109TH CONGRESS

1ST SESSION S. 1932

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).

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

3 SECTION 1. SHORT TITLE.

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

2

S 1932 ES

1 SEC. 2. TABLE OF CONTENTS.

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

Sec. 1. Short title.

Sec. 2. Table of Contents.

TITLE I—COMMITTEE ON AGRICULTURE, NUTRITION, AND

FORESTRY

Sec. 1001. Short title.

Subtitle A—Commodity Programs

Sec. 1101. Reduction of commodity program payments.

Sec. 1102. Forfeiture penalty for nonrecourse sugar loans.

Sec. 1103. Cotton competitiveness provisions.

Sec. 1104. National dairy market loss payments.

Sec. 1105. Advance direct payments.

Subtitle B—Conservation

Sec. 1201. Conservation reserve program.

Sec. 1202. Conservation security program.

Sec. 1203. Environmental quality incentives program.

Subtitle C—Miscellaneous

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

TITLE II—COMMITTEE ON BANKING, HOUSING, AND URBAN

AFFAIRS

Subtitle A—Merger of the Deposit Insurance Funds

Sec. 2001. Short title.

Sec. 2002. Definitions.

Sec. 2003. Merger of BIF and SAIF.

Sec. 2004. Establishment of the Deposit Insurance Fund.

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

Sec. 2006. Other technical and conforming amendments.

Sec. 2007. Effective date.

Subtitle B—Deposit Insurance Modernization and Improvement

Sec. 2011. Short title.

Sec. 2012. Changes to Federal deposit insurance coverage.

Sec. 2013. Designated reserve ratio.

Sec. 2014. Assessment credits and dividends.

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

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

Sec. 2017. Regulations required.

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

Sec. 2019. Effective date.

Subtitle C—FHA Asset Disposition
†

3

S 1932 ES

Sec. 2021. Short title.

Sec. 2022. Definitions.

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

Sec. 2024. Up-front grants.

Sec. 2025. Authorization of appropriations.

Subtitle D—Adaptive Housing Assistance

Sec. 2031. Short title.

Sec. 2032. Adoptive housing assistance for disabled veterans residing temporarily in housing owned by a family member.

Sec. 2033. GAO reports.

TITLE III—COMMITTEE ON COMMERCE, SCIENCE, AND

TRANSPORTATION

Sec. 3001. Short title.

Sec. 3002. Analog spectrum recovery; hard deadline.

Sec. 3003. Auction of recovered spectrum.

Sec. 3004. Supplemental license fees.

Sec. 3005. Digital Transition and Public Safety Fund.

Sec. 3005A. Communication system grants.

Sec. 3006. Essential air service program.

TITLE IV—ENERGY AND NATURAL RESOURCES

Sec. 4001. Oil and gas leasing program.

TITLE V—COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

Sec. 5001. Technical corrections to SAFETEA–LU.

TITLE VI—COMMITTEE ON FINANCE

Sec. 6000. Amendments to Social Security Act.

Subtitle A—Medicaid

CHAPTER 1—PAYMENT FOR PRESCRIPTION DRUGS UNDER MEDICAID

Sec. 6001. Pharmacy reimbursement.

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

Sec. 6003. Improved regulation of authorized generic drugs.

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

CHAPTER 2—LONG-TERM CARE UNDER MEDICAID

Sec. 6011. Reform of Medicaid asset transfer rules.

Sec. 6012. State long-term care partnerships.

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

Sec. 6021. Enhancing third party recovery.

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

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

Sec. 6024. Employee education about False Claims Recovery.

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

Sec. 6026. Medicaid Integrity Program.
†

4

S 1932 ES

CHAPTER 4—STATE FINANCING UNDER MEDICAID

Sec. 6031. Reforms of targeted case management.

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

Sec. 6033. Managed care organization provider tax reform.

Sec. 6034. Inclusion of podiatrists as physicians.

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

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

owned or operated institutions for mental diseases.

Sec. 6037. Limitation on severe reduction in the Medicaid FMAP for fiscal

year 2006.

Sec. 6038. Extension of prescription drug rebates to enrollees in Medicaid managed care organizations.

Sec. 6039. Extension of the Medicare Part A and B payment holiday.

Sec. 6039A. Sense of the Senate.

Sec. 6039B. Authority to continue providing certain adult day health care services or medical adult day care services.

Sec. 6039C. Demonstration project regarding Medicaid coverage of low-income

HIV-infected individuals.

Sec. 6039D. Additional increase in rebate for single source and innovator multiple source drugs.

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

INSURANCE PROGRAMS

SUBCHAPTER A—FAMILY OPPORTUNITY ACT

Sec. 6041. Short title of subchapter.

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

coverage for such children.

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

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

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

SUBCHAPTER B—STATE CHILDREN’S HEALTH INSURANCE PROGRAM

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

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

Sec. 6053. Prohibition against covering nonpregnant childless adults with

SCHIP funds.

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

Medicaid expenditures.

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

SUBCHAPTER C—MONEY FOLLOWS THE PERSON REBALANCING

DEMONSTRATION

Sec. 6061. Money Follows the Person Rebalancing Demonstration.

CHAPTER 6—OPTION FOR HURRICANE KATRINA DISASTER STATES TO

DELAY APPLICATION
†

5

S 1932 ES

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

Subtitle B—Medicare

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

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

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

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

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

service hospitals.

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

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

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

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

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

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

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

amount of payments to Medicare Advantage organizations.

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

Sec. 6113. Rural PACE provider grant program.

Sec. 6114. Waiver of part B late enrollment penalty for certain international

volunteers.

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

Sec. 6116. Technical correction regarding purchase agreements for power-driven wheelchairs.

Sec. 6117. Medicare coverage of ultrasound screening for abdominal aortic aneurysms; national educational and information campaign.

Sec. 6118. Improving patient access to, and utilization of, colorectal cancer

screening under medicare.

Sec. 6119. Coverage of marriage and family therapist services and mental

health counselor services under part b of the medicare program.

Sec. 6120. Quality measurement systems amendments.

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

PENSIONS

Subtitle A—Education Provisions

CHAPTER 1—EDUCATION

Sec. 7101. Provisional grant assistance program.

Sec. 7102. National smart grants.

Sec. 7103. Loan limits.

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

Sec. 7105. Reduction of lender insurance reimbursement rates.

Sec. 7106. Guaranty agency origination fee.

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

Sec. 7108. Recovery through consolidation.

Sec. 7109. Single holder rule.

Sec. 7110. Default reduction program.

Sec. 7111. Requirements for disbursements of student loans.
†

6

S 1932 ES

Sec. 7112. Special insurance and reinsurance rules.

Sec. 7113. School as lender moratorium.

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

the proceeds of tax exempt issues.

Sec. 7115. Special allowances.

Sec. 7116. Origination fee.

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

Sec. 7118. Family contribution for dependent students.

Sec. 7119. Family contribution for independent students without dependents

other than a spouse.

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

than a spouse.

Sec. 7121. Regulations; updated tables.

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

Sec. 7123. Loan forgiveness for teachers.

Sec. 7124. Effective date.

CHAPTER 2—HURRICANE KATRINA HIGHER EDUCATION RECOVERY

Sec. 7151. Short title.

Sec. 7152. Definitions.

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

Higher Education Act of 1965.

Sec. 7154. General waiver authority and required consultation.

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

Sec. 7156. Regulatory requirements inapplicable.

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

Sec. 7158. Sunset provision.

Subtitle B—Pension Benefit Guaranty Corporation Premiums

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

1974.

Subtitle C—Higher Education Reauthorization

CHAPTER 1—SHORT TITLE; REFERENCES; GENERAL EFFECTIVE DATE

Sec. 7301. Short title.

Sec. 7302. References.

Sec. 7303. General effective date.

CHAPTER 2—GENERAL PROVISIONS

Sec. 7311. Additional definitions.

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

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

programs.

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

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

Sec. 7316. Drug and alcohol abuse prevention.

Sec. 7317. Prior rights and obligations.

Sec. 7318. Cost of higher education.

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

financial assistance.

Sec. 7320. Procurement flexibility.
†

7

S 1932 ES

CHAPTER 3—TEACHER QUALITY ENHANCEMENT

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

CHAPTER 4—INSTITUTIONAL AID

Sec. 7341. Program purpose.

Sec. 7342. Definitions; eligibility.

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

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

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

Sec. 7346. Part B definitions.

Sec. 7347. Grants to institutions.

Sec. 7348. Allotments to institutions.

Sec. 7349. Professional or graduate institutions.

Sec. 7350. Authorization of appropriations.

Sec. 7351. Technical corrections.

CHAPTER 5—STUDENT ASSISTANCE

SUBCHAPTER A—GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF

HIGHER EDUCATION

Sec. 7361. Federal Pell Grants.

Sec. 7362. Federal TRIO Programs.

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

Sec. 7364. Academic Achievement Incentive Scholarships.

Sec. 7365. Federal Supplemental Educational Opportunity Grants.

Sec. 7366. Leveraging Educational Assistance Partnership Program.

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

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

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

Sec. 7370. Learning anytime anywhere partnerships.

SUBCHAPTER B—FEDERAL FAMILY EDUCATION LOAN PROGRAM

Sec. 7381. Extension of authorities.

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

Sec. 7383. Federal consolidation loans.

Sec. 7384. Default reduction program.

Sec. 7385. Requirements for disbursement of student loans.

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

Sec. 7387. Common forms and formats.

Sec. 7388. Student loan information by eligible borrowers.

Sec. 7389. Consumer education information.

Sec. 7390. Definition of eligible lender.

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

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

SUBCHAPTER C—FEDERAL WORK-STUDY PROGRAMS

Sec. 7391. Authorization of appropriations.

Sec. 7392. Allowance for books and supplies.

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

8

S 1932 ES

Sec. 7394. Job location and development programs.

Sec. 7395. Work colleges.

SUBCHAPTER D—WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

Sec. 7401. Funds for administrative expenses.

SUBCHAPTER E—FEDERAL PERKINS LOANS

Sec. 7411. Program authority.

Sec. 7412. Terms of loans.

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

Sec. 7414. Federal capital contribution recovery.

SUBCHAPTER F—NEED ANALYSIS

Sec. 7421. Cost of attendance.

Sec. 7422. Discretion of student financial aid administrators.

Sec. 7423. Definitions.

SUBCHAPTER G—GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE

Sec. 7431. Definitions.

Sec. 7432. Compliance calendar.

Sec. 7433. Forms and regulations.

Sec. 7434. Student eligibility.

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

Sec. 7436. Institutional refunds.

Sec. 7437. Institutional and financial assistance for students.

Sec. 7438. National student loan data system.

Sec. 7439. Early awareness of financial aid eligibility.

Sec. 7440. College access initiative.

Sec. 7441. Program participation agreements.

Sec. 7442. Regulatory relief and improvement.

Sec. 7443. Transfer of allotments.

Sec. 7444. Wage garnishment requirement.

Sec. 7445. Purpose of administrative payments.

Sec. 7446. Advisory committee on student financial assistance.

Sec. 7447. Regional meetings.

Sec. 7448. Year 2000 requirements at the department.

SUBCHAPTER H—PROGRAM INTEGRITY

Sec. 7451. Recognition of accrediting agency or association.

Sec. 7452. Administrative capacity standard.

Sec. 7453. Program review and data.

CHAPTER 6—DEVELOPING INSTITUTIONS

Sec. 7501. Definitions.

Sec. 7502. Authorized activities.

Sec. 7503. Duration of grant.

Sec. 7504. Postbaccalaureate opportunities for Hispanic Americans.

Sec. 7505. Applications.

Sec. 7506. Cooperative arrangements.

Sec. 7507. Authorization of appropriations.

CHAPTER 7—INTERNATIONAL EDUCATION PROGRAMS
†

9

S 1932 ES

Sec. 7601. Findings.

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

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

Sec. 7604. Research; studies.

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

Sec. 7606. Selection of certain grant recipients.

Sec. 7607. American overseas research centers.

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

Sec. 7609. Centers for international business education.

Sec. 7610. Education and training programs.

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

Sec. 7612. Minority foreign service professional development program.

Sec. 7613. Institutional development.

Sec. 7614. Study abroad program.

Sec. 7615. Advanced degree in international relations.

Sec. 7616. Internships.

Sec. 7617. Financial assistance.

Sec. 7618. Report.

Sec. 7619. Gifts and donations.

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

public policy.

Sec. 7621. Definitions.

Sec. 7622. Assessment and enforcement.

CHAPTER 8—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

Sec. 7701. Purpose.

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

Sec. 7703. Stipends.

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

Program.

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

Sec. 7706. Awards to graduate students.

Sec. 7707. Additional assistance for cost of education.

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

of national need program.

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

Educational Opportunity Program.

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

Sec. 7711. Special projects.

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

postsecondary education.

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

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

with disabilities receive a quality higher education.

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

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

ensure students with disabilities receive a quality higher education.
†

10

S 1932 ES

CHAPTER 9—MISCELLANEOUS

Sec. 7801. Miscellaneous.

CHAPTER 10—AMENDMENTS TO OTHER LAWS

SUBCHAPTER A—EDUCATION OF THE DEAF ACT OF 1986

Sec. 7901. Laurent Clerc National Deaf Education Center.

Sec. 7902. Agreement with Gallaudet University.

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

Sec. 7904. Cultural experiences grants.

Sec. 7905. Audit.

Sec. 7906. Reports.

Sec. 7907. Monitoring, evaluation, and reporting.

Sec. 7908. Liaison for educational programs.

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

Sec. 7910. Oversight and effect of agreements.

Sec. 7911. International students.

Sec. 7912. Research priorities.

Sec. 7913. Authorization of appropriations.

SUBCHAPTER B—UNITED STATES INSTITUTE OF PEACE ACT

Sec. 7921. United States Institute of Peace Act.

SUBCHAPTER C—THE HIGHER EDUCATION AMENDMENTS OF 1998

Sec. 7931. Repeals.

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

for incarcerated youth offenders.

SUBCHAPTER D—INDIAN EDUCATION

PART I—TRIBAL COLLEGES AND UNIVERSITIES

Sec. 7941. Reauthorization of the Tribally Controlled College or University Assistance Act of 1978.

PART II—NAVAJO HIGHER EDUCATION

Sec. 7945. Short title.

Sec. 7946. Reauthorization of Navajo Community College Act.

Subtitle D—Hurricane Relief

Sec. 7947. Findings.

Sec. 7948. Immediate aid to restart school operations.

Sec. 7949. Hold harmless for local educational agencies serving major disaster

areas.

Sec. 7950. Teacher and paraprofessional reciprocity; delay.

Sec. 7951. Assistance for homeless youth.

Sec. 7952. Temporary emergency impact aid for displaced students.

Sec. 7953. Origination fees for student loans.

Sec. 7954. Authorization and appropriation of funds.

Sec. 7955. Sunset provision.

TITLE VIII—COMMITTEE ON THE JUDICIARY
†

11

S 1932 ES

Sec. 8001. Recapture of unused visa numbers.

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

Sec. 8003. Justice programs.

Sec. 8004. Copyright program.

DIVISION A—AMTRAK REAUTHORIZATION

Sec. 1. Short title.

Sec. 2. Amendment of Title 49, United States Code.

TITLE I—AUTHORIZATIONS

Sec. 101. Authorization for Amtrak capital and operating expenses and State

capital grants.

Sec. 102. Authorization for the Federal Railroad Administration.

Sec. 103. Repayment of long-term debt and capital leases.

Sec. 104. Excess railroad retirement.

Sec. 105. Other authorizations.

TITLE II—AMTRAK REFORM AND OPERATIONAL IMPROVEMENTS

Sec. 201. National railroad passenger transportation system defined.

Sec. 202. Amtrak board of directors.

Sec. 203. Establishment of improved financial accounting system.

Sec. 204. Development of 5-year financial plan.

Sec. 205. Establishment of grant process.

Sec. 206. State-supported routes.

Sec. 207. Independent auditor to establish methodologies for Amtrak route and

service planning decisions.

Sec. 208. Metrics and standards.

Sec. 209. Passenger train performance.

Sec. 210. Long distance routes.

Sec. 211. Alternate passenger rail service program.

Sec. 212. Employee transition assistance.

Sec. 213. Northeast corridor state-of-good-repair plan.

Sec. 214. Northeast corridor infrastructure and operations improvements.

Sec. 215. Restructuring long-term debt and capital leases.

Sec. 216. Study of compliance requirements at existing intercity rail stations.

Sec. 217. Incentive pay.

Sec. 218. Access to Amtrak equipment and services.

Sec. 219. General Amtrak provisions.

Sec. 220. Private sector funding of passenger trains.

Sec. 221. On-board service improvements.

Sec. 222. Amtrak management accountability.

TITLE III—INTERCITY PASSENGER RAIL POLICY

Sec. 301. Capital assistance for intercity passenger rail service.

Sec. 302. State rail plans.

Sec. 303. Next generation corridor train equipment pool.

Sec. 304. Federal rail policy.

Sec. 305. Rail cooperation research program.

TITLE IV—PASSENGER RAIL SECURITY AND SAFETY

Sec. 401. Systemwide Amtrak security upgrades.
†

12

S 1932 ES

Sec. 402. Fire and life-safety improvements.

Sec. 403. Amtrak plan to assist families of passengers involved in rail passenger accidents.

Sec. 404. Northern border rail passenger report.

Sec. 405. Passenger, baggage, and cargo screening.

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

3 FORESTRY

4 SEC. 1001. SHORT TITLE.

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

7 Subtitle A—Commodity Programs

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

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

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

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

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

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

18 payments’ means—

19 ‘‘(1) direct payments;

20 ‘‘(2) counter-cyclical payments; and

21 ‘‘(3) payments and benefits associated with the

22 loan program, including gains from the forfeiture of

23 any commodity pledged as collateral for loans and
†

13

S 1932 ES

1 gains from in-kind payments described in section

2 166 of the Federal Agriculture Improvement and

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

4 by the Secretary.

5 ‘‘(b) REDUCTION.—

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

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

8 2010 crop years for wheat, corn, grain sorghum,

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

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

11 dry peas, lentils, small chickpeas, unshorn pelts, si12 lage, hay, and peanuts, the Secretary shall reduce

13 the total amount of commodity program payments

14 received by the producers on a farm for those com15 modities for that crop year by an amount equal to

16 2.5 percent of that amount.

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

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

19 2007, the Secretary shall reduce the total amount of

20 payments received by producers pursuant to section

21 1502 by an amount equal to 2.5 percent of that

22 amount.’’.

23 (b) COMMODITIES.—

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

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

14

S 1932 ES

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

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

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

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

5 and inserting ‘‘2011’’.

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

7 of the Farm Security and Rural Investment Act of

8 2002 (7 U.S.C. 7934(e)(1), 7938(a)) are amended

9 by striking ‘‘2008’’ each place it appears and insert10 ing ‘‘2012’’.

11 SEC. 1102. FORFEITURE PENALTY FOR NONRECOURSE

12 SUGAR LOANS.

13 Section 156 of the Federal Agriculture Improvement

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

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

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

17 (2) by inserting after subsection (g) the fol18 lowing:

19 ‘‘(h) FORFEITURE PENALTY.—

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

21 2006 through 2010 crops of sugar beets and sugar22 cane, a penalty shall be assessed on the forfeiture of

23 any sugar pledged as collateral for a nonrecourse

24 loan under this section.
†

15

S 1932 ES

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

2 sugar beets under this subsection shall be 1.2 per3 cent of the loan rate established for sugarcane and

4 sugar beets under subsections (a) and (b), respec5 tively.

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

7 owed producers by a processor that forfeits any

8 sugar pledged as collateral for a nonrecourse loan

9 shall be reduced in proportion to the loan forfeiture

10 penalty incurred by the processor.

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

12 to the 2006 through 2010 crops of sugar beets and

13 sugarcane.’’.

14 SEC. 1103. COTTON COMPETITIVENESS PROVISIONS.

15 (a) IN GENERAL.—Section 1207 of the Farm Secu16 rity and Rural Investment Act of 2002 (7 U.S.C. 7937)

17 is amended—

18 (1) by striking the section heading and insert19 ing the following: ‘‘UPLAND COTTON IMPORT

20 QUOTAS.’’;

21 (2) by striking subsection (a);

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

23 subsections (a) and (b), respectively;

24 (4) in subsection (a) (as so redesignated)—

25 (A) in paragraph (1)—
†

16

S 1932 ES

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

2 adjusted for the value of any certificate

3 issued under subsection (a),’’; and

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

5 ‘‘, for the value of any certificates issued

6 under subsection (a)’’; and

7 (B) in paragraph (4), by striking ‘‘sub8 section (c)’’ and inserting ‘‘subsection (b)’’; and

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

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

11 (a)’’.

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

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

14 is repealed.

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

16 this section take effect on August 1, 2006.

17 SEC. 1104. NATIONAL DAIRY MARKET LOSS PAYMENTS.

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

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

20 amended by striking paragraph (3) and inserting the fol21 lowing:

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

23 day of the month the producers on a dairy farm

24 enter into a contract under this section and ending

25 on September 30, 2005, 45 percent; and
†

17

S 1932 ES

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

2 2005, and ending on September 30, 2007, 34 per3 cent.’’.

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

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

6 amended by striking ‘‘2005’’ each place it appears in sub7 sections (f) and (g)(1) and inserting ‘‘2007’’.

8 (c) CONFORMING AMENDMENTS.—Section 1502 of

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

10 U.S.C. 7982) is amended—

11 (1) in subsection (g)(1), by striking ‘‘and sub12 section (h)’’; and

13 (2) by striking subsection (h).

14 SEC. 1105. ADVANCE DIRECT PAYMENTS.

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

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

17 7913(d)(2)) is amended in the first sentence by striking

18 ‘‘2007 crops years’’ and inserting ‘‘2005 crop years, up

19 to 40 percent of the direct payment for a covered com20 modity for the 2006 crop year, and up to 29 percent of

21 the direct payment for a covered commodity for any of

22 the 2007 through 2011 crop years,’’.

23 (b) PEANUTS.—Section 1303(e)(2) of the Farm Se24 curity and Rural Investment Act of 2002 (7 U.S.C.

25 7953(e)(2)) is amended in the first sentence by striking
†

18

S 1932 ES

1 ‘‘2007 crops years’’ and inserting ‘‘2005 crop years, up

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

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

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

5 Subtitle B—Conservation

6 SEC. 1201. CONSERVATION RESERVE PROGRAM.

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

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

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

10 inserting ‘‘2011’’;

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

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

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

14 during the 2002 through 2010 calendar years and

15 38,300,000 acres in the 2011 calendar year’’; and

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

17 and inserting ‘‘2011’’.

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

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

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

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

22 provided in this subsection, for’’; and

23 (2) in paragraph (1), by striking ‘‘The con24 servation’’ and inserting ‘‘For fiscal years 2002

25 through 2011, the conservation’’.
†

19

S 1932 ES

1 (c) IMPLEMENTATION.—In implementing the amend2 ments made by this section, the Secretary of Agriculture

3 shall achieve the new maximum acreage enrollment limit

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

5 Act without affecting conservation reserve existing con6 tracts.

7 SEC. 1202. CONSERVATION SECURITY PROGRAM.

8 (a) IN GENERAL.—Section 1238A(a) of the Food Se9 curity Act of 1985 (16 U.S.C. 3838a(a)) is amended by

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

11 (b) FUNDING.—Section 1241(a)(3) of the Food Secu12 rity Act of 1985 (16 U.S.C. 3841(a)(3)) is amended by

13 striking ‘‘not more than $6,037,000,000’’ and all that fol14 lows through ‘‘2014.’’ and inserting the following: ‘‘not

15 more than—

16 ‘‘(A) $1,954,000,000 for the period of fis17 cal years 2006 through 2010; and

18 ‘‘(B) $5,200,000,000 for the period of fis19 cal years 2006 through 2015.’’.

20 SEC. 1203. ENVIRONMENTAL QUALITY INCENTIVES PRO21 GRAM.

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

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

24 amended by striking ‘‘2007’’ and inserting ‘‘2011’’.
†

20

S 1932 ES

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

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

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

4 (c) FUNDING.—Section 1241(a)(6) of the Food Secu5 rity Act of 1985 (16 U.S.C. 3841(a)(6)) is amended by

6 striking subparagraphs (D) and (E) and inserting the fol7 lowing:

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

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

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

11 years 2007 through 2010; and

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

13 Subtitle C—Miscellaneous

14 SEC. 1301. INITIATIVE FOR FUTURE AGRICULTURE AND

15 FOOD SYSTEMS.

16 (a) IN GENERAL.—Section 401(b)(3) of the Agricul17 tural Research, Extension, and Education Reform Act of

18 1998 (7 U.S.C. 7621(b)(3)) is amended—

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

20 ‘‘$160,000,000; and’’ and inserting

21 ‘‘$104,000,000;’’;

22 (2) by redesignating subparagraph (D) as sub23 paragraph (E);

24 (3) by inserting after subparagraph (C) the fol25 lowing:
†

21

S 1932 ES

1 ‘‘(D) on October 1, 2006, and each Octo2 ber 1 thereafter through October 1, 2009,

3 $130,000,000; and’’; and

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

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

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

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

8 TITLE II—COMMITTEE ON BANK9 ING, HOUSING, AND URBAN

10 AFFAIRS

11 Subtitle A—Merger of the Deposit

12 Insurance Funds

13 SEC. 2001. SHORT TITLE.

14 This subtitle may be cited as the ‘‘Safe and Fair De15 posit Insurance Act of 2005’’.

16 SEC. 2002. DEFINITIONS.

17 In this subtitle—

18 (1) the term ‘‘Administration’’ means the Na19 tional Credit Union Administration;

20 (2) the term ‘‘Board’’ means the Board of Di21 rectors of the Federal Deposit Insurance Corpora22 tion (other than in connection with the National

23 Credit Union Administration Board);

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

25 Deposit Insurance Corporation;
†

22

S 1932 ES

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

2 the reserve ratio designated by the Board under sec3 tion 7(b)(3) of the Federal Deposit Insurance Act,

4 as amended by this subtitle;

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

6 Fund’’ mean the Deposit Insurance Fund estab7 lished under section 11(a)(4) of the Federal Deposit

8 Insurance Act, as amended by this subtitle;

9 (6) the terms ‘‘depository institution’’ and ‘‘in10 sured depository institution’’ have the same mean11 ings as in section 3 of the Federal Deposit Insur12 ance Act; and

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

14 the fund balance of the Deposit Insurance Fund to

15 aggregate estimated insured deposits held in all in16 sured depository institutions.

17 SEC. 2003. MERGER OF BIF AND SAIF.

18 (a) IN GENERAL.—

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

20 the Savings Association Insurance Fund shall be

21 merged into the Deposit Insurance Fund.

22 (2) DISPOSITION OF ASSETS AND LIABIL23 ITIES.—All assets and liabilities of the Bank Insur24 ance Fund and the Savings Association Insurance
†

23

S 1932 ES

1 Fund shall be transferred to the Deposit Insurance

2 Fund.

3 (3) NO SEPARATE EXISTENCE.—The separate

4 existence of the Bank Insurance Fund and the Sav5 ings Association Insurance Fund shall cease on the

6 effective date of the merger thereof under this sec7 tion.

8 (b) REPEAL OF OUTDATED MERGER PROVISION.—

9 Section 2704 of the Deposit Insurance Funds Act of 1996

10 (12 U.S.C. 1821 note) is repealed.

11 SEC. 2004. ESTABLISHMENT OF THE DEPOSIT INSURANCE

12 FUND.

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

14 Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is

15 amended—

16 (1) by redesignating subparagraph (B) as sub17 paragraph (C);

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

19 the following:

20 ‘‘(A) ESTABLISHMENT.—There is estab21 lished the Deposit Insurance Fund, which the

22 Corporation shall—

23 ‘‘(i) maintain and administer;
†

24

S 1932 ES

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

2 purposes, in the manner provided by this

3 subsection; and

4 ‘‘(iii) invest in accordance with section

5 13(a).

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

7 shall be available to the Corporation for use

8 with respect to Deposit Insurance Fund mem9 bers.’’;

10 (3) by striking ‘‘(4) GENERAL PROVISIONS RE11 LATING TO FUNDS.—’’ and inserting the following:

12 ‘‘(4) ESTABLISHMENT OF THE DEPOSIT INSUR13 ANCE FUND.—’’;

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

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

16 Insurance Fund and the Savings Association Insur17 ance Fund’’ and inserting ‘‘Deposit Insurance

18 Fund’’; and

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

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

21 against insured depository institutions by the

22 Corporation shall be deposited in the Deposit

23 Insurance Fund.’’.

24 (b) MERGER-RELATED AMENDMENTS TO THE FED25 ERAL DEPOSIT INSURANCE ACT.—
†

25

S 1932 ES

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

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

3 amended to read as follows:

4 ‘‘(y) DEFINITIONS RELATING TO THE DEPOSIT IN5 SURANCE FUND.—

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

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

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

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

10 Deposit Insurance Act (12 U.S.C. 1817) is

11 amended—

12 (A) by striking subsection (l);

13 (B) by redesignating subsections (m) and

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

15 (C) in subsection (b), by striking para16 graph (2) and inserting the following:

17 ‘‘(2) ASSESSMENTS.—

18 ‘‘(A) IN GENERAL.—Each insured deposi19 tory institution shall pay assessments to the

20 Corporation in such amounts and at such time

21 or times as the Board of Directors may require.

22 ‘‘(B) FACTORS TO BE CONSIDERED.—In

23 setting assessments for insured depository insti24 tutions, the Board of Directors shall consider—
†

26

S 1932 ES

1 ‘‘(i) the estimated operating expenses

2 of the Deposit Insurance Fund;

3 ‘‘(ii) the estimated case resolution ex4 penditures and income of the Deposit In5 surance Fund;

6 ‘‘(iii) the projected effects of assess7 ments on the earnings and capital of in8 sured depository institutions;

9 ‘‘(iv) the need to maintain a risk10 based assessment system under paragraph

11 (1); and

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

13 of Directors may determine to be appro14 priate.

15 ‘‘(C) NOTICE OF ASSESSMENTS.—The Cor16 poration shall notify each insured depository in17 stitution of assessments charged to that institu18 tion.

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

20 facilitate the administration of this section, the

21 Board of Directors may waive the requirements

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

23 this paragraph for any assessment period in

24 which a depository institution becomes in25 sured.’’.
†

27

S 1932 ES

1 (3) REPEAL OF SEPARATE FUNDS PROVI2 SIONS.—Section 11(a) of the Federal Deposit Insur3 ance Act (12 U.S.C. 1821(a)) is amended—

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

5 (7); and

6 (B) by redesignating paragraph (8) as

7 paragraph (5).

8 SEC. 2005. TECHNICAL AND CONFORMING AMENDMENTS

9 TO THE FEDERAL DEPOSIT INSURANCE ACT.

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

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

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

13 by striking subparagraph (B) and inserting the fol14 lowing:

15 ‘‘(B) includes any former savings associa16 tion.’’;

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

18 by striking ‘‘the Bank Insurance Fund or the Sav19 ings Association Insurance Fund;’’ and inserting

20 ‘‘the Deposit Insurance Fund,’’;

21 (3) in section 5(c)(4), by striking ‘‘deposit in22 surance fund’’ and inserting ‘‘Deposit Insurance

23 Fund’’;

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

25 striking paragraphs (2) and (3);
†

28

S 1932 ES

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

2 (A) in subparagraph (A), by striking ‘‘re3 serve ratios in the Bank Insurance Fund and

4 the Savings Association Insurance Fund as re5 quired by section 7’’ and inserting ‘‘the reserve

6 ratio of the Deposit Insurance Fund’’;

7 (B) by striking subparagraph (B) and in8 serting the following:

9 ‘‘(2) FEE CREDITED TO THE DEPOSIT INSUR10 ANCE FUND.—The fee paid by the depository insti11 tution under paragraph (1) shall be credited to the

12 Deposit Insurance Fund.’’;

13 (C) by striking ‘‘UNINSURED INSTITU14 TIONS.—’’ and all that follows through ‘‘GEN15 ERAL.—’’ and inserting ‘‘UNINSURED INSTITU16 TIONS.—’’; and

17 (D) by redesignating subparagraph (C) as

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

19 the left;

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

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

22 ‘‘Bank Insurance Fund or the Savings Associa23 tion Insurance Fund’’ and inserting ‘‘Deposit

24 Insurance Fund’’;

25 (B) by striking paragraph (6); and
†

29

S 1932 ES

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

2 and (9) as paragraphs (6), (7), and (8), respec3 tively;

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

5 striking ‘‘Bank Insurance Fund or the Savings As6 sociation Insurance Fund’’ and inserting ‘‘Deposit

7 Insurance Fund’’;

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

9 (A) by striking ‘‘in July’’; and

10 (B) by striking ‘‘in January’’;

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

12 (A) in paragraph (1)—

13 (i) in subparagraph (B)(ii), by strik14 ing ‘‘institution’s semiannual assessment’’

15 and inserting ‘‘assessments for that insti16 tution under subsection (b)’’; and

17 (ii) in subparagraph (C)—

18 (I) by striking ‘‘a depository in19 stitution’s semiannual assessment’’

20 and inserting ‘‘assessments for a de21 pository institution under subsection

22 (b)’’; and

23 (II) by striking ‘‘deposit insur24 ance fund’’ each place that term ap-
†

30

S 1932 ES

1 pears and inserting ‘‘Deposit Insur2 ance Fund’’;

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

4 deposit insurance fund’’ and inserting ‘‘the De5 posit Insurance Fund’’;

6 (C) by striking paragraph (4) and redesig7 nating paragraphs (5) through (7) as para8 graphs (4) through (6), respectively;

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

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

11 and inserting ‘‘any such assessment is nec12 essary’’;

13 (ii) by striking subparagraph (B);

14 (iii) in subparagraph (A)—

15 (I) by striking ‘‘(A) is nec16 essary—’’;

17 (II) by striking ‘‘Bank Insurance

18 Fund members’’ and inserting ‘‘in19 sured depository institutions’’; and

20 (III) by redesignating clauses (i),

21 (ii), and (iii) as subparagraphs (A),

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

23 the margins 2 ems to the left; and

24 (iv) in subparagraph (C) (as redesig25 nated)—
†

31

S 1932 ES

1 (I) by inserting ‘‘that’’ before

2 ‘‘the Corporation’’; and

3 (II) by striking ‘‘; and’’ and in4 serting a period; and

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

6 by striking ‘‘semiannual assessment’’ and in7 serting ‘‘assessment under subsection (b)’’;

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

9 (A) in paragraph (1), by striking ‘‘institu10 tion’s semiannual assessment’’ and inserting

11 ‘‘assessments for that institution under sub12 section (b)’’;

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

14 and

15 (C) by redesignating paragraph (4) as

16 paragraph (2);

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

18 1817(j)(7)(F)), by striking ‘‘Bank Insurance Fund

19 or the Savings Association Insurance Fund’’ and in20 serting ‘‘Deposit Insurance Fund’’;

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

22 (A) in subsection (p), by striking ‘‘semi23 annual’’;

24 (B) in subsection (q), by striking ‘‘semi25 annual’’ and inserting ‘‘assessment’’; and
†

32

S 1932 ES

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

2 ‘‘deposit insurance fund’’ and inserting ‘‘De3 posit Insurance Fund’’;

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

5 ‘‘deposit insurance fund’’ each place that term ap6 pears and inserting ‘‘Deposit Insurance Fund’’;

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

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

9 through the end of the paragraph and inserting a

10 period;

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

12 1821(i)(3))—

13 (A) by striking subparagraph (B);

14 (B) by redesignating subparagraph (C) as

15 subparagraph (B); and

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

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

18 inserting ‘‘subparagraph (A)’’;

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

20 1821(p)(2)(B)), by striking ‘‘institution, any’’ and

21 inserting ‘‘institution, the’’;

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

23 1822(f)(4)(E)(iv)), by striking ‘‘Federal deposit in24 surance funds’’ and inserting ‘‘the Deposit Insur-
†

33

S 1932 ES

1 ance Fund, or any predecessor deposit insurance

2 fund’’;

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

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

5 each place that term appears and inserting

6 ‘‘Deposit 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’’;

14 and

15 (ii) in clause (i), by striking ‘‘any in16 surance fund’’ and inserting ‘‘the Deposit

17 Insurance Fund’’;

18 (D) in subsection (c)(4)(G)(ii)—

19 (i) by striking ‘‘appropriate insurance

20 fund’’ and inserting ‘‘Deposit Insurance

21 Fund’’;

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

23 insurance fund (of which such institution

24 is a member)’’ and inserting ‘‘insured de25 pository institutions’’;
†

34

S 1932 ES

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

2 inserting ‘‘each insured depository institu3 tion’s’’;

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

5 place that term appears and inserting ‘‘the

6 institution’s’’; and

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

8 ‘‘semiannual’’ and inserting ‘‘applicable as9 sessment’’;

10 (E) in subsection (c), by striking para11 graph (11);

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

13 Insurance Fund’’ and inserting ‘‘Deposit Insur14 ance Fund’’;

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

16 ‘‘Savings Association Insurance Fund member’’

17 and inserting ‘‘savings association’’; and

18 (H) in subsection (k)(5)—

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

20 ‘‘Savings Association Insurance Fund

21 members’’ and inserting ‘‘savings associa22 tions’’;

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

24 that term appears and inserting ‘‘savings

25 association’s’’; and
†

35

S 1932 ES

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

2 that term appears and inserting ‘‘savings

3 association’’;

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

5 the 5th sentence—

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

7 the Savings Association Insurance Fund’’ and

8 inserting ‘‘Deposit Insurance Fund’’; and

9 (B) by striking ‘‘each such fund’’ and in10 serting ‘‘the Deposit Insurance Fund’’;

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

12 striking ‘‘Bank Insurance Fund or Savings Associa13 tion Insurance Fund’’ and inserting ‘‘Deposit Insur14 ance Fund’’;

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

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

17 and inserting ‘‘(6)’’; and

18 (B) by striking paragraph (3);

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

20 (A) by striking ‘‘Bank Insurance Fund

21 member’’ each place that term appears and in22 serting ‘‘insured depository institution’’;

23 (B) by striking ‘‘Bank Insurance Fund

24 members’’ each place that term appears and in25 serting ‘‘insured depository institutions’’;
†

36

S 1932 ES

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

2 each place that term appears (other than in

3 connection with a reference to a Bank Insur4 ance Fund member or members) and inserting

5 ‘‘Deposit Insurance Fund’’;

6 (D) by striking the subsection heading and

7 inserting the following:

8 ‘‘(d) BORROWING FOR THE DEPOSIT INSURANCE

9 FUND FROM INSURED DEPOSITORY INSTITUTIONS.—’’;

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

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

12 DEPOSIT INSURANCE FUND’’; and

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

14 heading, by striking ‘‘BIF MEMBERS’’ and in15 serting ‘‘INSURED DEPOSITORY INSTITUTIONS’’;

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

17 at the end the following:

18 ‘‘(e) BORROWING FOR THE DEPOSIT INSURANCE

19 FUND FROM FEDERAL HOME LOAN BANKS.—

20 ‘‘(1) IN GENERAL.—The Corporation may bor21 row from the Federal home loan banks, with the

22 concurrence of the Federal Housing Finance Board,

23 such funds as the Corporation considers necessary

24 for the use of the Deposit Insurance Fund.
†

37

S 1932 ES

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

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

3 the Deposit Insurance Fund shall—

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

5 than the current marginal cost of funds to that

6 bank, taking into account the maturities in7 volved;

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

9 by the Federal Housing Finance Board; and

10 ‘‘(C) be a direct liability of the Deposit In11 surance Fund.’’;

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

13 1825(c)(5))—

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

15 or Savings Association Insurance Fund, respec16 tively’’ each place that term appears and insert17 ing ‘‘the Deposit Insurance Fund’’; and

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

19 Bank Insurance Fund or the Savings Associa20 tion Insurance Fund, respectively’’ and insert21 ing ‘‘the Deposit Insurance Fund’’;

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

23 (A) in the subsection heading, by striking

24 ‘‘BIF, SAIF,’’ and inserting ‘‘THE DEPOSIT IN25 SURANCE FUND’’; and
†

38

S 1932 ES

1 (B) in paragraph (1)—

2 (i) by striking ‘‘the Bank Insurance

3 Fund, the Savings Association Insurance

4 Fund,’’ each place that term appears and

5 inserting ‘‘the Deposit Insurance Fund’’;

6 and

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

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

9 Fund’’;

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

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

12 Association Insurance Fund,’’ each place that term

13 appears and inserting ‘‘the Deposit Insurance

14 Fund’’;

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

16 (A) in paragraph (2), in the matter pre17 ceding subparagraph (A), by striking the colon

18 and inserting a dash;

19 (B) in paragraph (3)(A)—

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

21 to the Savings Association Insurance

22 Fund’’ and inserting ‘‘of an insured sav23 ings association poses a serious threat to

24 the Deposit Insurance Fund’’; and
†

39

S 1932 ES

1 (ii) by striking ‘‘Savings Association

2 Insurance Fund member’’ and inserting

3 ‘‘insured savings association’’; and

4 (C) in paragraph (3)(C), by striking ‘‘Sav5 ings Association Insurance Fund or the Bank

6 Insurance Fund’’ and inserting ‘‘Deposit Insur7 ance Fund’’;

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

9 striking ‘‘deposit insurance funds’’ and ‘‘deposit in10 surance fund’’ each place those terms appear and in11 serting ‘‘Deposit Insurance Fund’’;

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

13 striking ‘‘deposit insurance funds’’ and inserting

14 ‘‘Deposit Insurance Fund’’;

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

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

17 striking ‘‘appropriate deposit insurance fund’’

18 each place that term appears and inserting

19 ‘‘Deposit Insurance Fund’’;

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

21 ‘‘risk to’’ and all that follows through the pe22 riod and inserting ‘‘risk to the Deposit Insur23 ance Fund.’’; and

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

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

40

S 1932 ES

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

2 term appears and inserting ‘‘the Deposit Insur3 ance Fund’’;

4 (31) in section 28 (12 U.S.C. 1831e), by strik5 ing ‘‘affected deposit insurance fund’’ each place

6 that term appears and inserting ‘‘Deposit Insurance

7 Fund’’;

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

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

10 1831m(i)(3)), by striking ‘‘affected deposit insur11 ance fund’’ and inserting ‘‘Deposit Insurance

12 Fund’’;

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

14 1831n(a)(1)(C)), by striking ‘‘insurance funds’’ and

15 inserting ‘‘Deposit Insurance Fund’’;

16 (35) in section 38 (12 U.S.C. 1831o), by strik17 ing ‘‘the deposit insurance fund’’ each place that

18 term appears and inserting ‘‘the Deposit Insurance

19 Fund’’;

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

21 the subsection heading, by striking ‘‘FUNDS’’ and in22 serting ‘‘FUND’’;

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

41

S 1932 ES

1 (A) in paragraph (1), by striking ‘‘a de2 posit insurance fund’’ and inserting ‘‘the De3 posit Insurance Fund’’;

4 (B) in paragraph (2), by striking ‘‘A de5 posit insurance fund’’ and inserting ‘‘The De6 posit Insurance Fund’’; and

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

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

9 each place that term appears and inserting ‘‘the

10 outlays of the Deposit Insurance Fund’’; and

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

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

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

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

15 Subsections (e)(2)’’;

16 (B) by redesignating subparagraphs (A),

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

18 respectively, and moving the margins 2 ems to

19 the left; and

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

21 by redesignating clauses (i) and (ii) as subpara22 graphs (A) and (B), respectively, and moving

23 the margins 2 ems to the left.

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

25 resulting from the application of section 7(d)(2) of the
†

42

S 1932 ES

1 Federal Deposit Insurance Act prior to its repeal under

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

3 general fund of the Deposit Insurance Fund established

4 pursuant to this subtitle.

5 SEC. 2006. OTHER TECHNICAL AND CONFORMING AMEND6 MENTS.

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

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

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

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

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

12 Fund’’.

13 (b) INVESTMENTS PROMOTING PUBLIC WELFARE;

14 LIMITATIONS ON AGGREGATE INVESTMENTS.—The 23d

15 undesignated paragraph of section 9 of the Federal Re16 serve Act (12 U.S.C. 338a) is amended in the 4th sen17 tence, by striking ‘‘affected deposit insurance fund’’ and

18 inserting ‘‘Deposit Insurance Fund’’.

19 (c) ADVANCES TO CRITICALLY UNDERCAPITALIZED

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

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

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

23 inserting ‘‘the Deposit Insurance Fund of’’.
†

43

S 1932 ES

1 (d) AMENDMENTS TO THE FEDERAL HOME LOAN

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

3 U.S.C. 1421 et seq.) is amended—

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

5 (A) in the subsection heading, by striking

6 ‘‘SAIF’’ and inserting ‘‘THE DEPOSIT INSUR7 ANCE FUND’’; and

8 (B) by striking ‘‘Savings Association In9 surance Fund’’ each place that term appears

10 and inserting ‘‘Deposit Insurance Fund’’;

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

12 (A) in subsection (f)(2), by striking ‘‘, ex13 cept that’’ and all that follows through the end

14 of the paragraph and inserting a period; and

15 (B) in subsection (k), by striking para16 graph (4);

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

18 1441a(b)(4)(B)), by striking ‘‘affected deposit insur19 ance fund’’ and inserting ‘‘Deposit Insurance

20 Fund’’; and

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

22 inserting before the colon ‘‘, the following definitions

23 shall apply’’.
†

44

S 1932 ES

1 (e) AMENDMENTS TO THE HOME OWNERS’ LOAN

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

3 seq.) is amended—

4 (1) in section 5 (12 U.S.C. 1464)—

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

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

7 purposes of this subsection, the following defini8 tions shall apply:’’;

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

10 is a Bank Insurance Fund member’’;

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

12 Bank Insurance Fund member until such time

13 as it changes its status to a Savings Association

14 Insurance Fund member’’ and inserting ‘‘in15 sured by the Deposit Insurance Fund’’;

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

17 striking ‘‘affected deposit insurance fund’’ and

18 inserting ‘‘Deposit Insurance Fund’’;

19 (E) in subsection (t)(7)(C)(i)(I), by strik20 ing ‘‘affected deposit insurance fund’’ and in21 serting ‘‘Deposit Insurance Fund’’; and

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

23 ‘‘the Savings Association Insurance Fund’’ and

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

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

45

S 1932 ES

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

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

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

4 ‘‘Savings Association Insurance Fund or Bank

5 Insurance Fund’’ and inserting ‘‘Deposit Insur6 ance Fund’’;

7 (C) in subsection (e)(2), by striking ‘‘Sav8 ings Association Insurance Fund or the Bank

9 Insurance Fund’’ and inserting ‘‘Deposit Insur10 ance Fund’’;

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

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

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

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

15 subsection’’;

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

17 paragraph (5) as paragraph (4);

18 (G) in subsection (m)(3), by striking sub19 paragraph (E), and by redesignating subpara20 graphs (F), (G), and (H) as subparagraphs

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

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

23 ‘‘during period’’ and inserting ‘‘during the pe24 riod’’; and
†

46

S 1932 ES

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

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

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

4 (f) AMENDMENTS TO THE NATIONAL HOUSING

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

6 seq.) is amended—

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

8 1723i(b)(1)(B)), by striking ‘‘Bank Insurance Fund

9 for banks or through the Savings Association Insur10 ance Fund for savings associations’’ and inserting

11 ‘‘Deposit Insurance Fund’’; and

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

13 1735f–14(b)(1)(B)(ii)), by striking ‘‘Bank Insurance

14 Fund for banks and through the Savings Association

15 Insurance Fund for savings associations’’ and insert16 ing ‘‘Deposit Insurance Fund’’.

17 (g) AMENDMENTS TO THE FINANCIAL INSTITUTIONS

18 REFORM, RECOVERY, AND ENFORCEMENT ACT OF

19 1989.—The Financial Institutions Reform, Recovery, and

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

21 amended—

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

23 1833a(b)(3)(B)), by striking ‘‘Bank Insurance

24 Fund, the Savings Association Insurance Fund,’’
†

47

S 1932 ES

1 and inserting ‘‘Deposit Insurance Fund (or any

2 predecessor deposit insurance fund)’’; and

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

4 3341(c)(1)(B)), by striking ‘‘Bank Insurance Fund,

5 the Savings Association Insurance Fund,’’ and in6 serting ‘‘Deposit Insurance Fund’’.

7 (h) AMENDMENT TO THE BANK HOLDING COMPANY

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

9 (12 U.S.C. 1841 et seq.) is amended—

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

11 striking ‘‘Savings Association Insurance Fund’’ and

12 inserting ‘‘Deposit Insurance Fund’’; and

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

14 1842(d)(1)(D)(iii)), by striking ‘‘appropriate deposit

15 insurance fund’’ and inserting ‘‘Deposit Insurance

16 Fund’’.

17 (i) AMENDMENTS TO THE GRAMM-LEACH-BLILEY

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

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

20 paragraphs (2)(B) and (4)(B) of subsection (b), and sub21 section (c)(1)(B), by striking ‘‘any Federal deposit insur22 ance fund’’ and inserting ‘‘the Deposit Insurance Fund’’.

23 SEC. 2007. EFFECTIVE DATE.

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

25 this subtitle, this subtitle and the amendments made by
†

48

S 1932 ES

1 this subtitle shall become effective not later than the first

2 day of the first calendar quarter that begins more than

3 90 days after the date of enactment of this Act.

4 (b) EARLIER IMPLEMENTATION.—

5 (1) CORPORATION DETERMINATION.—If the

6 Corporation determines that merger of the deposit

7 insurance funds should occur before the first day of

8 the first calendar quarter as described in subsection

9 (a), the Corporation shall—

10 (A) announce such determination publicly;

11 and

12 (B) establish the effective date of the

13 merger.

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

15 established under paragraph (1)(B), this subtitle

16 and the amendments made by this subtitle shall be17 come effective.

18 Subtitle B—Deposit Insurance

19 Modernization and Improvement

20 SEC. 2011. SHORT TITLE.

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

22 Reform Act of 2005’’.

23 SEC. 2012. CHANGES TO FEDERAL DEPOSIT INSURANCE

24 COVERAGE.

25 (a) INSURED DEPOSITORY INSTITUTIONS.—
†

49

S 1932 ES

1 (1) IN GENERAL.—Section 11(a)(1) of the Fed2 eral Deposit Insurance Act (12 U.S.C. 1821(a)(1))

3 is amended—

4 (A) by striking subparagraph (B) and in5 serting the following:

6 ‘‘(B) NET AMOUNT OF INSURED DEPOS7 ITS.—The net amount of deposit insurance pay8 able to any depositor at an insured depository

9 institution shall not exceed the standard max10 imum deposit insurance amount, as determined

11 in accordance with subparagraphs (C) through

12 (M).’’; and

13 (B) by striking subparagraph (D) and in14 serting the following:

15 ‘‘(D) COVERAGE FOR CERTAIN EMPLOYEE

16 BENEFIT PLAN DEPOSITS.—

17 ‘‘(i) PASS-THROUGH INSURANCE.—

18 The Corporation shall provide pass19 through deposit insurance for the deposits

20 of any employee benefit plan.

21 ‘‘(ii) PROHIBITION ON ACCEPTANCE

22 OF BENEFIT PLAN DEPOSITS.—An insured

23 depository institution that is not well cap24 italized or adequately capitalized may not

25 accept employee benefit plan deposits.
†

50

S 1932 ES

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

2 this subparagraph, the following definitions

3 shall apply:

4 ‘‘(I) CAPITAL STANDARDS.—The

5 terms ‘well capitalized’ and ‘ade6 quately capitalized’ have the same

7 meanings as in section 38.

8 ‘‘(II) EMPLOYEE BENEFIT

9 PLAN.—The term ‘employee benefit

10 plan’ has the same meaning as in

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

12 eligible deferred compensation plan

13 described in section 457 of the Inter14 nal Revenue Code of 1986.

15 ‘‘(III) PASS-THROUGH DEPOSIT

16 INSURANCE.—The term ‘pass-through

17 deposit insurance’ means, with respect

18 to an employee benefit plan, deposit

19 insurance coverage based on the inter20 est of each participant, in accordance

21 with regulations issued by the Cor22 poration.

23 ‘‘(E) STANDARD MAXIMUM DEPOSIT IN24 SURANCE AMOUNT DEFINED.—For purposes of

25 this paragraph, the term ‘standard maximum
†

51

S 1932 ES

1 deposit insurance amount’ means, until April 1,

2 2010, $100,000.

3 ‘‘(F) DETERMINATION REGARDING INFLA4 TION ADJUSTMENTS.—

5 ‘‘(i) ADJUSTMENTS TO STANDARD

6 MAXIMUM DEPOSIT INSURANCE AMOUNT.—

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

8 day of each 5-year period thereafter, the

9 Board of Directors shall determine whether

10 to increase the standard maximum deposit

11 insurance amount based on the factors set

12 forth under subparagraph (G).

13 ‘‘(ii) ADJUSTMENTS FOR CERTAIN RE14 TIREMENT ACCOUNTS.—Not later than

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

16 year period thereafter, the Board of Direc17 tors shall determine whether to increase

18 the amount of insurance available for re19 tirement accounts under paragraph (3),

20 based on the factors set forth under sub21 paragraph (G).

22 ‘‘(G) INFLATION ADJUSTMENT CONSIDER23 ATIONS.—In making any determination under

24 subparagraph (F), the Board of Directors shall

25 consider—
†

52

S 1932 ES

1 ‘‘(i) the economic conditions affecting

2 insured depository institutions;

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

4 Deposit Insurance Fund;

5 ‘‘(iii) a demonstrated need by deposi6 tors for the inflation adjustment increase;

7 ‘‘(iv) the ability of insured depository

8 institutions to identify and obtain alter9 native funding sources;

10 ‘‘(v) the ability of insured depository

11 institutions to meet the credit needs of

12 their communities;

13 ‘‘(vi) potential problems affecting in14 sured depository institutions generally or a

15 specific group or type of insured depository

16 institutions; and

17 ‘‘(vii) any other factors that the

18 Board of Directors deems appropriate.

19 ‘‘(H) INFLATION ADJUSTMENT CALCULA20 TIONS FOR 2010.—

21 ‘‘(i) CALCULATION FOR STANDARD

22 MAXIMUM DEPOSIT INSURANCE AMOUNT.—

23 The amount provided for any increase in

24 the standard maximum deposit insurance
†

53

S 1932 ES

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

2 product of—

3 ‘‘(I) $100,000; and

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

5 Personal Consumption Expenditures

6 Chain-Type Index (or any successor

7 index thereto), published by the De8 partment of Commerce, for December

9 31 of the year preceding the year in

10 which the adjustment is calculated

11 under this subparagraph, to the value

12 of such index for December 31 of the

13 year preceding the effective date of

14 the Safe and Fair Deposit Insurance

15 Act of 2005.

16 ‘‘(ii) CALCULATION FOR CERTAIN RE17 TIREMENT ACCOUNTS FOR 2010.—The

18 amount provided for any increase in the in19 surance for retirement accounts under

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

21 2010, the product of—

22 ‘‘(I) $250,000; and

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

24 Personal Consumption Expenditures

25 Chain-Type Index (or any successor
†

54

S 1932 ES

1 index thereto), published by the De2 partment of Commerce, for December

3 31 of the year preceding the year in

4 which the adjustment is calculated

5 under this subparagraph, to the value

6 of such index for December 31 of the

7 year preceding the effective date of

8 the Safe and Fair Deposit Insurance

9 Act of 2005.

10 ‘‘(I) INFLATION ADJUSTMENT CALCULA11 TIONS AFTER 2010.—

12 ‘‘(i) CALCULATION FOR THE STAND13 ARD MAXIMUM DEPOSIT INSURANCE

14 AMOUNT.—The amount provided for any

15 increase in the standard maximum deposit

16 insurance amount shall be, as of the 1st

17 day of each 5-year period beginning on

18 April 1, 2015, the product of—

19 ‘‘(I) the standard maximum de20 posit insurance amount; and

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

22 Personal Consumption Expenditures

23 Chain-Type Index (or any successor

24 index thereto), published by the De25 partment of Commerce, for December
†

55

S 1932 ES

1 31 of the year preceding the year in

2 which the adjustment is calculated

3 under this subparagraph, to the value

4 of such index for December 31 of the

5 6 years prior to the year in which the

6 adjustment is calculated under this

7 subparagraph.

8 ‘‘(ii) CALCULATION FOR CERTAIN RE9 TIREMENT ACCOUNTS.—The amount pro10 vided for any increase in the insurance for

11 retirement accounts under paragraph (3)

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

13 period beginning on April 1, 2015, the

14 product of—

15 ‘‘(I) the amount available for re16 tirement accounts under paragraph

17 (3), as adjusted pursuant to subpara18 graph (H) or this subparagraph, as

19 appropriate; and

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

21 Personal Consumption Expenditures

22 Chain-Type Index (or any successor

23 index thereto), published by the De24 partment of Commerce, for December

25 31 of the year preceding the year in
†

56

S 1932 ES

1 which the adjustment is calculated

2 under this subparagraph, to the value

3 of such index for December 31 of the

4 6 years prior to the year in which the

5 adjustment is calculated under this

6 subparagraph.

7 ‘‘(J) DETERMINATION OF NO INFLATION

8 INCREASES.—If the Board cannot support an

9 increase under subparagraph (F) after consid10 eration of the factors in subparagraph (G), no

11 inflation adjustment shall be made until recon12 sideration at the beginning of the next 5-year

13 period.

14 ‘‘(K) ROUNDING.—If the amount of in15 crease determined for any period is not a mul16 tiple of $10,000, the amount so determined

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

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

19 1, 2010, and not later than the first day of

20 each 5-year period thereafter, the Board of Di21 rectors shall publish in the Federal Register the

22 standard maximum deposit insurance amount

23 and the amount of deposit insurance coverage

24 that may be due to any depositor at any in-
†

57

S 1932 ES

1 sured depository institution during the applica2 ble 5-year period.

3 ‘‘(M) NO INFLATION ADJUSTMENTS FOR

4 PUBLIC FUNDS.—Subparagraphs (E) through

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

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

7 due to any such depositor at an insured deposi8 tory institution shall not exceed $100,000.’’.

9 (2) DEPOSIT INSURANCE FOR RETIREMENT AC10 COUNTS.—Section 11(a)(3)(A) of the Federal De11 posit Insurance Act (12 U.S.C. 1821(a)(3)(A)) is

12 amended—

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

14 ‘‘$250,000’’; and

15 (B) by inserting before the period at the

16 end the following: ‘‘which amount shall be sub17 ject to inflation adjustments as provided in

18 paragraph (1).’’.

19 (3) TECHNICAL AND CONFORMING AMENDMENT

20 RELATING TO INSURANCE OF TRUST FUNDS.—Sec21 tion 7(i) of the Federal Deposit Insurance Act (12

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

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

24 appears and inserting ‘‘the standard maximum de-
†

58

S 1932 ES

1 posit insurance amount (as determined under section

2 11(a)(1))’’.

3 (4) OTHER TECHNICAL AND CONFORMING

4 AMENDMENTS.—The Federal Deposit Insurance Act

5 (12 U.S.C. 1811 et seq.) is amended—

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

7 1821(m)(6)), by striking ‘‘$100,000’’ and in8 serting ‘‘the standard maximum deposit insur9 ance amount (as determined under subsection

10 (a)(1))’’;

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

12 striking subsection (a) and inserting the fol13 lowing:

14 ‘‘(a) INSURANCE LOGO.—

15 ‘‘(1) INSURED DEPOSITORY INSTITUTIONS.—

16 ‘‘(A) IN GENERAL.—Each insured deposi17 tory institution shall display at each place of

18 business maintained by that institution a sign

19 or signs relating to the insurance of the depos20 its of the institution, in accordance with regula21 tions to be prescribed by the Corporation.

22 ‘‘(B) STATEMENT TO BE INCLUDED.—

23 Each sign required under subparagraph (A)

24 shall include a statement that insured deposits
†

59

S 1932 ES

1 are backed by the full faith and credit of the

2 United States Government.

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

4 prescribe regulations to carry out this subsection, in5 cluding regulations governing the substance of signs

6 required by paragraph (1) and the manner of dis7 play or use of such signs.

8 ‘‘(3) PENALTIES.—For each day that an in9 sured depository institution continues to violate this

10 subsection or any regulation issued under this sub11 section, it shall be subject to a penalty of not more

12 than $100, which the Corporation may recover for

13 its use.’’; and

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

15 by striking ‘‘$100,000’’ and inserting ‘‘the

16 standard maximum deposit insurance amount

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

18 (b) INSURED CREDIT UNIONS.—

19 (1) IN GENERAL.—Section 207(k) of the Fed20 eral Credit Union Act (12 U.S.C. 1787(k)) is

21 amended—

22 (A) by striking ‘‘(k)(1)’’ and all that fol23 lows through the end of paragraph (1) and in24 serting the following:

25 ‘‘(k) INSURED AMOUNTS PAYABLE.—
†

60

S 1932 ES

1 ‘‘(1) NET INSURED AMOUNT.—

2 ‘‘(A) IN GENERAL.—Subject to the provi3 sions of paragraph (2), the net amount of share

4 insurance payable to any member at an insured

5 credit union shall not exceed the total amount

6 of the shares or deposits in the name of the

7 member (after deducting offsets), less any part

8 thereof which is in excess of the standard max9 imum share insurance amount, as determined

10 in accordance with this paragraph and para11 graphs (5) and (6), and consistent with actions

12 taken by the Federal Deposit Insurance Cor13 poration under section 11(a) of the Federal De14 posit Insurance Act.

15 ‘‘(B) AGGREGATION.—Determination of

16 the net amount of share insurance under sub17 paragraph (A), shall be in accordance with such

18 regulations as the Board may prescribe, and, in

19 determining the amount payable to any mem20 ber, there shall be added together all accounts

21 in the credit union maintained by that member

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

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

24 ‘‘(C) AUTHORITY TO DEFINE THE EXTENT

25 OF COVERAGE.—The Board may define, with
†

61

S 1932 ES

1 such classifications and exceptions as it may

2 prescribe, the extent of the share insurance cov3 erage provided for member accounts, including

4 member accounts in the name of a minor, in

5 trust, or in joint tenancy.’’;

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

7 ‘‘(4) COVERAGE FOR CERTAIN EMPLOYEE BEN8 EFIT PLAN DEPOSITS.—

9 ‘‘(A) PASS-THROUGH INSURANCE.—The

10 Administration shall provide pass-through share

11 insurance for the deposits or shares of any em12 ployee benefit plan, subject to subparagraph

13 (B).

14 ‘‘(B) PROHIBITION ON ACCEPTANCE OF

15 DEPOSITS.—An insured credit union that is not

16 well capitalized or adequately capitalized may

17 not accept employee benefit plan deposits.

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

19 paragraph, the following definitions shall apply:

20 ‘‘(i) CAPITAL STANDARDS.—The

21 terms ‘well capitalized’ and ‘adequately

22 capitalized’ have the same meanings as in

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

24 the Credit Union Membership Access Act

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

62

S 1932 ES

1 ‘‘(ii) EMPLOYEE BENEFIT PLAN.—

2 The term ‘employee benefit plan’—

3 ‘‘(I) has the same meaning as in

4 section 3(3) of the Employee Retire5 ment Income Security Act of 1974;

6 ‘‘(II) includes any plan described

7 in section 401(d) of the Internal Rev8 enue Code of 1986; and

9 ‘‘(III) includes any eligible de10 ferred compensation plan described in

11 section 457 of the Internal Revenue

12 Code of 1986.

13 ‘‘(iii) PASS-THROUGH SHARE INSUR14 ANCE.—The term ‘pass-through share in15 surance’ means, with respect to an em16 ployee benefit plan, insurance coverage

17 based on the interest of each participant,

18 in accordance with regulations issued by

19 the Corporation.

20 ‘‘(5) STANDARD MAXIMUM SHARE INSURANCE

21 AMOUNT DEFINED.—For purposes of this sub22 section, the term ‘standard maximum share insur23 ance amount’ means, until April 1, 2010, $100,000.

24 ‘‘(6) DETERMINATIONS REGARDING INFLATION

25 ADJUSTMENTS.—
†

63

S 1932 ES

1 ‘‘(A) ADJUSTMENTS TO STANDARD MAX2 IMUM SHARE INSURANCE AMOUNT.—Not later

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

4 5-year period thereafter, the Board shall deter5 mine whether to increase the standard max6 imum share insurance amount based on the fac7 tors set forth under paragraph (7).

8 ‘‘(B) ADJUSTMENT FOR CERTAIN RETIRE9 MENT ACCOUNTS.—Not later than April 1,

10 2010, and the first day of each 5-year period

11 thereafter, the Board shall determine whether

12 to increase the amount of insurance available

13 for retirement accounts under paragraph (3),

14 based on the factors set forth under paragraph

15 (7).

16 ‘‘(7) INFLATION ADJUSTMENT CONSIDER17 ATIONS.—In making any determination under para18 graph (6), the Board shall consider—

19 ‘‘(A) the economic conditions affecting in20 sured credit unions;

21 ‘‘(B) the overall risk or risks to the Na22 tional Credit Union Share Insurance Fund;

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

24 the inflation adjustment increase;
†

64

S 1932 ES

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

2 identify and obtain alternative funding sources;

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

4 meet the credit needs of their communities;

5 ‘‘(F) potential problems affecting insured

6 credit unions generally or a specific group or

7 type of insured credit unions; and

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

9 deems appropriate.

10 ‘‘(8) INFLATION ADJUSTMENT CALCULATIONS

11 FOR 2010.—

12 ‘‘(A) CALCULATION FOR STANDARD MAX13 IMUM SHARE INSURANCE AMOUNT.—The

14 amount provided for any increase in the stand15 ard maximum share insurance amount shall be,

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

17 ‘‘(i) $100,000; and

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

24 calculated under this paragraph, to the

25 value of such index for December 31 of the
†

65

S 1932 ES

1 year preceding the effective date of the

2 Safe and Fair Deposit Insurance Act of

3 2005.

4 ‘‘(B) CALCULATION FOR CERTAIN RETIRE5 MENT ACCOUNTS FOR 2010.—The amount pro6 vided for any increase in the insurance for re7 tirement accounts under paragraph (3) shall be,

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

9 ‘‘(i) $250,000; and

10 ‘‘(ii) the ratio of the value of the Per11 sonal Consumption Expenditures Chain12 Type Index (or any successor index there13 to), published by the Department of Com14 merce, for December 31 of the year pre15 ceding the year in which the adjustment is

16 calculated under this paragraph, to the

17 value of such index for December 31 of the

18 year preceding the effective date of the

19 Safe and Fair Deposit Insurance Act of

20 2005.

21 ‘‘(9) INFLATION ADJUSTMENT CALCULATIONS

22 AFTER 2010.—

23 ‘‘(A) CALCULATION FOR THE STANDARD

24 MAXIMUM SHARE INSURANCE AMOUNT.—The

25 amount provided for any increase in the stand-
†

66

S 1932 ES

1 ard maximum share insurance amount shall be,

2 as of the 1st day of each 5-year period begin3 ning on April 1, 2015, the product of—

4 ‘‘(i) the standard maximum share in5 surance amount; and

6 ‘‘(ii) the ratio of the value of the Per7 sonal Consumption Expenditures Chain8 Type Index (or any successor index there9 to), published by the Department of Com10 merce, for December 31 of the year pre11 ceding the year in which the adjustment is

12 calculated under this paragraph, to the

13 value of such index for December 31 of the

14 6 years prior to the year in which the ad15 justment is calculated under this para16 graph.

17 ‘‘(B) CALCULATION FOR CERTAIN RETIRE18 MENT ACCOUNTS.—The amount provided for

19 any increase in the insurance for retirement ac20 counts under paragraph (3) shall be, as of the

21 1st day of each 5-year period beginning on

22 April 1, 2015, the product of—

23 ‘‘(i) the amount available for retire24 ment accounts under paragraph (3), as ad-
†

67

S 1932 ES

1 justed pursuant to paragraph (8) or this

2 paragraph, as appropriate; and

3 ‘‘(ii) the ratio of the value of the Per4 sonal Consumption Expenditures Chain5 Type Index (or any successor index there6 to), published by the Department of Com7 merce, for December 31 of the year pre8 ceding the year in which the adjustment is

9 calculated under this paragraph, to the

10 value of such index for December 31 of the

11 6 years prior to the year in which the ad12 justment is calculated under this para13 graph.

14 ‘‘(10) DETERMINATION OF NO INFLATION IN15 CREASE.—If the Board cannot support an increase

16 under paragraph (6) after consideration of the fac17 tors in paragraph (7), no inflation adjustment shall

18 be made until reconsideration at the beginning of

19 the next 5-year period.

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

21 determined for any period is not a multiple of

22 $10,000, the amount so determined shall be rounded

23 to the nearest $10,000.

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

25 2010, and not later than the first day of each 5-year
†

68

S 1932 ES

1 period thereafter, the Board shall publish in the

2 Federal Register the standard maximum share in3 surance amount and the amount of share insurance

4 coverage that may be due to any depositor at any in5 sured credit union during the applicable 5-year pe6 riod.

7 ‘‘(13) NO INFLATION ADJUSTMENTS FOR PUB8 LIC FUNDS.—Paragraphs (5) through (12) shall not

9 apply to any deposits of depositors described in

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

11 depositor at an insured credit union shall not exceed

12 $100,000.’’; and

13 (C) in paragraph (3), by striking

14 ‘‘$100,000 per account’’ and inserting the fol15 lowing: ‘‘$250,000 per account, which amount

16 shall be subject to inflation adjustments as pro17 vided in paragraphs (6) through (12).’’.

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

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

20 1782(h)) is amended by striking ‘‘207(c)(1)’’ and in21 serting ‘‘207(k)’’.

22 (c) EFFECTIVE DATE.—Except as otherwise specifi23 cally provided in this section or the amendments made by

24 this section, this section and such amendments shall be25 come effective on the effective date of the regulations re-
†

69

S 1932 ES

1 quired under section 2017(a)(2), relating to the implemen2 tation of deposit insurance changes under this section.

3 SEC. 2013. DESIGNATED RESERVE RATIO.

4 (a) REPEAL OF RECAPITALIZATION SCHEDULE.—

5 (1) IN GENERAL.—Section 7(b)(3) of the Fed6 eral Deposit Insurance Act (12 U.S.C. 1817(b)(3))

7 is amended to read as follows:

8 ‘‘(3) DESIGNATED RESERVE RATIO.—

9 ‘‘(A) ACTION BY THE BOARD.—

10 ‘‘(i) IN GENERAL.—Before the begin11 ning of each calendar year, the Board of

12 Directors shall, subject to clause (ii)—

13 ‘‘(I) designate the reserve ratio

14 applicable to the Deposit Insurance

15 Fund for that year; and

16 ‘‘(II) publish the reserve ratio so

17 designated.

18 ‘‘(ii) RULEMAKING.—Any change to

19 the designated reserve ratio for any cal20 endar year shall be made pursuant to sec21 tion 553 of title 5, United States Code.

22 ‘‘(B) RANGE.—The reserve ratio des23 ignated by the Board of Directors for any

24 year—

25 ‘‘(i) may not exceed 1.50 percent; and
†

70

S 1932 ES

1 ‘‘(ii) may not be less than 1.15 per2 cent.

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

7 losses to the Deposit Insurance Fund in

8 that year and in future years;

9 ‘‘(ii) take into account economic con10 ditions generally affecting insured deposi11 tory institutions, to provide for an increase

12 in the designated reserve ratio during more

13 favorable economic conditions and to pro14 vide for a decrease in the designated re15 serve ratio during less favorable economic

16 conditions, notwithstanding the increased

17 risks of loss that may exist during such

18 less favorable conditions, as determined to

19 be appropriate by the Board;

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

21 the assessment rates for insured depository

22 institutions; and

23 ‘‘(iv) take into account such other fac24 tors as the Board of Directors may deter-
†

71

S 1932 ES

1 mine to be appropriate, consistent with the

2 requirements of this subparagraph.’’.

3 (2) TECHNICAL AND CONFORMING AMEND4 MENTS.—Section 3(y) of the Federal Deposit Insur5 ance Act (12 U.S.C. 1813), as amended by this title,

6 is amended by adding at the end the following:

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

8 means the ratio of the fund balance of the Deposit

9 Insurance Fund to aggregate estimated insured de10 posits held in all insured depository institutions.

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

12 ‘designated reserve ratio’ means the reserve ratio

13 designated by the Board of Directors under section

14 7(b)(3).’’.

15 (3) EFFECTIVE DATE.—Subject to paragraph

16 (4), and except as otherwise provided, this sub17 section and the amendments made by this subsection

18 shall become effective on the effective date of the

19 regulations required under section 2017(a)(1), relat20 ing to designation of the reserve ratio by the Board.

21 (4) DESIGNATION OF INITIAL RESERVE RATIO

22 FOR DEPOSIT INSURANCE FUND.—During the period

23 beginning on the effective date of the merger of the

24 deposit insurance funds under section 2003, and

25 ending on the effective date of final regulations des-
†

72

S 1932 ES

1 ignating the reserve ratio, as required by section

2 2017(a)(1), the designated reserve ratio of the De3 posit Insurance Fund shall continue to be deter4 mined pursuant to section 7(b)(2)(A)(iv), as in ef5 fect on the day before the effective date of the merg6 er under section 2003.

7 (b) REQUIREMENTS APPLICABLE TO ANY MODIFICA8 TION OF THE RISK-BASED ASSESSMENT SYSTEM.—Sec9 tion 7(b)(1) of the Federal Deposit Insurance Act (12

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

11 following:

12 ‘‘(E) REQUIREMENTS APPLICABLE TO ANY

13 MODIFICATION OF THE RISK-BASED ASSESS14 MENT SYSTEM.—

15 ‘‘(i) IN GENERAL.—In revising or

16 modifying the risk-based assessment sys17 tem at any time after the date of enact18 ment of the Deposit Insurance Reform Act

19 of 2005, the Board of Directors—

20 ‘‘(I) may not make any change to

21 the information collected from or re22 quired to be retained by insured de23 pository institutions solely for pur24 poses of the assessment risk classifica25 tion, as defined by regulations of the
†

73

S 1932 ES

1 Board, if the change would result in

2 the imposition of an overall greater

3 regulatory or reporting burden on in4 sured depository institutions than was

5 the case before that date of enact6 ment; and

7 ‘‘(II) may implement any such

8 revision or modification in final form

9 only after notice and opportunity for

10 comment.

11 ‘‘(ii) RULE OF CONSTRUCTION.—An

12 increase in an assessment rate or a revi13 sion of the assessment base shall not be

14 considered to be a revision or modification

15 resulting in greater regulatory or reporting

16 burden for purposes of this subpara17 graph.’’.

18 SEC. 2014. ASSESSMENT CREDITS AND DIVIDENDS.

19 (a) IN GENERAL.—Section 7(e)(2) of the Federal De20 posit Insurance Act (12 U.S.C. 1817(e)(2)) is amended

21 to read as follows:

22 ‘‘(2) ONE-TIME CREDIT BASED ON TOTAL AS23 SESSMENT BASE AT YEAR-END 1996.—

24 ‘‘(A) IN GENERAL.—The Board of Direc25 tors shall, by regulation, provide for a credit to
†

74

S 1932 ES

1 each insured depository institution that was in

2 existence on December 31, 1996, and that had

3 paid a deposit insurance assessment prior to

4 that date (or a successor insured depository in5 stitution), based on the assessment base of the

6 institution on that date, as compared to the

7 combined aggregate assessment base of all such

8 institutions, taking into account such factors as

9 the Board may determine to be appropriate.

10 ‘‘(B) CREDIT LIMIT.—The aggregate

11 amount of credits available under subparagraph

12 (A) to all insured depository institutions that

13 are eligible for the credit shall not exceed the

14 amount that the Corporation could collect if it

15 imposed an assessment of 9 basis points on the

16 combined assessment base of the Bank Insur17 ance Fund and the Savings Association Insur18 ance Fund as of December 31, 2001.

19 ‘‘(C) DEFINITION OF SUCCESSOR.—The

20 Corporation shall define the term ‘successor’ for

21 purposes of this paragraph, by regulation, and

22 may consider, among other factors and as the

23 Board may deem appropriate, whether and to

24 what extent, if any, an insured depository insti25 tution that acquires deposits from another in-
†

75

S 1932 ES

1 sured depository institution may deemed to be

2 a successor.

3 ‘‘(D) APPLICATION OF CREDITS.—The

4 amount of a credit to any insured depository in5 stitution under this paragraph may be applied

6 by the Corporation to those portions of the as7 sessments under subsection (b) applicable to

8 that institution which become due for assess9 ment periods beginning after the effective date

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

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

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

13 is amended by adding at the end the following new para14 graphs:

15 ‘‘(3) DIVIDENDS.—

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

17 PERCENT OF ESTIMATED INSURED DEPOSITS.—

18 The Corporation shall provide cash dividends to

19 insured depository institutions in accordance

20 with this paragraph if the reserve ratio of the

21 Deposit Insurance Fund exceeds the maximum

22 amount established under subsection

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

24 amount.
†

76

S 1932 ES

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

2 1.40 PERCENT OF ESTIMATED INSURED DEPOS3 ITS AND NOT MORE THAN 1.50 PERCENT.—The

4 Corporation shall provide cash dividends to in5 sured depository institutions in accordance with

6 this paragraph if the reserve ratio of the De7 posit Insurance Fund equals or exceeds 1.40

8 and is not more than 1.50 percent, and that

9 amount shall equal 50 percent of the amount in

10 excess of the amount required to maintain the

11 reserve ratio at 1.40 percent of the estimated

12 insured deposits.

13 ‘‘(C) FACTORS FOR CONSIDERATION FOR

14 ALLOCATION OF DIVIDENDS.—In implementing

15 the provisions of this paragraph, and in accord16 ance with its regulations, the Corporation shall

17 consider—

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

19 of an insured depository institution (in20 cluding any predecessor institution) on De21 cember 31, 1996, to the assessment base

22 of all eligible insured depository institu23 tions on such date;

24 ‘‘(ii) the total amount of assessments

25 paid on or after January 1, 1997, by an
†

77

S 1932 ES

1 insured depository institution (including

2 any predecessor institution) to the Deposit

3 Insurance Fund (and any predecessor de4 posit insurance fund);

5 ‘‘(iii) that portion of assessments paid

6 by an insured depository institution (in7 cluding any predecessor institution) that

8 reflects higher levels of risk assumed by

9 such institution; and

10 ‘‘(iv) such other factors as the Cor11 poration determines appropriate.

12 ‘‘(D) LIMITATION.—The Board of Direc13 tors may suspend or limit dividends paid under

14 subparagraph (B) if the Board determines in

15 writing that—

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

17 Deposit Insurance Fund exists over the

18 next one-year period; and

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

20 sufficiently high as to justify a finding by

21 the Board that the reserve ratio should

22 temporarily be allowed—

23 ‘‘(I) to grow without requiring

24 dividends under subparagraph (B); or
†

78

S 1932 ES

1 ‘‘(II) to exceed the maximum

2 amount established under subsection

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

4 ‘‘(E) CONSIDERATIONS.—In making a de5 termination under subparagraph (D), the Board

6 shall consider—

7 ‘‘(i) national and regional conditions

8 and their impact on insured depository in9 stitutions;

10 ‘‘(ii) potential problems affecting in11 sured depository institutions or a specific

12 group or type of depository institution;

13 ‘‘(iii) the degree to which the contin14 gent liability of the Corporation for antici15 pated failures of insured institutions ade16 quately addresses concerns over funding

17 levels in the Deposit Insurance Fund; and

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

19 determines are appropriate.

20 ‘‘(F) REPORT TO CONGRESS.—

21 ‘‘(i) SUBMISSION.—Any determination

22 under subparagraph (D) shall be submitted

23 to the Committee on Banking, Housing,

24 and Urban Affairs of the Senate and the

25 Committee on Financial Services of the
†

79

S 1932 ES

1 House of Representatives, not later than

2 270 days after making such determination.

3 ‘‘(ii) CONTENT.—The report sub4 mitted under clause (i) shall include—

5 ‘‘(I) a detailed explanation for

6 the determination; and

7 ‘‘(II) a discussion of the factors

8 required to be considered under sub9 paragraph (E).

10 ‘‘(G) REVIEW OF DETERMINATION.—

11 ‘‘(i) ANNUAL REVIEW.—A determina12 tion to suspend or limit dividends under

13 subparagraph (D) shall be reviewed by the

14 Board of Directors annually.

15 ‘‘(ii) ACTION BY BOARD.—Based on

16 each annual review under clause (i), the

17 Board of Directors shall either renew or

18 remove a determination to suspend or limit

19 dividends under subparagraph (D), or shall

20 make a new determination in accordance

21 with this paragraph. Unless justified under

22 the terms of the renewal or new determina23 tion, the Corporation shall be required to

24 provide cash dividends under subparagraph

25 (A) or (B), as appropriate.
†

80

S 1932 ES

1 ‘‘(4) CHALLENGES TO CREDIT OR DIVIDEND

2 AMOUNTS.—The regulations required under this sub3 section shall include provisions allowing an insured

4 depository institution a reasonable opportunity to

5 challenge administratively the amount of its credit

6 or dividend under this subsection. The determination

7 of the Corporation of the amount of the credit or

8 dividend following such challenge shall be final, and

9 not subject to judicial review.’’.

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

11 this section shall become effective on the effective date of

12 the regulations required to be issued under section

13 2017(a)(3), relating to implementation of the one-time as14 sessment credit.

15 SEC. 2015. ASSESSMENTS-RELATED RECORDS RETENTION

16 AND STATUTE OF LIMITATIONS.

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

18 7(b) of the Federal Deposit Insurance Act (12 U.S.C.

19 1817(b)) is amended to read as follows:

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

21 DEPOSITORY INSTITUTION.—Each insured deposi22 tory institution shall maintain all records that the

23 Corporation may require for verifying the correct24 ness of the institution’s assessments until the later

25 of—
†

81

S 1932 ES

1 ‘‘(A) 3 years from the due date of each as2 sessment payment; or

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

4 any dispute between the insured depository in5 stitution and the Corporation over the amount

6 of any assessment.’’.

7 (b) STATUTE OF LIMITATIONS FOR ASSESSMENT AC8 TIONS.—Subsection (g) of section 7 of the Federal Deposit

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

10 as follows:

11 ‘‘(g) STATUTE OF LIMITATIONS FOR ASSESSMENT

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

13 jurisdiction, shall be entitled to recover from any insured

14 depository institution the amount of any unpaid assess15 ment lawfully payable by such insured depository institu16 tion. Notwithstanding any other provision in Federal law,

17 or the law of any State—

18 ‘‘(1) any action by an insured depository insti19 tution to recover from the Corporation the overpaid

20 amount of any assessment shall be brought within 3

21 years after the date the assessment payment was

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

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

24 from an insured depository institution the underpaid

25 amount of any assessment shall be brought within 3
†

82

S 1932 ES

1 years after the date the assessment payment was

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

3 (5);

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

5 made a false or fraudulent statement with intent to

6 evade any or all of its assessment, the Corporation

7 shall have until 3 years after the date of discovery

8 of the false or fraudulent statement in which to

9 bring an action to recover the underpaid amount;

10 ‘‘(4) assessment deposit information contained

11 in records no longer required to be maintained pur12 suant to subsection (b)(5) shall be considered con13 clusive and not subject to change; and

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

15 amount of any assessment that became due prior to

16 the effective date of this subsection shall be subject

17 to the statute of limitations for assessments in effect

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

19 SEC. 2016. INCREASE IN FEES FOR LATE ASSESSMENT PAY20 MENTS.

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

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

23 (1) by striking ‘‘Any insured depository institu24 tion’’ and inserting ‘‘(1) IN GENERAL.—Any insured

25 depository institution’’;
†

83

S 1932 ES

1 (2) in paragraph (1), as redesignated, by strik2 ing ‘‘penalty of not more than $100’’ and inserting

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

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

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

6 follows:

7 ‘‘(2) EXCEPTION FOR SMALL ASSESSMENT

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

9 amount of the assessment for an insured depository

10 institution is less than $10,000 at the time such in11 stitution fails or refuses to pay the assessment, such

12 institution shall be subject to a penalty of not more

13 than $100 for each day that such violation con14 tinues.

15 ‘‘(3) AUTHORITY TO MODIFY OR REMIT PEN16 ALTY.—The Corporation, in the sole discretion of

17 the Corporation, may compromise, modify, or remit

18 any penalty which the Corporation may assess or

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

20 upon a finding that good cause prevented the timely

21 payment of an assessment.’’.

22 SEC. 2017. REGULATIONS REQUIRED.

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

24 date of enactment of this Act, the Board shall issue final
†

84

S 1932 ES

1 regulations, in accordance with section 553 of chapter 5

2 of title 5, United States Code—

3 (1) designating the reserve ratio for the Deposit

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

5 of the Federal Deposit Insurance Act, as amended

6 by section 2013 of this subtitle, which regulations

7 shall become effective not later than 90 days after

8 the date of their publication in final form;

9 (2) implementing changes in deposit insurance

10 coverage in accordance with the amendments made

11 by section 2012, which regulations shall become ef12 fective not later than 90 days after the date of their

13 publication in final form;

14 (3) implementing the one-time assessment cred15 it to certain insured depository institutions in ac16 cordance with section 7(e)(2) of the Federal Deposit

17 Insurance Act, as amended by section 2014 of this

18 subtitle;

19 (4) establishing the qualifications and proce20 dures under which the Corporation may provide divi21 dends under section 7(e)(3) of the Federal Deposit

22 Insurance Act, as amended by section 2014 of this

23 subtitle; and

24 (5) providing for assessments under section 7 of

25 the Federal Deposit Insurance Act, as amended by
†

85

S 1932 ES

1 this subtitle, which regulations shall become effective

2 on the effective date of the regulations required by

3 paragraph (3).

4 (b) SAVINGS CLAUSE.—

5 (1) IN GENERAL.—

6 (A) CONTINUATION OF EXISTING ASSESS7 MENT REGULATIONS.—Nothing in this title or

8 the amendments made by this title shall be con9 strued to affect the authority of the Corpora10 tion with regard to the setting or collection of

11 deposit insurance assessments pursuant to any

12 regulations in effect prior to the effective date

13 of any regulations required under subsection

14 (a).

15 (B) TREATMENT OF DIF MEMBERS UNDER

16 EXISTING REGULATIONS.—Assessment regula17 tions in effect prior to the date of enactment of

18 this title shall be read as applying to members

19 of the Deposit Insurance Fund rather than

20 members of the Bank Insurance Fund or Sav21 ings Association Insurance Fund, effective on

22 or after the date on which merger of the deposit

23 insurance funds becomes effective under title I.

24 (2) SETTING ASSESSMENTS.—Clause (i) of sec25 tion 7(b)(2)(A) of the Federal Deposit Insurance
†

86

S 1932 ES

1 Act (12 U.S.C. 1817(b)(2)(A)) is amended by strik2 ing ‘‘necessary—’’ and all that follows through the

3 period at the end and inserting ‘‘necessary.’’.

4 SEC. 2018. STUDIES OF POTENTIAL CHANGES TO THE FED5 ERAL DEPOSIT INSURANCE SYSTEM.

6 (a) STUDY AND REPORT BY FDIC AND NCUA.—

7 (1) STUDY.—The Board of Directors of the

8 Federal Deposit Insurance Corporation and the Na9 tional Credit Union Administration Board shall each

10 conduct a study of—

11 (A) the feasibility of increasing the limit

12 on deposit insurance for deposits of municipali13 ties and other units of general local govern14 ment, and the potential benefits and the poten15 tial adverse consequences that may result from

16 any such increase; and

17 (B) the feasibility of establishing a vol18 untary deposit insurance system for deposits in

19 excess of the maximum amount of deposit in20 surance for any depositor, and the potential

21 benefits and the potential adverse consequences

22 that may result from the establishment of any

23 such system.

24 (2) REPORT.—Not later than 1 year after the

25 date of enactment of this title, the Board of Direc-
†

87

S 1932 ES

1 tors of the Federal Deposit Insurance Corporation

2 and the National Credit Union Administration

3 Board shall each submit a report to the Congress on

4 the study required under paragraph (1), containing

5 the findings and conclusions of the reporting agency,

6 together with such recommendations for legislative

7 or administrative changes as the agency may deter8 mine to be appropriate.

9 (b) STUDY AND REPORT REGARDING APPROPRIATE

10 RESERVE RATIO.—

11 (1) STUDY.—The Corporation shall conduct a

12 study on the feasibility of using alternatives to esti13 mated insured deposits in calculating the reserve

14 ratio of the Deposit Insurance Fund.

15 (2) REPORT.—Not later than 1 year after the

16 date of enactment of this title, the Board shall sub17 mit a report to Congress on the results of the study

18 required under paragraph (1), together with such

19 recommendations for legislative or administrative ac20 tions as may be determined to be appropriate.

21 SEC. 2019. EFFECTIVE DATE.

22 Except as otherwise specifically provided in this sub23 title, this subtitle and the amendments made by this sub24 title shall become effective on the date of enactment of

25 this Act.
†

88

S 1932 ES

1 Subtitle C—FHA Asset Disposition

2 SEC. 2021. SHORT TITLE.

3 This subtitle may be cited as the ‘‘FHA Asset Dis4 position Act of 2005’’.

5 SEC. 2022. DEFINITIONS.

6 For purposes of this subtitle—

7 (1) the term ‘‘affordability requirement’’ means

8 any requirement or restriction imposed by the Sec9 retary, at the time of sale, on any multifamily real

10 property or multifamily loan, including a use restric11 tion, rent restriction, or rehabilitation requirement;

12 (2) the term ‘‘discount sale’’ means the sale of

13 multifamily real property in a transaction, including

14 a negotiated sale, in which the sale price is—

15 (A) lower than the property market value;

16 and

17 (B) set outside of a competitive bidding

18 process that has no affordability requirements;

19 (3) the term ‘‘discount loan sale’’ means the

20 sale of a multifamily loan in a transaction, including

21 a negotiated sale, in which the sale price is lower

22 than the loan market value and is set outside of a

23 competitive bidding process that has no affordability

24 requirements;
†

89

S 1932 ES

1 (4) the term ‘‘loan market value’’ means the

2 value of a multifamily loan, without taking into ac3 count any affordability requirements;

4 (5) the term ‘‘multifamily real property’’ means

5 any rental or cooperative housing project of 5 or

6 more units owned by the Secretary that prior to ac7 quisition by the Secretary was security for a loan or

8 loans insured under title II of the National Housing

9 Act;

10 (6) the term ‘‘multifamily loan’’ means a loan

11 held by the Secretary and secured by a multifamily

12 rental or cooperative housing project of 5 or more

13 units that was formerly insured under title II of the

14 National Housing Act;

15 (7) the term ‘‘property market value’’ means

16 the value of any multifamily real property for its

17 current use, without taking into account any afford18 ability requirements; and

19 (8) the term ‘‘Secretary’’ means the Secretary

20 of Housing and Urban Development.

21 SEC. 2023. APPROPRIATED FUNDS REQUIREMENT FOR

22 BELOW MARKET SALES.

23 (a) DISPOSITIONS BY SECRETARY.—Notwithstanding

24 any other provision of law, other than any statutory af25 fordability requirement for the elderly and disabled, dis-
†

90

S 1932 ES

1 position by the Secretary of any multifamily real property

2 through a discount sale under section 207(l) or 246 of

3 the National Housing Act, section 203 of the Housing and

4 Community Development Amendments of 1978, or section

5 204 of the Departments of Veterans Affairs and Housing

6 and Urban Development, and Independent Agencies Ap7 propriations Act, 1997, shall be subject to the availability

8 of appropriations to the extent that the property value ex9 ceeds the sale proceeds. If the multifamily real property

10 is sold for an amount equal to or greater than the property

11 market value, the transaction is not subject to the avail12 ability of appropriations.

13 (b) DISCOUNT LOAN SALES.—Notwithstanding any

14 other provision of law, and in accordance with the Credit

15 Reform Act of 1990, a discount loan sale under 207(k)

16 of the National Housing Act, section 203(k) of the Hous17 ing and Community Development Amendments of 1978,

18 or section 204(a) of the Departments of Veterans Affairs

19 and Housing and Urban Development, and Independent

20 Agencies Appropriations Act, 1997, shall be subject to the

21 availability of appropriations, to the extent that the loan

22 value exceeds the sale proceeds. If the multifamily loan

23 is sold for an amount equal to or greater than the loan

24 market value, then the transaction is not subject to the

25 availability of appropriations.
†

91

S 1932 ES

1 (c) LIMITATION.—This section shall not apply to any

2 transaction that formally commences during the 1-year pe3 riod preceding the date of enactment of this Act.

4 SEC. 2024. UP-FRONT GRANTS.

5 (a) VA–HUD.—Section 204(a) of the Departments

6 of Veterans Affairs and Housing and Urban Development,

7 and Independent Agencies Appropriations Act, 1997 (12

8 U.S.C. 1715z–11a(a)) is amended by adding at the end

9 the following: ‘‘A grant provided under this subsection

10 shall be available only to the extent that appropriations

11 are made in advance for such purpose, and shall not be

12 derived from the General Insurance Fund.’’.

13 (b) OTHER GRANT AUTHORITY.—Section 203(f) of

14 the Housing and Community Development Amendments

15 of 1978 (12 U.S.C. 1701z–11(f)) is amended—

16 (1) by striking paragraph (4); and

17 (2) by redesignating paragraphs (5) through

18 (9) as paragraphs (4) through (8), respectively.

19 (c) LIMITATION.—The amendments made by this sec20 tion shall not apply to any grant in connection with any

21 transaction that formally commences during the 1-year pe22 riod preceding the date of enactment of this Act.

23 SEC. 2025. AUTHORIZATION OF APPROPRIATIONS.

24 There are authorized to be appropriated for fiscal

25 year 2006, $100,000,000 to carry out this subtitle.
†

92

S 1932 ES

1 Subtitle D—Adaptive Housing

2 Assistance

3 SEC. 2031. SHORT TITLE.

4 This subtitle may be cited as the ‘‘Specially Adapted

5 Housing Grants Improvements Act of 2005’’.

6 SEC. 2032. ADAPTIVE HOUSING ASSISTANCE FOR DISABLED

7 VETERANS RESIDING TEMPORARILY IN

8 HOUSING OWNED BY A FAMILY MEMBER.

9 (a) ASSISTANCE AUTHORIZED.—Chapter 21 of title

10 38, United States Code, is amended by inserting after sec11 tion 2102 the following new section:

12 ‘‘§ 2102A. Assistance for veterans residing tempo13 rarily in housing owned by a family mem14 ber

15 ‘‘(a) ASSISTANCE AUTHORIZED.—If a disabled vet16 eran described in subsection (a)(2) or (b)(2) of section

17 2101 of this title resides, but does not intend to perma18 nently reside, in a residence owned by a member of such

19 veteran’s family, the Secretary may assist the veteran in

20 acquiring such adaptations to such residence as are deter21 mined by the Secretary to be reasonably necessary because

22 of the veteran’s disability.

23 ‘‘(b) LIMITATION ON AMOUNT OF ASSISTANCE.—

24 Subject to section 2102(d) of this title, the assistance au25 thorized under subsection (a) may not exceed—
†

93

S 1932 ES

1 ‘‘(1) $10,000, in the case of a veteran described

2 in section 2101(a)(2) of this title; or

3 ‘‘(2) $2,000, in the case of a veteran described

4 in section 2101(b)(2) of this title.

5 ‘‘(c) LIMITATION ON NUMBER OF RESIDENCES SUB6 JECT TO ASSISTANCE.—A veteran eligible for assistance

7 authorized under subsection (a) may only be provided such

8 assistance with respect to 1 residence.

9 ‘‘(d) REGULATIONS.—Assistance under this section

10 shall be provided in accordance with such regulations as

11 the Secretary may prescribe.

12 ‘‘(e) TERMINATION OF AUTHORITY.—The authority

13 to provide assistance under subsection (a) shall expire at

14 the end of the 5-year period beginning on the date of en15 actment of the Specially Adapted Housing Grants Im16 provements Act of 2005.’’.

17 (b) LIMITATIONS ON ADAPTIVE HOUSING ASSIST18 ANCE.—Section 2102 of such title is amended—

19 (1) in subsection (a), by striking ‘‘The assist20 ance authorized by section 2101(a)’’ and all that fol21 lows through ‘‘any one case—’’ and inserting ‘‘Sub22 ject to subsection (d), the assistance authorized

23 under section 2101(a) of this title shall be afforded

24 under 1 of the following plans, at the election of the

25 veteran—’’;
†

94

S 1932 ES

1 (2) by amending subsection (b) to read as fol2 lows:

3 ‘‘(b) Subject to subsection (d), and except as provided

4 in section 2104(b) of this title, the assistance authorized

5 by section 2101(b) of this title may not exceed the actual

6 cost, or in the case of a veteran acquiring a residence al7 ready adapted with special features, the fair market value,

8 of the adaptations determined by the Secretary under such

9 section 2101(b) to be reasonably necessary.’’; and

10 (3) by adding at the end the following new sub11 section:

12 ‘‘(d)(1) The aggregate amount of assistance available

13 to a veteran under sections 2101(a) and 2102A of this

14 title shall be limited to $50,000.

15 ‘‘(2) The aggregate amount of assistance available to

16 a veteran under sections 2101(b) and 2102A of this title

17 shall be limited to the lesser of—

18 ‘‘(A) the sum of the cost or fair market value

19 described in section 2102(b) of this title and the ac20 tual cost of acquiring the adaptations described in

21 subsection (a); and

22 ‘‘(B) $10,000.

23 ‘‘(3) No veteran may receive more than 3 grants of

24 assistance under this chapter.’’.
†

95

S 1932 ES

1 (c) CLERICAL AMENDMENT.—The table of sections

2 at the beginning of such chapter of such title is amended

3 by inserting after the item relating to section 2102 the

4 following:

‘‘2102A. Assistance for veterans residing temporarily in housing owned by family member.’’.

5 SEC. 2033. GAO REPORTS.

6 (a) INTERIM REPORT.—Not later than 3 years after

7 the date of enactment of this Act, the Comptroller General

8 of the United States shall submit to Congress an interim

9 report on the implementation of section 2102A of title 38,

10 United States Code (as added by section 2(a)), by the De11 partment of Veterans Affairs.

12 (b) FINAL REPORT.—Not later than 5 years after the

13 date of enactment of this Act, the Comptroller General

14 of the United States shall submit to Congress a final re15 port on the implementation of such section 2102A by the

16 Department of Veterans Affairs.

17 TITLE III—COMMITTEE ON COM18 MERCE, SCIENCE, AND

19 TRANSPORTATION

20 SEC. 3001. SHORT TITLE.

21 This title may be cited as the ‘‘Digital Transition and

22 Public Safety Act of 2005.’’.
†

96

S 1932 ES

1 SEC. 3002. ANALOG SPECTRUM RECOVERY; HARD DEAD2 LINE.

3 Section 309(j)(14) of the Communications Act of

4 1934 (47 U.S.C. 309(j)(14)) is amended—

5 (1) by striking ‘‘December 31, 2006.’’ in sub6 paragraph (A) and inserting ‘‘April 7, 2009.’’;

7 (2) by striking subparagraph (B);

8 (3) by striking ‘‘or (B)’’ in subparagraph

9 (C)(i)(I);

10 (4) by striking ‘‘(C)(i),’’ in subparagraph (D)

11 and inserting ‘‘(B)(i),’’; and

12 (5) by redesignating subparagraphs (C) and

13 (D) as subparagraphs (B) and (C), respectively.

14 SEC. 3003. AUCTION OF RECOVERED SPECTRUM.

15 (a) AUCTION: DATE, APPLICABLE REQUIRE16 MENTS.—Section 309(j)(15)(C) of the Communications

17 Act of 1934 (47 U.S.C. 309(j)(15)(C)) is amended by add18 ing at the end the following:

19 ‘‘(v) ADDITIONAL DEADLINES FOR RE20 COVERED ANALOG SPECTRUM.—Notwith21 standing subparagraph (B), the Commis22 sion shall—

23 ‘‘(I) conduct the auction of the li24 censes for recovered analog spectrum

25 commencing January 28, 2008;
†

97

S 1932 ES

1 ‘‘(II) not later than 60 days after

2 the end of the pleading cycle for long3 form applications for such auction es4 tablished pursuant to part 1 of title

5 47, Code of Federal Regulations,

6 grant or deny such long-form applica7 tions and issue the licenses for such

8 recovered analog spectrum to each

9 successful bidder whose long-form ap10 plication is granted; and

11 ‘‘(III) collect and deposit the pro12 ceeds of such auction in the Digital

13 Transition and Public Safety Fund

14 established by section 3005 of the

15 Digital Transition and Public Safety

16 Act of 2005.

17 ‘‘(vi) RECOVERED ANALOG SPEC18 TRUM.—For purposes of this subpara19 graph, the term ‘recovered analog spec20 trum’ means spectrum reclaimed from the

21 analog television service under paragraph

22 (14), except—

23 ‘‘(I) spectrum required by section

24 337 to be made available for public

25 safety services; and
†

98

S 1932 ES

1 ‘‘(II) spectrum auctioned prior to

2 the date of enactment of the Digital

3 Transition and Public Safety Act of

4 2005.’’.

5 (b) EXTENSION OF AUCTION AUTHORITY.—Para6 graph (11) of section 309(j) of the Communications Act

7 of 1934 (47 U.S.C. 309(j)(11)) is amended by striking

8 ‘‘September 30, 2007.’’ and inserting ‘‘September 30,

9 2009.’’.

10 SEC. 3004. SUPPLEMENTAL LICENSE FEES.

11 In addition to any fees assessed under the Commu12 nications Act of 1934 (47 U.S.C. 151 et seq.), the Com13 mission shall assess extraordinary fees for licenses in the

14 aggregate amount of $10,000,000, which shall be depos15 ited in the Treasury during fiscal year 2006 as offsetting

16 receipts.

17 SEC. 3005. DIGITAL TRANSITION AND PUBLIC SAFETY

18 FUND.

19 (a) ESTABLISHMENT.—There is established in the

20 Treasury of the United States a fund called the Digital

21 Transition and Public Safety Fund.

22 (b) DEPOSIT OF AUCTION PROCEEDS.—The Com23 mission shall deposit the proceeds of the auction author24 ized by section 309(j)(15)(C)(v) of the Communications
†

99

S 1932 ES

1 Act of 1934 (47 U.S.C. 309(j)(15)(C)(v)) in the Fund as

2 required by item (III) of that section.

3 (c) PAYMENTS AUTHORIZED.—The Secretary of

4 Commerce or the Secretary’s designee shall make pay5 ments from the Fund in the following amounts, for the

6 following programs, and in the following order:

7 (1) Not to exceed $3,000,000,000 for a pro8 gram to assist consumers in the purchase of con9 verter boxes that convert a digital television signal to

10 an analog television signal, and any amounts unex11 pended or unobligated at the conclusion of the pro12 gram shall be used for the program described in

13 paragraph (3).

14 (2) Not to exceed $200,000,000 for a program

15 to convert low-power television stations and tele16 vision translator stations from analog to digital, and

17 any amounts unexpended or unobligated at the con18 clusion of the program shall be used for the program

19 described in paragraph (3).

20 (3) Not to exceed $1,250,000,000 for a pro21 gram to facilitate emergency communications, of

22 which $1,000,000,000 shall be used for an interoper23 ability fund and $250,000,000 shall be used to im24 plement a national alert system, of which
†

100

S 1932 ES

1 $50,000,000 shall be used for tsunami warning and

2 coastal vulnerability programs.

3 (4) Not to exceed $250,000,000 for a program

4 to implement the ENHANCE 911 Act of 2004 (47

5 U.S.C. 942 note).

6 (5) Not to exceed $200,000,000 for a program

7 to provide assistance to coastal States and Indian

8 tribes affected by hurricanes and other coastal disas9 ters.

10 (d) TRANSFER OF AMOUNT TO TREASURY.—On Oc11 tober 2, 2009, Secretary shall transfer $5,000,000,000

12 from the Fund to the general fund of the Treasury.

13 (e) OBLIGATION TIME PERIOD.—Any amounts that

14 are to be paid from the Fund under subsection (c) shall

15 be obligated no later than September 14, 2010. The Sec16 retary may not obligate any amounts from the Fund until

17 the proceeds of the auction authorized by section

18 309(j)(15)(C)(v) are actually deposited by the Commission

19 pursuant to subsection (b). Any amount in the Fund that

20 is not obligated under subsection (c) by that date shall

21 be transferred to the general fund of the Treasury.

22 (f) USE OF EXCESS PROCEEDS.—Any proceeds of the

23 auction authorized by section 309(j)(15)(C)(v) of the

24 Communications Act of 1934, as added by section 3003

25 of this Act, that exceed the sum of the payments made
†

101

S 1932 ES

1 from the Fund under subsection (c), the transfer from the

2 Fund under subsection (d), and any amount made avail3 able under section 3006 (referred to in this subsection as

4 ‘‘excess proceeds’’), shall be distributed as follows:

5 (1) The first $1,000,000,000 of excess proceeds

6 shall be transferred to and deposited in the general

7 fund of the Treasury as miscellaneous receipts.

8 (2) After the transfer under paragraph (1), the

9 next $500,000,000 of excess proceeds shall be trans10 ferred to the interoperability fund described in sub11 section (c)(3).

12 (3) After the transfers under paragraphs (1)

13 and (2), the next $1,200,000,000 of excess proceeds

14 shall be transferred to the assistance program de15 scribed in subsection (c)(5).

16 (4) After the transfers under paragraphs (1)

17 through (3), any remaining excess proceeds shall be

18 transferred to and deposited in the general fund of

19 the Treasury as miscellaneous receipts.

20 SEC. 3005A. COMMUNICATION SYSTEM GRANTS.

21 (a) DEFINITIONS.—In this section—

22 (1) the term ‘‘demonstration project’’ means

23 the demonstration project established under sub24 section (b)(1);
†

102

S 1932 ES

1 (2) the term ‘‘Department’’ means the Depart2 ment of Homeland Security;

3 (3) the term ‘‘emergency response provider’’

4 has the meaning given that term in section 2(6) the

5 Homeland Security Act of 2002 (6 U.S.C. 101(6));

6 and

7 (4) the term ‘‘Secretary’’ means the Secretary

8 of Homeland Security.

9 (b) IN GENERAL.—

10 (1) ESTABLISHMENT.—There is established in

11 the Department an ‘‘International Border Commu12 nity Interoperable Communications Demonstration

13 Project’’.

14 (2) MINIMUM NUMBER OF COMMUNITIES.—The

15 Secretary shall select not fewer than 2 communities

16 to participate in a demonstration project.

17 (3) LOCATION OF COMMUNITIES.—Not fewer

18 than 1 of the communities selected under paragraph

19 (2) shall be located on the northern border of the

20 United States and not fewer than 1 of the commu21 nities selected under paragraph (2) shall be located

22 on the southern border of the United States.

23 (c) PROJECT REQUIREMENTS.—The demonstration

24 projects shall—
†

103

S 1932 ES

1 (1) address the interoperable communications

2 needs of police officers, firefighters, emergency med3 ical technicians, National Guard, and other emer4 gency response providers;

5 (2) foster interoperable communications—

6 (A) among Federal, State, local, and tribal

7 government agencies in the United States in8 volved in preventing or responding to terrorist

9 attacks or other catastrophic events; and

10 (B) with similar agencies in Canada and

11 Mexico;

12 (3) identify common international cross-border

13 frequencies for communications equipment, including

14 radio or computer messaging equipment;

15 (4) foster the standardization of interoperable

16 communications equipment;

17 (5) identify solutions that will facilitate commu18 nications interoperability across national borders ex19 peditiously;

20 (6) ensure that emergency response providers

21 can communicate with each another and the public

22 at disaster sites or in the event of a terrorist attack

23 or other catastrophic event;
†

104

S 1932 ES

1 (7) provide training and equipment to enable

2 emergency response providers to deal with threats

3 and contingencies in a variety of environments; and

4 (8) identify and secure appropriate joint-use

5 equipment to ensure communications access.

6 (d) DISTRIBUTION OF FUNDS.—

7 (1) IN GENERAL.—The Secretary shall dis8 tribute funds under this section to each community

9 participating in a demonstration project through the

10 State, or States, in which each community is lo11 cated.

12 (2) OTHER PARTICIPANTS.—Not later than 60

13 days after receiving funds under paragraph (1), a

14 State receiving funds under this section shall make

15 the funds available to the local governments and

16 emergency response providers participating in a

17 demonstration project selected by the Secretary.

18 (e) FUNDING.—Amounts made available from the

19 interoperability fund under section 3005(c)(3) shall be

20 available to carry out this section without appropriation.

21 (f) REPORTING.—Not later than December 31, 2005,

22 and each year thereafter in which funds are appropriated

23 for a demonstration project, the Secretary shall provide

24 to the Committee on Homeland Security and Govern25 mental Affairs of the Senate and the Committee on Home-
†

105

S 1932 ES

1 land Security of the House of Representatives a report on

2 the demonstration projects under this section.

3 SEC. 3006. ESSENTIAL AIR SERVICE PROGRAM.

4 (a) IN GENERAL.—If the amount appropriated to

5 carry out the essential air service program under sub6 chapter II of chapter 417 of title 49, United States Code,

7 equals or exceeds $110,000,000 for fiscal year 2006,

8 2007, 2008, 2009, or 2010, then the Secretary of Com9 merce shall make $15,000,000 available from the Digital

10 Transition and Public Safety Fund available to the Sec11 retary of Transportation for use in carrying out the essen12 tial air service program for that fiscal year.

13 (b) APPLICATION WITH OTHER FUNDS.—Amounts

14 made available under subsection (a) for any fiscal year

15 shall be in addition to any amounts—

16 (1) appropriated for that fiscal year; or

17 (2) derived from fees collected pursuant to sec18 tion 45301(a)(1) of title 49, United States Code,

19 that are made available for obligation and expendi20 ture to carry out the essential air service program

21 for that fiscal year.

22 TITLE IV—ENERGY AND

23 NATURAL RESOURCES

24 SEC. 4001. OIL AND GAS LEASING PROGRAM.

25 (a) DEFINITIONS.—In this section:
†

106

S 1932 ES

1 (1) COASTAL PLAIN.—The term ‘‘Coastal

2 Plain’’ means the area identified as the Coastal

3 Plain on the map prepared by the United States Ge4 ological Survey, entitled ‘‘Arctic National Wildlife

5 Refuge 1002 Coastal Plain Area’’, dated September

6 2005, and on file with the United States Geological

7 Survey.

8 (2) SECRETARY.—The term ‘‘Secretary’’ means

9 the Secretary of the Interior, acting through the Bu10 reau of Land Management.

11 (b) PROGRAM.—

12 (1) IN GENERAL.—Congress—

13 (A) authorizes the leasing, development,

14 production, and transportation of oil and gas in

15 and from the Coastal Plain; and

16 (B) directs the Secretary to take such ac17 tions as are necessary to—

18 (i) establish and implement an envi19 ronmentally sound competitive oil and gas

20 leasing program to carry out the activities

21 authorized under subparagraph (A); and

22 (ii) conduct 2 lease sales before Octo23 ber 1, 2010.

24 (2) ADMINISTRATION.—The Secretary shall ad25 minister this section through regulations, lease
†

107

S 1932 ES

1 terms, conditions, restrictions, prohibitions, stipula2 tions, and other provisions that ensure the oil and

3 gas exploration, development, production, and trans4 portation activities on the Coastal Plain are carried

5 out in a manner that will ensure the receipt of fair

6 market value by the public for the mineral resources

7 to be leased.

8 (c) LEASE SALES BEFORE FISCAL YEAR 2011.—

9 (1) IN GENERAL.—In order to enable the Sec10 retary to hold 2 lease sales before October 1, 2010,

11 this subsection shall apply with respect to the oil

12 and gas leasing program established by the Sec13 retary pursuant to this section.

14 (2) PURPOSES.—For purposes of the National

15 Wildlife Refuge System Administration Act of 1966

16 (16 U.S.C. 668dd et seq.) and amendments made by

17 that Act, the oil and gas leasing program and activi18 ties authorized by this section in the Coastal Plain

19 are deemed to be compatible with the purposes for

20 which the Arctic National Wildlife Refuge was estab21 lished, and no further findings or decisions are re22 quired to implement this determination of compat23 ibility.

24 (3) PRELEASE ACTIVITIES.—The Final Legisla25 tive Environmental Impact Statement on the Coastal
†

108

S 1932 ES

1 Plain dated April 1987 and prepared pursuant to

2 section 1002 of the Alaska National Interest Lands

3 Conservation Act (16 U.S.C. 3142) and section

4 102(2)(C) of the National Environmental Policy Act

5 of 1969 (42 U.S.C. 4332(2)(C)) is deemed to satisfy

6 the requirements under the National Environmental

7 Policy Act of 1969 (42 U.S.C. 4321 et seq.) that

8 apply with respect to prelease activities, including

9 actions authorized to be taken by the Secretary to

10 develop and promulgate regulations for the establish11 ment of the leasing program authorized by this sec12 tion before the conduct of the first lease sale.

13 (4) PREFERRED ACTION.—

14 (A) NONLEASING ALTERNATIVES.—With

15 respect to any environmental impact statement

16 prepared by the Secretary under the National

17 Environmental Policy Act of 1969 (42 U.S.C.

18 4321 et seq.) with respect to any lease sale con19 ducted under the leasing program authorized by

20 this section, the Secretary is not required to

21 identify nonleasing alternative courses of action

22 or to analyze the environmental effects of those

23 courses of action.

24 (B) LEASING ALTERNATIVES.—The Sec25 retary shall only identify a preferred action for
†

109

S 1932 ES

1 leasing and a single leasing alternative, and

2 analyze the environmental effects and potential

3 mitigation measures for the preferred action

4 and leasing alternative.

5 (C) DEADLINE.—The identification and re6 lated analyses required by subparagraph (B)

7 shall be completed within 18 months after the

8 date of enactment of this Act.

9 (D) PUBLIC COMMENTS.—The Secretary

10 shall only consider public comments that are

11 filed within 30 days after publication of an en12 vironmental analysis.

13 (E) COMPLIANCE.—Compliance with this

14 paragraph satisfies all requirements of section

15 102(2)(C) of the National Environmental Policy

16 Act of 1969 (42 U.S.C. 4332(2)(C)) for the

17 analysis and consideration of the environmental

18 effects of proposed leasing under this section.

19 (5) EXPEDITED JUDICIAL REVIEW.—

20 (A) VENUE; DEADLINE.—Any complaint

21 seeking judicial review of this section or any ac22 tion of the Secretary under this section shall be

23 filed in the United States Court of Appeals for

24 the District of Columbia—
†

110

S 1932 ES

1 (i) within the 90-day period beginning

2 on the date of the action being challenged;

3 or

4 (ii) in the case of a complaint based

5 solely on grounds arising after that period,

6 within 90 days after the complainant knew

7 or reasonably should have known of the

8 grounds for the complaint.

9 (B) SCOPE.—Judicial review of a decision

10 of the Secretary to conduct a lease sale under

11 this section (including the environmental anal12 ysis of the decision) shall be—

13 (i) limited to whether the Secretary

14 has complied with this section; and

15 (ii) based on the administrative record

16 of that decision.

17 (d) RECEIPTS.—Notwithstanding any other provision

18 of law, of the amount of adjusted bonus, rental, and roy19 alty receipts derived from oil and gas leasing and oper20 ations authorized under this section—

21 (1) 50 percent shall be paid to the State of

22 Alaska; and

23 (2) the balance shall be deposited into the

24 Treasury as miscellaneous receipts.
†

111

S 1932 ES

1 (e) RIGHTS-OF-WAY.—For purposes of section

2 1102(4)(A) of the Alaska National Interest Lands Con3 servation Act (16 U.S.C. 3162(4)(A)), any rights-of-way

4 or easements across the Coastal Plain for the exploration,

5 development, production, or transportation of oil and gas

6 shall be considered to be established incident to the man7 agement of the Coastal Plain under this section.

8 (f) MAXIMUM SURFACE ACREAGE.—In administering

9 this section, the Secretary shall ensure that the maximum

10 quantity of surface acreage covered by production and

11 support facilities (including airstrips and any area covered

12 by gravel berms or piers for support of pipelines) does not

13 exceed 2,000 acres on the Coastal Plain.

14 (g) PROHIBITION ON EXPORTS.—An oil or gas lease

15 issued under this title shall prohibit the exportation of oil

16 or gas produced under the lease.

17 TITLE V—COMMITTEE ON ENVI18 RONMENT AND PUBLIC

19 WORKS

20 SEC. 5001. TECHNICAL CORRECTIONS TO SAFETEA–LU.

21 (a)(1) Notwithstanding any other provision of law,

22 the amount of $639,000,000 described in section

23 1102(b)(10) of the Safe, Accountable, Flexible, Efficient

24 Transportation Equity Act: A Legacy for Users (119 Stat.

25 1144), shall be considered to be—
†

112

S 1932 ES

1 (A) for fiscal year 2006 only, $631,000,000;

2 and

3 (B) for fiscal year 2007 only, $647,000,000.

4 (2) Notwithstanding any other provision of law, the

5 amount of $2,639,000,000 described in section 1102(c)(6)

6 of the Safe, Accountable, Flexible, Efficient Transpor7 tation Equity Act: A Legacy for Users (119 Stat. 1144),

8 shall be considered to be—

9 (A) for fiscal year 2006 only, $2,631,000,000;

10 and

11 (B) for fiscal year 2007 only, $2,647,000,000.

12 (b) Section 4409 of the Safe, Accountable, Flexible,

13 Efficient Transportation Equity Act: A Legacy for Users

14 (119 Stat. 1144) is amended—

15 (1) by striking ‘‘Section’’ and inserting the fol16 lowing:

17 ‘‘(a) IN GENERAL.—Section’’; and

18 (2) by adding at the end the following:

19 ‘‘(b) EFFECTIVE DATE.—The amendments made by

20 this section shall take effect on December 31, 2008.’’.

21 TITLE VI—COMMITTEE ON

22 FINANCE

23 SEC. 6000. AMENDMENTS TO SOCIAL SECURITY ACT.

24 (a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex25 cept as otherwise specifically provided, whenever in this
†

113

S 1932 ES

1 title an amendment is expressed in terms of an amend2 ment to or repeal of a section or other provision, the ref3 erence shall be considered to be made to that section or

4 other provision of the Social Security Act.

5 (b) REFERENCES TO THE SECRETARY.—In this title,

6 the term ‘‘Secretary’’ means the Secretary of Health and

7 Human Services.

8 Subtitle A—Medicaid

9 CHAPTER 1—PAYMENT FOR

10 PRESCRIPTION DRUGS UNDER MEDICAID

11 SEC. 6001. PHARMACY REIMBURSEMENT.

12 (a) DEFINITION OF AVERAGE MANUFACTURER

13 PRICE.—

14 (1) IN GENERAL.—Section 1927(k)(1) (42

15 U.S.C. 1396r–8(k)(1)) is amended—

16 (A) in the paragraph heading, by striking

17 ‘‘PRICE’’ and inserting ‘‘PRICE; WEIGHTED AV18 ERAGE MANUFACTURER PRICE’’;

19 (B) by striking ‘‘The term’’ and inserting

20 the following:

21 ‘‘(A) IN GENERAL.—The term’’; and

22 (C) by adding at the end the following:

23 ‘‘(B) CALCULATION REQUIREMENTS.—For

24 purposes of subparagraph (A), the average
†

114

S 1932 ES

1 manufacturer price shall be calculated accord2 ing to the following:

3 ‘‘(i) SALES EXEMPTED FROM COM4 PUTATION.—Without regard to—

5 ‘‘(I) sales exempt from inclusion

6 in the determination of best price

7 under subsection (c)(1)(C)(i);

8 ‘‘(II) such other sales as the Sec9 retary identifies as sales to an entity

10 that are merely nominal in amount

11 under subsection (c)(1)(C)(ii)(III);

12 and

13 ‘‘(III) bona fide service fees (as

14 defined in subparagraph (E)) that are

15 paid by a manufacturer to an entity,

16 that represent fair market value for a

17 bona fide service, and that are not

18 passed on in whole or in part to a cli19 ent or customer of an entity.

20 ‘‘(ii) SALE PRICE NET OF DIS21 COUNTS.—By including the following:

22 ‘‘(I) Cash discounts and volume

23 discounts.
†

115

S 1932 ES

1 ‘‘(II) Free goods that are contin2 gent upon any purchase requirement

3 or agreement.

4 ‘‘(III) Sales at a nominal price

5 that are contingent upon any pur6 chase requirement or agreement.

7 ‘‘(IV) Chargebacks, rebates pro8 vided to a pharmacy (including a mail

9 order pharmacy but excluding a phar10 macy benefit manager), or any other

11 direct or indirect discounts.

12 ‘‘(V) Any other price concessions,

13 which may be based on recommenda14 tions of the Inspector General of the

15 Department of Health and Human

16 Services, that would result in a reduc17 tion of the cost to the purchaser, but

18 only if the Secretary provides notice

19 of the Secretary’s intent to include

20 such price concessions in accordance

21 with section 553 of title 5, United

22 States Code.

23 ‘‘(C) WEIGHTED AVERAGE MANUFAC24 TURER PRICE.—The term ‘weighted average

25 manufacturer price’ means, with respect to a
†

116

S 1932 ES

1 rebate period and multiple source drug, the vol2 ume-weighted average of the average manufac3 turer prices reported under subsection

4 (b)(3)(A)(i)(I) for all drug products described

5 in paragraph (7)(A)(i) that are therapeutically

6 equivalent and bioequivalent forms of the drug,

7 determined by—

8 ‘‘(i) computing the sum of the prod9 ucts (for each National Drug Code as10 signed to such drug products) of—

11 ‘‘(I) the average manufacturer

12 price; and

13 ‘‘(II) the total number of units

14 reported sold under subsection

15 (b)(3)(A)(i)(I); and

16 ‘‘(ii) dividing the sum determined

17 under clause (i) by the sum of the total

18 number of units under clause (i)(II) for all

19 National Drug Codes assigned to such

20 drug products.

21 ‘‘(D) LIMITATION ON SALES AT A NOMINAL

22 PRICE.—

23 ‘‘(i) IN GENERAL.—For purposes of

24 clauses (i)(II) and (ii)(III) of subpara25 graph (B), only sales by a manufacturer of
†

117

S 1932 ES

1 covered outpatient drugs that are single

2 source drugs, innovator multiple source

3 drugs, or authorized generic drugs at

4 nominal prices to the following shall be

5 considered to be sales at a nominal price or

6 merely nominal in amount:

7 ‘‘(I) A covered entity described in

8 section 340B(a)(4) of the Public

9 Health Service Act.

10 ‘‘(II) An intermediate care facil11 ity for the mentally retarded.

12 ‘‘(III) A State-owned or operated

13 nursing facility.

14 ‘‘(IV) Any other facility or entity

15 that the Secretary determines is a

16 safety net provider to which sales of

17 such drugs at a nominal price would

18 be appropriate based on the following

19 factors:

20 ‘‘(aa) The type of facility.

21 ‘‘(bb) The services provided

22 by the facility.

23 ‘‘(cc) The patient population

24 served by the facility.
†

118

S 1932 ES

1 ‘‘(dd) The number of other

2 facilities eligible to purchase at

3 nominal prices in the same serv4 ice area.

5 ‘‘(ii) NONAPPLICATION.—Clause (i)

6 shall not apply with respect to sales by a

7 manufacturer at a nominal price of covered

8 outpatient drugs that are single source

9 drugs, innovator multiple source drugs, or

10 authorized generic drugs pursuant to a

11 master agreement under section 8126 of

12 title 38, United States Code.

13 ‘‘(E) BONA FIDE SERVICE FEES.—For

14 purposes of subparagraph (B)(i)(III), the term

15 ‘bona fide service fees’ means expenses that are

16 for an itemized service actually performed by an

17 entity on behalf of a manufacturer that would

18 have generally been paid for by the manufac19 turer at the same rate had these services been

20 performed by another entity.’’.

21 (2) CONFORMING AMENDMENTS.—Section

22 1927(b)(3)(A)(i) (42 U.S.C. 1396r–8(b)(3)(A)(i)),

23 as amended by section 6003(a), is amended—

24 (A) in subclause (I)—
†

119

S 1932 ES

1 (i) by inserting ‘‘and the total number

2 of units sold’’ after ‘‘(as defined in sub3 section (k)(1))’’; and

4 (ii) by striking ‘‘and’’ at the end;

5 (B) in subclause (II), by adding ‘‘and’’ at

6 the end; and

7 (C) by adding at the end the following:

8 ‘‘(III) information and data on

9 any sales that were made during such

10 period at a nominal price, including,

11 with respect to each such sale, the

12 purchaser, the name of the product,

13 the amount or number of units of the

14 product sold at a nominal price, and

15 the nominal price paid;’’.

16 (3) EFFECTIVE DATE.—

17 (A) IN GENERAL.—Except as provided in

18 subparagraph (B), the amendments made by

19 this subsection shall take effect on January 1,

20 2006.

21 (B) EXCEPTION.—Subparagraph (D) of

22 section 1927(k)(1) of the Social Security Act

23 (42 U.S.C. 1396r–8(k)(1)) (as added by para24 graph (1)) shall not apply with respect to a con25 tract in effect on the date of enactment of this
†

120

S 1932 ES

1 Act pursuant to which pharmaceutical products

2 are or may be available at nominal prices until

3 the expiration date of such contract, or October

4 1, 2006, whichever is earlier, and shall apply to

5 sales made, and rebate periods beginning, on or

6 after that date.

7 (4) EXCLUSION OF DISCOUNTS PROVIDED TO

8 MAIL ORDER AND NURSING FACILITY PHARMACIES

9 FROM THE DETERMINATION OF AVERAGE MANUFAC10 TURER PRICE.—

11 (A) IN GENERAL.—Section

12 1927(k)(1)(B)(ii)(IV) (42 U.S.C. 1396r–

13 8(k)(1)(B)(ii)(IV)), as added by paragraph

14 (1)(C), is amended to read as follows:

15 ‘‘(IV) Chargebacks, rebates pro16 vided to a pharmacy (excluding a mail

17 order pharmacy, a pharmacy at a

18 nursing facility or home, and a phar19 macy benefit manager), or any other

20 direct or indirect discounts.’’.

21 (B) EFFECTIVE DATE.—Paragraph (3)

22 shall apply to the amendment made by subpara23 graph (A).
†

121

S 1932 ES

1 (5) EXTENSION OF PRESCRIPTION DRUG DIS2 COUNTS TO ENROLLEES OF MEDICAID MANAGED

3 CARE ORGANIZATIONS.—

4 (A) IN GENERAL.—Section 1903(m)(2)(A)

5 (42 U.S.C. 1396b(m)(2)(A)) is amended—

6 (i) in clause (xi), by striking ‘‘and’’ at

7 the end;

8 (ii) in clause (xii), by striking the pe9 riod at the end and inserting ‘‘; and’’; and

10 (iii) by adding at the end the fol11 lowing:

12 ‘‘(xiii) such contract provides that payment for

13 covered outpatient drugs dispensed to individuals eli14 gible for medical assistance who are enrolled with

15 the entity shall be subject to the same rebate agree16 ment entered into under section 1927 as the State

17 is subject to and that the State shall have the option

18 of collecting rebates for the dispensing of such drugs

19 by the entity directly from manufacturers or allow20 ing the entity to collect such rebates from manufac21 turers in exchange for a reduction in the prepaid

22 payments made to the entity for the enrollment of

23 such individuals.’’.

24 (B) CONFORMING AMENDMENT.—Section

25 1927(j)(1) (42 U.S.C. 1396r–8(j)91)) is
†

122

S 1932 ES

1 amended by inserting ‘‘other than for purposes

2 of collection of rebates for the dispensing of

3 such drugs in accordance with the provisions of

4 a contract under section 1903(m) that meets

5 the requirements of paragraph (2)(A)(xiii) of

6 that section’’ before the period.

7 (C) EFFECTIVE DATE.—The amendments

8 made by this paragraph take effect on the date

9 of enactment of this Act and apply to rebate

10 agreements entered into or renewed under sec11 tion 1927 of the Social Security Act (42 U.S.C.

12 1396r–8) on or after such date.

13 (b) UPPER PAYMENT LIMIT FOR INGREDIENT COST

14 OF COVERED OUTPATIENT DRUGS.—

15 (1) IN GENERAL.—Section 1927(e) (42 U.S.C.

16 1396r–8(e)) is amended to read as follows:

17 ‘‘(e) PHARMACY REIMBURSEMENT LIMITS.—

18 ‘‘(1) UPPER PAYMENT LIMIT FOR INGREDIENT

19 COST OF COVERED OUTPATIENT DRUGS.—No Fed20 eral financial participation shall be available for pay21 ment for the ingredient cost of a covered outpatient

22 drug that exceeds the upper payment limit for that

23 drug established under paragraph (2).

24 ‘‘(2) UPPER PAYMENT LIMIT.—
†

123

S 1932 ES

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

2 subparagraphs (B) and (C), the upper payment

3 limit established under this paragraph for the

4 ingredient cost of a—

5 ‘‘(i) single source drug, is 105 percent

6 of the average manufacturer price for that

7 drug; and

8 ‘‘(ii) multiple source drug, is 115 per9 cent of the weighted average manufacturer

10 price for that drug.

11 ‘‘(B) EXCEPTION FOR INITIAL SALES PERI12 ODS.—

13 ‘‘(i) IN GENERAL.—In the case of a

14 covered outpatient drug during an initial

15 sales period (not to exceed 2 calendar

16 quarters) in which data on sales for the

17 drug is not sufficiently available from the

18 manufacturer to compute the average man19 ufacturer price or the weighted average

20 manufacturer price, the Secretary shall es21 tablish the upper payment limit for the in22 gredient cost of such drug to apply only

23 during such period based on the following:

24 ‘‘(I) In the case of a single

25 source drug, such upper payment
†

124

S 1932 ES

1 limit shall be the wholesale acquisition

2 cost for the drug.

3 ‘‘(II) In the case of a first non4 innovator multiple source drug, such

5 upper payment limit shall be the aver6 age manufacturer price for the single

7 source drug that is rated as thera8 peutically equivalent and bioequivalent

9 to such drug, minus 10 percent.

10 ‘‘(III) In the case of a subse11 quent noninnovator multiple source

12 drug—

13 ‘‘(aa) if the Secretary has

14 sufficient data to determine the

15 weighted average manufacturer

16 price for the drug, such upper

17 payment limit shall be the

18 weighted average manufacturer

19 price determined for the thera20 peutically equivalent and bio21 equivalent form of the drug; and

22 ‘‘(bb) if the Secretary does

23 not have sufficient data to deter24 mine the weighted average manu25 facturer price for the drug, such
†

125

S 1932 ES

1 upper payment limit shall be the

2 average manufacturer price for

3 the single source drug that is

4 rated as therapeutically equiva5 lent and bioequivalent to the

6 drug, minus 10 percent.

7 ‘‘(ii) DEFINITION OF WHOLESALE AC8 QUISITION COST.—For purposes of clause

9 (i), the term ‘wholesale acquisition cost’

10 means, with respect to a drug or biological,

11 the manufacturer’s list price for the drug

12 or biological to wholesalers or direct pur13 chasers in the United States, not including

14 prompt pay or other discounts, rebates, or

15 reductions in price, for the most recent

16 month for which the information is avail17 able, as reported in wholesale price guides

18 or other publications of drug or biological

19 pricing data.

20 ‘‘(C) EXCEPTION FOR CERTAIN INNOVATOR

21 MULTIPLE SOURCE DRUGS.—In the case of an

22 innovator multiple source drug that a pre23 scribing health care provider determines is nec24 essary for treatment of a condition and that a

25 noninnovator multiple source drug would not be
†

126

S 1932 ES

1 as effective for the individual or would have ad2 verse effects for the individual or both, and for

3 which the provider obtains prior authorization

4 in accordance with a program described in sub5 section (d)(5), the upper payment limit for the

6 innovator multiple source drug shall be 105

7 percent of the average manufacturer price for

8 such drug.

9 ‘‘(D) UPDATES; AVAILABILITY OF DATA.—

10 ‘‘(i) FREQUENCY OF DETERMINA11 TION.—The Secretary shall update the

12 upper payment limits applicable under this

13 paragraph on a quarterly basis, taking into

14 account the most recent data collected for

15 purposes of determining such limits and

16 the Food and Drug Administration’s most

17 recent publication of ‘Approved Drug

18 Products with Therapeutic Equivalence

19 Evaluations’.

20 ‘‘(ii) COLLECTION OF DATA.—

21 ‘‘(I) IN GENERAL.—Beginning on

22 January 1, 2006, the Secretary shall

23 collect data with respect to the aver24 age manufacturer prices and volume

25 of sales of covered outpatient drugs
†

127

S 1932 ES

1 (or, in the case of covered outpatient

2 drugs that are first marketed after

3 such date, beginning with the first

4 quarter during which the drugs are

5 first marketed).

6 ‘‘(II) DATA REPORTED FOR PUR7 POSES OF DETERMINING WEIGHTED

8 AVERAGE MANUFACTURER PRICE.—

9 Insofar as there is a lag in the report10 ing of the information on rebates and

11 chargebacks so that adequate data are

12 not available on a timely basis to up13 date the weighted average manufac14 turer price for a multiple source drug,

15 the manufacturer of such drug shall

16 apply a methodology based on a 12-

17 month rolling average for the manu18 facturer to estimate costs attributable

19 to rebates and charge backs for such

20 drug. For years after 2006, the Sec21 retary shall establish a uniform meth22 odology to estimate and apply such

23 costs.

24 ‘‘(iii) AVAILABILITY OF DATA TO

25 STATES.—Notwithstanding subsection
†

128

S 1932 ES

1 (b)(3)(D), beginning with the first quarter

2 of fiscal year 2006 for which data is avail3 able, and for each fiscal year quarter

4 thereafter, the Secretary shall make avail5 able to States the most recently reported

6 average manufacturer prices for single

7 source drugs and weighted average manu8 facturer prices for multiple source drugs.

9 ‘‘(E) AUTHORITY TO ENTER CON10 TRACTS.—The Secretary may enter into con11 tracts with appropriate entities to determine av12 erage manufacturer prices, volume, and other

13 data necessary to calculate the upper payment

14 limit for a covered outpatient drug established

15 under this subsection and to calculate that pay16 ment limit.

17 ‘‘(3) STATE USE OF PRICE DATA.—

18 ‘‘(A) DISTRIBUTION OF DATA.—The Sec19 retary shall devise and implement a means for

20 electronic distribution of the most recently cal21 culated weighted average manufacturer price

22 and the average manufacturer price for all cov23 ered outpatient drugs to each State agency des24 ignated under section 1902(a)(5) with responsi25 bility for the administration or supervision of
†

129

S 1932 ES

1 the administration of the State plan under this

2 title.

3 ‘‘(B) AUTHORITY TO ESTABLISH PAYMENT

4 RATES BASED ON DATA.—A State may use the

5 price data received in accordance with subpara6 graph (A) in establishing payment rates for the

7 ingredient costs and dispensing fees for covered

8 outpatient drugs dispensed to individuals eligi9 ble for medical assistance under this title.

10 ‘‘(4) REASONABLE DISPENSING FEES RE11 QUIRED.—

12 ‘‘(A) IN GENERAL.—A State which pro13 vides medical assistance for covered outpatient

14 drugs shall pay a dispensing fee for each cov15 ered outpatient drug for which Federal finan16 cial participation is available in accordance with

17 this section in accordance with the following:

18 ‘‘(i) The dispensing fee for a noninno19 vator multiple source drug shall be greater

20 than the dispensing fee for an innovator

21 multiple source drug that is rated as thera22 peutically equivalent and bioequivalent to

23 such drug.

24 ‘‘(ii) In establishing such dispensing

25 fees, the State takes into consideration
†

130

S 1932 ES

1 such requirements as the Secretary shall,

2 by regulation, establish, and which shall in3 clude consideration of the following:

4 ‘‘(I) Any reasonable costs associ5 ated with a pharmacist’s time in

6 checking for information about an in7 dividual’s coverage or performing

8 quality assurance activities.

9 ‘‘(II) Costs associated with—

10 ‘‘(aa) the measurement or

11 mixing of a covered outpatient

12 drug;

13 ‘‘(bb) filling the container

14 for the drug;

15 ‘‘(cc) physically providing

16 the completed prescription to an

17 individual enrolled in the pro18 gram under this title;

19 ‘‘(dd) delivery;

20 ‘‘(ee) special packaging;

21 ‘‘(ff) overhead related to

22 maintaining the facility and

23 equipment necessary to operate

24 the pharmacy, including the sala-
†

131

S 1932 ES

1 ries of pharmacists and other

2 pharmacy workers;

3 ‘‘(gg) geographic factors

4 that impact operational costs;

5 ‘‘(hh) patient counseling;

6 and

7 ‘‘(ii) the dispensing of drugs

8 requiring specialty pharmacy care

9 management services (as deter10 mined by the Secretary in ac11 cordance with subparagraph

12 (B)).

13 ‘‘(B) DETERMINATION OF DRUGS REQUIR14 ING SPECIALTY PHARMACY CARE MANAGEMENT

15 SERVICES.—

16 ‘‘(i) IN GENERAL.—Not later than 15

17 months after the date of enactment of the

18 Deficit Reduction Omnibus Reconciliation

19 Act of 2005, the Secretary shall establish

20 a list of covered outpatient drugs which re21 quire specialty pharmacy care management

22 services that includes only those drugs for

23 which the Secretary determines that access

24 by individuals eligible for medical assist25 ance under this title would be seriously im-
†

132

S 1932 ES

1 paired without the provision of specialty

2 pharmacy care management services.

3 ‘‘(ii) SPECIALTY PHARMACY CARE

4 MANAGEMENT SERVICES DEFINED.—For

5 purposes of this paragraph, the term ‘spe6 cialty pharmacy care management services’

7 means services provided in connection with

8 the dispensing or administration of a cov9 ered outpatient drug which the Secretary

10 determines requires—

11 ‘‘(I) significant caregiver and

12 provider contact and education re13 garding the relevant disease state,

14 prevention, treatment, drug indica15 tions, benefits, risks, complications,

16 use, pharmacy counseling, and expla17 nation of existing provider guidelines;

18 ‘‘(II) patient compliance services,

19 including coordination of provider vis20 its with drug delivery, compliance with

21 a drug dosing regimen, mailing or

22 telephone call reminders, compiling

23 compliance data, and assisting pro24 viders in developing compliance pro25 grams; or
†

133

S 1932 ES

1 ‘‘(III) tracking services, including

2 developing referral processes with pro3 viders, screening referrals, and track4 ing patient weight for dosing require5 ments.

6 ‘‘(iii) QUARTERLY UPDATES.—The

7 Secretary shall update the list of covered

8 outpatient drugs requiring specialty phar9 macy management services on a quarterly

10 basis.

11 ‘‘(5) RULES APPLICABLE TO CRITICAL ACCESS

12 RETAIL PHARMACIES.—

13 ‘‘(A) REIMBURSEMENT LIMITS.—Notwith14 standing paragraph (2)(A), in the case of a

15 critical access retail pharmacy (as defined in

16 subparagraph (C)), the upper payment limit—

17 ‘‘(i) for the ingredient cost of a single

18 source drug, is the lesser of—

19 ‘‘(I) 108 percent of the average

20 manufacturer price for the drug; or

21 ‘‘(II) the wholesale acquisition

22 cost for the drug; and

23 ‘‘(ii) for the ingredient cost of a mul24 tiple source drug, is the lesser of—
†

134

S 1932 ES

1 ‘‘(II) 140 percent of the weighted

2 average manufacturer price for the

3 drug; or

4 ‘‘(II) the wholesale acquisition

5 cost for the drug.

6 ‘‘(B) APPLICATION OF OTHER PROVI7 SIONS.—The preceding provisions of this sub8 section shall apply with respect to reimburse9 ment to a critical access retail pharmacy in the

10 same manner as such provisions apply to reim11 bursement to other retail pharmacies except

12 that, in establishing the dispensing fee for a

13 critical access pharmacy the Secretary, in addi14 tion to the factors required under paragraph

15 (4), shall include consideration of the costs as16 sociated with operating a critical access retail

17 pharmacy.

18 ‘‘(C) CRITICAL ACCESS RETAIL PHARMACY

19 DEFINED.—For purposes of subparagraph (A),

20 the term ‘critical access retail pharmacy’ means

21 an retail pharmacy that is not within a 20-mile

22 radius of another retail pharmacy.’’.

23 (2) INCREASE IN BASIC REBATE FOR SINGLE

24 SOURCE DRUGS AND INNOVATOR MULTIPLE SOURCE

25 DRUGS.—Section 1927(c)(1)(B)(i)(VI) (42 U.S.C.
†

135

S 1932 ES

1 1396r–8(c)(1)(B)(i)(VI), as added by section

2 6002(a)(3), is amended by striking ‘‘17’’ and insert3 ing ‘‘18.1’’.

4 (3) CONFORMING AMENDMENTS.—

5 (A) Section 1927(b)(3)(D)(i) (42 U.S.C.

6 1396r–8(b)(3)(D)(i)) is amended by inserting

7 ‘‘(including with respect to the determination of

8 weighted average manufacturer prices under

9 subsection (e)(2) and the distribution of weight10 ed average manufacturer prices and average

11 manufacturer prices for covered outpatient

12 drugs to States under subsection (e)(3))’’ after

13 ‘‘this section’’.

14 (B) Section 1903(i)(10) (42 U.S.C.

15 1396b(i)(10)) is amended—

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

17 ‘‘and’’ at the end;

18 (ii) in subparagraph (B), by striking

19 ‘‘or’’ at the end and inserting ‘‘and’’; and

20 (iii) by adding at the end the fol21 lowing:

22 ‘‘(C) with respect to any amount expended for

23 the ingredient cost of a covered outpatient drug that

24 exceeds the upper payment limit for that drug estab25 lished under section 1927(e); or’’.
†

136

S 1932 ES

1 (4) EFFECTIVE DATE.—The amendments made

2 by this subsection take effect with respect to a State

3 on the later of—

4 (A) January 1, 2007; or

5 (B) the date that is 6 months after the

6 close of the first regular session of the State

7 legislature that begins after the date of enact8 ment of this Act.

9 (c) INTERIM UPPER PAYMENT LIMIT.—

10 (1) IN GENERAL.—With respect to a State pro11 gram under title XIX of the Social Security Act,

12 during the period that begins on January 1, 2006,

13 and ends on the effective date applicable to such

14 State under subsection (b)(3), the Secretary shall—

15 (A) apply the Federal upper payment limit

16 established under section 447.332(b) of title 42,

17 Code of Federal Regulations to the State by

18 substituting ‘‘125 percent’’ for ‘‘150 percent’’;

19 and

20 (B) in the case of covered outpatient drugs

21 under title XIX of such Act that are marketed

22 as of July 1, 2005, and are subject to Federal

23 upper payment limits that apply under section

24 447.332 of title 42, Code of Federal Regula25 tions, use average wholesale prices, direct
†

137

S 1932 ES

1 prices, and wholesale acquisition costs for such

2 drugs that do not exceed such prices and costs

3 as of such date to determine the Federal upper

4 payment limits that apply under section

5 447.332 of title 42, Code of Federal Regula6 tions to such drugs during such period.

7 (2) APPLICATION TO NEW DRUGS.—Paragraph

8 (1)(A) shall apply to a covered outpatient drug

9 under title XIX of the Social Security Act that is

10 first marketed after July 1, 2005, but before Janu11 ary 1, 2007, and is subject to the Federal upper

12 payment limit established under section 447.332(b)

13 of title 42, Code of Federal Regulations.

14 SEC. 6002. INCREASE IN REBATES FOR COVERED OUT15 PATIENT DRUGS.

16 (a) INCREASE IN BASIC REBATE FOR SINGLE

17 SOURCE DRUGS AND INNOVATOR MULTIPLE SOURCE

18 DRUGS.—Section 1927(c)(1)(B)(i) (42 U.S.C. 1396r–

19 8(c)(1)(B)(i)) is amended—

20 (1) in subclause (IV), by striking ‘‘and’’ after

21 the semicolon;

22 (2) in subclause (V)—

23 (A) by inserting ‘‘and before January 1,

24 2006,’’ after ‘‘1995,’’; and
†

138

S 1932 ES

1 (B) by striking the period and inserting ‘‘;

2 and’’; and

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

4 ‘‘(VI) after December 31, 2005,

5 is 17 percent.’’.

6 (b) INCREASE IN REBATE FOR OTHER DRUGS.—Sec7 tion 1927(c)(3)(B) (42 U.S.C. 1396r–8(c)(3)(B)) is

8 amended—

9 (1) in clause (i), by striking ‘‘and’’ at the end;

10 (2) in clause (ii)—

11 (A) by inserting ‘‘and before January 1,

12 2006,’’ after ‘‘December 31, 1993,’’; and

13 (B) by striking the period at the end and

14 inserting ‘‘; and’’; and

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

16 ‘‘(iii) after December 31, 2005, is 17

17 percent.’’.

18 SEC. 6003. IMPROVED REGULATION OF AUTHORIZED GE19 NERIC DRUGS.

20 (a) INCLUSION WITH OTHER REPORTED AVERAGE

21 MANUFACTURER AND BEST PRICES.—Section

22 1927(b)(3)(A) (42 U.S.C. 1396r–8(b)(3)(A)) is

23 amended—

24 (1) by striking clause (i) and inserting the fol25 lowing:
†

139

S 1932 ES

1 ‘‘(i) not later than 30 days after the

2 last day of each rebate period under the

3 agreement—

4 ‘‘(I) on the average manufacturer

5 price (as defined in subsection (k)(1))

6 for each covered outpatient drug for

7 the rebate period under the agreement

8 (including for each such drug that is

9 an authorized generic drug or is any

10 other drug sold under a new drug ap11 plication approved under section

12 505(c) of the Federal Food, Drug,

13 and Cosmetic Act); and

14 ‘‘(II) for each single source drug,

15 innovator multiple source drug, au16 thorized generic drug, and any other

17 drug sold under a new drug applica18 tion approved under section 505(c) of

19 the Federal Food, Drug, and Cos20 metic Act, on the manufacturer’s best

21 price (as defined in subsection

22 (c)(1)(C)) for such drug for the rebate

23 period under the agreement;’’; and

24 (2) in clause (ii), by inserting ‘‘(including for

25 such drugs that are authorized generic drugs or are
†

140

S 1932 ES

1 any other drugs sold under a new drug application

2 approved under section 505(c) of the Federal Food,

3 Drug, and Cosmetic Act)’’ after ‘‘drugs’’.

4 (b) CONFORMING AMENDMENTS.—Section 1927 of

5 such Act (42 U.S.C. 1396r–8) is amended—

6 (1) in subsection (c)(1)(C)—

7 (A) in clause (i), in the matter preceding

8 subclause (I), by striking ‘‘or innovator multiple

9 source drug of a manufacturer’’ and inserting

10 ‘‘, innovator multiple source drug, or authorized

11 generic drug of a manufacturer, or any other

12 drug of a manufacturer that is sold under a

13 new drug application approved under section

14 505(c) of the Federal Food, Drug, and Cos15 metic Act’’; and

16 (B) in clause (ii)—

17 (i) in subclause (II), by striking

18 ‘‘and’’ at the end;

19 (ii) in subclause (III), by striking the

20 period at the end and inserting ‘‘; and’’;

21 and

22 (iii) by adding at the end the fol23 lowing:

24 ‘‘(IV) in the case of a manufac25 turer that approves, allows, or other-
†

141

S 1932 ES

1 wise permits an authorized generic

2 drug or any other drug of the manu3 facturer to be sold under a new drug

4 application approved under section

5 505(c) of the Federal Food, Drug,

6 and Cosmetic Act, shall be inclusive of

7 the lowest price for such authorized

8 generic or other drug available from

9 the manufacturer during the rebate

10 period to any wholesaler, retailer, pro11 vider, health maintenance organiza12 tion, nonprofit entity, or governmental

13 entity within the United States, ex14 cluding those prices described in sub15 clauses (I) through (IV) of clause

16 (i).’’; and

17 (2) in subsection (k)—

18 (A) in paragraph (1), as amended by sec19 tion 6001(a)(1)(B), by adding at the end the

20 following:

21 ‘‘(F) INCLUSION OF AUTHORIZED GENERIC

22 DRUGS.—In the case of a manufacturer that

23 approves, allows, or otherwise permits an au24 thorized generic drug or any other drug of the

25 manufacturer to be sold under a new drug ap-
†

142

S 1932 ES

1 plication approved under section 505(c) of the

2 Federal Food, Drug, and Cosmetic Act, such

3 term shall be inclusive of the average price paid

4 for such authorized generic or other drug.’’; and

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

6 ‘‘(10) AUTHORIZED GENERIC DRUG.—The term

7 ‘authorized generic drug’ means a listed drug (as

8 that term is used in section 505(j) of the Federal

9 Food, Drug, and Cosmetic Act) that—

10 ‘‘(A) has been approved under section

11 505(c) of such Act; and

12 ‘‘(B) is marketed, sold, or distributed di13 rectly or indirectly to the retail class of trade

14 under a different labeling, packaging (other

15 than repackaging as the listed drug in blister

16 packs, unit doses, or similar packaging for use

17 in institutions), product code, labeler code,

18 trade name, or trade mark than the listed

19 drug.’’.

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

21 this section take effect on January 1, 2006.
†

143

S 1932 ES

1 SEC. 6004. COLLECTION OF REBATES FOR CERTAIN PHYSI2 CIAN ADMINISTERED DRUGS.

3 (a) IN GENERAL.—Section 1927(a) (42 U.S.C.

4 1396r–8(a)) is amended by adding at the end the fol5 lowing:

6 ‘‘(7) REQUIREMENT FOR SUBMISSION OF UTILI7 ZATION DATA FOR CERTAIN PHYSICIAN-ADMINIS8 TERED DRUGS.—In order for payment to be avail9 able under section 1903(a) for a covered outpatient

10 drug that is physician administered (as determined

11 by the Secretary), and that is administered on or

12 after January 1, 2006, the State shall provide for

13 the submission of such utilization data and coding

14 (including both J-codes and National Drug Code

15 numbers) for each such drug as the Secretary may

16 specify as necessary in order to secure rebates for

17 payments made under this title.’’.

18 (b) LIMITATION ON PAYMENT.—Section 1903(i)(10)

19 (42 U.S.C. 1396b(i)(10)), as amended by section

20 6001(b)(2)(B), is amended—

21 (1) in subparagraph (B), by striking ‘‘and’’ at

22 the end;

23 (2) in subparagraph (C), by striking ‘‘; or’’ at

24 the end and inserting ‘‘, and’’; and

25 (3) by adding at the end the following:
†

144

S 1932 ES

1 ‘‘(D) with respect to covered outpatient drugs

2 described in section 1927(a)(7), unless information

3 with respect to utilization data and coding on such

4 drugs is submitted in accordance with that section;

5 or’’.

6 CHAPTER 2—LONG-TERM CARE UNDER

7 MEDICAID

8 SEC. 6011. REFORM OF MEDICAID ASSET TRANSFER RULES.

9 (a) REQUIREMENT TO IMPOSE PARTIAL MONTHS OF

10 INELIGIBILITY.—Section 1917(c)(1)(E) (42 U.S.C.

11 1396p(c)(1)(E)) is amended by adding at the end the fol12 lowing:

13 ‘‘(iv) A State shall not round down, or otherwise dis14 regard any fractional period of ineligibility determined

15 under clause (i) or (ii) with respect to the disposal of as16 sets.’’.

17 (b) AUTHORITY FOR STATES TO ACCUMULATE MUL18 TIPLE TRANSFERS INTO 1 PENALTY PERIOD.—Section

19 1917(c)(1) (42 U.S.C. 1396p(c)(1)) is amended by adding

20 at the end the following:

21 ‘‘(F) Notwithstanding the preceding provisions of this

22 paragraph, in the case of an individual (or individual’s

23 spouse) who disposes of multiple assets in more than 1

24 month for less than fair market value on or after the appli25 cable look-back date specified in subparagraph (B), a
†

145

S 1932 ES

1 State may determine the period of ineligibility applicable

2 to such individual under this paragraph by—

3 ‘‘(i) treating the total, cumulative uncompen4 sated value of all assets transferred by the individual

5 (or individual’s spouse) during all months on or

6 after the look-back date specified in subparagraph

7 (B) as 1 transfer for purposes of clause (i) or (ii)

8 (as the case may be) of subparagraph (E); and

9 ‘‘(ii) beginning such period on the earliest date

10 which would apply under subparagraph (D) to any

11 of such transfers.’’.

12 (c) INCLUSION OF TRANSFER OF CERTAIN NOTES

13 AND LOANS ASSETS.—Section 1917(c)(1) (42 U.S.C.

14 1396p(c)(1)), as amended by subsection (b), is amended

15 by adding at the end the following:

16 ‘‘(G) For purposes of this paragraph with respect to

17 a transfer of assets, the term ‘assets’ includes funds used

18 to purchase a promissory note, loan, or mortgage unless

19 such note, loan, or mortgage—

20 ‘‘(i) has a repayment term that is actuarially

21 sound (as determined in accordance with actuarial

22 publications of the Office of the Chief Actuary of the

23 Social Security Administration);
†

146

S 1932 ES

1 ‘‘(ii) provides for payments to be made in equal

2 amounts during the term of the loan, with no defer3 ral and no balloon payments made; and

4 ‘‘(iii) prohibits the cancellation of the balance

5 upon the death of the lender.

6 In the case of a promissory note, loan, or mortgage that

7 does not satisfy the requirements of clauses (i) through

8 (iii), the value of such note, loan, or mortgage shall be

9 the outstanding balance due as of the date of the individ10 ual’s application for medical assistance for services de11 scribed in subparagraph (C).’’.

12 (d) TREATMENT OF ANNUITIES.—

13 (1) INCLUSION OF TRANSFERS TO PURCHASE

14 BALLOON ANNUITIES.—Section 1917(c)(1) (42

15 U.S.C. 1396p(c)(1)), as amended by subsection (c),

16 is amended by adding at the end the following:

17 ‘‘(H) For purposes of this paragraph with respect to

18 a transfer of assets, the term ‘assets’ includes an annuity

19 purchased by or on behalf of an annuitant who has applied

20 for medical assistance with respect to nursing facility serv21 ices or other long-term care services under this title

22 unless—

23 ‘‘(i) the annuity is—
†

147

S 1932 ES

1 ‘‘(I) an annuity described in subsection (b)

2 or (q) of section 408 of the Internal Revenue

3 Code of 1986; or

4 ‘‘(II) purchased with proceeds from—

5 ‘‘(aa) an account or trust described in

6 subsection (a), (c), (p) of section 408 of

7 such Code;

8 ‘‘(bb) a simplified employee pension

9 (within the meaning of section 408(k) of

10 such Code); or

11 ‘‘(cc) a Roth IRA described in section

12 408A of such Code; or

13 ‘‘(ii) the annuity—

14 ‘‘(I) is irrevocable and nonassignable;

15 ‘‘(II) is actuarially sound (as determined in

16 accordance with actuarial publications of the

17 Office of the Chief Actuary of the Social Secu18 rity Administration); and

19 ‘‘(III) provides for payments in equal

20 amounts during the term of the annuity, with

21 no deferral and no balloon payments made.’’.

22 (2) REQUIREMENT FOR STATE TO BE NAMED

23 AS A REMAINDER BENEFICIARY.—Section 1917(c)(1)

24 (42 U.S.C. 1396p(c)(1)), as amended by paragraph

25 (1), is amended by adding at the end the following:
†

148

S 1932 ES

1 ‘‘(I) For purposes of this paragraph, the purchase of

2 an annuity shall be treated as the disposal of an asset

3 for less than fair market value unless the State is named

4 as the remainder beneficiary in the first position for at

5 least the total amount of medical assistance paid on behalf

6 of the annuitant under this title or is named as such a

7 beneficiary in the second position after the community

8 spouse and such spouse does not dispose of any such re9 mainder for less than fair market value.’’.

10 (3) INCLUSION OF CERTAIN ANNUITIES IN AN

11 ESTATE.—Section 1917(b)(4) (42 U.S.C.

12 1396p(b)(4)) is amended—

13 (A) in subparagraph (A), by striking

14 ‘‘and’’ at the end;

15 (B) in subparagraph (B), by striking the

16 period at the end and inserting ‘‘; and’’; and

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

18 ‘‘(C) shall include an annuity unless the annu19 ity was purchased from a financial institution or

20 other business that sells annuities in the State as

21 part of its regular business.’’.

22 (e) INCLUSION OF TRANSFERS TO PURCHASE LIFE

23 ESTATES.—Section 1917(c)(1) (42 U.S.C. 1396p(c)(1)),

24 as amended by subsection (d)(2), is amended by adding

25 at the end the following:
†

149

S 1932 ES

1 ‘‘(J) For purposes of this paragraph with respect to

2 a transfer of assets, the term ‘assets’ includes the pur3 chase of a life estate interest in another individual’s home

4 unless the purchaser resides in the home for a period of

5 at least 1 year after the date of the purchase.

6 (f) PROTECTION AGAINST UNDUE HARDSHIP.—Sec7 tion 1917(c) (42 U.S.C. 1396p(c)) is amended by adding

8 at the end the following:

9 ‘‘(6) For purposes of paragraph (2)(D) and sub10 section (d)(5), the procedures established by the State in

11 accordance with standards specified by the Secretary shall

12 provide for—

13 ‘‘(A) notice, before application of the provisions

14 of paragraph (1) or subsection (d), to an individual

15 who is an applicant for medical assistance under this

16 title who would be subject to such a penalty under

17 such provisions that an undue hardship exception ex18 ists;

19 ‘‘(B) a timely process before the imposition of

20 a penalty for determining whether an undue hard21 ship waiver will be granted for the individual;

22 ‘‘(C) a process under which an adverse deter23 mination can be appealed; and

24 ‘‘(D) application of criteria that specifies that

25 an undue hardship exists when application of the
†

150

S 1932 ES

1 provisions of paragraph (1) or subsection (d) would

2 deprive the individual of medical care such that the

3 individual’s health or life would be endangered or

4 when the application of such provisions would de5 prive the individual of food, clothing, shelter, or

6 other necessities of life.’’.

7 (g) EFFECTIVE DATES.—

8 (1) IN GENERAL.—Except as provided in para9 graphs (2) and (3), the amendments made by this

10 section shall apply to payments under title XIX of

11 the Social Security Act (42 U.S.C. 1396 et seq.) for

12 calendar quarters beginning on or after the date of

13 enactment of this Act, without regard to whether or

14 not final regulations to carry out such amendments

15 have been promulgated by such date.

16 (2) EXCEPTIONS.—The amendments made by

17 this section shall not apply—

18 (A) to medical assistance provided for serv19 ices furnished before the date of enactment;

20 (B) with respect to assets disposed of on

21 or before the date of enactment of this Act; or

22 (C) with respect to trusts established on or

23 before the date of enactment of this Act.

24 (3) EXTENSION OF EFFECTIVE DATE FOR

25 STATE LAW AMENDMENT.—In the case of a State
†

151

S 1932 ES

1 plan under title XIX of the Social Security Act (42

2 U.S.C. 1396 et seq.) which the Secretary of Health

3 and Human Services determines requires State legis4 lation in order for the plan to meet the additional

5 requirements imposed by the amendments made by

6 a provision of this section, the State plan shall not

7 be regarded as failing to comply with the require8 ments of such title solely on the basis of its failure

9 to meet these additional requirements before the

10 first day of the first calendar quarter beginning

11 after the close of the first regular session of the

12 State legislature that begins after the date of the en13 actment of this Act. For purposes of the previous

14 sentence, in the case of a State that has a 2-year

15 legislative session, each year of the session is consid16 ered to be a separate regular session of the State

17 legislature.

18 SEC. 6012. STATE LONG-TERM CARE PARTNERSHIPS.

19 (a) EXPANSION OF STATE LONG-TERM CARE PART20 NERSHIPS.—

21 (1) IN GENERAL.—Section 1917(b)(1)(C)(ii)

22 (42 U.S.C. 1396p(b)(1)(C)(ii)) is amended to read

23 as follows:

24 ‘‘(ii) Clause (i) shall not apply in the case of an

25 individual who received medical assistance under—
†

152

S 1932 ES

1 ‘‘(I) a Qualified State Long-Term Care In2 surance Partnership (as defined in paragraph

3 (5)); or

4 ‘‘(II) under a State plan of a State

5 which—

6 ‘‘(aa) had a State plan amendment

7 approved as of May 14, 1993, which pro8 vided for the disregard of any assets or re9 sources to the extent that payments are

10 made under a long-term care insurance

11 policy or because an individual has received

12 (or is entitled to receive) benefits under a

13 long-term care insurance policy; and

14 ‘‘(bb) has a State plan amendment

15 which satisfies the requirements of sub16 paragraphs (B) through (G) of paragraph

17 (5) in the case of any long-term care insur18 ance policy sold under such plan amend19 ment on or after the date that is 2 years

20 after the date of enactment of such para21 graph.

22 For purposes of this clause and paragraphs (5) and

23 (6), the term ‘long-term care insurance policy’ in24 cludes a certificate issued under a group insurance

25 contract.’’.
†

153

S 1932 ES

1 (2) SATISFACTION OF MINIMUM FEDERAL

2 STANDARDS, TAX QUALIFICATIONS, INFLATION PRO3 TECTION, AND OTHER REQUIREMENTS FOR LONG4 TERM CARE INSURANCE PARTNERSHIPS.—Section

5 1917(b) (42 U.S.C. 1396p(b)) is amended by insert6 ing at the end the following:

7 ‘‘(5) The term ‘Qualified State Long-Term

8 Care Insurance Partnership’ means a program of9 fered in a State with an approved State plan amend10 ment that provides for the following:

11 ‘‘(A) Subject to the limit specified in sub12 paragraph (D), the disregard of any assets or

13 resources in an amount equal to the amount of

14 payments made to, or on behalf of, an indi15 vidual who is a beneficiary under any long-term

16 care insurance policy sold under such plan

17 amendment.

18 ‘‘(B) A requirement that the State will

19 treat benefits paid under any long-term care in20 surance policy sold under a plan amendment of

21 another State that maintains a Qualified Long22 Term Care Insurance Partnership or is de23 scribed in subsection (b)(1)(C)(ii)(II) the same

24 as the State treats benefits paid under such a

25 policy sold under the State’s plan amendment.
†

154

S 1932 ES

1 ‘‘(C) A requirement that any long-term

2 care insurance policy sold under such plan

3 amendment—

4 ‘‘(i) be a qualified long-term care in5 surance contract within the meaning of

6 section 7702B(b) of the Internal Revenue

7 Code of 1986; and

8 ‘‘(ii) meet the requirements described

9 in paragraph (6).

10 ‘‘(D) A requirement that any such policy

11 sold under the State plan amendment shall pro12 vide for—

13 ‘‘(i) compound annual inflation pro14 tection of at least 5 percent; and

15 ‘‘(ii) asset protection that does not ex16 ceed $250,000.

17 The dollar amount specified in the preceding

18 sentence shall be increased, beginning with

19 2007, from year to year based on the percent20 age increase in the medical care expenditure

21 category of the Consumer Price Index for All

22 Urban Consumers (United States city average),

23 published by the Bureau of Labor Statistics,

24 rounded to the nearest $100.
†

155

S 1932 ES

1 ‘‘(E) A requirement that an insurer may

2 rescind a long-term care insurance policy sold

3 under such State plan amendment that has

4 been in effect for at least 2 years or deny an

5 otherwise valid long-term care insurance claim

6 under such a policy only upon a showing of mis7 representation that is material to the accept8 ance of coverage, pertains to the claim made,

9 and could not have been known by the insurer

10 at the time the policy was sold.

11 ‘‘(F) A requirement that any individual

12 who sells such a policy receive training, and

13 demonstrate evidence of an understanding of,

14 the policy and how the policy relates to other

15 public and private coverage of long-term care.

16 ‘‘(G) A requirement that the issuer of any

17 such policy report—

18 ‘‘(i) to the Secretary, such informa19 tion or data as the Secretary may require;

20 and

21 ‘‘(ii) to the State, the information or

22 data reported to the Secretary (if any), the

23 information or data required under the

24 minimum reporting requirements developed

25 under section 6012(b)(2)(B) of the Deficit
†

156

S 1932 ES

1 Reduction Omnibus Reconciliation Act of

2 2005, and such additional information or

3 data as the State may require.

4 For purposes of applying this paragraph, if a long5 term care insurance policy is exchanged for another

6 such policy, the date coverage became effective

7 under the first policy shall determine when coverage

8 first becomes effective.

9 ‘‘(6)(A) For purposes of subparagraph (C)(ii)

10 of paragraph (5), the requirements of this paragraph

11 are met if a long-term care insurance policy sold

12 under a plan amendment described in that para13 graph meets—

14 ‘‘(i) MODEL REGULATION.—The following

15 requirements of the model regulation:

16 ‘‘(I) Section 6A (relating to guaran17 teed renewal or noncancellability), other

18 than paragraph (5) thereof, and the re19 quirements of section 6B of the model Act

20 relating to such section 6A.

21 ‘‘(II) Section 6B (relating to prohibi22 tions on limitations and exclusions) other

23 than paragraph (7) thereof.

24 ‘‘(III) Section 6C (relating to exten25 sion of benefits).
†

157

S 1932 ES

1 ‘‘(IV) Section 6D (relating to continu2 ation or conversion of coverage).

3 ‘‘(V) Section 6E (relating to dis4 continuance and replacement of policies).

5 ‘‘(VI) Section 7 (relating to uninten6 tional lapse).

7 ‘‘(VII) Section 8 (relating to disclo8 sure), other than sections 8F, 8G, 8H, and

9 8I thereof.

10 ‘‘(VIII) Section 9 (relating to required

11 disclosure of rating practices to consumer).

12 ‘‘(IX) Section 11 (relating to prohibi13 tions against post-claims underwriting).

14 ‘‘(X) Section 12 (relating to minimum

15 standards).

16 ‘‘(XI) Section 14 (relating to applica17 tion forms and replacement coverage).

18 ‘‘(XII) Section 15 (relating to report19 ing requirements).

20 ‘‘(XIII) Section 22 (relating to filing

21 requirements for marketing).

22 ‘‘(XIV) Section 23 (relating to stand23 ards for marketing), including inaccurate

24 completion of medical histories, other than
†

158

S 1932 ES

1 paragraphs (1), (6), and (9) of section

2 23C.

3 ‘‘(XV) Section 25 (relating to prohibi4 tion against preexisting conditions and

5 probationary periods in replacement poli6 cies or certificates).

7 ‘‘(XVI) The provisions of section 26

8 relating to contingent nonforfeiture bene9 fits, if the policyholder declines the offer of

10 a nonforfeiture provision described in para11 graph (4).

12 ‘‘(XVII) Section 29 (relating to stand13 ard format outline of coverage).

14 ‘‘(XVIII) Section 30 (relating to re15 quirement to deliver shopper’s guide).

16 ‘‘(ii) MODEL ACT.—The following require17 ments of the model Act:

18 ‘‘(I) Section 6C (relating to pre19 existing conditions).

20 ‘‘(II) Section 6D (relating to prior

21 hospitalization).

22 ‘‘(III) The provisions of section 8 re23 lating to contingent nonforfeiture benefits.

24 ‘‘(IV) Section 6F (relating to right to

25 return).
†

159

S 1932 ES

1 ‘‘(V) Section 6G (relating to outline of

2 coverage).

3 ‘‘(VI) Section 6H (relating to require4 ments for certificates under group plans).

5 ‘‘(VII) Section 6J (relating to policy

6 summary).

7 ‘‘(VIII) Section 6K (relating to

8 monthly reports on accelerated death bene9 fits).

10 ‘‘(B) DEFINITIONS.—For purposes of this

11 paragraph—

12 ‘‘(i) MODEL PROVISIONS.—The terms

13 ‘model regulation’ and ‘model Act’ mean the

14 long-term care insurance model regulation, and

15 the long-term care insurance model Act, respec16 tively, promulgated by the National Association

17 of Insurance Commissioners (as adopted as of

18 October 2000).

19 ‘‘(ii) COORDINATION.—Any provision of

20 the model regulation or model Act listed under

21 clause (i) or (ii) of subparagraph (A) shall be

22 treated as including any other provision of such

23 regulation or Act necessary to implement the

24 provision.
†

160

S 1932 ES

1 ‘‘(iii) DETERMINATION.—For purposes of

2 this paragraph, the determination of whether

3 any requirement of a model regulation or the

4 model Act has been met shall be made by the

5 Secretary.’’.

6 (3) EFFECTIVE DATE.—The amendments made

7 by this subsection take effect on October 1, 2007,

8 and apply to long-term care insurance policies sold

9 on or after that date.

10 (b) DEVELOPMENT OF UNIFORM STANDARDS AND

11 RECOMMENDATIONS.—

12 (1) IN GENERAL.—Not later than 1 year after

13 the date of enactment of this Act, the Secretary, in

14 consultation with the National Association of Insur15 ance Commissioners, issuers of long-term care insur16 ance policies, States with experience with long-term

17 care insurance partnership plans, other States, and

18 representatives of consumers of long-term care in19 surance policies shall develop the uniform standards

20 described in paragraph (2) and submit recommenda21 tions to Congress with respect to the issues identi22 fied in paragraph (3).

23 (2) UNIFORM STANDARDS.—The uniform

24 standards described in this paragraph are the fol25 lowing:
†

161

S 1932 ES

1 (A) RECIPROCITY.—Standards for ensur2 ing that long-term care insurance policies

3 issued under a State long-term care insurance

4 partnership under section 1917(b)(1)(C)(ii) of

5 the Social Security Act (42 U.S.C.

6 1396p(b)(1)(C)(ii)) (as amended by subsection

7 (a)) are portable to other States with such a

8 partnership.

9 (B) MINIMUM REPORTING REQUIRE10 MENTS.—Standards for minimum reporting re11 quirements for issuers of long-term care insur12 ance policies under such State long-term care

13 insurance partnerships that shall specify the

14 data and information that each such issuer

15 shall report to the State with which it has such

16 a partnership. The requirements developed in

17 accordance with this subparagraph shall specify

18 the type and format of the data and informa19 tion to be reported and the frequency with

20 which such reports are to be made.

21 (C) SUITABILITY.—Suitability standards

22 for determining whether a long-term care insur23 ance policy is appropriate for the needs of an

24 applicant, based on guidance of the National
†

162

S 1932 ES

1 Association of Insurance Commissioners regard2 ing suitability.

3 (3) RECOMMENDATIONS.—The recommenda4 tions described in this paragraph are the following:

5 (A) INCONTESTABILITY.—Recommenda6 tions regarding whether the requirements relat7 ing to incontestability for long-term care insur8 ance policies sold under a State long-term care

9 insurance partnership program under section

10 1917(b)(1)(C)(ii) of the Social Security Act

11 should be modified based on guidance of the

12 National Association of Insurance Commis13 sioners regarding incontestability.

14 (B) NONFORFEITURE.—Recommendations

15 regarding whether requirements relating to non16 forfeiture for issuers of long-term care insur17 ance policies under a State long-term care in18 surance partnership program under section

19 1917(b)(1)(C)(ii) of such Act should be modi20 fied to reflect changes in an insured’s financial

21 circumstances.

22 (C) INDEPENDENT CERTIFICATION FOR

23 BENEFITS ASSESSMENT.—Recommendations re24 garding whether uniform standards for requir25 ing benefits assessment evaluations to be con-
†

163

S 1932 ES

1 ducted by independent entities should be estab2 lished for issuers of long-term care insurance

3 policies under such a State partnership pro4 gram and, if so, what such standards should be.

5 (D) RATING REQUIREMENTS.—Rec6 ommendations regarding whether uniform

7 standards for the establishment of, and annual

8 increases in, premiums for long-term care in9 surance policies sold under such a State part10 nership program should be established and, if

11 so, what such standards should be.

12 (E) DISPUTE RESOLUTION.—Rec13 ommendations regarding whether uniform

14 standards are needed to ensure fair adjudica15 tion of coverage disputes under long-term care

16 insurance policies sold under such a State part17 nership program and the delivery of the benefits

18 promised under such policies.

19 (4) STATE REPORTING REQUIREMENTS.—Noth20 ing in paragraph (2)(B) shall be construed as pro21 hibiting a State from requiring an issuer of a long22 term care insurance policy sold in the State (regard23 less of whether the policy is issued under a State

24 long-term care insurance partnership under section

25 1917(b)(1)(C)(ii) of the Social Security Act) to re-
†

164

S 1932 ES

1 quire the issuer to report information or data to the

2 State that is in addition to the information or data

3 required under the minimum reporting requirements

4 developed under that paragraph.

5 (c) ANNUAL REPORTS TO CONGRESS.—The Sec6 retary of Health and Human Services shall annually re7 port to Congress on the long-term care insurance partner8 ships established in accordance with section

9 1917(b)(1)(C)(ii) of the Social Security Act (42 U.S.C.

10 1396p(b)(1)(C)(ii)) (as amended by subsection (a)(1)).

11 Such reports shall include analyses of the extent to which

12 such partnerships expand or limit access of individuals to

13 long-term care and the impact of such partnerships on

14 Federal and State expenditures under the Medicare and

15 Medicaid programs.

16 CHAPTER 3—ELIMINATING FRAUD,

17 WASTE, AND ABUSE IN MEDICAID

18 SEC. 6021. ENHANCING THIRD PARTY RECOVERY.

19 (a) CLARIFICATION OF RIGHT OF RECOVERY

20 AGAINST ANY THIRD PARTY LEGALLY RESPONSIBLE FOR

21 PAYMENT OF A CLAIM FOR A HEALTH CARE ITEM OR

22 SERVICE.—Section 1902(a)(25) (42 U.S.C. 1396a(a)(25))

23 is amended—

24 (1) in subparagraph (A), in the matter pre25 ceding clause (i)—
†

165

S 1932 ES

1 (A) by inserting ‘‘, including self-insured

2 plans’’ after ‘‘health insurers’’; and

3 (B) by striking ‘‘and health maintenance

4 organizations’’ and inserting ‘‘health mainte5 nance organizations, pharmacy benefit man6 agers, or other parties that are, by statute, con7 tract, or agreement, legally responsible for pay8 ment of a claim for a health care item or serv9 ice’’; and

10 (2) in subparagraph (G)—

11 (A) by inserting ‘‘a self-insured plan,’’

12 after ‘‘1974,’’; and

13 (B) by striking ‘‘and a health maintenance

14 organization’’ and inserting ‘‘a health mainte15 nance organization, a pharmacy benefit man16 ager, or other party that is, by statute, con17 tract, or agreement, legally responsible for pay18 ment of a claim for a health care item or serv19 ice’’.

20 (b) REQUIREMENT FOR THIRD PARTIES TO PROVIDE

21 THE STATE WITH COVERAGE ELIGIBILITY AND CLAIMS

22 DATA.—Section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) is

23 amended—

24 (1) in subparagraph (G), by striking ‘‘and’’ at

25 the end;
†

166

S 1932 ES

1 (2) in subparagraph (H), by adding ‘‘and’’ after

2 the semicolon at the end; and

3 (3) by inserting after subparagraph (H), the

4 following:

5 ‘‘(I) that the State shall provide assur6 ances satisfactory to the Secretary that the

7 State has in effect laws requiring health insur8 ers, including self-insured plans, group health

9 plans (as defined in section 607(1) of the Em10 ployee Retirement Income Security Act of

11 1974), service benefit plans, health maintenance

12 organizations, pharmacy benefit managers, or

13 other parties that are, by statute, contract, or

14 agreement, legally responsible for payment of a

15 claim for a health care item or service, as a

16 condition of doing business in the State, to—

17 ‘‘(i) provide eligibility and claims pay18 ment data with respect to an individual

19 who is eligible for, or is provided, medical

20 assistance under the State plan, upon the

21 request of the State;

22 ‘‘(ii) accept the subrogation of the

23 State to any right of an individual or other

24 entity to payment from the party for an
†

167

S 1932 ES

1 item or service for which payment has been

2 made under the State plan;

3 ‘‘(iii) respond to any inquiry by the

4 State regarding a claim for payment for

5 any health care item or service submitted

6 not later than 3 years after the date of the

7 provision of such health care item or serv8 ice; and

9 ‘‘(iv) agree not to deny a claim sub10 mitted by the State solely on the basis of

11 the date of submission of the claim;’’.

12 (c) EFFECTIVE DATE.—Except as provided in section

13 6026(e), the amendments made by this section take effect

14 on January 1, 2006.

15 SEC. 6022. LIMITATION ON USE OF CONTINGENCY FEE AR16 RANGEMENTS.

17 (a) IN GENERAL.—Section 1903(i) (42 U.S.C.

18 1396b(i)), as amended by section 104(b) of the QI, TMA,

19 and Abstinence Programs Extension and Hurricane

20 Katrina Unemployment Relief Act of 2005 (Public Law

21 109–91), is amended—

22 (1) in paragraph (19), by adding ‘‘or’’ at the

23 end;

24 (2) by striking the period at the end of para25 graph (21) and inserting ‘‘; or’’; and
†

168

S 1932 ES

1 (3) by inserting after paragraph (21), the fol2 lowing:

3 ‘‘(22) with respect to any amount expended in

4 connection with a contract or agreement (other than

5 a risk contract under section 1903(m)) between the

6 State agency under section 1902(a)(5) (or any State

7 or local agency designated by such agency to admin8 ister any portion of the State plan under this title)

9 and a consultant or other contractor if the terms of

10 compensation for the consultant or other contractor

11 do not meet the standards established by the Inspec12 tor General of the Department of Health and

13 Human Services under section 6022(b) of the Def14 icit Reduction Omnibus Reconciliation Act of

15 2005.’’.

16 (b) CONTINGENCY FEE ARRANGEMENT STAND17 ARDS.—Not later than 6 months after the date of enact18 ment of this Act, the Inspector General of the Department

19 of Health and Human Services shall issue standards for

20 the terms of compensation of consultants and other indi21 viduals or entities contracting with State agencies (or their

22 designees) administering State Medicaid plans under title

23 XIX of the Social Security Act that ensure prudent pur24 chasing and program integrity with respect to Federal

25 funds. The Inspector General shall annually review and,
†

169

S 1932 ES

1 as necessary, revise such standards to promptly address

2 new compensation arrangements that may present a risk

3 to program integrity under such title.

4 (c) EFFECTIVE DATE.—Except as provided in section

5 6026(e), the amendments made by subsection (a) take ef6 fect on January 1, 2007.

7 SEC. 6023. ENCOURAGING THE ENACTMENT OF STATE

8 FALSE CLAIMS ACTS.

9 (a) IN GENERAL.—Title XIX (42 U.S.C. 1396 et

10 seq.) is amended by inserting after section 1908A the fol11 lowing:

12 ‘‘STATE FALSE CLAIMS ACT REQUIREMENTS FOR

13 INCREASED STATE SHARE OF RECOVERIES

14 ‘‘SEC. 1909. (a) IN GENERAL.—Notwithstanding sec15 tion 1905(b), if a State has in effect a law relating to

16 false or fraudulent claims that meets the requirements of

17 subsection (b), the Federal medical assistance percentage

18 with respect to any amounts recovered under a State ac19 tion brought under such law, shall be decreased by 10 per20 centage points.

21 ‘‘(b) REQUIREMENTS.—For purposes of subsection

22 (a), the requirements of this subsection are that the In23 spector General of the Department of Health and Human

24 Services, in consultation with the Attorney General, deter25 mines that the State has in effect a law that meets the

26 following requirements:
†

170

S 1932 ES

1 ‘‘(1) The law establishes liability to the State

2 for false or fraudulent claims described in section

3 3729 of title 31, United States Code, with respect

4 to any expenditure described in section 1903(a).

5 ‘‘(2) The law contains provisions that are at

6 least as effective in rewarding and facilitating qui

7 tam actions for false or fraudulent claims as those

8 described in sections 3730 through 3732 of title 31,

9 United States Code.

10 ‘‘(3) The law contains a requirement for filing

11 an action under seal for 60 days with review by the

12 State Attorney General.

13 ‘‘(4) The law contains a civil penalty that is not

14 less than the amount of the civil penalty authorized

15 under section 3729 of title 31, United States Code.

16 ‘‘(5) The law contains provisions that are de17 signed to prevent a windfall recovery for a qui tam

18 relator in the event that the relator files a Federal

19 and State action for the same false or fraudulent

20 claim.

21 ‘‘(c) DEEMED COMPLIANCE.—A State that, as of

22 January 1, 2007, has a law in effect that meets the re23 quirements of subsection (b) shall be deemed to be in com24 pliance with such requirements for so long as the law con25 tinues to meet such requirements.
†

171

S 1932 ES

1 ‘‘(d) NO PRECLUSION OF BROADER LAWS.—Nothing

2 in this section shall be construed as prohibiting a State

3 that has in effect a law that establishes liability to the

4 State for false or fraudulent claims described in section

5 3729 of title 31, United States Code, with respect to pro6 grams in addition to the State program under this title,

7 or with respect to expenditures in addition to expenditures

8 described in section 1903(a), from being considered to be

9 in compliance with the requirements of subsection (a) so

10 long as the law meets such requirements.’’.

11 (b) EFFECTIVE DATE.—Except as provided in sec12 tion 6026(e), the amendments made by this section take

13 effect on January 1, 2007.

14 SEC. 6024. EMPLOYEE EDUCATION ABOUT FALSE CLAIMS

15 RECOVERY.

16 (a) IN GENERAL.—Section 1902(a) (42 U.S.C.

17 1396a(a)) is amended—

18 (1) in paragraph (66), by striking ‘‘and’’ at the

19 end;

20 (2) in paragraph (67) by striking the period at

21 the end and inserting ‘‘; and’’; and

22 (3) by inserting after paragraph (67) the fol23 lowing:

24 ‘‘(68) provide that any entity that receives or

25 makes annual payments under the State plan of at
†

172

S 1932 ES

1 least $1,000,000, as a condition of receiving such

2 payments, shall—

3 ‘‘(A) establish written policies, procedures,

4 and protocols for training of all employees of

5 the entity (including management), and of any

6 contractor or agent of the entity, that includes

7 a detailed discussion of the False Claims Act

8 established under sections 3729 through 3733

9 of title 31, United States Code, administrative

10 remedies for false claims and statements estab11 lished under chapter 38 of title 31, United

12 States Code, any State laws pertaining to civil

13 or criminal penalties for false claims and state14 ments, and whistleblower protections under

15 such laws, with respect to the role of such laws

16 in preventing and detecting fraud, waste, and

17 abuse in Federal health care programs (as de18 fined in section 1128B(f));

19 ‘‘(B) include as part of such written poli20 cies, procedures, and protocols, detailed provi21 sions and training regarding the entity’s poli22 cies and procedures for detecting and pre23 venting fraud, waste, and abuse;

24 ‘‘(C) include in any employee handbook for

25 the entity, a specific discussion of the laws de-
†

173

S 1932 ES

1 scribed in subparagraph (A), the rights of em2 ployees to be protected as whistleblowers, and

3 the entity’s policies and procedures for detect4 ing and preventing fraud, waste, and abuse;

5 and

6 ‘‘(D) require mandatory training for all

7 employees of the entity and of any contractor or

8 agent of the entity, at the time of hiring, with

9 respect to the laws described in subparagraph

10 (A) (including the whistleblower protections

11 under such laws) and the entity’s policies and

12 procedures for detecting fraud, waste, and

13 abuse.’’.

14 (b) EFFECTIVE DATE.—Except as provided in sec15 tion 6026(e), the amendments made by subsection (a) take

16 effect on January 1, 2007.

17 SEC. 6025. PROHIBITION ON RESTOCKING AND DOUBLE

18 BILLING OF PRESCRIPTION DRUGS.

19 (a) IN GENERAL.—Section 1903(i)(10) (42 U.S.C.

20 1396b(i)), as amended by section 6004(b), is amended—

21 (1) in subparagraph (C), by striking ‘‘and’’ at

22 the end;

23 (2) in subparagraph (D), by striking ‘‘; or’’ at

24 the end and inserting ‘‘, and’’; and

25 (3) by adding at the end the following:
†

174

S 1932 ES

1 ‘‘(E) with respect to any amount expended for

2 reimbursement to a pharmacy under this title for

3 the ingredient cost of a covered outpatient drug for

4 which the pharmacy has already received payment

5 under this title (other than with respect to a reason6 able restocking fee for such drug); or’’.

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

8 subsection (a) take effect on the first day of the first fiscal

9 year quarter that begins after the date of enactment of

10 this Act.

11 SEC. 6026. MEDICAID INTEGRITY PROGRAM.

12 (a) ESTABLISHMENT OF MEDICAID INTEGRITY PRO13 GRAM; MEDICAID CFO; MEDICAID PROGRAM INTEGRITY

14 OVERSIGHT BOARD.—Title XIX (42 U.S.C. 1396 et seq.)

15 is amended—

16 (1) by redesignating section 1936 as section

17 1938; and

18 (2) by inserting after section 1935 the fol19 lowing:

20 ‘‘MEDICAID INTEGRITY PROGRAM

21 ‘‘SEC. 1936. (a) IN GENERAL.—There is hereby es22 tablished the Medicaid Integrity Program (in this section

23 referred to as the ‘Program’) under which the Secretary

24 shall promote the integrity of the program under this title

25 by entering into contracts in accordance with this section
†

175

S 1932 ES

1 with eligible entities to carry out the activities described

2 in subsection (b).

3 ‘‘(b) ACTIVITIES DESCRIBED—Activities described in

4 this subsection are as follows:

5 ‘‘(1) Review of the actions of individuals or en6 tities furnishing items or services (whether on a fee7 for-service, risk, or other basis) for which payment

8 may be made under a State plan approved under

9 this title (or under any waiver of such plan approved

10 under section 1115) to determine whether fraud,

11 waste, or abuse has occurred, is likely to occur, or

12 whether such actions have any potential for resulting

13 in an expenditure of funds under this title in a man14 ner which is not intended under the provisions of

15 this title.

16 ‘‘(2) Audit of claims for payment for items or

17 services furnished, or administrative services ren18 dered, under a State plan under this title,

19 including—

20 ‘‘(A) cost reports;

21 ‘‘(B) consulting contracts; and

22 ‘‘(C) risk contracts under section 1903(m).

23 ‘‘(3) Identification and recovery of overpay24 ments to individuals or entities receiving Federal

25 funds under this title.
†

176

S 1932 ES

1 ‘‘(4) Education of providers of services, man2 aged care entities, beneficiaries, and other individ3 uals with respect to payment integrity and benefit

4 quality assurance issues.

5 ‘‘(c) ELIGIBLE ENTITY AND CONTRACTING REQUIRE6 MENTS.—

7 ‘‘(1) IN GENERAL.—An entity is eligible to

8 enter into a contract under the Program to carry

9 out any of the activities described in subsection (b)

10 if the entity satisfies the requirements of paragraphs

11 (2) and (3).

12 ‘‘(2) ELIGIBILITY REQUIREMENTS.—The re13 quirements of this paragraph are the following:

14 ‘‘(A) The entity has demonstrated capa15 bility to carry out the activities described in

16 subsection (b).

17 ‘‘(B) In carrying out such activities, the

18 entity agrees to cooperate with the Inspector

19 General of the Department of Health and

20 Human Services, the Attorney General, and

21 other law enforcement agencies, as appropriate,

22 in the investigation and deterrence of fraud and

23 abuse in relation to this title and in other cases

24 arising out of such activities.
†

177

S 1932 ES

1 ‘‘(C) The entity complies with such conflict

2 of interest standards as are generally applicable

3 to Federal acquisition and procurement.

4 ‘‘(D) The entity meets such other require5 ments as the Secretary may impose.

6 ‘‘(3) CONTRACTING REQUIREMENTS.—The enti7 ty has contracted with the Secretary in accordance

8 with such procedures as the Secretary shall by regu9 lation establish, except that such procedures shall in10 clude the following:

11 ‘‘(A) Procedures for identifying, evalu12 ating, and resolving organizational conflicts of

13 interest that are generally applicable to Federal

14 acquisition and procurement.

15 ‘‘(B) Competitive procedures to be used—

16 ‘‘(i) when entering into new contracts

17 under this section;

18 ‘‘(ii) when entering into contracts that

19 may result in the elimination of respon20 sibilities under section 202(b) of the

21 Health Insurance Portability and Account22 ability Act of 1996; and

23 ‘‘(iii) at any other time considered ap24 propriate by the Secretary.
†

178

S 1932 ES

1 ‘‘(C) Procedures under which a contract

2 under this section may be renewed without re3 gard to any provision of law requiring competi4 tion if the contractor has met or exceeded the

5 performance requirements established in the

6 current contract.

7 The Secretary may enter into such contracts without

8 regard to final rules having been promulgated.

9 ‘‘(4) LIMITATION ON CONTRACTOR LIABIL10 ITY.—The Secretary shall by regulation provide for

11 the limitation of a contractor’s liability for actions

12 taken to carry out a contract under the Program,

13 and such regulation shall, to the extent the Sec14 retary finds appropriate, employ the same or com15 parable standards and other substantive and proce16 dural provisions as are contained in section 1157.

17 ‘‘(d) COMPREHENSIVE PLAN FOR PROGRAM INTEG18 RITY.—

19 ‘‘(1) 5-YEAR PLAN.—With respect to the 5 fis20 cal year period beginning with fiscal year 2006, and

21 each such 5-fiscal year period that begins thereafter,

22 the Secretary shall establish a comprehensive plan

23 for ensuring the integrity of the program established

24 under this title by combatting fraud, waste, and

25 abuse.
†

179

S 1932 ES

1 ‘‘(2) CONSULTATION.—Each 5-fiscal year plan

2 established under paragraph (1) shall be developed

3 by the Secretary in consultation with the Attorney

4 General, the Director of the Federal Bureau of In5 vestigation, the Comptroller General of the United

6 States, the Inspector General of the Department of

7 Health and Human Services, and State officials with

8 responsibility for controlling provider fraud and

9 abuse under State plans under this title.

10 ‘‘(e) APPROPRIATION.—

11 ‘‘(1) IN GENERAL.—Out of any money in the

12 Treasury of the United States not otherwise appro13 priated, there are appropriated to carry out the

14 Medicaid Integrity Program under this section, with15 out further appropriation—

16 ‘‘(A) for fiscal year 2006, $50,000,000;

17 ‘‘(B) for each of fiscal years 2007 and

18 2008, $49,000,000;

19 ‘‘(C) for each of fiscal years 2009 and

20 2010, $74,000,000; and

21 ‘‘(D) for fiscal year 2011 and each fiscal

22 year thereafter, $75,000,000.

23 ‘‘(2) AVAILABILITY.—Amounts appropriated

24 pursuant to paragraph (1) shall remain available

25 until expended.
†

180

S 1932 ES

1 ‘‘(3) ANNUAL REPORT.—Not later than 180

2 days after the end of each fiscal year (beginning

3 with fiscal year 2006), the Secretary shall submit a

4 report to Congress which identifies—

5 ‘‘(A) the use of funds appropriated pursu6 ant to paragraph (1); and

7 ‘‘(B) the effectiveness of the use of such

8 funds.’’.

9 ‘‘MEDICAID CHIEF FINANCIAL OFFICER; MEDICAID

10 PROGRAM INTEGRITY OVERSIGHT BOARD

11 ‘‘SEC. 1937. (a) ESTABLISHMENT OF MEDICAID

12 CFO.—

13 ‘‘(1) IN GENERAL.—There is established in the

14 Centers for Medicare & Medicaid Services within the

15 Office of Financial Management the position of

16 Medicaid Chief Financial Officer. The Medicaid

17 Chief Financial Officer shall be appointed by, and

18 report directly to, the Administrator of such Cen19 ters. The Medicaid Chief Financial Officer may be

20 removed only for cause.

21 ‘‘(2) DUTIES AND AUTHORITY.—The duties and

22 authority of the Medicaid Chief Financial Officer

23 with respect to the management and expenditure of

24 Federal funds under this title shall be comparable to

25 the duties and authority of other Chief Financial Of26 ficers with respect to the management and expendi-
†

181

S 1932 ES

1 ture of Federal funds under Federal health care pro2 grams (as defined in section 1128B(f)).

3 ‘‘(b) PROGRAM INTEGRITY OVERSIGHT BOARD.—

4 The Secretary shall establish a Medicaid Program Integ5 rity Oversight Board. The duties and authority of the

6 Medicaid Program Integrity Oversight Board shall be

7 comparable to the duties and authority of other oversight

8 boards established for purposes of Federal health care pro9 grams (as so defined) and shall include responsibility for

10 identifying vulnerabilities in the State programs estab11 lished under this title and developing strategies for mini12 mizing integrity risks to such programs.’’.

13 (b) STATE REQUIREMENT TO COOPERATE WITH IN14 TEGRITY PROGRAM EFFORTS.—Section 1902(a) (42

15 U.S.C. 1396a(a)), as amended by section 6024(a), is

16 amended—

17 (1) in paragraph (67), by striking ‘‘and’’ at the

18 end;

19 (2) in paragraph (68), by striking the period at

20 the end and inserting ‘‘; and’’; and

21 (3) by inserting after paragraph (68), the fol22 lowing:

23 ‘‘(69) provide that the State must comply with

24 any requirements determined by the Secretary to be

25 necessary for carrying out the Medicaid Integrity
†

182

S 1932 ES

1 Program established under section 1936, or the du2 ties of the Medicaid Chief Financial Officer and the

3 Medicaid Program Integrity Oversight Board estab4 lished under section 1937.’’.

5 (c) INCREASED FUNDING FOR MEDICAID FRAUD AND

6 ABUSE CONTROL ACTIVITIES.—

7 (1) IN GENERAL.—Out of any money in the

8 Treasury of the United States not otherwise appro9 priated, there are appropriated to the Office of the

10 Inspector General of the Department of Health and

11 Human Services, without further appropriation,

12 $25,000,000 for each of fiscal years 2006 through

13 2010, for activities of such Office with respect to the

14 Medicaid program under title XIX of the Social Se15 curity Act (42 U.S.C. 1396 et seq.).

16 (2) AVAILABILITY; AMOUNTS IN ADDITION TO

17 OTHER AMOUNTS APPROPRIATED FOR SUCH ACTIVI18 TIES.—Amounts appropriated pursuant to para19 graph (1) shall—

20 (A) remain available until expended; and

21 (B) be in addition to any other amounts

22 appropriated or made available to the Office of

23 the Inspector General of the Department of

24 Health and Human Services for activities of
†

183

S 1932 ES

1 such Office with respect to the Medicaid pro2 gram.

3 (3) ANNUAL REPORT.—Not later than 180 days

4 after the end of each fiscal year (beginning with fis5 cal year 2006), the Inspector General of the Depart6 ment of Health and Human Services shall submit a

7 report to Congress which identifies—

8 (A) the use of funds appropriated pursuant

9 to paragraph (1); and

10 (B) the effectiveness of the use of such

11 funds.

12 (d) INCREASE IN CMS STAFFING DEVOTED TO EN13 SURING MEDICAID PROGRAM INTEGRITY.—The Secretary

14 shall significantly increase the number of full-time equiva15 lent employees whose duties consist solely of ensuring the

16 integrity of the Medicaid program established under title

17 XIX of the Social Security Act by providing effective sup18 port and assistance to States to combat provider fraud

19 and abuse.

20 (e) DELAYED EFFECTIVE DATE FOR CHAPTER.—in

21 the case of a State plan under title XIX of the Social Se22 curity Act which the Secretary determines requires State

23 legislation in order for the plan to meet the additional re24 quirements imposed by the amendments made by a provi25 sion of this chapter, the State plan shall not be regarded
†

184

S 1932 ES

1 as failing to comply with the requirements of such Act

2 solely on the basis of its failure to meet these additional

3 requirements before the first day of the first calendar

4 quarter beginning after the close of the first regular ses5 sion of the State legislature that begins after the date of

6 enactment of this Act. For purposes of the previous sen7 tence, in the case of a State that has a 2-year legislative

8 session, each year of the session shall be considered to be

9 a separate regular session of the State legislature.

10 CHAPTER 4—STATE FINANCING UNDER

11 MEDICAID

12 SEC. 6031. REFORMS OF TARGETED CASE MANAGEMENT.

13 (a) IN GENERAL.—Section 1915(g) (42 U.S.C.

14 1396n(g)(2)) is amended by striking paragraph (2) and

15 inserting the following:

16 ‘‘(2) For purposes of this subsection:

17 ‘‘(A)(i) The term ‘case management services’

18 means services which will assist individuals eligible

19 under the plan in gaining access to needed medical,

20 social, educational, and other services.

21 ‘‘(ii) Such term includes the following:

22 ‘‘(I) Assessment of an eligible individual to

23 determine service needs, including activities

24 that focus on needs identification, to determine

25 the need for any medical, educational, social, or
†

185

S 1932 ES

1 other services. Such assessment activities in2 clude the following:

3 ‘‘(aa) Taking client history.

4 ‘‘(bb) Identifying the needs of the in5 dividual, and completing related docu6 mentation.

7 ‘‘(cc) Gathering information from

8 other sources such as family members,

9 medical providers, social workers, and edu10 cators, if necessary, to form a complete as11 sessment of the eligible individual.

12 ‘‘(II) Development of a specific care plan

13 based on the information collected through an

14 assessment, that specifies the goals and actions

15 to address the medical, social, educational, and

16 other services needed by the eligible individual,

17 including activities such as ensuring the active

18 participation of the eligible individual and work19 ing with the individual (or the individual’s au20 thorized health care decision maker) and others

21 to develop such goals and identify a course of

22 action to respond to the assessed needs of the

23 eligible individual.

24 ‘‘(III) Referral and related activities to

25 help an individual obtain needed services, in-
†

186

S 1932 ES

1 cluding activities that help link eligible individ2 uals with medical, social, educational providers

3 or other programs and services that are capable

4 of providing needed services, such as making re5 ferrals to providers for needed services and

6 scheduling appointments for the individual.

7 ‘‘(IV) Monitoring and followup activities,

8 including activities and contacts that are nec9 essary to ensure the care plan is effectively im10 plemented and adequately addressing the needs

11 of the eligible individual, and which may be

12 with the individual, family members, providers,

13 or other entities and conducted as frequently as

14 necessary to help determine such matters as—

15 ‘‘(aa) whether services are being fur16 nished in accordance with an individual’s

17 care plan;

18 ‘‘(bb) whether the services in the care

19 plan are adequate; and

20 ‘‘(cc) whether there are changes in the

21 needs or status of the eligible individual,

22 and if so, making necessary adjustments in

23 the care plan and service arrangements

24 with providers.
†

187

S 1932 ES

1 ‘‘(iii) Such term does not include the direct de2 livery of an underlying medical, educational, social,

3 or other service to which an eligible individual has

4 been referred, including, with respect to the direct

5 delivery of foster care services, services such as (but

6 not limited to) the following:

7 ‘‘(I) Research gathering and completion of

8 documentation required by the foster care pro9 gram.

10 ‘‘(II) Assessing adoption placements.

11 ‘‘(III) Recruiting or interviewing potential

12 foster care parents.

13 ‘‘(IV) Serving legal papers.

14 ‘‘(V) Home investigations.

15 ‘‘(VI) Providing transportation.

16 ‘‘(VII) Administering foster care subsidies.

17 ‘‘(VIII) Making placement arrangements.

18 ‘‘(B) The term ‘targeted case management serv19 ices’ are case management services that are fur20 nished without regard to the requirements of section

21 1902(a)(1) and section 1902(a)(10)(B) to specific

22 classes of individuals or to individuals who reside in

23 specified areas.

24 ‘‘(3) With respect to contacts with individuals who

25 are not eligible for medical assistance under the State plan
†

188

S 1932 ES

1 or, in the case of targeted case management services, indi2 viduals who are eligible for such assistance but are not

3 part of the target population specified in the State plan,

4 such contacts—

5 ‘‘(A) are considered an allowable case manage6 ment activity, when the purpose of the contact is di7 rectly related to the management of the eligible indi8 vidual’s care; and

9 ‘‘(B) are not considered an allowable case man10 agement activity if such contacts relate directly to

11 the identification and management of the noneligible

12 or nontargeted individual’s needs and care.

13 ‘‘(4)(A) In accordance with section 1902(a)(25), Fed14 eral financial participation only is available under this title

15 for case management services or targeted case manage16 ment services if there are no other third parties liable to

17 pay for such services, including as reimbursement under

18 a medical, social, educational, or other program.

19 ‘‘(B) A State shall allocate the costs of any part of

20 such services which are reimbursable under another feder21 ally funded program in accordance with OMB Circular A–

22 87 (or any related or successor guidance or regulations

23 regarding allocation of costs among federally funded pro24 grams) under an approved cost allocation program.’’.
†

189

S 1932 ES

1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall take effect on January 1, 2006.

3 SEC. 6032. TEMPORARY FEDERAL MATCHING PAYMENTS

4 FOR FEDERAL ASSISTANCE.

5 (a) 100 PERCENT FEDERAL MATCHING PAYMENTS

6 FOR MEDICAL ASSISTANCE PROVIDED TO SPECIFIED IN7 DIVIDUALS.—

8 (1) IN GENERAL.—Notwithstanding section

9 1905(b) of the Social Security Act (42 U.S.C.

10 1396d(b)), for items and services furnished during

11 the period that begins on August 28, 2005, and ends

12 on May 15, 2006, the Federal medical assistance

13 percentage for providing medical assistance for such

14 items and services under a State Medicaid plan to

15 a specified individual (as defined in subsection (b)),

16 and for costs directly attributable to all administra17 tive activities that relate to the provision of such

18 medical assistance, shall be 100 percent.

19 (2) APPLICATION TO CHILD HEALTH ASSIST20 ANCE.—Notwithstanding section 2105(b) of the So21 cial Security Act (42 U.S.C. 1397ee(b)), for items

22 and services furnished during the period described in

23 paragraph (1), the Federal matching rate for pro24 viding child health assistance for such items and

25 services under a State child health plan to a speci-
†

190

S 1932 ES

1 fied individual (as so defined), and for costs directly

2 attributable to all administrative activities that re3 late to the provision of such child health assistance,

4 shall be 100 percent.

5 (b) SPECIFIED INDIVIDUAL.—

6 (1) IN GENERAL.—For purposes of subsection

7 (a), the term ‘‘specified individual’’ means an indi8 vidual who, on any day during the week preceding

9 August 28, 2005, had a primary residence in a Lou10 isiana parish described in paragraph (2), a Mis11 sissippi county described in paragraph (3), or an

12 Alabama county described in paragraph (4).

13 (2) LOUISIANA PARISHES DESCRIBED.—For

14 purposes of paragraph (1), the Louisiana parishes

15 described in this paragraph are the following:

16 (A) Acadia.

17 (B) Ascension.

18 (C) Assumption.

19 (D) Calcasieu.

20 (E) Cameron.

21 (F) East Baton Rouge.

22 (G) East Feliciana.

23 (H) Iberia.

24 (I) Iberville.

25 (J) Jefferson.
†

191

S 1932 ES

1 (K) Jefferson Davis.

2 (L) Lafayette.

3 (M) Lafourche.

4 (N) Livingston.

5 (O) Orleans.

6 (P) Pointe Coupee.

7 (Q) Plaquemines.

8 (R) St. Bernard.

9 (S) St. Charles.

10 (T) St. Helena.

11 (U) St. James.

12 (V) St. John.

13 (W) St. Mary.

14 (X) St. Martin.

15 (Y) St. Tammany.

16 (Z) Tangipahoa.

17 (AA) Terrebonne.

18 (BB) Vermilion.

19 (CC) Washington.

20 (DD) West Baton Rouge.

21 (EE) West Feliciana.

22 (3) MISSISSIPPI COUNTIES DESCRIBED.—For

23 purposes of paragraph (1), the Mississippi counties

24 described in this paragraph are the following:

25 (A) Adams.
†

192

S 1932 ES

1 (B) Amite.

2 (C) Attala.

3 (D) Clairborne.

4 (E) Choctaw.

5 (F) Clarke.

6 (G) Copiah.

7 (H) Covington.

8 (I) Forrest.

9 (J) Franklin.

10 (K) George.

11 (L) Greene.

12 (M) Hancock.

13 (N) Harrison.

14 (O) Hinds.

15 (P) Jackson.

16 (Q) Jasper.

17 (R) Jefferson.

18 (S) Jefferson Davis.

19 (T) Jones.

20 (U) Kemper.

21 (V) Lamar.

22 (W) Lauderdale.

23 (X) Lawrence.

24 (Y) Leake.

25 (Z) Lincoln.
†

193

S 1932 ES

1 (AA) Lowndes.

2 (BB) Madison.

3 (CC) Marion.

4 (DD) Neshoba.

5 (EE) Newton.

6 (FF) Noxubee.

7 (GG) Oktibbeha.

8 (HH) Pearl River.

9 (II) Perry.

10 (JJ) Pike.

11 (KK) Rankin.

12 (LL) Scott.

13 (MM) Simpson.

14 (NN) Smith.

15 (OO) Stone.

16 (PP) Walthall.

17 (QQ) Warren.

18 (RR) Wayne.

19 (SS) Wilkinson.

20 (TT) Winston.

21 (UU) Yazoo.

22 (4) ALABAMA COUNTIES DESCRIBED.—For pur23 poses of paragraph (1) the Alabama counties de24 scribed in this paragraph are the following:

25 (A) Baldwin.
†

194

S 1932 ES

1 (B) Choctaw.

2 (C) Clarke.

3 (D) Greene.

4 (E) Hale.

5 (F) Marengo.

6 (G) Mobile.

7 (H) Pickens.

8 (I) Sumter.

9 (J) Tuscaloosa.

10 (K) Washington.

11 (c) FMAP ADJUSTMENT.—Notwithstanding the first

12 sentence of section 1905(b) of the Social Security Act (42

13 U.S.C. 1396d(b)), if, for purposes of titles XIX and XXI

14 of the Social Security Act (42 U.S.C. 1396 et seq., 1397aa

15 et seq.), the Federal medical assistance percentage deter16 mined for Alaska for fiscal year 2006 or fiscal year 2007

17 is less than the Federal medical assistance percentage de18 termined for Alaska for fiscal year 2005, the Federal med19 ical assistance percentage determined for Alaska for fiscal

20 year 2005 shall be substituted for the Federal medical as21 sistance percentage otherwise determined for Alaska for

22 fiscal year 2006 or fiscal year 2007, as the case may be.
†

195

S 1932 ES

1 SEC. 6033. MANAGED CARE ORGANIZATION PROVIDER TAX

2 REFORM.

3 (a) IN GENERAL.—Section 1903(w)(7)(A)(viii) (42

4 U.S.C. 1396b(w)(7)(A)(viii)) is amended to read as fol5 lows:

6 ‘‘(viii) Services of managed care organiza7 tions (including health maintenance organiza8 tions, preferred provider organizations, and

9 such other similar organizations as the Sec10 retary may specify by regulation).’’.

11 (b) EFFECTIVE DATE.—

12 (1) IN GENERAL.—Except as provided in para13 graph (2), the amendment made by subsection (a)

14 shall take effect on January 1, 2006.

15 (2) NONAPPLICATION.—The amendment made

16 by subsection (a) shall not apply in the case of a

17 State that, as of December 31, 2005, has in effect

18 a tax imposed on the class of health care items and

19 services described in section 1903(w)(7)(A)(viii) of

20 the Social Security Act (42 U.S.C.

21 1396b(w)(7)(A)(viii)) (as in effect before the date of

22 enactment of this Act).

23 SEC. 6034. INCLUSION OF PODIATRISTS AS PHYSICIANS.

24 (a) IN GENERAL.—Section 1905(a)(5)(A) (42 U.S.C.

25 1396d(a)(5)(A)) is amended by striking ‘‘section
†

196

S 1932 ES

1 1861(r)(1)’’ and inserting ‘‘paragraphs (1) and (3) of sec2 tion 1861(r)’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply to services furnished on or after

5 January 1, 2006.

6 SEC. 6035. DSH ALLOTMENT FOR THE DISTRICT OF COLUM7 BIA.

8 (a) IN GENERAL.—The table in section 1923(f)(2)

9 (42 U.S.C. 1396r–4(f)(2)) is amended under each of the

10 columns for FY 00, FY 01, and FY 02, in the entry for

11 the District of Columbia, by striking ‘‘32’’ and inserting

12 ‘‘49’’.

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

14 subsection (a) shall take effect as if enacted on October

15 1, 2005 and shall apply to expenditures made on or after

16 that date.

17 SEC. 6036. DEMONSTRATION PROJECT REGARDING MED18 ICAID REIMBURSEMENT FOR STABILIZATION

19 OF EMERGENCY MEDICAL CONDITIONS BY

20 NON-PUBLICLY OWNED OR OPERATED INSTI21 TUTIONS FOR MENTAL DISEASES.

22 (a) AUTHORITY TO CONDUCT DEMONSTRATION

23 PROJECT.—The Secretary shall establish a demonstration

24 project under which an eligible State (as defined in sub25 section (b)) shall provide reimbursement under the State
†

197

S 1932 ES

1 medicaid plan to an institution for mental diseases that

2 is not publicly owned or operated and that is subject to

3 the requirements of section 1867 of the Social Security

4 Act (42 U.S.C, 1395dd) for the provision of medical as5 sistance available under such plan to an individual who—

6 (1) has attained age 21, but has not attained

7 age 65;

8 (2) is eligible for medical assistance under such

9 plan; and

10 (3) requires such medical assistance to stabilize

11 an emergency medical condition.

12 (b) ELIGIBLE STATE DEFINED.—

13 (1) APPLICATION.—Upon approval of an appli14 cation submitted by a State described in paragraph

15 (2), the State shall be an eligible State for purposes

16 of conducting a demonstration project under this

17 section.

18 (2) STATE DESCRIBED.—A State described in

19 this paragraph is each of the following:

20 (A) Arizona.

21 (B) Arkansas.

22 (C) Louisiana.

23 (D) Maine.

24 (E) North Dakota.

25 (F) Wyoming.
†

198

S 1932 ES

1 (G) Four other States selected by the Sec2 retary to provide geographic diversity on the

3 basis of the application to conduct a demonstra4 tion project under this section submitted by

5 such States.

6 (c) LENGTH OF DEMONSTRATION PROJECT.—The

7 demonstration project established under this section shall

8 be conducted for a period of 3 consecutive years.

9 (d) LIMITATIONS ON FEDERAL FUNDING.—

10 (1) APPROPRIATION.—

11 (A) IN GENERAL.—Out of any funds in the

12 Treasury not otherwise appropriated, there is

13 appropriated to carry out this section,

14 $30,000,000 for fiscal year 2006.

15 (B) BUDGET AUTHORITY.—Subparagraph

16 (A) constitutes budget authority in advance of

17 appropriations Act and represents the obliga18 tion of the Federal Government to provide for

19 the payment of the amounts appropriated under

20 that subparagraph.

21 (2) 3-YEAR AVAILABILITY.—Funds appro22 priated under paragraph (1) shall remain available

23 for obligation through December 31, 2008.

24 (3) LIMITATION ON PAYMENTS.—In no case

25 may—
†

199

S 1932 ES

1 (A) the aggregate amount of payments

2 made by the Secretary to eligible States under

3 this section exceed $30,000,000; or

4 (B) payments be provided by the Secretary

5 under this section after December 31, 2008.

6 (4) FUNDS ALLOCATED TO STATES.—The Sec7 retary shall allocate funds to eligible States based on

8 their applications and the availability of funds.

9 (5) PAYMENTS TO STATES.—The Secretary

10 shall pay to each eligible State, from its allocation

11 under paragraph (4), an amount each quarter equal

12 to the Federal medical assistance percentage of ex13 penditures in the quarter for medical assistance de14 scribed in subsection (a).

15 (e) REPORTS.—

16 (1) ANNUAL PROGRESS REPORTS.—The Sec17 retary shall submit annual reports to Congress on

18 the progress of the demonstration project conducted

19 under this section.

20 (2) FINAL REPORT AND RECOMMENDATION.—

21 Not later than March 31, 2009, the Secretary shall

22 submit to Congress a final report on the demonstra23 tion project conducted under this section that shall

24 include the following:
†

200

S 1932 ES

1 (A) A determination as to whether the

2 demonstration project resulted in increased ac3 cess to inpatient mental health services under

4 the medicaid program.

5 (B) An analysis regarding whether the

6 demonstration project produced a significant re7 duction in the use of higher cost emergency

8 room visits for individuals eligible for medical

9 assistance under the medicaid program.

10 (C) An assessment of the impact of the

11 demonstration project on the costs related to

12 the provision of inpatient psychiatric care and

13 services under the medicaid program.

14 (D) A recommendation regarding whether

15 the demonstration project should be continued

16 after December 31, 2008, and expanded on a

17 national basis.

18 (f) WAIVER AUTHORITY.—

19 (1) IN GENERAL.—The Secretary shall waive

20 the limitation of subdivision (B) following paragraph

21 (28) of section 1905(a) of the Social Security Act

22 (42 U.S.C. 1396d(a)) (relating to limitations on pay23 ments for care or services for individuals under 65

24 years of age who are patients in an institution for
†

201

S 1932 ES

1 mental diseases) for purposes of carrying out the

2 demonstration project under this section.

3 (2) LIMITED OTHER WAIVER AUTHORITY.—The

4 Secretary may waive other requirements of titles XI

5 and XIX of the Social Security Act (including the

6 requirements of sections 1902(a)(1) (relating to

7 statewideness) and 1902(a)(10)(B) (relating to com8 parability)) only to extent necessary to carry out the

9 demonstration project under this section.

10 (g) DEFINITIONS.—In this section:

11 (1) EMERGENCY MEDICAL CONDITION.—The

12 term ‘‘emergency medical condition’’ has the mean13 ing given that term in section 1867(e)(1) of the So14 cial Security Act (42 U.S.C. 1395dd(e)(1)).

15 (2) FEDERAL MEDICAL ASSISTANCE PERCENT16 AGE.—The term ‘‘Federal medical assistance per17 centage’’ has the meaning given that term with re18 spect to a State in section 1905(b) of the Social Se19 curity Act (42 U.S.C. 1396d(b)).

20 (3) INSTITUTION FOR MENTAL DISEASES.—The

21 term ‘‘institution for mental diseases’’ has the mean22 ing given that term in section 1905(i) of the Social

23 Security Act (42 U.S.C. 1396d(i)).

24 (4) MEDICAL ASSISTANCE.—The term ‘‘medical

25 assistance’’ has the meaning given that term in sec-
†

202

S 1932 ES

1 tion 1905(a) of the Social Security Act (42 U.S.C.

2 1396d(a)).

3 (5) STABILIZE.—The term ‘‘stabilize’’ has the

4 meaning given that term in section 1867(e)(3)(A) of

5 the Social Security Act (42 U.S..C

6 1395dd(e)(3)(A)).

7 (6) STATE.—The term ‘‘State’’ has the mean8 ing given that term for purposes of title XIX of the

9 Social Security Act (42 U.S.C. 1396 et seq.).

10 SEC. 6037. LIMITATION ON SEVERE REDUCTION IN THE

11 MEDICAID FMAP FOR FISCAL YEAR 2006.

12 (a) LIMITATION ON REDUCTION.—In no case shall

13 the FMAP for a State for fiscal year 2006 be less than

14 the greater of the following:

15 (1) 2005 FMAP DECREASED BY THE APPLICA16 BLE PERCENTAGE POINTS.—The FMAP determined

17 for the State for fiscal year 2005, decreased by—

18 (A) 0.1 percentage points in the case of

19 Delaware and Michigan;

20 (B) 0.3 percentage points in the case of

21 Kentucky; and

22 (C) 0.5 percentage points in the case of

23 any other State.

24 (2) COMPUTATION WITHOUT RETROACTIVE AP25 PLICATION OF REBENCHMARKED PER CAPITA IN-
†

203

S 1932 ES

1 COME.—The FMAP that would have been deter2 mined for the State for fiscal year 2006 if the per

3 capita incomes for 2001 and 2002 that was used to

4 determine the FMAP for the State for fiscal year

5 2005 were used.

6 (b) SCOPE OF APPLICATION.—The FMAP applicable

7 to a State for fiscal year 2006 after the application of

8 subsection (a) shall apply only for purposes of titles XIX

9 and XXI of the Social Security Act (including for purposes

10 of making disproportionate share hospital payments de11 scribed in section 1923 of such Act (42 U.S.C. 1396r–

12 4) and payments under such titles that are based on the

13 enhanced FMAP described in section 2105(b) of such Act

14 (42 U.S.C. 1397ee(b))) and shall not apply with respect

15 to payments under title IV of such Act (42 U.S.C. 601

16 et seq.).

17 (c) DEFINITIONS.—In this section:

18 (1) FMAP.—The term ‘‘FMAP’’ means the

19 Federal medical assistance percentage, as defined in

20 section 1905(b) of the Social Security Act (42

21 U.S.C. 1396d(b)).

22 (2) STATE.—The term ‘‘State’’ has the mean23 ing given such term for purposes of title XIX of the

24 Social Security Act (42 U.S.C. 1396 et seq.).
†

204

S 1932 ES

1 (d) REPEAL.—Effective as of October 1, 2006, this

2 section is repealed and shall not apply to any fiscal year

3 after fiscal year 2006.

4 SEC. 6038. EXTENSION OF PRESCRIPTION DRUG REBATES

5 TO ENROLLEES IN MEDICAID MANAGED

6 CARE ORGANIZATIONS.

7 (a) IN GENERAL.—Section 1927(j)(1) (42 U.S.C.

8 1396r–8(j)(1)) is amended by striking ‘‘dispensed’’ and all

9 that follows through the period and inserting ‘‘are not sub10 ject to the requirements of this section if such drugs are—

11 ‘‘(A) dispensed by health maintenance organiza12 tions that contract under section 1903(m); and

13 ‘‘(B) subject to discounts under section 340B of

14 the Public Health Service Act (42 U.S.C. 256b).’’.

15 (b) EFFECTIVE DATE.—The amendment made by

16 subsection (a) shall take effect on the date of enactment

17 of this Act and apply to rebate agreements entered into

18 or renewed under section 1927 of the Social Security Act

19 (42 U.S.C. 1396r–8) on or after such date.

20 SEC. 6039. EXTENSION OF THE MEDICARE PART A AND B

21 PAYMENT HOLIDAY.

22 Section 6112(b)(1) of this Act is amended by striking

23 ‘‘September 22, 2006’’ and inserting ‘‘September 21,

24 2006’’.
†

205

S 1932 ES

1 SEC. 6039A. SENSE OF THE SENATE.

2 (a) FINDINGS.—The Senate makes the following

3 findings:

4 (1) On October 26, 2005, the Committee on

5 Ways and Means of the United States House of

6 Representatives approved a budget reconciliation

7 package that would significantly reduce the Federal

8 Government’s funding used to pay for the child sup9 port program established under part D of title IV of

10 the Social Security Act (42 U.S.C. 651 et seq.) and

11 would restrict the ability of States to use Federal

12 child support incentive payments for child support

13 program expenditures that are eligible for Federal

14 matching payments.

15 (2) The child support program enforces the re16 sponsibility of non-custodial parents to support their

17 children. The program is jointly funded by Federal,

18 State and local governments.

19 (3) The Office of Management and Budget gave

20 the child support program a 90 percent rating under

21 the Program Assessment Rating Tool (PART), mak22 ing it the highest performing social services pro23 gram.

24 (4) The President’s 2006 budget cites the child

25 support program as ‘‘one of the highest rated block/

26 formula grants of all reviewed programs govern-
†

206

S 1932 ES

1 ment-wide. This high rating is due to its strong mis2 sion, effective management, and demonstration of

3 measurable progress toward meeting annual and

4 long term performance measures.’’

5 (5) In 2004, the child support program spent

6 $5,300,000,000 to collect $21,900,000,000 in sup7 port payments. Public investment in the child sup8 port program provides more than a four-fold return,

9 collecting $4.38 in child support for every Federal

10 and State dollar that the program spends.

11 (6) In 2004, 17,300,000 children, or 60 percent

12 of all children living apart from a parent, received

13 child support services through the program. The per14 centage is higher for poor children—84 percent of

15 poor children living apart from their parent receive

16 child support services through the program. Families

17 assisted by the child support program generally have

18 low or moderate incomes.

19 (7) Children who receive child support from

20 their parents do better in school than those that do

21 not receive support payments. Older children with

22 child support payments are more likely to finish high

23 school and attend college.

24 (8) The child support program directly de25 creases the costs of other public assistance programs
†

207

S 1932 ES

1 by increasing family self-sufficiency. The more effec2 tive the child support program in a State, the higher

3 the savings in public assistance costs.

4 (9) Child support helps lift more than

5 1,000,000 Americans out of poverty each year.

6 (10) Families that are former recipients of as7 sistance under the temporary assistance for needy

8 families program (TANF) have seen the greatest in9 crease in child support payments. Collections for

10 these families increased 94 percent between 1999

11 and 2004, even though the number of former TANF

12 families did not increase during this period.

13 (11) Families that receive child support are

14 more likely to find and hold jobs, and less likely to

15 be poor than comparable families without child sup16 port.

17 (12) The child support program saved costs in

18 the TANF, Medicaid, Food Stamps, Supplemental

19 Security Income, and subsidized housing programs.

20 (13) The Congressional Budget Office estimates

21 that the funding cuts proposed by the Committee on

22 Ways and Means of the House of Representatives

23 would reduce child support collections by nearly

24 $7,900,000,000 in the next 5 years and

25 $24,100,000,000 in the next 10 years.
†

208

S 1932 ES

1 (14) That National Governor’s Association has

2 stated that such cuts are unduly burdensome and

3 will force States to reevaluate several services that

4 make the child support program so effective.

5 (15) The Federal Government has a moral re6 sponsibility to ensure that parents who do not live

7 with their children meet their financial support obli8 gations for those children.

9 (b) SENSE OF THE SENATE.—It is the sense of the

10 Senate that the Senate will not accept any reduction in

11 funding for the child support program established under

12 part D of title IV of the Social Security Act (42 U.S.C.

13 651 et seq.), or any restrictions on the ability of States

14 to use Federal child support incentive payments for child

15 support program expenditures that are eligible for Federal

16 matching payments, during this Congress.

17 SEC. 6039B. AUTHORITY TO CONTINUE PROVIDING CER18 TAIN ADULT DAY HEALTH CARE SERVICES

19 OR MEDICAL ADULT DAY CARE SERVICES.

20 The Secretary shall not—

21 (1) withhold, suspend, disallow, or otherwise

22 deny Federal financial participation under section

23 1903(a) of the Social Security Act (42 U.S.C.

24 1396b(a)) for adult day health care services or med25 ical adult day care services, as defined under a State
†

209

S 1932 ES

1 medicaid plan approved on or before 1982, if such

2 services are provided consistent with such definition

3 and the requirements of such plan; or

4 (2) withdraw Federal approval of any such

5 State plan or part thereof regarding the provision of

6 such services.

7 SEC. 6039C. DEMONSTRATION PROJECT REGARDING MED8 ICAID COVERAGE OF LOW-INCOME HIV-IN9 FECTED INDIVIDUALS.

10 (a) REQUIREMENT TO CONDUCT DEMONSTRATION

11 PROJECT.—

12 (1) IN GENERAL.—The Secretary shall establish

13 a demonstration project under which a State may

14 apply under section 1115 of the Social Security Act

15 (42 U.S.C. 1315) to provide medical assistance

16 under a State medicaid program to HIV-infected in17 dividuals described in subsection (b) in accordance

18 with the provisions of this section.

19 (2) LIMITATION ON NUMBER OF APPROVED AP20 PLICATIONS.—The Secretary shall only approve as

21 many State applications to provide medical assist22 ance in accordance with this section as will not ex23 ceed the limitation on aggregate payments under

24 subsection (d)(2)(A).
†

210

S 1932 ES

1 (3) AUTHORITY TO WAIVE RESTRICTIONS ON

2 PAYMENTS TO TERRITORIES.—The Secretary shall

3 waive the limitations on payment under subsections

4 (f) and (g) of section 1108 of the Social Security

5 Act (42 U.S.C. 1308) in the case of a State that is

6 subject to such limitations and submits an approved

7 application to provide medical assistance in accord8 ance with this section.

9 (b) HIV-INFECTED INDIVIDUALS DESCRIBED.—For

10 purposes of subsection (a), HIV-infected individuals de11 scribed in this subsection are individuals who are not de12 scribed in section 1902(a)(10)(A)(i) of the Social Security

13 Act (42 U.S.C. 1396a(a)(10)(A)(i))—

14 (1) who have HIV infection;

15 (2) whose income (as determined under the

16 State Medicaid plan with respect to disabled individ17 uals) does not exceed 200 percent of the poverty line

18 (as defined in section 2110(c)(5) of the Social Secu19 rity Act (42 U.S.C. 1397jj(c)(5)); and

20 (3) whose resources (as determined under the

21 State Medicaid plan with respect to disabled individ22 uals) do not exceed the maximum amount of re23 sources a disabled individual described in section

24 1902(a)(10)(A)(i) of such Act may have and obtain

25 medical assistance under such plan.
†

211

S 1932 ES

1 (c) LENGTH OF PERIOD FOR PROVISION OF MEDICAL

2 ASSISTANCE.—A State shall not be approved to provide

3 medical assistance to an HIV-infected individual in ac4 cordance with the demonstration project established under

5 this section for a period of more than 5 consecutive years.

6 (d) LIMITATIONS ON FEDERAL FUNDING.—

7 (1) APPROPRIATION.—

8 (A) IN GENERAL.—Out of any funds in the

9 Treasury not otherwise appropriated, there is

10 appropriated to carry out this section,

11 $450,000,000 for the period of fiscal years

12 2006 through 2010.

13 (B) BUDGET AUTHORITY.—Subparagraph

14 (A) constitutes budget authority in advance of

15 appropriations Act and represents the obliga16 tion of the Federal Government to provide for

17 the payment of the amounts appropriated under

18 that subparagraph.

19 (2) LIMITATION ON PAYMENTS.—In no case

20 may—

21 (A) the aggregate amount of payments

22 made by the Secretary to eligible States under

23 this section exceed $450,000,000; or

24 (B) payments be provided by the Secretary

25 under this section after September 30, 2010.
†

212

S 1932 ES

1 (3) FUNDS ALLOCATED TO STATES.—The Sec2 retary shall allocate funds to States with approved

3 applications under this section based on their appli4 cations and the availability of funds.

5 (4) PAYMENTS TO STATES.—The Secretary

6 shall pay to each State, from its allocation under

7 paragraph (3), an amount each quarter equal to the

8 enhanced Federal medical assistance percentage de9 scribed in section 2105(b) of the Social Security Act

10 (42 U.S.C. 1397ee(b)) of expenditures in the quarter

11 for medical assistance provided to HIV-infected indi12 viduals who are eligible for such assistance under a

13 State Medicaid program in accordance with the dem14 onstration project established under this section.

15 (e) EVALUATION AND REPORT.—

16 (1) EVALUATION.—The Secretary shall conduct

17 an evaluation of the demonstration project estab18 lished under this section. Such evaluation shall in19 clude an analysis of the cost-effectiveness of the

20 project and the impact of the project on the Medi21 care, Medicaid, and Supplemental Security Income

22 programs established under titles XVIII, XIX, and

23 XVI, respectively, of the Social Security Act (42

24 U.S.C. 1395 et seq., 1396 et seq., 1381 et seq.).
†

213

S 1932 ES

1 (2) REPORT TO CONGRESS.—Not later than De2 cember 31, 2010, the Secretary shall submit a re3 port to Congress on the results of the evaluation of

4 the demonstration project established under this sec5 tion.

6 (f) EFFECTIVE DATE.—This section shall take effect

7 on January 1, 2006.

8 SEC. 6039D. ADDITIONAL INCREASE IN REBATE FOR SIN9 GLE SOURCE AND INNOVATOR MULTIPLE

10 SOURCE DRUGS.

11 Section 1927(c)(1)(B)(i)(VI) (42 U.S.C. 1396r–

12 8(c)(1)(B)(i)(VI)), as added by section 6002(a)(3), is

13 amended by striking ‘‘17’’ and inserting ‘‘17.8’’.

14 CHAPTER 5—IMPROVING THE MEDICAID

15 AND STATE CHILDREN’S HEALTH IN16 SURANCE PROGRAMS

17 Subchapter A—Family Opportunity Act

18 SEC. 6041. SHORT TITLE OF SUBCHAPTER.

19 This subchapter may be cited as the ‘‘Family Oppor20 tunity Act of 2005’’ or the ‘‘Dylan Lee James Act’’.
†

214

S 1932 ES

1 SEC. 6042. OPPORTUNITY FOR FAMILIES OF DISABLED

2 CHILDREN TO PURCHASE MEDICAID COV3 ERAGE FOR SUCH CHILDREN.

4 (a) STATE OPTION TO ALLOW FAMILIES OF DIS5 ABLED CHILDREN TO PURCHASE MEDICAID COVERAGE

6 FOR SUCH CHILDREN.—

7 (1) IN GENERAL.—Section 1902 (42 U.S.C.

8 1396a) is amended—

9 (A) in subsection (a)(10)(A)(ii)—

10 (i) by striking ‘‘or’’ at the end of sub11 clause (XVII);

12 (ii) by adding ‘‘or’’ at the end of sub13 clause (XVIII); and

14 (iii) by adding at the end the fol15 lowing new subclause:

16 ‘‘(XIX) who are disabled children

17 described in subsection (cc)(1);’’; and

18 (B) by adding at the end the following new

19 subsection:

20 ‘‘(cc)(1) Individuals described in this paragraph are

21 individuals—

22 ‘‘(A) who are children who have not attained 19

23 years of age and are born—

24 ‘‘(i) on or after January 1, 2002 (or, at

25 the option of a State, on or after an earlier
†

215

S 1932 ES

1 date), in the case of the second, third, and

2 fourth quarters of fiscal year 2008;

3 ‘‘(ii) on or after October 1, 1996 (or, at

4 the option of a State, on or after an earlier

5 date), in the case of each quarter of fiscal year

6 2009; and

7 ‘‘(iii) after October 1, 1990, in the case of

8 each quarter of fiscal year 2010 and each quar9 ter of any fiscal year thereafter;

10 ‘‘(B) who would be considered disabled under

11 section 1614(a)(3)(C) but for having earnings or

12 deemed income or resources (as determined under

13 title XVI for children) that exceed the requirements

14 for receipt of supplemental security income benefits;

15 and

16 ‘‘(C) whose family income does not exceed such

17 income level as the State establishes and does not

18 exceed—

19 ‘‘(i) 300 percent of the poverty line (as de20 fined in section 2110(c)(5)) applicable to a fam21 ily of the size involved; or

22 ‘‘(ii) such higher percent of such poverty

23 line as a State may establish, except that—

24 ‘‘(I) any medical assistance provided

25 to an individual whose family income ex-
†

216

S 1932 ES

1 ceeds 300 percent of such poverty line may

2 only be provided with State funds; and

3 ‘‘(II) no Federal financial participa4 tion shall be provided under section

5 1903(a) for any medical assistance pro6 vided to such an individual.’’.

7 (2) INTERACTION WITH EMPLOYER-SPONSORED

8 FAMILY COVERAGE.—Section 1902(cc) (42 U.S.C.

9 1396a(cc)), as added by paragraph (1)(B), is

10 amended by adding at the end the following new

11 paragraph:

12 ‘‘(2)(A) If an employer of a parent of an individual

13 described in paragraph (1) offers family coverage under

14 a group health plan (as defined in section 2791(a) of the

15 Public Health Service Act), the State shall—

16 ‘‘(i) require such parent to apply for, enroll in,

17 and pay premiums for such coverage as a condition

18 of such parent’s child being or remaining eligible for

19 medical assistance under subsection

20 (a)(10)(A)(ii)(XIX) if the parent is determined eligi21 ble for such coverage and the employer contributes

22 at least 50 percent of the total cost of annual pre23 miums for such coverage; and

24 ‘‘(ii) if such coverage is obtained—
†

217

S 1932 ES

1 ‘‘(I) subject to paragraph (2) of section

2 1916(h), reduce the premium imposed by the

3 State under that section in an amount that rea4 sonably reflects the premium contribution made

5 by the parent for private coverage on behalf of

6 a child with a disability; and

7 ‘‘(II) treat such coverage as a third party

8 liability under subsection (a)(25).

9 ‘‘(B) In the case of a parent to which subparagraph

10 (A) applies, a State, subject to paragraph (1)(C)(ii), may

11 provide for payment of any portion of the annual premium

12 for such family coverage that the parent is required to

13 pay. Any payments made by the State under this subpara14 graph shall be considered, for purposes of section 1903(a),

15 to be payments for medical assistance.’’.

16 (b) STATE OPTION TO IMPOSE INCOME-RELATED

17 PREMIUMS.—Section 1916 (42 U.S.C. 1396o) is

18 amended—

19 (1) in subsection (a), by striking ‘‘subsection

20 (g)’’ and inserting ‘‘subsections (g) and (h)’’; and

21 (2) by adding at the end the following new sub22 section:

23 ‘‘(h)(1) With respect to disabled children provided

24 medical assistance under section 1902(a)(10)(A)(ii)(XIX),

25 subject to paragraph (2), a State may (in a uniform man-
†

218

S 1932 ES

1 ner for such children) require the families of such children

2 to pay monthly premiums set on a sliding scale based on

3 family income.

4 ‘‘(2) A premium requirement imposed under para5 graph (1) may only apply to the extent that—

6 ‘‘(A) in the case of a disabled child described in

7 that paragraph whose family income—

8 ‘‘(i) does not exceed 200 percent of the

9 poverty line, the aggregate amount of such pre10 mium and any premium that the parent is re11 quired to pay for family coverage under section

12 1902(cc)(2)(A)(i) and other cost-sharing

13 charges do not exceed 5 percent of the family’s

14 income; and

15 ‘‘(ii) exceeds 200, but does not exceed 300,

16 percent of the poverty line, the aggregate

17 amount of such premium and any premium that

18 the parent is required to pay for family cov19 erage under section 1902(cc)(2)(A)(i) and other

20 cost-sharing charges do not exceed 7.5 percent

21 of the family’s income; and

22 ‘‘(B) the requirement is imposed consistent with

23 section 1902(cc)(2)(A)(ii)(I).

24 ‘‘(3) A State shall not require prepayment of a pre25 mium imposed pursuant to paragraph (1) and shall not
†

219

S 1932 ES

1 terminate eligibility of a child under section

2 1902(a)(10)(A)(ii)(XIX) for medical assistance under this

3 title on the basis of failure to pay any such premium until

4 such failure continues for a period of at least 60 days from

5 the date on which the premium became past due. The

6 State may waive payment of any such premium in any

7 case where the State determines that requiring such pay8 ment would create an undue hardship.’’.

9 (c) CONFORMING AMENDMENTS.—(1) Section

10 1903(f)(4) (42 U.S.C. 1396b(f)(4)) is amended in the

11 matter preceding subparagraph (A), by inserting

12 ‘‘1902(a)(10)(A)(ii)(XIX),’’ after

13 ‘‘1902(a)(10)(A)(ii)(XVIII),’’.

14 (2) Section 1905(u)(2)(B) (42 U.S.C.

15 1396d(u)(2)(B)) is amended by adding at the end the fol16 lowing sentence: ‘‘Such term excludes any child eligible for

17 medical assistance only by reason of section

18 1902(a)(10)(A)(ii)(XIX).’’.

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

20 this section shall apply to medical assistance for items and

21 services furnished on or after January 1, 2008.
†

220

S 1932 ES

1 SEC. 6043. DEMONSTRATION PROJECTS REGARDING HOME

2 AND COMMUNITY-BASED ALTERNATIVES TO

3 PSYCHIATRIC RESIDENTIAL TREATMENT FA4 CILITIES FOR CHILDREN.

5 (a) IN GENERAL.—The Secretary is authorized to

6 conduct, during each of fiscal years 2007 through 2011,

7 demonstration projects (each in the section referred to as

8 a ‘‘demonstration project’’) in accordance with this section

9 under which up to 10 States (as defined for purposes of

10 title XIX of the Social Security Act) are awarded grants,

11 on a competitive basis, to test the effectiveness in improv12 ing or maintaining a child’s functional level and cost-effec13 tiveness of providing coverage of home and community14 based alternatives to psychiatric residential treatment for

15 children enrolled in the Medicaid program under title XIX

16 of such Act.

17 (b) APPLICATION OF TERMS AND CONDITIONS.—

18 (1) IN GENERAL.—Subject to the provisions of

19 this section, for the purposes of the demonstration

20 projects, and only with respect to children enrolled

21 under such demonstration projects, a psychiatric res22 idential treatment facility (as defined in section

23 483.352 of title 42 of the Code of Federal Regula24 tions) shall be deemed to be a facility specified in

25 section 1915(c) of the Social Security Act (42

26 U.S.C. 1396n(c)), and to be included in each ref-
†

221

S 1932 ES

1 erence in such section 1915(c) to hospitals, nursing

2 facilities, and intermediate care facilities for the

3 mentally retarded.

4 (2) STATE OPTION TO ASSURE CONTINUITY OF

5 MEDICAID COVERAGE.—Upon the termination of a

6 demonstration project under this section, the State

7 that conducted the project may elect, only with re8 spect to a child who is enrolled in such project on

9 the termination date, to continue to provide medical

10 assistance for coverage of home and community11 based alternatives to psychiatric residential treat12 ment for the child in accordance with section

13 1915(c) of the Social Security Act (42 U.S.C.

14 1396n(c)), as modified through the application of

15 paragraph (1). Expenditures incurred for providing

16 such medical assistance shall be treated as a home

17 and community-based waiver program under section

18 1915(c) of the Social Security Act (42 U.S.C.

19 1396n(c)) for purposes of payment under section

20 1903 of such Act (42 U.S.C. 1396b).

21 (c) TERMS OF DEMONSTRATION PROJECTS.—

22 (1) IN GENERAL.—Except as otherwise pro23 vided in this section, a demonstration project shall

24 be subject to the same terms and conditions as apply

25 to a waiver under section 1915(c) of the Social Se-
†

222

S 1932 ES

1 curity Act (42 U.S.C. 1396n(c)), including the waiv2 er of certain requirements under the first sentence

3 of paragraph (3) of such section but not applying

4 the second sentence of such paragraph.

5 (2) BUDGET NEUTRALITY.—In conducting the

6 demonstration projects under this section, the Sec7 retary shall ensure that the aggregate payments

8 made by the Secretary under title XIX of the Social

9 Security Act (42 U.S.C. 1396 et seq.) do not exceed

10 the amount which the Secretary estimates would

11 have been paid under that title if the demonstration

12 projects under this section had not been imple13 mented.

14 (3) EVALUATION.—The application for a dem15 onstration project shall include an assurance to pro16 vide for such interim and final evaluations of the

17 demonstration project by independent third parties,

18 and for such interim and final reports to the Sec19 retary, as the Secretary may require.

20 (d) PAYMENTS TO STATES; LIMITATIONS TO SCOPE

21 AND FUNDING.—

22 (1) IN GENERAL.—Subject to paragraph (2), a

23 demonstration project approved by the Secretary

24 under this section shall be treated as a home and

25 community-based waiver program under section
†

223

S 1932 ES

1 1915(c) of the Social Security Act (42 U.S.C.

2 1396n(c)) for purposes of payment under section

3 1903 of such Act (42 U.S.C. 1396b).

4 (2) LIMITATION.—In no case may the amount

5 of payments made by the Secretary under this sec6 tion for State demonstration projects for a fiscal

7 year exceed the amount available under subsection

8 (f)(2)(A) for such fiscal year.

9 (e) SECRETARY’S EVALUATION AND REPORT.—The

10 Secretary shall conduct an interim and final evaluation of

11 State demonstration projects under this section and shall

12 report to the President and Congress the conclusions of

13 such evaluations within 12 months of completing such

14 evaluations.

15 (f) FUNDING.—

16 (1) IN GENERAL.—For the purpose of carrying

17 out this section, there are appropriated, from

18 amounts in the Treasury not otherwise appropriated,

19 for fiscal years 2007 through 2011, a total of

20 $218,000,000, of which—

21 (A) the amount specified in paragraph (2)

22 shall be available for each of fiscal years 2007

23 through 2011; and
†

224

S 1932 ES

1 (B) a total of $1,000,000 shall be available

2 to the Secretary for the evaluations and report

3 under subsection (e).

4 (2) FISCAL YEAR LIMIT.—

5 (A) IN GENERAL.—For purposes of para6 graph (1), the amount specified in this para7 graph for a fiscal year is the amount specified

8 in subparagraph (B) for the fiscal year plus the

9 difference, if any, between the total amount

10 available under this paragraph for prior fiscal

11 years and the total amount previously expended

12 under paragraph (1)(A) for such prior fiscal

13 years.

14 (B) FISCAL YEAR AMOUNTS.—The amount

15 specified in this subparagraph for—

16 (i) fiscal year 2007 is $21,000,000;

17 (ii) fiscal year 2008 is $37,000,000;

18 (iii) fiscal year 2009 is $49,000,000;

19 (iv) fiscal year 2010 is $53,000,000;

20 and

21 (v) fiscal year 2011 is $57,000,000.

22 SEC. 6044. DEVELOPMENT AND SUPPORT OF FAMILY-TO23 FAMILY HEALTH INFORMATION CENTERS.

24 Section 501 (42 U.S.C. 701) is amended by adding

25 at the end the following new subsection:
†

225

S 1932 ES

1 ‘‘(c)(1)(A) For the purpose of enabling the Secretary

2 (through grants, contracts, or otherwise) to provide for

3 special projects of regional and national significance for

4 the development and support of family-to-family health in5 formation centers described in paragraph (2)—

6 ‘‘(i) there is appropriated to the Secretary, out

7 of any money in the Treasury not otherwise

8 appropriated—

9 ‘‘(I) $3,000,000 for fiscal year 2007;

10 ‘‘(II) $4,000,000 for fiscal year 2008; and

11 ‘‘(III) $5,000,000 for fiscal year 2009; and

12 ‘‘(ii) there is authorized to be appropriated to

13 the Secretary, $5,000,000 for each of fiscal years

14 2010 and 2011.

15 ‘‘(B) Funds appropriated or authorized to be appro16 priated under subparagraph (A) shall—

17 ‘‘(i) be in addition to amounts appropriated

18 under subsection (a) and retained under section

19 502(a)(1) for the purpose of carrying out activities

20 described in subsection (a)(2); and

21 ‘‘(ii) remain available until expended.

22 ‘‘(2) The family-to-family health information centers

23 described in this paragraph are centers that—

24 ‘‘(A) assist families of children with disabilities

25 or special health care needs to make informed
†

226

S 1932 ES

1 choices about health care in order to promote good

2 treatment decisions, cost-effectiveness, and improved

3 health outcomes for such children;

4 ‘‘(B) provide information regarding the health

5 care needs of, and resources available for, such chil6 dren;

7 ‘‘(C) identify successful health delivery models

8 for such children;

9 ‘‘(D) develop with representatives of health care

10 providers, managed care organizations, health care

11 purchasers, and appropriate State agencies, a model

12 for collaboration between families of such children

13 and health professionals;

14 ‘‘(E) provide training and guidance regarding

15 caring for such children;

16 ‘‘(F) conduct outreach activities to the families

17 of such children, health professionals, schools, and

18 other appropriate entities and individuals; and

19 ‘‘(G) are staffed—

20 ‘‘(i) by such families who have expertise in

21 Federal and State public and private health

22 care systems; and

23 ‘‘(ii) by health professionals.
†

227

S 1932 ES

1 ‘‘(3) The Secretary shall develop family-to-family

2 health information centers described in paragraph (2) in

3 accordance with the following:

4 ‘‘(A) With respect to fiscal year 2007, such cen5 ters shall be developed in not less than 25 States.

6 ‘‘(B) With respect to fiscal year 2008, such

7 centers shall be developed in not less than 40 States.

8 ‘‘(C) With respect to fiscal year 2009 and each

9 fiscal year thereafter, such centers shall be developed

10 in all States.

11 ‘‘(4) The provisions of this title that are applicable

12 to the funds made available to the Secretary under section

13 502(a)(1) apply in the same manner to funds made avail14 able to the Secretary under paragraph (1)(A).

15 ‘‘(5) For purposes of this subsection, the term ‘State’

16 means each of the 50 States and the District of Colum17 bia.’’.

18 SEC. 6045. RESTORATION OF MEDICAID ELIGIBILITY FOR

19 CERTAIN SSI BENEFICIARIES.

20 (a) IN GENERAL.—Section 1902(a)(10)(A)(i)(II) (42

21 U.S.C. 1396a(a)(10)(A)(i)(II)) is amended—

22 (1) by inserting ‘‘(aa)’’ after ‘‘(II)’’;

23 (2) by striking ‘‘) and’’ and inserting ‘‘and’’;

24 (3) by striking ‘‘section or who are’’ and insert25 ing ‘‘section), (bb) who are’’; and
†

228

S 1932 ES

1 (4) by inserting before the comma at the end

2 the following: ‘‘, or (cc) who are under 21 years of

3 age and with respect to whom supplemental security

4 income benefits would be paid under title XVI if

5 subparagraphs (A) and (B) of section 1611(c)(7)

6 were applied without regard to the phrase ‘the first

7 day of the month following’ ’’.

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

9 subsection (a) shall apply to medical assistance for items

10 and services furnished on or after the date that is 1 year

11 after the date of enactment of this Act.

12 Subchapter B—State Children’s Health

13 Insurance Program

14 SEC. 6051. RULES FOR AVAILABILITY, REDISTRIBUTION,

15 AND EXTENDED AVAILABILITY OF ALLOT16 MENTS FOR FISCAL YEARS 2003, 2004, AND

17 2005.

18 (a) IN GENERAL.—Section 2104 (42 U.S.C. 1397dd)

19 is amended—

20 (1) by amending subsection (e) to read as fol21 lows:

22 ‘‘(e) AVAILABILITY OF AMOUNTS ALLOTTED.—

23 ‘‘(1) IN GENERAL.—Except as provided in para24 graph (2), amounts allotted to a State pursuant to

25 this section—
†

229

S 1932 ES

1 ‘‘(A) for each of fiscal years 1998 through

2 2003, and for fiscal year 2006 and each fiscal

3 year thereafter, shall remain available for ex4 penditure by the State through the end of the

5 second succeeding fiscal year; and

6 ‘‘(B) for each of fiscal years 2004 and

7 2005, shall remain available for expenditure by

8 the State during the initial availability period

9 (as defined in paragraph (3)(A)).

10 ‘‘(2) AVAILABILITY OF REALLOTMENTS, REDIS11 TRIBUTED AMOUNTS, AND EXTENDED AVAIL12 ABILITY.—

13 ‘‘(A) IN GENERAL.—Amounts reallotted to

14 a State under subsection (f) shall be available

15 for expenditure by the State through the end of

16 the fiscal year in which they are reallotted.

17 ‘‘(B) AVAILABILITY OF REDISTRIBUTED

18 FUNDS AND EXTENDED AVAILABILITY.—

19 Amounts redistributed to a State under sub20 section (i)(3) or (j)(3) and unused allotments of

21 a State extended under subsection (i)(4) or

22 (j)(4) are available for expenditure by the State

23 during the redistribution/extension period (as

24 defined in paragraph (3)(B)).
†

230

S 1932 ES

1 ‘‘(3) PERIODS DEFINED.—For purposes of this

2 section:

3 ‘‘(A) INITIAL AVAILABILITY PERIOD.—The

4 term ‘initial availability period’ means, with re5 spect to allotments for a fiscal year, the 2-fiscal

6 year period beginning with that fiscal year.

7 ‘‘(B) REDISTRIBUTION/EXTENSION PE8 RIOD.—The term ‘redistribution/extension pe9 riod’ means, with respect to allotments for a

10 fiscal year, the second year following that fiscal

11 year.’’; and

12 (2) by adding at the end the following new sub13 sections:

14 ‘‘(h) RULE FOR REDISTRIBUTION OF FISCAL YEAR

15 2003 ALLOTMENTS.—

16 ‘‘(1) COMPUTATION OF UNEXPENDED ALLOT17 MENTS FOR FISCAL YEAR 2003.—The Secretary shall

18 determine—

19 ‘‘(A) the amount of each State’s allotment

20 under this section for fiscal year 2003 that was

21 not expended by the end of fiscal year 2005;

22 and

23 ‘‘(B) the total of the unexpended allot24 ments determined under subparagraph (A).
†

231

S 1932 ES

1 ‘‘(2) DETERMINATION OF INITIAL PROJECTED

2 SHORTFALLS FOR FISCAL YEAR 2006.—For each

3 State that receives an allotment for fiscal year 2006

4 under subsection (b), the Secretary shall determine

5 the following:

6 ‘‘(A) FISCAL YEAR 2005 CARRYOVER.—The

7 amount of the State’s allotment for 2005 that

8 was not expended in fiscal year 2005.

9 ‘‘(B) PROJECTED EXPENDITURES FOR FIS10 CAL YEAR 2006.—The estimated expenditures

11 for the State as would be reported as quarterly

12 expenditures under section 2105(a) for quarters

13 in fiscal year 2006.

14 ‘‘(C) INITIAL PROJECTED SHORTFALL FOR

15 FISCAL YEAR 2006.—The amount, if any, by

16 which the projected expenditures determined

17 under subparagraph (B) for the State for quar18 ters in fiscal year 2006 exceeds the sum of the

19 following:

20 ‘‘(i) FISCAL YEAR 2005 CARRYOVER.—

21 The amount determined under subpara22 graph (A) for the State.

23 ‘‘(ii) FISCAL YEAR 2006 ALLOT24 MENT.—The amount of the State’s allot25 ment for fiscal year 2006.
†

232

S 1932 ES

1 ‘‘(D) STATE’S PROPORTION OF AGGREGATE

2 SHORTFALL.—For each State for which there is

3 an excess determined under subparagraph (C),

4 the ratio of—

5 ‘‘(i) the amount of such excess; to

6 ‘‘(ii) the total of such excesses deter7 mined for all States with such an excess.

8 ‘‘(3) REDISTRIBUTION OF UNEXPENDED AL9 LOTMENTS FOR FISCAL YEAR 2003.—From the total

10 of the unexpended allotments for fiscal year 2003

11 determined under paragraph (1)(B) the Secretary

12 shall redistribute under subsection (f) the following:

13 ‘‘(A) STATES OTHER THAN TERRI14 TORIES.—There shall be redistributed to each

15 State for which there is an excess determined

16 under paragraph (2)(C) an amount equal to the

17 product of the following:

18 ‘‘(i) STATE REDISTRIBUTION POOL.—

19 The amount determined under paragraph

20 (1)(B), reduced by the total amount redis21 tributed under subparagraph (B).

22 ‘‘(ii) STATE’S SHORTFALL PROPOR23 TION.—The ratio described in paragraph

24 (2)(D) for that State.
†

233

S 1932 ES

1 ‘‘(B) TERRITORIES.—There shall be redis2 tributed to each commonwealth or territory de3 scribed in subsection (c)(3) an amount equal to

4 the product of the following:

5 ‘‘(i) TERRITORIAL REDISTRIBUTION

6 POOL.—1.05 percent of the amount deter7 mined under paragraph (1)(B).

8 ‘‘(ii) TERRITORIAL PROPORTION.—

9 The ratio of—

10 ‘‘(I) the allotment for fiscal year

11 2003 for such commonwealth or terri12 tory under subsection (c), to

13 ‘‘(II) the total of all such allot14 ments for such fiscal year for such

15 commonwealths or territories under

16 such subsection.

17 ‘‘(4) DETERMINATION OF AMOUNTS.—For pur18 poses of calculating the amounts described in—

19 ‘‘(A) paragraphs (1) and (2)(A), the Sec20 retary shall use the amounts reported by the

21 States not later than November 30, 2005, on

22 Form CMS–64 or Form CMS–21, as the case

23 may be, as approved by the Secretary; and

24 ‘‘(B) paragraph (2)(B), the Secretary shall

25 use the amounts reported by the States not
†

234

S 1932 ES

1 later than September 30, 2005, on Form CMS–

2 37 or Form CMS–21B, as the case may be, as

3 approved by the Secretary.

4 ‘‘(i) REDISTRIBUTION AND EXTENSION OF AVAIL5 ABILITY OF UNUSED ALLOTMENTS FOR FISCAL YEAR

6 2004.—Notwithstanding subsection (f):

7 ‘‘(1) COMPUTATION OF UNEXPENDED ALLOT8 MENTS FOR FISCAL YEAR 2004.—

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

10 determine with respect to each State that re11 ceives an allotment for fiscal year 2004 under

12 subsection (b)—

13 ‘‘(i) the amount of the State’s allot14 ment for such fiscal year that was not ex15 pended by the end of fiscal year 2005; and

16 ‘‘(ii) the total of the unexpended allot17 ments determined under clause (i).

18 ‘‘(B) REDUCTION OF UNEXPENDED AL19 LOTMENT BY NET FISCAL YEAR 2006 SHORT20 FALL.—

21 ‘‘(i) IN GENERAL.—In the case of a

22 State described in clause (ii), the Secretary

23 shall reduce, but not below 0, the amount

24 determined for the State under subpara25 graph (A)(i) (relating to the State’s unex-
†

235

S 1932 ES

1 pended allotment for fiscal year 2004) by

2 the amount of the allotment of the State

3 for which availability is extended under

4 paragraph (4)(A).

5 ‘‘(ii) STATE DESCRIBED.—A State de6 scribed in this clause is a State that meets

7 the following requirements:

8 ‘‘(I) FULLY SPENT FISCAL YEAR

9 2003 ALLOTMENT.—The State’s allot10 ment under this section for fiscal year

11 2003 was fully expended by the end of

12 fiscal year 2005.

13 ‘‘(II) DID NOT FULLY EXPEND

14 FISCAL YEAR 2004 ALLOTMENT BY

15 END OF FISCAL YEAR 2005.—The

16 State’s allotment under this section

17 for fiscal year 2004 was not fully ex18 pended by the end of fiscal year 2005.

19 ‘‘(III) PROJECTED FISCAL YEAR

20 2006 SHORTFALL.—The State has an

21 excess determined under subsection

22 (h)(2)(C) (relating to initial projected

23 fiscal year 2006 shortfall).

24 ‘‘(C) TOTALS AND RATIOS.—The Secretary

25 shall determine the following:
†

236

S 1932 ES

1 ‘‘(i) REDISTRIBUTION POOL.—A redis2 tribution pool equal to the total of the

3 amounts determined under subparagraph

4 (A)(i), as reduced (if applicable) under

5 subparagraph (B)(i).

6 ‘‘(ii) STATE PROPORTION TOWARD RE7 DISTRIBUTION POOL.—For each State in

8 which the amount determined under sub9 paragraph (A)(i) (as reduced, if applicable,

10 under subparagraph (B)(i)) exceeds 0, the

11 ratio of—

12 ‘‘(I) such amount (as so reduced)

13 for the State; to

14 ‘‘(II) the total determined under

15 clause (i).

16 ‘‘(D) AMOUNT OF UNEXPENDED FISCAL

17 YEAR 2004 ALLOTMENT APPLIED TO REDIS18 TRIBUTIONS.—For each State described in sub19 paragraph (C)(ii), the Secretary shall determine

20 a redistribution/reduction amount equal to the

21 product of the following:

22 ‘‘(i) TOTAL AMOUNT REDISTRIB23 UTED.—The total amount redistributed

24 under paragraph (3).
†

237

S 1932 ES

1 ‘‘(ii) STATE’S PROPORTION OF UNEX2 PENDED ALLOTMENTS.—The ratio for the

3 State determined under subparagraph

4 (C)(ii).

5 ‘‘(2) DETERMINATION OF NET PROJECTED

6 SHORTFALLS FOR FISCAL YEAR 2006.—For each

7 State that has an excess determined under sub8 section (h)(2)(C) (relating to initial projected fiscal

9 year 2006 shortfall), the Secretary shall determine

10 an amount equal to the amount determined under

11 such subsection, reduced by the sum of—

12 ‘‘(A) the amount redistributed to the State

13 under subsection (h)(3)(A), and

14 ‘‘(B) the amount of funds of the State for

15 which availability is extended under paragraph

16 (4)(A).

17 ‘‘(3) REDISTRIBUTION FROM REDISTRIBUTION

18 POOL.—From the redistribution pool determined

19 under paragraph (1)(C)(i)—

20 ‘‘(A) STATES OTHER THAN TERRI21 TORIES.—There shall be redistributed to each

22 State which has a net projected shortfall under

23 paragraph (2) an amount determined under

24 such paragraph for the State.
†

238

S 1932 ES

1 ‘‘(B) TERRITORIES.—There shall be redis2 tributed to each commonwealth or territory de3 scribed in subsection (c)(3) an amount equal to

4 the product of the following:

5 ‘‘(i) TERRITORIAL REDISTRIBUTION

6 POOL.—1.05 percent of the amount of

7 such unexpended allotments determined

8 under paragraph (1)(A)(ii).

9 ‘‘(ii) TERRITORIAL PROPORTION.—

10 The ratio of—

11 ‘‘(I) the allotment under sub12 section (c) for such commonwealth or

13 territory for fiscal year 2004, to

14 ‘‘(II) the total of all such allot15 ments for such commonwealths and

16 territories.

17 ‘‘(4) EXTENDED AVAILABILITY OF REMAINING

18 UNEXPENDED ALLOTMENTS.—

19 ‘‘(A) TO MEET NET SHORTFALL FOR FIS20 CAL YEAR 2006.—In the case of a State de21 scribed in paragraph (1)(B)(ii), the Secretary

22 shall extend the availability of funds from the

23 State’s allotment for fiscal year 2004 to the ex24 tent that—
†

239

S 1932 ES

1 ‘‘(i) the amount determined under

2 subsection (h)(2)(C) (relating to initial

3 shortfall for fiscal year 2006), exceeds

4 ‘‘(ii) the amount redistributed to the

5 State under subsection (h)(3)(A).

6 ‘‘(B) OTHER EXTENSIONS.—The Secretary

7 shall extend the availability of funds from allot8 ments for fiscal year 2004 for each State which

9 has an unexpended allotment for fiscal year

10 2004 determined under paragraph (1)(A) (as

11 reduced, if applicable, under paragraph (1)(B))

12 by an amount equal to the amount (if any) by

13 which—

14 ‘‘(i) the amount of such unexpended

15 allotment (as so reduced) for the State, ex16 ceeds

17 ‘‘(ii) the redistribution/reduction

18 amount determined under paragraph

19 (1)(D) for the State (relating to the por20 tion of the unexpended allotment applied

21 to redistributions).

22 ‘‘(5) DETERMINATION OF AMOUNTS.—For pur23 poses of calculating the amounts described in—

24 ‘‘(A) paragraph (1)(A)(i), the Secretary

25 shall use the amounts reported by the States
†

240

S 1932 ES

1 not later than November 30, 2005, on Form

2 CMS–64 or Form CMS–21, as the case may be,

3 as approved by the Secretary; and

4 ‘‘(B) paragraph (1)(B)(i), the Secretary

5 shall use the amounts reported by the States

6 not later than September 30, 2005, on Form

7 CMS–37 or Form CMS–21B, as the case may

8 be, as approved by the Secretary.

9 ‘‘(j) REDISTRIBUTION AND EXTENSION OF AVAIL10 ABILITY OF UNUSED ALLOTMENTS FOR FISCAL YEAR

11 2005.—Notwithstanding subsection (f):

12 ‘‘(1) COMPUTATION OF UNEXPENDED ALLOT13 MENTS FOR FISCAL YEAR 2005.—

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

15 determine with respect to each State that re16 ceives an allotment for fiscal year 2005 under

17 subsection (b)—

18 ‘‘(i) the amount of the State’s allot19 ment for fiscal year 2005 that was not ex20 pended by the end of fiscal year 2006; and

21 ‘‘(ii) the total of the unexpended allot22 ments determined under clause (i).

23 ‘‘(B) REDUCTION OF UNEXPENDED AL24 LOTMENT BY NET FISCAL YEAR 2007 SHORT25 FALL.—
†

241

S 1932 ES

1 ‘‘(i) IN GENERAL.—In the case of a

2 State described in clause (ii), the Secretary

3 shall reduce, but not below 0, the amount

4 determined for the State under subpara5 graph (A)(i) (relating to the State’s unex6 pended allotment for fiscal year 2005) by

7 the amount of the allotment of the State

8 for which availability is extended under

9 paragraph (4)(A).

10 ‘‘(ii) STATE DESCRIBED.—A State de11 scribed in this clause is a State that meets

12 the following requirements:

13 ‘‘(I) DID NOT FULLY EXPEND

14 FISCAL YEAR 2005 ALLOTMENT BY

15 END OF FISCAL YEAR 2006.—The

16 State’s allotment under this section

17 for fiscal year 2005 was not fully ex18 pended by the end of fiscal year 2006.

19 ‘‘(II) PROJECTED SHORTFALL

20 FOR FISCAL YEAR 2007.—The State

21 has an excess determined under para22 graph (2)(C) for fiscal year 2007 (re23 lating to initial projected fiscal year

24 2007 shortfall).
†

242

S 1932 ES

1 ‘‘(C) TOTALS AND RATIOS.—The Secretary

2 shall determine the following:

3 ‘‘(i) REDISTRIBUTION POOL.—A redis4 tribution pool equal to the total of the

5 amounts determined under subparagraph

6 (A)(i), as reduced (if applicable) under

7 subparagraph (B)(i).

8 ‘‘(ii) STATE PROPORTION TOWARD RE9 DISTRIBUTION POOL.—For each State in

10 which the amount determined under sub11 paragraph (A)(i) (as reduced, if applicable,

12 under subparagraph (B)(i)) exceeds 0, the

13 ratio of—

14 ‘‘(I) such amount (as so reduced)

15 for the State; to

16 ‘‘(II) the total determined under

17 clause (i).

18 ‘‘(D) AMOUNT OF UNEXPENDED FISCAL

19 YEAR 2005 ALLOTMENT APPLIED TO REDIS20 TRIBUTIONS.—For each State described in sub21 paragraph (C)(ii), the Secretary shall determine

22 a redistribution/reduction amount equal to the

23 product of the following:
†

243

S 1932 ES

1 ‘‘(i) TOTAL AMOUNT REDISTRIB2 UTED.—The total amount redistributed

3 under paragraph (3).

4 ‘‘(ii) STATE’S PROPORTION OF UNEX5 PENDED ALLOTMENTS.—The ratio for the

6 State determined under subparagraph

7 (C)(ii).

8 ‘‘(2) DETERMINATION OF INITIAL PROJECTED

9 SHORTFALLS FOR FISCAL YEAR 2007.—For each

10 State that receives an allotment for fiscal year 2007

11 under subsection (b), the Secretary shall determine

12 the following:

13 ‘‘(A) FISCAL YEAR 2006 CARRYOVER.—The

14 amount of the State’s allotment for fiscal year

15 2006 that was not expended in fiscal year 2006.

16 ‘‘(B) PROJECTED EXPENDITURES FOR FIS17 CAL YEAR 2007.—The estimated expenditures

18 for the State as would be reported as quarterly

19 expenditures under section 2105(a) for quarters

20 in fiscal year 2007.

21 ‘‘(C) INITIAL PROJECTED SHORTFALL FOR

22 FISCAL YEAR 2007.—The amount, if any, by

23 which the projected expenditures determined

24 under subparagraph (B) for the State for quar-
†

244

S 1932 ES

1 ters in fiscal year 2007 exceeds the sum of the

2 following:

3 ‘‘(i) FISCAL YEAR 2006 CARRYOVER.—

4 The amount determined under subpara5 graph (A) for the State.

6 ‘‘(ii) FISCAL YEAR 2007 ALLOT7 MENT.—The amount of the State’s allot8 ment for fiscal year 2007.

9 ‘‘(D) DETERMINATION OF NET PROJECTED

10 SHORTFALLS FOR FISCAL YEAR 2007.—For each

11 State that has an excess determined under sub12 paragraph (C), the Secretary shall determine an

13 amount equal to the amount determined under

14 such subparagraph, reduced by the amount of

15 funds (if any) of the State for which availability

16 is extended under paragraph (4)(A).

17 ‘‘(E) STATE’S PROPORTION OF NET AG18 GREGATE SHORTFALL.—For each State for

19 which there is a net excess determined under

20 subparagraph (D), the ratio of—

21 ‘‘(i) the amount of such net excess; to

22 ‘‘(ii) the total of such net excesses.

23 ‘‘(3) REDISTRIBUTION FROM REDISTRIBUTION

24 POOL.—From the redistribution pool determined

25 under paragraph (1)(C)(i)—
†

245

S 1932 ES

1 ‘‘(A) STATES OTHER THAN TERRI2 TORIES.—There shall be redistributed to each

3 State for which there is a net projected short4 fall under paragraph (2)(D) an amount equal

5 the lesser of the following:

6 ‘‘(i) NET FISCAL YEAR 2007 SHORT7 FALL.—The amount of the net excess de8 scribed in paragraph (2)(D) for the State.

9 ‘‘(ii) PORTION OF UNEXPENDED

10 FUNDS AVAILABLE.—The product of the

11 following:

12 ‘‘(I) STATE REDISTRIBUTION

13 POOL.—The amount determined

14 under paragraph (1)(C)(i), reduced by

15 the total amount redistributed under

16 subparagraph (B).

17 ‘‘(II) STATE’S SHORTFALL PRO18 PORTION.—The ratio described in

19 paragraph (2)(E) for that State.

20 ‘‘(B) TERRITORIES.—There shall be redis21 tributed to each commonwealth or territory de22 scribed in subsection (c)(3) an amount equal to

23 the product of the following:

24 ‘‘(i) TERRITORIAL REDISTRIBUTION

25 POOL.—1.05 percent of the total amount
†

246

S 1932 ES

1 of unexpended allotments determined

2 under paragraph (1)(A)(ii).

3 ‘‘(ii) TERRITORIAL PROPORTION.—

4 The ratio of—

5 ‘‘(I) the allotment under sub6 section (c) for such commonwealth or

7 territory for fiscal year 2005, to

8 ‘‘(II) the total of all such allot9 ments for such commonwealths and

10 territories.

11 ‘‘(4) EXTENDED AVAILABILITY OF REMAINING

12 UNEXPENDED ALLOTMENTS.—

13 ‘‘(A) TO MEET INITIAL PROJECTED

14 SHORTFALL FOR FISCAL YEAR 2007.—In the

15 case of a State that is described in paragraph

16 (1)(B)(ii), the Secretary shall extend the avail17 ability of funds from the State’s allotment for

18 fiscal year 2005 to the extent of the amount de19 scribed in paragraph (2)(C).

20 ‘‘(B) OTHER EXTENSIONS.—If the redis21 tribution pool amount determined under para22 graph (1)(C)(i) exceeds the total amount redis23 tributed under paragraph (3), the Secretary

24 shall extend the availability of funds from allot25 ments for fiscal year 2005 for each State which
†

247

S 1932 ES

1 has an unexpended allotment for that fiscal

2 year determined under paragraph (1)(A) (as re3 duced, if applicable, under paragraph (1)(B))

4 by an amount equal to the amount (if any) by

5 which—

6 ‘‘(i) the amount of the unexpended al7 lotment (as so reduced) for the State, ex8 ceeds

9 ‘‘(ii) the redistribution/reduction

10 amount determined under paragraph

11 (1)(D) for the State (relating to the por12 tion of the unexpended allotment applied

13 to redistributions).

14 ‘‘(5) DETERMINATION OF AMOUNTS.—For pur15 poses of calculating the amounts described in—

16 ‘‘(A) paragraph (1)(A), the Secretary shall

17 use the amounts reported by the States not

18 later than November 30, 2006, on Form CMS–

19 64 or Form CMS–21, as the case may be, as

20 approved by the Secretary; or

21 ‘‘(B) paragraph (2), the Secretary shall

22 use the amounts reported by the States not

23 later than September 30, 2006, on Form CMS–

24 37 or Form CMS–21B, as the case may be, as

25 approved by the Secretary.’’.
†

248

S 1932 ES

1 (b) USE OF REDISTRIBUTED FUNDS FOR CHILD

2 HEALTH ASSISTANCE FOR TARGETED LOW-INCOME

3 CHILDREN.—Section 2105(a) (42 U.S.C. 1397ee(a)) is

4 amended—

5 (1) in paragraph (1), in the matter preceding

6 subparagraph (A), by inserting ‘‘or paragraph (3)’’

7 after ‘‘subparagraph (B)’’; and

8 (2) by adding at the end the following:

9 ‘‘(3) USE OF REDISTRIBUTED FUNDS FOR

10 CHILD HEALTH ASSISTANCE FOR TARGETED LOW-IN11 COME CHILDREN.—For purposes of paragraph (1),

12 the expenditures described in this paragraph are ex13 penditures that are not expenditures for child health

14 assistance for targeted low-income children, but only

15 if such expenditures are from any amounts redistrib16 uted under subparagraphs (A) or (B) of subsection

17 (h)(3), (i)(3), or (j)(3) of section 2104.’’.

18 SEC. 6052. AUTHORITY TO USE UP TO 10 PERCENT OF FIS19 CAL YEAR 2006 AND 2007 ALLOTMENTS FOR

20 OUTREACH.

21 Section 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is

22 amended by adding at the end the following:

23 ‘‘(C) USE OF UP TO 10 PERCENT OF 2006

24 AND 2007 ALLOTMENTS FOR OUTREACH ACTIVI25 TIES.—Notwithstanding subparagraph (A), a
†

249

S 1932 ES

1 State may use up to 10 percent of the allotment

2 for the State for fiscal year 2006 and for fiscal

3 year 2007 for expenditures incurred during the

4 respective fiscal year for outreach activities as

5 provided in section 2102(c)(1) under the plan.’’.

6 SEC. 6053. PROHIBITION AGAINST COVERING NONPREG7 NANT CHILDLESS ADULTS WITH SCHIP

8 FUNDS.

9 (a) PROHIBITION ON USE OF SCHIP FUNDS.—Sec10 tion 2107 (42 U.S.C. 1397gg) is amended by adding at

11 the end the following:

12 ‘‘(f) LIMITATION OF WAIVER AUTHORITY.—Notwith13 standing subsection (e)(2)(A) and section 1115(a), on and

14 after the date of enactment of this subsection, the Sec15 retary may not approve a waiver, experimental, pilot, or

16 demonstration project that would allow funds made avail17 able under this title to be used to provide child health as18 sistance or other health benefits coverage to a nonpreg19 nant childless adult. For purposes of the preceding sen20 tence, a caretaker relative (as such term is defined for pur21 poses of carrying out section 1931) shall not be considered

22 a childless adult.’’.

23 (b) CONFORMING AMENDMENTS.—Section

24 2105(c)(1) (42 U.S.C. 1397ee(c)(1)) is amended—
†

250

S 1932 ES

1 (1) by inserting ‘‘and may not include coverage

2 of a nonpregnant childless adult’’ after ‘‘section

3 2101)’’; and

4 (2) by adding at the end the following: ‘‘For

5 purposes of the preceding sentence, a caretaker rel6 ative (as such term is defined for purposes of car7 rying out section 1931) shall not be considered a

8 childless adult.’’.

9 (c) RULE OF CONSTRUCTION.—Nothing in this sec10 tion or the amendments made by this section shall be con11 strued to—

12 (1) authorize the waiver of any provision of title

13 XIX or XXI of the Social Security Act (42 U.S.C.

14 1396 et seq., 1397aa et seq.) that is not otherwise

15 authorized to be waived under such titles or under

16 title XI of such Act (42 U.S.C. 1301 et seq.) as of

17 the date of enactment of this Act;

18 (2) imply congressional approval of any waiver,

19 experimental, pilot, or demonstration project affect20 ing funds made available under the State children’s

21 health insurance program under title XXI of the So22 cial Security Act (42 U.S.C. 1397aa et. seq.) or any

23 amendment to such a waiver or project that has

24 been approved as of such date of enactment; or
†

251

S 1932 ES

1 (3) apply to any waiver, experimental, pilot, or

2 demonstration project that would allow funds made

3 available under title XXI of the Social Security Act

4 (42 U.S.C. 1397aa et seq.) to be used to provide

5 child health assistance or other health benefits cov6 erage to a nonpregnant childless adult that is ap7 proved before the date of enactment of this Act or

8 to any extension, renewal, or amendment of such a

9 waiver or project that is approved on or after such

10 date of enactment.

11 SEC. 6054. CONTINUED AUTHORITY FOR QUALIFYING

12 STATES TO USE CERTAIN FUNDS FOR MED13 ICAID EXPENDITURES.

14 (a) IN GENERAL.—Section 2105(g)(1)(A) (42 U.S.C.

15 1397ee(g)(1)(A)) is amended by striking ‘‘or 2001’’ and

16 inserting ‘‘2001, 2004, or 2005’’.

17 (b) EFFECTIVE DATE.—The amendment made by

18 subsection (a) shall apply to expenditures made under title

19 XIX of the Social Security Act (42 U.S.C. 1396 et seq.)

20 on or after October 1, 2005.

21 SEC. 6055. GRANTS TO PROMOTE INNOVATIVE OUTREACH

22 AND ENROLLMENT UNDER MEDICAID AND

23 SCHIP.

24 Title XXI (42 U.S.C. 1397aa et seq.) is amended by

25 adding at the end the following:
†

252

S 1932 ES

1 ‘‘SEC. 2111. EXPANDED OUTREACH ACTIVITIES.

2 ‘‘(a) GRANTS TO CONDUCT INNOVATIVE OUTREACH

3 AND ENROLLMENT EFFORTS.—

4 ‘‘(1) IN GENERAL.—The Secretary shall award

5 grants to eligible entities to—

6 ‘‘(A) conduct innovative outreach and en7 rollment efforts that are designed to increase

8 the enrollment and participation of eligible chil9 dren under this title and title XIX; and

10 ‘‘(B) promote understanding of the impor11 tance of health insurance coverage for prenatal

12 care and children.

13 ‘‘(2) PERFORMANCE BONUSES.—The Secretary

14 may reserve a portion of the funds appropriated

15 under subsection (g) for a fiscal year for the purpose

16 of awarding performance bonuses during the suc17 ceeding fiscal year to eligible entities that meet en18 rollment goals or other criteria established by the

19 Secretary.

20 ‘‘(b) PRIORITY FOR AWARD OF GRANTS.—

21 ‘‘(1) IN GENERAL.—In making grants under

22 subsection (a)(1), the Secretary shall give priority

23 to—

24 ‘‘(A) eligible entities that propose to target

25 geographic areas with high rates of—
†

253

S 1932 ES

1 ‘‘(i) eligible but unenrolled children,

2 including such children who reside in rural

3 areas; or

4 ‘‘(ii) racial and ethnic minorities and

5 health disparity populations, including

6 those proposals that address cultural and

7 linguistic barriers to enrollment; and

8 ‘‘(B) eligible entities that plan to engage in

9 outreach efforts with respect to individuals de10 scribed in subparagraph (A) and that are—

11 ‘‘(i) Federal health safety net organi12 zations; or

13 ‘‘(ii) faith-based organizations or con14 sortia.

15 ‘‘(2) 10 PERCENT SET ASIDE FOR OUTREACH

16 TO INDIAN CHILDREN.—An amount equal to 10 per17 cent of the funds appropriated under subsection (g)

18 for a fiscal year shall be used by the Secretary to

19 award grants to Indian Health Service providers and

20 urban Indian organizations receiving funds under

21 title V of the Indian Health Care Improvement Act

22 (25 U.S.C. 1651 et seq.) for outreach to, and enroll23 ment of, children who are Indians.

24 ‘‘(c) APPLICATION.—An eligible entity that desires to

25 receive a grant under subsection (a)(1) shall submit an
†

254

S 1932 ES

1 application to the Secretary in such form and manner, and

2 containing such information, as the Secretary may decide.

3 Such application shall include—

4 ‘‘(1) quality and outcomes performance meas5 ures to evaluate the effectiveness of activities funded

6 by a grant awarded under this section to ensure that

7 the activities are meeting their goals; and

8 ‘‘(2) an assurance that the entity shall—

9 ‘‘(A) conduct an assessment of the effec10 tiveness of such activities against such perform11 ance measures; and

12 ‘‘(B) cooperate with the collection and re13 porting of enrollment data and other informa14 tion determined as a result of conducting such

15 assessments to the Secretary, in such form and

16 manner as the Secretary shall require.

17 ‘‘(d) DISSEMINATION OF ENROLLMENT DATA AND

18 INFORMATION DETERMINED FROM EFFECTIVENESS AS19 SESSMENTS; ANNUAL REPORT.—The Secretary shall—

20 ‘‘(1) disseminate to eligible entities and make

21 publicly available the enrollment data and informa22 tion collected and reported in accordance with sub23 section (c)(2)(B); and
†

255

S 1932 ES

1 ‘‘(2) submit an annual report to Congress on

2 the outreach activities funded by grants awarded

3 under this section.

4 ‘‘(e) SUPPLEMENT, NOT SUPPLANT.—Federal funds

5 awarded under this section shall be used to supplement,

6 not supplant, non-Federal funds that are otherwise avail7 able for activities funded under this section.

8 ‘‘(f) DEFINITIONS.—In this section:

9 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en10 tity’ means any of the following:

11 ‘‘(A) A State or local government.

12 ‘‘(B) A Federal health safety net organiza13 tion.

14 ‘‘(C) A national, local, or community-based

15 public or nonprofit private organization.

16 ‘‘(D) A faith-based organization or con17 sortia, to the extent that a grant awarded to

18 such an entity is consistent with the require19 ments of section 1955 of the Public Health

20 Service Act (42 U.S.C. 300x–65) relating to a

21 grant award to non-governmental entities.

22 ‘‘(E) An elementary or secondary school.

23 ‘‘(2) FEDERAL HEALTH SAFETY NET ORGANI24 ZATION.—The term ‘Federal health safety net orga25 nization’ means—
†

256

S 1932 ES

1 ‘‘(A) an Indian tribe, tribal organization,

2 or an urban Indian organization receiving funds

3 under title V of the Indian Health Care Im4 provement Act (25 U.S.C. 1651 et seq.), or an

5 Indian Health Service provider;

6 ‘‘(B) a Federally-qualified health center

7 (as defined in section 1905(l)(2)(B));

8 ‘‘(C) a hospital defined as a dispropor9 tionate share hospital for purposes of section

10 1923;

11 ‘‘(D) a covered entity described in section

12 340B(a)(4) of the Public Health Service Act

13 (42 U.S.C. 256b(a)(4)); and

14 ‘‘(E) any other entity or a consortium that

15 serves children under a federally-funded pro16 gram, including the special supplemental nutri17 tion program for women, infants, and children

18 (WIC) established under section 17 of the Child

19 Nutrition Act of 1966 (42 U.S.C. 1786), the

20 head start and early head start programs under

21 the Head Start Act (42 U.S.C. 9801 et seq.),

22 the school lunch program established under the

23 Richard B. Russell National School Lunch Act,

24 and an elementary or secondary school.
†

257

S 1932 ES

1 ‘‘(3) INDIANS; INDIAN TRIBE; TRIBAL ORGANI2 ZATION; URBAN INDIAN ORGANIZATION.—The terms

3 ‘Indian’, ‘Indian tribe’, ‘tribal organization’, and

4 ‘urban Indian organization’ have the meanings given

5 such terms in section 4 of the Indian Health Care

6 Improvement Act (25 U.S.C. 1603).

7 ‘‘(g) APPROPRIATION.—There is appropriated, out of

8 any money in the Treasury not otherwise appropriated,

9 $25,000,000 for fiscal year 2007 for the purpose of

10 awarding grants under this section. Amounts appropriated

11 and paid under the authority of this section shall—

12 ‘‘(1) be in addition to amounts appropriated

13 under section 2104 and paid to States in accordance

14 with section 2105; and

15 ‘‘(2) not be subject to the limitation on expendi16 tures described in section 2105(c)(2)(A).’’.

17 Subchapter C—Money Follows the Person

18 Rebalancing Demonstration

19 SEC. 6061. MONEY FOLLOWS THE PERSON REBALANCING

20 DEMONSTRATION.

21 (a) PROGRAM PURPOSE AND AUTHORITY.—The Sec22 retary is authorized to award, on a competitive basis,

23 grants to States in accordance with this section for dem24 onstration projects (each in this section referred to as an

25 ‘‘MFP demonstration project’’) designed to achieve the
†

258

S 1932 ES

1 following objectives with respect to institutional and home

2 and community-based long-term care services under State

3 Medicaid programs:

4 (1) REBALANCING.—Increase the use of home

5 and community-based, rather than institutional,

6 long-term care services.

7 (2) MONEY FOLLOWS THE PERSON.—Eliminate

8 barriers or mechanisms, whether in the State law,

9 the State Medicaid plan, the State budget, or other10 wise, that prevent or restrict the flexible use of Med11 icaid funds to enable Medicaid-eligible individuals to

12 receive support for appropriate and necessary long13 term services in the settings of their choice.

14 (3) CONTINUITY OF SERVICE.—Increase the

15 ability of the State Medicaid program to assure con16 tinued provision of home and community-based long17 term care services to eligible individuals who choose

18 to transition from an institutional to a community

19 setting.

20 (4) QUALITY ASSURANCE AND QUALITY IM21 PROVEMENT.—Ensure that procedures are in place

22 (at least comparable to those required under the

23 qualified HCB program) to provide quality assur24 ance for eligible individuals receiving Medicaid home

25 and community-based long-term care services and to
†

259

S 1932 ES

1 provide for continuous quality improvement in such

2 services.

3 (b) DEFINITIONS.—For purposes of this section:

4 (1) HOME AND COMMUNITY-BASED LONG-TERM

5 CARE SERVICES.—The term ‘‘home and community6 based long-term care services’’ means, with respect

7 to a State Medicaid program, home and community8 based services (including home health and personal

9 care services) that are provided under the State’s

10 qualified HCB program or that could be provided

11 under such a program but are otherwise provided

12 under the Medicaid program.

13 (2) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible

14 individual’’ means, with respect to an MFP dem15 onstration project of a State, an individual in the

16 State—

17 (A) who, immediately before beginning

18 participation in the MFP demonstration

19 project—

20 (i) resides (and has resided, for a pe21 riod of not less than 6 months or for such

22 longer minimum period, not to exceed 2

23 years, as may be specified by the State) in

24 an inpatient facility;
†

260

S 1932 ES

1 (ii) is receiving Medicaid benefits for

2 inpatient services furnished by such inpa3 tient facility; and

4 (iii) with respect to whom a deter5 mination has been made that, but for the

6 provision of home and community-based

7 long-term care services, the individual

8 would continue to require the level of care

9 provided in an inpatient facility; and

10 (B) who resides in a qualified residence be11 ginning on the initial date of participation in

12 the demonstration project.

13 (3) INPATIENT FACILITY.—The term ‘‘inpatient

14 facility’’ means a hospital, nursing facility, or inter15 mediate care facility for the mentally retarded. Such

16 term includes an institution for mental diseases, but

17 only, with respect to a State, to the extent medical

18 assistance is available under the State Medicaid plan

19 for services provided by such institution.

20 (4) MEDICAID.—The term ‘‘Medicaid’’ means,

21 with respect to a State, the State program under

22 title XIX of the Social Security Act (including any

23 waiver or demonstration under such title or under

24 section 1115 of such Act relating to such title).
†

261

S 1932 ES

1 (5) QUALIFIED HCB PROGRAM.—The term

2 ‘‘qualified HCB program’’ means a program pro3 viding home and community-based long-term care

4 services operating under Medicaid, whether or not

5 operating under waiver authority.

6 (6) QUALIFIED RESIDENCE.—The term ‘‘quali7 fied residence’’ means, with respect to an eligible

8 individual—

9 (A) a home owned or leased by the indi10 vidual or the individual’s family member;

11 (B) an apartment with an individual lease,

12 with lockable access and egress, and which in13 cludes living, sleeping, bathing, and cooking

14 areas over which the individual or the individ15 ual’s family has domain and control; and

16 (C) a residence, in a community-based res17 idential setting, in which no more than 4 unre18 lated individuals reside.

19 (7) QUALIFIED EXPENDITURES.—The term

20 ‘‘qualified expenditures’’ means expenditures by the

21 State under its MFP demonstration project for

22 home and community-based long-term care services

23 for an eligible individual participating in the MFP

24 demonstration project, but only with respect to serv25 ices furnished during the 12-month period beginning
†

262

S 1932 ES

1 on the date the individual is discharged from an in2 patient facility referred to in paragraph (2)(A)(i).

3 (8) SELF-DIRECTED SERVICES.—The term

4 ‘‘self-directed’’ means, with respect to home and

5 community-based long-term care services for an eli6 gible individual, such services for the individual

7 which are planned and purchased under the direc8 tion and control of such individual or the individ9 ual’s authorized representative (as defined by the

10 Secretary), including the amount, duration, scope,

11 provider, and location of such services, under the

12 State Medicaid program consistent with the fol13 lowing requirements:

14 (A) ASSESSMENT.—There is an assess15 ment of the needs, capabilities, and preferences

16 of the individual with respect to such services.

17 (B) SERVICE PLAN.—Based on such as18 sessment, there is developed jointly with such

19 individual or the individual’s authorized rep20 resentative a plan for such services for such in21 dividual that is approved by the State and

22 that—

23 (i) specifies those services, if any,

24 which the individual or the individual’s au-
†

263

S 1932 ES

1 thorized representative would be respon2 sible for directing;

3 (ii) identifies the methods by which

4 the individual or the individual’s author5 ized representative or an agency designated

6 by an individual or representative will se7 lect, manage, and dismiss providers of such

8 services;

9 (iii) specifies the role of family mem10 bers and others whose participation is

11 sought by the individual or the individual’s

12 authorized representative with respect to

13 such services;

14 (iv) is developed through a person15 centered process that—

16 (I) is directed by the individual

17 or the individual’s authorized rep18 resentative;

19 (II) builds upon the individual’s

20 capacity to engage in activities that

21 promote community life and that re22 spects the individual’s preferences,

23 choices, and abilities; and

24 (III) involves families, friends,

25 and professionals as desired or re-
†

264

S 1932 ES

1 quired by the individual or the indi2 vidual’s authorized representative;

3 (v) includes appropriate risk manage4 ment techniques that recognize the roles

5 and sharing of responsibilities in obtaining

6 services in a self-directed manner and as7 sure the appropriateness of such plan

8 based upon the resources and capabilities

9 of the individual or the individual’s author10 ized representative; and

11 (vi) may include an individualized

12 budget which identifies the dollar value of

13 the services and supports under the control

14 and direction of the individual or the indi15 vidual’s authorized representative.

16 (C) BUDGET PROCESS.—With respect to

17 individualized budgets described in subpara18 graph (B)(vi), the State application under sub19 section (c)—

20 (i) describes the method for calcu21 lating the dollar values in such budgets

22 based on reliable costs and service utiliza23 tion;

24 (ii) defines a process for making ad25 justments in such dollar values to reflect
†

265

S 1932 ES

1 changes in individual assessments and

2 service plans; and

3 (iii) provides a procedure to evaluate

4 expenditures under such budgets.

5 (9) STATE.—The term ‘‘State’’ has the mean6 ing given such term for purposes of title XIX of the

7 Social Security Act.

8 (c) STATE APPLICATION.—A State seeking approval

9 of an MFP demonstration project shall submit to the Sec10 retary, at such time and in such format as the Secretary

11 requires, an application meeting the following require12 ments and containing such additional information, provi13 sions, and assurances, as the Secretary may require:

14 (1) ASSURANCE OF A PUBLIC DEVELOPMENT

15 PROCESS.—The application contains an assurance

16 that the State has engaged, and will continue to en17 gage, in a public process for the design, develop18 ment, and evaluation of the MFP demonstration

19 project that allows for input from eligible individ20 uals, the families of such individuals, authorized rep21 resentatives of such individuals, providers, and other

22 interested parties.

23 (2) OPERATION IN CONNECTION WITH QUALI24 FIED HCB PROGRAM TO ASSURE CONTINUITY OF

25 SERVICES.—The State will conduct the MFP dem-
†

266

S 1932 ES

1 onstration project for eligible individuals in conjunc2 tion with the operation of a qualified HCB program

3 that is in operation (or approved) in the State for

4 such individuals in a manner that assures continuity

5 of Medicaid coverage for such individuals so long as

6 such individuals continue to be eligible for medical

7 assistance.

8 (3) DEMONSTRATION PROJECT PERIOD.—The

9 application shall specify the period of the MFP dem10 onstration project, which shall include at least 2 con11 secutive fiscal years in the 5-fiscal-year period begin12 ning with fiscal year 2009.

13 (4) SERVICE AREA.—The application shall

14 specify the service area or areas of the MFP dem15 onstration project, which may be a statewide area or

16 one or more geographic areas of the State.

17 (5) TARGETED GROUPS AND NUMBERS OF INDI18 VIDUALS SERVED.—The application shall specify—

19 (A) the target groups of eligible individuals

20 to be assisted to transition from an inpatient

21 facility to a qualified residence during each fis22 cal year of the MFP demonstration project;

23 (B) the projected numbers of eligible indi24 viduals in each targeted group of eligible indi-
†

267

S 1932 ES

1 viduals to be so assisted during each such year;

2 and

3 (C) the estimated total annual qualified ex4 penditures for each fiscal year of the MFP

5 demonstration project.

6 (6) INDIVIDUAL CHOICE, CONTINUITY OF

7 CARE.—The application shall contain assurances

8 that—

9 (A) each eligible individual or the individ10 ual’s authorized representative will be provided

11 the opportunity to make an informed choice re12 garding whether to participate in the MFP

13 demonstration project;

14 (B) each eligible individual or the individ15 ual’s authorized representative will choose the

16 qualified residence in which the individual will

17 reside and the setting in which the individual

18 will receive home and community-based long19 term care services;

20 (C) the State will continue to make avail21 able, so long as the State operates its qualified

22 HCB program consistent with applicable re23 quirements, home and community-based long24 term care services to each individual who com25 pletes participation in the MFP demonstration
†

268

S 1932 ES

1 project for as long as the individual remains eli2 gible for medical assistance for such services

3 under such qualified HCB program (including

4 meeting a requirement relating to requiring a

5 level of care provided in an inpatient facility

6 and continuing to require such services).

7 (7) REBALANCING.—The application shall—

8 (A) provide such information as the Sec9 retary may require concerning the dollar

10 amounts of State Medicaid expenditures for the

11 fiscal year, immediately preceding the first fis12 cal year of the State’s MFP demonstration

13 project, for long-term care services and the per14 centage of such expenditures that were for in15 stitutional long-term care services or were for

16 home and community-based long-term care

17 services;

18 (B)(i) specify the methods to be used by

19 the State to increase, for each fiscal year dur20 ing the MFP demonstration project, the dollar

21 amount of such total expenditures for home and

22 community-based long-term care services and

23 the percentage of such total expenditures for

24 long-term care services that are for home and

25 community-based long-term care services; and
†

269

S 1932 ES

1 (ii) describe the extent to which the MFP

2 demonstration project will contribute to accom3 plishment of objectives described in subsection

4 (a).

5 (8) MONEY FOLLOWS THE PERSON.—The appli6 cation shall describe the methods to be used by the

7 State to eliminate any legal, budgetary, or other bar8 riers to flexibility in the availability of Medicaid

9 funds to pay for long-term care services for eligible

10 individuals participating in the project in the appro11 priate settings of their choice, including costs to

12 transition from an institutional setting to a qualified

13 residence.

14 (9) MAINTENANCE OF EFFORT AND COST-EF15 FECTIVENESS.—The application shall contain or be

16 accompanied by such information and assurances as

17 may be required to satisfy the Secretary that—

18 (A) total expenditures under the State

19 Medicaid program for home and community20 based long-term care services will not be less

21 for any fiscal year during the MFP demonstra22 tion project than for the greater of such ex23 penditures for—

24 (i) fiscal year 2005; or
†

270

S 1932 ES

1 (ii) any succeeding fiscal year before

2 the first year of the MFP demonstration

3 project; and

4 (B) in the case of a qualified HCB pro5 gram operating under a waiver under sub6 section (c) or (d) of section 1915 of the Social

7 Security Act (42 U.S.C. 1396n), but for the

8 amount awarded under a grant under this sec9 tion, the State program would continue to meet

10 the cost-effectiveness requirements of subsection

11 (c)(2)(D) of such section or comparable require12 ments under subsection (d)(5) of such section,

13 respectively.

14 (10) WAIVER REQUESTS.—The application shall

15 contain or be accompanied by requests for any modi16 fication or adjustment of waivers of Medicaid re17 quirements described in subsection (d)(3), including

18 adjustments to the maximum numbers of individuals

19 included and package of benefits, including one-time

20 transitional services, provided.

21 (11) QUALITY ASSURANCE AND QUALITY IM22 PROVEMENT.—The application shall include—

23 (A) a plan satisfactory to the Secretary for

24 quality assurance and quality improvement for

25 home and community-based long-term care
†

271

S 1932 ES

1 services under the State Medicaid program, in2 cluding a plan to assure the health and welfare

3 of individuals participating in the MFP dem4 onstration project; and

5 (B) an assurance that the State will co6 operate in carrying out activities under sub7 section (f) to develop and implement continuous

8 quality assurance and quality improvement sys9 tems for home and community-based long-term

10 care services.

11 (12) OPTIONAL PROGRAM FOR SELF-DIRECTED

12 SERVICES.—If the State elects to provide for any

13 home and community-based long-term care services

14 as self-directed services (as defined in subsection

15 (b)(8)) under the MFP demonstration project, the

16 application shall provide the following:

17 (A) MEETING REQUIREMENTS.—A descrip18 tion of how the project will meet the applicable

19 requirements of such subsection for the provi20 sion of self-directed services.

21 (B) VOLUNTARY ELECTION.—A description

22 of how eligible individuals will be provided with

23 the opportunity to make an informed election to

24 receive self-directed services under the project

25 and after the end of the project.
†

272

S 1932 ES

1 (C) STATE SUPPORT IN SERVICE PLAN DE2 VELOPMENT.—Satisfactory assurances that the

3 State will provide support to eligible individuals

4 who self-direct in developing and implementing

5 their service plans.

6 (D) OVERSIGHT OF RECEIPT OF SERV7 ICES.—Satisfactory assurances that the State

8 will provide oversight of eligible individual’s re9 ceipt of such self-directed services, including

10 steps to assure the quality of services provided

11 and that the provision of such services are con12 sistent with the service plan under such sub13 section.

14 Nothing in this section shall be construed as requir15 ing a State to make an election under the project to

16 provide for home and community-based long-term

17 care services as self-directed services, or as requiring

18 an individual to elect to receive self-directed services

19 under the project.

20 (13) REPORTS AND EVALUATION.—The applica21 tion shall provide that—

22 (A) the State will furnish to the Secretary

23 such reports concerning the MFP demonstra24 tion project, on such timetable, in such uniform

25 format, and containing such information as the
†

273

S 1932 ES

1 Secretary may require, as will allow for reliable

2 comparisons of MFP demonstration projects

3 across States; and

4 (B) the State will participate in and co5 operate with the evaluation of the MFP dem6 onstration project.

7 (d) SECRETARY’S AWARD OF COMPETITIVE

8 GRANTS.—

9 (1) IN GENERAL.—The Secretary shall award

10 grants under this section on a competitive basis to

11 States selected from among those with applications

12 meeting the requirements of subsection (c), in ac13 cordance with the provisions of this subsection.

14 (2) SELECTION AND MODIFICATION OF STATE

15 APPLICATIONS.—In selecting State applications for

16 the awarding of such a grant, the Secretary—

17 (A) shall take into consideration the man18 ner in which, and extent to which, the State

19 proposes to achieve the objectives specified in

20 subsection (a);

21 (B) shall seek to achieve an appropriate

22 national balance in the numbers of eligible indi23 viduals, within different target groups of eligi24 ble individuals, who are assisted to transition to

25 qualified residences under MFP demonstration
†

274

S 1932 ES

1 projects, and in the geographic distribution of

2 States operating MFP demonstration projects;

3 (C) shall give preference to State applica4 tions proposing—

5 (i) to provide transition assistance to

6 eligible individuals within multiple target

7 groups; and

8 (ii) to provide eligible individuals with

9 the opportunity to receive home and com10 munity-based long-term care services as

11 self-directed services, as defined in sub12 section (b)(8); and

13 (D) shall take such objectives into consid14 eration in setting the annual amounts of State

15 grant awards under this section.

16 (3) WAIVER AUTHORITY.—The Secretary is au17 thorized to waive the following provisions of title

18 XIX of the Social Security Act, to the extent nec19 essary to enable a State initiative to meet the re20 quirements and accomplish the purposes of this sec21 tion:

22 (A) STATEWIDENESS.—Section

23 1902(a)(1), in order to permit implementation

24 of a State initiative in a selected area or areas

25 of the State.
†

275

S 1932 ES

1 (B) COMPARABILITY.—Section

2 1902(a)(10)(B), in order to permit a State ini3 tiative to assist a selected category or categories

4 of individuals described in subsection (b)(2)(A).

5 (C) INCOME AND RESOURCES ELIGI6 BILITY.—Section 1902(a)(10)(C)(i)(III), in

7 order to permit a State to apply institutional

8 eligibility rules to individuals transitioning to

9 community-based care.

10 (D) PROVIDER AGREEMENTS.—Section

11 1902(a)(27), in order to permit a State to im12 plement self-directed services in a cost-effective

13 manner.

14 (4) CONDITIONAL APPROVAL OF OUTYEAR

15 GRANT.—In awarding grants under this section, the

16 Secretary shall condition the grant for the second

17 and any subsequent fiscal years of the grant period

18 on the following:

19 (A) NUMERICAL BENCHMARKS.—The

20 State must demonstrate to the satisfaction of

21 the Secretary that it is meeting numerical

22 benchmarks specified in the grant agreement

23 for—
†

276

S 1932 ES

1 (i) increasing State Medicaid support

2 for home and community-based long-term

3 care services under subsection (c)(5); and

4 (ii) numbers of eligible individuals as5 sisted to transition to qualified residences.

6 (B) QUALITY OF CARE.—The State must

7 demonstrate to the satisfaction of the Secretary

8 that it is meeting the requirements under sub9 section (c)(11) to assure the health and welfare

10 of MFP demonstration project participants.

11 (e) PAYMENTS TO STATES; CARRYOVER OF UNUSED

12 GRANT AMOUNTS.—

13 (1) PAYMENTS.—For each calendar quarter in

14 a fiscal year during the period a State is awarded

15 a grant under subsection (d), the Secretary shall pay

16 to the State from its grant award for such fiscal

17 year an amount equal to the lesser of—

18 (A) 90 percent of the amount of qualified

19 expenditures made during such quarter; or

20 (B) the total amount remaining in such

21 grant award for such fiscal year (taking into

22 account the application of paragraph (2)).

23 (2) CARRYOVER OF UNUSED AMOUNTS.—Any

24 portion of a State grant award for a fiscal year

25 under this section remaining at the end of such fis-
†

277

S 1932 ES

1 cal year shall remain available to the State for the

2 next 4 fiscal years, subject to paragraph (3).

3 (3) REAWARDING OF CERTAIN UNUSED

4 AMOUNTS.—In the case of a State that the Sec5 retary determines pursuant to subsection (d)(4) has

6 failed to meet the conditions for continuation of a

7 MFP demonstration project under this section in a

8 succeeding year or years, the Secretary shall rescind

9 the grant awards for such succeeding year or years,

10 together with any unspent portion of an award for

11 prior years, and shall add such amounts to the ap12 propriation for the immediately succeeding fiscal

13 year for grants under this section.

14 (4) PREVENTING DUPLICATION OF PAYMENT.—

15 The payment under a MFP demonstration project

16 with respect to qualified expenditures shall be in lieu

17 of any payment with respect to such expenditures

18 that could otherwise be paid under Medicaid, includ19 ing under section 1903(a) of the Social Security Act.

20 Nothing in the previous sentence shall be construed

21 as preventing the payment under Medicaid for such

22 expenditures in a grant year after amounts available

23 to pay for such expenditures under the MFP dem24 onstration project have been exhausted.
†

278

S 1932 ES

1 (f) QUALITY ASSURANCE AND IMPROVEMENT; TECH2 NICAL ASSISTANCE; OVERSIGHT.—

3 (1) IN GENERAL.—The Secretary, either di4 rectly or by grant or contract, shall provide for tech5 nical assistance to, and oversight of, States for pur6 poses of upgrading quality assurance and quality im7 provement systems under Medicaid home and com8 munity-based waivers, including—

9 (A) dissemination of information on prom10 ising practices;

11 (B) guidance on system design elements

12 addressing the unique needs of participating

13 beneficiaries;

14 (C) ongoing consultation on quality, in15 cluding assistance in developing necessary tools,

16 resources, and monitoring systems; and

17 (D) guidance on remedying programmatic

18 and systemic problems.

19 (2) FUNDING.—From the amounts appro20 priated under subsection (h)(1) for the portion of

21 fiscal year 2009 that begins on January 1, 2009,

22 and ends on September 30, 2009, and for fiscal year

23 2010, not more than $2,400,000 shall be available

24 to the Secretary to carry out this subsection during
†

279

S 1932 ES

1 the period that begins on January 1, 2009, and ends

2 on September 30, 2013.

3 (g) RESEARCH AND EVALUATION.—

4 (1) IN GENERAL.—The Secretary, directly or

5 through grant or contract, shall provide for research

6 on, and a national evaluation of, the program under

7 this section, including assistance to the Secretary in

8 preparing the final report required under paragraph

9 (2). The evaluation shall include an analysis of pro10 jected and actual savings related to the transition of

11 individuals to qualified residences in each State con12 ducting an MFP demonstration project.

13 (2) FINAL REPORT.—The Secretary shall make

14 a final report to the President and Congress, not

15 later than September 30, 2013, reflecting the eval16 uation described in paragraph (1) and providing

17 findings and conclusions on the conduct and effec18 tiveness of MFP demonstration projects.

19 (3) FUNDING.—From the amounts appro20 priated under subsection (h)(1) for each of fiscal

21 years 2010 through 2013, not more than $1,100,000

22 per year shall be available to the Secretary to carry

23 out this subsection.

24 (h) APPROPRIATIONS.—
†

280

S 1932 ES

1 (1) IN GENERAL.—There are appropriated,

2 from any funds in the Treasury not otherwise appro3 priated, for grants to carry out this section—

4 (A) $250,000,000 for the portion of fiscal

5 year 2009 beginning on January 1, 2009, and

6 ending on September 30, 2009;

7 (B) $300,000,000 for fiscal year 2010;

8 (C) $350,000,000 for fiscal year 2011;

9 (D) $400,000,000 for fiscal year 2012;

10 and

11 (E) $450,000,000 for fiscal year 2013.

12 (2) AVAILABILITY.—Amounts made available

13 under paragraph (1) for a fiscal year shall remain

14 available for the awarding of grants to States by not

15 later than September 30, 2013.

16 CHAPTER 6—OPTION FOR HURRICANE

17 KATRINA DISASTER STATES TO DELAY

18 APPLICATION

19 SEC. 6071. OPTION FOR HURRICANE KATRINA DISASTER

20 STATES TO DELAY APPLICATION.

21 Notwithstanding any provision of this subtitle, or any

22 amendment made by this subtitle, the State of Louisiana,

23 Mississippi, or Alabama may elect to not have the provi24 sions of this subtitle, or of any amendment made by this

25 subtitle, apply with respect to the State during any period
†

281

S 1932 ES

1 for which a major disaster declared in accordance with

2 section 401 of the Robert T. Stafford Disaster Relief and

3 Emergency Assistance Act (42 U.S.C. 5170) with respect

4 to a parish, in the case of Louisiana, or a county, in the

5 case of Mississippi or Alabama, as a result of Hurricane

6 Katrina is in effect.

7 Subtitle B—Medicare

8 SEC. 6101. IMPROVEMENTS TO THE MEDICARE-DEPENDENT

9 HOSPITAL (MDH) PROGRAM.

10 (a) 5-YEAR EXTENSION.—

11 (1) EXTENSION OF PAYMENT METHOD12 OLOGY.—Section 1886(d)(5)(G) (42 U.S.C.

13 1395ww(d)(5)(G)) is amended—

14 (A) in clause (i), by striking ‘‘October 1,

15 2006’’ and inserting ‘‘October 1, 2011’’; and

16 (B) in clause (ii)(II)—

17 (i) by striking ‘‘October 1, 2006’’ and

18 inserting ‘‘October 1, 2011’’; and

19 (ii) by inserting ‘‘or for discharges in

20 the fiscal year’’ after ‘‘for the cost report21 ing period’’.

22 (2) CONFORMING AMENDMENTS.—

23 (A) EXTENSION OF TARGET AMOUNT.—

24 Section 1886(b)(3)(D) (42 U.S.C.

25 1395ww(b)(3)(D)) is amended—
†

282

S 1932 ES

1 (i) in the matter preceding clause

2 (i)—

3 (I) by striking ‘‘beginning’’ and

4 inserting ‘‘occurring’’; and

5 (II) by striking ‘‘October 1,

6 2006’’ and inserting ‘‘October 1,

7 2011’’; and

8 (ii) in clause (iv), by striking

9 ‘‘through fiscal year 2005’’ and inserting

10 ‘‘through fiscal year 2011’’.

11 (B) PERMITTING HOSPITALS TO DECLINE

12 RECLASSIFICATION.—Section 13501(e)(2) of

13 the Omnibus Budget Reconciliation Act of 1993

14 (42 U.S.C. 1395ww note) is amended by strik15 ing ‘‘through fiscal year 2005’’ and inserting

16 ‘‘through fiscal year 2011’’.

17 (b) OPTION TO USE OF 2002 AS BASE YEAR.—Sec18 tion 1886(b)(3) (42 U.S.C. 1395ww(b)(3)) is amended—

19 (1) in subparagraph (D), by inserting ‘‘subject

20 to subparagraph (K),’’ after ‘‘(d)(5)(G)),’’; and

21 (2) by adding at the end the following new sub22 paragraph:

23 ‘‘(K)(i) With respect to discharges occurring on or

24 after October 1, 2006, in the case of a medicare-depend-
†

283

S 1932 ES

1 ent, small rural hospital, for purposes of applying sub2 paragraph (D)—

3 ‘‘(I) there shall be substituted for the base cost

4 reporting period described in subparagraph (D)(i)

5 the 12-month cost reporting period beginning during

6 fiscal year 2002; and

7 ‘‘(II) any reference in such subparagraph to the

8 ‘first cost reporting period’ described in such sub9 paragraph is deemed a reference to the first cost re10 porting period beginning on or after October 1,

11 2006.

12 ‘‘(ii) This subparagraph shall only apply to a hospital

13 if the substitution described in clause (i)(I) results in an

14 increase in the target amount under subparagraph (D) for

15 the hospital.’’.

16 (c) ENHANCED PAYMENT FOR AMOUNT BY WHICH

17 THE TARGET EXCEEDS THE PPS RATE.—Section

18 1886(d)(5)(G)(ii)(II) (42 U.S.C.

19 1395ww(d)(5)(G)(iv)(II)) is amended by inserting ‘‘(or 75

20 percent in the case of discharges occurring on or after Oc21 tober 1, 2006)’’ after ‘‘50 percent’’.

22 (d) ENHANCED DISPROPORTIONATE SHARE HOS23 PITAL (DSH) TREATMENT FOR MEDICARE DEPENDENT

24 HOSPITALS.—Section 1886(d)(5)(F)(xiv)(II) (42 U.S.C.

25 1395ww(d)(5)(F)(xiv)(II)) is amended by inserting ‘‘or, in
†

284

S 1932 ES

1 the case of discharges occurring on or after October 1,

2 2006, as a medicare-dependent, small rural hospital under

3 subparagraph (G)(iv)’’ before the period at the end.

4 SEC. 6102. REDUCTION IN PAYMENTS TO SKILLED NURSING

5 FACILITIES FOR BAD DEBT.

6 (a) IN GENERAL.—Section 1861(v)(1) (42 U.S.C.

7 1395x(v)(1)) is amended by adding at the end the fol8 lowing new subparagraph:

9 ‘‘(V) In determining such reasonable costs for skilled

10 nursing facilities with respect to services furnished on or

11 after October 1, 2005, the amount of bad debts otherwise

12 treated as allowed costs which are attributable to the

13 deductibles and coinsurance amounts under this title shall

14 be reduced by 30 percent of such amount otherwise allow15 able.’’.

16 (b) TECHNICAL AMENDMENT.—Section

17 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is amended by

18 striking ‘‘section 1833(t)(5)(B)’’ and inserting ‘‘section

19 1833(t)(8)(B)’’.

20 SEC. 6103. TWO-YEAR EXTENSION OF THE 50 PERCENT COM21 PLIANCE THRESHOLD USED TO DETERMINE

22 WHETHER A HOSPITAL OR UNIT OF A HOS23 PITAL IS AN INPATIENT REHABILITATION FA24 CILITY UNDER THE MEDICARE PROGRAM.

25 (a) EXTENSION.—
†

285

S 1932 ES

1 (1) IN GENERAL.—Effective as if enacted on

2 June 30, 2005, notwithstanding section

3 412.23(b)(2) of title 42, Code of Federal Regula4 tions, during the period beginning on July 1, 2005,

5 and ending on June 30, 2007, the Secretary of

6 Health and Human Services shall not—

7 (A) require a compliance rate, pursuant to

8 the criterion (commonly known as the ‘‘75 per9 cent rule’’) that is used to determine whether a

10 hospital or unit of a hospital is an inpatient re11 habilitation facility (as defined in the rule pub12 lished in the Federal Register on May 7, 2004,

13 entitled ‘‘Medicare Program; Final Rule;

14 Changes to the Criteria for Being Classified as

15 an Inpatient Rehabilitation Facility’’ (69 Fed.

16 Reg. 25752)), that is greater than the 50 per17 cent compliance threshold that became effective

18 on July 1, 2004; or

19 (B) change the designation of an inpatient

20 rehabilitation facility that is in compliance with

21 such 50 percent threshold.

22 (2) RETROACTIVE STATUS AS AN INPATIENT

23 REHABILITATION FACILITY; PAYMENTS; EXPEDITED

24 REVIEW.—The Secretary of Health and Human

25 Services shall establish procedures for—
†

286

S 1932 ES

1 (A) making any necessary retroactive ad2 justment to restore the status of a facility as an

3 inpatient rehabilitation facility as a result of

4 subsection (a); and

5 (B) making any necessary payments to in6 patient rehabilitation facilities based on such

7 adjustment for discharges occurring on or after

8 July 1, 2005, and before the date of enactment

9 of this Act.

10 (b) SPECIAL RULE.—In the case of a hospital or unit

11 of a hospital that failed to meet the 50 percent compliance

12 threshold described in subsection (a)(1)(A) with respect

13 to the first cost reporting period of the hospital or unit

14 that began on or after July 1, 2004, the following rules

15 shall apply:

16 (1) Such hospital or unit shall be deemed to

17 meet such 50 percent threshold for purposes of sub18 section (a).

19 (2) The Secretary shall examine all the claims

20 of the hospital or unit under title XVIII of the So21 cial Security Act submitted during the 6-month pe22 riod beginning after the end of such first cost re23 porting period.
†

287

S 1932 ES

1 (3) If the Secretary determines after such re2 view that the hospital or unit is still not in compli3 ance with such 50 percent compliance threshold—

4 (A) the deemed status of the hospital or

5 unit under paragraph (1) shall be revoked ret6 roactive to the beginning of such 6-month pe7 riod; and

8 (B) the Secretary shall provide for the col9 lection of any necessary overpayments by rea10 son of the revocation under subparagraph (A).

11 (c) STUDY AND REPORT BY THE HHS INSPECTOR

12 GENERAL.—

13 (1) STUDY.—

14 (A) IN GENERAL.—The Inspector General

15 of the Department of Health and Human Serv16 ices shall conduct a study of hospitals and units

17 of hospitals that—

18 (i) are designated as inpatient reha19 bilitation facilities under title XVIII of the

20 Social Security Act; and

21 (ii) would not be so designated if this

22 section had not been enacted because the

23 hospital or unit has a compliance rate that

24 is greater than the 50 percent compliance

25 threshold described in subsection (a)(1)(A)
†

288

S 1932 ES

1 but is less than the 60 percent compliance

2 threshold that would have become effective

3 on July 1, 2005, but for this section.

4 (B) REQUIREMENT.—In conducting the

5 study under subparagraph (A), the Inspector

6 General shall analyze the types of patients the

7 hospitals and units are treating and issues re8 lating to the medical conditions of such patients

9 that do not meet the medical requirements for

10 determining compliance with such threshold.

11 (2) REPORT.—Not later than January 1, 2007,

12 the Inspector General shall submit to Congress and

13 the Secretary a report on the study conducted under

14 paragraph (1), together with such recommendations

15 as the Inspector General determines appropriate.

16 (d) REHABILITATION ADVISORY COUNCIL.—

17 (1) ESTABLISHMENT.—The Secretary shall es18 tablish an advisory council to be known as the ‘‘Re19 habilitation Advisory Council’’.

20 (2) MEMBERSHIP.—The membership of the Re21 habilitation Advisory Council shall include—

22 (A) physicians;

23 (B) Medicare beneficiaries;

24 (C) representatives of inpatient rehabilita25 tion facilities; and
†

289

S 1932 ES

1 (D) representatives of other entities and

2 practitioners that provide rehabilitative care in

3 settings other than in such facilities, such as

4 skilled nursing facilities.

5 (3) DUTIES.—

6 (A) ADVICE AND RECOMMENDATIONS.—

7 The Rehabilitation Advisory Council shall pro8 vide advice and recommendations to Congress

9 and the Secretary concerning the coverage of

10 rehabilitation services under the Medicare pro11 gram, including the appropriate medical criteria

12 for determining the appropriateness of inpatient

13 rehabilitation facility admissions.

14 (B) PERIODIC REPORTS.—The Rehabilita15 tion Advisory Council shall provide Congress

16 and the Secretary with periodic reports that

17 summarize—

18 (i) the Council’s activities; and

19 (ii) any recommendations for legisla20 tion or administrative action the Council

21 considers to be appropriate.

22 (4) TERMINATION.—The Rehabilitation

23 Advisory Council shall terminate on September

24 30, 2010.
†

290

S 1932 ES

1 SEC. 6104. PROHIBITION ON PHYSICIAN SELF REFERRALS

2 TO PHYSICIAN OWNED, LIMITED SERVICE

3 HOSPITALS.

4 (a) PROHIBITION.—Section 1877(d) (42 U.S.C.

5 1395nn(d)) is amended in each of paragraphs (2)(B) and

6 (3)(B) by striking ‘‘effective for the 18-month period be7 ginning on the date of enactment of the Medicare Pre8 scription Drug, Improvement, and Modernization Act of

9 2003’’ and inserting ‘‘on and after December 8, 2003’’.

10 (b) REVISIONS TO THE REQUIREMENTS TO QUALIFY

11 FOR THE EXCEPTION TO THE DEFINITION OF SPECIALTY

12 HOSPITAL.—Section 1877(h)(7)(B) (42 U.S.C.

13 1395nn(h)(7)(B)) is amended—

14 (1) by redesignating clauses (iii), (iv), and (v)

15 as clauses (vi), (vii), and (viii), respectively;

16 (2) by inserting after clause (ii) the following

17 new clauses:

18 ‘‘(iii) for which the percent of invest19 ment in the hospital by physician investors

20 at any time on or after June 8, 2005, is

21 no greater than the percent of such invest22 ment by physician investors as of such

23 date;

24 ‘‘(iv) for which the percent of invest25 ment in the hospital by any physician in26 vestor at any time on or after June 8,
†

291

S 1932 ES

1 2005, is no greater than the percent of

2 such investment by such physician as of

3 such date;

4 ‘‘(v) for which the number of oper5 ating rooms at the hospital at any time on

6 or after June 8, 2005, is no greater than

7 the number of such rooms as of such

8 date;’’; and

9 (3) by striking clause (vii), as so redesignated,

10 and inserting the following:

11 ‘‘(vii) for which—

12 ‘‘(I) during the period beginning

13 on December 8, 2003, and ending on

14 June 7, 2005, any increase in the

15 number of beds occurs only in the fa16 cilities on the main campus of the

17 hospital and does not exceed 50 per18 cent of the number of beds in the hos19 pital as of November 18, 2003, or 5

20 beds, whichever is greater; and

21 ‘‘(II) the number of beds at the

22 hospital at any time on or after June

23 8, 2005, is no greater than the num24 ber of such beds as of such date;

25 and’’.
†

292

S 1932 ES

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

2 this section shall take effect on June 8, 2005.

3 SEC. 6105. MINIMUM UPDATE FOR PHYSICIANS’ SERVICES

4 FOR 2006.

5 (a) MINIMUM UPDATE FOR 2006.—Section 1848(d)

6 (42 U.S.C. 1395w–4(d)), as amended by section 6110(c),

7 is amended by adding at the end the following new para8 graph:

9 ‘‘(7) UPDATE FOR 2006.—The update to the

10 single conversion factor established in paragraph

11 (1)(C) for 2006 shall be not less than 1 percent.’’.

12 (b) CONFORMING AMENDMENT.—Section

13 1848(d)(4)(B) (42 U.S.C. 1395w–4(d)(4)(B)) is amended,

14 in the matter preceding clause (i), by striking ‘‘paragraph

15 (5)’’ and inserting ‘‘paragraphs (5) and (7)’’.

16 (c) NOT TREATED AS CHANGE IN LAW AND REGULA17 TION IN SUSTAINABLE GROWTH RATE DETERMINA18 TION.—The amendments made by this section shall not

19 be treated as a change in law for purposes of applying

20 section 1848(f)(2)(D) of the Social Security Act (42

21 U.S.C. 1395w–4(f)(2)(D)).
†

293

S 1932 ES

1 SEC. 6106. ONE-YEAR EXTENSION OF HOLD HARMLESS PRO2 VISIONS FOR SMALL RURAL HOSPITALS AND

3 SOLE COMMUNITY HOSPITALS UNDER THE

4 PROSPECTIVE PAYMENT SYSTEM FOR HOS5 PITAL OUTPATIENT DEPARTMENT SERVICES.

6 Section 1833(t)(7)(D)(i) (42 U.S.C.

7 1395l(t)(7)(D)(i)) is amended by striking ‘‘January 1,

8 2006’’ and inserting ‘‘January 1, 2007’’.

9 SEC. 6107. UPDATE TO THE COMPOSITE RATE COMPONENT

10 OF THE BASIC CASE-MIX ADJUSTED PRO11 SPECTIVE PAYMENT SYSTEM FOR DIALYSIS

12 SERVICES.

13 Section 1881(b)(12) (42 U.S.C. 1395rr(b)(12)) is

14 amended—

15 (1) in subparagraph (F), in the flush matter at

16 the end, by striking ‘‘Nothing’’ and inserting ‘‘Ex17 cept as provided in subparagraph (G), nothing’’;

18 (2) by redesignating subparagraph (G) as sub19 paragraph (H); and

20 (3) by inserting after subparagraph (F) the fol21 lowing new subparagraph:

22 ‘‘(G) The Secretary shall increase the amount of the

23 composite rate component of the basic case-mix adjusted

24 system under subparagraph (B) for dialysis services fur25 nished on or after January 1, 2006, by 1.6 percent above
†

294

S 1932 ES

1 the amount of such composite rate component for such

2 services furnished on December 31, 2005.’’.

3 SEC. 6108. ONE-YEAR EXTENSION OF MORATORIUM ON

4 THERAPY CAPS.

5 Section 1833(g)(4) (42 U.S.C. 1395l(g)(4)) is

6 amended by striking ‘‘and 2005’’ and inserting ‘‘2005,

7 and 2006’’.

8 SEC. 6109. TRANSFER OF TITLE OF CERTAIN DME TO PA9 TIENT AFTER 13-MONTH RENTAL.

10 (a) IN GENERAL.—Section 1834(a)(7)(A) (42 U.S.C.

11 1395m(a)(7)(A)) is amended to read as follows:

12 ‘‘(A) PAYMENT.—In the case of an item of

13 durable medical equipment not described in

14 paragraphs (2) through (6), the following rules

15 shall apply:

16 ‘‘(i) RENTAL.—

17 ‘‘(I) IN GENERAL.—Payment for

18 the item shall be made on a monthly

19 basis for the rental of the item during

20 the period of medical need (but pay21 ments under this clause may not ex22 tend over a period of continuous use

23 (as determined by the Secretary) of

24 longer than 13 months).
†

295

S 1932 ES

1 ‘‘(II) PAYMENT AMOUNT.—Sub2 ject to subparagraph (B), the amount

3 recognized for the item—

4 ‘‘(aa) for each of the first 3

5 months of such period is 10 per6 cent of the purchase price recog7 nized under paragraph (8) with

8 respect to the item; and

9 ‘‘(bb) for each of the re10 maining months of such period is

11 7.5 percent of such purchase

12 price.

13 ‘‘(ii) OWNERSHIP AFTER RENTAL.—

14 ‘‘(I) TRANSFER OF TITLE.—On

15 the first day that begins after the

16 13th continuous month during which

17 payment is made for the rental of an

18 item under clause (i), the supplier of

19 the item shall transfer title to the

20 item to the individual.

21 ‘‘(II) MAINTENANCE AND SERV22 ICING.—After the supplier transfers

23 title to the item under subclause (I),

24 maintenance and servicing payments

25 shall, if the Secretary determines such
†

296

S 1932 ES

1 payments are reasonable and nec2 essary, be made (for parts and labor

3 not covered by the supplier’s or manu4 facturer’s warranty, as determined by

5 the Secretary to be appropriate for

6 the particular type of durable medical

7 equipment), and such payments shall

8 be in an amount determined to be ap9 propriate by the Secretary.’’.

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

11 subsection (a) shall apply to items furnished for which the

12 first rental month occurs on or after January 1, 2006.

13 SEC. 6110. ESTABLISHMENT OF MEDICARE VALUE-BASED

14 PURCHASING PROGRAMS.

15 (a) IN GENERAL.—Title XVIII (42 U.S.C. 1395 et

16 seq.) is amended—

17 (1) by redesignating part E as part F; and

18 (2) by inserting after part D the following new

19 part:

20 ‘‘PART E—VALUE-BASED PURCHASING

21 ‘‘QUALITY MEASUREMENT SYSTEMS FOR VALUE-BASED

22 PURCHASING PROGRAMS

23 ‘‘SEC. 1860E–1. (a) ESTABLISHMENT.—

24 ‘‘(1) IN GENERAL.—The Secretary shall develop

25 quality measurement systems in accordance with
†

297

S 1932 ES

1 subsections (b), (c), (d), and (e), for purposes of

2 providing value-based payments to—

3 ‘‘(A) hospitals pursuant to section 1860E–

4 2;

5 ‘‘(B) physicians and practitioners pursuant

6 to section 1860E–3;

7 ‘‘(C) plans pursuant to section 1860E–4;

8 ‘‘(D) end stage renal disease providers and

9 facilities pursuant to section 1860E–5; and

10 ‘‘(E) home health agencies pursuant to

11 section 1860E–6.

12 ‘‘(2) QUALITY.—The systems developed under

13 paragraph (1) shall measure the quality of the care

14 furnished by the provider involved.

15 ‘‘(3) HIGH QUALITY HEALTH CARE DEFINED.—

16 In this part, the term ‘high quality health care’

17 means health care that is safe, effective, patient-cen18 tered, timely, equitable, efficient, necessary, and ap19 propriate.

20 ‘‘(b) REQUIREMENTS FOR SYSTEMS.—Under each

21 quality measurement system described in subsection

22 (a)(1), the Secretary shall do the following:

23 ‘‘(1) MEASURES.—

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (B), the Secretary shall select measures
†

298

S 1932 ES

1 of quality to be used by the Secretary under

2 each system.

3 ‘‘(B) REQUIREMENTS.—In selecting the

4 measures to be used under each system pursu5 ant to subparagraph (A), the Secretary shall, to

6 the extent feasible and practicable, ensure

7 that—

8 ‘‘(i) such measures are evidence9 based, reliable and valid, actionable, and

10 reasonable to collect and report;

11 ‘‘(ii) measures of process, structure,

12 outcomes, and beneficiary experience of

13 care are included;

14 ‘‘(iii) except for the system that is

15 used to provide value-based payments to

16 physicians and practitioners under section

17 1860E–3, measures of efficiency (where ef18 ficiency is improved quality care through

19 the effective use of resources) are included;

20 ‘‘(iv) measures of overuse and

21 underuse of health care items and services

22 are included;

23 ‘‘(v)(I) at least 1 measure of health

24 information technology infrastructure that

25 enables the provision of high quality health
†

299

S 1932 ES

1 care and facilitates the exchange of health

2 information, such as the use of 1 or more

3 elements of a qualified health information

4 system (as defined in subparagraph (E)),

5 is included during the first year each sys6 tem is implemented; and

7 ‘‘(II) additional measures of health in8 formation technology infrastructure are in9 cluded in subsequent years;

10 ‘‘(vi) in the case of the system that is

11 used to provide value-based payments to

12 hospitals under section 1860E–2, by not

13 later than January 1, 2008, at least 5

14 measures that take into account the unique

15 characteristics of small hospitals located in

16 rural areas and frontier areas are included;

17 and

18 ‘‘(vii) measures that assess the quality

19 of care furnished to frail individuals over

20 the age of 75 and to individuals with mul21 tiple complex chronic conditions are in22 cluded.

23 ‘‘(C) REQUIREMENT FOR COLLECTION OF

24 DATA ON A MEASURE FOR 1 YEAR PRIOR TO

25 USE UNDER THE SYSTEMS.—Data on any
†

300

S 1932 ES

1 measure selected by the Secretary under sub2 paragraph (A) must be collected by the Sec3 retary for at least a 12-month period before

4 such measure may be used to determine wheth5 er a provider receives a value-based payment

6 under a program described in subsection (a)(1).

7 ‘‘(D) AUTHORITY TO VARY MEASURES.—

8 The Secretary may vary the measures selected

9 under subparagraph (A) by the entity or indi10 vidual involved based on factors such as the

11 type of, the size of, and the scope and volume

12 of services provided by, the entity or individual.

13 If the Secretary varies the measures for pro14 viders under the preceding sentence, the Sec15 retary shall ensure that such measures are

16 aligned to promote coordinated quality of care

17 across provider settings.

18 ‘‘(E) QUALIFIED HEALTH INFORMATION

19 SYSTEM DEFINED.—For purposes of subpara20 graph (B)(iv)(I), the term ‘qualified health in21 formation system’ means a computerized sys22 tem (including hardware, software, and train23 ing) that—
†

301

S 1932 ES

1 ‘‘(i) protects the privacy and security

2 of health information and properly

3 encrypts such health information;

4 ‘‘(ii) maintains and provides access to

5 patients’ health records in an electronic

6 format;

7 ‘‘(iii) incorporates decision support

8 software to reduce medical errors and en9 hance health care quality;

10 ‘‘(iv) is consistent with data standards

11 and certification processes recommended

12 by the Secretary;

13 ‘‘(v) allows for the reporting of quality

14 measures; and

15 ‘‘(vi) includes other features deter16 mined appropriate by the Secretary.

17 ‘‘(2) WEIGHTS OF MEASURES.—The Secretary

18 shall assign weights to the measures used by the

19 Secretary under each system. If the Secretary deter20 mines appropriate, in assigning the weights under

21 the preceding sentence, some measures may be

22 weighted more heavily than other measures.

23 ‘‘(3) RISK ADJUSTMENT.—The Secretary shall

24 establish procedures, as appropriate, to control for

25 differences in beneficiary health status and bene-
†

302

S 1932 ES

1 ficiary characteristics. To the extent feasible, such

2 procedures may be based on existing models for con3 trolling for such differences.

4 ‘‘(4) MAINTENANCE.—

5 ‘‘(A) IN GENERAL.—The Secretary shall,

6 as determined appropriate, but not more often

7 than once each 12-month period, review and re8 vise each system, including through—

9 ‘‘(i) the refinement of measures under

10 the systems and the retirement of existing

11 outdated measures under the system;

12 ‘‘(ii) the refinement of the weights as13 signed to measures under the system; and

14 ‘‘(iii) the refinement of the risk ad15 justment procedures established pursuant

16 to paragraph (3) under the system.

17 ‘‘(B) REVISION SHALL ALLOW FOR COM18 PARISON OF DATA.—Each revision under sub19 paragraph (A) of a quality measurement system

20 shall allow for the comparison of data from one

21 year to the next for purposes of providing

22 value-based payments under the programs de23 scribed in subsection (a)(1).

24 ‘‘(5) USE OF MOST RECENT QUALITY DATA.—
†

303

S 1932 ES

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

2 subparagraph (B), the Secretary shall use the

3 most recent quality data with respect to the

4 provider involved that is available to the Sec5 retary.

6 ‘‘(B) INSUFFICIENT DATA DUE TO LOW

7 VOLUME.—If the Secretary determines that

8 there is insufficient data with respect to a

9 measure or measures because of a low number

10 of services provided, the Secretary may aggre11 gate data across more than 1 fiscal or calendar

12 year, as the case may be.

13 ‘‘(c) REQUIREMENTS FOR DEVELOPING AND RE14 VIEWING AND REVISING THE SYSTEMS.—In developing

15 and reviewing and revising each quality measurement sys16 tem under this section, the Secretary shall—

17 ‘‘(1) consult with, and take into account the

18 recommendations of, the entity that the Secretary

19 has an arrangement with under subsection (e);

20 ‘‘(2) consult with provider-based groups, clinical

21 specialty societies, and certification boards;

22 ‘‘(3) take into account existing quality measure23 ment systems that have been developed through a

24 rigorous process of validation and with the involve-
†

304

S 1932 ES

1 ment of entities and persons described in subsection

2 (e)(2)(B); and

3 ‘‘(4) take into account—

4 ‘‘(A) each of the reports by the Medicare

5 Payment Advisory Commission that are re6 quired under section 1860E–3(a)(1);

7 ‘‘(B) the results of appropriate studies, re8 ports, and demonstration programs; and

9 ‘‘(C) the report by the Institute of Medi10 cine of the National Academy of Sciences under

11 section 238(b) of the Medicare Prescription

12 Drug, Improvement, and Modernization Act of

13 2003 (Public Law 108–173).

14 ‘‘(d) REQUIREMENTS FOR IMPLEMENTING THE SYS15 TEMS.—In implementing each quality measurement sys16 tem under this section, the Secretary shall consult with

17 entities—

18 ‘‘(1) that have joined together to develop strate19 gies for quality measurement and reporting, includ20 ing the feasibility of collecting and reporting mean21 ingful data on quality measures; and

22 ‘‘(2) that involve representatives of health care

23 providers, health plans, consumers, employers, pur24 chasers, quality experts, government agencies, and
†

305

S 1932 ES

1 other individuals and groups that are interested in

2 quality of care.

3 ‘‘(e) ARRANGEMENT WITH AN ENTITY TO PROVIDE

4 ADVICE AND RECOMMENDATIONS.—

5 ‘‘(1) ARRANGEMENT.—On and after July 1,

6 2006, the Secretary shall have in place an arrange7 ment with an entity that meets the requirements de8 scribed in paragraph (2) under which such entity

9 provides the Secretary with advice on, and rec10 ommendations with respect to, the development and

11 review and revision of the quality measurement sys12 tems under this section, including the assigning of

13 weights to the measures under subsection (b)(2).

14 ‘‘(2) REQUIREMENTS DESCRIBED.—The re15 quirements described in this paragraph are the fol16 lowing:

17 ‘‘(A) The entity is a private nonprofit enti18 ty governed by an executive director and a

19 board.

20 ‘‘(B) The members of the entity include

21 representatives of—

22 ‘‘(i)(I) health plans and providers re23 ceiving reimbursement under this title for

24 the provision of items and services, includ25 ing health plans and providers with experi-
†

306

S 1932 ES

1 ence in the care of the frail elderly and in2 dividuals with multiple complex chronic

3 conditions; or

4 ‘‘(II) groups representing such health

5 plans and providers;

6 ‘‘(ii) groups representing individuals

7 receiving benefits under this title;

8 ‘‘(iii) purchasers and employers or

9 groups representing purchasers or employ10 ers;

11 ‘‘(iv) organizations that focus on qual12 ity improvement as well as the measure13 ment and reporting of quality measures;

14 ‘‘(v) organizations that certify and li15 cense such providers;

16 ‘‘(vi) State government health pro17 grams;

18 ‘‘(vii) persons skilled in the conduct

19 and interpretation of biomedical, health

20 services, and health economics research

21 and with expertise in outcomes and effec22 tiveness research and technology assess23 ment; and

24 ‘‘(viii) persons or entities involved in

25 the development and establishment of
†

307

S 1932 ES

1 standards and certification for health in2 formation technology systems and clinical

3 data.

4 ‘‘(C) The membership of the entity is rep5 resentative of individuals with experience

6 with—

7 ‘‘(i) urban health care issues;

8 ‘‘(ii) safety net health care issues; and

9 ‘‘(iii) rural and frontier health care

10 issues.

11 ‘‘(D) The entity does not charge a fee for

12 membership for participation in the work of the

13 entity related to the arrangement with the Sec14 retary under paragraph (1). If the entity does

15 require a fee for membership for participation

16 in other functions of the entity, there shall be

17 no linkage between such fee and participation

18 in the work of the entity related to such ar19 rangement with the Secretary.

20 ‘‘(E) The entity—

21 ‘‘(i) permits members described in

22 subparagraph (B) to vote on matters of

23 the entity related to the arrangement with

24 the Secretary under paragraph (1); and
†

308

S 1932 ES

1 ‘‘(ii) ensures that such members have

2 an equal vote on such matters.

3 ‘‘(F) With respect to matters related to the

4 arrangement with the Secretary under para5 graph (1), the entity conducts its business in an

6 open and transparent manner and provides the

7 opportunity for public comment.

8 ‘‘(G) The entity operates as a voluntary

9 consensus standards setting organization as de10 fined for purposes of section 12(d) of the Na11 tional Technology Transfer and Advancement

12 Act of 1995 (Public Law 104–113) and Office

13 of Management and Budget Revised Circular

14 A–119 (published in the Federal Register on

15 February 10, 1998).

16 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—

17 For the purpose of carrying out the provisions of

18 this subsection, there are authorized to be

19 appropriated—

20 ‘‘(A) for each of the fiscal years 2006 and

21 2007, $3,000,000; and

22 ‘‘(B) for fiscal year 2008 and each subse23 quent fiscal year, an amount equal to the sum

24 of—

25 ‘‘(i) $3,000,000; and
†

309

S 1932 ES

1 ‘‘(ii) such amount multiplied by the

2 percentage (if any) by which the average of

3 the Consumer Price Index for all urban

4 consumers (United States city average) for

5 the 12-month period ending with June of

6 the calendar year in which such fiscal year

7 begins exceeds such average for the 12-

8 month period ending with June 2006.

9 ‘‘PPS HOSPITAL VALUE-BASED PURCHASING PROGRAM

10 ‘‘SEC. 1860E–2. (a) PROGRAM.—

11 ‘‘(1) IN GENERAL.—The Secretary shall estab12 lish a program under which value-based payments

13 are provided each fiscal year to hospitals that dem14 onstrate the provision of high quality health care to

15 individuals who are entitled to benefits under part A

16 and are inpatients of the hospital.

17 ‘‘(2) PROGRAM TO BEGIN IN FISCAL YEAR

18 2007.—The Secretary shall establish the program

19 under this section so that value-based payments de20 scribed in subsection (b) are made with respect to

21 fiscal year 2007 and each subsequent fiscal year.

22 ‘‘(3) APPLICABILITY OF PROGRAM TO HOS23 PITALS.—For purposes of this section, the term

24 ‘hospital’ means a subsection (d) hospital (as defined

25 in section 1886(d)(1)(B)).

26 ‘‘(b) VALUE-BASED PAYMENTS.—
†

310

S 1932 ES

1 ‘‘(1) IN GENERAL.—Subject to paragraph (4),

2 the Secretary shall make a value-based payment to

3 a hospital with respect to a fiscal year if the Sec4 retary determines that the quality of the care pro5 vided in that year to individuals who are entitled to

6 benefits under part A and are inpatients of the

7 hospital—

8 ‘‘(A) has substantially improved (as deter9 mined by the Secretary) over the prior year; or

10 ‘‘(B) exceeds a threshold established by the

11 Secretary.

12 ‘‘(2) USE OF SYSTEM.—In determining which

13 hospitals qualify for a value-based payment under

14 paragraph (1), the Secretary shall use the quality

15 measurement system developed for this section pur16 suant to section 1860E–1(a).

17 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

18 AND ALLOCATION OF AWARDS.—

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

20 determine—

21 ‘‘(i) the amount of a value-based pay22 ment under paragraph (1) provided to a

23 hospital; and

24 ‘‘(ii) subject to subparagraph (B), the

25 allocation of the total amount available
†

311

S 1932 ES

1 under subsection (d) for value-based pay2 ments for any fiscal year between pay3 ments with respect to hospitals that meet

4 the requirement under subparagraph (A)

5 of paragraph (1) and hospitals that meet

6 the requirement under subparagraph (B)

7 of such paragraph.

8 ‘‘(B) REQUIREMENTS REGARDING THE

9 AMOUNT OF FUNDING AVAILABLE FOR VALUE10 BASED PAYMENTS FOR HOSPITALS EXCEEDING

11 A THRESHOLD.—The Secretary shall ensure

12 that—

13 ‘‘(i) a majority of the total amount

14 available under subsection (d) for value15 based payments for any fiscal year is pro16 vided to hospitals that are receiving such

17 payments because they meet the require18 ment under paragraph (1)(B); and

19 ‘‘(ii) with respect to fiscal year 2008

20 and each subsequent fiscal year, the per21 centage of the total amount available

22 under subsection (d) for value-based pay23 ments for any fiscal year that is used to

24 make payments to hospitals that meet such
†

312

S 1932 ES

1 requirement is greater than such percent2 age in the previous fiscal year.

3 ‘‘(4) REQUIREMENTS.—

4 ‘‘(A) REQUIRED SUBMISSION OF DATA.—

5 In order for a hospital to be eligible for a value6 based payment for a fiscal year, the hospital

7 must have complied with the requirements

8 under section 1886(b)(3)(B)(viii)(II) with re9 spect to that fiscal year.

10 ‘‘(B) ATTESTATION REGARDING DATA.—In

11 order for a hospital to be eligible for a value12 based payment for a fiscal year, the hospital

13 must have provided the Secretary (under proce14 dures established by the Secretary) with an at15 testation that the data submitted under section

16 1886(b)(3)(B)(viii)(II) for the fiscal year is

17 complete and accurate.

18 ‘‘(5) TOTAL AMOUNT OF VALUE-BASED PAY19 MENTS EQUAL TO TOTAL AMOUNT OF AVAILABLE

20 FUNDING.—The Secretary shall establish payment

21 amounts under paragraph (3)(A) so that, as esti22 mated by the Secretary, the total amount of value23 based payments made in a fiscal year under para24 graph (1) is equal to the total amount available

25 under subsection (d) for such payments for the year.
†

313

S 1932 ES

1 ‘‘(6) PAYMENT METHODS AND TIMING OF PAY2 MENTS.—

3 ‘‘(A) IN GENERAL.—Subject to subpara4 graph (B), the payment of value-based pay5 ments under paragraph (1) shall be based on

6 such a method as the Secretary determines ap7 propriate.

8 ‘‘(B) TIMING.—The Secretary shall ensure

9 that value-based payments under paragraph (1)

10 with respect to a fiscal year are made by not

11 later than the close of the following fiscal year.

12 ‘‘(c) DESCRIPTION OF HOW HOSPITALS WOULD

13 HAVE FARED UNDER PROGRAM.—Not later than Janu14 ary 1, 2007, the Secretary shall provide each hospital with

15 a description of the Secretary’s estimate of how payments

16 to the hospital under this title would have been affected

17 with respect to items and services furnished during a pe18 riod, as determined by the Secretary, if the program under

19 this section (and the amendments made by paragraphs (1)

20 and (2) of section 6110(b) of the Deficit Reduction Omni21 bus Reconciliation Act of 2005) had been in effect with

22 respect to that period.

23 ‘‘(d) FUNDING.—

24 ‘‘(1) AMOUNT.—The amount available for

25 value-based payments under this section with respect
†

314

S 1932 ES

1 to a fiscal year shall be equal to the amount of the

2 reduction in expenditures under the Federal Hos3 pital Insurance Trust Fund under section 1817 in

4 the year as a result of the amendments made by sec5 tion 6110(b)(2) of the Deficit Reduction Omnibus

6 Reconciliation Act of 2005, as estimated by the Sec7 retary.

8 ‘‘(2) PAYMENTS FROM TRUST FUND.—Pay9 ments to hospitals under this section shall be made

10 from the Federal Hospital Insurance Trust Fund.

11 ‘‘PHYSICIAN AND PRACTITIONER VALUE-BASED

12 PURCHASING PROGRAM

13 ‘‘SEC. 1860E–3. (a) PROGRAM.—

14 ‘‘(1) IN GENERAL.—The Secretary shall estab15 lish a program under which value-based payments

16 are provided each year to physicians and practi17 tioners that demonstrate the provision of high qual18 ity health care to individuals enrolled under part B

19 and the Medicare Payment Advisory Commission

20 shall (A) conduct a study, and submit to Congress

21 and the Secretary an initial report by not later than

22 March 1, 2008, and a final report by not later than

23 June 1, 2012, on how the Medicare value-based pur24 chasing programs under this part will impact Medi25 care beneficiaries, Medicare providers, and Medicare

26 financing, including how such programs will impact
†

315

S 1932 ES

1 the access of such beneficiaries to items and services

2 under this title, the volume and utilization of such

3 items and services, and low-volume providers; and

4 (B) conduct a study, and submit to Congress and

5 the Secretary a report by not later than March 1,

6 2007, on the advisability and feasibility of estab7 lishing a value-based purchasing program under the

8 this title for critical access hospitals (as defined in

9 section 1861(mm)(1)); and (C) conduct a study, and

10 submit to Congress and the Secretary a report by

11 not later than June 1, 2007, on the advisability and

12 feasibility of including renal dialysis facilities de13 scribed in subsection (a)(3)(A) of section 1860E–5

14 in the value-based purchasing program under such

15 section 1860E–5 or establishing a value-based pur16 chasing program under this title for such facilities;

17 (D) taking into account the results to date of the

18 demonstration of bundled case-mix adjusted pay19 ment system for ESRD services under section

20 623(e) of the Medicare Prescription Drug, Improve21 ment, and Modernization Act of 2003, conduct a

22 study, and submit to Congress and the Secretary a

23 report by not later than June 1, 2008, on the imple24 mentation of the ESRD provider and facility value25 based purchasing program under section 1860E–5,
†

316

S 1932 ES

1 including issues for the Secretary to consider in op2 erating the ESRD provider and facility value-based

3 purchasing program and recommendations on such

4 issues; and (E) conduct a study, and submit to Con5 gress and the Secretary a report by not later than

6 June 1, 2007, on the advisability and feasibility of

7 establishing a value-based purchasing program

8 under this title for skilled nursing facilities (as de9 fined in section 1819(a)).

10 ‘‘(2) PROGRAM TO BEGIN IN 2009.—The Sec11 retary shall establish the program under this section

12 so that value-based payments described in subsection

13 (b) are made with respect to 2009 and each subse14 quent year.

15 ‘‘(3) DEFINITION OF PHYSICIAN AND PRACTI16 TIONER.—In this section:

17 ‘‘(A) PHYSICIAN.—The term ‘physician’

18 has the meaning given that term in section

19 1861(r).

20 ‘‘(B) PRACTITIONER.—The term ‘practi21 tioner’ means—

22 ‘‘(i) a practitioner described in section

23 1842(b)(18)(C);

24 ‘‘(ii) a physical therapist (as described

25 in section 1861(p));
†

317

S 1932 ES

1 ‘‘(iii) an occupational therapist (as so

2 described); and

3 ‘‘(iv) a qualified speech-language pa4 thologist (as defined in section

5 1861(ll)(3)(A)).

6 ‘‘(4) IDENTIFICATION OF PHYSICIANS AND

7 PRACTITIONERS.—For purposes of applying this sec8 tion and paragraphs (4)(G) and (6) of section

9 1848(d), the Secretary shall establish procedures for

10 the identification of physicians and practitioners,

11 such as through physician or practitioner billing

12 units or other units, provider identification numbers,

13 taxpayer identification numbers, the National Pro14 vider Identifier, and unique physician identifier

15 numbers.

16 ‘‘(b) VALUE-BASED PAYMENTS.—

17 ‘‘(1) IN GENERAL.—Subject to paragraph (4),

18 the Secretary shall make a value-based payment to

19 a physician or a practitioner with respect to a year

20 if the Secretary determines that both the quality of

21 the care and the efficiency of the care provided in

22 that year by the physician or practitioner to individ23 uals enrolled under part B—

24 ‘‘(A) has substantially improved (as deter25 mined by the Secretary) over the prior year; or
†

318

S 1932 ES

1 ‘‘(B) exceeds a threshold established by the

2 Secretary.

3 ‘‘(2) USE OF SYSTEMS AND DATA.—

4 ‘‘(A) IN GENERAL.—In determining which

5 physicians and practitioners qualify for a value6 based payment under paragraph (1), the Sec7 retary shall use—

8 ‘‘(i) the quality measurement system

9 developed for this section pursuant to sec10 tion 1860E–1(a) with respect to the qual11 ity of the care provided by the physician or

12 practitioner; and

13 ‘‘(ii) the comparative utilization sys14 tem developed under subsection (c) with

15 respect to the efficiency and appropriate16 ness of such care.

17 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

18 AND ALLOCATION OF AWARDS.—

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

20 determine—

21 ‘‘(i) the amount of a value-based pay22 ment under paragraph (1) provided to a

23 physician or a practitioner; and

24 ‘‘(ii) subject to subparagraph (B), the

25 allocation of the total amount available
†

319

S 1932 ES

1 under subsection (e) for value-based pay2 ments for any year between payments with

3 respect to physicians and practitioners that

4 meet the requirement under subparagraph

5 (A) of paragraph (1) and physicians and

6 practitioners that meet the requirement

7 under subparagraph (B) of such para8 graph.

9 ‘‘(B) REQUIREMENTS REGARDING THE

10 AMOUNT OF FUNDING AVAILABLE FOR VALUE11 BASED PAYMENTS FOR PHYSICIANS AND PRAC12 TITIONERS EXCEEDING A THRESHOLD.—The

13 Secretary shall ensure that—

14 ‘‘(i) a majority of the total amount

15 available under subsection (e) for value16 based payments for any year is provided to

17 physicians and practitioners that are re18 ceiving such payments because they meet

19 the requirement under paragraph (1)(B);

20 and

21 ‘‘(ii) with respect to 2010 and each

22 subsequent year, the percentage of the

23 total amount available under subsection (e)

24 for value-based payments for any year that

25 is used to make payments to physicians
†

320

S 1932 ES

1 and practitioners that meet such require2 ment is greater than such percentage in

3 the previous year.

4 ‘‘(4) REQUIREMENTS.—

5 ‘‘(A) REQUIRED SUBMISSION OF DATA.—

6 In order for a physician or a practitioner to be

7 eligible for a value-based payment for a year,

8 the physician or practitioner must have com9 plied with the requirements under section

10 1848(d)(6)(B)(ii) with respect to that year.

11 ‘‘(B) ATTESTATION REGARDING DATA.—In

12 order for a physician or a practitioner to be eli13 gible for a value-based payment for a year, the

14 physician or practitioner must have provided

15 the Secretary (under procedures established by

16 the Secretary) with an attestation that the data

17 submitted under section 1848(d)(6)(B)(ii) with

18 respect to that year is complete and accurate.

19 ‘‘(5) TOTAL AMOUNT OF VALUE-BASED PAY20 MENTS EQUAL TO TOTAL AMOUNT OF AVAILABLE

21 FUNDING.—The Secretary shall establish payment

22 amounts under paragraph (3)(A) so that, as esti23 mated by the Secretary, the total amount of value24 based payments made in a year under paragraph (1)
†

321

S 1932 ES

1 is equal to the total amount available under sub2 section (e) for such payments for the year.

3 ‘‘(6) PAYMENT METHODS AND TIMING OF PAY4 MENTS.—

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), the payment of value-based pay7 ments under paragraph (1) shall be based on

8 such a method as the Secretary determines ap9 propriate.

10 ‘‘(B) TIMING.—The Secretary shall ensure

11 that value-based payments under paragraph (1)

12 with respect to a year are made by not later

13 than December 31 of the subsequent year.

14 ‘‘(c) COMPARATIVE UTILIZATION SYSTEM.—

15 ‘‘(1) DEVELOPMENT.—The Secretary, in con16 sultation with relevant stakeholders, shall develop a

17 comparative utilization system for purposes of pro18 viding value-based payments under subsection (b).

19 ‘‘(2) MEASURES OF EFFICIENCY AND APPRO20 PRIATENESS OF CARE.—The comparative utilization

21 system developed under paragraph (1) shall measure

22 the efficiency and appropriateness of the care pro23 vided by a physician or practitioner.
†

322

S 1932 ES

1 ‘‘(3) REQUIREMENTS FOR SYSTEM.—Under the

2 comparative utilization system described in para3 graph (1), the Secretary shall do the following:

4 ‘‘(A) MEASURES.—The Secretary shall se5 lect measures of efficiency appropriateness to

6 be used by the Secretary under the system. The

7 Secretary may vary the measures selected under

8 the preceding sentence by the type or specialty

9 of the physician or practitioner. If the Secretary

10 varies the measures for providers under the pre11 ceding sentence, the Secretary shall ensure that

12 such measures are aligned to promote coordi13 nated quality of care across provider settings.

14 ‘‘(B) USE OF CLAIMS DATA FOR UTILIZA15 TION PATTERNS.—

16 ‘‘(i) REVIEW OF CLAIMS DATA.—The

17 Secretary shall review claims data with re18 spect to services furnished or ordered by

19 physicians and practitioners.

20 ‘‘(ii) USE OF MOST RECENT CLAIMS

21 DATA.—The Secretary shall use the most

22 recent claims data with respect to the phy23 sician or practitioner that is available to

24 the Secretary.
†

323

S 1932 ES

1 ‘‘(C) RISK ADJUSTMENT.—The Secretary

2 shall establish procedures, as appropriate, to

3 control for differences in beneficiary health sta4 tus and beneficiary characteristics.

5 ‘‘(4) ANNUAL REPORTS.—Beginning in 2007,

6 the Secretary shall provide physicians and practi7 tioners with annual reports on the utilization of

8 items and services under this title based upon the

9 review of claims data under paragraph (3)(B). With

10 respect to reports provided in 2007 and 2008, such

11 reports are confidential and the Secretary shall not

12 make such reports available to the public.

13 ‘‘(d) DESCRIPTION OF HOW PHYSICIANS AND PRAC14 TITIONERS WOULD HAVE FARED UNDER PROGRAM.—

15 Not later than March 1, 2009, the Secretary shall provide

16 each physician and practitioner with a description of the

17 Secretary’s estimate of how payments to the physician or

18 practitioner under this title would have been affected with

19 respect to items and services furnished during a period,

20 as determined by the Secretary, if the program under this

21 section (and the amendments made by paragraphs (1) and

22 (2) of section 6110(c) of the Deficit Reduction Omnibus

23 Reconciliation Act of 2005) had been in effect with respect

24 to that period.

25 ‘‘(e) FUNDING.—
†

324

S 1932 ES

1 ‘‘(1) AMOUNT.—The amount available for

2 value-based payments under this section with respect

3 to a year shall be equal to the amount of the reduc4 tion in expenditures under the Federal Supple5 mentary Medical Insurance Trust Fund under sec6 tion 1841 in the year as a result of the amendments

7 made by section 6110(c)(2) of the Deficit Reduction

8 Omnibus Reconciliation Act of 2005, as estimated

9 by the Secretary.

10 ‘‘(2) PAYMENTS FROM TRUST FUND.—Pay11 ments to physicians and practitioners under this sec12 tion shall be made from the Federal Supplementary

13 Medical Insurance Trust Fund.

14 ‘‘PLAN VALUE-BASED PURCHASING PROGRAM

15 ‘‘SEC. 1860E–4. (a) PROGRAM.—

16 ‘‘(1) IN GENERAL.—The Secretary shall estab17 lish a program under which value-based payments

18 are provided each year to Medicare Advantage orga19 nizations offering Medicare Advantage plans under

20 part C that demonstrate the provision of high qual21 ity health care to enrollees under the plan.

22 ‘‘(2) PROGRAM TO BEGIN IN 2009.—The Sec23 retary shall establish the program under this section

24 so that value-based payments under subsection (b)

25 are made with respect to 2009 and each subsequent

26 year.
†

325

S 1932 ES

1 ‘‘(3) DEFINITIONS OF MEDICARE ADVANTAGE

2 ORGANIZATION AND PLAN.—

3 ‘‘(A) IN GENERAL.—In this section:

4 ‘‘(i) MEDICARE ADVANTAGE ORGANI5 ZATION.—The term ‘Medicare Advantage

6 organization’ has the meaning given such

7 term in section 1859(a)(1).

8 ‘‘(ii) MEDICARE ADVANTAGE PLAN.—

9 The term ‘Medicare Advantage plan’ has

10 the meaning given such term in section

11 1859(b)(1).

12 ‘‘(B) APPLICABILITY OF PROGRAM TO

13 MEDICARE ADVANTAGE REGIONAL AND LOCAL

14 PLANS.—For purposes of this section, the term

15 ‘Medicare Advantage plan’ shall include both

16 Medicare Advantage regional plans (as defined

17 in section 1859(b)(4)) and Medicare Advantage

18 local plans (as defined in section 1859(b)(5)).

19 ‘‘(C) APPLICABILITY OF PROGRAM TO REA20 SONABLE COST CONTRACTS.—Except for para21 graphs (5) and (6) of subsection (b), for pur22 poses of this section, the terms—

23 ‘‘(i) ‘Medicare Advantage organiza24 tion’ and ‘organization’ include an organi25 zation that is providing benefits under a
†

326

S 1932 ES

1 reasonable cost reimbursement contract

2 under section 1876(h); and

3 ‘‘(ii) ‘Medicare Advantage plan’ and

4 ‘plan’ include such a contract.

5 ‘‘(b) VALUE-BASED PAYMENTS.—

6 ‘‘(1) IN GENERAL.—Subject to paragraph (4),

7 the Secretary shall make value-based payments to

8 Medicare Advantage organizations with respect to

9 each Medicare Advantage plan offered by the organi10 zation during a year if the Secretary determines that

11 the quality of the care provided under the plan—

12 ‘‘(A) has substantially improved (as deter13 mined by the Secretary) over the prior year; or

14 ‘‘(B) exceeds a threshold established by the

15 Secretary.

16 ‘‘(2) USE OF SYSTEM.—In determining which

17 organizations offering Medicare Advantage plans

18 qualify for a value-based payment under paragraph

19 (1), the Secretary shall—

20 ‘‘(A) use the quality measurement system

21 developed for this section pursuant to section

22 1860E–1(a); and

23 ‘‘(B) ensure that awards are based on data

24 from a full 12-month period (or 24-month pe25 riod in the case of an award described in para-
†

327

S 1932 ES

1 graph (1)(A)), such periods determined without

2 regard to calendar year periods.

3 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

4 AND ALLOCATION OF AWARDS.—

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

6 determine—

7 ‘‘(i) the amount of a value-based pay8 ment under paragraph (1) provided to an

9 organization with respect to a plan; and

10 ‘‘(ii) subject to subparagraph (B), the

11 allocation of the total amount available

12 under subsection (d) for value-based pay13 ments for any year between payments with

14 respect to plans that meet the requirement

15 under subparagraph (A) of paragraph (1)

16 and plans that meet the requirement under

17 subparagraph (B) of such paragraph.

18 ‘‘(B) REQUIREMENT REGARDING THE

19 AMOUNT OF FUNDING AVAILABLE FOR VALUE20 BASED PAYMENTS FOR PLANS EXCEEDING A

21 THRESHOLD.—The Secretary shall ensure

22 that—

23 ‘‘(i) a majority of the total amount

24 available under subsection (d) for value25 based payments for any year is provided to
†

328

S 1932 ES

1 organizations, with respect to plans offered

2 by such organizations, that are receiving

3 such payments because they meet the re4 quirement under paragraph (1)(B); and

5 ‘‘(ii) with respect to 2010 and each

6 subsequent year, the percentage of the

7 total amount available under subsection (d)

8 for value-based payments for any year that

9 is used to make payments to organizations,

10 with respect to plans offered by such orga11 nizations, that meet such requirement is

12 greater than such percentage in the pre13 vious year.

14 ‘‘(4) USE OF PAYMENTS.—Value-based pay15 ments received under this section may only be used

16 for the following purposes:

17 ‘‘(A) To invest in quality improvement pro18 grams operated by the organization with respect

19 to the plan.

20 ‘‘(B) To enhance beneficiary benefits under

21 the plan.

22 ‘‘(5) REQUIRED SUBMISSION OF DATA.—In

23 order for an organization to be eligible for a value24 based payment for a year with respect to a Medicare

25 Advantage plan or a reasonable cost contract, the
†

329

S 1932 ES

1 organization must have provided for the collection,

2 analysis, and reporting of data pursuant to sections

3 1852(e)(3) (or submitted the data under section

4 1876(h)(6) in the case of a reasonable cost contract)

5 with respect to the plan or contract for the 2 years

6 preceding that year.

7 ‘‘(6) NO EFFECT ON MEDICARE ADVANTAGE

8 PLAN BIDS.—In order for a Medicare Advantage or9 ganization to be eligible for a value-based payment

10 for a year with respect to a Medicare Advantage

11 plan, the organization must have provided the Sec12 retary with an attestation that the program under

13 this section, including the payment adjustments

14 made by reason of the amendments made by section

15 6110(d)(2)(A) of the Deficit Reduction Omnibus

16 Reconciliation Act of 2005, had no effect on the in17 tegrity and actuarial soundness of the bid submitted

18 under section 1854 for the plan for the year.

19 ‘‘(7) TOTAL AMOUNT OF VALUE-BASED PAY20 MENTS EQUAL TO TOTAL AMOUNT OF REDUCTION IN

21 PAYMENTS.—The Secretary shall establish payment

22 amounts under paragraph (3)(A) so that, as esti23 mated by the Secretary, the total amount of value24 based payments made in a year under paragraph (1)
†

330

S 1932 ES

1 is equal to the total amount available under sub2 section (d) for such payments for the year.

3 ‘‘(8) PAYMENT METHODS AND TIMING OF PAY4 MENTS.—

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (B), the payment of value-based pay7 ments under paragraph (1) shall be based on

8 such a method as the Secretary determines ap9 propriate.

10 ‘‘(B) TIMING.—The Secretary shall ensure

11 that value-based payments under paragraph (1)

12 with respect to a year are made by not later

13 than March 1 of the subsequent year.

14 ‘‘(c) DESCRIPTION OF HOW PLANS WOULD HAVE

15 FARED UNDER PROGRAM—Not later than March 1, 2009,

16 the Secretary shall provide each Medicare Advantage orga17 nization offering a Medicare Advantage plan with a de18 scription of the Secretary’s estimate of how payments

19 under this title to such organization with respect to the

20 plan for a period, as determined by the Secretary, would

21 have been affected if the program under this section (and

22 the amendments made by section 6110(d) of the Deficit

23 Reduction Omnibus Reconciliation Act of 2005) had been

24 in effect with respect to that period.

25 ‘‘(d) FUNDING.—
†

331

S 1932 ES

1 ‘‘(1) AMOUNT.—The amount available for

2 value-based payments under this section with respect

3 to a year shall be equal to the amount of the reduc4 tion in expenditures under the Federal Hospital In5 surance Trust Fund under section 1817 and the

6 Federal Supplementary Medical Insurance Trust

7 Fund under section 1841 in the year as a result of

8 the amendments made by section 6110(d)(2) of the

9 Deficit Reduction Omnibus Reconciliation Act of

10 2005, as estimated by the Secretary.

11 ‘‘(2) PAYMENTS FROM TRUST FUNDS.—Pay12 ments to organizations under this section shall be

13 made from the Federal Hospital Insurance Trust

14 Fund and the Federal Supplementary Medical In15 surance Trust Fund in the same proportion as pay16 ments to Medicare Advantage organizations are

17 made from such Trust Funds under the first sen18 tence of section 1853(f).

19 ‘‘ESRD PROVIDER AND FACILITY VALUE-BASED

20 PURCHASING PROGRAM

21 ‘‘SEC. 1860E–5. (a) PROGRAM.—

22 ‘‘(1) IN GENERAL.—The Secretary shall estab23 lish a program under which value-based payments

24 are provided each year to providers of services and

25 renal dialysis facilities that—
†

332

S 1932 ES

1 ‘‘(A) provide items and services to individ2 uals with end stage renal disease who are en3 rolled under part B; and

4 ‘‘(B) demonstrate the provision of high

5 quality health care to such individuals.

6 ‘‘(2) PROGRAM TO BEGIN IN 2007.—The Sec7 retary shall establish the program under this section

8 so that value-based payments described in subsection

9 (b) are made with respect to 2007 and each subse10 quent year.

11 ‘‘(3) EXCLUSIONS FROM PROGRAM.—

12 ‘‘(A) PEDIATRIC FACILITIES.—Any renal

13 dialysis facility at least 50 percent of whose pa14 tients are individuals under 18 years of age

15 shall not be included in the program under this

16 section.

17 ‘‘(B) PROVIDERS AND FACILITIES CUR18 RENTLY PARTICIPATING IN BUNDLED CASE-MIX

19 DEMONSTRATION NOT INCLUDED IN PRO20 GRAM.—Any provider of services or renal dialy21 sis facility that is currently participating in the

22 bundled case-mix adjusted payment system for

23 ESRD services demonstration project under

24 section 623(e) of the Medicare Prescription

25 Drug, Improvement, and Modernization Act of
†

333

S 1932 ES

1 2003 (Public Law 108–173) shall not be in2 cluded in the program under this section, but

3 only for so long as the provider or facility is so

4 participating.

5 ‘‘(b) VALUE-BASED PAYMENTS.—

6 ‘‘(1) IN GENERAL.—Subject to paragraph (4),

7 the Secretary shall make a value-based payment to

8 a provider of services or a renal dialysis facility with

9 respect to a year if the Secretary determines that

10 the quality of the care provided in that year by the

11 provider or facility to individuals with end stage

12 renal disease who are enrolled under part B—

13 ‘‘(A) has substantially improved (as deter14 mined by the Secretary) over the prior year; or

15 ‘‘(B) exceeds a threshold established by the

16 Secretary.

17 ‘‘(2) USE OF SYSTEM.—In determining which

18 providers of services and renal dialysis facilities

19 qualify for a value-based payment under paragraph

20 (1), the Secretary shall use the quality measurement

21 system developed for this section pursuant to section

22 1860E–1(a).

23 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

24 AND ALLOCATION OF AWARDS.—
†

334

S 1932 ES

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

2 determine—

3 ‘‘(i) the amount of a value-based pay4 ment under paragraph (1) provided to a

5 provider of services or a renal dialysis fa6 cility; and

7 ‘‘(ii) subject to subparagraphs (B)

8 and (C), the allocation of the total amount

9 available under subsection (c) for value10 based payments for any year between pay11 ments with respect to providers and facili12 ties that meet the requirement under sub13 paragraph (A) of paragraph (1) and pro14 viders and facilities that meet the require15 ment under subparagraph (B) of such

16 paragraph.

17 ‘‘(B) REQUIREMENT REGARDING AMOUNT

18 OF FUNDING AVAILABLE FOR VALUE-BASED

19 PAYMENTS FOR PROVIDERS AND FACILITIES

20 EXCEEDING A THRESHOLD.—The Secretary

21 shall ensure that—

22 ‘‘(i) a majority of the total amount

23 available under subsection (c) for value24 based payments for any year is provided to

25 providers of services and renal dialysis fa-
†

335

S 1932 ES

1 cilities that are receiving such payments

2 because they meet the requirement under

3 paragraph (1)(B); and

4 ‘‘(ii) with respect to 2009 and each

5 subsequent year, the percentage of the

6 total amount available under subsection (c)

7 for value-based payments for any year that

8 is used to make payments to providers and

9 facilities that meet such requirement is

10 greater than such percentage in the pre11 vious year.

12 ‘‘(C) ONLY VALUE-BASED PAYMENTS FOR

13 PROVIDERS AND FACILITIES EXCEEDING A

14 THRESHOLD IN 2007.—With respect to 2007,

15 the entire amount available under subsection (c)

16 for value-based payments for that year shall be

17 used to make payments to providers of services

18 and renal dialysis facilities that meet the re19 quirement under paragraph (1)(B).

20 ‘‘(4) REQUIREMENTS.—

21 ‘‘(A) REQUIRED SUBMISSION OF DATA.—

22 ‘‘(i) IN GENERAL.—In order for a pro23 vider of services or a renal dialysis facility

24 to be eligible for a value-based payment for

25 a year, the provider or facility must have
†

336

S 1932 ES

1 provided for the submission of data in ac2 cordance with clause (ii) with respect to

3 that year.

4 ‘‘(ii) SUBMISSION OF DATA.—For

5 2007 and each subsequent year, each pro6 vider of services and renal dialysis facility

7 that receives payments under paragraph

8 (12) shall submit to the Secretary such

9 data that the Secretary determines is ap10 propriate for the measurement of health

11 outcomes and other indices of quality, in12 cluding data necessary for the operation of

13 the program under this section. Such data

14 shall be submitted in a form and manner,

15 and at a time, specified by the Secretary

16 for purposes of this clause.

17 ‘‘(iii) AVAILABILITY TO THE PUB18 LIC.—The Secretary shall establish proce19 dures for making data submitted under

20 clause (ii) available to the public in a clear

21 and understandable form. Such procedures

22 shall ensure that a provider or facility has

23 the opportunity to review the data that is

24 to be made public with respect to the pro-
†

337

S 1932 ES

1 vider or facility prior to such data being

2 made public.

3 ‘‘(B) ATTESTATION REGARDING DATA.—In

4 order for a provider of services or a renal dialy5 sis facility to be eligible for a value-based pay6 ment for a year, the provider or facility must

7 have provided the Secretary (under procedures

8 established by the Secretary) with an attesta9 tion that the data submitted under subpara10 graph (A)(ii) for the year is complete and accu11 rate.

12 ‘‘(5) TOTAL AMOUNT OF VALUE-BASED PAY13 MENTS EQUAL TO TOTAL AMOUNT OF AVAILABLE

14 FUNDING.—The Secretary shall establish payment

15 amounts under paragraph (3)(A) so that, as esti16 mated by the Secretary, the total amount of value17 based payments made in a year under paragraph (1)

18 is equal to the total amount available under sub19 section (c) for such payments for the year.

20 ‘‘(6) PAYMENT METHODS AND TIMING OF PAY21 MENTS.—

22 ‘‘(A) IN GENERAL.—Subject to subpara23 graph (B), the payment of value-based pay24 ments under paragraph (1) shall be based on
†

338

S 1932 ES

1 such a method as the Secretary determines ap2 propriate.

3 ‘‘(B) TIMING.—The Secretary shall ensure

4 that value-based payments under paragraph (1)

5 with respect to a year are made by not later

6 than December 31 of the subsequent year.

7 ‘‘(c) FUNDING.—

8 ‘‘(1) AMOUNT.—The amount available for

9 value-based payments under this section with respect

10 to a year shall be equal to the amount of the reduc11 tion in expenditures under the Federal Supple12 mentary Medical Insurance Trust Fund under sec13 tion 1841 in the year by reason of the application

14 of section 1881(b)(12)(G), as estimated by the Sec15 retary.

16 ‘‘(2) PAYMENTS FROM TRUST FUND.—Pay17 ments to providers of services and renal dialysis fa18 cilities under this section shall be made from the

19 Federal Supplementary Medical Insurance Trust

20 Fund.

21 ‘‘HOME HEALTH AGENCY VALUE-BASED PURCHASING

22 PROGRAM

23 ‘‘SEC. 1860E–6. (a) PROGRAM.—

24 ‘‘(1) IN GENERAL.—The Secretary shall estab25 lish a program under which value-based payments

26 are provided each year to home health agencies that
†

339

S 1932 ES

1 demonstrate the provision of high quality health care

2 to individuals entitled to benefits under part A or

3 enrolled under part B.

4 ‘‘(2) PROGRAM TO BEGIN IN 2008.—The Sec5 retary shall establish the program under this section

6 so that value-based payments described in subsection

7 (b) are made with respect to 2008 and each subse8 quent year.

9 ‘‘(3) HOME HEALTH AGENCY DEFINED.—In

10 this section, the term ‘‘home health agency’’ has the

11 meaning given that term in section 1861(o).

12 ‘‘(b) VALUE-BASED PAYMENTS.—

13 ‘‘(1) IN GENERAL.—Subject to paragraph (4),

14 the Secretary shall make a value-based payment to

15 a home health agency with respect to a year if the

16 Secretary determines that the quality of the care

17 provided in that year by the agency to individuals

18 entitled to benefits under part A or enrolled under

19 part B—

20 ‘‘(A) has substantially improved (as deter21 mined by the Secretary) over the prior year; or

22 ‘‘(B) exceeds a threshold established by the

23 Secretary.

24 ‘‘(2) USE OF SYSTEM.—In determining which

25 home health agencies qualify for a value-based pay-
†

340

S 1932 ES

1 ment under paragraph (1), the Secretary shall use

2 the quality measurement system developed for this

3 section pursuant to section 1860E–1(a).

4 ‘‘(3) DETERMINATION OF AMOUNT OF AWARD

5 AND ALLOCATION OF AWARDS.—

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

7 determine—

8 ‘‘(i) the amount of a value-based pay9 ment under paragraph (1) provided to a

10 home health agency; and

11 ‘‘(ii) subject to subparagraph (B), the

12 allocation of the total amount available

13 under subsection (d) for value-based pay14 ments for any year between payments with

15 respect to agencies that meet the require16 ment under subparagraph (A) of para17 graph (1) and agencies that meet the re18 quirement under subparagraph (B) of such

19 paragraph.

20 ‘‘(B) REQUIREMENTS REGARDING THE

21 AMOUNT OF FUNDING AVAILABLE FOR VALUE22 BASED PAYMENTS FOR AGENCIES EXCEEDING A

23 THRESHOLD.—The Secretary shall ensure

24 that—
†

341

S 1932 ES

1 ‘‘(i) a majority of the total amount

2 available under subsection (d) for value3 based payments for any year is provided to

4 home health agencies that are receiving

5 such payments because they meet the re6 quirement under paragraph (1)(B); and

7 ‘‘(ii) with respect to 2009 and each

8 subsequent year, the percentage of the

9 total amount available under subsection (d)

10 for value-based payments for any year that

11 is used to make payments to agencies that

12 meet such requirement is greater than

13 such percentage in the previous year.

14 ‘‘(4) REQUIREMENTS.—

15 ‘‘(A) REQUIRED SUBMISSION OF DATA.—

16 In order for a home health agency to be eligible

17 for a value-based payment for a year, the agen18 cy must have complied with the requirements

19 under section 1895(b)(3)(B)(v)(II) with respect

20 to that year.

21 ‘‘(B) ATTESTATION REGARDING DATA.—In

22 order for a home health agency to be eligible for

23 a value-based payment for a year, the agency

24 must have provided the Secretary (under proce25 dures established by the Secretary) with an at-
†

342

S 1932 ES

1 testation that the data submitted under section

2 1895(b)(3)(B)(v)(II) with respect to that year

3 is complete and accurate.

4 ‘‘(5) TOTAL AMOUNT OF VALUE-BASED PAY5 MENTS EQUAL TO TOTAL AMOUNT OF AVAILABLE

6 FUNDING.—The Secretary shall establish payment

7 amounts under paragraph (3)(A) so that, as esti8 mated by the Secretary, the total amount of value9 based payments made in a year under paragraph (1)

10 is equal to the total amount available under sub11 section (d) for such payments for the year.

12 ‘‘(6) PAYMENT METHODS AND TIMING OF PAY13 MENTS.—

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graph (B), the payment of value-based pay16 ments under paragraph (1) shall be based on

17 such a method as the Secretary determines ap18 propriate.

19 ‘‘(B) TIMING.—The Secretary shall ensure

20 that value-based payments under paragraph (1)

21 with respect to a year are made by not later

22 than December 31 of the subsequent year.

23 ‘‘(c) DESCRIPTION OF HOW AGENCIES WOULD HAVE

24 FARED UNDER PROGRAM.—Not later than January 1,

25 2008, the Secretary shall provide each home health agency
†

343

S 1932 ES

1 with a description of the Secretary’s estimate of how pay2 ments to the agency under this title would have been af3 fected with respect to items and services furnished during

4 a period, as determined by the Secretary, if the program

5 under this section (and the amendments made by section

6 6110(f) of the Deficit Reduction Omnibus Reconciliation

7 Act of 2005) had been in effect with respect to that period.

8 ‘‘(d) FUNDING.—

9 ‘‘(1) AMOUNT.—The amount available for

10 value-based payments under this section with respect

11 to a year shall be equal to the amount of the reduc12 tion in expenditures under the Federal Hospital In13 surance Trust Fund under section 1817 and Federal

14 Supplementary Medical Insurance Trust Fund under

15 section 1841 in the year as a result of the applica16 tion of section 1895(b)(3)(D), as estimated by the

17 Secretary.

18 ‘‘(2) PAYMENTS FROM TRUST FUND.—Pay19 ments to home health agencies under this section

20 shall be made from the Federal Hospital Insurance

21 Trust Fund and Federal Supplementary Medical In22 surance Trust Fund, in the same proportion as pay23 ments for home health services are made from such

24 trust funds.’’.

25 (b) HOSPITALS.—
†

344

S 1932 ES

1 (1) VOLUNTARY SUBMISSION OF HOSPITAL

2 QUALITY DATA.—

3 (A) UPDATE FOR HOSPITALS THAT SUB4 MIT QUALITY DATA.—Section 1886(b)(3)(B)

5 (42 U.S.C. 1395ww(b)(3)(B)) is amended—

6 (i) in clause (vii)—

7 (I) in subclause (I), by striking

8 ‘‘for each of fiscal years 2005 through

9 2007’’ and inserting ‘‘for fiscal years

10 2005 and 2006’’; and

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

12 ‘‘Each’’ and inserting ‘‘For fiscal

13 years 2005 and 2006, each’’; and

14 (ii) by adding at the end the following

15 new clause:

16 ‘‘(viii)(I) For purposes of clause

17 (i)(XX), for fiscal year 2007 and each sub18 sequent fiscal year, in the case of a sub19 section (d) hospital that does not submit

20 data in accordance with subclause (II) with

21 respect to such a fiscal year, the applicable

22 percentage increase under such clause for

23 such fiscal year shall be reduced by 2 per24 centage points. Such reduction shall apply

25 only with respect to the fiscal year in-
†

345

S 1932 ES

1 volved, and the Secretary shall not take

2 into account such reduction in computing

3 the applicable percentage increase under

4 clause (i)(XX) for a subsequent fiscal year.

5 ‘‘(II) For fiscal year 2007 and each

6 subsequent fiscal year, each subsection (d)

7 hospital shall submit to the Secretary such

8 data that the Secretary determines is ap9 propriate for the measurement of health

10 care quality, including data necessary for

11 the operation of the PPS hospital value12 based purchasing program under section

13 1860E–2. Such data shall be submitted in

14 a form and manner, and at a time, speci15 fied by the Secretary for purposes of this

16 clause.

17 ‘‘(III) The Secretary shall establish

18 procedures for making data submitted

19 under subclause (II) available to the public

20 in a clear and understandable form. Such

21 procedures shall ensure that a subsection

22 (d) hospital has the opportunity to review

23 the data that is to be made public with re24 spect to the hospital prior to such data

25 being made public.’’.
†

346

S 1932 ES

1 (B) CONFORMING AMENDMENTS.—Section

2 1886(b)(3)(B)(i) (42 U.S.C.

3 1395ww(b)(3)(B)(i)) is amended—

4 (i) in subclause (XIX), by striking

5 ‘‘2007’’ and inserting ‘‘2006’’; and

6 (ii) in subclause (XX)—

7 (I) by striking ‘‘2008’’ and in8 serting ‘‘2007’’; and

9 (II) by inserting ‘‘subject to

10 clause (viii),’’ after ‘‘fiscal year,’’.

11 (2) REDUCTION IN PAYMENTS IN ORDER TO

12 FUND PROGRAM.—

13 (A) REDUCTION IN PAYMENTS.—Section

14 1886(d)(5)(A) (42 U.S.C. 1395ww(d)(5)(A)) is

15 amended—

16 (i) in clause (iv), by striking ‘‘5 per17 cent nor more than 6 percent’’ and insert18 ing ‘‘the applicable lower percent nor more

19 than the applicable upper percent’’; and

20 (ii) by adding at the end the following

21 new clause:

22 ‘‘(vii) For purposes of clause (iv)—

23 ‘‘(I) for fiscal years prior to 2007, the ‘lower

24 percent’ is 5.0 percent and the ‘upper percent’ is 6.0

25 percent;
†

347

S 1932 ES

1 ‘‘(II) for fiscal year 2007, the ‘lower percent’ is

2 4.0 percent and the ‘upper percent’ is 5.0 percent;

3 ‘‘(III) for fiscal year 2008, the ‘lower percent’

4 is 3.75 percent and the ‘upper percent’ is 4.75 per5 cent;

6 ‘‘(IV) for fiscal year 2009, the ‘lower percent’

7 is 3.5 percent and the ‘upper percent’ is 4.5 percent;

8 ‘‘(V) for fiscal year 2010, the ‘lower percent’ is

9 3.25 percent and the ‘upper percent’ is 4.25 percent;

10 and

11 ‘‘(VI) for fiscal year 2011 and each subsequent

12 fiscal year, the ‘lower percent’ is 3.0 percent and the

13 ‘upper percent’ is 4.0 percent.’’.

14 (B) CONTINUATION OF CURRENT LEVEL

15 OF REDUCTIONS TO THE AVERAGE STANDARD16 IZED AMOUNT.—Section 1886(d)(3)(B) (42

17 U.S.C. 1395ww(d)(3)(B)) is amended to read

18 as follows:

19 ‘‘(B) REDUCING FOR VALUE OF OUTLIER PAY20 MENTS AND FOR FUNDING OF HOSPITAL VALUE21 BASED PURCHASING PROGRAM.—

22 ‘‘(i) IN GENERAL.—The Secretary shall re23 duce each of the average standardized amounts

24 determined under subparagraph (A) by a factor

25 equal to a fraction—
†

348

S 1932 ES

1 ‘‘(I) the numerator of which is the

2 sum of—

3 ‘‘(aa) the additional payments

4 described in paragraph (5)(A) (relat5 ing to outlier payments); and

6 ‘‘(bb) the applicable percent of

7 the total payments projected or esti8 mated to be made based on DRG pro9 spective payment rates for discharges

10 in that year; and

11 ‘‘(II) the denominator of which is the

12 total payments projected or estimated to

13 be made based on DRG prospective pay14 ment rates for discharges in that year.

15 ‘‘(ii) APPLICABLE PERCENT.—For pur16 poses of clause (i)(I)(bb), the term ‘applicable

17 percent’ means—

18 ‘‘(I) for fiscal years prior to fiscal

19 year 2007, 0 percent;

20 ‘‘(II) for fiscal year 2007, 1.0 percent;

21 ‘‘(III) for fiscal year 2008, 1.25 per22 cent;

23 ‘‘(IV) for fiscal year 2009, 1.5 per24 cent;
†

349

S 1932 ES

1 ‘‘(V) for fiscal year 2010, 1.75 per2 cent; and

3 ‘‘(VI) for fiscal year 2011 and each

4 subsequent year, 2.0 percent.’’.

5 (3) VALUE-BASED PURCHASING DEMONSTRA6 TION PROGRAM FOR CRITICAL ACCESS HOSPITALS.—

7 (A) ESTABLISHMENT.—Not later than 6

8 months after the date of enactment of this Act,

9 the Secretary shall establish a 2-year dem10 onstration program under which the Secretary

11 establishes a value-based purchasing program

12 under the Medicare program under title XVIII

13 of the Social Security Act for critical access

14 hospitals (as defined in section 1861(mm)(1) of

15 such Act (42 U.S.C. 1395x(mm)(1)) in order to

16 test innovative methods of measuring and re17 warding quality health care furnished by such

18 hospitals.

19 (B) SITES.—The Secretary shall conduct

20 the demonstration program at 6 critical access

21 hospitals. The Secretary shall ensure that such

22 hospitals are representative of the spectrum of

23 such hospitals that participate in the Medicare

24 program.
†

350

S 1932 ES

1 (C) WAIVER AUTHORITY.—The Secretary

2 may waive such requirements of titles XI and

3 XVIII of the Social Security Act as may be nec4 essary to carry out the demonstration program.

5 (D) FUNDING.—The Secretary shall pro6 vide for the transfer from the Federal Hospital

7 Insurance Trust Fund under section 1817 of

8 the Social Security Act (42 U.S.C. 1395i) of

9 such funds as are necessary for the costs of car10 rying out the demonstration program.

11 (E) REPORT.—Not later than 6 months

12 after the demonstration program is completed,

13 the Secretary shall submit to Congress a report

14 on the demonstration program together with

15 recommendations on the establishment of a per16 manent value-based purchasing program under

17 the Medicare program for critical access hos18 pitals and recommendations for such other leg19 islation or administrative action as the Sec20 retary determines appropriate.

21 (c) PHYSICIANS AND PRACTITIONERS.—

22 (1) VOLUNTARY SUBMISSION OF PHYSICIAN

23 AND PRACTITIONER QUALITY DATA.—

24 (A) UPDATE FOR PHYSICIANS AND PRACTI25 TIONERS THAT SUBMIT QUALITY DATA.—Sec-
†

351

S 1932 ES

1 tion 1848(d)(4) (42 U.S.C. 1395w–4(d)(4)) is

2 amended by adding at the end the following

3 new subparagraph:

4 ‘‘(G) ADJUSTMENT IF QUALITY DATA NOT

5 SUBMITTED.—

6 ‘‘(i) ADJUSTMENT.—For 2007 and

7 each subsequent year, in the case of serv8 ices furnished by a physician or a practi9 tioner (as defined in section 1860E–

10 3(a)(3)) that does not submit data in ac11 cordance with clause (ii) with respect to

12 such a year, the update otherwise deter13 mined under subparagraph (A) shall be re14 duced by 2 percentage points. Such reduc15 tion shall apply only with respect to the

16 year involved, and the Secretary shall not

17 take into account such reduction in com18 puting the conversion factor for a subse19 quent year.

20 ‘‘(ii) SUBMISSION OF QUALITY

21 DATA.—For 2007 and each subsequent

22 year, each physician and practitioner (as

23 defined in section 1860E–3(a)(3)) shall

24 submit to the Secretary such data that the

25 Secretary determines is appropriate for the
†

352

S 1932 ES

1 measurement of health outcomes and other

2 indices of quality, including data necessary

3 for the operation of the physician and

4 practitioner value-based purchasing pro5 gram under section 1860E–3. Such data

6 shall be submitted in a form and manner,

7 and at a time, specified by the Secretary

8 for purposes of this subparagraph.

9 ‘‘(iii) AVAILABLE TO THE PUBLIC.—

10 ‘‘(I) IN GENERAL.—Subject to

11 subclauses (II) and (III), the Sec12 retary shall establish procedures for

13 making data submitted under clause

14 (ii), with respect to items and services

15 furnished on or after January 1,

16 2008, available to the public in 3

17 phases as follows:

18 ‘‘(aa) PHASE I.—During

19 phase I, the Secretary shall make

20 available to the public the iden21 tity of physicians and practi22 tioners that are submitting such

23 data.

24 ‘‘(bb) PHASE II.—During

25 phase II, the Secretary shall
†

353

S 1932 ES

1 make available to the public the

2 identity of physicians and practi3 tioners that are receiving a value4 based payment under section

5 1860E–3.

6 ‘‘(cc) PHASE III.—During

7 phase III, the Secretary shall

8 make data submitted under

9 clause (ii) available to the public

10 in a clear and understandable

11 form.

12 ‘‘(II) REVIEW.—The procedures

13 established under subclause (I) shall

14 ensure that a physician or practitioner

15 has the opportunity to review the data

16 that is to be made public with respect

17 to the physician or practitioner under

18 subclause (I)(cc) prior to such data

19 being made public.

20 ‘‘(III) EXCEPTIONS.—The Sec21 retary shall establish exceptions to the

22 requirement for making data available

23 to the public under subclause (I). In

24 providing for such exceptions, the Sec25 retary shall take into account the size
†

354

S 1932 ES

1 and specialty representation of the

2 practice involved.’’.

3 (B) CONFORMING AMENDMENT.—Section

4 1848(d)(4)(A) (42 U.S.C. 1395w–4(d)(4)(A)) is

5 amended, in the matter preceding clause (i), by

6 striking ‘‘subparagraph (F)’’ and inserting

7 ‘‘subparagraphs (F) and (G)’’.

8 (2) REDUCTION IN CONVERSION FACTOR FOR

9 PHYSICIANS AND PRACTITIONERS THAT SUBMIT

10 QUALITY DATA IN ORDER TO FUND PROGRAM.—

11 (A) IN GENERAL.—Section 1848(d) (42

12 U.S.C. 1395w–4(d)) is amended by adding at

13 the end the following new paragraph:

14 ‘‘(6) REDUCTION IN CONVERSION FACTOR FOR

15 PHYSICIANS AND PRACTITIONERS IN ORDER TO

16 FUND VALUE-BASED PURCHASING PROGRAM.—

17 ‘‘(A) IN GENERAL.—For 2009 and each

18 subsequent year, the single conversion factor

19 otherwise applicable under this subsection to

20 services furnished in the year by a physician or

21 a practitioner (as defined in section 1860E–

22 3(a)(3)) that complies with the requirements

23 under paragraph (4)(G)(ii) for the year (deter24 mined after application of the update under
†

355

S 1932 ES

1 paragraph (4)) shall be reduced by the applica2 ble percent.

3 ‘‘(B) APPLICABLE PERCENT.—For pur4 poses of subparagraph (A), the term ‘applicable

5 percent’ means—

6 ‘‘(i) for 2009, 1.0 percent;

7 ‘‘(ii) for 2010, 1.25 percent;

8 ‘‘(iii) for 2011, 1.5 percent;

9 ‘‘(iv) for 2012, 1.75 percent; and

10 ‘‘(v) for 2013 and each subsequent

11 year, 2.0 percent.’’.

12 (B) CONFORMING AMENDMENT.—Section

13 1848(d)(1)(A) (42 U.S.C. 1395w–4(d)(1)(A)) is

14 amended by striking ‘‘The conversion factor’’

15 and inserting ‘‘Subject to paragraph (6), the

16 conversion factor’’.

17 (d) PLANS.—

18 (1) SUBMISSION OF QUALITY DATA.—

19 (A) MEDICARE ADVANTAGE ORGANIZA20 TIONS.—Section 1852(e) (42 U.S.C. 1395w–

21 22(e)), as amended by section 722 of the Medi22 care Prescription Drug, Improvement, and

23 Modernization Act of 2003 (Public Law 108–

24 173; 117 Stat. 2347), is amended—
†

356

S 1932 ES

1 (i) in paragraph (1), by striking ‘‘an

2 MA private fee-for-service plan or’’; and

3 (ii) in paragraph (3)—

4 (I) in subparagraph (A)—

5 (aa) in clause (i), by adding

6 at the end the following new sen7 tence: ‘‘Such data shall include

8 data necessary for the operation

9 of the plan value-based pur10 chasing program under section

11 1860E–4.’’;

12 (bb) by redesignating clause

13 (iv) as clause (vi); and

14 (cc) by inserting after clause

15 (iii) the following new clauses:

16 ‘‘(iv) APPLICATION TO MA PRIVATE

17 FEE-FOR-SERVICE PLANS.—The Secretary

18 shall establish as appropriate by regulation

19 requirements for the collection, analysis,

20 and reporting of data that permits the

21 measurement of health outcomes and other

22 indices of quality for MA organizations

23 with respect to MA private fee-for-service

24 plans.’’.
†

357

S 1932 ES

1 ‘‘(v) AVAILABILITY TO THE PUBLIC.—

2 The Secretary shall establish procedures

3 for making data reported under this sub4 paragraph available to the public in a clear

5 and understandable form. Such procedures

6 shall ensure that an MA organization has

7 the opportunity to review the data that is

8 to be made public with respect to the plan

9 offered by the organization prior to such

10 data being made public.’’; and

11 (II) in subparagraph (B)—

12 (aa) in clause (i), by striking

13 ‘‘The’’ and inserting ‘‘Subject to

14 clause (ii), the’’; and

15 (bb) by striking clause (ii)

16 and inserting the following new

17 clause:

18 ‘‘(ii) CHANGES IN TYPES OF DATA.—

19 Subject to clause (iii), the Secretary may

20 only change the types of data that are re21 quired to be submitted under subpara22 graph (A) after submitting to Congress a

23 report on the reasons for such changes

24 that was prepared—
†

358

S 1932 ES

1 ‘‘(I) in the case of data necessary

2 for the operation of the plan value3 based purchasing program under sec4 tion 1860E–4, after the requirements

5 under subsections (c) and (d) of sec6 tion 1860E–1 have been complied

7 with; and

8 ‘‘(II) in the case of any other

9 data, in consultation with MA organi10 zations and private accrediting bod11 ies.’’.

12 (B) ELIGIBLE ENTITIES WITH REASON13 ABLE COST CONTRACTS.—Section 1876(h) (42

14 U.S.C. 1395mm(h)) is amended by adding at

15 the end the following new paragraph:

16 ‘‘(6)(A) With respect to plan years beginning on or

17 after January 1, 2006, an eligible entity with a reasonable

18 cost reimbursement contract under this subsection shall

19 submit to the Secretary such data that the Secretary de20 termines is appropriate for the measurement of health out21 comes and other indices of quality, including data nec22 essary for the operation of the plan value-based pur23 chasing program under section 1860E–4. Such data shall

24 be submitted in a form and manner, and at a time, speci25 fied by the Secretary for purposes of this subparagraph.
†

359

S 1932 ES

1 ‘‘(B) The Secretary shall establish procedures for

2 making data reported under subparagraph (A) available

3 to the public in a clear and understandable form. Such

4 procedures shall ensure that an eligible entity has the op5 portunity to review the data that is to be made public with

6 respect to the contract prior to such data being made pub7 lic.’’.

8 (C) EFFECTIVE DATE.—The amendments

9 made by this subsection shall apply to plan

10 years beginning on or after January 1, 2006.

11 (D) SENSE OF THE SENATE.—It is the

12 sense of the Senate that, in establishing the

13 timeframes for Medicare Advantage organiza14 tions and entities with a reasonable cost reim15 bursement contract under section 1876(h) of

16 the Social Security Act (42 U.S.C. 1395mm(h))

17 to report quality data under sections 1852(e)(3)

18 and 1876(h)(6), respectively, of such Act, as

19 added by this section, the Secretary should take

20 into account other timeframes for reporting

21 quality data that such organizations and enti22 ties are subject to under other Federal and

23 State programs and in the commercial market.

24 (2) REDUCTION IN PAYMENTS TO ORGANIZA25 TIONS IN ORDER TO FUND PROGRAM.—
†

360

S 1932 ES

1 (A) MEDICARE ADVANTAGE PAYMENTS.—

2 (i) IN GENERAL.—Section 1853(a)(1)

3 (42 U.S.C. 1395w–23(a)(1)), as amended

4 by section 222(e) of the Medicare Prescrip5 tion Drug, Improvement, and Moderniza6 tion Act of 2003 (Public Law 108–173;

7 117 Stat. 2200), is amended—

8 (I) in clauses (i) and (ii) of sub9 paragraph (B), by inserting ‘‘and, for

10 2009 and each subsequent year, ex11 cept in the case of an MSA plan or an

12 MA plan for which there was no con13 tract under section 1857 during either

14 of the preceding 2 years, reduced by

15 the applicable percent (as defined in

16 subparagraph (I))’’ after ‘‘(G)’’; and

17 (II) by adding at the end the fol18 lowing new subparagraph:

19 ‘‘(I) APPLICABLE PERCENT.—For pur20 poses of clauses (i) and (ii) of subparagraph

21 (B), the term ‘applicable percent’ means—

22 ‘‘(i) for 2009, 1.0 percent;

23 ‘‘(ii) for 2010, 1.25 percent;

24 ‘‘(iii) for 2011, 1.5 percent;

25 ‘‘(iv) for 2012, 1.75 percent; and
†

361

S 1932 ES

1 ‘‘(v) for 2013 and each subsequent

2 year, 2.0 percent.’’.

3 (iii) REDUCTIONS IN PAYMENTS DO

4 NOT AFFECT THE REBATE FOR BIDS

5 BELOW THE BENCHMARK.—The amend6 ments made by subparagraph (A) shall not

7 be construed to have any effect on—

8 (I) the determination of whether

9 a Medicare Advantage plan has aver10 age per capita monthly savings de11 scribed in paragraph (3)(C) or (4)(C)

12 of section 1854(b) of the Social Secu13 rity Act (42 U.S.C. 1395w–24(b)); or

14 (II) the amount of such savings.

15 (A) REASONABLE COST CONTRACT PAY16 MENTS.—Section 1876(h) (42 U.S.C.

17 1395mm(h)), as amended by subsection (a)(2),

18 is amended by adding at the end the following

19 new paragraph:

20 ‘‘(7) Notwithstanding the preceding provisions of this

21 subsection, the Secretary shall reduce each payment to an

22 eligible organization under this subsection with respect to

23 benefits provided on or after January 1, 2009, by an

24 amount equal to the applicable percent (as defined in sec25 tion 1853(a)(1)(I)) of the payment amount.’’.
†

362

S 1932 ES

1 (3) REQUIREMENT FOR REPORTING ON USE OF

2 VALUE-BASED PAYMENTS.—

3 (A) MA PLANS.—Section 1854(a) (42

4 U.S.C. 1395w–24(a)), as amended by section

5 222(a) of the Medicare Prescription Drug, Im6 provement, and Modernization Act of 2003

7 (Public Law 108–173; 117 Stat. 2193), is

8 amended—

9 (i) in paragraph (1)(A)(i), by striking

10 ‘‘or (6)(A)’’ and inserting ‘‘(6)(A), or (7)’’;

11 and

12 (ii) by adding at the end the fol13 lowing:

14 ‘‘(7) SUBMISSION OF INFORMATION OF HOW

15 VALUE-BASED PAYMENTS WILL BE USED.—For an

16 MA plan for a plan year beginning on or after Janu17 ary 1, 2011, the information described in this para18 graph is a description of how the organization offer19 ing the plan will use any value-based payments that

20 the organization received under section 1860E–4

21 with respect to the plan for the year preceding the

22 year in which such information is submitted.’’.

23 (B) REASONABLE COST CONTRACTS.—Sec24 tion 1876(h) (42 U.S.C. 1395mm(h)), as
†

363

S 1932 ES

1 amended by subsection (c)(2), is amended by

2 adding at the end the following new paragraph:

3 ‘‘(8) Not later than July 1 of each year (beginning

4 in 2010), any eligible entity with a reasonable cost reim5 bursement contract under this subsection that received a

6 value-based payment under section 1860E–4 with respect

7 to the contract for the preceding year shall submit to the

8 Secretary a report containing a description of how the or9 ganization will use such payments under the contract.’’.

10 (e) ESRD PROVIDERS AND FACILITIES.—

11 (1) VOLUNTARY SUBMISSION OF QUALITY

12 DATA.—Section 1881(b) (42 U.S.C. 1395rr(b)) is

13 amended by adding at the end the following new

14 paragraph:

15 ‘‘(14) By not later than July 31, 2006, the Sec16 retary shall establish procedures under which pro17 viders of services and renal dialysis facilities that re18 ceive payments under paragraph (12) or (13) may

19 submit to the Secretary data that permits the meas20 urement of health outcomes and other indices of

21 quality.’’.

22 (2) REDUCTION IN CASE-MIX ADJUSTED PRO23 SPECTIVE PAYMENT AMOUNT IN ORDER TO FUND

24 PROGRAM.—Section 1881(b)(12) (42 U.S.C.

25 1395rr(b)(12)) is amended—
†

364

S 1932 ES

1 (A) by redesignating subparagraph (G) as

2 subparagraph (H); and

3 (B) by inserting after subparagraph (F)

4 the following new subparagraph:

5 ‘‘(G)(i) In the case of any payment made under

6 this paragraph for an item or service furnished on

7 or after January 1, 2007, such payment shall be re8 duced by the applicable percent. The preceding sen9 tence shall not apply to a payment for an item or

10 service furnished by a provider of services or a renal

11 dialysis facility that is excluded from the program

12 under section 1860E–5 by reason of subsection

13 (a)(3) of such section at the time the item or service

14 is furnished.

15 ‘‘(ii) For purposes of clause (i), the term ‘appli16 cable percent’ means—

17 ‘‘(I) for 2007, 1.0 percent;

18 ‘‘(II) for 2008, 1.25 percent;

19 ‘‘(III) for 2009, 1.5 percent;

20 ‘‘(IV) for 2010, 1.75 percent; and

21 ‘‘(V) for 2011 and each subsequent year,

22 2.0 percent.’’.

23 (3) VALUE-BASED PURCHASING UNDER THE

24 DEMONSTRATION OF BUNDLED CASE-MIX ADJUSTED

25 PAYMENT SYSTEM FOR ESRD SERVICES.—Section
†

365

S 1932 ES

1 623(e) of the Medicare Prescription Drug, Improve2 ment, and Modernization Act of 2003 (42 U.S.C.

3 1395rr note) is amended by adding at the end the

4 following new paragraph:

5 ‘‘(7) VALUE-BASED PURCHASING PROGRAM.—

6 As part of the demonstration project under this sub7 section, the Secretary shall, beginning January 1,

8 2007, implement a value-based purchasing program

9 for providers and facilities participating in the dem10 onstration project. The Secretary shall implement

11 such value-based purchasing program in a similar

12 manner as the ESRD provider and facility value13 based purchasing program is implemented under

14 section 1860E–5 of the Social Security Act, includ15 ing the funding of such program.’’.

16 (f) HOME HEALTH AGENCIES.—

17 (1) UPDATE FOR HOME HEALTH AGENCIES

18 THAT SUBMIT QUALITY DATA.—Section

19 1895(b)(3)(B) (42 U.S.C.fff(b)(3)(B)) is amended—

20 (A) in clause (ii)(IV), by inserting ‘‘subject

21 to clause (v),’’ after ‘‘subsequent year,’’; and

22 (B) by adding at the end the following new

23 clause:

24 ‘‘(v) ADJUSTMENT IF QUALITY DATA

25 NOT SUBMITTED.—
†

366

S 1932 ES

1 ‘‘(I) ADJUSTMENT.—For pur2 poses of clause (ii)(IV), for 2007 and

3 each subsequent year, in the case of a

4 home health agency that does not sub5 mit data in accordance with subclause

6 (II) with respect to such a year, the

7 home health market basket percentage

8 increase applicable under such clause

9 for such year shall be reduced by 2

10 percentage points. Such reduction

11 shall apply only with respect to the

12 year involved, and the Secretary shall

13 not take into account such reduction

14 in computing the prospective payment

15 amount under this section for a subse16 quent year.

17 ‘‘(II) SUBMISSION OF QUALITY

18 DATA.—For 2007 and each subse19 quent year, each home health agency

20 shall submit to the Secretary such

21 data that the Secretary determines is

22 appropriate for the measurement of

23 health care quality, including data

24 necessary for the operation of the

25 home health agency value-based pur-
†

367

S 1932 ES

1 chasing program under section

2 1860E–6. Such data shall be sub3 mitted in a form and manner, and at

4 a time, specified by the Secretary for

5 purposes of this clause.

6 ‘‘(III) PUBLIC AVAILABILITY OF

7 DATA SUBMITTED.—The Secretary

8 shall establish procedures for making

9 data submitted under subclause (II)

10 available to the public in a clear and

11 understandable form. Such procedures

12 shall ensure that a home health agen13 cy has the opportunity to review the

14 data that is to be made public with

15 respect to the agency prior to such

16 data being made public.’’.

17 (2) REDUCTION IN STANDARD PROSPECTIVE

18 PAYMENT AMOUNT FOR AGENCIES THAT SUBMIT

19 QUALITY DATA IN ORDER TO FUND PROGRAM.—Sec20 tion 1895(b)(3) (42 U.S.C. 1395fff(b)(3)) is amend21 ed by adding at the end the following new subpara22 graph:

23 ‘‘(D) REDUCTION IN ORDER TO FUND

24 VALUE-BASED PURCHASING PROGRAM.—
†

368

S 1932 ES

1 ‘‘(i) IN GENERAL.—For 2008 and

2 each subsequent year, in the case of a

3 home health agency that complies with the

4 submission requirements under section

5 1895(b)(3)(B)(v)(II) for the year, the

6 standard prospective payment amount (or

7 amounts) otherwise applicable under this

8 paragraph for the year shall be reduced by

9 the applicable percent.

10 ‘‘(ii) APPLICABLE PERCENT.—For

11 purposes of clause (i), the term ‘applicable

12 percent’ means—

13 ‘‘(I) for 2008, 1.0 percent;

14 ‘‘(II) for 2009, 1.25 percent;

15 ‘‘(III) for 2010, 1.5 percent;

16 ‘‘(IV) for 2011, 1.75 percent;

17 and

18 ‘‘(V) for 2012 and each subse19 quent year, 2.0 percent.’’.

20 (g) SKILLED NURSING FACILITIES.—

21 (1) REQUIREMENT FOR SKILLED NURSING FA22 CILITIES TO REPORT FUNCTIONAL CAPACITY OF

23 MEDICARE RESIDENTS UPON ADMISSION AND DIS24 CHARGE.—Section 1819(b) (42 U.S.C. 1395i–3(b))
†

369

S 1932 ES

1 is amended by adding at the end the following new

2 paragraph:

3 ‘‘(9) REPORTING FUNCTIONAL CAPACITY AT AD4 MISSION AND DISCHARGE.—

5 ‘‘(A) IN GENERAL.—On and after October

6 1, 2006, a skilled nursing facility must submit

7 a report to the Secretary on the functional ca8 pacity of each resident who is entitled to bene9 fits under this part at the time of—

10 ‘‘(i) the admission of such resident;

11 and

12 ‘‘(ii) the discharge of such resident.

13 ‘‘(B) TIMEFRAME.—A report required

14 under subparagraph (A) shall be submitted

15 within 10 days of the admission or discharge,

16 as the case may be.’’.

17 (2) VOLUNTARY SUBMISSION OF SKILLED

18 NURSING FACILITY QUALITY DATA.—Section

19 1888(e)(4)(E) (42 U.S.C. 1395yy(e)(4)(E)) is

20 amended—

21 (A) in clause (ii)(IV), by inserting ‘‘subject

22 to clause (iii),’’ after ‘‘subsequent fiscal year,’’;

23 and

24 (B) by adding at the end the following new

25 clause:
†

370

S 1932 ES

1 ‘‘(iii) ADJUSTMENT IF QUALITY DATA

2 NOT SUBMITTED.—

3 ‘‘(I) ADJUSTMENT.—For pur4 poses of clause (ii)(IV), for fiscal year

5 2009 and each subsequent fiscal year,

6 in the case of a skilled nursing facility

7 that does not submit data in accord8 ance with subclause (II) with respect

9 to such a fiscal year, the skilled nurs10 ing facility market basket percentage

11 change applicable under such clause

12 for such fiscal year shall be reduced

13 by 2 percentage points. Such reduc14 tion shall apply only with respect to

15 the fiscal year involved, and the Sec16 retary shall not take into account

17 such reduction in computing the Fed18 eral per diem rate under this section

19 for a subsequent fiscal year.

20 ‘‘(II) SUBMISSION OF QUALITY

21 DATA.—For fiscal year 2008 and each

22 subsequent fiscal year, each skilled

23 nursing facility shall submit to the

24 Secretary such data that the Sec25 retary determines, after conducting a
†

371

S 1932 ES

1 study in consultation with the entities

2 described in subsections (c)(1), (c)(2),

3 and (d) of section 1860E–1, is appro4 priate for the measurement of health

5 outcomes and other indices of quality.

6 Such data shall be submitted in a

7 form and manner, and at a time,

8 specified by the Secretary for pur9 poses of this clause.

10 ‘‘(III) PUBLIC AVAILABILITY OF

11 DATA SUBMITTED.—The Secretary

12 shall establish procedures for making

13 data submitted under subclause (II)

14 available to the public in a clear and

15 understandable form. Such procedures

16 shall ensure that a facility has the op17 portunity to review the data that is to

18 be made public with respect to the fa19 cility prior to such data being made

20 public.’’.

21 (h) CONFORMING REFERENCES TO PREVIOUS PART

22 E.—Any reference in law (in effect before the date of the

23 enactment of this Act) to part E of title XVIII of the So24 cial Security Act is deemed a reference to part F of such

25 title (as in effect after such date).
†

372

S 1932 ES

1 SEC. 6111. PHASE-OUT OF RISK ADJUSTMENT BUDGET NEU2 TRALITY IN DETERMINING THE AMOUNT OF

3 PAYMENTS TO MEDICARE ADVANTAGE ORGA4 NIZATIONS.

5 (a) IN GENERAL.—Section 1853 (42 U.S.C. 1395w–

6 23) is amended—

7 (1) in subsection (j)(1)—

8 (A) in subparagraph (A)—

9 (i) by inserting ‘‘(or, beginning with

2007, 1 10 ⁄12 of the applicable amount deter11 mined under subsection (k)(1))’’ after

12 ‘‘1853(c)(1)’’; and

13 (ii) by inserting ‘‘(for years before

14 2007)’’ after ‘‘adjusted as appropriate’’;

15 (B) in subparagraph (B), by inserting

16 ‘‘(for years before 2007)’’ after ‘‘adjusted as

17 appropriate’’; and

18 (2) by adding at the end the following new sub19 section:

20 ‘‘(k) DETERMINATION OF APPLICABLE AMOUNT FOR

21 PURPOSES OF CALCULATING THE BENCHMARK

22 AMOUNTS.—

23 ‘‘(1) APPLICABLE AMOUNT DEFINED.—For

24 purposes of subsection (j), subject to paragraph (2),

25 the term ‘applicable amount’ means for an area—

26 ‘‘(A) for 2007—
†

373

S 1932 ES

1 ‘‘(i) if such year is not specified under

2 subsection (c)(1)(D)(ii), an amount equal

3 to the amount specified in subsection

4 (c)(1)(C) for the area for 2006—

5 ‘‘(I) first adjusted by the re6 scaling factor for 2006 for the area

7 (as made available by the Secretary in

8 the announcement of the rates on

9 April 4, 2005, under subsection

10 (b)(1), but excluding any national ad11 justment factors for coding intensity

12 and risk adjustment budget neutrality

13 that were included in such factor);

14 and

15 ‘‘(II) then increased by the na16 tional per capita MA growth percent17 age, described in subsection (c)(6) for

18 that succeeding year, but not taking

19 into account any adjustment under

20 subparagraph (C) of such subsection

21 for a year before 2004;

22 ‘‘(ii) if such year is specified under

23 subsection (c)(1)(D)(ii), an amount equal

24 to the greater of—
†

374

S 1932 ES

1 ‘‘(I) the amount determined

2 under clause (i) for the area for the

3 year; or

4 ‘‘(II) the amount specified in

5 subsection (c)(1)(D) for the area for

6 the year; and

7 ‘‘(B) for a subsequent year—

8 ‘‘(i) if such year is not specified under

9 subsection (c)(1)(D)(ii), an amount equal

10 to the amount determined under this para11 graph for the area for the previous year,

12 increased by the national per capita MA

13 growth percentage, described in subsection

14 (c)(6) for that succeeding year, but not

15 taking into account any adjustment under

16 subparagraph (C) of such subsection for a

17 year before 2004; and

18 ‘‘(ii) if such year is specified under

19 subsection (c)(1)(D)(ii), an amount equal

20 to the greater of—

21 ‘‘(I) the amount determined

22 under clause (i) for the area for the

23 year; or
†

375

S 1932 ES

1 ‘‘(II) the amount specified in

2 subsection (c)(1)(D) for the area for

3 the year.

4 ‘‘(2) ADJUSTMENT.—

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

6 subparagraph (D), in the case of 2007 through

7 2010, the applicable amount determined under

8 paragraph (1) shall be increased by a factor

9 equal to 1 plus the product of—

10 ‘‘(i) the percent determined under

11 subparagraph (B) for the year; and

12 ‘‘(ii) the applicable percent for the

13 year under subparagraph (C).

14 ‘‘(B) PERCENT DETERMINED.—

15 ‘‘(i) IN GENERAL.—For purposes of

16 subparagraph (A)(i), subject to clause (ii),

17 the percent determined under this subpara18 graph for a year is a percent equal to a

19 fraction—

20 ‘‘(I) the numerator of which is an

21 amount equal to—

22 ‘‘(aa) the Secretary’s esti23 mate of the total payments that

24 would have been made under this

25 part in the year if all the month-
†

376

S 1932 ES

1 ly payment amounts for all MA

plans were equal to 1 2 ⁄12 of the

3 annual MA capitation rate under

4 subsection (c)(1) for the area and

5 year; minus

6 ‘‘(bb) the Secretary’s esti7 mate of the total payments that

8 would have been made under this

9 part in the year if all the month10 ly payment amounts for all MA

plans were equal to 1 11 ⁄12 of the

12 MA area-specific non-drug

13 monthly benchmark amount

14 under subsection (j) for the area

15 and year; and

16 ‘‘(II) the denominator of which is

17 equal to the total amount estimated

18 for the year under subclause (I)(bb).

19 ‘‘(ii) REQUIREMENTS.—In estimating

20 the amounts under clause (i), the

21 Secretary—

22 ‘‘(I) shall—

23 ‘‘(aa) use a complete set of

24 the most recent and representa25 tive Medicare Advantage risk
†

377

S 1932 ES

1 scores under subsection (a)(3)

2 that are available from the risk

3 adjustment model announced for

4 the year;

5 ‘‘(bb) adjust the risk scores

6 to reflect changes in treatment

7 and coding practices in the fee8 for-service sector;

9 ‘‘(cc) adjust the risk scores

10 for differences in coding patterns

11 between Medicare Advantage

12 plans and providers under part A

13 and B to the extent that the Sec14 retary has identified such dif15 ferences;

16 ‘‘(dd) as necessary, adjust

17 the risk scores for late data sub18 mitted by Medicare Advantage

19 organizations;

20 ‘‘(ee) as necessary, adjust

21 the risk scores for lagged cohorts;

22 and

23 ‘‘(ff) as necessary, adjust

24 the risk scores for changes in en-
†

378

S 1932 ES

1 rollment in Medicare Advantage

2 plans during the year; and

3 ‘‘(II) may take into account the

4 estimated health risk of enrollees in

5 preferred provider organization plans

6 (including MA regional plans) for the

7 year.

8 In order to make the adjustment required

9 under item (cc) and to ensure payment ac10 curacy, the Secretary shall conduct an

11 analysis of the differences described in

12 such item. The Secretary shall complete

13 such analysis by a date necessary to ensure

14 that the results of such analysis are incor15 porated into the payment rates for a year

16 not later than 2008. In conducting such

17 analysis, the Secretary shall use data sub18 mitted with respect to 2004 and subse19 quent years, as available.

20 ‘‘(C) APPLICABLE PERCENT.—For pur21 poses of subparagraph (A)(ii), the term ‘appli22 cable percent’ means—

23 ‘‘(i) for 2007, 55 percent;

24 ‘‘(ii) for 2008, 40 percent;

25 ‘‘(iii) for 2009, 25 percent; and
†

379

S 1932 ES

1 ‘‘(iv) for 2010, 5 percent.

2 ‘‘(D) TERMINATION OF ADJUSTMENT.—

3 The Secretary shall not make any adjustment

4 under subparagraph (A) in a year if the

5 amount estimated under subparagraph

6 (B)(i)(I)(bb) for the year is equal to or greater

7 than the amount estimated under subparagraph

8 (B)(i)(I)(aa) for the year.

9 ‘‘(3) NO ADDITIONAL ADJUSTMENTS.—

10 ‘‘(A) IN GENERAL.—Except for the adjust11 ment provided for in paragraph (2), the Sec12 retary may not make any adjustment to the ap13 plicable amount determined in paragraph (1)

14 for any year.

15 ‘‘(B) RULE OF CONSTRUCTION.—Nothing

16 in this subsection shall be construed to limit the

17 authority of the Secretary to risk adjust the

18 amount under subsection (c)(1)(D) pursuant to

19 clause (i) of such subsection.’’.

20 (b) REFINEMENTS TO HEALTH STATUS ADJUST21 MENT.—Section 1853(a)(1)(C) (42 U.S.C. 1395w–23) is

22 amended by inserting after the first sentence the following

23 new sentence: ‘‘In applying such adjustment for health

24 status to such payment amounts, the Secretary shall en25 sure that such adjustment reflects changes in treatment
†

380

S 1932 ES

1 and coding practices in the fee-for-service sector and re2 flects differences in coding patterns between Medicare Ad3 vantage plans and providers under part A and B to the

4 extent that the Secretary has identified such differences.’’.

5 SEC. 6112. ELIMINATION OF MEDICARE ADVANTAGE RE6 GIONAL PLAN STABILIZATION FUND.

7 (a) ELIMINATION.—

8 (1) IN GENERAL.—Subsection (e) of section

9 1858 (42 U.S.C. 1395w–27a) is repealed.

10 (2) CONFORMING AMENDMENT.—Section

11 1858(f)(1) (42 U.S.C. 1395w–27a(f)(1)) is amended

12 by striking ‘‘subject to subsection (e),’’.

13 (3) EFFECTIVE DATE.—The amendments made

14 by this subsection shall take effect as if included in

15 the enactment of section 221(c) of the Medicare Pre16 scription Drug, Improvement, and Modernization

17 Act of 2003 (Public Law 108–173; 117 Stat. 2181).

18 (b) TIMEFRAME FOR PART A AND B PAYMENTS.—

19 Notwithstanding sections 1816(c) and 1842(c)(2) of the

20 Social Security Act or any other provision of law—

21 (1) any payment from the Federal Hospital In22 surance Trust Fund under section 1817 of the So23 cial Security Act (42 U.S.C. 1395i) or from the Fed24 eral Supplementary Medical Insurance Trust Fund

25 under section 1841 of such Act (42 U.S.C. 1395t)
†

381

S 1932 ES

1 for claims submitted under part A or B of title

2 XVIII of such Act for items and services furnished

3 under such part A or B, respectively, that would

4 otherwise be payable during the period beginning on

5 September 22, 2006, and ending on September 30,

6 2006, shall be paid on the first business day of Oc7 tober 2006; and

8 (2) no interest or late penalty shall be paid to

9 an entity or individual for any delay in a payment

10 by reason of the application of paragraph (1).

11 SEC. 6113. RURAL PACE PROVIDER GRANT PROGRAM.

12 (a) DEFINITIONS.—In this section:

13 (1) CMS.—The term ‘‘CMS’’ means the Cen14 ters for Medicare & Medicaid Services.

15 (2) ELIGIBLE PARTICIPANT.—The term ‘‘eligi16 ble participant’’ means a PACE program eligible in17 dividual (as defined in sections 1894(a)(5) and

18 1934(a)(5) of the Social Security Act (42 U.S.C.

19 1395eee(a)(5); 1396u–4(a)(5))).

20 (3) PACE PROGRAM.—The term ‘‘PACE pro21 gram’’ has the meaning given that term in sections

22 1894(a)(2) and 1934(a)(2) of the Social Security

23 Act (42 U.S.C. 1395eee(a)(2); 1396u–4(a)(2)).

24 (4) PACE PROVIDER.—The term ‘‘PACE pro25 vider’’ has the meaning given that term in section
†

382

S 1932 ES

1 1894(a)(3) or 1934(a)(3) of the Social Security Act

2 (42 U.S.C. 1395eee(a)(3); 1396u–4(a)(3)).

3 (5) RURAL AREA.—The term ‘‘rural area’’ has

4 the meaning given that term in section

5 1886(d)(2)(D) of the Social Security Act (42 U.S.C.

6 1395ww(d)(2)(D)).

7 (6) RURAL PACE PILOT SITE.—The term ‘‘rural

8 PACE pilot site’’ means a PACE provider that has

9 been approved to provide services in a geographic

10 service area that is, in whole or in part, a rural area,

11 and that has received a site development grant

12 under this section.

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

14 the Secretary of Health and Human Services.

15 (b) SITE DEVELOPMENT GRANTS AND TECHNICAL

16 ASSISTANCE PROGRAM.—

17 (1) SITE DEVELOPMENT GRANTS.—

18 (A) IN GENERAL.—The Secretary shall es19 tablish a process and criteria to award site de20 velopment grants to qualified PACE providers

21 that have been approved to serve a geographic

22 service area that is, in whole or in part, a rural

23 area.

24 (B) AMOUNT PER AWARD.—A site develop25 ment grant awarded under subparagraph (A) to
†

383

S 1932 ES

1 any individual rural PACE pilot site shall not

2 exceed $750,000.

3 (C) NUMBER OF AWARDS.—Not more than

4 15 rural PACE pilot sites shall be awarded a

5 site development grant under subparagraph

6 (A).

7 (D) USE OF FUNDS.—Funds made avail8 able under a site development grant awarded

9 under subparagraph (A) may be used for the

10 following expenses only to the extent such ex11 penses are incurred in relation to establishing

12 or delivering PACE program services in a rural

13 area:

14 (i) Feasibility analysis and planning.

15 (ii) Interdisciplinary team develop16 ment.

17 (iii) Development of a provider net18 work, including contract development.

19 (iv) Development or adaptation of

20 claims processing systems.

21 (v) Preparation of special education

22 and outreach efforts required for the

23 PACE program.
†

384

S 1932 ES

1 (vi) Development of expense reporting

2 required for calculation of outlier payments

3 or reconciliation processes.

4 (vii) Development of any special qual5 ity of care or patient satisfaction data col6 lection efforts.

7 (viii) Establishment of a working cap8 ital fund to sustain fixed administrative,

9 facility, or other fixed costs until the pro10 vider reaches sufficient enrollment size.

11 (ix) Startup and development costs in12 curred prior to the approval of the rural

13 PACE pilot site’s PACE provider applica14 tion by CMS.

15 (x) Any other efforts determined by

16 the rural PACE pilot site to be critical to

17 its successful startup, as approved by the

18 Secretary.

19 (E) APPROPRIATION.—

20 (i) IN GENERAL.—Out of funds in the

21 Treasury not otherwise appropriated, there

22 are appropriated to the Secretary to carry

23 out this subsection for the period of fiscal

24 years 2006 through 2007, $7,500,000.
†

385

S 1932 ES

1 (ii) AVAILABILITY.—Funds appro2 priated under clause (i) shall remain avail3 able for expenditure through fiscal year

4 2010.

5 (2) TECHNICAL ASSISTANCE PROGRAM.—The

6 Secretary shall establish a technical assistance pro7 gram to provide—

8 (A) outreach and education to State agen9 cies and provider organizations interested in es10 tablishing PACE programs in rural areas; and

11 (B) technical assistance necessary to sup12 port rural PACE pilot sites.

13 (c) COST OUTLIER PROTECTION FOR RURAL PACE

14 PILOT SITES.—

15 (1) ESTABLISHMENT OF FUND FOR REIM16 BURSEMENT OF OUTLIER COSTS.—

17 (A) IN GENERAL.—Notwithstanding any

18 other provision of law, the Secretary shall es19 tablish an outlier fund to reimburse rural

20 PACE pilot sites for outlier costs (as defined in

21 subparagraph (B)) incurred for eligible partici22 pants who reside in a rural area in accordance

23 with the expense payment specified in subpara24 graph (C).

25 (B) OUTLIER COSTS DEFINED.—
†

386

S 1932 ES

1 (i) IN GENERAL.—In subparagraph

2 (A), the term ‘‘outlier costs’’ means the in3 patient and related physician and ancillary

4 costs in excess of $50,000 incurred within

5 a given 12-month period for an eligible

6 participant who resides in a rural area.

7 (ii) INCLUSION IN ONLY 1 PERIOD.—

8 Outlier costs may not be included in more

9 than one 12-month period for purposes of

10 calculating an outlier expense payment

11 under subparagraph (C).

12 (C) OUTLIER EXPENSE PAYMENT.—

13 (i) PAYMENT FOR OUTLIER COSTS.—

14 Subject to clause (ii), in the case of a rural

15 PACE pilot site that has incurred outlier

16 costs for an eligible participant, the rural

17 PACE pilot site shall receive an outlier ex18 pense payment equal to 80 percent of such

19 costs.

20 (ii) LIMITATIONS.—

21 (I) COSTS INCURRED PER ELIGI22 BLE PARTICIPANT.—The total amount

23 of outlier expense payments made

24 under clause (i) to a rural PACE pilot

25 site for outlier costs incurred with re-
†

387

S 1932 ES

1 spect to an eligible participant shall

2 not exceed $100,000 for the 12-month

3 period used to calculate the payment.

4 (II) COSTS INCURRED PER PRO5 VIDER.—No rural PACE pilot site

6 may receive more than $500,000 in

7 total outlier expense payments in a

8 12-month period.

9 (III) LIMITATION OF OUTLIER

10 COST REIMBURSEMENT PERIOD.—A

11 rural PACE pilot site shall only re12 ceive outlier expense payments under

13 this subparagraph with respect to

14 outlier costs incurred during the first

15 3 years of the site’s operation.

16 (D) REQUIREMENT TO ACCESS RISK RE17 SERVES PRIOR TO PAYMENT.—A rural PACE

18 pilot site shall access and exhaust any risk re19 serves held or arranged for the provider (other

20 than revenue or reserves maintained to satisfy

21 the requirements of section 460.80(c) of title

22 42, Code of Federal Regulations) and any

23 working capital established through a site devel24 opment grant awarded under subsection (b)(1),
†

388

S 1932 ES

1 prior to receiving any payment from the outlier

2 fund.

3 (E) APPROPRIATION.—

4 (i) IN GENERAL.—Out of funds in the

5 Treasury not otherwise appropriated, there

6 are appropriated to the Secretary to carry

7 out this subsection for the period of fiscal

8 years 2006 through 2007, $10,000,000.

9 (ii) AVAILABILITY.—Funds appro10 priated under clause (i) shall remain avail11 able for expenditure through fiscal year

12 2010.

13 (d) EVALUATION OF PACE PROVIDERS SERVING

14 RURAL SERVICE AREAS.—Not later than 60 months after

15 the date of enactment of this Act, the Secretary shall sub16 mit a report to Congress containing an evaluation of the

17 experience of rural PACE pilot sites.

18 (e) AMOUNTS IN ADDITION TO PAYMENTS UNDER

19 SOCIAL SECURITY ACT.—Any amounts paid under the au20 thority of this section to a PACE provider shall be in addi21 tion to payments made to the provider under section 1894

22 or 1934 of the Social Security Act (42 U.S.C. 1395eee;

23 1396u–4).
†

389

S 1932 ES

1 SEC. 6114. WAIVER OF PART B LATE ENROLLMENT PEN2 ALTY FOR CERTAIN INTERNATIONAL VOLUN3 TEERS.

4 (a) IN GENERAL.—

5 (1) WAIVER OF PENALTY.—Section 1839(b)(42

6 U.S.C. 1395r(b)) is amended in the second sentence

7 by inserting the following before the period at the

8 end: ‘‘or months for which the individual can dem9 onstrate that the individual was an individual de10 scribed in section 1837(k)(3)’’.

11 (2) SPECIAL ENROLLMENT PERIOD.—

12 (A) IN GENERAL.—Section 1837 (42

13 U.S.C. 1395p) is amended by adding at the end

14 the following new subsection:

15 ‘‘(k)(1) In the case of an individual who—

16 ‘‘(A) at the time the individual first satisfies

17 paragraph (1) or (2) of section 1836, is described in

18 paragraph (3), and has elected not to enroll (or to

19 be deemed enrolled) under this section during the in20 dividual’s initial enrollment period; or

21 ‘‘(B) has terminated enrollment under this sec22 tion during a month in which the individual is de23 scribed in paragraph (3),

24 there shall be a special enrollment period described in

25 paragraph (2).
†

390

S 1932 ES

1 ‘‘(2) The special enrollment period referred to in

2 paragraph (1) is the 6-month period beginning on the first

3 day of the month which includes the date that the indi4 vidual is no longer described in paragraph (3).

5 ‘‘(3) For purposes of paragraph (1), an individual de6 scribed in this paragraph is an individual that is serving

7 as a volunteer outside of the United States through a

8 program—

9 ‘‘(A) that covers at least a 12-month period;

10 and

11 ‘‘(B) that is sponsored by an organization de12 scribed in section 501(c)(3) of the Internal Revenue

13 Code of 1986 and exempt from taxation under sec14 tion 501(a) of such Code.’’.

15 (B) COVERAGE PERIOD.—Section 1838

16 (42 U.S.C. 1395q) is amended by adding at the

17 end the following new subsection:

18 ‘‘(f) Notwithstanding subsection (a), in the case of

19 an individual who enrolls during a special enrollment pe20 riod pursuant to section 1837(k), the coverage period shall

21 begin on the first day of the month following the month

22 in which the individual so enrolls.’’.

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

24 subsection (a)(1) shall apply to months beginning with
†

391

S 1932 ES

1 January 2007 and the amendments made by subsection

2 (a)(2) shall take effect on January 1, 2007.

3 SEC. 6115. DELIVERY OF SERVICES AT FEDERALLY QUALI4 FIED HEALTH CENTERS.

5 (a) COVERAGE.—

6 (1) IN GENERAL.—Section 1861(aa)(3) (42

7 U.S.C. 1395x(aa)(3)) is amended—

8 (A) in subparagraph (A), by striking ‘‘,

9 and’’ and inserting ‘‘and services described in

10 subsections (qq) and (vv); and’’;

11 (B) in subparagraph (B), by striking ‘‘sec12 tions 329, 330, and 340’’ and inserting ‘‘section

13 330’’; and

14 (C) in the flush matter at the end, by in15 serting ‘‘by the center or by a health care pro16 fessional under contract with the center’’ after

17 ‘‘outpatient of a Federally qualified health cen18 ter’’.

19 (2) CONSOLIDATED BILLING.—The first sen20 tence of section 1842(b)(6)(F) (42 U.S.C.

21 1395u(b)(6)(F)) is amended—

22 (A) by striking ‘‘and (G)’’ and inserting

23 ‘‘(G)’’; and

24 (B) by inserting before the period at the

25 end the following: ‘‘, and (H) in the case of
†

392

S 1932 ES

1 services described in section 1861(aa)(3) that

2 are furnished by a health care professional

3 under contract with a Federally qualified health

4 center, payment shall be made to the center’’.

5 (b) TECHNICAL CORRECTIONS.—Clauses (i) and

6 (ii)(II) of section 1861(aa)(4)(A) (42 U.S.C.

7 1395x(aa)(4)(A)) are each amended by striking ‘‘(other

8 than subsection (h))’’.

9 (c) EFFECTIVE DATES.—The amendments made by

10 this section shall apply to services furnished on or after

11 January 1, 2006.

12 SEC. 6116. TECHNICAL CORRECTION REGARDING PUR13 CHASE AGREEMENTS FOR POWER-DRIVEN

14 WHEELCHAIRS.

15 (a) IN GENERAL.—Section 1834(a)(7)(A) (42 U.S.C.

16 1395m(a)(7)(A)), as amended by section 6109 of this Act,

17 is amended—

18 (1) in clause (i)(I), by striking ‘‘Payment’’ and

19 inserting ‘‘Except as provided in clause (iii), pay20 ment’’; and

21 (2) by adding at the end the following new

22 clause:

23 ‘‘(iii) PURCHASE AGREEMENT OPTION

24 FOR POWER-DRIVEN WHEELCHAIRS.—
†

393

S 1932 ES

1 ‘‘(I) IN GENERAL.—In the case

2 of a power-driven wheelchair, at the

3 time the supplier furnishes the item,

4 the supplier shall offer the individual

5 the option to purchase the item, and

6 payment for such item shall be made

7 on a lump-sum basis if the individual

8 exercises such option.

9 ‘‘(II) MAINTENANCE AND SERV10 ICING.—In the case of a power-driven

11 wheelchair for which a purchase

12 agreement has been entered into

13 under subclause (I), maintenance and

14 servicing payments shall, if the Sec15 retary determines such payments are

16 reasonable and necessary, be made

17 (for parts and labor not covered by

18 the supplier’s or manufacturer’s war19 ranty, as determined by the Secretary

20 to be appropriate), and such payments

21 shall be in an amount determined to

22 be appropriate by the Secretary.’’.

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

24 subsection (a) shall apply to items furnished on or after

25 October 1, 2006.
†

394

S 1932 ES

1 SEC. 6117. MEDICARE COVERAGE OF ULTRASOUND

2 SCREENING FOR ABDOMINAL AORTIC ANEU3 RYSMS; NATIONAL EDUCATIONAL AND IN4 FORMATION CAMPAIGN.

5 (a) IN GENERAL.—Section 1861 (42 U.S.C. 1395x)

6 is amended—

7 (1) in subsection (s)(2)—

8 (A) by striking ‘‘and’’ at the end of sub9 paragraph (Y);

10 (B) by adding ‘‘and’’ at the end of sub11 paragraph (Z); and

12 (C) by adding at the end the following new

13 subparagraph:

14 ‘‘(AA) ultrasound screening for abdominal aor15 tic aneurysm (as defined in subsection (bbb)) for an

16 individual—

17 ‘‘(i) who receives a referral for such an

18 ultrasound screening as a result of an initial

19 preventive physical examination (as defined in

20 section 1861(ww)(1));

21 ‘‘(ii) who has not been previously furnished

22 such an ultrasound screening under this title;

23 and

24 ‘‘(iii) who—

25 ‘‘(I) has a family history of abdominal

26 aortic aneurysm; or
†

395

S 1932 ES

1 ‘‘(II) manifests risk factors included

2 in a beneficiary category (not including

3 categories related to age) recommended for

4 screening by the United States Preventive

5 Services Task Force regarding abdominal

6 aortic aneurysms;’’; and

7 (2) by adding at the end the following new sub8 section:

9 ‘‘Ultrasound Screening for Abdominal Aortic Aneurysm

10 ‘‘(bbb) The term ‘ultrasound screening for abdominal

11 aortic aneurysm’ means—

12 ‘‘(1) a procedure using sound waves (or such

13 other procedures using alternative technologies, of

14 commensurate accuracy and cost, that the Secretary

15 may specify) provided for the early detection of ab16 dominal aortic aneurysm; and

17 ‘‘(2) includes a physician’s interpretation of the

18 results of the procedure.’’.

19 (b) INCLUSION OF ULTRASOUND SCREENING FOR

20 ABDOMINAL AORTIC ANEURYSM IN SCREENING SERVICES

21 FOR WHICH EDUCATION, COUNSELING, AND REFERRAL

22 IS PROVIDED FOR UNDER BENEFITS FOR INITIAL PRE23 VENTIVE PHYSICAL EXAMINATION.—Section 1861(ww)(2)

24 (42 U.S.C. 1395x(ww)(2)) is amended by adding at the

25 end the following new subparagraph:
†

396

S 1932 ES

1 ‘‘(L) Ultrasound screening for abdominal aortic

2 aneurysm as defined in section 1861(bbb).’’.

3 (c) PAYMENT FOR ULTRASOUND SCREENING FOR

4 ABDOMINAL AORTIC ANEURYSM.—Section 1848(j)(3) (42

5 U.S.C. 1395w–4(j)(3)) is amended by inserting

6 ‘‘(2)(AA),’’ after ‘‘(2)(W),’’.

7 (d) FREQUENCY AND QUALITY STANDARDS.—Sec8 tion 1862(a)(1) (42 U.S.C. 1395y(a)(1)) is amended—

9 (1) by striking ‘‘and’’ at the end of subpara10 graph (L);

11 (2) by striking the semicolon at the end of sub12 paragraph (M) and inserting ‘‘, and’’; and

13 (3) by adding at the end the following new sub14 paragraph:

15 ‘‘(N) in the case of ultrasound screening for ab16 dominal aortic aneurysm—

17 ‘‘(i) which is performed more frequently

18 than is provided for under section

19 1861(s)(2)(AA); or

20 ‘‘(ii) which is performed by an individual

21 or diagnostic laboratory that does not meet

22 quality assurance standards that the Secretary,

23 in consultation with national medical, vascular

24 technologist and sonographer societies, shall es25 tablish, including with respect to individuals
†

397

S 1932 ES

1 performing ultrasound screening for abdominal

2 aortic aneurysm (other than physicians) and di3 agnostic laboratories, that the individual or lab4 oratory is certified by the appropriate State li5 censing or certification agency or, in the case of

6 a service performed in a State that does not li7 cense or certify such individuals or laboratories,

8 by a national certification or accreditation orga9 nization recognized by the Secretary;’’.

10 (e) NON-APPLICATION OF PART B DEDUCTIBLE.—

11 Section 1833(b) (42 U.S.C. 1395l(b)) is amended in the

12 first sentence—

13 (1) by striking ‘‘and (6)’’ and inserting ‘‘(6)’’;

14 and

15 (2) by inserting ‘‘, and (7) such deductible shall

16 not apply with respect to ultrasound screening for

17 abdominal aortic aneurysm (as defined in section

18 1861(bbb))’’ before the period at the end.

19 (f) NATIONAL EDUCATIONAL AND INFORMATION

20 CAMPAIGN.—

21 (1) IN GENERAL.—After consultation with na22 tional medical, vascular technologist, and

23 sonographer societies, the Secretary of Health and

24 Human Services shall carry out a national education

25 and information campaign to promote awareness
†

398

S 1932 ES

1 among health care practitioners and the general

2 public with respect to the importance of early detec3 tion and treatment of abdominal aortic aneurysms.

4 (2) USE OF FUNDS.—The Secretary may use

5 amounts appropriated pursuant to this subsection to

6 make grants to national medical, vascular tech7 nologist, and sonographer societies (in accordance

8 with procedures and criteria specified by the Sec9 retary) to enable them to educate practitioners and

10 providers about matters relating to such aneurysms.

11 (3) AUTHORIZATION OF APPROPRIATIONS.—

12 There is authorized to be appropriated for fiscal

13 year 2006 and each fiscal year thereafter such sums

14 as may be necessary to carry out this subsection.

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

16 this section shall apply to ultrasound screenings for ab17 dominal aortic aneurysm performed on or after January

18 1, 2007.

19 SEC. 6118. IMPROVING PATIENT ACCESS TO, AND UTILIZA20 TION OF, COLORECTAL CANCER SCREENING

21 UNDER MEDICARE.

22 (a) INCREASE IN PART B REIMBURSEMENT FOR

23 COLORECTAL CANCER SCREENING AND DIAGNOSTIC

24 TESTS.—
†

399

S 1932 ES

1 (1) IN GENERAL.—Section 1834(d) (42 U.S.C.

2 1395m(d)) is amended by adding at the end the fol3 lowing new paragraph:

4 ‘‘(4) ENHANCED PART B PAYMENT FOR

5 COLORECTAL CANCER SCREENING AND DIAGNOSTIC

6 TESTS.—

7 ‘‘(A) NONFACILITY RATES.—Notwith8 standing paragraphs (2)(A) and (3)(A), the

9 Secretary shall establish national minimum pay10 ment amounts for CPT codes 45378, 45380,

11 and 45385, and HCPCS codes G0105 and

12 GO121 for items and services furnished on or

13 after January 1, 2007, which reflect a 5-per14 cent increase above the relative value units in

15 effect as the nonfacility rates for such codes on

16 December 31, 2006, with such revised payment

17 level to apply to items and services performed

18 in a nonfacility setting.

19 ‘‘(B) FACILITY RATES.—Notwithstanding

20 paragraphs (2)(A) and (3)(A), the Secretary

21 shall establish national minimum payment

22 amounts for CPT codes 45378, 45380, and

23 45385, and HCPCS codes G0105 and GO121

24 for items and services furnished on or after

25 January 1, 2007, which reflect a 5-percent in-
†

400

S 1932 ES

1 crease above the relative value units in effect as

2 the facility rates for such codes on December

3 31, 2006, with such revised payment level to

4 apply to items and services performed in a facil5 ity setting.

6 ‘‘(C) ANNUAL ADJUSTMENTS.—In the case

7 of items and services furnished on or after Jan8 uary 1, 2007, the payment rates described in

9 subparagraphs (A) and (B) shall, subject to the

10 minimum payment amounts established in such

11 subparagraphs, be adjusted annually as pro12 vided in section 1848.’’.

13 (2) NO EFFECT ON HOPD PAYMENTS.—The

14 Secretary shall not take into account the provisions

15 of section 1834(d)(4) of the Social Security Act, as

16 added by subsection (a), in determining the amount

17 of payment for any covered OPD service under the

18 prospective payment system for hospitals outpatient

19 department services under section 1833(t) of such

20 Act (42 U.S.C. 1395l(t)).

21 (b) MEDICARE COVERAGE OF OFFICE VISIT OR CON22 SULTATION PRIOR TO A SCREENING COLONOSCOPY OR IN

23 CONJUNCTION WITH A BENEFICIARY’S DECISION TO OB24 TAIN SUCH A SCREENING.—
†

401

S 1932 ES

1 (1) COVERAGE.—Section 1861(s)(2) (42 U.S.C.

2 1395x(s)(2)), as amended by section 6117, is

3 amended—

4 (A) in subparagraph (Z), by striking

5 ‘‘and’’ at the end;

6 (B) in subparagraph (AA), by inserting

7 ‘‘and’’ at the end; and

8 (C) by adding at the end the following new

9 subparagraph:

10 ‘‘(BB) an outpatient office visit or con11 sultation for the purpose of beneficiary edu12 cation, assuring selection of the proper screen13 ing test, and securing information relating to

14 the procedure and sedation of the beneficiary,

15 prior to a colorectal cancer screening test con16 sisting of a screening colonoscopy or in conjunc17 tion with the beneficiary’s decision to obtain

18 such a screening, regardless of whether such

19 screening is medically indicated with respect to

20 the beneficiary;’’.

21 (2) PAYMENT.—

22 (A) IN GENERAL.—Section 1833(a)(1) (42

23 U.S.C. 1395l(a)(1)) is amended—

24 (i) by striking ‘‘and’’ before ‘‘(V)’’;

25 and
†

402

S 1932 ES

1 (ii) by inserting before the semicolon

2 at the end the following: ‘‘, and (W) with

3 respect to an outpatient office visit or con4 sultation under section 1861(s)(2)(BB),

5 the amounts paid shall be 80 percent of

6 the lesser of the actual charge or the

7 amount established under section 1848’’.

8 (B) PAYMENT UNDER PHYSICIAN FEE

9 SCHEDULE.—Section 1848(j)(3) (42 U.S.C.

10 1395w–4(j)(3)), as amended by section 6117, is

11 amended by inserting ‘‘(2)(BB),’’ after

12 ‘‘(2)(AA),’’.

13 (C) REQUIREMENT FOR ESTABLISHMENT

14 OF PAYMENT AMOUNT UNDER PHYSICIAN FEE

15 SCHEDULE.—Section 1834(d) (42 U.S.C.

16 1395m(d)), as amended by subsection (a), is

17 amended by adding at the end the following

18 new paragraph:

19 ‘‘(5) PAYMENT FOR OUTPATIENT OFFICE VISIT

20 OR CONSULTATION PRIOR TO SCREENING

21 COLONOSCOPY.—With respect to an outpatient office

22 visit or consultation under section 1861(s)(2)(BB),

23 payment under section 1848 shall be consistent with

24 the payment amounts for CPT codes 99203 and

25 99243.’’.
†

403

S 1932 ES

1 (3) EFFECTIVE DATE.—The amendments made

2 by this subsection shall apply to items and services

3 provided on or after January 1, 2007.

4 (c) WAIVER OF DEDUCTIBLE FOR COLORECTAL CAN5 CER SCREENING TESTS.—

6 (1) IN GENERAL.—Section 1833(b) (42 U.S.C.

7 1395l(b)), as amended by section 6117, is amended

8 in the first sentence—

9 (A) by striking ‘‘and’’ before ‘‘(7)’’; and

10 (B) by inserting before the period at the

11 end the following: ‘‘, and (8) such deductible

12 shall not apply with respect to colorectal cancer

13 screening tests (as described in section

14 1861(pp)(1))’’.

15 (2) CONFORMING AMENDMENTS.—Paragraphs

16 (2)(C)(ii) and (3)(C)(ii) of section 1834(d) (42

17 U.S.C. 1395m(d)) are each amended—

18 (A) by striking ‘‘DEDUCTIBLE AND’’ in the

19 heading; and

20 (B) in subclause (I), by striking ‘‘deduct21 ible or’’ each place it appears.

22 (3) EFFECTIVE DATE.—The amendments made

23 by this subsection shall apply to items and services

24 furnished on or after January 1, 2007.
†

404

S 1932 ES

1 SEC. 6119. COVERAGE OF MARRIAGE AND FAMILY THERA2 PIST SERVICES AND MENTAL HEALTH COUN3 SELOR SERVICES UNDER PART B OF THE

4 MEDICARE PROGRAM.

5 (a) COVERAGE OF SERVICES.—

6 (1) IN GENERAL.—Section 1861(s)(2) (42

7 U.S.C. 1395x(s)(2)), as amended by section

8 6118(b), is amended—

9 (A) in subparagraph (AA), by striking

10 ‘‘and’’ after the semicolon at the end;

11 (B) in subparagraph (BB), by inserting

12 ‘‘and’’ after the semicolon at the end; and

13 (C) by adding at the end the following new

14 subparagraph:

15 ‘‘(CC) marriage and family therapist services

16 (as defined in subsection (ccc)(1)) and mental health

17 counselor services (as defined in subsection

18 (ccc)(3));’’.

19 (2) DEFINITIONS.—Section 1861 (42 U.S.C.

20 1395x), as amended by section 6117, is amended by

21 adding at the end the following new subsection:

22 ‘‘Marriage and Family Therapist Services; Marriage and

23 Family Therapist; Mental Health Counselor Serv24 ices; Mental Health Counselor

25 ‘‘(ccc)(1) The term ‘marriage and family therapist

26 services’ means services performed by a marriage and
†

405

S 1932 ES

1 family therapist (as defined in paragraph (2)) for the diag2 nosis and treatment of mental illnesses, which the mar3 riage and family therapist is legally authorized to perform

4 under State law (or the State regulatory mechanism pro5 vided by State law) of the State in which such services

6 are performed, as would otherwise be covered if furnished

7 by a physician or as an incident to a physician’s profes8 sional service, but only if no facility or other provider

9 charges or is paid any amounts with respect to the fur10 nishing of such services.

11 ‘‘(2) The term ‘marriage and family therapist’ means

12 an individual who—

13 ‘‘(A) possesses a master’s or doctoral degree

14 which qualifies for licensure or certification as a

15 marriage and family therapist pursuant to State

16 law;

17 ‘‘(B) after obtaining such degree has performed

18 at least 2 years of clinical supervised experience in

19 marriage and family therapy; and

20 ‘‘(C) in the case of an individual performing

21 services in a State that provides for licensure or cer22 tification of marriage and family therapists, is li23 censed or certified as a marriage and family thera24 pist in such State.
†

406

S 1932 ES

1 ‘‘(3) The term ‘mental health counselor services’

2 means services performed by a mental health counselor (as

3 defined in paragraph (4)) for the diagnosis and treatment

4 of mental illnesses which the mental health counselor is

5 legally authorized to perform under State law (or the

6 State regulatory mechanism provided by the State law) of

7 the State in which such services are performed, as would

8 otherwise be covered if furnished by a physician or as inci9 dent to a physician’s professional service, but only if no

10 facility or other provider charges or is paid any amounts

11 with respect to the furnishing of such services.

12 ‘‘(4) The term ‘mental health counselor’ means an

13 individual who—

14 ‘‘(A) possesses a master’s or doctor’s degree in

15 mental health counseling or a related field;

16 ‘‘(B) after obtaining such a degree has per17 formed at least 2 years of supervised mental health

18 counselor practice; and

19 ‘‘(C) in the case of an individual performing

20 services in a State that provides for licensure or cer21 tification of mental health counselors or professional

22 counselors, is licensed or certified as a mental health

23 counselor or professional counselor in such State.’’.

24 (3) PROVISION FOR PAYMENT UNDER PART

25 B.—Section 1832(a)(2)(B) (42 U.S.C.
†

407

S 1932 ES

1 1395k(a)(2)(B)) is amended by adding at the end

2 the following new clause:

3 ‘‘(v) marriage and family therapist

4 services and mental health counselor serv5 ices;’’.

6 (4) AMOUNT OF PAYMENT.—Section 1833(a)(1)

7 (42 U.S.C. 1395l(a)(1)), as amended by section

8 6118, is amended—

9 (A) by striking ‘‘and (W)’’ and inserting

10 ‘‘(W)’’; and

11 (B) by inserting before the semicolon at

12 the end the following: ‘‘, and (X) with respect

13 to marriage and family therapist services and

14 mental health counselor services under section

15 1861(s)(2)(CC), the amounts paid shall be 80

16 percent of the lesser of the actual charge for

17 the services or 75 percent of the amount deter18 mined for payment of a psychologist under sub19 paragraph (L)’’.

20 (5) EXCLUSION OF MARRIAGE AND FAMILY

21 THERAPIST SERVICES AND MENTAL HEALTH COUN22 SELOR SERVICES FROM SKILLED NURSING FACILITY

23 PROSPECTIVE PAYMENT SYSTEM.—Section

24 1888(e)(2)(A)(ii) (42 U.S.C. 1395yy(e)(2)(A)(ii)) is

25 amended by inserting ‘‘marriage and family thera-
†

408

S 1932 ES

1 pist services (as defined in section 1861(ccc)(1)),

2 mental health counselor services (as defined in sec3 tion 1861(ccc)(3)),’’ after ‘‘qualified psychologist

4 services,’’.

5 (6) INCLUSION OF MARRIAGE AND FAMILY

6 THERAPISTS AND MENTAL HEALTH COUNSELORS AS

7 PRACTITIONERS FOR ASSIGNMENT OF CLAIMS.—Sec8 tion 1842(b)(18)(C) (42 U.S.C. 1395u(b)(18)(C)) is

9 amended by adding at the end the following new

10 clauses:

11 ‘‘(vii) A marriage and family therapist (as de12 fined in section 1861(ccc)(2)).

13 ‘‘(viii) A mental health counselor (as defined in

14 section 1861(ccc)(4)).’’.

15 (b) COVERAGE OF CERTAIN MENTAL HEALTH SERV16 ICES PROVIDED IN CERTAIN SETTINGS.—

17 (1) RURAL HEALTH CLINICS AND FEDERALLY

18 QUALIFIED HEALTH CENTERS.—Section

19 1861(aa)(1)(B) (42 U.S.C. 1395x(aa)(1)(B)) is

20 amended by striking ‘‘or by a clinical social worker

21 (as defined in subsection (hh)(1)),’’ and inserting ‘‘,

22 by a clinical social worker (as defined in subsection

23 (hh)(1)), by a marriage and family therapist (as de24 fined in subsection (ccc)(2)), or by a mental health

25 counselor (as defined in subsection (ccc)(4)),’’.
†

409

S 1932 ES

1 (2) HOSPICE PROGRAMS.—Section

2 1861(dd)(2)(B)(i)(III) (42 U.S.C.

3 1395x(dd)(2)(B)(i)(III)) is amended by inserting ‘‘or

4 one marriage and family therapist (as defined in

5 subsection (bbb)(2))’’ after ‘‘social worker’’.

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

7 this section shall apply with respect to services furnished

8 on or after January 1, 2007.

9 SEC. 6120. QUALITY MEASUREMENT SYSTEMS AMEND10 MENTS.

11 Section 1860E–1 , as added by section 6110(a)(2),

12 is amended—

13 (1) in subsection (b)(1)—

14 (A) in subparagraph (B)—

15 (i) in clause (vi), by striking ‘‘and’’ at

16 the end;

17 (ii) in clause (vii), by striking the pe18 riod at the end and inserting ‘‘; and’’; and

19 (iii) by adding at the end the fol20 lowing new clause:

21 ‘‘(viii) measures that address condi22 tions where there is the greatest disparity

23 of health care provided and health out24 comes between majority and minority

25 groups.’’; and
†

410

S 1932 ES

1 (B) in subparagraph (E)—

2 (i) in clause (v), by striking ‘‘and’’ at

3 the end;

4 (ii) by redesignating clause (vi) as

5 clause (vii); and

6 (iii) by inserting after clause (v) the

7 following new clause:

8 ‘‘(vi) allows quality measures that are

9 reported to be stratified according to pa10 tient group characteristics, and’’;

11 (2) in subsection (c)(4)—

12 (A) in subparagraph (B), by striking

13 ‘‘and’’ at the end;

14 (B) in subparagraph (C), by striking the

15 period at the end and inserting ‘‘; and’’; and

16 (C) by adding at the end the following new

17 subparagraph:

18 ‘‘(D) The report commissioned by Con19 gress from the Institute of Medicine of the Na20 tional Academy of Sciences, titled ‘Unequal

21 Treatment: Confronting Racial and Ethnic Dis22 parities in Health Care’.’’; and

23 (3) in subsection (d)(2), by inserting ‘‘experts

24 in minority health,’’ after ‘‘government agencies,’’.
†

411

S 1932 ES

1 TITLE VII—COMMITTEE ON

2 HEALTH, EDUCATION, LABOR,

3 AND PENSIONS

4 Subtitle A—Education Provisions

5 CHAPTER 1—EDUCATION

6 SEC. 7101. PROVISIONAL GRANT ASSISTANCE PROGRAM.

7 (a) AMENDMENT.—Subpart 1 of part A of title IV

8 of the Higher Education Act of 1965 (20 U.S.C. 1070a)

9 is amended by adding at the end the following:

10 ‘‘SEC. 401A. PROVISIONAL GRANT ASSISTANCE PROGRAM.

11 ‘‘(a) GRANTS.—

12 ‘‘(1) IN GENERAL.—From amounts appro13 priated under subsection (e) for a fiscal year and

14 subject to subsection (b), the Secretary shall award

15 grants to students (which shall be known as

16 ‘ProGAP awards’) in the same manner as the Sec17 retary awards grants to students under section 401,

18 except that—

19 ‘‘(A) at the beginning of each award year,

20 the Secretary shall establish a maximum and

21 minimum award level based on amounts made

22 available under subsection (e);

23 ‘‘(B) the Secretary shall only award grants

24 under this section to students eligible for a
†

412

S 1932 ES

1 grant under section 401 for the award year;

2 and

3 ‘‘(C) when determining eligibility for the

4 awards, the Secretary shall consider only those

5 students who are eligible for a grant under sec6 tion 401, as of June 30 of the award year for

7 which the determination is made.

8 ‘‘(D) the Secretary—

9 ‘‘(i) shall determine if an increase in

10 the amount of a grant under this section

11 is needed to help encourage students to

12 pursue courses of study that are important

13 to the current and future national, home14 land, and economic security needs of the

15 United States; and

16 ‘‘(ii) after making the determination

17 described in clause (i), may increase the

18 maximum and minimum award level estab19 lished under subparagraph (A) by not

20 more than 25 percent, for students eligible

21 for a grant under this section who are pur22 suing a degree with a major in mathe23 matics, science, technology, engineering, or

24 a foreign language that is critical to the

25 national security of the United States; and
†

413

S 1932 ES

1 ‘‘(E) not later than September 30 of each

2 fiscal year, the Secretary shall notify Congress,

3 in writing, of the Secretary’s determination

4 with respect to subparagraph (D)(i) and of any

5 increase in award levels under subparagraph

6 (D)(ii).

7 ‘‘(2) STUDENTS WITH THE GREATEST NEED.—

8 The Secretary shall ensure grants are awarded

9 under this section to students with the greatest need

10 as determined in accordance with section 471.

11 ‘‘(b) COST OF ATTENDANCE LIMITATION.—A grant

12 awarded under this section for an award year shall be

13 awarded in an amount that does not exceed—

14 ‘‘(1) the student’s cost of attendance for the

15 award year; less

16 ‘‘(2) an amount equal to the expected family

17 contribution for that student for the award year.

18 ‘‘(c) SUPPLEMENT NOT SUPPLANT.—Grants award19 ed from funds made available under subsection (e) shall

20 be used to supplement, and not supplant, other Federal,

21 State, or institutional grant funds.

22 ‘‘(d) USE OF EXCESS FUNDS.—

23 ‘‘(1) 15 PERCENT OR LESS.—If, at the end of

24 a fiscal year, the funds available for making grant

25 payments under this section exceed the amount nec-
†

414

S 1932 ES

1 essary to make the grant payments required under

2 this section to eligible students by 15 percent or less,

3 then all of the excess funds shall remain available

4 for making grant payments under this section dur5 ing the next succeeding fiscal year.

6 ‘‘(2) MORE THAN 15 PERCENT.—If, at the end

7 of a fiscal year, the funds available for making grant

8 payments under this section exceed the amount nec9 essary to make the grant payments required under

10 this section to eligible students by more than 15 per11 cent, then all of such funds shall remain available

12 for making such grant payments but grant payments

13 may be made under this paragraph only with respect

14 to awards for that fiscal year.’’.

15 ‘‘(e) AUTHORIZATION AND APPROPRIATION OF

16 FUNDS.—There are authorized to be appropriated, and

17 there are appropriated, out of any money in the Treasury

18 not otherwise appropriated, for the Department of Edu19 cation to carry out this section and section 401B—

20 ‘‘(1) $1,897,000,000 for fiscal year 2006;

21 ‘‘(2) $1,901,000,000 for fiscal year 2007;

22 ‘‘(3) $1,899,000,000 for fiscal year 2008;

23 ‘‘(4) $1,898,000,000 for fiscal year 2009; and

24 ‘‘(5) $1,897,000,000 for fiscal year 2010.
†

415

S 1932 ES

1 ‘‘(f) SUNSET PROVISION.—This section shall be effec2 tive with respect to amounts appropriated for fiscal year

3 2006 and each of the 4 succeeding fiscal years.’’.

4 (b) SENSE OF THE SENATE.—It is the sense of the

5 Senate that the amounts appropriated to carry out sec6 tions 401A and 401B of the Higher Education Act of

7 1965 are the result of the savings generated by the

8 amendments made by this chapter.

9 SEC. 7102. NATIONAL SMART GRANTS.

10 Subpart 1 of part A of title IV of the Higher Edu11 cation Act of 1965 (20 U.S.C. 1070a) is further amended

12 by adding after section 401A (as added by section 7101):

13 ‘‘SEC. 401B. NATIONAL SMART GRANTS.

14 ‘‘(a) FINDINGS.—Congress makes the following find15 ings:

16 ‘‘(1) If the United States is to remain a world

17 leader in the global economy, its college students

18 must have the training they need to compete for the

19 best jobs of the 21st century.

20 (2) The United States intelligence community

21 faces major shortages in foreign languages critical to

22 national security, and will also require major incen23 tives to fill projected workforce needs.

24 ‘‘(3) Increasingly, the best jobs of the 21st cen25 tury will require baccalaureate degrees in the
†

416

S 1932 ES

1 sciences, mathematics, technology, engineering, and

2 foreign languages critical to national security, or be

3 generated by people who have such degrees.

4 ‘‘(4) Congress should establish a National

5 Science and Mathematics Access to Retain Talent

6 (SMART) grant program to meet the goals de7 scribed in paragraphs (1) through (3).

8 ‘‘(b) PURPOSE.—The purpose of this section is to in9 crease the number of postsecondary students from low-in10 come backgrounds who are enrolled in studies leading to

11 baccalaureate degrees in physical, life, or computer

12 sciences, mathematics, technology, engineering, and for13 eign languages critical to national security.

14 ‘‘(c) GRANTS AUTHORIZED.—From amounts appro15 priated under section 401A(c) for a fiscal year, the Sec16 retary shall award grants to eligible students to assist the

17 eligible students in paying their college education ex18 penses.

19 ‘‘(d) DESIGNATION.—A grant under this section shall

20 be known as a ‘National Science and Mathematics Access

21 to Retain Talent Grant’ or a ‘National SMART Grant’.

22 ‘‘(e) DEFINITION OF ELIGIBLE STUDENT.—In this

23 section the term ‘eligible student’ means a student who,

24 for the academic year for which the determination is

25 made—
†

417

S 1932 ES

1 ‘‘(1) is eligible for a Federal Pell Grant; and

2 ‘‘(2) is in the student’s 3rd or 4th year at an

3 institution of higher education majoring in—

4 ‘‘(A) mathematics, science, technology, or

5 engineering (as determined by the Secretary

6 pursuant to regulations); or

7 ‘‘(B) a foreign language that the Sec8 retary, in consultation with the Director of Na9 tional Intelligence, determines is critical to the

10 national security of the United States.

11 ‘‘(f) GRANT AMOUNT.—The Secretary shall award a

12 grant under this section in an amount that does not exceed

13 $1,500 for an academic year.

14 ‘‘(g) FUNDING RULE.—The Secretary shall use not

15 more than $450,000,000 of the funds appropriated under

16 section 401A(c) for each of the fiscal years 2006 through

17 2010 to carry out this section.

18 ‘‘(h) UNOBLIGATED FUNDS AVAILABLE FOR FED19 ERAL GRANT ASSISTANCE.—The Secretary shall make

20 any funds made available under subsection (g) for a fiscal

21 year that remain unobligated at the end of the fiscal year

22 available to carry out section 401A.

23 ‘‘(i) MATCHING ASSISTANCE.—An institution of

24 higher education may, from funds provided from private

25 sources, provide additional assistance to a student receiv-
†

418

S 1932 ES

1 ing a grant under this section, except that the total assist2 ance provided under this title to a student shall not exceed

3 the student’s cost of attendance.’’.

4 SEC. 7103. LOAN LIMITS.

5 (a) FEDERAL INSURANCE LIMITS.—Section

6 425(a)(1)(A) of the Higher Education Act of 1965 (20

7 U.S.C. 1075(a)(1)(A)) is amended—

8 (1) in clause (i)(I), by striking ‘‘$2,625’’ and

9 inserting ‘‘$3,500’’; and

10 (2) in clause (ii)(I), by striking ‘‘$3,500’’ and

11 inserting ‘‘$4,500’’.

12 (b) GUARANTEE LIMITS.—Section 428(b)(1)(A) of

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

14 1078(b)(1)(A)) is amended—

15 (1) in clause (i)(I), by striking ‘‘$2,625’’ and

16 inserting ‘‘$3,500’’; and

17 (2) in clause (ii)(I), by striking ‘‘$3,500’’ and

18 inserting ‘‘$4,500’’.

19 (c) FEDERAL PLUS LOANS.—Section 428B of the

20 Higher Education Act of 1965 (20 U.S.C. 1078–2) is

21 amended—

22 (1) in subsection (a)(1)—

23 (A) in the matter preceding subparagraph

24 (A), by striking ‘‘Parents’’ and inserting ‘‘A
†

419

S 1932 ES

1 graduate or professional student or the par2 ents’’;

3 (B) in subparagraph (A), by striking ‘‘the

4 parents’’ and inserting ‘‘the graduate or profes5 sional student or the parents’’; and

6 (C) in subparagraph (B), by striking ‘‘the

7 parents’’ and inserting ‘‘the graduate or profes8 sional student or the parents’’;

9 (2) in subsection (b), by striking ‘‘any parent’’

10 and inserting ‘‘any graduate or professional student

11 or any parent’’;

12 (3) in subsection (c)(2), by striking ‘‘parent’’

13 and inserting ‘‘graduate or professional student or

14 parent’’; and

15 (4) in subsection (d)(1), by striking ‘‘the par16 ent’’ and inserting ‘‘the graduate or professional stu17 dent or the parent’’.

18 (d) UNSUBSIDIZED STAFFORD LOANS FOR GRAD19 UATE OR PROFESSIONAL STUDENTS.—Section

20 428H(d)(2) of the Higher Education Act of 1965 (20

21 U.S.C. 1078–8(d)(2)) is amended—

22 (1) in subparagraph (C), by striking ‘‘$10,000’’

23 and inserting ‘‘$12,000’’; and

24 (2) in subparagraph (D)—
†

420

S 1932 ES

1 (A) in clause (i), by striking ‘‘$5,000’’ and

2 inserting ‘‘$7,000’’; and

3 (B) in clause (ii), by striking ‘‘$5,000’’

4 and inserting ‘‘$7,000’’.

5 SEC. 7104. PLUS LOAN INTEREST RATES AND ZERO SPE6 CIAL ALLOWANCE PAYMENT.

7 (a) PLUS LOANS.—Section 427A(l)(2) of the Higher

8 Education Act of 1965 (20 U.S.C. 1077a(l)(2)) is amend9 ed by striking ‘‘7.9 percent’’ and inserting ‘‘8.5 percent’’.

10 (b) CONFORMING AMENDMENTS FOR SPECIAL AL11 LOWANCES.—

12 (1) AMENDMENTS.—Subparagraph (I) of sec13 tion 438(b)(2) of the Higher Education Act of 1965

14 (20 U.S.C. 1087–1(b)(2)) is amended—

15 (A) in clause (iv), by striking ‘‘, subject to

16 clause (vi) of this subparagraph’’;

17 (B) in clause (v), by striking ‘‘July 1,

18 2006’’ each place it appears and inserting

19 ‘‘April 1, 2006’’; and

20 (C) by striking clauses (vi) and (vii) and

21 inserting the following:

22 ‘‘(vi) RECAPTURE OF EXCESS INTER23 EST.—

24 ‘‘(I) EXCESS CREDITED.—With

25 respect to a loan on which the applica-
†

421

S 1932 ES

1 ble interest rate is determined under

2 subsection (k) or (l) of section 427A

3 and for which the first disbursement

4 of principal is made on or after April

5 1, 2006, if the applicable interest rate

6 for any 3-month period exceeds the

7 special allowance support level appli8 cable to such loan under this subpara9 graph for such period, then an adjust10 ment shall be made by calculating the

11 excess interest in the amount com12 puted under subclause (II) of this

13 clause, and by crediting the excess in14 terest to the Government not less

15 often than annually.

16 ‘‘(II) CALCULATION OF EX17 CESS.—The amount of any adjust18 ment of interest on a loan to be made

19 under this subsection for any quarter

20 shall be equal to—

21 ‘‘(aa) the applicable interest

22 rate minus the special allowance

23 support level determined under

24 this subparagraph; multiplied by
†

422

S 1932 ES

1 ‘‘(bb) the average daily prin2 cipal balance of the loan (not in3 cluding unearned interest added

4 to principal) during such cal5 endar quarter; divided by

6 ‘‘(cc) four.

7 ‘‘(III) SPECIAL ALLOWANCE SUP8 PORT LEVEL.—For purposes of this

9 clause, the term ‘special allowance

10 support level’ means, for any loan, a

11 number expressed as a percentage

12 equal to the sum of the rates deter13 mined under subclauses (I) and (III)

14 of clause (i), and applying any substi15 tution rules applicable to such loan

16 under clauses (ii), (iii), and (iv) in de17 termining such sum.’’.

18 (2) EFFECTIVE DATE.—The amendments made

19 by this subsection shall not apply with respect to

20 any special allowance payment made under section

21 438 of the Higher Education Act of 1965 (20 U.S.C

22 1087–1) before April 1, 2006.
†

423

S 1932 ES

1 SEC. 7105. REDUCTION OF LENDER INSURANCE REIM2 BURSEMENT RATES.

3 (a) AMENDMENT.—Subparagraph (G) of section

4 428(b)(1) of the Higher Education Act of 1965 (20

5 U.S.C. 1078(b)(1)) is amended to read as follows:

6 ‘‘(G) insures 97 percent of the unpaid

7 principal of loans insured under the program;’’.

8 (b) EFFECTIVE DATE.—The amendment made by

9 subsection (a) shall apply with respect to any loan made,

10 insured, or guaranteed under part B of title IV of the

11 Higher Education Act of 1965 (20 U.S.C. 1071 et seq.)

12 for which the first disbursement is made on or after Janu13 ary 1, 2006.

14 SEC. 7106. GUARANTY AGENCY ORIGINATION FEE.

15 (a) AMENDMENT.—Section 428(b)(1)(H) of the

16 Higher Education Act of 1965 (20 U.S.C. 1078(b)(1)(H))

17 is amended to read as follows:

18 ‘‘(H) provides for the collection, and the

19 deposit in the Federal Fund established under

20 section 422A(a), of a guaranty agency origina21 tion fee of 1.0 percent of each disbursement of

22 the proceeds of the loan, which fee may be pro23 vided from funds in the guaranty agency’s oper24 ating fund under section 422B or from other

25 non-Federal funds;’’.
†

424

S 1932 ES

1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall be effective with respect to any loan

3 disbursed under part B of title IV of the Higher Edu4 cation Act of 1965 on or after April 1, 2006.

5 SEC. 7107. DEFERMENT OF STUDENT LOANS FOR MILITARY

6 SERVICE.

7 (a) FEDERAL FAMILY EDUCATION LOANS.—Section

8 428(b)(1)(M) of the Higher Education Act of 1965 (20

9 U.S.C. 1078(b)(1)(M)) is amended—

10 (1) by striking ‘‘or’’ at the end of clause (ii);

11 (2) by redesignating clause (iii) as clause (iv);

12 and

13 (3) by inserting after clause (ii) the following

14 new clause:

15 ‘‘(iii) not in excess of 3 years during

16 which the borrower—

17 ‘‘(I) is serving on active duty

18 during a war or other military oper19 ation or national emergency; or

20 ‘‘(II) is performing qualifying

21 National Guard duty during a war or

22 other military operation or national

23 emergency; or’’.
†

425

S 1932 ES

1 (b) DIRECT LOANS.—Section 455(f)(2) of the Higher

2 Education Act of 1965 (20 U.S.C. 1087e(f)(2)) is

3 amended—

4 (1) by redesignating subparagraph (C) as sub5 paragraph (D); and

6 (2) by inserting after subparagraph (B) the fol7 lowing new subparagraph:

8 ‘‘(C) not in excess of 3 years during which

9 the borrower—

10 ‘‘(i) is serving on active duty during a

11 war or other military operation or national

12 emergency; or

13 ‘‘(ii) is performing qualifying National

14 Guard duty during a war or other military

15 operation or national emergency; or’’.

16 (c) PERKINS LOANS.—Section 464(c)(2)(A) of the

17 Higher Education Act of 1965 (20 U.S.C.

18 1087dd(c)(2)(A)) is amended—

19 (1) by redesignating clauses (iii) and (iv) as

20 clauses (iv) and (v), respectively; and

21 (2) by inserting after clause (ii) the following

22 new clause:

23 ‘‘(iii) not in excess of 3 years during

24 which the borrower—
†

426

S 1932 ES

1 ‘‘(I) is serving on active duty

2 during a war or other military oper3 ation or national emergency; or

4 ‘‘(II) is performing qualifying

5 National Guard duty during a war or

6 other military operation or national

7 emergency;’’.

8 (d) DEFINITIONS.—Section 481 of the Higher Edu9 cation Act of 1965 (20 U.S.C. 1088) is amended by add10 ing at the end the following new subsection:

11 ‘‘(d) DEFINITIONS FOR MILITARY DEFERMENTS.—

12 For purposes of parts B, D, and E of this title:

13 ‘‘(1) ACTIVE DUTY.—The term ‘active duty’ has

14 the meaning given such term in section 101(d)(1) of

15 title 10, United States Code, except that such term

16 does not include active duty for training or attend17 ance at a service school.

18 ‘‘(2) MILITARY OPERATION.—The term ‘mili19 tary operation’ means a contingency operation as

20 such term is defined in section 101(a)(13) of title

21 10, United States Code.

22 ‘‘(3) NATIONAL EMERGENCY.—The term ‘na23 tional emergency’ means the national emergency by

24 reason of certain terrorist attacks declared by the

25 President on September 14, 2001, or subsequent na-
†

427

S 1932 ES

1 tional emergencies declared by the President by rea2 son of terrorist attacks.

3 ‘‘(4) SERVING ON ACTIVE DUTY.—The term

4 ‘serving on active duty during a war or other mili5 tary operation or national emergency’ means service

6 by an individual who is—

7 ‘‘(A) a Reserve of an Armed Force ordered

8 to active duty under section 12301(a),

9 12301(g), 12302, 12304, or 12306 of title 10,

10 United States Code, or any retired member of

11 an Armed Force ordered to active duty under

12 section 688 of such title, for service in connec13 tion with a war or other military operation or

14 national emergency, regardless of the location

15 at which such active duty service is performed;

16 and

17 ‘‘(B) any other member of an Armed Force

18 on active duty in connection with such emer19 gency or subsequent actions or conditions who

20 has been assigned to a duty station at a loca21 tion other than the location at which such mem22 ber is normally assigned.

23 ‘‘(5) QUALIFYING NATIONAL GUARD DUTY.—

24 The term ‘qualifying National Guard duty during a

25 war or other military operation or national emer-
†

428

S 1932 ES

1 gency’ means service as a member of the National

2 Guard on full-time National Guard duty (as defined

3 in section 101(d)(5) of title 10, United States Code)

4 under a call to active service authorized by the

5 President or the Secretary of Defense for a period

6 of more than 30 consecutive days under section

7 502(f) of title 32, United States Code, in connection

8 with a war, other military operation, or a national

9 emergency declared by the President and supported

10 by Federal funds.’’.

11 (e) RULE OF CONSTRUCTION.—Nothing in the

12 amendments made by this section shall be construed to

13 authorize any refunding of any repayment of a loan.

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

15 this section shall apply with respect to loans for which the

16 first disbursement is made on or after July 1, 2001.

17 SEC. 7108. RECOVERY THROUGH CONSOLIDATION.

18 Section 428(c) of the Higher Education Act of 1965

19 (20 U.S.C 1078(c)) is amended—

20 (1) in paragraph (2)(A)—

21 (A) by inserting ‘‘(i)’’ after ‘‘including’’;

22 and

23 (B) by inserting before the semicolon at

24 the end the following: ‘‘and (ii) requirements es25 tablishing procedures to preclude consolidation
†

429

S 1932 ES

1 lending from being an excessive proportion of

2 guaranty agency recoveries on defaulted loans

3 under this part’’;

4 (2) in paragraph (2)(D), by striking ‘‘para5 graph (6)’’ and inserting ‘‘paragraph (6)(A)’’; and

6 (3) in paragraph (6)—

7 (A) by inserting ‘‘(A)’’ before ‘‘For the

8 purposes of paragraph (2)(D),’’;

9 (B) by redesignating subparagraphs (A)

10 and (B) as clauses (i) and (ii), respectively; and

11 (C) by adding at the end the following new

12 subparagraphs:

13 ‘‘(B) GUARANTY AGENCY OBLIGATIONS.—A

14 guaranty agency shall—

15 ‘‘(i) on or after October 1, 2006—

16 ‘‘(I) not charge the borrower collec17 tion costs in an amount in excess of 18.5

18 percent of the outstanding principal and

19 interest of a defaulted loan that is paid off

20 through consolidation by the borrower

21 under this title; and

22 ‘‘(II) remit to the Secretary a portion

23 of the collection charge under subclause (I)

24 equal to 8.5 percent of the outstanding
†

430

S 1932 ES

1 principal and interest of such defaulted

2 loan; and

3 ‘‘(ii) on and after October 1, 2009, remit

4 to the Secretary the entire amount charged

5 under clause (i)(I) with respect to each de6 faulted loan that is paid off with excess consoli7 dation proceeds.

8 ‘‘(C) EXCESS CONSOLIDATION PRO9 CEEDS.—For purposes of subparagraph (B),

10 the term ‘excess consolidation proceeds’ means,

11 with respect to any guaranty agency for any

12 Federal fiscal year beginning on or after Octo13 ber 1, 2009, the proceeds of consolidation of de14 faulted loans under this title that exceed 45

15 percent of the agency’s total collections on de16 faulted loans in such Federal fiscal year.’’.

17 SEC. 7109. SINGLE HOLDER RULE.

18 Subparagraph (A) of section 428C(b)(1) of the High19 er Education Act of 1965 (20 U.S.C. 1078–3(b)(1)) is

20 amended by striking ‘‘and (i)’’ and all that follows through

21 ‘‘so selected for consolidation)’’.

22 SEC. 7110. DEFAULT REDUCTION PROGRAM.

23 Section 428F(a)(1) of the Higher Education Act of

24 1965 (20 U.S.C. 1078–6(a)(1)) is amended—
†

431

S 1932 ES

1 (1) in subparagraph (A), by striking ‘‘consecu2 tive payments for 12 months’’ and inserting ‘‘9 pay3 ments made within 20 days of the due date during

4 10 consecutive months’’;

5 (2) by redesignating subparagraph (C) as sub6 paragraph (D); and

7 (3) by inserting after subparagraph (B) the fol8 lowing new subparagraph:

9 ‘‘(C) A guaranty agency may charge the

10 borrower and retain collection costs in an

11 amount not to exceed 18.5 percent of the out12 standing principal and interest at the time of

13 sale of a loan rehabilitated under subparagraph

14 (A).’’.

15 SEC. 7111. REQUIREMENTS FOR DISBURSEMENTS OF STU16 DENT LOANS.

17 Section 428G of the Higher Education Act of 1965

18 (20 U.S.C. 1078–7) is amended—

19 (1) in subsection (a)(3), by adding at the end

20 the following: ‘‘Notwithstanding section 422(d) of

21 the Higher Education Amendments of 1998, this

22 paragraph shall be effective beginning on the date of

23 enactment of the Higher Education Amendments of

24 2005.’’; and
†

432

S 1932 ES

1 (2) in subsection (b)(1), by adding at the end

2 the following: ‘‘Notwithstanding section 422(d) of

3 the Higher Education Amendments of 1998, the sec4 ond sentence of this paragraph shall be effective be5 ginning on the date of enactment of the Higher

6 Education Amendments of 2005.’’.

7 SEC. 7112. SPECIAL INSURANCE AND REINSURANCE RULES.

8 (a) REPEAL.—Section 428I of the Higher Education

9 Act of 1965 (20 U.S.C. 1078–9) is repealed.

10 (b) CONFORMING AMENDMENTS.—Part A of title IV

11 of the Higher Education Act of 1965 (20 U.S.C.1070 et

12 seq.) is amended—

13 (1) in section 428(c)(1)—

14 (A) by striking subparagraph (D); and

15 (B) by redesignating subparagraphs (E)

16 and (F) as subparagraphs (D) and (E), respec17 tively; and

18 (2) in section 438(b)(5), by striking the matter

19 following subparagraph (B).

20 SEC. 7113. SCHOOL AS LENDER MORATORIUM.

21 Section 435(d)(2) of the Higher Education Act of

22 1965 (20 U.S.C. 1085(d)(2)) is amended—

23 (1) in subparagraph (E), by striking ‘‘and’’

24 after the semicolon; and
†

433

S 1932 ES

1 (2) by inserting before the matter following

2 subparagraph (F) (as amended by section 7390) the

3 following:

4 ‘‘(G) shall have met the requirements of

5 subparagraphs (A) through (F), and made

6 loans under this part, on or before August 31,

7 2005;

8 ‘‘(H) shall hold each loan the eligible insti9 tution makes under this part to a student en10 rolled at the eligible institution until the stu11 dent enters into a grace period described in sec12 tion 427(a)(2)(B) or 428(b)(7);

13 ‘‘(I) shall use the proceeds from the sale of

14 a loan made under this part, for need based

15 grant aid programs, except that such

16 proceeds—

17 ‘‘(i) shall not be used to provide a

18 grant to a student for an academic year in

19 an amount that is more than the student’s

20 cost of attendance for the academic year;

21 and

22 ‘‘(ii) shall supplement and not sup23 plant other Federal, State, and institu24 tional grant aid; and
†

434

S 1932 ES

1 ‘‘(J) shall not be a foundation or alumni

2 organization;’’.

3 SEC. 7114. PERMANENT REDUCTION OF SPECIAL ALLOW4 ANCE PAYMENTS FOR LOANS FROM THE PRO5 CEEDS OF TAX EXEMPT ISSUES.

6 (a) TECHNICAL CLARIFICATION.—The matter pre7 ceding paragraph (1) of section 2 of the Taxpayer-Teacher

8 Protection Act of 2004 (Public Law 108–409; 118 Stat.

9 2299) is amended by inserting ‘‘of the Higher Education

10 Act of 1965’’ after ‘‘Section 438(b)(2)(B)’’. The amend11 ment made by the preceding sentence shall be effective as

12 if enacted on October 30, 2004.

13 (b) AMENDMENT.—Section 438(b)(2)(B) of the

14 Higher Education Act of 1965 (20 U.S.C. 1087–

15 1(b)(2)(B)) is amended—

16 (1) in clause (iv), by striking ‘‘and before Janu17 ary 1, 2006,’’; and

18 (2) in clause (v)(II)—

19 (A) in item (aa), by striking ‘‘and before

20 January 1, 2006,’’;

21 (B) in item (bb), by striking ‘‘and before

22 January 1, 2006,’’; and

23 (C) in item (cc), by striking ‘‘and before

24 January 1, 2006,’’.
†

435

S 1932 ES

1 SEC. 7115. SPECIAL ALLOWANCES.

2 (a) ORIGINATION FEES.—Paragraph (2) of section

3 438(c) of the Higher Education Act of 1965 (20 U.S.C.

4 1087–1(c)) is amended—

5 (1) by striking the designation and heading of

6 such paragraph and inserting the following:

7 ‘‘(2) AMOUNT OF ORIGINATION FEES.—

8 ‘‘(A) IN GENERAL.—’’; and

9 (2) by adding at the end the following new sub10 paragraph:

11 ‘‘(B) SUBSEQUENT REDUCTIONS.—Sub12 paragraph (A) shall be applied to loans made

13 under this part (other than loans made under

14 sections 428C and 439(o)) by substituting ‘2.50

15 percent’ for ‘3.0 percent’ with respect to loans

16 for which the first disbursement of principal is

17 made on or after July 1, 2007.’’.

18 (b) LOAN FEES FROM LENDERS.—

19 (1) AMENDMENT.—Paragraph (2) of section

20 438(d)(2) of the Higher Education Act of 1965 (20

21 U.S.C. 1087–1(d)) is amended to read as follows:

22 ‘‘(2) AMOUNT OF LOAN FEES.—

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

24 subparagraph (B), with respect to any loan

25 made under this part for which the first dis26 bursement was made on or after October 1,
†

436

S 1932 ES

1 1993, the amount of the loan fee that shall be

2 deducted under paragraph (1) shall be equal to

3 0.50 percent of the principal amount of the

4 loan.

5 ‘‘(B) CONSOLIDATION LOANS.—With re6 spect to any loan made under section 428C on

7 or after April 1, 2006, the amount of the loan

8 fee that shall be deducted under paragraph (1)

9 shall be equal to 1.0 percent of the principal

10 amount of the loan.’’.

11 (2) EFFECTIVE DATE.—The amendment made

12 by paragraph (1) shall apply with respect to any

13 loan made, insured, or guaranteed under part B of

14 title IV of the Higher Education Act of 1965 (20

15 U.S.C. 1071 et seq.) for which the first disburse16 ment is made on or after April 1, 2006.

17 SEC. 7116. ORIGINATION FEE.

18 Section 455(c) of the Higher Education Act of 1965

19 (20 U.S.C. 1087e(c)) is amended—

20 (1) by striking ‘‘shall’’ and inserting ‘‘is author21 ized to’’; and

22 (2) by striking ‘‘4.0 percent of the principal

23 amount of loan’’ and inserting ‘‘not less than 1 per24 cent and not more than 3 percent of the principal

25 amount of the loan, except that the Secretary shall
†

437

S 1932 ES

1 charge the borrower of a Federal Direct PLUS Loan

2 an origination fee of 4.0 percent of the principal

3 amount of the loan. Beginning on July 1, 2007, the

4 preceding sentence shall be applied by substituting

5 ‘2.5 percent’ for ‘3 percent’ ’’.

6 SEC. 7117. INCOME CONTINGENT REPAYMENT FOR PUBLIC

7 SECTOR EMPLOYEES.

8 Section 455(e) of the Higher Education Act of 1965

9 (20 U.S.C. 1087e(e)) is amended by adding at the end

10 the following:

11 ‘‘(7) REPAYMENT PLAN FOR PUBLIC SECTOR

12 EMPLOYEES.—

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

14 forgive the balance due on any loan made under

15 this part or section 428C(b)(5) for a

16 borrower—

17 ‘‘(i) who has made 120 payments on

18 such loan pursuant to income contingent

19 repayment; and

20 ‘‘(ii) who is employed, and was em21 ployed for the 10-year period in which the

22 borrower made the 120 payments de23 scribed in clause (i), in a public sector job.

24 ‘‘(B) PUBLIC SECTOR JOB.—In this para25 graph, the term ‘public sector job’ means a full-
†

438

S 1932 ES

1 time job in emergency management, govern2 ment, public safety, law enforcement, public

3 health, education (including early childhood

4 education), or public interest legal services (in5 cluding prosecution or public defense).

6 ‘‘(8) RETURN TO STANDARD REPAYMENT.—A

7 borrower who is repaying a loan made under this

8 part pursuant to income contingent repayment may

9 choose, at any time, to terminate repayment pursu10 ant to income contingent repayment and repay such

11 loan under the standard repayment plan.’’.

12 SEC. 7118. FAMILY CONTRIBUTION FOR DEPENDENT STU13 DENTS.

14 (a) AMENDMENTS.—Section 475 of the Higher Edu15 cation Act of 1965 (20 U.S.C. 1087oo) is amended—

16 (1) in subsection (g)(2)(D), by striking

17 ‘‘$2,200’’ and inserting ‘‘$3,000’’; and

18 (2) in subsection (h), by striking ‘‘35’’ and in19 serting ‘‘20’’.

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

21 subsection (a) shall apply with respect to determinations

22 of need for periods of enrollment beginning on or after

23 July 1, 2007.
†

439

S 1932 ES

1 SEC. 7119. FAMILY CONTRIBUTION FOR INDEPENDENT STU2 DENTS WITHOUT DEPENDENTS OTHER THAN

3 A SPOUSE.

4 (a) AMENDMENTS.—Section 476 of the Higher Edu5 cation Act of 1965 (20 U.S.C.1087pp) is amended—

6 (1) in subsection (b)(1)(A)(iv)—

7 (A) in subclause (I), by striking ‘‘$5,000’’

8 and inserting ‘‘$6,050’’;

9 (B) in subclause (II), by striking ‘‘$5,000’’

10 and inserting ‘‘$6,050’’; and

11 (C) in subclause (III), by striking

12 ‘‘$8,000’’ and inserting ‘‘$9,700’’; and

13 (2) in subsection (c)(4), by striking ‘‘35’’ and

14 inserting ‘‘20’’.

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

16 subsection (a) shall apply with respect to determinations

17 of need for periods of enrollment beginning on or after

18 July 1, 2007.

19 SEC. 7120. FAMILY CONTRIBUTION FOR INDEPENDENT STU20 DENTS WITH DEPENDENTS OTHER THAN A

21 SPOUSE.

22 (a) AMENDMENT.—Section 477(c)(4) of the Higher

23 Education Act of 1965 (20 U.S.C. 1087qq(c)(4)) is

24 amended by striking ‘‘12’’ and inserting ‘‘7’’.

25 (b) EFFECTIVE DATE.—The amendment made by

26 subsection (a) shall apply with respect to determinations
†

440

S 1932 ES

1 of need for periods of enrollment beginning on or after

2 July 1, 2007.

3 SEC. 7121. REGULATIONS; UPDATED TABLES.

4 Section 478(b) of the Higher Education Act of 1965

5 (20 U.S.C. 1087rr(b)) is amended—

6 (1) in paragraph (1), by adding at the end the

7 following: ‘‘For the 2007–2008 academic year, the

8 Secretary shall revise the tables in accordance with

9 this paragraph, except that the Secretary shall in10 crease the amounts contained in the table in section

11 477(b)(4) by a percentage equal to the greater of

12 the estimated percentage increase in the Consumer

13 Price Index (as determined under the preceding sen14 tence) or 5 percent.’’; and

15 (2) in paragraph (2), by striking ‘‘2000–2001’’

16 and inserting ‘‘2007–2008’’.

17 SEC. 7122. SIMPLIFIED NEED TEST AND AUTOMATIC ZERO

18 IMPROVEMENTS.

19 (a) AMENDMENTS.—Section 479 of the Higher Edu20 cation Act of 1965 (20 U.S.C. 1087ss) is amended—

21 (1) in subsection (b)—

22 (A) in paragraph (1)—

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

24 clause (i) and inserting the following:

25 ‘‘(i) the student’s parents—
†

441

S 1932 ES

1 ‘‘(I) file, or are eligible to file, a

2 form described in paragraph (3);

3 ‘‘(II) certify that the parents are

4 not required to file a Federal income

5 tax return; or

6 ‘‘(III) received, or the student re7 ceived, benefits at some time during

8 the previous 12-month period under a

9 means-tested Federal benefit program

10 as defined under subsection (d); and’’;

11 and

12 (ii) in subparagraph (B), by striking

13 clause (i) and inserting the following:

14 ‘‘(i) the student (and the student’s

15 spouse, if any)—

16 ‘‘(I) files, or is eligible to 1 file,

17 a form described in paragraph (3);

18 ‘‘(II) certifies that the student

19 (and the student’s spouse, if any) is

20 not required to file a Federal income

21 tax return; or

22 ‘‘(III) received benefits at some

23 time during the previous 12-month

24 period under a means-tested Federal
†

442

S 1932 ES

1 benefit program as defined under sub2 section (d); and’’; and

3 (B) in the matter preceding subparagraph

4 (A) of paragraph (3), by striking ‘‘A student or

5 family files a form described in this subsection,

6 or subsection (c), as the case maybe, if the stu7 dent or family, respectively, files’’ and inserting

8 ‘‘In the case of an independent student, the stu9 dent, or in the case of a dependent student, the

10 family, files a form described in this subsection,

11 or subsection (c), as the case may be, if the stu12 dent or family, as appropriate, files’’;

13 (2) in subsection (c)—

14 (A) in paragraph (1)—

15 (i) by striking subparagraph (A) and

16 inserting the following:

17 ‘‘(A) the student’s parents—

18 ‘‘(i) file, or are eligible to file, a form

19 described in subsection (b)(3);

20 ‘‘(ii) certify that the parents are not

21 required to file a Federal income tax re22 turn; or

23 ‘‘(iii) received, or the student received,

24 benefits at some time during the previous

25 12-month period under a means-tested
†

443

S 1932 ES

1 Federal benefit program as defined under

2 subsection (d); and’’; and

3 (ii) by striking subparagraph (B) and

4 inserting the following:

5 ‘‘(B) the sum of the adjusted gross income

6 of the parents is less than or equal to $20,000;

7 or’’; and

8 (B) in paragraph (2)—

9 (i) by striking subparagraph (A) and

10 inserting the following:

11 ‘‘(A) the student (and the student’s

12 spouse, if any)—

13 ‘‘(i) files, or is eligible to file, a form

14 described in subsection (b)(3);

15 ‘‘(ii) certifies that the student (and

16 the student’s spouse, if any) is not re17 quired to file a Federal income tax return;

18 or

19 ‘‘(iii) received benefits at some time

20 during the previous 12-month period under

21 a means-tested Federal benefit program as

22 defined under subsection (d); and’’; and

23 (ii) by striking subparagraph (B) and

24 inserting the following:
†

444

S 1932 ES

1 ‘‘(B) the sum of the adjusted gross income

2 of the student and spouse (if appropriate) is

3 less than or equal to $20,000.’’; and

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

5 ‘‘(d) DEFINITIONS.—In this section:

6 ‘‘(1) MEANS-TESTED FEDERAL BENEFIT PRO7 GRAM.—In this section, the term ‘‘means-tested

8 Federal benefit program’’ means a mandatory

9 spending program of the Federal Government, other

10 than a program under this title, in which eligibility

11 for the program’s benefits, or the amount of such

12 benefits, are determined on the basis of income or

13 resources of the individual or family seeking the ben14 efit, and may include such programs as—

15 ‘‘(A) the supplemental security income pro16 gram under title XVI of the Social Security Act

17 (42 U.S.C. 1381 et seq.);

18 ‘‘(B) the food stamp program under the

19 Food Stamp Act of 1977 (7 U.S.C. 2011 et

20 seq.);

21 ‘‘(C) the free and reduced price school

22 lunch program established under the Richard

23 B. Russell National School Lunch Act (42

24 U.S.C. 1751 et seq.);
†

445

S 1932 ES

1 ‘‘(D) the program of block grants for

2 States for temporary assistance for needy fami3 lies established under part A of title IV of the

4 Social Security Act (42 U.S.C. 601 et seq.);

5 ‘‘(E) the special supplemental nutrition

6 program for women, infants, and children es7 tablished by section 17 of the Child Nutrition

8 Act of 1966 (42 U.S.C. 1786); and

9 ‘‘(F) other programs identified by the Sec10 retary.’’.

11 (b) EVALUATION OF SIMPLIFIED NEEDS TEST.—

12 (1) ELIGIBILITY GUIDELINES.—The Secretary

13 of Education shall regularly evaluate the impact of

14 the eligibility guidelines in subsections (b)(1)(A)(i),

15 (b)(1)(B)(i), (c)(1)(A), and (c)(2)(A) of section 479

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

17 1087ss(b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A), and

18 (c)(2)(A)).

19 (2) MEANS-TESTED FEDERAL BENEFIT PRO20 GRAM.—For each 3-year period, the Secretary of

21 Education shall evaluate the impact of including the

22 receipt of benefits by a student or parent under a

23 means-tested Federal benefit program (as defined in

24 section 479(d) of the Higher Education Act of 1965

25 (20 U.S.C. 1087ss(d)) as a factor in determining eli-
†

446

S 1932 ES

1 gibility under subsections (b) and (c) of section 479

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

3 1087ss(b) and (c)).

4 SEC. 7123. LOAN FORGIVENESS FOR TEACHERS.

5 Section 3(b)(3) of the Taxpayer-Teacher Protection

6 Act of 2004 (20 U.S.C. 1078–10 note) is amended by

7 striking ‘‘, and before October 1, 2005’’.

8 SEC. 7124. EFFECTIVE DATE.

9 Except as otherwise provided in this chapter or the

10 amendments made by this chapter, the amendments made

11 by this chapter shall take effect on July 1, 2006.

12 CHAPTER 2—HURRICANE KATRINA

13 HIGHER EDUCATION RECOVERY

14 SEC. 7151. SHORT TITLE.

15 This chapter may be cited as the ‘‘Hurricane Katrina

16 Higher Education Recovery Act’’.

17 SEC. 7152. DEFINITIONS.

18 In this chapter:

19 (1) AFFECTED BORROWER.—The term ‘‘af20 fected borrower’’ means an individual who—

21 (A) was in repayment, but not in

22 deferment, on a loan made, insured, or guaran23 teed under part B, D, or E of the Higher Edu24 cation Act of 1965 (20 U.S.C. 1071 et seq.,

25 1087a et seq., 1087aa et seq.) on August 22,
†

447

S 1932 ES

1 2005, or enters or entered repayment after Au2 gust 22, 2005 and before June 30, 2006; and

3 (B)(i) lives or lived, as of August 22,

4 2005, in a county or parish of Alabama, Lou5 isiana, or Mississippi—

6 (I) in which a major disaster has been

7 declared in accordance with section 401 of

8 the Robert T. Stafford Disaster Relief and

9 Emergency Assistance Act (42 U.S.C.

10 5170) as a result of Hurricane Katrina;

11 and

12 (II) which the President has deter13 mined warrants individual assistance from

14 the Federal Government; or

15 (ii) worked, as of August 22, 2005, in a

16 county or parish described in clause (i).

17 (2) AFFECTED INSTITUTION.—

18 (A) IN GENERAL.—The term ‘‘affected in19 stitution’’ means an institution of higher edu20 cation, as defined in section 101 or 102 of the

21 Higher Education Act of 1965 (20 U.S.C.

22 1001, 1002), that—

23 (i) is located in an area in which a

24 major disaster has been declared in accord25 ance with section 401 of the Robert T.
†

448

S 1932 ES

1 Stafford Disaster Relief and Emergency

2 Assistance Act due to the effects of Hurri3 cane Katrina; and

4 (ii) is impacted by Hurricane Katrina.

5 (B) LENGTH OF TIME.—In determining

6 eligibility for assistance under this chapter, the

7 Secretary, using consistent, objective criteria,

8 shall determine the time period for which an in9 stitution of higher education is an affected in10 stitution.

11 (C) SPECIAL RULE.—An organizational

12 unit of an affected institution that is not im13 pacted by Hurricane Katrina shall not be con14 sidered as part of such affected institution for

15 purposes of receiving assistance under this

16 chapter.

17 (3) AFFECTED STUDENT.—The term ‘‘affected

18 student’’ means a student who was enrolled on Au19 gust 29, 2005 in an affected institution.

20 (4) DISTANCE EDUCATION.—

21 (A) IN GENERAL.—The term ‘‘distance

22 education’’ means a course or program that

23 uses 1 or more of the technologies described in

24 subparagraph (B) to—
†

449

S 1932 ES

1 (i) deliver instruction to students who

2 are separated from the instructor; and

3 (ii) support regular and substantive

4 interaction between the students and the

5 instructor, either synchronously or asyn6 chronously.

7 (B) INCLUSIONS.—For the purposes of

8 subparagraph (A), the technologies used may

9 include—

10 (i) the Internet;

11 (ii) one-way and two-way trans12 missions through open broadcast, closed

13 circuit, cable, microwave, broadband lines,

14 fiber optics, satellite, or wireless commu15 nications devices;

16 (iii) audio conferencing; or

17 (iv) video cassette, DVDs, and CD–

18 ROMs, provided that they are used in a

19 course in conjunction with the technologies

20 listed in clauses (i) through (iii).

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

22 the Secretary of Education.
†

450

S 1932 ES

1 SEC. 7153. WAIVER AUTHORITY AND MODIFICATIONS TO

2 CERTAIN PROVISIONS OF THE HIGHER EDU3 CATION ACT OF 1965.

4 (a) WAIVER OF INSTITUTIONAL REPAYMENT.—Not5 withstanding any other provision of law, including require6 ments related to cash management, an affected institution

7 shall not be required to return any funds received by the

8 affected institution for, or on behalf of, its students under

9 subparts 1 and 3 of part A and parts B, C, D, and E

10 of title IV of the Higher Education Act of 1965 (20 U.S.C.

11 1070, 1070b et seq., 1071 et seq., 1087a et seq., 1087aa

12 et seq., 42 U.S.C. 2751 et seq.) during the 2005–2006

13 academic year.

14 (b) WAIVER OF STUDENT RETURN OF ASSIST15 ANCE.—Notwithstanding any other provision of law, an

16 affected student who, as of the date of enactment of this

17 Act, received assistance under subpart 1 or 3 of part A

18 or parts B, C, D, or E of title IV of the Higher Education

19 Act of 1965 for attendance at an affected institution of

20 higher education during the 2005–2006 academic year,

21 shall not be required to return such assistance.

22 (c) AFFECTED STUDENTS WHO DO NOT ENROLL IN

23 ANOTHER INSTITUTION AND BORROWERS IN GRACE PE24 RIODS OR DEFERMENT.—With respect to a loan made, in25 sured, or guaranteed under part B, D, or E of title IV
†

451

S 1932 ES

1 of the Higher Education Act of 1965 (20 U.S.C. 1071

2 et seq., 1087a et seq., 1087aa et seq.)—

3 (1) an affected student who does not enroll in

4 another institution of higher education shall be re5 tained in in-school status during the period begin6 ning on August 22, 2005, and ending on June 30,

7 2006; and

8 (2) a borrower in a grace period or in

9 deferment as of August 22, 2005 who satisfies the

10 requirement described in clause (i) or clause (ii) of

11 section 201(1)(B) shall be retained in such status,

12 without documentation or action by the borrower,

13 until June 30, 2006.

14 (d) DISCHARGE OR CANCELLATION OF LOANS.—The

15 Secretary shall—

16 (1) discharge all loan amounts under parts B

17 and D of title IV of the Higher Education Act of

18 1965 (20 U.S.C. 1071 et seq., 1087a et seq.) dis19 bursed to, or on behalf of, an affected student for

20 attendance at an affected institution of higher edu21 cation during the 2005–2006 academic year;

22 (2) reimburse lenders for the purpose of dis23 charging any loan amounts disbursed to, or on be24 half of, a student under part B of title IV of the

25 Higher Education Act of 1965 (20 U.S.C. 1071 et
†

452

S 1932 ES

1 seq.), for attendance at an affected institution of

2 higher education during the 2005–2006 academic

3 year; and

4 (3) cancel any loan under part E of title IV of

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

6 1087aa et seq.) disbursed to a student for attend7 ance at an affected institution of higher education

8 during the 2005–2006 academic year.

9 (e) AGGREGATE AND ANNUAL LIMITS.—In the case

10 of an affected student, any grant or loan assistance under

11 title IV of the Higher Education Act of 1965 (20 U.S.C.

12 1070 et seq.) that such student received, or was to have

13 received, for a program of study at an affected institution

14 of higher education during the 2005–2006 academic year

15 shall not count against such student’s annual or aggregate

16 grant or loan limits for receipt of aid under such title.

17 (f) FORBEARANCE.—Notwithstanding the provisions

18 of part B, D, or E of title IV of the Higher Education

19 Act of 1965 (20 U.S.C. 1071 et seq., 1087a et seq.,

20 1087aa et seq.), a lender, the Secretary, or an institution

21 of higher education is authorized to provide not more than

22 1 year of forbearance to an affected borrower without doc23 umentation.

24 (g) PROFESSIONAL JUDGMENT.—A financial aid ad25 ministrator shall be considered to be making an adjust-
†

453

S 1932 ES

1 ment in accordance with section 479A(a) of the Higher

2 Education Act of 1965 (20 U.S.C. 1087tt(a)) if the finan3 cial aid administrator makes the adjustment with respect

4 to the calculation of the expected student or parent con5 tribution (or both) for an affected student, or for a stu6 dent or a parent who resides or resided on August 22,

7 2005, or was employed on August 22, 2005, in an area

8 in which a major disaster has been declared in accordance

9 with section 401 of the Robert T. Stafford Disaster Relief

10 and Emergency Assistance Act due to the effects of Hurri11 cane Katrina. The financial aid administrator shall ade12 quately document the need for the adjustment.

13 (h) MODIFICATION OF PART A OF TITLE II GRANTS

14 AUTHORIZED.—The Secretary is authorized to approve

15 modifications to the requirements for Teacher Quality En16 hancement Grants for States and Partnerships under part

17 A of title II of the Higher Education Act of 1965 (20

18 U.S.C. 1021 et seq.), at the request of the grantee—

19 (1) to assist States and local educational agen20 cies to recruit and retain highly qualified teachers in

21 a school district located in an area in which a major

22 disaster has been declared in accordance with section

23 401 of the Robert T. Stafford Disaster Relief and

24 Emergency Assistance Act due to the effects of Hur25 ricane Katrina; and
†

454

S 1932 ES

1 (2) to assist institutions of higher education, as

2 defined in section 101 of such Act (20 U.S.C. 1001),

3 located in such area to recruit and retain faculty

4 necessary to prepare teachers and provide profes5 sional development.

6 (i) WAIVER AUTHORITY TO MODIFY AUTHORIZED

7 USES OF TRIO, GEAR-UP, PART A OR B OF TITLE III,

8 AND OTHER GRANTS.—The Secretary is authorized to

9 modify the required and allowable uses of funds under

10 chapters 1 and 2 of subpart 2 of part A of title IV of

11 the Higher Education Act of 1965 (20 U.S.C. 1070a et

12 seq., 1070a–21 et seq.), under part A or B of title III

13 (20 U.S.C. 1057 et seq., 1060 et seq.), and under any

14 other competitive grant program, at the request of an af15 fected institution or other grantee, with respect to affected

16 institutions and other grantees located in an area in which

17 a major disaster has been declared in accordance with sec18 tion 401 of the Robert T. Stafford Disaster Relief and

19 Emergency Assistance Act due to the effects of Hurricane

20 Katrina.

21 (j) AUTHORITY TO EXTEND OR WAIVE REPORTING

22 REQUIREMENTS UNDER SECTION 131(a).—The Secretary

23 is authorized to extend reporting deadlines or waive re24 porting requirements under section 131(a) of the Higher
†

455

S 1932 ES

1 Education Act of 1965 (20 U.S.C. 1015(a)) for an af2 fected institution.

3 (k) DISTANCE EDUCATION.—The Secretary may

4 waive the restrictions of subparagraphs (A) and (B) of

5 section 102(a)(3) of the Higher Education Act of 1965

6 (20 U.S.C. 1002(a)(3)(A) and (B)) with respect to an in7 stitution of higher education, other than a foreign institu8 tion, that offers education or training programs through

9 distance education and is otherwise eligible to participate

10 in programs authorized under title IV of such Act (20

11 U.S.C. 1070 et seq.), if such institution exceeds such re12 strictions described in such subparagraphs due to the en13 rollment of affected students.

14 SEC. 7154. GENERAL WAIVER AUTHORITY AND REQUIRED

15 CONSULTATION.

16 (a) WAIVER AUTHORITY.—

17 (1) IN GENERAL.—Notwithstanding any other

18 provision of law, the Secretary may waive or modify

19 any statutory provision of the Higher Education Act

20 of 1965 (20 U.S.C. 1001 et seq.) or any regulation

21 implementing such Act as the Secretary determines

22 necessary in connection with a major disaster that

23 has been declared in accordance with section 401 of

24 the Robert T. Stafford Disaster Relief and Emer-
†

456

S 1932 ES

1 gency Assistance Act due to the effects of Hurricane

2 Katrina.

3 (2) ACTIONS AUTHORIZED.—In carrying out

4 paragraph (1), the Secretary is authorized to waive

5 or modify any provision described in paragraph (1)

6 as the Secretary determines necessary to ensure

7 that—

8 (A) administrative requirements placed on

9 affected students, affected borrowers, institu10 tions of higher education, lenders, guaranty

11 agencies and grantees are minimized to the ex12 tent possible without impairing the integrity of

13 the higher education programs under the High14 er Education Act of 1965, to ease the burden

15 on such participants; or

16 (B) institutions of higher education, lend17 ers, guaranty agencies, and other entities par18 ticipating in the student financial assistance

19 programs under title IV of the Higher Edu20 cation Act of 1965 (20 U.S.C. 1070 et seq.),

21 that serve an area in which a major disaster

22 has been declared in accordance with section

23 401 of the Robert T. Stafford Disaster Relief

24 and Emergency Assistance Act due to the ef25 fects of Hurricane Katrina, may be granted
†

457

S 1932 ES

1 temporary relief from requirements that are

2 rendered infeasible or unreasonable due to the

3 effects of Hurricane Katrina, including due dili4 gence requirements and reporting deadlines.

5 (b) CONSTRUCTION.—Nothing in this section shall be

6 construed to allow the Secretary to waive or modify any

7 applicable statutory or regulatory requirements prohib8 iting discrimination in a program or activity, or in employ9 ment or contracting, under existing law (in existence on

10 the date of the Secretary’s action).

11 (c) CONSULTATION.—Prior to granting any waiver or

12 modification under this section, the Secretary shall consult

13 with the Committee on Health, Education, Labor, and

14 Pensions and the Committee on Appropriations of the

15 Senate and the Committee on Education and the Work16 force and the Committee on Appropriations of the House

17 of Representatives with respect to waivers or modifications

18 under this section.

19 SEC. 7155. NOTICE OF WAIVERS, MODIFICATIONS, OR EX20 TENSIONS.

21 Notwithstanding section 437 of the General Edu22 cation Provisions Act (20 U.S.C. 1232) and section 553

23 of title 5, United States Code, the Secretary shall make

24 publicly available the waivers, modifications, or extensions

25 granted under section 7153 or 7154.
†

458

S 1932 ES

1 SEC. 7156. REGULATORY REQUIREMENTS INAPPLICABLE.

2 Sections 482(c) and 492 of the Higher Education Act

3 of 1965 (20 U.S.C. 1089(c), 1098a), section 437 of the

4 General Education Provisions Act (20 U.S.C. 1232), and

5 section 553 of title 5, United States Code, shall not apply

6 to this chapter.

7 SEC. 7157. DEPARTMENT OF EDUCATION INSPECTOR GEN8 ERAL AUDIT AND REPORT.

9 (a) IN GENERAL.—The Inspector General of the De10 partment of Education (referred to in this section as the

11 ‘‘Inspector General’’) shall conduct an audit and investiga12 tion of each program carried out by the Department of

13 Education that includes response and recovery activities

14 related to Hurricane Katrina.

15 (b) WEEKLY REPORT.—Not less frequently than once

16 a week, the Inspector General shall provide a report to

17 the Committee on Health, Education, Labor, and Pen18 sions and the Committee on Appropriations of the Senate

19 and the Committee on Education and the Workforce and

20 the Committee on Appropriations of the House of Rep21 resentatives listing the audits and investigations initiated

22 pursuant to subsection (a).

23 (c) STATUS REPORT.—Not later than 6 months after

24 the date of enactment of this Act, and biannually there25 after until the audits and investigations described in sub26 section (a) are complete, the Inspector General shall re-
†

459

S 1932 ES

1 port to the Committee on Health, Education, Labor, and

2 Pensions and the Committee on Appropriations of the

3 Senate and the Committee on Education and the Work4 force and the Committee on Appropriations of the House

5 of Representatives on the full status of the activities of

6 the Inspector General under this section.

7 (d) COOPERATIVE VENTURES.—In carrying out this

8 section, the Inspector General is encouraged to enter into

9 cooperative ventures with Inspectors General of other Fed10 eral agencies.

11 SEC. 7158. SUNSET PROVISION.

12 Except as otherwise provided in this chapter, the pro13 visions of this chapter shall be effective for the period be14 ginning on the date of enactment of this Act and ending

15 on September 30, 2006.

16 Subtitle B—Pension Benefit

17 Guaranty Corporation Premiums

18 SEC. 7201. AMENDMENTS TO THE EMPLOYEE RETIREMENT

19 INCOME SECURITY ACT OF 1974.

20 (a) FLAT-RATE PREMIUMS.—

21 (1) SINGLE-EMPLOYER PLANS.—Section

22 4006(a)(3)(A)(i) of the Employee Retirement In23 come Security Act of 1974 (29 U.S.C.

24 1306(a)(3)(A)(i)) is amended to read as follows:
†

460

S 1932 ES

1 ‘‘(i) in the case of a single-employer plan, an

2 amount equal to—

3 ‘‘(I) for plan years beginning after Decem4 ber 31, 1990, and before January 1, 2006, $19,

5 or

6 ‘‘(II) except as provided in subparagraph

7 (F), for plan years beginning after December

8 31, 2005, $46.75,

9 plus the additional premium (if any) determined

10 under subparagraph (E) for each individual who is

11 a participant in such plan during the plan year;’’.

12 (2) MULTIEMPLOYER PLANS.—Section

13 4006(a)(3)(A) of such Act (29 U.S.C.

14 1306(a)(3)(A)) is amended—

15 (A) in clause (iii), by—

16 (i) inserting ‘‘and before January 1,

17 2006,’’ after ‘‘Act of 1980,’’; and

18 (ii) striking the period at the end and

19 inserting ‘‘, or’’; and

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

21 ‘‘(iv) in the case of a multiemployer

22 plan an amount equal to the following for

23 each individual who is a participant in

24 such plan during the applicable plan year:
†

461

S 1932 ES

1 ‘‘(I) $8.00 for plan years begin2 ning in 2006.

3 ‘‘(II) For plan years after De4 cember 31, 2006, the amount deter5 mined under subparagraph (G).

6 (3) INDEXING OF FLAT-RATE PREMIUMS.—

7 (A) SINGLE-EMPLOYER PREMIUMS.—Sec8 tion 4006(a)(3) of such Act (29 U.S.C.

9 1306(a)(3)), as amended by this Act, is amend10 ed by adding at the end the following:

11 ‘‘(F) INDEXING OF SINGLE-EMPLOYER

12 FLAT-RATE PREMIUMS.—

13 ‘‘(i) IN GENERAL.—In the case of any

14 plan year beginning after 2006, the ad15 justed amount under clause (ii) shall be

16 substituted for the dollar amount under

17 clause (i)(II) of subparagraph (A), if such

18 adjusted amount is greater than such dol19 lar amount.

20 ‘‘(ii) ADJUSTED AMOUNT.—The ad21 justed amount for the dollar amount in

22 clause (i)(II) of subparagraph (A) for any

23 plan year is the product derived by multi24 plying such dollar amount by the ratio

25 of—
†

462

S 1932 ES

1 ‘‘(I) the national average wage

2 index (as defined in section 209(k)(1)

3 of the Social Security Act) for the

4 first of the 2 calendar years preceding

5 the calendar year in which the plan

6 year begins, to

7 ‘‘(II) the national average wage

8 index (as so defined) for 2004.

9 If the amount determined under this

10 clause is not a multiple of $1, such product

11 shall be rounded to the nearest multiple of

12 $1.’’.

13 (B) MULTIEMPLOYER PREMIUMS—Section

14 4006(a)(3) of such Act (29 U.S.C. 1306(a)(3)),

15 as amended by this Act, is amended by adding

16 at the end the following:

17 ‘‘(G) INDEXING OF MULTIEMPLOYER

18 FLAT-RATE PREMIUMS.—The amount deter19 mined under this subparagraph is the product

20 derived by multiplying $8.00 by the ratio of—

21 ‘‘(i) the national average wage index

22 (as defined in section 209(k)(1) of the So23 cial Security Act) for the first of the 2 cal24 endar years preceding the calendar year in

25 which the plan year begins, to
†

463

S 1932 ES

1 ‘‘(ii) the national average wage index

2 (as defined in subparagraph (F)) for 2004.

3 If the amount determined under this clause is

4 not a multiple of $1, such product shall be

5 rounded to the nearest multiple of $1.’’.

6 (b) PREMIUM RATE FOR CERTAIN TERMINATED SIN7 GLE-EMPLOYER PLANS.—Section 4006(a) of such Act (29

8 U.S.C. 1306(a)) is amended by adding at the end the fol9 lowing:

10 ‘‘(7) PREMIUM RATE FOR CERTAIN TERMI11 NATED SINGLE-EMPLOYER PLANS.—

12 ‘‘(A) IN GENERAL.—If there is a termi13 nation of a single-employer plan under clause

14 (ii) or (iii) of section 4041(c)(2)(B) or section

15 4042, there shall be payable to the corporation,

16 with respect to each applicable 12-month pe17 riod, a premium at a rate equal to $1,250 mul18 tiplied by the number of individuals who were

19 participants in the plan immediately before the

20 termination date. Such premium shall be in ad21 dition to any other premium under this section.

22 ‘‘(B) SPECIAL RULE FOR PLANS TERMI23 NATED IN BANKRUPTCY REORGANIZATION.—

24 Subparagraph (A) shall not apply to a single25 employer plan terminated under section
†

464

S 1932 ES

1 4041(c)(2)(B)(ii) or under section 4042 during

2 pendency of any bankruptcy reorganization pro3 ceeding under chapter 11 of title 11, United

4 States Code, (or under any similar law of a

5 State or political subdivision of a State) until

6 the plan sponsor emerges from bankruptcy.

7 ‘‘(C) APPLICABLE 12-MONTH PERIOD.—

8 For purposes of subparagraph (A)—

9 ‘‘(i) IN GENERAL.—The term ‘applica10 ble 12-month period’ means—

11 ‘‘(I) the 12-month period begin12 ning with the first month following

13 the month in which the termination

14 date occurs, and

15 ‘‘(II) each of the first two 12-

16 month periods immediately following

17 the period described in subclause (I).

18 ‘‘(ii) PLANS TERMINATED IN BANK19 RUPTCY REORGANIZATION.—In the case of

20 a plan described under subparagraph (B),

21 the 12-month period described in clause

22 (i)(I) shall be the 12-month period begin23 ning with the first month following the

24 month which includes the date the plan

25 sponsor emerges from bankruptcy.
†

465

S 1932 ES

1 ‘‘(D) COORDINATION WITH SECTION

2 4007.—For purposes of section 4007—

3 ‘‘(i) premiums under this paragraph

4 shall be due within 30 days after the be5 ginning of any applicable 12-month period,

6 ‘‘(ii) the fifth sentence of section

7 4007(a) shall not apply, and

8 ‘‘(iii) the designated payor under sec9 tion 4007(e)(1)(A) shall be the contrib10 uting sponsor immediately before the ter11 mination date.’’.

12 (c) CONFORMING AMENDMENT.—Section

13 4006(a)(3)(B) of such Act (29 U.S.C. 1306(a)(3)(B)) is

14 amended by striking ‘‘subparagraph (A)(iii)’’ and insert15 ing ‘‘clause (iii) or (iv) of subparagraph (A)’’.

16 (d) EFFECTIVE DATES.—

17 (1) IN GENERAL.—The amendments made by

18 this section shall apply to plan years beginning after

19 December 31, 2005.

20 (2) SPECIAL RULE FOR PLANS TERMINATED IN

21 BANKRUPTCY.—The amendment made by subsection

22 (b) shall not apply to a termination of a single-em23 ployer plan that is terminated during the pendency

24 of any bankruptcy reorganization proceeding under

25 chapter 11 of title 11, United States Code (or under
†

466

S 1932 ES

1 any similar law of a State or political subdivision of

2 a State), if the proceeding is pursuant to a bank3 ruptcy filing occurring before October 18, 2005.

4 (3) SPECIAL RULE IF SUBSEQUENT SAVINGS

5 ENACTED.—The amendments made by this section

6 shall not take effect if, after the date of enactment

7 of this Act and before January 1, 2006, a Federal

8 law is enacted which—

9 (A) provides for decreases in Federal out10 lays which in the aggregate are not less than

11 the decreases in Federal outlays by reason of

12 the amendments made by this section; and

13 (B) specifically provides that such de14 creases are to be in lieu of the decreases in

15 Federal outlays by reason of the amendments

16 made by this section.

17 Subtitle C—Higher Education

18 Reauthorization

19 CHAPTER 1—SHORT TITLE; REFERENCES;

20 GENERAL EFFECTIVE DATE

21 SEC. 7301. SHORT TITLE.

22 (a) SHORT TITLE.—This subtitle may be cited as the

23 ‘‘Higher Education Amendments of 2005’’.
†

467

S 1932 ES

1 SEC. 7302. REFERENCES.

2 Except as otherwise expressly provided, whenever in

3 this subtitle an amendment or repeal is expressed in terms

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a

6 section or other provision of the Higher Education Act of

7 1965 (20 U.S.C. 1001 et seq.).

8 SEC. 7303. GENERAL EFFECTIVE DATE.

9 Except as otherwise provided in this subtitle or the

10 amendments made by this subtitle, the amendments made

11 by this subtitle shall take effect on July 1, 2006.

12 CHAPTER 2—GENERAL PROVISIONS

13 SEC. 7311. ADDITIONAL DEFINITIONS.

14 (a) AMENDMENT.—Section 103 (20 U.S.C. 1003) is

15 amended—

16 (1) by redesignating paragraphs (1) through

17 (16) as paragraphs (2) through (17), respectively;

18 and

19 (2) by inserting before paragraph (2) (as redes20 ignated by paragraph (1)) the following:

21 ‘‘(1) AUTHORIZING COMMITTEES.—The term

22 ‘authorizing committees’ means the Committee on

23 Health, Education, Labor, and Pensions of the Sen24 ate and the Committee on Education and the Work25 force of the House of Representatives.’’.
†

468

S 1932 ES

1 (b) CONFORMING AMENDMENTS.—The Act (20

2 U.S.C. 1001 et seq.) is amended—

3 (1) in section 131(a)(3)(B) (20 U.S.C.

4 1015(a)(3)(B)), by striking ‘‘Committee on Labor

5 and Human Resources of the Senate and the Com6 mittee on Education and the Workforce of the

7 House of Representatives’’ and inserting ‘‘author8 izing committees’’;

9 (2) in section 141(d)(4)(B) (20 U.S.C.

10 1018(d)(4)(B)), by striking ‘‘Committee on Edu11 cation and the Workforce of the House of Rep12 resentatives and the Committee on Labor and

13 Human Resources of the Senate’’ and inserting ‘‘au14 thorizing committees’’;

15 (3) in section 207(c)(1) (20 U.S.C. 1027(c)(1)),

16 by striking ‘‘Committee on Labor and Human Re17 sources of the Senate and the Committee on Edu18 cation and the Workforce of the House of Rep19 resentatives’’ and inserting ‘‘authorizing commit20 tees’’;

21 (4) in section 401(f)(3) (20 U.S.C.

22 1070a(f)(3)), by striking ‘‘to the Committee on Ap23 propriations’’ and all that follows through ‘‘House of

24 Representatives’’ and inserting ‘‘to the Committee

25 on Appropriations of the Senate, the Committee on
†

469

S 1932 ES

1 Appropriations of the House of Representatives, and

2 the authorizing committees’’;

3 (5) in section 428 (20 U.S.C. 1078)—

4 (A) in subsection (c)(9)(K), by striking

5 ‘‘House Committee on Education and the

6 Workforce and the Senate Committee on Labor

7 and Human Resources’’ and inserting ‘‘author8 izing committees’’;

9 (B) in the matter following paragraph (2)

10 of subsection (g), by striking ‘‘Committee on

11 Labor and Human Resources of the Senate and

12 the Committee on Education and the Workforce

13 of the House of Representatives’’ and inserting

14 ‘‘authorizing committees’’; and

15 (C) in subsection (n)(4), ‘‘Committee on

16 Education and the Workforce of the House of

17 Representatives and the Committee on Labor

18 and Human Resources of the Senate’’ and in19 serting ‘‘authorizing committees’’;

20 (6) in section 428A (20 U.S.C. 1078–1)—

21 (A) in the matter preceding subparagraph

22 (A) of subsection (a)(4), by striking ‘‘Com23 mittee on Labor and Human Resources of the

24 Senate and the Committee on Education and
†

470

S 1932 ES

1 the Workforce of the House of Representatives’’

2 and inserting ‘‘authorizing committees’’; and

3 (B) in subsection (c)—

4 (i) in the matter preceding subpara5 graph (A) of paragraph (2), by striking

6 ‘‘Chairperson’’ and all that follows through

7 ‘‘House of Representatives’’ and inserting

8 ‘‘Chairpersons and Ranking Members of

9 the authorizing committees’’;

10 (ii) in paragraph (3), by striking

11 ‘‘Chairperson’’ and all that follows through

12 ‘‘House of Representatives’’ and inserting

13 ‘‘Chairpersons and Ranking Members of

14 the authorizing committees’’; and

15 (iii) in paragraph (5), by striking

16 ‘‘Chairperson’’ and all that follows through

17 ‘‘House of Representatives’’ and inserting

18 ‘‘Chairpersons and Ranking Members of

19 the authorizing committees’’;

20 (7) in section 432 (20 U.S.C. 1082)—

21 (A) in subsection (f)(1)(C), by striking

22 ‘‘the Committee on Education and the Work23 force of the House of Representatives or the

24 Committee on Labor and Human Resources of
†

471

S 1932 ES

1 the Senate’’ and inserting ‘‘either of the author2 izing committees’’; and

3 (B) in the matter following subparagraph

4 (D) of subsection (n)(3), by striking ‘‘Com5 mittee on Education and the Workforce of the

6 House of Representatives and the Committee

7 on Labor and Human Resources of the Senate’’

8 and inserting ‘‘authorizing committees’’;

9 (8) in section 437(c)(1) (20 U.S.C. 1087(c)(1)),

10 by striking ‘‘Committee on Education and the Work11 force of the House of Representatives and the Com12 mittee on Labor and Human Resources of the Sen13 ate’’ and inserting ‘‘authorizing committees’’;

14 (9) in section 439 (20 U.S.C. 1087–2)—

15 (A) in subsection (d)(1)(E)(iii), by striking

16 ‘‘advise the Chairman’’ and all that follows

17 through ‘‘House of Representatives’’ and insert18 ing ‘‘advise the Chairpersons and Ranking

19 Members of the authorizing committees’’;

20 (B) in subsection (r)—

21 (i) in paragraph (3), by striking ‘‘in22 form the Chairman’’ and all that follows

23 through ‘‘House of Representatives,’’ and

24 inserting ‘‘inform the Chairpersons and
†

472

S 1932 ES

1 Ranking Members of the authorizing com2 mittees’’;

3 (ii) in paragraph (5)(B), by striking

4 ‘‘plan, to the Chairman’’ and all that fol5 lows through ‘‘Education and Labor’’ and

6 inserting ‘‘plan, to the Chairpersons and

7 Ranking Members of the authorizing com8 mittees’’;

9 (iii) in paragraph (6)(B)—

10 (I) by striking ‘‘plan, to the

11 Chairman’’ and all that follows

12 through ‘‘House of Representatives’’

13 and inserting ‘‘plan, to the Chair14 persons and Ranking Members of the

15 authorizing committees’’; and

16 (II) by striking ‘‘Chairmen and

17 ranking minority members of such

18 Committees’’ and inserting ‘‘Chair19 persons and Ranking Members of the

20 authorizing committees’’;

21 (iv) in paragraph (8)(C), by striking

22 ‘‘implemented to the Chairman’’ and all

23 that follows through ‘‘House of Represent24 atives, and’’ and inserting ‘‘implemented to
†

473

S 1932 ES

1 the Chairpersons and Ranking Members of

2 the authorizing committees, and to’’; and

3 (v) in the matter preceding subpara4 graph (A) of paragraph (10), by striking

5 ‘‘days to the Chairman’’ and all that fol6 lows through ‘‘Education and Labor’’ and

7 inserting ‘‘days to the Chairpersons and

8 Ranking Members of the authorizing com9 mittees’’; and

10 (C) in subsection (s)(2)—

11 (i) in the matter preceding clause (i)

12 of subparagraph (A), by striking ‘‘Treas13 ury and to the Chairman’’ and all that fol14 lows through ‘‘House of Representatives’’

15 and inserting ‘‘Treasury and to the Chair16 persons and Ranking Members of the au17 thorizing committees’’; and

18 (ii) in subparagraph (B), by striking

19 ‘‘Treasury and to the Chairman’’ and all

20 that follows through ‘‘House of Represent21 atives’’ and inserting ‘‘Treasury and to the

22 Chairpersons and Ranking Members of the

23 authorizing committees’’;

24 (10) in section 455(b)(8)(B) (20 U.S.C.

25 1087e(b)(8)(B)), by striking ‘‘Committee on Labor
†

474

S 1932 ES

1 and Human Resources of the Senate and the Com2 mittee on Education and the Workforce of the

3 House of Representatives’’ and inserting ‘‘author4 izing committees’’;

5 (11) in section 482(d) (20 U.S.C. 1089(d)), by

6 striking ‘‘Committee on Labor and Human Re7 sources of the Senate and the Committee on Edu8 cation and Labor of the House of Representatives’’

9 and inserting ‘‘authorizing committees’’;

10 (12) in section 483(c) (20 U.S.C. 1090(c)), by

11 striking ‘‘Committee on Labor and Human Re12 sources of the Senate and the Committee on Edu13 cation and the Workforce of the House of Rep14 resentatives’’ and inserting ‘‘authorizing commit15 tees’’;

16 (13) in section 485 (20 U.S.C. 1092)—

17 (A) in subsection (f)(5)(A), by striking

18 ‘‘Committee on Education and the Workforce of

19 the House of Representatives and the Com20 mittee on Labor and Human Resources of the

21 Senate’’ and inserting ‘‘authorizing commit22 tees’’; and

23 (B) in subsection (g)(4)(B), by striking

24 ‘‘Committee on Education and the Workforce of

25 the House of Representatives and the Com-
†

475

S 1932 ES

1 mittee on Labor and Human Resources of the

2 Senate’’ and inserting ‘‘authorizing commit3 tees’’;

4 (14) in section 486 (20 U.S.C. 1093)—

5 (A) in subsection (e), by striking ‘‘Com6 mittee on Labor and Human Resources of the

7 Senate and the Committee on Education and

8 the Workforce of the House of Representatives’’

9 and inserting ‘‘authorizing committees’’; and

10 (B) in subsection (f)(3)—

11 (i) in the matter preceding clause (i)

12 of subparagraph (A), by striking ‘‘Com13 mittee on Labor and Human Resources of

14 the Senate and the Committee on Edu15 cation and the Workforce of the House of

16 Representatives’’ and inserting ‘‘author17 izing committees’’; and

18 (ii) in the matter preceding clause (i)

19 of subparagraph (B), by striking ‘‘Com20 mittee on Labor and Human Resources of

21 the Senate and the Committee on Edu22 cation and the Workforce of the House of

23 Representatives’’ and inserting ‘‘author24 izing committees’’;
†

476

S 1932 ES

1 (15) in section 487A(a)(5) (20 U.S.C.

2 1094a(a)(5)), by striking ‘‘Committee on Labor and

3 Human Resources of the Senate and the Committee

4 on Education and the Workforce of the House of

5 Representatives’’ and inserting ‘‘authorizing commit6 tees’’; and

7 (16) in section 498B(d) (20 U.S.C. 1099c–

8 2(d))—

9 (A) in paragraph (1), by striking ‘‘Com10 mittee on Labor and Human Resources of the

11 Senate and the Committee on Education and

12 the Workforce of the House of Representatives’’

13 and inserting ‘‘authorizing committees’’; and

14 (B) in paragraph (2), by striking ‘‘Com15 mittee on Labor and Human Resources of the

16 Senate and the Committee on Education and

17 the Workforce of the House of Representatives’’

18 and inserting ‘‘authorizing committees’’.

19 SEC. 7312. GENERAL DEFINITION OF INSTITUTION OF

20 HIGHER EDUCATION.

21 Section 101 (20 U.S.C. 1001) is amended—

22 (1) in subsection (a)(3), by inserting ‘‘, or

23 awards a degree that is acceptable for admission to

24 a graduate or professional degree program, subject
†

477

S 1932 ES

1 to the review and approval by the Secretary’’ after

2 ‘‘such a degree’’; and

3 (2) by striking subsection (b)(2) and inserting

4 the following:

5 ‘‘(2) a public or nonprofit private educational

6 institution in any State that, in lieu of the require7 ment in subsection (a)(1), admits as regular stu8 dents persons—

9 ‘‘(A) who meet the requirements of section

10 484(d)(3);

11 ‘‘(B) who are beyond the age of compul12 sory school attendance in the State in which the

13 institution is located; or

14 ‘‘(C) who are dually or concurrently en15 rolled in such institution and a secondary

16 school.’’.

17 SEC. 7313. DEFINITION OF INSTITUTION OF HIGHER EDU18 CATION FOR PURPOSES OF TITLE IV PRO19 GRAMS.

20 Section 102 (20 U.S.C. 1002) is amended—

21 (1) in subsection (a)—

22 (A) by striking paragraph (2)(A)(i) and in23 serting the following:

24 ‘‘(i) in the case of a graduate medical

25 school located outside the United States—
†

478

S 1932 ES

1 ‘‘(I) at least 60 percent of those

2 enrolled in, and at least 60 percent of

3 the graduates of, the graduate med4 ical school outside the United States

5 were not persons described in section

6 484(a)(5) in the year preceding the

7 year for which a student is seeking a

8 loan under part B of title IV; and

9 ‘‘(II) at least 60 percent of the

10 individuals who were students or

11 graduates of the graduate medical

12 school outside the United States or

13 Canada (both nationals of the United

14 States and others) taking the exami15 nations administered by the Edu16 cational Commission for Foreign Med17 ical Graduates received a passing

18 score in the year preceding the year

19 for which a student is seeking a loan

20 under part B of title IV; or’’;

21 (B) by striking paragraph (3) and insert22 ing the following:

23 ‘‘(3) LIMITATIONS BASED ON ENROLLMENT.—

24 An institution shall not be considered to meet the
†

479

S 1932 ES

1 definition of an institution of higher education in

2 paragraph (1) if such institution—

3 ‘‘(A) has a student enrollment in which

4 more than 25 percent of the students are incar5 cerated, except that the Secretary may waive

6 the limitation contained in this subparagraph

7 for a nonprofit institution that provides a 2- or

8 4-year program of instruction (or both) for

9 which the institution awards a bachelor’s de10 gree, or an associate’s degree or a postsec11 ondary diploma, respectively; or

12 ‘‘(B) has a student enrollment in which

13 more than 50 percent of the students do not

14 have a secondary school diploma or its recog15 nized equivalent, and does not provide a 2- or

16 4-year program of instruction (or both) for

17 which the institution awards a bachelor’s degree

18 or an associate’s degree, respectively, except

19 that the Secretary may waive the limitation

20 contained in this subparagraph if a nonprofit

21 institution demonstrates to the satisfaction of

22 the Secretary that the institution exceeds such

23 limitation because the institution serves,

24 through contracts with Federal, State, or local

25 government agencies, significant numbers of
†

480

S 1932 ES

1 students who do not have a secondary school di2 ploma or its recognized equivalent.’’;

3 (C) by redesignating paragraphs (4), (5),

4 and (6), as paragraphs (5), (6), and (7), re5 spectively; and

6 (D) by inserting after paragraph (3) the

7 following:

8 ‘‘(4) LIMITATIONS BASED ON MODE OF DELIV9 ERY.—

10 ‘‘(A) IN GENERAL.—An institution shall

11 not be considered to meet the definition of an

12 institution of higher education in paragraph (1)

13 if such institution—

14 ‘‘(i) offers more than 50 percent of

15 such institution’s courses by correspond16 ence, unless the institution is an institution

17 that meets the definition in section 3(3)(C)

18 of the Carl D. Perkins Vocational and

19 Technical Education Act of 1998; or

20 ‘‘(ii) enrolls 50 percent or more of the

21 institution’s students in correspondence

22 courses, unless the institution is an institu23 tion that meets the definition in such sec24 tion 3(3)(C), except that the Secretary, at

25 the request of such institution, may waive
†

481

S 1932 ES

1 the applicability of this subparagraph to

2 such institution for good cause, as deter3 mined by the Secretary in the case of an

4 institution of higher education that pro5 vides a 2- or 4-year program of instruction

6 (or both) for which the institution awards

7 an associate or baccalaureate degree, re8 spectively.

9 ‘‘(B) DISTANCE EDUCATION PROGRAM ELI10 GIBILITY.—Notwithstanding subparagraph (A),

11 an institution of higher education, other than a

12 foreign institution, that offers education or

13 training programs principally through distance

14 education shall be considered to meet the defini15 tion of an institution of higher education in

16 paragraph (1) if such institution—

17 ‘‘(i) has been evaluated and deter18 mined (before or after the date of enact19 ment of the Higher Education Amend20 ments of 2005) to have the capability to

21 effectively deliver distance education pro22 grams by an accrediting agency or associa23 tion that—

24 ‘‘(I) is recognized by the Sec25 retary under title IV; and
†

482

S 1932 ES

1 ‘‘(II) has evaluation of distance

2 education programs within the scope

3 of its recognition, as described in sec4 tion 496(n)(3);

5 ‘‘(ii) is otherwise eligible to participate

6 in programs authorized under title IV;

7 ‘‘(iii) has not had its participation in

8 programs under title IV suspended or ter9 minated within the previous 5 years;

10 ‘‘(iv) has not had, or failed to resolve,

11 an audit finding or program review finding

12 under this Act during the 2 years pre13 ceding the year for which the determina14 tion is made that, following any appeal to

15 the Secretary, resulted in the institution

16 being required to repay an amount that is

17 equal to or greater than 25 percent of the

18 total funds the institution received under

19 the programs authorized under title IV for

20 the most recent award year; and

21 ‘‘(v) has met the requirements of sec22 tion 487(d), if applicable.

23 ‘‘(C) DEFINITION.—

24 ‘‘(i) IN GENERAL.—In this Act, except

25 as otherwise provided, the term ‘distance
†

483

S 1932 ES

1 education’ means a course or program that

2 uses 1 or more of the technologies de3 scribed in clause (ii) to—

4 ‘‘(I) deliver instruction to stu5 dents who are separated from the in6 structor; and

7 ‘‘(II) support regular and sub8 stantive interaction between the stu9 dents and the instructor, either syn10 chronously or asynchronously.

11 ‘‘(ii) INCLUSIONS.—For the purposes

12 of clause (i), the technologies used may

13 include—

14 ‘‘(I) the Internet;

15 ‘‘(II) one-way and two-way trans16 missions through open broadcast,

17 closed circuit, cable, microwave,

18 broadband lines, fiber optics, satellite,

19 or wireless communications devices;

20 ‘‘(III) audio conferencing; or

21 ‘‘(IV) video cassette, DVDs, and

22 CD–ROMs, provided that they are

23 used in a course in conjunction with

24 the technologies listed in subclauses

25 (I) through (III).’’; and
†

484

S 1932 ES

1 (2) in subsection (b)(1)—

2 (A) in subparagraph (D), by inserting

3 ‘‘and’’ after the semicolon;

4 (B) in subparagraph (E), by striking ‘‘;

5 and’’ and inserting a period; and

6 (C) by striking subparagraph (F).

7 SEC. 7314. PROTECTION OF STUDENT SPEECH AND ASSO8 CIATION RIGHTS.

9 Section 112 (20 U.S.C. 1011a) is amended—

10 (1) in subsection (a)—

11 (A) by inserting ‘‘(1)’’ before ‘‘It is the

12 sense’’; and

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

14 ‘‘(2) It is the sense of Congress that—

15 ‘‘(A) the diversity of institutions and edu16 cational missions is one of the key strengths of

17 American higher education;

18 ‘‘(B) individual colleges and universities have

19 different missions and each institution should design

20 its academic program in accordance with its edu21 cational goals;

22 ‘‘(C) within the context of institutional mission,

23 a college should facilitate the free and open ex24 change of ideas;
†

485

S 1932 ES

1 ‘‘(D) students should not be intimated, har2 assed, discouraged from speaking out, or discrimi3 nated against;

4 ‘‘(E) students should be treated equally and

5 fairly; and

6 ‘‘(F) nothing in this paragraph shall be con7 strued to modify, change, or infringe upon any con8 stitutionally protected religious liberty, freedom, ex9 pression, or association.’’; and

10 (2) in subsection (b)(1), by inserting ‘‘, pro11 vided that the imposition of such sanction is done

12 objectively and fairly’’ after ‘‘higher education’’.

13 SEC. 7315. NATIONAL ADVISORY COMMITTEE ON INSTITU14 TIONAL QUALITY AND INTEGRITY.

15 Section 114(g) (20 U.S.C. 1011c(g)) is amended by

16 striking ‘‘September 30, 2004’’ and inserting ‘‘September

17 30, 2011’’.

18 SEC. 7316. DRUG AND ALCOHOL ABUSE PREVENTION.

19 Section 120 (20 U.S.C. 1011i) is amended by striking

20 subsections (e) and (f) and inserting the following:

21 ‘‘(e) GRANTS DIRECTED AT REDUCING HIGHER

22 EDUCATION DRUG AND ALCOHOL ABUSE.—

23 ‘‘(1) AUTHORIZATION OF PROGRAM.—The Sec24 retary may award grants to eligible entities to enable

25 the entities to reduce the rate of drug use, underage
†

486

S 1932 ES

1 alcohol use, and binge drinking among students at

2 institutions of higher education.

3 ‘‘(2) APPLICATIONS.—An eligible entity that de4 sires to receive a grant under this subsection shall

5 submit an application to the Secretary at such time,

6 in such manner, and accompanied by such informa7 tion as the Secretary may require. Each application

8 shall include—

9 ‘‘(A) a description of how the eligible enti10 ty will work to enhance an existing, or where

11 none exists to build a, statewide coalition;

12 ‘‘(B) a description of how the eligible enti13 ty will target underage students in the State;

14 ‘‘(C) a description of how the eligible enti15 ty intends to ensure that the statewide coalition

16 is actually implementing the purpose described

17 in paragraph (1) and moving toward the

18 achievement indicators described in paragraph

19 (4);

20 ‘‘(D) a list of the members of the statewide

21 coalition or interested parties involved in the

22 work of the eligible entity;

23 ‘‘(E) a description of how the eligible enti24 ty intends to work with State agencies on sub25 stance abuse prevention and education;
†

487

S 1932 ES

1 ‘‘(F) the anticipated impact of funds pro2 vided under this subsection in reducing the

3 rates of drug abuse and underage alcohol use;

4 ‘‘(G) outreach strategies, including ways in

5 which the eligible entity proposes to—

6 ‘‘(i) reach out to students;

7 ‘‘(ii) promote the purpose described in

8 paragraph (1);

9 ‘‘(iii) address the range of needs of

10 the students and the surrounding commu11 nities; and

12 ‘‘(iv) address community norms for

13 underage students regarding drug and al14 cohol use; and

15 ‘‘(H) such additional information as re16 quired by the Secretary.

17 ‘‘(3) USES OF FUNDS.—Each eligible entity

18 that receives a grant under this subsection shall use

19 the grant funds to carry out the activities described

20 in such entity’s application submitted pursuant to

21 paragraph (2).

22 ‘‘(4) ACCOUNTABILITY.—On the date on which

23 the Secretary first publishes a notice in the Federal

24 Register soliciting applications for grants under this

25 subsection, the Secretary shall include in the notice
†

488

S 1932 ES

1 achievement indicators for the program authorized

2 under this subsection. The achievement indicators

3 shall be designed—

4 ‘‘(A) to measure the impact that the state5 wide coalitions assisted under this subsection

6 are having on the institutions of higher edu7 cation and the surrounding communities, in8 cluding changes in the number of alcohol and

9 drug-related abuse incidents of any kind (in10 cluding violations, physical assaults, sexual as11 saults, reports of intimidation, disruptions of

12 school functions, disruptions of student studies,

13 mental health referrals, illnesses, or deaths);

14 ‘‘(B) to measure the quality and accessi15 bility of the programs or information offered by

16 the statewide coalitions; and

17 ‘‘(C) to provide such other measures of

18 program impact as the Secretary determines

19 appropriate.

20 ‘‘(5) SUPPLEMENT NOT SUPPLANT.—Grant

21 funds provided under this subsection shall be used to

22 supplement, and not supplant, Federal and non-Fed23 eral funds available for carrying out the activities

24 described in this subsection.

25 ‘‘(6) DEFINITIONS.—In this subsection:
†

489

S 1932 ES

1 ‘‘(A) ELIGIBLE ENTITY.—The term ‘eligi2 ble entity’ means a State, an institution of

3 higher education as defined in section 102, or

4 a nonprofit entity.

5 ‘‘(B) INSTITUTION OF HIGHER EDU6 CATION.—The term ‘institution of higher edu7 cation’ has the meaning given the term in sec8 tion 101(a).

9 ‘‘(C) STATE.—The term ‘State’ means

10 each of the 50 States, the District of Columbia,

11 and the Commonwealth of Puerto Rico.

12 ‘‘(D) STATEWIDE COALITION.—The term

13 ‘statewide coalition’ means a coalition that—

14 ‘‘(i) includes—

15 ‘‘(I) institutions of higher edu16 cation within a State; and

17 ‘‘(II) a nonprofit group, a com18 munity anti-drug or underage drink19 ing prevention coalition, or another

20 substance abuse prevention group

21 within a State; and

22 ‘‘(ii) works toward lowering alcohol

23 abuse rates by targeting underage students

24 at institutions of higher education through-
†

490

S 1932 ES

1 out the State and in the surrounding com2 munities.

3 ‘‘(E) SURROUNDING COMMUNITY.—The

4 term ‘surrounding community’ means the

5 community—

6 ‘‘(i) that surrounds an institution of

7 higher education participating in a state8 wide coalition;

9 ‘‘(ii) where the students from the in10 stitution of higher education take part in

11 the community; and

12 ‘‘(iii) where students from the institu13 tion of higher education live in off-campus

14 housing.

15 ‘‘(7) ADMINISTRATIVE EXPENSES.—Not more

16 than 5 percent of a grant awarded under this sub17 section may be expended for administrative ex18 penses.

19 ‘‘(8) AUTHORIZATION OF APPROPRIATIONS.—

20 There are authorized to be appropriated to carry out

21 this subsection such sums as may be necessary for

22 fiscal year 2006 and each of the 5 succeeding fiscal

23 years.’’.

24 SEC. 7317. PRIOR RIGHTS AND OBLIGATIONS.

25 Section 121(a) (20 U.S.C. 1011j(a)) is amended—
†

491

S 1932 ES

1 (1) in paragraph (1), by striking ‘‘1999’’ and

2 inserting ‘‘2006’’; and

3 (2) in paragraph (2), by striking ‘‘1999’’ and

4 inserting ‘‘2006’’.

5 SEC. 7318. COST OF HIGHER EDUCATION.

6 Section 131 (20 U.S.C. 1015) is amended—

7 (1) by striking subsection (b) and inserting the

8 following:

9 ‘‘(b) COLLEGE CONSUMER INFORMATION.—

10 ‘‘(1) IN GENERAL.—The Secretary shall make

11 available to the public the information described in

12 paragraph (2), in a form that enables the public to

13 compare the information among institutions of high14 er education. Such information shall be made avail15 able for each of the categories described in para16 graph (3) and updated annually.

17 ‘‘(2) INFORMATION.—The information de18 scribed in this paragraph is the following:

19 ‘‘(A) Tuition and fees for a first-time, full20 time undergraduate student.

21 ‘‘(B) Cost of attendance for a first-time,

22 full-time undergraduate student.

23 ‘‘(C) The average annual cost of attend24 ance for a first-time, full-time undergraduate

25 student for the preceding periods of 5 and 10
†

492

S 1932 ES

1 academic years preceding the year for which the

2 information is made available under this sub3 section, or if data are not available for such

4 academic years, data for as many of such aca5 demic years as are available.

6 ‘‘(D) The percentage of full-time under7 graduate students receiving financial assistance,

8 including—

9 ‘‘(i) Federal grants;

10 ‘‘(ii) State and local grants;

11 ‘‘(iii) institutional grants; and

12 ‘‘(iv) loans to students.

13 ‘‘(E) The average amount of financial aid

14 received by students from sources described in

15 clauses (i) through (iv) of subparagraph (D).

16 ‘‘(F) Graduation rates, as described in sec17 tion 485(a)(1)(L).

18 ‘‘(G) A ranking of the dollar and percent19 age increases in tuition and fees for all institu20 tions of higher education for which data are

21 available in each of the categories described in

22 paragraph (3).

23 ‘‘(3) CATEGORIES.—The categories described in

24 this paragraph are as follows:

25 ‘‘(A) All institutions of higher education.
†

493

S 1932 ES

1 ‘‘(B) 4-year public, degree-granting, insti2 tutions of higher education.

3 ‘‘(C) 2-year public, degree-granting, insti4 tutions of higher education.

5 ‘‘(D) 4-year, nonprofit, private, degree6 granting institutions of higher education.

7 ‘‘(E) 2-year, nonprofit, private, degree8 granting institutions of higher education.

9 ‘‘(F) 4-year, for-profit, private, degree10 granting institutions of higher education.

11 ‘‘(G) 2-year, for-profit, private, degree12 granting institutions of higher education.

13 ‘‘(H) Less than 2-year, for-profit, private

14 institutions of higher education.

15 ‘‘(4) STANDARD DEFINITIONS.—In carrying out

16 this section, the Secretary shall use the standard

17 definitions developed under subsection (a)(3).’’; and

18 (2) in subsection (c)—

19 (A) in paragraph (1), by inserting ‘‘be con20 ducted on an annual basis and’’ after ‘‘Such

21 study shall’’;

22 (B) in paragraph (2)—

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

24 ‘‘and’’ after the semicolon;
†

494

S 1932 ES

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

2 the period and inserting a semicolon; and

3 (iii) by adding at the end the fol4 lowing:

5 ‘‘(D) the average cost of attending an in6 stitution of higher education, disaggregated by

7 category, as described in subsection (b)(3);

8 ‘‘(E) the average annual cost of attending

9 an institution of higher education for the peri10 ods of 5 and 10 academic years preceding the

11 year for which the study is conducted (or if

12 data are not available for such academic years,

13 data for as many of such academic years as are

14 available), disaggregated by category, as de15 scribed in subsection (b)(3); and

16 ‘‘(F) the assistance provided to institutions

17 of higher education by each State.’’;

18 (C) in paragraph (3)—

19 (i) in the paragraph heading, by strik20 ing ‘‘FINAL’’ and inserting ‘‘ANNUAL’’;

21 (ii) by striking ‘‘a report’’ and insert22 ing ‘‘an annual report’’; and

23 (iii) by striking ‘‘not later than Sep24 tember 30, 2002’’ and inserting ‘‘and the

25 public’’; and
†

495

S 1932 ES

1 (D) by striking paragraph (4) and insert2 ing the following:

3 ‘‘(4) HIGHER EDUCATION COST INDEX.—The

4 Bureau of Labor Statistics, in consultation with the

5 Commissioner of Education Statistics, shall develop

6 a higher education cost index that tracks inflation

7 changes in the relevant costs associated with higher

8 education.’’.

9 SEC. 7319. PERFORMANCE-BASED ORGANIZATION FOR THE

10 DELIVERY OF FEDERAL STUDENT FINANCIAL

11 ASSISTANCE.

12 Section 141 (20 U.S.C. 1018) is amended—

13 (1) in subsection (a)—

14 (A) in paragraph (1), by striking ‘‘oper15 ational’’ and inserting ‘‘administrative and

16 oversight’’; and

17 (B) in paragraph (2)(D), by striking ‘‘of

18 the operational functions’’ and inserting ‘‘and

19 administration’’;

20 (2) in subsection (b)—

21 (A) in paragraph (1)—

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

23 ‘‘the information systems administered by

24 the PBO, and other functions performed

25 by the PBO’’ and inserting ‘‘the Federal
†

496

S 1932 ES

1 student financial assistance programs au2 thorized under title IV’’; and

3 (ii) by striking subparagraph (C) and

4 inserting the following:

5 ‘‘(C) assist the Chief Operating Officer in

6 identifying goals for—

7 ‘‘(i) the administration of the systems

8 used to administer the Federal student fi9 nancial assistance programs authorized

10 under title IV; and

11 ‘‘(ii) the updating of such systems to

12 current technology.’’; and

13 (B) in paragraph (2)—

14 (i) in the matter preceding subpara15 graph (A), by striking ‘‘administration of

16 the information and financial systems that

17 support’’ and inserting ‘‘the administration

18 of Federal’’;

19 (ii) in subparagraph (A)—

20 (I) in the matter preceding clause

21 (i), by striking ‘‘of the delivery system

22 for Federal student assistance’’ and

23 inserting ‘‘for the Federal student as24 sistance programs authorized under

25 title IV’’;
†

497

S 1932 ES

1 (II) by striking clauses (i) and

2 (ii) and inserting the following:

3 ‘‘(i) the collection, processing, and

4 transmission of data to students, institu5 tions, lenders, State agencies, and other

6 authorized parties;

7 ‘‘(ii) the design and technical speci8 fications for software development and pro9 curement for systems supporting the stu10 dent financial assistance programs author11 ized under title IV;’’;

12 (III) in clause (iii), by striking

13 ‘‘delivery’’ and inserting ‘‘administra14 tion’’;

15 (IV) in clause (iv)—

16 (aa) by inserting ‘‘the’’ after

17 ‘‘supporting’’; and

18 (bb) by striking ‘‘and’’ after

19 the semicolon;

20 (V) in clause (v), by striking

21 ‘‘systems that support those pro22 grams.’’ and inserting ‘‘the adminis23 tration of the Federal student assist24 ance programs authorized under title

25 IV; and’’; and
†

498

S 1932 ES

1 (VI) by adding at the end the fol2 lowing:

3 ‘‘(vi) ensuring the integrity of the stu4 dent assistance programs authorized under

5 title IV.’’; and

6 (iii) in subparagraph (B), by striking

7 ‘‘operations and services’’ and inserting

8 ‘‘activities and functions’’; and

9 (3) in subsection (c)—

10 (A) in paragraph (1)(C)—

11 (i) in clause (iii), by striking ‘‘infor12 mation and delivery’’; and

13 (ii) in clause (iv)—

14 (I) by striking ‘‘Developing an’’

15 and inserting ‘‘Developing’’; and

16 (II) by striking ‘‘delivery and in17 formation system’’ and inserting ‘‘sys18 tems’’;

19 (B) in paragraph (2)—

20 (i) in subparagraph (A), by inserting

21 ‘‘the’’ after ‘‘PBO and’’; and

22 (ii) in subparagraph (B), by striking

23 ‘‘Officer’’ and inserting ‘‘Officers’’; and

24 (C) in paragraph (3), by inserting ‘‘stu25 dents,’’ after ‘‘consult with’’;
†

499

S 1932 ES

1 (4) in subsection (d)—

2 (A) in paragraph (1), by striking the sec3 ond sentence; and

4 (B) in paragraph (5)—

5 (i) in subparagraph (B), by striking

6 ‘‘paragraph (2)’’ and inserting ‘‘paragraph

7 (4)’’; and

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

9 ‘‘this’’;

10 (5) in subsection (f)—

11 (A) in paragraph (2), by striking ‘‘to bor12 rowers’’ and inserting ‘‘to students, bor13 rowers,’’; and

14 (B) in paragraph (3)(A), by striking

15 ‘‘(1)(A)’’ and inserting ‘‘(1)’’;

16 (6) in subsection (g)(3), by striking ‘‘not more

17 than 25’’;

18 (7) in subsection (h), by striking ‘‘organiza19 tional effectiveness’’ and inserting ‘‘effectiveness’’;

20 (8) by striking subsection (i);

21 (9) by redesignating subsection (j) as sub22 section (i); and

23 (10) in subsection (i) (as redesignated by para24 graph (9)), by striking ‘‘, including transition costs’’.
†

500

S 1932 ES

1 SEC. 7320. PROCUREMENT FLEXIBILITY.

2 Section 142 (20 U.S.C. 1018a) is amended—

3 (1) in subsection (b)—

4 (A) in paragraph (1)—

5 (i) by striking ‘‘for information sys6 tems supporting the programs authorized

7 under title IV’’; and

8 (ii) by striking ‘‘and’’ after the semi9 colon;

10 (B) in paragraph (2), by striking the pe11 riod at the end and inserting ‘‘; and’’; and

12 (C) by adding at the end the following:

13 ‘‘(3) through the Chief Operating Officer—

14 ‘‘(A) to the maximum extent practicable,

15 utilize procurement systems that streamline op16 erations, improve internal controls, and enhance

17 management; and

18 ‘‘(B) assess the efficiency of such systems

19 and assess such systems’ ability to meet PBO

20 requirements.’’;

21 (2) by striking subsection (c)(2) and inserting

22 the following:

23 ‘‘(2) FEE FOR SERVICE ARRANGEMENTS.—The

24 Chief Operating Officer shall, when appropriate and

25 consistent with the purposes of the PBO, acquire

26 services related to the functions set forth in section
†

501

S 1932 ES

1 141(b)(2) from any entity that has the capability

2 and capacity to meet the requirements set by the

3 PBO. The Chief Operating Officer is authorized to

4 pay fees that are equivalent to those paid by other

5 entities to an organization that provides services

6 that meet the requirements of the PBO, as deter7 mined by the Chief Operating Officer.’’;

8 (3) in subsection (d)(2)(B), by striking ‘‘on

9 Federal Government contracts’’;

10 (4) in subsection (g)—

11 (A) in paragraph (4)(A)—

12 (i) in the subparagraph heading, by

13 striking ‘‘SOLE SOURCE.—’’ and inserting

14 ‘‘SINGLE-SOURCE BASIS.—’’; and

15 (ii) by striking ‘‘sole-source’’ and in16 serting ‘‘single-source’’; and

17 (B) in paragraph (7), by striking ‘‘sole18 source’’ and inserting ‘‘single-source’’;

19 (5) in subsection (h)(2)(A), by striking ‘‘sole20 source’’ and inserting ‘‘single-source’’; and

21 (6) in subsection (l), by striking paragraph (3)

22 and inserting the following:

23 ‘‘(3) SINGLE-SOURCE BASIS.—The term ‘single24 source basis’, with respect to an award of a contract,

25 means that the contract is awarded to a source after
†

502

S 1932 ES

1 soliciting an offer or offers from, and negotiating

2 with, only such source (although such source is not

3 the only source in the marketplace capable of meet4 ing the need) because such source is the most advan5 tageous source for purposes of the award.’’.

6 CHAPTER 3—TEACHER QUALITY

7 ENHANCEMENT

8 SEC. 7331. TEACHER QUALITY ENHANCEMENT GRANTS FOR

9 STATES AND PARTNERSHIPS.

10 Part A of title II (20 U.S.C. 1021 et seq.) is amended

11 to read as follows:

12 ‘‘PART A—TEACHER QUALITY ENHANCEMENT

13 GRANTS FOR STATES AND PARTNERSHIPS

14 ‘‘SEC. 201. PURPOSES; DEFINITIONS.

15 ‘‘(a) PURPOSES.—The purposes of this part are to—

16 ‘‘(1) improve student achievement;

17 ‘‘(2) improve the quality of the current and fu18 ture teaching force by improving the preparation of

19 prospective teachers and enhancing professional de20 velopment activities;

21 ‘‘(3) hold institutions of higher education ac22 countable for preparing highly qualified teachers;

23 and
†

503

S 1932 ES

1 ‘‘(4) recruit qualified individuals, including mi2 norities and individuals from other occupations, into

3 the teaching force.

4 ‘‘(b) DEFINITIONS.—In this part:

5 ‘‘(1) ARTS AND SCIENCES.—The term ‘arts and

6 sciences’ means—

7 ‘‘(A) when referring to an organizational

8 unit of an institution of higher education, any

9 academic unit that offers 1 or more academic

10 majors in disciplines or content areas cor11 responding to the academic subject areas in

12 which teachers provide instruction; and

13 ‘‘(B) when referring to a specific academic

14 subject area, the disciplines or content areas in

15 which academic majors are offered by the arts

16 and sciences organizational unit.

17 ‘‘(2) CHILDREN FROM LOW-INCOME FAMI18 LIES.—The term ‘children from low-income families’

19 means children as described in section 1124(c)(1)(A)

20 of the Elementary and Secondary Education Act of

21 1965.

22 ‘‘(3) EARLY CHILDHOOD EDUCATION PRO23 GRAM.—The term ‘early childhood education pro24 gram’ means a Head Start program or an Early

25 Head Start program carried out under the Head
†

504

S 1932 ES

1 Start Act (42 U.S.C. 9831 et seq.), a State licensed

2 or regulated child care program or school, or a State

3 prekindergarten program that serves children from

4 birth through kindergarten and that addresses the

5 children’s cognitive (including language, early lit6 eracy, and pre-numeracy), social, emotional, and

7 physical development.

8 ‘‘(4) EARLY CHILDHOOD EDUCATOR.—The

9 term ‘early childhood educator’ means an individual

10 with primary responsibility for the education of chil11 dren in an early childhood education program.

12 ‘‘(5) EDUCATIONAL SERVICE AGENCY.—The

13 term ‘educational service agency’ has the meaning

14 given such term in section 9101 of the Elementary

15 and Secondary Education Act of 1965.

16 ‘‘(6) EXEMPLARY TEACHER.—The term ‘exem17 plary teacher’ has the meaning given such term in

18 section 9101 of the Elementary and Secondary Edu19 cation Act of 1965.

20 ‘‘(7) HIGH-NEED LOCAL EDUCATIONAL AGEN21 CY.—The term ‘high-need local educational agency’

22 means a local educational agency or educational

23 service agency—

24 ‘‘(A)(i) that serves not fewer than 10,000

25 children from low-income families;
†

505

S 1932 ES

1 ‘‘(ii) for which not less than 20 percent of

2 the children served by the agency are children

3 from low-income families; or

4 ‘‘(iii) with a total of less than 600 students

5 in average daily attendance at the schools that

6 are served by the agency and all of whose

7 schools are designated with a school locale code

8 of 7 or 8, as determined by the Secretary; and

9 ‘‘(B)(i) for which there is a high percent10 age of teachers not teaching in the academic

11 subject areas or grade levels in which the teach12 ers were trained to teach; or

13 ‘‘(ii) for which there is a high teacher

14 turnover rate or a high percentage of teachers

15 with emergency, provisional, or temporary cer16 tification or licensure.

17 ‘‘(8) HIGHLY QUALIFIED.—The term ‘highly

18 qualified’ has the meaning given such term in sec19 tion 9101 of the Elementary and Secondary Edu20 cation Act of 1965 and, with respect to special edu21 cation teachers, in section 602 of the Individuals

22 with Disabilities Education Act.

23 ‘‘(9) PROFESSIONAL DEVELOPMENT.—The

24 term ‘professional development’ has the meaning
†

506

S 1932 ES

1 given such term in section 9101 of the Elementary

2 and Secondary Education Act of 1965.

3 ‘‘(10) SCIENTIFICALLY BASED READING RE4 SEARCH.—The term ‘scientifically based reading re5 search’ has the meaning given such term in section

6 1208 of the Elementary and Secondary Education

7 Act of 1965.

8 ‘‘(11) SCIENTIFICALLY BASED RESEARCH.—

9 The term ‘scientifically based research’ has the

10 meaning given such term in section 9101 of the Ele11 mentary and Secondary Education Act of 1965.

12 ‘‘(12) TEACHER MENTORING.—The term

13 ‘teacher mentoring’ means mentoring of teachers

14 through an established or implemented program—

15 ‘‘(A) that includes qualifications for men16 tors;

17 ‘‘(B) that provides training for mentors;

18 ‘‘(C) that provides regular and ongoing op19 portunities for mentors and mentees to observe

20 each other’s teaching methods in classroom set21 tings during the school day;

22 ‘‘(D) in which the mentoring is provided by

23 a colleague who teaches in the same field,

24 grade, or subject as the mentee; and

25 ‘‘(E) that includes—
†

507

S 1932 ES

1 ‘‘(i) common planning time or regu2 larly scheduled collaboration with teachers

3 in the teachers’ same field, grade, or sub4 ject area; and

5 ‘‘(ii) additional professional develop6 ment opportunities.

7 ‘‘(13) TEACHING SKILLS.—The term ‘teaching

8 skills’ means the ability to—

9 ‘‘(A) increase student achievement;

10 ‘‘(B) effectively convey and explain aca11 demic subject matter;

12 ‘‘(C) employ strategies that—

13 ‘‘(i) are based on scientifically based

14 research;

15 ‘‘(ii) are specific to academic subject

16 matter; and

17 ‘‘(iii) focus on identification and tai18 loring of academic instruction to students’

19 specific learning needs, particularly stu20 dents with disabilities, students who are

21 limited English proficient, and students

22 who are gifted and talented;

23 ‘‘(D) conduct ongoing assessment of stu24 dent learning;

25 ‘‘(E) effectively manage a classroom;
†

508

S 1932 ES

1 ‘‘(F) communicate and work with parents

2 and guardians, and involve parents and guard3 ians in their children’s education; and

4 ‘‘(G) in the case of an early childhood edu5 cator, use age appropriate strategies and prac6 tices for children in early childhood education

7 programs.

8 ‘‘SEC. 202. STATE GRANTS.

9 ‘‘(a) IN GENERAL.—From amounts made available

10 under section 209(a)(1) for a fiscal year, the Secretary

11 is authorized to award grants under this section, on a

12 competitive basis, to eligible States to enable the eligible

13 States to carry out the activities described in subsections

14 (d) and (e).

15 ‘‘(b) ELIGIBLE STATE.—

16 ‘‘(1) DEFINITION.—In this part, the term ‘eligi17 ble State’ means—

18 ‘‘(A) the Governor of a State; or

19 ‘‘(B) in the case of a State for which the

20 constitution or law of such State designates an21 other individual, entity, or agency in the State

22 to be responsible for teacher certification or li23 censure and preparation activity, such indi24 vidual, entity, or agency.
†

509

S 1932 ES

1 ‘‘(2) CONSULTATION.—The Governor or the in2 dividual, entity, or agency designated under para3 graph (1)(B) shall consult with the Governor, State

4 board of education, State educational agency, State

5 agency for higher education, or other applicable

6 State entities (including the State agency responsible

7 for early childhood education), as appropriate, with

8 respect to the activities assisted under this section,

9 including the development of the grant application

10 and implementation of the activities.

11 ‘‘(3) CONSTRUCTION.—Nothing in this sub12 section shall be construed to negate or supersede the

13 legal authority under State law of any State agency,

14 State entity, or State public official over programs

15 that are under the jurisdiction of the agency, entity,

16 or official.

17 ‘‘(c) APPLICATION.—To be eligible to receive a grant

18 under this section, an eligible State shall submit an appli19 cation to the Secretary that—

20 ‘‘(1) meets the requirement of this section;

21 ‘‘(2) demonstrates that the eligible State is in

22 full compliance with—

23 ‘‘(A) sections 206(b) and 207; and

24 ‘‘(B) if applicable, sections 207(b) and

25 208, as such sections were in effect on the day
†

510

S 1932 ES

1 before the date of enactment of the Higher

2 Education Amendments of 2005;

3 ‘‘(3) includes a description of how the eligible

4 State intends to use funds provided under this sec5 tion;

6 ‘‘(4) includes measurable objectives for the use

7 of the funds provided under this section;

8 ‘‘(5) describes how funded activities will—

9 ‘‘(A) reduce shortages, if any, of—

10 ‘‘(i) highly qualified general and spe11 cial education teachers, including in low-in12 come urban and rural areas and in high13 need academic subject areas; and

14 ‘‘(ii) fully competent early childhood

15 educators; and

16 ‘‘(B) be consistent with State, local, and

17 other education reform activities that promote

18 effective teaching skills and student academic

19 achievement and consistent with State early

20 learning standards for early childhood education

21 programs, including how funded activities will

22 support carrying out the applicable require23 ments of the eligible State under sections 1111

24 and 1119 of the Elementary and Secondary

25 Education Act of 1965, and section 612(a)(14)
†

511

S 1932 ES

1 of the Individuals with Disabilities Education

2 Act;

3 ‘‘(6) contains an assurance that the eligible

4 State will carry out each of the intended uses of

5 grant funds described in paragraph (3);

6 ‘‘(7) describes the eligible State’s—

7 ‘‘(A) current capacity to measure the effec8 tiveness of teacher preparation programs and

9 professional development activities within the

10 State using available statewide data;

11 ‘‘(B) activities to enhance or expand the

12 integration of existing data systems to better

13 measure the effectiveness of teacher preparation

14 programs and professional development activi15 ties within the State; or

16 ‘‘(C) if such data systems do not exist,

17 plans for the development of an integrated

18 statewide data system to measure the effective19 ness of teacher preparation programs and pro20 fessional development activities within the State

21 using available statewide data; and

22 ‘‘(8) contains such other information and assur23 ances as the Secretary may require.

24 ‘‘(d) REQUIRED USES OF FUNDS.—An eligible State

25 that receives a grant under this section shall use the grant
†

512

S 1932 ES

1 funds to reform teacher preparation requirements, to co2 ordinate with State activities under section 2113(c) of the

3 Elementary and Secondary Education Act of 1965 and

4 subsections (a) and (b) of section 654 of the Individuals

5 with Disabilities Education Act, and to ensure that cur6 rent and prospective teachers are highly qualified, by car7 rying out each of the following activities:

8 ‘‘(1) REFORMS.—Ensuring that all teacher

9 preparation programs in the State are preparing

10 current or prospective teachers to become highly

11 qualified, to understand scientifically based research

12 and its applicability, and to use technology effec13 tively, including use of instructional techniques to

14 improve student academic achievement, by assisting

15 such programs—

16 ‘‘(A) in retraining faculty;

17 ‘‘(B) in designing (or redesigning) teacher

18 preparation programs so that such programs—

19 ‘‘(i) are based on rigorous academic

20 content and scientifically based research

21 (including scientifically based reading re22 search), and aligned with challenging State

23 academic content standards;

24 ‘‘(ii) promote effective teaching skills;

25 and
†

513

S 1932 ES

1 ‘‘(iii) promote understanding of effec2 tive instructional strategies for students

3 with special needs, including students with

4 disabilities, students who are limited

5 English proficient, and students who are

6 gifted and talented;

7 ‘‘(C) in ensuring collaboration with depart8 ments, programs, or units outside of the teach9 er preparation program in relevant academic

10 content areas to ensure a successful combina11 tion of training in both teaching and such con12 tent;

13 ‘‘(D) in developing high-quality, rigorous

14 clinical experiences (that include student teach15 ing experience) in which students participate

16 while enrolled in a teacher preparation pro17 gram, lasting not less than 1 term, through dis18 semination of best practices, technical assist19 ance, or other relevant activities; and

20 ‘‘(E) in collecting and using data, in col21 laboration with institutions of higher education,

22 schools, and local educational agencies, on

23 teacher retention rates, by school, to evaluate

24 and strengthen the effectiveness of the State’s

25 teacher support system.
†

514

S 1932 ES

1 ‘‘(2) CERTIFICATION OR LICENSURE REQUIRE2 MENTS.—Reforming teacher certification or licen3 sure requirements to ensure that—

4 ‘‘(A) teachers have the academic content

5 knowledge and teaching skills in the academic

6 subject areas that the teachers teach that are

7 necessary to help students meet challenging

8 State student academic achievement standards,

9 as required under section 1111(b)(1) of the El10 ementary and Secondary Education Act of

11 1965;

12 ‘‘(B) such requirements are aligned with

13 challenging State academic content standards,

14 as required under section 1111(b)(1) of the El15 ementary and Secondary Education Act of

16 1965;

17 ‘‘(C) teacher certification and licensure as18 sessments are—

19 ‘‘(i) used for purposes for which such

20 assessments are valid and reliable;

21 ‘‘(ii) consistent with relevant, profes22 sional, and technical standards; and

23 ‘‘(iii) aligned with the reporting re24 quirements of sections 205 and 206; and
†

515

S 1932 ES

1 ‘‘(D) such requirements for high-need aca2 demic subject areas (such as reading, mathe3 matics, science, and foreign language, including

4 less commonly taught languages) and high-need

5 areas (such as special education, language in6 struction educational programs, and early child7 hood education) exist and reflect qualifications

8 to help students meet high standards, which

9 may include the development of a State test for

10 such areas.

11 ‘‘(3) EVALUATION.—

12 ‘‘(A) ANNUAL EVALUATION.—An eligible

13 State that receives a grant under this section

14 shall evaluate annually the effectiveness of

15 teacher preparation programs and professional

16 development activities within the State. To the

17 extent practicable, such evaluation shall

18 examine—

19 ‘‘(i) teachers’ contributions to improv20 ing student academic achievement, as

21 measured by State academic assessments

22 required under section 1111(b)(3) of the

23 Elementary and Secondary Education Act

24 of 1965; and
†

516

S 1932 ES

1 ‘‘(ii) teacher mastery of the academic

2 subject matter the teachers teach.

3 ‘‘(B) PUBLIC REPORTING.—The eligible

4 State shall make the information described in

5 subparagraph (A) widely available through pub6 lic means, such as posting on the Internet, dis7 tribution to the media, and distribution through

8 public agencies, except such reporting shall not

9 be made in a case in which the reporting of the

10 data would reveal personally identifiable infor11 mation about a teacher or student.

12 ‘‘(C) BETTER MEASUREMENT OF EFFEC13 TIVENESS.—

14 ‘‘(i) IN GENERAL.—An eligible State

15 that receives a grant under this section

16 and does not have the capacity to measure

17 the effectiveness of teacher preparation

18 programs and professional development ac19 tivities within the State using available

20 statewide data, shall use a portion of funds

21 received under this section to enhance or

22 expand the integration of existing data sys23 tems, as described in subsection (c)(7)(B),

24 or develop an integrated statewide data

25 system, as described in subsection
†

517

S 1932 ES

1 (c)(7)(C), to better measure and provide

2 information that will improve the effective3 ness of teacher preparation programs on

4 student learning and achievement, and the

5 impact of pre-service and ongoing profes6 sional development on teacher placement

7 and retention.

8 ‘‘(ii) TECHNICAL QUALITY; STUDENT

9 PRIVACY; FUNDS FROM OTHER SOURCES.—

10 In carrying out clause (i), the eligible State

11 shall ensure—

12 ‘‘(I) the technical quality of the

13 data system to maximize the validity,

14 reliability, and accessibility of the

15 data;

16 ‘‘(II) that student privacy is pro17 tected and that individually identifi18 able information about students, their

19 achievements, and their families re20 mains confidential, in accordance with

21 the Family Educational Rights and

22 Privacy Act of 1974; and

23 ‘‘(III) that funds provided under

24 this section are used to supplement

25 State efforts to enhance or expand the
†

518

S 1932 ES

1 integration of existing data systems or

2 to develop an integrated statewide

3 data system.

4 ‘‘(e) ALLOWABLE USES OF FUNDS.—An eligible

5 State that receives a grant under this section may use the

6 grant funds to reform teacher preparation requirements,

7 to coordinate with State activities under section 2113(c)

8 of the Elementary and Secondary Education Act of 1965

9 and subsections (a) and (b) of section 654 of the Individ10 uals with Disabilities Education Act, and to ensure that

11 current and future teachers are highly qualified, by car12 rying out any of the following activities:

13 ‘‘(1) ALTERNATIVES TO TRADITIONAL PREPA14 RATION FOR TEACHING AND STATE CERTIFICATION

15 OR LICENSURE.—Providing prospective teachers

16 with alternative routes to State certification or licen17 sure and alternative route programs to become high18 ly qualified teachers through—

19 ‘‘(A) innovative approaches that reduce un20 necessary barriers to State certification or licen21 sure while producing highly qualified teachers;

22 ‘‘(B) a selective means for admitting indi23 viduals into such programs that includes pas24 sage of State approved teacher examinations in

25 appropriate subject areas;
†

519

S 1932 ES

1 ‘‘(C) programs that help prospective teach2 ers develop effective teaching skills and strate3 gies through knowledge of research-based infor4 mation on the learning process and learning

5 practices;

6 ‘‘(D) programs that provide support to

7 teachers during the teachers’ initial years in the

8 profession; and

9 ‘‘(E) alternative routes to State certifi10 cation or licensure of teachers for qualified indi11 viduals, including mid-career professionals from

12 other occupations, paraprofessionals, former

13 military personnel, and recent college graduates

14 with records of academic distinction.

15 ‘‘(2) INNOVATIVE PROGRAMS.—Planning and

16 implementing innovative programs to enhance the

17 ability of institutions of higher education, including

18 charter colleges of education, or university and local

19 educational agency partnership schools, to prepare

20 highly qualified teachers, which programs shall—

21 ‘‘(A) permit flexibility in the manner in

22 which the institution of higher education meets

23 State requirements as long as graduates, during

24 the graduates’ initial years in the profession, in25 crease student academic achievement;
†

520

S 1932 ES

1 ‘‘(B) provide a description in the applica2 tion of long-term data gathered from teachers’

3 performance over multiple years in the class4 room regarding the teachers’ ability to increase

5 student academic achievement;

6 ‘‘(C) ensure high-quality preparation of

7 teachers from underrepresented groups;

8 ‘‘(D) create performance measures that

9 can be used to document the effectiveness of in10 novative methods for preparing highly qualified

11 teachers; and

12 ‘‘(E) develop frameworks for exemplary in13 duction programs informed by research and

14 best practices.

15 ‘‘(3) TEACHER RECRUITMENT AND RETEN16 TION.—Undertaking activities that develop and im17 plement effective mechanisms to ensure that local

18 educational agencies and schools are able to recruit

19 and retain highly qualified teachers, which may in20 clude the following activities:

21 ‘‘(A) PERFORMANCE BASED COMPENSA22 TION.—Assisting local educational agencies in

23 developing—

24 ‘‘(i) performance systems that reward

25 teachers who increase student academic
†

521

S 1932 ES

1 achievement and take on additional respon2 sibilities, such as teacher mentoring and

3 serving as master teachers; and

4 ‘‘(ii) strategies that provide differen5 tial and bonus pay in high-need local edu6 cational agencies to recruit and retain—

7 ‘‘(I) principals;

8 ‘‘(II) highly qualified teachers

9 who teach in high-need academic sub10 ject areas (such as reading, mathe11 matics, science, and foreign language,

12 including less commonly taught lan13 guages);

14 ‘‘(III) highly qualified teachers

15 who teach in schools identified for

16 school improvement under section

17 1116(b) of the Elementary and Sec18 ondary Education Act of 1965;

19 ‘‘(IV) highly qualified special

20 education teachers;

21 ‘‘(V) highly qualified teachers

22 specializing in teaching children who

23 are limited English proficient; and
†

522

S 1932 ES

1 ‘‘(VI) highly qualified teachers in

2 low-income urban and rural schools or

3 districts.

4 ‘‘(B) ADDITIONAL MECHANISMS.—Devel5 oping and implementing effective mechanisms

6 to ensure that local educational agencies and

7 schools are able to—

8 ‘‘(i) address needs identified with re9 spect to—

10 ‘‘(I) underrepresented groups;

11 ‘‘(II) high-need academic subject

12 areas (such as reading, mathematics,

13 science, and foreign language, includ14 ing less commonly taught languages);

15 ‘‘(III) high-need areas (such as

16 special education, language instruc17 tion educational programs for limited

18 English proficient students, and early

19 childhood education);

20 ‘‘(IV) high-need communities,

21 such as rural and urban areas; and

22 ‘‘(V) high-need schools, including

23 schools with high rates of teacher

24 turnover;
†

523

S 1932 ES

1 ‘‘(ii) offer teacher mentoring for new

2 teachers during such teachers’ initial years

3 of teaching; and

4 ‘‘(iii) provide access to ongoing profes5 sional development and innovative training

6 opportunities for teachers and administra7 tors.

8 ‘‘(C) TEACHER ADVANCEMENT.—Assisting

9 local educational agencies in developing teacher

10 advancement and retention initiatives that pro11 mote professional growth and emphasize mul12 tiple career paths (such as paths to becoming a

13 highly qualified mentor teacher or exemplary

14 teacher) and pay differentiation.

15 ‘‘(D) RECRUIT QUALIFIED PROFES16 SIONALS.—Developing recruitment programs or

17 assisting local educational agencies in—

18 ‘‘(i) recruiting qualified professionals

19 from other fields, including highly qualified

20 paraprofessionals (as defined in section

21 2102 of the Elementary and Secondary

22 Education Act of 1965); and

23 ‘‘(ii) providing such professionals with

24 alternative routes to teacher certification

25 or licensure.
†

524

S 1932 ES

1 ‘‘(E) UNDERREPRESENTED POPU2 LATIONS.—Providing increased opportunities

3 for minorities, individuals with disabilities, and

4 other individuals underrepresented in the teach5 ing profession to become highly qualified teach6 ers.

7 ‘‘(F) RURAL EDUCATION RECRUITMENT

8 AND RETENTION PROGRAMS.—Making grants to

9 rural school districts, or a consortia of rural

10 school districts, to implement—

11 ‘‘(i) teacher recruitment strategies,

12 which may include tuition assistance, stu13 dent loan forgiveness, housing assistance,

14 bonus pay, and other effective approaches;

15 ‘‘(ii) teacher retention strategies, such

16 as mentoring programs and ongoing oppor17 tunities for professional growth and ad18 vancement; and

19 ‘‘(iii) partnerships with institutions of

20 higher education designed to—

21 ‘‘(I) prepare beginning teachers

22 to teach; and

23 ‘‘(II) assist teachers (including

24 teachers who teach multiple subjects)

25 to become highly qualified.
†

525

S 1932 ES

1 ‘‘(4) TEACHER SCHOLARSHIPS AND SUPPORT.—

2 Providing—

3 ‘‘(A) scholarships to help students, such as

4 individuals who have been accepted by, or who

5 are enrolled in, a program of undergraduate

6 education or initial teacher preparation at an

7 institution of higher education, pay the costs of

8 tuition, room, board, and other expenses of

9 completing a teacher preparation program, if—

10 ‘‘(i) the Secretary establishes such re11 quirements as the Secretary determines

12 necessary to ensure that recipients of

13 scholarships under this section who com14 plete teacher preparation programs—

15 ‘‘(I) subsequently teach in an

16 early childhood education program or

17 a high-need local educational agency

18 for a period of time equivalent to the

19 period of time for which the recipient

20 received scholarship assistance, plus

21 an additional 1 year; or

22 ‘‘(II) repay the amount of the

23 scholarship if the recipient does not

24 teach as described in subclause (I);

25 and
†

526

S 1932 ES

1 ‘‘(ii) the eligible State provides an as2 surance that the eligible State will recruit

3 minority students to become highly quali4 fied teachers;

5 ‘‘(B) support services, if needed, to enable

6 scholarship recipients to complete postsecondary

7 education programs, or to move from a career

8 outside of the field of education into a teaching

9 career; and

10 ‘‘(C) follow-up services to former scholar11 ship recipients during the recipients’ initial

12 years of teaching.

13 ‘‘(5) TEACHER REMOVAL.—Developing and im14 plementing effective mechanisms to ensure that local

15 educational agencies and schools are able to expedi16 tiously remove incompetent or unqualified teachers

17 consistent with procedures to ensure due process for

18 the teachers.

19 ‘‘(6) TEACHER EFFECTIVENESS.—Developing—

20 ‘‘(A) systems to measure the effectiveness

21 of teacher preparation programs and profes22 sional development programs; and

23 ‘‘(B) strategies to document gains in stu24 dent academic achievement or increases in

25 teacher mastery of the academic subject matter
†

527

S 1932 ES

1 the teachers teach, as a result of such pro2 grams.

3 ‘‘(7) EARLY CHILDHOOD EDUCATORS.—Devel4 oping strategies to improve and expand teacher

5 preparation programs for early childhood educators

6 to teach in early childhood education programs.

7 ‘‘(8) PROFESSIONAL DEVELOPMENT.—Devel8 oping and enhancing high-quality professional devel9 opment, instructional materials, and relevant edu10 cational materials.

11 ‘‘(9) TECHNOLOGY.—Assisting teachers to use

12 technology effectively, including use for instructional

13 techniques and the collection, management, and

14 analysis of data to improve teaching, learning, and

15 decision making for the purpose of increasing stu16 dent academic achievement.

17 ‘‘(10) AREAS OF INSTRUCTIONAL SHORTAGE.—

18 Increasing the number of—

19 ‘‘(A) teachers in the classroom providing

20 instruction in high-need academic subject areas

21 (such as reading, mathematics, science, and for22 eign language, including less commonly taught

23 languages) and high-need areas (such as special

24 education, language instruction educational pro-
†

528

S 1932 ES

1 grams for limited English proficient students,

2 and early childhood education); and

3 ‘‘(B) special education faculty dedicated to

4 preparing highly qualified special education

5 teachers at institutions of higher education.

6 ‘‘(11) TECHNICAL ASSISTANCE.—Providing

7 technical assistance to low-performing programs of

8 teacher preparation within institutions of higher

9 education identified under section 207(a).

10 ‘‘(12) EVALUATION SUPPORT.—Performing

11 data collection, evaluation, and reporting to meet the

12 requirements of subsection (d)(3).

13 ‘‘(13) PROFESSIONAL ADVANCEMENT.—Devel14 oping a professional advancement system to—

15 ‘‘(A) initiate or enhance a system in which

16 highly qualified teachers who pursue advanced

17 licensure levels are required to demonstrate in18 creased competencies and undertake increased

19 responsibilities for increased compensation as

20 the teachers progress through levels established

21 by the State; or

22 ‘‘(B) provide opportunities for professional

23 growth, including through—

24 ‘‘(i) a nationally recognized advance

25 credentialing system; or
†

529

S 1932 ES

1 ‘‘(ii) special certification in advanced

2 placement or international baccalaureate

3 content, teaching gifted and talented stu4 dents, and pedagogy.

5 ‘‘(f) SUPPLEMENT, NOT SUPPLANT.—Funds made

6 available under this section shall be used to supplement,

7 and not supplant, other Federal, State, and local funds

8 that would otherwise be expended to carry out activities

9 under this section.

10 ‘‘SEC. 203. PARTNERSHIP GRANTS.

11 ‘‘(a) GRANTS.—From amounts made available under

12 section 209(a)(2) for a fiscal year, the Secretary is author13 ized to award grants under this section, on a competitive

14 basis, to eligible partnerships to enable the eligible part15 nerships to carry out the activities described in subsections

16 (e) and (f).

17 ‘‘(b) DEFINITIONS.—

18 ‘‘(1) ELIGIBLE PARTNERSHIP.—

19 ‘‘(A) IN GENERAL.—In this part, the term

20 ‘eligible partnership’ means an entity that shall

21 include—

22 ‘‘(i) a partner institution;

23 ‘‘(ii) a school of arts and sciences;
†

530

S 1932 ES

1 ‘‘(iii) a high-need local educational

2 agency and a school or a consortium of

3 schools served by the agency; and

4 ‘‘(iv) at least 1 individual or entity de5 scribed in subparagraph (B).

6 ‘‘(B) ADDITIONAL INDIVIDUALS AND ENTI7 TIES.—In this part, the term ‘eligible partner8 ship’ means an entity that shall include at least

9 1 of the following:

10 ‘‘(i) A Governor.

11 ‘‘(ii) A State educational agency.

12 ‘‘(iii) A State board of education.

13 ‘‘(iv) A State agency for higher edu14 cation.

15 ‘‘(v) A school or department within

16 the partner institution focusing on edu17 cation, psychology, human development, or

18 a department with comparable expertise in

19 the disciplines of teaching, learning, and

20 child and adolescent development.

21 ‘‘(vi) An institution of higher edu22 cation or a department within such institu23 tion, not described in subparagraph (A).

24 ‘‘(vii) A public charter school.
†

531

S 1932 ES

1 ‘‘(viii) A public or private elementary

2 school or secondary school.

3 ‘‘(ix) A public or private nonprofit

4 educational organization.

5 ‘‘(x) A business.

6 ‘‘(xi) A science-, mathematics-, or

7 technology-oriented entity.

8 ‘‘(xii) An early childhood education

9 program.

10 ‘‘(xiii) A teacher organization.

11 ‘‘(xiv) An educational service agency.

12 ‘‘(xv) A consortium of local edu13 cational agencies.

14 ‘‘(xvi) A nonprofit telecommunications

15 entity.

16 ‘‘(2) PARTNER INSTITUTION.—In this section,

17 the term ‘partner institution’ means an institution of

18 higher education, which may include a 2-year insti19 tution of higher education offering a dual program

20 with a 4-year institution of higher education, that

21 has a teacher preparation program—

22 ‘‘(A) whose graduates exhibit strong per23 formance on State-determined qualifying assess24 ments for new teachers through—
†

532

S 1932 ES

1 ‘‘(i) demonstrating that 80 percent or

2 more of the graduates of the program who

3 intend to enter the field of teaching have

4 passed all of the applicable State qualifica5 tion assessments for new teachers, which

6 shall include an assessment of each pro7 spective teacher’s subject matter knowledge

8 in the content area in which the teacher in9 tends to teach; or

10 ‘‘(ii) being ranked among the highest11 performing teacher preparation programs

12 in the State as determined by the State—

13 ‘‘(I) using criteria consistent with

14 the requirements for the State report

15 card under section 206(b); and

16 ‘‘(II) using the State report card

17 on teacher preparation required under

18 section 206(b), after the first publica19 tion of such report card and for every

20 year thereafter; or

21 ‘‘(B) that requires all the students of the

22 program to meet high academic standards and

23 participate in intensive clinical experience,

24 and—
†

533

S 1932 ES

1 ‘‘(i) in the case of secondary school

2 candidates, to successfully complete—

3 ‘‘(I) a major or its equivalent in

4 coursework in the academic subject

5 area in which the candidate intends to

6 teach; or

7 ‘‘(II) a related major in the aca8 demic subject area in which the can9 didate intends to teach;

10 ‘‘(ii) in the case of elementary school

11 candidates, to successfully complete—

12 ‘‘(I) an academic major or its

13 equivalent in coursework in the arts

14 and sciences; or

15 ‘‘(II) a major in elementary edu16 cation with a significant amount of

17 coursework in the arts and sciences;

18 and

19 ‘‘(iii) in the case of early childhood

20 educators, to become fully competent and

21 meet degree requirements, as established

22 by the State.

23 ‘‘(c) APPLICATION.—Each eligible partnership desir24 ing a grant under this section shall submit an application

25 to the Secretary at such time, in such manner, and accom-
†

534

S 1932 ES

1 panied by such information as the Secretary may require.

2 Each such application shall contain—

3 ‘‘(1) a needs assessment of all the partners with

4 respect to the preparation, induction, and profes5 sional development of early childhood educators,

6 general and special education teachers, and prin7 cipals;

8 ‘‘(2) a description of the extent to which the

9 teacher preparation program of the eligible partner10 ship prepares new teachers with effective teaching

11 skills;

12 ‘‘(3) a description of how the eligible partner13 ship will coordinate with other teacher preparation

14 or professional development programs, including

15 those funded under the Elementary and Secondary

16 Education Act of 1965 and the Individuals with Dis17 abilities Education Act, and how the activities of the

18 eligible partnership will be consistent with State,

19 local, and other education reform activities that pro20 mote student achievement;

21 ‘‘(4) a resource assessment that describes the

22 resources available to the eligible partnership, the in23 tended use of the grant funds (including a descrip24 tion of how the grant funds will be fairly distrib25 uted), and the commitment of the resources of the
†

535

S 1932 ES

1 eligible partnership to the activities assisted under

2 this part, including financial support, faculty partici3 pation, time commitments, and continuation of the

4 activities when the grant period ends;

5 ‘‘(5) a description of—

6 ‘‘(A) how the eligible partnership will meet

7 the purposes of this part;

8 ‘‘(B) how the eligible partnership will carry

9 out the activities required under subsection (e)

10 and any permissible activities under subsection

11 (f);

12 ‘‘(C) the eligible partnership’s evaluation

13 plan pursuant to section 205(b);

14 ‘‘(D) how the eligible partnership will align

15 the teacher preparation program with the chal16 lenging student academic achievement stand17 ards, State early learning standards for early

18 childhood education programs (where applica19 ble), and challenging academic content stand20 ards, established by the State in which the

21 partnership is located;

22 ‘‘(E) how faculty of the teacher prepara23 tion program at the partner institution will

24 serve, over the period of the grant, with highly

25 qualified teachers in the classrooms of the high-
†

536

S 1932 ES

1 need local educational agency included in the el2 igible partnership;

3 ‘‘(F) how the eligible partnership will en4 sure that teachers, principals, and superintend5 ents in all schools (including private schools, as

6 appropriate) located in the geographic areas

7 served by an eligible partnership under this sec8 tion are provided information about the activi9 ties carried out with funds under this section,

10 including through electronic means;

11 ‘‘(G) how the eligible partnership will de12 sign, implement, or enhance the clinical pro13 gram component, including promoting close su14 pervision of student teachers by faculty of the

15 teacher preparation program and mentor teach16 ers while in the program and during the stu17 dent teachers’ initial years of teaching if hired

18 by schools included in the eligible partnership;

19 ‘‘(H) how the eligible partnership will de20 velop or enhance an induction program that in21 cludes high-quality professional development to

22 support new teachers during the teachers’ ini23 tial years of teaching that includes teacher

24 mentoring and collaborating with teachers in

25 the same grade, department, or field; and
†

537

S 1932 ES

1 ‘‘(I) how the eligible partnership will col2 lect, analyze, use, and disseminate data on the

3 retention of all teachers in schools located in

4 the geographic areas served by the eligible part5 nership to evaluate the effectiveness of its

6 teacher support system; and

7 ‘‘(6) an assurance that the eligible partnership

8 will carry out each of the activities described in

9 paragraph (5).

10 ‘‘(d) CONSULTATION.—

11 ‘‘(1) IN GENERAL.—Members of an eligible

12 partnership that receives a grant under this section

13 shall engage in regular consultation throughout the

14 development and implementation of programs and

15 activities under this section.

16 ‘‘(2) REGULAR COMMUNICATION.—To ensure

17 timely and meaningful consultation, regular commu18 nication shall occur among all members of the eligi19 ble partnership, including the high-need local edu20 cational agency. Such communication shall continue

21 throughout the implementation of the grant and the

22 assessment of programs and activities under this

23 section.

24 ‘‘(3) WRITTEN CONSENT.—The Secretary may

25 approve changes in grant activities only if a written
†

538

S 1932 ES

1 consent signed by all members of the eligible part2 nership is submitted to the Secretary.

3 ‘‘(e) REQUIRED USES OF FUNDS.—An eligible part4 nership that receives a grant under this section shall use

5 the grant funds to carry out each of the following activi6 ties:

7 ‘‘(1) REFORMS.—Ensuring that each teacher

8 preparation program and each early childhood edu9 cator preparation program, where applicable, of the

10 eligible partnership that is assisted under this sec11 tion addresses the needs identified in the needs as12 sessment of the partnership and is preparing current

13 or prospective teachers to be highly qualified, and,

14 where applicable, early childhood educators to be

15 fully competent, to understand scientifically based

16 research and its applicability, and to use technology

17 effectively, including use of instructional techniques

18 to improve student academic achievement, and in the

19 case of early childhood educators, techniques to im20 prove children’s cognitive, social, emotional, and

21 physical development, by assisting such programs—

22 ‘‘(A) in retraining faculty;

23 ‘‘(B) in designing (or redesigning) teacher

24 preparation programs so that such programs—
†

539

S 1932 ES

1 ‘‘(i) are based on rigorous academic

2 content and scientifically based research

3 (including scientifically based reading re4 search), and aligned with challenging State

5 academic content standards, as required

6 under section 1111(b)(1) of the Elemen7 tary and Secondary Education Act of

8 1965, and for early childhood educators,

9 aligned with State early learning stand10 ards;

11 ‘‘(ii) promote effective teaching skills;

12 ‘‘(iii) promote understanding of effec13 tive instructional strategies for students

14 with special needs, including students with

15 disabilities, students who are limited

16 English proficient, students who are gifted

17 and talented, and children in early child18 hood education programs; and

19 ‘‘(iv) promote high-quality mathe20 matics, science, and foreign language in21 struction, where applicable;

22 ‘‘(C) in ensuring collaboration with depart23 ments, programs, or units outside of the teach24 er preparation program in all academic content
†

540

S 1932 ES

1 areas to ensure a successful combination of

2 training in both teaching and such content; and

3 ‘‘(D) in developing high-quality, rigorous

4 clinical experiences, lasting not less than 1

5 term, through dissemination of best practices,

6 technical assistance, or other relevant activities.

7 ‘‘(2) CLINICAL EXPERIENCE AND INTER8 ACTION.—Improving sustained and high-quality

9 preservice clinical experiences, including—

10 ‘‘(A) providing teacher mentoring; and

11 ‘‘(B) substantially increasing interaction

12 between faculty at institutions of higher edu13 cation and new and experienced teachers, prin14 cipals, and other administrators at elementary

15 schools or secondary schools, and providing sup16 port, including preparation time and release

17 time, for such interaction.

18 ‘‘(3) SUPPORT PROGRAMS FOR NEW TEACH19 ERS.—Creating a program to support new teachers

20 during the initial years of teaching (for not less than

21 1 year and not more than 3 years). Such program

22 shall promote effective teaching skills and may in23 clude the following components:
†

541

S 1932 ES

1 ‘‘(A) Development of skills in educational

2 interventions based on scientifically based re3 search.

4 ‘‘(B) Development of knowledge of scientif5 ically based research on teaching and learning.

6 ‘‘(C) Inclusion of faculty who model the in7 tegration of research and practice in the class8 room.

9 ‘‘(D) Opportunities for—

10 ‘‘(i) high-quality teacher mentoring;

11 and

12 ‘‘(ii) additional professional develop13 ment, dissemination of evidence-based re14 search on educational practices, and pro15 fessional development activities.

16 ‘‘(E) Interdisciplinary collaboration among

17 exemplary teachers, faculty, researchers, and

18 other staff who prepare new teachers in the

19 learning process and the assessment of learn20 ing.

21 ‘‘(f) ALLOWABLE USES OF FUNDS.—An eligible part22 nership that receives a grant under this section may use

23 the grant funds to carry out any of the following activities

24 that address the needs identified in the needs assessment:
†

542

S 1932 ES

1 ‘‘(1) ALTERNATIVES TO TRADITIONAL PREPA2 RATION FOR TEACHING AND STATE CERTIFICATION

3 OR LICENSURE.—The activity described in section

4 202(e)(1).

5 ‘‘(2) DISSEMINATION AND COORDINATION.—

6 Broadly disseminating information on effective prac7 tices used by the eligible partnership, and coordi8 nating with the recruitment and training activities of

9 the Governor, State board of education, State agen10 cy for higher education, State agency responsible for

11 early childhood education, and State educational

12 agency, as appropriate.

13 ‘‘(3) INNOVATIVE PROGRAMS.—Developing in14 novative programs designed to provide graduates of

15 programs funded under this title with opportunities

16 to continue their education through supports and op17 portunities to improve instructional practices in the

18 initial years of teaching, including the following:

19 ‘‘(A) INTERNSHIPS.—

20 ‘‘(i) TEACHER PREPARATION EN21 HANCEMENT INTERNSHIP.—Developing a

22 1-year paid internship program for stu23 dents who have completed an initial teach24 er preparation program, or alternative

25 routes to State certification or licensure
†

543

S 1932 ES

1 program, to enable such students to de2 velop the skills and experience necessary

3 for success in teaching, including providing

4 intensive clinical training and combining

5 in-service instruction in teacher methods

6 and assessments with classroom observa7 tions, experiences, and practices. Such in8 terns shall have a reduced teaching load

9 and a mentor for assistance in the class10 room.

11 ‘‘(ii) MID-CAREER PROFESSIONAL IN12 TERNSHIPS.—Developing a 1-year paid in13 ternship program for mid-career profes14 sionals from other occupations, former

15 military personnel, and recent college grad16 uates from fields other than teacher prepa17 ration with records of academic distinction

18 to enable such individuals to develop the

19 skills and experience necessary for success

20 in teaching, including providing intensive

21 clinical training and combining in-service

22 instruction in teacher methods and assess23 ments with classroom observations, experi24 ences, and practices. Such interns shall
†

544

S 1932 ES

1 have a reduced teaching load and a mentor

2 for assistance in the classroom.

3 ‘‘(B) RESIDENCY PROGRAMS FOR NEW

4 TEACHERS.—Supporting teachers in a residency

5 program that provides an induction period for

6 all new general education and special education

7 teachers that includes—

8 ‘‘(i) a forum for information sharing

9 among prospective teachers, teachers, prin10 cipals, administrators, and participating

11 faculty in the partner institution; and

12 ‘‘(ii) the application of scientifically

13 based research on teaching and learning

14 generated by entities such as the Institute

15 of Education Sciences, and the National

16 Research Council of the National Acad17 emies.

18 ‘‘(C) PATHWAYS FOR PARAPROFESSIONALS

19 TO ENTER TEACHING.—Creating intensive pro20 grams to provide the coursework and clinical

21 experiences needed by highly qualified para22 professionals, as defined in section 2102 of the

23 Elementary and Secondary Education Act of

24 1965, to qualify for State teacher certification

25 or licensure to become highly qualified teachers.
†

545

S 1932 ES

1 ‘‘(4) MANAGERIAL AND LEADERSHIP SKILLS.—

2 Developing and implementing proven mechanisms to

3 provide principals and superintendents with effective

4 managerial, leadership, curricula, and instructional

5 skills that result in increased student academic

6 achievement.

7 ‘‘(5) TEACHER SCHOLARSHIPS AND SUPPORT.—

8 Providing—

9 ‘‘(A) scholarships to help students, such as

10 individuals who have been accepted by, or who

11 are enrolled in, a program of undergraduate

12 education at an institution of higher education,

13 pay the costs of tuition, room, board, and other

14 expenses of completing a teacher preparation

15 program, if—

16 ‘‘(i) the Secretary establishes such re17 quirements as the Secretary determines

18 necessary to ensure that recipients of

19 scholarships under this paragraph who

20 complete teacher preparation programs—

21 ‘‘(I) subsequently teach in a

22 high-need local educational agency for

23 a period of time equivalent to the pe24 riod of time for which the recipient re-
†

546

S 1932 ES

1 ceived the scholarship assistance, plus

2 an additional 1 year; or

3 ‘‘(II) repay the amount of the

4 scholarship if the recipient does not

5 teach as described in subclause (I);

6 and

7 ‘‘(ii) the eligible partnership provides

8 an assurance that the eligible partnership

9 will recruit minority students to become

10 highly qualified teachers;

11 ‘‘(B) support services, if needed, to enable

12 scholarship recipients to complete postsecondary

13 education programs, or to transition from a ca14 reer outside of the field of education into a

15 teaching career; and

16 ‘‘(C) follow-up services for former scholar17 ship recipients during the recipients’ initial

18 years of teaching.

19 ‘‘(6) COORDINATION WITH COMMUNITY COL20 LEGES.—

21 ‘‘(A) TEACHER PREPARATION PRO22 GRAMS.—Coordinating with 2-year institutions

23 of higher education to implement teacher prepa24 ration programs, including through distance
†

547

S 1932 ES

1 learning, for the purposes of allowing prospec2 tive teachers—

3 ‘‘(i) to obtain a bachelor’s degree and

4 State certification or licensure; and

5 ‘‘(ii) to become highly qualified teach6 ers.

7 ‘‘(B) PROFESSIONAL DEVELOPMENT.—Co8 ordinating with 2-year institutions of higher

9 education to provide professional development

10 that—

11 ‘‘(i) improves the academic content

12 knowledge of teachers in the academic sub13 ject areas in which the teachers are cer14 tified or licensed to teach, or in which the

15 teachers are working toward certification

16 or licensure to teach; and

17 ‘‘(ii) promotes effective teaching skills.

18 ‘‘(7) CLINICAL EXPERIENCE IN SCIENCE, MATH19 EMATICS, AND TECHNOLOGY.—Creating opportuni20 ties for clinical experience and training for teachers

21 and prospective teachers through participation with

22 professionals in business, research, and work envi23 ronments in areas relating to science, mathematics,

24 and technology, including opportunities for using

25 laboratory equipment.
†

548

S 1932 ES

1 ‘‘(8) PROFESSIONAL DEVELOPMENTCreating

2 opportunities for enhanced and ongoing professional

3 development for experienced general education and

4 special education teachers, early childhood edu5 cators, principals, administrators, and faculty.

6 ‘‘(9) TECHNOLOGY.—The activity described in

7 section 202(e)(9).

8 ‘‘(10) AREAS OF INSTRUCTIONAL SHORTAGE.—

9 Increasing the number of—

10 ‘‘(A) teachers in the classroom providing

11 instruction in high-need academic subject areas

12 (such as reading, mathematics, science, and for13 eign language, including less commonly taught

14 languages), and high-need areas (such as spe15 cial education, language instruction educational

16 programs for limited English proficient stu17 dents, and early childhood education);

18 ‘‘(B) special education faculty dedicated to

19 preparing highly qualified special education

20 teachers at institutions of higher education; and

21 ‘‘(C) faculty at institutions of higher edu22 cation with expertise in instruction of students

23 who are limited English proficient.

24 ‘‘(11) IMPROVING INSTRUCTION.—Improving

25 instruction by—
†

549

S 1932 ES

1 ‘‘(A) improving understanding and instruc2 tion in core academic subjects and other, spe3 cialized courses, such as geography, American

4 history and government, and world history; and

5 ‘‘(B) creating externships for teachers and

6 prospective teachers for field experience and

7 training through participation in business, re8 search, and work environments in high-need

9 academic subject areas (such as reading, math10 ematics, science, and foreign language, includ11 ing less commonly taught languages) and high12 need areas (such as special education, language

13 instruction educational programs for limited

14 English proficient students, and early childhood

15 education).

16 ‘‘(12) GRADUATE PROGRAMS.—Developing, in

17 collaboration with departments, programs, or units

18 of both academic content and teacher education

19 within a partner institution, master’s degree pro20 grams that meet the demonstrated needs of teachers

21 in the high-need local educational agency partici22 pating in the eligible partnership for content exper23 tise and teaching skills.

24 ‘‘(13) LITERACY TEACHER TRAINING.—Estab25 lishing and implementing a program that strength-
†

550

S 1932 ES

1 ens content knowledge and teaching skills of sec2 ondary school teachers in literacy that—

3 ‘‘(A) provides teacher training and sti4 pends for literacy coaches who train classroom

5 teachers to implement literacy programs;

6 ‘‘(B) develops or redesigns rigorous re7 search-based curricula that are aligned with

8 challenging State academic content standards,

9 as required under section 1111(b)(1) of the El10 ementary and Secondary Education Act of

11 1965, and with postsecondary standards for

12 reading and writing;

13 ‘‘(C) provides training and stipends for

14 teachers to tutor students with intense individ15 ualized reading, writing, and subject matter in16 struction during or beyond the school day;

17 ‘‘(D) provides opportunities for teachers to

18 plan and assess instruction with other teachers,

19 school leaders, and faculty at institutions of

20 higher education; and

21 ‘‘(E) establishes an evaluation and ac22 countability plan for activities conducted under

23 this paragraph to measure the impact of such

24 activities.
†

551

S 1932 ES

1 ‘‘(g) CONSTRUCTION.—Nothing in this section shall

2 be construed to prohibit an eligible partnership from using

3 grant funds to coordinate with the activities of eligible

4 partnerships in other States or on a regional basis through

5 Governors, State boards of education, State educational

6 agencies, State agencies responsible for early childhood

7 education, local educational agencies, or State agencies for

8 higher education.

9 ‘‘(h) SUPPLEMENT, NOT SUPPLANT.—Funds made

10 available under this section shall be used to supplement,

11 and not supplant, other Federal, State, and local funds

12 that would otherwise be expended to carry out activities

13 under this section.

14 ‘‘SEC. 204. ADMINISTRATIVE PROVISIONS.

15 ‘‘(a) DURATION; NUMBER OF AWARDS; PAY16 MENTS.—

17 ‘‘(1) DURATION.—

18 ‘‘(A) ELIGIBLE STATES.—Grants awarded

19 to eligible States under this part shall be

20 awarded for a period not to exceed 3 years.

21 ‘‘(B) ELIGIBLE PARTNERSHIPS.—Grants

22 awarded to eligible partnerships under this part

23 shall be awarded for a period of 5 years.

24 ‘‘(2) NUMBER OF AWARDS.—An eligible part25 nership may not receive more than 1 grant during
†

552

S 1932 ES

1 a 5-year period. Nothing in this title shall be con2 strued to prohibit an individual member, that can

3 demonstrate need, of an eligible partnership that re4 ceives a grant under this title from entering into an5 other eligible partnership consisting of new members

6 and receiving a grant with such other eligible part7 nership before the 5-year period described in the

8 preceding sentence applicable to the eligible partner9 ship with which the individual member has first

10 partnered has expired.

11 ‘‘(3) PAYMENTS.—The Secretary shall make

12 annual payments of grant funds awarded under this

13 part.

14 ‘‘(b) PEER REVIEW.—

15 ‘‘(1) PANEL.—The Secretary shall provide the

16 applications submitted under this part to a peer re17 view panel for evaluation. With respect to each ap18 plication, the peer review panel shall initially rec19 ommend the application for funding or for dis20 approval.

21 ‘‘(2) PRIORITY.—In recommending applications

22 to the Secretary for funding under this part, the

23 panel shall—

24 ‘‘(A) with respect to grants under section

25 202, give priority to eligible States—
†

553

S 1932 ES

1 ‘‘(i) that have innovative reforms to

2 hold institutions of higher education with

3 teacher preparation programs accountable

4 for preparing teachers to become highly

5 qualified and have effective teaching skills;

6 ‘‘(ii) that have innovative efforts

7 aimed at reducing the shortage of highly

8 qualified general and special education

9 teachers, including in low-income urban

10 and rural areas and in high-need academic

11 subject areas (such as reading, mathe12 matics, science, and foreign language, in13 cluding less commonly taught languages);

14 and

15 ‘‘(iii) whose awards promote an equi16 table geographic distribution of grants

17 among rural and urban areas; and

18 ‘‘(B) with respect to grants under section

19 203, give priority—

20 ‘‘(i) to applications from broad-based

21 eligible partnerships that involve busi22 nesses and community organizations; and

23 ‘‘(ii) to eligible partnerships so that

24 the awards promote an equitable geo-
†

554

S 1932 ES

1 graphic distribution of grants among rural

2 and urban areas.

3 ‘‘(3) SECRETARIAL SELECTION.—The Secretary

4 shall determine, based on the peer review process,

5 which applications shall receive funding and the

6 amounts of the grants. In determining grant

7 amounts, the Secretary shall take into account the

8 total amount of funds available for all grants under

9 this part and the types of activities proposed to be

10 carried out.

11 ‘‘(c) MATCHING REQUIREMENTS.—

12 ‘‘(1) STATE GRANTS.—Each eligible State re13 ceiving a grant under section 202 shall provide, from

14 non-Federal sources, an amount equal to 50 percent

15 of the amount of the grant (in cash or in kind) to

16 carry out the activities supported by the grant.

17 ‘‘(2) PARTNERSHIP GRANTS.—Each eligible

18 partnership receiving a grant under section 203

19 shall provide, from non-Federal sources (in cash or

20 in kind), an amount equal to 25 percent of the

21 amount of the grant for the first year of the grant,

22 35 percent of the amount of the grant for the second

23 year of the grant, and 50 percent of the amount of

24 the grant for each succeeding year of the grant.
†

555

S 1932 ES

1 ‘‘(d) LIMITATION ON ADMINISTRATIVE EXPENSES.—

2 An eligible State or eligible partnership that receives a

3 grant under this part may use not more than 2 percent

4 of the grant funds for purposes of administering the grant.

5 ‘‘(e) ADDITIONAL ACTIVITIES.—The Secretary shall

6 use funds repaid pursuant to section 202(e)(4)(A)(i)(II)

7 or section 203(f)(5)(A)(i)(II) to carry out additional ac8 tivities under section 202 or 203, respectively.

9 ‘‘SEC. 205. ACCOUNTABILITY AND EVALUATION.

10 ‘‘(a) STATE GRANT ACCOUNTABILITY REPORT.—An

11 eligible State that receives a grant under section 202 shall

12 submit an annual accountability report to the Secretary

13 and the authorizing committees. Such report shall include

14 a description of the degree to which the eligible State, in

15 using funds provided under such section, has made

16 progress in meeting the purposes of this part and substan17 tial progress in meeting the following goals, as applicable:

18 ‘‘(1) STUDENT ACADEMIC ACHIEVEMENT.—In19 creasing student academic achievement for all stu20 dents as defined by the eligible State.

21 ‘‘(2) RAISING STANDARDS.—Raising the State

22 academic standards required to enter the teaching

23 profession as a highly qualified teacher, and where

24 applicable, as a fully competent early childhood edu25 cator.
†

556

S 1932 ES

1 ‘‘(3) INITIAL CERTIFICATION OR LICENSURE.—

2 Improving the pass rates and scaled scores for initial

3 State teacher certification or licensure, or increasing

4 the numbers of qualified individuals being certified

5 or licensed as teachers through alternative routes to

6 State certification or licensure programs.

7 ‘‘(4) PERCENTAGE OF HIGHLY QUALIFIED

8 TEACHERS.—Providing data on the progress of the

9 State towards meeting the highly qualified teacher

10 requirements under section 1119(a)(2) of the Ele11 mentary and Secondary Education Act of 1965.

12 ‘‘(5) DECREASING TEACHER SHORTAGES.—De13 creasing shortages of—

14 ‘‘(A) highly qualified teachers in—

15 ‘‘(i) low-income urban and rural

16 areas;

17 ‘‘(ii) high-need academic subject areas

18 (such as reading, mathematics, science,

19 and foreign language, including less com20 monly taught languages);

21 ‘‘(iii) special education; and

22 ‘‘(iv) high-need areas (such as special

23 education, language instruction educational

24 programs for limited English proficient
†

557

S 1932 ES

1 students, and early childhood education);

2 and

3 ‘‘(B) fully competent early childhood edu4 cators.

5 ‘‘(6) INCREASING OPPORTUNITIES FOR PROFES6 SIONAL DEVELOPMENT.—Increasing opportunities

7 for enhanced and ongoing professional development

8 that—

9 ‘‘(A) improves the academic content knowl10 edge of teachers in the academic subject areas

11 in which the teachers are certified or licensed to

12 teach or in which the teachers are working to13 ward certification or licensure to teach; and

14 ‘‘(B) promotes effective teaching skills.

15 ‘‘(b) ELIGIBLE PARTNERSHIP EVALUATION.—Each

16 eligible partnership submitting an application for a grant

17 under section 203 shall establish and include in such ap18 plication, an evaluation plan that includes strong perform19 ance objectives. The plan shall include objectives and

20 measures for increasing—

21 ‘‘(1) student achievement for all students as

22 measured by the eligible partnership;

23 ‘‘(2) teacher retention in the first 3 years of a

24 teacher’s career;
†

558

S 1932 ES

1 ‘‘(3) improvement in the pass rates and scaled

2 scores for initial State certification or licensure of

3 teachers;

4 ‘‘(4) the percentage of highly qualified teachers

5 hired by the high-need local educational agency par6 ticipating in the eligible partnership; and

7 ‘‘(5) the percentage of—

8 ‘‘(A) highly qualified teachers among

9 underrepresented groups, in high-need academic

10 subject areas (such as reading, mathematics,

11 science, and foreign language, including less

12 commonly taught languages), in high-need

13 areas (such as special education, language in14 struction educational programs for limited

15 English proficient students, and early childhood

16 education), and in high-need schools;

17 ‘‘(B) elementary school, middle school, and

18 secondary school classes taught by teachers who

19 are highly qualified;

20 ‘‘(C) early childhood education program

21 classes taught by providers who are fully com22 petent; and

23 ‘‘(D) highly qualified special education

24 teachers.

25 ‘‘(c) REVOCATION OF GRANT.—
†

559

S 1932 ES

1 ‘‘(1) ELIGIBLE STATES.—If the Secretary de2 termines that an eligible State is not making sub3 stantial progress in meeting the purposes, goals, ob4 jectives, and measures, as appropriate, by the end of

5 the second year of a grant under this part, then the

6 grant payment shall not be made for the third year

7 of the grant.

8 ‘‘(2) ELIGIBLE PARTNERSHIPS.—If the Sec9 retary determines that an eligible partnership is not

10 making substantial progress in meeting the pur11 poses, goals, objectives, and measures, as appro12 priate, by the end of the third year of a grant under

13 this part, then the grant payments shall not be made

14 for any succeeding year of the grant.

15 ‘‘(d) EVALUATION AND DISSEMINATION.—The Sec16 retary shall evaluate the activities funded under this part

17 and report the Secretary’s findings regarding the activities

18 to the authorizing committees. The Secretary shall broadly

19 disseminate—

20 ‘‘(1) successful practices developed by eligible

21 States and eligible partnerships under this part; and

22 ‘‘(2) information regarding such practices that

23 were found to be ineffective.
†

560

S 1932 ES

1 ‘‘SEC. 206. ACCOUNTABILITY FOR PROGRAMS THAT PRE2 PARE TEACHERS.

3 ‘‘(a) INSTITUTIONAL AND PROGRAM REPORT CARDS

4 ON THE QUALITY OF TEACHER PREPARATION.—

5 ‘‘(1) REPORT CARD.—Each institution of higher

6 education that conducts a traditional teacher prepa7 ration program or alternative routes to State certifi8 cation or licensure program and that enrolls stu9 dents receiving Federal assistance under this Act

10 shall report annually to the State and the general

11 public, in a uniform and comprehensible manner

12 that conforms with the definitions and methods es13 tablished by the Secretary, both for traditional

14 teacher preparation programs and alternative routes

15 to State certification or licensure programs, the fol16 lowing information:

17 ‘‘(A) PASS RATES AND SCALED SCORES.—

18 For the most recent year for which the informa19 tion is available for those students who took the

20 assessments and are enrolled in the traditional

21 teacher preparation program or alternative

22 routes to State certification or licensure pro23 gram, and for those who have taken the assess24 ments and have completed the traditional teach25 er preparation program or alternative routes to

26 State certification or licensure program during
†

561

S 1932 ES

1 the 2-year period preceding such year, for each

2 of the assessments used for teacher certification

3 or licensure by the State in which the program

4 is located—

5 ‘‘(i) the percentage of students who

6 have completed 100 percent of the nonclin7 ical coursework and taken the assessment

8 who pass such assessment;

9 ‘‘(ii) the percentage of all such stu10 dents who passed each such assessment;

11 ‘‘(iii) the percentage of students tak12 ing an assessment who completed the

13 teacher preparation program after enroll14 ing in the program, which shall be made

15 available widely and publicly by the State;

16 ‘‘(iv) the average scaled score for all

17 students who took each such assessment;

18 ‘‘(v) a comparison of the program’s

19 pass rates with the average pass rates for

20 programs in the State; and

21 ‘‘(vi) a comparison of the program’s

22 average scaled scores with the average

23 scaled scores for programs in the State.

24 ‘‘(B) PROGRAM INFORMATION.—The cri25 teria for admission into the program, the num-
†

562

S 1932 ES

1 ber of students in the program (disaggregated

2 by race and gender), the average number of

3 hours of supervised clinical experience required

4 for those in the program, the number of full5 time equivalent faculty and students in the su6 pervised clinical experience, and the total num7 ber of students who have been certified or li8 censed as teachers, disaggregated by subject

9 and area of certification or licensure.

10 ‘‘(C) STATEMENT.—In States that require

11 approval or accreditation of teacher preparation

12 programs, a statement of whether the institu13 tion’s program is so approved or accredited,

14 and by whom.

15 ‘‘(D) DESIGNATION AS LOW-PER16 FORMING.—Whether the program has been des17 ignated as low-performing by the State under

18 section 207(a).

19 ‘‘(E) USE OF TECHNOLOGY.—A descrip20 tion of the activities that prepare teachers to ef21 fectively integrate technology into curricula and

22 instruction and effectively use technology to col23 lect, manage, and analyze data in order to im24 prove teaching, learning, and decision making
†

563

S 1932 ES

1 for the purpose of increasing student academic

2 achievement.

3 ‘‘(2) REPORT.—Each eligible partnership re4 ceiving a grant under section 203 shall report annu5 ally on the progress of the eligible partnership to6 ward meeting the purposes of this part and the ob7 jectives and measures described in section 205(b).

8 ‘‘(3) FINES.—The Secretary may impose a fine

9 not to exceed $25,000 on an institution of higher

10 education for failure to provide the information de11 scribed in this subsection in a timely or accurate

12 manner.

13 ‘‘(4) SPECIAL RULE.—In the case of an institu14 tion of higher education that conducts a traditional

15 teacher preparation program or alternative routes to

16 State certification or licensure program and has

17 fewer than 10 scores reported on any single initial

18 teacher certification or licensure assessment during

19 an academic year, the institution shall collect and

20 publish information, as required under paragraph

21 (1)(A), with respect to an average pass rate and

22 scaled score on each State certification or licensure

23 assessment taken over a 3-year period.

24 ‘‘(b) STATE REPORT CARD ON THE QUALITY OF

25 TEACHER PREPARATION.—
†

564

S 1932 ES

1 ‘‘(1) IN GENERAL.—Each State that receives

2 funds under this Act shall provide to the Secretary,

3 annually, in a uniform and comprehensible manner

4 that conforms with the definitions and methods es5 tablished by the Secretary, a State report card on

6 the quality of teacher preparation in the State, both

7 for traditional teacher preparation programs and for

8 alternative routes to State certification or licensure

9 programs, which shall include not less than the fol10 lowing:

11 ‘‘(A) A description of reliability and valid12 ity of the teacher certification and licensure as13 sessments, and any other certification and licen14 sure requirements, used by the State.

15 ‘‘(B) The standards and criteria that pro16 spective teachers must meet in order to attain

17 initial teacher certification or licensure and to

18 be certified or licensed to teach particular aca19 demic subject areas or in particular grades

20 within the State.

21 ‘‘(C) A description of how the assessments

22 and requirements described in subparagraph

23 (A) are aligned with the State’s challenging

24 academic content standards required under sec25 tion 1111(b)(1) of the Elementary and Sec-
†

565

S 1932 ES

1 ondary Education Act of 1965 and State early

2 learning standards for early childhood education

3 programs.

4 ‘‘(D) For each of the assessments used by

5 the State for teacher certification or licensure—

6 ‘‘(i) for each institution of higher edu7 cation located in the State and each entity

8 located in the State that offers an alter9 native route for teacher certification or li10 censure, the percentage of students at such

11 institution or entity who have completed

12 100 percent of the nonclinical coursework

13 and taken the assessment who pass such

14 assessment;

15 ‘‘(ii) the percentage of all such stu16 dents at all such institutions taking the as17 sessment who pass such assessment; and

18 ‘‘(iii) the percentage of students tak19 ing an assessment who completed the

20 teacher preparation program after enroll21 ing in the program, which shall be made

22 available widely and publicly by the State.

23 ‘‘(E) A description of alternative routes to

24 State certification or licensure in the State (in25 cluding any such routes operated by entities
†

566

S 1932 ES

1 that are not institutions of higher education), if

2 any, including, for each of the assessments used

3 by the State for teacher certification or

4 licensure—

5 ‘‘(i) the percentage of individuals par6 ticipating in such routes, or who have com7 pleted such routes during the 2-year period

8 preceding the date of the determination,

9 who passed each such assessment; and

10 ‘‘(ii) the average scaled score of indi11 viduals participating in such routes, or who

12 have completed such routes during the pe13 riod preceding the date of the determina14 tion, who took each such assessment.

15 ‘‘(F) A description of the State’s criteria

16 for assessing the performance of teacher prepa17 ration programs within institutions of higher

18 education in the State. Such criteria shall in19 clude indicators of the academic content knowl20 edge and teaching skills of students enrolled in

21 such programs.

22 ‘‘(G) For each teacher preparation pro23 gram in the State, the criteria for admission

24 into the program, the number of students in the

25 program, disaggregated by race and gender (ex-
†

567

S 1932 ES

1 cept that such disaggregation shall not be re2 quired in a case in which the number of stu3 dents in a category is insufficient to yield sta4 tistically reliable information or the results

5 would reveal personally identifiable information

6 about an individual student), the average num7 ber of hours of supervised clinical experience re8 quired for those in the program, and the num9 ber of full-time equivalent faculty, adjunct fac10 ulty, and students in supervised clinical experi11 ence.

12 ‘‘(H) For the State as a whole, and for

13 each teacher preparation program in the State,

14 the number of teachers prepared, in the aggre15 gate and reported separately by—

16 ‘‘(i) area of certification or licensure;

17 ‘‘(ii) academic major; and

18 ‘‘(iii) subject area for which the teach19 er has been prepared to teach.

20 ‘‘(I) Using the data generated under sub21 paragraphs (G) and (H), a description of the

22 extent to which teacher preparation programs

23 are helping to address shortages of highly quali24 fied teachers, by area of certification or licen25 sure, subject, and specialty, in the State’s pub-
†

568

S 1932 ES

1 lic schools, including those areas described in

2 section 205(a)(5).

3 ‘‘(J) A description of the activities that

4 prepare teachers to effectively integrate tech5 nology into curricula and instruction and effec6 tively use technology to collect, manage, and

7 analyze data in order to improve teaching,

8 learning, and decision making for the purpose

9 of increasing student academic achievement.

10 ‘‘(2) PROHIBITION AGAINST CREATING A NA11 TIONAL LIST.—The Secretary shall not create a na12 tional list or ranking of States, institutions, or

13 schools using the scaled scores provided under this

14 subsection.

15 ‘‘(c) REPORT OF THE SECRETARY ON THE QUALITY

16 OF TEACHER PREPARATION.—

17 ‘‘(1) REPORT CARD.—The Secretary shall pro18 vide to Congress, and publish and make widely avail19 able, a report card on teacher qualifications and

20 preparation in the United States, including all the

21 information reported in subparagraphs (A) through

22 (J) of subsection (b)(1). Such report shall identify

23 States for which eligible States and eligible partner24 ships received a grant under this part. Such report
†

569

S 1932 ES

1 shall be so provided, published, and made available

2 annually.

3 ‘‘(2) REPORT TO CONGRESS.—The Secretary

4 shall prepare and submit a report to Congress that

5 contains the following:

6 ‘‘(A) A comparison of States’ efforts to im7 prove the quality of the current and future

8 teaching force.

9 ‘‘(B) A comparison of eligible partnerships’

10 efforts to improve the quality of the current

11 and future teaching force.

12 ‘‘(C) The national mean and median scaled

13 scores and pass rate on any standardized test

14 that is used in more than 1 State for teacher

15 certification or licensure.

16 ‘‘(3) SPECIAL RULE.—In the case of a teacher

17 preparation program with fewer than 10 scores re18 ported on any single initial teacher certification or li19 censure assessment during an academic year, the

20 Secretary shall collect and publish information, and

21 make publicly available, with respect to an average

22 pass rate and scaled score on each State certification

23 or licensure assessment taken over a 3-year period.

24 ‘‘(d) COORDINATION.—The Secretary, to the extent

25 practicable, shall coordinate the information collected and
†

570

S 1932 ES

1 published under this part among States for individuals

2 who took State teacher certification or licensure assess3 ments in a State other than the State in which the indi4 vidual received the individual’s most recent degree.

5 ‘‘SEC. 207. STATE FUNCTIONS.

6 ‘‘(a) STATE ASSESSMENT.—In order to receive funds

7 under this Act, a State shall have in place a procedure

8 to identify and assist, through the provision of technical

9 assistance, low-performing programs of teacher prepara10 tion. Such State shall provide the Secretary an annual list

11 of such low-performing teacher preparation programs that

12 includes an identification of those programs at risk of

13 being placed on such list. Such levels of performance shall

14 be determined solely by the State and may include criteria

15 based on information collected pursuant to this part. Such

16 assessment shall be described in the report under section

17 206(b).

18 ‘‘(b) TERMINATION OF ELIGIBILITY.—Any program

19 of teacher preparation from which the State has with20 drawn the State’s approval, or terminated the State’s fi21 nancial support, due to the low performance of the pro22 gram based upon the State assessment described in sub23 section (a)—
†

571

S 1932 ES

1 ‘‘(1) shall be ineligible for any funding for pro2 fessional development activities awarded by the De3 partment;

4 ‘‘(2) shall not be permitted to accept or enroll

5 any student that receives aid under title IV in the

6 institution’s teacher preparation program; and

7 ‘‘(3) shall provide transitional support, includ8 ing remedial services if necessary, for students en9 rolled at the institution at the time of termination

10 of financial support or withdrawal of approval.

11 ‘‘(c) NEGOTIATED RULEMAKING.—If the Secretary

12 develops any regulations implementing subsection (b)(2),

13 the Secretary shall submit such proposed regulations to

14 a negotiated rulemaking process, which shall include rep15 resentatives of States, institutions of higher education,

16 and educational and student organizations.

17 ‘‘(d) APPLICATION OF THE REQUIREMENTS.—The

18 requirements of this section shall apply to both traditional

19 teacher preparation programs and alternative routes to

20 State certification and licensure programs.

21 ‘‘SEC. 208. GENERAL PROVISIONS.

22 ‘‘(a) METHODS.—In complying with sections 206 and

23 207, the Secretary shall ensure that States and institu24 tions of higher education use fair and equitable methods
†

572

S 1932 ES

1 in reporting and that the reporting methods do not allow

2 identification of individuals.

3 ‘‘(b) SPECIAL RULE.—For each State that does not

4 use content assessments as a means of ensuring that all

5 teachers teaching in core academic subjects within the

6 State are highly qualified not later than the end of the

7 2005–2006 school year, as required under section 1119

8 of the Elementary and Secondary Education Act of 1965,

9 and that each person employed as a special education

10 teacher in the State who teaches elementary school, middle

11 school, or secondary school is highly qualified by such

12 deadline, as required under section 612(a)(14)(C) of the

13 Individuals with Disabilities Education Act,—

14 ‘‘(1) the Secretary shall, to the extent prac15 ticable, collect data comparable to the data required

16 under this part from States, local educational agen17 cies, institutions of higher education, or other enti18 ties that administer such assessments to teachers or

19 prospective teachers; and

20 ‘‘(2) notwithstanding any other provision of this

21 part, the Secretary shall use such data to carry out

22 requirements of this part related to assessments,

23 pass rates, and scaled scores.

24 ‘‘(c) LIMITATIONS.—
†

573

S 1932 ES

1 ‘‘(1) FEDERAL CONTROL PROHIBITED.—Noth2 ing in this title shall be construed to permit, allow,

3 encourage, or authorize any Federal control over any

4 aspect of any private, religious, or home school,

5 whether or not a home school is treated as a private

6 school or home school under State law. This section

7 shall not be construed to prohibit private, religious,

8 or home schools from participation in programs or

9 services under this title.

10 ‘‘(2) NO CHANGE IN STATE CONTROL ENCOUR11 AGED OR REQUIRED.—Nothing in this title shall be

12 construed to encourage or require any change in a

13 State’s treatment of any private, religious, or home

14 school, whether or not a home school is treated as

15 a private school or home school under State law.

16 ‘‘(3) NATIONAL SYSTEM OF TEACHER CERTIFI17 CATION OR LICENSURE PROHIBITED.—Nothing in

18 this title shall be construed to permit, allow, encour19 age, or authorize the Secretary to establish or sup20 port any national system of teacher certification or

21 licensure.

22 ‘‘(d) RELEASE OF INFORMATION TO TEACHER PREP23 ARATION PROGRAMS.—

24 ‘‘(1) IN GENERAL.—For the purpose of improv25 ing teacher preparation programs, a State edu-
†

574

S 1932 ES

1 cational agency shall provide to a teacher prepara2 tion program, upon the request of the teacher prepa3 ration program, any and all pertinent education-re4 lated information that—

5 ‘‘(A) may enable the teacher preparation

6 program to evaluate the effectiveness of the

7 program’s graduates or the program itself; and

8 ‘‘(B) is possessed, controlled, or accessible

9 by the State educational agency.

10 ‘‘(2) CONTENT OF INFORMATION.—The infor11 mation described in paragraph (1)—

12 ‘‘(A) shall include an identification of spe13 cific individuals who graduated from the teach14 er preparation program to enable the teacher

15 preparation program to evaluate the informa16 tion provided to the program from the State

17 educational agency with the program’s own

18 data about the specific courses taken by, and

19 field experiences of, the individual graduates;

20 and

21 ‘‘(B) may include—

22 ‘‘(i) kindergarten through grade 12

23 academic achievement and demographic

24 data, without revealing personally identifi25 able information about an individual stu-
†

575

S 1932 ES

1 dent, for students who have been taught by

2 graduates of the teacher preparation pro3 gram; and

4 ‘‘(ii) teacher effectiveness evaluations

5 for teachers who graduated from the teach6 er preparation program.

7 ‘‘SEC. 209. AUTHORIZATION OF APPROPRIATIONS.

8 ‘‘(a) IN GENERAL.—There are authorized to be ap9 propriated to carry out this part such sums as may be

10 necessary for fiscal year 2006 and each of the 5 suc11 ceeding fiscal years, of which—

12 ‘‘(1) 50 percent shall be available for each fiscal

13 year to award grants under section 202; and

14 ‘‘(2) 50 percent shall be available for each fiscal

15 year to award grants under section 203.

16 ‘‘(b) SPECIAL RULE.—If the Secretary determines

17 that there is an insufficient number of meritorious appli18 cations for grants under section 202 or 203 to justify

19 awarding the full amount described in paragraph (1) or

20 (2) of subsection (a), respectively, the Secretary may, after

21 funding the meritorious applications, use the remaining

22 funds for grants under the other such section.’’.

23 CHAPTER 4—INSTITUTIONAL AID

24 SEC. 7341. PROGRAM PURPOSE.

25 Section 311 (20 U.S.C. 1057) is amended—
†

576

S 1932 ES

1 (1) in subsection (b)—

2 (A) in paragraph (1), by striking ‘‘351’’

3 and inserting ‘‘391’’; and

4 (B) in paragraph (3)(F), by inserting ‘‘,

5 including services that will assist in the edu6 cation of special populations’’ before the period;

7 and

8 (2) in subsection (c)—

9 (A) in paragraph (6), by inserting ‘‘, in10 cluding innovative, customized, remedial edu11 cation and English language instruction courses

12 designed to help retain students and move the

13 students rapidly into core courses and through

14 program completion’’ before the period;

15 (B) by redesignating paragraphs (7)

16 through (12) as paragraphs (8) through (13),

17 respectively;

18 (C) by inserting after paragraph (6) the

19 following:

20 ‘‘(7) Education or counseling services designed

21 to improve the financial literacy and economic lit22 eracy of students or the students’ parents.’’; and

23 (D) in the matter preceding subparagraph

24 (A) of paragraph (13) (as redesignated by sub-
†

577

S 1932 ES

1 paragraph (B)), by striking ‘‘subsection (c)’’

2 and inserting ‘‘subsection (b) and section 391’’.

3 SEC. 7342. DEFINITIONS; ELIGIBILITY.

4 Section 312 (20 U.S.C. 1058) is amended—

5 (1) in subsection (b)(1)(A), by striking ‘‘sub6 section (c) of this section’’ and inserting ‘‘subsection

7 (d)’’; and

8 (2) in subsection (d)(2), by striking ‘‘subdivi9 sion’’ and inserting ‘‘paragraph’’.

10 SEC. 7343. AMERICAN INDIAN TRIBALLY CONTROLLED COL11 LEGES AND UNIVERSITIES.

12 Section 316 (20 U.S.C. 1059c) is amended—

13 (1) by striking subsection (b)(3) and inserting

14 the following:

15 ‘‘(3) TRIBAL COLLEGE OR UNIVERSITY.—The

16 term ‘Tribal College or University’ means an institu17 tion that—

18 ‘‘(A) qualifies for funding under the Trib19 ally Controlled College or University Assistance

20 Act of 1978 (25 U.S.C. 1801 et seq.) or the

21 Navajo Community College Assistance Act of

22 1978 (25 U.S.C. 640a note); or

23 ‘‘(B) is cited in section 532 of the Equity

24 in Educational Land-Grant Status Act of 1994

25 (7 U.S.C. 301 note).’’;
†

578

S 1932 ES

1 (2) in subsection (c)(2)—

2 (A) in subparagraph (B), by inserting be3 fore the semicolon at the end the following:

4 ‘‘and the acquisition of real property adjacent

5 to the campus of the institution’’;

6 (B) by redesignating subparagraphs (G),

7 (H), (I), (J), (K), and (L) as subparagraphs

8 (H), (I), (J), (K), (L), and (N), respectively;

9 (C) by inserting after subparagraph (F)

10 the following:

11 ‘‘(G) education or counseling services de12 signed to improve the financial literacy and eco13 nomic literacy of students or parents of stu14 dents;’’;

15 (D) in subparagraph (L) (as redesignated

16 by subparagraph (B)), by striking ‘‘and’’ after

17 the semicolon;

18 (E) by inserting after subparagraph (L)

19 (as redesignated by subparagraph (B)) the fol20 lowing:

21 ‘‘(M) developing or improving facilities for

22 Internet use or other distance learning aca23 demic instruction capabilities; and’’; and

24 (F) in subparagraph (N) (as redesignated

25 by subparagraph (B)), by striking ‘‘subpara-
†

579

S 1932 ES

1 graphs (A) through (K)’’ and inserting ‘‘sub2 paragraphs (A) through (M)’’; and

3 (3) by striking subsection (d) and inserting the

4 following:

5 ‘‘(d) APPLICATION, PLAN, AND ALLOCATION.—

6 ‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligi7 ble to receive assistance under this section, a Tribal

8 College or University shall be an eligible institution

9 under section 312(b).

10 ‘‘(2) APPLICATION.—

11 ‘‘(A) IN GENERAL.—A Tribal College or

12 University desiring to receive assistance under

13 this section shall submit an application to the

14 Secretary at such time, and in such manner, as

15 the Secretary may reasonably require.

16 ‘‘(B) STREAMLINED PROCESS.—The Sec17 retary shall establish application requirements

18 in such a manner as to simplify and streamline

19 the process for applying for grants.

20 ‘‘(3) ALLOCATIONS TO INSTITUTIONS.—

21 ‘‘(A) CONSTRUCTION GRANTS.—

22 ‘‘(i) IN GENERAL.—Of the amount ap23 propriated to carry out this section for any

24 fiscal year, the Secretary may reserve 30

25 percent for the purpose of awarding 1-year
†

580

S 1932 ES

1 grants of not less than $1,000,000 to ad2 dress construction, maintenance, and ren3 ovation needs at eligible institutions.

4 ‘‘(ii) PREFERENCE.—In providing

5 grants under clause (i), the Secretary shall

6 give preference to eligible institutions that

7 have not yet received an award under this

8 section.

9 ‘‘(B) ALLOTMENT OF REMAINING

10 FUNDS.—

11 ‘‘(i) IN GENERAL.—Except as pro12 vided in clause (ii), the Secretary shall dis13 tribute the remaining funds appropriated

14 for any fiscal year to each eligible institu15 tion as follows:

16 ‘‘(I) 60 percent of the remaining

17 appropriated funds shall be distrib18 uted among the eligible Tribal Col19 leges and Universities on a pro rata

20 basis, based on the respective Indian

21 student counts (as defined in section

22 2(a) of the Tribally Controlled College

23 or University Assistance Act of 1978

24 (25 U.S.C. 1801(a)) of the Tribal

25 Colleges and Universities; and
†

581

S 1932 ES

1 ‘‘(II) the remaining 40 percent

2 shall be distributed in equal shares to

3 the eligible Tribal Colleges and Uni4 versities.

5 ‘‘(ii) MINIMUM GRANT.—The amount

6 distributed to a Tribal College or Univer7 sity under clause (i) shall not be less than

8 $500,000.

9 ‘‘(4) SPECIAL RULES.—

10 ‘‘(A) CONCURRENT FUNDING.—For the

11 purposes of this part, no Tribal College or Uni12 versity that is eligible for and receives funds

13 under this section shall concurrently receive

14 funds under other provisions of this part or

15 part B.

16 ‘‘(B) EXEMPTION.—Section 313(d) shall

17 not apply to institutions that are eligible to re18 ceive funds under this section.’’.

19 SEC. 7344. ALASKA NATIVE AND NATIVE HAWAIIAN-SERV20 ING INSTITUTIONS.

21 Section 317(c)(2) (20 U.S.C. 1059d(c)(2)) is

22 amended—

23 (1) in subparagraph (G), by striking ‘‘and’’

24 after the semicolon;
†

582

S 1932 ES

1 (2) in subparagraph (H), by striking the period

2 and inserting ‘‘; and’’; and

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

4 ‘‘(I) education or counseling services de5 signed to improve the financial literacy and eco6 nomic literacy of students or the students’ par7 ents.’’.

8 SEC. 7345. NATIVE AMERICAN-SERVING, NONTRIBAL INSTI9 TUTIONS.

10 (a) GRANT PROGRAM AUTHORIZED.—Part A of title

11 III (20 U.S.C. 1057 et seq.) is amended by adding at the

12 end the following:

13 ‘‘SEC. 318. NATIVE AMERICAN-SERVING, NONTRIBAL INSTI14 TUTIONS.

15 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall

16 provide grants and related assistance to Native American17 serving, nontribal institutions to enable such institutions

18 to improve and expand their capacity to serve Native

19 Americans.

20 ‘‘(b) DEFINITIONS.—In this section:

21 ‘‘(1) NATIVE AMERICAN.—The term ‘Native

22 American’ means an individual who is of a tribe,

23 people, or culture that is indigenous to the United

24 States.
†

583

S 1932 ES

1 ‘‘(2) NATIVE AMERICAN-SERVING, NONTRIBAL

2 INSTITUTION.—The term ‘Native American-serving,

3 nontribal institution’ means an institution of higher

4 education that, at the time of application—

5 ‘‘(A) has an enrollment of undergraduate

6 students that is not less than 10 percent Native

7 American students; and

8 ‘‘(B) is not a Tribal College or University

9 (as defined in section 316).

10 ‘‘(c) AUTHORIZED ACTIVITIES.—

11 ‘‘(1) TYPES OF ACTIVITIES AUTHORIZED.—

12 Grants awarded under this section shall be used by

13 Native American-serving, nontribal institutions to

14 assist such institutions to plan, develop, undertake,

15 and carry out activities to improve and expand such

16 institutions’ capacity to serve Native Americans.

17 ‘‘(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—

18 Such programs may include—

19 ‘‘(A) the purchase, rental, or lease of sci20 entific or laboratory equipment for educational

21 purposes, including instructional and research

22 purposes;

23 ‘‘(B) renovation and improvement in class24 room, library, laboratory, and other instruc25 tional facilities;
†

584

S 1932 ES

1 ‘‘(C) support of faculty exchanges, and fac2 ulty development and faculty fellowships to as3 sist faculty in attaining advanced degrees in the

4 faculty’s field of instruction;

5 ‘‘(D) curriculum development and aca6 demic instruction;

7 ‘‘(E) the purchase of library books, peri8 odicals, microfilm, and other educational mate9 rials;

10 ‘‘(F) funds and administrative manage11 ment, and acquisition of equipment for use in

12 strengthening funds management;

13 ‘‘(G) the joint use of facilities such as lab14 oratories and libraries; and

15 ‘‘(H) academic tutoring and counseling

16 programs and student support services.

17 ‘‘(d) APPLICATION PROCESS.—

18 ‘‘(1) INSTITUTIONAL ELIGIBILITY.—A Native

19 American-serving, nontribal institution desiring to

20 receive assistance under this section shall submit to

21 the Secretary such enrollment data as may be nec22 essary to demonstrate that the institution is a Na23 tive American-serving, nontribal institution, along

24 with such other information and data as the Sec25 retary may by regulation require.
†

585

S 1932 ES

1 ‘‘(2) APPLICATIONS.—

2 ‘‘(A) PERMISSION TO SUBMIT APPLICA3 TIONS.—Any institution that is determined by

4 the Secretary to be a Native American-serving,

5 nontribal institution may submit an application

6 for assistance under this section to the Sec7 retary.

8 ‘‘(B) SIMPLIFIED AND STREAMLINED FOR9 MAT.—The Secretary shall, to the extent pos10 sible, prescribe a simplified and streamlined for11 mat for applications under this section that

12 takes into account the limited number of insti13 tutions that are eligible for assistance under

14 this section.

15 ‘‘(C) CONTENT.—An application submitted

16 under subparagraph (A) shall include—

17 ‘‘(i) a 5-year plan for improving the

18 assistance provided by the Native Amer19 ican-serving, nontribal institution to Native

20 Americans; and

21 ‘‘(ii) such other information and as22 surances as the Secretary may require.

23 ‘‘(3) SPECIAL RULES.—

24 ‘‘(A) ELIGIBILITY.—No Native American25 serving, nontribal institution that receives funds
†

586

S 1932 ES

1 under this section shall concurrently receive

2 funds under other provisions of this part or

3 part B.

4 ‘‘(B) EXEMPTION.—Section 313(d) shall

5 not apply to institutions that are eligible to re6 ceive funds under this section.

7 ‘‘(C) DISTRIBUTION.—In awarding grants

8 under this section, the Secretary shall, to the

9 extent possible and consistent with the competi10 tive process under which such grants are

11 awarded, ensure maximum and equitable dis12 tribution among all eligible institutions.’’.

13 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

14 399 (20 U.S.C. 1068h) is amended by adding at the end

15 the following:

16 ‘‘(c) MINIMUM GRANT AMOUNT.—The minimum

17 amount of a grant under this title shall be $200,000.’’.

18 SEC. 7346. PART B DEFINITIONS.

19 Section 322(4) (20 U.S.C. 1061(4)) is amended by

20 inserting ‘‘, in consultation with the Commissioner for

21 Education Statistics’’ before ‘‘and the Commissioner’’.

22 SEC. 7347. GRANTS TO INSTITUTIONS.

23 Section 323(a) (20 U.S.C. 1062(a)) is amended—

24 (1) in the matter preceding paragraph (1), by

25 striking ‘‘360(a)(2)’’ and inserting ‘‘399(a)(2)’’;
†

587

S 1932 ES

1 (2) by redesignating paragraphs (7) through

2 (12) as paragraphs (8) through (13), respectively;

3 and

4 (3) by inserting after paragraph (6) the fol5 lowing:

6 ‘‘(7) Education or counseling services designed

7 to improve the financial literacy and economic lit8 eracy of students or the students’ parents.’’.

9 SEC. 7348. ALLOTMENTS TO INSTITUTIONS.

10 Section 324 (20 U.S.C. 1063) is amended by adding

11 at the end the following:

12 ‘‘(h) SPECIAL RULE ON ELIGIBILITY.—Notwith13 standing any other provision of this section, a part B insti14 tution shall not receive an allotment under this section un15 less the part B institution provides, on an annual basis,

16 data indicating that the part B institution—

17 ‘‘(1) enrolled Federal Pell Grant recipients in

18 the preceding academic year;

19 ‘‘(2) in the preceding academic year, has grad20 uated students from a program of academic study

21 that is licensed or accredited by a nationally recog22 nized accrediting agency or association recognized by

23 the Secretary pursuant to part H of title IV where

24 appropriate; and
†

588

S 1932 ES

1 ‘‘(3) where appropriate, has graduated students

2 who, within the past 5 years, enrolled in graduate or

3 professional school.’’.

4 SEC. 7349. PROFESSIONAL OR GRADUATE INSTITUTIONS.

5 Section 326 (20 U.S.C. 1063b) is amended—

6 (1) in subsection (c)—

7 (A) in paragraph (2), by inserting ‘‘, and

8 for the acquisition and development of real

9 property that is adjacent to the campus for

10 such construction, maintenance, renovation, or

11 improvement’’ after ‘‘services’’;

12 (B) by redesignating paragraphs (5)

13 through (7) as paragraphs (7) through (9), re14 spectively;

15 (C) by inserting after paragraph (4) the

16 following:

17 ‘‘(5) tutoring, counseling, and student service

18 programs designed to improve academic success;

19 ‘‘(6) education or counseling services designed

20 to improve the financial literacy and economic lit21 eracy of students or the students’ parents;’’;

22 (D) in paragraph (7) (as redesignated by

23 subparagraph (B)), by striking ‘‘establish or

24 improve’’ and inserting ‘‘establishing or improv25 ing’’;
†

589

S 1932 ES

1 (E) in paragraph (8) (as redesignated by

2 subparagraph (B))—

3 (i) by striking ‘‘assist’’ and inserting

4 ‘‘assisting’’; and

5 (ii) by striking ‘‘and’’ after the semi6 colon;

7 (F) in paragraph (9) (as redesignated by

8 subparagraph (B)), by striking the period and

9 inserting ‘‘; and’’; and

10 (G) by adding at the end the following:

11 ‘‘(10) other activities proposed in the applica12 tion submitted under subsection (d) that—

13 ‘‘(A) contribute to carrying out the pur14 poses of this part; and

15 ‘‘(B) are approved by the Secretary as part

16 of the review and acceptance of such applica17 tion.’’;

18 (2) in subsection (e)—

19 (A) in paragraph (1)—

20 (i) by inserting a colon after ‘‘the fol21 lowing’’;

22 (ii) in subparagraph (Q), by striking

23 ‘‘and’’ at the end;

24 (iii) in subparagraph (R), by striking

25 the period and inserting a semicolon; and
†

590

S 1932 ES

1 (iv) by adding at the end the fol2 lowing:

3 ‘‘(S) Alabama State University qualified

4 graduate program;

5 ‘‘(T) Coppin State University qualified

6 graduate program; and

7 ‘‘(U) Prairie View A & M University quali8 fied graduate program.’’;

9 (B) in paragraph (2), by inserting ‘‘in law

10 or’’ after ‘‘instruction’’; and

11 (C) in paragraph (3)—

12 (i) by striking ‘‘1998’’ and inserting

13 ‘‘2006’’; and

14 (ii) by striking ‘‘(Q) and (R)’’ and in15 serting ‘‘(S), (T), and (U)’’;

16 (3) in subsection (f)—

17 (A) in paragraph (1), by striking ‘‘(P)’’

18 and inserting ‘‘(R)’’; and

19 (B) in paragraph (3)—

20 (i) by striking subparagraphs (A) and

21 (B) and inserting the following:

22 ‘‘(A) The amount of non-Federal funds for

23 the fiscal year for which the determination is

24 made that the institution or program listed in

25 subsection (e)—
†

591

S 1932 ES

1 ‘‘(i) allocates from institutional re2 sources;

3 ‘‘(ii) secures from non-Federal

4 sources, including amounts appropriated

5 by the State and amounts from the private

6 sector; and

7 ‘‘(iii) will utilize to match Federal

8 funds awarded for the fiscal year for which

9 the determination is made under this sec10 tion to the institution or program.

11 ‘‘(B) The number of students enrolled in

12 the qualified graduate programs of the eligible

13 institution or program, for which the institution

14 or program received and allocated funding

15 under this section in the preceding year.’’;

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

17 ‘‘(or the equivalent) enrolled in the eligible

18 professional or graduate school’’ and all

19 that follows through the period and insert20 ing ‘‘enrolled in the qualified programs or

21 institutions listed in paragraph (1).’’;

22 (iii) in subparagraph (D)—

23 (I) by striking ‘‘students’’ and in24 serting ‘‘Black American students or

25 minority students’’; and
†

592

S 1932 ES

1 (II) by striking ‘‘institution’’ and

2 inserting ‘‘institution or program’’;

3 and

4 (iv) by striking subparagraph (E) and

5 inserting the following:

6 ‘‘(E) The percentage that the total number

7 of Black American students and minority stu8 dents who receive their first professional, mas9 ter’s, or doctoral degrees from the institution or

10 program in the academic year preceding the

11 academic year for which the determination is

12 made, represents of the total number of Black

13 American students and minority students in the

14 United States who receive their first profes15 sional, master’s, or doctoral degrees in the pro16 fessions or disciplines related to the course of

17 study at such institution or program, respec18 tively, in the preceding academic year.’’; and

19 (4) in subsection (g), by striking ‘‘1998’’ and

20 inserting ‘‘2006’’.

21 SEC. 7350. AUTHORIZATION OF APPROPRIATIONS.

22 Subsection (a) of section 399 (20 U.S.C. 1068h) is

23 amended to read as follows:

24 ‘‘(a) AUTHORIZATIONS.—
†

593

S 1932 ES

1 ‘‘(1) PART A.—(A) There are authorized to be

2 appropriated to carry out part A (other than section

3 316) such sums as may be necessary for fiscal year

4 2006 and each of the 5 succeeding fiscal years.

5 ‘‘(B) There are authorized to be appropriated

6 to carry out section 316 such sums as may be nec7 essary for fiscal year 2006 and each of the 5 suc8 ceeding fiscal years.

9 ‘‘(C) There are authorized to be appropriated to

10 carry out section 317 such sums as may be nec11 essary for fiscal year 2006 and each of the 5 suc12 ceeding fiscal years.

13 ‘‘(D) There are authorized to be appropriated

14 to carry out section 318 such sums as may be nec15 essary for fiscal year 2006 and each of the 5 suc16 ceeding fiscal years.

17 ‘‘(2) PART B.—(A) There are authorized to be

18 appropriated to carry out part B (other than section

19 326) such sums as may be necessary for fiscal year

20 2006 and each of the 5 succeeding fiscal years.

21 ‘‘(B) There are authorized to be appropriated

22 to carry out section 326 such sums as may be nec23 essary for fiscal year 2006 and each of the 5 suc24 ceeding fiscal years.
†

594

S 1932 ES

1 ‘‘(3) PART C.—There are authorized to be ap2 propriated to carry out part C such sums as may be

3 necessary for fiscal year 2006 and each of the 5 suc4 ceeding fiscal years.

5 ‘‘(4) PART D.—(A) There are authorized to be

6 appropriated to carry out part D (other than section

7 345(7), but including section 347) such sums as

8 may be necessary for fiscal year 2006 and each of

9 the 5 succeeding fiscal years.

10 ‘‘(B) There are authorized to be appropriated

11 to carry out section 345(7) such sums as may be

12 necessary for fiscal year 2006 and each of the 5 suc13 ceeding fiscal years.

14 ‘‘(5) PART E.—There are authorized to be ap15 propriated to carry out part E such sums as may be

16 necessary for fiscal year 2006 and each of the 5 suc17 ceeding fiscal years.’’.

18 SEC. 7351. TECHNICAL CORRECTIONS.

19 Title III (20 U.S.C. 1051 et seq.) is further

20 amended—

21 (1) in section 342(5)(C) (20 U.S.C.

22 1066a(5)(C)), by striking ‘‘,,’’ and inserting ‘‘,’’;

23 (2) in section 343(e) (20 U.S.C. 1066b(e)), by

24 inserting ‘‘SALE OF QUALIFIED BONDS.—’’ before

25 ‘‘Notwithstanding’’;
†

595

S 1932 ES

1 (3) in the matter preceding clause (i) of section

2 365(9)(A) (20 U.S.C. 1067k(9)(A)), by striking

3 ‘‘support’’ and inserting ‘‘supports’’;

4 (4) in section 391(b)(7)(E) (20 U.S.C.

5 1068(b)(7)(E)), by striking ‘‘subparagraph (E)’’ and

6 inserting ‘‘subparagraph (D)’’;

7 (5) in the matter preceding subparagraph (A)

8 of section 392(b)(2) (20 U.S.C. 1068a(b)(2)), by

9 striking ‘‘eligible institutions under part A institu10 tions’’ and inserting ‘‘eligible institutions under part

11 A’’; and

12 (6) in the matter preceding paragraph (1) of

13 section 396 (20 U.S.C. 1068e), by striking ‘‘360’’

14 and inserting ‘‘399’’.

15 CHAPTER 5—STUDENT ASSISTANCE

16 Subchapter A—Grants to Students in Attend17 ance at Institutions of Higher Education

18 SEC. 7361. FEDERAL PELL GRANTS.

19 Section 401 (20 U.S.C. 1070a) is amended—

20 (1) in subsection (a)(1)—

21 (A) in the first sentence, by striking

22 ‘‘2004’’ and inserting ‘‘2012’’; and

23 (B) in the second sentence, by striking ‘‘,,’’

24 and inserting ‘‘,’’;

25 (2) in subsection (b)—
†

596

S 1932 ES

1 (A) by striking paragraph (2)(A) and in2 serting the following:

3 ‘‘(2)(A) the amount of the Federal Pell Grant for a

4 student eligible under this part shall be—

5 ‘‘(i) $5,100 for academic year 2006–2007;

6 ‘‘(ii) $5,400 for academic year 2007–2008;

7 ‘‘(iii) $5,700 for academic year 2008–2009;

8 ‘‘(iv) $6,000 for academic year 2009–2010; and

9 ‘‘(v) $6,300 for academic year 2010–2011,

10 less an amount equal to the amount determined to be the

11 expected family contribution with respect to that student

12 for that year.’’;

13 (B) by striking paragraph (3);

14 (C) by redesignating paragraphs (4)

15 through (8) as paragraphs (3) through (7), re16 spectively;

17 (D) in paragraph (4) (as redesignated by

18 subparagraph (C)), by striking ‘‘$400, except’’

19 and all that follows through the period and in20 serting ‘‘10 percent of the maximum basic

21 grant level specified in the appropriate Appro22 priation Act for such academic year, except that

23 a student who is eligible for a Federal Pell

24 Grant in an amount that is equal to or greater

25 than 5 percent of such level but less than 10
†

597

S 1932 ES

1 percent of such level shall be awarded a Federal

2 Pell grant in the amount of 10 percent of such

3 level.’’; and

4 (E) by striking paragraph (5) (as redesig5 nated by subparagraph (C)) and inserting the

6 following:

7 ‘‘(5) In the case of a student who is enrolled, on at

8 least a half-time basis and for a period of more than 1

9 academic year in a 2-year or 4-year program of instruction

10 for which an institution of higher education awards an as11 sociate or baccalaureate degree, the Secretary shall allow

12 such student to receive not more than 2 Federal Pell

13 Grants during a single award year to permit such student

14 to accelerate the student’s progress toward a degree by

15 attending additional sessions. In the case of a student re16 ceiving more than 1 Federal Pell Grant in a single award

17 year, the total amount of Federal Pell Grants awarded to

18 such student for the award year may exceed the maximum

19 basic grant level specified in the appropriate Appropria20 tion Act for such award year.’’; and

21 (3) in subsection (c), by adding at the end the

22 following:

23 ‘‘(5) The period of time during which a student may

24 receive Federal Pell Grants shall not exceed 18 semesters,
†

598

S 1932 ES

1 or an equivalent period of time as determined by the Sec2 retary pursuant to regulations, which period shall—

3 ‘‘(A) be determined without regard to whether

4 the student is enrolled on a full-time basis during

5 any portion of the period of time; and

6 ‘‘(B) include any period of time for which the

7 student received a Federal Pell Grant prior to the

8 date of enactment of the Higher Education Amend9 ments of 2005.’’.

10 SEC. 7362. FEDERAL TRIO PROGRAMS.

11 (a) PROGRAM AUTHORITY; AUTHORIZATION OF AP12 PROPRIATIONS.—Section 402A (20 U.S.C. 1070a–11) is

13 amended—

14 (1) in subsection (b)—

15 (A) in paragraph (2)—

16 (i) in the matter preceding subpara17 graph (A), by striking ‘‘4’’ and inserting

18 ‘‘5’’;

19 (ii) by striking subparagraph (A); and

20 (iii) by redesignating subparagraphs

21 (B) and (C) as subparagraphs (A) and

22 (B), respectively; and

23 (B) by striking paragraph (3) and insert24 ing the following:
†

599

S 1932 ES

1 ‘‘(3) MINIMUM GRANTS.—Unless the institution

2 or agency requests a smaller amount, an individual

3 grant authorized under this chapter shall be award4 ed in an amount that is not less than $200,000, ex5 cept that an individual grant authorized under sec6 tion 402G shall be awarded in an amount that is not

7 less than $170,000.’’;

8 (2) in subsection (c)—

9 (A) in paragraph (2), by striking ‘‘service

10 delivery’’ and inserting ‘‘high quality service de11 livery, as determined under subsection (f),’’;

12 (B) in paragraph (3)(B), by striking ‘‘is

13 not required to’’ and inserting ‘‘shall not’’; and

14 (C) in paragraph (5), by striking ‘‘cam15 puses’’ and inserting ‘‘different campuses’’;

16 (3) in subsection (e), by striking ‘‘(g)(2)’’ each

17 place the term occurs and inserting ‘‘(h)(4)’’;

18 (4) by redesignating subsections (f) and (g) as

19 subsections (g) and (h), respectively;

20 (5) by inserting after subsection (e) the fol21 lowing:

22 ‘‘(f) OUTCOME CRITERIA.—

23 ‘‘(1) IN GENERAL.—The Secretary, by regula24 tion, shall establish outcome criteria for measuring,

25 annually and for longer periods, the quality and ef-
†

600

S 1932 ES

1 fectiveness of programs authorized under this chap2 ter.

3 ‘‘(2) USE FOR PRIOR EXPERIENCE DETERMINA4 TION.—The outcome criteria under paragraph (1)

5 shall be used to evaluate the programs provided by

6 a recipient of a grant under this chapter, and the

7 Secretary shall determine an eligible entity’s prior

8 experience of high quality service delivery, as re9 quired in subsection (c)(2), based on the outcome

10 criteria.

11 ‘‘(3) CONSIDERATION OF RELEVANT DATA.—

12 The outcome criteria under this subsection shall

13 take into account data pertaining to secondary

14 school completion, postsecondary education enroll15 ment, and postsecondary education completion for

16 low-income students, first generation college stu17 dents, and individuals with disabilities, in the schools

18 and institutions of higher education served by the

19 program to be evaluated.

20 ‘‘(4) CONTENTS OF OUTCOME CRITERIA.—The

21 outcome criteria shall include the following:

22 ‘‘(A) For programs authorized under sec23 tion 402B, whether the eligible entity met or

24 exceeded the entity’s objectives established in
†

601

S 1932 ES

1 the entity’s application for such program

2 regarding—

3 ‘‘(i) the delivery of service to a total

4 number of students served by the program;

5 ‘‘(ii) the continued secondary school

6 enrollment of such students;

7 ‘‘(iii) the graduation of such students

8 from secondary school; and

9 ‘‘(iv) the enrollment of such students

10 in an institution of higher education.

11 ‘‘(B) For programs authorized under sec12 tion 402C, whether the eligible entity met or ex13 ceeded its objectives for such program

14 regarding—

15 ‘‘(i) the delivery of service to a total

16 number of students served by the program,

17 as agreed upon by the entity and the Sec18 retary for the period;

19 ‘‘(ii) such students’ school perform20 ance, as measured by the grade point aver21 age, or its equivalent;

22 ‘‘(iii) such students’ academic per23 formance, as measured by standardized

24 tests, including tests required by the stu25 dents’ State;
†

602

S 1932 ES

1 ‘‘(iv) the retention in, and graduation

2 from, secondary school of such students;

3 and

4 ‘‘(v) the enrollment of such students

5 in an institution of higher education.

6 ‘‘(C) For programs authorized under sec7 tion 402D—

8 ‘‘(i) whether the eligible entity met or

9 exceeded the entity’s objectives regarding

10 the retention in postsecondary education of

11 the students served by the program;

12 ‘‘(ii)(I) in the case of an entity that is

13 an institution of higher education offering

14 a baccalaureate degree, the extent to which

15 the entity met or exceeded the entity’s ob16 jectives regarding such students’ comple17 tion of the degree programs in which such

18 students were enrolled; or

19 ‘‘(II) in the case of an entity that is

20 an institution of higher education that does

21 not offer a baccalaureate degree, the extent

22 to which the entity met or exceeded the en23 tity’s objectives regarding—

24 ‘‘(aa) the completion of a degree

25 or certificate by such students; and
†

603

S 1932 ES

1 ‘‘(bb) the transfer of such stu2 dents to institutions of higher edu3 cation that offer baccalaureate de4 grees;

5 ‘‘(iii) whether the entity met or ex6 ceeded the entity’s objectives regarding the

7 delivery of service to a total number of stu8 dents, as agreed upon by the entity and

9 the Secretary for the period; and

10 ‘‘(iv) whether the applicant met or ex11 ceeded the entity’s objectives regarding

12 such students remaining in good academic

13 standing.

14 ‘‘(D) For programs authorized under sec15 tion 402E, whether the entity met or exceeded

16 the entity’s objectives for such program

17 regarding—

18 ‘‘(i) the delivery of service to a total

19 number of students, as agreed upon by the

20 entity and the Secretary for the period;

21 ‘‘(ii) the provision of appropriate

22 scholarly and research activities for the

23 students served by the program;
†

604

S 1932 ES

1 ‘‘(iii) the acceptance and enrollment

2 of such students in graduate programs;

3 and

4 ‘‘(iv) the attainment of doctoral de5 grees by former program participants.

6 ‘‘(E) For programs authorized under sec7 tion 402F, whether the entity met or exceeded

8 the entity’s objectives for such program

9 regarding—

10 ‘‘(i) the enrollment of students with11 out a secondary school diploma or its rec12 ognized equivalent, who were served by the

13 program, in programs leading to such di14 ploma or equivalent;

15 ‘‘(ii) the enrollment of secondary

16 school graduates who were served by the

17 program in programs of postsecondary

18 education;

19 ‘‘(iii) the delivery of service to a total

20 number of students, as agreed upon by the

21 entity and the Secretary for the period;

22 and

23 ‘‘(iv) the provision of assistance to

24 students served by the program in com-
†

605

S 1932 ES

1 pleting financial aid applications and col2 lege admission applications.’’;

3 (6) in subsection (g) (as redesignated by para4 graph (4))—

5 (A) in the first sentence, by striking

6 ‘‘$700,000,000 for fiscal year 1999’’ and all

7 that follows through the period and inserting

8 ‘‘such sums as may be necessary for fiscal year

9 2006 and each of the 5 succeeding fiscal

10 years.’’; and

11 (B) by striking the fourth sentence; and

12 (7) in subsection (h) (as redesignated by para13 graph (4))—

14 (A) by redesignating paragraphs (1)

15 through (4) as paragraphs (3) through (6), re16 spectively;

17 (B) by inserting before paragraph (3) (as

18 redesignated by subparagraph (A)) the fol19 lowing:

20 ‘‘(1) DIFFERENT CAMPUS.—The term ‘different

21 campus’ means a site of an institution of higher edu22 cation that—

23 ‘‘(A) is geographically apart from the main

24 campus of the institution;

25 ‘‘(B) is permanent in nature; and
†

606

S 1932 ES

1 ‘‘(C) offers courses in educational pro2 grams leading to a degree, certificate, or other

3 recognized educational credential.

4 ‘‘(2) DIFFERENT POPULATION.—The term ‘dif5 ferent population’ means a group of individuals, with

6 respect to whom an eligible entity desires to serve

7 through an application for a grant under this chap8 ter, that—

9 ‘‘(A) is separate and distinct from any

10 other population that the entity has applied for

11 a grant under this chapter to serve; or

12 ‘‘(B) while sharing some of the same needs

13 as another population that the eligible entity

14 has applied for a grant under this chapter to

15 serve, has distinct needs for specialized serv16 ices.’’;

17 (C) in paragraph (5) (as redesignated by

18 subparagraph (A))—

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

20 ‘‘or’’ after the semicolon;

21 (ii) in subparagraph (B), by striking

22 the period at the end and inserting ‘‘; or’’;

23 and

24 (iii) by adding at the end the fol25 lowing:
†

607

S 1932 ES

1 ‘‘(C) was a member of a reserve component

2 of the Armed Forces called to active duty for a

3 period of more than 180 days.’’; and

4 (D) in paragraph (6), by striking ‘‘sub5 paragraph (A) or (B) of paragraph (3)’’ and in6 serting ‘‘subparagraph (A), (B), or (C) of para7 graph (5)’’.

8 (b) TALENT SEARCH.—Section 402B (20 U.S.C.

9 1070a–12) is amended—

10 (1) in subsection (a)—

11 (A) in paragraph (1), by striking ‘‘to iden12 tify qualified youths with potential for edu13 cation at the postsecondary level and to encour14 age such youths’’ and inserting ‘‘to encourage

15 eligible youths’’;

16 (B) in paragraph (2), by inserting ‘‘, and

17 facilitate the application for,’’ after ‘‘the avail18 ability of’’; and

19 (C) in paragraph (3), by striking ‘‘, but

20 who have the ability to complete such programs,

21 to reenter’’ and inserting ‘‘to enter or reenter,

22 and complete’’;

23 (2) by redesignating subsection (c) as sub24 section (d);
†

608

S 1932 ES

1 (3) by striking subsection (b) and inserting the

2 following:

3 ‘‘(b) REQUIRED SERVICES.—Any project assisted

4 under this section shall provide—

5 ‘‘(1) academic tutoring, or connections to high

6 quality academic tutoring services, to enable stu7 dents to complete secondary or postsecondary

8 courses, which may include instruction in reading,

9 writing, study skills, mathematics, science, and other

10 subjects;

11 ‘‘(2) advice and assistance in secondary course

12 selection and, if applicable, initial postsecondary

13 course selection;

14 ‘‘(3) assistance in preparing for college entrance

15 examinations and completing college admission ap16 plications;

17 ‘‘(4)(A) information on both the full range of

18 Federal student financial aid programs (including

19 Federal Pell Grant awards and loan forgiveness) and

20 resources for locating public and private scholar21 ships; and

22 ‘‘(B) assistance in completing financial aid ap23 plications, including the Free Application for Fed24 eral Student Aid described in section 483(a);

25 ‘‘(5) guidance on and assistance in—
†

609

S 1932 ES

1 ‘‘(A) secondary school reentry;

2 ‘‘(B) alternative education programs for

3 secondary school dropouts that lead to the re4 ceipt of a regular secondary school diploma;

5 ‘‘(C) entry into general educational devel6 opment (GED) programs; or

7 ‘‘(D) postsecondary education; and

8 ‘‘(6) education or counseling services designed

9 to improve the financial literacy and economic lit10 eracy of students or their parents, including finan11 cial planning for postsecondary education.

12 ‘‘(c) PERMISSIBLE SERVICES.—Any project assisted

13 under this section may provide services such as—

14 ‘‘(1) personal and career counseling or activi15 ties;

16 ‘‘(2) information and activities designed to ac17 quaint youths with the range of career options avail18 able to the youths;

19 ‘‘(3) exposure to the campuses of institutions of

20 higher education, as well as cultural events, aca21 demic programs, and other sites or activities not

22 usually available to disadvantaged youth;

23 ‘‘(4) workshops and counseling for families of

24 students served;
†

610

S 1932 ES

1 ‘‘(5) mentoring programs involving elementary

2 or secondary school teachers or counselors, faculty

3 members at institutions of higher education, stu4 dents, or any combination of such persons; and

5 ‘‘(6) programs and activities as described in

6 subsection (b) or paragraphs (1) through (5) of this

7 subsection that are specially designed for students

8 who are limited English proficient, students with

9 disabilities, students who are homeless children and

10 youths (as such term is defined in section 725 of the

11 McKinney-Vento Homeless Assistance Act (42

12 U.S.C. 11434a)), or students who are in foster care

13 or are aging out of the foster care system.’’; and

14 (4) in the matter preceding paragraph (1) of

15 subsection (d) (as redesignated by paragraph (2)),

16 by striking ‘‘talent search projects under this chap17 ter’’ and inserting ‘‘projects under this section’’.

18 (c) UPWARD BOUND.—Section 402C (20 U.S.C.

19 1070a–13) is amended—

20 (1) by striking subsection (b) and inserting the

21 following:

22 ‘‘(b) REQUIRED SERVICES.—Any project assisted

23 under this section shall provide—

24 ‘‘(1) academic tutoring to enable students to

25 complete secondary or postsecondary courses, which
†

611

S 1932 ES

1 may include instruction in reading, writing, study

2 skills, mathematics, science, and other subjects;

3 ‘‘(2) advice and assistance in secondary and

4 postsecondary course selection;

5 ‘‘(3) assistance in preparing for college entrance

6 examinations and completing college admission ap7 plications;

8 ‘‘(4)(A) information on both the full range of

9 Federal student financial aid programs (including

10 Federal Pell Grant awards and loan forgiveness) and

11 resources for locating public and private scholar12 ships; and

13 ‘‘(B) assistance in completing financial aid ap14 plications, including the Free Application for Fed15 eral Student Aid described in section 483(a);

16 ‘‘(5) guidance on and assistance in—

17 ‘‘(A) secondary school reentry;

18 ‘‘(B) alternative education programs for

19 secondary school dropouts that lead to the re20 ceipt of a regular secondary school diploma;

21 ‘‘(C) entry into general educational devel22 opment (GED) programs; or

23 ‘‘(D) postsecondary education; and

24 ‘‘(6) education or counseling services designed

25 to improve the financial literacy and economic lit-
†

612

S 1932 ES

1 eracy of students, including financial planning for

2 postsecondary education.’’;

3 (2) in subsection (c)—

4 (A) in the subsection heading, by striking

5 ‘‘REQUIRED SERVICES’’ and inserting ‘‘ADDI6 TIONAL REQUIRED SERVICES FOR MULTIPLE7 YEAR GRANT RECIPIENTS’’; and

8 (B) by striking ‘‘upward bound project as9 sisted under this chapter’’ and inserting

10 ‘‘project assisted under this section’’;

11 (3) by redesignating subsections (d) and (e) as

12 subsections (e) and (f), respectively;

13 (4) by inserting after subsection (c) the fol14 lowing:

15 ‘‘(d) PERMISSIBLE SERVICES.—Any project assisted

16 under this section may provide such services as—

17 ‘‘(1) exposure to cultural events, academic pro18 grams, and other activities not usually available to

19 disadvantaged youth;

20 ‘‘(2) information, activities and instruction de21 signed to acquaint youths participating in the

22 project with the range of career options available to

23 the youths;

24 ‘‘(3) on-campus residential programs;
†

613

S 1932 ES

1 ‘‘(4) mentoring programs involving elementary

2 school or secondary school teachers or counselors,

3 faculty members at institutions of higher education,

4 students, or any combination of such persons;

5 ‘‘(5) work-study positions where youth partici6 pating in the project are exposed to careers requir7 ing a postsecondary degree;

8 ‘‘(6) special services to enable veterans to make

9 the transition to postsecondary education; and

10 ‘‘(7) programs and activities as described in

11 subsection (b), subsection (c), or paragraphs (1)

12 through (6) of this subsection that are specially de13 signed for students who are limited English pro14 ficient, students with disabilities, students who are

15 homeless children and youths (as such term is de16 fined in section 725 of the McKinney-Vento Home17 less Assistance Act (42 U.S.C. 11434a)), or students

18 who are in foster care or are aging out of the foster

19 care system.’’;

20 (5) in the matter preceding paragraph (1) of

21 subsection (e) (as redesignated by paragraph (3)),

22 by striking ‘‘upward bound projects under this chap23 ter’’ and inserting ‘‘projects under this section’’; and

24 (6) in subsection (f) (as redesignated by para25 graph (3))—
†

614

S 1932 ES

1 (A) by striking ‘‘during June, July, and

2 August’’ each place the term occurs and insert3 ing ‘‘during the summer school recess, for a pe4 riod not to exceed 3 months’’; and

5 (B) by striking ‘‘(b)(10)’’ and inserting

6 ‘‘(d)(5)’’.

7 (d) STUDENT SUPPORT SERVICES.—Section 402D

8 (20 U.S.C. 1070a–14) is amended—

9 (1) in subsection (a)—

10 (A) in paragraph (2), by striking ‘‘and’’

11 after the semicolon;

12 (B) by striking paragraph (3) and insert13 ing the following:

14 ‘‘(3) to foster an institutional climate sup15 portive of the success of low-income and first gen16 eration college students, students with disabilities,

17 students who are limited English proficient, students

18 who are homeless children and youths (as such term

19 is defined in section 725 of the McKinney-Vento

20 Homeless Assistance Act (42 U.S.C. 11434a)), and

21 students who are in foster care or are aging out of

22 the foster care system.’’; and

23 (C) by adding at the end the following:

24 ‘‘(4) to improve the financial literacy and eco25 nomic literacy of students, including—
†

615

S 1932 ES

1 ‘‘(A) basic personal income, household

2 money management, and financial planning

3 skills; and

4 ‘‘(B) basic economic decisionmaking

5 skills.’’;

6 (2) by redesignating subsections (c) and (d) as

7 subsections (d) and (e);

8 (3) by striking subsection (b) and inserting the

9 following:

10 ‘‘(b) REQUIRED SERVICES.—A project assisted under

11 this section shall provide—

12 ‘‘(1) academic tutoring to enable students to

13 complete postsecondary courses, which may include

14 instruction in reading, writing, study skills, mathe15 matics, science, and other subjects;

16 ‘‘(2) advice and assistance in postsecondary

17 course selection;

18 ‘‘(3)(A) information on both the full range of

19 Federal student financial aid programs (including

20 Federal Pell Grant awards and loan forgiveness) and

21 resources for locating public and private scholar22 ships; and

23 ‘‘(B) assistance in completing financial aid ap24 plications, including the Free Application for Fed25 eral Student Aid described in section 483(a);
†

616

S 1932 ES

1 ‘‘(4) education or counseling services designed

2 to improve the financial literacy and economic lit3 eracy of students, including financial planning for

4 postsecondary education;

5 ‘‘(5) activities designed to assist students par6 ticipating in the project in securing college admis7 sion and financial assistance for enrollment in grad8 uate and professional programs; and

9 ‘‘(6) activities designed to assist students en10 rolled in 2-year institutions of higher education in

11 securing admission and financial assistance for en12 rollment in a 4-year program of postsecondary edu13 cation.

14 ‘‘(c) PERMISSIBLE SERVICES.—A project assisted

15 under this section may provide services such as—

16 ‘‘(1) consistent, individualized personal, career,

17 and academic counseling, provided by assigned coun18 selors;

19 ‘‘(2) information, activities, and instruction de20 signed to acquaint youths participating in the

21 project with the range of career options available to

22 the students;

23 ‘‘(3) exposure to cultural events and academic

24 programs not usually available to disadvantaged stu25 dents;
†

617

S 1932 ES

1 ‘‘(4) activities designed to acquaint students

2 participating in the project with the range of career

3 options available to the students;

4 ‘‘(5) mentoring programs involving faculty or

5 upper class students, or a combination thereof;

6 ‘‘(6) securing temporary housing during breaks

7 in the academic year for students who are homeless

8 children and youths (as such term is defined in sec9 tion 725 of the McKinney-Vento Homeless Assist10 ance Act (42 U.S.C. 11434a)) or were formerly

11 homeless children and youths and students who are

12 in foster care or are aging out of the foster care sys13 tem; and

14 ‘‘(7) programs and activities as described in

15 subsection (b) or paragraphs (1) through (5) of this

16 subsection that are specially designed for students

17 who are limited English proficient, students with

18 disabilities, students who are homeless children and

19 youths (as such term is defined in section 725 of the

20 McKinney-Vento Homeless Assistance Act (42

21 U.S.C. 11434a)) or were formerly homeless children

22 and youths, or students who are in foster care or are

23 aging out of the foster care system.’’;
†

618

S 1932 ES

1 (4) in subsection (d)(1) (as redesignated by

2 paragraph (2)), by striking ‘‘subsection (b)’’ and in3 serting ‘‘subsection (c)’’; and

4 (5) in the matter preceding paragraph (1) of

5 subsection (e) (as redesignated by paragraph (2)),

6 by striking ‘‘student support services projects under

7 this chapter’’ and inserting ‘‘projects under this sec8 tion’’.

9 (e) POSTBACCALAUREATE ACHIEVEMENT PROGRAM

10 AUTHORITY.—Section 402E (20 U.S.C. 1070a–15) is

11 amended—

12 (1) in subsection (b)—

13 (A) in the subsection heading, by inserting

14 ‘‘REQUIRED’’ before ‘‘SERVICES’’;

15 (B) in the matter preceding paragraph (1),

16 by striking ‘‘A postbaccalaureate achievement

17 project assisted under this section may provide

18 services such as—’’ and inserting ‘‘A project as19 sisted under this section shall provide—’’;

20 (C) in paragraph (5), by inserting ‘‘and’’

21 after the semicolon;

22 (D) in paragraph (6), by striking the semi23 colon and inserting a period; and

24 (E) by striking paragraphs (7) and (8);
†

619

S 1932 ES

1 (2) by redesignating subsections (c) through (f)

2 as subsections (d) through (g), respectively;

3 (3) by inserting after subsection (b) the fol4 lowing:

5 ‘‘(c) PERMISSIBLE SERVICES.—A project assisted

6 under this section may provide services such as—

7 ‘‘(1) education or counseling services designed

8 to improve the financial literacy and economic lit9 eracy of students or their parents, including finan10 cial planning for postsecondary education;

11 ‘‘(2) mentoring programs involving faculty

12 members at institutions of higher education, stu13 dents, or any combination of such persons; and

14 ‘‘(3) exposure to cultural events and academic

15 programs not usually available to disadvantaged stu16 dents.’’;

17 (4) in the matter preceding paragraph (1) of

18 subsection (d) (as redesignated by paragraph (2)),

19 by striking ‘‘postbaccalaureate achievement’’;

20 (5) in the matter preceding paragraph (1) of

21 subsection (f) (as redesignated by paragraph (2)), by

22 striking ‘‘postbaccalaureate achievement project’’

23 and inserting ‘‘project under this section’’; and

24 (6) in subsection (g) (as redesignated by para25 graph (2))—
†

620

S 1932 ES

1 (A) by striking ‘‘402A(f)’’ and inserting

2 ‘‘402A(g)’’; and

3 (B) by striking ‘‘1993 through 1997’’ and

4 inserting ‘‘2006 through 2010’’.

5 (f) EDUCATIONAL OPPORTUNITY CENTERS.—Section

6 402F (20 U.S.C. 1070a–16) is amended—

7 (1) in subsection (a)—

8 (A) in paragraph (1), by striking ‘‘and’’

9 after the semicolon;

10 (B) in paragraph (2), by striking the pe11 riod at the end and inserting ‘‘; and’’; and

12 (C) by adding at the end the following:

13 ‘‘(3) to improve the financial literacy and eco14 nomic literacy of students, including—

15 ‘‘(A) basic personal income, household

16 money management, and financial planning

17 skills; and

18 ‘‘(B) basic economic decisionmaking

19 skills.’’; and

20 (2) in subsection (b)—

21 (A) by redesignating paragraphs (5)

22 through (10) as paragraphs (6) through (11),

23 respectively;

24 (B) by inserting after paragraph (4) the

25 following:
†

621

S 1932 ES

1 ‘‘(5) education or counseling services designed

2 to improve the financial literacy and economic lit3 eracy of students;’’;

4 (C) by striking paragraph (7) (as redesig5 nated by subparagraph (A)) and inserting the

6 following:

7 ‘‘(7) individualized personal, career, and aca8 demic counseling;’’; and

9 (D) by striking paragraph (11) (as redesig10 nated by subparagraph (A)) and inserting the

11 following:

12 ‘‘(11) programs and activities as described in

13 paragraphs (1) through (10) that are specially de14 signed for students who are limited English pro15 ficient, students with disabilities, or students who

16 are homeless children and youths (as such term is

17 defined in section 725 of the McKinney-Vento

18 Homeless Assistance Act (42 U.S.C. 11434a)), or

19 programs and activities for students who are in fos20 ter care or are aging out of the foster care system.’’.

21 (g) STAFF DEVELOPMENT ACTIVITIES.—Section

22 402G(b)(3) (20 U.S.C. 1070a–17(b)(3)) is amended by in23 serting ‘‘, including strategies for recruiting and serving

24 students who are homeless children and youths (as such

25 term is defined in section 725 of the McKinney-Vento
†

622

S 1932 ES

1 Homeless Assistance Act (42 U.S.C. 11434a)) and stu2 dents who are in foster care or are aging out of the foster

3 care system’’ before the period at the end.

4 (h) REPORTS, EVALUATIONS, AND GRANTS FOR

5 PROJECT IMPROVEMENT AND DISSEMINATION.—Section

6 402H (20 U.S.C. 1070a–18) is amended—

7 (1) by striking the section heading and insert8 ing ‘‘REPORTS, EVALUATIONS, AND GRANTS

9 FOR PROJECT IMPROVEMENT AND DISSEMINA10 TION.’’;

11 (2) by redesignating subsections (a) through (c)

12 as subsections (b) through (d), respectively; and

13 (3) by inserting before subsection (b) (as redes14 ignated by paragraph (2)) the following:

15 ‘‘(a) REPORT TO CONGRESS.—At least once every 2-

16 year period, the Secretary shall prepare and submit to

17 Congress a report on the outcomes achieved by the pro18 grams authorized under this chapter. Such report shall in19 clude a statement for the preceding fiscal year

20 specifying—

21 ‘‘(1) the number of grants awarded during each

22 fiscal year, and the number of individuals served by

23 the programs carried out under such grants;
†

623

S 1932 ES

1 ‘‘(2) the number of entities that received grants

2 during the fiscal year, including the number of enti3 ties that—

4 ‘‘(A) received a grant to carry out a pro5 gram under this chapter for the fiscal year; and

6 ‘‘(B) had not received funding for that

7 particular program during the previous grant

8 cycle;

9 ‘‘(3) a comparison of the number and percent10 age of grant awards made to entities described in

11 paragraph (2), with the number of such entities

12 funded through discretionary grant competitions

13 conducted by the Secretary under this chapter in the

14 3 grant cycles preceding the fiscal year;

15 ‘‘(4) information on the number of individuals

16 served in each program authorized under this chap17 ter; and

18 ‘‘(5) information on the outcomes achieved by

19 each program authorized under this chapter, includ20 ing the outcome criteria described in section 402A(f)

21 for each program.’’.
†

624

S 1932 ES

1 SEC. 7363. GAINING EARLY AWARENESS AND READINESS

2 FOR UNDERGRADUATE PROGRAMS.

3 (a) EARLY INTERVENTION AND COLLEGE AWARE4 NESS PROGRAM AUTHORIZED.—Section 404A (20 U.S.C.

5 1070a–21) is amended—

6 (1) by striking subsection (a) and inserting the

7 following:

8 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary is au9 thorized, in accordance with the requirements of this chap10 ter, to establish a program that encourages eligible entities

11 to provide support to eligible low-income students to assist

12 the students in obtaining a secondary school diploma (or

13 its recognized equivalent) and to prepare for and succeed

14 in postsecondary education, by providing—

15 ‘‘(1) financial assistance, academic support, ad16 ditional counseling, mentoring, outreach, and sup17 portive services to middle school and secondary

18 school students to reduce—

19 ‘‘(A) the risk of such students dropping

20 out of school; or

21 ‘‘(B) the need for remedial education for

22 such students at the postsecondary level; and

23 ‘‘(2) information to students and their parents

24 about the advantages of obtaining a postsecondary

25 education and the college financing options for the

26 students and their parents.’’;
†

625

S 1932 ES

1 (2) by striking subsection (b)(2)(A) and insert2 ing the following:

3 ‘‘(A) give priority to eligible entities that

4 have a prior, demonstrated commitment to

5 early intervention leading to college access

6 through collaboration and replication of suc7 cessful strategies;’’; and

8 (3) by striking subsection (c)(2) and inserting

9 the following:

10 ‘‘(2) a partnership—

11 ‘‘(A) consisting of—

12 ‘‘(i) 1 or more local educational agen13 cies; and

14 ‘‘(ii) 1 or more degree granting insti15 tutions of higher education; and

16 ‘‘(B) which may include not less than 2

17 other community organizations or entities, such

18 as businesses, professional organizations, State

19 agencies, institutions or agencies sponsoring

20 programs authorized under subpart 4, or other

21 public or private agencies or organizations.’’.

22 (b) REQUIREMENTS.—Section 404B (20 U.S.C.

23 1070a–22) is amended—

24 (1) by striking subsection (a) and inserting the

25 following:—
†

626

S 1932 ES

1 ‘‘(a) FUNDING RULES.—

2 ‘‘(1) DISTRIBUTION.—In awarding grants from

3 the amount appropriated under section 404G for a

4 fiscal year, the Secretary shall take into

5 consideration—

6 ‘‘(A) the geographic distribution of such

7 awards; and

8 ‘‘(B) the distribution of such awards be9 tween urban and rural applicants.

10 ‘‘(2) SPECIAL RULE.—The Secretary shall an11 nually reevaluate the distribution of funds described

12 in paragraph (1) based on number, quality, and

13 promise of the applications.’’;

14 (2) by striking subsections (b), (e), and (f);

15 (3) by redesignating subsections (c), (d), and

16 (g) as subsections (b), (c), and (d), respectively; and

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

18 ‘‘(e) SUPPLEMENT, NOT SUPPLANT.—Grant funds

19 awarded under this chapter shall be used to supplement,

20 and not supplant, other Federal, State, and local funds

21 that would otherwise be expended to carry out activities

22 assisted under this chapter.’’.

23 (c) APPLICATION.—Section 404C (20 U.S.C. 1070a–

24 23) is amended—
†

627

S 1932 ES

1 (1) in the section heading, by striking ‘‘ELIGI2 BLE ENTITY PLANS’’ and inserting ‘‘APPLICA3 TIONS’’;

4 (2) in subsection (a)—

5 (A) in the subsection heading, by striking

6 ‘‘PLAN’’ and inserting ‘‘APPLICATION’’;

7 (B) in paragraph (1)—

8 (i) by striking ‘‘a plan’’ and inserting

9 ‘‘an application’’; and

10 (ii) by striking the second sentence;

11 and

12 (C) by striking paragraph (2) and insert13 ing the following:

14 ‘‘(2) CONTENTS.—Each application submitted

15 pursuant to paragraph (1) shall be in such form,

16 contain or be accompanied by such information or

17 assurances, and be submitted at such time as the

18 Secretary may require. Each such application shall,

19 at a minimum—

20 ‘‘(A) describe the activities for which as21 sistance under this chapter is sought, including

22 how the eligible entity will carry out the re23 quired activities described in section 404D(a);

24 ‘‘(B) describe how the eligible agency will

25 meet the requirements of section 404E;
†

628

S 1932 ES

1 ‘‘(C) provide assurances that adequate ad2 ministrative and support staff will be respon3 sible for coordinating the activities described in

4 section 404D;

5 ‘‘(D) ensure that activities assisted under

6 this chapter will not displace an employee or

7 eliminate a position at a school assisted under

8 this chapter, including a partial displacement

9 such as a reduction in hours, wages or employ10 ment benefits;

11 ‘‘(E) describe, in the case of an eligible en12 tity described in section 404A(c)(2), how the el13 igible entity will define the cohorts of the stu14 dents served by the eligible entity pursuant to

15 section 404B(d), and how the eligible entity will

16 serve the cohort through grade 12, including—

17 ‘‘(i) how vacancies in the program

18 under this chapter will be filled; and

19 ‘‘(ii) how the eligible entity will serve

20 students attending different secondary

21 schools;

22 ‘‘(F) describe how the eligible entity will

23 coordinate programs with other existing Fed24 eral, State, or local programs to avoid duplica-
†

629

S 1932 ES

1 tion and maximize the number of students

2 served;

3 ‘‘(G) provide such additional assurances as

4 the Secretary determines necessary to ensure

5 compliance with the requirements of this chap6 ter; and

7 ‘‘(H) provide information about the activi8 ties that will be carried out by the eligible enti9 ty to support systemic changes from which fu10 ture cohorts of students will benefit.’’;

11 (3) in the matter preceding subparagraph (A)

12 of subsection (b)(1)—

13 (A) by striking ‘‘a plan’’ and inserting ‘‘an

14 application’’; and

15 (B) by striking ‘‘such plan’’ and inserting

16 ‘‘such application’’; and

17 (4) in subsection (c)(1), by striking the semi18 colon at the end and inserting ‘‘including—

19 ‘‘(A) the amount contributed to a student

20 scholarship fund established under section

21 404E; and

22 ‘‘(B) the amount of the costs of admin23 istering the scholarship program under section

24 404E;’’.
†

630

S 1932 ES

1 (d) ACTIVITIES.—Section 404D (20 U.S.C. 1070a–

2 24) is amended to read as follows:

3 ‘‘SEC. 404D. ACTIVITIES.

4 ‘‘(a) REQUIRED ACTIVITIES.—Each eligible entity re5 ceiving a grant under this chapter shall carry out the fol6 lowing:

7 ‘‘(1) Provide information regarding financial

8 aid for postsecondary education to participating stu9 dents in the cohort described in subsection

10 404B(d)(1)(A).

11 ‘‘(2) Encourage student enrollment in rigorous

12 and challenging curricula and coursework, in order

13 to reduce the need for remedial coursework at the

14 postsecondary level.

15 ‘‘(3) Support activities designed to improve the

16 number of participating students who—

17 ‘‘(A) obtain a secondary school diploma;

18 and

19 ‘‘(B) complete applications for and enroll

20 in a program of postsecondary education.

21 ‘‘(4) In the case of an eligible entity described

22 in section 404A(c)(1), provide for the scholarships

23 described in section 404E.

24 ‘‘(b) OPTIONAL ACTIVITIES FOR STATES AND PART25 NERSHIPS.—An eligible entity that receives a grant under
†

631

S 1932 ES

1 this chapter may use grant funds to carry out 1 or more

2 of the following activities:

3 ‘‘(1) Providing tutoring and supporting men4 tors, including adults or former participants of a

5 program under this chapter, for eligible students.

6 ‘‘(2) Conducting outreach activities to recruit

7 priority students described in subsection (d) to par8 ticipate in program activities.

9 ‘‘(3) Providing supportive services to eligible

10 students.

11 ‘‘(4) Supporting the development or implemen12 tation of rigorous academic curricula, which may in13 clude college preparatory, Advanced Placement, or

14 International Baccalaureate programs, and providing

15 participating students access to rigorous core

16 courses that reflect challenging State academic

17 standards.

18 ‘‘(5) Supporting dual or concurrent enrollment

19 programs between the secondary school and institu20 tion of higher education partners of an eligible entity

21 described in section 404A(c)(2), and other activities

22 that support participating students in—

23 ‘‘(A) meeting challenging academic stand24 ards;
†

632

S 1932 ES

1 ‘‘(B) successfully applying for postsec2 ondary education;

3 ‘‘(C) successfully applying for student fi4 nancial aid; and

5 ‘‘(D) developing graduation and career

6 plans.

7 ‘‘(6) Providing support for scholarships de8 scribed in section 404E.

9 ‘‘(7) Introducing eligible students to institutions

10 of higher education, through trips and school-based

11 sessions.

12 ‘‘(8) Providing an intensive extended school

13 day, school year, or summer program that offers—

14 ‘‘(A) additional academic classes; or

15 ‘‘(B) assistance with college admission ap16 plications.

17 ‘‘(9) Providing other activities designed to en18 sure secondary school completion and postsecondary

19 education enrollment of at-risk children, such as—

20 ‘‘(A) the identification of at-risk children;

21 ‘‘(B) after-school and summer tutoring;

22 ‘‘(C) assistance to at-risk children in ob23 taining summer jobs;

24 ‘‘(D) academic counseling;

25 ‘‘(E) volunteer and parent involvement;
†

633

S 1932 ES

1 ‘‘(F) encouraging former or current par2 ticipants of a program under this chapter to

3 serve as peer counselors;

4 ‘‘(G) skills assessments;

5 ‘‘(H) personal counseling;

6 ‘‘(I) family counseling and home visits;

7 ‘‘(J) staff development; and

8 ‘‘(K) programs and activities described in

9 this subsection that are specially designed for

10 students who are limited English proficient.

11 ‘‘(10) Enabling eligible students to enroll in Ad12 vanced Placement or International Baccalaureate

13 courses, or college entrance examination preparation

14 courses.

15 ‘‘(11) Providing services to eligible students in

16 the participating cohort described in section

17 404B(d)(1)(A), through the first year of attendance

18 at an institution of higher education.

19 ‘‘(c) ADDITIONAL OPTIONAL ACTIVITIES FOR

20 STATES.—In addition to the required activities described

21 in subsection (a) and the optional activities described in

22 subsection (b), an eligible entity described in section

23 404A(c)(1) receiving funds under this chapter may use

24 grant funds to carry out 1 or more of the following activi25 ties:
†

634

S 1932 ES

1 ‘‘(1) Providing technical assistance to—

2 ‘‘(A) middle schools or secondary schools

3 that are located within the State; or

4 ‘‘(B) partnerships described in section

5 404A(c)(2) that are located within the State.

6 ‘‘(2) Providing professional development oppor7 tunities to individuals working with eligible cohorts

8 of students described in section 404B(d)(1)(A).

9 ‘‘(3) Providing strategies and activities that

10 align efforts in the State to prepare eligible students

11 for attending and succeeding in postsecondary edu12 cation, which may include the development of grad13 uation and career plans.

14 ‘‘(4) Disseminating information on the use of

15 scientifically based research and best practices to

16 improve services for eligible students.

17 ‘‘(5)(A) Disseminating information on effective

18 coursework and support services that assist students

19 in obtaining the goals described in subparagraph

20 (B)(ii).

21 ‘‘(B) Identifying and disseminating information

22 on best practices with respect to—

23 ‘‘(i) increasing parental involvement; and

24 ‘‘(ii) preparing students, including students

25 with disabilities and students who are limited
†

635

S 1932 ES

1 English proficient, to succeed academically in,

2 and prepare financially for, postsecondary edu3 cation.

4 ‘‘(6) Working to align State academic standards

5 and curricula with the expectations of postsecondary

6 institutions and employers.

7 ‘‘(7) Developing alternatives to traditional sec8 ondary school that give students a head start on at9 taining a recognized postsecondary credential (in10 cluding an industry certificate, an apprenticeship, or

11 an associate’s or a bachelor’s degree), including

12 school designs that give students early exposure to

13 college-level courses and experiences and allow stu14 dents to earn transferable college credits or an asso15 ciate’s degree at the same time as a secondary

16 school diploma.

17 ‘‘(8) Creating community college programs for

18 drop-outs that are personalized drop-out recovery

19 programs that allow drop-outs to complete a regular

20 secondary school diploma and begin college-level

21 work.

22 ‘‘(d) PRIORITY STUDENTS.—For eligible entities not

23 using a cohort approach, the eligible entity shall treat as

24 priority students any student in middle or secondary

25 school who is eligible—
†

636

S 1932 ES

1 ‘‘(1) to be counted under section 1124(c) of the

2 Elementary and Secondary Education Act of 1965;

3 ‘‘(2) for free or reduced price meals under the

4 Richard B. Russell National School Lunch Act;

5 ‘‘(3) for assistance under a State program

6 funded under part A or E of title IV of the Social

7 Security Act (42 U.S.C. 601 et seq., 670 et seq.);

8 or

9 ‘‘(4) for assistance under subtitle B of title VII

10 of the McKinney-Vento Homeless Assistance Act (42

11 U.S.C. 11431 et seq.).

12 ‘‘(e) ALLOWABLE PROVIDERS.—In the case of eligible

13 entities described in section 404A(c)(1), the activities re14 quired by this section may be provided by service providers

15 such as community-based organizations, schools, institu16 tions of higher education, public and private agencies,

17 nonprofit and philanthropic organizations, businesses, in18 stitutions and agencies sponsoring programs authorized

19 under subpart 4, and other organizations the State deter20 mines appropriate.’’.

21 (e) SCHOLARSHIP COMPONENT.—Section 404E (20

22 U.S.C. 1070a–25) is amended—

23 (1) by striking subsections (e) and (f);

24 (2) by redesignating subsections (b), (c), and

25 (d) as subsections (d), (f), and (g), respectively;
†

637

S 1932 ES

1 (3) by inserting after subsection (a) the fol2 lowing:

3 ‘‘(b) LIMITATION.—

4 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

5 each eligible entity described in section 404A(c)(1)

6 that receives a grant under this chapter shall use

7 not less than 25 percent and not more than 50 per8 cent of the grant funds for activities described in

9 section 404D(c), with the remainder of such funds

10 to be used for a scholarship program under this sec11 tion.

12 ‘‘(2) EXCEPTION.—Notwithstanding paragraph

13 (1), the Secretary may allow an eligible entity to use

14 more than 50 percent of grant funds received under

15 this chapter for such activities, if the eligible entity

16 demonstrates that the eligible entity has another

17 means of providing the students with the financial

18 assistance described in this section and describes

19 such means in the application submitted under sec20 tion 404C.

21 ‘‘(c) NOTIFICATION OF ELIGIBILITY.—Each eligible

22 entity providing scholarships under this section shall pro23 vide information on the eligibility requirements for the

24 scholarships to all participating students upon the stu-
†

638

S 1932 ES

1 dents’ entry into the programs assisted under this chap2 ter.’’;

3 (4) in subsection (d) (as redesignated by para4 graph (2)), by striking ‘‘the lesser of’’ and all that

5 follows through the period at the end of paragraph

6 (2) and inserting ‘‘the minimum Federal Pell Grant

7 award under section 401 for such award year.’’;

8 (5) by inserting after subsection (d) (as redesig9 nated by paragraph (2) and amended by paragraph

10 (4)) the following:

11 ‘‘(e) PORTABILITY OF ASSISTANCE.—

12 ‘‘(1) IN GENERAL.—Each eligible entity de13 scribed in section 404A(c)(1) that receives a grant

14 under this chapter shall create or organize a trust

15 for each cohort described in section 404B(d)(1)(A)

16 for which the grant is sought in the application sub17 mitted by the entity, which trust shall be an amount

18 that is not less than the minimum scholarship

19 amount described in subsection (d), multiplied by

20 the number of students participating in the cohort.

21 ‘‘(2) REQUIREMENT FOR PORTABILITY.—Funds

22 contributed to the trust for a cohort shall be avail23 able to a student in the cohort when the student

24 has—
†

639

S 1932 ES

1 ‘‘(A) completed a secondary school di2 ploma, its recognized equivalent, or other recog3 nized alternative standard for individuals with

4 disabilities; and

5 ‘‘(B) enrolled in an institution of higher

6 education.

7 ‘‘(3) QUALIFIED EDUCATIONAL EXPENSES.—

8 Funds available to an eligible student from a trust

9 may be used for—

10 ‘‘(A) tuition, fees, books, supplies, and

11 equipment required for the enrollment or at12 tendance of the eligible student at an institution

13 of higher education; and

14 ‘‘(B) in the case of an eligible student with

15 special needs, expenses for special needs serv16 ices which are incurred in connection with such

17 enrollment or attendance.

18 ‘‘(4) RETURN OF FUNDS.—

19 ‘‘(A) REDISTRIBUTION.—

20 ‘‘(i) IN GENERAL.—Trust funds that

21 are not used by an eligible student within

22 6 years of the student’s scheduled comple23 tion of secondary school may be redistrib24 uted by the eligible entity to other eligible

25 students.
†

640

S 1932 ES

1 ‘‘(ii) RETURN OF EXCESS TO THE

2 SECRETARY.—If, after meeting the require3 ments of paragraph (1) and, if applicable,

4 redistributing excess funds in accordance

5 with clause (i), an eligible entity has funds

6 remaining, the eligible entity shall return

7 excess funds to the Secretary for distribu8 tion to other grantees under this chapter.

9 ‘‘(B) NONPARTICIPATING ENTITY.—Not10 withstanding subparagraph (A), in the case of

11 an eligible entity described in section

12 404A(c)(1)(A) that does not receive assistance

13 under this subpart for 6 fiscal years, the eligi14 ble entity shall return any trust funds not

15 awarded or obligated to eligible students to the

16 Secretary for distribution to other grantees

17 under this chapter.’’; and

18 (6) in subsection (g) (as redesignated by para19 graph (2))—

20 (A) in paragraph (2), by striking ‘‘1993’’

21 and inserting ‘‘2000’’; and

22 (B) in paragraph (4), by striking ‘‘early

23 intervention component required under section

24 404D’’ and inserting ‘‘activities required under

25 section 404D(a)’’.
†

641

S 1932 ES

1 (f) REPEAL OF 21ST CENTURY SCHOLAR CERTIFI2 CATES.—Chapter 2 of subpart 2 of part A of title IV (20

3 U.S.C. 1070a–21 et seq.) is further amended—

4 (1) by striking section 404F; and

5 (2) by redesignating sections 404G and 404H

6 as sections 404F and 404G, respectively.

7 (g) AUTHORIZATION OF APPROPRIATIONS.—Section

8 404G (as redesignated by subsection (f)) (20 U.S.C.

9 1070a–28) is amended by striking ‘‘$200,000,000 for fis10 cal year 1999’’ and all that follows through the period and

11 inserting ‘‘such sums as may be necessary for fiscal year

12 2006 and each of the 5 succeeding fiscal years.’’.

13 (h) CONFORMING AMENDMENTS.—Chapter 2 of sub14 part 2 of part A of title IV (20 U.S.C. 1070a–21 et seq.)

15 is further amended—

16 (1) in section 404A(b)(1), by striking ‘‘404H’’

17 and inserting ‘‘404G’’;

18 (2) in section 404B(a)(1), by striking ‘‘404H’’

19 and inserting ‘‘404G’’; and

20 (3) in section 404F(c) (as redesignated by sub21 section (f)(2)), by striking ‘‘404H’’ and inserting

22 ‘‘404G’’.
†

642

S 1932 ES

1 SEC. 7364. ACADEMIC ACHIEVEMENT INCENTIVE SCHOLAR2 SHIPS.

3 Chapter 3 of subpart 2 of part A of title IV (20

4 U.S.C. 1070a–31 et seq.) is repealed.

5 SEC. 7365. FEDERAL SUPPLEMENTAL EDUCATIONAL OP6 PORTUNITY GRANTS.

7 (a) APPROPRIATIONS AUTHORIZED.—Section

8 413A(b)(1) (20 U.S.C. 1070b(b)(1)) is amended by strik9 ing ‘‘$675,000,000 for fiscal year 1999’’ and all that fol10 lows through the period and inserting ‘‘such sums as may

11 be necessary for fiscal year 2006 and each of the 5 suc12 ceeding fiscal years.’’.

13 (b) ALLOCATION OF FUNDS.—

14 (1) ALLOCATION OF FUNDS.—Section 413D

15 (20 U.S.C. 1070b–3) is amended—

16 (A) by striking subsection (a)(4); and

17 (B) in subsection (c)(3)(D), by striking

18 ‘‘$450’’ and inserting ‘‘$600’’.

19 (2) TECHNICAL CORRECTION.—Section

20 413D(a)(1) (20 U.S.C. 1070b–3(a)(1)) is amended

21 by striking ‘‘such institution’’ and all that follows

22 through the period and inserting ‘‘such institution

23 received under subsections (a) and (b) of this section

24 for fiscal year 1999 (as such subsections were in ef25 fect with respect to allocations for such fiscal

26 year).’’.
†

643

S 1932 ES

1 SEC. 7366. LEVERAGING EDUCATIONAL ASSISTANCE PART2 NERSHIP PROGRAM.

3 (a) APPROPRIATIONS AUTHORIZED.—Section

4 415A(b)(1) (20 U.S.C. 1070c(b)(1)) is amended to read

5 as follows:

6 ‘‘(1) IN GENERAL.—There are authorized to be

7 appropriated to carry out this subpart such sums as

8 may be necessary for fiscal year 2006 and each of

9 the 5 succeeding fiscal years.’’.

10 (b) APPLICATIONS.—Section 415C(b) (20 U.S.C.

11 1070c–2(b)) is amended—

12 (1) in the matter preceding subparagraph (A)

13 of paragraph (2), by striking ‘‘not in excess of

14 $5,000 per academic year’’ and inserting ‘‘not to ex15 ceed the lesser of $12,500 or the student’s cost of

16 attendance per academic year’’; and

17 (2) by striking paragraph (10) and inserting

18 the following:

19 ‘‘(10) provides notification to eligible students

20 that such grants are—

21 ‘‘(A) Leveraging Educational Assistance

22 Partnership grants; and

23 ‘‘(B) funded by the Federal Government,

24 the State, and other contributing partners.’’.
†

644

S 1932 ES

1 (c) GRANTS FOR ACCESS AND PERSISTENCE.—Sec2 tion 415E (20 U.S.C. 1070c–3a) is amended to read as

3 follows:

4 ‘‘SEC. 415E. GRANTS FOR ACCESS AND PERSISTENCE.

5 ‘‘(a) PURPOSE.—It is the purpose of this section to

6 expand college access and increase college persistence by

7 making allotments to States to enable the States to—

8 ‘‘(1) expand and enhance partnerships with in9 stitutions of higher education, early information and

10 intervention, mentoring, or outreach programs, pri11 vate corporations, philanthropic organizations, and

12 other interested parties in order to—

13 ‘‘(A) carry out activities under this section;

14 and

15 ‘‘(B) provide coordination and cohesion

16 among Federal, State, and local governmental

17 and private efforts that provide financial assist18 ance to help low-income students attend an in19 stitution of higher education;

20 ‘‘(2) provide need-based grants for access and

21 persistence to eligible low-income students;

22 ‘‘(3) provide early notification to low-income

23 students of the students’ eligibility for financial aid;

24 and
†

645

S 1932 ES

1 ‘‘(4) encourage increased participation in early

2 information and intervention, mentoring, or outreach

3 programs.

4 ‘‘(b) ALLOTMENTS TO STATES.—

5 ‘‘(1) IN GENERAL.—

6 ‘‘(A) AUTHORIZATION.—From sums re7 served under section 415A(b)(2) for each fiscal

8 year, the Secretary shall make an allotment to

9 each State that submits an application for an

10 allotment in accordance with subsection (c) to

11 enable the State to pay the Federal share, as

12 described in paragraph (2), of the cost of car13 rying out the activities under subsection (d).

14 ‘‘(B) DETERMINATION OF ALLOTMENT.—

15 In making allotments under subparagraph (A),

16 the Secretary shall consider the following:

17 ‘‘(i) CONTINUATION OF AWARD.—If a

18 State continues to meet the specifications

19 established in such State’s application

20 under subsection (c), the Secretary shall

21 make an allotment to such State that is

22 not less than the allotment made to such

23 State for the previous fiscal year.

24 ‘‘(ii) PRIORITY.—The Secretary shall

25 give priority in making allotments to
†

646

S 1932 ES

1 States that meet the requirements de2 scribed in paragraph (2)(A)(ii).

3 ‘‘(2) FEDERAL SHARE.—

4 ‘‘(A) IN GENERAL.—The Federal share

5 under this section shall be determined in ac6 cordance with the following:

7 ‘‘(i) If a State applies for an allot8 ment under this section in partnership

9 with—

10 ‘‘(I) any number of degree grant11 ing institutions of higher education in

12 the State whose combined full-time

13 enrollment represents less than a ma14 jority of all students attending institu15 tions of higher education in the State;

16 and

17 ‘‘(II)(aa) philanthropic organiza18 tions that are located in, or that pro19 vide funding in, the State; or

20 ‘‘(bb) private corporations that

21 are located in, or that do business in,

22 the State,

23 then the Federal share of the cost of car24 rying out the activities under subsection

25 (d) shall be equal to 50 percent.
†

647

S 1932 ES

1 ‘‘(ii) If a State applies for an allot2 ment under this section in partnership

3 with—

4 ‘‘(I) any number of degree grant5 ing institutions of higher education in

6 the State whose combined full-time

7 enrollment represents a majority of all

8 students attending institutions of

9 higher education in the State; and

10 ‘‘(II)(aa) philanthropic organiza11 tions that are located in, or that pro12 vide funding in, the State; or

13 ‘‘(bb) private corporations that

14 are located in, or that do business in,

15 the State,

16 then the Federal share of the cost of car17 rying out the activities under subsection

18 (d) shall be equal to 57 percent.

19 ‘‘(B) NON-FEDERAL SHARE.—

20 ‘‘(i) IN GENERAL.—The non-Federal

21 share under this section may be provided

22 in cash or in kind, fully evaluated and in

23 accordance with this subparagraph.

24 ‘‘(ii) IN KIND CONTRIBUTION.—For

25 the purpose of calculating the non-Federal
†

648

S 1932 ES

1 share under this section, an in kind con2 tribution is a non-cash award that has

3 monetary value, such as provision of room

4 and board and transportation passes, and

5 that helps a student meet the cost of at6 tendance.

7 ‘‘(iii) EFFECT ON NEED ANALYSIS.—

8 For the purpose of calculating a student’s

9 need in accordance with part F of this

10 title, an in-kind contribution described in

11 clause (ii) shall not be considered an asset

12 or income.

13 ‘‘(c) APPLICATION FOR ALLOTMENT.—

14 ‘‘(1) IN GENERAL.—

15 ‘‘(A) SUBMISSION.—A State that desires

16 to receive an allotment under this section on be17 half of a partnership described in paragraph (3)

18 shall submit an application to the Secretary at

19 such time, in such manner, and containing such

20 information as the Secretary may require.

21 ‘‘(B) CONTENT.—An application submitted

22 under subparagraph (A) shall include the fol23 lowing:

24 ‘‘(i) A description of the State’s plan

25 for using the allotted funds.
†

649

S 1932 ES

1 ‘‘(ii) Assurances that the State will

2 provide the non-Federal share from State,

3 institutional, philanthropic, or private

4 funds, of not less than the required share

5 of the cost of carrying out the activities

6 under subsection (d), as determined under

7 subsection (b), in accordance with the fol8 lowing:

9 ‘‘(I) The State shall specify the

10 methods by which non-Federal share

11 funds will be paid and include provi12 sions designed to ensure that funds

13 provided under this section will be

14 used to supplement, and not supplant,

15 Federal and non-Federal funds avail16 able for carrying out the activities

17 under this title.

18 ‘‘(II) A State that uses non-Fed19 eral funds to create or expand existing

20 partnerships with nonprofit organiza21 tions or community-based organiza22 tions in which such organizations

23 match State funds for student schol24 arships, may apply such matching

25 funds from such organizations toward
†

650

S 1932 ES

1 fulfilling the State’s non-Federal

2 share obligation under this clause.

3 ‘‘(iii) Assurances that early informa4 tion and intervention, mentoring, or out5 reach programs exist within the State or

6 that there is a plan to make such pro7 grams widely available.

8 ‘‘(iv) A description of the organiza9 tional structure that the State has in place

10 to administer the activities under sub11 section (d), including a description of the

12 system the State will use to track the par13 ticipation of students who receive grants

14 under this section to degree completion.

15 ‘‘(v) Assurances that the State has a

16 method in place, such as acceptance of the

17 automatic zero expected family contribu18 tion determination described in section

19 479, to identify eligible low-income stu20 dents and award State grant aid to such

21 students.

22 ‘‘(vi) Assurances that the State will

23 provide notification to eligible low-income

24 students that grants under this section

25 are—
†

651

S 1932 ES

1 ‘‘(I) Leveraging Educational As2 sistance Partnership Grants; and

3 ‘‘(II) funded by the Federal Gov4 ernment, the State, and other contrib5 uting partners.

6 ‘‘(2) STATE AGENCY.—The State agency that

7 submits an application for a State under section

8 415C(a) shall be the same State agency that sub9 mits an application under paragraph (1) for such

10 State.

11 ‘‘(3) PARTNERSHIP.—In applying for an allot12 ment under this section, the State agency shall apply

13 for the allotment in partnership with—

14 ‘‘(A) not less than 1 public and 1 private

15 degree granting institution of higher education

16 that are located in the State, if applicable;

17 ‘‘(B) new or existing early information and

18 intervention, mentoring, or outreach programs

19 located in the State; and

20 ‘‘(C) not less than 1—

21 ‘‘(i) philanthropic organization located

22 in, or that provides funding in, the State;

23 or

24 ‘‘(ii) private corporation located in, or

25 that does business in, the State.
†

652

S 1932 ES

1 ‘‘(4) ROLES OF PARTNERS.—

2 ‘‘(A) STATE AGENCY.—A State agency

3 that is in a partnership receiving an allotment

4 under this section—

5 ‘‘(i) shall—

6 ‘‘(I) serve as the primary admin7 istrative unit for the partnership;

8 ‘‘(II) provide or coordinate non9 Federal share funds, and coordinate

10 activities among partners;

11 ‘‘(III) encourage each institution

12 of higher education in the State to

13 participate in the partnership;

14 ‘‘(IV) make determinations and

15 early notifications of assistance as de16 scribed under subsection (d)(2); and

17 ‘‘(V) annually report to the Sec18 retary on the partnership’s progress

19 in meeting the purpose of this section;

20 and

21 ‘‘(ii) may provide early information

22 and intervention, mentoring, or outreach

23 programs.

24 ‘‘(B) DEGREE GRANTING INSTITUTIONS OF

25 HIGHER EDUCATION.—A degree granting insti-
†

653

S 1932 ES

1 tution of higher education that is in a partner2 ship receiving an allotment under this section—

3 ‘‘(i) shall—

4 ‘‘(I) recruit and admit partici5 pating qualified students and provide

6 such additional institutional grant aid

7 to participating students as agreed to

8 with the State agency;

9 ‘‘(II) provide support services to

10 students who receive grants for access

11 and persistence under this section and

12 are enrolled at such institution; and

13 ‘‘(III) assist the State in the

14 identification of eligible students and

15 the dissemination of early notifica16 tions of assistance as agreed to with

17 the State agency; and

18 ‘‘(ii) may provide funding for early in19 formation and intervention, mentoring, or

20 outreach programs or provide such services

21 directly.

22 ‘‘(C) PROGRAMS.—An early information

23 and intervention, mentoring, or outreach pro24 gram that is in a partnership receiving an allot25 ment under this section shall provide direct
†

654

S 1932 ES

1 services, support, and information to partici2 pating students.

3 ‘‘(D) PHILANTHROPIC ORGANIZATION OR

4 PRIVATE CORPORATION.—A philanthropic orga5 nization or private corporation that is in a part6 nership receiving an allotment under this sec7 tion shall provide funds for grants for access

8 and persistence for participating students, or

9 provide funds or support for early information

10 and intervention, mentoring, or outreach pro11 grams.

12 ‘‘(d) AUTHORIZED ACTIVITIES.—

13 ‘‘(1) IN GENERAL.—

14 ‘‘(A) ESTABLISHMENT OF PARTNER15 SHIP.—Each State receiving an allotment under

16 this section shall use the funds to establish a

17 partnership to award grants for access and per18 sistence to eligible low-income students in order

19 to increase the amount of financial assistance

20 such students receive under this subpart for un21 dergraduate education expenses.

22 ‘‘(B) AMOUNT OF GRANTS.—

23 ‘‘(i) PARTNERSHIPS WITH INSTITU24 TIONS SERVING LESS THAN A MAJORITY

25 OF STUDENTS IN THE STATE.—
†

655

S 1932 ES

1 ‘‘(I) IN GENERAL.—In the case

2 where a State receiving an allotment

3 under this section is in a partnership

4 described in subsection (b)(2)(A)(i),

5 the amount of a grant for access and

6 persistence awarded by such State

7 shall be not less than the amount that

8 is equal to the average undergraduate

9 tuition and mandatory fees at 4-year

10 public institutions of higher education

11 in the State where the student resides

12 (less any other Federal or State spon13 sored grant amount, work study

14 amount, and scholarship amount re15 ceived by the student), and such

16 amount shall be used toward the cost

17 of attendance at an institution of

18 higher education located in the State.

19 ‘‘(II) COST OF ATTENDANCE.—A

20 State that has a program, apart from

21 the partnership under this section, of

22 providing eligible low-income students

23 with grants that are equal to the aver24 age undergraduate tuition and man25 datory fees at 4-year public institu-
†

656

S 1932 ES

1 tions of higher education in the State,

2 may increase the amount of grants for

3 access and persistence awarded by

4 such State up to an amount that is

5 equal to the average cost of attend6 ance at 4-year public institutions of

7 higher education in the State (less

8 any other Federal or State sponsored

9 grant amount, work study amount,

10 and scholarship amount received by

11 the student).

12 ‘‘(ii) PARTNERSHIPS WITH INSTITU13 TIONS SERVING THE MAJORITY OF STU14 DENTS IN THE STATE.—In the case where

15 a State receiving an allotment under this

16 section is in a partnership described in

17 subsection (b)(2)(A)(ii), the amount of a

18 grant for access and persistence awarded

19 by such State shall be not more than an

20 amount that is equal to the average cost of

21 attendance at 4-year public institutions of

22 higher education in the State where the

23 student resides (less any other Federal or

24 State sponsored grant amount, college

25 work study amount, and scholarship
†

657

S 1932 ES

1 amount received by the student), and such

2 amount shall be used by the student to at3 tend an institution of higher education lo4 cated in the State.

5 ‘‘(C) SPECIAL RULES.—

6 ‘‘(i) PARTNERSHIP INSTITUTIONS.—A

7 State receiving an allotment under this

8 section may restrict the use of grants for

9 access and persistence under this section

10 by awarding the grants only to students

11 attending institutions of higher education

12 that are participating in the partnership.

13 ‘‘(ii) OUT-OF-STATE INSTITUTIONS.—

14 If a State provides grants through another

15 program under this subpart to students at16 tending institutions of higher education lo17 cated in another State, such agreement

18 may also apply to grants awarded under

19 this section.

20 ‘‘(2) EARLY NOTIFICATION.—

21 ‘‘(A) IN GENERAL.—Each State receiving

22 an allotment under this section shall annually

23 notify low-income students, such as students

24 who are eligible to receive a free lunch under

25 the school lunch program established under the
†

658

S 1932 ES

1 Richard B. Russell National School Lunch Act,

2 in grade 7 through grade 12 in the State, of

3 the students’ potential eligibility for student fi4 nancial assistance, including a grant for access

5 and persistence, to attend an institution of

6 higher education.

7 ‘‘(B) CONTENT OF NOTICE.—The notifica8 tion under subparagraph (A)—

9 ‘‘(i) shall include—

10 ‘‘(I) information about early in11 formation and intervention, men12 toring, or outreach programs available

13 to the student;

14 ‘‘(II) information that a stu15 dent’s candidacy for a grant for ac16 cess and persistence is enhanced

17 through participation in an early in18 formation and intervention, men19 toring, or outreach program;

20 ‘‘(III) an explanation that stu21 dent and family eligibility and partici22 pation in other Federal means-tested

23 programs may indicate eligibility for a

24 grant for access and persistence and

25 other student aid programs;
†

659

S 1932 ES

1 ‘‘(IV) a nonbinding estimation of

2 the total amount of financial aid a

3 low-income student with a similar in4 come level may expect to receive, in5 cluding an estimation of the amount

6 of a grant for access and persistence

7 and an estimation of the amount of

8 grants, loans, and all other available

9 types of aid from the major Federal

10 and State financial aid programs;

11 ‘‘(V) an explanation that in order

12 to be eligible for a grant for access

13 and persistence, at a minimum, a stu14 dent shall—

15 ‘‘(aa) meet the requirement

16 under paragraph (3);

17 ‘‘(bb) graduate from sec18 ondary school; and

19 ‘‘(cc) enroll at an institution

20 of higher education that is a

21 partner in the partnership or

22 qualifies under subsection

23 (d)(1)(C)(ii);

24 ‘‘(VI) information on any addi25 tional requirements (such as a student
†

660

S 1932 ES

1 pledge detailing student responsibil2 ities) that the State may impose for

3 receipt of a grant for access and per4 sistence under this section; and

5 ‘‘(VII) instructions on how to

6 apply for a grant for access and per7 sistence and an explanation that a

8 student is required to file a Free Ap9 plication for Federal Student Aid au10 thorized under section 483(a) to be el11 igible for such grant and assistance

12 from other Federal and State finan13 cial aid programs; and

14 ‘‘(ii) may include a disclaimer that

15 grant awards for access and persistence

16 are contingent upon—

17 ‘‘(I) a determination of the stu18 dent’s financial eligibility at the time

19 of the student’s enrollment at an in20 stitution of higher education that is a

21 partner in the partnership or qualifies

22 under subsection (d)(1)(C)(ii);

23 ‘‘(II) annual Federal and State

24 appropriations; and
†

661

S 1932 ES

1 ‘‘(III) other aid received by the

2 student at the time of the student’s

3 enrollment at such institution of high4 er education.

5 ‘‘(3) ELIGIBILITY.—In determining which stu6 dents are eligible to receive grants for access and

7 persistence, the State shall ensure that each such

8 student meets not less than 1 of the following:

9 ‘‘(A) Meets not less than 2 of the following

10 criteria, with priority given to students meeting

11 all of the following criteria:

12 ‘‘(i) Has an expected family contribu13 tion equal to zero (as described in section

14 479) or a comparable alternative based

15 upon the State’s approved criteria in sec16 tion 415C(b)(4).

17 ‘‘(ii) Has qualified for a free lunch, or

18 at the State’s discretion a reduced price

19 lunch, under the school lunch program es20 tablished under the Richard B. Russell Na21 tional School Lunch Act.

22 ‘‘(iii) Qualifies for the State’s max23 imum undergraduate award, as authorized

24 under section 415C(b).
†

662

S 1932 ES

1 ‘‘(iv) Is participating in, or has par2 ticipated in, a Federal, State, institutional,

3 or community early information and inter4 vention, mentoring, or outreach program,

5 as recognized by the State agency admin6 istering activities under this section.

7 ‘‘(B) Is receiving, or has received, a grant

8 for access and persistence under this section, in

9 accordance with paragraph (5).

10 ‘‘(4) GRANT AWARD.—Once a student, includ11 ing those students who have received early notifica12 tion under paragraph (2) from the State, applies for

13 admission to an institution that is a partner in the

14 partnership, files a Free Application for Federal

15 Student Aid and any related existing State form,

16 and is determined eligible by the State under para17 graph (3), the State shall—

18 ‘‘(A) issue the student a preliminary award

19 certificate for a grant for access and persistence

20 with tentative award amounts; and

21 ‘‘(B) inform the student that payment of

22 the grant for access and persistence award

23 amounts is subject to certification of enrollment

24 and award eligibility by the institution of higher

25 education.
†

663

S 1932 ES

1 ‘‘(5) DURATION OF AWARD.—An eligible stu2 dent that receives a grant for access and persistence

3 under this section shall receive such grant award for

4 each year of such student’s undergraduate education

5 in which the student remains eligible for assistance

6 under this title, including pursuant to section

7 484(c), and remains financially eligible as deter8 mined by the State, except that the State may im9 pose reasonable time limits to degree completion.

10 ‘‘(e) USE OF FUNDS FOR ADMINISTRATIVE COSTS

11 PROHIBITED.—A State that receives an allotment under

12 this section shall not use any of the allotted funds to pay

13 administrative costs associated with any of the authorized

14 activities described in subsection (d).

15 ‘‘(f) STATUTORY AND REGULATORY RELIEF FOR IN16 STITUTIONS OF HIGHER EDUCATION.—The Secretary

17 may grant, upon the request of an institution of higher

18 education that is in a partnership described in subsection

19 (b)(2)(A)(ii) and that receives an allotment under this sec20 tion, a waiver for such institution from statutory or regu21 latory requirements that inhibit the ability of the institu22 tion to successfully and efficiently participate in the activi23 ties of the partnership.
†

664

S 1932 ES

1 ‘‘(g) APPLICABILITY RULE.—The provisions of this

2 subpart which are not inconsistent with this section shall

3 apply to the program authorized by this section.

4 ‘‘(h) MAINTENANCE OF EFFORT REQUIREMENT.—

5 Each State receiving an allotment under this section for

6 a fiscal year shall provide the Secretary with an assurance

7 that the aggregate amount expended per student or the

8 aggregate expenditures by the State, from funds derived

9 from non-Federal sources, for the authorized activities de10 scribed in subsection (d) for the preceding fiscal year were

11 not less than the amount expended per student or the ag12 gregate expenditure by the State for the activities for the

13 second preceding fiscal year.

14 ‘‘(i) SPECIAL RULE.—Notwithstanding subsection

15 (h), for purposes of determining a State’s share of the cost

16 of the authorized activities described in subsection (d), the

17 State shall consider only those expenditures from non18 Federal sources that exceed the State’s total expenditures

19 for need-based grants, scholarships, and work-study as20 sistance for fiscal year 1999 (including any such assist21 ance provided under this subpart).

22 ‘‘(j) CONTINUATION AND TRANSITION.—For the 2-

23 year period that begins on the date of enactment of the

24 Higher Education Amendments of 2005, the Secretary

25 shall continue to award grants under section 415E of the
†

665

S 1932 ES

1 Higher Education Act of 1965 as such section existed on

2 the day before the date of enactment of such Act to States

3 that choose to apply for grants under such predecessor

4 section.

5 ‘‘(k) REPORTS.—Not later than 3 years after the

6 date of enactment of the Higher Education Amendments

7 of 2005 and annually thereafter, the Secretary shall sub8 mit a report describing the activities and the impact of

9 the partnerships under this section to the authorizing

10 committees.’’.

11 SEC. 7367. SPECIAL PROGRAMS FOR STUDENTS WHOSE

12 FAMILIES ARE ENGAGED IN MIGRANT AND

13 SEASONAL FARMWORK.

14 Section 418A (20 U.S.C. 1070d–2) is amended—

15 (1) in subsection (a), by adding ‘‘(including

16 providing outreach and technical assistance)’’ after

17 ‘‘maintain and expand’’;

18 (2) in subsection (b)—

19 (A) in paragraph (1)(B)(i), by striking

20 ‘‘parents’’ and inserting ‘‘immediate family’’;

21 (B) in paragraph (3)(B), by inserting ‘‘(in22 cluding preparation for college entrance exami23 nations)’’ after ‘‘college program’’;

24 (C) in paragraph (5), by striking ‘‘weekly’’;
†

666

S 1932 ES

1 (D) in paragraph (7), by striking ‘‘and’’

2 after the semicolon;

3 (E) in paragraph (8), by striking the pe4 riod at the end and inserting ‘‘; and’’; and

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

6 ‘‘(9) other activities to improve persistence and

7 retention in postsecondary education.’’;

8 (3) in subsection (c)—

9 (A) in paragraph (1)—

10 (i) in subparagraph (B)—

11 (I) in the matter preceding clause

12 (i), by inserting ‘‘to improve place13 ment, persistence, and retention in

14 postsecondary education’’ after ‘‘serv15 ices’’; and

16 (II) in clause (i), by striking

17 ‘‘and career’’ and inserting ‘‘career,

18 and economic education or personal fi19 nance’’;

20 (ii) in subparagraph (E), by striking

21 ‘‘and’’ after the semicolon;

22 (iii) by redesignating subparagraph

23 (F) as subparagraph (G); and

24 (iv) by inserting after subparagraph

25 (E) the following:
†

667

S 1932 ES

1 ‘‘(F) internships; and’’; and

2 (B) in paragraph (2)—

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

4 ‘‘and’’ after the semicolon;

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

6 the period at the end and inserting ‘‘, and

7 coordinating such services, assistance, and

8 aid with other non-program services, as9 sistance, and aid, including services, assist10 ance, and aid provided by community11 based organizations, which may include

12 mentoring and guidance; and’’; and

13 (iii) by adding at the end the fol14 lowing:

15 ‘‘(C) for students attending 2-year institu16 tions of higher education, encouraging the stu17 dents to transfer to 4-year institutions of higher

18 education, where appropriate, and monitoring

19 the rate of transfer of such students.’’;

20 (4) in subsection (e), by striking ‘‘section

21 402A(c)(1)’’ and inserting ‘‘section 402A(c)(2)’’;

22 (5) in subsection (f)—

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

24 ‘‘$150,000’’ and inserting ‘‘$180,000’’; and
†

668

S 1932 ES

1 (B) in paragraph (2), by striking

2 ‘‘$150,000’’ and inserting ‘‘$180,000’’; and

3 (6) in subsection (h)—

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

5 ‘‘$15,000,000 for fiscal year 1999’’ and all that

6 follows through the period and inserting ‘‘such

7 sums as may be necessary for fiscal year 2006

8 and each of the 5 succeeding fiscal years.’’; and

9 (B) in paragraph (2), by striking

10 ‘‘$5,000,000 for fiscal year 1999’’ and all that

11 follows through the period and inserting ‘‘such

12 sums as may be necessary for fiscal year 2006

13 and each of the 5 succeeding fiscal years.’’.

14 SEC. 7368. ROBERT C. BYRD HONORS SCHOLARSHIP PRO15 GRAM.

16 (a) ELIGIBILITY OF SCHOLARS.—Section 419F(a)

17 (20 U.S.C. 1070d–36(a)) is amended by inserting ‘‘(or a

18 home school, whether treated as a home school or a private

19 school under State law)’’ after ‘‘private or public sec20 ondary school’’.

21 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

22 419K (20 U.S.C. 1070d–41) is amended by striking

23 ‘‘$45,000,000 for fiscal year 1999’’ and all that follows

24 through the period and inserting ‘‘such sums as may be
†

669

S 1932 ES

1 necessary for fiscal year 2006 and each of the 5 suc2 ceeding fiscal years.’’.

3 SEC. 7369. CHILD CARE ACCESS MEANS PARENTS IN

4 SCHOOL.

5 (a) MINIMUM GRANT.—Section 419N(b)(2)(B) (20

6 U.S.C. 1070e(b)(2)(B)) is amended—

7 (1) by striking ‘‘A grant’’ and inserting the fol8 lowing:

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clause (ii), a grant’’; and

11 (2) by adding at the end the following:

12 ‘‘(ii) INCREASE TRIGGER.—For any

13 fiscal year for which the amount appro14 priated under the authority of subsection

15 (g) is equal to or greater than

16 $20,000,000, a grant under this section

17 shall be awarded in an amount that is not

18 less than $30,000.’’.

19 (b) DEFINITION OF LOW-INCOME STUDENT.—Para20 graph (7) of section 419N(b) (20 U.S.C. 1070e(b)) is

21 amended to read as follows:

22 ‘‘(7) DEFINITION OF LOW-INCOME STUDENT.—

23 For the purpose of this section, the term ‘low-income

24 student’ means a student who—
†

670

S 1932 ES

1 ‘‘(A) is eligible to receive a Federal Pell

2 Grant for the fiscal year for which the deter3 mination is made; or

4 ‘‘(B) would otherwise be eligible to receive

5 a Federal Pell Grant for the fiscal year for

6 which the determination is made, except that

7 the student fails to meet the requirements of—

8 ‘‘(i) section 401(c)(1) because the stu9 dent is enrolled in a graduate or first pro10 fessional course of study; or

11 ‘‘(ii) section 484(a)(5) because the

12 student is in the United States for a tem13 porary purpose.’’.

14 (c) AUTHORIZATION OF APPROPRIATIONS.—Section

15 419N(g) (20 U.S.C. 1070e(g)) is amended by striking

16 ‘‘$45,000,000 for fiscal year 1999’’ and all that follows

17 through the period and inserting ‘‘such sums as may be

18 necessary for fiscal year 2006 and each of the 5 suc19 ceeding fiscal years.’’.

20 SEC. 7370. LEARNING ANYTIME ANYWHERE PARTNERSHIPS.

21 Subpart 8 of part A of title IV (20 U.S.C. 1070f et

22 seq.) is repealed.
†

671

S 1932 ES

1 Subchapter B—Federal Family Education

2 Loan Program

3 SEC. 7381. EXTENSION OF AUTHORITIES.

4 (a) FEDERAL INSURANCE LIMITATIONS.—Section

5 424(a) (20 U.S.C. 1074(a)) is amended—

6 (1) by striking ‘‘2004’’ and inserting ‘‘2012’’;

7 and

8 (2) by striking ‘‘2008’’ and inserting ‘‘2016’’.

9 (b) GUARANTEED LOANS.—Section 428(a)(5) (20

10 U.S.C. 1078(a)(5)) is amended—

11 (1) by striking ‘‘2004’’ and inserting ‘‘2012’’;

12 and

13 (2) by striking ‘‘2008’’ and inserting ‘‘2016’’.

14 (3) CONSOLIDATION LOANS.—Section 428C(e)

15 (20 U.S.C. 1078–3(e)) is amended by striking

16 ‘‘2004’’ and inserting ‘‘2012’’.

17 SEC. 7382. FEDERAL PAYMENTS TO REDUCE STUDENT IN18 TEREST COSTS.

19 Section 428 (20 U.S.C. 1078) is amended—

20 (1) in subsection (b)(1)—

21 (A) in subparagraph (N)—

22 (i) in clause (i), by striking ‘‘or’’ after

23 the semicolon; and

24 (ii) by striking clause (ii) and insert25 ing the following:
†

672

S 1932 ES

1 ‘‘(ii) in the case of a student who is

2 studying outside the United States in a

3 program of study abroad that is approved

4 for credit by the home institution at which

5 such student is enrolled, and only after

6 verification of the student’s enrollment by

7 the lender or guaranty agency, are, at the

8 request of the student, disbursed directly

9 to the student by the means described in

10 clause (i), unless such student requests

11 that the check be endorsed, or the funds

12 transfer be authorized, pursuant to an au13 thorized power-of-attorney; or

14 ‘‘(iii) in the case of a student who is

15 studying outside the United States in a

16 program of study at an eligible foreign in17 stitution, are, at the request of the foreign

18 institution, disbursed directly to the stu19 dent, only after verification of the stu20 dent’s enrollment by the lender or guar21 anty agency by the means described in

22 clause (i);’’; and

23 (B) in subparagraph (Y)(i)(III), by insert24 ing ‘‘, except that, if requested by an institution

25 of higher education, the lender shall confirm
†

673

S 1932 ES

1 such status through use of the National Stu2 dent Loan Data System’’ before the semicolon;

3 and

4 (2) in subsection (c)(2)(H)(i), by striking

5 ‘‘preclaims’’ and inserting ‘‘default aversion’’.

6 SEC. 7383. FEDERAL CONSOLIDATION LOANS.

7 Section 428C(b)(1) (20 U.S.C. 1078–3(b)(1)) is

8 amended—

9 (1) in subparagraph (E), by striking ‘‘and’’

10 after the semicolon;

11 (2) by redesignating subparagraph (F) as sub12 paragraph (G); and

13 (3) by inserting after subparagraph (E) the fol14 lowing:

15 ‘‘(F) that the lender will disclose, in a

16 clear and conspicuous manner, to borrowers

17 who consolidate loans made under part E of

18 this title—

19 ‘‘(i) that once the borrower adds the

20 borrower’s Federal Perkins Loan to a Fed21 eral Consolidation Loan, the borrower will

22 lose all interest-free periods that would

23 have been available, such as those periods

24 when no interest accrues on the Federal

25 Perkins Loan while the borrower is en-
†

674

S 1932 ES

1 rolled in school at least half-time, during

2 the grace period, and during periods when

3 the borrower’s student loan repayments

4 are deferred;

5 ‘‘(ii) that the borrower will no longer

6 be eligible for loan forgiveness of Federal

7 Perkins Loans under any provision of sec8 tion 465; and

9 ‘‘(iii) the occupations described in sec10 tion 465(a)(2), individually and in detail,

11 for which the borrower will lose eligibility

12 for Federal Perkins Loan forgiveness;

13 and’’.

14 SEC. 7384. DEFAULT REDUCTION PROGRAM.

15 Section 428F (20 U.S.C. 1078–6) is amended by

16 adding at the end the following:

17 ‘‘(c) FINANCIAL AND ECONOMIC LITERACY.—Where

18 appropriate as determined by the institution of higher edu19 cation in which a borrower is enrolled, each program de20 scribed in subsection (b) shall include making available fi21 nancial and economic education materials for the bor22 rower, including making the materials available before,

23 during, or after rehabilitation of a loan.’’.
†

675

S 1932 ES

1 SEC. 7385. REQUIREMENTS FOR DISBURSEMENT OF STU2 DENT LOANS.

3 Section 428G(e) (20 U.S.C. 1078–7(e)) is amended

4 by striking ‘‘, made to a student to cover the cost of at5 tendance at an eligible institution outside the United

6 States’’.

7 SEC. 7386. REPORTS TO CREDIT BUREAUS AND INSTITU8 TIONS OF HIGHER EDUCATION.

9 Section 430A(a) (20 U.S.C. 1080a(a)) is amended—

10 (1) in the first sentence, by striking ‘‘with cred11 it bureau organizations’’ and inserting ‘‘with each

12 consumer reporting agency that compiles and main13 tains files on consumers on a nationwide basis (as

14 defined in section 603(p) of the Fair Credit Report15 ing Act (15 U.S.C. 1681a(p))’’;

16 (2) by redesignating paragraphs (1), (2), and

17 (3) as paragraphs (2), (4), and (5), respectively;

18 (3) by inserting before paragraph (2) (as redes19 ignated by paragraph (2)), the following:

20 ‘‘(1) the type of loan made, insured, or guaran21 teed under this title;’’;

22 (4) by inserting after paragraph (2) (as redesig23 nated by paragraph (2)), the following:

24 ‘‘(3) information concerning the repayment sta25 tus of the loan, which information shall be included

26 in the file of the borrower, except that nothing in
†

676

S 1932 ES

1 this subsection shall be construed to affect any oth2 erwise applicable provision of the Fair Credit Re3 porting Act (15 U.S.C. 1681 et seq.)’’;

4 (5) in paragraph (4) (as redesignated by para5 graph (2)), by striking ‘‘and’’ after the semicolon;

6 (6) in paragraph (5) (as redesignated by para7 graph (2)), by striking the period and inserting ‘‘;

8 and’’; and

9 (7) by adding at the end the following:

10 ‘‘(6) any other information required to be re11 ported by Federal law.’’.

12 SEC. 7387. COMMON FORMS AND FORMATS.

13 Section 432(m)(1)(D)(i) (20 U.S.C.

14 1082(m)(1)(D)(i)) is amended by adding at the end the

15 following: ‘‘Unless otherwise notified by the Secretary,

16 each institution of higher education that participates in

17 the program under this part or part D may use a master

18 promissory note for loans under this part and part D.’’.

19 SEC. 7388. STUDENT LOAN INFORMATION BY ELIGIBLE

20 BORROWERS.

21 Section 433 (20 U.S.C. 1083) is amended by adding

22 at the end the following:

23 ‘‘(f) BORROWER INFORMATION AND PRIVACY.—Each

24 entity participating in a program under this part that is

25 subject to subtitle A of title V of the Gramm-Leach-Bliley
†

677

S 1932 ES

1 Act (15 U.S.C. 6801 et seq.) shall only use, release, dis2 close, sell, transfer, or give student information, including

3 the name, address, social security number, or amount bor4 rowed by a borrower or a borrower’s parent, in accordance

5 with the provisions of such subtitle.

6 ‘‘(g) LOAN BENEFIT DISCLOSURES.—

7 ‘‘(1) IN GENERAL.—Each eligible lender, hold8 er, or servicer of a loan made, insured, or guaran9 teed under this part shall provide the borrower with

10 information on the loan benefit repayment options

11 the lender, holder, or servicer offer, including infor12 mation on reductions in interest rates—

13 ‘‘(A) by repaying the loan by automatic

14 payroll or checking account deduction;

15 ‘‘(B) by completing a program of on-time

16 repayment; and

17 ‘‘(C) under any other interest rate reduc18 tion program.

19 ‘‘(2) INFORMATION.—Such borrower informa20 tion shall include—

21 ‘‘(A) any limitations on such options;

22 ‘‘(B) explicit information on the reasons a

23 borrower may lose eligibility for such an option;
†

678

S 1932 ES

1 ‘‘(C) examples of the impact the interest

2 rate reductions will have on a borrower’s time

3 for repayment and amount of repayment;

4 ‘‘(D) upon the request of the borrower, the

5 effect the reductions in interest rates will have

6 with respect to the borrower’s payoff amount

7 and time for repayment; and

8 ‘‘(E) information on borrower recertifi9 cation requirements.’’.

10 SEC. 7389. CONSUMER EDUCATION INFORMATION.

11 Part B of title IV (20 U.S.C. 1071 et seq.) is amend12 ed by inserting after section 433 (20 U.S.C. 1083) the

13 following:

14 ‘‘SEC. 433A. CONSUMER EDUCATION INFORMATION.

15 ‘‘Each guaranty agency participating in a program

16 under this part working with the institutions of higher

17 education served by such guaranty agency (or in the case

18 of an institution of higher education that provides loans

19 exclusively through part D, the institution working with

20 a guaranty agency or with the Secretary) shall develop and

21 make available a quality educational program and mate22 rials to provide training for students in budgeting and fi23 nancial management, including debt management and

24 other aspects of financial literacy, such as the cost of using

25 very high interest loans to pay for postsecondary edu-
†

679

S 1932 ES

1 cation, particularly as budgeting and financial manage2 ment relates to student loan programs authorized by this

3 title. Nothing in this section shall be construed to prohibit

4 a guaranty agency from using an existing program or ex5 isting materials to meet the requirement of this section.

6 The activities described in this section shall be considered

7 default reduction activities for the purposes of section

8 422.’’.

9 SEC. 7390. DEFINITION OF ELIGIBLE LENDER.

10 Section 435(d)(2) (20 U.S.C. 1085(d)(2)) is amended

11 by striking subparagraph (F) and inserting the following:

12 ‘‘(F) shall use the proceeds from special al13 lowance payments, interest payments from bor14 rowers, proceeds from the sale of a loan made,

15 insured, or guaranteed under this part, and all

16 other proceeds related to such a loan that are

17 furnished to the eligible institution or any enti18 ty affiliated (directly or indirectly) with the eli19 gible institution, for need based grant pro20 grams, except that such payments and proceeds

21 may be used for reasonable reimbursement for

22 direct administrative expenses;’’.
†

680

S 1932 ES

1 SEC. 7390A. REPAYMENT BY THE SECRETARY OF LOANS OF

2 BANKRUPT, DECEASED, OR DISABLED BOR3 ROWERS; TREATMENT OF BORROWERS AT4 TENDING SCHOOLS THAT FAIL TO PROVIDE A

5 REFUND, ATTENDING CLOSED SCHOOLS, OR

6 FALSELY CERTIFIED AS ELIGIBLE TO BOR7 ROW.

8 Section 437 (20 U.S.C. 1087) is amended—

9 (1) in the section heading, by striking

10 ‘‘CLOSED SCHOOLS OR FALSELY CERTIFIED AS

11 ELIGIBLE TO BORROW’’ and inserting ‘‘SCHOOLS

12 THAT FAIL TO PROVIDE A REFUND, ATTEND13 ING CLOSED SCHOOLS, OR FALSELY CERTIFIED

14 AS ELIGIBLE TO BORROW’’; and

15 (2) in the first sentence of subsection (c)(1), by

16 inserting ‘‘or was falsely certified as a result of a

17 crime of identity theft’’ after ‘‘falsely certified by the

18 eligible institution’’.

19 Subchapter C—Federal Work-Study

20 Programs

21 SEC. 7391. AUTHORIZATION OF APPROPRIATIONS.

22 Section 441(b) (42 U.S.C. 2751(b)) is amended by

23 striking ‘‘$1,000,000 for fiscal year 1999’’ and all that

24 follows through the period and inserting ‘‘such sums as

25 may be necessary for fiscal year 2006 and each of the 5

26 succeeding fiscal years.’’.
†

681

S 1932 ES

1 SEC. 7392. ALLOWANCE FOR BOOKS AND SUPPLIES.

2 Section 442(c)(4)(D) (42 U.S.C. 2752(c)(4)(D)) is

3 amended by striking ‘‘$450’’ and inserting ‘‘$600’’.

4 SEC. 7393. GRANTS FOR FEDERAL WORK-STUDY PRO5 GRAMS.

6 Section 443(b)(2) (42 U.S.C. 2753(b)(2)) is

7 amended—

8 (1) by striking subparagraph (A);

9 (2) by redesignating subparagraphs (B) and

10 (C) as subparagraphs (A) and (B), respectively; and

11 (3) in subparagraph (A) (as redesignated by

12 paragraph (2)), by striking ‘‘this subparagraph if’’

13 and all that follows through ‘‘institution;’’ and in14 serting ‘‘this subparagraph if—

15 ‘‘(i) the Secretary determines that en16 forcing this subparagraph would cause

17 hardship for students at the institution; or

18 ‘‘(ii) the institution certifies to the

19 Secretary that 15 percent or more of its

20 total full-time enrollment participates in

21 community service activities described in

22 section 441(c) or tutoring and literacy ac23 tivities described in subsection (d) of this

24 section;’’.
†

682

S 1932 ES

1 SEC. 7394. JOB LOCATION AND DEVELOPMENT PROGRAMS.

2 Section 446(a)(1) (42 U.S.C. 2756(a)(1)) is amended

3 by striking ‘‘$50,000’’ and inserting ‘‘$75,000’’.

4 SEC. 7395. WORK COLLEGES.

5 Section 448 (42 U.S.C. 2756b) is amended—

6 (1) in subsection (b)—

7 (A) in paragraph (1), by striking ‘‘under

8 subsection (f)’’ and inserting ‘‘for this section

9 under section 441(b)’’; and

10 (B) in paragraph (2)—

11 (i) in the matter preceding subpara12 graph (A), by striking ‘‘pursuant to sub13 section (f)’’ and inserting ‘‘for this section

14 under section 441(b)’’;

15 (ii) by redesignating subparagraphs

16 (C) through (F) as subparagraphs (D)

17 through (G), respectively; and

18 (iii) by inserting after subparagraph

19 (B) the following:

20 ‘‘(C) support existing and new model stu21 dent volunteer community service projects asso22 ciated with local institutions of higher edu23 cation, such as operating drop-in resource cen24 ters that are staffed by students and that link

25 people in need with the resources and opportu26 nities necessary to become self-sufficient;’’;
†

683

S 1932 ES

1 (2) in subsection (c), by striking ‘‘by subsection

2 (f) to use funds under subsection (b)(1)’’ and insert3 ing ‘‘for this section under section 441(b) or to use

4 funds under subsection (b)(1),’’; and

5 (4) by striking subsection (f).

6 Subchapter D—William D. Ford Federal

7 Direct Loan Program

8 SEC. 7401. FUNDS FOR ADMINISTRATIVE EXPENSES.

9 Section 458 (20 U.S.C. 1087h) is amended—

10 (1) in subsection (a)(1), in the matter following

11 subparagraph (B), by striking ‘‘$617,000,000’’ and

12 all that follows through the period and inserting

13 ‘‘$904,000,000 in fiscal year 2006, $943,000,000 in

14 fiscal year 2007, $983,000,000 in fiscal year 2008,

15 $1,023,000,000 in fiscal year 2009, $1,064,000,000

16 in fiscal year 2010, and $1,106,000,000 in fiscal

17 year 2011.’’; and

18 (2) in subsection (c)(1), by striking subpara19 graphs (A) through (E) and inserting the following:

20 ‘‘(A) for fiscal year 2006, shall not exceed

21 $271,000,000;

22 ‘‘(B) for fiscal year 2007, shall not exceed

23 $293,000,000;

24 ‘‘(C) for fiscal year 2008, shall not exceed

25 $315,000,000;
†

684

S 1932 ES

1 ‘‘(D) for fiscal year 2009, shall not exceed

2 $336,000,000;

3 ‘‘(E) for fiscal year 2010, shall not exceed

4 $356,000,000; and

5 ‘‘(F) for fiscal year 2011, shall not exceed

6 $378,000,000.’’.

7 Subchapter E—Federal Perkins Loans

8 SEC. 7411. PROGRAM AUTHORITY.

9 Section 461(b) (20 U.S.C. 1087aa(b)) is amended—

10 (1) in paragraph (1), by striking

11 ‘‘$250,000,000 for fiscal year 1999’’ and all that

12 follows through the period and inserting ‘‘such sums

13 as may be necessary for fiscal year 2006 and each

14 of the 5 succeeding fiscal years.’’; and

15 (2) in paragraph (2),—

16 (A) by striking ‘‘fiscal year 2003’’ and in17 serting ‘‘fiscal year 2012’’; and

18 (B) by striking ‘‘October 1, 2003’’ and in19 serting ‘‘October 1, 2012’’.

20 SEC. 7412. TERMS OF LOANS.

21 Section 464 (20 U.S.C. 1087dd) is amended—

22 (1) in subsection (b)(1), by striking ‘‘for an ad23 ditional loan under this part’’ and inserting ‘‘for ad24 ditional aid under this title’’; and

25 (2) in subsection (e), by striking ‘‘written’’.
†

685

S 1932 ES

1 SEC. 7413. CANCELLATION OF LOANS FOR CERTAIN PUBLIC

2 SERVICE.

3 Section 465(a) (20 U.S.C. 1087ee(a)) is amended—

4 (1) in paragraph ( 2)—

5 (A) in subparagraph (B), by striking

6 ‘‘Head Start Act which’’ and inserting ‘‘Head

7 Start Act, or in a prekindergarten or child care

8 program that is licensed or regulated by the

9 State, that’’;

10 (B) in subparagraph (H), by striking ‘‘or’’

11 after the semicolon;

12 (C) in subparagraph (I), by striking the

13 period and inserting a semicolon; and

14 (D) by inserting before the matter fol15 lowing subparagraph (I) (as amended by sub16 paragraph (C)) the following:

17 ‘‘(J) as a full-time faculty member at a Tribal

18 College or University, as that term is defined in sec19 tion 316;

20 ‘‘(K) as a librarian, if the librarian has a mas21 ter’s degree in library science and is employed in—

22 ‘‘(i) an elementary school or secondary

23 school that is eligible for assistance under title

24 I of the Elementary and Secondary Education

25 Act of 1965; or
†

686

S 1932 ES

1 ‘‘(ii) a public library that serves a geo2 graphic area that contains 1 or more schools el3 igible for assistance under title I of the Elemen4 tary and Secondary Education Act of 1965; or

5 ‘‘(L) as a full-time speech language therapist, if

6 the therapist has a master’s degree and is working

7 exclusively with schools that are eligible for assist8 ance under title I of the Elementary and Secondary

9 Education Act of 1965.’’; and

10 (2) in paragraph (3)(A)(i), by striking ‘‘or (I)’’

11 and inserting ‘‘(I), (J), (K), or (L)’’.

12 SEC. 7414. FEDERAL CAPITAL CONTRIBUTION RECOVERY.

13 Section 466 (20 U.S.C. 1087ff) is amended—

14 (1) in subsection (a)—

15 (A) by striking ‘‘2003’’ each place it ap16 pears and inserting ‘‘2011’’; and

17 (B) by striking ‘‘2004’’ and inserting

18 ‘‘2012’’; and

19 (2) in subsection (c), by striking ‘‘2004’’ and

20 inserting ‘‘2012’’.

21 Subchapter F—Need Analysis

22 SEC. 7421. COST OF ATTENDANCE.

23 Section 472 (20 U.S.C. 1087ll) is amended—

24 (1) by striking paragraph (4) and inserting the

25 following:
†

687

S 1932 ES

1 ‘‘(4) for less than half-time students (as deter2 mined by the institution), tuition and fees and an al3 lowance for only—

4 ‘‘(A) books, supplies, and transportation

5 (as determined by the institution);

6 ‘‘(B) dependent care expenses (determined

7 in accordance with paragraph (8)); and

8 ‘‘(C) room and board costs (determined in

9 accordance with paragraph (3)), except that a

10 student may receive an allowance for such costs

11 under this subparagraph for not more than 3

12 semesters or the equivalent, of which not more

13 than 2 semesters or the equivalent may be con14 secutive;’’;

15 (2) in paragraph (11), by striking ‘‘and’’ after

16 the semicolon;

17 (3) in paragraph (12), by striking the period

18 and inserting ‘‘; and’’; and

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

20 ‘‘(13) at the option of the institution, for a stu21 dent in a program requiring professional licensure or

22 certification, the one time cost of obtaining the first

23 professional credentials (as determined by the insti24 tution).’’.
†

688

S 1932 ES

1 SEC. 7422. DISCRETION OF STUDENT FINANCIAL AID AD2 MINISTRATORS.

3 The third sentence of section 479A(a) (20 U.S.C.

4 1087tt(a)) is amended—

5 (1) by inserting ‘‘or an independent student’’

6 after ‘‘family member’’; and

7 (2) by inserting ‘‘a change in housing status

8 that results in homelessness,’’ after ‘‘under section

9 487,’’.

10 SEC. 7423. DEFINITIONS.

11 (a) DEFINITIONS.—Section 480 (20 U.S.C. 1087vv)

12 is amended—

13 (1) in subsection (f)—

14 (A) in paragraph (1), by inserting ‘‘quali15 fied education benefits (except as provided in

16 paragraph (3)),’’ after ‘‘tax shelters,’’; and

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

18 ‘‘(3) A qualified education benefit shall not be consid19 ered an asset of a student for purposes of section 475.

20 ‘‘(4) In determining the value of assets in a deter21 mination of need under this title (other than for subpart

22 4 of part A), the value of a qualified education benefit

23 shall be—

24 ‘‘(A) the refund value of any tuition credits or

25 certificates purchased under a qualified education

26 benefit; and
†

689

S 1932 ES

1 ‘‘(B) in the case of a program in which con2 tributions are made to an account that is established

3 for the purpose of meeting the qualified higher edu4 cation expenses of the designated beneficiary of the

5 account, the current balance of such account.

6 ‘‘(5) In this subsection:

7 ‘‘(A) QUALIFIED EDUCATION BENEFIT.—The

8 term ‘qualified education benefit’ means—

9 ‘‘(i) a qualified tuition program (as defined

10 in section 529(b)(1)(A) of the Internal Revenue

11 Code of 1986) or other prepaid tuition plan of12 fered by a State; and

13 ‘‘(ii) a Coverdell education savings account

14 (as defined in section 530(b)(1) of the Internal

15 Revenue Code of 1986).

16 ‘‘(B) QUALIFIED HIGHER EDUCATION EX17 PENSES.—The term ‘qualified higher education ex18 penses’ has the meaning given the term in section

19 529(e) of the Internal Revenue Code of 1986.’’; and

20 (2) in subsection (j)—

21 (A) in the subsection heading, by striking

22 ‘‘; TUITION PREPAYMENT PLANS’’;

23 (B) by striking paragraph (2);

24 (C) by redesignating paragraph (3) as

25 paragraph (2); and
†

690

S 1932 ES

1 (D) by inserting after paragraph (2) (as

2 redesignated by subparagraph (C)) the fol3 lowing paragraph:

4 ‘‘(3) Notwithstanding paragraph (1) and section 472,

5 assistance not received under this title may be excluded

6 from both estimated financial assistance and cost of at7 tendance, if that assistance is designated by the State pro8 viding that assistance to offset a specific component of the

9 cost of attendance. If that assistance is excluded from esti10 mated financial assistance or cost of attendance, that as11 sistance shall be excluded from both calculations.’’.

12 (3) in subsection (d)—

13 (A) in paragraph (2), by striking ‘‘is an or14 phan or ward of the court’’ and inserting ‘‘is an

15 orphan, in foster care, or ward of the court or

16 was in foster care’’;

17 (B) in paragraph (6), by striking ‘‘or’’

18 after the semicolon;

19 (C) by redesignating paragraph (7) as

20 paragraph (8); and

21 (D) by inserting after paragraph (6) the

22 following:

23 ‘‘(7) has been verified as both a homeless child

24 or youth and an unaccompanied youth, as such

25 terms are defined in section 725 of the McKinney-
†

691

S 1932 ES

1 Vento Homeless Assistance Act (42 U.S.C. 11434a),

2 during the school year in which the application for

3 financial assistance is submitted, by—

4 ‘‘(A) a local educational agency liaison for

5 homeless children and youths, as designated

6 under section 722(g)(1)(J)(ii) of the McKinney7 Vento Homeless Assistance Act (42 U.S.C.

8 11432(g)(1)(J)(ii));

9 ‘‘(B) a director of a homeless shelter, tran10 sitional shelter, or independent living program;

11 or

12 ‘‘(C) a financial aid administrator; or’’.

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

14 this section shall apply with respect to determinations of

15 need under part F of title IV for academic years beginning

16 on or after July 1, 2006.

17 Subchapter G—General Provisions Relating

18 to Student Assistance

19 SEC. 7431. DEFINITIONS.

20 Section 481 (20 U.S.C. 1088) is amended—

21 (1) in the second sentence of subsection (a)(2),

22 by inserting ‘‘and that measures program length in

23 credit hours or clock hours’’ after ‘‘baccalaureate de24 gree’’; and
†

692

S 1932 ES

1 (2) in subsection (b), by adding at the end the

2 following:

3 ‘‘(3) For purposes of this title, the term ‘eligible pro4 gram’ includes an instructional program that utilizes di5 rect assessment of student learning or recognizes the di6 rect assessment of student learning by others, if such as7 sessment is consistent with the accreditation of the institu8 tion or program utilizing the results of the assessment,

9 in lieu of credit hours or clock hours as the measure of

10 student learning. In the case of a program being deter11 mined eligible for the first time under this paragraph, such

12 determination shall be made by the Secretary before such

13 program is considered to be an eligible program.’’.

14 SEC. 7432. COMPLIANCE CALENDAR.

15 Section 482 (20 U.S.C. 1089) is amended by adding

16 at the end the following:

17 ‘‘(a) COMPLIANCE CALENDAR.—Prior to the begin18 ning of each award year, the Secretary shall provide to

19 institutions of higher education a list of all the reports

20 and disclosures required under this Act. The list shall

21 include—

22 ‘‘(1) the date each report or disclosure is re23 quired to be completed and to be submitted, made

24 available, or disseminated;
†

693

S 1932 ES

1 ‘‘(2) the required recipients of each report or

2 disclosure;

3 ‘‘(3) any required method for transmittal or

4 dissemination of each report or disclosure;

5 ‘‘(4) a description of the content of each report

6 or disclosure sufficient to allow the institution to

7 identify the appropriate individuals to be assigned

8 the responsibility for such report or disclosure;

9 ‘‘(5) references to the statutory authority, ap10 plicable regulations, and current guidance issued by

11 the Secretary regarding each report or disclosure;

12 and

13 ‘‘(6) any other information which is pertinent to

14 the content or distribution of the report or disclo15 sure.’’.

16 SEC. 7433. FORMS AND REGULATIONS.

17 Section 483 (20 U.S.C. 1090) is amended—

18 (1) by striking subsections (a) and (b), and in19 serting the following:

20 ‘‘(a) COMMON FINANCIAL AID FORM DEVELOPMENT

21 AND PROCESSING.—

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-
†

694

S 1932 ES

1 mon financial reporting forms as described in this

2 subsection to be used to determine the need and eli3 gibility of a student for financial assistance under

4 parts A through E of this title (other than under

5 subpart 4 of part A). The forms shall be made avail6 able to applicants in both paper and electronic for7 mats and shall be referred to (except as otherwise

8 provided in this subsection) as the ‘Free Application

9 for Federal Student Aid’, or ‘FAFSA’.

10 ‘‘(2) PAPER FORMAT.—

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (C), the Secretary shall produce, dis13 tribute, and process common forms in paper

14 format to meet the requirements of paragraph

15 (1). The Secretary shall develop a common

16 paper form for applicants who do not meet the

17 requirements of or do not wish to use the proc18 ess described in subparagraph (B).

19 ‘‘(B) EZ FAFSA.—

20 ‘‘(i) IN GENERAL.—The Secretary

21 shall develop and use a simplified paper

22 application form, to be known as the ‘EZ

23 FAFSA’, to be used for applicants meeting

24 the requirements under section 479(c).
†

695

S 1932 ES

1 ‘‘(ii) REDUCED DATA REQUIRE2 MENTS.—The EZ FAFSA shall permit an

3 applicant to submit for purposes of deter4 mining financial need and eligibility, only

5 the data elements required to make a de6 termination of student eligibility and

7 whether the applicant meets the require8 ments of section 479(c).

9 ‘‘(iii) STATE DATA.—The Secretary

10 shall include on the EZ FAFSA such data

11 items as may be necessary to award State

12 financial assistance, as provided under

13 paragraph (5), except the Secretary shall

14 not include a State’s data if that State

15 does not permit its applicants for State as16 sistance to use the EZ FAFSA.

17 ‘‘(iv) FREE AVAILABILITY AND PROC18 ESSING.—The provisions of paragraph (6)

19 shall apply to the EZ FAFSA, and the

20 data collected by means of the EZ FAFSA

21 shall be available to institutions of higher

22 education, guaranty agencies, and States

23 in accordance with paragraph (9).
†

696

S 1932 ES

1 ‘‘(v) TESTING.—The Secretary shall

2 conduct appropriate field testing on the

3 EZ FAFSA.

4 ‘‘(C) PHASING OUT THE FULL PAPER

5 FORM FOR STUDENTS WHO DO NOT MEET THE

6 REQUIREMENTS OF THE EZ FAFSA.—

7 ‘‘(i) IN GENERAL.—The Secretary

8 shall make all efforts to encourage all ap9 plicants to utilize the electronic forms de10 scribed in paragraph (3).

11 ‘‘(ii) PHASEOUT OF FULL PAPER

12 FAFSA.—Not later than 5 years after the

13 date of enactment of the Higher Education

14 Amendments of 2005, to the extent prac15 ticable, the Secretary shall phase out the

16 printing of the long paper form created

17 under subparagraph (A) and used by appli18 cants who do not meet the requirements of

19 the EZ FAFSA described in subparagraph

20 (B).

21 ‘‘(iii) AVAILABILITY OF FULL PAPER

22 FAFSA.—

23 ‘‘(I) IN GENERAL.—Both prior to

24 and after the phaseout described in

25 clause (ii), the Secretary shall main-
†

697

S 1932 ES

1 tain on the Internet printable versions

2 of the paper forms described in sub3 paragraphs (A) and (B).

4 ‘‘(II) ACCESSIBILITY.—The

5 printable versions described in sub6 clause (I) shall be made easily acces7 sible and downloadable to students on

8 the same Web site used to provide

9 students with the common electronic

10 forms described in paragraph (3).

11 ‘‘(III) SUBMISSION OF FORMS.—

12 The Secretary shall conduct a study

13 to determine the feasibility of using

14 downloaded forms to ensure sufficient

15 quality to meet the processing require16 ments of this section. Following the

17 completion of the study, the Secretary

18 shall enable, to the extent practicable,

19 students to submit a form described

20 in this clause that is downloaded from

21 the Internet and printed, in order to

22 meet the filing requirements of this

23 section and to receive financial assist24 ance under this title.

25 ‘‘(iv) USE OF SAVINGS.—
†

698

S 1932 ES

1 ‘‘(I) IN GENERAL.—The Sec2 retary shall utilize any realized sav3 ings accrued by phasing out the full

4 paper FAFSA and moving more appli5 cants to the common electronic forms,

6 to improve access to the electronic

7 forms for applicants meeting the re8 quirements of section 479(c).

9 ‘‘(II) REPORT.—The Secretary

10 shall report annually to the author11 izing committees on—

12 ‘‘(aa) the steps taken to im13 prove access to the common elec14 tronic forms for applicants meet15 ing the requirements of section

16 479(c); and

17 ‘‘(bb) the phaseout of the

18 long common paper form de19 scribed in subparagraph (A).

20 ‘‘(3) ELECTRONIC FORMAT.—

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

22 produce, distribute, and process common forms

23 in electronic format and make such forms avail24 able through a broadly accessible website to

25 meet the requirements of paragraph (1). The
†

699

S 1932 ES

1 Secretary shall develop common electronic

2 forms for applicants who do not meet the re3 quirements of subparagraph (B). The Secretary

4 shall include on the common electronic forms

5 space for information that needs to be sub6 mitted from the applicant to be eligible for

7 State financial assistance, as provided under

8 paragraph (5), except the Secretary shall not

9 require applicants to complete data required by

10 any State other than the applicant’s State of

11 residence. The Secretary shall use all available

12 technology to ensure that a student using a

13 common electronic form answers only the min14 imum number of questions necessary.

15 ‘‘(B) SIMPLIFIED ELECTRONIC APPLICA16 TIONS.—

17 ‘‘(i) IN GENERAL.—The Secretary

18 shall develop and use a simplified elec19 tronic application form to be used by appli20 cants meeting the requirements of section

21 479(c) and an additional, separate sim22 plified electronic application form to be

23 used by applicants meeting the require24 ments under section 479(b).
†

700

S 1932 ES

1 ‘‘(ii) REDUCED DATA REQUIRE2 MENTS.—The simplified electronic applica3 tion forms shall permit an applicant to

4 submit for purposes of determining finan5 cial need and eligibility, only the data ele6 ments required to make a determination of

7 student eligibility and whether the appli8 cant meets the requirements of subsection

9 (b) or (c) of section 479.

10 ‘‘(iii) STATE DATA.—The Secretary

11 shall include on the simplified electronic

12 application forms such data items as may

13 be necessary to award State financial as14 sistance, as provided under paragraph (5),

15 except the Secretary shall not require ap16 plicants to complete data required by any

17 State other than the applicant’s State of

18 residence and shall not include a State’s

19 data if such State does not permit its ap20 plicants for State assistance to use the

21 simplified electronic application form de22 scribed in this subparagraph.

23 ‘‘(iv) FREE AVAILABILITY AND PROC24 ESSING.—The provisions of paragraph (6)

25 shall apply to the simplified electronic ap-
†

701

S 1932 ES

1 plication forms, and the data collected by

2 means of the simplified electronic applica3 tion forms shall be available to institutions

4 of higher education, guaranty agencies,

5 and States in accordance with paragraph

6 (9).

7 ‘‘(v) TESTING.—The Secretary shall

8 conduct appropriate field testing on the

9 forms developed under this subparagraph.

10 ‘‘(C) USE OF FORMS.—Nothing in this

11 subsection shall be construed to prohibit the use

12 of the forms developed by the Secretary pursu13 ant to this paragraph by an eligible institution,

14 eligible lender, a guaranty agency, a State

15 grant agency, a private computer software pro16 vider, a consortium of such entities, or such

17 other entity as the Secretary may designate.

18 Data collected by the forms shall be used only

19 for the application, award, and administration

20 of aid awarded under this title, State aid, or aid

21 awarded by eligible institutions or such entities

22 as the Secretary may designate. No data col23 lected by such electronic version of the forms

24 shall be used for making final aid awards under

25 this title until such data have been processed by
†

702

S 1932 ES

1 the Secretary or a contractor or designee of the

2 Secretary, except as may be permitted under

3 this title.

4 ‘‘(D) PRIVACY.—The Secretary shall en5 sure that data collection under this paragraph

6 complies with section 552a of title 5, United

7 States Code, and that any entity using the elec8 tronic version of the forms developed by the

9 Secretary pursuant to this paragraph shall

10 maintain reasonable and appropriate adminis11 trative, technical, and physical safeguards to

12 ensure the integrity and confidentiality of the

13 information, and to protect against security

14 threats, or unauthorized uses or disclosures of

15 the information provided on the electronic

16 version of the forms.

17 ‘‘(E) SIGNATURE.—Notwithstanding any

18 other provision of this Act, the Secretary may

19 permit an electronic form under this paragraph

20 to be submitted without a signature, if a signa21 ture is subsequently submitted by the applicant

22 or if the applicant uses a personal identification

23 number provided by the Secretary under sub24 paragraph (F).
†

703

S 1932 ES

1 ‘‘(F) PERSONAL IDENTIFICATION NUM2 BERS AUTHORIZED.—The Secretary is author3 ized to assign to applicants personal identifica4 tion numbers—

5 ‘‘(i) to enable the applicants to use

6 such numbers as a signature for purposes

7 of completing a form under this paragraph;

8 and

9 ‘‘(ii) for any purpose determined by

10 the Secretary to enable the Secretary to

11 carry out this title.

12 ‘‘(4) STREAMLINED REAPPLICATION PROC13 ESS.—

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

15 develop streamlined reapplication forms and

16 processes, including both paper and electronic

17 reapplication processes, consistent with the re18 quirements of this subsection, for an applicant

19 who applies for financial assistance under this

20 title in the next succeeding academic year sub21 sequent to an academic year in which such ap22 plicant applied for financial assistance under

23 this title.
†

704

S 1932 ES

1 ‘‘(B) MECHANISMS FOR REAPPLICATION.—

2 The Secretary shall develop appropriate mecha3 nisms to support reapplication.

4 ‘‘(C) IDENTIFICATION OF UPDATED

5 DATA.—The Secretary shall determine, in co6 operation with States, institutions of higher

7 education, and agencies and organizations in8 volved in student financial assistance, the data

9 elements that can be updated from the previous

10 academic year’s application.

11 ‘‘(D) REDUCED DATA AUTHORIZED.—

12 Nothing in this title shall be construed as lim13 iting the authority of the Secretary to reduce

14 the number of data elements required of re15 applicants.

16 ‘‘(E) ZERO FAMILY CONTRIBUTION.—Ap17 plicants determined to have a zero family con18 tribution pursuant to section 479(c) shall not

19 be required to provide any financial data in a

20 replication form, except that which is necessary

21 to determine eligibility under such section.

22 ‘‘(5) STATE REQUIREMENTS.—

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

24 paragraphs (2)(B)(iii), (3)(A), and (3)(B)(iii),

25 the Secretary shall include on the forms devel-
†

705

S 1932 ES

1 oped under this subsection, such State-specific

2 data items as the Secretary determines are nec3 essary to meet State requirements for need4 based State aid. Such items shall be selected in

5 consultation with State agencies in order to as6 sist in the awarding of State financial assist7 ance in accordance with the terms of this sub8 section, except as provided in paragraphs

9 (2)(B)(iii), (3)(A), and (3)(B)(iii). The number

10 of such data items shall not be less than the

11 number included on the form for the 2005–

12 2006 award year unless a State notifies the

13 Secretary that the State no longer requires

14 those data items for the distribution of State

15 need-based aid.

16 ‘‘(B) ANNUAL REVIEW.—The Secretary

17 shall conduct an annual review process to deter18 mine which data items the States require to

19 award need-based State aid.

20 ‘‘(C) ENCOURAGE USE OF FORMS.—The

21 Secretary shall encourage States to take such

22 steps as are necessary to encourage the use of

23 simplified application forms, including those de24 scribed in paragraphs (2)(B) and (3)(B), for
†

706

S 1932 ES

1 applicants who meet the requirements of sub2 section (b) or (c) of section 479.

3 ‘‘(D) FEDERAL REGISTER NOTICE.—The

4 Secretary shall publish, on an annual basis, a

5 notice in the Federal Register requiring States

6 to inform the Secretary—

7 ‘‘(i) if the State plans to use the

8 FAFSA to collect data to determine eligi9 bility for State need-based financial aid;

10 ‘‘(ii) of the State-specific data that

11 the State requires for delivery of State

12 need-based financial aid; and

13 ‘‘(iii) if the State agency is unable to

14 permit applicants to utilize the simplified

15 application forms described in paragraph

16 (2)(B) or (3)(B).

17 ‘‘(E) STATE NOTIFICATION TO THE SEC18 RETARY.—

19 ‘‘(i) IN GENERAL.—Each State agency

20 shall notify the Secretary—

21 ‘‘(I) whether the State permits

22 an applicant to file a form described

23 in paragraph (2)(B) or (3)(B) for

24 purposes of determining eligibility for

25 State need-based financial aid; and
†

707

S 1932 ES

1 ‘‘(II) of the State-specific data

2 that the State requires for delivery of

3 State need-based financial aid.

4 ‘‘(ii) ACCEPTANCE OF FORMS.—If a

5 State does not permit an applicant to file

6 a form described in paragraph (2)(B) or

7 (3)(B) for purposes of determining eligi8 bility for State need-based financial aid,

9 then the State shall notify the Secretary if

10 it is not permitted to do so because of

11 State law or agency policy. The notification

12 shall include an acknowledgment that

13 State-specific questions will not be included

14 on a form described in paragraph (2)(B)

15 or (3)(B).

16 ‘‘(iii) LACK OF NOTIFICATION BY THE

17 STATE.—If a State does not notify the

18 Secretary pursuant to clause (i), the Sec19 retary shall—

20 ‘‘(I) permit residents of that

21 State to complete simplified applica22 tion forms under paragraphs (2)(B)

23 and (3)(B); and

24 ‘‘(II) not require any resident of

25 such State to complete any data pre-
†

708

S 1932 ES

1 viously required by that State under

2 this section.

3 ‘‘(F) RESTRICTION.—The Secretary shall

4 not require applicants to complete any financial

5 or non-financial data that are not required by

6 the applicant’s State, except as may be required

7 for applicants who use the paper forms de8 scribed in subparagraphs (A) and (B) of para9 graph (2).

10 ‘‘(6) CHARGES TO STUDENTS AND PARENTS

11 FOR USE OF FORMS PROHIBITED.—The common fi12 nancial reporting forms prescribed by the Secretary

13 under this subsection shall be produced, distributed,

14 and processed by the Secretary, and no parent or

15 student shall be charged a fee by the Secretary, a

16 contractor, a third-party servicer or private software

17 provider, or any other public or private entity for the

18 collection, processing, or delivery of financial aid

19 through the use of such forms. The need and eligi20 bility of a student for financial assistance under

21 parts A through E (other than under subpart 4 of

22 part A) may be determined only by using a form de23 veloped by the Secretary pursuant to this subsection.

24 No student may receive financial assistance under

25 parts A through E (other than under subpart 4 of
†

709

S 1932 ES

1 part A), except by use of a form developed by the

2 Secretary pursuant to this subsection. No data col3 lected on a paper or electronic form or other docu4 ment that the Secretary determines was created to

5 replace a form prescribed under this subsection and

6 therefore violates the integrity of a simplified and

7 free financial aid application process and for which

8 a fee is charged shall be used to complete the form

9 prescribed under this subsection. No person, com10 mercial entity, or other entity shall request, obtain,

11 or utilize an applicant’s personal identification num12 ber assigned under paragraph (3)(F) for purposes of

13 submitting an application on an applicant’s behalf.

14 ‘‘(7) APPLICATION PROCESSING CYCLE.—The

15 Secretary shall—

16 ‘‘(A) enable students to submit forms cre17 ated under this subsection in order to meet the

18 filing requirements of this section and in order

19 to receive financial assistance from programs

20 under this title; and

21 ‘‘(B) enable students to submit forms cre22 ated under this subsection and initiate the proc23 essing of such forms under this subsection, as

24 early as practicable prior to January 1 of the

25 student’s planned year of enrollment.
†

710

S 1932 ES

1 ‘‘(8) EARLY ESTIMATES.—The Secretary shall

2 permit an applicant to complete a form described in

3 this subsection in the years prior to enrollment in

4 order to obtain from the Secretary a nonbinding es5 timate of the applicant’s expected family contribu6 tion, as defined in section 473. Such applicant shall

7 be permitted to update information submitted on a

8 form described in this subsection using the process

9 required under paragraph (4).

10 ‘‘(9) DISTRIBUTION OF DATA.—Institutions of

11 higher education, guaranty agencies, and States

12 shall receive, without charge, the data collected by

13 the Secretary using the form developed pursuant to

14 this subsection for the purposes of processing loan

15 applications and determining need and eligibility for

16 institutional and State financial aid awards. Entities

17 designated by institutions of higher education, guar18 anty agencies, or States to receive such data shall be

19 subject to all the requirements of this section, unless

20 such requirements are waived by the Secretary.

21 ‘‘(10) THIRD PARTY SERVICERS AND PRIVATE

22 SOFTWARE PROVIDERS.—To the extent practicable

23 and in a timely manner, the Secretary shall provide,

24 to private organizations and consortia that develop

25 software used by institutions of higher education for
†

711

S 1932 ES

1 the administration of funds under this title, all the

2 necessary specifications that the organizations and

3 consortia must meet for the software the organiza4 tions and consortia develop, produce, and distribute

5 (including any diskette, modem, or network commu6 nications) which are so used. The specifications shall

7 contain record layouts for required data. The Sec8 retary shall develop in advance of each processing

9 cycle an annual schedule for providing such speci10 fications. The Secretary, to the extent practicable,

11 shall use means of providing such specifications, in12 cluding conferences and other meetings, outreach,

13 and technical support mechanisms (such as training

14 and printed reference materials). The Secretary

15 shall, from time to time, solicit from such organiza16 tions and consortia means of improving the support

17 provided by the Secretary.

18 ‘‘(11) PARENT’S SOCIAL SECURITY NUMBER

19 AND BIRTH DATE.—The Secretary is authorized to

20 include on the form developed under this subsection

21 space for the social security number and birth date

22 of parents of dependent students seeking financial

23 assistance under this title.’’;

24 (2) by redesignating subsections (c) through (e)

25 as subsections (b) through (d), respectively;
†

712

S 1932 ES

1 (3) in subsection (c) (as redesignated by para2 graph (2)), by striking ‘‘that is authorized’’ and all

3 that follows through the period at the end and in4 serting ‘‘or other appropriate provider of technical

5 assistance and information on postsecondary edu6 cational services that is authorized under section

7 663(a) of the Individuals with Disabilities Education

8 Act. Not later than 2 years after the date of enact9 ment of the Higher Education Amendments of 2005,

10 the Secretary shall test and implement, to the extent

11 practicable, a toll-free telephone based system to

12 permit applicants who meet the requirements of

13 479(c) to submit an application over such system.’’;

14 and

15 (4) by striking subsection (d) (as redesignated

16 by paragraph (2)) and inserting the following:

17 ‘‘(d) ASSISTANCE IN PREPARATION OF FINANCIAL

18 AID APPLICATION.—

19 ‘‘(1) PREPARATION AUTHORIZED.—Notwith20 standing any provision of this Act, an applicant may

21 use a preparer for consultative or preparation serv22 ices for the completion of the common financial re23 porting forms described in subsection (a) if the pre24 parer satisfies the requirements of this subsection.
†

713

S 1932 ES

1 ‘‘(2) PREPARER IDENTIFICATION.—Any com2 mon financial reporting form required to be made

3 under this title shall include the name, signature,

4 address or employer’s address, social security num5 ber or employer identification number, and organiza6 tional affiliation of the preparer of such common fi7 nancial reporting form.

8 ‘‘(3) ADDITIONAL REQUIREMENTS.—A preparer

9 that provides consultative or preparation services

10 pursuant to this subsection shall—

11 ‘‘(A) clearly inform individuals upon initial

12 contact (including advertising in clear and con13 spicuous language on the website of the pre14 parer, including by providing a link directly to

15 the website described in subsection (a)(3), if the

16 preparer provides such services through a

17 website) that the common financial reporting

18 forms that are required to determine eligibility

19 for financial assistance under parts A through

20 E (other than subpart 4 of part A) may be

21 completed for free via paper or electronic forms

22 provided by the Secretary;

23 ‘‘(B) refrain from producing or dissemi24 nating any form other than the forms produced

25 by the Secretary under subsection (a); and
†

714

S 1932 ES

1 ‘‘(C) not charge any fee to any individual

2 seeking such services who meets the require3 ments of subsection (b) or (c) of section 479.

4 ‘‘(4) SPECIAL RULE.—Nothing in this Act shall

5 be construed to limit preparers of the common finan6 cial reporting forms required to be made under this

7 title who meet the requirements of this subsection

8 from collecting source information from a student or

9 parent, including Internal Revenue Service tax

10 forms, in providing consultative and preparation

11 services in completing the forms.’’.

12 SEC. 7434. STUDENT ELIGIBILITY.

13 Section 484 (20 U.S.C. 1091) is amended—

14 (1) in subsection (d), by adding at the end the

15 following:

16 ‘‘(4) The student shall be determined by the in17 stitution of higher education as having the ability to

18 benefit from the education or training offered by the

19 institution of higher education, upon satisfactory

20 completion of 6 credit hours or the equivalent

21 coursework that are applicable toward a degree or

22 certificate offered by the institution of higher edu23 cation.’’;

24 (2) by striking subsection (l) and inserting the

25 following:
†

715

S 1932 ES

1 ‘‘(l) COURSES OFFERED THROUGH DISTANCE EDU2 CATION.—

3 ‘‘(1) RELATION TO CORRESPONDENCE

4 COURSES.—

5 ‘‘(A) IN GENERAL.—A student enrolled in

6 a course of instruction at an institution of high7 er education that is offered principally through

8 distance education and leads to a recognized

9 certificate, or associate, baccalaureate, or grad10 uate degree, conferred by such institution, shall

11 not be considered to be enrolled in correspond12 ence courses.

13 ‘‘(B) EXCEPTION.—An institution of high14 er education referred to in subparagraph (A)

15 shall not include an institution or school de16 scribed in section 3(3)(C) of the Carl D. Per17 kins Vocational and Technical Education Act of

18 1998.

19 ‘‘(2) RESTRICTION OR REDUCTIONS OF FINAN20 CIAL AID.—A student’s eligibility to receive grants,

21 loans, or work assistance under this title shall be re22 duced if a financial aid officer determines under the

23 discretionary authority provided in section 479A

24 that distance education results in a substantially re25 duced cost of attendance to such student.
†

716

S 1932 ES

1 ‘‘(3) SPECIAL RULE.—For award years prior to

2 the date of enactment of this subsection, the Sec3 retary shall not take any compliance, disallowance,

4 penalty, or other action against a student or an eli5 gible institution when such action arises out of such

6 institution’s prior award of student assistance under

7 this title if the institution demonstrates to the satis8 faction of the Secretary that its course of instruction

9 would have been in conformance with the require10 ments of this subsection.

11 ‘‘(4) DEFINITION.—In this subsection, the term

12 ‘distance education’ has the meaning given the term

13 in section 102.’’; and

14 (3) in subsection (r)—

15 (A) in the matter preceding the table, by

16 inserting ‘‘of a controlled substance, while such

17 student is enrolled in an institution of higher

18 education and receiving financial assistance

19 under this title,’’ after ‘‘the possession’’;

20 (B) in the column heading of the first

21 table, by inserting ‘‘while the student is

22 enrolled in an institution of higher

23 education and receiving financial as24 sistance under this title’’ after ‘‘posses25 sion of a controlled substance’’; and
†

717

S 1932 ES

1 (C) by redesignating paragraph (3) as

2 paragraph (4); and

3 (D) by inserting after paragraph (2) the

4 following:

5 ‘‘(2) INTERACTION WITH FAFSA.—The Sec6 retary shall not require a student to provide infor7 mation regarding the student’s possession of a con8 trolled substance on the Free Application for Fed9 eral Student Aid described in section 483(a).’’.

10 SEC. 7435. STATUTE OF LIMITATIONS AND STATE COURT

11 JUDGMENTS.

12 Section 484A (20 U.S.C. 1091a) is amended—

13 (1) in subsection (b)—

14 (A) in paragraph (1), by striking ‘‘and’’

15 after the semicolon;

16 (B) in paragraph (2), by striking the pe17 riod and inserting ‘‘; and’’; and

18 (C) by adding at the end the following:

19 ‘‘(3) in collecting any obligation arising from a

20 loan made under part E of this title, an institution

21 of higher education that has an agreement with the

22 Secretary pursuant to section 463(a) shall not be

23 subject to a defense raised by any borrower based on

24 a claim of infancy.’’; and

25 (2) by adding at the end the following:
†

718

S 1932 ES

1 ‘‘(d) SPECIAL RULE.—This section shall not apply in

2 the case of a student who is deceased or to a deceased

3 student’s estate or the estate of such student’s family. If

4 a student is deceased, then the student’s estate or the es5 tate of the student’s family shall not be required to repay

6 any financial assistance under this title , including interest

7 paid on the student’s behalf, collection costs, or other

8 charges specified in this title.’’.

9 SEC. 7436. INSTITUTIONAL REFUNDS.

10 Section 484B (20 U.S.C. 1091B) is amended—

11 (1) in subsection (a)—

12 (A) in the matter preceding clause (i) of

13 paragraph (2)(A), by striking ‘‘a leave of’’ and

14 inserting ‘‘1 or more leaves of’’; and

15 (B) in paragraph (3)(C)(i), by striking

16 ‘‘grant or loan assistance under this title’’ and

17 inserting ‘‘grant assistance under subparts 1

18 and 3 of part A, or loan assistance under parts

19 B, D, and E,’’;

20 (2) in subsection (b), by adding at the end the

21 following:

22 ‘‘(4) TIME FRAME.—Not later than 45 days

23 after the date of an institution’s determination that

24 a student withdrew from the institution, the institu25 tion shall—
†

719

S 1932 ES

1 ‘‘(A) return the amount required under

2 paragraph (1);

3 ‘‘(B) notify the student of the applicable

4 requirements regarding the overpayment of

5 grant and loan assistance and

6 ‘‘(C) notify the student of the student’s eli7 gibility for post-withdrawal disbursements.’’;

8 (3) in subsection (c)(2), by striking ‘‘may deter9 mine the appropriate withdrawal date.’’ and insert10 ing ‘‘may determine—

11 (A) the appropriate withdrawal date; and

12 ‘‘(B) that the requirements of this section

13 do not apply to the student.’’; and

14 (4) in subsection (d)(2), by striking ‘‘clock

15 hours—’’ and all that follows through the period and

16 inserting ‘‘clock hours scheduled to be completed by

17 the student in that period as of the day the student

18 withdrew.’’.

19 SEC. 7437. INSTITUTIONAL AND FINANCIAL ASSISTANCE

20 FOR STUDENTS.

21 Section 485 (20 U.S.C. 1092) is amended—

22 (1) in subsection (a)—

23 (A) in paragraph (1)—

24 (i) in subparagraph (N), by striking

25 ‘‘and’’ after the semicolon;
†

720

S 1932 ES

1 (ii) in subparagraph (O), by striking the period

2 and inserting a semicolon; and

3 (iii) by adding at the end the fol4 lowing:

5 ‘‘(P) student body diversity at the institution,

6 including information on the percentage of enrolled,

7 full-time students who are—

8 ‘‘(i) male;

9 ‘‘(ii) female;

10 ‘‘(iii) from a low-income background; and

11 ‘‘(iv) a self-identified member of a major

12 racial or ethnic group;

13 ‘‘(Q) the placement in employment of, and

14 types of employment obtained by, graduates of

15 the institution’s degree or certificate programs,

16 gathered from such sources as alumni surveys,

17 student satisfaction surveys, the National Sur18 vey of Student Engagement, the Community

19 College Survey of Student Engagement, State

20 data systems, or other relevant sources; and

21 ‘‘(R) the types of graduate and profes22 sional education in which graduates of the insti23 tution’s 4-year degree programs enrolled, gath24 ered from such sources as alumni surveys, stu25 dent satisfaction surveys, the National Survey
†

721

S 1932 ES

1 of Student Engagement, State data systems, or

2 other relevant sources.’’;

3 (B) by striking paragraph (4) and insert4 ing the following:

5 ‘‘(4) For purposes of this section, institutions

6 may—

7 ‘‘(A) exclude from the information dis8 closed in accordance with subparagraph (L) of

9 paragraph (1) the completion or graduation

10 rates of students who leave school to serve in

11 the Armed Forces, on official church missions,

12 or with a recognized foreign aid service of the

13 Federal Government; or

14 ‘‘(B) in cases where the students described

15 in subparagraph (A) represent 20 percent or

16 more of the certificate- or degree-seeking, full17 time, undergraduate students at the institution,

18 the institution may recalculate the completion

19 or graduation rates of such students by exclud20 ing from the calculation described in paragraph

21 (3) the time period such students were not en22 rolled due to their service in the Armed Forces,

23 on official church missions, or with a recognized

24 foreign aid service of the Federal Govern25 ment.’’; and
†

722

S 1932 ES

1 (C) by adding at the end the following:

2 ‘‘(7) The information disclosed under subparagraph

3 (L) of paragraph (1), or reported under subsection (e),

4 shall include information disaggregated by gender, by each

5 major racial and ethnic subgroup, and by low-income

6 background status as measured by Federal Pell Grant eli7 gibility, if the number of students in such subgroup or

8 with such status is sufficient to yield statistically reliable

9 information and reporting would not reveal personally

10 identifiable information about an individual student. If

11 such number is not sufficient for such purposes, then the

12 institution shall note that the institution enrolled too few

13 of such students to so disclose or report with confidence

14 and confidentiality.’’;

15 (2) in subsection (b), by adding at the end the

16 following:

17 ‘‘(3) Each eligible institution shall, during the

18 exit interview required by this subsection, provide to

19 a borrower of a loan made under part B, D, or E

20 a clear and conspicuous notice describing the general

21 effects of using a consolidation loan to discharge the

22 borrower’s student loans, including—

23 ‘‘(A) the effects of consolidation on total

24 interest to be paid, fees to be paid, and length

25 of repayment;
†

723

S 1932 ES

1 ‘‘(B) the effects of consolidation on a bor2 rower’s underlying loan benefits, including loan

3 forgiveness, cancellation, and deferment;

4 ‘‘(C) the ability for the borrower to prepay

5 the loan, pay on a shorter schedule, and to

6 change repayment plans, and that borrower

7 benefit programs may vary among different

8 loan holders;

9 ‘‘(D) the tax benefits for which the bor10 rower may be eligible; and

11 ‘‘(E) the consequences of default.’’;

12 (3) in subsection (d)(2)—

13 (A) by inserting ‘‘grant assistance, as well

14 as State’’ after ‘‘describing State’’; and

15 (B) by inserting ‘‘and other means, includ16 ing through the Internet’’ before the period at

17 the end;

18 (4) in subsection (e), by striking paragraph (3)

19 and inserting the following:

20 ‘‘(3) For purposes of this subsection, institu21 tions may—

22 ‘‘(A) exclude from the reporting require23 ments under paragraphs (1) and (2) the com24 pletion or graduation rates of students and stu25 dent athletes who leave school to serve in the
†

724

S 1932 ES

1 Armed Forces, on official church missions, or

2 with a recognized foreign aid service of the Fed3 eral Government; or

4 ‘‘(B) in cases where the students described

5 in subparagraph (A) represent 20 percent or

6 more of the certificate- or degree-seeking, full7 time, undergraduate students at the institution,

8 the institution may calculate the completion or

9 graduation rates of such students by excluding

10 from the calculations described in paragraph

11 (1) the time period such students were not en12 rolled due to their service in the Armed Forces,

13 on official church missions, or with a recognized

14 foreign aid service of the Federal Govern15 ment.’’;

16 (5) in the matter preceding subparagraph (A)

17 of subsection (f)(1), by inserting ‘‘, other than a for18 eign institution of higher education,’’ after ‘‘under

19 this title’’; and

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

21 ‘‘(h) TRANSFER OF CREDIT POLICIES.—

22 ‘‘(1) DISCLOSURE.—Each institution of higher

23 education participating in any program under this

24 title shall publicly disclose in a readable and com25 prehensible manner the institution’s transfer of cred-
†

725

S 1932 ES

1 it policies which shall include a statement of the in2 stitution’s current transfer of credit policies that in3 cludes, at a minimum—

4 ‘‘(A) a statement that transfer of credit

5 shall not be denied solely on the basis of the

6 agency or association that accredited such other

7 institution of higher education, if that agency

8 or association is recognized by the Secretary

9 pursuant to section 496 to be a reliable author10 ity as to the quality of the education or training

11 offered;

12 ‘‘(B) a list of institutions of higher edu13 cation with which the institution has established

14 an articulation agreement; and

15 ‘‘(C) the percentage of students at the in16 stitution who successfully transfer academic

17 credits, updated on an annual basis.

18 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in

19 this subsection shall be construed to—

20 ‘‘(A) authorize an officer or employee of

21 the Department to exercise any direction, su22 pervision, or control over the curriculum, pro23 gram of instruction, administration, or per24 sonnel of any institution of higher education, or

25 over any accrediting agency or association;
†

726

S 1932 ES

1 ‘‘(B) limit the application of the General

2 Education Provisions Act; or

3 ‘‘(C) create any legally enforceable right on

4 the part of a student to require an institution

5 of higher education to accept a transfer of cred6 it from another institution.’’.

7 SEC. 7438. NATIONAL STUDENT LOAN DATA SYSTEM.

8 Section 485B(a) (20 U.S.C. 1092b(a)) is amended—

9 (1) by redesignating paragraphs (6) through

10 (10) as paragraphs (7) through (11), respectively;

11 (2) in paragraph (5) (as added by Public Law

12 101–610), by striking ‘‘effectiveness.’’ and inserting

13 ‘‘effectiveness;’’; and

14 (3) by redesignating paragraph (5) (as added

15 by Public Law 101–234) as paragraph (6).

16 SEC. 7439. EARLY AWARENESS OF FINANCIAL AID ELIGI17 BILITY.

18 Part G of title IV (20 U.S.C. 1088 et seq.) is amend19 ed by inserting after section 485C (20 U.S.C. 1092c) the

20 following:

21 ‘‘SEC. 485D. EARLY AWARENESS OF FINANCIAL AID ELIGI22 BILITY.

23 ‘‘(a) IN GENERAL.—The Secretary shall implement,

24 in cooperation with States, institutions of higher edu25 cation, secondary schools, middle schools, early interven-
†

727

S 1932 ES

1 tion and outreach programs under this title, other agen2 cies and organizations involved in student financial assist3 ance and college access, public libraries, community cen4 ters, employers, and businesses, a comprehensive system

5 of early financial aid information in order to provide stu6 dents and families with early information about financial

7 aid and early estimates of such students’ eligibility for fi8 nancial aid from multiple sources. Such system shall in9 clude the activities described in subsections (b) and (c).

10 ‘‘(b) COMMUNICATION OF AVAILABILITY OF AID AND

11 AID ELIGIBILITY.—

12 ‘‘(1) STUDENTS WHO RECEIVE BENEFITS.—The

13 Secretary shall—

14 ‘‘(A) make special efforts to notify stu15 dents who receive or are eligible to receive bene16 fits under Federal means-tested benefit pro17 grams (including the school lunch program es18 tablished under the Richard B. Russell National

19 School Lunch Act (42 U.S.C. 1751 et seq.), the

20 food stamp program under the Food Stamp Act

21 of 1977 (7 U.S.C. 2011 et seq.), and other such

22 programs as determined by the Secretary) of

23 such students’ potential eligibility for a max24 imum Federal Pell Grant under subpart 1 of

25 part A; and
†

728

S 1932 ES

1 ‘‘(B) disseminate such informational mate2 rials as the Secretary determines necessary.

3 ‘‘(2) MIDDLE SCHOOL STUDENTS.—The Sec4 retary, in cooperation with States, institutions of

5 higher education, other organizations involved in col6 lege access and student financial aid, middle schools,

7 and programs under this title that serve middle

8 school students, shall make special efforts to notify

9 students and their parents of the availability of fi10 nancial aid under this title and, in accordance with

11 subsection (c), shall provide nonbinding estimates of

12 grant and loan aid that an individual may be eligible

13 for under this title upon completion of an applica14 tion form under section 483(a). The Secretary shall

15 ensure that such information is as accurate as pos16 sible and that such information is provided in an

17 age-appropriate format using dissemination mecha18 nisms suitable for students in middle school.

19 ‘‘(3) SECONDARY SCHOOL STUDENTS.—The

20 Secretary, in cooperation with States, institutions of

21 higher education, other organizations involved in col22 lege access and student financial aid, secondary

23 schools, and programs under this title that serve sec24 ondary school students, shall make special efforts to

25 notify students in secondary school and their par-
†

729

S 1932 ES

1 ents, as early as possible but not later than such

2 students’ junior year of secondary school, of the

3 availability of financial aid under this title and, in

4 accordance with subsection (c), shall provide non5 binding estimates of the amounts of grant and loan

6 aid that an individual may be eligible for under this

7 title upon completion of an application form under

8 section 483(a). The Secretary shall ensure that such

9 information is as accurate as possible and that such

10 information is provided in an age-appropriate format

11 using dissemination mechanisms suitable for stu12 dents in secondary school.

13 ‘‘(4) ADULT LEARNERS.—The Secretary, in co14 operation with States, institutions of higher edu15 cation, other organizations involved in college access

16 and student financial aid, employers, workforce in17 vestment boards and public libraries, shall make spe18 cial efforts to provide individuals who would qualify

19 as independent students, as defined in section

20 480(d), with information regarding the availability

21 of financial aid under this title and, in accordance

22 with subsection (c), with nonbinding estimates of the

23 amounts of grant and loan aid that an individual

24 may be eligible for under this title upon completion
†

730

S 1932 ES

1 of an application form under section 483(a). The

2 Secretary shall ensure that such information—

3 ‘‘(A) is as accurate as possible;

4 ‘‘(B) includes specific information regard5 ing the availability of financial aid for students

6 qualified as independent students, as defined in

7 section 480(d); and

8 ‘‘(C) uses dissemination mechanisms suit9 able for adult learners.

10 ‘‘(5) PUBLIC AWARENESS CAMPAIGN.—Not

11 later than 2 years after the date of enactment of the

12 Higher Education Amendments of 2005, the Sec13 retary, in coordination with States, institutions of

14 higher education, early intervention and outreach

15 programs under this title, other agencies and organi16 zations involved in student financial aid, local edu17 cational agencies, public libraries, community cen18 ters, businesses, employers, employment services,

19 workforce investment boards, and movie theaters,

20 shall implement a public awareness campaign in

21 order to increase national awareness regarding the

22 availability of financial aid under this title. The pub23 lic awareness campaign shall disseminate accurate

24 information regarding the availability of financial

25 aid under this title and shall be implemented, to the
†

731

S 1932 ES

1 extent practicable, using a variety of media, includ2 ing print, television, radio and the Internet. The

3 Secretary shall design and implement the public

4 awareness campaign based upon relevant inde5 pendent research and the information and dissemi6 nation strategies found most effective in imple7 menting paragraphs (1) through (4).

8 ‘‘(c) AVAILABILITY OF NONBINDING ESTIMATES OF

9 FEDERAL FINANCIAL AID ELIGIBILITY.—

10 ‘‘(1) IN GENERAL.—The Secretary, in coopera11 tion with States, institutions of higher education,

12 and other agencies and organizations involved in stu13 dent financial aid, shall provide, via a printed form

14 and the Internet or other electronic means, the capa15 bility for individuals to determine easily, by entering

16 relevant data, nonbinding estimates of amounts of

17 grant and loan aid an individual may be eligible for

18 under this title upon completion and processing of

19 an application and enrollment in an institution of

20 higher education.

21 ‘‘(2) DATA ELEMENTS.—The Secretary, in co22 operation with States, institutions of higher edu23 cation, and other agencies and organizations in24 volved in student financial aid, shall determine the

25 data elements that are necessary to create a sim-
†

732

S 1932 ES

1 plified form that individuals can use to obtain easily

2 nonbinding estimates of the amounts of grant and

3 loan aid an individual may be eligible for under this

4 title.

5 ‘‘(3) QUALIFICATION TO USE SIMPLIFIED AP6 PLICATION.—The capability provided under this

7 paragraph shall include the capability to determine

8 whether the individual is eligible to submit a sim9 plified application form under paragraph (2)(B) or

10 (3)(B) of section 483(a).’’.

11 SEC. 7440. COLLEGE ACCESS INITIATIVE.

12 Part G of title IV (20 U.S.C. 1088 et seq.) is further

13 amended by inserting after section 485D (as added by sec14 tion 7439) the following:

15 ‘‘SEC. 485E. COLLEGE ACCESS INITIATIVE.

16 ‘‘(a) STATE-BY-STATE INFORMATION.—The Sec17 retary shall direct each guaranty agency with which the

18 Secretary has an agreement under section 428(c) to pro19 vide to the Secretary the information necessary for the de20 velopment of Internet Web links and access for students

21 and families to a comprehensive listing of the postsec22 ondary education opportunities programs, publications,

23 Internet Web sites, and other services available in the

24 States for which such agency serves as the designated

25 guarantor.
†

733

S 1932 ES

1 ‘‘(b) GUARANTY AGENCY ACTIVITIES.—

2 ‘‘(1) PLAN AND ACTIVITY REQUIRED.—Each

3 guaranty agency with which the Secretary has an

4 agreement under section 428(c) shall develop a plan,

5 and undertake the activity, necessary to gather the

6 information required under subsection (a) and to

7 make such information available to the public and to

8 the Secretary in a form and manner prescribed by

9 the Secretary.

10 ‘‘(2) ACTIVITIES.—Each guaranty agency shall

11 undertake such activities as are necessary to pro12 mote access to postsecondary education for students

13 through providing information on college planning,

14 career preparation, and paying for college. The guar15 anty agency shall publicize such information and co16 ordinate such activities with other entities that pro17 vide or distribute such information in the States for

18 which such guaranty agency serves as the designated

19 guarantor.

20 ‘‘(3) FUNDING.—The activities required by this

21 section may be funded from the guaranty agency’s

22 Operating Fund established pursuant to section

23 422B and to the extent funds remain, from earnings

24 on the restricted account established pursuant to

25 section 422(h)(4).
†

734

S 1932 ES

1 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in

2 this subsection shall require a guaranty agency to

3 duplicate any efforts currently underway that meet

4 the requirements of this subsection.

5 ‘‘(c) ACCESS TO INFORMATION.—

6 ‘‘(1) SECRETARY’S RESPONSIBILITY.—The Sec7 retary shall ensure the availability of the information

8 provided, by the guaranty agencies in accordance

9 with this section, to students, parents, and other in10 terested individuals, through Web links or other

11 methods prescribed by the Secretary.

12 ‘‘(2) GUARANTY AGENCY RESPONSIBILITY.—

13 The guaranty agencies shall ensure that the infor14 mation required by this section is available without

15 charge in printed format for students and parents

16 requesting such information.

17 ‘‘(3) PUBLICITY.—Not later than 270 days

18 after the date of enactment of the Higher Education

19 Amendments Act of 2005, the Secretary and guar20 anty agencies shall publicize the availability of the

21 information required by this section, with special

22 emphasis on ensuring that populations that are tra23 ditionally underrepresented in postsecondary edu24 cation are made aware of the availability of such in25 formation.’’.
†

735

S 1932 ES

1 SEC. 7441. PROGRAM PARTICIPATION AGREEMENTS.

2 Section 487 (20 U.S.C. 1094) is amended—

3 (1) in subsection (a)—

4 (A) in paragraph (23), by adding at the

5 end the following:

6 ‘‘(D) An institution shall be considered in

7 compliance with the requirements of subpara8 graph (A) for any student to whom the institu9 tion electronically transmits a message con10 taining a voter registration form acceptable for

11 use in the State in which the institution is lo12 cated, or an Internet address where such a

13 form can be downloaded, if such information is

14 in an electronic message devoted solely to voter

15 registration.’’; and

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

17 ‘‘(24) The institution will, as calculated in ac18 cordance with subsection (g)(1), have not less than

19 10 percent of its revenues from sources other than

20 funds provided under this title, or will be subject to

21 the sanctions described in subsection (g)(2).’’;

22 (2) in subsection (c)(1)(A)(i), by inserting ‘‘,

23 except that the Secretary may modify the require24 ments of this clause with regard to an institution

25 outside the United States’’ before the semicolon at

26 the end;
†

736

S 1932 ES

1 (3) by redesignating subsections (d) and (e) as

2 subsection (e) and (f), respectively;

3 (4) by inserting after subsection (c) the fol4 lowing:

5 ‘‘(d) INSTITUTIONAL REQUIREMENTS FOR TEACH6 OUTS.—

7 ‘‘(1) IN GENERAL.—In the event the Secretary

8 initiates the limitation, suspension, or termination of

9 the participation of an institution of higher edu10 cation in any program under this title under the au11 thority of subsection (c)(1)(F) or initiates an emer12 gency action for termination under the authority of

13 subsection (c)(1)(G) and its prescribed regulations,

14 the Secretary shall require that institution to pre15 pare a teach-out plan for submission to the institu16 tion’s accrediting agency or association in compli17 ance with section 496(c)(4), the Secretary’s regula18 tions on teach-out plans, and the standards of the

19 institution’s accrediting agency or association.

20 ‘‘(2) TEACH-OUT PLAN DEFINED.—In this sub21 section, the term ‘teach-out plan’ means a written

22 plan that provides for the equitable treatment of stu23 dents if an institution of higher education ceases to

24 operate before all students have completed their pro25 gram of study, and may include, if required by the
†

737

S 1932 ES

1 institution’s accrediting agency or association, an

2 agreement between institutions for such a teach-out

3 plan.’’; and

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

5 ‘‘(g) IMPLEMENTATION OF NONTITLE IV REVENUE

6 REQUIREMENT.—

7 ‘‘(1) CALCULATION.—In carrying out sub8 section (a)(24), an institution shall use the cash

9 basis of accounting and count the following funds as

10 from sources of funds other than funds provided

11 under this title:

12 ‘‘(A) Funds used by students from sources

13 other than funds received under this title to pay

14 tuition, fees, and other institutional charges to

15 the institution, provided the institution can rea16 sonably demonstrate that such funds were used

17 for such purposes.

18 ‘‘(B) Funds used by the institution to sat19 isfy matching-fund requirements for programs

20 under this title.

21 ‘‘(C) Funds used by a student from sav22 ings plans for educational expenses established

23 by or on behalf of the student and which qualify

24 for special tax treatment under the Internal

25 Revenue Code of 1986.
†

738

S 1932 ES

1 ‘‘(D) Funds paid by a student, or on be2 half of a student by a party other than the in3 stitution, to the institution for an education or

4 training program that is not eligible for funds

5 under this title, provided that the program is

6 approved or licensed by the appropriate State

7 agency or an accrediting agency recognized by

8 the Secretary.

9 ‘‘(E) Funds generated by the institution

10 from institutional activities that are necessary

11 for the education and training of the institu12 tion’s students, if such activities are—

13 ‘‘(i) conducted on campus or at a fa14 cility under the control of the institution;

15 ‘‘(ii) performed under the supervision

16 of a member of the institution’s faculty;

17 and

18 ‘‘(iii) required to be performed by all

19 students in a specific educational program

20 at the institution.

21 ‘‘(F) Institutional aid, as follows:

22 ‘‘(i) In the case of loans made by the

23 institution, only the amount of loan repay24 ments received by the institution during
†

739

S 1932 ES

1 the fiscal year for which the determination

2 is made.

3 ‘‘(ii) In the case of scholarships pro4 vided by the institution, only those scholar5 ship funds provided by the institution that

6 are—

7 ‘‘(I) in the form of monetary aid

8 based upon the academic achieve9 ments or financial need of students;

10 and

11 ‘‘(II) disbursed during the fiscal

12 year for which the determination is

13 made from an established restricted

14 account and only to the extent that

15 the funds in that account represent

16 designated funds from an outside

17 source or income earned on those

18 funds.

19 ‘‘(iii) In the case of tuition discounts,

20 only those tuition discounts based upon the

21 academic achievement or financial need of

22 students.

23 ‘‘(2) SANCTIONS.—

24 ‘‘(A) FAILURE TO MEET REQUIREMENT

25 FOR 1 YEAR.—In addition to such other means
†

740

S 1932 ES

1 of enforcing the requirements of this title as

2 may be available to the Secretary, if an institu3 tion fails to meet the requirements of sub4 section (a)(24) in any year, the Secretary may

5 impose 1 or both of the following sanctions on

6 the institution:

7 ‘‘(i) Place the institution on provi8 sional certification in accordance with sec9 tion 498(h) until the institution dem10 onstrates, to the satisfaction of the Sec11 retary, that it is in compliance with sub12 section (a)(24).

13 ‘‘(ii) Require such other increased

14 monitoring and reporting requirements as

15 the Secretary determines necessary until

16 the institution demonstrates, to the satis17 faction of the Secretary, that it is in com18 pliance with subsection (a)(24).

19 ‘‘(B) FAILURE TO MEET REQUIREMENT

20 FOR 2YEARS.—An institution that fails to meet

21 the requirements of subsection (a)(24) for 2

22 consecutive years shall be ineligible to partici23 pate in the programs authorized under this

24 title.
†

741

S 1932 ES

1 ‘‘(3) PUBLIC AVAILABILITY OF INFORMATION.—

2 The Secretary shall make publicly available, through

3 the means described in subsection (b) of section 131,

4 any institution that fails to meet the requirements of

5 subsection (a)(24) in any year as an institution that

6 is failing to meet the minimum non-Federal source

7 of revenue requirements of such subsection

8 (a)(24).’’.

9 SEC. 7442. REGULATORY RELIEF AND IMPROVEMENT.

10 Section 487A(b) (20 U.S.C. 1094a(b)) is amended—

11 (1) in paragraph (1)–

12 (A) by striking ‘‘1998’’ and inserting

13 ‘‘2005’’ ; and

14 (B) by striking ‘‘1999’’ and inserting

15 ‘‘2006’’; and

16 (2) by striking the matter preceding paragraph

17 (2)(A) and inserting the following:

18 ‘‘(2) REPORT.—The Secretary shall review and

19 evaluate the experience of institutions participating

20 as experimental sites and shall, on a biennial basis,

21 submit a report based on the review and evaluation

22 to the authorizing committees. Such report shall in23 clude—’’; and

24 (3) in paragraph (3)—

25 (A) in subparagraph (A)—
†

742

S 1932 ES

1 (i) by striking ‘‘Upon the submission

2 of the report required by paragraph (2),

3 the’’ and inserting ‘‘The’’; and

4 (ii) by inserting ‘‘periodically’’ after

5 ‘‘authorized to’’;

6 (B) by striking subparagraph (B);

7 (C) by redesignating subparagraph (C) as

8 subparagraph (B); and

9 (D) in subparagraph (B) (as redesignated

10 by subparagraph (C))—

11 (i) by inserting ‘‘, including require12 ments related to the award process and

13 disbursement of student financial aid (such

14 as innovative delivery systems for modular

15 or compressed courses, or other innovative

16 systems), verification of student financial

17 aid application data, entrance and exit

18 interviews, or other management proce19 dures or processes as determined in the ne20 gotiated rulemaking process under section

21 492,’’ after ‘‘requirements in this title’’;

22 and

23 (ii) by inserting ‘‘(other than an

24 award rule related to an experiment in
†

743

S 1932 ES

1 modular or compressed schedules)’’ after

2 ‘‘award rules’’; and

3 (iii) by inserting ‘‘unless the waiver of

4 such provisions is authorized by another

5 provision under this title’’ before the pe6 riod at the end.

7 SEC. 7443. TRANSFER OF ALLOTMENTS.

8 Section 488 (20 U.S.C. 1095) is amended in the first

9 sentence—

10 (1) in paragraph (1), by striking ‘‘and’’ after

11 the semicolon;

12 (2) in paragraph (2), by striking ‘‘413D.’’ and

13 inserting ‘‘413D; and’’; and

14 (3) by adding at the end ‘‘(3) transfer 25 per15 cent of the institution’s allotment under section

16 413D to the institution’s allotment under section

17 442.’’.

18 SEC. 7444. WAGE GARNISHMENT REQUIREMENT.

19 Section 488A(a)(1) (20 U.S.C. 1095a(a)(1)) is

20 amended by striking ‘‘10 percent’’ and inserting ‘‘15 per21 cent’’.

22 SEC. 7445. PURPOSE OF ADMINISTRATIVE PAYMENTS.

23 Section 489(b) (20 U.S.C. 1096(b)) is amended by

24 striking ‘‘offsetting the administrative costs of’’ and in25 serting ‘‘administering’’.
†

744

S 1932 ES

1 SEC. 7446. ADVISORY COMMITTEE ON STUDENT FINANCIAL

2 ASSISTANCE.

3 Section 491 (20 U.S.C. 1098) is amended—

4 (1) in subsection (a)(2)—

5 (A) in subparagraph (B), by striking

6 ‘‘and’’ after the semicolon;

7 (B) in subparagraph (C), by striking the

8 period and inserting a semicolon; and

9 (C) by adding at the end the following:

10 ‘‘(D) to provide knowledge and under11 standing of early intervention programs, and to

12 make recommendations that will result in early

13 awareness by low- and moderate-income stu14 dents and families—

15 ‘‘(i) of their eligibility for assistance

16 under this title; and

17 ‘‘(ii) to the extent practicable, of their

18 eligibility for other forms of State and in19 stitutional need-based student assistance;

20 and

21 ‘‘(E) to make recommendations that will

22 expand and improve partnerships among the

23 Federal Government, States, institutions of

24 higher education, and private entities to in25 crease the awareness and the total amount of
†

745

S 1932 ES

1 need-based student assistance available to low2 and moderate-income students.’’;

3 (2) in subsection (c), by adding at the end the

4 following:

5 ‘‘(3) The appointment of a member under subpara6 graph (A) or (B) of paragraph (1) shall be effective upon

7 confirmation of the member by the Senate and publication

8 of such appointment in the Congressional Record.’’.

9 (3) in subsection (d)(6), by striking ‘‘, but

10 nothing’’ and all that follows through ‘‘or analyses’’;

11 (4) in subsection (j)—

12 (A) in paragraph (1)—

13 (i) by inserting ‘‘and simplification’’

14 after ‘‘modernization’’ each place the term

15 appears; and

16 (ii) by striking ‘‘including’’ and all

17 that follows through ‘‘Department,’’; and

18 (B) by striking paragraphs (4) and (5) and

19 inserting the following:

20 ‘‘(4) conduct a review and analysis of regula21 tions in accordance with subsection (l); and

22 ‘‘(5) conduct a study in accordance with sub23 section (m).’’;

24 (5) in subsection (k), by striking ‘‘2004’’ and

25 inserting ‘‘2010’’; and
†

746

S 1932 ES

1 (6) by adding at the end the following:

2 ‘‘(l) REVIEW AND ANALYSIS OF REGULATIONS.—

3 ‘‘(1) RECOMMENDATIONS.—The Advisory Com4 mittee shall make recommendations to the Secretary

5 and Congress for consideration of future legislative

6 action regarding redundant or outdated regulations

7 under this title, consistent with the Secretary’s re8 quirements under section 498B.

9 ‘‘(2) REVIEW AND ANALYSIS OF REGULA10 TIONS.—The Advisory Committee shall conduct a re11 view and analysis of the regulations issued under

12 this title that are in effect at the time of the review

13 and that apply to the operations or activities of par14 ticipants in the programs assisted under this title.

15 The review and analysis may include a determina16 tion of whether the regulation is duplicative, is no

17 longer necessary, is inconsistent with other Federal

18 requirements, or is overly burdensome. In con19 ducting the review, the Advisory Committee shall

20 pay specific attention to evaluating ways in which

21 regulations under this title affecting institutions of

22 higher education (other than institutions described

23 in section 102(a)(1)(C)), that have received in each

24 of the 2 most recent award years prior to the date

25 of enactment of the Higher Education Amendments
†

747

S 1932 ES

1 of 2005 less than $200,000 in funds through this

2 title, may be improved, streamlined, or eliminated.

3 ‘‘(3) CONSULTATION.—

4 ‘‘(A) IN GENERAL.—In carrying out the

5 review and analysis under paragraph (2), the

6 Advisory Committee shall consult with the Sec7 retary, relevant representatives of institutions

8 of higher education, and individuals who have

9 expertise and experience with the regulations

10 issued under this title, in accordance with sub11 paragraph (B).

12 ‘‘(B) REVIEW PANELS.—The Advisory

13 Committee shall convene not less than 2 review

14 panels of representatives of the groups involved

15 in student financial assistance programs under

16 this title who have experience and expertise in

17 the regulations issued under this title to review

18 the regulations under this title, and to provide

19 recommendations to the Advisory Committee

20 with respect to the review and analysis under

21 paragraph (2). The panels shall be made up of

22 experts in areas such as the operations of the

23 financial assistance programs, the institutional

24 eligibility requirements for the financial assist25 ance programs, regulations not directly related
†

748

S 1932 ES

1 to the operations or the institutional eligibility

2 requirements of the financial assistance pro3 grams, and regulations for dissemination of in4 formation to students about the financial assist5 ance programs.

6 ‘‘(4) REPORTS TO CONGRESS.—The Advisory

7 Committee shall submit, not later than 2 years after

8 the completion of the negotiated rulemaking process

9 required under section 492 resulting from the

10 amendments to this Act made by the Higher Edu11 cation Amendments of 2005, a report to the author12 izing committees and the Secretary detailing the ex13 pert panels’ findings and recommendations with re14 spect to the review and analysis under paragraph

15 (2).

16 ‘‘(5) ADDITIONAL SUPPORT.—The Secretary

17 and the Inspector General of the Department shall

18 provide such assistance and resources to the Advi19 sory Committee as the Secretary and Inspector Gen20 eral determine are necessary to conduct the review

21 required by this subsection.

22 ‘‘(m) STUDY OF INNOVATIVE PATHWAYS TO BACCA23 LAUREATE DEGREE ATTAINMENT.—

24 ‘‘(1) STUDY REQUIRED.—The Advisory Com25 mittee shall conduct a study of the feasibility of in-
†

749

S 1932 ES

1 creasing baccalaureate degree attainment rates by

2 reducing the costs and financial barriers to attaining

3 a baccalaureate degree through innovative programs.

4 ‘‘(2) SCOPE OF STUDY.—The Advisory Com5 mittee shall examine new and existing programs that

6 promote baccalaureate degree attainment through

7 innovative ways, such as dual or concurrent enroll8 ment programs, changes made to the Federal Pell

9 Grant program, simplification of the needs analysis

10 process, compressed or modular scheduling, articula11 tion agreements, and programs that allow 2-year in12 stitutions of higher education to offer baccalaureate

13 degrees.

14 ‘‘(3) REQUIRED ASPECTS OF THE STUDY.—In

15 performing the study described in this subsection,

16 the Advisory Committee shall examine the following

17 aspects of such innovative programs:

18 ‘‘(A) The impact of such programs on bac19 calaureate attainment rates.

20 ‘‘(B) The degree to which a student’s total

21 cost of attaining a baccalaureate degree can be

22 reduced by such programs.

23 ‘‘(C) The ways in which low- and mod24 erate-income students can be specifically tar25 geted by such programs.
†

750

S 1932 ES

1 ‘‘(D) The ways in which nontraditional

2 students can be specifically targeted by such

3 programs.

4 ‘‘(E) The cost-effectiveness for the Federal

5 Government, States, and institutions of higher

6 education to implement such programs.

7 ‘‘(4) CONSULTATION.—

8 ‘‘(A) IN GENERAL.—In performing the

9 study described in this subsection the Advisory

10 Committee shall consult with a broad range of

11 interested parties in higher education, including

12 parents, students, appropriate representatives

13 of secondary schools and institutions of higher

14 education, appropriate State administrators, ad15 ministrators of dual enrollment programs, and

16 appropriate officials from the Department.

17 ‘‘(B) CONGRESSIONAL CONSULTATION.—

18 The Advisory Committee shall consult on a reg19 ular basis with the authorizing committees in

20 carrying out the study required by this section.

21 ‘‘(5) REPORTS TO CONGRESS.—

22 ‘‘(A) INTERIM REPORT.—The Advisory

23 Committee shall prepare and submit to the au24 thorizing committees and the Secretary 1 in25 terim report, not later than 1 year after the
†

751

S 1932 ES

1 date of enactment of the Higher Education

2 Amendments of 2005, describing the progress

3 that has been made in conducting the study re4 quired by this subsection and any preliminary

5 findings on the topics identified under para6 graph (2).

7 ‘‘(B) FINAL REPORT.—The Advisory Com8 mittee shall, not later than 3 years after the

9 date of enactment of the Higher Education

10 Amendments of 2005, prepare and submit to

11 the authorizing committees and the Secretary a

12 final report on the study, including rec13 ommendations for legislative, regulatory, and

14 administrative changes based on findings re15 lated to the topics identified under paragraph

16 (2).’’.

17 SEC. 7447. REGIONAL MEETINGS.

18 Section 492(a)(1) (20 U.S.C. 1098a(a)(1)) is amend19 ed by inserting ‘‘State student grant agencies,’’ after ‘‘in20 stitutions of higher education,’’.

21 SEC. 7448. YEAR 2000 REQUIREMENTS AT THE DEPART22 MENT.

23 (a) REPEAL.—Section 493A (20 U.S.C. 1098c) is re24 pealed.
†

752

S 1932 ES

1 (b) REDESIGNATION.—Section 493B (20 U.S.C.

2 1098d) is redesignated as section 493A.

3 Subchapter H—Program Integrity

4 SEC. 7451. RECOGNITION OF ACCREDITING AGENCY OR AS5 SOCIATION.

6 Section 496 (200 U.S.C. 1099b) is amended—

7 (1) in subsection (a)—

8 (A) by striking paragraph (4) and insert9 ing the following:

10 ‘‘(4)(A) such agency or association consistently

11 applies and enforces standards that respect the stat12 ed mission of the institution of higher education, in13 cluding religious missions, and that ensure that the

14 courses or programs of instruction, training, or

15 study offered by the institution of higher education,

16 including distance education courses or programs,

17 are of sufficient quality to achieve, for the duration

18 of the accreditation period, the stated objective for

19 which the courses or the programs are offered; and

20 ‘‘(B) if such agency or association has or seeks

21 to include within its scope of recognition the evalua22 tion of the quality of institutions or programs offer23 ing distance education, such agency or association

24 shall, in addition to meeting the other requirements

25 of this subpart, demonstrate to the Secretary that—
†

753

S 1932 ES

1 ‘‘(i) the agency or association’s standards

2 effectively address the quality of an institution’s

3 distance education in the areas identified in sec4 tion 496(a)(5), except that the agency or asso5 ciation shall not be required to have separate

6 standards, procedures or policies for the evalua7 tion of distance education institutions or pro8 grams in order to meet the requirements of this

9 subparagraph; and

10 ‘‘(ii) the agency or association requires an

11 institution that offers distance education to

12 have processes through which the institution es13 tablishes that the student who registers in a

14 distance education course or program is the

15 same student who participates, completes and

16 receives the academic credit;’’;

17 (B) in paragraph (5), by striking subpara18 graph (A) and inserting the following:

19 ‘‘(A) success with respect to student

20 achievement in relation to the institution’s mis21 sion, including—

22 ‘‘(i) consideration of student academic

23 achievement as determined by the institu24 tion;

25 ‘‘(ii) student retention;
†

754

S 1932 ES

1 ‘‘(iii) course and program completion;

2 ‘‘(iv) as appropriate, State licensing

3 examinations;

4 ‘‘(v) as appropriate, job placement

5 rates or enrollment in graduate or profes6 sional programs; and

7 ‘‘(vi) as appropriate, other student

8 performance information selected by the

9 institution, particularly that information

10 used by the institution to evaluate or

11 strengthen its programs;’’;

12 (C) by striking paragraph (6) and insert13 ing the following:

14 ‘‘(6) such an agency or association shall estab15 lish and apply review procedures throughout the ac16 crediting process, including evaluation and with17 drawal proceedings which comply with due process

18 procedures that provide for—

19 ‘‘(A) adequate specification of require20 ments and deficiencies at the institution of

21 higher education or program examined;

22 ‘‘(B) an opportunity for a written response

23 by any such institution to be included, prior to

24 final action, in the evaluation and withdrawal

25 proceedings;
†

755

S 1932 ES

1 ‘‘(C) upon the written request of an insti2 tution, an opportunity for the institution to ap3 peal any adverse action, including denial, with4 drawal, suspension, or termination of accredita5 tion, or placement on probation of an institu6 tion, at a hearing prior to such action becoming

7 final, before an appeals panel that—

8 ‘‘(i) shall not include current members

9 of the agency or association’s underlying

10 decision-making body that made the ad11 verse decision; and

12 ‘‘(ii) is subject to a conflict of interest

13 policy; and

14 ‘‘(D) the right to representation by counsel

15 for such an institution during an appeal of the

16 adverse action;’’; and

17 (D) by striking paragraph (8) and insert18 ing the following:

19 ‘‘(8) such agency or association shall make

20 available to the public and the State licensing or au21 thorizing agency, and submit to the Secretary, a

22 summary of agency or association actions,

23 including—

24 ‘‘(A) the award of accreditation or re25 accreditation of an institution;
†

756

S 1932 ES

1 ‘‘(B) final denial, withdrawal, suspension,

2 or termination of accreditation, or placement on

3 probation of an institution, and any findings

4 made in connection with the action taken, to5 gether with the official comments of the af6 fected institution; and

7 ‘‘(C) any other adverse action taken with

8 respect to an institution.’’; and

9 (2) in subsection (c)—

10 (A) in paragraph (1), by inserting ‘‘, in11 cluding those regarding distance education’’

12 after ‘‘their responsibilities’’;

13 (B) by redesignating paragraphs (2)

14 through (6) as paragraphs (5) through (9);

15 (C) by inserting after paragraph (1) (as

16 amended by subparagraph (A)) the following:

17 ‘‘(2) ensures that the agency or association’s

18 on-site evaluation for accreditation or reaccreditation

19 includes review of the Federally required information

20 the institution or program provides its current and

21 prospective students;

22 ‘‘(3) monitors the growth of programs at insti23 tutions that are experiencing significant enrollment

24 growth;
†

757

S 1932 ES

1 ‘‘(4) requires an institution to submit a teach2 out plan for approval to the accrediting agency upon

3 the occurrence of any of the following events:

4 ‘‘(A) The Department notifies the accred5 iting agency of an action against the institution

6 pursuant to section 487(d).

7 ‘‘(B) The accrediting agency acts to with8 draw, terminate, or suspend the accreditation of

9 an institution.

10 ‘‘(C) The institution notifies the accred11 iting agency that the institution intends to

12 cease operations.’’;

13 (D) in paragraph (8) (as redesignated by

14 subparagraph (B)), by striking ‘‘and’’ after the

15 semicolon;

16 (E) in subparagraph (9) (as redesignated

17 by subparagraph (B)), by striking the period

18 and inserting ‘‘; and’’; and

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

20 ‘‘(10) confirms, as a part of the agency or asso21 ciation’s review for accreditation or reaccreditation,

22 that the institution has transfer of credit policies—

23 ‘‘(A) that are publicly disclosed;

24 ‘‘(B) that do not deny transfer of credit

25 based solely on the accreditation of the sending
†

758

S 1932 ES

1 institution, if the agency or association accred2 iting the sending institution is recognized by

3 the Secretary pursuant to this section; and

4 ‘‘(C) in which acceptance or denial of

5 transfer of credit is decided according to cri6 teria established in guidelines developed by the

7 institution’s admissions committee.’’.

8 SEC. 7452. ADMINISTRATIVE CAPACITY STANDARD.

9 Section 498 (20 U.S.C. 1099c) is amended—

10 (1) in subsection (d)(1)(B), by inserting ‘‘and’’

11 after the semicolon; and

12 (2) by adding at the end the following:

13 ‘‘(k) TREATMENT OF TEACH-OUTS AT ADDITIONAL

14 LOCATIONS.—

15 ‘‘(1) IN GENERAL.—A location of a closed insti16 tution of higher education shall be eligible as an ad17 ditional location of an eligible institution of higher

18 education, as defined pursuant to regulations of the

19 Secretary, for the purposes of a teach-out, if such

20 teach-out has been approved by the institution’s ac21 crediting agency.

22 ‘‘(2) SPECIAL RULE.—An institution of higher

23 education that conducts a teach-out through the es24 tablishment of an additional location described in

25 paragraph (1) shall be permitted to establish a per-
†

759

S 1932 ES

1 manent additional location at a closed institution

2 and shall not be required—

3 ‘‘(A) to meet the requirements of sections

4 102(b)(1)(E) and 102(c)(1)(C) for such addi5 tional location; or

6 ‘‘(B) to assume the liabilities of the closed

7 institution.’’.

8 SEC. 7453. PROGRAM REVIEW AND DATA.

9 Section 498A(b) (20 U.S.C. 1099c–1(b)) is

10 amended—

11 (1) in paragraph (4), by striking ‘‘and’’ after

12 the semicolon;

13 (2) in paragraph (5) by striking the period and

14 inserting a semicolon; and

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

16 ‘‘(6) provide to an institution of higher edu17 cation an adequate opportunity to review and re18 spond to any program review report and relevant

19 materials related to the report before any final pro20 gram review is reached;

21 ‘‘(7) review and take into consideration an in22 stitution of higher education’s response in any final

23 program review; and

24 ‘‘(8) maintain and preserve at all times the con25 fidentiality of any program review report until the
†

760

S 1932 ES

1 requirements of paragraphs (6) and (7) are met, and

2 until a final program review is issued, other than to

3 the extent required to comply with paragraph (5),

4 except that the Secretary shall promptly disclose any

5 and all program review reports to the institution of

6 higher education under review.’’.

7 CHAPTER 6—DEVELOPING INSTITUTIONS

8 SEC. 7501. DEFINITIONS.

9 Section 502(a) (20 U.S.C. 1101a(a)) is amended—

10 (1) in paragraph (5)—

11 (A) in subparagraph (A), by inserting

12 ‘‘and’’ after the semicolon;

13 (B) in subparagraph (B), by striking ‘‘;

14 and’’ and inserting a period; and

15 (C) by striking subparagraph (C); and

16 (2) by striking paragraph (7).

17 SEC. 7502. AUTHORIZED ACTIVITIES.

18 Section 503(b) (20 U.S.C. 1101b(b)) is amended—

19 (1) by redesignating paragraphs (6) through

20 (14) as paragraphs (8) through (16), respectively;

21 (2) in paragraph (5), by inserting ‘‘, including

22 innovative, customized remedial education and

23 English language instruction courses designed to

24 help retain students and move the students rapidly
†

761

S 1932 ES

1 into core courses and through program completion’’

2 before the period at the end; and

3 (3) by inserting after paragraph (5) the fol4 lowing:

5 ‘‘(6) Education or counseling services designed

6 to improve the financial literacy and economic lit7 eracy of students or the students’ parents.

8 ‘‘(7) Articulation agreements and student sup9 port programs designed to facilitate the transfer

10 from 2-year to 4-year institutions.’’.

11 SEC. 7503. DURATION OF GRANT.

12 Section 504(a) (20 U.S.C. 1101c(a)) is amended to

13 read as follows:

14 ‘‘(a) AWARD PERIOD.—The Secretary may award a

15 grant to a Hispanic-serving institution under this title for

16 5 years.’’.

17 SEC. 7504. POSTBACCALAUREATE OPPORTUNITIES FOR

18 HISPANIC AMERICANS.

19 (a) ESTABLISHMENT OF PROGRAM.—Title V (20

20 U.S.C. 1101 et seq.) is amended—

21 (1) by redesignating part B as part C;

22 (2) by redesignating sections 511 through 518

23 as sections 521 through 528, respectively; and

24 (3) by inserting after section 505 the following:
†

762

S 1932 ES

1 ‘‘PART B—PROMOTING POSTBACCALAUREATE

2 OPPORTUNITIES FOR HISPANIC AMERICANS

3 ‘‘SEC. 511. PROGRAM AUTHORITY AND ELIGIBILITY.

4 ‘‘(a) PROGRAM AUTHORIZED.—Subject to the avail5 ability of funds appropriated to carry out this part, the

6 Secretary shall award grants, on a competitive basis, to

7 eligible institutions to enable the eligible institutions to

8 carry out the authorized activities described in section

9 512.

10 ‘‘(b) ELIGIBILITY.—For the purposes of this part, an

11 ‘eligible institution’ means an institution of higher edu12 cation that—

13 ‘‘(1) is a Hispanic-serving institution (as de14 fined in section 502); and

15 ‘‘(2) offers a postbaccalaureate certificate or de16 gree granting program.

17 ‘‘SEC. 512. AUTHORIZED ACTIVITIES.

18 ‘‘Grants awarded under this part shall be used for

19 1 or more of the following activities:

20 ‘‘(1) Purchase, rental, or lease of scientific or

21 laboratory equipment for educational purposes, in22 cluding instructional and research purposes.

23 ‘‘(2) Construction, maintenance, renovation,

24 and improvement in classroom, library, laboratory,

25 and other instructional facilities, including purchase
†

763

S 1932 ES

1 or rental of telecommunications technology equip2 ment or services.

3 ‘‘(3) Purchase of library books, periodicals,

4 technical and other scientific journals, microfilm,

5 microfiche, and other educational materials, includ6 ing telecommunications program materials.

7 ‘‘(4) Support for needy postbaccalaureate stu8 dents, including outreach, academic support services,

9 mentoring, scholarships, fellowships, and other fi10 nancial assistance, to permit the enrollment of such

11 students in postbaccalaureate certificate and degree

12 granting programs.

13 ‘‘(5) Support of faculty exchanges, faculty de14 velopment, faculty research, curriculum development,

15 and academic instruction.

16 ‘‘(6) Creating or improving facilities for Inter17 net or other distance learning academic instruction

18 capabilities, including purchase or rental of tele19 communications technology equipment or services.

20 ‘‘(7) Collaboration with other institutions of

21 higher education to expand postbaccalaureate certifi22 cate and degree offerings.

23 ‘‘(8) Other activities proposed in the application

24 submitted pursuant to section 513 that are approved
†

764

S 1932 ES

1 by the Secretary as part of the review and accept2 ance of such application.

3 ‘‘SEC. 513. APPLICATION AND DURATION.

4 ‘‘(a) APPLICATION.—Any eligible institution may

5 apply for a grant under this part by submitting an applica6 tion to the Secretary at such time and in such manner

7 as the Secretary may require. Such application shall dem8 onstrate how the grant funds will be used to improve

9 postbaccalaureate education opportunities for Hispanic

10 and low-income students and will lead to such students’

11 greater financial independence.

12 ‘‘(b) DURATION.—Grants under this part shall be

13 awarded for a period not to exceed 5 years.

14 ‘‘(c) LIMITATION.—The Secretary may not award

15 more than 1 grant under this part in any fiscal year to

16 any Hispanic-serving institution.’’.

17 SEC. 7505. APPLICATIONS.

18 Section 521(b)(1)(A) (as redesignated by section

19 7504(a)(2)) (20 U.S.C. 1103(b)(1)(A)) is amended by

20 striking ‘‘subsection (b)’’ and inserting ‘‘subsection (c)’’.

21 SEC. 7506. COOPERATIVE ARRANGEMENTS.

22 Section 524(a) (as redesignated by section

23 7504(a)(2)) (20 U.S.C. 1103c(a)) is amended by striking

24 ‘‘section 503’’ and inserting ‘‘sections 503 and 512’’.
†

765

S 1932 ES

1 SEC. 7507. AUTHORIZATION OF APPROPRIATIONS.

2 Section 528(a) (as redesignated by section

3 7504(a)(2)) (20 U.S.C. 1103g(a)) is amended—

4 (1) by inserting ‘‘part A of’’ after ‘‘carry out’’;

5 (2) by striking ‘‘$62,500,000 for fiscal year

6 1999’’ and all that follows through the period and

7 inserting ‘‘such sums as may be necessary for fiscal

8 year 2006 and each of the 5 succeeding fiscal

9 years.’’;

10 (3) by striking ‘‘(a) AUTHORIZATIONS.—There

11 are’’ and inserting the following:

12 ‘‘(a) AUTHORIZATIONS.—

13 ‘‘(1) PART A.—There are’’; and

14 (4) by adding at the end the following:

15 ‘‘(2) PART B.—There are authorized to be ap16 propriated to carry out part B of this title such

17 sums as may be necessary for fiscal year 2006 and

18 each of the 5 succeeding fiscal years.’’.

19 CHAPTER 7—INTERNATIONAL EDUCATION

20 PROGRAMS

21 SEC. 7601. FINDINGS.

22 Section 601 (20 U.S.C. 1121) is amended—

23 (1) in the section heading, by striking ‘‘AND

24 PURPOSES’’ and inserting ‘‘; PURPOSES; CON25 SULTATION; SURVEY’’
†

766

S 1932 ES

1 (2) in subsection (a)(3), by striking ‘‘post-Cold

2 War’’;

3 (3) in subsection (b)(1)(D), by inserting ‘‘, in4 cluding through linkages with overseas institutions’’

5 before the semicolon; and

6 (4) by adding at the end the following:

7 ‘‘(c) CONSULTATION.—The Secretary shall, prior to

8 requesting applications for funding under this title during

9 each grant cycle, consult with and receive recommenda10 tions regarding national need for expertise in foreign lan11 guages and world regions from the head official, or a des12 ignee of such head official, of the National Security Coun13 cil, the Department of Homeland Security, the Depart14 ment of Defense, the Department of State, the Federal

15 Bureau of Investigation, the Department of Labor, and

16 the Department of Commerce, the Director of National

17 Intelligence, and other relevant agencies. These entities

18 shall provide information to the Secretary regarding how

19 the entities utilize expertise and resources provided by

20 grantees under this title. The Secretary shall take into ac21 count such recommendations and information when re22 questing applications for funding under this title, and

23 shall make available to applicants a list of areas identified

24 as areas of national need.
†

767

S 1932 ES

1 ‘‘(d) SURVEY.—The Secretary shall assist grantees in

2 developing a survey to administer to students who have

3 participated in programs under this title to determine

4 postparticipation placement. All grantees, where applica5 ble, shall administer such survey not less often than annu6 ally and report such data to the Secretary.’’.

7 SEC. 7602. GRADUATE AND UNDERGRADUATE LANGUAGE

8 AND AREA CENTERS AND PROGRAMS.

9 Section 602 (20 U.S.C. 1122) is amended—

10 (1) in subsection (a)—

11 (A) in paragraph (2)—

12 (i) in subparagraph (G), by striking

13 ‘‘and’’ after the semicolon;

14 (ii) in subparagraph (H), by striking

15 the period and inserting ‘‘; and’’; and

16 (iii) by adding at the end the fol17 lowing:

18 ‘‘(I) support for instructors of the less

19 commonly taught languages.’’; and

20 (B) in paragraph (4)—

21 (i) by redesignating subparagraphs

22 (C) through (E) as subparagraphs (D)

23 through (F), respectively;

24 (ii) by inserting after subparagraph

25 (B) the following:
†

768

S 1932 ES

1 ‘‘(C) Programs of linkage or outreach be2 tween or among—

3 ‘‘(i) foreign language, area studies, or

4 other international fields; and

5 ‘‘(ii) State educational agencies or

6 local educational agencies.’’; and

7 (iii) in subparagraph (F) (as redesig8 nated by clause (i)), by striking ‘‘and (D)’’

9 and inserting ‘‘(D), and (E)’’;

10 (2) in subsection (b)—

11 (A) in the subsection heading, by striking

12 ‘‘GRADUATE’’; and

13 (B) by striking paragraph (2) and insert14 ing the following:

15 ‘‘(2) ELIGIBLE STUDENTS.—A student receiv16 ing a stipend described in paragraph (1) shall be

17 engaged—

18 ‘‘(A) in an instructional program with stat19 ed performance goals for functional foreign lan20 guage use or in a program developing such per21 formance goals, in combination with area stud22 ies, international studies, or the international

23 aspects of a professional studies program; and
†

769

S 1932 ES

1 ‘‘(B)(i) in the case of an undergraduate

2 student, in the intermediate or advanced study

3 of a less commonly taught language; or

4 ‘‘(ii) in the case of a graduate student, in

5 graduate study in connection with a program

6 described in subparagraph (A), including—

7 ‘‘(I) predissertation level study;

8 ‘‘(II) preparation for dissertation re9 search;

10 ‘‘(III) dissertation research abroad; or

11 ‘‘(IV) dissertation writing.’’;

12 (3) by striking subsection (d) and inserting the

13 following:

14 ‘‘(d) ALLOWANCES.—

15 ‘‘(1) GRADUATE LEVEL RECIPIENTS.—A sti16 pend awarded to a graduate level recipient may in17 clude allowances for dependents and for travel for

18 research and study in the United States and abroad.

19 ‘‘(2) UNDERGRADUATE LEVEL RECIPIENTS.—A

20 stipend awarded to an undergraduate level recipient

21 may include an allowance for educational programs

22 in the United States or educational programs abroad

23 that—

24 ‘‘(A) are closely linked to the overall goals

25 of the recipient’s course of study; and
†

770

S 1932 ES

1 ‘‘(B) have the purpose of promoting for2 eign language fluency and knowledge of foreign

3 cultures.’’; and

4 (4) by adding at the end the following:

5 ‘‘(e) APPLICATION.—Each institution or combination

6 of institutions desiring a grant under this section shall

7 submit an application to the Secretary at such time, in

8 such manner, and accompanied by such information and

9 assurances as the Secretary may require. Each application

10 shall include an explanation of how the activities funded

11 by the grant will reflect diverse perspectives and a wide

12 range of views and generate debate on world regions and

13 international affairs. Each application shall also describe

14 how the applicant will address disputes regarding whether

15 activities funded under the application reflect diverse per16 spectives and a wide range of views. Each application shall

17 also include a description of how the applicant will encour18 age government service in areas of national need as identi19 fied by the Secretary.’’.

20 SEC. 7603. UNDERGRADUATE INTERNATIONAL STUDIES

21 AND FOREIGN LANGUAGE PROGRAMS.

22 Section 604 (20 U.S.C. 1124) is amended—

23 (1) in subsection (a)—

24 (A) in paragraph (2)—
†

771

S 1932 ES

1 (i) by redesignating subparagraphs (I)

2 through (M) as subparagraphs (J) through

3 (N), respectively; and

4 (ii) by inserting after subparagraph

5 (H) the following:

6 ‘‘(I) providing subgrants to undergraduate

7 students for educational programs abroad

8 that—

9 ‘‘(i) are closely linked to the overall

10 goals of the program for which the grant

11 is awarded; and

12 ‘‘(ii) have the purpose of promoting

13 foreign language fluency and knowledge of

14 foreign cultures;’’; and

15 (B) in paragraph (7)—

16 (i) in subparagraph (C), by striking

17 ‘‘and’’ after the semicolon;

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

19 the period at the end and inserting a semi20 colon; and

21 (iii) by adding at the end the fol22 lowing:

23 ‘‘(E) an explanation of how the activities

24 funded by the grant will reflect diverse perspec25 tives and a wide range of views and generate
†

772

S 1932 ES

1 debate on world regions and international af2 fairs, where applicable;

3 ‘‘(F) a description of how the applicant

4 will address disputes regarding whether the ac5 tivities funded under the application reflect di6 verse perspectives and a wide range of views;

7 and

8 ‘‘(G) a description of how the applicant

9 will encourage government service in areas of

10 national need as identified by the Secretary.’’;

11 and

12 (2) in subsection (c)—

13 (A) by striking ‘‘FUNDING SUPPORT.—The

14 Secretary’’ and inserting ‘‘FUNDING RULES.—

15 ‘‘(1) THE SECRETARY.—The Secretary’’;

16 (B) by striking ‘‘10’’ and inserting ‘‘20’’;

17 and

18 (C) by adding at the end the following:

19 ‘‘(2) GRANTEES.—Of the total amount of grant

20 funds awarded to a grantee under this section, the

21 grantee may use not more than 10 percent of such

22 funds for the activity described in subsection

23 (a)(2)(I).’’.

24 SEC. 7604. RESEARCH; STUDIES.

25 Section 605(a) (20 U.S.C. 1125(a)) is amended—
†

773

S 1932 ES

1 (1) in paragraph (8), by striking ‘‘and’’ after

2 the semicolon;

3 (2) in paragraph (9), by striking the period and

4 inserting a semicolon; and

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

6 ‘‘(10) evaluation of the extent to which pro7 grams assisted under this title reflect diverse per8 spectives and a wide range of views and generate de9 bate on world regions and international affairs;

10 ‘‘(11) the systematic collection, analysis, and

11 dissemination of data that contribute to achieving

12 the purposes of this part; and

13 ‘‘(12) support for programs or activities to

14 make data collected, analyzed, or disseminated under

15 this section publicly available and easy to under16 stand.’’.

17 SEC. 7605. TECHNOLOGICAL INNOVATION AND COOPERA18 TION FOR FOREIGN INFORMATION ACCESS.

19 Section 606 (20 U.S.C. 1126) is amended—

20 (1) in subsection (a)—

21 (A) by striking ‘‘new electronic tech22 nologies’’ and insert ‘‘electronic technologies’’;

23 (B) by inserting ‘‘from foreign sources’’

24 after ‘‘disseminate information’’;
†

774

S 1932 ES

1 (C) by striking ‘‘AUTHORITY.—The Sec2 retary’’ and insert ‘‘AUTHORITY.—

3 ‘‘(1) IN GENERAL.—The Secretary’’; and

4 (D) by adding at the end the following:

5 ‘‘(2) PARTNERSHIPS WITH NOT-FOR-PROFIT

6 EDUCATIONAL ORGANIZATIONS.—The Secretary may

7 award grants under this section to carry out the ac8 tivities authorized under this section to the fol9 lowing:

10 ‘‘(A) An institution of higher education.

11 ‘‘(B) A public or nonprofit private library.

12 ‘‘(C) A consortium of an institution of

13 higher education and 1 or more of the fol14 lowing:

15 ‘‘(i) Another institution of higher edu16 cation.

17 ‘‘(ii) A library.

18 ‘‘(iii) A not-for-profit educational or19 ganization.’’;

20 (2) in subsection (b)—

21 (A) in paragraph (1), by striking ‘‘to facili22 tate access to’’ and inserting ‘‘to acquire, facili23 tate access to,’’;

24 (B) in paragraph (2), by inserting ‘‘or

25 standards for’’ after ‘‘means of’’;
†

775

S 1932 ES

1 (C) in paragraph (6), by striking ‘‘and’’

2 after the semicolon;

3 (D) in paragraph (7), by striking the pe4 riod and inserting a semicolon; and

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

6 ‘‘(8) to establish linkages to facilitate carrying

7 out the activities described in this subsection

8 between—

9 ‘‘(A) the institutions of higher education,

10 libraries, and consortia receiving grants under

11 this section; and

12 ‘‘(B) institutions of higher education, not13 for-profit educational organizations, and librar14 ies overseas; and

15 ‘‘(9) to carry out other activities that the Sec16 retary determines are consistent with the purpose of

17 the grants or contracts awarded under this section.’’;

18 and

19 (3) in subsection (c), by striking ‘‘institution or

20 consortium’’ and inserting ‘‘institution of higher

21 education, library, or consortium’’.

22 SEC. 7606. SELECTION OF CERTAIN GRANT RECIPIENTS.

23 Section 607 (20 U.S.C. 1127) is amended—

24 (1) in subsection (a), by striking ‘‘evaluates the

25 applications for comprehensive and undergraduate
†

776

S 1932 ES

1 language and area centers and programs.’’ and in2 serting ‘‘evaluates—

3 ‘‘(1) the applications for comprehensive foreign

4 language and area or international studies centers

5 and programs; and

6 ‘‘(2) the applications for undergraduate foreign

7 language and area or international studies centers

8 and programs.’’; and

9 (2) in subsection (b), by adding at the end the

10 following: ‘‘The Secretary shall also consider an ap11 plicant’s record of sending students into public serv12 ice and an applicant’s stated efforts to increase the

13 number of students that go into public service.’’.

14 SEC. 7607. AMERICAN OVERSEAS RESEARCH CENTERS.

15 Section 609 (20 U.S.C. 1128a) is amended by adding

16 at the end the following:

17 ‘‘(e) APPLICATION.—Each center desiring a grant

18 under this section shall submit an application to the Sec19 retary at such time, in such manner, and accompanied by

20 such information and assurances as the Secretary may re21 quire. Each application shall include how the activities

22 funded by the grant will reflect diverse perspectives and

23 a wide range of views and generate debate on world re24 gions and international affairs, where applicable. Each ap25 plication shall also describe how the applicant will address
†

777

S 1932 ES

1 disputes regarding whether the activities funded under the

2 application reflect diverse perspectives and a wide range

3 of views.’’.

4 SEC. 7608. AUTHORIZATION OF APPROPRIATIONS FOR

5 INTERNATIONAL AND FOREIGN LANGUAGE

6 STUDIES.

7 Section 610 (20 U.S.C. 1128b) is amended by strik8 ing ‘‘$80,000,000 for fiscal year 1999’’ and all that fol9 lows through the period and inserting ‘‘such sums as may

10 be necessary for fiscal year 2006 and each of the 5 suc11 ceeding fiscal years.’’.

12 SEC. 7609. CENTERS FOR INTERNATIONAL BUSINESS EDU13 CATION.

14 Section 612(f) (20 U.S.C. 1130–1(f)) is amended—

15 (1) in paragraph (3), by striking ‘‘and’’ after

16 the semicolon;

17 (2) in paragraph (4), by striking the period at

18 the end and inserting ‘‘; and’’; and

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

20 ‘‘(5) assurances that activities funded by the

21 grant will reflect diverse perspectives and a wide

22 range of views and generate debate on world regions

23 and international affairs, where applicable.’’.
†

778

S 1932 ES

1 SEC. 7610. EDUCATION AND TRAINING PROGRAMS.

2 Section 613(c) (20 U.S.C. 1130a(c)) is amended by

3 adding at the end the following: ‘‘Each such application

4 shall include an assurance that, where applicable, the ac5 tivities funded by the grant will reflect diverse perspectives

6 and a wide range of views on world regions and inter7 national affairs.’’.

8 SEC. 7611. AUTHORIZATION OF APPROPRIATIONS FOR

9 BUSINESS AND INTERNATIONAL EDUCATION

10 PROGRAMS.

11 Section 614 (20 U.S.C. 1130b) is amended—

12 (1) in subsection (a), by striking ‘‘$11,000,000

13 for fiscal year 1999’’ and all that follows through

14 ‘‘fiscal years’’ and inserting ‘‘such sums as may be

15 necessary for fiscal year 2006 and each of the 5 suc16 ceeding fiscal years’’; and

17 (2) in subsection (b), by striking ‘‘$7,000,000

18 for fiscal year 1999’’ and all that follows through

19 ‘‘fiscal years,’’ and inserting ‘‘such sums as may be

20 necessary for fiscal year 2006 and each of the 5 suc21 ceeding fiscal years’’.

22 SEC. 7612. MINORITY FOREIGN SERVICE PROFESSIONAL

23 DEVELOPMENT PROGRAM.

24 Section 621 (20 U.S.C. 1131) is amended—

25 (1) in subsection (c), by adding at the end the

26 following: ‘‘Each application shall include a descrip-
†

779

S 1932 ES

1 tion of how the activities funded by the grant will re2 flect diverse perspectives and a wide range of views

3 on world regions and international affairs, where ap4 plicable.’’; and

5 (2) in subsection (e)—

6 (A) by striking ‘‘MATCH REQUIRED.—The

7 eligible’’ and inserting ‘‘MATCHING FUNDS.—

8 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

9 the eligible’’; and

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

11 ‘‘(2) WAIVER.—The Secretary may waive the

12 requirement of paragraph (1) for an eligible recipi13 ent if the Secretary determines such waiver is appro14 priate.’’.

15 SEC. 7613. INSTITUTIONAL DEVELOPMENT.

16 Section 622 (20 U.S.C. 1131–1) is amended—

17 (1) in subsection (a)—

18 (A) by striking ‘‘Tribally Controlled Col19 leges or Universities’’ and inserting ‘‘tribally

20 controlled colleges or universities’’; and

21 (B) by striking ‘‘international affairs pro22 grams.’’ and inserting ‘‘international affairs,

23 international business, and foreign language

24 study programs, including the teaching of for25 eign languages, at such colleges, universities,
†

780

S 1932 ES

1 and institutions, respectively, through increased

2 collaboration with institutions of higher edu3 cation that receive funding under this title.’’;

4 and

5 (2) in subsection (c)—

6 (A) by striking paragraphs (1) and (3);

7 and

8 (B) by redesignating paragraphs (2) and

9 (4) as paragraphs (1) and (2), respectively.

10 SEC. 7614. STUDY ABROAD PROGRAM.

11 Section 623(a) (20 U.S.C. 1131a(a)) is amended—

12 (1) by striking ‘‘as defined in section 322 of

13 this Act’’; and

14 (2) by striking ‘‘tribally controlled Indian com15 munity colleges as defined in the Tribally Controlled

16 Community College Assistance Act of 1978’’ and in17 serting ‘‘tribally controlled colleges or universities’’.

18 SEC. 7615. ADVANCED DEGREE IN INTERNATIONAL RELA19 TIONS.

20 Section 624 (20 U.S.C. 1131b) is amended—

21 (1) in the section heading, by striking ‘‘MAS22 TERS’’ and inserting ‘‘ADVANCED’’;

23 (2) in the first sentence, by inserting ‘‘, and in

24 exceptional circumstances, a doctoral degree,’’ after

25 ‘‘masters degree’’;
†

781

S 1932 ES

1 (3) in the second sentence, by striking ‘‘masters

2 degree’’ and inserting ‘‘advanced degree’’; and

3 (4) in the fourth sentence, by striking ‘‘United

4 States’’ and inserting ‘‘United States.’’.

5 SEC. 7616. INTERNSHIPS.

6 Section 625 (20 U.S.C. 1131c) is amended—

7 (1) in subsection (a)—

8 (A) by striking ‘‘as defined in section 322

9 of this Act’’;

10 (B) by striking ‘‘tribally controlled Indian

11 community colleges as defined in the Tribally

12 Controlled Community College Assistance Act

13 of 1978’’ and inserting ‘‘tribally controlled col14 leges or universities’’;

15 (C) by striking ‘‘an international’’ and in16 serting ‘‘international,’’; and

17 (D) by striking ‘‘the United States Infor18 mation Agency’’ and inserting ‘‘the Department

19 of State’’; and

20 (2) in subsection (c)(1)—

21 (A) in subparagraph (E), by inserting

22 ‘‘and’’ after the semicolon;

23 (B) in subparagraph (F), by striking ‘‘;

24 and’’ and inserting a period; and

25 (C) by striking subparagraph (G).
†

782

S 1932 ES

1 SEC. 7617. FINANCIAL ASSISTANCE.

2 Part C of title VI (20 U.S.C. 1131 et seq.) is further

3 amended—

4 (1) by redesignating sections 626, 627, and 628

5 as sections 627, 628, and 629, respectively; and

6 (2) by inserting after section 625 the following:

7 ‘‘SEC. 626. FINANCIAL ASSISTANCE.

8 ‘‘(a) AUTHORITY.—The Institute may provide finan9 cial assistance, in the form of summer stipends described

10 in subsection (b) and Ralph Bunche scholarship assistance

11 described in subsection (c), to needy students to facilitate

12 the participation of the students in the Institute’s pro13 grams under this part.

14 ‘‘(b) SUMMER STIPENDS.—

15 ‘‘(1) REQUIREMENTS.—A student receiving a

16 summer stipend under this section shall use such sti17 pend to defray the student’s cost of participation in

18 a summer institute program funded under this part,

19 including the costs of travel, living, and educational

20 expenses necessary for the student’s participation in

21 such program.

22 ‘‘(2) AMOUNT.—A summer stipend awarded to

23 a student under this section shall not exceed $3,000

24 per summer.

25 ‘‘(c) RALPH BUNCHE SCHOLARSHIP.—
†

783

S 1932 ES

1 ‘‘(1) REQUIREMENTS.—A student receiving a

2 Ralph Bunche scholarship under this section—

3 ‘‘(A) shall be a full-time student at an in4 stitution of higher education who is accepted

5 into a program funded under this part; and

6 ‘‘(B) shall use such scholarship to pay

7 costs related to the cost of attendance, as de8 fined in section 472, at the institution of higher

9 education in which the student is enrolled.

10 ‘‘(2) AMOUNT AND DURATION.—A Ralph

11 Bunche scholarship awarded to a student under this

12 section shall not exceed $5,000 per academic year.’’.

13 SEC. 7618. REPORT.

14 Section 627 (as redesignated by section 7617(1)) (20

15 U.S.C. 1131d) is amended by striking ‘‘annually’’ and in16 serting ‘‘biennially’’.

17 SEC. 7619. GIFTS AND DONATIONS.

18 Section 628 (as redesignated by section 7617(1)) (20

19 U.S.C. 1131e) is amended by striking ‘‘annual report de20 scribed in section 626’’ and inserting ‘‘biennial report de21 scribed in section 627’’.
†

784

S 1932 ES

1 SEC. 7620. AUTHORIZATION OF APPROPRIATIONS FOR THE

2 INSTITUTE FOR INTERNATIONAL PUBLIC

3 POLICY.

4 Section 629 (as redesignated by section 7617(1)) (20

5 U.S.C. 1131f) is amended by striking ‘‘$10,000,000 for

6 fiscal year 1999’’ and all that follows through the period

7 and inserting ‘‘such sums as may be necessary for fiscal

8 year 2006 and each of the 5 succeeding fiscal years.’’.

9 SEC. 7621. DEFINITIONS.

10 Section 631 (20 U.S.C. 1132) is amended—

11 (1) by redesignating paragraphs (2), (3), (4),

12 (5), (6), (7), (8), and (9), as paragraphs (8), (5),

13 (9), (2), (11), (3), (7), and (4), respectively;

14 (2) in paragraph (2), as redesignated by para15 graph (1), by striking ‘‘comprehensive language and

16 area center’’ and inserting ‘‘comprehensive foreign

17 language and area or international studies center’’;

18 (3) in paragraph (11), as redesignated by para19 graph (1), by striking ‘‘undergraduate language and

20 area center’’ and inserting ‘‘undergraduate foreign

21 language and area or international studies center’’;

22 (4) in paragraph (3), as redesignated by para23 graph (1), by striking the first occurrence of the

24 term ‘‘critical languages’’ and inserting ‘‘critical for25 eign languages’’;
†

785

S 1932 ES

1 (5) in paragraph (7), as redesignated by para2 graph (1), by striking ‘‘and’’ after the semicolon;

3 (6) in paragraph (4), as redesignated by para4 graph (1), by striking the period at the end and in5 serting a semicolon;

6 (7) by inserting after paragraph (5), as redesig7 nated by paragraph (1), the following:

8 ‘‘(6) the term ‘historically Black college and

9 university’ has the meaning given the term ‘part B

10 institution’ in section 322;’’; and

11 (8) by inserting after paragraph (9), as redesig12 nated by paragraph (1), the following:

13 ‘‘(10) the term ‘tribally controlled college or

14 university’ has the meaning given the term in sec15 tion 2 of the Tribally Controlled College or Univer16 sity Assistance Act of 1978 (25 U.S.C. 1801); and’’.

17 SEC. 7622. ASSESSMENT AND ENFORCEMENT.

18 Part D of title VI (20 U.S.C. 1132) is amended by

19 adding at the end the following:

20 ‘‘SEC. 632. ASSESSMENT; ENFORCEMENT; RULE OF CON21 STRUCTION.

22 ‘‘(a) IN GENERAL.—The Secretary is authorized to

23 assess and ensure compliance with all the conditions and

24 terms of grants provided under this title. If a complaint

25 regarding activities funded under this title is not resolved
†

786

S 1932 ES

1 under the process outlined in the relevant grantee’s appli2 cation, and such complaint is filed with the Department,

3 the Secretary shall be notified, and is authorized, when

4 circumstances warrant, to immediately suspend future

5 funding for the grant pending resolution of such dispute.

6 Such resolution shall not exceed 60 days. The Secretary

7 shall take the outcomes of such complaints into account

8 when determining the renewal of grants.

9 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in this title

10 shall be construed to authorize the Secretary to mandate,

11 direct, or control an institution of higher education’s spe12 cific instructional content, curriculum, or program of in13 struction.

14 ‘‘SEC. 633. EVALUATION, OUTREACH, AND INFORMATION.

15 ‘‘The Secretary may use not more than 1 percent of

16 the funds made available under this title to carry out pro17 gram evaluation, national outreach, and information dis18 semination activities relating to the programs authorized

19 under this title.’’.

20 CHAPTER 8—GRADUATE AND POSTSEC21 ONDARY IMPROVEMENT PROGRAMS

22 SEC. 7701. PURPOSE.

23 Section 700(1)(B)(i) (20 U.S.C. 1133(1)(B)(i)) is

24 amended by inserting ‘‘, including those areas critical to

25 United States national and homeland security needs such
†

787

S 1932 ES

1 as mathematics, science, and engineering’’ before the

2 semicolon at the end.

3 SEC. 7702. ALLOCATION OF JACOB K. JAVITS FELLOW4 SHIPS.

5 Section 702(a)(1) (20 U.S.C. 1134a(a)(1)) is amend6 ed to read as follows:

7 ‘‘(1) APPOINTMENT.—

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

9 appoint a Jacob K. Javits Fellows Program

10 Fellowship Board (referred to in this subpart as

11 the ‘Board’) consisting of 9 individuals rep12 resentative of both public and private institu13 tions of higher education who are especially

14 qualified to serve on the Board.

15 ‘‘(B) QUALIFICATIONS.—In making ap16 pointments under subparagraph (A), the Sec17 retary shall—

18 ‘‘(i) give due consideration to the ap19 pointment of individuals who are highly re20 spected in the academic community;

21 ‘‘(ii) assure that individuals appointed

22 to the Board are broadly representative of

23 a range of disciplines in graduate edu24 cation in arts, humanities, and social

25 sciences;
†

788

S 1932 ES

1 ‘‘(iii) appoint members to represent

2 the various geographic regions of the

3 United States; and

4 ‘‘(iv) include representatives from mi5 nority institutions, as defined in section

6 365.’’.

7 SEC. 7703. STIPENDS.

8 Section 703(a) (20 U.S.C. 1134b(a)) is amended by

9 striking ‘‘graduate fellowships’’ and inserting ‘‘Graduate

10 Research Fellowship Program’’.

11 SEC. 7704. AUTHORIZATION OF APPROPRIATIONS FOR THE

12 JACOB K. JAVITS FELLOWSHIP PROGRAM.

13 Section 705 (20 U.S.C. 1134d) is amended by strik14 ing ‘‘$30,000,000 for fiscal year 1999’’ and all that fol15 lows through the period and inserting ‘‘such sums as may

16 be necessary for fiscal year 2006 and each of the 5 suc17 ceeding fiscal years to carry out this subpart.’’.

18 SEC. 7705. INSTITUTIONAL ELIGIBILITY UNDER THE GRAD19 UATE ASSISTANCE IN AREAS OF NATIONAL

20 NEED PROGRAM.

21 Section 712(b) (20 U.S.C. 1135a(b)) is amended to

22 read as follows:

23 ‘‘(b) DESIGNATION OF AREAS OF NATIONAL

24 NEED.—After consultation with appropriate Federal and

25 nonprofit agencies and organizations, including the Na-
†

789

S 1932 ES

1 tional Science Foundation, the Department of Defense,

2 the Department of Homeland Security, the National Acad3 emy of Sciences, and the Bureau of Labor Statistics, the

4 Secretary shall designate areas of national need. In mak5 ing such designations, the Secretary shall take into

6 consideration—

7 ‘‘(1) the extent to which the interest in the area

8 is compelling;

9 ‘‘(2) the extent to which other Federal pro10 grams support postbaccalaureate study in the area

11 concerned;

12 ‘‘(3) an assessment of how the program may

13 achieve the most significant impact with available re14 sources; and

15 ‘‘(4) an assessment of current and future pro16 fessional workforce needs of the United States.’’.

17 SEC. 7706. AWARDS TO GRADUATE STUDENTS.

18 Section 714 (20 U.S.C. 1135c) is amended—

19 (1) in subsection (b)—

20 (A) by striking ‘‘1999–2000’’ and inserting

21 ‘‘2006–2007’’; and

22 (B) by striking ‘‘graduate fellowships’’ and

23 inserting ‘‘Graduate Research Fellowship Pro24 gram’’; and

25 (2) in subsection (c)—
†

790

S 1932 ES

1 (A) by striking ‘‘716(a)’’ and inserting

2 ‘‘715(a)’’; and

3 (B) by striking ‘‘714(b)(2)’’ and inserting

4 ‘‘713(b)(2)’’.

5 SEC. 7707. ADDITIONAL ASSISTANCE FOR COST OF EDU6 CATION.

7 Section 715(a)(1) (20 U.S.C. 1135d(a)(1)) is

8 amended—

9 (1) by striking ‘‘1999–2000’’ and inserting

10 ‘‘2006–2007’’; and

11 (2) by striking ‘‘1998–1999’’ and inserting

12 ‘‘2005–2006’’.

13 SEC. 7708. AUTHORIZATION OF APPROPRIATIONS FOR THE

14 GRADUATE ASSISTANCE IN AREAS OF NA15 TIONAL NEED PROGRAM.

16 Section 716 (20 U.S.C. 1135e) is amended by strik17 ing ‘‘$35,000,000 for fiscal year 1999’’ and all that fol18 lows through the period and inserting ‘‘such sums as may

19 be necessary for fiscal year 2006 and each of the 5 suc20 ceeding fiscal years to carry out this subpart.’’.

21 SEC. 7709. AUTHORIZATION OF APPROPRIATIONS FOR THE

22 THURGOOD MARSHALL LEGAL EDUCATIONAL

23 OPPORTUNITY PROGRAM.

24 Section 721(h) (20 U.S.C. 1136(h)) is amended by

25 striking ‘‘$5,000,000 for fiscal year 1999’’ and all that
†

791

S 1932 ES

1 follows through the period and inserting ‘‘such sums as

2 may be necessary for fiscal year 2006 and each of the 5

3 succeeding fiscal years.’’.

4 SEC. 7710. FUND FOR THE IMPROVEMENT OF POSTSEC5 ONDARY EDUCATION.

6 Section 741(a) (20 U.S.C. 1138(a)) is amended—

7 (1) by striking paragraph (3) and inserting the

8 following:

9 ‘‘(3) the establishment and continuation of in10 stitutions, programs, consortia, collaborations, and

11 other joint efforts based on the technology of com12 munications, including those efforts that utilize dis13 tance education and technological advancements to

14 educate and train postsecondary students (including

15 health professionals serving medically underserved

16 populations);’’;

17 (2) in paragraph (7), by striking ‘‘and’’ after

18 the semicolon;

19 (3) in paragraph (8), by striking the period at

20 the end and inserting a semicolon; and

21 (4) by adding at the end the following:

22 ‘‘(9) the introduction of reforms in remedial

23 education, including English language instruction, to

24 customize remedial courses to student goals and help
†

792

S 1932 ES

1 students progress rapidly from remedial courses into

2 core courses and through program completion;

3 ‘‘(10) the creation of consortia that join diverse

4 institutions of higher education for the purpose of

5 integrating curricular and co-curricular interdiscipli6 nary study; and

7 ‘‘(11) providing support and assistance to pro8 grams implementing integrated education reform

9 services in order to improve secondary school grad10 uation and college attendance and completion rates

11 for disadvantaged students.’’.

12 SEC. 7711. SPECIAL PROJECTS.

13 Section 744(c) (20 U.S.C. 1138c) is amended to read

14 as follows:

15 ‘‘(c) AREAS OF NATIONAL NEED.—Areas of national

16 need shall include, at a minimum, the following:

17 ‘‘(1) Institutional restructuring to improve

18 learning and promote productivity, efficiency, quality

19 improvement, and cost and price control.

20 ‘‘(2) Improvements in academic instruction and

21 student learning, including efforts designed to assess

22 the learning gains made by postsecondary students.

23 ‘‘(3) Articulation between 2- and 4-year institu24 tions of higher education, including developing inno25 vative methods for ensuring the successful transfer
†

793

S 1932 ES

1 of students from 2- to 4-year institutions of higher

2 education.

3 ‘‘(4) Development, evaluation and dissemination

4 of model programs, including model core curricula

5 that—

6 ‘‘(A) provide students with a broad and in7 tegrated knowledge base;

8 ‘‘(B) include, at a minimum, broad survey

9 courses in English literature, American and

10 world history, American political institutions,

11 economics, philosophy, college-level mathe12 matics, and the natural sciences; and

13 ‘‘(C) include sufficient study of a foreign

14 language to lead to reading and writing com15 petency in the foreign language.

16 ‘‘(5) International cooperation and student ex17 changes among postsecondary educational institu18 tions.’’.

19 SEC. 7712. AUTHORIZATION OF APPROPRIATIONS FOR THE

20 FUND FOR THE IMPROVEMENT OF POSTSEC21 ONDARY EDUCATION.

22 Section 745 (20 U.S.C. 1138d) is amended by strik23 ing ‘‘$30,000,000 for fiscal year 1999’’ and all that fol24 lows through the period and inserting ‘‘such sums as may
†

794

S 1932 ES

1 be necessary for fiscal year 2006 and each of the 5 suc2 ceeding fiscal years.’’.

3 SEC. 7713. REPEAL OF THE URBAN COMMUNITY SERVICE

4 PROGRAM.

5 Part C of title VII (20 U.S.C. 1139 et seq.) is re6 pealed.

7 SEC. 7714. GRANTS AUTHORIZED FOR DEMONSTRATION

8 PROJECTS TO ENSURE STUDENTS WITH DIS9 ABILITIES RECEIVE A QUALITY HIGHER EDU10 CATION.

11 Section 762 (20 U.S.C. 1140a) is amended—

12 (1) in subsection (b)—

13 (A) in paragraph (2)—

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

15 ‘‘to teach students with disabilities’’ and

16 inserting ‘‘to teach and meet the academic

17 and programmatic needs of students with

18 disabilities in order to improve retention

19 and completion of postsecondary edu20 cation’’;

21 (ii) by redesignating subparagraphs

22 (B) and (C) as subparagraphs (C) and

23 (F), respectively;

24 (iii) by inserting after subparagraph

25 (A) the following:
†

795

S 1932 ES

1 ‘‘(B) EFFECTIVE TRANSITION PRAC2 TICES.—The development of innovative and ef3 fective teaching methods and strategies to en4 sure the successful transition of students with

5 disabilities from secondary school to postsec6 ondary education.’’;

7 (iv) in subparagraph (C), as redesig8 nated by clause (ii), by striking the period

9 at the end and inserting ‘‘, including data

10 on the postsecondary education of and im11 pact on subsequent employment of stu12 dents with disabilities. Such research, in13 formation, and data shall be made publicly

14 available and accessible.’’;

15 (v) by inserting after subparagraph

16 (C), as redesignated by clause (ii), the fol17 lowing:

18 ‘‘(D) DISTANCE LEARNING.—The develop19 ment of innovative and effective teaching meth20 ods and strategies to provide faculty and ad21 ministrators with the ability to provide acces22 sible distance education programs or classes

23 that would enhance access of students with dis24 abilities to higher education, including the use
†

796

S 1932 ES

1 of accessible curriculum and electronic commu2 nication for instruction and advisement.

3 ‘‘(E) DISABILITY CAREER PATHWAYS.—

4 Training and providing support to secondary

5 and postsecondary staff to encourage interest

6 in, enhance awareness and understanding of,

7 provide educational opportunities in, teach prac8 tical skills related to, and offer work-based op9 portunities in, disability related fields, among

10 students, including students with disabilities.

11 Such training and support may include devel12 oping means to offer students credit-bearing,

13 college-level coursework, and career and edu14 cational counseling.’’; and

15 (vi) by adding at the end the fol16 lowing:

17 ‘‘(G) ACCESSIBILITY OF EDUCATION.—

18 Making postsecondary education more acces19 sible to students with disabilities through cur20 riculum development.’’; and

21 (B) in paragraph (3), by striking ‘‘sub22 paragraphs (A) through (C)’’ and inserting

23 ‘‘subparagraphs (A) through (G)’’; and

24 (2) by adding at the end the following:
†

797

S 1932 ES

1 ‘‘(d) REPORT.—The Secretary shall prepare and dis2 seminate a report reviewing the activities of the dem3 onstration projects authorized under this part and pro4 viding guidance and recommendations on how successful

5 projects can be replicated.’’.

6 SEC. 7715. APPLICATIONS FOR DEMONSTRATION PROJECTS

7 TO ENSURE STUDENTS WITH DISABILITIES

8 RECEIVE A QUALITY HIGHER EDUCATION.

9 Section 763 (20 U.S.C. 1140b) is amended—

10 (1) by striking paragraph (1) and inserting the

11 following:

12 ‘‘(1) a description of how such institution plans

13 to address the activities allowed under this part;’’;

14 (2) in paragraph (2), by striking ‘‘and’’ after

15 the semicolon;

16 (3) in paragraph (3), by striking the period at

17 the end and inserting ‘‘; and’’; and

18 (4) by adding at the end the following:

19 ‘‘(4) a description of the extent to which the in20 stitution will work to replicate the research based

21 and best practices of institutions of higher education

22 with demonstrated success in serving students with

23 disabilities.’’.
†

798

S 1932 ES

1 SEC. 7716. AUTHORIZATION OF APPROPRIATIONS FOR THE

2 DEMONSTRATION PROJECTS TO ENSURE

3 STUDENTS WITH DISABILITIES RECEIVE A

4 QUALITY HIGHER EDUCATION.

5 Section 765 (20 U.S.C. 1140d) is amended by strik6 ing ‘‘$10,000,000 for fiscal year 1999’’ and all that fol7 lows through the period and inserting ‘‘such sums as may

8 be necessary for fiscal year 2006 and each of the 5 suc9 ceeding fiscal years.’’.

10 CHAPTER 9—MISCELLANEOUS

11 SEC. 7801. MISCELLANEOUS.

12 The Act (20 U.S.C. 1001 et seq.) is amended by add13 ing at the end the following:

14 ‘‘TITLE VIII—MISCELLANEOUS

15 ‘‘PART A—MATHEMATICS AND SCIENCE

16 SCHOLARS PROGRAM

17 ‘‘SEC. 811. MATHEMATICS AND SCIENCE SCHOLARS PRO18 GRAM.

19 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary is au20 thorized to award grants to States, on a competitive basis,

21 to enable the States to award eligible students, who com22 plete a rigorous secondary school curriculum in mathe23 matics and science, scholarships for undergraduate study.

24 ‘‘(b) ELIGIBLE STUDENTS.—A student is eligible for

25 a scholarship under this section if the student is a full26 time undergraduate student in the student’s first and sec-
†

799

S 1932 ES

1 ond year of study who has completed a rigorous secondary

2 school curriculum in mathematics and science.

3 ‘‘(c) RIGOROUS CURRICULUM.—Each participating

4 State shall determine the requirements for a rigorous sec5 ondary school curriculum in mathematics and science de6 scribed in subsection (b).

7 ‘‘(d) PRIORITY FOR SCHOLARSHIPS.—The Governor

8 of a State may set a priority for awarding scholarships

9 under this section for particular eligible students, such as

10 students attending schools in high-need areas, students

11 who are from groups underrepresented in the fields of

12 mathematics, science, and engineering, students served by

13 local educational agencies that do not meet or exceed State

14 standards in mathematics and science, or students with

15 regional or geographic needs as determined appropriate by

16 the Governor.

17 ‘‘(e) AMOUNT AND DURATION OF SCHOLARSHIP.—

18 The Secretary shall award a grant under this section—

19 ‘‘(1) in an amount that does not exceed $1,000;

20 and

21 ‘‘(2) for not more than 2 years of under22 graduate study.

23 ‘‘(f) MATCHING REQUIREMENT.—In order to receive

24 a grant under this section, a State shall provide matching

25 funds for the scholarships awarded under this section in
†

800

S 1932 ES

1 an amount equal to 50 percent of the Federal funds re2 ceived.

3 ‘‘(g) AUTHORIZATION.—There are authorized to be

4 appropriated to carry out this section such sums as may

5 be necessary for fiscal year 2006 and each of the 5 suc6 ceeding fiscal years.

7 ‘‘PART B—POSTSECONDARY EDUCATION

8 ASSESSMENT

9 ‘‘SEC. 821. POSTSECONDARY EDUCATION ASSESSMENT.

10 ‘‘(a) CONTRACT FOR ASSESSMENT.—The Secretary

11 shall enter into a contract, with an independent, bipartisan

12 organization with specific expertise in public administra13 tion and financial management, to carry out an inde14 pendent assessment of the cost factors associated with the

15 cost of tuition at institutions of higher education.

16 ‘‘(b) TIMEFRAME.—The Secretary shall enter into

17 the contract described in subsection (a) not later than 90

18 days after the date of enactment of the Higher Education

19 Amendments of 2005.

20 ‘‘(c) MATTERS ASSESSED.—The assessment de21 scribed in subsection (a) shall—

22 ‘‘(1) examine the key elements driving the cost

23 factors associated with the cost of tuition at institu24 tions of higher education during academic year 2000

25 and succeeding academic years;
†

801

S 1932 ES

1 ‘‘(2) identify and evaluate measures being used

2 to control postsecondary education costs;

3 ‘‘(3) identify and evaluate effective measures

4 that may be utilized to control postsecondary edu5 cation costs in the future; and

6 ‘‘(4) identify systemic approaches to monitor

7 future postsecondary education cost trends and post8 secondary education cost control mechanisms.

9 ‘‘PART C—JOB SKILL TRAINING IN HIGH-GROWTH

10 OCCUPATIONS OR INDUSTRIES

11 ‘‘SEC. 831. JOB SKILL TRAINING IN HIGH-GROWTH OCCUPA12 TIONS OR INDUSTRIES.

13 ‘‘(a) GRANTS AUTHORIZED.—The Secretary is au14 thorized to award grants, on a competitive basis, to eligible

15 partnerships to enable the eligible partnerships to provide

16 relevant job skill training in high-growth industries or oc17 cupations.

18 ‘‘(b) DEFINITIONS.—In this section:

19 ‘‘(1) ELIGIBLE PARTNERSHIP.—The term ‘eligi20 ble partnership’ means a partnership—

21 ‘‘(A) between an institution of higher edu22 cation and a local board (as such term is de23 fined in section 101 of the Workforce Invest24 ment Act of 1998); or
†

802

S 1932 ES

1 ‘‘(B) if an institution of higher education

2 is located within a State that does not operate

3 local boards, between the institution of higher

4 education and a State board (as such term is

5 defined in section 101 of the Workforce Invest6 ment Act of 1998).

7 ‘‘(2) NONTRADITIONAL STUDENT.—The term

8 ‘nontraditional student’ means a student who—

9 ‘‘(A) is independent, as defined in section

10 480(d);

11 ‘‘(B) attends an institution of higher

12 education—

13 ‘‘(i) on less than a full-time basis;

14 ‘‘(ii) via evening, weekend, modular,

15 or compressed courses; or

16 ‘‘(iii) via distance learning methods;

17 or

18 ‘‘(C) has delayed enrollment at an institu19 tion of higher education.

20 ‘‘(3) INSTITUTION OF HIGHER EDUCATION.—

21 The term ‘institution of higher education’ means an

22 institution of higher education, as defined in section

23 101(b), that offers a 1- or 2-year program of study

24 leading to a degree or certificate.

25 ‘‘(c) APPLICATION.—
†

803

S 1932 ES

1 ‘‘(1) IN GENERAL.—Each eligible partnership

2 that desires a grant under this section shall submit

3 an application to the Secretary at such time, in such

4 manner, and accompanied by such additional infor5 mation as the Secretary may require.

6 ‘‘(2) CONTENTS.—Each application submitted

7 under paragraph (1) shall include a description of—

8 ‘‘(A) how the eligible partnership, through

9 the institution of higher education, will provide

10 relevant job skill training for students to enter

11 high-growth occupations or industries;

12 ‘‘(B) local high-growth occupations or in13 dustries; and

14 ‘‘(C) the need for qualified workers to meet

15 the local demand of high-growth occupations or

16 industries.

17 ‘‘(d) AWARD BASIS.—In awarding grants under this

18 section, the Secretary shall—

19 ‘‘(1) ensure an equitable distribution of grant

20 funds under this section among urban and rural

21 areas of the United States; and

22 ‘‘(2) take into consideration the capability of

23 the institution of higher education—
†

804

S 1932 ES

1 ‘‘(A) to offer relevant, high quality instruc2 tion and job skill training for students entering

3 a high-growth occupation or industry;

4 ‘‘(B) to involve the local business commu5 nity and to place graduates in the community

6 in employment in high-growth occupations or

7 industries;

8 ‘‘(C) to provide secondary students with

9 dual-enrollment or concurrent enrollment op10 tions;

11 ‘‘(D) to serve nontraditional or low-income

12 students, or adult or displaced workers; and

13 ‘‘(E) to serve students from rural or re14 mote communities.

15 ‘‘(e) USE OF FUNDS.—Grant funds provided under

16 this section may be used—

17 ‘‘(1) to expand or create academic programs or

18 programs of training that provide relevant job skill

19 training for high-growth occupations or industries;

20 ‘‘(2) to purchase equipment which will facilitate

21 the development of academic programs or programs

22 of training that provide training for high-growth oc23 cupations or industries;

24 ‘‘(3) to support outreach efforts that enable

25 students to attend institutions of higher education
†

805

S 1932 ES

1 with academic programs or programs of training fo2 cused on high-growth occupations or industries;

3 ‘‘(4) to expand or create programs for distance,

4 evening, weekend, modular, or compressed learning

5 opportunities that provide relevant job skill training

6 in high-growth occupations or industries;

7 ‘‘(5) to build partnerships with local businesses

8 in high-growth occupations or industries;

9 ‘‘(6) to support curriculum development related

10 to entrepreneurial training; and

11 ‘‘(7) for other uses that the Secretary deter12 mines to be consistent with the intent of this section.

13 ‘‘(f) REQUIREMENTS.—

14 ‘‘(1) FISCAL AGENT.—For the purpose of this

15 section, the institution of higher education in an eli16 gible partnership shall serve as the fiscal agent and

17 grant recipient for the eligible partnership.

18 ‘‘(2) DURATION.—The Secretary shall award

19 grants under this section for periods that may not

20 exceed 5 years.

21 ‘‘(3) SUPPLEMENT, NOT SUPPLANT.—Funds

22 made available under this section shall be used to

23 supplement and not supplant other Federal, State,

24 and local funds available to the eligible partnership
†

806

S 1932 ES

1 for carrying out the activities described in subsection

2 (e).

3 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There

4 are authorized to be appropriated to carry out this part

5 such sums as may be necessary for fiscal year 2006 and

6 each of the 5 succeeding fiscal years.

7 ‘‘PART D—GRANT PROGRAM TO INCREASE STU8 DENT RETENTION AND PROMOTE ARTICULA9 TION AGREEMENTS

10 ‘‘SEC. 841. GRANT PROGRAM TO INCREASE STUDENT RE11 TENTION AND PROMOTE ARTICULATION

12 AGREEMENTS.

13 ‘‘(a) AUTHORIZATION OF PROGRAM.—The Secretary

14 shall award grants, on a competitive basis, to eligible insti15 tutions to enable the institutions to—

16 ‘‘(1) focus on increasing traditional and non17 traditional student retention at such institutions;

18 and

19 ‘‘(2) promote articulation agreements among

20 different institutions that will increase the likelihood

21 of progression of students at such institutions to

22 baccalaureate degrees.

23 ‘‘(b) DEFINITION OF ELIGIBLE INSTITUTION.—In

24 this section, the term ‘eligible institution’ means an insti25 tution of higher education (as defined in section 101(a))
†

807

S 1932 ES

1 where not less than 40 percent of such institution’s stu2 dent body receives financial aid under subpart 1 of part

3 A of title IV.

4 ‘‘(c) APPLICATION.—An eligible institution that de5 sires a grant under this section shall submit an application

6 to the Secretary at such time, in such manner, and con7 taining such information as the Secretary may require, in8 cluding the number of students proposed to be served and

9 a description of the services that will be provided.

10 ‘‘(d) MANDATORY ACTIVITIES.—An eligible institu11 tion that receives a grant under this section shall use the

12 grant funds to carry out each of the following:

13 ‘‘(1) Offering counseling and advisement serv14 ices to help students adapt to postsecondary edu15 cation and select appropriate coursework.

16 ‘‘(2) Making mentors available to students who

17 are at risk for not completing a degree.

18 ‘‘(3) Providing detailed assistance to students

19 who request help in understanding—

20 ‘‘(A) the options for financing their edu21 cation, including information on grants, loans,

22 and loan repayment programs;

23 ‘‘(B) the process of applying for financial

24 assistance;
†

808

S 1932 ES

1 ‘‘(C) the outcome of their financial assist2 ance application; and

3 ‘‘(D) any unanticipated problems related to

4 financing their education that arise.

5 ‘‘(4) Offering tutoring to students at risk of

6 dropping out of school with any course or subject.

7 ‘‘(5) Designing and implementing innovative

8 ways to improve retention in and completion of

9 courses, such as enrolling students in cohorts, pro10 viding counseling, or creating bridge programs that

11 customize courses to the needs of special population

12 students.

13 ‘‘(6) Conducting outreach activities so that all

14 students know that these services are available and

15 are aware of how to access the services.

16 ‘‘(7) Creating articulation agreements to pro17 mote smooth transition from two year to four year

18 programs.

19 ‘‘(8) Making services listed in paragraphs (1)

20 through (5) available in students’ native languages,

21 if it is not English, if the percentage of students

22 needing translation services in a specific language

23 exceeds 5 percent.
†

809

S 1932 ES

1 ‘‘(e) PERMISSIBLE ACTIVITIES.—An eligible institu2 tion that receives a grant under this section may use grant

3 funds to carry out any of the following activities:

4 ‘‘(1) Designing innovative course schedules to

5 meet the needs of working adults, such as online,

6 modular, compressed, or other alternative methods.

7 ‘‘(2) Offering childcare during the hours when

8 students have class or are studying.

9 ‘‘(3) Providing transportation assistance to stu10 dents that helps such students manage their sched11 ules.

12 ‘‘(4) Partnering with local businesses to create

13 flexible work-hour programs so that students can

14 balance work and school.

15 ‘‘(5) Offering time management or financial lit16 eracy seminars to help students improve their man17 agement skills.

18 ‘‘(6) Improving professional development to

19 align instruction with innovative program designs.

20 ‘‘(7) Any other activities the Secretary believes

21 will promote retention of students attending eligible

22 institutions.

23 ‘‘(f) TECHNICAL ASSISTANCE.—The Secretary may

24 enter into a contract with a private entity to provide such
†

810

S 1932 ES

1 technical assistance to grantees under this section as the

2 Secretary determines appropriate.

3 ‘‘(g) EVALUATION.—The Secretary shall conduct an

4 evaluation of program impacts under the demonstration

5 program, and shall disseminate to the public the findings

6 from the evaluation and information on best practices.

7 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There

8 is authorized to be appropriated to carry out this and such

9 sums as may be necessary for fiscal year 2006 and each

10 of the 5 succeeding fiscal years.

11 ‘‘PART E—AMERICAN HISTORY FOR FREEDOM

12 ‘‘SEC. 851. AMERICAN HISTORY FOR FREEDOM.

13 ‘‘(a) GRANTS AUTHORIZED.—The Secretary is au14 thorized to award 3-year grants, on a competitive basis,

15 to eligible institutions to establish or strengthen postsec16 ondary academic programs or centers that promote and

17 impart knowledge of—

18 ‘‘(1) traditional American history;

19 ‘‘(2) the history and nature of, and threats to,

20 free institutions; or

21 ‘‘(3) the history and achievements of Western

22 civilization.

23 ‘‘(b) DEFINITIONS.—In this section:
†

811

S 1932 ES

1 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi2 ble institution’ means an institution of higher edu3 cation as defined in section 101.

4 ‘‘(2) FREE INSTITUTION.—The term ‘free insti5 tution’ means an institution that emerged out of

6 Western civilization, such as democracy, constitu7 tional government, individual rights, market econom8 ics, religious freedom and religious tolerance, and

9 freedom of thought and inquiry.

10 ‘‘(3) TRADITIONAL AMERICAN HISTORY.—The

11 term ‘traditional American history’ means—

12 ‘‘(A) the significant constitutional, polit13 ical, intellectual, economic, and foreign policy

14 trends and issues that have shaped the course

15 of American history; and

16 ‘‘(B) the key episodes, turning points, and

17 leading figures involved in the constitutional,

18 political, intellectual, diplomatic, and economic

19 history of the United States.

20 ‘‘(c) APPLICATION.—

21 ‘‘(1) IN GENERAL.—Each eligible institution

22 that desires a grant under this part shall submit an

23 application to the Secretary at such time, in such

24 manner, and accompanied by such additional infor25 mation as the Secretary may require.
†

812

S 1932 ES

1 ‘‘(2) CONTENTS.—Each application submitted

2 under subsection (a) shall include a description of —

3 ‘‘(A) how funds made available under this

4 part will be used for the activities set forth

5 under subsection (e), including how such activi6 ties will increase knowledge with respect to tra7 ditional American history, free institutions, or

8 Western civilization;

9 ‘‘(B) how the eligible institution will ensure

10 that information about the activities funded

11 under this part is widely disseminated pursuant

12 to subsection (e)(1)(B);

13 ‘‘(C) any activities to be undertaken pursu14 ant to subsection (e)(2)(A), including identifica15 tion of entities intended to participate;

16 ‘‘(D) how funds made available under this

17 part shall be used to supplement and not sup18 plant non-Federal funds available for the activi19 ties described in subsection (e); and

20 ‘‘(E) such fiscal controls and accounting

21 procedures as may be necessary to ensure prop22 er disbursement of and accounting for funding

23 made available to the eligible institution under

24 this part.
†

813

S 1932 ES

1 ‘‘(d) AWARD BASIS.—In awarding grants under this

2 part, the Secretary shall take into consideration the capa3 bility of the eligible institution to—

4 ‘‘(1) increase access to quality programming

5 that expands knowledge of traditional American his6 tory, free institutions, or Western civilization;

7 ‘‘(2) involve personnel with strong expertise in

8 traditional American history, free institutions, or

9 Western civilization; and

10 ‘‘(3) sustain the activities funded under this

11 part after the grant has expired.

12 ‘‘(e) USE OF FUNDS.—

13 ‘‘(1) REQUIRED USE OF FUNDS.—Funds pro14 vided under this part shall be used to—

15 ‘‘(A) establish or strengthen academic pro16 grams or centers focused on traditional Amer17 ican history, free institutions, or Western civili18 zation, which may include—

19 ‘‘(i) design and implementation of

20 programs of study, courses, lecture series,

21 seminars, and symposia;

22 ‘‘(ii) development, publication, and

23 dissemination of instructional materials;

24 ‘‘(iii) research;
†

814

S 1932 ES

1 ‘‘(iv) support for faculty teaching in

2 undergraduate and, if applicable, graduate

3 programs;

4 ‘‘(v) support for graduate and post5 graduate fellowships, if applicable; or

6 ‘‘(vi) teacher preparation initiatives

7 that stress content mastery regarding tra8 ditional American history, free institutions,

9 or Western civilization; and

10 ‘‘(B) conduct outreach activities to ensure

11 that information about the activities funded

12 under this part is widely disseminated—

13 ‘‘(i) to undergraduate students (in14 cluding students enrolled in teacher edu15 cation programs, if applicable);

16 ‘‘(ii) to graduate students (including

17 students enrolled in teacher education pro18 grams), if applicable;

19 ‘‘(iii) to faculty;

20 ‘‘(iv) to local educational agencies;

21 and

22 ‘‘(v) within the local community.

23 ‘‘(2) ALLOWABLE USES OF FUNDS.—Funds

24 provided under this part may be used to support—

25 ‘‘(A) collaboration with entities such as—
†

815

S 1932 ES

1 ‘‘(i) local educational agencies, for the

2 purpose of providing elementary, middle

3 and secondary school teachers an oppor4 tunity to enhance their knowledge of tradi5 tional American history, free institutions,

6 or Western civilization; and

7 ‘‘(ii) nonprofit organizations whose

8 mission is consistent with the purpose of

9 this part, such as academic organizations,

10 museums, and libraries, for assistance in

11 carrying out activities described under sub12 section (a); and

13 ‘‘(B) other activities that meet the pur14 poses of this part.

15 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—For the

16 purpose of carrying out this part, there are authorized to

17 be appropriated such sums as may be necessary for fiscal

18 year 2006 and each of the 5 succeeding fiscal years.

19 ‘‘PART F—TEACH FOR AMERICA

20 ‘‘SEC. 861. TEACH FOR AMERICA.

21 ‘‘(a) DEFINITIONS.—

22 ‘‘(1) IN GENERAL.—The terms ‘highly quali23 fied’, ‘local educational agency’, and ‘Secretary’ have

24 the meanings given the terms in section 9101 of the
†

816

S 1932 ES

1 Elementary and Secondary Education Act of 1965

2 (20 U.S.C. 7801).

3 ‘‘(2) GRANTEE.—The term ‘grantee’ means

4 Teach For America, Inc.

5 ‘‘(3) HIGH NEED.—The term ‘high need’, when

6 used with respect to a local educational agency,

7 means a local educational agency experiencing a

8 shortage of highly qualified teachers.

9 ‘‘(b) GRANTS AUTHORIZED.—The Secretary is au10 thorized to award a grant to Teach For America, Inc.,

11 the national teacher corps of outstanding recent college

12 graduates who commit to teach for 2 years in underserved

13 communities in the United States, to implement and ex14 pand its program of recruiting, selecting, training, and

15 supporting new teachers.

16 ‘‘(c) REQUIREMENTS.—In carrying out the grant pro17 gram under subsection (b), the Secretary shall enter into

18 an agreement with the grantee under which the grantee

19 agrees to use the grant funds provided under this

20 section—

21 ‘‘(1) to provide highly qualified teachers to high

22 need local educational agencies in urban and rural

23 communities;

24 ‘‘(2) to pay the cost of recruiting, selecting,

25 training, and supporting new teachers; and
†

817

S 1932 ES

1 ‘‘(3) to serve a substantial number and percent2 age of underserved students.

3 ‘‘(d) AUTHORIZED ACTIVITIES.—

4 ‘‘(1) IN GENERAL.—Grant funds provided

5 under this section shall be used by the grantee to

6 carry out each of the following activities:

7 ‘‘(A) Recruiting and selecting teachers

8 through a highly selective national process.

9 ‘‘(B) Providing preservice training to the

10 teachers through a rigorous summer institute

11 that includes hands-on teaching experience and

12 significant exposure to education coursework

13 and theory.

14 ‘‘(C) Placing the teachers in schools and

15 positions designated by partner local edu16 cational agencies as high need placements serv17 ing underserved students.

18 ‘‘(D) Providing ongoing professional devel19 opment activities for the teachers’ first 2 years

20 in the classroom, including regular classroom

21 observations and feedback, and ongoing train22 ing and support.

23 ‘‘(2) LIMITATION.—The grantee shall use all

24 grant funds received under this section to support

25 activities related directly to the recruitment, selec-
†

818

S 1932 ES

1 tion, training, and support of teachers as described

2 in subsection (a).

3 ‘‘(e) REPORTS AND EVALUATIONS.—

4 ‘‘(1) ANNUAL REPORT.—The grantee shall pro5 vide to the Secretary an annual report that

6 includes—

7 ‘‘(A) data on the number and quality of

8 the teachers provided to local educational agen9 cies through a grant under this section;

10 ‘‘(B) an externally conducted analysis of

11 the satisfaction of local educational agencies

12 and principals with the teachers so provided;

13 and

14 ‘‘(C) comprehensive data on the back15 ground of the teachers chosen, the training the

16 teachers received, the placement sites of the

17 teachers, the professional development of the

18 teachers, and the retention of the teachers.

19 ‘‘(2) STUDY.—

20 ‘‘(A) IN GENERAL.—From funds appro21 priated under subsection (f), the Secretary shall

22 provide for a study that examines the achieve23 ment levels of the students taught by the teach24 ers assisted under this section.
†

819

S 1932 ES

1 ‘‘(B) ACHIEVEMENT GAINS COMPARED.—

2 The study shall compare, within the same

3 schools, the achievement gains made by stu4 dents taught by teachers who are assisted

5 under this section with the achievement gains

6 made by students taught by teachers who are

7 not assisted under this section.

8 ‘‘(3) REQUIREMENTS.—The Secretary shall

9 provide for such a study not less than once every 3

10 years, and each such study shall include multiple

11 placement sites and multiple schools within place12 ment sites.

13 ‘‘(4) PEER REVIEW STANDARDS.—Each such

14 study shall meet the peer review standards of the

15 education research community.

16 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—

17 ‘‘(1) IN GENERAL.—There are authorized to be

18 appropriated to carry out this section such sums as

19 may be necessary for fiscal year 2006 and each of

20 the 5 succeeding fiscal years.

21 ‘‘(2) LIMITATION.—The grantee shall not use

22 more than 25 percent of Federal funds from any

23 source for administrative costs.
†

820

S 1932 ES

1 ‘‘PART G—PATSY T. MINK FELLOWSHIP PROGRAM

2 ‘‘SEC. 871. PATSY T. MINK FELLOWSHIP PROGRAM.

3 ‘‘(a) PURPOSE.—

4 ‘‘(1) IN GENERAL.—It is the purpose of this

5 section to provide, through eligible institutions, a

6 program of fellowship awards to assist highly quali7 fied minorities and women to acquire the doctoral

8 degree, or highest possible degree available, in aca9 demic areas in which such individuals are underrep10 resented for the purpose of enabling such individuals

11 to enter the higher education professoriate.

12 ‘‘(2) DESIGNATION.—Each recipient of a fellow13 ship award from an eligible institution receiving a

14 grant under this section shall be known as a ‘Patsy

15 T. Mink Graduate Fellow’.

16 ‘‘(b) DEFINITIONS.—In this section, the term ‘eligible

17 institution’ means an institution of higher education, or

18 a consortium of such institutions, that offers a program

19 of postbaccalaureate study leading to a graduate degree.

20 ‘‘(c) PROGRAM AUTHORIZED.—

21 ‘‘(1) GRANTS BY SECRETARY.—

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

23 award grants to eligible institutions to enable

24 such institutions to make fellowship awards to

25 individuals in accordance with the provisions of

26 this section.
†

821

S 1932 ES

1 ‘‘(B) PRIORITY CONSIDERATION.—In

2 awarding grants under this section, the Sec3 retary shall consider the eligible institution’s

4 prior experience in producing doctoral degree,

5 or highest possible degree available, holders who

6 are minorities and women, and shall give pri7 ority consideration in making grants under this

8 section to those eligible institutions with a dem9 onstrated record of producing minorities and

10 women who have earned such degrees.

11 ‘‘(2) APPLICATIONS.—

12 ‘‘(A) IN GENERAL.—An eligible institution

13 that desires a grant under this section shall

14 submit an application to the Secretary at such

15 time, in such manner, and containing such in16 formation as the Secretary may require.

17 ‘‘(B) APPLICATIONS MADE ON BEHALF.—

18 ‘‘(i) IN GENERAL.—The following en19 tities may submit an application on behalf

20 of an eligible institution:

21 ‘‘(I) A graduate school or depart22 ment of such institution.

23 ‘‘(II) A graduate school or de24 partment of such institution in col-
†

822

S 1932 ES

1 laboration with an undergraduate col2 lege or university of such institution.

3 ‘‘(III) An organizational unit

4 within such institution that offers a

5 program of postbaccalaureate study

6 leading to a graduate degree, includ7 ing an interdisciplinary or an inter8 departmental program.

9 ‘‘(IV) A nonprofit organization

10 with a demonstrated record of helping

11 minorities and women earn

12 postbaccalaureate degrees.

13 ‘‘(ii) NONPROFIT ORGANIZATIONS.—

14 Nothing in this paragraph shall be con15 strued to permit the Secretary to award a

16 grant under this section to an entity other

17 than an eligible institution.

18 ‘‘(3) SELECTION OF APPLICATIONS.—In award19 ing grants under subsection (a), the Secretary

20 shall—

21 ‘‘(A) take into account—

22 ‘‘(i) the number and distribution of

23 minority and female faculty nationally;
†

823

S 1932 ES

1 ‘‘(ii) the current and projected need

2 for highly trained individuals in all areas

3 of the higher education professoriate; and

4 ‘‘(iii) the present and projected need

5 for highly trained individuals in academic

6 career fields in which minorities and

7 women are underrepresented in the higher

8 education professoriate; and

9 ‘‘(B) consider the need to prepare a large

10 number of minorities and women generally in

11 academic career fields of high national priority,

12 especially in areas in which such individuals are

13 traditionally underrepresented in college and

14 university faculties, such as mathematics,

15 science, technology, and engineering.

16 ‘‘(4) DISTRIBUTION AND AMOUNTS OF

17 GRANTS.—

18 ‘‘(A) EQUITABLE DISTRIBUTION.—In

19 awarding grants under this section, the Sec20 retary shall, to the maximum extent feasible,

21 ensure an equitable geographic distribution of

22 awards and an equitable distribution among

23 public and independent eligible institutions that

24 apply for grants under this section and that
†

824

S 1932 ES

1 demonstrate an ability to achieve the purpose of

2 this section.

3 ‘‘(B) SPECIAL RULE.—To the maximum

4 extent practicable, the Secretary shall use not

5 less than 30 percent of the amount appro6 priated pursuant to subsection (f) to award

7 grants to eligible institutions that—

8 ‘‘(i) are eligible for assistance under

9 title III or title V; or

10 ‘‘(ii) have formed a consortium that

11 includes both non-minority serving institu12 tions and minority serving institutions.

13 ‘‘(C) ALLOCATION.—In awarding grants

14 under this section, the Secretary shall allocate

15 appropriate funds to those eligible institutions

16 whose applications indicate an ability to signifi17 cantly increase the numbers of minorities and

18 women entering the higher education professo19 riate and that commit institutional resources to

20 the attainment of the purpose of this section.

21 ‘‘(D) NUMBER OF FELLOWSHIP

22 AWARDS.—An eligible institution that receives a

23 grant under this section shall make not less

24 than 15 fellowship awards.
†

825

S 1932 ES

1 ‘‘(E) REALLOTMENT.—If the Secretary de2 termines that an eligible institution awarded a

3 grant under this section is unable to use all of

4 the grant funds awarded to the institution, the

5 Secretary shall reallot, on such date during

6 each fiscal year as the Secretary may fix, the

7 unused funds to other eligible institutions that

8 demonstrate that such institutions can use any

9 reallocated grant funds to make fellowship

10 awards to individuals under this section.

11 ‘‘(5) INSTITUTIONAL ALLOWANCE.—

12 ‘‘(A) IN GENERAL.—

13 ‘‘(i) NUMBER OF ALLOWANCES.—In

14 awarding grants under this section, the

15 Secretary shall pay to each eligible institu16 tion awarded a grant, for each individual

17 awarded a fellowship by such institution

18 under this section, an institutional allow19 ance.

20 ‘‘(ii) AMOUNT.—Except as provided in

21 paragraph (3), an institutional allowance

22 shall be in an amount equal to, for aca23 demic year 2006–2007 and succeeding aca24 demic years, the amount of institutional al25 lowance made to an institution of higher
†

826

S 1932 ES

1 education under section 715 for such aca2 demic year.

3 ‘‘(B) USE OF FUNDS.—Institutional allow4 ances may be expended in the discretion of the

5 eligible institution and may be used to provide,

6 except as prohibited under paragraph (4), aca7 demic support and career transition services for

8 individuals awarded fellowships by such institu9 tion.

10 ‘‘(C) REDUCTION.—The institutional al11 lowance paid under paragraph (1) shall be re12 duced by the amount the eligible institution

13 charges and collects from a fellowship recipient

14 for tuition and other expenses as part of the re15 cipient’s instructional program.

16 ‘‘(D) USE FOR OVERHEAD PROHIBITED.—

17 Funds made available under this section may

18 not be used for general operational overhead of

19 the academic department or institution receiv20 ing funds under this section.

21 ‘‘(d) FELLOWSHIP RECIPIENTS.—

22 ‘‘(1) AUTHORIZATION.—An eligible institution

23 that receives a grant under this section shall use the

24 grant funds to make fellowship awards to minorities

25 and women who are enrolled at such institution in
†

827

S 1932 ES

1 a doctoral degree, or highest possible degree avail2 able, program and—

3 ‘‘(A) intend to pursue a career in instruc4 tion at—

5 ‘‘(i) an institution of higher education

6 (as the term is defined in section 101);

7 ‘‘(ii) an institution of higher education

8 (as the term is defined in section

9 102(a)(1));

10 ‘‘(iii) an institution of higher edu11 cation outside the United States (as the

12 term is described in section 102(a)(2)); or

13 ‘‘(iv) a proprietary institution of high14 er education (as the term is defined in sec15 tion 102(b)); and

16 ‘‘(B) sign an agreement with the Secretary

17 agreeing—

18 ‘‘(i) to begin employment at an insti19 tution described in paragraph (1) not later

20 than 3 years after receiving the doctoral

21 degree or highest possible degree available,

22 which 3-year period may be extended by

23 the Secretary for extraordinary cir24 cumstances; and
†

828

S 1932 ES

1 ‘‘(ii) to be employed by such institu2 tion for 1 year for each year of fellowship

3 assistance received under this section.

4 ‘‘(2) FAILURE TO COMPLY.—If an individual

5 who receives a fellowship award under this section

6 fails to comply with the agreement signed pursuant

7 to subsection (a)(2), then the Secretary shall do 1

8 or both of the following:

9 ‘‘(A) Require the individual to repay all or

10 the applicable portion of the total fellowship

11 amount awarded to the individual by converting

12 the balance due to a loan at the interest rate

13 applicable to loans made under part B of title

14 IV.

15 ‘‘(B) Impose a fine or penalty in an

16 amount to be determined by the Secretary.

17 ‘‘(3) WAIVER AND MODIFICATION.—

18 ‘‘(A) REGULATIONS.—The Secretary shall

19 promulgate regulations setting forth criteria to

20 be considered in granting a waiver for the serv21 ice requirement under subsection (a)(2).

22 ‘‘(B) CONTENT.—The criteria under para23 graph (1) shall include whether compliance with

24 the service requirement by the fellowship recipi25 ent would be—
†

829

S 1932 ES

1 ‘‘(i) inequitable and represent an ex2 traordinary hardship; or

3 ‘‘(ii) deemed impossible because the

4 individual is permanently and totally dis5 abled at the time of the waiver request.

6 ‘‘(4) AMOUNT OF FELLOWSHIP AWARDS.—Fel7 lowship awards under this section shall consist of a

8 stipend in an amount equal to the level of support

9 provided to the National Science Foundation grad10 uate fellows, except that such stipend shall be ad11 justed as necessary so as not to exceed the fellow’s

12 tuition and fees or demonstrated need (as deter13 mined by the institution of higher education where

14 the graduate student is enrolled), whichever is great15 er.

16 ‘‘(5) ACADEMIC PROGRESS REQUIRED.—An in17 dividual student shall not be eligible to receive a fel18 lowship award—

19 ‘‘(A) except during periods in which such

20 student is enrolled, and such student is main21 taining satisfactory academic progress in, and

22 devoting essentially full time to, study or re23 search in the pursuit of the degree for which

24 the fellowship support was awarded; and
†

830

S 1932 ES

1 ‘‘(B) if the student is engaged in gainful

2 employment, other than part-time employment

3 in teaching, research, or similar activity deter4 mined by the eligible institution to be consistent

5 with and supportive of the student’s progress

6 toward the appropriate degree.

7 ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec8 tion shall be construed to require an eligible institution

9 that receives a grant under this section—

10 ‘‘(1) to grant a preference or to differentially

11 treat any applicant for a faculty position as a result

12 of the institution’s participation in the program

13 under this section; or

14 ‘‘(2) to hire a Patsy T. Mink Fellow who com15 pletes this program and seeks employment at such

16 institution.

17 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There

18 is authorized to be appropriated to carry out this section

19 such sums as may be necessary for fiscal year 2006 for

20 each of the 5 succeeding fiscal years.
†

831

S 1932 ES

1 ‘‘PART H—STUDY ON COLLEGE ENROLLMENT BY

2 SECONDARY SCHOOLS

3 ‘‘SEC. 881. STUDY ON COLLEGE ENROLLMENT BY SEC4 ONDARY SCHOOLS.

5 ‘‘The Secretary shall contract with a not-for-profit or6 ganization, with demonstrated expertise in increasing col7 lege enrollment rates in low-income communities nation8 wide, to make publicly available year-to-year college enroll9 ment rate trends by secondary schools, in full compliance

10 with the Family Educational Rights and Privacy Act of

11 1974 (FERPA).’’.

12 CHAPTER 10—AMENDMENTS TO OTHER

13 LAWS

14 Subchapter A—Education of the Deaf Act of

15 1986

16 SEC. 7901. LAURENT CLERC NATIONAL DEAF EDUCATION

17 CENTER.

18 Section 104 of the Education of the Deaf Act of 1986

19 (20 U.S.C. 4304) is amended—

20 (1) by striking the heading and inserting

21 ‘‘LAURENT CLERC NATIONAL DEAF EDUCATION

22 CENTER’’;

23 (2) in subsection (a)(1)(A), by inserting ‘‘the

24 Laurent Clerc National Deaf Education Center (re25 ferred to in this section as the ‘Clerc Center’) to

26 carry out’’ after ‘‘maintain and operate’’; and
†

832

S 1932 ES

1 (3) in subsection (b)—

2 (A) in the matter preceding subparagraph

3 (A) of paragraph (1), by striking ‘‘elementary

4 and secondary education programs’’ and insert5 ing ‘‘Clerc Center’’;

6 (B) in paragraph (2), by striking ‘‘elemen7 tary and secondary education programs’’ and

8 inserting ‘‘Clerc Center’’; and

9 (C) by adding at the end the following:

10 ‘‘(5) The University, for purposes of the elementary

11 and secondary education programs carried out at the Clerc

12 Center, shall—

13 ‘‘(A)(i) select challenging academic content

14 standards, challenging student academic achieve15 ment standards, and academic assessments of a

16 State, adopted and implemented, as appropriate,

17 pursuant to paragraphs (1) and (3) of section

18 1111(b) of the Elementary and Secondary Edu19 cation Act of 1965 (20 U.S.C. 6311(b)(1) and (3))

20 and approved by the Secretary; and

21 ‘‘(ii) implement such standards and assess22 ments for such programs by not later than the be23 ginning of the 2008–2009 academic year;

24 ‘‘(B) annually determine whether such pro25 grams at the Clerc Center are making adequate
†

833

S 1932 ES

1 yearly progress, as determined according to the defi2 nition of adequate yearly progress defined (pursuant

3 to section 1111(b)(2)(C) of such Act (20 U.S.C.

4 6311(b)(2)(C))) by the State that has adopted and

5 implemented the standards and assessments selected

6 under subparagraph (A)(i); and

7 ‘‘(C) publicly report the results of the academic

8 assessments implemented under subparagraph (A)

9 and whether the programs at the Clerc Center are

10 making adequate yearly progress, as determined

11 under subparagraph (B).’’.

12 SEC. 7902. AGREEMENT WITH GALLAUDET UNIVERSITY.

13 Section 105(b)(4) of the Education of the Deaf Act

14 of 1986 (20 U.S.C. 4305(b)(4)) is amended—

15 (1) by striking ‘‘the Act of March 3, 1931 (40

16 U.S.C. 276a–276a–5) commonly referred to as the

17 Davis-Bacon Act’’ and inserting ‘‘subchapter IV of

18 chapter 31 of title 40, United States Code, com19 monly referred to as the Davis-Bacon Act’’; and

20 (2) by striking ‘‘section 2 of the Act of June

21 13, 1934 (40 U.S.C. 276c)’’ and inserting ‘‘section

22 3145 of title 40, United States Code’’.
†

834

S 1932 ES

1 SEC. 7903. AGREEMENT FOR THE NATIONAL TECHNICAL IN2 STITUTE FOR THE DEAF.

3 Section 112 of the Education of the Deaf Act of 1986

4 (20 U.S.C. 4332) is amended—

5 (1) in subsection (a)—

6 (A) in paragraph (1)—

7 (i) in the first sentence—

8 (I) by striking ‘‘an institution of

9 higher education’’ and inserting ‘‘the

10 Rochester Institute of Technology,

11 Rochester, New York’’; and

12 (II) by striking ‘‘of a’’ and in13 serting ‘‘of the’’; and

14 (ii) by striking the second sentence;

15 (B) by redesignating paragraph (2) as

16 paragraph (3); and

17 (C) by inserting after paragraph (1) the

18 following:

19 ‘‘(2) Notwithstanding the requirement under

20 paragraph (1), if the Secretary or the Rochester In21 stitute of Technology terminates the agreement

22 under paragraph (1), the Secretary shall consider

23 proposals from other institutions of higher education

24 and enter into an agreement with 1 of such institu25 tions for the establishment and operation of a Na26 tional Technical Institution for the Deaf.’’; and
†

835

S 1932 ES

1 (2) in subsection (b)—

2 (A) in paragraph (3), by striking ‘‘Com3 mittee on Education and Labor of the House of

4 Representatives and to the Committee on Labor

5 and Human Resources of the Senate’’ and in6 serting ‘‘Committee on Education and the

7 Workforce of the House of Representatives and

8 to the Committee on Health, Education, Labor,

9 and Pensions of the Senate’’; and

10 (B) in paragraph (5)—

11 (i) by striking ‘‘the Act of March 3,

12 1931 (40 U.S.C. 276a–276a–5) commonly

13 referred to as the Davis-Bacon Act’’ and

14 inserting ‘‘subchapter IV of chapter 31 of

15 title 40, United States Code, commonly re16 ferred to as the Davis-Bacon Act’’; and

17 (ii) by striking ‘‘section 2 of the Act

18 of June 13, 1934 (40 U.S.C. 276c)’’ and

19 inserting ‘‘section 3145 of title 40, United

20 States Code’’.

21 SEC. 7904. CULTURAL EXPERIENCES GRANTS.

22 (a) CULTURAL EXPERIENCES GRANTS.—Title I of

23 the Education of the Deaf Act of 1986 (20 U.S.C. 4301

24 et seq.) is amended by adding at the end the following:
†

836

S 1932 ES

1 ‘‘PART C—OTHER PROGRAMS

2 ‘‘SEC. 121. CULTURAL EXPERIENCES GRANTS.

3 ‘‘(a) IN GENERAL.—The Secretary shall, on a com4 petitive basis, make grants to, and enter into contracts

5 and cooperative agreements with, eligible entities to sup6 port the activities described in subsection (b).

7 ‘‘(b) ACTIVITIES.—In carrying out this section, the

8 Secretary shall support activities providing cultural experi9 ences, through appropriate nonprofit organizations with a

10 demonstrated proficiency in providing such activities,

11 that—

12 ‘‘(1) enrich the lives of deaf and hard-of-hear13 ing children and adults;

14 ‘‘(2) increase public awareness and under15 standing of deafness and of the artistic and intellec16 tual achievements of deaf and hard-of-hearing per17 sons; or

18 ‘‘(3) promote the integration of hearing, deaf,

19 and hard-of-hearing persons through shared cul20 tural, educational, and social experiences.

21 ‘‘(c) APPLICATIONS.—An eligible entity that desires

22 to receive a grant, or enter into a contract or cooperative

23 agreement, under this section shall submit an application

24 to the Secretary at such time, in such manner, and con25 taining such information as the Secretary may require.
†

837

S 1932 ES

1 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated to carry out this section

3 such sums as may be necessary for fiscal year 2006 and

4 each of the 5 succeeding fiscal years.’’.

5 (b) CONFORMING AMENDMENT.—The title heading

6 of title I of the Education of the Deaf Act of 1986 (20

7 U.S.C. 4301 et seq.) is amended by adding at the end

8 ‘‘; OTHER PROGRAMS’’.

9 SEC. 7905. AUDIT.

10 Section 203 of the Education of the Deaf Act of 1986

11 (20 U.S.C. 4353) is amended—

12 (1) in subsection (b)—

13 (A) in paragraph (1), by striking the sec14 ond sentence and inserting the following: ‘‘The

15 institution of higher education that the Sec16 retary has an agreement with under section 112

17 shall have an annual independent financial and

18 compliance audit made of NTID programs and

19 activities. The audit shall follow the cycle of the

20 Federal fiscal year.’’;

21 (B) in paragraph (2), by striking ‘‘sec22 tions’’ and all that follows through the period

23 and inserting ‘‘sections 102(b), 105(b)(4),

24 112(b)(5), 203(c), 207(b)(2), subsections (c)
†

838

S 1932 ES

1 through (f) of section 207, and subsections (b)

2 and (c) of section 209.’’; and

3 (C) in paragraph (3), by inserting ‘‘and

4 the Committee on Education and the Workforce

5 of the House of Representatives and the Com6 mittee on Health, Education, Labor, and Pen7 sions of the Senate’’ after ‘‘Secretary’’; and

8 (2) in subsection (c)(2)(A), by striking ‘‘Com9 mittee on Education and Labor of the House of

10 Representatives and the Committee on Labor and

11 Human Resources of the Senate’’ and inserting

12 ‘‘Committee on Education and the Workforce of the

13 House of Representatives and the Committee on

14 Health, Education, Labor, and Pensions of the Sen15 ate’’.

16 SEC. 7906. REPORTS.

17 Section 204 of the Education of the Deaf Act of 1986

18 (20 U.S.C. 4354) is amended—

19 (1) in the matter preceding paragraph (1), by

20 striking ‘‘Committee on Education and Labor of the

21 House of Representatives and the Committee on

22 Labor and Human Resources of the Senate’’ and in23 serting ‘‘Committee on Education and the Workforce

24 of the House of Representatives and the Committee
†

839

S 1932 ES

1 on Health, Education, Labor, and Pensions of the

2 Senate’’;

3 (2) in paragraph (1), by striking ‘‘pre4 paratory,’’;

5 (3) in paragraph (2)(C), by striking ‘‘upon

6 graduation/completion’’ and inserting ‘‘on the date

7 that is 1 year after the date of graduation or com8 pletion’’; and

9 (4) in paragraph (3)(B), by striking ‘‘of the in10 stitution of higher education’’ and all that follows

11 through the period and inserting ‘‘of NTID pro12 grams and activities.’’.

13 SEC. 7907. MONITORING, EVALUATION, AND REPORTING.

14 Section 205 of the Education of the Deaf Act of 1986

15 (20 U.S.C. 4355) is amended—

16 (1) in subsection (b), by striking ‘‘The Sec17 retary, as part of the annual report required under

18 section 426 of the Department of Education Organi19 zation Act, shall include a description of’’ and in20 serting ‘‘The Secretary shall annually transmit infor21 mation to Congress on’’; and

22 (2) in subsection (c), by striking ‘‘fiscal years

23 1998 through 2003’’ and inserting ‘‘fiscal years

24 2006 through 2010’’.
†

840

S 1932 ES

1 SEC. 7908. LIAISON FOR EDUCATIONAL PROGRAMS.

2 Section 206(a) of the Education of the Deaf Act of

3 1986 (20 U.S.C. 4356(a)) is amended by striking ‘‘Not

4 later than 30 days after the date of enactment of this Act,

5 the’’ and inserting ‘‘The’’.

6 SEC. 7909. FEDERAL ENDOWMENT PROGRAMS FOR GAL7 LAUDET UNIVERSITY AND THE NATIONAL

8 TECHNICAL INSTITUTE FOR THE DEAF.

9 Section 207(h) of the Education of the Deaf Act of

10 1986 (20 U.S.C. 4357(h)) is amended by striking ‘‘fiscal

11 years 1998 through 2003’’ each place it appears and in12 serting ‘‘fiscal years 2006 through 2010’’.

13 SEC. 7910. OVERSIGHT AND EFFECT OF AGREEMENTS.

14 Section 208(a) of the Education of the Deaf Act of

15 1986 (20 U.S.C. 4359(a)) is amended by striking ‘‘Com16 mittee on Labor and Human Resources of the Senate and

17 the Committee on Education and the Workforce of the

18 House of Representatives’’ and inserting ‘‘Committee on

19 Education and the Workforce of the House of Representa20 tives and the Committee on Health, Education, Labor,

21 and Pensions of the Senate’’.

22 SEC. 7911. INTERNATIONAL STUDENTS.

23 Section 209 of the Education of the Deaf Act of 1986

24 (20 U.S.C. 4359a) is amended—

25 (1) in subsection (a)—
†

841

S 1932 ES

1 (A) by striking ‘‘preparatory, under2 graduate,’’ and inserting ‘‘undergraduate’’;

3 (B) by striking ‘‘Effective with’’ and in4 serting the following:

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2), effective with’’; and

7 (C) by adding at the end the following:

8 ‘‘(2) DISTANCE LEARNING.—International stu9 dents who participate in distance learning courses

10 that are at NTID or the University and who are re11 siding outside of the United States shall—

12 ‘‘(A) not be counted as international stu13 dents for purposes of the cap on international

14 students under paragraph (1), except that in

15 any school year no United States citizen who

16 applies to participate in distance learning

17 courses that are at the University or NTID

18 shall be denied participation in such courses be19 cause of the participation of an international

20 student in such courses; and

21 ‘‘(B) not be charged a tuition surcharge,

22 as described in subsection (b).’’; and

23 (2) by striking subsections (b), (c), and (d), and

24 inserting the following:
†

842

S 1932 ES

1 ‘‘(b) TUITION SURCHARGE.—Except as provided in

2 subsections (a)(2)(B) and (c), the tuition for postsec3 ondary international students enrolled in the University

4 (including undergraduate and graduate students) or

5 NTID shall include, for academic year 2007–2008 and

6 any succeeding academic year, a surcharge of—

7 ‘‘(1) 100 percent for a postsecondary inter8 national student from a non-developing country; and

9 ‘‘(2) 50 percent for a postsecondary inter10 national student from a developing country.

11 ‘‘(c) REDUCTION OF SURCHARGE.—

12 ‘‘(1) IN GENERAL.—Beginning with the aca13 demic year 2007–2008, the University or NTID may

14 reduce the surcharge—

15 ‘‘(A) under subsection (b)(1) to 50 percent

16 if—

17 ‘‘(i) a student described under sub18 section (b)(1) demonstrates need; and

19 ‘‘(ii) such student has made a good

20 faith effort to secure aid through such stu21 dent’s government or other sources; and

22 ‘‘(B) under subsection (b)(2) to 25 percent

23 if—

24 ‘‘(i) a student described under sub25 section (b)(2) demonstrates need; and
†

843

S 1932 ES

1 ‘‘(ii) such student has made a good

2 faith effort to secure aid through such stu3 dent’s government or other sources.

4 ‘‘(2) DEVELOPMENT OF SLIDING SCALE.—The

5 University and NTID shall develop a sliding scale

6 model that—

7 ‘‘(A) will be used to determine the amount

8 of a tuition surcharge reduction pursuant to

9 paragraph (1); and

10 ‘‘(B) shall be approved by the Secretary.

11 ‘‘(d) DEFINITION.—In this section, the term ‘devel12 oping country’ means a country with a per-capita income

13 of not more than $4,825, measured in 1999 United States

14 dollars, as adjusted by the Secretary to reflect inflation

15 since 1999.’’.

16 SEC. 7912. RESEARCH PRIORITIES.

17 Section 210(b) of the Education of the Deaf Act of

18 1986 (20 U.S.C. 4359b(b)) is amended by striking ‘‘Com19 mittee on Labor and Human Resources of the Senate’’

20 and inserting ‘‘Committee on Health, Education, Labor,

21 and Pensions of the Senate’’.

22 SEC. 7913. AUTHORIZATION OF APPROPRIATIONS.

23 Section 212 of the Education of the Deaf Act of 1986

24 (20 U.S.C. 4360a) is amended—
†

844

S 1932 ES

1 (1) in subsection (a), in the matter preceding

2 paragraph (1), by striking ‘‘fiscal years 1998

3 through 2003’’ and inserting ‘‘fiscal years 2006

4 through 2011’’; and

5 (2) in subsection (b), by striking ‘‘fiscal years

6 1998 through 2003’’ and inserting ‘‘fiscal years

7 2006 through 2011’’.

8 Subchapter B—United States Institute of

9 Peace Act

10 SEC. 7921. UNITED STATES INSTITUTE OF PEACE ACT.

11 (a) POWERS AND DUTIES.—Section 1705(b)(3) of

12 the United States Institute of Peace Act (22 U.S.C.

13 4604(b)(3)) is amended by striking ‘‘the Arms Control

14 and Disarmament Agency,’’.

15 (b) BOARD OF DIRECTORS.—Section 1706 of the

16 United States Institute of Peace Act (22 U.S.C. 4605)

17 is amended—

18 (1) by striking ‘‘(b)(5)’’ each place the term ap19 pears and inserting ‘‘(b)(4)’’; and

20 (2) in subsection (e), by adding at the end the

21 following:

22 ‘‘(5) The term of a member of the Board shall

23 not commence until the member is confirmed by the

24 Senate and sworn in as a member of the Board.’’.
†

845

S 1932 ES

1 (c) FUNDING.—Section 1710 of the United States In2 stitute of Peace Act (22 U.S.C. 4609) is amended by add3 ing at the end the following:

4 ‘‘(d) EXTENSION.—Any authorization of appropria5 tions made for the purposes of carrying out this title shall

6 be extended in the same manner as applicable programs

7 are extended under section 422 of the General Education

8 Provisions Act.’’.

9 Subchapter C—The Higher Education

10 Amendments of 1998

11 SEC. 7931. REPEALS.

12 The following provisions of title VIII of the Higher

13 Education Amendments of 1998 (Public Law 105–244)

14 are repealed:

15 (1) Part A.

16 (2) Part C (20 U.S.C. 1070 note).

17 (3) Part F (20 U.S.C. 1862 note).

18 (4) Part J.

19 (5) Section 861.

20 (6) Section 863.

21 SEC. 7932. GRANTS TO STATES FOR WORKPLACE AND COM22 MUNITY TRANSITION TRAINING FOR INCAR23 CERATED YOUTH OFFENDERS.

24 Section 821(b) of the Higher Education Amendment

25 of 1988 is amended by striking ‘‘25’’ and inserting ‘‘35’’.
†

846

S 1932 ES

1 Subchapter D—Indian Education

2 PART I—TRIBAL COLLEGES AND UNIVERSITIES

3 SEC. 7941. REAUTHORIZATION OF THE TRIBALLY CON4 TROLLED COLLEGE OR UNIVERSITY ASSIST5 ANCE ACT OF 1978.

6 (a) CLARIFICATION OF THE DEFINITION OF NA7 TIONAL INDIAN ORGANIZATION.—Section 2(a)(6) of the

8 Tribally Controlled College or University Assistance Act

9 of 1978 (25 U.S.C. 1801(a)(6)) is amended by striking

10 ‘‘in the field of Indian education’’ and inserting ‘‘in the

11 fields of tribally controlled colleges and universities and

12 Indian higher education’’.

13 (b) INDIAN STUDENT COUNT.—Section 2(a) of the

14 Tribally Controlled College or University Assistance Act

15 (25 U.S.C. 1801(a)) is amended—

16 (1) by redesignating paragraphs (7) and (8) as

17 paragraphs (8) and (9), respectively; and

18 (2) by inserting after paragraph (6) the fol19 lowing:

20 ‘‘(7) ‘Indian student’ means a student who is—

21 ‘‘(A) a member of an Indian tribe; or

22 ‘‘(B) a biological child of a member of an

23 Indian tribe, living or deceased;’’.

24 (c) CONTINUING EDUCATION.—Section 2(b) of the

25 Tribally Controlled College or University Assistance Act
†

847

S 1932 ES

1 (25 U.S.C. 1801(b)) is amended by striking paragraph (5)

2 and inserting the following:

3 ‘‘(5) DETERMINATION OF CREDITS.—Eligible

4 credits earned in a continuing education program—

5 ‘‘(A) shall be determined as 1 credit for

6 every 10 contact hours in the case of an institu7 tion on a quarter system, or 15 contact hours

8 in the case of an institution on a semester sys9 tem, of participation in an organized continuing

10 education experience under responsible sponsor11 ship, capable direction, and qualified instruc12 tion, as described in the criteria established by

13 the International Association for Continuing

14 Education and Training; and

15 ‘‘(B) shall be limited to 10 percent of the

16 Indian student count of a tribally controlled col17 lege or university.’’.

18 (d) ACCREDITATION REQUIREMENT.—Section 103 of

19 the Tribally Controlled College or University Assistance

20 Act (25 U.S.C. 1804) is amended—

21 (1) in paragraph (2), by striking ‘‘and’’ at the

22 end;

23 (2) in paragraph (3), by striking the period at

24 the end and inserting ‘‘; and’’; and
†

848

S 1932 ES

1 (3) by inserting after paragraph (3), the fol2 lowing:

3 ‘‘(4)(A) is accredited by a nationally recognized

4 accrediting agency or association determined by the

5 Secretary of Education to be a reliable authority

6 with regard to the quality of training offered; or

7 ‘‘(B) is, according to such an agency or associa8 tion, making reasonable progress toward accredita9 tion.’’.

10 (e) TECHNICAL ASSISTANCE CONTRACT AWARDS.—

11 Section 105 of the Tribally Controlled College or Univer12 sity Assistance Act (25 U.S.C. 1805) is amended in the

13 second sentence by striking ‘‘In the awarding of contracts

14 for technical assistance, preference shall be given’’ and in15 serting ‘‘The Secretary shall direct that contracts for tech16 nical assistance be awarded’’.

17 (f) TITLE I REAUTHORIZATION.—Section 110(a) of

18 the Tribally Controlled College or University Assistance

19 Act of 1978 (25 U.S.C. 1810(a)) is amended—

20 (1) in paragraphs (1), (2), (3), and (4), by

21 striking ‘‘1999’’ and inserting ‘‘2006’’;

22 (2) in paragraphs (1), (2), and (3), by striking

23 ‘‘4 succeeding’’ and inserting ‘‘5 succeeding’’;
†

849

S 1932 ES

1 (3) in paragraph (2), by striking

2 ‘‘$40,000,000’’ and inserting ‘‘such sums as may be

3 necessary’’;

4 (4) in paragraph (3), by striking

5 ‘‘$10,000,000’’ and inserting ‘‘such sums as may be

6 necessary’’; and

7 (5) in paragraph (4), by striking ‘‘succeeding

8 4’’ and inserting ‘‘5 succeeding’’.

9 (g) TITLE III REAUTHORIZATION.—Section 306(a)

10 of the Tribally Controlled College or University Assistance

11 Act of 1978 (25 U.S.C. 1836(a)) is amended—

12 (1) by striking ‘‘1999’’ and inserting ‘‘2006’’;

13 and

14 (2) by striking ‘‘4 succeeding’’ and inserting ‘‘5

15 succeeding’’.

16 (h) TITLE IV REAUTHORIZATION.—Section 403 of

17 the Tribal Economic Development and Technology Re18 lated Education Assistance Act of 1990 (25 U.S.C. 1852)

19 is amended—

20 (1) by striking ‘‘$2,000,000 for fiscal year

21 1999’’ and inserting ‘‘such sums as may be nec22 essary for fiscal year 2006’’; and

23 (2) by striking ‘‘4 succeeding’’ and inserting ‘‘5

24 succeeding’’.
†

850

S 1932 ES

1 PART II—NAVAJO HIGHER EDUCATION

2 SEC. 7945. SHORT TITLE.

3 This part may be cited as the ‘‘Navajo Nation Higher

4 Education Act of 2005’’.

5 SEC. 7946. REAUTHORIZATION OF NAVAJO COMMUNITY

6 COLLEGE ACT.

7 (a) PURPOSE.—Section 2 of the Navajo Community

8 College Act (25 U.S.C. 640a) is amended—

9 (1) by striking ‘‘Navajo Tribe of Indians’’ and

10 inserting ‘‘Navajo Nation’’; and

11 (2) by striking ‘‘the Navajo Community Col12 lege’’ and inserting ‘‘Dine ́ College’’.

13 (b) GRANTS.—Section 3 of the Navajo Community

14 College Act (25 U.S.C. 640b) is amended—

15 (1) in the first sentence—

16 (A) by inserting ‘‘the’’ before ‘‘Interior’’;

17 (B) by striking ‘‘Navajo Tribe of Indians’’

18 and inserting ‘‘Navajo Nation’’; and

19 (C) by striking ‘‘the Navajo Community

20 College’’ and inserting ‘‘Dine ́ College’’; and

21 (2) in the second sentence—

22 (A) by striking ‘‘Navajo Tribe’’ and insert23 ing ‘‘Navajo Nation’’; and

24 (B) by striking ‘‘Navajo Indians’’ and in25 serting ‘‘Navajo people’’.
†

851

S 1932 ES

1 (c) STUDY OF FACILITIES NEEDS.—Section 4 of the

2 Navajo Community College Act (25 U.S.C. 640c) is

3 amended—

4 (1) in subsection (a)—

5 (A) in the first sentence—

6 (i) by striking ‘‘the Navajo Commu7 nity College’’ and inserting ‘‘Dine ́ College’’;

8 and

9 (ii) by striking ‘‘August 1, 1979’’ and

10 inserting ‘‘October 31, 2009’’; and

11 (B) in the second sentence, by striking

12 ‘‘Navajo Tribe’’ and inserting ‘‘Navajo Nation’’;

13 (2) in subsection (b), by striking ‘‘the date of

14 enactment of the Tribally Controlled Community

15 College Assistance Act of 1978’’ and inserting ‘‘Oc16 tober 1, 2006’’; and

17 (3) in subsection (c), in the first sentence, by

18 striking ‘‘the Navajo Community College’’ and in19 serting ‘‘Dine ́ College’’.

20 (d) AUTHORIZATION OF APPROPRIATIONS.—Section

21 5 of the Navajo Community College Act (25 U.S.C. 640c–

22 1) is amended—

23 (1) in subsection (a)—

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

25 ‘‘$2,000,000’’ and all that follows through the
†

852

S 1932 ES

1 end of the paragraph and inserting ‘‘such sums

2 as are necessary for fiscal years 2006 through

3 2011.’’; and

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

5 ‘‘(3) Sums described in paragraph (2) shall be used

6 to provide grants for construction activities, including the

7 construction of buildings, water and sewer facilities, roads,

8 information technology and telecommunications infra9 structure, classrooms, and external structures (such as

10 walkways).’’;

11 (2) in subsection (b)(1)—

12 (A) in the matter preceding subparagraph

13 (A)—

14 (i) by striking ‘‘the Navajo Commu15 nity College’’ and inserting ‘‘Dine ́ College’’;

16 and

17 (ii) by striking ‘‘, for each fiscal year’’

18 and all that follows through ‘‘for—’’ and

19 inserting ‘‘such sums as are necessary for

20 fiscal years 2006 through 2011 to pay the

21 cost of—’’;

22 (B) in subparagraph (A)—

23 (i) by striking ‘‘college’’ and inserting

24 ‘‘College’’;
†

853

S 1932 ES

1 (ii) in clauses (i) and (iii), by striking

2 the commas at the ends of the clauses and

3 inserting semicolons; and

4 (iii) in clause (ii), by striking ‘‘, and’’

5 at the end and inserting ‘‘; and’’;

6 (C) in subparagraph (B), by striking the

7 comma at the end and inserting a semicolon;

8 (D) in subparagraph (C), by striking ‘‘,

9 and’’ at the end and inserting a semicolon;

10 (E) in subparagraph (D), by striking the

11 period at the end and inserting ‘‘; and’’; and

12 (F) by adding at the end the following:

13 ‘‘(E) improving and expanding the College,

14 including by providing, for the Navajo people

15 and others in the community of the College—

16 ‘‘(i) higher education programs;

17 ‘‘(ii) vocational and technical edu18 cation;

19 ‘‘(iii) activities relating to the preser20 vation and protection of the Navajo lan21 guage, philosophy, and culture;

22 ‘‘(iv) employment and training oppor23 tunities;

24 ‘‘(v) economic development and com25 munity outreach; and
†

854

S 1932 ES

1 ‘‘(vi) a safe learning, working, and liv2 ing environment.’’; and

3 (3) in subsection (c), by striking ‘‘the Navajo

4 Community College’’ and inserting ‘‘Dine ́ College’’.

5 (e) EFFECT ON OTHER LAWS.—Section 6 of the

6 Navajo Community College Act (25 U.S.C. 640c–2) is

7 amended—

8 (1) by striking ‘‘the Navajo Community Col9 lege’’ each place it appears and inserting ‘‘Dine ́ Col10 lege’’; and

11 (2) in subsection (b), by striking ‘‘college’’ and

12 inserting ‘‘College’’.

13 (f) PAYMENTS; INTEREST.—Section 7 of the Navajo

14 Community College Act (25 U.S.C. 640c–3) is amended

15 by striking ‘‘the Navajo Community College’’ each place

16 it appears and inserting ‘‘Dine ́ College’’.

17 Subtitle D—Hurricane Relief

18 SEC. 7947. FINDINGS.

19 Congress finds the following:

20 (1) Hurricane Katrina has had a devastating

21 and unprecedented impact on students who attended

22 schools in the disaster areas.

23 (2) Due to the devastating effects of Hurricane

24 Katrina, a significant number of students have en25 rolled in schools outside of the area in which they
†

855

S 1932 ES

1 resided on August 22, 2005, including a significant

2 number of students who enrolled in non-public

3 schools because their parents chose to enroll them in

4 such schools.

5 (3) 372,000 students were displaced by Hurri6 cane Katrina. Approximately 700 schools have been

7 damaged or destroyed. Nine States each have more

8 than 1,000 of such displaced students enrolled in

9 their schools. In Texas alone, over 45,000 displaced

10 students have enrolled in schools.

11 (4) In response to these extraordinary condi12 tions, this subtitle creates a one-time only emergency

13 grant for the 2005–2006 school year tailored to the

14 needs and particular circumstances of students dis15 placed by Hurricane Katrina.

16 SEC. 7948. IMMEDIATE AID TO RESTART SCHOOL OPER17 ATIONS.

18 (a) PURPOSE.—It is the purpose of this section—

19 (1) to provide immediate and direct assistance

20 to local educational agencies in Louisiana, Mis21 sissippi, and Alabama that serve an area in which a

22 major disaster has been declared in accordance with

23 section 401 of the Robert T. Stafford Disaster Relief

24 and Emergency Assistance Act (42 U.S.C. 5170),

25 related to Hurricane Katrina;
†

856

S 1932 ES

1 (2) to assist school district administrators and

2 personnel of such agencies who are working to re3 start operations in elementary schools and secondary

4 schools served by such agencies; and

5 (3) to facilitate the re-opening of elementary

6 schools and secondary schools served by such agen7 cies and the re-enrollment of students in such

8 schools as soon as possible.

9 (b) PAYMENTS AND GRANTS AUTHORIZED.—From

10 amounts appropriated to carry out this subtitle, the Sec11 retary of Education is authorized to make payments, not

12 later than November 30, 2005, to State educational agen13 cies (as defined in section 9101 of the Elementary and

14 Secondary Education Act of 1965 (20 U.S.C. 7801 et

15 seq.)) in Louisiana, Mississippi, and Alabama to enable

16 such agencies to award grants to local educational agen17 cies serving an area in which a major disaster has been

18 declared in accordance with section 401 of the Robert T.

19 Stafford Disaster Relief and Emergency Assistance Act

20 (42 U.S.C. 5170), related to Hurricane Katrina.

21 (c) ELIGIBILITY AND CONSIDERATION.—In deter22 mining whether to award a grant under this section, or

23 the amount of the grant, the State educational agency

24 shall consider the following:
†

857

S 1932 ES

1 (1) The number of school-aged children served

2 by the local educational agency in the academic year

3 preceding the academic year for which the grant is

4 awarded.

5 (2) The severity of the impact of Hurricane

6 Katrina on the local educational agency and the ex7 tent of the needs in each local educational agency in

8 Louisiana, Mississippi, and Alabama that is in an

9 area in which a major disaster has been declared in

10 accordance with section 401 of the Robert T. Staf11 ford Disaster Relief and Emergency Assistance Act

12 (42 U.S.C. 5170), related to Hurricane Katrina.

13 (d) APPLICATIONS.—Each local educational agency

14 desiring a grant under this section shall submit an appli15 cation to the State educational agency at such time, in

16 such manner, and accompanied by such information as the

17 State educational agency may reasonably require to ensure

18 expedited and timely payment to the local educational

19 agency.

20 (e) USES OF FUNDS.—

21 (1) IN GENERAL.—A local educational agency

22 receiving a grant under this section shall use the

23 grant funds for—

24 (A) recovery of student and personnel

25 data, and other electronic information;
†

858

S 1932 ES

1 (B) replacement of school district informa2 tion systems, including hardware and software;

3 (C) financial operations;

4 (D) reasonable transportation costs;

5 (E) rental of mobile educational units and

6 leasing of neutral sites or spaces;

7 (F) initial replacement of instructional ma8 terials and equipment, including textbooks;

9 (G) redeveloping instructional plans, in10 cluding curriculum development;

11 (H) initiating and maintaining education

12 and support services; and

13 (I) such other activities related to the pur14 pose of this section that are approved by the

15 Secretary.

16 (2) USE WITH OTHER AVAILABLE FUNDS.—A

17 local educational agency receiving a grant under this

18 section may use the grant funds in coordination with

19 other Federal, State, or local funds available for the

20 activities described in paragraph (1).

21 (3) PROHIBITIONS.—Grant funds received

22 under this section shall not be used for any of the

23 following:

24 (A) Construction or major renovation of

25 schools.
†

859

S 1932 ES

1 (B) Payments to school administrators or

2 teachers who are not actively engaged in re3 starting or re-opening schools.

4 (f) SUPPLEMENT NOT SUPPLANT.—

5 (1) IN GENERAL.—Except as provided in para6 graph (2), funds made available under this section

7 shall be used to supplement, not supplant, any funds

8 made available through the Federal Emergency

9 Management Agency or through a State.

10 (2) EXCEPTION.—Paragraph (1) shall not pro11 hibit the provision of Federal assistance under this

12 section to an eligible educational agency that is or

13 may be entitled to receive, from another source, ben14 efits for the same purposes as under this section

15 if—

16 (A) such agency has not received such

17 other benefits by the time of application for

18 Federal assistance under this section; and

19 (B) such agency agrees to repay all dupli20 cative Federal assistance received to carry out

21 the purposes of this section.

22 SEC. 7949. HOLD HARMLESS FOR LOCAL EDUCATIONAL

23 AGENCIES SERVING MAJOR DISASTER AREAS.

24 In the case of a local educational agency that serves

25 an area in which the President has declared that a major
†

860

S 1932 ES

1 disaster exists in accordance with section 401 of the Rob2 ert T. Stafford Disaster Relief and Emergency Assistance

3 Act (42 U.S.C. 5170), related to Hurricane Katrina, the

4 amount made available for such local educational agency

5 under each of sections 1124, 1124A, 1125, and 1125A

6 of the Elementary and Secondary Education Act of 1965

7 (20 U.S.C. 6333, 6334, 6335, and 6337) for fiscal year

8 2006 shall be not less than the amount made available

9 for such local educational agency under each of such sec10 tions for fiscal year 2005.

11 SEC. 7950. TEACHER AND PARAPROFESSIONAL RECI12 PROCITY; DELAY.

13 (a) TEACHER AND PARAPROFESSIONAL RECI14 PROCITY.—

15 (1) TEACHERS.—

16 (A) AFFECTED TEACHER.—In this sub17 section, the term ‘‘affected teacher’’ means a

18 teacher who is displaced due to Hurricane

19 Katrina and relocates to a State that is dif20 ferent from the State in which such teacher re21 sided on August 22, 2005.

22 (B) IN GENERAL.—A local educational

23 agency may consider an affected teacher hired

24 by such agency who is not highly qualified in

25 the State in which such agency is located to be
†

861

S 1932 ES

1 highly qualified, for purposes of section 1119 of

2 the Elementary and Secondary Education Act

3 of 1965 (20 U.S.C. 6319) and section

4 612(a)(14) of the Individuals with Disabilities

5 Education Act (20 U.S.C. 1412(a)(14)), for a

6 period not to exceed 1 year, if such teacher was

7 highly qualified, consistent with section

8 9101(23) of the Elementary and Secondary

9 Education Act of 1965 (20 U.S.C. 7801(23))

10 and section 602(10) of the Individuals with

11 Disabilities Education Act (20 U.S.C.

12 1401(10)), on or before August 22, 2005, in

13 the State in which such teacher resided on Au14 gust 22, 2005.

15 (2) PARAPROFESSIONAL.—

16 (A) AFFECTED PARAPROFESSIONAL.—In

17 this subsection, the term ‘‘affected paraprofes18 sional’’ means a paraprofessional who is dis19 placed due to Hurricane Katrina and relocates

20 to a State that is different from the State in

21 which such paraprofessional resided on August

22 22, 2005.

23 (B) IN GENERAL.—A local educational

24 agency may consider an affected paraprofes25 sional hired by such agency who does not sat-
†

862

S 1932 ES

1 isfy the requirements of section 1119(c) of the

2 Elementary and Secondary Education Act of

3 1965 (20 U.S.C. 6319(c)) in the State in which

4 such agency is located to satisfy such require5 ments, for purposes of such section, for a pe6 riod not to exceed 1 year, if such paraprofes7 sional satisfied such requirements on or before

8 August 22, 2005, in the State in which such

9 paraprofessional resided on August 22, 2005.

10 (b) DELAY.—The Secretary of Education may delay,

11 for a period not to exceed 1 year, applicability of the re12 quirements of paragraphs (2) and (3) of section 1119(a)

13 of the Elementary and Secondary Education Act of 1965

14 (20 U.S.C. 6319(a)(2) and (3)) and section 612(a)(14)(C)

15 of the Individuals with Disabilities Education Act (20

16 U.S.C. 1412(a)(14)(C)) with respect to the States of Ala17 bama, Louisiana, and Mississippi (and local educational

18 agencies within the jurisdiction of such States), if any

19 such State or local educational agency demonstrates that

20 a failure to comply with such requirements is due to excep21 tional or uncontrollable circumstances, such as a natural

22 disaster or a precipitous and unforeseen decline in the fi23 nancial resources of local educational agencies within the

24 State.
†

863

S 1932 ES

1 SEC. 7951. ASSISTANCE FOR HOMELESS YOUTH.

2 (a) IN GENERAL.—The Secretary of Education shall

3 provide assistance to local educational agencies serving

4 homeless children and youths displaced by Hurricane

5 Katrina, consistent with section 723 of the McKinney6 Vento Homeless Assistance Act (42 U.S.C. 11433), in7 cluding identification, enrollment assistance, assessment

8 and school placement assistance, transportation, coordina9 tion of school services, supplies, referrals for health, men10 tal health, and other needs.

11 (b) EXCEPTION AND DISTRIBUTION OF FUNDS.—

12 (1) EXCEPTION.—For purposes of providing as13 sistance under subsection (a), subsections (c) and

14 (e)(1) of section 722 and subsections (b) and (c) of

15 section 723 of the McKinney-Vento Homeless Assist16 ance Act (42 U.S.C. 11432(c) and (e)(1), 11433(b)

17 and (c)) shall not apply.

18 (2) DISBURSEMENT.—The Secretary of Edu19 cation shall disburse funding provided under sub20 section (a) to State educational agencies based on

21 demonstrated need, as determined by the Secretary,

22 and such State educational agencies shall distribute

23 funds, that are appropriated under section 7958 and

24 available to carry out this section, to local edu25 cational agencies based on demonstrated need, for

26 the purposes of carrying out section 723 of the
†

864

S 1932 ES

1 McKinney-Vento Homeless Assistance Act (42

2 U.S.C. 11433).

3 SEC. 7952. TEMPORARY EMERGENCY IMPACT AID FOR DIS4 PLACED STUDENTS.

5 (a) TEMPORARY EMERGENCY IMPACT AID AUTHOR6 IZED.—

7 (1) AID TO STATE EDUCATIONAL AGENCIES.—

8 From amounts appropriated under this subtitle, the

9 Secretary of Education shall provide emergency im10 pact aid to State educational agencies to enable the

11 State educational agencies to make emergency im12 pact aid payments to eligible local educational agen13 cies and eligible BIA-funded schools to enable—

14 (A) such eligible local educational agencies

15 and schools to provide for the instruction of dis16 placed students served by such agencies and

17 schools; and

18 (B) such eligible local educational agencies

19 to make immediate impact aid payments to ac20 counts established on behalf of displaced stu21 dents (referred to in this section as ‘‘accounts’’)

22 who are attending eligible non-public schools lo23 cated in the areas served by the eligible local

24 educational agencies.
†

865

S 1932 ES

1 (2) AID TO LOCAL EDUCATIONAL AGENCIES

2 AND BIA-FUNDED SCHOOLS.—A State educational

3 agency shall make emergency impact aid payments

4 to eligible local educational agencies and eligible

5 BIA-funded schools in accordance with subsection

6 (d).

7 (3) STATE EDUCATIONAL AGENCIES IN CER8 TAIN STATES.—In the case of the States of Lou9 isiana and Mississippi, the State educational agency

10 shall carry out the activities of eligible local edu11 cational agencies that are unable to carry out this

12 section, including eligible local educational agencies

13 in such States for which the State exercises the au14 thorities normally exercised by such local educational

15 agencies.

16 (b) DEFINITIONS.—In this section:

17 (1) DISPLACED STUDENT.—The term ‘‘dis18 placed student’’ means a student who enrolled in a

19 school (other than the school that the student was

20 enrolled in, or was eligible to be enrolled in, on Au21 gust 22, 2005) because such student resides or re22 sided on August 22, 2005, in an area for which a

23 major disaster has been declared in accordance with

24 section 401 of the Robert T. Stafford Disaster Relief
†

866

S 1932 ES

1 and Emergency Assistance Act (42 U.S.C. 5170),

2 related to Hurricane Katrina.

3 (2) ELIGIBLE LOCAL EDUCATIONAL AGEN4 CIES.—The term ‘‘eligible local educational agency’’

5 means a local educational agency that serves—

6 (A) an elementary school or secondary

7 school (including a charter school) in which

8 there is enrolled a displaced student; or

9 (B) an area in which there is located an el10 igible non-public school.

11 (3) ELIGIBLE NON-PUBLIC SCHOOL.—The term

12 ‘‘eligible non-public school’’ means a non-public

13 school that—

14 (A) is accredited or licensed or otherwise

15 operates in accordance with State law;

16 (B) was in existence on August 22, 2005;

17 and

18 (C) serves a displaced student on behalf of

19 whom an application for an account has been

20 made pursuant to subsection (c)(2)(A)(ii).

21 (4) ELIGIBLE BIA-FUNDED SCHOOL.—In this

22 section, the term ‘‘eligible BIA-funded school’’

23 means a school funded by the Bureau of Indian Af24 fairs in which there is enrolled a displaced student.

25 (c) APPLICATION.—
†

867

S 1932 ES

1 (1) STATE EDUCATIONAL AGENCY.—A State

2 educational agency that desires to receive emergency

3 impact aid under this section shall submit an appli4 cation to the Secretary of Education at such time,

5 in such manner, and accompanied by such informa6 tion as the Secretary of Education may reasonably

7 require, including—

8 (A) information on the total displaced stu9 dent child count of the State provided by eligi10 ble local educational agencies in the State and

11 eligible BIA-funded schools in the State under

12 paragraph (2);

13 (B) a description of the process for the

14 parent or guardian of a displaced student en15 rolled in a non-public school to indicate to the

16 eligible local educational agency serving the

17 area in which such school is located that the

18 student is enrolled in such school;

19 (C) a description of the procedure to be

20 used by an eligible local educational agency in

21 such State to provide payments to accounts;

22 (D) a description of the process to be used

23 by an eligible local educational agency in such

24 State to obtain—
†

868

S 1932 ES

1 (i) attestations of attendance of eligi2 ble displaced students from eligible non3 public schools, in order for the local edu4 cational agency to provide payments to ac5 counts on behalf of eligible displaced stu6 dents; and

7 (ii) attestations from eligible non-pub8 lic schools that accounts are used only for

9 the purposes described in subsection

10 (e)(2)(A); and

11 (E) the criteria, including family income,

12 used to determine the eligibility for and the

13 amount of assistance under this section pro14 vided on behalf of a displaced student attending

15 an eligible non-public school.

16 (2) LOCAL EDUCATIONAL AGENCIES AND BIA17 FUNDED SCHOOLS.—An eligible local educational

18 agency or eligible BIA-funded school that desires an

19 emergency impact aid payment under this section

20 shall submit an application to the State educational

21 agency at such time, in such manner, and accom22 panied by such information as the State educational

23 agency may reasonably require, including docu24 mentation submitted quarterly for the 2005–2006

25 school year that indicates the following:
†

869

S 1932 ES

1 (A) In the case of an eligible local edu2 cational agency—

3 (i) the number of displaced students

4 enrolled in the elementary schools and sec5 ondary schools (including charter schools

6 and including the number of displaced stu7 dents who are served under part B of the

8 Individuals with Disabilities Education

9 Act) served by such agency for such quar10 ter; and

11 (ii) the number of displaced students

12 for whom the eligible local educational

13 agency expects to provide payments to ac14 counts under subsection (e)(2) (including

15 the number of displaced students who are

16 served under part B of the Individuals

17 with Disabilities Education Act) for such

18 quarter who meet the following criteria:

19 (I) The displaced student en20 rolled in an eligible non-public school

21 prior to the date of enactment of this

22 Act.

23 (II) The parent or guardian of

24 the displaced student chose to enroll

25 the student in the eligible non-public
†

870

S 1932 ES

1 school in which the student is en2 rolled.

3 (III) The parent or guardian of

4 the displaced student submitted an

5 application requesting that the agency

6 make a payment to an account on be7 half of the student.

8 (IV) The displaced student’s tui9 tion and fees (and transportation ex10 penses, if any) for the 2005–2006

11 school year is waived or reimbursed

12 (by the eligible non-public school) in

13 an amount that is not less than the

14 amount of emergency impact aid pay15 ment provided on behalf of such stu16 dent under this section.

17 (B) In the case of an eligible BIA-funded

18 school, the number of displaced students, in19 cluding the number of displaced students who

20 are served under part B of the Individuals with

21 Disabilities Education Act (20 U.S.C. 1411 et

22 seq.), enrolled in such school for such quarter.

23 (3) DETERMINATION OF NUMBER OF DIS24 PLACED STUDENTS.—In determining the number of

25 displaced students for a quarter under paragraph
†

871

S 1932 ES

1 (2), an eligible local educational agency or eligible

2 BIA-funded school shall include in such number the

3 number of displaced students served during such

4 quarter prior to the date of enactment of this Act.

5 (d) AMOUNT OF EMERGENCY IMPACT AID.—

6 (1) AID TO STATE EDUCATIONAL AGENCIES.—

7 (A) IN GENERAL.—The amount of emer8 gency impact aid received by a State edu9 cational agency for the 2005–2006 school year

10 shall equal the sum of—

11 (i) the product of the number of dis12 placed students (who are not served under

13 part B of the Individuals with Disabilities

14 Education Act (20 U.S.C. 1411 et seq.)),

15 as determined by the eligible local edu16 cational agencies and eligible BIA-funded

17 schools in the State under subsection

18 (c)(2), times $6,000; and

19 (ii) the product of the number of dis20 placed students who are served under part

21 B of the Individuals with Disabilities Edu22 cation Act, as determined by the eligible

23 local educational agencies and eligible BIA24 funded schools in the State under sub25 section (c)(2), times $7,500.
†

872

S 1932 ES

1 (B) INSUFFICIENT FUNDS.—If the amount

2 available under this section to provide emer3 gency impact aid under this subsection is insuf4 ficient to pay the full amount that a State edu5 cational agency is eligible to receive under this

6 section, the Secretary of Education shall rat7 ably reduce the amount of such emergency im8 pact aid.

9 (2) AID TO ELIGIBLE LOCAL EDUCATIONAL

10 AGENCIES AND ELIGIBLE BIA-FUNDED SCHOOLS.—

11 (A) QUARTERLY INSTALLMENTS.—

12 (i) IN GENERAL.—A State educational

13 agency shall provide emergency impact aid

14 payments under this section on a quarterly

15 basis for the 2005–2006 school year by

16 such dates as determined by the Secretary

17 of Education. Such quarterly installment

18 payments shall be based on the number of

19 displaced students reported under sub20 section (c)(2) and in the amount deter21 mined under clause (ii).

22 (ii) PAYMENT AMOUNT.—Each quar23 terly installment payment under clause (i)

24 shall equal 25 percent of the sum of—
†

873

S 1932 ES

1 (I) the number of displaced stu2 dents (who are not served under part

3 B of the Individuals with Disabilities

4 Education Act (20 U.S.C. 1411 et

5 seq.)) reported by the eligible local

6 educational agency or eligible BIA7 funded school for such quarter (as de8 termined under subsection (c)(2))

9 times $6,000; and

10 (II) the number of displaced stu11 dents who are served under part B of

12 the Individuals with Disabilities Edu13 cation Act (20 U.S.C. 1411 et seq.)

14 reported by the eligible local edu15 cational agency or eligible BIA-funded

16 school for such quarter (as deter17 mined under subsection (c)(2)) times

18 $7,500.

19 (iii) TIMELINE.—The Secretary of

20 Education shall establish a timeline for

21 quarterly reporting on the number of dis22 placed students in order to make the ap23 propriate disbursements in a timely man24 ner.
†

874

S 1932 ES

1 (iv) INSUFFICIENT FUNDS.—If, for

2 any quarter, the amount available under

3 this section to make payments under this

4 subsection is insufficient to pay the full

5 amount that an eligible local educational

6 agency or eligible BIA-funded school is eli7 gible to receive under this section, the

8 State educational agency shall ratably re9 duce the amount of such payments.

10 (B) MAXIMUM PAYMENT TO ACCOUNT.—In

11 providing quarterly payments to an account for

12 the 2005–2006 school year on behalf of a dis13 placed student for each quarter that such stu14 dent is enrolled in a non-public school in the

15 area served by the agency under subsection

16 (e)(2), an eligible local educational agency may

17 provide not more than 4 quarterly payments to

18 such account, and the aggregate amount of

19 such payments shall not exceed the lesser of—

20 (i)(I) in the case of a displaced stu21 dent who is not served under part B of the

22 Individuals with Disabilities Education Act

23 (20 U.S.C. 1411 et seq.), $6,000; or

24 (II) in the case of a displaced student

25 who is served under part B of the Individ-
†

875

S 1932 ES

1 uals with Disabilities Education Act,

2 $7,500; or

3 (ii) the cost of tuition and fees (and

4 transportation expenses, if any) at the

5 non-public school for the 2005–2006 school

6 year.

7 (e) USE OF FUNDS.—

8 (1) DISPLACED STUDENTS IN PUBLIC

9 SCHOOLS.—An eligible local educational agency or

10 eligible BIA-funded school receiving emergency im11 pact aid payments under this section shall use the

12 payments to provide instructional opportunities for

13 displaced students who enroll in elementary schools

14 and secondary schools (including charter schools)

15 served by such agency or in such a school, and for

16 other expenses incurred as a result of the agency or

17 school serving displaced students, which uses may

18 include—

19 (A) paying the compensation of personnel,

20 including teacher aides, in schools enrolling dis21 placed students;

22 (B) identifying and acquiring curricular

23 material, including the costs of providing addi24 tional classroom supplies, and mobile edu25 cational units and leasing sites or spaces;
†

876

S 1932 ES

1 (C) basic instructional services for such

2 students, including tutoring, mentoring, or aca3 demic counseling;

4 (D) reasonable transportation costs;

5 (E) health services (including counseling

6 and mental health services); and

7 (F) education and support services.

8 (2) DISPLACED STUDENTS IN NON-PUBLIC

9 SCHOOLS.—

10 (A) IN GENERAL.—An eligible local edu11 cational agency that receives emergency impact

12 aid payments under this section and that serves

13 an area in which there is located an eligible

14 non-public school shall, at the request of the

15 parent or guardian of a displaced student who

16 meets the criteria described in subsection

17 (c)(2)(A)(ii) and who enrolled in a non-public

18 school in an area served by the agency, use

19 such emergency impact aid payment to provide

20 payment on a quarterly basis (but not to exceed

21 the total amount specified in subsection

22 (d)(2)(B) for the 2005–2006 school year) to an

23 account on behalf of such displaced student,

24 which payment shall be used to assist in paying

25 for any of the following:
†

877

S 1932 ES

1 (i) Paying the compensation of per2 sonnel, including teacher aides, in the non3 public school, which funds shall not be

4 used for religious instruction, proselytiza5 tion, or worship.

6 (ii) Identifying and acquiring cur7 ricular material, including the costs of pro8 viding additional classroom supplies (which

9 shall be secular, neutral, and shall not

10 have a religious component), and mobile

11 educational units and leasing sites or

12 spaces, which shall not be used for reli13 gious instruction, proselytization, or wor14 ship.

15 (iii) Basic instructional services, in16 cluding tutoring, mentoring, or academic

17 counseling, which services shall be secular

18 and neutral and shall not be used for reli19 gious instruction, proselytization, or wor20 ship.

21 (iv) Reasonable transportation costs.

22 (v) Health services (including coun23 seling and mental health services), which

24 services shall be secular and neutral and
†

878

S 1932 ES

1 shall not be used for religious instruction,

2 proselytization, or worship.

3 (vi) Education and support services,

4 which services shall be secular and neutral

5 and shall not be used for religious instruc6 tion, proselytization, or worship.

7 (B) VERIFICATION OF ENROLLMENT.—Be8 fore providing a quarterly payment to an ac9 count under subparagraph (A), the eligible local

10 educational agency shall verify with the parent

11 or guardian of a displaced student that such

12 displaced student is enrolled in the non-public

13 school.

14 (3) PROVISION OF SPECIAL EDUCATION AND

15 RELATED SERVICES.—

16 (A) IN GENERAL.—In the case of a dis17 placed student who is served under part B of

18 the Individuals with Disabilities Education Act

19 (20 U.S.C. 1411 et seq.), any payment made on

20 behalf of such student to an eligible local edu21 cational agency or any payment available in an

22 account for such student, shall be used to pay

23 the cost of providing the student with special

24 education and related services consistent with
†

879

S 1932 ES

1 the Individuals with Disabilities Education Act

2 (20 U.S.C. 1400 et seq.).

3 (B) SPECIAL RULE.—

4 (i) RETENTION.—Notwithstanding

5 any other provision of this section, if an el6 igible local educational agency provides

7 services to a displaced student attending

8 an eligible non-public school under section

9 612(a)(10) of the Individuals with Disabil10 ities Education Act (20 U.S.C.

11 1412(a)(10)), the eligible local educational

12 agency may retain a portion of the assist13 ance received under this section for such

14 student to pay the cost of providing such

15 services.

16 (ii) DETERMINATION OF PORTION.—

17 (I) GUIDELINES.—Each State

18 shall issue guidelines that specify the

19 portion of the assistance that an eligi20 ble local educational agency in the

21 State may retain under this subpara22 graph. Each State shall apply such

23 guidelines in a consistent manner

24 throughout the State.
†

880

S 1932 ES

1 (II) DETERMINATION OF POR2 TION.—The portion specified in the

3 guidelines shall be based on cus4 tomary costs of providing services

5 under such section 612(a)(10) for the

6 local educational agency.

7 (C) DEFINITIONS.—In this paragraph:

8 (i) SPECIAL EDUCATION; RELATED

9 SERVICES.—The terms ‘‘special education’’

10 and ‘‘related services’’ have the meaning

11 given such terms in section 602 of the In12 dividuals with Disabilities Education Act

13 (20 U.S.C. 1401).

14 (ii) INDIVIDUALIZED EDUCATION PRO15 GRAM.—The term ‘‘individualized edu16 cation program’’ has the meaning given

17 the term in section 614(d)(2) of the Indi18 viduals with Disabilities Education Act (20

19 U.S.C. 1414(d)(2)).

20 (f) RETURN OF AID.—

21 (1) ELIGIBLE LOCAL EDUCATIONAL AGENCY OR

22 ELIGIBLE BIA-FUNDED SCHOOL.—An eligible local

23 educational agency or eligible BIA-funded school

24 that receives an emergency impact aid payment

25 under this section shall return to the State edu-
†

881

S 1932 ES

1 cational agency any payment provided to the eligible

2 local educational agency or school under this section

3 that the eligible local educational agency or school

4 has not obligated by the end of the 2005–2006

5 school year in accordance with this section.

6 (2) STATE EDUCATIONAL AGENCY.—A State

7 educational agency that receives emergency impact

8 aid under this section, shall return to the Secretary

9 of Education—

10 (A) any aid provided to the agency under

11 this section that the agency has not obligated

12 by the end of the 2005–2006 school year in ac13 cordance with this section; and

14 (B) any payment funds returned to the

15 State educational agency under paragraph (1).

16 (g) LIMITATION ON USE OF AID AND PAYMENTS.—

17 Aid and payments provided under this section shall only

18 be used for expenses incurred during the 2005–2006

19 school year.

20 (h) ADMINISTRATIVE EXPENSES.—A State edu21 cational agency that receives emergency impact aid under

22 this section may use not more than 1 percent of such aid

23 for administrative expenses. An eligible local educational

24 agency or eligible BIA-funded school that receives emer25 gency impact aid payments under this section may use not
†

882

S 1932 ES

1 more than 2 percent of such payments for administrative

2 expenses.

3 (i) SPECIAL FUNDING RULE.—In calculating funding

4 under section 8003 of the Elementary and Secondary

5 Education Act of 1965 (20 U.S.C. 7703) for an eligible

6 local educational agency that receives an emergency im7 pact aid payment under this section, the Secretary of Edu8 cation shall not count displaced students served by such

9 agency for whom an emergency impact aid payment is re10 ceived under this section, nor shall such students be count11 ed for the purpose of calculating the total number of chil12 dren in average daily attendance at the schools served by

13 such agency as provided in section 8003(b)(3)(B)(i) of

14 such Act (20 U.S.C. 7703(b)(3)(B)(i)).

15 (j) NOTICE OF OPTION OF PUBLIC SCHOOL OR NON16 PUBLIC SCHOOL ENROLLMENT.—Each State receiving

17 emergency impact aid under this section shall provide, to

18 the parent or guardian of each displaced student for whom

19 a payment is made under this section to an account who

20 resides in such State, notification that such parent or

21 guardian has the option of enrolling such student in a pub22 lic school or a non-public school.

23 (k) BY-PASS.—If a State educational agency or eligi24 ble local educational agency is unable to carry out this

25 section, the Secretary of Education may make such ar-
†

883

S 1932 ES

1 rangements with the State as the Secretary determines ap2 propriate to carry out this section on behalf of displaced

3 students attending an eligible non-public school in the area

4 served by such agency. For a State in which State law

5 prohibits the State from using Federal funds to directly

6 provide services on behalf of students attending non-public

7 schools and provides that another entity shall provide such

8 services, the Secretary of Education shall make such ar9 rangements with that entity.

10 (l) NONDISCRIMINATION.—

11 (1) IN GENERAL.—A school that enrolls a dis12 placed student under this section shall not discrimi13 nate against students on the basis of race, color, na14 tional origin, religion, disability, or sex.

15 (2) APPLICABILITY AND SINGLE SEX SCHOOLS,

16 CLASSES, OR ACTIVITIES.—

17 (A) IN GENERAL.—To the extent con18 sistent with title IX of the Education Amend19 ments of 1972 (20 U.S.C. 1681 et seq.), the

20 prohibition of sex discrimination in paragraph

21 (1) shall not apply to a non-public school that

22 is controlled by a religious organization if the

23 application of paragraph (1) would not be con24 sistent with the religious tenets of such organi25 zation.
†

884

S 1932 ES

1 (B) SINGLE SEX SCHOOLS, CLASSES, OR

2 ACTIVITIES.—Notwithstanding paragraph (1)

3 and to the extent consistent with title IX of the

4 Education Amendments of 1972, a parent or

5 guardian may choose and a non-public school

6 may offer a single sex school, class, or activity.

7 (C) ENROLLMENT.—The prohibition of re8 ligious discrimination in paragraph (1) shall not

9 apply with regard to enrollment for a non-pub10 lic school that is controlled by a religious orga11 nization, except in the case of the enrollment of

12 displaced students assisted under this section.

13 (3) GENERAL PROVISION.—Nothing in this sec14 tion may be construed to alter or modify the provi15 sions of the Individuals with Disabilities Education

16 Act (20 U.S.C. 1400 et seq.), title VI of the Civil

17 Rights Act of 1964 (42 U.S.C. 2000d et seq.), title

18 IX of the Education Amendments of 1972 (20

19 U.S.C. 1681 et seq.), and the Rehabilitation Act of

20 1973 (29 U.S.C. 701 et seq.).

21 (4) OPT-IN.—A displaced student assisted

22 under this section who is enrolled in a non-public

23 school shall not participate in religious worship or

24 religious classes at such school unless such student’s
†

885

S 1932 ES

1 parent or guardian chooses to opt-in such student

2 for such religious worship or religious classes.

3 (5) RULE OF CONSTRUCTION.—The amount of

4 any payment (or other form of support provided on

5 behalf of a displaced student) under this section

6 shall not be treated as income of a parent or guard7 ian of the student for purposes of Federal tax laws

8 or for determining eligibility for any other Federal

9 program.

10 (m) TREATMENT OF STATE AID.—A State shall not

11 take into consideration emergency impact aid payments

12 received under this section by a local educational agency

13 in the State in determining the eligibility of such local edu14 cational agency for State aid, or the amount of State aid,

15 with respect to free public education of children.

16 SEC. 7953. ORIGINATION FEES FOR STUDENT LOANS.

17 (a) SPECIAL ALLOWANCES.—Notwithstanding sec18 tion 438(c)(2) of the Higher Education Act of 1965 (as

19 amended by this Act) (20 U.S.C. 1087–1(c)(2)), subpara20 graph (A) of section 438(c)(2) of such Act shall be applied

21 by substituting ‘‘2.0 percent’’ for ‘‘3.0 percent’’ with re22 spect to loans for which the first disbursement of principal

23 is made on or after July 1, 2007.

24 (b) ORIGINATION FEES FOR FEDERAL DIRECT

25 LOANS.—Notwithstanding subsection (c) of section 455 of
†

886

S 1932 ES

1 the Higher Education Act of 1965 (as amended by this

2 Act) (20 U.S.C. 1087e(c)), the second sentence of such

3 subsection shall be applied by substituting ‘‘2.0 percent’’

4 for ‘‘2.5 percent’’ with respect to loans for which the first

5 disbursement of principal is made on or after July 1,

6 2007.

7 (c) REPEAL OF ORIGINATION FEES.—

8 (1) AMENDMENTS.—Sections 438(c) and 455(c)

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

10 1087–1(c), 1087e(c)) are repealed.

11 (2) EFFECTIVE DATE.—The amendments made

12 by paragraph (1) shall take effect on July 1, 2011.

13 (d) NONAPPLICABILITY OF SUNSET PROVISION.—

14 Section 7959 shall not apply to this section or to the

15 amendments made by this section.

16 SEC. 7954. AUTHORIZATION AND APPROPRIATION OF

17 FUNDS.

18 There are authorized to be appropriated, and there

19 are appropriated, out of any money in the Treasury not

20 otherwise appropriated, $1,660,000,000 to carry out this

21 subtitle, of which—

22 (1) $450,000,000 shall be available to carry out

23 section 7952;

24 (2) $10,000,000 shall be available to carry out

25 section 7955; and
†

887

S 1932 ES

1 (3) $1,200,000,000 shall be available to carry

2 out section 7956.

3 SEC. 7955. SUNSET PROVISION.

4 Except as otherwise provided in this subtitle, the pro5 visions of this subtitle shall be effective for the period be6 ginning on the date of enactment of this Act and ending

7 on August 1, 2006.

8 TITLE VIII—COMMITTEE ON THE

9 JUDICIARY

10 SEC. 8001. RECAPTURE OF UNUSED VISA NUMBERS.

11 (a) RECAPTURE OF UNUSED EMPLOYMENT-BASED

12 IMMIGRANT VISAS.—Section 201(d) of the Immigration

13 and Nationality Act (8 U.S.C. 1151(d)) is amended—

14 (1) in paragraph (2)(C)—

15 (A) by striking ‘‘is the difference’’ and in16 serting ‘‘is the sum of—

17 ‘‘(i) the difference’’; and

18 (B) by striking the period at the end and

19 inserting the following: ‘‘; and

20 ‘‘(ii) the lesser of—

21 ‘‘(I) the number of immigrant

22 visas that were available in any pre23 vious fiscal year to employment-based

24 immigrants (and their family mem25 bers accompanying or following to join
†

888

S 1932 ES

1 under section 203(d)) and that were

2 not issued for that fiscal year or for

3 any subsequent fiscal year, excluding

4 those immigrant visas reserved for

5 employment-based immigrants for an

6 occupation listed in schedule A of sec7 tion 656.5 of title 20, Code of Federal

8 Regulations; and

9 ‘‘(II) 90,000.’’; and

10 (2) by adding at the end the following:

11 ‘‘(3) Immigrant visas issued on or after October

12 1, 2004, to spouses and children of employment13 based immigrants shall not be counted against the

14 numerical limitation set forth in paragraph (1).’’.

15 (b) SUPPLEMENTAL PETITION FEE.—Section

16 204(a)(1) of the Immigration and Nationality Act (8

17 U.S.C. 1154(a)(1)) is amended—

18 (1) in subparagraph (E), by adding at the end

19 the following: ‘‘Such petition shall be accompanied

20 by a supplemental petition fee in the amount of

21 $500.’’; and

22 (2) in subparagraph (F), by adding at the end

23 the following: ‘‘Such petition shall be accompanied

24 by a supplemental petition fee in the amount of

25 $500.’’.
†

889

S 1932 ES

1 (c) ADJUSTMENT OF STATUS.—

2 (1) IN GENERAL.—Section 245(a) of the Immi3 gration and Nationality Act (8 U.S.C. 1255(a)) is

4 amended to read as follows:

5 ‘‘(a)(1) The status of an alien who was inspected and

6 admitted or paroled into the United States or the status

7 of any other alien having an approved petition for classi8 fication under subparagraph (A)(iii), (A)(iv), (B)(ii), or

9 (B)(iii) of section 204(a)(1) may be adjusted by the Sec10 retary of Homeland Security or the Attorney General, in

11 the discretion of the Secretary or Attorney General, and

12 under such regulations as the Secretary or Attorney Gen13 eral may prescribe, to that of an alien lawfully admitted

14 for permanent residence if—

15 ‘‘(A) the alien makes an application for such

16 adjustment;

17 ‘‘(B) the alien is eligible to receive an immi18 grant visa and is admissible to the United States for

19 permanent residence; and

20 ‘‘(C) an immigrant visa is immediately available

21 to the alien at the time the application is filed.

22 ‘‘(2) If a supplemental petition fee is paid for any

23 petition under subparagraph (E) or (F) of section

24 204(a)(1), an application under paragraph (1) of this sub25 section on behalf of an alien beneficiary of such petition
†

890

S 1932 ES

1 (including a spouse or child who is accompanying or fol2 lowing to join the principal beneficiary) may be filed with3 out regard to the limitation set forth in paragraph (1)(C).

4 An application for adjustment of status filed under this

5 paragraph may not be approved until such time as an im6 migrant visa becomes available.’’.

7 (2) PENDING APPLICATIONS.—An alien on

8 whose behalf a petition was pending under subpara9 graph (E) or (F) of section 204(a)(1) of the Immi10 gration and Nationality Act (8 U.S.C. 1154(a)(1)),

11 on the date of enactment of this Act may, upon the

12 payment of the supplemental petition fee set forth in

13 such section, apply for adjustment of status under

14 this subsection without regard to the limitation set

15 forth in section 245(a)(1)(C) of the Immigration and

16 Nationality Act (8 U.S.C. 1255(a)(1)(C)), as amend17 ed by paragraph (1).

18 (d) RECAPTURE OF UNUSED H–1B VISA NUM19 BERS.—Section 214(g) of the Immigration and Nation20 ality Act (8 U.S.C. 1184(g)) is amended—

21 (1) by redesignating paragraphs (9) through

22 (11) as paragraphs (10) through (12), respectively;

23 and

24 (2) by inserting after paragraph (8) the fol25 lowing:
†

891

S 1932 ES

1 ‘‘(9)(A) If the numerical limitation in para2 graph (1)(A) for fiscal year 2006 or a subsequent

3 fiscal year has been reached, such numerical limita4 tion shall be supplemented in a number equal to the

5 lesser of—

6 ‘‘(i) the cumulative total number of visas

7 that were available in all prior fiscal years sub8 sequent to fiscal year 1991, and not issued for

9 each such fiscal year or any subsequent fiscal

10 year; and

11 ‘‘(ii) 30,000.

12 ‘‘(B) Any petition filed after the numerical limi13 tation set forth in paragraph (1)(A) has been

14 reached for that fiscal year, and seeking an H–1B

15 visa number recaptured under subparagraph (A) of

16 this paragraph, shall be accompanied by an H–1B

17 recapture fee in the amount of $500.’’.

18 (e) CONFORMING AMENDMENT.—Section 286(m) of

19 the Immigration and Nationality Act (8 U.S.C. 1356(m))

20 is amended by inserting ‘‘, including those fees provided

21 for in subparagraphs (E) and (F) of section 204(a)(1) and

22 subsections (c)(15) and (g)(9)(B) of section 214,’’ after

23 ‘‘all adjudication fees’’.

24 (f) EXPENDITURE LIMITATION.—Amounts collected

25 under subparagraphs (E) and (F) of section 204(a)(1)
†

892

S 1932 ES

1 and subsections (c)(15) and (g)(9)(B) of section 214 of

2 the Immigration and Nationality Act, as amended by this

3 Act, may not be expended unless specifically appropriated

4 by an Act of Congress.

5 SEC. 8002. FEES WITH RESPECT TO IMMIGRATION SERV6 ICES FOR INTRACOMPANY TRANSFEREES.

7 Section 214(c) of the Immigration and Nationality

8 Act (8 U.S.C. 1184(c)) is amended by adding at the end

9 the following:

10 ‘‘(15)(A) The Secretary of State shall impose a fee

11 on an employer when an alien files an application abroad

12 for a visa authorizing initial admission to the United

13 States as a nonimmigrant described in section

14 101(a)(15)(L) in order to be employed by the employer,

15 if the alien is covered under a blanket petition described

16 in paragraph (2)(A).

17 ‘‘(B) The Secretary of Homeland Security shall im18 pose a fee on an employer filing a petition under para19 graph (1) initially to grant an alien nonimmigrant status

20 described in section 101(a)(15)(L) or to extend for the

21 first time the stay of an alien having such status.

22 ‘‘(C) The amount of the fee imposed under subpara23 graph (A) or (B) shall be $750.

24 ‘‘(D) The fees imposed under subparagraphs (A) and

25 (B) shall only apply to principal aliens and not to spouses
†

893

S 1932 ES

1 or children who are accompanying or following to join such

2 principal aliens.

3 ‘‘(E)(i) An employer may not require an alien who

4 is the beneficiary of the visa or petition for which a fee

5 is imposed under this paragraph to reimburse, or other6 wise compensate, the employer for part or all of the cost

7 of such fee.

8 ‘‘(ii) Section 274A(g)(2) shall apply to a violation of

9 clause (i) in the same manner as it applies to a violation

10 of section 274A(g)(1).’’.

11 SEC. 8003. JUSTICE PROGRAMS.

12 (a) IN GENERAL.—The Secretary of the Treasury—

13 (1) for fiscal year 2006, out of the funds in the

14 Treasury not otherwise appropriated, shall pay to

15 the Attorney General, by December 31, 2005, the

16 amounts listed in subsection (b) that are to be pro17 vided for fiscal year 2006; and

18 (2) for each subsequent fiscal year provided in

19 subsection (b) out of funds in the Treasury not oth20 erwise appropriated, shall pay to the Attorney Gen21 eral the amounts provided by November 1 of each

22 such fiscal year.

23 (b) AMOUNTS PROVIDED.—The amounts referred to

24 in subsection (a), which shall be in addition to funds ap25 propriated for each fiscal year, are—
†

894

S 1932 ES

1 (1) $8,000,000 for fiscal year 2006,

2 $17,000,000 for fiscal year 2007, $15,000,000 for

3 fiscal year 2008, $10,000,000 for fiscal year 2009,

4 and $10,000,000 for fiscal year 2010, to fund the

5 Bulletproof Vest Partnership Program as authorized

6 under section 4 of Public Law 108–372.

7 (2) $3,700,000 for fiscal year 2006, $6,300,000

8 for fiscal year 2007, $5,000,000 for fiscal year

9 2008, $5,000,000 for fiscal year 2009, and

10 $5,000,000 for fiscal year 2010, to fund DNA

11 Training and Education for Law Enforcement, Cor12 rectional Personnel, and Court Officers as author13 ized by section 303 of Public Law 108–405.

14 (3) $8,000,000 for fiscal year 2006,

15 $12,000,000 for fiscal year 2007, $10,000,000 for

16 fiscal year 2008, $10,000,000 for fiscal year 2009,

17 and $10,000,000 for fiscal year 2010, to fund DNA

18 Research and Development as authorized by section

19 305 of Public Law 108–405.

20 (4) $500,000 for fiscal year 2006, $500,000 for

21 fiscal year 2007, $500,000 for fiscal year 2008,

22 $500,000 for fiscal year 2009, and $500,000 for fis23 cal year 2010, to fund the National Forensic Science

24 Commission as authorized by section 306 of Public

25 Law 108–405.
†

895

S 1932 ES

1 (5) $1,000,000 for fiscal year 2006, $1,000,000

2 for fiscal year 2007, $1,000,000 for fiscal year

3 2008, $1,000,000 for fiscal year 2009, and

4 $1,000,000 for fiscal year 2010, to fund DNA Iden5 tification of Missing Persons as authorized by sec6 tion 308 of Public Law 108–405.

7 (6) $8,000,000 for fiscal year 2006,

8 $27,000,000 for fiscal year 2007, $26,000,000 for

9 fiscal year 2008, $25,000,000 for fiscal year 2009,

10 and $25,000,000 for fiscal year 2010, to fund Cap11 ital Litigation Improvement Grants as authorized by

12 sections 421, 422, and 426 of Public Law 108–405.

13 (7) $2,500,000 for fiscal year 2006, $3,000,000

14 for fiscal year 2007, $2,500,000 for fiscal year

15 2008, $2,500,000 for fiscal year 2009, and

16 $2,500,000 for fiscal year 2010, to fund the Kirk

17 Bloodsworth Post-Conviction DNA Testing Grant

18 Program as authorized by sections 412 and 413 of

19 Public Law 108–405.

20 (8) $1,000,000 for fiscal year 2006, $1,000,000

21 for fiscal year 2007, $1,000,000 for fiscal year

22 2008, $1,000,000 for fiscal year 2009, and

23 $1,000,000 for fiscal year 2010, to fund Increased

24 Resources for Enforcement of Crime Victims Rights,

25 Crime Victims Notification Grants as authorized by
†

896

S 1932 ES

1 section 1404D of the Victims of Crime Act of 1984

2 (42 U.S.C. 10603d).

3 (c) OBLIGATION OF FUNDS.—The Attorney General

4 shall—

5 (1) receive funds under this section for fiscal

6 years 2006 through 2010; and

7 (2) accept such funds in the amounts provided

8 which shall be obligated for the purposes stated in

9 this section by March 1 of each fiscal year.

10 SEC. 8004. COPYRIGHT PROGRAM.

11 (a) IN GENERAL.—The Secretary of the Treasury—

12 (1) for fiscal year 2006, out of the funds in the

13 Treasury not otherwise appropriated, shall pay to

14 the Librarian of the Congress, by December 31,

15 2005, the amounts listed in subsection (b) that are

16 to be provided for fiscal year 2006; and

17 (2) for each subsequent fiscal year provided in

18 subsection (b) out of funds in the Treasury not oth19 erwise appropriated shall pay to the Librarian of the

20 Congress the amounts provided by November 1 of

21 each such fiscal year.

22 (b) AMOUNTS PROVIDED.—The amounts referred to

23 in subsection (a), which shall be in addition to funds ap24 propriated for each fiscal year, are: $1,300,000 for fiscal

25 year 2006, $1,300,000 for fiscal year 2007, $1,300,000
†

897

S 1932 ES

1 for fiscal year 2008, $1,300,000 for fiscal year 2009, and

2 $1,300,000 for fiscal year 2010, to fund the Copyright

3 Royalty Judges Program as authorized under section

4 803(e)(1)(B) of title 17, United States Code.

5 (c) OBLIGATION OF FUNDS.—The Librarian of the

6 Congress shall—

7 (1) receive funds under this section for fiscal

8 years 2006 through 2010; and

9 (2) accept such funds in the amounts provided

10 which shall be obligated for the purposes stated in

11 this section by March 1 of each fiscal year.

12 DIVISION A—AMTRAK

13 REAUTHORIZATION

14 SECTION 1. SHORT TITLE.

15 This division may be cited as the ‘‘Passenger Rail In16 vestment and Improvement Act of 2005’’.

17 SEC. 2. AMENDMENT OF TITLE 49, UNITED STATES CODE.

18 Except as otherwise specifically provided, whenever in

19 this division an amendment is expressed in terms of an

20 amendment to a section or other provision of law, the ref21 erence shall be considered to be made to a section or other

22 provision of title 49, United States Code.
†

898

S 1932 ES

1 TITLE I—AUTHORIZATIONS

2 SEC. 101. AUTHORIZATION FOR AMTRAK CAPITAL AND OP3 ERATING EXPENSES AND STATE CAPITAL

4 GRANTS.

5 (a) OPERATING GRANTS.—There are authorized to

6 be appropriated to the Secretary of Transportation for the

7 use of Amtrak for operating costs the following amounts:

8 (1) For fiscal year 2006, $580,000,000.

9 (2) For fiscal year 2007, $590,000,000.

10 (3) For fiscal year 2008, $600,000,000.

11 (4) For fiscal year 2009, $575,000,000.

12 (5) For fiscal year 2010, $535,000,000.

13 (6) For fiscal year 2011, $455,000,000.

14 (b) CAPITAL GRANTS.—There are authorized to be

15 appropriated to the Secretary of Transportation for the

16 use of Amtrak for capital projects (as defined in subpara17 graphs (A) and (B) of section 24401(2) of title 49, United

18 States Code) to bring the Northeast Corridor (as defined

19 in section 24102(a)) to a state-of-good-repair, for capital

20 expenses of the national railroad passenger transportation

21 system, and for purposes of making capital grants under

22 section 24402 of that title to States, the following

23 amounts:

24 (1) For fiscal year 2006, $813,000,000.

25 (2) For fiscal year 2007, $910,000,000.
†

899

S 1932 ES

1 (3) For fiscal year 2008, $1,071,000,000.

2 (4) For fiscal year 2009, $1,096,000,000.

3 (5) For fiscal year 2010, $1,191,000,000.

4 (6) For fiscal year 2011, $1,231,000,000.

5 (c) AMOUNTS FOR STATE GRANTS.—Out of the

6 amounts authorized under subsection (b), the following

7 percentage shall be available each fiscal year for capital

8 grants to States under section 24402 of title 49, United

9 States Code, to be administered by the Secretary of Trans10 portation:

11 (1) 3 percent for fiscal year 2006.

12 (2) 11 percent for fiscal year 2007.

13 (3) 23 percent for fiscal year 2008.

14 (4) 25 percent for fiscal year 2009.

15 (5) 31 percent for fiscal year 2010.

16 (6) 33 percent for fiscal year 2011.

17 (d) PROJECT MANAGEMENT OVERSIGHT.—The Secretary may withhold up to 1 18 ⁄2 of 1 percent of amounts

19 appropriated pursuant to subsection (b) for the costs of

20 project management oversight of capital projects carried

21 out by Amtrak.

22 SEC. 102. AUTHORIZATION FOR THE FEDERAL RAILROAD

23 ADMINISTRATION.

24 There are authorized to be appropriated to the Sec25 retary of Transportation for the use of the Federal Rail-
†

900

S 1932 ES

1 road Administration such sums as necessary to implement

2 the provisions required under this division for fiscal years

3 2006 through 2011.

4 SEC. 103. REPAYMENT OF LONG-TERM DEBT AND CAPITAL

5 LEASES.

6 (a) AMTRAK PRINCIPAL AND INTEREST PAY7 MENTS.—

8 (1) PRINCIPAL ON DEBT SERVICE.—There are

9 authorized to be appropriated to the Secretary of

10 Transportation for the use of Amtrak for retirement

11 of principal on loans for capital equipment, or cap12 ital leases, not more than the following amounts:

13 (A) For fiscal year 2006, $130,200,000.

14 (B) For fiscal year 2007, $140,700,000.

15 (C) For fiscal year 2008, $156,000,000.

16 (D) For fiscal year 2009, $183,800,000.

17 (E) For fiscal year 2010, $156,100,000.

18 (F) For fiscal year 2011, $193,500,000.

19 (2) INTEREST ON DEBT.—There are authorized

20 to be appropriated to the Secretary of Transpor21 tation for the use of Amtrak for the payment of in22 terest on loans for capital equipment, or capital

23 leases, the following amounts:

24 (A) For fiscal year 2006, $148,100,000.

25 (B) For fiscal year 2007, $141,500,000.
†

901

S 1932 ES

1 (C) For fiscal year 2008, $133,800,000.

2 (D) For fiscal year 2009, $124,000,000.

3 (E) For fiscal year 2010, $113,900,000.

4 (F) For fiscal year 2011, $103,800,000.

5 (3) EARLY BUYOUT OPTION.—There are au6 thorized to be appropriated to the Secretary of

7 Transportation such sums as may be necessary for

8 the use of Amtrak for the payment of costs associ9 ated with early buyout options if the exercise of

10 those options is determined to be advantageous to

11 Amtrak.

12 (4) LEGAL EFFECT OF PAYMENTS UNDER THIS

13 SECTION.—The payment of principal and interest on

14 secured debt, with the proceeds of grants authorized

15 by this section shall not—

16 (A) modify the extent or nature of any in17 debtedness of the National Railroad Passenger

18 Corporation to the United States in existence of

19 the date of enactment of this Act;

20 (B) change the private nature of Amtrak’s

21 or its successors’ liabilities; or

22 (C) imply any Federal guarantee or com23 mitment to amortize Amtrak’s outstanding in24 debtedness.
†

902

S 1932 ES

1 SEC. 104. EXCESS RAILROAD RETIREMENT.

2 There are authorized to be appropriated to the Sec3 retary of Transportation, beginning with fiscal year 2006,

4 such sums as may be necessary to pay to the Railroad

5 Retirement Account an amount equal to the amount Am6 trak must pay under section 3221 of the Internal Revenue

7 Code of 1986 in such fiscal years that is more than the

8 amount needed for benefits for individuals who retire from

9 Amtrak and for their beneficiaries. For each fiscal year

10 in which the Secretary makes such a payment, the

11 amounts authorized by section 101(a) shall be reduced by

12 an amount equal to such payment.

13 SEC. 105. OTHER AUTHORIZATIONS.

14 There are authorized to be appropriated to the Sec15 retary of Transportation—

16 (1) $5,000,000 for each of fiscal years 2006

17 through 2011 to carry out the rail cooperative re18 search program under section 24910 of title 49,

19 United States Code;

20 (2) $5,000,000 for fiscal year 2006, to remain

21 available until expended, for grants to Amtrak and

22 States participating in the Next Generation Corridor

23 Train Equipment Pool Committee established under

24 section 303 of this division for the purpose of de25 signing, developing specifications for, and initiating

26 the procurement of an initial order of 1 or more
†

903

S 1932 ES

1 types of standardized next-generation corridor train

2 equipment and establishing a jointly-owned corpora3 tion to manage that equipment; and

4 (3) $2,000,000 for fiscal year 2007, for the use

5 of Amtrak in conducting the evaluation required by

6 section 216 of this division.

7 TITLE II—AMTRAK REFORM AND

8 OPERATIONAL IMPROVEMENTS

9 SEC. 201. NATIONAL RAILROAD PASSENGER TRANSPOR10 TATION SYSTEM DEFINED.

11 (a) IN GENERAL.—Section 24102 is amended—

12 (1) by striking paragraph (2);

13 (2) by redesignating paragraphs (3), (4), and

14 (5) as paragraphs (2), (3), and (4), respectively; and

15 (3) by inserting after paragraph (4) as so re16 designated the following:

17 ‘‘(5) ‘national rail passenger transportation sys18 tem’ means—

19 ‘‘(A) the segment of the Northeast Cor20 ridor between Boston, Massachusetts and

21 Washington, D.C.;

22 ‘‘(B) rail corridors that have been des23 ignated by the Secretary of Transportation as

24 high-speed corridors (other than corridors de25 scribed in subparagraph (A)), but only after
†

904

S 1932 ES

1 they have been improved to permit operation of

2 high-speed service;

3 ‘‘(C) long distance routes of more than

4 750 miles between endpoints operated by Am5 trak as of the date of enactment of the Pas6 senger Rail Investment and Improvement Act of

7 2005; and

8 ‘‘(D) short-distance corridors, or routes of

9 not more than 750 miles between endpoints, op10 erated by—

11 ‘‘(i) Amtrak; or

12 ‘‘(ii) another rail carrier that receives

13 funds under chapter 244.’’.

14 (b) AMTRAK ROUTES WITH STATE FUNDING.—

15 (1) IN GENERAL.—Chapter 247 is amended by

16 inserting after section 24701 the following:

17 ‘‘§ 24702. Transportation requested by States, au18 thorities, and other persons

19 ‘‘(a) CONTRACTS FOR TRANSPORTATION.—Amtrak

20 may enter into a contract with a State, a regional or local

21 authority, or another person for Amtrak to operate an

22 intercity rail service or route not included in the national

23 rail passenger transportation system upon such terms as

24 the parties thereto may agree.
†

905

S 1932 ES

1 ‘‘(b) DISCONTINUANCE.—Upon termination of a con2 tract entered into under this section, or the cessation of

3 financial support under such a contract by either party,

4 Amtrak may discontinue such service or route, notwith5 standing any other provision of law.’’.

6 (2) CONFORMING AMENDMENT.—The chapter

7 analysis for chapter 247 is amended by inserting

8 after the item relating to section 24701 the fol9 lowing:

‘‘24702. Transportation requested by States, authorities, and other persons’’.

10 (c) AMTRAK TO CONTINUE TO PROVIDE NON-HIGH11 SPEED SERVICES.—Nothing in this division is intended to

12 preclude Amtrak from restoring, improving, or developing

13 non-high-speed intercity passenger rail service.

14 (d) APPLICABILITY OF SECTION 24706.—Section

15 24706 is amended by adding at the end the following:

16 ‘‘(c) APPLICABILITY.—This section applies to all

17 service over routes provided by Amtrak, notwithstanding

18 any provision of section 24701 of this title or any other

19 provision of this title except section 24702(b).’’.

20 SEC. 202. AMTRAK BOARD OF DIRECTORS.

21 (a) IN GENERAL.—Section 24302 is amended to read

22 as follows:

23 ‘‘§ 24302. Board of directors

24 ‘‘(a) COMPOSITION AND TERMS.—
†

906

S 1932 ES

1 ‘‘(1) The Board of Directors of Amtrak is com2 posed of the following 10 directors, each of whom

3 must be a citizen of the United States:

4 ‘‘(A) The Secretary of Transportation.

5 ‘‘(B) The President of Amtrak, who shall

6 serve ex officio, as a non-voting member.

7 ‘‘(C) 8 individuals appointed by the Presi8 dent of the United States, by and with the ad9 vice and consent of the Senate, with general

10 business and financial experience, experience or

11 qualifications in transportation, freight and

12 passenger rail transportation, travel, hospi13 tality, cruise line, and passenger air transpor14 tation businesses, or representatives of employ15 ees or users of passenger rail transportation or

16 a State government.

17 ‘‘(2) In selecting individuals described in para18 graph (1) for nominations for appointments to the

19 Board, the President shall consult with the Speaker

20 of the House of Representatives, the Minority Lead21 er of the House of Representatives, the Majority

22 Leader of the Senate, and the Minority Leader of

23 the Senate and try to provide adequate and balanced

24 representation of the major geographic regions of

25 the United States served by Amtrak.
†

907

S 1932 ES

1 ‘‘(3) An individual appointed under paragraph

2 (1)(C) of this subsection serves for 5 years or until

3 the individual’s successor is appointed and qualified.

4 Not more than 5 individuals appointed under para5 graph (1)(C) may be members of the same political

6 party.

7 ‘‘(4) The Board shall elect a chairman and a

8 vice chairman from among its membership. The vice

9 chairman shall serve as chairman in the absence of

10 the chairman.

11 ‘‘(5) The Secretary may be represented at

12 board meetings by the Secretary’s designee.

13 ‘‘(6) The voting privileges of the President can

14 be changed by a unanimous decision of the Board.

15 ‘‘(b) PAY AND EXPENSES.—Each director not em16 ployed by the United States Government is entitled to

17 $300 a day when performing Board duties. Each Director

18 is entitled to reimbursement for necessary travel, reason19 able secretarial and professional staff support, and sub20 sistence expenses incurred in attending Board meetings.

21 ‘‘(c) VACANCIES.—A vacancy on the Board is filled

22 in the same way as the original selection, except that an

23 individual appointed by the President of the United States

24 under subsection (a)(1)(C) of this section to fill a vacancy

25 occurring before the end of the term for which the prede-
†

908

S 1932 ES

1 cessor of that individual was appointed is appointed for

2 the remainder of that term. A vacancy required to be filled

3 by appointment under subsection (a)(1)(C) must be filled

4 not later than 120 days after the vacancy occurs.

5 ‘‘(d) QUORUM.—A majority of the members serving

6 shall constitute a quorum for doing business.

7 ‘‘(e) BYLAWS.—The Board may adopt and amend by8 laws governing the operation of Amtrak. The bylaws shall

9 be consistent with this part and the articles of incorpora10 tion.’’.

11 (b) EFFECTIVE DATE FOR DIRECTORS’ PROVI12 SION.—The amendment made by subsection (a) shall take

13 effect on January 1, 2006. The members of the Amtrak

14 Board serving on the date of enactment of this Act may

15 continue to serve for the remainder of the term to which

16 they were appointed.

17 SEC. 203. ESTABLISHMENT OF IMPROVED FINANCIAL AC18 COUNTING SYSTEM.

19 (a) IN GENERAL.—The Amtrak Board of Directors—

20 (1) may employ an independent financial con21 sultant with experience in railroad accounting to as22 sist Amtrak in improving Amtrak’s financial ac23 counting and reporting system and practices; and

24 (2) shall implement a modern financial account25 ing and reporting system that will produce accurate
†

909

S 1932 ES

1 and timely financial information in sufficient

2 detail—

3 (A) to enable Amtrak to assign revenues

4 and expenses appropriately to each of its lines

5 of business and to each major activity within

6 each line of business activity, including train

7 operations, equipment maintenance, ticketing,

8 and reservations;

9 (B) to aggregate expenses and revenues re10 lated to infrastructure and distinguish them

11 from expenses and revenues related to rail oper12 ations;

13 (C) to allow the analysis of ticketing and

14 reservation information on a real-time basis;

15 (D) to provide Amtrak cost accounting

16 data; and

17 (E) to allow financial analysis by route and

18 service.

19 (b) VERIFICATION OF SYSTEM; REPORT.—The In20 spector General of the Department of Transportation shall

21 review the accounting system designed and implemented

22 under subsection (a) to ensure that it accomplishes the

23 purposes for which it is intended. The Inspector General

24 shall report his findings and conclusions, together with

25 any recommendations, to the Senate Committee on Com-
†

910

S 1932 ES

1 merce, Science, and Transportation and the House of Rep2 resentatives Committee on Transportation and Infrastruc3 ture.

4 SEC. 204. DEVELOPMENT OF 5-YEAR FINANCIAL PLAN.

5 (a) DEVELOPMENT OF 5-YEAR FINANCIAL PLAN.—

6 The Amtrak Board of Directors shall submit an annual

7 budget and business plan for Amtrak, and a 5-year finan8 cial plan for the fiscal year to which that budget and busi9 ness plan relate and the subsequent 4 years, prepared in

10 accordance with this section, to the Secretary of Transpor11 tation and the Inspector General of the Department of

12 Transportation no later than—

13 (1) the first day of each fiscal year beginning

14 after the date of enactment of this Act; or

15 (2) the date that is 60 days after the date of

16 enactment of an appropriation Act for the fiscal

17 year, if later.

18 (b) CONTENTS OF 5-YEAR FINANCIAL PLAN.—The

19 5-year financial plan for Amtrak shall include, at a

20 minimum—

21 (1) all projected revenues and expenditures for

22 Amtrak, including governmental funding sources;

23 (2) projected ridership levels for all Amtrak

24 passenger operations;
†

911

S 1932 ES

1 (3) revenue and expenditure forecasts for non2 passenger operations;

3 (4) capital funding requirements and expendi4 tures necessary to maintain passenger service which

5 will accommodate predicted ridership levels and pre6 dicted sources of capital funding;

7 (5) operational funding needs, if any, to main8 tain current and projected levels of passenger serv9 ice, including state-supported routes and predicted

10 funding sources;

11 (6) projected capital and operating require12 ments, ridership, and revenue for any new passenger

13 service operations or service expansions;

14 (7) an assessment of the continuing financial

15 stability of Amtrak, as indicated by factors such as

16 the ability of the Federal government to fund capital

17 and operating requirements adequately, Amtrak’s

18 ability to efficiently manage its workforce, and Am19 trak’s ability to effectively provide passenger train

20 service;

21 (8) estimates of long-term and short-term debt

22 and associated principle and interest payments (both

23 current and anticipated);

24 (9) annual cash flow forecasts;
†

912

S 1932 ES

1 (10) a statement describing methods of esti2 mation and significant assumptions;

3 (11) specific measures that demonstrate meas4 urable improvement year over year in Amtrak’s abil5 ity to operate with reduced Federal operating assist6 ance; and

7 (12) capital and operating expenditures for an8 ticipated security needs.

9 (c) STANDARDS TO PROMOTE FINANCIAL STA10 BILITY.—In meeting the requirements of subsection (b),

11 Amtrak shall—

12 (1) apply sound budgetary practices, including

13 reducing costs and other expenditures, improving

14 productivity, increasing revenues, or combinations of

15 such practices;

16 (2) use the categories specified in the financial

17 accounting and reporting system developed under

18 section 203 when preparing its 5-year financial plan;

19 and

20 (3) ensure that the plan is consistent with the

21 authorizations of appropriations under title I of this

22 division.

23 (d) ASSESSMENT BY DOT INSPECTOR GENERAL.—

24 (1) IN GENERAL.—The Inspector General of

25 the Department of Transportation shall assess the
†

913

S 1932 ES

1 5-year financial plans prepared by Amtrak under

2 this section to determine whether they meet the re3 quirements of subsection (b), and may suggest revi4 sions to any components thereof that do not meet

5 those requirements.

6 (2) ASSESSMENT TO BE FURNISHED TO THE

7 CONGRESS.—The Inspector General shall furnish to

8 the House of Representatives Committee on Appro9 priations, the Senate Committee on Appropriations,

10 the House of Representatives Committee on Trans11 portation and Infrastructure, and the Senate Com12 mittee on Commerce, Science, and Transportation—

13 (A) an assessment of the annual budget

14 within 90 days after receiving it from Amtrak;

15 and

16 (B) an assessment of the remaining 4

17 years of the 5-year financial plan within 180

18 days after receiving it from Amtrak.

19 SEC. 205. ESTABLISHMENT OF GRANT PROCESS.

20 (a) GRANT REQUESTS.—Amtrak shall submit grant

21 requests (including a schedule for the disbursement of

22 funds), consistent with the requirements of this division,

23 to the Secretary of Transportation for funds authorized

24 to be appropriated to the Secretary for the use of Amtrak

25 under sections 101(a) and (b), 103, and 105.
†

914

S 1932 ES

1 (b) PROCEDURES FOR GRANT REQUESTS.—The Sec2 retary shall establish substantive and procedural require3 ments, including schedules, for grant requests under this

4 section not later than 30 days after the date of enactment

5 of this Act and shall transmit copies to the Senate Com6 mittee on Commerce, Science, and Transportation and the

7 House of Representatives Committee on Transportation

8 and Infrastructure. As part of those requirements, the

9 Secretary shall require, at a minimum, that Amtrak de10 posit grant funds, consistent with the appropriated

11 amounts for each area of expenditure in a given fiscal

12 year, in the following 3 accounts:

13 (1) The Amtrak Operating account.

14 (2) The Amtrak General Capital account.

15 (3) The Northeast Corridor Improvement funds

16 account.

17 Amtrak may not transfer such funds to another account

18 or expend such funds for any purpose other than the pur19 poses covered by the account in which the funds are depos20 ited without approval by the Secretary.

21 (c) REVIEW AND APPROVAL.—

22 (1) 30-DAY APPROVAL PROCESS.—The Sec23 retary shall complete the review of a complete grant

24 request (including the disbursement schedule) and

25 approve or disapprove the request within 30 days
†

915

S 1932 ES

1 after the date on which Amtrak submits the grant

2 request. If the Secretary disapproves the request or

3 determines that the request is incomplete or defi4 cient, the Secretary shall include the reason for dis5 approval or the incomplete items or deficiencies in

6 the notice to Amtrak.

7 (2) 15-DAY MODIFICATION PERIOD.—Within 15

8 days after receiving notification from the Secretary

9 under the preceding sentence, Amtrak shall submit

10 a modified request for the Secretary’s review.

11 (3) REVISED REQUESTS.—Within 15 days after

12 receiving a modified request from Amtrak, the Sec13 retary shall either approve the modified request, or,

14 if the Secretary finds that the request is still incom15 plete or deficient, the Secretary shall identify in

16 writing to the Senate Committee on Commerce,

17 Science, and Transportation and the House of Rep18 resentatives Committee on Transportation and In19 frastructure the remaining deficiencies and rec20 ommend a process for resolving the outstanding por21 tions of the request.

22 SEC. 206. STATE-SUPPORTED ROUTES.

23 (a) IN GENERAL.—Within 2 years after the date of

24 enactment of this Act, the Board of Directors of Amtrak,

25 in consultation with the Secretary of Transportation and
†

916

S 1932 ES

1 the governors of each State and the Mayor of the District

2 of Columbia or groups representing those officials, shall

3 develop and implement a standardized methodology for es4 tablishing and allocating the operating and capital costs

5 among the States and Amtrak associated with trains oper6 ated on routes described in section 24102(5)(B) or (D)

7 or section 24702 that—

8 (1) ensures, within 5 years after the date of en9 actment of this Act, equal treatment in the provision

10 of like services of all States and groups of States

11 (including the District of Columbia); and

12 (2) allocates to each route the costs incurred

13 only for the benefit of that route and a propor14 tionate share, based upon factors that reasonably re15 flect relative use, of costs incurred for the common

16 benefit of more than 1 route.

17 (b) REVIEW.—If Amtrak and the States (including

18 the District of Columbia) in which Amtrak operates such

19 routes do not voluntarily adopt and implement the meth20 odology developed under subsection (a) in allocating costs

21 and determining compensation for the provision of service

22 in accordance with the date established therein, the Sur23 face Transportation Board shall determine the appro24 priate methodology required under subsection (a) for such

25 services in accordance with the procedures and procedural
†

917

S 1932 ES

1 schedule applicable to a proceeding under section 24904(c)

2 of title 49, United States Code, and require the full imple3 mentation of this methodology with regards to the provi4 sion of such service within 1 year after the Board’s deter5 mination of the appropriate methodology.

6 (c) USE OF CHAPTER 244 FUNDS.—Funds provided

7 to a State under chapter 244 of title 49, United States

8 Code, may be used, as provided in that chapter, to pay

9 capital costs determined in accordance with this section.

10 SEC. 207. INDEPENDENT AUDITOR TO ESTABLISH METH11 ODOLOGIES FOR AMTRAK ROUTE AND SERV12 ICE PLANNING DECISIONS.

13 (a) METHODOLOGY DEVELOPMENT.—The Federal

14 Railroad Administration shall obtain the services of an

15 independent auditor or consultant to develop and rec16 ommend objective methodologies for determining intercity

17 passenger routes and services, including the establishment

18 of new routes, the elimination of existing routes, and the

19 contraction or expansion of services or frequencies over

20 such routes. In developing such methodologies, the auditor

21 or consultant shall consider—

22 (1) the current or expected performance and

23 service quality of intercity passenger train oper24 ations, including cost recovery, on-time performance
†

918

S 1932 ES

1 and minutes of delay, ridership, on-board services,

2 stations, facilities, equipment, and other services;

3 (2) connectivity of a route with other routes;

4 (3) the transportation needs of communities

5 and populations that are not well served by other

6 forms of public transportation;

7 (4) Amtrak’s and other major intercity pas8 senger rail service providers in other countries’

9 methodologies for determining intercity passenger

10 rail routes and services; and

11 (5) the views of the States and other interested

12 parties.

13 (b) SUBMITTAL TO CONGRESS.—The auditor or con14 sultant shall submit recommendations developed under

15 subsection (a) to Amtrak, the House of Representatives

16 Committee on Transportation and Infrastructure, and the

17 Senate Committee on Commerce, Science, and Transpor18 tation.

19 (c) CONSIDERATION OF RECOMMENDATIONS.—With20 in 90 days after receiving the recommendations developed

21 under subsection (a) by the independent auditor or con22 sultant, the Amtrak Board shall consider the adoption of

23 those recommendations. The Board shall transmit a report

24 to the Senate Committee on Commerce, Science, and

25 Transportation and the House of Representatives Com-
†

919

S 1932 ES

1 mittee on Transportation and Infrastructure explaining its

2 action in adopting or failing to adopt any of the rec3 ommendations.

4 (d) AUTHORIZATION OF APPROPRIATIONS.—There

5 are authorized to be made available to the Secretary of

6 Transportation, out of any amounts authorized by this di7 vision to be appropriated for the benefit of Amtrak and

8 not otherwise obligated or expended, such sums as may

9 be necessary to carry out this section.

10 (e) PIONEER ROUTE.—Within 2 years after the date

11 of enactment of this Act, Amtrak shall conduct a 1-time

12 evaluation of the Pioneer Route formerly operated by Am13 trak to determine, using methodologies adopted under

14 subsection (c), whether a level of passenger demand exists

15 that would warrant consideration of reinstating the entire

16 Pioneer Route service or segments of that service.

17 SEC. 208. METRICS AND STANDARDS.

18 (a) IN GENERAL.—Within 180 days after the date

19 of enactment of this Act, the Administrator of the Federal

20 Railroad Administration and Amtrak shall jointly, in con21 sultation with the Surface Transportation Board, rail car22 riers over whose rail lines Amtrak trains operate, States,

23 Amtrak employees, and groups representing Amtrak pas24 sengers, as appropriate, develop new or improve existing

25 metrics and minimum standards for measuring the per-
†

920

S 1932 ES

1 formance and service quality of intercity passenger train

2 operations, including cost recovery, on-time performance

3 and minutes of delay, ridership, on-board services, sta4 tions, facilities, equipment, and other services. Such

5 metrics, at a minimum, shall include the percentage of

6 avoidable and fully allocated operating costs covered by

7 passenger revenues on each route, ridership per train mile

8 operated, measures of on-time performance and delays in9 curred by intercity passenger trains on the rail lines of

10 each rail carrier and, for long distance routes, measures

11 of connectivity with other routes in all regions currently

12 receiving Amtrak service and the transportation needs of

13 communities and populations that are not well-served by

14 other forms of public transportation. Amtrak shall provide

15 reasonable access to the Federal Railroad Administration

16 in order to enable the Administration to carry out its duty

17 under this section.

18 (b) QUARTERLY REPORTS.—The Administrator of

19 the Federal Railroad Administration shall collect the nec20 essary data and publish a quarterly report on the perform21 ance and service quality of intercity passenger train oper22 ations, including cost recovery, ridership, on-time perform23 ance and minutes of delay, causes of delay, on-board serv24 ices, stations, facilities, equipment, and other services.
†

921

S 1932 ES

1 (c) CONTRACT WITH HOST RAIL CARRIERS.—To the

2 extent practicable, Amtrak and its host rail carriers shall

3 incorporate the metrics and standards developed under

4 subsection (a) into their access and service agreements.

5 (d) ARBITRATION.—If the development of the metrics

6 and standards is not completed within the 180-day period

7 required by subsection (a), any party involved in the devel8 opment of those standards may petition the Surface

9 Transportation Board to appoint an arbitrator to assist

10 the parties in resolving their disputes through binding ar11 bitration.

12 SEC. 209. PASSENGER TRAIN PERFORMANCE.

13 (a) IN GENERAL.—Section 24308 is amended by

14 adding at the end the following:

15 ‘‘(f) PASSENGER TRAIN PERFORMANCE AND OTHER

16 STANDARDS.—

17 ‘‘(1) INVESTIGATION OF SUBSTANDARD PER18 FORMANCE.—If the on-time performance of any

19 intercity passenger train averages less than 80 per20 cent for any 2 consecutive calendar quarters, or the

21 service quality of intercity passenger train operations

22 for which minimum standards are established under

23 section 208 of the Passenger Rail Investment and

24 Improvement Act of 2005 fails to meet those stand25 ards for 2 consecutive calendar quarters, the Surface
†

922

S 1932 ES

1 Transportation Board shall investigate whether, and

2 to what extent, delays or failure to achieve minimum

3 standards are due to causes that could reasonably be

4 addressed by a rail carrier over the tracks of which

5 the intercity passenger train operates or reasonably

6 addressed by the intercity passenger rail operator.

7 In carrying out such an investigation, the Board

8 shall obtain information from all parties involved

9 and make recommendations regarding reasonable

10 measures to improve the service, quality, and on11 time performance of the train.

12 ‘‘(2) PROBLEMS CAUSED BY HOST RAIL CAR13 RIER.—If the Board determines that delays or fail14 ures to achieve minimum standards investigated

15 under paragraph (1) are attributable to a rail car16 rier’s failure to provide preference to Amtrak over

17 freight transportation under subsection (c), then the

18 Board shall enforce its recommendations for relief

19 under this section.

20 ‘‘(3) PENALTIES.—

21 ‘‘(A) IN GENERAL.—The Board shall pub22 lish a schedule of penalties which will—

23 ‘‘(A) fairly reflect the extent to which Am24 trak suffers financial loss as a result of host
†

923

S 1932 ES

1 rail carrier delays or failure to achieve min2 imum standards; and

3 ‘‘(B) will adequately deter future actions

4 which may reasonably be expected to be likely

5 to result in delays to Amtrak.

6 ‘‘(B) ASSESSMENT.—The Board may as7 sess these penalties upon a host rail carrier.

8 ‘‘(C) USE.—The Board shall make any

9 amounts received as penalties under this para10 graph available to Amtrak or a State con11 tracting with Amtrak, as applicable, for capital

12 or operating expenditures on such routes.’’.

13 (b) CHANGE OF REFERENCE.—Section 24308 is

14 amended—

15 (1) by striking ‘‘Interstate Commerce Commis16 sion’’ in subsection (a)(2)(A) and inserting ‘‘Surface

17 Transportation Board’’;

18 (2) by striking ‘‘Commission’’ each place it ap19 pears and inserting ‘‘Board’’;

20 (3) by striking ‘‘Secretary’’ the last 3 places it

21 appears in subsection (c) and each place it appears

22 in subsections (d) and (e) and inserting ‘‘Board’’.

23 SEC. 210. LONG DISTANCE ROUTES.

24 (a) IN GENERAL.—Chapter 247 is amended by add25 ing at the end thereof the following:
†

924

S 1932 ES

1 ‘‘§ 24710. Long distance routes

2 ‘‘(a) ANNUAL EVALUATION.—Using the financial and

3 performance metrics developed under section 208 of the

4 Passenger Rail Investment and Improvement Act of 2005,

5 Amtrak shall—

6 ‘‘(1) evaluate annually the financial and oper7 ating performance of each long distance passenger

8 rail route operated by Amtrak; and

9 ‘‘(2) rank the overall performance of such

10 routes for 2006 and identify each long distance pas11 senger rail route operated by Amtrak in 2006 ac12 cording to its overall performance as belonging to

13 the best performing third of such routes, the second

14 best performing third of such routes, or the worst

15 performing third of such routes.

16 ‘‘(b) PERFORMANCE IMPROVEMENT PLAN.—Amtrak

17 shall develop and publish a performance improvement plan

18 for its long distance passenger rail routes to achieve finan19 cial and operating improvements based on the data col20 lected through the application of the financial and per21 formance metrics developed under section 208 of that Act.

22 The plan shall address—

23 ‘‘(1) on-time performance;

24 ‘‘(2) scheduling, frequency, routes, and stops;

25 ‘‘(3) the feasibility of restructuring service into

26 connected corridor service;
†

925

S 1932 ES

1 ‘‘(4) performance-related equipment changes

2 and capital improvements;

3 ‘‘(5) on-board amenities and service, including

4 food, first class, and sleeping car service;

5 ‘‘(6) State or other non-Federal financial con6 tributions;

7 ‘‘(7) improving financial performance; and

8 ‘‘(8) other aspects of Amtrak’s long distance

9 passenger rail routes that affect the financial, com10 petitive, and functional performance of service on

11 Amtrak’s long distance passenger rail routes.

12 ‘‘(c) IMPLEMENTATION.—Amtrak shall implement

13 the performance improvement plan developed under sub14 section (b)—

15 ‘‘(1) beginning in fiscal year 2007 for those

16 routes identified as being in the worst performing

17 third under subsection (a)(2);

18 ‘‘(2) beginning in fiscal year 2008 for those

19 routes identified as being in the second best per20 forming third under subsection (a)(2); and

21 ‘‘(3) beginning in fiscal year 2009 for those

22 routes identified as being in the best performing

23 third under subsection (a)(2).

24 ‘‘(d) ENFORCEMENT.—The Federal Railroad Admin25 istration shall monitor the development, implementation,
†

926

S 1932 ES

1 and outcome of improvement plans under this section. If,

2 for any year, it determines that Amtrak is not making

3 reasonable progress in implementing its performance im4 provement plan or in achieving the expected outcome of

5 the plan for any calendar year, the Federal Railroad

6 Administration—

7 ‘‘(1) shall notify Amtrak, the Inspector General

8 of the Department of Transportation, and appro9 priate Congressional committees of its determination

10 under this subsection;

11 ‘‘(2) shall provide an opportunity for a hearing

12 with respect to that determination; and

13 ‘‘(3) may withhold any appropriated funds oth14 erwise available to Amtrak for the operation of a

15 route or routes on which it is not making progress,

16 other than funds made available for passenger safety

17 or security measures.’’.

18 (b) CONFORMING AMENDMENT.—The chapter anal19 ysis for chapter 247 is amended by inserting after the item

20 relating to section 24709 the following:

‘‘24710. Long distance routes’’.

21 SEC. 211. ALTERNATE PASSENGER RAIL SERVICE PRO22 GRAM.

23 (a) IN GENERAL.—Chapter 247, as amended by sec24 tion 209, is amended by adding at the end thereof the

25 following:
†

927

S 1932 ES

1 ‘‘§ 24711. Alternate passenger rail service program

2 ‘‘(a) IN GENERAL.—Within 1 year after the date of

3 enactment of the Passenger Rail Investment and Improve4 ment Act of 2005, the Federal Railroad Administration

5 shall initiate a rulemaking proceeding to develop a pro6 gram under which—

7 ‘‘(1) a rail carrier or rail carriers that own in8 frastructure over which Amtrak operates a pas9 senger rail service route described in subparagraph

10 (B), (C), or (D) of section 24102(5) or in section

11 24702 of title 49, United States Code may petition

12 the Federal Railroad Administration to be consid13 ered as a passenger rail service provider over that

14 route in lieu of Amtrak;

15 ‘‘(2) the Administration would notify Amtrak

16 within 30 days after receiving a petition under para17 graph (1) and establish a deadline by which both the

18 petitioner and Amtrak would be required to submit

19 a bid to provide passenger rail service over the route

20 to which the petition relates;

21 ‘‘(3) each bid would describe how the bidder

22 would operate the route, what Amtrak passenger

23 equipment would be needed, if any, what sources of

24 non-Federal funding the bidder would use, including

25 any State subsidy, among other things;
†

928

S 1932 ES

1 ‘‘(4) the Administration would make a decision

2 and execute a contract within a specified, limited

3 time after that deadline awarding to the winning

4 bidder—

5 ‘‘(A) the right and obligation to provide

6 passenger rail service over that route subject to

7 such performance standards as the Administra8 tion may require, consistent with the standards

9 developed under section 208 of this division;

10 and

11 ‘‘(B) an operating subsidy—

12 ‘‘(i) for the first year at a level not in

13 excess of the level in effect during the fis14 cal year preceding the fiscal year in which

15 the petition was received, adjusted for in16 flation;

17 ‘‘(ii) for any subsequent years at such

18 level, adjusted for inflation; and

19 ‘‘(5) each bid would contain a staffing plan de20 scribing the number of employees needed to operate

21 the service, the job assignments and requirements,

22 and the terms of work for prospective and current

23 employees of the bidder for the service outlined in

24 the bid, and such staffing plan would be made avail-
†

929

S 1932 ES

1 able by the winning bidder to the public after the bid

2 award.

3 ‘‘(b) IMPLEMENTATION.—

4 ‘‘(1) INITIAL PETITIONS.—Pursuant to any

5 rules or regulations promulgated under subsection

6 (A), the Administration shall establish a deadline for

7 the submission of a petition under subsection (a)—

8 ‘‘(A) during fiscal year 2007 for operations

9 commencing in fiscal year 2008; and

10 ‘‘(B) during the immediately preceding fis11 cal year for operations commencing in subse12 quent fiscal years.

13 ‘‘(2) ROUTE LIMITATIONS.—The Administra14 tion may not make the program available with re15 spect to more than 1 Amtrak passenger rail route

16 for operations beginning in fiscal year 2008 nor to

17 more than 2 such routes for operations beginning in

18 fiscal year 2010 and subsequent fiscal years.

19 ‘‘(c) PERFORMANCE STANDARDS; ACCESS TO FACILI20 TIES; EMPLOYEES.—If the Administration awards the

21 right and obligation to provide passenger rail service over

22 a route under the program to a rail carrier or rail

23 carriers—

24 ‘‘(1) it shall execute a contract with the rail

25 carrier or rail carriers for rail passenger operations
†

930

S 1932 ES

1 on that route that conditions the operating and sub2 sidy rights upon—

3 ‘‘(A) the service provider continuing to

4 provide passenger rail service on the route that

5 is no less frequent, nor over a shorter distance,

6 than Amtrak provided on that route before the

7 award; and

8 ‘‘(B) the service provider’s compliance with

9 the minimum standards established under sec10 tion 208 of the Passenger Rail Investment and

11 Improvement Act of 2005 and such additional

12 performance standards as the Administration

13 may establish;

14 ‘‘(2) it shall, if the award is made to a rail car15 rier other than Amtrak, require Amtrak to provide

16 access to its reservation system, stations, and facili17 ties to any rail carrier or rail carriers awarded a

18 contract under this section, in accordance with sec19 tion 218 of that Act, necessary to carry out the pur20 poses of this section;

21 ‘‘(3) the employees of any person used by a rail

22 carrier or rail carriers (as defined in section

23 10102(5) of this title) in the operation of a route

24 under this section shall be considered an employee of

25 that carrier or carriers and subject to the applicable
†

931

S 1932 ES

1 Federal laws and regulations governing similar

2 crafts or classes of employees of Amtrak, including

3 provisions under section 121 of the Amtrak Reform

4 and Accountability Act of 1997 relating to employ5 ees that provide food and beverage service; and

6 ‘‘(4) the winning bidder shall provide preference

7 in hiring to qualified Amtrak employees displaced by

8 the award of the bid, consistent with the staffing

9 plan submitted by the bidder.

10 ‘‘(d) CESSATION OF SERVICE.—If a rail carrier or

11 rail carriers awarded a route under this section cease to

12 operate the service or fail to fulfill their obligations under

13 the contract required under subsection (c), the Adminis14 trator, in collaboration with the Surface Transportation

15 Board shall take any necessary action consistent with this

16 title to enforce the contract and ensure the continued pro17 vision of service, including the installment of an interim

18 service provider and re-bidding the contract to operate the

19 service. The entity providing service shall either be Am20 trak or a rail carrier defined in section 24711(a)(1).

21 ‘‘(e) ADEQUATE RESOURCES.—Before taking any ac22 tion allowed under this section, the Secretary shall certify

23 that the Administrator has sufficient resources that are

24 adequate to undertake the program established under this

25 section.’’.
†

932

S 1932 ES

1 (b) CONFORMING AMENDMENT.—The chapter anal2 ysis for chapter 247, as amended by section 209, is

3 amended by inserting after the item relating to section

4 24710 the following:

‘‘24711. Alternate passenger rail service program’’.

5 SEC. 212. EMPLOYEE TRANSITION ASSISTANCE.

6 (a) PROVISION OF FINANCIAL INCENTIVES.—For

7 Amtrak employees who are adversely affected by the ces8 sation of the operation of a long distance route or any

9 other route under section 24711 of title 49, United States

10 Code, previously operated by Amtrak, the Secretary shall

11 develop a program under which the Secretary may, in the

12 Secretary’s discretion, provide grants for financial incen13 tives to be provided to employees of the National Railroad

14 Passenger Corporation who voluntarily terminate their

15 employment with the Corporation and relinquish any legal

16 rights to receive termination-related payments under any

17 contractual agreement with the Corporation.

18 (b) CONDITIONS FOR FINANCIAL INCENTIVES.—As a

19 condition for receiving financial assistance grants under

20 this section, the Corporation must certify that—

21 (1) a reasonable attempt was made to reassign

22 an employee adversely affected under section 24711

23 of title 49, United States Code, or by the elimination

24 of any route, to other positions within the Corpora25 tion in accordance with any contractual agreements;
†

933

S 1932 ES

1 (2) the financial assistance results in a net re2 duction in the total number of employees equal to

3 the number receiving financial incentives;

4 (3) the financial assistance results in a net re5 duction in total employment expense equivalent to

6 the total employment expenses associated with the

7 employees receiving financial incentives; and

8 (4) the total number of employees eligible for

9 termination-related payments will not be increased

10 without the express written consent of the Secretary.

11 (c) AMOUNT OF FINANCIAL INCENTIVES.—The fi12 nancial incentives authorized under this section may be

13 no greater than $50,000 per employee.

14 (d) AUTHORIZATION OF APPROPRIATIONS.—There

15 are hereby authorized to be appropriated to the Secretary

16 such sums as may be necessary to make grants to the Na17 tional Railroad Passenger Corporation to provide financial

18 incentives under subsection (a).

19 (e) TERMINATION-RELATED PAYMENTS.—If Amtrak

20 employees adversely affected by the cessation of Amtrak

21 service resulting from the awarding of a grant to an oper22 ator other than Amtrak for the operation of a route under

23 section 24711 of title 49, United States Code, or any other

24 route, previously operated by Amtrak do not receive finan25 cial incentives under subsection (a), then the Secretary
†

934

S 1932 ES

1 shall make grants to the National Railroad Passenger Cor2 poration from funds authorized by section 102 of this divi3 sion for termination-related payments to employees under

4 existing contractual agreements.

5 SEC. 213. NORTHEAST CORRIDOR STATE-OF-GOOD-REPAIR

6 PLAN.

7 (a) IN GENERAL.—Within 6 months after the date

8 of enactment of this Act, the National Railroad Passenger

9 Corporation, in consultation with the Secretary and the

10 States (including the District of Columbia) that make up

11 the Northeast Corridor (as defined in section 24102 of

12 title 49, United States Code), shall prepare a capital

13 spending plan for capital projects required to return the

14 Northeast Corridor to a state of good repair by the end

15 of fiscal year 2011, consistent with the funding levels au16 thorized in this division and shall submit the plan to the

17 Secretary.

18 (b) APPROVAL BY THE SECRETARY.—

19 (1) The Corporation shall submit the capital

20 spending plan prepared under this section to the

21 Secretary of Transportation for review and approval

22 pursuant to the procedures developed under section

23 205 of this division.

24 (2) The Secretary of Transportation shall re25 quire that the plan be updated at least annually and
†

935

S 1932 ES

1 shall review and approve such updates. During re2 view, the Secretary shall seek comments and review

3 from the commission established under section

4 24905 of title 49, United States Code, and other

5 Northeast Corridor users regarding the plan.

6 (3) The Secretary shall make grants to the Cor7 poration with funds authorized by section 101(b) for

8 Northeast Corridor capital investments contained

9 within the capital spending plan prepared by the

10 Corporation and approved by the Secretary.

11 (4) Using the funds authorized by section

12 101(d), the Secretary shall review Amtrak’s capital

13 expenditures funded by this section to ensure that

14 such expenditures are consistent with the capital

15 spending plan and that Amtrak is providing ade16 quate project management oversight and fiscal con17 trols.

18 (c) ELIGIBILITY OF EXPENDITURES.—The Federal

19 share of expenditures for capital improvements under this

20 section may not exceed 100 percent.

21 SEC. 214. NORTHEAST CORRIDOR INFRASTRUCTURE AND

22 OPERATIONS IMPROVEMENTS.

23 (a) IN GENERAL.—Section 24905 is amended to read

24 as follows:
†

936

S 1932 ES

1 ‘‘§ 24905. Northeast Corridor Infrastructure and Op2 erations Advisory Commission; Safety

3 and Security Committee.

4 ‘‘(a) NORTHEAST CORRIDOR INFRASTRUCTURE AND

5 OPERATIONS ADVISORY COMMISSION.—

6 ‘‘(1) Within 180 days after the date of enact7 ment of the Passenger Rail Investment and Im8 provement Act of 2005, the Secretary of Transpor9 tation shall establish a Northeast Corridor Infra10 structure and Operations Advisory Commission

11 (hereinafter referred to in this section as the ‘Com12 mission’) to promote mutual cooperation and plan13 ning pertaining to the rail operations and related ac14 tivities of the Northeast Corridor. The Commission

15 shall be made up of—

16 ‘‘(A) members representing the National

17 Railroad Passenger Corporation;

18 ‘‘(B) members representing the Secretary

19 of Transportation and the Federal Railroad Ad20 ministration;

21 ‘‘(C) 1 member from each of the States

22 (including the District of Columbia) that con23 stitute the Northeast Corridor as defined in sec24 tion 24102, designated by, and serving at the

25 pleasure of, the chief executive officer thereof;

26 and
†

937

S 1932 ES

1 ‘‘(D) non-voting representatives of freight

2 railroad carriers using the Northeast Corridor

3 selected by the Secretary.

4 ‘‘(2) The Secretary shall ensure that the mem5 bership belonging to any of the groups enumerated

6 under subparagraph (1) shall not constitute a major7 ity of the commission’s memberships.

8 ‘‘(3) The commission shall establish a schedule

9 and location for convening meetings, but shall meet

10 no less than four times per fiscal year, and the com11 mission shall develop rules and procedures to govern

12 the commission’s proceedings.

13 ‘‘(4) A vacancy in the Commission shall be

14 filled in the manner in which the original appoint15 ment was made.

16 ‘‘(5) Members shall serve without pay but shall

17 receive travel expenses, including per diem in lieu of

18 subsistence, in accordance with sections 5702 and

19 5703 of title 5, United States Code.

20 ‘‘(6) The Chairman of the Commission shall be

21 elected by the members.

22 ‘‘(7) The Commission may appoint and fix the

23 pay of such personnel as it considers appropriate.

24 ‘‘(8) Upon request of the Commission, the head

25 of any department or agency of the United States
†

938

S 1932 ES

1 may detail, on a reimbursable basis, any of the per2 sonnel of that department or agency to the Commis3 sion to assist it in carrying out its duties under this

4 section.

5 ‘‘(9) Upon the request of the Commission, the

6 Administrator of General Services shall provide to

7 the Commission, on a reimbursable basis, the admin8 istrative support services necessary for the Commis9 sion to carry out its responsibilities under this sec10 tion.

11 ‘‘(10) The commission shall consult with other

12 entities as appropriate.

13 ‘‘(b) GENERAL RECOMMENDATIONS.—The Commis14 sion shall develop recommendations concerning Northeast

15 Corridor rail infrastructure and operations including pro16 posals addressing, as appropriate—

17 ‘‘(1) short-term and long term capital invest18 ment needs beyond the state-of-good-repair under

19 section 213;

20 ‘‘(2) future funding requirements for capital

21 improvements and maintenance;

22 ‘‘(3) operational improvements of intercity pas23 senger rail, commuter rail, and freight rail services;

24 ‘‘(4) opportunities for additional non-rail uses

25 of the Northeast Corridor;
†

939

S 1932 ES

1 ‘‘(5) scheduling and dispatching;

2 ‘‘(6) safety and security enhancements;

3 ‘‘(7) equipment design;

4 ‘‘(8) marketing of rail services; and

5 ‘‘(9) future capacity requirements.

6 ‘‘(c) ACCESS COSTS.—

7 ‘‘(1) DEVELOPMENT OF FORMULA.—Within 1

8 year after verification of Amtrak’s new financial ac9 counting system pursuant to section 203(b) of the

10 Passenger Rail Investment and Improvement Act of

11 2005, the Commission shall—

12 ‘‘(A) develop a standardized formula for

13 determining and allocating costs, revenues, and

14 compensation for Northeast Corridor commuter

15 rail passenger transportation, as defined in sec16 tion 24102 of this title, that use National Rail17 road Passenger Corporation facilities or services

18 or that provide such facilities or services to the

19 National Railroad Passenger Corporation that

20 ensure that—

21 ‘‘(i) there is no cross-subsidization of

22 commuter rail passenger, intercity rail pas23 senger, or freight rail transportation; and

24 ‘‘(ii) each service is assigned the costs

25 incurred only for the benefit of that serv-
†

940

S 1932 ES

1 ice, and a proportionate share, based upon

2 factors that reasonably reflect relative use,

3 of costs incurred for the common benefit of

4 more than 1 service;

5 ‘‘(B) develop a proposed timetable for im6 plementing the formula before the end of the

7 6th year following the date of enactment of that

8 Act;

9 ‘‘(C) transmit the proposed timetable to

10 the Surface Transportation Board; and

11 ‘‘(D) at the request of a Commission mem12 ber, petition the Surface Transportation Board

13 to appoint a mediator to assist the Commission

14 members through non-binding mediation to

15 reach an agreement under this section.

16 ‘‘(2) IMPLEMENTATION.—The National Rail17 road Passenger Corporation and the commuter au18 thorities providing commuter rail passenger trans19 portation on the Northeast Corridor shall implement

20 new agreements for usage of facilities or services

21 based on the formula proposed in paragraph (1) in

22 accordance with the timetable established therein. If

23 the entities fail to implement such new agreements

24 in accordance with the timetable, the Commission

25 shall petition the Surface Transportation Board to
†

941

S 1932 ES

1 determine the appropriate compensation amounts for

2 such services in accordance with section 24904(c) of

3 this title. The Surface Transportation Board shall

4 enforce its determination on the party or parties in5 volved.

6 ‘‘(d) TRANSMISSION OF RECOMMENDATIONS.—The

7 commission shall annually transmit the recommendations

8 developed under subsection (b) and the formula and time9 table developed under subsection (c)(1) to the Senate

10 Committee on Commerce, Science, and Transportation

11 and the House of Representatives Committee on Trans12 portation and Infrastructure.

13 ‘‘(e) NORTHEAST CORRIDOR SAFETY AND SECURITY

14 COMMITTEE.—

15 ‘‘(1) IN GENERAL.—The Secretary shall estab16 lish a Northeast Corridor Safety and Security Com17 mittee composed of members appointed by the Sec18 retary. The members shall be representatives of—

19 ‘‘(A) the Secretary;

20 ‘‘(B) Amtrak;

21 ‘‘(C) freight carriers operating more than

22 150,000 train miles a year on the main line of

23 the Northeast Corridor;

24 ‘‘(D) commuter agencies;

25 ‘‘(E) rail passengers;
†

942

S 1932 ES

1 ‘‘(F) rail labor;

2 ‘‘(G) the Transportation Security Adminis3 tration; and

4 ‘‘(H) other individuals and organizations

5 the Secretary decides have a significant interest

6 in rail safety or security.

7 ‘‘(2) FUNCTION; MEETINGS.—The Secretary

8 shall consult with the Committee about safety and

9 security improvements on the Northeast Corridor

10 main line. The Committee shall meet at least once

11 every 2 years to consider safety matters on the main

12 line.

13 ‘‘(3) REPORT.—At the beginning of the first

14 session of each Congress, the Secretary shall submit

15 a report to the Commission and to Congress on the

16 status of efforts to improve safety and security on

17 the Northeast Corridor main line. The report shall

18 include the safety recommendations of the Com19 mittee and the comments of the Secretary on those

20 recommendations.’’.

21 (3) CONFORMING AMENDMENTS.—Section

22 24904(c)(2) is amended by—

23 (A) inserting ‘‘commuter rail passenger’’

24 after ‘‘between’’; and
†

943

S 1932 ES

1 (B) striking ‘‘freight’’ in the second sen2 tence.

3 SEC. 215. RESTRUCTURING LONG-TERM DEBT AND CAP4 ITAL LEASES.

5 (a) IN GENERAL.—The Secretary of the Treasury, in

6 consultation with the Secretary of Transportation and

7 Amtrak, may make agreements to restructure Amtrak’s

8 indebtedness as of the date of enactment of this Act. This

9 authorization expires on January 1, 2007.

10 (b) DEBT RESTRUCTURING.—The Secretary of

11 Treasury, in consultation with the Secretary of the Trans12 portation and Amtrak, shall enter into negotiations with

13 the holders of Amtrak debt, including leases, outstanding

14 on the date of enactment of this Act for the purpose of

15 restructuring (including repayment) and repaying that

16 debt. The Secretary of the Treasury may secure agree17 ments for restructuring or repayment on such terms as

18 the Secretary of the Treasury deems favorable to the in19 terests of the Government.

20 (c) CRITERIA.—In restructuring Amtrak’s indebted21 ness, the Secretary and Amtrak—

22 (1) shall take into consideration repayment

23 costs, the term of any loan or loans, and market

24 conditions; and
†

944

S 1932 ES

1 (2) shall ensure that the restructuring results

2 in significant savings to Amtrak and the United

3 States Government.

4 (d) PAYMENT OF RENEGOTIATED DEBT.—If the cri5 teria under subsection (c) are met, the Secretary of Treas6 ury shall assume or repay the restructured debt, as appro7 priate.

8 (e) AMTRAK PRINCIPAL AND INTEREST PAY9 MENTS.—

10 (1) PRINCIPAL ON DEBT SERVICE.—Unless the

11 Secretary of Treasury makes sufficient payments to

12 creditors under subsection (d) so that Amtrak is re13 quired to make no payments to creditors in a fiscal

14 year, the Secretary of Transportation shall use

15 funds authorized by section 103(a)(1) for the use of

16 Amtrak for retirement of principal on loans for cap17 ital equipment, or capital leases.

18 (2) INTEREST ON DEBT.—Unless the Secretary

19 of Treasury makes sufficient payments to creditors

20 under subsection (d) so that Amtrak is required to

21 make no payments to creditors in a fiscal year, the

22 Secretary of Transportation shall use funds author23 ized by section 103(a)(2) for the use of Amtrak for

24 the payment of interest on loans for capital equip25 ment, or capital leases.
†

945

S 1932 ES

1 (3) REDUCTIONS IN AUTHORIZATION LEVELS.—

2 Whenever action taken by the Secretary of the

3 Treasury under subsection (a) results in reductions

4 in amounts of principal or interest that Amtrak

5 must service on existing debt, the corresponding

6 amounts authorized by section 103(a)(1) or (2) shall

7 be reduced accordingly.

8 (f) LEGAL EFFECT OF PAYMENTS UNDER THIS SEC9 TION.—The payment of principal and interest on secured

10 debt, other than debt assumed under subsection (d), with

11 the proceeds of grants under subsection (e) shall not—

12 (1) modify the extent or nature of any indebt13 edness of the National Railroad Passenger Corpora14 tion to the United States in existence of the date of

15 enactment of this Act;

16 (2) change the private nature of Amtrak’s or its

17 successors’ liabilities; or

18 (3) imply any Federal guarantee or commit19 ment to amortize Amtrak’s outstanding indebted20 ness.

21 (g) SECRETARY APPROVAL.—Amtrak may not incur

22 more debt after the date of enactment of this Act without

23 the express advance approval of the Secretary of Trans24 portation.
†

946

S 1932 ES

1 (h) REPORT.—The Secretary of the Treasury shall

2 transmit a report to the Senate Committee on Commerce,

3 Science, and Transportation, the Senate Committee on

4 Appropriations, the House of Representatives Committee

5 on Transportation and Infrastructure, and the House of

6 Representatives Committee on Appropriations by June 1,

7 2007—

8 (1) describing in detail any agreements to re9 structure the Amtrak debt; and

10 (2) providing an estimate of the savings to Am11 trak and the United States Government.

12 SEC. 216. STUDY OF COMPLIANCE REQUIREMENTS AT EX13 ISTING INTERCITY RAIL STATIONS.

14 Amtrak, in consultation with station owners, shall

15 evaluate the improvements necessary to make all existing

16 stations it serves readily accessible to and usable by indi17 viduals with disabilities, as required by section 242(e)(2)

18 of the Americans with Disabilities Act of 1990 (42 U.S.C.

19 12162(e)(2)). The evaluation shall include the estimated

20 cost of the improvements necessary, the identification of

21 the responsible person (as defined in section 241(5) of

22 that Act (42 U.S.C. 12161(5))), and the earliest prac23 ticable date when such improvements can be made. Am24 trak shall submit the evaluation to the Senate Committee

25 on Commerce, Science, and Transportation, the House of
†

947

S 1932 ES

1 Representatives Committee on Transportation and Infra2 structure, and the National Council on Disability by Sep3 tember 30, 2007, along with recommendations for funding

4 the necessary improvements.

5 SEC. 217. INCENTIVE PAY.

6 The Amtrak Board of Directors is encouraged to de7 velop an incentive pay program for Amtrak management

8 employees.

9 SEC. 218. ACCESS TO AMTRAK EQUIPMENT AND SERVICES.

10 If a State desires to select or selects an entity other

11 than Amtrak to provide services required for the operation

12 of an intercity passenger train route described in section

13 24102(5)(D) or 24702 of title 49, United States Code,

14 the State may make an agreement with Amtrak to use

15 facilities and equipment of, or have services provided by,

16 Amtrak under terms agreed to by the State and Amtrak

17 to enable the State to utilize an entity other than Amtrak

18 to provide services required for operation of the route. If

19 the parties cannot agree upon terms, and the Surface

20 Transportation Board finds that access to Amtrak’s facili21 ties or equipment, or the provision of services by Amtrak,

22 is necessary to carry out this provision and that the oper23 ation of Amtrak’s other services will not be impaired

24 thereby, the Surface Transportation Board shall, within

25 120 days after submission of the dispute, issue an order
†

948

S 1932 ES

1 that the facilities and equipment be made available, and

2 that services be provided, by Amtrak, and shall determine

3 reasonable compensation, liability and other terms for use

4 of the facilities and equipment and provision of the serv5 ices. Compensation shall be determined in accord with the

6 methodology established pursuant to section 206 of this

7 division.

8 SEC. 219. GENERAL AMTRAK PROVISIONS.

9 (a) REPEAL OF SELF-SUFFICIENCY REQUIREMENTS.

10 (1) TITLE 49 AMENDMENTS.—Chapter 241 is

11 amended—

12 (A) by striking the last sentence of section

13 24101(d); and

14 (B) by striking the last sentence of section

15 24104(a).

16 (2) AMTRAK REFORM AND ACCOUNTABILITY

17 ACT AMENDMENTS.—Title II of the Amtrak Reform

18 and Accountability Act of 1997 (49 U.S.C. 24101

19 nt) is amended by striking sections 204 and 205.

20 (3) COMMON STOCK REDEMPTION DATE.—Sec21 tion 415 of the Amtrak Reform and Accountability

22 Act of 1997 (49 U.S.C. 24304 nt) is amended by

23 striking subsection (b).

24 (b) LEASE ARRANGEMENTS.—Amtrak may obtain

25 services from the Administrator of General Services, and
†

949

S 1932 ES

1 the Administrator may provide services to Amtrak, under

2 section 201(b) and 211(b) of the Federal Property and

3 Administrative Service Act of 1949 (40 U.S.C. 481(b) and

4 491(b)) for each of fiscal years 2006 through 2011.

5 SEC. 220. PRIVATE SECTOR FUNDING OF PASSENGER

6 TRAINS.

7 Amtrak is encouraged to increase its operation of

8 trains funded by the private sector in order to minimize

9 its need for Federal subsidies. Amtrak shall utilize the

10 provisions of section 24308 of title 49, United States

11 Code, when necessary to obtain access to facilities, train

12 and engine crews, or services of a rail carrier or regional

13 transportation authority that are required to operate such

14 trains.

15 SEC. 221. ON-BOARD SERVICE IMPROVEMENTS.

16 (a) IN GENERAL.—Within 1 year after metrics and

17 standards are established under section 208 of this divi18 sion, Amtrak shall develop and implement a plan to im19 prove on-board service pursuant to the metrics and stand20 ards for such service developed under that section.

21 (b) REPORT.—Amtrak shall provide a report to the

22 Senate Committee on Commerce, Science, and Transpor23 tation and the House of Representatives Committee on

24 Transportation and Infrastructure on the on-board service
†

950

S 1932 ES

1 improvements proscribed in the plan and the timeline for

2 implementing such improvements.

3 SEC. 222. AMTRAK MANAGEMENT ACCOUNTABILITY.

4 (a) IN GENERAL.—Chapter 243 is amended by in5 serting after section 24309 the following:

6 ‘‘§ 24310. Management accountability

7 ‘‘(a) IN GENERAL.—Three years after the date of en8 actment of the Passenger Rail Investment and Improve9 ment Act of 2005, and two years thereafter, the Inspector

10 General of the Department of Transportation shall com11 plete an overall assessment of the progress made by Am12 trak management and the Department of Transportation

13 in implementing the provisions of that Act.

14 ‘‘(b) ASSESSMENT.—The management assessment

15 undertaken by the Inspector General may include a review

16 of—

17 ‘‘(1) effectiveness improving annual financial

18 planning;

19 ‘‘(2) effectiveness in implementing improved fi20 nancial accounting;

21 ‘‘(3) efforts to implement minimum train per22 formance standards;

23 ‘‘(4) progress maximizing revenues and mini24 mizing Federal subsidies; and
†

951

S 1932 ES

1 ‘‘(5) any other aspect of Amtrak operations the

2 Inspector General finds appropriate to review.’’.

3 (b) CONFORMING AMENDMENT.—The chapter anal4 ysis for chapter 243 is amended by inserting after the item

5 relating to section 24309 the following:

‘‘24310. Management accountability’’.

6 TITLE III—INTERCITY

7 PASSENGER RAIL POLICY

8 SEC. 301. CAPITAL ASSISTANCE FOR INTERCITY PAS9 SENGER RAIL SERVICE.

10 (a) IN GENERAL.—Part C of subtitle V is amended

11 by inserting the following after chapter 243:

‘‘CHAPTER 244. INTERCITY PASSENGER RAIL SERVICE CORRIDOR

CAPITAL ASSISTANCE

‘‘Sec.

‘‘24401. Definitions.

‘‘24402. Capital investment grants to support intercity passenger rail service.

‘‘24403. Project management oversight

‘‘24404. Use of capital grants to finance first-dollar liability of grant project.

‘‘24405. Grant conditions.

12 ‘‘§ 24401. Definitions

13 ‘‘In this subchapter:

14 ‘‘(1) APPLICANT.—The term ‘applicant’ means

15 a State (including the District of Columbia), a group

16 of States, an Interstate Compact, or a public agency

17 established by one or more States and having re18 sponsibility for providing intercity passenger rail

19 service.
†

952

S 1932 ES

1 ‘‘(2) CAPITAL PROJECT.—The term ‘capital

2 project’ means a project or program in a State rail

3 plan developed under chapter 225 of this title for—

4 ‘‘(A) acquiring, constructing, improving, or

5 inspecting equipment, track and track struc6 tures, or a facility for use in or for the primary

7 benefit of intercity passenger rail service, ex8 penses incidental to the acquisition or construc9 tion (including designing, engineering, location

10 surveying, mapping, environmental studies, and

11 acquiring rights-of-way), payments for the cap12 ital portions of rail trackage rights agreements,

13 highway-rail grade crossing improvements re14 lated to intercity passenger rail service, secu15 rity, mitigating environmental impacts, commu16 nication and signalization improvements, reloca17 tion assistance, acquiring replacement housing

18 sites, and acquiring, constructing, relocating,

19 and rehabilitating replacement housing;

20 ‘‘(B) rehabilitating, remanufacturing or

21 overhauling rail rolling stock and facilities used

22 primarily in intercity passenger rail service;

23 ‘‘(C) costs associated with developing State

24 rail plans; and
†

953

S 1932 ES

1 ‘‘(D) the first-dollar liability costs for in2 surance related to the provision of intercity pas3 senger rail service under section 24404.

4 ‘‘(3) INTERCITY PASSENGER RAIL SERVICE.—

5 The term ‘intercity passenger rail service’ means

6 transportation services with the primary purpose of

7 passenger transportation between towns, cities and

8 metropolitan areas by rail, including high-speed rail,

9 as defined in section 24102 of title 49, United

10 States Code.

11 ‘‘§ 24402. Capital investment grants to support inter12 city passenger rail service.

13 ‘‘(a) GENERAL AUTHORITY.—

14 ‘‘(1) The Secretary of Transportation may

15 make grants under this section to an applicant to

16 assist in financing the capital costs of facilities and

17 equipment necessary to provide or improve intercity

18 passenger rail transportation.

19 ‘‘(2) The Secretary shall require that a grant

20 under this section be subject to the terms, condi21 tions, requirements, and provisions the Secretary de22 cides are necessary or appropriate for the purposes

23 of this section, including requirements for the dis24 position of net increases in value of real property re25 sulting from the project assisted under this section
†

954

S 1932 ES

1 and shall prescribe procedures and schedules for the

2 awarding of grants under this title, including appli3 cation and qualification procedures and a record of

4 decision on applicant eligibility. The Secretary shall

5 issue a final rule establishing such procedures not

6 later than 90 days after the date of enactment of

7 the Passenger Rail Investment and Improvement

8 Act of 2005.

9 ‘‘(b) PROJECT AS PART OF STATE RAIL PLAN.—

10 ‘‘(1) The Secretary may not approve a grant for

11 a project under this section unless the Secretary

12 finds that the project is part of a State rail plan de13 veloped under chapter 225 of this title, or under the

14 plan required by section 203 of the Passenger Rail

15 Investment and Improvement Act of 2005, and that

16 the applicant or recipient has or will have the legal,

17 financial, and technical capacity to carry out the

18 project, satisfactory continuing control over the use

19 of the equipment or facilities, and the capability and

20 willingness to maintain the equipment or facilities.

21 ‘‘(2) An applicant shall provide sufficient infor22 mation upon which the Secretary can make the find23 ings required by this subsection.

24 ‘‘(3) If an applicant has not selected the pro25 posed operator of its service competitively, the appli-
†

955

S 1932 ES

1 cant shall provide written justification to the Sec2 retary showing why the proposed operator is the

3 best, taking into account price and other factors,

4 and that use of the proposed operator will not un5 necessarily increase the cost of the project.

6 ‘‘(c) PROJECT SELECTION CRITERIA.—The Sec7 retary, in selecting the recipients of financial assistance

8 to be provided under subsection (a), shall—

9 ‘‘(1) require that each proposed project meet all

10 safety and security requirements that are applicable

11 to the project under law;

12 ‘‘(2) give preference to projects with high levels

13 of estimated ridership, increased on-time perform14 ance, reduced trip time, additional service frequency

15 to meet anticipated or existing demand, or other sig16 nificant service enhancements as measured against

17 minimum standards developed under section 208 of

18 the Passenger Rail Investment and Improvement

19 Act of 2005;

20 ‘‘(3) encourage intermodal connectivity through

21 projects that provide direct connections between

22 train stations, airports, bus terminals, subway sta23 tions, ferry ports, and other modes of transpor24 tation;
†

956

S 1932 ES

1 ‘‘(4) ensure that each project is compatible

2 with, and is operated in conformance with—

3 ‘‘(A) plans developed pursuant to the re4 quirements of section 135 of title 23, United

5 States Code; and

6 ‘‘(B) the national rail plan (if it is avail7 able); and

8 ‘‘(5) favor the following kinds of projects:

9 ‘‘(A) Projects that are expected to have a

10 significant favorable impact on air or highway

11 traffic congestion, capacity, or safety.

12 ‘‘(B) Projects that also improve freight or

13 commuter rail operations.

14 ‘‘(C) Projects that have significant envi15 ronmental benefits.

16 ‘‘(D) Projects that are—

17 ‘‘(i) at a stage of preparation that all

18 pre-commencement compliance with envi19 ronmental protection requirements has al20 ready been completed; and

21 ‘‘(ii) ready to be commenced.

22 ‘‘(E) Projects with positive economic and

23 employment impacts.

24 ‘‘(F) Projects that encourage the use of

25 positive train control technologies.
†

957

S 1932 ES

1 ‘‘(G) Projects that have commitments of

2 funding from non-Federal Government sources

3 in a total amount that exceeds the minimum

4 amount of the non-Federal contribution re5 quired for the project.

6 ‘‘(H) Projects that involve donated prop7 erty interests or services.

8 ‘‘(I) Projects that are identified by the

9 Surface Transportation Board as necessary to

10 improve the on time performance and reliability

11 of intercity passenger rail under section

12 24308(f).

13 ‘‘(d) AMTRAK ELIGIBILITY.—To receive a grant

14 under this section, the National Railroad Passenger Cor15 poration may enter into a cooperative agreement with 1

16 or more States to carry out 1 or more projects on a State

17 rail plan’s ranked list of rail capital projects developed

18 under section 22504(a)(5) of this title.

19 ‘‘(e) LETTERS OF INTENT, FULL FUNDING GRANT

20 AGREEMENTS, AND EARLY SYSTEMS WORK AGREE21 MENTS.—

22 ‘‘(1)(A) The Secretary may issue a letter of in23 tent to an applicant announcing an intention to obli24 gate, for a major capital project under this section,

25 an amount from future available budget authority
†

958

S 1932 ES

1 specified in law that is not more than the amount

2 stipulated as the financial participation of the Sec3 retary in the project.

4 ‘‘(B) At least 30 days before issuing a let5 ter under subparagraph (A) of this paragraph

6 or entering into a full funding grant agreement,

7 the Secretary shall notify in writing the Com8 mittee on Transportation and Infrastructure of

9 the House of Representatives and the Com10 mittee on Commerce, Science, and Transpor11 tation of the Senate and the House and Senate

12 Committees on Appropriations of the proposed

13 letter or agreement. The Secretary shall include

14 with the notification a copy of the proposed let15 ter or agreement as well as the evaluations and

16 ratings for the project.

17 ‘‘(C) An obligation or administrative com18 mitment may be made only when amounts are

19 appropriated.

20 ‘‘(2)(A) The Secretary may make a full funding

21 grant agreement with an applicant. The agreement

22 shall—

23 ‘‘(i) establish the terms of participa24 tion by the United States Government in a

25 project under this section;
†

959

S 1932 ES

1 ‘‘(ii) establish the maximum amount

2 of Government financial assistance for the

3 project;

4 ‘‘(iii) cover the period of time for com5 pleting the project, including a period ex6 tending beyond the period of an authoriza7 tion; and

8 ‘‘(iv) make timely and efficient man9 agement of the project easier according to

10 the law of the United States.

11 ‘‘(B) An agreement under this paragraph

12 obligates an amount of available budget author13 ity specified in law and may include a commit14 ment, contingent on amounts to be specified in

15 law in advance for commitments under this

16 paragraph, to obligate an additional amount

17 from future available budget authority specified

18 in law. The agreement shall state that the con19 tingent commitment is not an obligation of the

20 Government and is subject to the availability of

21 appropriations made by Federal law and to

22 Federal laws in force on or enacted after the

23 date of the contingent commitment. Interest

24 and other financing costs of efficiently carrying

25 out a part of the project within a reasonable
†

960

S 1932 ES

1 time are a cost of carrying out the project

2 under a full funding grant agreement, except

3 that eligible costs may not be more than the

4 cost of the most favorable financing terms rea5 sonably available for the project at the time of

6 borrowing. The applicant shall certify, in a way

7 satisfactory to the Secretary, that the applicant

8 has shown reasonable diligence in seeking the

9 most favorable financing terms.

10 ‘‘(3)(A) The Secretary may make an early sys11 tems work agreement with an applicant if a record

12 of decision under the National Environmental Policy

13 Act of 1969 (42 U.S.C. 4321 et seq.) has been

14 issued on the project and the Secretary finds there

15 is reason to believe—

16 ‘‘(i) a full funding grant agreement

17 for the project will be made; and

18 ‘‘(ii) the terms of the work agreement

19 will promote ultimate completion of the

20 project more rapidly and at less cost.

21 ‘‘(B) A work agreement under this para22 graph obligates an amount of available budget

23 authority specified in law and shall provide for

24 reimbursement of preliminary costs of carrying

25 out the project, including land acquisition, time-
†

961

S 1932 ES

1 ly procurement of system elements for which

2 specifications are decided, and other activities

3 the Secretary decides are appropriate to make

4 efficient, long-term project management easier.

5 A work agreement shall cover the period of time

6 the Secretary considers appropriate. The period

7 may extend beyond the period of current au8 thorization. Interest and other financing costs

9 of efficiently carrying out the work agreement

10 within a reasonable time are a cost of carrying

11 out the agreement, except that eligible costs

12 may not be more than the cost of the most fa13 vorable financing terms reasonably available for

14 the project at the time of borrowing. The appli15 cant shall certify, in a way satisfactory to the

16 Secretary, that the applicant has shown reason17 able diligence in seeking the most favorable fi18 nancing terms. If an applicant does not carry

19 out the project for reasons within the control of

20 the applicant, the applicant shall repay all Gov21 ernment payments made under the work agree22 ment plus reasonable interest and penalty

23 charges the Secretary establishes in the agree24 ment.
†

962

S 1932 ES

1 ‘‘(4) The total estimated amount of future obli2 gations of the Government and contingent commit3 ments to incur obligations covered by all outstanding

4 letters of intent, full funding grant agreements, and

5 early systems work agreements may be not more

6 than the amount authorized under section 101(c) of

7 Passenger Rail Investment and Improvement Act of

8 2005, less an amount the Secretary reasonably esti9 mates is necessary for grants under this section not

10 covered by a letter. The total amount covered by

11 new letters and contingent commitments included in

12 full funding grant agreements and early systems

13 work agreements may be not more than a limitation

14 specified in law.

15 ‘‘(f) FEDERAL SHARE OF NET PROJECT COST.—

16 ‘‘(1)(A) Based on engineering studies, studies

17 of economic feasibility, and information on the ex18 pected use of equipment or facilities, the Secretary

19 shall estimate the net project cost.

20 ‘‘(B) A grant for the project shall not ex21 ceed 80 percent of the project net capital cost.

22 ‘‘(C) The Secretary shall give priority in

23 allocating future obligations and contingent

24 commitments to incur obligations to grant re-
†

963

S 1932 ES

1 quests seeking a lower Federal share of the

2 project net capital cost.

3 ‘‘(2) Up to an additional 20 percent of the re4 quired non-Federal funds may be funded from

5 amounts appropriated to or made available to a de6 partment or agency of the Federal Government that

7 are eligible to be expended for transportation.

8 ‘‘(3) 50 percent of the average amounts ex9 pended by a State or group of States (including the

10 District of Columbia) for capital projects to benefit

11 intercity passenger rail service in fiscal years 2003,

12 2004, and 2005 shall be credited towards the match13 ing requirements for grants awarded under this sec14 tion. The Secretary may require such information as

15 necessary to verify such expenditures.

16 ‘‘(4) 50 percent of the average amounts ex17 pended by a State or group of States (including the

18 District of Columbia) in a fiscal year beginning in

19 2006 for capital projects to benefit intercity pas20 senger rail service or for the operating costs of such

21 service above the average of expenditures made for

22 such service in fiscal years 2003, 2004, and 2005

23 shall be credited towards the matching requirements

24 for grants awarded under this section. The Secretary
†

964

S 1932 ES

1 may require such information as necessary to verify

2 such expenditures.

3 ‘‘(g) UNDERTAKING PROJECTS IN ADVANCE.—

4 ‘‘(1) The Secretary may pay the Federal share

5 of the net capital project cost to an applicant that

6 carries out any part of a project described in this

7 section according to all applicable procedures and re8 quirements if—

9 ‘‘(A) the applicant applies for the payment;

10 ‘‘(B) the Secretary approves the payment;

11 and

12 ‘‘(C) before carrying out the part of the

13 project, the Secretary approves the plans and

14 specifications for the part in the same way as

15 other projects under this section.

16 ‘‘(2) The cost of carrying out part of a project

17 includes the amount of interest earned and payable

18 on bonds issued by the applicant to the extent pro19 ceeds of the bonds are expended in carrying out the

20 part. However, the amount of interest under this

21 paragraph may not be more than the most favorable

22 interest terms reasonably available for the project at

23 the time of borrowing. The applicant shall certify, in

24 a manner satisfactory to the Secretary, that the ap-
†

965

S 1932 ES

1 plicant has shown reasonable diligence in seeking the

2 most favorable financial terms.

3 ‘‘(3) The Secretary shall consider changes in

4 capital project cost indices when determining the es5 timated cost under paragraph (2) of this subsection.

6 ‘‘(h) 2-YEAR AVAILABILITY.—Funds appropriated

7 under this section shall remain available until expended.

8 If any amount provided as a grant under this section is

9 not obligated or expended for the purposes described in

10 subsection (a) within 2 years after the date on which the

11 State received the grant, such sums shall be returned to

12 the Secretary for other intercity passenger rail develop13 ment projects under this section at the discretion of the

14 Secretary.

15 ‘‘(i) PUBLIC-PRIVATE PARTNERSHIPS.—

16 ‘‘(1) IN GENERAL.—A metropolitan planning

17 organization, State transportation department, or

18 other project sponsor may enter into an agreement

19 with any public, private, or nonprofit entity to coop20 eratively implement any project funded with a grant

21 under this title.

22 ‘‘(2) FORMS OF PARTICIPATION.—Participation

23 by an entity under paragraph (1) may consist of—
†

966

S 1932 ES

1 ‘‘(A) ownership or operation of any land,

2 facility, locomotive, rail car, vehicle, or other

3 physical asset associated with the project;

4 ‘‘(B) cost-sharing of any project expense;

5 ‘‘(C) carrying out administration, construc6 tion management, project management, project

7 operation, or any other management or oper8 ational duty associated with the project; and

9 ‘‘(D) any other form of participation ap10 proved by the Secretary.

11 ‘‘(3) SUB-ALLOCATION.—A State may allocate

12 funds under this section to any entity described in

13 paragraph (1).

14 ‘‘(j) SPECIAL TRANSPORTATION CIRCUMSTANCES.—

15 In carrying out this section, the Secretary shall allocate

16 an appropriate portion of the amounts available under this

17 section to provide grants to States—

18 ‘‘(1) in which there is no intercity passenger

19 rail service for the purpose of funding freight rail

20 capital projects that are on a State rail plan devel21 oped under chapter 225 of this title that provide

22 public benefits (as defined in chapter 225) as deter23 mined by the Secretary; or

24 ‘‘(2) in which the rail transportation system is

25 not physically connected to rail systems in the conti-
†

967

S 1932 ES

1 nental United States or may not otherwise qualify

2 for a grant under this section due to the unique

3 characteristics of the geography of that State or

4 other relevant considerations, for the purpose of

5 funding transportation-related capital projects.

6 ‘‘(k) SMALL CAPITAL PROJECTS.—The Secretary

7 shall make available $10,000,000 annually from the

8 amounts authorized under section 101(c) of the Passenger

9 Rail Investment and Improvement Act of 2005 beginning

10 in fiscal year 2007 for grants for capital projects eligible

11 under this section not exceeding $2,000,000, including

12 costs eligible under section 206(c) of that Act. The Sec13 retary may wave requirements of this section, including

14 state rail plan requirements, as appropriate.

15 ‘‘§ 24403. Project management oversight

16 ‘‘(a) PROJECT MANAGEMENT PLAN REQUIRE17 MENTS.—To receive Federal financial assistance for a

18 major capital project under this subchapter, an applicant

19 must prepare and carry out a project management plan

20 approved by the Secretary of Transportation. The plan

21 shall provide for—

22 ‘‘(1) adequate recipient staff organization with

23 well-defined reporting relationships, statements of

24 functional responsibilities, job descriptions, and job

25 qualifications;
†

968

S 1932 ES

1 ‘‘(2) a budget covering the project management

2 organization, appropriate consultants, property ac3 quisition, utility relocation, systems demonstration

4 staff, audits, and miscellaneous payments the recipi5 ent may be prepared to justify;

6 ‘‘(3) a construction schedule for the project;

7 ‘‘(4) a document control procedure and record8 keeping system;

9 ‘‘(5) a change order procedure that includes a

10 documented, systematic approach to handling the

11 construction change orders;

12 ‘‘(6) organizational structures, management

13 skills, and staffing levels required throughout the

14 construction phase;

15 ‘‘(7) quality control and quality assurance func16 tions, procedures, and responsibilities for construc17 tion, system installation, and integration of system

18 components;

19 ‘‘(8) material testing policies and procedures;

20 ‘‘(9) internal plan implementation and reporting

21 requirements;

22 ‘‘(10) criteria and procedures to be used for

23 testing the operational system or its major compo24 nents;
†

969

S 1932 ES

1 ‘‘(11) periodic updates of the plan, especially

2 related to project budget and project schedule, fi3 nancing, and ridership estimates; and

4 ‘‘(12) the recipient’s commitment to submit a

5 project budget and project schedule to the Secretary

6 each month.

7 ‘‘(b) SECRETARIAL OVERSIGHT.—

8 ‘‘(1) The Secretary may use no more than 0.5

9 percent of amounts made available in a fiscal year

10 for capital projects under this subchapter to enter

11 into contracts to oversee the construction of such

12 projects.

13 ‘‘(2) The Secretary may use amounts available

14 under paragraph (1) of this subsection to make con15 tracts for safety, procurement, management, and fi16 nancial compliance reviews and audits of a recipient

17 of amounts under paragraph (1).

18 ‘‘(3) The Federal Government shall pay the en19 tire cost of carrying out a contract under this sub20 section.

21 ‘‘(c) ACCESS TO SITES AND RECORDS.—Each recipi22 ent of assistance under this subchapter shall provide the

23 Secretary and a contractor the Secretary chooses under

24 subsection (c) of this section with access to the construc-
†

970

S 1932 ES

1 tion sites and records of the recipient when reasonably

2 necessary.

3 ‘‘§ 24404. Use of capital grants to finance first-dollar

4 liability of grant project

5 ‘‘Notwithstanding the requirements of section 24402

6 of this subchapter, the Secretary of Transportation may

7 approve the use of capital assistance under this sub8 chapter to fund self-insured retention of risk for the first

9 tier of liability insurance coverage for rail passenger serv10 ice associated with the capital assistance grant, but the

11 coverage may not exceed $20,000,000 per occurrence or

12 $20,000,000 in aggregate per year.

13 ‘‘§ 24405. Grant conditions

14 ‘‘(a) DOMESTIC BUYING PREFERENCE.—

15 ‘‘(1) REQUIREMENT.—

16 ‘‘(A) IN GENERAL.—In carrying out a

17 project funded in whole or in part with a grant

18 under this title, the grant recipient shall pur19 chase only—

20 ‘‘(i) unmanufactured articles, mate21 rial, and supplies mined or produced in the

22 United States; or

23 ‘‘(ii) manufactured articles, material,

24 and supplies manufactured in the United

25 States substantially from articles, material,
†

971

S 1932 ES

1 and supplies mined, produced, or manufac2 tured in the United States.

3 ‘‘(B) DE MINIMIS AMOUNT.—Subpara4 graph (1) applies only to a purchase in an total

5 amount that is not less than $1,000,000.

6 ‘‘(2) EXEMPTIONS.—On application of a recipi7 ent, the Secretary may exempt a recipient from the

8 requirements of this subsection if the Secretary de9 cides that, for particular articles, material, or

10 supplies—

11 ‘‘(A) such requirements are inconsistent

12 with the public interest;

13 ‘‘(B) the cost of imposing the requirements

14 is unreasonable; or

15 ‘‘(C) the articles, material, or supplies, or

16 the articles, material, or supplies from which

17 they are manufactured, are not mined, pro18 duced, or manufactured in the United States in

19 sufficient and reasonably available commercial

20 quantities and are not of a satisfactory quality.

21 ‘‘(3) UNITED STATES DEFINED.—In this sub22 section, the term ‘the United States’ means the

23 States, territories, and possessions of the United

24 States and the District of Columbia.
†

972

S 1932 ES

1 ‘‘(b) OPERATORS DEEMED RAIL CARRIERS AND EM2 PLOYERS FOR CERTAIN PURPOSES.—A person that con3 ducts rail operations over rail infrastructure constructed

4 or improved with funding provided in whole or in part in

5 a grant made under this title shall be considered a rail

6 carrier as defined in section 10102(5) of this title for pur7 poses of this title and any other statute that adopts the

8 that definition or in which that definition applies,

9 including—

10 ‘‘(1) the Railroad Retirement Act of 1974 (45

11 U.S.C. 231 et seq.); and

12 ‘‘(2) the Railway Labor Act (43 U.S.C. 151 et

13 seq.).

14 ‘‘(c) GRANT CONDITIONS.—The Secretary shall re15 quire as a condition of making any grant under this title

16 for a project that uses rights-of-way owned by a railroad

17 that—

18 ‘‘(1) a written agreement exist between the ap19 plicant and the railroad regarding such use and

20 ownership, including—

21 ‘‘(A) any compensation for such use;

22 ‘‘(B) assurances regarding the adequacy of

23 infrastructure capacity to accommodate both

24 existing and future freight and passenger oper25 ations; and
†

973

S 1932 ES

1 ‘‘(C) an assurance by the railroad that col2 lective bargaining agreements with the rail3 road’s employees (including terms regulating

4 the contracting of work) will remain in full

5 force and effect according to their terms for

6 work performed by the railroad on the railroad

7 transportation corridor;

8 ‘‘(D) an assurance that an applicant com9 plies with liability requirements consistent with

10 section 28103 of this title; and

11 ‘‘(2) the applicant agrees to comply with—

12 ‘‘(A) the standards of section 24312 of this

13 title, as such section was in effect on September

14 1, 2003, with respect to the project in the same

15 manner that the National Railroad Passenger

16 Corporation is required to comply with those

17 standards for construction work financed under

18 an agreement made under section 24308(a) of

19 this title; and

20 ‘‘(B) the protective arrangements estab21 lished under section 504 of the Railroad Revi22 talization and Regulatory Reform Act of 1976

23 (45 U.S.C. 836) with respect to employees af24 fected by actions taken in connection with the
†

974

S 1932 ES

1 project to be financed in whole or in part by

2 grants under this subchapter.

3 ‘‘(d) REPLACEMENT OF EXISTING INTERCITY PAS4 SENGER RAIL SERVICE.—

5 ‘‘(1) COLLECTIVE BARGAINING AGREEMENT

6 FOR INTERCITY PASSENGER RAIL PROJECTS.—Any

7 entity providing intercity passenger railroad trans8 portation that begins operations after the date of en9 actment of this Act on a project funded in whole or

10 in part by grants made under this title and replaces

11 intercity rail passenger service that was provided by

12 Amtrak, unless such service was provided solely by

13 Amtrak to another entity, as of such date shall enter

14 into an agreement with the authorized bargaining

15 agent or agents for adversely affected employees of

16 the predecessor provider that—

17 ‘‘(A) gives each such qualified employee of

18 the predecessor provider priority in hiring ac19 cording to the employee’s seniority on the pred20 ecessor provider for each position with the re21 placing entity that is in the employee’s craft or

22 class and is available within 3 years after the

23 termination of the service being replaced;

24 ‘‘(B) establishes a procedure for notifying

25 such an employee of such positions;
†

975

S 1932 ES

1 ‘‘(C) establishes a procedure for such an

2 employee to apply for such positions; and

3 ‘‘(D) establishes rates of pay, rules, and

4 working conditions.

5 ‘‘(2) IMMEDIATE REPLACEMENT SERVICE.—

6 ‘‘(A) NEGOTIATIONS.—If the replacement

7 of preexisting intercity rail passenger service oc8 curs concurrent with or within a reasonable

9 time before the commencement of the replacing

10 entity’s rail passenger service, the replacing en11 tity shall give written notice of its plan to re12 place existing rail passenger service to the au13 thorized collective bargaining agent or agents

14 for the potentially adversely affected employees

15 of the predecessor provider at least 90 days be16 fore the date on which it plans to commence

17 service. Within 5 days after the date of receipt

18 of such written notice, negotiations between the

19 replacing entity and the collective bargaining

20 agent or agents for the employees of the prede21 cessor provider shall commence for the purpose

22 of reaching agreement with respect to all mat23 ters set forth in subparagraphs (A) through (D)

24 of paragraph (1). The negotiations shall con25 tinue for 30 days or until an agreement is
†

976

S 1932 ES

1 reached, whichever is sooner. If at the end of

2 30 days the parties have not entered into an

3 agreement with respect to all such matters, the

4 unresolved issues shall be submitted for arbitra5 tion in accordance with the procedure set forth

6 in subparagraph (B).

7 ‘‘(B) ARBITRATION.—If an agreement has

8 not been entered into with respect to all mat9 ters set forth in subparagraphs (A) through (D)

10 of paragraph (1) as described in subparagraph

11 (A) of this paragraph, the parties shall select

12 an arbitrator. If the parties are unable to agree

13 upon the selection of such arbitrator within 5

14 days, either or both parties shall notify the Na15 tional Mediation Board, which shall provide a

16 list of seven arbitrators with experience in arbi17 trating rail labor protection disputes. Within 5

18 days after such notification, the parties shall al19 ternately strike names from the list until only

20 1 name remains, and that person shall serve as

21 the neutral arbitrator. Within 45 days after se22 lection of the arbitrator, the arbitrator shall

23 conduct a hearing on the dispute and shall

24 render a decision with respect to the unresolved

25 issues among the matters set forth in subpara-
†

977

S 1932 ES

1 graphs (A) through (D) of paragraph (1). This

2 decision shall be final, binding, and conclusive

3 upon the parties. The salary and expenses of

4 the arbitrator shall be borne equally by the par5 ties; all other expenses shall be paid by the

6 party incurring them.

7 ‘‘(3) SERVICE COMMENCEMENT.—A replacing

8 entity under this subsection shall commence service

9 only after an agreement is entered into with respect

10 to the matters set forth in subparagraphs (A)

11 through (D) of paragraph (1) or the decision of the

12 arbitrator has been rendered.

13 ‘‘(4) SUBSEQUENT REPLACEMENT OF SERV14 ICE.—If the replacement of existing rail passenger

15 service takes place within 3 years after the replacing

16 entity commences intercity passenger rail service,

17 the replacing entity and the collective bargaining

18 agent or agents for the adversely affected employees

19 of the predecessor provider shall enter into an agree20 ment with respect to the matters set forth in sub21 paragraphs (A) through (D) of paragraph (1). If the

22 parties have not entered into an agreement with re23 spect to all such matters within 60 days after the

24 date on which the replacing entity replaces the pred25 ecessor provider, the parties shall select an arbi-
†

978

S 1932 ES

1 trator using the procedures set forth in paragraph

2 (2)(B), who shall, within 20 days after the com3 mencement of the arbitration, conduct a hearing and

4 decide all unresolved issues. This decision shall be

5 final, binding, and conclusive upon the parties.

6 ‘‘(e) INAPPLICABILITY TO CERTAIN RAIL OPER7 ATIONS.— Nothing in this section applies to—

8 ‘‘(1) commuter rail passenger transportation

9 (as defined in section 24102(4) of this title) oper10 ations of a State or local government authority (as

11 those terms are defined in section 5302(11) and (6),

12 respectively, of this title) eligible to receive financial

13 assistance under section 5307 of this title, or to its

14 contractor performing services in connection with

15 commuter rail passenger operations (as so defined);

16 ‘‘(2) the Alaska Railroad or its contractors; or

17 ‘‘(3) the National Railroad Passenger Corpora18 tion’s access rights to railroad rights of way and fa19 cilities under current law.’’.

20 (b) CONFORMING AMENDMENTS.—

21 (1) The table of chapters for the title is amend22 ed by inserting the following after the item relating

23 to chapter 243:

‘‘244. Intercity passenger rail service capital assistance.....................................24401’’.
†

979

S 1932 ES

1 ‘‘(2) The chapter analysis for subtitle V is

2 amended by inserting the following after the item re3 lating to chapter 243:

‘‘244. Intercity passenger rail service capital assistance.....................................24401’’.

4 SEC. 302. STATE RAIL PLANS.

5 (a) IN GENERAL.—Part B of subtitle V is amended

6 by adding at the end the following:

‘‘CHAPTER 225. STATE RAIL PLANS AND HIGH PRIORITY

PROJECTS

‘‘Sec.

‘‘22501. Definitions

‘‘22502. Authority

‘‘22503. Purposes

‘‘22504. Transparency; coordination; review

‘‘22505. Content

‘‘22506. Review

7 ‘‘§ 22501. Definitions

8 ‘‘In this subchapter:

9 ‘‘(1) PRIVATE BENEFIT.—

10 ‘‘(A) IN GENERAL.—The term ‘private

11 benefit’—

12 ‘‘(i) means a benefit accrued to a per13 son or private entity, other than the Na14 tional Railroad Passenger Corporation,

15 that directly improves the economic and

16 competitive condition of that person or en17 tity through improved assets, cost reduc18 tions, service improvements, or any other

19 means as defined by the Secretary; and
†

980

S 1932 ES

1 ‘‘(ii) shall be determined on a project2 by-project basis, based upon an agreement

3 between the parties.

4 ‘‘(B) CONSULTATION.—The Secretary may

5 seek the advice of the States and rail carriers

6 in further defining this term.

7 ‘‘(2) PUBLIC BENEFIT.—

8 ‘‘(A) IN GENERAL.—The term ‘public

9 benefit’—

10 ‘‘(i) means a benefit accrued to the

11 public in the form of enhanced mobility of

12 people or goods, environmental protection

13 or enhancement, congestion mitigation, en14 hanced trade and economic development,

15 improved air quality or land use, more effi16 cient energy use, enhanced public safety or

17 security, reduction of public expenditures

18 due to improved transportation efficiency

19 or infrastructure preservation, and any

20 other positive community effects as defined

21 by the Secretary; and

22 ‘‘(ii) shall be determined on a project23 by-project basis, based upon an agreement

24 between the parties.
†

981

S 1932 ES

1 ‘‘(B) CONSULTATION.—The Secretary may

2 seek the advice of the States and rail carriers

3 in further defining this term.

4 ‘‘(3) STATE.—The term ‘State’ means any of

5 the 50 States and the District of Columbia.

6 ‘‘(4) STATE RAIL TRANSPORTATION AUTHOR7 ITY.—The term ‘State rail transportation authority’

8 means the State agency or official responsible under

9 the direction of the Governor of the State or a State

10 law for preparation, maintenance, coordination, and

11 administration of the State rail plan.’’.

12 ‘‘§ 22502. Authority

13 ‘‘(a) IN GENERAL.—Each State may prepare and

14 maintain a State rail plan in accordance with the provi15 sions of this subchapter.

16 ‘‘(b) REQUIREMENTS.—For the preparation and peri17 odic revision of a State rail plan, a State shall—

18 ‘‘(1) establish or designate a State rail trans19 portation authority to prepare, maintain, coordinate,

20 and administer the plan;

21 ‘‘(2) establish or designate a State rail plan ap22 proval authority to approve the plan;

23 ‘‘(3) submit the State’s approved plan to the

24 Secretary of Transportation for review; and
†

982

S 1932 ES

1 ‘‘(4) revise and resubmit a State-approved plan

2 no less frequently than once every 5 years for re3 approval by the Secretary.

4 ‘‘§ 22503. Purposes

5 ‘‘(a) PURPOSES.—The purposes of a State rail plan

6 are as follows:

7 ‘‘(1) To set forth State policy involving freight

8 and passenger rail transportation, including com9 muter rail operations, in the State.

10 ‘‘(2) To establish the period covered by the

11 State rail plan.

12 ‘‘(3) To present priorities and strategies to en13 hance rail service in the State that benefits the pub14 lic.

15 ‘‘(4) To serve as the basis for Federal and

16 State rail investments within the State.

17 ‘‘(b) COORDINATION.—A State rail plan shall be co18 ordinated with other State transportation planning goals

19 and programs and set forth rail transportation’s role with20 in the State transportation system.

21 ‘‘§ 22504. Transparency; coordination; review

22 ‘‘(a) PREPARATION.—A State shall provide adequate

23 and reasonable notice and opportunity for comment and

24 other input to the public, rail carriers, commuter and tran25 sit authorities operating in, or affected by rail operations
†

983

S 1932 ES

1 within the State, units of local government, and other in2 terested parties in the preparation and review of its State

3 rail plan.

4 ‘‘(b) INTERGOVERNMENTAL COORDINATION.—A

5 State shall review the freight and passenger rail service

6 activities and initiatives by regional planning agencies, re7 gional transportation authorities, and municipalities with8 in the State, or in the region in which the State is located,

9 while preparing the plan, and shall include any rec10 ommendations made by such agencies, authorities, and

11 municipalities as deemed appropriate by the State.

12 ‘‘§ 22505. Content

13 ‘‘(a) IN GENERAL.—Each State rail plan shall con14 tain the following:

15 ‘‘(1) An inventory of the existing overall rail

16 transportation system and rail services and facilities

17 within the State and an analysis of the role of rail

18 transportation within the State’s surface transpor19 tation system.

20 ‘‘(2) A review of all rail lines within the State,

21 including proposed high speed rail corridors and sig22 nificant rail line segments not currently in service.

23 ‘‘(3) A statement of the State’s passenger rail

24 service objectives, including minimum service levels,

25 for rail transportation routes in the State.
†

984

S 1932 ES

1 ‘‘(4) A general analysis of rail’s transportation,

2 economic, and environmental impacts in the State,

3 including congestion mitigation, trade and economic

4 development, air quality, land-use, energy-use, and

5 community impacts.

6 ‘‘(5) A long-range rail investment program for

7 current and future freight and passenger infrastruc8 ture in the State that meets the requirements of

9 subsection (b).

10 ‘‘(6) A statement of public financing issues for

11 rail projects and service in the State, including a list

12 of current and prospective public capital and oper13 ating funding resources, public subsidies, State tax14 ation, and other financial policies relating to rail in15 frastructure development.

16 ‘‘(7) An identification of rail infrastructure

17 issues within the State that reflects consultation

18 with all relevant stake holders.

19 ‘‘(8) A review of major passenger and freight

20 intermodal rail connections and facilities within the

21 State, including seaports, and prioritized options to

22 maximize service integration and efficiency between

23 rail and other modes of transportation within the

24 State.
†

985

S 1932 ES

1 ‘‘(9) A review of publicly funded projects within

2 the State to improve rail transportation safety and

3 security, including all major projects funded under

4 section 130 of title 23.

5 ‘‘(10) A performance evaluation of passenger

6 rail services operating in the State, including pos7 sible improvements in those services, and a descrip8 tion of strategies to achieve those improvements.

9 ‘‘(11) A compilation of studies and reports on

10 high-speed rail corridor development within the

11 State not included in a previous plan under this sub12 chapter, and a plan for funding any recommended

13 development of such corridors in the State.

14 ‘‘(12) A statement that the State is in compli15 ance with the requirements of section 22102.

16 ‘‘(b) LONG-RANGE SERVICE AND INVESTMENT PRO17 GRAM.—

18 ‘‘(1) PROGRAM CONTENT.—A long-range rail

19 investment program included in a State rail plan

20 under subsection (a)(5) shall include the following

21 matters:

22 ‘‘(A) A list of any rail capital projects ex23 pected to be undertaken or supported in whole

24 or in part by the State.
†

986

S 1932 ES

1 ‘‘(B) A detailed funding plan for those

2 projects.

3 ‘‘(2) PROJECT LIST CONTENT.—The list of rail

4 capital projects shall contain—

5 ‘‘(A) a description of the anticipated public

6 and private benefits of each such project; and

7 ‘‘(B) a statement of the correlation

8 between—

9 ‘‘(i) public funding contributions for

10 the projects; and

11 ‘‘(ii) the public benefits.

12 ‘‘(3) CONSIDERATIONS FOR PROJECT LIST.—In

13 preparing the list of freight and intercity passenger

14 rail capital projects, a State rail transportation au15 thority should take into consideration the following

16 matters:

17 ‘‘(A) Contributions made by non-Federal

18 and non-State sources through user fees,

19 matching funds, or other private capital involve20 ment.

21 ‘‘(B) Rail capacity and congestion effects.

22 ‘‘(C) Effects on highway, aviation, and

23 maritime capacity, congestion, or safety.

24 ‘‘(D) Regional balance.

25 ‘‘(E) Environmental impact.
†

987

S 1932 ES

1 ‘‘(F) Economic and employment impacts.

2 ‘‘(G) Projected ridership and other service

3 measures for passenger rail projects.

4 ‘‘§ 22506. Review

5 The Secretary shall prescribe procedures for States

6 to submit State rail plans for review under this title, in7 cluding standardized format and data requirements. State

8 rail plans completed before the date of enactment of the

9 Passenger Rail Investment and Improvement Act of 2005

10 that substantially meet the requirements of this chapter,

11 as determined by the Secretary, shall be deemed by the

12 Secretary to have met the requirements of this chapter’’.

13 (b) CONFORMING AMENDMENTS.—

14 (1) The table of chapters for the title is amend15 ed by inserting the following after the item relating

16 to chapter 223:

‘‘225. State rail plans .............................................................................................22501’’.

17 ‘‘(2) The chapter analysis for subtitle V is

18 amended by inserting the following after the item re19 lating to chapter 223:

‘‘225. State rail plans .............................................................................................24401’’.

20 SEC. 303. NEXT GENERATION CORRIDOR TRAIN EQUIP21 MENT POOL.

22 (a) IN GENERAL.—Within 180 days after the date

23 of enactment of this Act, Amtrak shall establish a Next

24 Generation Corridor Equipment Pool Committee, com-
†

988

S 1932 ES

1 prised of representatives of Amtrak, the Federal Railroad

2 Administration, and interested States. The purpose of the

3 Committee shall be to design, develop specifications for,

4 and procure standardized next-generation corridor equip5 ment.

6 (b) FUNCTIONS.—The Committee may—

7 (1) determine the number of different types of

8 equipment required, taking into account variations

9 in operational needs and corridor infrastructure;

10 (2) establish a pool of equipment to be used on

11 corridor routes funded by participating States; and

12 (3) subject to agreements between Amtrak and

13 States, utilize services provided by Amtrak to design,

14 maintain and remanufacture equipment.

15 (c) COOPERATIVE AGREEMENTS.—Amtrak and

16 States participating in the Committee may enter into

17 agreements for the funding, procurement, remanufacture,

18 ownership and management of corridor equipment, includ19 ing equipment currently owned or leased by Amtrak and

20 next-generation corridor equipment acquired as a result

21 of the Committee’s actions, and may establish a corpora22 tion, which may be owned or jointly-owned by Amtrak,

23 participating States or other entities, to perform these

24 functions.
†

989

S 1932 ES

1 (d) FUNDING.—In addition to the authorization pro2 vided in section 105 of this division, capital projects to

3 carry out the purposes of this section shall be eligible for

4 grants made pursuant to chapter 244 of title 49, United

5 States Code.

6 SEC. 304. FEDERAL RAIL POLICY.

7 Section 103 is amended—

8 (1) by inserting ‘‘IN GENERAL.—’’ before ‘‘The

9 Federal’’ in subsection (a);

10 (2) by striking the second and third sentences

11 of subsection (a);

12 (3) by inserting ‘‘ADMINISTRATOR.—’’ before

13 ‘‘The head’’ in subsection (b);

14 (4) by redesignating subsections (c), (d), and

15 (e) as subsections (d), (e), and (f), respectively and

16 by inserting after subsection (b) the following:

17 ‘‘(c) SAFETY.—To carry out all railroad safety laws

18 of the United States, the Administration is divided on a

19 geographical basis into at least 8 safety offices. The Sec20 retary of Transportation is responsible for all acts taken

21 under those laws and for ensuring that the laws are uni22 formly administered and enforced among the safety of23 fices.’’;

24 (5) by inserting ‘‘POWERS AND DUTIES.—’’ be25 fore ‘‘The’’ in subsection (d), as redesignated;
†

990

S 1932 ES

1 (6) by striking ‘‘and’’ after the semicolon in

2 paragraph (1) of subsection (d), as redesignated;

3 (7) by redesignating paragraph (2) of sub4 section (d), as redesignated, as paragraph (3) and

5 inserting after paragraph (1) the following:

6 ‘‘(2) the duties and powers related to railroad

7 policy and development under subsection (e); and’’;

8 (8) by inserting ‘‘TRANSFERS OF DUTY.—’’ be9 fore ‘‘A duty’’ in subsection (e), as redesignated;

10 (9) by inserting ‘‘CONTRACTS, GRANTS, LEASES,

11 COOPERATIVE AGREEMENTS, AND SIMILAR TRANS12 ACTIONS.—’’ before ‘‘Subject’’ in subsection (f), as

13 redesignated;

14 (10) by striking the last sentence in subsection

15 (f), as redesignated; and

16 (11) by adding at the end the following:

17 ‘‘(g) ADDITIONAL DUTIES OF THE ADMINIS18 TRATOR.—The Administrator shall—

19 ‘‘(1) provide assistance to States in developing

20 State rail plans prepared under chapter 225 and re21 view all State rail plans submitted under that sec22 tion;

23 ‘‘(2) develop a long range national rail plan

24 that is consistent with approved State rail plans and

25 the rail needs of the Nation, as determined by the
†

991

S 1932 ES

1 Secretary in order to promote an integrated, cohe2 sive, efficient, and optimized national rail system for

3 the movement of goods and people;

4 ‘‘(3) develop a preliminary national rail plan

5 within a year after the date of enactment of the Pas6 senger Rail Investment and Improvement Act of

7 2005;

8 ‘‘(4) develop and enhance partnerships with the

9 freight and passenger railroad industry, States, and

10 the public concerning rail development;

11 ‘‘(5) support rail intermodal development and

12 high-speed rail development, including high speed

13 rail planning;

14 ‘‘(6) ensure that programs and initiatives devel15 oped under this section benefit the public and work

16 toward achieving regional and national transpor17 tation goals; and

18 ‘‘(7) facilitate and coordinate efforts to assist

19 freight and passenger rail carriers, transit agencies

20 and authorities, municipalities, and States in pas21 senger-freight service integration on shared rights of

22 way by providing neutral assistance at the joint re23 quest of affected rail service providers and infra24 structure owners relating to operations and capacity

25 analysis, capital requirements, operating costs, and
†

992

S 1932 ES

1 other research and planning related to corridors

2 shared by passenger or commuter rail service and

3 freight rail operations.

4 ‘‘(h) PERFORMANCE GOALS AND REPORTS.—

5 ‘‘(1) PERFORMANCE GOALS.—In conjunction

6 with the objectives established and activities under7 taken under section 103(e) of this title, the Adminis8 trator shall develop a schedule for achieving specific,

9 measurable performance goals.

10 ‘‘(2) RESOURCE NEEDS.—The strategy and an11 nual plans shall include estimates of the funds and

12 staff resources needed to accomplish each goal and

13 the additional duties required under section 103(e).

14 ‘‘(3) SUBMISSION WITH PRESIDENT’S BUDG15 ET.—Beginning with fiscal year 2007 and each fis16 cal year thereafter, the Secretary shall submit to

17 Congress, at the same time as the President’s budg18 et submission, the Administration’s performance

19 goals and schedule developed under paragraph (1),

20 including an assessment of the progress of the Ad21 ministration toward achieving its performance

22 goals.’’.

23 SEC. 305. RAIL COOPERATIVE RESEARCH PROGRAM.

24 (a) ESTABLISHMENT AND CONTENT.—Chapter 249

25 is amended by adding at the end the following:
†

993

S 1932 ES

1 ‘‘§ 24910. Rail cooperative research program

2 ‘‘(a) IN GENERAL.—The Secretary shall establish

3 and carry out a rail cooperative research program. The

4 program shall—

5 ‘‘(1) address, among other matters, intercity

6 rail passenger and freight rail services, including ex7 isting rail passenger and freight technologies and

8 speeds, incrementally enhanced rail systems and in9 frastructure, and new high-speed wheel-on-rail sys10 tems and rail security;

11 ‘‘(2) address ways to expand the transportation

12 of international trade traffic by rail, enhance the ef13 ficiency of intermodal interchange at ports and other

14 intermodal terminals, and increase capacity and

15 availability of rail service for seasonal freight needs;

16 ‘‘(3) consider research on the interconnected17 ness of commuter rail, passenger rail, freight rail,

18 and other rail networks; and

19 ‘‘(4) give consideration to regional concerns re20 garding rail passenger and freight transportation,

21 including meeting research needs common to des22 ignated high-speed corridors, long-distance rail serv23 ices, and regional intercity rail corridors, projects,

24 and entities.

25 ‘‘(b) CONTENT.—The program to be carried out

26 under this section shall include research designed—
†

994

S 1932 ES

1 ‘‘(1) to identify the unique aspects and at2 tributes of rail passenger and freight service;

3 ‘‘(2) to develop more accurate models for evalu4 ating the impact of rail passenger and freight serv5 ice, including the effects on highway and airport and

6 airway congestion, environmental quality, and energy

7 consumption;

8 ‘‘(3) to develop a better understanding of modal

9 choice as it affects rail passenger and freight trans10 portation, including development of better models to

11 predict utilization;

12 ‘‘(4) to recommend priorities for technology

13 demonstration and development;

14 ‘‘(5) to meet additional priorities as determined

15 by the advisory board established under subsection

16 (c), including any recommendations made by the Na17 tional Research Council;

18 ‘‘(6) to explore improvements in management,

19 financing, and institutional structures;

20 ‘‘(7) to address rail capacity constraints that

21 affect passenger and freight rail service through a

22 wide variety of options, ranging from operating im23 provements to dedicated new infrastructure, taking

24 into account the impact of such options on oper25 ations;
†

995

S 1932 ES

1 ‘‘(8) to improve maintenance, operations, cus2 tomer service, or other aspects of intercity rail pas3 senger and freight service;

4 ‘‘(9) to recommend objective methodologies for

5 determining intercity passenger rail routes and serv6 ices, including the establishment of new routes, the

7 elimination of existing routes, and the contraction or

8 expansion of services or frequencies over such

9 routes;

10 ‘‘(10) to review the impact of equipment and

11 operational safety standards on the further develop12 ment of high speed passenger rail operations con13 nected to or integrated with non-high speed freight

14 or passenger rail operations; and

15 ‘‘(11) to recommend any legislative or regu16 latory changes necessary to foster further develop17 ment and implementation of high speed passenger

18 rail operations while ensuring the safety of such op19 erations that are connected to or integrated with

20 non-high speed freight or passenger rail operations.

21 ‘‘(c) ADVISORY BOARD.—

22 ‘‘(1) ESTABLISHMENT.—In consultation with

23 the heads of appropriate Federal departments and

24 agencies, the Secretary shall establish an advisory

25 board to recommend research, technology, and tech-
†

996

S 1932 ES

1 nology transfer activities related to rail passenger

2 and freight transportation.

3 ‘‘(2) MEMBERSHIP.—The advisory board shall

4 include—

5 ‘‘(A) representatives of State transpor6 tation agencies;

7 ‘‘(B) transportation and environmental

8 economists, scientists, and engineers; and

9 ‘‘(C) representatives of Amtrak, the Alaska

10 Railroad, freight railroads, transit operating

11 agencies, intercity rail passenger agencies, rail12 way labor organizations, and environmental or13 ganizations.

14 ‘‘(d) NATIONAL ACADEMY OF SCIENCES.— The Sec15 retary may make grants to, and enter into cooperative

16 agreements with, the National Academy of Sciences to

17 carry out such activities relating to the research, tech18 nology, and technology transfer activities described in sub19 section (b) as the Secretary deems appropriate.’’.

20 (b) CLERICAL AMENDMENT.—The chapter analysis

21 for chapter 249 is amended by adding at the end the fol22 lowing:

‘‘24910. Rail cooperative research program’’.
†

997

S 1932 ES

1 TITLE IV—PASSENGER RAIL

2 SECURITY AND SAFETY

3 SEC. 401. SYSTEMWIDE AMTRAK SECURITY UPGRADES.

4 (a) IN GENERAL—Subject to subsection (c) the Sec5 retary of Homeland Security, in consultation with the Sec6 retary of Transportation, is authorized to make grants to

7 Amtrak—

8 (1) to secure major tunnel access points and en9 sure tunnel integrity in New York, Baltimore, and

10 Washington, DC;

11 (2) to secure Amtrak trains;

12 (3) to secure Amtrak stations;

13 (4) to obtain a watch list identification system

14 approved by the Secretary;

15 (5) to obtain train tracking and interoperable

16 communications systems that are coordinated to the

17 maximum extent possible;

18 (6) to hire additional police and security offi19 cers, including canine units;

20 (7) to expand emergency preparedness efforts;

21 and

22 (8) for employee security training.

23 (b) CONDITIONS.—The Secretary of Transportation

24 shall disburse funds to Amtrak provided under subsection

25 (a) for projects contained in a systemwide security plan
†

998

S 1932 ES

1 approved by the Secretary of Homeland Security. The

2 plan shall include appropriate measures to address secu3 rity awareness, emergency response, and passenger evacu4 ation training.

5 (c) EQUITABLE GEOGRAPHIC ALLOCATION.—The

6 Secretary shall ensure that, subject to meeting the highest

7 security needs on Amtrak’s entire system, stations and fa8 cilities located outside of the Northeast Corridor receive

9 an equitable share of the security funds authorized by this

10 section.

11 (d) AUTHORIZATION OF APPROPRIATIONS.—There

12 are authorized to be appropriated to the Secretary of

13 Homeland Security to carry out this section—

14 (1) $63,500,000 for fiscal year 2006;

15 (2) $30,000,000 for fiscal year 2007; and

16 (3) $30,000,000 for fiscal year 2008.

17 Amounts appropriated pursuant to this subsection shall

18 remain available until expended.

19 SEC. 402. FIRE AND LIFE-SAFETY IMPROVEMENTS.

20 (a) LIFE-SAFETY NEEDS.—The Secretary of Trans21 portation is authorized to make grants to Amtrak for the

22 purpose of making fire and life-safety improvements to

23 Amtrak tunnels on the Northeast Corridor in New York,

24 NY, Baltimore, MD, and Washington, DC.
†

999

S 1932 ES

1 (b) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated to the Secretary of

3 Transportation for the purposes of carrying out subsection

4 (a) the following amounts:

5 (1) For the 6 New York tunnels to provide ven6 tilation, electrical, and fire safety technology up7 grades, emergency communication and lighting sys8 tems, and emergency access and egress for

9 passengers—

10 (A) $190,000,000 for fiscal year 2006;

11 (B) $190,000,000 for fiscal year 2007;

12 (C) $190,000,000 for fiscal year 2008;

13 (2) For the Baltimore & Potomac tunnel and

14 the Union tunnel, together, to provide adequate

15 drainage, ventilation, communication, lighting, and

16 passenger egress upgrades—

17 (A) $19,000,000 for fiscal year 2006;

18 (B) $19,000,000 for fiscal year 2007;

19 (C) $19,000,000 for fiscal year 2008;

20 (3) For the Washington, DC, Union Station

21 tunnels to improve ventilation, communication, light22 ing, and passenger egress upgrades—

23 (A) $13,333,000 for fiscal year 2006;

24 (B) $13,333,000 for fiscal year 2007;

25 (C) $13,333,000 for fiscal year 2008;
†

1000

S 1932 ES

1 (c) INFRASTRUCTURE UPGRADES.—There are au2 thorized to be appropriated to the Secretary of Transpor3 tation for fiscal year 2006 $3,000,000 for the preliminary

4 design of options for a new tunnel on a different alignment

5 to augment the capacity of the existing Baltimore tunnels.

6 (d) AVAILABILITY OF APPROPRIATED FUNDS.—

7 Amounts made available pursuant to this section shall re8 main available until expended.

9 (e) PLANS REQUIRED.—The Secretary may not make

10 amounts available to Amtrak for obligation or expenditure

11 under subsection (a)—

12 (1) until Amtrak has submitted to the Sec13 retary, and the Secretary has approved, an engineer14 ing and financial plan for such projects; and

15 (2) unless, for each project funded pursuant to

16 this section, the Secretary has approved a project

17 management plan prepared by Amtrak addressing

18 appropriate project budget, construction schedule,

19 recipient staff organization, document control and

20 record keeping, change order procedure, quality con21 trol and assurance, periodic plan updates, and peri22 odic status reports.

23 (f) REVIEW OF PLANS.—The Secretary of Transpor24 tation shall complete the review of the plans required by

25 paragraphs (1) and (2) of subsection (e) and approve or
†

1001

S 1932 ES

1 disapprove the plans within 45 days after the date on

2 which each such plan is submitted by Amtrak. If the Sec3 retary determines that a plan is incomplete or deficient,

4 the Secretary shall notify Amtrak of the incomplete items

5 or deficiencies and Amtrak shall, within 30 days after re6 ceiving the Secretary’s notification, submit a modified

7 plan for the Secretary’s review. Within 15 days after re8 ceiving additional information on items previously included

9 in the plan, and within 45 days after receiving items newly

10 included in a modified plan, the Secretary shall either ap11 prove the modified plan, or, if the Secretary finds the plan

12 is still incomplete or deficient, the Secretary shall identify

13 in writing to the Senate Committee on Commerce, Science,

14 and Transportation and the House of Representatives

15 Committee on Transportation and Infrastructure the por16 tions of the plan the Secretary finds incomplete or defi17 cient, approve all other portions of the plan, obligate the

18 funds associated with those other portions, and execute

19 an agreement with Amtrak within 15 days thereafter on

20 a process for resolving the remaining portions of the plan.

21 (g) FINANCIAL CONTRIBUTION FROM OTHER TUN22 NEL USERS.—The Secretary shall, taking into account the

23 need for the timely completion of all portions of the tunnel

24 projects described in subsection (a)—
†

1002

S 1932 ES

1 (1) consider the extent to which rail carriers

2 other than Amtrak use or plan to use the tunnels;

3 (2) consider the feasibility of seeking a financial

4 contribution from those other rail carriers toward

5 the costs of the projects; and

6 (3) obtain financial contributions or commit7 ments from such other rail carriers at levels reflect8 ing the extent of their use or planned use of the tun9 nels, if feasible.

10 SEC. 403. AMTRAK PLAN TO ASSIST FAMILIES OF PAS11 SENGERS INVOLVED IN RAIL PASSENGER AC12 CIDENTS.

13 (a) IN GENERAL.—Chapter 243 of title 49, United

14 States Code, is amended by adding at the end the fol15 lowing:

16 ‘‘§ 24316. Plans to address needs of families of pas17 sengers involved in rail passenger acci18 dents

19 ‘‘(a) SUBMISSION OF PLAN.—Not later than 6

20 months after the date of the enactment of the Passenger

21 Rail Investment and Improvement Act of 2005, Amtrak

22 shall submit to the Chairman of the National Transpor23 tation Safety Board and the Secretary of Transportation

24 a plan for addressing the needs of the families of pas-
†

1003

S 1932 ES

1 sengers involved in any rail passenger accident involving

2 an Amtrak intercity train and resulting in a loss of life.

3 ‘‘(b) CONTENTS OF PLANS.—The plan to be sub4 mitted by Amtrak under subsection (a) shall include, at

5 a minimum, the following:

6 ‘‘(1) A process by which Amtrak will maintain

7 and provide to the National Transportation Safety

8 Board and the Secretary of Transportation, imme9 diately upon request, a list (which is based on the

10 best available information at the time of the request)

11 of the names of the passengers aboard the train

12 (whether or not such names have been verified), and

13 will periodically update the list. The plan shall in14 clude a procedure, with respect to unreserved trains

15 and passengers not holding reservations on other

16 trains, for Amtrak to use reasonable efforts to ascer17 tain the number and names of passengers aboard a

18 train involved in an accident.

19 ‘‘(2) A plan for creating and publicizing a reli20 able, toll-free telephone number within 4 hours after

21 such an accident occurs, and for providing staff, to

22 handle calls from the families of the passengers.

23 ‘‘(3) A process for notifying the families of the

24 passengers, before providing any public notice of the
†

1004

S 1932 ES

1 names of the passengers, by suitably trained individ2 uals.

3 ‘‘(4) A process for providing the notice de4 scribed in paragraph (2) to the family of a pas5 senger as soon as Amtrak has verified that the pas6 senger was aboard the train (whether or not the

7 names of all of the passengers have been verified).

8 ‘‘(5) A process by which the family of each pas9 senger will be consulted about the disposition of all

10 remains and personal effects of the passenger within

11 Amtrak’s control; that any possession of the pas12 senger within Amtrak’s control will be returned to

13 the family unless the possession is needed for the ac14 cident investigation or any criminal investigation;

15 and that any unclaimed possession of a passenger

16 within Amtrak’s control will be retained by the rail

17 passenger carrier for at least 18 months.

18 ‘‘(6) A process by which the treatment of the

19 families of nonrevenue passengers will be the same

20 as the treatment of the families of revenue pas21 sengers.

22 ‘‘(7) An assurance that Amtrak will provide

23 adequate training to its employees and agents to

24 meet the needs of survivors and family members fol25 lowing an accident.
†

1005

S 1932 ES

1 ‘‘(c) USE OF INFORMATION.—The National Trans2 portation Safety Board, the Secretary of Transportation,

3 and Amtrak may not release to any person information

4 on a list obtained under subsection (b)(1) but may provide

5 information on the list about a passenger to the family

6 of the passenger to the extent that the Board or Amtrak

7 considers appropriate.

8 ‘‘(d) LIMITATION ON LIABILITY.—Amtrak shall not

9 be liable for damages in any action brought in a Federal

10 or State court arising out of the performance of Amtrak

11 in preparing or providing a passenger list, or in providing

12 information concerning a train reservation, pursuant to a

13 plan submitted by Amtrak under subsection (b), unless

14 such liability was caused by Amtrak’s conduct.

15 ‘‘(e) LIMITATION ON STATUTORY CONSTRUCTION.—

16 Nothing in this section may be construed as limiting the

17 actions that Amtrak may take, or the obligations that Am18 trak may have, in providing assistance to the families of

19 passengers involved in a rail passenger accident.

20 ‘‘(f) FUNDING.—There are authorized to be appro21 priated to the Secretary of Transportation for the use of

22 Amtrak $500,000 for fiscal year 2006 to carry out this

23 section. Amounts made available pursuant to this sub24 section shall remain available until expended.’’.
†

1006

S 1932 ES

1 (b) CONFORMING AMENDMENT.—The chapter anal2 ysis for chapter 243 of title 49, United States Code, is

3 amended by adding at the end the following:

‘‘24316. Plan to assist families of passengers involved in rail passenger accidents.’’.

4 SEC. 404. NORTHERN BORDER RAIL PASSENGER REPORT.

5 Within 180 days after the date of enactment of this

6 Act, the Secretary of Transportation, in consultation with

7 the Secretary of Homeland Security, the Assistant Sec8 retary of Homeland Security (Transportation Security Ad9 ministration), heads of other appropriate Federal depart10 ments, and agencies and the National Railroad Passenger

11 Corporation, shall transmit a report to the Senate Com12 mittee on Commerce, Science, and Transportation and the

13 House of Representatives Committee on Transportation

14 and Infrastructure that contains—

15 (1) a description of the current system for

16 screening passengers and baggage on passenger rail

17 service between the United States and Canada;

18 (2) an assessment of the current program to

19 provide preclearance of airline passengers between

20 the United States and Canada as outlined in ‘‘The

21 Agreement on Air Transport Preclearance between

22 the Government of Canada and the Government of

23 the United States of America’’, dated January 18,

24 2001;
†

1007

S 1932 ES

1 (3) an assessment of the current program to

2 provide preclearance of freight railroad traffic be3 tween the United States and Canada as outlined in

4 the ‘‘Declaration of Principle for the Improved Secu5 rity of Rail Shipments by Canadian National Rail6 way and Canadian Pacific Railway from Canada to

7 the United States’’, dated April 2, 2003;

8 (4) information on progress by the Department

9 of Homeland Security and other Federal agencies to10 wards finalizing a bilateral protocol with Canada

11 that would provide for preclearance of passengers on

12 trains operating between the United States and Can13 ada;

14 (5) a description of legislative, regulatory,

15 budgetary, or policy barriers within the United

16 States Government to providing pre-screened pas17 senger lists for rail passengers traveling between the

18 United States and Canada to the Department of

19 Homeland Security;

20 (6) a description of the position of the Govern21 ment of Canada and relevant Canadian agencies

22 with respect to preclearance of such passengers;

23 (7) a draft of any changes in existing Federal

24 law necessary to provide for pre-screening of such
†

1008

S 1932 ES

1 passengers and providing pre-screened passenger

2 lists to the Department of Homeland Security; and

3 (8) an analysis of the feasibility of reinstating

4 United States Customs and Border Patrol rolling in5 spections onboard international Amtrak trains.

6 SEC. 405. PASSENGER, BAGGAGE, AND CARGO SCREENING.

7 (a) REQUIREMENT FOR STUDY AND REPORT.—The

8 Secretary of Homeland Security, in cooperation with the

9 Secretary of Transportation through the Assistant Sec10 retary of Homeland Security (Transportation Security Ad11 ministration) and other appropriate agencies, shall—

12 (1) study the cost and feasibility of requiring

13 security screening for passengers, baggage, and

14 cargo on passenger trains including an analysis of

15 any passenger train screening pilot programs under16 taken by the Department of Homeland Security; and

17 (2) report the results of the study, together

18 with any recommendations that the Secretary of

19 Homeland Security may have for implementing a

20 rail security screening program to the Senate Com21 mittee on Commerce, Science, and Transportation

22 and the House of Representatives Committee on

23 Transportation and Infrastructure within 1 year

24 after the date of enactment of this Act.
†

1009

S 1932 ES

1 (b) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated to the Secretary of

3 Homeland Security $1,000,000 for fiscal year 2006 to

4 carry out this section.

Passed the Senate November 3, 2005.

Attest:

Secretary.
109TH CONGRESS

1ST SESSION S. 1932

AN ACT

To provide for reconciliation pursuant to section

for fiscal year 2006 (H. Con. Res. 95).202(a) of the concurrent resolution on the budget