to the 

11 extent inconsistent with paragraph (2) or 

12 (4) of this subsection. 

13 (B) DEADLINE EXTENDED IF ADDITIONAL

14 INFORMATION IS SOUGHT.—The 90-day period 

15 referred to in subparagraph (A) shall not include 

16 any period that begins with the date the Sec17 retary requests the applicant to provide addi18 tional information with respect to the applica19 tion and ends with the date the additional infor20 mation is provided. 

21 (e) DURATION OF PROJECTS.—A demonstration 

22 project under this section may be approved for a term of 

23 not more than 5 years. 

24 (f) REPORTS TO CONGRESS.—
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1 (1) REPORT ON DISPOSITION OF APPLICA2 TIONS.—Within 90 days after an administering Sec3 retary receives an application submitted pursuant to 

4 this section, the administering Secretary shall submit 

5 to each Committee of the Congress which has jurisdic6 tion over a qualified program identified in the appli7 cation notice of the receipt, a description of the deci8 sion of the administering Secretary with respect to 

9 the application, and the reasons for approving or dis10 approving the application. 

11 (2) REPORTS ON PROJECTS.—Each admin12 istering Secretary shall provide annually to the Con13 gress a report concerning demonstration projects ap14 proved under this section, including—

15 (A) the projects approved for each appli16 cant; 

17 (B) the number of waivers granted under 

18 this section, and the specific statutory provisions 

19 waived; 

20 (C) how well each project for which a waiv21 er is granted is improving or enhancing pro22 gram achievement from the standpoint of qual23 ity, cost-effectiveness, or both; 
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1 (D) how well each project for which a waiv2 er is granted is meeting the performance objec3 tives specified in subsection (c)(3)(B); 

4 (E) how each project for which a waiver is 

5 granted is conforming with the cost-neutrality 

6 requirements of subsection (d)(4); and 

7 (F) to the extent the administering Sec8 retary deems appropriate, recommendations for 

9 modification of programs based on outcomes of 

10 the projects. 

11 Subtitle G—Repeal of Continued 

12 Dumping and Subsidy Offset 

13 SEC. 8701. REPEAL OF CONTINUED DUMPING AND SUBSIDY 

14 OFFSET. 

15 (a) REPEAL.—Section 754 of the Tariff Act of 1930 

16 (19 U.S.C. 1675c), and the item relating to section 754 in 

17 the table of contents for title VII of that Act, are repealed. 

18 (b) EXISTING ACCOUNTS.—All amounts remaining, 

19 upon the enactment of this title, in any special account es20 tablished under section 754(e)(1) of the Tariff Act of 1930 

21 (as in effect on the day before the date of the enactment 

22 of this title) shall be deposited in the general fund of the 

23 Treasury. 
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1 Subtitle H—Effective Date 

2 SEC. 8801. EFFECTIVE DATE. 

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

4 this title, this title and the amendments made by this title 

5 shall be effective as of October 1, 2005. 

6 (b) EXCEPTION.—In the case of a State plan under 

7 title IV of the Social Security Act which the Secretary deter8 mines requires State legislation in order for the plan to 

9 meet the additional requirements imposed by the amend10 ments made by this title, the effective date of the amend11 ments imposing the additional requirements shall be 3 

12 months after the first day of the first calendar quarter be13 ginning after the close of the first regular session of the 

14 State legislature that begins after the date of the enactment 

15 of this Act. For purposes of the preceding sentence, in the 

16 case of a State that has a 2-year legislative session, each 

17 year of the session shall be considered to be a separate reg18 ular session of the State legislature.

Attest:

Clerk. 

109TH CONGRESS 

1ST SESSION S. 1932

AMENDMENT