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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1932 Engrossed Amendment House (EAH)]

                In the House of Representatives, U. S.,

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

    Resolved, That the bill from the Senate (S. 1932) entitled ``An Act to 
provide for reconciliation pursuant to section 202(a) of the concurrent 
resolution on the budget for fiscal year 2006 (H. Con. Res. 95)'', do pass with 
the following

                               AMENDMENT:

            Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Deficit Reduction Act of 2005''.

SEC. 2. TABLE OF TITLES.

    The table of titles is as follows:

                   TITLE I--COMMITTEE ON AGRICULTURE

           TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE

              TITLE III--COMMITTEE ON ENERGY AND COMMERCE

               TITLE IV--COMMITTEE ON FINANCIAL SERVICES

                  TITLE V--COMMITTEE ON THE JUDICIARY

                    TITLE VI--COMMITTEE ON RESOURCES

       TITLE VII--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                TITLE VIII--COMMITTEE ON WAYS AND MEANS

                   TITLE I--COMMITTEE ON AGRICULTURE

SECTION 1001. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Agricultural 
Reconciliation Act of 2005''.
    (b) Table of Contents.--The table of contents of this title is as 
follows:

Sec. 1001. Short title; table of contents.

                     Subtitle A--Commodity Programs

Sec. 1101. Percentage reduction in amount of direct payments for 
                            covered commodities and peanuts.
Sec. 1102. Reduction in percentage of direct payment amount authorized 
                            to be paid in advance.
Sec. 1103. Cotton competitiveness provisions.

                        Subtitle B--Conservation

Sec. 1201. Limitations on use of Commodity Credit Corporation funds to 
                            carry out watershed rehabilitation program.
Sec. 1202. Conservation security program.
Sec. 1203. Limitations on use of Commodity Credit Corporation funds to 
                            carry out agricultural management 
                            assistance program.

                           Subtitle C--Energy

Sec. 1301. Termination of use of Commodity Credit Corporation funds to 
                            carry out renewable energy systems and 
                            energy efficiency improvements program.

                     Subtitle D--Rural Development

Sec. 1401. Enhanced access to broadband telecommunications services in 
                            rural areas.
Sec. 1402. Value-added agricultural product market development grants.
Sec. 1403. Rural business investment program.
Sec. 1404. Rural business strategic investment grants.
Sec. 1405. Rural firefighters and emergency personnel grants.

                          Subtitle E--Research

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

                         Subtitle F--Nutrition

Sec. 1601. Eligible households.
Sec. 1602. Availability of commodities for the emergency food 
                            assistance program.
Sec. 1603. Residency requirement.
Sec. 1604. Disaster food stamp program.

                     Subtitle A--Commodity Programs

SEC. 1101. PERCENTAGE REDUCTION IN AMOUNT OF DIRECT PAYMENTS FOR 
              COVERED COMMODITIES AND PEANUTS.

    (a) Covered Commodities.--Section 1103 of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 7913) is amended--
            (1) in subsection (c), by striking ``The amount'' and 
        inserting ``Except as provided in subsection (e), the amount''; 
        and
            (2) by adding at the end the following new subsection:
    ``(e) Direct Payment Amount Reduction.--Notwithstanding subsection 
(c), for the 2006 and 2007 crop years (and the 2008 and 2009 crop years 
if direct payments are provided under this section for those crop 
years), the Secretary shall reduce the total amount of the direct 
payment to be paid to the producers on a farm for a covered commodity 
for the crop year concerned by an amount equal to 1 percent of the 
direct payment amount otherwise determined for that farm for that 
covered commodity for that crop year. No reduction shall be made under 
the authority of this subsection if direct payments are made for the 
2010 or any subsequent crop year of a covered commodity.''.
    (b) Peanuts.--Section 1303 of such Act (7 U.S.C. 7953) is amended--
            (1) in subsection (d), by striking ``The amount'' and 
        inserting ``Except as provided in subsection (f), the amount''; 
        and
            (2) by adding at the end the following new subsection:
    ``(f) Direct Payment Amount Reduction.--Notwithstanding subsection 
(d), for the 2006 and 2007 crops of peanuts (and the 2008 and 2009 
crops of peanuts if direct payments are provided under this section for 
those crops), the Secretary shall reduce the total amount of the direct 
payment to be paid to the producers on a farm for that crop of peanuts 
by an amount equal to 1 percent of the direct payment amount otherwise 
determined for that farm for that crop of peanuts. No reduction shall 
be made under the authority of this subsection if direct payments are 
made for the 2010 or any subsequent crop of peanuts.''.

SEC. 1102. REDUCTION IN PERCENTAGE OF DIRECT PAYMENT AMOUNT AUTHORIZED 
              TO BE PAID IN ADVANCE.

    (a) Covered Commodities.--Section 1103(d)(2) of the Farm Security 
and Rural Investment Act of 2002 (7 U.S.C. 7913(d)(2)) is amended in 
the first sentence by striking ``2007 crop years'' and inserting ``2005 
crop years and up to 40 percent of the direct payment for a covered 
commodity for each of the 2006 and 2007 crop years''.
    (b) Peanuts.--Section 1303(e)(2) of such Act (7 U.S.C. 7953(e)(2)) 
is amended in the first sentence by striking ``2007 crop years'' and 
inserting ``2005 crop years and up to 40 percent of the direct payment 
for each of the 2006 and 2007 crop years''.

SEC. 1103. COTTON COMPETITIVENESS PROVISIONS.

    (a) Repeal of Authority to Issue Cotton User Marketing 
Certificates.--Section 1207 of the Farm Security and Rural Investment 
Act of 2002 (7 U.S.C. 7937) is amended--
            (1) by striking the section heading and inserting the 
        following: ``upland cotton import quotas.'';
            (2) by striking subsection (a);
            (3) by redesignating subsections (b) and (c) as subsections 
        (a) and (b), respectively;
            (4) in subsection (a), as so redesignated--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by striking ``, 
                        adjusted for the value of any certificate 
                        issued under subsection (a),''; and
                            (ii) in subparagraph (C), by striking ``, 
                        for the value of any certificates issued under 
                        subsection (a)''; and
                    (B) in paragraph (4), by striking ``subsection 
                (c)'' and inserting ``subsection (b)''; and
            (5) in subsection (b)(2), as so redesignated, by striking 
        ``subsection (b)'' and inserting ``subsection (a)''.
    (b) Conforming Amendment.--Section 136 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7236) is repealed.
    (c) Effective Date.--The amendments made by this section take 
effect on August 1, 2006.

                        Subtitle B--Conservation

SEC. 1201. LIMITATIONS ON USE OF COMMODITY CREDIT CORPORATION FUNDS TO 
              CARRY OUT WATERSHED REHABILITATION PROGRAM.

    (a) Fiscal Year 2007 Funding.--Subparagraph (E) of section 14(h)(1) 
of the Watershed Protection and Flood Prevention Act (16 U.S.C. 
1012(h)(1)) is amended by striking ``$65,000,000'' and inserting 
``$50,000,000''.
    (b) Termination of Multi-Year Availability of Funds.--Such section 
is further amended by striking ``, to remain available until expended'' 
in the matter preceding subparagraph (A).
    (c) Rescission of Unobligated Prior-Year Funds.--Funds previously 
made available under such section for a fiscal year and unobligated as 
of September 30, 2006, are hereby rescinded effective on that date.

SEC. 1202. CONSERVATION SECURITY PROGRAM.

    (a) Funding.--Section 1241(a) of the Food Security Act of 1985 (16 
U.S.C. 3841(a)) is amended--
            (1) in the matter before paragraph (1), by striking ``For'' 
        and inserting ``Except as otherwise provided in this 
        subsection, for''; and
            (2) in paragraph (3), by striking ``not more than 
        $6,037,000,000'' and all that follows through ``2014.'' and 
        inserting the following:
 ``not more than--
                    ``(A) $2,213,000,000 for the period of fiscal years 
                2006 through 2010; and
                    ``(B) $5,729,000,000 for the period of fiscal years 
                2006 through 2015.''.
    (b) Duration.--Section 1238A(a) of such Act (16 U.S.C. 3838a(a)) is 
amended by striking ``2007'' and inserting ``2011''.

SEC. 1203. LIMITATIONS ON USE OF COMMODITY CREDIT CORPORATION FUNDS TO 
              CARRY OUT AGRICULTURAL MANAGEMENT ASSISTANCE PROGRAM.

    Section 524(b)(4)(B) of the Federal Crop Insurance Act (7 U.S.C. 
1524(b)(4)(B)) is amended--
            (1) in clause (i), by inserting before the period at the 
        end the following: ``, except fiscal years 2007 through 2010''; 
        and
            (2) in clauses (ii) and (iii), by striking ``2007'' both 
        places it appears and inserting ``2006''.

                           Subtitle C--Energy

SEC. 1301. TERMINATION OF USE OF COMMODITY CREDIT CORPORATION FUNDS TO 
              CARRY OUT RENEWABLE ENERGY SYSTEMS AND ENERGY EFFICIENCY 
              IMPROVEMENTS PROGRAM.

    Section 9006(f) of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 8106(f)) is amended by striking ``2007'' and inserting 
``2006''.

                     Subtitle D--Rural Development

SEC. 1401. ENHANCED ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN 
              RURAL AREAS.

    (a) Termination of Fiscal Year 2007 Funding.--Subparagraph (B) of 
section 601(j)(1) of the Rural Electrification Act of 1936 (7 U.S.C. 
950bb(j)(1)) is amended by striking ``for each of fiscal years 2006 and 
2007'' and inserting ``for fiscal year 2006''.
    (b) Termination of Multi-Year Availability of Funds.--Such section 
is further amended by striking ``, to remain available until expended'' 
both places it appears.
    (c) Rescission of Unobligated Prior-Year Funds.--Funds previously 
made available under such section for a fiscal year and unobligated as 
of September 30, 2006, are hereby rescinded effective on that date.

SEC. 1402. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.

    (a) Termination of Fiscal Year 2007 Funding.--Section 231(b)(4) of 
the Agricultural Risk Protection Act of 2000 (Public Law 106-224; 7 
U.S.C. 1621 note) is amended by striking ``October 1, 2006'' and 
inserting ``October 1, 2005''.
    (b) Termination of Multi-Year Availability of Funds.--Such section 
is further amended by striking ``, to remain available until 
expended''.
    (c) Rescission of Unobligated Prior-Year Funds.--Funds previously 
made available under such section for a fiscal year and unobligated as 
of September 30, 2006, are hereby rescinded effective on that date.

SEC. 1403. RURAL BUSINESS INVESTMENT PROGRAM.

    (a) Termination of Fiscal Year 2007 and Subsequent Funding.--
Subsection (a)(1) of section 384S of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2009cc-18) is amended by inserting after 
``necessary'' the following: ``through fiscal year 2006''.
    (b) Termination of Multi-Year Availability of Funds.--Such section 
is further amended--
            (1) by striking ``(a) In General.--''; and
            (2) by striking subsection (b).
    (c) Rescission of Unobligated Prior-Year Funds.--Funds previously 
made available under such section and unobligated as of September 30, 
2006, are hereby rescinded effective on that date.

SEC. 1404. RURAL BUSINESS STRATEGIC INVESTMENT GRANTS.

    (a) Termination of Multi-Year Availability of Funds.--Subsection 
(a) of section 385E of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 2009dd-4) is amended by striking ``, to remain available 
until expended,''.
    (b) Rescission of Unobligated Prior-Year Funds.--Funds previously 
made available under such section and unobligated as of September 30, 
2006, are hereby rescinded effective on that date.

SEC. 1405. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL GRANTS.

    (a) Termination of Fiscal Year 2007 Funding.--Section 6405(c) of 
the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 2655(c)) 
is amended by striking ``2007'' and inserting ``2006''.
    (b) Termination of Multi-Year Availability of Funds.--Such section 
is further amended by striking ``, to remain available until 
expended''.
    (c) Rescission of Unobligated Prior-Year Funds.--Funds previously 
made available under such section for a fiscal year and unobligated as 
of September 30, 2006, are hereby rescinded effective on that date.

                          Subtitle E--Research

SEC. 1501. INITIATIVE FOR FUTURE FOOD AND AGRICULTURE SYSTEMS.

    (a) Termination of Fiscal Year 2007, 2008, and 2009 Transfers.--
Subsection (b)(3)(D) of section 401 of the Agricultural Research, 
Extension, and Education Reform Act of 1998 (7 U.S.C. 7621) is amended 
by striking ``2006'' and inserting ``2009''.
    (b) Termination of Multi-Year Availability of Fiscal Year 2006 
Funds.--Paragraph (6) of subsection (f) of such section is amended to 
read as follows:
            ``(6) Availability of funds.--
                    ``(A) Two-year availability.--Except as provided in 
                subparagraph (B), funds for grants under this section 
                shall be available to the Secretary for obligation for 
                a 2-year period beginning on the date of the transfer 
                of the funds under subsection (b).
                    ``(B) Exception for fiscal year 2006 transfer.--In 
                the case of the funds required to be transferred by 
                subsection (b)(3)(C), the funds shall be available to 
                the Secretary for obligation for the 1-year period 
                beginning on October 1, 2005.''.

                         Subtitle F--Nutrition

SEC. 1601. ELIGIBLE HOUSEHOLDS.

    (a) Eligible Households.--The Food Stamp Act of 1977 (7 U.S.C. 2011 
et seq.) is amended--
            (1) in section 5--
                    (A) in the 2d sentence of subsection (a); and
                    (B) in subsection (j);
        by striking ``receives benefits'' each place it appears and 
        inserting ``in fiscal years 2006 through 2010 receives cash 
        assistance, and in any other fiscal year receives benefits,'';
            (2) in section 5(a) by adding at the end the following:
``Notwithstanding any other provisions of this Act except sections 
6(b), 6(d)(2), and 6(g) and section 3(i)(4), households in which each 
member receives substantial and ongoing noncash benefits under a State 
program funded under part A of title IV of the Social Security Act (42 
U.S.C. 601 et seq.) provided for purposes of shelter, utilities, child 
care, health care, transportation, or job training, and that have a 
monthly income that does not exceed (before the exclusions and 
deductions provided for in subsections (d) and (e)) 150 percent of the 
poverty line, as defined in section 673(2) of the Community Services 
Block Grant Act (42 U.S.C. 9902(2)), for the forty-eight contiguous 
States and the District of Columbia, Alaska, Hawaii, the Virgin Islands 
of the United States, and Guam, respectively, shall be eligible to 
participate in the food stamp program.''; and
            (3) in section 5(j) by adding at the end the following:
``Notwithstanding subsections (a) through (i), a State agency shall 
consider a member of a household in which each household member 
receives substantial and ongoing noncash benefits under a State program 
funded under part A of title IV of the Social Security Act (42 U.S.C. 
601 et seq.) provided for purposes of shelter, utilities, child care, 
health care, transportation, or job training, and which has a monthly 
income that does not exceed (before the exclusions and deductions 
provided for in subsections (d) and (e)) 150 percent of the poverty 
line, as defined in section 673(2) of the Community Services Block 
Grant Act (42 U.S.C. 9902(2)), for the forty-eight contiguous States 
and the District of Columbia, Alaska, Hawaii, the Virgin Islands of the 
United States, and Guam, respectively, to have satisfied the resource 
limitations prescribed under subsection (g).''.
    (b) Extensions.--The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) 
is amended in--
            (1) section 11(t)(1);
            (2) section 16--
                    (A) in subparagraphs (A)(vii) and (E)(i) of 
                subsection (h)(1); and
                    (B) in subparagraphs (A) and (B)(ii) of subsection 
                (k)(3);
            (3) section 17(b)(1)(B)(vi);
            (4) section 18(a); and
            (5) section 19(a)(2)(A)(ii);
 by striking ``2007'' each place it appears and inserting ``2011''.
    (c) Certification for School Lunch Program.--Section 9 of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1758) is 
amended--
            (1) in subsection (b)(12)--
                    (A) in subparagraph (A)--
                            (i) in clause (v), by striking ``; or'' and 
                        inserting a semicolon;
                            (ii) in clause (vi), by striking the period 
                        and inserting ``; or''; and
                            (iii) by adding at the end the following 
                        new clause:
                            ``(vii) a member of a household in which 
                        each member receives or is eligible to receive 
                        non-cash or in-kind benefits under a State 
                        program funded under part A of title IV of the 
                        Social Security Act (42 U.S.C. 601 et seq.), 
                        and requires participants to have a gross 
                        monthly income at or below 200 percent of the 
                        Federal poverty level.''; and
                    (B) in subparagraph (B), by striking ``or 
                assistance'' and inserting ``, benefits, or 
                assistance''; and
            (2) in subsection (d)(2)--
                    (A) in subparagraph (D), by striking ``; or'' and 
                inserting a semicolon;
                    (B) in subparagraph (E), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(F) documentation has been provided to the local 
                educational agency showing that the household is one in 
                which each member receives or is eligible to receive 
                non-cash or in-kind benefits under a State program 
                funded under part A of title IV of the Social Security 
                Act (42 U.S.C. 601 et seq.), and requires participants 
                to have a gross monthly income at or below 200 percent 
                of the Federal poverty level.''.

SEC. 1602. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD 
              ASSISTANCE PROGRAM.

     Section 27(a) of the Food Stamp Act of 1977 (7 U.S.C. 2036(a)) is 
amended--
            (1) by striking ``2007,'' and inserting ``2005 and for each 
        of the fiscal years 2007 through 2011'';
            (2) by inserting ``, and for fiscal year 2006 the Secretary 
        shall purchase $152,000,000,'' before ``of a variety''; and
            (3) by adding at the end the following:
``Of the funds used to purchase commodities in accordance with this 
subsection for fiscal year 2006, $12,000,000 shall be used to purchase 
commodities for distribution to States that received a Presidential 
designation of a major disaster under the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5121-5206) as a result 
of Hurricane Katrina or Hurricane Rita and States contiguous to those 
States.''.

SEC. 1603. RESIDENCY REQUIREMENT.

    Section 402(a)(2)(L) of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(L)) is 
amended by striking ``for a period of 5 years or more beginning'' and 
inserting the following:
``for a period--
            ``(1) effective until September 30, 2010--
                    ``(A) for an alien--
                            ``(i)(I) who is 60 years of age or older; 
                        or
                            ``(II) with respect to whom--
                                    ``(aa) an application for 
                                naturalization under Immigration and 
                                Nationality Act is approved; or
                                    ``(bb) such application is pending 
                                under such Act and no previous 
                                application for naturalization has been 
                                rejected under such Act; and
                            ``(ii) who is a member of a household that 
                        receives food stamp benefits;
                as of the date of the enactment of the Agricultural 
                Reconciliation Act of 2005, of 5 years or more; and
                    ``(B) for an alien with respect to whom 
                subparagraph (A) does not apply, of 7 years or more; 
                and
            ``(2) effective beginning on October 1, 2010, of 5 years or 
        more;
beginning''.

SEC. 1604. DISASTER FOOD STAMP PROGRAM.

    Notwithstanding section 16(a) of the Food Stamp Act of 1977 (7 
U.S.C. 2025(a)), the Secretary of Agriculture is authorized, at the 
discretion of the Secretary, to pay to State agencies 100 percent of 
the administrative costs incurred in the certification of, and issuance 
of benefits to, applicant households that become eligible to receive 
food stamp benefits under the disaster food stamp program eligibility 
standards in effect during the Presidentially declared emergency in 
response to Hurricane Katrina or Hurricane Rita.

           TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE

SECTION 2000. TABLE OF CONTENTS.

    The table of contents of this title is as follows:

           TITLE II--COMMITTEE ON EDUCATION AND THE WORKFORCE

Sec. 2000. Table of contents.

                       Subtitle A--Welfare Reform

                    Part 1--Short title; references

Sec. 2001. Short title.
Sec. 2002. References.

                              Part 2--TANF

Sec. 2011. Universal engagement and family self-sufficiency plan 
                            requirements.
Sec. 2012. Work participation requirements.
Sec. 2013. Work-related performance improvement.
Sec. 2014. Report on coordination.
Sec. 2015. Fatherhood program.
Sec. 2016. State option to make TANF programs mandatory partners with 
                            one-stop employment training centers.
Sec. 2017. Sense of the Congress.
Sec. 2018. Prohibition on offshoring.

                           Part 3--Child Care

Sec. 2021. Short title.
Sec. 2022. Goals.
Sec. 2023. Authorization of appropriations.
Sec. 2024. Application and plan.
Sec. 2025. Activities to improve the quality of child care.
Sec. 2026. Reports and audits.
Sec. 2027. Report by Secretary.
Sec. 2028. Definitions.
Sec. 2029. Waiver authority to expand the availability of services 
                            under Child Care and Development Block 
                            Grant Act of 1990.

                  Part 4--State and Local Flexibility

Sec. 2041. Program coordination demonstration projects.

                         Part 5--Effective Date

Sec. 2051. Effective date.

                      Subtitle B--Higher Education

Sec. 2101. Short title.

         Part 1--Amendments to the Higher Education Act of 1965

Sec. 2111. References; effective date.
Sec. 2112. Modification of 50/50 Rule.
Sec. 2113. Reauthorization of Federal Family Education Loan Program.
Sec. 2114. Loan limits.
Sec. 2115. Interest rates and special allowances.
Sec. 2116. Additional loan terms and conditions.
Sec. 2117. Consolidation loan changes.
Sec. 2118. Deferment of student loans for military service.
Sec. 2119. Loan forgiveness for service in areas of national need.
Sec. 2120. Unsubsidized Stafford loans.
Sec. 2121. Elimination of termination dates from Taxpayer-Teacher 
                            Protection Act of 2004.
Sec. 2122. Loan fees from lenders.
Sec. 2123. Additional administrative provisions.
Sec. 2124. Funds for administrative expenses.
Sec. 2125. Significantly simplifying the student aid application 
                            process.
Sec. 2126. Additional need analysis amendments.
Sec. 2127. Definition of eligible program.
Sec. 2128. Distance education.
Sec. 2129. Student eligibility.
Sec. 2130. Institutional refunds.
Sec. 2131. College access initiative.
Sec. 2132. Cancellation of Student Loan Indebtedness For Survivors of 
                            Victims of the September 11, 2001, Attacks.
Sec. 2133. Independent evaluation of distance education programs.
Sec. 2134. Disbursement of student loans.

                    Part 2--Higher education relief

Sec. 2141. References.
Sec. 2142. Waivers and modifications.
Sec. 2143. Cancellation of institutional repayment by colleges and 
                            universities affected by a Gulf hurricane 
                            disaster.
Sec. 2144. Cancellation of student loans for cancelled enrollment 
                            periods.
Sec. 2145. Temporary deferment of student loan repayment.
Sec. 2146. No affect on grant and loan limits.
Sec. 2147. Teacher loan relief.
Sec. 2148. Expanding information dissemination regarding eligibility 
                            for Pell Grants.
Sec. 2149. Procedures.
Sec. 2150. Termination of authority.
Sec. 2151. Definitions.

                          Subtitle C--Pensions

Sec. 2201. Increases in PBGC premiums.

                       Subtitle A--Welfare Reform

                    PART 1--SHORT TITLE; REFERENCES

SEC. 2001. SHORT TITLE.

    This subtitle may be cited as the ``Personal Responsibility, Work, 
and Family Promotion Act of 2005''.

SEC. 2002. REFERENCES.

    Except as otherwise expressly provided, wherever in this subtitle 
an amendment or repeal is expressed in terms of an amendment to, or 
repeal of, a section or other provision, the amendment or repeal shall 
be considered to be made to a section or other provision of the Social 
Security Act.

                              PART 2--TANF

SEC. 2011. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY PLAN 
              REQUIREMENTS.

    (a) Modification of State Plan Requirements.--Section 402(a)(1)(A) 
(42 U.S.C. 602(a)(1)(A)) is amended by striking clauses (ii) and (iii) 
and inserting the following:
                            ``(ii) Require a parent or caretaker 
                        receiving assistance under the program to 
                        engage in work or alternative self-sufficiency 
                        activities (as defined by the State), 
                        consistent with section 407(e)(2).
                            ``(iii) Require families receiving 
                        assistance under the program to engage in 
                        activities in accordance with family self-
                        sufficiency plans developed pursuant to section 
                        408(b).''.
    (b) Establishment of Family Self-Sufficiency Plans.--
            (1) In general.--Section 408(b) (42 U.S.C. 608(b)) is 
        amended to read as follows:
    ``(b) Family Self-Sufficiency Plans.--
            ``(1) In general.--A State to which a grant is made under 
        section 403 shall--
                    ``(A) assess, in the manner deemed appropriate by 
                the State, the skills, prior work experience, and 
                employability of each work-eligible individual (as 
                defined in section 407(b)(2)(C)) receiving assistance 
                under the State program funded under this part;
                    ``(B) establish for each family that includes such 
                an individual, in consultation as the State deems 
                appropriate with the individual, a self-sufficiency 
                plan that specifies appropriate activities described in 
                the State plan submitted pursuant to section 402, 
                including direct work activities as appropriate 
                designed to assist the family in achieving their 
                maximum degree of self-sufficiency, and that provides 
                for the ongoing participation of the individual in the 
                activities;
                    ``(C) require, at a minimum, each such individual 
                to participate in activities in accordance with the 
                self-sufficiency plan;
                    ``(D) monitor the participation of each such 
                individual in the activities specified in the self-
                sufficiency plan, and regularly review the progress of 
                the family toward self-sufficiency;
                    ``(E) upon such a review, revise the self-
                sufficiency plan and activities as the State deems 
                appropriate.
            ``(2) Timing.--The State shall comply with paragraph (1) 
        with respect to a family--
                    ``(A) in the case of a family that, as of October 
                1, 2005, is not receiving assistance from the State 
                program funded under this part, not later than 60 days 
                after the family first receives assistance on the basis 
                of the most recent application for the assistance; or
                    ``(B) in the case of a family that, as of such 
                date, is receiving the assistance, not later than 12 
                months after the date of enactment of this subsection.
            ``(3) State discretion.--A State shall have sole 
        discretion, consistent with section 407, to define and design 
        activities for families for purposes of this subsection, to 
        develop methods for monitoring and reviewing progress pursuant 
        to this subsection, and to make modifications to the plan as 
        the State deems appropriate to assist the individual in 
        increasing their degree of self-sufficiency.
            ``(4) Rule of interpretation.--Nothing in this part shall 
        preclude a State from--
                    ``(A) requiring participation in work and any other 
                activities the State deems appropriate for helping 
                families achieve self-sufficiency and improving child 
                well-being; or
                    ``(B) using job search or other appropriate job 
                readiness or work activities to assess the 
                employability of individuals and to determine 
                appropriate future engagement activities.''.
            (2) Penalty for failure to establish family self-
        sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is 
        amended--
                    (A) in the paragraph heading, by inserting ``or 
                establish family self-sufficiency plan'' after 
                ``Rates''; and
                    (B) in subparagraph (A), by inserting ``or 408(b)'' 
                after ``407(a)''.

SEC. 2012. WORK PARTICIPATION REQUIREMENTS.

    (a) Elimination of Separate Participation Rate Requirements for 2-
Parent Families.--
            (1) Section 407 (42 U.S.C. 607) is amended in each of 
        subsections (a) and (b) by striking paragraph (2).
            (2) Section 407(b)(4) (42 U.S.C. 607(b)(4)) is amended by 
        striking ``paragraphs (1)(B) and (2)(B)'' and inserting 
        ``paragraph (1)(B)''.
            (3) Section 407(c)(1) (42 U.S.C. 607(c)(1)) is amended by 
        striking subparagraph (B).
            (4) Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is 
        amended by striking ``paragraphs (1)(B)(i) and (2)(B) of 
        subsection (b)'' and inserting ``subsection (b)(1)(B)(i)''.
    (b) Work Participation Requirements.--Section 407 (42 U.S.C. 607) 
is amended by striking all that precedes subsection (b)(3) and 
inserting the following:

``SEC. 407. WORK PARTICIPATION REQUIREMENTS.

    ``(a) Participation Rate Requirements.--A State to which a grant is 
made under section 403 for a fiscal year shall achieve a minimum 
participation rate equal to not less than--
            ``(1) 50 percent for fiscal year 2006;
            ``(2) 55 percent for fiscal year 2007;
            ``(3) 60 percent for fiscal year 2008;
            ``(4) 65 percent for fiscal year 2009; and
            ``(5) 70 percent for fiscal year 2010 and each succeeding 
        fiscal year.
    ``(b) Calculation of Participation Rates.--
            ``(1) Average monthly rate.--For purposes of subsection 
        (a), the participation rate of a State for a fiscal year is the 
        average of the participation rates of the State for each month 
        in the fiscal year.
            ``(2) Monthly participation rates; incorporation of 40-hour 
        work week standard.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the participation rate of a State for a month is--
                            ``(i) the total number of countable hours 
                        (as defined in subsection (c)) with respect to 
                        the counted families for the State for the 
                        month; divided by
                            ``(ii) 160 multiplied by the number of 
                        counted families for the State for the month.
                    ``(B) Counted families defined.--
                            ``(i) In general.--In subparagraph (A), the 
                        term `counted family' means, with respect to a 
                        State and a month, a family that includes a 
                        work-eligible individual and that receives 
                        assistance in the month under the State program 
                        funded under this part, subject to clause (ii).
                            ``(ii) State option to exclude certain 
                        families.--At the option of a State, the term 
                        `counted family' shall not include--
                                    ``(I) a family in the first month 
                                for which the family receives 
                                assistance from a State program funded 
                                under this part on the basis of the 
                                most recent application for such 
                                assistance;
                                    ``(II) on a case-by-case basis, a 
                                family in which the youngest child has 
                                not attained 12 months of age; or
                                    ``(III) a family that is subject to 
                                a sanction under this part or part D, 
                                but that has not been subject to such a 
                                sanction for more than 3 months 
                                (whether or not consecutive) in the 
                                preceding 12-month period.
                            ``(iii) State option to include individuals 
                        receiving assistance under a tribal family 
                        assistance plan or tribal work program.--At the 
                        option of a State, the term `counted family' 
                        may include families in the State that are 
                        receiving assistance under a tribal family 
                        assistance plan approved under section 412 or 
                        under a tribal work program to which funds are 
                        provided under this part.
                    ``(C) Work-eligible individual defined.--In this 
                section, the term `work-eligible individual' means an 
                individual--
                            ``(i) who is married or a single head of 
                        household; and
                            ``(ii) whose needs are (or, but for 
                        sanctions under this part or part D, would be) 
                        included in determining the amount of cash 
                        assistance to be provided to the family under 
                        the State program funded under this part.''.
    (c) Recalibration of Caseload Reduction Credit.--
            (1) In general.--Section 407(b)(3)(A)(ii) (42 U.S.C. 
        607(b)(3)(A)(ii)) is amended to read as follows:
                            ``(ii) the average monthly number of 
                        families that received assistance under the 
                        State program funded under this part during the 
                        base year.''.
            (2) Conforming amendment.--Section 407(b)(3)(B) (42 U.S.C. 
        607(b)(3)(B)) is amended by striking ``and eligibility 
        criteria'' and all that follows through the close parenthesis 
        and inserting ``and the eligibility criteria in effect during 
        the then applicable base year''.
            (3) Base year defined.--Section 407(b)(3) (42 U.S.C. 
        607(b)(3)) is amended by adding at the end the following:
                    ``(C) Base year defined.--In this paragraph, the 
                term `base year' means, with respect to a fiscal year--
                            ``(i) if the fiscal year is fiscal year 
                        2006, fiscal year 1996;
                            ``(ii) if the fiscal year is fiscal year 
                        2007, fiscal year 1998;
                            ``(iii) if the fiscal year is fiscal year 
                        2008, fiscal year 2001; or
                            ``(iv) if the fiscal year is fiscal year 
                        2009 or any succeeding fiscal year, the then 
                        4th preceding fiscal year.''.
    (d) Superachiever Credit.--Section 407(b) (42 U.S.C. 607(b)) is 
amended by striking paragraphs (4) and (5) and inserting the following:
            ``(4) Superachiever credit.--
                    ``(A) In general.--The participation rate, 
                determined under paragraphs (1) and (2) of this 
                subsection, of a superachiever State for a fiscal year 
                shall be increased by the lesser of--
                            ``(i) the amount (if any) of the 
                        superachiever credit applicable to the State; 
                        or
                            ``(ii) the number of percentage points (if 
                        any) by which the minimum participation rate 
                        required by subsection (a) for the fiscal year 
                        exceeds 50 percent.
                    ``(B) Superachiever state.--For purposes of 
                subparagraph (A), a State is a superachiever State if 
                the State caseload for fiscal year 2001 has declined by 
                at least 60 percent from the State caseload for fiscal 
                year 1995.
                    ``(C) Amount of credit.--The superachiever credit 
                applicable to a State is the number of percentage 
                points (if any) by which the decline referred to in 
                subparagraph (B) exceeds 60 percent.
                    ``(D) Definitions.--In this paragraph:
                            ``(i) State caseload for fiscal year 
                        2001.--The term `State caseload for fiscal year 
                        2001' means the average monthly number of 
                        families that received assistance during fiscal 
                        year 2001 under the State program funded under 
                        this part.
                            ``(ii) State caseload for fiscal year 
                        1995.--The term `State caseload for fiscal year 
                        1995' means the average monthly number of 
                        families that received aid under the State plan 
                        approved under part A (as in effect on 
                        September 30, 1995) during fiscal year 1995.''.
    (e) Countable Hours.--Section 407 (42 U.S.C. 607) is amended by 
striking subsections (c) and (d) and inserting the following:
    ``(c) Countable Hours.--
            ``(1) Definition.--In subsection (b)(2), the term 
        `countable hours' means, with respect to a family for a month, 
        the total number of hours in the month in which any member of 
        the family who is a work-eligible individual is engaged in a 
        direct work activity or other activities specified by the State 
        (excluding an activity that does not address a purpose 
        specified in section 401(a)), subject to the other provisions 
        of this subsection.
            ``(2) Limitations.--Subject to such regulations as the 
        Secretary may prescribe:
                    ``(A) Minimum weekly average of 24 hours of direct 
                work activities required.--If the work-eligible 
                individuals in a family are engaged in a direct work 
                activity for an average total of fewer than 24 hours 
                per week in a month, then the number of countable hours 
                with respect to the family for the month shall be zero.
                    ``(B) Maximum weekly average of 16 hours of other 
                activities.--An average of not more than 16 hours per 
                week of activities specified by the State (subject to 
                the exclusion described in paragraph (1)) may be 
                considered countable hours in a month with respect to a 
                family.
            ``(3) Special rules.--For purposes of paragraph (1):
                    ``(A) Participation in qualified activities.--
                            ``(i) In general.--If, with the approval of 
                        the State, the work-eligible individuals in a 
                        family are engaged in 1 or more qualified 
                        activities for an average total of at least 24 
                        hours per week in a month, then all such 
                        engagement in the month shall be considered 
                        engagement in a direct work activity, subject 
                        to clause (iii).
                            ``(ii) Qualified activity defined.--The 
                        term `qualified activity' means an activity 
                        specified by the State (subject to the 
                        exclusion described in paragraph (1)) that 
                        meets such standards and criteria as the State 
                        may specify, including--
                                    ``(I) substance abuse counseling or 
                                treatment;
                                    ``(II) rehabilitation treatment and 
                                services;
                                    ``(III) work-related education or 
                                training directed at enabling the 
                                family member to work;
                                    ``(IV) job search or job readiness 
                                assistance; and
                                    ``(V) any other activity that 
                                addresses a purpose specified in 
                                section 401(a).
                            ``(iii) Limitation.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), clause (i) 
                                shall not apply to a family for more 
                                than 3 months in any period of 24 
                                consecutive months.
                                    ``(II) Special rule applicable to 
                                education and training.--A State may, 
                                on a case-by-case basis, apply clause 
                                (i) to a work-eligible individual so 
                                that participation by the individual in 
                                education or training, if needed to 
                                permit the individual to complete a 
                                certificate program or other work-
                                related education or training directed 
                                at enabling the individual to fill a 
                                known job need in a local area, may be 
                                considered countable hours with respect 
                                to the family of the individual for not 
                                more than 4 months in any period of 24 
                                consecutive months.
                    ``(B) School attendance by teen head of 
                household.--The work-eligible members of a family shall 
                be considered to be engaged in a direct work activity 
                for an average of 40 hours per week in a month if the 
                family includes an individual who is married, or is a 
                single head of household, who has not attained 20 years 
                of age, and the individual--
                            ``(i) maintains satisfactory attendance at 
                        secondary school or the equivalent in the 
                        month; or
                            ``(ii) participates in education directly 
                        related to employment for an average of at 
                        least 20 hours per week in the month.
                    ``(C) Parental participation in schools.--Each 
                work-eligible individual in a family shall make 
                verified visits at least twice per school year to the 
                school of each of the individual's minor dependent 
                children required to attend school under the law of the 
                State in which the minor children reside, during the 
                period in which the family receives assistance under 
                the program funded under this part. Hours spent in such 
                activity may be specified by the State as countable 
                hours for purposes of paragraph (2)(B).
    ``(d) Direct Work Activity.--In this section, the term `direct work 
activity' means--
            ``(1) unsubsidized employment;
            ``(2) subsidized private sector employment;
            ``(3) subsidized public sector employment;
            ``(4) on-the-job training;
            ``(5) supervised work experience; or
            ``(6) supervised community service.''.
    (f) Penalties Against Individuals.--Section 407(e)(1) (42 U.S.C. 
607(e)(1)) is amended to read as follows:
            ``(1) Reduction or termination of assistance.--
                    ``(A) In general.--Except as provided in paragraph 
                (2), if an individual in a family receiving assistance 
                under a State program funded under this part fails to 
                engage in activities required in accordance with this 
                section, or other activities required by the State 
                under the program, and the family does not otherwise 
                engage in activities in accordance with the self-
                sufficiency plan established for the family pursuant to 
                section 408(b), the State shall--
                            ``(i) if the failure is partial or persists 
                        for not more than 1 month--
                                    ``(I) reduce the amount of 
                                assistance otherwise payable to the 
                                family pro rata (or more, at the option 
                                of the State) with respect to any 
                                period during a month in which the 
                                failure occurs; or
                                    ``(II) terminate all assistance to 
                                the family, subject to such good cause 
                                exceptions as the State may establish; 
                                or
                            ``(ii) if the failure is total and persists 
                        for at least 2 consecutive months, terminate 
                        all cash payments to the family including 
                        qualified State expenditures (as defined in 
                        section 409(a)(7)(B)(i)) for at least 1 month 
                        and thereafter until the State determines that 
                        the individual has resumed full participation 
                        in the activities, subject to such good cause 
                        exceptions as the State may establish.
                    ``(B) Special rule.--
                            ``(i) In general.--In the event of a 
                        conflict between a requirement of clause 
                        (i)(II) or (ii) of subparagraph (A) and a 
                        requirement of a State constitution, or of a 
                        State statute that, before 1966, obligated 
                        local government to provide assistance to needy 
                        parents and children, the State constitutional 
                        or statutory requirement shall control.
                            ``(ii) Limitation.--Clause (i) of this 
                        subparagraph shall not apply after the 1-year 
                        period that begins with the date of the 
                        enactment of this subparagraph.''.
    (g) Conforming Amendments.--
            (1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of 
        paragraphs (1) and (2) by striking ``work activity described in 
        subsection (d)'' and inserting ``direct work activity''.
            (2) The heading of section 409(a)(14) (42 U.S.C. 
        609(a)(14)) is amended by inserting ``or refusing to engage in 
        activities under a family self-sufficiency plan'' after 
        ``work''.

SEC. 2013. WORK-RELATED PERFORMANCE IMPROVEMENT.

    (a) State Plans.--Section 402(a)(1) (42 U.S.C. 602(a)) is amended--
            (1) in subparagraph (A), by adding at the end the 
        following:
                            ``(vii) The document shall--
                                    ``(I) describe how the State will 
                                pursue ending dependence of needy 
                                families on government benefits and 
                                reducing poverty by promoting job 
                                preparation and work;
                                    ``(II) include specific, numerical, 
                                and measurable performance objectives 
                                for accomplishing subclause (I); and
                                    ``(III) describe the methodology 
                                that the State will use to measure 
                                State performance in relation to each 
                                such objective.
                            ``(viii) Describe any strategies and 
                        programs the State may be undertaking to 
                        address--
                                    ``(I) employment retention and 
                                advancement for recipients of 
                                assistance under the program, including 
                                placement into high-demand jobs, and 
                                whether the jobs are identified using 
                                labor market information;
                                    ``(II) services for struggling and 
                                noncompliant families, and for clients 
                                with special problems; and
                                    ``(III) program integration, 
                                including the extent to which 
                                employment and training services under 
                                the program are provided through the 
                                One-Stop delivery system created under 
                                the Workforce Investment Act of 1998, 
                                and the extent to which former 
                                recipients of such assistance have 
                                access to additional core, intensive, 
                                or training services funded through 
                                such Act.''; and
            (2) in subparagraph (B), by striking clause (iv).
    (b) Report on Annual Performance Improvement.--Section 411 (42 
U.S.C. 611) is amended by adding at the end the following:
    ``(c) Annual Report on Performance Improvement.--Beginning with 
fiscal year 2007, not later than January 1 of each fiscal year, each 
eligible State shall submit to the Secretary a report on achievement 
and improvement during the preceding fiscal year under the numerical 
performance goals and measures under the State program funded under 
this part with respect to the matter described in section 
402(a)(1)(A)(vii).''.
    (c) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C. 
613(d)(1)) is amended by striking ``long-term private sector jobs,'' 
and inserting ``private sector jobs, the success of the recipients in 
retaining employment, the ability of the recipients to increase their 
wages,''.
    (d) Performance Improvement.--Section 413 (42 U.S.C. 613) is 
amended by adding at the end the following:
    ``(k) Performance Improvement.--The Secretary, in consultation with 
States, shall develop uniform performance measures designed to assess 
the degree of effectiveness, and the degree of improvement, of State 
programs funded under this part in accomplishing the work-related 
purposes of this part.''.

SEC. 2014. REPORT ON COORDINATION.

    Not later than 6 months after the date of the enactment of this 
Act, the Secretary of Health and Human Services and the Secretary of 
Labor shall jointly submit a report to the Congress describing common 
or conflicting data elements, definitions, performance measures, and 
reporting requirements in the Workforce Investment Act of 1998 and part 
A of title IV of the Social Security Act, and, to the degree each 
Secretary deems appropriate, at the discretion of either Secretary, any 
other program administered by the respective Secretary, to allow 
greater coordination between the welfare and workforce development 
systems.

SEC. 2015. FATHERHOOD PROGRAM.

    (a) Short Title.--This section may be cited as the ``Promotion and 
Support of Responsible Fatherhood and Healthy Marriage Act of 2005''.
    (b) Fatherhood Program.--
            (1) In general.--Title I of the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996 (Public Law 104-
        193) is amended by adding at the end the following:

``SEC. 117. FATHERHOOD PROGRAM.

    ``(a) In General.--Title IV (42 U.S.C. 601-679b) is amended by 
inserting after part B the following:

                      `PART C--FATHERHOOD PROGRAM

`SEC. 441. FINDINGS AND PURPOSES.

    `(a) Findings.--The Congress finds that there is substantial 
evidence strongly indicating the urgent need to promote and support 
involved, committed, and responsible fatherhood, and to encourage and 
support healthy marriages between parents raising children, including 
data demonstrating the following:
            `(1) In approximately 84 percent of cases where a parent is 
        absent, that parent is the father.
            `(2) If current trends continue, half of all children born 
        today will live apart from one of their parents, usually their 
        father, at some point before they turn 18.
            `(3) Where families (whether intact or with a parent 
        absent) are living in poverty, a significant factor is the 
        father's lack of job skills.
            `(4) Committed and responsible fathering during infancy and 
        early childhood contributes to the development of emotional 
        security, curiosity, and math and verbal skills.
            `(5) An estimated 19,400,000 children (27 percent) live 
        apart from their biological father.
            `(6) Forty percent of children under age 18 not living with 
        their biological father had not seen their father even once in 
        the last 12 months, according to national survey data.
    `(b) Purposes.--The purposes of this part are:
            `(1) To provide for projects and activities by public 
        entities and by nonprofit community entities, including 
        religious organizations, designed to test promising approaches 
        to accomplishing the following objectives:
                    `(A) Promoting responsible, caring, and effective 
                parenting through counseling, mentoring, and parenting 
                education, dissemination of educational materials and 
                information on parenting skills, encouragement of 
                positive father involvement, including the positive 
                involvement of nonresident fathers, and other methods.
                    `(B) Enhancing the abilities and commitment of 
                unemployed or low-income fathers to provide material 
                support for their families and to avoid or leave 
                welfare programs by assisting them to take full 
                advantage of education, job training, and job search 
                programs, to improve work habits and work skills, to 
                secure career advancement by activities such as 
                outreach and information dissemination, coordination, 
                as appropriate, with employment services and job 
                training programs, including the One-Stop delivery 
                system established under title I of the Workforce 
                Investment Act of 1998, encouragement and support of 
                timely payment of current child support and regular 
                payment toward past due child support obligations in 
                appropriate cases, and other methods.
                    `(C) Improving fathers' ability to effectively 
                manage family business affairs by means such as 
                education, counseling, and mentoring in matters 
                including household management, budgeting, banking, and 
                handling of financial transactions, time management, 
                and home maintenance.
                    `(D) Encouraging and supporting healthy marriages 
                and married fatherhood through such activities as 
                premarital education, including the use of premarital 
                inventories, marriage preparation programs, skills-
                based marriage education programs, marital therapy, 
                couples counseling, divorce education and reduction 
                programs, divorce mediation and counseling, 
                relationship skills enhancement programs, including 
                those designed to reduce child abuse and domestic 
                violence, and dissemination of information about the 
                benefits of marriage for both parents and children.
            `(2) Through the projects and activities described in 
        paragraph (1), to improve outcomes for children with respect to 
        measures such as increased family income and economic security, 
        improved school performance, better health, improved emotional 
        and behavioral stability and social adjustment, and reduced 
        risk of delinquency, crime, substance abuse, child abuse and 
        neglect, teen sexual activity, and teen suicide.
            `(3) To evaluate the effectiveness of various approaches 
        and to disseminate findings concerning outcomes and other 
        information in order to encourage and facilitate the 
        replication of effective approaches to accomplishing these 
        objectives.

`SEC. 442. DEFINITIONS.

    `In this part, the terms ``Indian tribe'' and ``tribal 
organization'' have the meanings given them in subsections (e) and (l), 
respectively, of section 4 of the Indian Self-Determination and 
Education Assistance Act.

`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

    `(a) In General.--The Secretary may make grants for fiscal years 
2006 through 2010 to public and nonprofit community entities, including 
religious organizations, and to Indian tribes and tribal organizations, 
for demonstration service projects and activities designed to test the 
effectiveness of various approaches to accomplish the objectives 
specified in section 441(b)(1).
    `(b) Eligibility Criteria for Full Service Grants.--In order to be 
eligible for a grant under this section, except as specified in 
subsection (c), an entity shall submit an application to the Secretary 
containing the following:
            `(1) Project description.--A statement including--
                    `(A) a description of the project and how it will 
                be carried out, including the geographical area to be 
                covered and the number and characteristics of clients 
                to be served, and how it will address each of the 4 
                objectives specified in section 441(b)(1); and
                    `(B) a description of the methods to be used by the 
                entity or its contractor to assess the extent to which 
                the project was successful in accomplishing its 
                specific objectives and the general objectives 
                specified in section 441(b)(1).
            `(2) Experience and qualifications.--A demonstration of 
        ability to carry out the project, by means such as 
        demonstration of experience in successfully carrying out 
        projects of similar design and scope, and such other 
        information as the Secretary may find necessary to demonstrate 
        the entity's capacity to carry out the project, including the 
        entity's ability to provide the non-Federal share of project 
        resources.
            `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
            `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
            `(5) Coordination with specified programs.--An undertaking 
        to coordinate, as appropriate, with State and local entities 
        responsible for the programs under parts A, B, and D of this 
        title, including programs under title I of the Workforce 
        Investment Act of 1998 (including the One-Stop delivery 
        system), and such other programs as the Secretary may require.
            `(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits as the Secretary may find necessary for 
        purposes of oversight of project activities and expenditures.
            `(7) Self-initiated evaluation.--If the entity elects to 
        contract for independent evaluation of the project (part or all 
        of the cost of which may be paid for using grant funds), a 
        commitment to submit to the Secretary a copy of the evaluation 
        report within 30 days after completion of the report and not 
        more than 1 year after completion of the project.
            `(8) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the Secretary's 
        evaluation of projects assisted under this section, by means 
        including random assignment of clients to service recipient and 
        control groups, if determined by the Secretary to be 
        appropriate, and affording the Secretary access to the project 
        and to project-related records and documents, staff, and 
        clients.
    `(c) Eligibility Criteria for Limited Purpose Grants.--In order to 
be eligible for a grant under this section in an amount under $25,000 
per fiscal year, an entity shall submit an application to the Secretary 
containing the following:
            `(1) Project description.--A description of the project and 
        how it will be carried out, including the number and 
        characteristics of clients to be served, the proposed duration 
        of the project, and how it will address at least 1 of the 4 
        objectives specified in section 441(b)(1).
            `(2) Qualifications.--Such information as the Secretary may 
        require as to the capacity of the entity to carry out the 
        project, including any previous experience with similar 
        activities.
            `(3) Coordination with related programs.--As required by 
        the Secretary in appropriate cases, an undertaking to 
        coordinate and cooperate with State and local entities 
        responsible for specific programs relating to the objectives of 
        the project including, as appropriate, jobs programs and 
        programs serving children and families.
            `(4) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits as the Secretary may find necessary for 
        purposes of oversight of project activities and expenditures.
            `(5) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the Secretary's 
        evaluation of projects assisted under this section, by means 
        including affording the Secretary access to the project and to 
        project-related records and documents, staff, and clients.
    `(d) Considerations in Awarding Grants.--
            `(1) Diversity of projects.--In awarding grants under this 
        section, the Secretary shall seek to achieve a balance among 
        entities of differing sizes, entities in differing geographic 
        areas, entities in urban and in rural areas, and entities 
        employing differing methods of achieving the purposes of this 
        section, including working with the State agency responsible 
        for the administration of part D to help fathers satisfy child 
        support arrearage obligations.
            `(2) Preference for projects serving low-income fathers.--
        In awarding grants under this section, the Secretary may give 
        preference to applications for projects in which a majority of 
        the clients to be served are low-income fathers.
    `(e) Federal Share.--
            `(1) In general.--Grants for a project under this section 
        for a fiscal year shall be available for a share of the cost of 
        such project in such fiscal year equal to--
                    `(A) up to 80 percent (or up to 90 percent, if the 
                entity demonstrates to the Secretary's satisfaction 
                circumstances limiting the entity's ability to secure 
                non-Federal resources) in the case of a project under 
                subsection (b); and
                    `(B) up to 100 percent, in the case of a project 
                under subsection (c).
            `(2) Non-federal share.--The non-Federal share may be in 
        cash or in kind. In determining the amount of the non-Federal 
        share, the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

    `(a) In General.--The Secretary may make grants under this section 
for fiscal years 2006 through 2010 to eligible entities (as specified 
in subsection (b)) for 2 multicity, multistate projects demonstrating 
approaches to achieving the objectives specified in section 441(b)(1). 
One of the projects shall test the use of married couples to deliver 
program services.
    `(b) Eligible Entities.--An entity eligible for a grant under this 
section must be a national nonprofit fatherhood promotion organization 
that meets the following requirements:
            `(1) Experience with fatherhood programs.--The organization 
        must have substantial experience in designing and successfully 
        conducting programs that meet the purposes described in section 
        441.
            `(2) Experience with multicity, multistate programs and 
        government coordination.--The organization must have experience 
        in simultaneously conducting such programs in more than 1 major 
        metropolitan area in more than 1 State and in coordinating such 
        programs, where appropriate, with State and local government 
        agencies and private, nonprofit agencies (including community-
        based and religious organizations), including State or local 
        agencies responsible for child support enforcement and 
        workforce development.
    `(c) Application Requirements.--In order to be eligible for a grant 
under this section, an entity must submit to the Secretary an 
application that includes the following:
            `(1) Qualifications.--
                    `(A) Eligible entity.--A demonstration that the 
                entity meets the requirements of subsection (b).
                    `(B) Other.--Such other information as the 
                Secretary may find necessary to demonstrate the 
                entity's capacity to carry out the project, including 
                the entity's ability to provide the non-Federal share 
                of project resources.
            `(2) Project description.--A description of and commitments 
        concerning the project design, including the following:
                    `(A) In general.--A detailed description of the 
                proposed project design and how it will be carried out, 
                which shall--
                            `(i) provide for the project to be 
                        conducted in at least 3 major metropolitan 
                        areas;
                            `(ii) state how it will address each of the 
                        4 objectives specified in section 441(b)(1);
                            `(iii) demonstrate that there is a 
                        sufficient number of potential clients to allow 
                        for the random selection of individuals to 
                        participate in the project and for comparisons 
                        with appropriate control groups composed of 
                        individuals who have not participated in such 
                        projects; and
                            `(iv) demonstrate that the project is 
                        designed to direct a majority of project 
                        resources to activities serving low-income 
                        fathers (but the project need not make services 
                        available on a means-tested basis).
                    `(B) Oversight, evaluation, and adjustment 
                component.--An agreement that the entity--
                            `(i) in consultation with the evaluator 
                        selected pursuant to section 446, and as 
                        required by the Secretary, will modify the 
                        project design, initially and (if necessary) 
                        subsequently throughout the duration of the 
                        project, in order to facilitate ongoing and 
                        final oversight and evaluation of project 
                        operation and outcomes (by means including, to 
                        the maximum extent feasible, random assignment 
                        of clients to service recipient and control 
                        groups), and to provide for mid-course 
                        adjustments in project design indicated by 
                        interim evaluations;
                            `(ii) will submit to the Secretary revised 
                        descriptions of the project design as modified 
                        in accordance with clause (i); and
                            `(iii) will cooperate fully with the 
                        Secretary's ongoing oversight and ongoing and 
                        final evaluation of the project, by means 
                        including affording the Secretary access to the 
                        project and to project-related records and 
                        documents, staff, and clients.
            `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
            `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
            `(5) Coordination with specified programs.--An undertaking 
        to coordinate, as appropriate, with State and local entities 
        responsible for the programs funded under parts A, B, and D of 
        this title, programs under title I of the Workforce Investment 
        Act of 1998 (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
            `(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits (in addition to those required under the 
        preceding provisions of paragraph (2)) as the Secretary may 
        find necessary for purposes of oversight of project activities 
        and expenditures.
    `(d) Federal Share.--
            `(1) In general.--Grants for a project under this section 
        for a fiscal year shall be available for up to 80 percent of 
        the cost of such project in such fiscal year.
            `(2) Non-federal share.--The non-Federal share may be in 
        cash or in kind. In determining the amount of the non-Federal 
        share, the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 445. ECONOMIC INCENTIVE DEMONSTRATION PROJECTS.

    `(a) In General.--The Secretary may make grants under this section 
for fiscal years 2006 through 2010 to eligible entities (as specified 
in subsection (b)) for two to five projects demonstrating approaches to 
achieving the objectives specified in section 441(b)(1). Drawing on the 
success of economic-incentive programs in demonstrating strong 
employment effects for low-income mothers, projects shall test the use 
of economic incentives combined with a comprehensive approach to 
addressing employment barriers to encourage non-custodial parents to 
enter the workforce and to contribute financially and emotionally to 
their children. The Secretary may make grants based on the level of 
innovation, comprehensiveness, and likelihood to achieve the goal of 
increased employment by the applicant.
    `(b) Eligible Entities.--An entity eligible for a grant under this 
section must be a national nonprofit fatherhood promotion organization 
that meets the following requirements:
            `(1) Experience with fatherhood programs.--The organization 
        must have substantial experience in designing and successfully 
        conducting programs that meet the purposes described in section 
        441.
            `(2) Experience addressing multiple barriers to 
        employment.--The organization must have experience in 
        conducting such programs and in coordinating such programs, 
        where appropriate, with State and local government agencies and 
        private, nonprofit agencies (including community-based and 
        religious organizations), including State or local agencies 
        responsible for child support enforcement and workforce 
        development.
            `(3) Negotiated agreements with state and local agencies 
        for appropriate policy changes to address barriers to 
        employment.--The organization must have agreements in place 
        with State and local government agencies, including State or 
        local agencies responsible for child support enforcement and 
        workforce development, to incorporate appropriate policy 
        changes proposed to address barriers to employment.
    `(c) Application Requirements.--In order to be eligible for a grant 
under this section, an entity must submit to the Secretary an 
application that includes the following:
            `(1) Qualifications.--
                    `(A) Eligible entity.--A demonstration that the 
                entity meets the requirements of subsection (b).
                    `(B) Other.--Such other information as the 
                Secretary may find necessary to demonstrate the 
                entity's capacity to carry out the project, including 
                the entity's ability to provide the non-Federal share 
                of project resources.
            `(2) Project description.--A description of and commitments 
        concerning the project design, including the following:
                    `(A) In general.--A detailed description of the 
                proposed project design and how the project will be 
                carried out, which shall--
                            `(i) state how the project will address 
                        each of the 4 objectives specified in section 
                        441(b)(1);
                            `(ii) state how the project will address 
                        employment barriers across programs (such as 
                        child support, criminal justice, and workforce 
                        development programs) using both sanctions and 
                        compliance along with monetary incentives for 
                        obtaining employment, with earning subsidies 
                        contingent upon work and child support payment;
                            `(iii) demonstrate that there is a 
                        sufficient number of potential clients to allow 
                        for the random selection of individuals to 
                        participate in the project and for comparisons 
                        with appropriate control groups composed of 
                        individuals who have not participated in such 
                        projects; and
                            `(iv) demonstrate that the project is 
                        designed to direct a majority of project 
                        resources to activities serving low-income 
                        fathers (but the project need not make services 
                        available on a means-tested basis).
                    `(B) Oversight, evaluation, and adjustment 
                component.--An agreement that the entity--
                            `(i) in consultation with the evaluator 
                        selected pursuant to section 446, and as 
                        required by the Secretary, will modify the 
                        project design, initially and (if necessary) 
                        subsequently throughout the duration of the 
                        project, in order to facilitate ongoing and 
                        final oversight and evaluation of project 
                        operation and outcomes (by means including, to 
                        the maximum extent feasible, random assignment 
                        of clients to service recipient and control 
                        groups), and to provide for mid-course 
                        adjustments in project design indicated by 
                        interim evaluations;
                            `(ii) will submit to the Secretary revised 
                        descriptions of the project design as modified 
                        in accordance with clause (i); and
                            `(iii) will cooperate fully with the 
                        Secretary's ongoing oversight and ongoing and 
                        final evaluation of the project, by means 
                        including affording the Secretary access to the 
                        project and to project-related records and 
                        documents, staff, and clients.
            `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
            `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
            `(5) Coordination with specified programs.--An undertaking 
        to coordinate, as appropriate, with State and local entities 
        responsible for the programs funded under parts A, B, and D of 
        this title, programs under title I of the Workforce Investment 
        Act of 1998 (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
            `(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits (in addition to those required under the 
        preceding provisions of paragraph (2)) as the Secretary may 
        find necessary for purposes of oversight of project activities 
        and expenditures.
    `(d) Federal Share.--
            `(1) In general.--Grants for a project under this section 
        for a fiscal year shall be available for up to 80 percent of 
        the cost of such project in such fiscal year.
            `(2) Non-federal share.--The non-Federal share may be in 
        cash or in kind. In determining the amount of the non-Federal 
        share, the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 446. EVALUATION.

    `(a) In General.--The Secretary, directly or by contract or 
cooperative agreement, shall evaluate the effectiveness of service 
projects funded under sections 443 and 444 from the standpoint of the 
purposes specified in section 441(b)(1).
    `(b) Evaluation Methodology.--Evaluations under this section 
shall--
            `(1) include, to the maximum extent feasible, random 
        assignment of clients to service delivery and control groups 
        and other appropriate comparisons of groups of individuals 
        receiving and not receiving services;
            `(2) describe and measure the effectiveness of the projects 
        in achieving their specific project goals; and
            `(3) describe and assess, as appropriate, the impact of 
        such projects on marriage, parenting, domestic violence, child 
        abuse and neglect, money management, employment and earnings, 
        payment of child support, and child well-being, health, and 
        education.
    `(c) Evaluation Reports.--The Secretary shall publish the following 
reports on the results of the evaluation:
            `(1) An implementation evaluation report covering the first 
        24 months of the activities under this part to be completed by 
        36 months after initiation of such activities.
            `(2) A final report on the evaluation to be completed by 
        September 30, 2013.

`SEC. 447. PROJECTS OF NATIONAL SIGNIFICANCE.

    `The Secretary is authorized, by grant, contract, or cooperative 
agreement, to carry out projects and activities of national 
significance relating to fatherhood promotion, including--
            `(1) Collection and dissemination of information.--
        Assisting States, communities, and private entities, including 
        religious organizations, in efforts to promote and support 
        marriage and responsible fatherhood by collecting, evaluating, 
        developing, and making available (through the Internet and by 
        other means) to all interested parties information regarding 
        approaches to accomplishing the objectives specified in section 
        441(b)(1).
            `(2) Media campaign.--Developing, promoting, and 
        distributing to interested States, local governments, public 
        agencies, and private nonprofit organizations, including 
        charitable and religious organizations, a media campaign that 
        promotes and encourages involved, committed, and responsible 
        fatherhood and married fatherhood.
            `(3) Technical assistance.--Providing technical assistance, 
        including consultation and training, to public and private 
        entities, including community organizations and faith-based 
        organizations, in the implementation of local fatherhood 
        promotion programs.
            `(4) Research.--Conducting research related to the purposes 
        of this part.

`SEC. 448. NONDISCRIMINATION.

    `The projects and activities assisted under this part shall be 
available on the same basis to all fathers and expectant fathers able 
to benefit from such projects and activities, including married and 
unmarried fathers and custodial and noncustodial fathers, with 
particular attention to low-income fathers, and to mothers and 
expectant mothers on the same basis as to fathers.

`SEC. 449. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN 
              PURPOSE.

    `(a) Authorization.--There are authorized to be appropriated 
$20,000,000 for each of fiscal years 2006 through 2010 to carry out the 
provisions of this part.
    `(b) Reservation.--Of the amount appropriated under this section 
for each fiscal year, not more than 35 percent shall be available for 
the costs of the multicity, multicounty, multistate demonstration 
projects under section 444, the economic incentives demonstration 
projects under section 445, evaluations under section 446, and projects 
of national significance under section 447, with not less than 
$5,000,000 allocated to the economic incentives demonstration project 
under section 445.'.
    ``(b) Inapplicability of Effective Date Provisions.--Section 116 
shall not apply to the amendment made by subsection (a) of this 
section.''.
            (2) Clerical amendment.--Section 2 of such Act is amended 
        in the table of contents by inserting after the item relating 
        to section 116 the following new item:

``Sec. 117. Fatherhood program.''.

SEC. 2016. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY PARTNERS WITH 
              ONE-STOP EMPLOYMENT TRAINING CENTERS.

    Section 408 (42 U.S.C. 608) is amended by adding at the end the 
following:
    ``(h) State Option to Make Tanf Programs Mandatory Partners With 
One-Stop Employment Training Centers.--For purposes of section 121(b) 
of the Workforce Investment Act of 1998, a State program funded under 
part A of title IV of the Social Security Act shall be considered a 
program referred to in paragraph (1)(B) of such section, unless, after 
the date of the enactment of this subsection, the Governor of the State 
notifies the Secretaries of Health and Human Services and Labor in 
writing of the decision of the Governor not to make the State program a 
mandatory partner.''.

SEC. 2017. SENSE OF THE CONGRESS.

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

SEC. 2018. PROHIBITION ON OFFSHORING.

    Section 408(a) (42 U.S.C. 608(a)) is amended by adding at the end 
the following:
            ``(12) Prohibition on offshoring.--A State to which a grant 
        is made under section 403 shall not use any part of the grant--
                    ``(A) to enter into a contract with an entity that, 
                directly or through a subcontractor, provides any 
                service, activity or function described under this part 
                at a location outside the United States; or
                    ``(B) to reduce employment in the United States 
                through use of 1 or more employees outside the United 
                States.''.

                           PART 3--CHILD CARE

SEC. 2021. SHORT TITLE.

    This part may be cited as the ``Caring for Children Act of 2005''.

SEC. 2022. GOALS.

    (a) Goals.--Section 658A(b) of the Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9801 note) is amended--
            (1) in paragraph (3) by striking ``encourage'' and 
        inserting ``assist'',
            (2) by amending paragraph (4) to read as follows:
            ``(4) to assist States to provide child care to low-income 
        parents;'',
            (3) by redesignating paragraph (5) as paragraph (7), and
            (4) by inserting after paragraph (4) the following:
            ``(5) to encourage States to improve the quality of child 
        care available to families;
            ``(6) to promote school readiness by encouraging the 
        exposure of young children in child care to nurturing 
        environments and developmentally-appropriate activities, 
        including activities to foster early cognitive and literacy 
        development; and''.
    (b) Conforming Amendment.--Section 658E(c)(3)(B) of the Child Care 
and Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(3)(B)) is 
amended by striking ``through (5)'' and inserting ``through (7)''.

SEC. 2023. AUTHORIZATION OF APPROPRIATIONS.

    Section 658B of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858) is amended--
            (1) by striking ``is'' and inserting ``are'', and
            (2) by striking ``$1,000,000,000 for each of the fiscal 
        years 1996 through 2002'' and inserting ``$2,300,000,000 for 
        fiscal year 2006, $2,500,000,000 for fiscal year 2007, 
        $2,700,000,000 for fiscal year 2008, $2,900,000,000 for fiscal 
        year 2009, and $3,100,000,000 for fiscal year 2010''.

SEC. 2024. APPLICATION AND PLAN.

    Section 658E(c)(2) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858C(c)(2)) is amended--
            (1) by amending subparagraph (D) to read as follows:
                    ``(D) Consumer and child care provider education 
                information.--
                            ``(i) Certification.--Certify that the 
                        State will collect and disseminate, through 
                        resource and referral services and other means 
                        as determined by the State, to parents of 
                        eligible children, child care providers, and 
                        the general public, information regarding--
                                    ``(I) the promotion of informed 
                                child care choices, including 
                                information about the quality and 
                                availability of child care services;
                                    ``(II) research and best practices 
                                on children's development, including 
                                early cognitive development;
                                    ``(III) the availability of 
                                assistance to obtain child care 
                                services; and
                                    ``(IV) other programs for which 
                                families that receive child care 
                                services for which financial assistance 
                                is provided under this subchapter may 
                                be eligible, including the food stamp 
                                program, the WIC program under section 
                                17 of the Child Nutrition Act of 1966, 
                                the child and adult care food program 
                                under section 17 of the Richard B. 
                                Russell National School Lunch Act, Head 
                                Start programs, Early Head Start 
                                programs, services and activities under 
                                section 619 and part C of the 
                                Individuals with Disabilities Education 
                                Act, and the medicaid and SCHIP 
                                programs under titles XIX and XXI of 
                                the Social Security Act.
                            ``(ii) Information.--Information provided 
                        to parents shall be in plain language and, to 
                        the extent practicable, be in a language that 
                        such parents can understand.'', and
            (2) by inserting after subparagraph (H) the following:
                    ``(I) Coordination with other early child care 
                services and early childhood education programs.--
                Demonstrate how the State is coordinating child care 
                services provided under this subchapter with Head Start 
                programs, Early Head Start programs, Early Reading 
                First, Even Start, Ready-To-Learn Television, services 
                and activities under section 619 and part C of the 
                Individuals with Disabilities Education Act, State pre-
                kindergarten programs, and other early childhood 
                education programs to expand accessibility to and 
                continuity of care and early education consistent with 
                the goals of this Act, without displacing services 
                provided by the current early care and education 
                delivery system.
                    ``(J) Public-private partnerships.--Demonstrate how 
                the State encourages partnerships with private and 
                other public entities to leverage existing service 
                delivery systems of early childhood education and 
                increase the supply and quality of child care services.
                    ``(K) Child care service quality.--
                            ``(i) Certification.--For each fiscal year 
                        after fiscal year 2006, certify that during the 
                        then preceding fiscal year the State was in 
                        compliance with section 658G and describe how 
                        funds were used to comply with such section 
                        during such preceding fiscal year.
                            ``(ii) Strategy.--For each fiscal year 
                        after fiscal year 2006, contain an outline of 
                        the strategy the State will implement during 
                        such fiscal year for which the State plan is 
                        submitted, to address the quality of child care 
                        services in the State available from eligible 
                        child care providers, and include in such 
                        strategy--
                                    ``(I) a statement specifying how 
                                the State will address the activities 
                                described in paragraphs (1), (2), and 
                                (3) of section 658G;
                                    ``(II) a description of measures 
                                for evaluating the quality improvements 
                                generated by the activities listed in 
                                each of such paragraphs that the State 
                                will use to evaluate its progress in 
                                improving the quality of such child 
                                care services;
                                    ``(III) a list of State-developed 
                                child care service quality targets for 
                                such fiscal year quantified on the 
                                basis of such measures; and
                                    ``(IV) for each fiscal year after 
                                fiscal year 2006, a report on the 
                                progress made to achieve such targets 
                                during the then preceding fiscal year.
                            ``(iii) Rule of construction.--Nothing in 
                        this subparagraph shall be construed to require 
                        that the State apply measures for evaluating 
                        quality to specific types of child care 
                        providers.
                    ``(L) Access to care for certain populations.--
                Demonstrate how the State is addressing the child care 
                needs of parents eligible for child care services for 
                which financial assistance is provided under this 
                subchapter who have children with special needs, are 
                limited English proficient, work nontraditional hours, 
                or require child care services for infants or 
                toddlers.''.

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

    Section 658G of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858e) is amended to read as follows:

``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE SERVICES.

    ``A State that receives funds to carry out this subchapter for a 
fiscal year, shall use not less than 6 percent of the amount of such 
funds for activities provided through resource and referral services 
and other means, that are designed to improve the quality of child care 
services in the State available from eligible child care providers. 
Such activities include--
            ``(1) programs that provide training, education, and other 
        professional development activities to enhance the skills of 
        the child care workforce, including training opportunities for 
        caregivers in informal care settings;
            ``(2) activities within child care settings to enhance 
        early learning for young children, to promote early literacy, 
        and to foster school readiness;
            ``(3) initiatives to increase the retention and 
        compensation of child care providers, including tiered 
        reimbursement rates for providers that meet quality standards 
        as defined by the State; or
            ``(4) other activities deemed by the State to improve the 
        quality of child care services provided in such State.''.

SEC. 2026. REPORTS AND AUDITS.

    Section 658K(a)(1)(B)(iii) of the Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9858i(a)(1)(B)(iii)) is amended by 
inserting ``ethnicity, primary language,'' after ``race,''.

SEC. 2027. REPORT BY SECRETARY.

    Section 658L of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858j) is amended to read as follows:

``SEC. 658L. REPORT BY SECRETARY.

    ``(a) Report Required.--Not later than October 1, 2007, and 
biennially thereafter, the Secretary shall prepare and submit to the 
Committee on Education and the Workforce of the House of 
Representatives and the Committee on Health, Education, Labor and 
Pensions of the Senate a report that contains the following:
            ``(1) A summary and analysis of the data and information 
        provided to the Secretary in the State reports submitted under 
        section 658K.
            ``(2) Aggregated statistics on the supply of, demand for, 
        and quality of child care, early education, and non-school-
        hours programs.
            ``(3) An assessment, and where appropriate, recommendations 
        for the Congress concerning efforts that should be undertaken 
        to improve the access of the public to quality and affordable 
        child care in the United States.
    ``(b) Collection of Information.--The Secretary may utilize the 
national child care data system available through resource and referral 
organizations at the local, State, and national level to collect the 
information required by subsection (a)(2).''.

SEC. 2028. DEFINITIONS.

    (a) Eligible Children.--Section 658P(4)(B) of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858N(4)(B)) is amended 
by striking ``85 percent of the State median income'' and inserting 
``income levels as established by the State, prioritized by need,''.
    (b) Limited English Proficient.--Section 658P of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858n) is amended--
            (1) by redesignating paragraph (9) as paragraph (10); and
            (2) by inserting after paragraph (8) the following:
            ``(9) Limited english proficient.--The term `limited 
        English proficient' means with respect to an individual, that 
        such individual--
                    ``(A)(i) was not born in the United States or has a 
                native language that is not English;
                    ``(ii)(I) is a Native American, an Alaska Native, 
                or a native resident of a territory or possession of 
                the United States; and
                    ``(II) comes from an environment in which a 
                language that is not English has had a significant 
                impact on such individual's level of English language 
                proficiency; or
                    ``(iii) is migratory, has a native language that is 
                not English, and comes from an environment in which a 
                language that is not English is dominant; and
                    ``(B) has difficultly in speaking or understanding 
                the English language to an extent that may be 
                sufficient to deny such individual--
                            ``(i) the ability to successfully achieve 
                        in classrooms in which the language of 
                        instruction is English; or
                            ``(ii) the opportunity to fully participate 
                        in society.''.

SEC. 2029. WAIVER AUTHORITY TO EXPAND THE AVAILABILITY OF SERVICES 
              UNDER CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT OF 1990.

    (a) Waiver Authority.--For such period up to June 30, 2006, and to 
such extent as the Secretary considers to be appropriate, the Secretary 
of Health and Human Service may waive or modify, for any affected 
State, and any State serving significant numbers of individuals 
adversely affected by a Gulf hurricane disaster, provisions of the 
Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et 
seq.)--
            (1) relating to Federal income limitations on eligibility 
        to receive child care services for which assistance is provided 
        under such Act,
            (2) relating to work requirements applicable to eligibility 
        to receive child care services for which assistance is provided 
        under such Act,
            (3) relating to limitations on the use of funds under 
        section 658G of the Child Care and Development Block Grant Act 
        of 1990, and
            (4) preventing children designated as evacuees from 
        receiving priority for child care services provided under such 
        Act, except that children residing in a State and currently 
        receiving services should not lose such services in order to 
        accommodate evacuee children,
for purposes of easing State fiscal burdens and providing child care 
services to children orphaned, or of families displaced, as a result of 
a Gulf hurricane disaster.
    (b) Definitions.--For purposes of this section:
            (1) Affected state.--The term ``affected State'' means the 
        State of Alabama, Florida, Louisiana, Mississippi, or Texas.
            (2) Gulf hurricane disaster.--The term ``Gulf hurricane 
        disaster'' means a major disaster that the President declared 
        to exist, in accordance with section 401 of the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act, and that 
        was caused by Hurricane Katrina or Hurricane Rita.
            (3) Individual adversely affected by a gulf hurricane 
        disaster.--The term ``individual adversely affected by a Gulf 
        hurricane disaster'' means an individual who, on August 29, 
        2005, was living, working, or attending school in an area in 
        which the President has declared to exist a Gulf hurricane 
        disaster.

                  PART 4--STATE AND LOCAL FLEXIBILITY

SEC. 2041. PROGRAM COORDINATION DEMONSTRATION PROJECTS.

    (a) Purpose.--The purpose of this section is to establish a program 
of demonstration projects in a State or portion of a State to 
coordinate multiple public assistance, workforce development, and other 
programs, for the purpose of supporting working individuals and 
families, helping families escape welfare dependency, promoting child 
well-being, or helping build stronger families, using innovative 
approaches to strengthen service systems and provide more coordinated 
and effective service delivery.
    (b) Definitions.--In this section:
            (1) Administering secretary.--The term ``administering 
        Secretary'' means, with respect to a qualified program, the 
        head of the Federal agency responsible for administering the 
        program.
            (2) Qualified program.--The term ``qualified program'' 
        means--
                    (A) activities funded under title I of the 
                Workforce Investment Act of 1998, except subtitle C of 
                such title;
                    (B) a demonstration project authorized under 
                section 505 of the Family Support Act of 1988;
                    (C) activities funded under the Wagner-Peyser Act;
                    (D) activities funded under the Adult Education and 
                Family Literacy Act; or
                    (E) activities funded under the Child Care and 
                Development Block Grant Act of 1990;
    (c) Application Requirements.--The head of a State entity or of a 
sub-State entity administering 2 or more qualified programs proposed to 
be included in a demonstration project under this section shall (or, if 
the project is proposed to include qualified programs administered by 2 
or more such entities, the heads of the administering entities (each of 
whom shall be considered an applicant for purposes of this section) 
shall jointly) submit to the administering Secretary of each such 
program an application that contains the following:
            (1) Programs included.--A statement identifying each 
        qualified program to be included in the project, and describing 
        how the purposes of each such program will be achieved by the 
        project.
            (2) Population served.--A statement identifying the 
        population to be served by the project and specifying the 
        eligibility criteria to be used.
            (3) Description and justification.--A detailed description 
        of the project, including--
                    (A) a description of how the project is expected to 
                improve or enhance achievement of the purposes of the 
                programs to be included in the project, from the 
                standpoint of quality, of cost-effectiveness, or of 
                both; and
                    (B) a description of the performance objectives for 
                the project, including any proposed modifications to 
                the performance measures and reporting requirements 
                used in the programs.
            (4) Waivers requested.--A description of the statutory and 
        regulatory requirements with respect to which a waiver is 
        requested in order to carry out the project, and a 
        justification of the need for each such waiver.
            (5) Cost neutrality.--Such information and assurances as 
        necessary to establish to the satisfaction of the administering 
        Secretary, in consultation with the Director of the Office of 
        Management and Budget, that the proposed project is reasonably 
        expected to meet the applicable cost neutrality requirements of 
        subsection (d)(4).
            (6) Evaluation and reports.--An assurance that the 
        applicant will conduct ongoing and final evaluations of the 
        project, and make interim and final reports to the 
        administering Secretary, at such times and in such manner as 
        the administering Secretary may require.
            (7) Other information and assurances.--Such other 
        information and assurances as the administering Secretary may 
        require.
    (d) Approval of Applications.--
            (1) In general.--The administering Secretary with respect 
        to a qualified program that is identified in an application 
        submitted pursuant to subsection (c) may approve the 
        application and, except as provided in paragraph (2), waive any 
        requirement applicable to the program, to the extent consistent 
        with this section and necessary and appropriate for the conduct 
        of the demonstration project proposed in the application, if 
        the administering Secretary determines that the project--
                    (A) has a reasonable likelihood of achieving the 
                objectives of the programs to be included in the 
                project;
                    (B) may reasonably be expected to meet the 
                applicable cost neutrality requirements of paragraph 
                (4), as determined by the Director of the Office of 
                Management and Budget; and
                    (C) includes the coordination of 2 or more 
                qualified programs.
            (2) Provisions excluded from waiver authority.--A waiver 
        shall not be granted under paragraph (1)--
                    (A) with respect to any provision of law relating 
                to--
                            (i) civil rights or prohibition of 
                        discrimination;
                            (ii) purposes or goals of any program;
                            (iii) maintenance of effort requirements;
                            (iv) health or safety;
                            (v) labor standards under the Fair Labor 
                        Standards Act of 1938; or
                            (vi) environmental protection;
                    (B) with respect to section 241(a) of the Adult 
                Education and Family Literacy Act;
                    (C) in the case of a program under the Workforce 
                Investment Act, with respect to any requirement the 
                waiver of which would violate section 189(i)(4)(A)(i) 
                of such Act;
                    (D) with respect to any requirement that a State 
                pass through to a sub-State entity part or all of an 
                amount paid to the State;
                    (E) if the waiver would waive any funding 
                restriction or limitation provided in an appropriations 
                Act, or would have the effect of transferring 
                appropriated funds from 1 appropriations account to 
                another; or
                    (F) except as otherwise provided by statute, if the 
                waiver would waive any funding restriction applicable 
                to a program authorized under an Act which is not an 
                appropriations Act (but not including program 
                requirements such as application procedures, 
                performance standards, reporting requirements, or 
                eligibility standards), or would have the effect of 
                transferring funds from a program for which there is 
                direct spending (as defined in section 250(c)(8) of the 
                Balanced Budget and Emergency Deficit Control Act of 
                1985) to another program.
            (3) Agreement of each administering secretary required.--
                    (A) In general.--An applicant may not conduct a 
                demonstration project under this section unless each 
                administering Secretary with respect to any program 
                proposed to be included in the project has approved the 
                application to conduct the project.
                    (B) Agreement with respect to funding and 
                implementation.--Before approving an application to 
                conduct a demonstration project under this section, an 
                administering Secretary shall have in place an 
                agreement with the applicant with respect to the 
                payment of funds and responsibilities required of the 
                administering Secretary with respect to the project.
            (4) Cost-neutrality requirement.--
                    (A) General rule.--Notwithstanding any other 
                provision of law (except subparagraph (B)), the total 
                of the amounts that may be paid by the Federal 
                Government for a fiscal year with respect to the 
                programs in the State in which an entity conducting a 
                demonstration project under this section is located 
                that are affected by the project shall not exceed the 
                estimated total amount that the Federal Government 
                would have paid for the fiscal year with respect to the 
                programs if the project had not been conducted, as 
                determined by the Director of the Office of Management 
                and Budget.
                    (B) Special rule.--If an applicant submits to the 
                Director of the Office of Management and Budget a 
                request to apply the rules of this subparagraph to the 
                programs in the State in which the applicant is located 
                that are affected by a demonstration project proposed 
                in an application submitted by the applicant pursuant 
                to this section, during such period of not more than 5 
                consecutive fiscal years in which the project is in 
                effect, and the Director determines, on the basis of 
                supporting information provided by the applicant, to 
                grant the request, then, notwithstanding any other 
                provision of law, the total of the amounts that may be 
                paid by the Federal Government for the period with 
                respect to the programs shall not exceed the estimated 
                total amount that the Federal Government would have 
                paid for the period with respect to the programs if the 
                project had not been conducted.
            (5) 90-day approval deadline.--
                    (A) In general.--If an administering Secretary 
                receives an application to conduct a demonstration 
                project under this section and does not disapprove the 
                application within 90 days after the receipt, then--
                            (i) the administering Secretary is deemed 
                        to have approved the application for such 
                        period as is requested in the application, 
                        except to the extent inconsistent with 
                        subsection (e); and
                            (ii) any waiver requested in the 
                        application which applies to a qualified 
                        program that is identified in the application 
                        and is administered by the administering 
                        Secretary is deemed to be granted, except to 
                        the extent inconsistent with paragraph (2) or 
                        (4) of this subsection.
                    (B) Deadline extended if additional information is 
                sought.--The 90-day period referred to in subparagraph 
                (A) shall not include any period that begins with the 
                date the Secretary requests the applicant to provide 
                additional information with respect to the application 
                and ends with the date the additional information is 
                provided.
    (e) Duration of Projects.--A demonstration project under this 
section may be approved for a term of not more than 5 years.
    (f) Reports to Congress.--
            (1) Report on disposition of applications.--Within 90 days 
        after an administering Secretary receives an application 
        submitted pursuant to this section, the administering Secretary 
        shall submit to each Committee of the Congress which has 
        jurisdiction over a qualified program identified in the 
        application notice of the receipt, a description of the 
        decision of the administering Secretary with respect to the 
        application, and the reasons for approving or disapproving the 
        application.
            (2) Reports on projects.--Each administering Secretary 
        shall provide annually to the Congress a report concerning 
        demonstration projects approved under this section, including--
                    (A) the projects approved for each applicant;
                    (B) the number of waivers granted under this 
                section, and the specific statutory provisions waived;
                    (C) how well each project for which a waiver is 
                granted is improving or enhancing program achievement 
                from the standpoint of quality, cost-effectiveness, or 
                both;
                    (D) how well each project for which a waiver is 
                granted is meeting the performance objectives specified 
                in subsection (c)(3)(B);
                    (E) how each project for which a waiver is granted 
                is conforming with the cost-neutrality requirements of 
                subsection (d)(4); and
                    (F) to the extent the administering Secretary deems 
                appropriate, recommendations for modification of 
                programs based on outcomes of the projects.

                         PART 5--EFFECTIVE DATE

SEC. 2051. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this subtitle, 
this subtitle and the amendments made by this subtitle shall take 
effect on the date of the enactment of this Act.
    (b) Exception.--In the case of a State plan under part A of title 
IV of the Social Security Act which the Secretary determines requires 
State legislation in order for the plan to meet the additional 
requirements imposed by the amendments made by this subtitle, the 
effective date of the amendments imposing the additional requirements 
shall be 3 months after the first day of the first calendar quarter 
beginning after the close of the first regular session of the State 
legislature that begins after the date of the enactment of this Act. 
For purposes of the preceding sentence, in the case of a State that has 
a 2-year legislative session, each year of the session shall be 
considered to be a separate regular session of the State legislature.

                      Subtitle B--Higher Education

SEC. 2101. SHORT TITLE.

    This subtitle may be cited as the ``Higher Education Budget 
Reconciliation Act of 2005''.

         PART 1--AMENDMENTS TO THE HIGHER EDUCATION ACT OF 1965

SEC. 2111. REFERENCES; EFFECTIVE DATE.

    (a) References.--Except as otherwise expressly provided, whenever 
in this part an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
    (b) Effective Date.--Except as otherwise provided in this part, the 
amendments made by this part shall be effective on the date of 
enactment of this Act.

SEC. 2112. MODIFICATION OF 50/50 RULE.

    Section 102(a)(3) (20 U.S.C. 1002(a)(3)) is amended--
            (1) in subparagraph (A), by inserting ``(excluding courses 
        offered by telecommunications as defined in section 
        484(l)(4))'' after ``courses by correspondence''; and
            (2) in subparagraph (B), by inserting ``(excluding courses 
        offered by telecommunications as defined in section 
        484(l)(4))'' after ``correspondence courses''.

SEC. 2113. REAUTHORIZATION OF FEDERAL FAMILY EDUCATION LOAN PROGRAM.

    (a) Authorization of Appropriations.--Section 421(b)(5) (20 U.S.C. 
1071(b)(5)) is amended by striking ``an administrative cost allowance'' 
and inserting ``a loan processing and issuance fee''.
    (b) Extension of Authority.--
            (1) Federal insurance limitations.--Section 424(a) (20 
        U.S.C. 1074(a)) is amended--
                    (A) by striking ``2004'' and inserting ``2012''; 
                and
                    (B) by striking ``2008'' and inserting ``2016''.
            (2) Guaranteed loans.--Section 428(a)(5) (20 U.S.C. 
        1078(a)(5)) is amended--
                    (A) by striking ``2004'' and inserting ``2012''; 
                and
                    (B) by striking ``2008'' and inserting ``2016''.
            (3) Consolidation loans.--Section 428C(e) (20 U.S.C. 1078-
        3(e)) is amended by striking ``2004'' and inserting ``2012''.

SEC. 2114. LOAN LIMITS.

    (a) Federal Insurance Limits.--Section 425(a)(1)(A) (20 U.S.C. 
1075(a)(1)(A)) is amended--
            (1) in clause (i)(I), by striking ``$2,625'' and inserting 
        ``$3,500''; and
            (2) in clause (ii)(I), by striking ``$3,500'' and inserting 
        ``$4,500''.
    (b) Guarantee Limits.--Section 428(b)(1)(A) (20 U.S.C. 
1078(b)(1)(A)) is amended--
            (1) in clause (i)(I), by striking ``$2,625'' and inserting 
        ``$3,500''; and
            (2) in clause (ii)(I), by striking ``$3,500'' and inserting 
        ``$4,500''.
    (c) Counting of Consolidation Loans Against Limits.--Section 
428C(a)(3)(B) (20 U.S.C. 1078-3(a)(3)(B)) is amended by adding at the 
end the following new clause:
            ``(ii) Loans made under this section shall, to the extent 
        used to pay off the outstanding principal balance on loans made 
        under this title, excluding capitalized interest, be counted 
        against the applicable limitations on aggregate indebtedness 
        contained in sections 425(a)(2), 428(b)(1)(B), 428H(d), 455, 
        and 464(a)(2)(B).''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to any loan made, insured, or guaranteed under part 
B or part D of title IV of the Higher Education Act of 1965 for which 
the first disbursement of principal is made on or after July 1, 2007.

SEC. 2115. INTEREST RATES AND SPECIAL ALLOWANCES.

    (a) FFEL Interest Rates.--Section 427A (20 U.S.C. 1077a(k)) is 
amended--
            (1) in subsection (k)--
                    (A) by striking ``, and Before July 1, 2006'' in 
                the heading of such subsection; and
                    (B) by striking ``, and before July 1, 2006,'' each 
                place it appears in paragraphs (1), (2), and (3);
            (2) by striking subsection (l); and
            (3) by redesignating subsections (m) and (n) as subsections 
        (l) and (m), respectively.
    (b) Direct Loan Interest Rates.--Section 455(b) (20 U.S.C. 
1087e(b)) is amended--
            (1) in paragraph (6)--
                    (A) by striking ``, and before july 1, 2006'' in 
                the heading of such paragraph; and
                    (B) by striking ``, and before July 1, 2006,'' each 
                place it appears in subparagraphs (A), (B), and (C);
            (2) by striking paragraph (7); and
            (3) by redesignating paragraphs (8) and (9) as paragraphs 
        (7) and (8), respectively.
    (c) Consolidation Loan Interest Rates.--
            (1) FFEL loans.--Section 427A(k) (20 U.S.C. 1077a(k)) is 
        further amended--
                    (A) in the heading of paragraph (4), by inserting 
                ``before july 1, 2006'' after ``loans'';
                    (B) by redesignating paragraph (5) as paragraph 
                (6); and
                    (C) by inserting after paragraph (4) the following:
            ``(5) Consolidation loans on or after july 1, 2006.--
                    ``(A) Borrower election.--With respect to any 
                consolidation loan under section 428C for which the 
                application is received by an eligible lender on or 
                after July 1, 2006, the applicable rate of interest 
                shall, at the election of the borrower at the time of 
                application for the loan, be either at the rate 
                determined under subparagraph (B) or the rate 
                determined under subparagraph (C).
                    ``(B) Variable rate.--Except as provided in 
                subparagraph (D), the rate determined under this 
                subparagraph shall, during any 12-month period 
                beginning on July 1 and ending on June 30, be 
                determined on the preceding June 1 and, for such 12-
                month period, not be more than--
                            ``(i) the bond equivalent rate of 91-day 
                        Treasury bills auctioned at the final auction 
                        held prior to such June 1; plus
                            ``(ii) 2.3 percent,
                except that such rate shall not exceed 8.25 percent.
                    ``(C) Fixed rate.--Except as provided in 
                subparagraph (D), the rate determined under this 
                subparagraph shall be determined for the duration of 
                the term of the loan on the July 1 that is or precedes 
                the date on which the application is received by an 
                eligible lender, and shall be, for such duration, not 
                more than--
                            ``(i) the bond equivalent rate of 91-day 
                        Treasury bills auctioned at the final auction 
                        held prior to the June 1 immediately preceding 
                        such July 1; plus
                            ``(ii) 3.3 percent,
                except that such rate shall not exceed 8.25 percent.
                    ``(D) Consolidation of plus loans.--In the case of 
                any such consolidation loan that is used to repay loans 
                each of which was made under section 428B or was a 
                Federal Direct PLUS Loan (or both), the rates 
                determined under clauses (B) and (C) shall be 
                determined--
                            ``(i) by substituting `3.1 percent' for 
                        `2.3 percent';
                            ``(ii) by substituting `4.1 percent' for 
                        `3.3 percent'; and
                            ``(iii) by substituting `9.0 percent' for 
                        `8.25 percent'.''.
            (2) Direct loans.--Section 455(b)(6) (20 U.S.C. 
        1087e(b)(6)) is further amended--
                    (A) in the heading of subparagraph (D), by 
                inserting ``before july 1, 2006'' after ``loans''
                    (B) by redesignating subparagraph (E) as 
                subparagraph (F); and
                    (C) by inserting after subparagraph (D) the 
                following:
                    ``(E) Consolidation loans on or after july 1, 
                2006.--
                            ``(i) Borrower election.--Notwithstanding 
                        the preceding paragraphs of this subsection, 
                        with respect to any Federal Direct 
                        Consolidation Loan for which the application is 
                        received by the Secretary on or after July 1, 
                        2006, the applicable rate of interest shall, at 
                        the election of the borrower at the time of 
                        application for the loan, be either at the rate 
                        determined under clause (ii) or the rate 
                        determined under clause (iii).
                            ``(ii) Variable rate.--Except as provided 
                        in clause (iv), the rate determined under this 
                        clause shall, during any 12-month period 
                        beginning on July 1 and ending on June 30, be 
                        determined on the preceding June 1 and, for 
                        such 12-month period, be equal to--
                                    ``(I) the bond equivalent rate of 
                                91-day Treasury bills auctioned at the 
                                final auction held prior to such June 
                                1; plus
                                    ``(II) 2.3 percent,
                        except that such rate shall not exceed 8.25 
                        percent.
                            ``(iii) Fixed rate.--Except as provided in 
                        clause (iv), the rate determined under this 
                        clause shall be determined for the duration of 
                        the term of the loan on the July 1 that is or 
                        precedes the date on which the application is 
                        received by the Secretary, and shall be, for 
                        such duration, equal to--
                                    ``(I) the bond equivalent rate of 
                                91-day Treasury bills auctioned at the 
                                final auction held prior to the June 1 
                                immediately preceding such July 1; plus
                                    ``(II) 3.3 percent,
                        except that such rate shall not exceed 8.25 
                        percent.
                            ``(iv) Consolidation of plus loans.--In the 
                        case of any such Federal Direct Consolidation 
                        Loan that is used to repay loans each of which 
                        was made under section 428B or was a Federal 
                        Direct PLUS Loan (or both), the rates 
                        determined under clauses (ii) and (iii) shall 
                        be determined--
                                    ``(I) by substituting `3.1 percent' 
                                for `2.3 percent';
                                    ``(II) by substituting `4.1 
                                percent' for `3.3 percent'; and
                                    ``(III) by substituting `9.0 
                                percent' for `8.25 percent'.''.
    (d) Consolidation Loan Conforming Amendment.--Section 
428C(c)(1)(A)(ii) (20 U.S.C. 1078-3(c)(1)(A)(ii)) is amended by 
striking ``section 427A(l)(3)'' and inserting ``section 427A(k)(5)''.
    (e) Conforming Amendments for Special Allowances.--
            (1) Amendment.--Subparagraph (I) of section 438(b)(2) (20 
        U.S.C. 1087-1(b)(2)) is amended--
                    (A) by striking clause (ii) and inserting the 
                following:
                            ``(ii) In school and grace period.--In the 
                        case of any loan for which the first 
                        disbursement is made on or after January 1, 
                        2000, and for which the applicable interest 
                        rate is described in section 427A(k)(2), clause 
                        (i)(III) of this subparagraph shall be applied 
                        by substituting `1.74 percent' for `2.34 
                        percent'.'';
                    (B) in clause (iii),
                            (i) by striking ``or (l)(2)''; and
                            (ii) by striking ``, subject to clause (v) 
                        of this subparagraph'';
                    (C) in clause (iv)--
                            (i) by striking ``or (l)(3)'' and inserting 
                        ``or (k)(5)''; and
                            (ii) by striking ``, subject to clause (vi) 
                        of this subparagraph''; and
                    (D) by striking clauses (v), (vi), and (vii) and 
                inserting the following:
                            ``(v) Recapture of excess interest.--
                                    ``(I) Excess credited.--With 
                                respect to a loan on which the 
                                applicable interest rate is determined 
                                under section 427A(k) and for which the 
                                first disbursement of principal is made 
                                on or after July 1, 2006, if the 
                                applicable interest rate for any 3-
                                month period exceeds the special 
                                allowance support level applicable to 
                                such loan under this subparagraph for 
                                such period, then an adjustment shall 
                                be made by calculating the excess 
                                interest in the amount computed under 
                                subclause (II) of this clause, and by 
                                crediting the excess interest to the 
                                Government not less often than 
                                annually.
                                    ``(II) Calculation of excess.--The 
                                amount of any adjustment of interest on 
                                a loan to be made under this subsection 
                                for any quarter shall be equal to--
                                            ``(aa) the applicable 
                                        interest rate minus the special 
                                        allowance support level 
                                        determined under this 
                                        subparagraph; multiplied by
                                            ``(bb) the average daily 
                                        principal balance of the loan 
                                        (not including unearned 
                                        interest added to principal) 
                                        during such calendar quarter; 
                                        divided by
                                            ``(cc) four.
                                    ``(III) Special allowance support 
                                level.--For purposes of this clause, 
                                the term `special allowance support 
                                level' means, for any loan, a number 
                                expressed as a percentage equal to the 
                                sum of the rates determined under 
                                subclauses (I) and (III) of clause (i), 
                                and applying any substitution rules 
                                applicable to such loan under clauses 
                                (ii), (iii), and (iv) in determining 
                                such sum.''.
            (2) Effective date.--The amendments made by this subsection 
        shall not apply with respect to any special allowance payment 
        made under section 438 of the Higher Education Act of 1965 (20 
        U.S.C 1087-1) before July 1, 2006.

SEC. 2116. ADDITIONAL LOAN TERMS AND CONDITIONS.

    (a) Federal Default Fees.--
            (1) In general.--Subparagraph (H) of section 428(b)(1) (20 
        U.S.C. 1078(b)(1)(H)) is amended to read as follows:
                    ``(H) provides--
                            ``(i) for loans for which the first 
                        disbursement of principal is made before July, 
                        1, 2006, for the collection of a single 
                        insurance premium equal to not more than 1.0 
                        percent of the principal amount of the loan, by 
                        deduction proportionately from each installment 
                        payment of the proceeds of the loan to the 
                        borrower, and ensures that the proceeds of the 
                        premium will not be used for incentive payments 
                        to lenders; or
                            ``(ii) for loans for which the first 
                        disbursement of principal is made on or after 
                        July 1, 2006, for the collection and deposit 
                        into the Federal Student Loan Reserve Fund 
                        under section 422A of a Federal default fee of 
                        1.0 percent of the principal amount of such 
                        loan, which shall be deducted proportionately 
                        from each installment payment of the proceeds 
                        of the loan to the borrower prior to payment to 
                        the borrower, and ensures that the proceeds of 
                        the Federal default fee will not be used for 
                        incentive payments to lenders;''.
            (2) Unsubsidized loans.--Section 428H(h) (20 U.S.C. 1078-
        8(h)) is amended by adding at the end the following new 
        sentence: ``Effective for loans for which the first 
        disbursement of principal is made on or after July 1, 2006, in 
        lieu of the insurance premium authorized under the preceding 
        sentence, each State or nonprofit private institution or 
        organization having an agreement with the Secretary under 
        section 428(b)(1) shall collect and deposit into the Federal 
        Student Loan Reserve Fund under section 422A a Federal default 
        fee of 1.0 percent of the principal amount of the loan, 
        obtained by deduction proportionately from each installment 
        payment of the proceeds of the loan to the borrower. The 
        Federal default fee shall not be used for incentive payments to 
        lenders.''.
            (3) Voluntary flexible agreements.--Section 428A(a)(1) (20 
        U.S.C. 1078-1(a)(1)) is amended--
                    (A) by striking ``or'' at the end of subparagraph 
                (A);
                    (B) by striking the period at the end of 
                subparagraph (B) and inserting ``; or''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) the Federal default fee required by section 
                428(b)(1)(H) and the second sentence of section 
                428H(h).''.
    (b) Disbursement.--Section 428(b)(1)(N) (20 U.S.C. 1078(b)(1)(N)) 
is amended--
            (1) in clause (i), by inserting ``(including an eligible 
        foreign institution, except as provided in clause (ii))'' after 
        ``institution''; and
            (2) in clause (ii), by striking ``or at an eligible foreign 
        institution''.
    (c) Repayment Plans.--
            (1) FFEL loans.--Section 428(b)(9)(A) (20 U.S.C. 
        1078(b)(9)(A)) is amended--
                    (A) by inserting before the semicolon at the end of 
                clause (ii) the following: ``, and the Secretary may 
                not restrict the proportions or ratios by which such 
                payments may be graduated with the informed agreement 
                of the borrower'';
                    (B) by striking ``and'' at the end of clause (iii);
                    (C) by redesignating clause (iv) as clause (v); and
                    (D) by inserting after clause (iii) the following 
                new clause:
                            ``(iv) a delayed repayment plan under which 
                        the borrower makes scheduled payments for not 
                        more than 2 years that are annually not less 
                        than the amount of interest due or $600, 
                        whichever is greater, and then makes payments 
                        in accordance with clause (i), (ii), or (iii); 
                        and''.
            (2) Direct loans.--Section 455(d)(1) (20 U.S.C. 
        1087e(d)(1)) is amended--
                    (A) by redesignating subparagraph (D) as 
                subparagraph (E); and
                    (B) by striking subparagraphs (A), (B), and (C) and 
                inserting the following:
                    ``(A) a standard repayment plan, consistent with 
                subsection (a)(1) of this section and with section 
                428(b)(9)(A)(i);
                    ``(B) a graduated repayment plan, consistent with 
                section 428(b)(9)(A)(ii);
                    ``(C) an extended repayment plan, consistent with 
                section 428(b)(9)(A)(v), except that the borrower shall 
                annually repay a minimum amount determined by the 
                Secretary in accordance with section 428(b)(1)(L);
                    ``(D) a delayed repayment plan under which the 
                borrower makes scheduled payments for not more than 2 
                years that are annually not less than the amount of 
                interest due or $600, whichever is greater, and then 
                makes payments in accordance with subparagraph (A), 
                (B), or (C); and''.
    (d) Origination Fees.--
            (1) FFEL program.--Paragraph (2) of section 438(c) (20 
        U.S.C. 1087-1(c)) is amended--
                    (A) by striking the designation and heading of such 
                paragraph and inserting the following:
            ``(2) Amount of origination fees.--
                    ``(A) In general.--''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(B) Subsequent reductions.--Subparagraph (A) 
                shall be applied to loans made under this part (other 
                than loans made under sections 428C and 439(o))--
                            ``(i) by substituting `2.0 percent' for 
                        `3.0 percent' with respect to loans for which 
                        the first disbursement of principal is made on 
                        or after July 1, 2006, and before July 1, 2007;
                            ``(ii) by substituting `1.5 percent' for 
                        `3.0 percent' with respect to loans for which 
                        the first disbursement of principal is made on 
                        or after July 1, 2007, and before July 1, 2008;
                            ``(iii) by substituting `1.0 percent' for 
                        `3.0 percent' with respect to loans for which 
                        the first disbursement of principal is made on 
                        or after July 1, 2008, and before July 1, 2009;
                            ``(iv) by substituting `0.5 percent' for 
                        `3.0 percent' with respect to loans for which 
                        the first disbursement of principal is made on 
                        or after July 1, 2009, and before July 1, 2010; 
                        and
                            ``(v) by substituting `0.0 percent' for 
                        `3.0 percent' with respect to loans for which 
                        the first disbursement of principal is made on 
                        or after July 1, 2010.''.
            (2) Direct loan program.--Subsection (c) of section 455 (20 
        U.S.C. 1087e(c)) is amended to read as follows:
    ``(c) Loan Fee.--
            ``(1) In general.--The Secretary shall charge the borrower 
        of a loan made under this part an origination fee of 4.0 
        percent of the principal amount of loan.
            ``(2) Subsequent reduction.--Paragraph (1) shall be applied 
        to loans made under this part, other than Federal Direct 
        Consolidation loans and Federal Direct PLUS loans--
                    ``(A) by substituting `not more or less than 3.0 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2006, and before July 1, 2007;
                    ``(B) by substituting `not more or less than 2.5 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2007, and before July 1, 2008;
                    ``(C) by substituting `not more or less than 2.0 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2008, and before July 1, 2009;
                    ``(D) by substituting `not more or less than 1.5 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2009, and before July 1, 2010; and
                    ``(E) by substituting `not more or less than 1.0 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2010.
            ``(3) Waivers and repayment incentives prohibited.--
        Beginning with loans made on or after July 1, 2006, the 
        Secretary is prohibited--
                    ``(A) from waiving any amount of the loan fee 
                prescribed under this section as part of a repayment 
                incentive in section 455(b)(7); and
                    ``(B) from providing any repayment incentive before 
                the borrower enters repayment.''.
    (e) Consolidation Loan Offset Charge.--
            (1) FFEL consolidation loans.--Section 438(c) (20 U.S.C. 
        1087-1(c)) is further amended--
                    (A) in paragraph (1)(A), by inserting after 
                ``paragraph (2) of this subsection'' the following: 
                ``and the amount the lender is authorized to collect as 
                a consolidation loan offset charge in accordance with 
                paragraph (9) of this subsection'';
                    (B) in paragraph (1)(B)--
                            (i) by inserting ``and the consolidation 
                        loan offset charge'' after ``origination fee''; 
                        and
                            (ii) by inserting ``and consolidation loan 
                        offset charges'' after ``origination fees'';
                    (C) in paragraphs (3) and (4), by inserting ``and 
                consolidation loan offset charge'' after ``origination 
                fee'' each place it appears;
                    (D) in paragraph (5)--
                            (i) by inserting ``or consolidation loan 
                        offset charge'' after ``origination fee''; and
                            (ii) by inserting ``or consolidation loan 
                        offset charges'' after ``origination fees'';
                    (E) in paragraph (7)--
                            (i) by inserting ``and consolidation loan 
                        offset charges'' after ``origination fees''; 
                        and
                            (ii) by striking ``428A or''; and
                    (F) by adding at the end the following new 
                paragraph:
            ``(9) Consolidation loan offset charge.--For any loan under 
        section 428C, the lender is authorized to collect a 
        consolidation loan offset charge in an amount not to exceed 1.0 
        percent of the principal amount of the loan. Such amount may be 
        added to the principal amount of the loan for repayment by the 
        borrower.''.
            (2) Direct loans.--Section 455(c) (20 U.S.C. 1087e(c)), as 
        amended by subsection (d)(2) of this section, is further 
        amended by adding at the end the following new paragraph:
            ``(4) Consolidation loan offset charges.--For any Federal 
        Direct Consolidation Loan, the Secretary shall collect a 
        consolidation loan offset charge in an amount not more or less 
        than 1.0 percent of the principal amount of the loan. Such 
        amount may be added to the principal amount of the loan for 
        repayment by the borrower. Such amount is not subject to the 
        requirements of paragraph (3) of this subsection.''.

SEC. 2117. CONSOLIDATION LOAN CHANGES.

    (a) Cross-Consolidation Between Programs.--Section 428C (20 U.S.C. 
1078-3) is amended--
            (1) in subsection (a)(3)(B)(i)--
                    (A) by inserting ``or under section 455(g)'' after 
                ``under this section'' both places it appears;
                    (B) by inserting ``under both sections'' after 
                ``terminates''
                    (C) by striking ``and'' at the end of subclause 
                (III);
                    (D) by striking the period at the end of subclause 
                (IV) and inserting ``; and''; and
                    (E) by adding at the end the following new 
                subclause:
                    ``(V) an individual may obtain a subsequent 
                consolidation loan under section 455(g) only for the 
                purposes of obtaining an income contingent repayment 
                plan, and only if the loan has been submitted to the 
                guaranty agency for default aversion.''; and
            (2) in subsection (b)(5), by striking the first sentence 
        and inserting the following: ``In the event that a lender with 
        an agreement under subsection (a)(1) of this section denies a 
        consolidation loan application submitted to it by an eligible 
        borrower under this section, or denies an application submitted 
        to it by such a borrower for a consolidation loan with income-
        sensitive repayment terms, the Secretary shall offer any such 
        borrower who applies for it, a Federal Direct Consolidation 
        loan. The Secretary shall offer such a loan to a borrower who 
        has defaulted, for the purpose of resolving the default.''.
    (b) Repeal of in-School Consolidation.--
            (1) Definition of repayment period.--Section 428(b)(7)(A) 
        (20 U.S.C. 1078(b)(7)(A)) is amended by striking ``shall 
        begin--'' and all that follows through ``earlier date.'' and 
        inserting the following: ``shall begin the day after 6 months 
        after the date the student ceases to carry at least one-half 
        the normal full-time academic workload (as determined by the 
        institution).''.
            (2) Conforming change to eligible borrower definition.--
        Section 428C(a)(3)(A)(ii)(I) (20 U.S.C. 1078-3(a)(3)(A)(ii)(I)) 
        is amended by inserting ``as determined under section 
        428(b)(7)(A)'' after ``repayment status''.
    (c) Interest Payment Rebate Fee.--Section 428C(f)(2) (20 U.S.C. 
1078-2(f)(2)) is amended--
            (1) by striking ``Special rule.--'' and inserting ``Special 
        rules.--(A)''; and
            (2) by adding at the end the following new subparagraph:
            ``(B) For consolidation loans based on applications 
        received on or after July 1, 2006, if 90 percent or more of the 
        total principal and accrued unpaid interest outstanding on the 
        loans held, directly or indirectly, by any holder is comprised 
        of principal and accrued unpaid interest owed on consolidation 
        loans, the rebate described in paragraph (1) for such holder 
        shall be equal to 1.30 percent of the principal plus accrued 
        unpaid interest on such loans.''.
    (d) Additional Amendments.--Section 428C (20 U.S.C. 1078-3) is 
amended--
            (1) in subsection (a)(3), by striking subparagraph (C); and
            (2) in subsection (b)(1)--
                    (A) by striking everything after ``under this 
                section'' the first place it appears in subparagraph 
                (A) and inserting the following: ``and that, if all the 
                borrower's loans under this part are held by a single 
                holder, the borrower has notified such holder that the 
                borrower is seeking to obtain a consolidation loan 
                under this section;'';
                    (B) by striking ``(i) which'' and all that follows 
                through ``and (ii)'' in subparagraph (C);
                    (C) by striking ``and'' at the end of subparagraph 
                (E);
                    (D) by redesignating subparagraph (F) as 
                subparagraph (G); and
                    (E) by inserting after subparagraph (E) the 
                following new subparagraph:
                    ``(F) that the lender of the consolidation loan 
                shall, upon application for such loan, provide the 
                borrower with a clear and conspicuous notice of at 
                least the following information:
                            ``(i) the effects of consolidation on total 
                        interest to be paid, fees to be paid, and 
                        length of repayment;
                            ``(ii) the effects of consolidation on a 
                        borrower's underlying loan benefits, including 
                        loan forgiveness, cancellation, deferment, and 
                        reduced interest rates on those underlying 
                        loans;
                            ``(iii) the ability of the borrower to 
                        prepay the loan, pay on a shorter schedule, and 
                        to change repayment plans;
                            ``(iv) that borrower benefit programs may 
                        vary among different loan holders, and a 
                        description of how the borrower benefits may 
                        vary among different loan holders;
                            ``(v) the tax benefits for which borrowers 
                        may be eligible;
                            ``(vi) the consequences of default; and
                            ``(vii) that by making the application the 
                        applicant is not obligated to agree to take the 
                        consolidation loan; and''.
    (e) Effective Date for Single Holder Amendment.--The amendment made 
by subsection (d)(2)(A) shall apply with respect to any loan made under 
section 428C of the Higher Education Act of 1965 (20 U.S.C. 1078-3) for 
which the application is received by an eligible lender on or after 
July 1, 2006.
    (f) Conforming Amendments to Direct Loan Program.--Section 455 (20 
U.S.C. 1087e) is amended
            (1) in subsection (a)(1) by inserting ``428C,'' after 
        ``428B,'';
            (2) in subsection (a)(2)--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D); and
                    (C) by inserting after subparagraph (B) the 
                following:
                    ``(C) section 428C shall be known as `Federal 
                Direct Consolidation Loans'; and ''; and
            (3) in subsection (g)--
                    (A) by striking the second sentence; and
                    (B) by adding at the end the following new 
                sentences: ``To be eligible for a consolidation loan 
                under this part, a borrower must meet the eligibility 
                criteria set forth in section 428C(a)(3). The 
                Secretary, upon application for such a loan, shall 
                comply with the requirements applicable to a lender 
                under section 428C(b)(1)(F).''.

SEC. 2118. DEFERMENT OF STUDENT LOANS FOR MILITARY SERVICE.

    (a) Federal Family Education Loans.--Section 428(b)(1)(M) (20 
U.S.C. 1078(b)(1)(M)) is amended--
            (1) by striking ``or'' at the end of clause (ii);
            (2) by redesignating clause (iii) as clause (iv); and
            (3) by inserting after clause (ii) the following new 
        clause:
                            ``(iii) not in excess of 3 years during 
                        which the borrower--
                                    ``(I) is serving on active duty 
                                during a war or other military 
                                operation or national emergency; or
                                    ``(II) is performing qualifying 
                                National Guard duty during a war or 
                                other military operation or national 
                                emergency; or''.
    (b) Direct Loans.--Section 455(f)(2) (20 U.S.C. 1087e(f)(2)) is 
amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) not in excess of 3 years during which the 
                borrower--
                            ``(i) is serving on active duty during a 
                        war or other military operation or national 
                        emergency; or
                            ``(ii) is performing qualifying National 
                        Guard duty during a war or other military 
                        operation or national emergency; or''.
    (c) Perkins Loans.--Section 464(c)(2)(A) (20 U.S.C. 
1087dd(c)(2)(A)) is amended--
            (1) by redesignating clauses (iii) and (iv) as clauses (iv) 
        and (v), respectively; and
            (2) by inserting after clause (ii) the following new 
        clause:
            ``(iii) not in excess of 3 years during which the 
        borrower--
                    ``(I) is serving on active duty during a war or 
                other military operation or national emergency; or
                    ``(II) is performing qualifying National Guard duty 
                during a war or other military operation or national 
                emergency;''.
    (d) Definitions.--Section 481 (20 U.S.C. 1088) is amended by adding 
at the end the following new subsection:
    ``(d) Definitions for Military Deferments.--For purposes of parts 
B, D, and E of this title:
            ``(1) Active duty.--The term `active duty' has the meaning 
        given such term in section 101(d)(1) of title 10, United States 
        Code, except that such term does not include active duty for 
        training or attendance at a service school.
            ``(2) Military operation.--The term `military operation' 
        means a contingency operation as such term is defined in 
        section 101(a)(13) of title 10, United States Code.
            ``(3) National emergency.--The term `national emergency' 
        means the national emergency by reason of certain terrorist 
        attacks declared by the President on September 14, 2001, or 
        subsequent national emergencies declared by the President by 
        reason of terrorist attacks.
            ``(4) Serving on active duty.--The term `serving on active 
        duty during a war or other military operation or national 
        emergency' means service by an individual who is--
                    ``(A) a Reserve of an Armed Force ordered to active 
                duty under section 12301(a), 12301(g), 12302, 12304, or 
                12306 of title 10, United States Code, or any retired 
                member of an Armed Force ordered to active duty under 
                section 688 of such title, for service in connection 
                with a war or other military operation or national 
                emergency, regardless of the location at which such 
                active duty service is performed; and
                    ``(B) any other member of an Armed Force on active 
                duty in connection with such emergency or subsequent 
                actions or conditions who has been assigned to a duty 
                station at a location other than the location at which 
                such member is normally assigned.
            ``(5) Qualifying national guard duty.--The term `qualifying 
        National Guard duty during a war or other military operation or 
        national emergency' means service as a member of the National 
        Guard on full-time National Guard duty (as defined in section 
        101(d)(5) of title 10, United States Code) under a call to 
        active service authorized by the President or the Secretary of 
        Defense for a period of more than 30 consecutive days under 
        section 502(f) of title 32, United States Code, in connection 
        with a war, other military operation, or a national emergency 
        declared by the President and supported by Federal funds.''.
    (e) Rule of Construction.--Nothing in the amendments made by this 
section shall be construed to authorize any refunding of any repayment 
of a loan.
    (f) Effective Date.--The amendments made by this section shall 
apply with respect to loans for which the first disbursement is made on 
or after July 1, 1993, to an individual who is a new borrower (within 
the meaning of section 103 of the Higher Education Act of 1965 (20 
U.S.C. 1003)) on or after such date.

SEC. 2119. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL NEED.

    Section 428K (20 U.S.C. 1078-11) is amended to read as follows:

``SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL NEED.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to encourage highly trained individuals to enter and 
        continue in service in areas of national need; and
            ``(2) to reduce the burden of student debt for Americans 
        who dedicate their careers to service in areas of national 
        need.
    ``(b) Program Authorized.--
            ``(1) In general.--The Secretary is authorized to carry out 
        a program of assuming the obligation to repay, pursuant to 
        subsections (c)(2) and (d), a qualified loan amount for a loan 
        made, insured, or guaranteed under this part or part D (other 
        than loans made under section 428B and 428C and comparable 
        loans made under part D), for any new borrower after the date 
        of enactment of the Higher Education Budget Reconciliation Act 
        of 2005, who--
                    ``(A) has been employed full-time for at least 5 
                consecutive complete school, academic, or calendar 
                years, as appropriate, in an area of national need 
                described in subsection (c); and
                    ``(B) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Award basis.--Loan repayment under this section shall 
        be on a first-come, first-served basis pursuant to the 
        designation under subsection (c) and subject to the 
        availability of appropriations.
            ``(3) Regulations.--The Secretary is authorized to issue 
        such regulations as may be necessary to carry out the 
        provisions of this section.
    ``(c) Areas of National Need.--
            ``(1) Statutory categories.--For purposes of this section, 
        an individual shall be treated as employed in an area of 
        national need if the individual is employed full-time and is 
        any of the following:
                    ``(A) Early childhood educators.--An individual who 
                is employed as an early childhood educator in an 
                eligible preschool program or child care facility in a 
                low-income community, and who is involved directly in 
                the care, development and education of infants, 
                toddlers, or young children through age five.
                    ``(B) Nurses.--An individual who is employed--
                            ``(i) as a nurse in a clinical setting; or
                            ``(ii) as a member of the nursing faculty 
                        at an accredited school of nursing (as those 
                        terms are defined in section 801 of the Public 
                        Health Service Act (42 U.S.C. 296)).
                    ``(C) Foreign language specialists.--An individual 
                who has obtained a baccalaureate degree in a critical 
                foreign language and is employed--
                            ``(i) in an elementary or secondary school 
                        as a teacher of a critical foreign language; or
                            ``(ii) in an agency of the United States 
                        Government in a position that regularly 
                        requires the use of such critical foreign 
                        language.
                    ``(D) Librarians.--An individual who is employed as 
                a librarian in--
                            ``(i) a public library that serves a 
                        geographic area within which the public schools 
                        have a combined average of 30 percent or more 
                        of their total student enrollments composed of 
                        children counted under section 1113(a)(5) of 
                        the Elementary and Secondary Education Act of 
                        1965; or
                            ``(ii) an elementary or secondary school 
                        which is in the school district of a local 
                        educational agency which is eligible in such 
                        year for assistance pursuant to title I of the 
                        Elementary and Secondary Education Act of 1965, 
                        and which for the purpose of this paragraph and 
                        for that year has been determined by the 
                        Secretary (pursuant to regulations and after 
                        consultation with the State educational agency 
                        of the State in which the school is located) to 
                        be a school in which the enrollment of children 
                        counted under section 1113(a)(5) of the 
                        Elementary and Secondary Education Act of 1965 
                        exceeds 30 percent of the total enrollment of 
                        that school.
                    ``(E) Highly qualified teachers: bilingual 
                education and low-income communities.--An individual 
                who--
                            ``(i) is highly qualified as such term is 
                        defined in section 9101 of the Elementary and 
                        Secondary Education Act of 1965; and
                            ``(ii)(I) is employed as a teacher of 
                        bilingual education; or
                            ``(II) is employed as a teacher for service 
                        in a public or nonprofit private elementary or 
                        secondary school which is in the school 
                        district of a local educational agency which is 
                        eligible in such year for assistance pursuant 
                        to title I of the Elementary and Secondary 
                        Education Act of 1965, and which for the 
                        purpose of this paragraph and for that year has 
                        been determined by the Secretary (pursuant to 
                        regulations and after consultation with the 
                        State educational agency of the State in which 
                        the school is located) to be a school in which 
                        the enrollment of children counted under 
                        section 1113(a)(5) of the Elementary and 
                        Secondary Education Act of 1965 exceeds 40 
                        percent of the total enrollment of that school.
                    ``(F) First responders in low-income communities.--
                An individual who--
                            ``(i) is employed as a firefighter, police 
                        officer, or emergency medical technician; and
                            ``(ii) serves as such in a low-income 
                        community.
                    ``(G) Child welfare workers.--An individual who--
                            ``(i) has obtained a degree in social work 
                        or a related field with a focus on serving 
                        children and families; and
                            ``(ii) is employed in public or private 
                        child welfare services.
                    ``(H) Speech-language pathologists.--An individual 
                who is a speech-language pathologist, who is employed 
                in an eligible preschool program or an elementary or 
                secondary school, and who has, at a minimum, a graduate 
                degree in speech-language pathology, or communication 
                sciences and disorders.
                    ``(I) Additional areas of national need.--An 
                individual who is employed in an area designated by the 
                Secretary under paragraph (2) and has completed a 
                baccalaureate or advanced degree related to such area.
            ``(2) Designation of additional areas of national need.--
        After consultation with appropriate Federal, State, and 
        community-based agencies and organizations, the Secretary shall 
        designate additional areas of national need in which an 
        individual may be employed full-time to be eligible for loan 
        repayment under this section. In making such designations, the 
        Secretary shall take into account the extent to which--
                    ``(A) the national interest in the area is 
                compelling;
                    ``(B) the area suffers from a critical lack of 
                qualified personnel; and
                    ``(C) other Federal programs support the area 
                concerned.
    ``(d) Qualified Loan Amount.--Subject to the availability of 
appropriations, the Secretary shall repay not more than $5,000 in the 
aggregate of the loan obligation on a loan made under section 428 or 
428H that is outstanding after the completion of the fifth consecutive 
school, academic, or calendar year, as appropriate, described in 
subsection (b)(1).
    ``(e) Construction.--Nothing in this section shall be construed to 
authorize the refunding of any repayment of a loan made under section 
428 or 428H.
    ``(f) Ineligibility of National Service Award Recipients.--No 
student borrower may, for the same service, receive a benefit under 
both this section and subtitle D of title I of the National and 
Community Service Act of 1990 (42 U.S.C. 12601 et seq.).
    ``(g) Ineligibility for Double Benefits.--No borrower may receive a 
reduction of loan obligations under both this section and section 428J 
or 460.
    ``(h) Definitions.--In this section
            ``(1) Child care facility.--The term `child care facility' 
        means a facility, including a home, that--
                    ``(A) provides for the education and care of 
                children from birth through age 5; and
                    ``(B) meets any applicable State or local 
                government licensing, certification, approval, or 
                registration requirements.
            ``(2) Critical foreign language.--The term `critical 
        foreign language' includes the languages of Arabic, Korean, 
        Japanese, Chinese, Pashto, Persian-Farsi, Serbian-Croatian, 
        Russian, Portuguese, and any other language identified by the 
        Secretary of Education, in consultation with the Defense 
        Language Institute, the Foreign Service Institute, and the 
        National Security Education Program, as a critical foreign 
        language need.
            ``(3) Early childhood educator.--The term `early childhood 
        educator' means an early childhood educator employed in an 
        eligible preschool program who has completed a baccalaureate or 
        advanced degree in early childhood development, early childhood 
        education, or in a field related to early childhood education.
            ``(4) Eligible preschool program.--The term `eligible 
        preschool program' means a program that provides for the care, 
        development, and education of infants, toddlers, or young 
        children through age 5, meets any applicable State or local 
        government licensing, certification, approval, and registration 
        requirements, and is operated by--
                    ``(A) a public or private school that may be 
                supported, sponsored, supervised, or administered by a 
                local educational agency;
                    ``(B) a Head Start agency serving as a grantee 
                designated under the Head Start Act (42 U.S.C. 9831 et 
                seq.);
                    ``(C) a nonprofit or community based organization; 
                or
                    ``(D) a child care program, including a home.
            ``(5) Low-income community.--In this subsection, the term 
        `low-income community' means a community in which 70 percent of 
        households earn less than 85 percent of the State median 
        household income.
            ``(6) Nurse.--The term `nurse' means a nurse who meets all 
        of the following:
                    ``(A) The nurse graduated from--
                            ``(i) an accredited school of nursing (as 
                        those terms are defined in section 801 of the 
                        Public Health Service Act (42 U.S.C. 296));
                            ``(ii) a nursing center; or
                            ``(iii) an academic health center that 
                        provides nurse training.
                    ``(B) The nurse holds a valid and unrestricted 
                license to practice nursing in the State in which the 
                nurse practices in a clinical setting.
                    ``(C) The nurse holds one or more of the following:
                            ``(i) A graduate degree in nursing, or an 
                        equivalent degree.
                            ``(ii) A nursing degree from a collegiate 
                        school of nursing (as defined in section 801 of 
                        the Public Health Service Act (42 U.S.C. 296)).
                            ``(iii) A nursing degree from an associate 
                        degree school of nursing (as defined in section 
                        801 of the Public Health Service Act (42 U.S.C. 
                        296)).
                            ``(iv) A nursing degree from a diploma 
                        school of nursing (as defined in section 801 of 
                        the Public Health Service Act (42 U.S.C. 296)).
            ``(7) Speech-language pathologist.--The term `speech-
        language pathologist' means a speech-language pathologist who 
        meets all of the following:
                    ``(A) the speech-language pathologist has received, 
                at a minimum, a graduate degree in speech-language 
                pathology or communication sciences and disorders from 
                an institution of higher education accredited by an 
                agency or association recognized by the Secretary 
                pursuant to section 496(a) of this Act; and
                    ``(B) the speech-language pathologist meets or 
                exceeds the qualifications described in section 
                1861(ll)(3) of the Social Security Act (42 U.S.C. 
                1395x(3)).
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2006 and such sums as may be necessary for each of the 
5 succeeding fiscal years.''.

SEC. 2120. UNSUBSIDIZED STAFFORD LOANS.

    (a) Amendment.--Section 428H(d)(2)(C) (20 U.S.C. 1078-8(d)(2)(C)) 
is amended by striking ``$10,000'' and inserting ``$12,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to loans for which the first disbursement of principal is made on 
or after July 1, 2007.

SEC. 2121. ELIMINATION OF TERMINATION DATES FROM TAXPAYER-TEACHER 
              PROTECTION ACT OF 2004.

    (a) Extension of Limitations on Special Allowance for Loans From 
the Proceeds of Tax Exempt Issues.--Section 438(b)(2)(B) (20 U.S.C. 
1087-1(b)(2)(B)) is amended--
            (1) in clause (iv), by striking ``and before January 1, 
        2006,''; and
            (2) in clause (v)(II)--
                    (A) by striking ``and before January 1, 2006,'' 
                each place it appears in divisions (aa) and (bb); and
                    (B) by striking ``, and before January 1, 2006'' in 
                division (cc).
    (b) Additional Limitation on Special Allowance for Loans From the 
Proceeds of Tax Exempt Issues.--Section 438(b)(2)(B) (20 U.S.C 1087-
1(b)(2)(B)) is further amended by adding at the end thereof the 
following new clause:
            ``(vi) Notwithstanding clauses (i), (ii), and (v), the 
        quarterly rate of the special allowance shall be the rate 
        determined under subparagraph (A), (E), (F), (G), (H), or (I) 
        of this paragraph, as the case may be, for a holder of loans--
                    ``(I) that were made or purchased on or after 
                October 1, 2005; or
                    ``(II) that were not earning a quarterly rate of 
                special allowance determined under clauses (i) or (ii) 
                of subparagraph (B) of this paragraph (20 U.S.C. 1087-
                1(b)(2)(b)) as of October 1, 2005.''.
    (c) Elimination of Effective Date Limitation on Higher Teacher Loan 
Forgiveness Benefits.--Paragraph (3) of section 3(b) of the Taxpayer-
Teacher Protection Act of 2004 (20 U.S.C. 1078-10 note) is amended by 
striking ``, and before October 1, 2005''.
    (d) Additional Changes to Teacher Loan Forgiveness Provisions.--
            (1) FFEL provisions.--Section 428J (20 U.S.C. 1078-10) is 
        amended--
                    (A) in subsection (b)(1)(B), by inserting after 
                ``1965'' the following: ``, or meets the requirements 
                of subsection (g)(3)'';
                    (B) in subsection (c)(3)--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                            (iii) by inserting after subparagraph (B) 
                        the following new subparagraph:
                    ``(C) an elementary or secondary school teacher who 
                primarily teaches reading--
                            ``(i) who meets the requirements of 
                        subsection (b);
                            ``(ii) who has obtained a separate reading 
                        instruction credential from the State in which 
                        the teacher is employed; and
                            ``(iii) who is certified by the chief 
                        administrative officer of the public or 
                        nonprofit private elementary or secondary 
                        school in which the borrower is employed to 
                        teach reading--
                                    ``(I) as being proficient in 
                                teaching the essential components of 
                                reading instruction as defined in 
                                section 1208 of the Elementary and 
                                Secondary Education Act of 1965; and
                                    ``(II) as having such 
                                credential.''; and
                    (C) in subsection (g), by adding at the end the 
                following new paragraph:
            ``(3) Private school teachers.--An individual who is 
        employed as a teacher in a private school and is exempt from 
        State certification requirements (unless otherwise applicable 
        under State law), may, in lieu of the requirement of subsection 
        (a)(1)(B), have such employment treated as qualifying 
        employment under this section if such individual is permitted 
        to and does satisfy rigorous subject knowledge and skills tests 
        by taking competency tests in the applicable grade levels and 
        subject areas. For such purposes, the competency tests taken by 
        such a private school teacher must be recognized by 5 or more 
        States for the purpose of fulfilling the highly qualified 
        teacher requirements under section 9101 of the Elementary and 
        Secondary Education Act of 1965, and the score achieved by such 
        teacher on each test must equal or exceed the average passing 
        score of those 5 States.''.
            (2) Direct loan provisions.--Section 460 (20 U.S.C. 1087j) 
        is amended--
                    (A) in subsection (b)(1)(A)(ii), by inserting after 
                ``1965'' the following: ``, or meets the requirements 
                of subsection (g)(3)'';
                    (B) in subsection (c)(3)--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                            (iii) by inserting after subparagraph (B) 
                        the following new subparagraph:
                    ``(C) an elementary or secondary school teacher who 
                primarily teaches reading--
                            ``(i) who meets the requirements of 
                        subsection (b);
                            ``(ii) who has obtained a separate reading 
                        instruction credential from the State in which 
                        the teacher is employed; and
                            ``(iii) who is certified by the chief 
                        administrative officer of the public or 
                        nonprofit private elementary or secondary 
                        school in which the borrower is employed to 
                        teach reading--
                                    ``(I) as being proficient in 
                                teaching the essential components of 
                                reading instruction as defined in 
                                section 1208 of the Elementary and 
                                Secondary Education Act of 1965; and
                                    ``(II) as having such 
                                credential.''; and
                    (C) in subsection (g), by adding at the end the 
                following new paragraph:
            ``(3) Private school teachers.--An individual who is 
        employed as a teacher in a private school and is exempt from 
        State certification requirements (unless otherwise applicable 
        under State law), may, in lieu of the requirement of subsection 
        (a)(1)(A)(ii), have such employment treated as qualifying 
        employment under this section if such individual is permitted 
        to and does satisfy rigorous subject knowledge and skills tests 
        by taking competency tests in the applicable grade levels and 
        subject areas. For such purposes, the competency tests taken by 
        such a private school teacher must be recognized by 5 or more 
        States for the purpose of fulfilling the highly qualified 
        teacher requirements under section 9101 of the Elementary and 
        Secondary Education Act of 1965, and the score achieved by such 
        teacher on each test must equal or exceed the average passing 
        score of those 5 States.''.

SEC. 2122. LOAN FEES FROM LENDERS.

    Section 438(d)(2) (20 U.S.C. 1087-1(d)(2)) is amended to read as 
follows:
            ``(2) Amount of loan fees.--The amount of the loan fee 
        which shall be deducted under paragraph (1) shall be equal to--
                    ``(A) 0.50 percent of the principal amount of the 
                loan with respect to any loan under this part for which 
                the first disbursement was made on or after October 1, 
                1993, and before July 1, 2006; and
                    ``(B) 1.0 percent of the principal amount of the 
                loan with respect to any loan under this part for which 
                the first disbursement was made on or after July 1, 
                2006.''.

SEC. 2123. ADDITIONAL ADMINISTRATIVE PROVISIONS.

    (a) Treatment of Exempt Claims.--
            (1) Insurance coverage.--Section 428(b)(1)(G) (20 U.S.C. 
        1078(b)(1)(G)) is amended by inserting before the semicolon at 
        the end the following: ``and 100 percent of the unpaid 
        principal amount of exempt claims as defined in subsection 
        (c)(1)(G)''.
            (2) Treatment.--Section 428(c)(1) (20 U.S.C. 1078(c)(1)) is 
        amended--
                    (A) by redesignating subparagraph (G) as 
                subparagraph (H), and moving such subparagraph 2 em 
                spaces to the left; and
                    (B) by inserting after subparagraph (F) the 
                following new subparagraph:
            ``(G)(i) Notwithstanding any other provisions of this 
        section, in the case of exempt claims, the Secretary shall 
        apply the provisions of--
                    ``(I) the fourth sentence of subparagraph (A) by 
                substituting `100 percent' for `95 percent';
                    ``(II) subparagraph (B)(i) by substituting `100 
                percent' for `85 percent'; and
                    ``(III) subparagraph (B)(ii) by substituting `100 
                percent' for `75 percent'.
            ``(ii) For purposes of clause (i) of this subparagraph, the 
        term `exempt claims' means claims with respect to loans for 
        which it is determined that the borrower (or the student on 
        whose behalf a parent has borrowed), without the lender's or 
        the institution's knowledge at the time the loan was made, 
        provided false or erroneous information or took actions that 
        caused the borrower or the student to be ineligible for all or 
        a portion of the loan or for interest benefits thereon.''.
    (b) Reduction of Insurance Percentage.--
            (1) Insurance percentage reduction.--Section 428(b)(1)(G) 
        as amended by subsection (a)(1) is further amended by inserting 
        after the matter inserted by such subsection the following: ``, 
        except, for any loan for which the first disbursement of 
        principal is made on or after July 1, 2006, the preceding 
        provisions of this subparagraph shall be applied by 
        substituting `96 percent' for `98 percent'''.
            (2) Increase insurance for exceptional performance.--
        Section 428I (20 U.S.C. 1078-9) is amended to read as follows:

``SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES FOR EXCEPTIONAL 
              PERFORMANCE.

    ``(a) Designation of Lenders and Servicers.--
            ``(1) In general.--Whenever the Secretary determines that 
        an eligible lender or servicer meets the performance measures 
        required by paragraph (2), the Secretary shall designate that 
        eligible lender or servicer, as the case may be, for 
        exceptional performance. The Secretary shall notify each 
        appropriate guaranty agency of the eligible lenders and 
        servicers designated under this section.
            ``(2) Performance measures.--
                    ``(A) In determining whether to award a lender or 
                servicer the exceptional performance designation, the 
                Secretary shall require that the lender or servicer be 
                performing at or above the 95 percentile of the 
                industry, and demonstrate improved performance against 
                the lender's or servicer's average of the last 3 years 
                on the factors described in subparagraph (B).
                    ``(B) The factors on which the Secretary shall 
                require improvement shall include--
                            ``(i) delinquency rates;
                            ``(ii) the rate at which delinquent 
                        accounts are restored to good standing;
                            ``(iii) default rates;
                            ``(iv) the rate of rejected claims; and
                            ``(v) any other such measures as determined 
                        by the Secretary.
                    ``(C) In addition, the Secretary shall not make any 
                award of such a designation unless the consequence of 
                the designation is cost-neutral to the Federal 
                Government.
            ``(3) Additional information on lenders and servicers.--
        Each appropriate guaranty agency shall provide the Secretary 
        with such other information in its possession regarding an 
        eligible lender or servicer desiring designation as may relate 
        to the Secretary's determination under paragraph (1), including 
        but not limited to any information suggesting that the 
        application of a lender or servicer for designation should not 
        be approved.
            ``(4) Determinations by the secretary.--
                    ``(A) The Secretary shall designate an eligible 
                lender or servicer for exceptional performance if the 
                eligible lender or servicer meets the performance 
                measures required by paragraph (2).
                    ``(B) The Secretary shall make the determination 
                under paragraph (1) based upon the documentation 
                submitted by the eligible lender or servicer as 
                specified in regulation, such other information as 
                provided by any guaranty agency under paragraph (3), 
                and any information in the possession of the Secretary 
                or submitted by any other agency or office of the 
                Federal Government.
                    ``(C) The Secretary shall inform the eligible 
                lender or servicer and the appropriate guaranty agency 
                that its application for designation as an exceptional 
                performance lender or servicer has been approved or 
                disapproved.
            ``(5) Transition.--
                    ``(A) Any eligible lender or servicer designated 
                for exceptional performance as of the day before the 
                date of enactment of the Higher Education Budget 
                Reconciliation Act of 2005 shall continue to be so 
                designated, and subject to the requirements of this 
                section as in effect on that day (including 
                revocation), until the performance standards described 
                in paragraph (2) are established.
                    ``(B) The Secretary shall not designate any 
                additional eligible lenders or servicers for 
                exceptional performance until those performance 
                standards are established.
    ``(b) Payment to Lenders and Servicers.--A guaranty agency shall 
pay, to each eligible lender or servicer (as agent for an eligible 
lender) designated under subsection (a), 98 percent of the unpaid 
principal and interest of all loans for which claims are submitted for 
payment by that eligible lender or servicer for the one-year period 
following the receipt by the guaranty agency of the notification of 
designation under this section, or until the guaranty agency receives 
notice from the Secretary that the designation of the lender or 
servicer under subsection (a)(2) has been revoked.
    ``(c) Revocation Authority.--
            ``(1) The Secretary shall revoke the designation of a 
        lender or a servicer under subsection (a) if the Secretary 
        determines that the lender or servicer has failed to meet the 
        performance standards required by subsection (a)(2).
            ``(2) Notwithstanding any other provision of this section, 
        a designation under subsection (a) may be revoked at any time 
        by the Secretary, in the Secretary's discretion, if the 
        Secretary determines that the eligible lender or servicer has 
        failed to meet the criteria and performance standards 
        established by the Secretary in regulation, or if the Secretary 
        believes the lender or servicer may have engaged in fraud in 
        securing designation under subsection (a), or is failing to 
        service loans in accordance with program regulations.
    ``(d) Documentation.--Nothing in this section shall restrict or 
limit the authority of guaranty agencies to require the submission of 
claims documentation evidencing servicing performed on loans, except 
that the guaranty agency may not require greater documentation than 
that required for lenders and servicers not designated under subsection 
(a).
    ``(e) Special Rule.--Reimbursements made by the Secretary on loans 
submitted for claim by an eligible lender or loan servicer designated 
for exceptional performance under this section shall not be subject to 
additional review by the Secretary or repurchase by the guaranty agency 
for any reason other than a determination by the Secretary that the 
eligible lender or loan servicer engaged in fraud or other purposeful 
misconduct in obtaining designation for exceptional performance.
    ``(f) Limitation.--Nothing in this section shall be construed to 
affect the processing of claims on student loans of eligible lenders 
not subject to this section.
    ``(g) Claims.--A lender or servicer designated under subsection (a) 
failing to service loans or otherwise comply with applicable program 
regulations shall be considered in violation of section 3729 of title 
31, United States Code.
    ``(h) Termination.--The Secretary may terminate the designation of 
lenders and servicers under this section if he determines that 
termination would be in the fiscal interest of the United States.
    ``(i) Definitions.--As used in this section--
            ``(1) the term `eligible loan' means a loan made, insured, 
        or guaranteed under this part; and
            ``(2) the term `servicer' means an entity servicing and 
        collecting student loans that--
                    ``(A) has substantial experience in servicing and 
                collecting consumer loans or student loans;
                    ``(B) has an independent financial audit annually 
                which is furnished to the Secretary and any other 
                parties designated by the Secretary;
                    ``(C) has business systems which are capable of 
                meeting the requirements of this part;
                    ``(D) has adequate personnel who are knowledgeable 
                about the student loan programs authorized by this 
                part; and
                    ``(E) does not have any owner, majority 
                shareholder, director, or officer of the entity who has 
                been convicted of a felony.''.
            (3) Effective date of amendments.--The amendments made by 
        this subsection shall apply with respect to loans for which the 
        first disbursement of principal is made on or after July 1, 
        2006.
    (c) Documentation of Forbearance Agreements.--Section 428(c) (20 
U.S.C. 1078(c)) is further amended--
            (1) in paragraph (3)(A)(i)--
                    (A) by striking ``in writing''; and
                    (B) by inserting ``and documented in accordance 
                with paragraph (10)'' after ``approval of the 
                insurer''; and
            (2) by adding at the end the following new paragraph:
            ``(10) Documentation of forbearance agreements.--For the 
        purposes of paragraph (3), the terms of forbearance agreed to 
        by the parties shall be documented by confirming the agreement 
        of the borrower by notice to the borrower from the lender, and 
        by recording the terms in the borrower's file.''.
    (d) Consolidation of Defaulted Loans.--Section 428(c) (20 U.S.C. 
1078(c)) is further amended--
            (1) in paragraph (2)(A)--
                    (A) by inserting ``(i)'' after ``including''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``and (ii) requirements establishing 
                procedures to preclude consolidation lending from being 
                an excessive proportion of guaranty agency recoveries 
                on defaulted loans under this part'';
            (2) in paragraph (2)(D), by striking ``paragraph (6)'' and 
        inserting ``paragraph (6)(A)''; and
            (3) in paragraph (6)--
                    (A) by inserting ``(A)'' before ``For the purpose 
                of paragraph (2)(D),'';
                    (B) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively; and
                    (C) by adding at the end the following new 
                subparagraphs:
            ``(B) A guaranty agency shall--
                    ``(i) on or after October 1, 2006--
                            ``(I) not charge the borrower collection 
                        costs in an amount in excess of 18.5 percent of 
                        the outstanding principal and interest of a 
                        defaulted loan that is paid off through 
                        consolidation by the borrower under this title; 
                        and
                            ``(II) remit to the Secretary a portion of 
                        the collection charge under subclause (I) equal 
                        to 8.5 percent of the outstanding principal and 
                        interest of such defaulted loan; and
                    ``(ii) on and after October 1, 2009, remit to the 
                Secretary the entire amount charged under clause (i)(I) 
                with respect to each defaulted loan that is paid off 
                with excess consolidation proceeds.
            ``(C) For purposes of subparagraph (B), the term `excess 
        consolidation proceeds' means, with respect to any guaranty 
        agency for any Federal fiscal year beginning on or after 
        October 1, 2009, the proceeds of consolidation of defaulted 
        loans under this title that exceed 45 percent of the agency's 
        total collections on defaulted loans in such Federal fiscal 
        year.''.
    (e) Collection Retention Percentages.--Clause (ii) of section 
428(c)(6)(B) (20 U.S.C. 1078(c)(6)(B)), as redesignated by subsection 
(d)(3) of this section, is amended to read as follows:
                    ``(ii) an amount equal to 24 percent of such 
                payments for use in accordance with section 422B, 
                except that--
                            ``(I) beginning on October 1, 2003, and 
                        ending on October 1, 2006, this clause shall be 
                        applied by substituting `23 percent' for `24 
                        percent'; and
                            ``(II) beginning on October 1, 2006, this 
                        clause shall be applied by substituting `20 
                        percent' for `24 percent'.''.
    (f) Voluntary Flexible Agreements.--Section 428A (20 U.S.C. 1078-1) 
is amended--
            (1) in subsection (a)(1)(B), by striking ``unless the 
        Secretary'' and all that follows through ``designated 
        guarantor'';
            (2) by striking paragraph (2) of subsection (a);
            (3) in paragraph (4)(B) of subsection (a), by striking 
        ``and any waivers provided to other guaranty agencies under 
        paragraph (2)'';
            (4) by redesignating paragraphs (3) and (4) of subsection 
        (a) as paragraphs (2) and (3), respectively; and
            (5) by striking paragraph (3) of subsection (c) and 
        inserting the following:
            ``(3) Notice to interested parties.--Once the Secretary 
        reaches a tentative agreement in principle under this section, 
        the Secretary shall publish in the Federal Register a notice 
        that invites interested parties to comment on the proposed 
        agreement. The notice shall state how to obtain a copy of the 
        tentative agreement in principle and shall give interested 
        parties no less than 30 days to provide comments. The Secretary 
        may consider such comments prior to providing the notices 
        pursuant to paragraph (2).''.
    (g) Fraud: Repayment Required.--Section 428B(a)(1) (20 U.S.C. 1078-
2(a)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (A);
            (2) by redesignating subparagraph (B) as subparagraph (C); 
        and
            (3) by inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) in the case of a parent who has been 
                convicted of, or has pled nolo contendere or guilty to, 
                a crime involving fraud in obtaining funds under this 
                title, such parent has completed the repayment of such 
                funds to the Secretary, or to the holder in the case of 
                a loan under this title obtained by fraud; and''.
    (h) Default Reduction Program.--Section 428F(a)(1) (20 U.S.C. 1078-
6(a)(1)) is amended--
            (1) in subparagraph (A), by striking ``consecutive payments 
        for 12 months'' and inserting ``9 payments made within 20 days 
        of the due date during 10 consecutive months'';
            (2) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (3) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) A guaranty agency may charge the borrower and 
                retain collection costs in an amount not to exceed 18.5 
                percent of the outstanding principal and interest at 
                the time of sale of a loan rehabilitated under 
                subparagraph (A).''.
    (i) Financial and Economic Literacy.--
            (1) Default reduction program.--Section 428F is further 
        amended by adding at the end the following:
    ``(c) Financial and Economic Literacy.--Where appropriate, each 
program described under subsection (b) shall include making financial 
and economic education materials available to the borrower.''.
            (2) Program assistance for borrowers.--Section 432(k)(1) 
        (20 U.S.C. 1082(k)(1)) is amended by striking ``and offering'' 
        and all that follows through the period and inserting ``, 
        offering loan repayment matching provisions as part of employee 
        benefit packages, and providing employees with financial and 
        economic education and counseling.''.
    (j) Credit Bureau Organization Agreements.--Section 430A(a) (20 
U.S.C. 1080a(a)) is amended by striking ``agreements with credit bureau 
organizations'' and inserting ``an agreement with each national credit 
bureau organization (as described in section 603(p) of the Fair Credit 
Reporting Act)''.
    (k) Uniform Administrative and Claims Procedure.--Section 
432(l)(1)(H) (20 U.S.C. 1082(l)(1)(H)) is amended by inserting ``and 
anticipated graduation date'' after ``status change''.
    (l) Default Reduction Management.--Section 432 is further amended--
            (1) by striking subsection (n); and
            (2) by redesignating subsections (o) and (p) as subsections 
        (n) and (o), respectively.
    (m) Schools as Lenders.--Paragraph (2) of section 435(d) (20 U.S.C. 
1085(d)(2)) is amended to read as follows:
            ``(2) Requirements for eligible institutions.--
                    ``(A) In general.--To be an eligible lender under 
                this part, an eligible institution--
                            ``(i) shall employ at least one person 
                        whose full-time responsibilities are limited to 
                        the administration of programs of financial aid 
                        for students attending such institution;
                            ``(ii) shall not be a home study school;
                            ``(iii) shall not--
                                    ``(I) make a loan to any 
                                undergraduate student;
                                    ``(II) make a loan other than a 
                                loan under section 428 or 428H to a 
                                graduate or professional student; or
                                    ``(III) make a loan to a borrower 
                                who is not enrolled at that 
                                institution;
                            ``(iv) shall award any contract for 
                        financing, servicing, or administration of 
                        loans under this title on a competitive basis;
                            ``(v) shall offer loans that carry an 
                        origination fee or an interest rate, or both, 
                        that are less than such fee or rate authorized 
                        under the provisions of this title;
                            ``(vi) shall not have a cohort default rate 
                        (as defined in section 435(m)) greater than 10 
                        percent;
                            ``(vii) shall, for any year for which the 
                        institution engages in activities as an 
                        eligible lender, provide for a compliance audit 
                        conducted in accordance with section 
                        428(b)(1)(U)(iii)(I), and the regulations 
                        thereunder, and submit the results of such 
                        audit to the Secretary; and
                            ``(viii) shall use any proceeds from 
                        special allowance payments and interest 
                        payments from borrowers, interest subsidies 
                        received from the Department of Education, and 
                        any proceeds from the sale or other disposition 
                        of loans, for need-based grant programs.
                    ``(B) Administrative expenses.--An eligible lender 
                under subparagraph (A) shall be permitted to use a 
                portion of the proceeds described in subparagraph 
                (A)(viii) for reasonable and direct administrative 
                expenses.
                    ``(C) Supplement, not supplant.--An eligible lender 
                under subparagraph (A) shall ensure that the proceeds 
                described in subparagraph (A)(viii) are used to 
                supplement, and not to supplant, non-Federal funds that 
                would otherwise be used for need-based grant 
                programs.''.
    (n) Disability Determinations.--Section 437(a) (20 U.S.C. 1087(a)) 
is amended by adding at the end the following new sentence: ``In making 
such determination of permanent and total disability, the Secretary 
shall not require a borrower who has been certified as permanently and 
totally disabled by the Department of Veterans Affairs or the Social 
Security Administration to present further documentation of disability 
for purposes of this title.''.
    (o) Treatment of Falsely Certified Borrowers.--Section 437(c)(1) 
(20 U.S.C. 1087(c)(1)) is amended by inserting ``or parent's 
eligibility'' after ``such student's eligibility''.
    (p) Perfection of Security Interests.--Section 439(d) (20 U.S.C. 
1087-2(d)) is amended--
            (1) by striking paragraph (3); and
            (2) by redesignating paragraphs (4) and (5) as paragraphs 
        (3) and (4), respectively.
    (q) Additional Technical Amendments.--
            (1) Section 428(a)(2)(A) (20 U.S.C. 1078(a)(2)(A)) is 
        amended--
                    (A) by striking ``and'' at the end of subclause 
                (II) of clause (i); and
                    (B) by moving the margin of clause (iii) two ems to 
                the left.
            (2) Section 428(a)(3)(A)(v) (20 U.S.C. 1078(a)(3)(A)(v)) is 
        amended--
                    (A) by striking ``or'' at the end of subclause (I);
                    (B) by striking the period at the end of subclause 
                (II) and inserting ``; or''; and
                    (C) by adding after subclause (II) the following 
                new subclause:
                    ``(III) in the case of a loan disbursed through an 
                escrow agent, 3 days before the first disbursement of 
                the loan.''.
            (3) Section 428(c)(1)(A) (20 U.S.C. 1078(c)(1)(A)) is 
        amended by striking ``45 days'' in the last sentence and 
        inserting ``30 days''.
            (4) Section 428(i)(1) (20 U.S.C. 1078(i)(1)) is amended by 
        striking ``21 days'' in the third sentence and inserting ``10 
        days''.
            (5) Section 428G(e) (20 U.S.C. 1078-7(e)) is amended by 
        striking ``, made to a student to cover the cost of attendance 
        at an eligible institution outside the United States,''.
            (6) Section 428H(e) (20 U.S.C. 1078-8(e)) is amended by 
        striking paragraph (6) and inserting the following:
            ``(6) Time limits on billing interest.--A lender may not 
        receive interest on a loan under this section from a borrower 
        for any period that precedes the dates described in section 
        428(a)(3)(A)(v).''.
            (7) Section 432(m)(1)(B) (20 U.S.C. 1082(m)(1)(B)) is 
        amended--
                    (A) in clause (i), by inserting ``and'' after the 
                semicolon at the end; and
                    (B) in clause (ii), by striking ``; and'' and 
                inserting a period.
            (8) Section 438(b)(4)(B) (20 U.S.C. 1087-1(b)(4)(B)) is 
        amended by striking ``shall be computed'' and all that follows 
        through ``to the loan'' and inserting ``described in 
        subparagraph (A) shall be computed using the interest rate 
        described in section 3902(a) of title 31, United States 
        Code,''.

SEC. 2124. FUNDS FOR ADMINISTRATIVE EXPENSES.

    Section 458 is amended to read as follows:

``SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES.

    ``(a) Administrative Expenses.--
            ``(1) Mandatory funds for fiscal year 2006.--For fiscal 
        year 2006, there shall be available to the Secretary, from 
        funds not otherwise appropriated, funds to be obligated for--
                    ``(A) administrative costs under this part and part 
                B, including the costs of the direct student loan 
                programs under this part; and
                    ``(B) account maintenance fees payable to guaranty 
                agencies under part B and calculated in accordance with 
                subsections (b) and (c),
        not to exceed (from such funds not otherwise appropriated) 
        $820,000,000 in fiscal year 2006.
            ``(2) Authorization for administrative costs beginning in 
        fiscal year 2007.--For each of the fiscal years 2007 through 
        2011, there are authorized to be appropriated such sums as may 
        be necessary for administrative costs under this part and part 
        B, including the costs of the direct student loan programs 
        under this part.
            ``(3) Continuing mandatory funds for account maintenance 
        fees.--For each of the fiscal years 2007 through 2011, there 
        shall be available to the Secretary, from funds not otherwise 
        appropriated, funds to be obligated for account maintenance 
        fees payable to guaranty agencies under part B and calculated 
        in accordance with subsection (b).
            ``(4) Account maintenance fees.--Account maintenance fees 
        under paragraph (3) shall be paid quarterly and deposited in 
        the Agency Operating Fund established under section 422B.
            ``(5) Carryover.--The Secretary may carry over funds made 
        available under this section to a subsequent fiscal year.
    ``(b) Calculation Basis.--Account maintenance fees payable to 
guaranty agencies under subsection (a)(3) shall not exceed the basis of 
0.10 percent of the original principal amount of outstanding loans on 
which insurance was issued under part B.
    ``(c) Budget Justification.--No funds may be expended under this 
section unless the Secretary includes in the Department of Education's 
annual budget justification to Congress a detailed description of the 
specific activities for which the funds made available by this section 
have been used in the prior and current years (if applicable), the 
activities and costs planned for the budget year, and the projection of 
activities and costs for each remaining year for which administrative 
expenses under this section are made available.''.

SEC. 2125. SIGNIFICANTLY SIMPLIFYING THE STUDENT AID APPLICATION 
              PROCESS.

    (a) Expanding the Auto-Zero and Further Simplifying the Simplified 
Needs Test.--
            (1) Simplified needs test.--Section 479 (20 U.S.C. 1087ss) 
        is amended--
                    (A) in subsection (b)--
                            (i) in paragraph (1)--
                                    (I) by striking clause (i) of 
                                subparagraph (A) and inserting the 
                                following:
                            ``(i) the student's parents file, or are 
                        eligible to file, a form described in paragraph 
                        (3) or certify that they are not required to 
                        file an income tax return, and the student 
                        files, or is eligible to file, such a form or 
                        certifies that the student is not required to 
                        file an income tax return, or the student's 
                        parents, or the student, received benefits at 
                        some time during the previous 12-month period 
                        under a means-tested Federal benefit program as 
                        defined under subsection (d); and''; and
                                    (II) by striking clause (i) of 
                                subparagraph (B) and inserting the 
                                following:
                            ``(i) the student (and the student's 
                        spouse, if any) files, or is eligible to file, 
                        a form described in paragraph (3) or certifies 
                        that the student (and the student's spouse, if 
                        any) is not required to file an income tax 
                        return, or the student (and the student's 
                        spouse, if any) received benefits at some time 
                        during the previous 12-month period under a 
                        means-tested Federal benefit program as defined 
                        under subsection (d); and''; and
                            (ii) in paragraph (3), by striking ``A 
                        student or family files a form described in 
                        this subsection, or subsection (c), as the case 
                        may be, if the student or family, respectively, 
                        files'' and inserting ``In the case of an 
                        independent student, the student, or in the 
                        case of a dependent student, the parent, files 
                        a form described in this subsection, or 
                        subsection (c), as the case may be, if the 
                        student or parent, as appropriate, files'';
                    (B) in subsection (c)--
                            (i) in paragraph (1), by striking 
                        subparagraph (A) and inserting the following:
                    ``(A) the student's parents file, or are eligible 
                to file, a form described in subsection (b)(3) or 
                certify that they are not required to file an income 
                tax return, and the student files, or is eligible to 
                file, such a form or certifies that the student is not 
                required to file an income tax return, or the student's 
                parents, or the student, received benefits at some time 
                during the previous 12-month period under a means-
                tested Federal benefit program as defined in subsection 
                (d); and''; and
                            (ii) in paragraph (2), by striking 
                        subparagraph (A) and inserting the following:
                    ``(A) the student (and the student's spouse, if 
                any) files, or is eligible to file, a form described in 
                subsection (b)(3) or certifies that the student (and 
                the student's spouse, if any) is not required to file 
                an income tax return, or the student (and the student's 
                spouse, if any) received benefits at some time during 
                the previous 12-month period under a means-tested 
                Federal benefit program as defined in subsection (d); 
                and''; and
                    (C) by adding at the end the following new 
                subsections:
    ``(d) Definition of Means-Tested Federal Benefit Program.--For the 
purposes of this section, the term `means-tested Federal benefit 
program' means a mandatory spending program of the Federal Government, 
other than a program under this title, in which eligibility for the 
program's benefits, or the amount of such benefits, or both, are 
determined on the basis of income or resources of the individual or 
family seeking the benefit, and may include such programs as the 
supplemental security income program under title XVI of the Social 
Security Act, the food stamp program under the Food Stamp Act of 1977, 
the free and reduced price school lunch program established under the 
Richard B. Russell National School Lunch Act, the temporary assistance 
to needy families program established under part A of title IV of the 
Social Security Act, and the women, infants and children program 
established under Section 17 of the Child Nutrition Act of 1966, and 
other programs identified by the Secretary.
    ``(e) Reporting Requirements.--The Secretary shall regularly 
evaluate the impact of the eligibility guidelines in subsections 
(b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A) and (c)(2)(A) of this section. In 
particular, the Secretary shall evaluate whether using receipt of 
benefits under a means-tested Federal benefit program (as defined in 
subsection (d)) for eligibility continues to target the Simplified 
Needs Test, to the greatest extent possible, for use by low- and 
moderate-income students and their families.''.
    (b) Improvements to Paper and Electronic Forms.--
            (1) Common financial aid form development and processing.--
        Section 483(a) (20 U.S.C. 1090(a)) is amended--
                    (A) by striking paragraphs (1), (2), and (5);
                    (B) by redesignating paragraphs (3), (4), (6), and 
                (7), as paragraphs (9), (10), (11), and (12), 
                respectively;
                    (C) by inserting before paragraph (9), as 
                redesignated by subparagraph (B), the following:
            ``(1) In general.--The Secretary, in cooperation with 
        representatives of agencies and organizations involved in 
        student financial assistance, shall produce, distribute, and 
        process free of charge common financial reporting forms as 
        described in this subsection to be used for application and 
        reapplication to determine the need and eligibility of a 
        student for financial assistance under parts A through E (other 
        than subpart 4 of part A). These forms shall be made available 
        to applicants in both paper and electronic formats and shall be 
        referred to as the `Free Application for Federal Student Aid' 
        or the `FAFSA' .
            ``(2) Early estimates.--
                    ``(A) In general.--The Secretary shall permit 
                applicants to complete such forms as described in this 
                subsection in the 4 years prior to enrollment in order 
                to obtain a non-binding estimate of the family 
                contribution, as defined in section 473. The estimate 
                shall clearly and conspicuously indicate that it is 
                only an estimate of family contribution, and may not 
                reflect the actual family contribution of the applicant 
                that shall be used to determine the grant, loan, or 
                work assistance that the applicant may receive under 
                this title when enrolled in a program of postsecondary 
                education. Such applicants shall be permitted to update 
                information submitted on forms described in this 
                subsection using the process required under paragraph 
                (5)(A).
                    ``(B) Evaluation.--Two years after the early 
                estimates are implemented under this paragraph and from 
                data gathered from the early estimates, the Secretary 
                shall evaluate the differences between initial, non-
                binding early estimates and the final financial aid 
                award made available under this title.
                    ``(C) Report.--The Secretary shall provide a report 
                to the authorizing committees on the results of the 
                evaluation.
            ``(3) Paper format.--
                    ``(A) In general.--The Secretary shall produce, 
                distribute, and process common forms in paper format to 
                meet the requirements of paragraph (1). The Secretary 
                shall develop a common paper form for applicants who do 
                not meet the requirements of subparagraph (B).
                    ``(B) EZ fafsa.--
                            ``(i) In general.--The Secretary shall 
                        develop and use a simplified paper application 
                        form, to be known as the `EZ FAFSA', to be used 
                        for applicants meeting the requirements of 
                        section 479(c).
                            ``(ii) Reduced data requirements.--The form 
                        under this subparagraph shall permit an 
                        applicant to submit, for financial assistance 
                        purposes, only the data elements required to 
                        make a determination of whether the applicant 
                        meets the requirements under section 479(c).
                            ``(iii) State data.--The Secretary shall 
                        include on the form under this subparagraph 
                        such data items as may be necessary to award 
                        State financial assistance, as provided under 
                        paragraph (6), except that the Secretary shall 
                        not include a State's data if that State does 
                        not permit its applicants for State assistance 
                        to use the form under this subparagraph.
                            ``(iv) Free availability and processing.--
                        The provisions of paragraph (7) shall apply to 
                        the form under this subparagraph, and the data 
                        collected by means of the form under this 
                        subparagraph shall be available to institutions 
                        of higher education, guaranty agencies, and 
                        States in accordance with paragraph (9).
                            ``(v) Testing.--The Secretary shall conduct 
                        appropriate field testing on the form under 
                        this subparagraph.
                    ``(C) Promoting the use of electronic fafsa.--
                            ``(i) In general.--The Secretary shall--
                                    ``(I) develop a form that uses skip 
                                logic to simplify the application 
                                process for applicants; and
                                    ``(II) make all efforts to 
                                encourage applicants to utilize the 
                                electronic forms described in paragraph 
                                (4).
                            ``(ii) Maintenance of the fafsa in a 
                        printable electronic file.--The Secretary shall 
                        maintain a version of the paper forms described 
                        in subparagraphs (A) and (B) in a printable 
                        electronic file that is easily portable. The 
                        printable electronic file will be made easily 
                        accessible and downloadable to students on the 
                        same website used to provide students with the 
                        electronic application forms described in 
                        paragraph (4) of this subsection. The Secretary 
                        shall enable students to submit a form created 
                        under this subparagraph that is downloaded and 
                        printed from an electronic file format in order 
                        to meet the filing requirements of this section 
                        and in order to receive aid from programs under 
                        this title.
                            ``(iii) Reporting requirement.--The 
                        Secretary shall report annually to Congress on 
                        the impact of the digital divide on students 
                        completing applications for title IV aid 
                        described under this paragraph and paragraph 
                        (4). The Secretary will also report on the 
                        steps taken to eliminate the digital divide and 
                        phase out the paper form described in 
                        subparagraph (A) of this paragraph. The 
                        Secretary's report will specifically address 
                        the impact of the digital divide on the 
                        following student populations: dependent 
                        students, independent students without 
                        dependents, and independent students with 
                        dependents other than a spouse.
            ``(4) Electronic format.--
                    ``(A) In general.--The Secretary shall produce, 
                distribute, and process common forms in electronic 
                format to meet the requirements of paragraph (1). The 
                Secretary shall develop common electronic forms for 
                applicants who do not meet the requirements of 
                subparagraph (C) of this paragraph.
                    ``(B) State data.--The Secretary shall include on 
                the common electronic forms space for information that 
                needs to be submitted from the applicant to be eligible 
                for State financial assistance, as provided under 
                paragraph (6), except the Secretary shall not require 
                applicants to complete data required by any State other 
                than the applicant's State of residence.
                    ``(C) Simplified applications: fafsa on the web.--
                            ``(i) In general.--The Secretary shall 
                        develop and use a simplified electronic 
                        application form to be used by applicants 
                        meeting the requirements under subsection (c) 
                        of section 479 and an additional, separate 
                        simplified electronic application form to be 
                        used by applicants meeting the requirements 
                        under subsection (b) of section 479.
                            ``(ii) Reduced data requirements.--The 
                        simplified electronic application forms shall 
                        permit an applicant to submit for financial 
                        assistance purposes only the data elements 
                        required to make a determination of whether the 
                        applicant meets the requirements under 
                        subsection (b) or (c) of section 479.
                            ``(iii) State data.--The Secretary shall 
                        include on the simplified electronic 
                        application forms such data items as may be 
                        necessary to award state financial assistance, 
                        as provided under paragraph (6), except that 
                        the Secretary shall not require applicants to 
                        complete data required by any State other than 
                        the applicant's State of residence.
                            ``(iv) Availability and processing.--The 
                        data collected by means of the simplified 
                        electronic application forms shall be available 
                        to institutions of higher education, guaranty 
                        agencies, and States in accordance with 
                        paragraph (9).
                            ``(v) Testing.--The Secretary shall conduct 
                        appropriate field testing on the forms 
                        developed under this subparagraph.
                    ``(D) Use of forms.--Nothing in this subsection 
                shall be construed to prohibit the use of the forms 
                developed by the Secretary pursuant to this paragraph 
                by an eligible institution, eligible lender, guaranty 
                agency, State grant agency, private computer software 
                provider, a consortium thereof, or such other entities 
                as the Secretary may designate.
                    ``(E) Privacy.--The Secretary shall ensure that 
                data collection under this paragraph complies with 
                section 552a of title 5, United States Code, and that 
                any entity using the electronic version of the forms 
                developed by the Secretary pursuant to this paragraph 
                shall maintain reasonable and appropriate 
                administrative, technical, and physical safeguards to 
                ensure the integrity and confidentiality of the 
                information, and to protect against security threats, 
                or unauthorized uses or disclosures of the information 
                provided on the electronic version of the forms. Data 
                collected by such electronic version of the forms shall 
                be used only for the application, award, and 
                administration of aid awarded under this title, State 
                aid, or aid awarded by eligible institutions or such 
                entities as the Secretary may designate. No data 
                collected by such electronic version of the forms shall 
                be used for making final aid awards under this title 
                until such data have been processed by the Secretary or 
                a contractor or designee of the Secretary, and an 
                expected family contribution has been calculated by the 
                Secretary, except as may be permitted under this title.
                    ``(F) Signature.--Notwithstanding any other 
                provision of this Act, the Secretary may permit an 
                electronic form under this paragraph to be submitted 
                with an electronic signature.
            ``(5) Streamlining.--
                    ``(A) Streamlined reapplication process.--
                            ``(i) In general.--The Secretary shall 
                        develop streamlined reapplication forms and 
                        processes, including both paper and electronic 
                        reapplication processes, consistent with the 
                        requirements of this subsection, for an 
                        applicant who applies for financial assistance 
                        under this title--
                                    ``(I) in the academic year 
                                succeeding the year in which such 
                                applicant first applied for financial 
                                assistance under this title; or
                                    ``(II) in any succeeding academic 
                                years.
                            ``(ii) Mechanisms for reapplication.--The 
                        Secretary shall develop appropriate mechanisms 
                        to support reapplication.
                            ``(iii) Identification of updated data.--
                        The Secretary shall determine, in cooperation 
                        with States, institutions of higher education, 
                        agencies, and organizations involved in student 
                        financial assistance, the data elements that 
                        can be updated from the previous academic 
                        year's application.
                            ``(iv) Reduced data authorized.--Nothing in 
                        this title shall be construed as limiting the 
                        authority of the Secretary to reduce the number 
                        of data elements required of reapplicants.
                            ``(v) Zero family contribution.--Applicants 
                        determined to have a zero family contribution 
                        pursuant to section 479(c) shall not be 
                        required to provide any financial data in a 
                        reapplication form, except that which is 
                        necessary to determine eligibility under such 
                        section.
                    ``(B) Reduction of data elements.--
                            ``(i) Reduction encouraged.--Of the number 
                        of data elements on the FAFSA on the date of 
                        enactment of the Higher Education Budget 
                        Reconciliation Act of 2005 (including questions 
                        on the FAFSA for the purposes described in 
                        paragraph (6)), the Secretary, in cooperation 
                        with representatives of agencies and 
                        organizations involved in student financial 
                        assistance, shall continue to reduce the number 
                        of such data elements following the date of 
                        enactment. Reductions of data elements under 
                        paragraph (3)(B), (4)(C), or (5)(A)(iv) shall 
                        not be counted towards the reduction referred 
                        to in this paragraph unless those data elements 
                        are reduced for all applicants.
                            ``(ii) Report.--The Secretary shall 
                        annually report to the House of Representatives 
                        and the Senate on the progress made of reducing 
                        data elements.
            ``(6) State requirements.--
                    ``(A) In general.--The Secretary shall include on 
                the forms developed under this subsection, such State-
                specific data items as the Secretary determines are 
                necessary to meet State requirements for State need-
                based financial aid under section 415C, except as 
                provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of 
                this subsection. Such items shall be selected in 
                consultation with State agencies in order to assist in 
                the awarding of State financial assistance in 
                accordance with the terms of this subsection, except as 
                provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of 
                this subsection. The number of such data items shall 
                not be less than the number included on the form on 
                October 7, 1998, unless a State notifies the Secretary 
                that the State no longer requires those data items for 
                the distribution of State need-based financial aid.
                    ``(B) Annual review.--The Secretary shall conduct 
                an annual review process to determine which forms and 
                data items the States require to award State need-based 
                financial aid and other application requirements that 
                the States may impose.
                    ``(C) State use of simplified forms.--The Secretary 
                shall encourage States to take such steps as necessary 
                to encourage the use of simplified application forms, 
                including those described in paragraphs (3)(B) and 
                (4)(C), to meet the requirements under subsection (b) 
                or (c) of section 479.
                    ``(D) Federal register notice.--The Secretary shall 
                publish on an annual basis a notice in the Federal 
                Register requiring State agencies to inform the 
                Secretary--
                            ``(i) if the State agency is unable to 
                        permit applicants to utilize the simplified 
                        application forms described in paragraphs 
                        (3)(B) and (4)(C); and
                            ``(ii) of the State-specific data that the 
                        State agency requires for delivery of State 
                        need-based financial aid.
                    ``(E) State notification to the secretary.--
                            ``(i) In general.--Each State agency shall 
                        notify the Secretary--
                                    ``(I) whether the State permits an 
                                applicant to file a form described in 
                                paragraph (3)(B) or paragraph (4)(C) of 
                                this subsection for purposes of 
                                determining eligibility for State need-
                                based financial aid; and
                                    ``(II) the State-specific data that 
                                the State agency requires for delivery 
                                of State need-based financial aid.
                            ``(ii) Acceptance of forms.--In the event 
                        that a State does not permit an applicant to 
                        file a form described in paragraph (3)(B) or 
                        paragraph (4)(C) of this subsection for 
                        purposes of determining eligibility for State 
                        need-based financial aid--
                                    ``(I) the State shall notify the 
                                Secretary if the State is not permitted 
                                to do so because of either State law or 
                                because of agency policy; and
                                    ``(II) the notification under 
                                subclause (I) shall include an estimate 
                                of the program cost to permit 
                                applicants to complete simplified 
                                application forms under paragraphs 
                                (3)(B) and paragraph (4)(C) of this 
                                subsection.
                            ``(iii) Lack of notification by the 
                        state.--If a State does not notify the 
                        Secretary pursuant to clause (i), the Secretary 
                        shall--
                                    ``(I) permit residents of that 
                                State to complete simplified 
                                application forms under paragraphs 
                                (3)(B) and paragraph (4)(C) of this 
                                subsection; and
                                    ``(II) not require any resident of 
                                that State to complete any data 
                                previously required by that State under 
                                this section.
            ``(7) Charges to students and parents for use of forms 
        prohibited.--
                    ``(A) Fees prohibited.--The FAFSA, in whatever form 
                (including the EZ-FAFSA, paper, electronic, simplified, 
                or reapplication), shall be produced, distributed, and 
                processed by the Secretary and no parent or student 
                shall be charged a fee by any entity for the 
                collection, processing, or delivery of financial aid 
                through the use of the FAFSA. The need and eligibility 
                of a student for financial assistance under parts A 
                through E of this title (other than under subpart 4 of 
                part A) may only be determined by using the FAFSA 
                developed by the Secretary pursuant to this subsection. 
                No student may receive assistance under parts A through 
                E of this title (other than under subpart 4 of part A), 
                except by use of the FAFSA developed by the Secretary 
                pursuant to this subsection. No data collected on a 
                form, worksheet, or other document for which a fee is 
                charged shall be used to complete the FAFSA.
                    ``(B) Notice.--Any entity that provides to students 
                or parents, or charges students or parents for, any 
                value-added services with respect to or in connection 
                with the FAFSA, such as completion of the FAFSA, 
                submission of the FAFSA, or tracking of the FAFSA for a 
                student, shall provide to students and parents clear 
                and conspicuous notice that--
                            ``(i) the FAFSA is a free Federal student 
                        aid application;
                            ``(ii) the FAFSA can be completed without 
                        professional assistance; and
                            ``(iii) includes the current Internet 
                        address for the FAFSA on the Department's web 
                        site.
            ``(8) Application processing cycle.--The Secretary shall 
        enable students to submit a form created under this subsection 
        in order to meet the filing requirements of this section and in 
        order to receive aid from programs under this title and shall 
        initiate the processing of applications under this subsection 
        as early as practicable prior to January 1 of the student's 
        planned year of enrollment.''.
            (2) Master calendar.--Section 482(a)(1)(B) (20 U.S.C. 1089) 
        is amended to read as follows:
                    ``(B) by March 1: proposed modifications, updates, 
                and notices pursuant to sections 478, 479(c)(2)(C), and 
                483(a)(6) published in the Federal Register;''.
    (c) Increasing Access to Technology.--Section 483 (20 U.S.C. 1090) 
is further amended by adding at the end the following:
    ``(f) Addressing the Digital Divide.--The Secretary shall utilize 
savings accrued by moving more applicants to the electronic forms 
described in subsection (a)(4) to improve access to the electronic 
forms described in subsection (a)(4) for applicants meeting the 
requirements of section 479(c).''.
    (d) Expanding the Definition of an Independent Student.--Section 
480(d) (20 U.S.C.1087vv(d)) is amended by striking paragraph (2) and 
inserting the following:
            ``(2) is an orphan, in foster care, or a ward of the court, 
        or was in foster care or a ward of the court until the 
        individual reached the age of 18;''.

SEC. 2126. ADDITIONAL NEED ANALYSIS AMENDMENTS.

    (a) Income Protection Allowance for Dependent Students.----
            (1) Amendment.--Section 475(g)(2)(D) (20 U.S.C. 
        1087oo(g)(2)(D)) is amended by striking ``$2,200'' and 
        inserting ``$3,000''.
            (2) Conforming amendment.--Section 478(b) (20 U.S.C. 
        1087rr(b)) is amended by adding at the end the following new 
        paragraph:
            ``(3) Revised amounts after increase.--Notwithstanding 
        paragraph (2), for each academic year after academic year 2006-
        2007, the Secretary shall publish in the Federal Register a 
        revised income protection allowance for the purpose of section 
        475(g)(2)(D). Such revised allowance shall be developed by 
        increasing the dollar amount contained in such section by a 
        percentage equal to the estimated percentage increase in the 
        Consumer Price Index (as determined by the Secretary) between 
        December 2005 and the December next preceding the beginning of 
        such academic year, and rounding the result to the nearest 
        $10.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to determinations of need for periods 
        of enrollment beginning on or after July 1, 2006.
    (b) Employment Expense Allowance.--Section 478(h) (20 U.S.C. 
1087rr(h)) is amended--
            (1) by striking ``476(b)(4)(B),''; and
            (2) by striking ``meals away from home, apparel and upkeep, 
        transportation, and housekeeping services'' and inserting 
        ``food away from home, apparel, transportation, and household 
        furnishings and operations''.
    (c) Discretion of Student Financial Aid Administrators.--Section 
479A(a) (20 U.S.C. 1087tt(a)) is amended--
            (1) by striking ``(a) In general.--'' and inserting the 
        following:
    ``(a) Authority to Make Adjustments.--
            ``(1) Adjustments for special circumstances.--'';
            (2) by inserting before ``Special circumstances may'' the 
        following:
            ``(2) Special circumstances defined.--'';
            (3) by inserting ``a student's status as a ward of the 
        court at any time prior to attaining 18 years of age, a 
        student's status as an individual who was adopted at or after 
        age 13, a student's status as a homeless or unaccompanied youth 
        (as defined in section 725 of the McKinney-Vento Homeless 
        Assistance Act),'' after ``487,'';
            (4) by inserting before ``Adequate documentation'' the 
        following:
            ``(3) Documentation and use of supplementary information.--
        ''; and
            (5) by inserting before ``No student'' the following:
            ``(4) Fees for supplementary information prohibited.--''.
    (d) Treating Active Duty Members of the Armed Forces as Independent 
Students.--Section 480(d)(3) (20 U.S.C. 1087vv(d)(3)) is amended by 
inserting before the semicolon at the end the following: ``or is 
currently serving on active duty in the Armed Forces for other than 
training purposes''.
    (e) Excludable Income.--Section 480(e) (20 U.S.C. 1087vv(e)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(5) any part of any distribution from a qualified tuition 
        program established under section 529 of the Internal Revenue 
        Code of 1986 that is not includable in gross income under such 
        section 529.''.
    (f) Treatment of Savings Plans.--
            (1) Amendment.--Section 480(f) (20 U.S.C. 1087vv(f)) is 
        amended--
                    (A) in paragraph (1), by inserting ``qualified 
                tuition programs established under section 529 of the 
                Internal Revenue Code of 1986 (26 U.S.C. 529), except 
                as provided in paragraph (2),'' after ``tax 
                shelters,'';
                    (B) by redesignating paragraph (2) as paragraph 
                (3); and
                    (C) by inserting after paragraph (1) the following 
                new paragraph:
    ``(2) A qualified tuition program shall not be considered an asset 
of a dependent student under section 475 of this part. The value of a 
qualified tuition program for purposes of determining the assets of 
parents or independent students shall be--
            ``(A) the refund value of any tuition credits or 
        certificates purchased under section 529 of the Internal 
        Revenue Code of 1986 (26 U.S.C. 529) on behalf of a 
        beneficiary; or
            ``(B) the current balance of any account which is 
        established under such section for the purpose of meeting the 
        qualified higher education expenses of the designated 
        beneficiary of the account.''.
            (2) Conforming amendment.--Section 480(j) (20 U.S.C. 
        1087vv(j)) is amended--
                    (A) by striking ``; Tuition Prepayment Plans'' in 
                the heading of such subsection;
                    (B) by striking paragraph (2);
                    (C) in paragraph (3), by inserting ``, or a 
                distribution that is not includable in gross income 
                under section 529 of such Code,'' after ``1986''; and
                    (D) by redesignating paragraph (3) as paragraph 
                (2).
    (g) Treatment of Family Ownership of Small Businesses.--Section 
480(f)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(f)(3)), 
as redesignated by subsection (f) of this section, is amended--
            (1) in subparagraph (A), by striking ``or'';
            (2) in subparagraph (B), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following new subparagraph:
            ``(C) a small business with not more than 100 full-time or 
        full-time equivalent employees (or any part of such a small 
        business) that is owned and controlled by the family.''.
    (h) Designated Assistance.--Section 480(j) (20 U.S.C. 1087vv(j)) is 
amended by adding after paragraph (2) (as redesignated by subsection 
(f)(2)(D) of this section) the following new paragraph:
    ``(3) Notwithstanding paragraph (1) and section 472, assistance not 
received under this title may be excluded from both estimated financial 
assistance and cost of attendance, if that assistance is provided by a 
State and is designated by such State to offset a specific component of 
the cost of attendance. If that assistance is excluded from either 
estimated financial assistance or cost of attendance, it shall be 
excluded from both.''.

SEC. 2127. DEFINITION OF ELIGIBLE PROGRAM.

    Section 481(b) (20 U.S.C. 1088(b)) is amended by adding at the end 
the following new paragraph:
    ``(3) For purposes of this title, an eligible program includes an 
instructional program that utilizes direct assessment of student 
learning, or recognizes the direct assessment of student learning, in 
lieu of credit hours or clock hours as the measure of student learning. 
In the case of a program being determined eligible for the first time 
under this paragraph, such determination shall be made by the Secretary 
before such program is considered to be eligible. The Secretary shall 
provide an annual report to Congress identifying the programs made 
eligible under this paragraph.''.

SEC. 2128. DISTANCE EDUCATION.

    (a) Distance Education: Eligible Program.--Section 481(b) (20 
U.S.C. 1088(b)) is amended by adding after paragraph (3) (as added by 
section 2127 of this Act) the following new paragraph:
    ``(4) An otherwise eligible program that is offered in whole or in 
part through telecommunications is eligible for the purposes of this 
title if the program is offered by an institution, other than a foreign 
institution, that has been evaluated and determined (before or after 
the date of enactment of this paragraph) to have the capability to 
effectively deliver distance education programs by an accrediting 
agency or association that--
            ``(A) is recognized by the Secretary under subpart 2 of 
        Part H; and
            ``(B) has evaluation of distance education programs within 
        the scope of its recognition, as described in section 
        496(n)(3).''.
    (b) Correspondence Courses.--Section 484(l)(1) (20 U.S.C. 
1091(l)(1)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``for a program of study of 1 year 
                or longer''; and
                    (B) by striking ``unless the total'' and all that 
                follows through ``courses at the institution''; and
            (2) by amending subparagraph (B) to read as follows:
                    ``(B) Exception.--Subparagraph (A) does not apply 
                to an institution or school described in section 
                3(3)(C) of the Carl D. Perkins Vocational and Technical 
                Education Act of 1998.''.

SEC. 2129. STUDENT ELIGIBILITY.

    (a) Fraud: Repayment Required.--Section 484(a) (20 U.S.C. 1091(a)) 
is amended--
            (1) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
            (2) by adding at the end the following new paragraph:
            ``(6) if the student has been convicted of, or has pled 
        nolo contendere or guilty to, a crime involving fraud in 
        obtaining funds under this title, have completed the repayment 
        of such funds to the Secretary, or to the holder in the case of 
        a loan under this title obtained by fraud.''.
    (b) Technical Amendment.--Section 484(b)(5) (20 U.S.C. 1091(b)(5)) 
is amended by inserting ``or parent (on behalf of a student)'' after 
``student''.
    (c) Loan Ineligibility Based on Involuntary Civil Commitment for 
Sexual Offenses.--Section 484(b)(5) (20 U.S.C. 1091(b)(5)) is further 
amended by inserting before the period the following: ``, and no 
student who is subject to an involuntary civil commitment upon 
completion of a period of incarceration for a sexual offense (as 
determined under regulations of the Secretary) is eligible to receive a 
loan under this title''.
    (d) Freely Associated States.--Section 484(j) (20 U.S.C. 1091(j)) 
is amended by inserting ``and shall be eligible only for assistance 
under subpart 1 of part A thereafter,'' after ``part C,''.
    (e) Verification of Income Date.--Paragraph (1) of section 484(q) 
(20 U.S.C. 1091(q)) is amended to read as follows:
            ``(1) Confirmation with irs.--The Secretary of Education, 
        in cooperation with the Secretary of the Treasury, is 
        authorized to confirm with the Internal Revenue Service the 
        information specified in section 6103(l)(13) of the Internal 
        Revenue Code of 1986 reported by applicants (including parents) 
        under this title on their Federal income tax returns for the 
        purpose of verifying the information reported by applicants on 
        student financial aid applications.''.
    (f) Suspension of Eligibility for Drug Offenses.--Section 484(r)(1) 
(20 U.S.C. 1091(r)(1)) is amended by striking everything preceding the 
table and inserting the following:
            ``(1) In general.--A student who is convicted of any 
        offense under any Federal or State law involving the possession 
        or sale of a controlled substance for conduct that occurred 
        during a period of enrollment for which the student was 
        receiving any grant, loan, or work assistance under this title 
        shall not be eligible to receive any grant, loan, or work 
        assistance under this title from the date of that conviction 
        for the period of time specified in the following table:''.

SEC. 2130. INSTITUTIONAL REFUNDS.

    Section 484B (20 U.S.C. 1091b) is amended--
            (1) in subsection (a)(1), by inserting ``subpart 4 of part 
        A or'' after ``received under'';
            (2) in subsection (a)(2), by striking ``takes a leave'' and 
        by inserting ``takes one or more leaves'';
            (3) in subsection (a)(3)(B)(ii), by inserting ``(as 
        determined in accordance with subsection (d))'' after ``student 
        has completed'';
            (4) in subsection (a)(4), by amending subparagraph (A) to 
        read as follows:
                    ``(A) In general.--After determining the 
                eligibility of the student for a late disbursement or 
                post-withdrawal disbursement (as required in 
                regulations prescribed by the Secretary), the 
                institution of higher education shall contact the 
                borrower and obtain confirmation that the loan funds 
                are still required by the borrower. In making such 
                contact, the institution shall explain to the borrower 
                the borrower's obligation to repay the funds following 
                any such disbursement. The institution shall document 
                in the borrower's file the result of such contact and 
                the final determination made concerning such 
                disbursement.'';
            (5) in subsection (b)(1), by inserting ``no later than 45 
        days from the determination of withdrawal'' after ``return'';
            (6) in subsection (b)(2), by amending subparagraph (C) to 
        read as follows:
                    ``(C) Grant overpayment requirements.--
                            ``(i) In general.--Notwithstanding 
                        subparagraphs (A) and (B), a student shall only 
                        be required to return grant assistance in the 
                        amount (if any) by which--
                                    ``(I) the amount to be returned by 
                                the student (as determined under 
                                subparagraphs (A) and (B)), exceeds
                                    ``(II) 50 percent of the total 
                                grant assistance received by the 
                                student under this title for the 
                                payment period or period of enrollment.
                            ``(ii) Minimum.--A student shall not be 
                        required to return amounts of $50 or less.''; 
                        and
            (7) in subsection (d), by striking ``(a)(3)(B)(i)'' and 
        inserting ``(a)(3)(B)''.

SEC. 2131. COLLEGE ACCESS INITIATIVE.

    Part G is further amended by inserting after section 485C (20 
U.S.C. 1092c) the following new section:

``SEC. 485D. COLLEGE ACCESS INITIATIVE.

    ``(a) State-by-State Information.--The Secretary shall direct each 
guaranty agency with which the Secretary has an agreement under section 
428(c) to provide to the Secretary the information necessary for the 
development of web links and access for students and families to a 
comprehensive listing of the postsecondary education opportunities, 
programs, publications, Internet Web sites, and other services 
available in the States for which such agency serves as the designated 
guarantor.
    ``(b) Guaranty Agency Activities.--
            ``(1) Plan and activity required.--Each guaranty agency 
        with which the Secretary has an agreement under section 428(c) 
        shall develop a plan and undertake the activity necessary to 
        gather the information required under subsection (a) and to 
        make such information available to the public and to the 
        Secretary in a form and manner as prescribed by the Secretary.
            ``(2) Activities.--Each guaranty agency shall undertake 
        such activities as are necessary to promote access to 
        postsecondary education for students through providing 
        information on college planning, career preparation, and paying 
        for college. The guaranty agency shall publicize such 
        information and coordinate such activities with other entities 
        that either provide or distribute such information in the 
        States for which such guaranty agency serves as the designated 
        guarantor.
            ``(3) Funding.--The activities required by this section may 
        be funded from the guaranty agency's operating account 
        established pursuant to section 422B and, to the extent funds 
        remain, from earnings on the restricted account established 
        pursuant to section 422(h)(4).
    ``(c) Access to Information.--
            ``(1) Secretary's responsibility.--The Secretary shall 
        ensure the availability of the information provided by the 
        guaranty agencies in accordance with this section to students, 
        parents, and other interested individuals, through web links or 
        other methods prescribed by the Secretary.
            ``(2) Guaranty agency responsibility.--The guaranty 
        agencies shall ensure that the information required by this 
        section is available without charge in printed format for 
        students and parents requesting such information.
            ``(3) Publicity.--Within 270 days after the date of 
        enactment of the Higher Education Budget Reconciliation Act of 
        2005, the Secretary and guaranty agencies shall publicize the 
        availability of the information required by this section, with 
        special emphasis on ensuring that populations that are 
        traditionally underrepresented in postsecondary education are 
        made aware of the availability of such information.''.

SEC. 2132. CANCELLATION OF STUDENT LOAN INDEBTEDNESS FOR SURVIVORS OF 
              VICTIMS OF THE SEPTEMBER 11, 2001, ATTACKS.

    (a) Definitions.--For purposes of this section:
            (1) Eligible public servant.--The term ``eligible public 
        servant'' means an individual who, as determined in accordance 
        with regulations of the Secretary--
                    (A) served as a police officer, firefighter, other 
                safety or rescue personnel, or as a member of the Armed 
                Forces; and
                    (B) died (or dies) or became (or becomes) 
                permanently and totally disabled due to injuries 
                suffered in the terrorist attacks on September 11, 
                2001.
            (2) Eligible victim.--The term ``eligible victim'' means an 
        individual who, as determined in accordance with regulations of 
        the Secretary, died (or dies) or became (or becomes) 
        permanently and totally disabled due to injuries suffered in 
        the terrorist attacks on September 11, 2001.
            (3) Eligible parent.--The term ``eligible parent'' means 
        the parent of an eligible victim if--
                    (A) the parent owes a Federal student loan that is 
                a consolidation loan that was used to repay a PLUS loan 
                incurred on behalf of such eligible victim; or
                    (B) the parent owes a Federal student loan that is 
                a PLUS loan incurred on behalf of an eligible victim.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (5) Federal student loan.--The term ``Federal student 
        loan'' means any loan made, insured, or guaranteed under part 
        B, D, or E of title IV of the Higher Education Act of 1965.
    (b) Relief From Indebtedness.--
            (1) In general.--The Secretary shall provide for the 
        discharge or cancellation of--
                    (A) the Federal student loan indebtedness of the 
                spouse of an eligible public servant, as determined in 
                accordance with regulations of the Secretary, including 
                any consolidation loan that was used jointly by the 
                eligible public servant and his or her spouse to repay 
                the Federal student loans of the spouse and the 
                eligible public servant;
                    (B) the portion incurred on behalf of the eligible 
                victim (other than an eligible public servant), of a 
                Federal student loan that is a consolidation loan that 
                was used jointly by the eligible victim and his or her 
                spouse, as determined in accordance with regulations of 
                the Secretary, to repay the Federal student loans of 
                the eligible victim and his or her spouse;
                    (C) the portion of the consolidation loan 
                indebtedness of an eligible parent that was incurred on 
                behalf of an eligible victim; and
                    (D) the PLUS loan indebtedness of an eligible 
                parent that was incurred on behalf of an eligible 
                victim.
            (2) Method of discharge or cancellation.--A loan required 
        to be discharged or canceled under paragraph (1) shall be 
        discharged or canceled by the method used under section 437(a), 
        455(a)(1), or 464(c)(1)(F) of the Higher Education Act of 1965 
        (20 U.S.C. 1087(a), 1087e(a)(1), 1087dd(c)(1)(F)), whichever is 
        applicable to such loan.
    (c) Facilitation of Claims.--The Secretary shall--
            (1) establish procedures for the filing of applications for 
        discharge or cancellation under this section by regulations 
        that shall be prescribed and published within 90 days after the 
        date of enactment of this Act and without regard to the 
        requirements of section 553 of title 5, United States Code; and
            (2) take such actions as may be necessary to publicize the 
        availability of discharge or cancellation of Federal student 
        loan indebtedness under this section.
    (d) Availability of Funds for Payments.--Funds available for the 
purposes of making payments to lenders in accordance with section 
437(a) for the discharge of indebtedness of deceased or disabled 
individuals shall be available for making payments under section 437(a) 
to lenders of loans as required by this section.
    (e) Applicable to Outstanding Debt.--The provisions of this section 
shall be applied to discharge or cancel only Federal student loans 
(including consolidation loans) on which amounts were owed on September 
11, 2001. Nothing in this section shall be construed to authorize any 
refunding of any repayment of a loan.

SEC. 2133. INDEPENDENT EVALUATION OF DISTANCE EDUCATION PROGRAMS.

    (a) Independent Evaluation.--The Secretary of Education shall enter 
into an agreement with the National Academy of Sciences to conduct a 
scientifically correct and statistically valid evaluation of the 
quality of distance education programs, as compared to campus-based 
education programs, at institutions of higher education. Such 
evaluation shall include--
            (1) identification of the elements by which the quality of 
        distance education, as compared to campus-based education, can 
        be assessed, including elements such as subject matter, 
        interactivity, and student outcomes;
            (2) identification of distance and campus-based education 
        program success, with respect to student achievement, in 
        relation to the mission of the institution of higher education; 
        and
            (3) identification of the types of students (including 
        classification of types of students based on student age) who 
        most benefit from distance education programs, the types of 
        students who most benefit from campus-based education programs, 
        and the types of students who do not benefit from distance 
        education programs, by assessing elements including access to 
        higher education, job placement rates, undergraduate graduation 
        rates, and graduate and professional degree attainment rates.
    (b) Scope.--The National Academy of Sciences shall select for 
participation in the evaluation under subsection (a) a diverse group of 
institutions of higher education with respect to size, mission, and 
geographic distribution.
    (c) Interim and Final Reports.--The agreement under subsection (a) 
shall require that the National Academy of Sciences submit to the 
Secretary of Education, the Committee on Health, Education, Labor and 
Pensions of the Senate, and the Committee on Education and the 
Workforce of the House of Representatives--
            (1) an interim report regarding the evaluation under 
        subsection (a) not later than December 31, 2007; and
            (2) a final report regarding such evaluation not later than 
        December 31, 2009.

SEC. 2134. DISBURSEMENT OF STUDENT LOANS.

    Section 422(d) of the Higher Education Amendments of 1998 (Public 
Law 105-244; 112 Stat. 1696) is amended by adding at the end the 
following new sentence: ``Such amendments shall also be effective on 
and after July 1, 2006.''.

                    PART 2--HIGHER EDUCATION RELIEF

SEC. 2141. REFERENCES.

    References in this part to ``the Act'' are references to the Higher 
Education Act of 1965 (20 U.S.C. 1001 et seq.).

SEC. 2142. WAIVERS AND MODIFICATIONS.

    Notwithstanding any other provision of law, unless enacted with 
specific reference to this section, the Secretary of Education is 
authorized to waive or modify any statutory or regulatory provision 
applicable to the student financial assistance programs under title IV 
of the Act, or any student or institutional eligibility provisions in 
the Act, as the Secretary of Education deems necessary in connection 
with a Gulf hurricane disaster to ensure that--
            (1) the calculation of expected family contribution under 
        section 474 of the Act used in the determination of need for 
        student financial assistance under title IV of the Act for any 
        affected student (and the determination of such need for his or 
        her family, if applicable), is modified to reflect any changes 
        in the financial condition of such affected student and his or 
        her family resulting from a Gulf hurricane disaster; and
            (2) institutions of higher education, systems of 
        institutions, or consortia of institutions that are located in 
        an area affected by a Gulf hurricane disaster, or that are 
        serving affected students, are eligible, notwithstanding 
        section 486(d) of the Act, to apply for participation in the 
        distance education demonstration program under section 486 of 
        the Act, except that the Secretary of Education shall include 
        in reports under section 486(f) of the Act an identification of 
        those institutions, systems, and consortia that were granted 
        participation in the demonstration program due to a Gulf 
        hurricane disaster.

SEC. 2143. CANCELLATION OF INSTITUTIONAL REPAYMENT BY COLLEGES AND 
              UNIVERSITIES AFFECTED BY A GULF HURRICANE DISASTER.

    Notwithstanding any provision of title IV of the Act or any 
regulation issued thereunder, the Secretary of Education shall cancel 
any obligation of an affected institution to return or repay any funds 
the institution received before the date of enactment of this Act for, 
or on behalf of, its students under subpart 1 or 3 of part A or parts 
B, C, D, or E of title IV of the Act for any cancelled enrollment 
period.

SEC. 2144. CANCELLATION OF STUDENT LOANS FOR CANCELLED ENROLLMENT 
              PERIODS.

    (a) Loan Forgiveness Authorized.--Notwithstanding any provision of 
title IV of the Act, the Secretary shall discharge all loan amounts 
under parts B and D of title IV of the Act, and cancel any loan made 
under part E of such title, disbursed to, or on behalf of, an affected 
student for a cancelled enrollment period.
    (b) Reimbursement.--The Secretary of Education shall--
            (1) reimburse each affected institution for any amounts 
        discharged under subsection (a) with respect to a loan under 
        part E of title IV of the Act in the same manner as is required 
        by section 465(b) of the Act with respect to a loan cancelled 
        under section 465(a) of the Act; and
            (2) reimburse lenders for the purpose of discharging any 
        loan amounts disbursed to, or on behalf of, an affected student 
        under part B of title IV of the Act for a cancelled enrollment 
        period.
    (c) Limitation on Consolidation Loans.--A loan amount for a loan 
made under section 428C of the Act or a Federal Direct Consolidation 
Loan may be eligible for discharge under this section only to the 
extent that such loan amount was used to repay a loan to an affected 
student for a cancelled enrollment period.
    (d) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any repayment of a loan.

SEC. 2145. TEMPORARY DEFERMENT OF STUDENT LOAN REPAYMENT.

    An affected individual who is a borrower of a qualified student 
loan or a qualified parent loan shall be granted a deferment, not in 
excess of 6 months, during which periodic installments of principal 
need not be paid, and interest--
            (1) shall accrue and be paid by the Secretary, in the case 
        of a loan made under section 428, 428B, 428C, or 428H of the 
        Act;
            (2) shall accrue and be paid by the Secretary to the 
        Perkins loan fund held by the institution of higher education 
        that made the loan, in the case of a loan made under part E of 
        title IV of the Act; and
            (3) shall not accrue, in the case of a Federal Direct Loan 
        made under part D of such title.

SEC. 2146. NO AFFECT ON GRANT AND LOAN LIMITS.

    Notwithstanding any provision of title IV of the Act or any 
regulation issued thereunder, no grant or loan funds received by an 
affected student under title IV of the Act for a cancelled enrollment 
period shall be counted against such affected student's annual or 
aggregate grant or loan limits for the receipt of grants or loans under 
that title.

SEC. 2147. TEACHER LOAN RELIEF.

    The Secretary of Education may waive the requirement of sections 
428J(b)(1) and 460(b)(1)(A) of the Higher Education Act of 1965 that 
the 5 years of qualifying service be consecutive academic years for any 
teacher whose employment was interrupted if--
            (1) the teacher was employed in qualifying service, at the 
        time of a Gulf hurricane disaster, in a school located in an 
        area affected by a Gulf hurricane disaster; and
            (2) the teacher resumes qualifying service not later than 
        the beginning of academic year 2006-2007 in that school or any 
        other school in which employment is qualifying service under 
        such section.

SEC. 2148. EXPANDING INFORMATION DISSEMINATION REGARDING ELIGIBILITY 
              FOR PELL GRANTS.

    (a) In General.--The Secretary of Education shall make special 
efforts, in conjunction with State efforts, to notify affected students 
and if applicable, their parents, who qualify for means-tested Federal 
benefit programs, of their potential eligibility for a maximum Pell 
Grant, and shall disseminate such informational materials as the 
Secretary of Education deems appropriate.
    (b) Means-Tested Federal Benefit Program.--For the purpose of this 
section, the term ``means-tested Federal benefit program'' means a 
mandatory spending program of the Federal Government, other than a 
program under the Act, in which eligibility for the program's benefits, 
or the amount of such benefits, or both, are determined on the basis of 
income or resources of the individual or family seeking the benefit, 
and may include such programs as the supplemental security income 
program under title XVI of the Social Security Act, the food stamp 
program under the Food Stamp Act of 1977, the free and reduced price 
school lunch program established under the Richard B. Russell National 
School Lunch Act, the temporary assistance to needy families program 
established under part A of title IV of the Social Security Act, and 
the women, infants, and children program established under section 17 
of the Child Nutrition Act of 1966, and other programs identified by 
the Secretary of Education.

SEC. 2149. PROCEDURES.

    (a) Deadlines and Procedures.--Sections 482(c) and 492 of the Act 
(20 U.S.C. 1089(c), 1098a) shall not apply to any waivers, 
modifications, or actions initiated by the Secretary of Education under 
this part.
    (b) Case-by-Case Basis.--The Secretary of Education is not required 
to exercise any waiver or modification authority under this part on a 
case-by-case basis.

SEC. 2150. TERMINATION OF AUTHORITY.

    The authority of the Secretary of Education to issue waivers or 
modifications under this part shall expire at the conclusion of the 
2005-2006 academic year, but the expiration of such authority shall not 
affect the continuing validity of any such waivers or modifications 
after such academic year.

SEC. 2151. DEFINITIONS.

    For the purposes of this part, the following terms have the 
following meanings:
            (1) Affected individual.--The term ``affected individual'' 
        means an individual who has applied for or received student 
        financial assistance under title IV of the Higher Education Act 
        of 1965, and--
                    (A) who is an affected student; or
                    (B) whose primary place of employment or residency 
                was, as of August 29, 2005, in an area affected by a 
                Gulf hurricane disaster.
            (2) Affected institution.--The term ``affected 
        institution'' means an institution of higher education that--
                    (A) is located in an area affected by a Gulf 
                hurricane disaster; and
                    (B) has temporarily ceased operations as a 
                consequence of a Gulf hurricane disaster, as determined 
                by the Secretary of Education.
            (3) Affected state.--The term ``affected State'' means the 
        State of Alabama, Florida, Louisiana, Mississippi, or Texas.
            (4) Affected student.--The term ``affected student'' means 
        an individual who has applied for or received student financial 
        assistance under title IV of the Higher Education Act of 1965, 
        and who--
                    (A) was enrolled or accepted for enrollment, as of 
                August 29, 2005, at an institution of higher education 
                in an area affected by a Gulf hurricane disaster;
                    (B) was a dependent student enrolled or accepted 
                for enrollment at an institution of higher education 
                that is not in an area affected by a Gulf hurricane 
                disaster, but whose parents resided or were employed, 
                as of August 29, 2005, in an area affected by a Gulf 
                hurricane disaster; or
                    (C) was enrolled or accepted for enrollment at an 
                institution of higher education, as of August 29, 2005, 
                and whose attendance was interrupted because of a Gulf 
                hurricane disaster.
            (5) Area affected by a gulf hurricane disaster.--The term 
        ``area affected by a Gulf hurricane disaster'' means a county 
        or parish, in an affected State, that has been designated by 
        the Federal Emergency Management Agency for disaster assistance 
        for individuals and households as a result of Hurricane Katrina 
        or Hurricane Rita.
            (6) Cancelled enrollment period.--The term ``cancelled 
        enrollment period'' means any period of enrollment at an 
        affected institution during the academic year 2005.
            (7) Gulf hurricane disaster.--The term ``Gulf hurricane 
        disaster'' means a major disaster that the President declared 
        to exist, in accordance with section 401 of the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act, and that 
        was caused by Hurricane Katrina or Hurricane Rita.
            (8) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given such 
        term in section 102 of the Higher Education Act of 1965, except 
        that the term does not include institutions under subsection 
        (a)(1)(C) of that section.
            (9) Qualified student loan.--The term ``qualified student 
        loan'' means any loan made, insured, or guaranteed under part 
        B, D, or E of title IV of the Higher Education Act of 1965, 
        other than a loan under section 428B of such title or a Federal 
        Direct Plus loan.
            (10) Qualified parent loan.--The term ``qualified parent 
        loan'' means a loan made under section 428B of title IV of the 
        Higher Education Act of 1965 or a Federal Direct Plus loan.

                          Subtitle C--Pensions

SEC. 2201. INCREASES IN PBGC PREMIUMS.

    (a) Flat-Rate Premiums.--Clause (i) of section 4006(a)(3)(A) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1306(a)(3)(A)) is amended by striking ``$19'' and inserting ``$30''.
    (b) Adjustment for Inflation.--Paragraph (3) of section 4006(a) of 
such Act (29 U.S.C. 1306(a)) is amended by adding at the end the 
following new subparagraph:
    ``(F) For each plan year beginning after 2006, there shall be 
substituted for the $30 dollar amount in subparagraph (A)(i) the amount 
equal to the product derived by multiplying the premium rate, as in 
effect under this paragraph immediately prior to such plan year for 
basic benefits guaranteed by the corporation under section 4022 for 
single-employer plans, by the ratio of--
            ``(i) the national average wage index (as defined in 
        section 209(k)(1) of the Social Security Act) for the first of 
        the 2 calendar years preceding the calendar year in which such 
        plan year begins, to
            ``(ii) the national average wage index (as so defined) for 
        the first of the 3 calendar years preceding the calendar year 
        in which the plan year begins,
with such product, if not a multiple of $1, being rounded to the next 
higher multiple of $1 where such product is a multiple of $0.50 but not 
of $1, and to the nearest multiple of $1 in any other case.''.
    (c) Additional Discretionary Increase.--Paragraph (3) of section 
4006(a) of such Act (as amended by subsection (b) of this section) is 
further amended by adding at the end the following new subparagraph:
    ``(G)(i) The corporation may increase under this subparagraph, 
effective for plan years commencing with or during any calendar year 
after 2006, the premium rate otherwise in effect under this section for 
basic benefits guaranteed by it under section 4022 for single-employer 
plans if the corporation determines that such increase is necessary to 
achieve actuarial soundness in the plan termination insurance program 
under this title.
    ``(ii) The amount of any premium rate described in clause (i), as 
increased under this subparagraph for plan years commencing with or 
during any calendar year, may not exceed by more than 20 percent the 
amount of the premium rate, in effect under this paragraph for plan 
years commencing with or during such calendar year for basic benefits 
guaranteed by the corporation under section 4022 for single-employer 
plans, as determined for plan years commencing with or during such 
calendar year without regard to this subparagraph.
    ``(iii) The preceding provisions of this subparagraph shall apply 
in connection with plan years commencing with or during any calendar 
year only if--
            ``(I) the corporation transmits to each House of the 
        Congress and to the Comptroller General its proposal for the 
        increase in the premium rate for plan years commencing with or 
        during such calendar year, subject to Congressional review 
        under chapter 8 of title 5 of the United States Code (relating 
        to Congressional review of agency rulemaking) not later than 
        120 calendar days after the beginning of the preceding calendar 
        year, and
            ``(II) a joint resolution disapproving such increase has 
        not been enacted as provided in section 802 of such title, 
        within the 60-day period described in section 802(a) of such 
        title.
The proposal transmitted by the corporation shall include a description 
of the methodologies and assumptions used in formulating its proposal. 
At the time of the transmittal of any such proposal to each House of 
the Congress pursuant to subclause (I), the corporation shall transmit 
a copy of such proposal to the Committee on Education and the Workforce 
and the Committee on Ways and Means of the House of Representatives and 
the Committee on Health, Education, Labor, and Pensions and the 
Committee on Finance of the Senate. Any such proposal shall, for 
purposes of chapter 8 of such title 5, be treated as a rule which is a 
major rule.''.
    (d) Premium Rate for Certain Terminated Single-Employer Plans.--
Subsection (a) of section 4006 of such Act (29 U.S.C. 1306) is amended 
by adding at the end the following:
    ``(7) Premium Rate for Certain Terminated Single-Employer Plans.--
            ``(A) In general.--If there is a termination of a single-
        employer plan under clause (ii) or (iii) of section 
        4041(c)(2)(B) or section 4042, there shall be payable to the 
        corporation, with respect to each applicable 12-month period, a 
        premium at a rate equal to $1,250 multiplied by the number of 
        individuals who were participants in the plan immediately 
        before the termination date. Such premium shall be in addition 
        to any other premium under this section.
            ``(B) Special rule for plans terminated in bankruptcy 
        reorganization.--If the plan is terminated under 
        4041(c)(2)(B)(ii) or under section 4042 and, as of the 
        termination date, a person who is (as of such date) a 
        contributing sponsor of the plan or a member of such sponsor's 
        controlled group has filed or has had filed against such person 
        a petition seeking reorganization in a case under title 11 of 
        the United States Code, or under any similar law of a State or 
        a political subdivision of a State (or a case described in 
        section 4041(c)(2)(B)(i) filed by or against such person has 
        been converted, as of such date, to such a case in which 
        reorganization is sought), subparagraph (A) shall not apply to 
        such plan until the date of the discharge of such person in 
        such case.
            ``(C) Applicable 12-month period.--For purposes of 
        subparagraph (A)--
                    ``(i) In general.--The term `applicable 12-month 
                period' means--
                            ``(I) the 12-month period beginning with 
                        the first month following the month in which 
                        the termination date occurs, and
                            ``(II) each of the first two 12-month 
                        periods immediately following the period 
                        described in subclause (I).
                    ``(ii) Plans terminated in bankruptcy 
                reorganization.--In any case in which the requirements 
                of subparagraph (B) are met in connection with the 
                termination of the plan with respect to 1 or more 
                persons described in such subparagraph, the 12-month 
                period described in clause (i)(I) shall be the 12-month 
                period beginning with the first month following the 
                month which includes the earliest date as of which each 
                such person is discharged in the case described in such 
                clause in connection with such person.
            ``(D) Coordination with section 4007.--
                    ``(i) Notwithstanding section 4007--
                            ``(I) premiums under this paragraph shall 
                        be due within 30 days after the beginning of 
                        any applicable 12-month period, and
                            ``(II) the designated payor shall be the 
                        person who is the contributing sponsor as of 
                        immediately before the termination date.
                    ``(ii) The fifth sentence of section 4007(a) shall 
                not apply in connection with premiums determined under 
                this paragraph.''.
    (e) Conforming Amendments.--
            (1) Section 4006(a)(2) of such Act (29 U.S.C. 1306(a)(2)) 
        is amended, in the matter following subparagraph (E), by 
        inserting ``paragraph (3)(G) of this subsection or'' after 
        ``Except as provided in''.
            (2) Section 4006(b)(1) of such Act (29 U.S.C. 1306(b)(1)) 
        is amended by inserting ``or a proposal for a premium rate 
        increase under subsection (a)(3)(G)'' after ``or (E)''.
    (f) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        plan years beginning after December 31, 2005.
            (2) Premium rate for certain terminated single-employer 
        plans.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the amendment made by subsection (d) shall apply 
                with respect to terminations for which the termination 
                date occurs on or after the date of the enactment of 
                this Act.
                    (B) Treatment of cases in bankruptcy.--In any case 
                in which the requirements of subparagraph (B) of 
                section 4007(a)(7) of the Employee Retirement Income 
                Security Act of 1974 (as added by subsection (d)) are 
                met in connection with the termination of the plan with 
                respect to 1 or more persons described in such 
                subparagraph, the amendment made by subsection (d) 
                shall apply with respect to any such termination 
                described in such subparagraph (B), notwithstanding 
                subparagraph (A) of this paragraph, if the case under 
                title 11, United States Code, or under any similar law 
                of a State or political subdivision of a State 
                (referred to in such subparagraph (B)) commenced after 
                October 26, 2005.
            (3) Special rule if subsequent savings enacted.--The 
        amendments made by this section shall not take effect if, after 
        the date of enactment of this Act and before January 1, 2006, a 
        Federal law is enacted which--
                    (A) provides for decreases in Federal outlays which 
                in the aggregate are less than the decreases in Federal 
                outlays by reason of the amendments made by this 
                section; and
                    (B) specifically provides that such decreases are 
                to be in lieu of the decreases in Federal outlays by 
                reason of the amendments made by this section.

              TITLE III--COMMITTEE ON ENERGY AND COMMERCE

                          Subtitle A--Medicaid

Sec. 3100. Short title of subtitle; rule of construction with regard to 
                            Katrina evacuees.

               Chapter 1--Payment for Prescription Drugs

Sec. 3101. Federal upper limit (FUL).
Sec. 3102. Collection and submission of utilization data for certain 
                            physician administered drugs.
Sec. 3103. Improved regulation of drugs sold under a new drug 
                            application approved under section 505(c) 
                            of the Federal Food, Drug, and Cosmetic 
                            Act.
Sec. 3104. Children's hospital participation in section 340B drug 
                            discount program.
Sec. 3105. Improving patient outcomes through greater reliance on 
                            science and best practices.

               Chapter 2--Reform of Asset Transfer Rules

Sec. 3111. Lengthening look-back period; change in beginning date for 
                            period of ineligibility.
Sec. 3112. Disclosure and treatment of annuities and of large 
                            transactions.
Sec. 3113. Application of ``income-first'' rule in applying community 
                            spouse's income before assets in providing 
                            support of community spouse.
Sec. 3114. Disqualification for long-term care assistance for 
                            individuals with substantial home equity.
Sec. 3115. Enforceability of continuing care retirement communities 
                            (CCRC) and life care community admission 
                            contracts.

          Chapter 3--Flexibility in Cost Sharing and Benefits

Sec. 3121. State option for alternative medicaid premiums and cost 
                            sharing.
Sec. 3122. Special rules for cost sharing for prescription drugs.
Sec. 3123. Emergency room copayments for non-emergency care.
Sec. 3124. Use of benchmark benefit packages.
Sec. 3125. State option to establish non-emergency medical 
                            transportation program.
Sec. 3126. Exempting women covered under breast or cervical cancer 
                            program.

             Chapter 4--Expanded Access to Certain Benefits

Sec. 3131. Expanded access to home and community-based services for the 
                            elderly and disabled.
Sec. 3132. Optional choice of self-directed personal assistance 
                            services (cash and counseling).
Sec. 3133. Expansion of State long-term care partnership program.
Sec. 3134. Health opportunity accounts.

                      Chapter 5--Other Provisions

Sec. 3141. Increase in medicaid payments to insular areas.
Sec. 3142. Managed care organization provider tax reform.
Sec. 3143. Medicaid transformation grants.
Sec. 3144. Enhancing third party identification and payment.
Sec. 3145. Improved enforcement of documentation requirements.
Sec. 3146. Reforms of targeted case management.
Sec. 3147. Emergency services furnished by non-contract providers for 
                            medicaid managed care enrollees.
Sec. 3148. Adjustment in computation of medicaid FMAP to disregard an 
                            extraordinary employer pension 
                            contribution.

                 Subtitle B--Katrina Health Care Relief

Sec. 3201. Targeted medicaid relief for States affected by Hurricane 
                            Katrina.
Sec. 3202. State high risk health insurance pool funding.
Sec. 3203. Recomputation of HPSA, MUA, and MUP designations within 
                            Hurricane Katrina affected areas.
Sec. 3204. Waiver of certain requirements applicable to the provision 
                            of health care in areas impacted by 
                            Hurricane Katrina.
Sec. 3205. FMAP hold harmless for Katrina impact.

               Subtitle C--Katrina and Rita Energy Relief

Sec. 3301. Hurricanes Katrina and Rita energy relief.

               Subtitle D--Digital Television Transition

Sec. 3401. Short title.
Sec. 3402. Findings.
Sec. 3403. Analog spectrum recovery: hard deadline.
Sec. 3404. Auction of recovered spectrum.
Sec. 3405. Digital Television Conversion Fund.
Sec. 3406. Public Safety Interoperable Communications Fund.
Sec. 3407. NYC 9/11 Digital Transition Fund.
Sec. 3408. Low-power television transition provisions.
Sec. 3409. Consumer education regarding analog televisions.
Sec. 3410. Additional provisions.
Sec. 3411. Deployment of broadband wireless technologies.
Sec. 3412. Sense of Congress.
Sec. 3413. Band plan revision required.

                          Subtitle A--Medicaid

SEC. 3100. SHORT TITLE OF SUBTITLE; RULE OF CONSTRUCTION WITH REGARD TO 
              KATRINA EVACUEES.

    (a) Short Title.--This subtitle may be cited as the ``Medicaid 
Reconciliation Act of 2005''.
    (b) Rule of Construction With Regard to Katrina Evacuees.--None of 
the provisions of the following chapters of this subtitle shall apply 
during the 11-month period beginning September 1, 2005, to individuals 
entitled to medical assistance under title XIX of the Social Security 
Act by reason of their residence in a parish in the State of Louisiana, 
or a county in the State of Mississippi or Alabama, for which a major 
disaster has been declared in accordance with section 401 of the Robert 
T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 
5170) as a result of Hurricane Katrina and which the President has 
determined, before September 14, 2005, warrants individual and public 
assistance from the Federal Government under such Act.

               CHAPTER 1--PAYMENT FOR PRESCRIPTION DRUGS

SEC. 3101. FEDERAL UPPER LIMIT (FUL).

    (a) In General.--Subsection (e) of section 1927 of the Social 
Security Act (42 U.S.C. 1396r-8) is amended to read as follows:
    ``(e) Pharmacy Reimbursement Limits.--
            ``(1) Federal upper limit for ingredient cost of covered 
        outpatient drugs.--
                    ``(A) In general.--Subject to subparagraph (B), no 
                Federal financial participation shall be available for 
                payment for the ingredient cost of a covered outpatient 
                drug in excess of the Federal upper limit for that drug 
                established under paragraph (2).
                    ``(B) Optional carve out.--A State may elect not to 
                apply subparagraph (A) to payment for either or both of 
                the following:
                            ``(i) Drugs dispensed by specialty 
                        pharmacies (such as those dispensing only 
                        immunosuppressive drugs), as defined by the 
                        Secretary.
                            ``(ii) Drugs administered by a physician in 
                        a physician's office.
            ``(2) Federal upper limit.--
                    ``(A) In general.--Except as provided in 
                subparagraph (D) and subject to paragraph (5), the 
                Federal upper limit established under this paragraph 
                for the ingredient cost of a--
                            ``(i) single source drug, is 106 percent of 
                        the RAMP (as defined in subparagraph (B)(i)) 
                        for that drug; and
                            ``(ii) multiple source drug, is 120 percent 
                        of the volume weighted average RAMP (as 
                        determined under subparagraph (C)) for that 
                        drug.
                A drug product that is a single source drug and that 
                becomes a multiple source drug shall continue to be 
                treated under this subsection as a single source drug 
                until the Secretary determines that there are 
                sufficient data to compile the volume weighted average 
                RAMP for that drug.
                    ``(B) RAMP and related provisions.--For purposes of 
                this subsection:
                            ``(i) RAMP defined.--The term `RAMP' means, 
                        with respect to a covered outpatient drug by a 
                        manufacturer for a calendar quarter and subject 
                        to clauses (ii) and (iii), the average price 
                        paid to a manufacturer for the drug in the 
                        United States in the quarter by wholesalers for 
                        drugs distributed to retail pharmacies, 
                        excluding service fees that are paid by the 
                        manufacturer to an entity and that represent 
                        fair market value for a bona-fide service 
                        provided by the entity.
                            ``(ii) Sales exempted from computation.--
                        The RAMP under clause (i) shall exclude any of 
                        the following:
                                    ``(I) Sales exempt from inclusion 
                                in the determination of best price 
                                under subsection (c)(1)(C)(i).
                                    ``(II) Such other sales as the 
                                Secretary identifies as sales to an 
                                entity that are merely nominal in 
                                amount under subsection 
                                (c)(1)(C)(ii)(III).
                            ``(iii) Sale price net of discounts.--In 
                        calculating the RAMP under clause (i), such 
                        RAMP shall include any of the following:
                                    ``(I) Cash discounts and volume 
                                discounts.
                                    ``(II) Free goods that are 
                                contingent upon any purchase 
                                requirement.
                                    ``(III) Sales at a nominal price 
                                that are contingent upon any purchase 
                                requirement or agreement.
                                    ``(IV) Chargebacks, rebates (not 
                                including rebates provided under an 
                                agreement under this section), or any 
                                other direct or indirect discounts.
                                    ``(V) Any other price concessions, 
                                which may be based on recommendations 
                                of the Inspector General of the 
                                Department of Health and Human 
                                Services, that would result in a 
                                reduction of the cost to the purchaser.
                            ``(iv) Retail pharmacy.--For purposes of 
                        this subsection, the term `retail pharmacy' 
                        does not include mail-order only pharmacies or 
                        any pharmacy at a nursing facility or home.
                    ``(C) Volume weighted average ramp defined.--For 
                purposes of this subsection, for all drug products 
                included within the same multiple source drug billing 
                and payment code (or such other methodology as may be 
                specified by the Secretary), the volume weighted 
                average RAMP is the volume weighted average of the 
                RAMPs reported under subsection (b)(3)(A)(iv) 
                determined by--
                            ``(i) computing the sum of the products 
                        (for each National Drug Code assigned to such 
                        drug products) of--
                                    ``(I) the manufacturer's RAMP (as 
                                defined in subparagraph (B)); and
                                    ``(II) the total number of units 
                                specified under section 1847A(b)(2) 
                                sold; and
                            ``(ii) dividing the sum determined under 
                        clause (i) by the sum of the total number of 
                        units under clause (i)(II) for all National 
                        Drug Codes assigned to such drug products.
                    ``(D) Exception for initial sales periods.--
                            ``(i) In general.--In the case of a single 
                        source drug during an initial sales period (not 
                        to exceed 2 calendar quarters) in which data on 
                        sales for the drug are not sufficiently 
                        available from the manufacturer to compute the 
                        RAMP or the volume weighted average RAMP under 
                        subparagraph (C), the Federal upper limit for 
                        the ingredient cost of such drug during such 
                        period shall be the wholesale acquisition cost 
                        (as defined in clause (ii)) for the drug.
                            ``(ii) Wholesale acquisition cost.--For 
                        purposes of clause (i), the term `wholesale 
                        acquisition cost' means, with respect to a 
                        single source drug, the manufacturer's list 
                        price for the drug to wholesalers or direct 
                        purchasers in the United States, not including 
                        prompt pay or other discounts, rebates or 
                        reductions in price, for the most recent month 
                        for which the information is available, as 
                        reported in wholesale price guides or other 
                        publications of drug or biological pricing 
                        data.
                    ``(E) Updates; data collection.--
                            ``(i) Frequency of determination.--The 
                        Secretary shall update the Federal upper limits 
                        applicable under this paragraph on at least a 
                        quarterly basis, taking into account the most 
                        recent data collected for purposes of 
                        determining such limits and the Food and Drug 
                        Administration's most recent publication of 
                        `Approved Drug Products with Therapeutic 
                        Equivalence Evaluations'.
                            ``(ii) Collection of data.--Data on RAMP is 
                        collected under subsection (b)(3)(A)(iv).
                    ``(F) Authority to enter contracts.--The Secretary 
                may enter into contracts with appropriate entities to 
                determine RAMPs and other data necessary to calculate 
                the Federal upper limit for a covered outpatient drug 
                established under this subsection and to calculate that 
                payment limit.
            ``(3) Dispensing fees.--
                    ``(A) In general.--A State which provides medical 
                assistance for covered outpatient drugs shall pay a 
                dispensing fee for each covered outpatient drug in 
                accordance with this paragraph. A State may vary the 
                amount of such dispensing fees, including taking into 
                account the special circumstances of pharmacies that 
                are serving rural or underserved areas or that are sole 
                community pharmacies, so long as such variation is 
                consistent with subparagraph (B).
                    ``(B) Dispensing fee payment for multiple source 
                drugs.--A State shall establish a dispensing fee under 
                this title for a covered outpatient drug that is 
                treated as a multiple source drug under paragraph 
                (2)(A) (whether or not it may be an innovator multiple 
                source drug) in an amount that is not less than $8 per 
                prescription unit. The Secretary shall define what 
                constitutes a prescription unit for purposes of the 
                previous sentence.
            ``(4) Effect on state maximum allowable cost limitations.--
        This section shall not supersede or affect provisions in effect 
        prior to January 1, 1991, or after December 31, 1994, relating 
        to any maximum allowable cost limitation established by a State 
        for payment by the State for covered outpatient drugs, and 
        rebates shall be made under this section without regard to 
        whether or not payment by the State for such drugs is subject 
        to such a limitation or the amount of such a limitation.
            ``(5) Evaluation of use of retail survey price 
        methodology.--
                    ``(A) In general.--The Secretary may develop a 
                methodology to set the Federal upper limit based on the 
                reported retail survey price, as most recently reported 
                under subparagraph (C), instead of a percentage of RAMP 
                or volume weighted average RAMP as described in 
                paragraph (2).
                    ``(B) Initial application.--For 2007, the Secretary 
                may use this methodology for a limited number of 
                covered outpatient drugs, including both single source 
                and multiple source drugs, selected by the Secretary in 
                a manner so as to be representative of the classes of 
                drugs dispensed under this title.
                    ``(C) Determination of retail survey price for 
                covered outpatient drugs.--
                            ``(i) Use of vendor.--The Secretary may 
                        contract services for the determination of 
                        retail survey prices for covered outpatient 
                        drugs that represent a nationwide average of 
                        pharmacy sales costs for such drugs, net of all 
                        discounts and rebates. Such a contract shall be 
                        awarded for a term of 2 years.
                            ``(ii) Use of competitive bidding.--In 
                        contracting for such services, the Secretary 
                        shall competitively bid for an outside vendor 
                        that has a demonstrated history in--
                                    ``(I) surveying and determining, on 
                                a representative nationwide basis, 
                                retail prices for ingredient costs of 
                                prescription drugs;
                                    ``(II) working with retail 
                                pharmacies, commercial payers, and 
                                States in obtaining and disseminating 
                                such price information; and
                                    ``(III) collecting and reporting 
                                such price information on at least a 
                                monthly basis.
                            ``(iii) Additional provisions.--A contract 
                        with a vendor under this subparagraph shall 
                        include such terms and conditions as the 
                        Secretary shall specify, including the 
                        following:
                                    ``(I) The vendor must monitor the 
                                marketplace and report to the Secretary 
                                each time there is a new covered 
                                outpatient drug available nationwide.
                                    ``(II) The vendor must update the 
                                Secretary no less often than monthly on 
                                the retail survey prices for multiple 
                                source drugs.
                                    ``(III) The vendor must apply 
                                methods for independently confirming 
                                retail survey prices.
                            ``(iv) Availability of information to 
                        states.--Information on retail survey prices 
                        obtained under this subparagraph, including 
                        applicable information on single source drugs, 
                        shall be provided to States on an ongoing, 
                        timely basis.
                    ``(D) State use of retail survey price data.--
                            ``(i) Distribution of price data.--The 
                        Secretary shall devise and implement a means 
                        for electronic distribution to each State 
                        agency designated under section 1902(a)(5) with 
                        responsibility for the administration or 
                        supervision of the administration of the State 
                        plan under this title of the retail survey 
                        price determined under this paragraph.
                            ``(ii) Authority to establish payment rates 
                        based on data.--A State may use the price data 
                        received in accordance with clause (i) in 
                        establishing payment rates for the ingredient 
                        costs and dispensing fees for covered 
                        outpatient drugs dispensed to individuals 
                        eligible for medical assistance under this 
                        title.
            ``(6) Limitation on judicial review.--There shall be no 
        administrative or judicial review of--
                    ``(A) the Secretary's determinations of Federal 
                upper limits, RAMPs, and volume weighted average RAMPs 
                under this subsection, including the assignment of 
                National Drug Codes to billing and payment classes;
                    ``(B) the Secretary's disclosure to States of the 
                average manufacturer prices, RAMPs, volume weighted 
                average RAMPs, and retail survey prices;
                    ``(C) determinations under this subsection by the 
                Secretary of covered outpatient drugs which are 
                dispensed by a specialty pharmacy or administered by a 
                physician in a physician's office;
                    ``(D) the contracting and calculations process 
                under this subsection; and
                    ``(E) the method to allocate rebates, chargebacks, 
                and other price concessions to a quarter if specified 
                by the Secretary.''.
    (b) Conforming Amendments.--
            (1) Reporting ramp-related information.--Subsection 
        (b)(3)(A) of such section is amended--
                    (A) by striking ``and'' at the end of clause (ii);
                    (B) by striking the period at the end of clause 
                (iii) and inserting ``; and''; and
                    (C) by inserting after clause (iii) the following 
                new clause:
                    ``(iv) for calendar quarters beginning on or after 
                July 1, 2006, in conjunction with reporting required 
                under clause (i) and by National Drug Code (including 
                package size)--
                            ``(I) the manufacturer's RAMP (as defined 
                        in subsection (e)(2)(B)(i)) and the total 
                        number of units required to compute the volume 
                        weighted average RAMP under subsection 
                        (e)(2)(C);
                            ``(II) if required to make payment under 
                        subsection (e)(2)(D), the manufacturer's 
                        wholesale acquisition cost, as defined in 
                        clause (ii) of such subsection; and
                            ``(III) information on those sales that 
                        were made at a nominal price or otherwise 
                        described in subsection (e)(2)(B)(ii)(II);
                for all covered outpatient drugs.''.
            (2) Disclosure to states.--Subsection (b)(3)(D) of such 
        section is amended--
                    (A) by striking ``and'' at the end of clause (ii);
                    (B) by striking the period at the end of clause 
                (iii) and inserting ``, and''; and
                    (C) by inserting after clause (iii) the following 
                new clause:
                            ``(iv) to States to carry out this 
                        title.''.
            (3) Limitations on federal financial participation.--
        Section 1903(i) of such Act (42 U.S.C. 1396b(i)) is amended--
                    (A) in paragraph (10)(A), by striking ``and'' at 
                the end;
                    (B) in paragraph (10)(B), by striking ``or'' at the 
                end and inserting ``and'';
                    (C) by adding at the end of paragraph (10) the 
                following:
            ``(C) with respect to any amount expended for the 
        ingredient cost of a covered outpatient drug that exceeds the 
        Federal upper limit for that drug established and applied under 
        section 1927(e); or''; and
                    (D) in paragraph (21), as inserted by section 
                104(b) of Public Law 109-91, by inserting before the 
                period at the end the following: ``or described in 
                subparagraph (B) or (C) of section 1927(d)(2)''.
    (c) Effective Date.--Except as otherwise provided, the amendments 
made by this section take effect with respect to a State on the later 
of--
            (1) January 1, 2007; or
            (2) the date that is 6 months after the close of the first 
        regular session of the State legislature that begins after the 
        date of the enactment of this Act.
    (d) GAO Study on Dispensing Fees, Estimated Payment Amounts, and 
Pharmacy Acquisition Costs.--The Comptroller General of the United 
States shall conduct a study on the appropriateness in payment levels 
to pharmacies for dispensing fees under the medicaid program, including 
payment to specialty pharmacies, and on whether the estimated average 
payment amounts to pharmacies for covered outpatient drugs under the 
medicaid program after implementation of the amendments made by this 
section are below the average prices paid by pharmacies for acquiring 
such drugs. Not later than 9 months after the date of the enactment of 
this Act, the Comptroller General shall submit to Congress a report on 
such study.
    (e) Secretarial Authority to Delay Implementation.--The Secretary 
of Health and Human Services may delay the implementation of the 
amendments made by subsections (a) and (b)(3)(C) for a period of not 
more than 1 year, if the Comptroller General finds, in the study 
conducted under subsection (d), that the estimated average payment 
amounts to pharmacies for covered outpatient drugs under the medicaid 
program after implementation of such amendments are below the average 
prices paid by pharmacies for acquiring such drugs. If the Secretary 
delays the implementation of such amendments under this subsection, the 
Secretary shall transmit to Congress, prior to the termination of the 
period of delay, a report containing specific recommendations for 
legislation to establish a more equitable payment system.
    (f) IG Report on Use of RAMP and Retail Survey Prices.--Not later 
than 2 years after the date of the enactment of this Act, the Inspector 
General of the Department of Health and Human Services shall submit to 
Congress a report on the appropriateness of using RAMPs and retail 
survey prices, rather than the average manufacturer prices or other 
price measures, as the basis for establishing a Federal upper limit for 
reimbursement for covered outpatient drugs under the medicaid program.

SEC. 3102. COLLECTION AND SUBMISSION OF UTILIZATION DATA FOR CERTAIN 
              PHYSICIAN ADMINISTERED DRUGS.

    (a) In General.--Section 1927(a) of the Social Security Act (42 
U.S.C. 1396r-8(a)) is amended by adding at the end the following new 
paragraph:
            ``(7) Requirement for submission of utilization data for 
        certain physician administered drugs.--
                    ``(A) Single source drugs.--In order for payment to 
                be available under section 1903(a) for a covered 
                outpatient drug that is a single source drug that is 
                physician administered (as determined by the 
                Secretary), and that is administered on or after 
                January 1, 2006, the State shall provide for the 
                submission of such utilization data and coding (such as 
                J-codes and National Drug Code numbers) for each such 
                drug as the Secretary may specify as necessary to 
                identify the manufacturer of the drug in order to 
                secure rebates under this section for drugs 
                administered for which payment is made under this 
                title.
                    ``(B) Multiple source drugs.--
                            ``(i) In general.--Not later than January 
                        1, 2007, the information shall be submitted 
                        under subparagraph (A) using National Drug Code 
                        codes unless the Secretary specifies that an 
                        alternative coding system should be used.
                            ``(ii) Identification of most frequently 
                        physician administered multiple source drugs.--
                        Not later than January 1, 2007, the Secretary 
                        shall publish a list of the 20 physician 
                        administered multiple source drugs that the 
                        Secretary determines have the highest dollar 
                        volume of physician administered drugs 
                        dispensed under this title. The Secretary may 
                        modify such list from year to year to reflect 
                        changes in such volume.
                            ``(iii) Requirement.--In order for payment 
                        to be available under section 1903(a) for a 
                        covered outpatient drug that is a multiple 
                        source drug that is physician administered (as 
                        determined by the Secretary), that is on the 
                        list published under clause (ii), and that is 
                        administered on or after January 1, 2008, the 
                        State shall provide for the submission of such 
                        utilization data and coding (such as J-codes 
                        and National Drug Code numbers) for each such 
                        drug as the Secretary may specify as necessary 
                        to identify the manufacturer of the drug in 
                        order to secure rebates under this section.
            ``(C) Hardship waiver.--The Secretary may delay the 
        application of subparagraph (A) or (B), or both, in the case of 
        a State to prevent hardship to States which require additional 
        time to implement the reporting system required under the 
        respective subparagraph.''.
    (b) Limitation on Payment.--Section 1903(i)(10) of such Act (42 
U.S.C. 1396b(i)(10)), as amended by section 3101(b)(3), is amended--
            (1) by striking ``and'' at the end of subparagraph (B);
            (2) by striking ``or'' at the end of subparagraph (C) and 
        inserting ``and''; and
            (3) by adding at the end the following new subparagraph:
            ``(D) with respect to covered outpatient drugs described in 
        section 1927(a)(7), unless information respecting utilization 
        data and coding on such drugs that is required to be submitted 
        under such section is submitted in accordance with such 
        section; or''.

SEC. 3103. IMPROVED REGULATION OF DRUGS SOLD UNDER A NEW DRUG 
              APPLICATION APPROVED UNDER SECTION 505(C) OF THE FEDERAL 
              FOOD, DRUG, AND COSMETIC ACT.

    (a) Inclusion With Other Reported Average Manufacturer and Best 
Prices.--Section 1927(b)(3)(A) of the Social Security Act (42 U.S.C. 
1396r-8(b)(3)(A)) is amended--
            (1) by striking clause (i) and inserting the following:
                            ``(i) not later than 30 days after the last 
                        day of each rebate period under the agreement--
                                    ``(I) on the average manufacturer 
                                price (as defined in subsection (k)(1)) 
                                for covered outpatient drugs for the 
                                rebate period under the agreement 
                                (including for all such drugs that are 
                                sold under a new drug application 
                                approved under section 505(c) of the 
                                Federal Food, Drug, and Cosmetic Act); 
                                and
                                    ``(II) for single source drugs and 
                                innovator multiple source drugs 
                                (including all such drugs that are sold 
                                under a new drug application approved 
                                under section 505(c) of the Federal 
                                Food, Drug, and Cosmetic Act), on the 
                                manufacturer's best price (as defined 
                                in subsection (c)(1)(C)) for such drugs 
                                for the rebate period under the 
                                agreement;''; and
            (2) in clause (ii), by inserting ``(including for such 
        drugs that are sold under a new drug application approved under 
        section 505(c) of the Federal Food, Drug, and Cosmetic Act)'' 
        after ``drugs''.
    (b) Conforming Amendments.--Section 1927 of such Act (42 U.S.C. 
1396r-8) is amended--
            (1) in subsection (c)(1)(C)--
                    (A) in clause (i), in the matter preceding 
                subclause (I), by inserting after ``or innovator 
                multiple source drug of a manufacturer'' the following: 
                ``(including any other such drug of a manufacturer that 
                is sold under a new drug application approved under 
                section 505(c) of the Federal Food, Drug, and Cosmetic 
                Act)''; and
                    (B) in clause (ii)--
                            (i) in subclause (II), by striking ``and'' 
                        at the end;
                            (ii) in subclause (III), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
                                    ``(IV) in the case of a 
                                manufacturer that approves, allows, or 
                                otherwise permits any other drug of the 
                                manufacturer to be sold under a new 
                                drug application approved under section 
                                505(c) of the Federal Food, Drug, and 
                                Cosmetic Act, shall be inclusive of the 
                                lowest price for such authorized drug 
                                available from the manufacturer during 
                                the rebate period to any wholesaler, 
                                retailer, provider, health maintenance 
                                organization, nonprofit entity, or 
                                governmental entity within the United 
                                States, excluding those prices 
                                described in subclauses (I) through 
                                (IV) of clause (i).''; and
            (2) in subsection (k)--
                    (A) in paragraph (1)--
                            (i) by striking ``The term'' and inserting 
                        the following:
                    ``(A) In general.--The term''; and
                            (ii) by adding at the end the following:
                    ``(B) Inclusion of section 505(c) drugs.--In the 
                case of a manufacturer that approves, allows, or 
                otherwise permits any drug of the manufacturer to be 
                sold under a new drug application approved under 
                section 505(c) of the Federal Food, Drug, and Cosmetic 
                Act, such term shall be inclusive of the average price 
                paid for such authorized drug by wholesalers for drugs 
                distributed to the retail pharmacy class of trade, 
                after deducting customary prompt pay discounts.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 3104. CHILDREN'S HOSPITAL PARTICIPATION IN SECTION 340B DRUG 
              DISCOUNT PROGRAM.

    (a) In General.--Section 1927(a)(5)(B) of the Social Security Act 
(42 U.S.C. 1396r-8(a)(5)(B)) is amended by inserting before the period 
at the end the following: ``and a children's hospital described in 
section 1886(d)(1)(B)(iii) which meets the requirements of clauses (i) 
and (iii) of section 340B(b)(4)(L) of the Public Health Service Act and 
which would meet the requirements of clause (ii) of such section if 
that clause were applied by taking into account the percentage of care 
provided by the hospital to patients eligible for medical assistance 
under a State plan under this title''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to drugs purchased on or after the date of the enactment of this 
Act.

SEC. 3105. IMPROVING PATIENT OUTCOMES THROUGH GREATER RELIANCE ON 
              SCIENCE AND BEST PRACTICES.

    (a) In General.--Section 1927 of Social Security Act (42 U.S.C. 
1396r-8) is amended--
            (1) in subsection (d)(5)--
                    (A) in the matter before subparagraph (A), by 
                striking ``providing for such approval--'' and 
                inserting ``providing for such approval meets the 
                following requirements:'';
                    (B) in subparagraph (A)--
                            (i) by inserting ``The system'' before 
                        ``provides''; and
                            (ii) by striking ``; and'' and inserting a 
                        period;
                    (C) in subparagraph (B)--
                            (i) by striking ``except'' and inserting 
                        ``Except''; and
                            (ii) by inserting ``the system'' before 
                        ``provides''; and
                    (D) by adding at the end the following new 
                subparagraphs:
                    ``(C) The system provides that an atypical 
                antipsychotic or antidepressant single source drug may 
                be placed on a list of drugs subject to prior 
                authorization only where a drug use review board has 
                determined, based on the strength of the scientific 
                evidence and standards of practice, including assessing 
                peer-reviewed medical literature, pharmacoeconomic 
                studies, outcomes research data and such other 
                information as the board determines to be appropriate, 
                that placing the drug on prior approval or otherwise 
                imposing restrictions on its use is not likely to harm 
                patients or increase overall medical costs.
                    ``(D) The system provides that where a response is 
                not received to a request for authorization of an 
                atypical antipsychotic or antidepressant drug 
                prescribed within 24 hours after the prescription is 
                transmitted, payment is made for a 30 day supply of a 
                medication that the prescriber certifies is medically 
                necessary.''; and
            (2) in subsection (g)(3)(C), by inserting after clause 
        (iii) the following new clause:
                            ``(iv) The development and oversight of 
                        prior authorization programs described in 
                        subsection (d)(5).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on January 1, 2007.

               CHAPTER 2--REFORM OF ASSET TRANSFER RULES

SEC. 3111. LENGTHENING LOOK-BACK PERIOD; CHANGE IN BEGINNING DATE FOR 
              PERIOD OF INELIGIBILITY.

    (a) Lengthening Look-Back Period for All Disposals to 5 Years.--
Section 1917(c)(1)(B)(i) of the Social Security Act (42 U.S.C. 
1396p(c)(1)(B)(i)) is amended by inserting ``or in the case of any 
other disposal of assets made on or after the date of the enactment of 
the Medicaid Reconciliation Act of 2005'' before ``, 60 months''.
    (b) Change in Beginning Date for Period of Ineligibility.--Section 
1917(c)(1)(D) of such Act (42 U.S.C. 1396p(c)(1)(D)) is amended--
            (1) by striking ``(D) The date'' and inserting ``(D)(i) In 
        the case of a transfer of asset made before the date of the 
        enactment of the Medicaid Reconciliation Act of 2005, the 
        date''; and
            (2) by adding at the end the following new clause:
    ``(ii) In the case of a transfer of asset made on or after the date 
of the enactment of the Medicaid Reconciliation Act of 2005, the date 
specified in this subparagraph is the first day of a month during or 
after which assets have been transferred for less than fair market 
value, or the date on which the individual is eligible for medical 
assistance under the State plan and is receiving services described in 
subparagraph (C) but for the application of the penalty period, 
whichever is later, and which does not occur during any other period of 
ineligibility under this subsection.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to transfers made on or after the date of the enactment of this 
Act.
    (d) Availability of Hardship Waivers.--Each State shall provide for 
a hardship waiver process in accordance with section 1917(c)(2)(D) of 
the Social Security Act (42 U.S.C. 1396p(c)(2)(D))--
            (1) under which an undue hardship exists when application 
        of the transfer of assets provision would deprive the 
        individual--
                    (A) of medical care such that the individual's 
                health or life would be endangered; or
                    (B) of food, clothing, shelter, or other 
                necessities of life; and
            (2) which provides for--
                    (A) notice to recipients that an undue hardship 
                exception exists;
                    (B) a timely process for determining whether an 
                undue hardship waiver will be granted; and
                    (C) a process under which an adverse determination 
                can be appealed.
    (e) Additional Provisions on Hardship Waivers.--
            (1) Application by facility.--Section 1917(c)(2) of the 
        Social Security Act (42 U.S.C. 1396p(c)(2)) is amended--
                    (A) by striking the semicolon at the end of 
                subparagraph (D) and inserting a period; and
            (B) by adding after and below such subparagraph the 
        following:
        ``The procedures established under subparagraph (D) shall 
        permit the facility in which the institutionalized individual 
        is residing to file an undue hardship waiver application on 
        behalf of the individual with the consent of the individual or 
        the legal guardian of the individual.''.
    (2) Authority to Make Bed Hold Payments for Hardship Applicants.--
Such section is further amended by adding at the end the following: 
``While an application for an undue hardship waiver is pending under 
subparagraph (D) in the case of an individual who is a resident of a 
nursing facility, if the application meets such criteria as the 
Secretary specifies, the State may provide for payments for nursing 
facility services in order to hold the bed for the individual at the 
facility, but not in excess of payments for 30 days.''.

SEC. 3112. DISCLOSURE AND TREATMENT OF ANNUITIES AND OF LARGE 
              TRANSACTIONS.

    (a) In General.--Section 1917 of the Social Security Act (42 U.S.C. 
1396p) is amended by redesignating subsection (e) as subsection (f) and 
by inserting after subsection (d) the following new subsection:
    ``(e)(1) In order to meet the requirements of this section for 
purposes of section 1902(a)(18), a State shall require, as a condition 
for the provision of medical assistance for services described in 
subsection (c)(1)(C)(i) (relating to long-term care services) for an 
individual, the application of the individual for such assistance 
(including any recertification of eligibility for such assistance) 
shall disclose the following:
            ``(A) A description of any interest the individual or 
        community spouse has in an annuity (or similar financial 
        instrument which provides for the conversion of a countable 
        asset to a noncountable asset, as may be specified by the 
        Secretary), regardless of whether the annuity is irrevocable or 
        is treated as an asset.
            ``(B) Full information (as specified by the Secretary) 
        concerning any transaction involving the transfer or disposal 
        of assets during the previous period of 60 months, if the 
        transaction exceeded $100,000, without regard to whether the 
        transfer or disposal was for fair market value. For purposes of 
        applying the previous sentence under this subsection, all 
        transactions of $5,000 or more occurring within a 12-month 
        period shall be treated as a single transaction. The dollar 
        amounts specified in the first and second sentences of this 
        subparagraph shall be increased, beginning with 2007, from year 
        to year based on the percentage increase in the consumer price 
        index for all urban consumers (all items; United States city 
        average), rounded to the nearest $1,000 in the case of the 
        first sentence and $100 in the case of the second sentence.
Such application or recertification form shall include a statement that 
under paragraph (2) the State becomes a remainder beneficiary under 
such an annuity or similar financial instrument by virtue of the 
provision of such medical assistance.
    ``(2)(A) In the case of any annuity in which an institutionalized 
individual or community spouse has an interest, if medical assistance 
is furnished to the individual for services described in subsection 
(c)(1)(C)(i), by virtue of the provision of such assistance the State 
becomes the remainder beneficiary in the first position for the total 
amount of such medical assistance paid on behalf of the individual 
under this title (or, where there is a community spouse or minor or 
disabled child in such first position, in the position immediately 
succeeding the position of such spouse or child or both).
    ``(B) In the case of disclosure concerning an annuity under 
paragraph (1)(A), the State shall notify the issuer of the annuity of 
the right of the State under subparagraph (A) as a preferred remainder 
beneficiary in the annuity for medical assistance furnished to the 
individual. Nothing in this paragraph shall be construed as preventing 
such an issuer from notifying persons with any other remainder interest 
of the State's remainder interest under subparagraph (A).
    ``(C) In the case of such an issuer receiving notice under 
subparagraph (B), the State may require the issuer to notify the State 
when there is a change in the amount of income or principal being 
withdrawn from the amount that was being withdrawn at the time of the 
most recent disclosure described in paragraph (1)(A). A State shall 
take such information into account in determining the amount of the 
State's obligations for medical assistance or in the individual's 
eligibility for such assistance.
    ``(3)(A) For purposes of subsection (c)(1), a transaction described 
in paragraph (1)(B) shall be deemed as the transfer of an asset for 
less than fair market value unless the individual demonstrates to the 
satisfaction of the State that the transfer of the asset was for fair 
market value.
    ``(B) The Secretary may provide guidance to States on categories of 
arms length transactions (such as the purchase of a commercial annuity) 
that could be generally treated as a transfer of asset for fair market 
value.
    ``(4) Nothing in this subsection shall be construed as preventing a 
State from denying eligibility for medical assistance for an individual 
based on the income or resources derived from an annuity described in 
paragraph (1)(A).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to transactions (including the purchase of an annuity) occurring 
on or after the date of the enactment of this Act.

SEC. 3113. APPLICATION OF ``INCOME-FIRST'' RULE IN APPLYING COMMUNITY 
              SPOUSE'S INCOME BEFORE ASSETS IN PROVIDING SUPPORT OF 
              COMMUNITY SPOUSE.

    (a) In General.--Section 1924(d) of the Social Security Act (42 
U.S.C. 1396r-5(d)) is amended by adding at the end the following new 
paragraph:
            ``(6) Application of `income first' rule for funding 
        community spouse monthly income allowance.--For purposes of 
        this subsection and subsection (e), any transfer or allocation 
        made from an institutionalized spouse to meet the need of a 
        community spouse for a community spouse monthly income 
        allowance under paragraph (1)(B) shall be first made from 
        income of the institutionalized spouse and then only when the 
        income is not available from the resources of such 
        institutionalized spouse.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to transfers and allocations made on or after the date of the 
enactment of this Act by individuals who become institutionalized 
spouses on or after such date.

SEC. 3114. DISQUALIFICATION FOR LONG-TERM CARE ASSISTANCE FOR 
              INDIVIDUALS WITH SUBSTANTIAL HOME EQUITY.

    (a) In General.--Section 1917 of the Social Security Act, as 
amended by section 3112, is further amended by redesignating subsection 
(f) as subsection (g) and by inserting after subsection (e) the 
following new subsection:
    ``(f)(1) Notwithstanding any other provision of this title, subject 
to paragraph (2), in determining eligibility of an individual for 
medical assistance with respect to nursing facility services or other 
long-term care services, the individual shall not be eligible for such 
assistance if the individual's equity interest in the individual's home 
exceeds $750,000. The dollar amount specified in the preceding sentence 
shall be increased, beginning with 2011, from year to year based on the 
percentage increase in the consumer price index for all urban consumers 
(all items; United States city average), rounded to the nearest $1,000.
    ``(2) Paragraph (1) shall not apply with respect to an individual 
if--
            ``(A) the spouse of such individual, or
            ``(B) such individual's child who is under age 21, or (with 
        respect to States eligible to participate in the State program 
        established under title XVI) is blind or permanently and 
        totally disabled, or (with respect to States which are not 
        eligible to participate in such program) is blind or disabled 
        as defined in section 1614,
is lawfully residing in the individual's home.
    ``(3) Nothing in this subsection shall be construed as preventing 
an individual from using a reverse mortgage or home equity loan to 
reduce the individual's total equity interest in the home.
    ``(4) The Secretary shall establish a process whereby paragraph (1) 
is waived in the case of a demonstrated hardship.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individuals who are determined eligible for medical assistance 
with respect to nursing facility services or other long-term care 
services based on an application filed on or after January 1, 2006.

SEC. 3115. ENFORCEABILITY OF CONTINUING CARE RETIREMENT COMMUNITIES 
              (CCRC) AND LIFE CARE COMMUNITY ADMISSION CONTRACTS.

    (a) Admission Policies of Nursing Facilities.--Section 1919(c)(5) 
of the Social Security Act (42 U.S.C. 1396r(c)(5)) is amended--
            (1) in subparagraph (A)(i)(II), by inserting ``subject to 
        clause (v),'' after ``(II)''; and
            (2) by adding at the end of subparagraph (B) the following 
        new clause:
                            ``(v) Treatment of continuing care 
                        retirement communities admission contracts.--
                        Notwithstanding subclause (II) of subparagraph 
                        (A)(i), subject to subsections (c) and (d) of 
                        section 1924, contracts for admission to a 
                        State licensed, registered, certified, or 
                        equivalent continuing care retirement community 
                        or life care community, including services in a 
                        nursing facility that is part of such 
                        community, may require residents to spend on 
                        their care resources declared for the purposes 
                        of admission before applying for medical 
                        assistance.''.
    (b) Treatment of Entrance Fees.--Section 1917 of such Act (42 
U.S.C. 1396p), as amended by sections 3112(a) and 3114(a), is amended 
by redesignating subsection (g) as subsection (h) and by inserting 
after subsection (f) the following new subsection:
    ``(g) Treatment of Entrance Fees of Individuals Residing in 
Continuing Care Retirement Communities.--
            ``(1) In general.--For purposes of determining an 
        individual's eligibility for, or amount of, benefits under a 
        State plan under this title, the rules specified in paragraph 
        (2) shall apply to individuals residing in continuing care 
        retirement communities or life care communities that collect an 
        entrance fee on admission from such individuals.
            ``(2) Treatment of entrance fee.--For purposes of this 
        subsection, an individual's entrance fee in a continuing care 
        retirement community or life care community shall be considered 
        a resource available to the individual to the extent that--
                    ``(A) the individual has the ability to use the 
                entrance fee, or the contract provides that the 
                entrance fee may be used, to pay for care should other 
                resources or income of the individual be insufficient 
                to pay for such care;
                    ``(B) the individual is eligible for a refund of 
                any remaining entrance fee when the individual dies or 
                terminates the continuing care retirement community or 
                life care community contract and leaves the community; 
                and
                    ``(C) the entrance fee does not confer an ownership 
                interest in the continuing care retirement community or 
                life care community.
            ``(3) Treatment in relation to spousal share.--To the 
        extent that an entrance fee is determined to be an available 
        resource to an individual applying for medical assistance and 
        the individual has a community spouse as defined in section 
        1924(h), the entrance fee shall be considered in the 
        computation of spousal share pursuant to section 1924(c).''.

          CHAPTER 3--FLEXIBILITY IN COST SHARING AND BENEFITS

SEC. 3121. STATE OPTION FOR ALTERNATIVE MEDICAID PREMIUMS AND COST 
              SHARING.

    (a) In General.--Title XIX of the Social Security Act is amended by 
inserting after section 1916 the following new section:

        ``state option for alternative premiums and cost sharing

    ``Sec. 1916A. (a) State Flexibility.--
            ``(1) In general.--Notwithstanding sections 1916 and 
        1902(a)(10)(B), a State, at its option and through a State plan 
        amendment, may impose premiums and cost sharing for any group 
        of individuals (as specified by the State) and for any type of 
        services (and may vary such premiums and cost sharing among 
        such groups or types, including through the use of tiered cost 
        sharing for prescription drugs) consistent with the limitations 
        established under this section. Nothing in this section shall 
        be construed as superseding (or preventing the application of) 
        section 1916(g).
            ``(2) Definitions.--In this section:
                    ``(A) Premium.--The term `premium' includes any 
                enrollment fee or similar charge.
                    ``(B) Cost sharing.--The term `cost sharing' 
                includes any deduction, deductible, copayment, or 
                similar charge.
    ``(b) Limitations on Exercise of Authority.--
            ``(1) Individuals with family income below 100 percent of 
        poverty level.--In the case of an individual whose family 
        income does not exceed 100 percent of the Federal poverty level 
        applicable to a family of the size involved, subject to 
        subsections (c)(2) and (e)(2)(A), the limitations otherwise 
        provided under subsections (a) and (b) of section 1916 shall 
        continue to apply and no premium will be imposed under the 
        plan, except that the total annual aggregate amount of cost 
        sharing imposed (including any increased cost sharing imposed 
        under subsection (c) or (e)) for all individuals in the family 
        may not exceed 5 percent of the family income of the family 
        involved for the year involved.
            ``(2) Individuals with family income above 100 percent of 
        poverty level.--In the case of an individual whose family 
        income exceeds 100 percent of the Federal poverty level 
        applicable to a family of the size involved, the total annual 
        aggregate amount of premiums and cost sharing imposed 
        (including any increase and cost sharing imposed under 
        subsection (c) or (e)) for all individuals in the family may 
        not exceed 5 percent of the family income of the family 
        involved for the year involved.
            ``(3) Additional limitations.--
                    ``(A) Premiums.--No premiums shall be imposed under 
                this section with respect to the following:
                            ``(i) Individuals under 18 years of age 
                        that are required to be provided medical 
                        assistance under section 1902(a)(10)(A)(i), and 
                        including individuals with respect to whom 
                        adoption or foster care assistance is made 
                        available under part E of title IV without 
                        regard to age.
                            ``(ii) Pregnant women.
                            ``(iii) Any terminally ill individual who 
                        is receiving hospice care (as defined in 
                        section 1905(o)).
                            ``(iv) Any individual who is an inpatient 
                        in a hospital, nursing facility, intermediate 
                        care facility for the mentally retarded, or 
                        other medical institution, if such individual 
                        is required, as a condition of receiving 
                        services in such institution under the State 
                        plan, to spend for costs of medical care all 
                        but a minimal amount of the individual's income 
                        required for personal needs.
                    ``(B) Cost sharing.--Subject to the succeeding 
                provisions of this section, no cost sharing shall be 
                imposed under this section with respect to the 
                following:
                            ``(i) Services furnished to individuals 
                        under 18 years of age that are required to be 
                        provided medical assistance under section 
                        1902(a)(10)(A)(i), and including services 
                        furnished to individuals with respect to whom 
                        adoption or foster care assistance is made 
                        available under part E of title IV without 
                        regard to age.
                            ``(ii) Preventive services (such as well 
                        baby and well child care and immunizations) 
                        provided to children under 18 years of age 
                        regardless of family income.
                            ``(iii) Services furnished to pregnant 
                        women, if such services relate to the pregnancy 
                        or to any other medical condition which may 
                        complicate the pregnancy.
                            ``(iv) Services furnished to a terminally 
                        ill individual who is receiving hospice care 
                        (as defined in section 1905(o)).
                            ``(v) Services furnished to any individual 
                        who is an inpatient in a hospital, nursing 
                        facility, intermediate care facility for the 
                        mentally retarded, or other medical 
                        institution, if such individual is required, as 
                        a condition of receiving services in such 
                        institution under the State plan, to spend for 
                        costs of medical care all but a minimal amount 
                        of the individual's income required for 
                        personal needs.
                            ``(vi) Emergency services (as defined by 
                        the Secretary for purposes of section 
                        1916(a)(2)(D)).
                            ``(vii) Family planning services and 
                        supplies described in section 1905(a)(4)(C).
                    ``(C) Construction.--Nothing in this paragraph 
                shall be construed as preventing a State from exempting 
                additional classes of individuals from premiums under 
                this section or from exempting additional individuals 
                or services from cost sharing under this section.
            ``(4) Indexing nominal amounts.--In applying section 1916 
        under paragraph (1) with respect to cost sharing that is 
        `nominal' in amount, the Secretary shall increase such 
        `nominal' amounts for each year (beginning with 2006) by the 
        annual percentage increase in the medical care component of the 
        consumer price index for all urban consumers (U.S. city 
        average) as rounded up in an appropriate manner.
            ``(5) Determinations of family income.--In applying this 
        subsection, family income shall be determined in a manner 
        specified by the State for purposes of this subsection, 
        including the use of such disregards as the State may provide. 
        Family income shall be determined for such period and at such 
        periodicity as the State may provide under this title.
            ``(6) Poverty line defined.--For purposes of this section, 
        the term `poverty line' has the meaning given such term in 
        section 673(2) of the Community Services Block Grant Act (42 
        U.S.C. 9902(2)), including any revision required by such 
        section.
            ``(7) Construction.--Nothing in this section shall be 
        construed--
                    ``(A) as preventing a State from further limiting 
                the premiums and cost sharing imposed under this 
                section beyond the limitations provided under this 
                subsection;
                    ``(B) as affecting the authority of the Secretary 
                through waiver to modify limitations on premiums and 
                cost sharing under this subsection; or
                    ``(C) as affecting any such waiver of requirements 
                in effect under this title before the date of the 
                enactment of this section with regard to the imposition 
                of premiums and cost sharing.
    ``(d) Enforceability of Premiums and Other Cost Sharing.--
            ``(1) Premiums.--Notwithstanding section 1916(c)(3) and 
        section 1902(a)(10)(B), a State may, at its option, condition 
        the provision of medical assistance for an individual upon 
        prepayment of a premium authorized to be imposed under this 
        section, or may terminate eligibility for such medical 
        assistance on the basis of failure to pay such a premium but 
        shall not terminate eligibility of an individual for medical 
        assistance under this title on the basis of failure to pay any 
        such premium until such failure continues for a period of not 
        less than 60 days. A State may apply the previous sentence for 
        some or all groups of beneficiaries as specified by the State 
        and may waive payment of any such premium in any case where the 
        State determines that requiring such payment would create an 
        undue hardship.
            ``(2) Cost sharing.--Notwithstanding section 1916(e) or any 
        other provision of law, a State may permit a provider 
        participating under the State plan to require, as a condition 
        for the provision of care, items, or services to an individual 
        entitled to medical assistance under this title for such care, 
        items, or services, the payment of any cost sharing authorized 
        to be imposed under this section with respect to such care, 
        items, or services. Nothing in this paragraph shall be 
        construed as preventing a provider from reducing or waiving the 
        application of such cost sharing.''.
    (b) Conforming Amendment.--Section 1916(f) of such Act (42 U.S.C. 
1396o(f)) is amended by inserting ``and section 1916A'' after 
``(b)(3)''.
    (c) GAO Study of Impact of Premiums and Cost Sharing.--The 
Comptroller General of the United States shall conduct a study on the 
impact of premiums and cost sharing under the medicaid program on 
access to, and utilization of, services. Not later than January 1, 
2008, the Comptroller General shall submit to Congress a report on such 
study.
    (d) Effective Date.--The amendments made by this section shall 
apply to cost sharing imposed for items and services furnished on or 
after January 1, 2006.

SEC. 3122. SPECIAL RULES FOR COST SHARING FOR PRESCRIPTION DRUGS.

    (a) In General.--Section 1916A of the Social Security Act, as 
inserted by section 3121, is amended by inserting after subsection (b) 
the following new subsection:
    ``(c) Special Rules for Cost Sharing for Prescription Drugs.--
            ``(1) In general.--In order to encourage beneficiaries to 
        use drugs (in this subsection referred to as `preferred drugs') 
        identified by the State as the least (or less) costly effective 
        prescription drugs within a class of drugs (as defined by the 
        State), with respect to one or more groups of beneficiaries 
        specified by the State, subject to paragraphs (2) and (5), the 
        State may--
                    ``(A) provide an increase in cost sharing (above 
                the nominal level otherwise permitted under section 
                1916 or subsection (b), but subject to paragraphs (2) 
                and (3)) with respect to drugs that are not preferred 
                drugs within a class; and
                    ``(B) waive or reduce the cost sharing otherwise 
                applicable for preferred drugs within such class and 
                shall not apply any such cost sharing for such 
                preferred drugs for individuals for whom cost sharing 
                may not otherwise be imposed under subsection 
                (b)(3)(B).
            ``(2) Limitations.--
                    ``(A) By income group as a multiple of nominal 
                amounts.--In no case may the increase in cost sharing 
                under paragraph (1)(A) with respect to a non-preferred 
                drug exceed, in the case of an individual whose family 
                income is--
                            ``(i) below 100 percent of the poverty line 
                        applicable to a family of the size involved, 
                        the amount of nominal cost sharing (as 
                        otherwise determined under subsection (b));
                            ``(ii) at least 100 percent, but below 150 
                        percent, of the poverty line applicable to a 
                        family of the size involved, two times the 
                        amount of nominal cost sharing (as otherwise 
                        determined under subsection (b)); or
                            ``(iii) at least 150 percent of the poverty 
                        line applicable to a family of the size 
                        involved, three times the amount of nominal 
                        cost sharing (as otherwise determined under 
                        subsection (b)).
                    ``(B) Limitation to nominal for exempt 
                populations.--In the case of an individual who is 
                otherwise not subject to cost sharing due to the 
                application of subsection (b)(3), any increase in cost 
                sharing under paragraph (1)(A) with respect to a non-
                preferred drug may not exceed a nominal amount (as 
                otherwise determined under subsection (b)).
                    ``(C) Continued application of aggregate cap.--In 
                addition to the limitations imposed under subparagraphs 
                (A) and (B), any increase in cost sharing under 
                paragraph (1)(A) continues to be subject to the 
                aggregate cap on cost sharing applied under paragraph 
                (1) or (2) of subsection (b), as the case may be.
                    ``(D) TRICARE pharmacy benefit program 
                limitations.--In no case may a State--
                            ``(i) treat as a non-preferred drug under 
                        this subsection a drug that is treated as a 
                        preferred drug under the TRICARE pharmacy 
                        benefit program established under section 1074g 
                        of title 10, United States Code, as such 
                        program is in effect on the date of the 
                        enactment of this section; or
                            ``(ii) impose cost sharing under this 
                        subsection that exceeds the cost sharing 
                        imposed under the standards under such pharmacy 
                        benefit program, as such program is in effect 
                        as of the date of the enactment of this 
                        section.
            ``(3) Waiver.--In carrying out paragraph (1), a State shall 
        provide for the application of cost sharing levels applicable 
        to a preferred drug in the case of a drug that is not a 
        preferred drug if the prescribing physician determines that the 
        preferred drug for treatment of the same condition either would 
        not be as effective for the individual or would have adverse 
        effects for the individual or both.
            ``(4) Exclusion authority.--Nothing in this subsection 
        shall be construed as preventing a State from excluding from 
        paragraph (1) specified drugs or classes of drugs.
            ``(5) Prior authorization and appeals process.--A State may 
        not provide for increased cost sharing under this subsection 
        unless the State has implemented for outpatient prescription 
        drugs a system for prior authorization and an appeals process 
        for determinations relating to prior authorization.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to cost sharing imposed for items and services furnished on or 
after October 1, 2006.

SEC. 3123. EMERGENCY ROOM COPAYMENTS FOR NON-EMERGENCY CARE.

    (a) In General.--Section 1916A of the Social Security Act, as 
inserted by section 3121 and as amended by section 3122, is further 
amended by adding at the end the following new subsection:
    ``(e) State Option for Imposing Cost Sharing for Non-Emergency Care 
Furnished in an Hospital Emergency Room.--
            ``(1) In general.--Notwithstanding section 1916 or the 
        previous provisions of this section, but subject to the 
        limitations of paragraph (2), a State may, by amendment to its 
        State plan under this title, impose cost sharing for non-
        emergency services furnished to an individual (within one or 
        more groups of individuals specified by the State) in a 
        hospital emergency department under this subsection if the 
        following conditions are met:
                    ``(A) Access to non-emergency room provider.--The 
                individual has actually available and accessible (as 
                such terms are applied by the Secretary under section 
                1916(b)(3)) an alternate non-emergency services 
                provider with respect to such services.
                    ``(B) Notice.--The physician or hospital must 
                inform the beneficiary after the appropriate screening 
                assessment, but before providing the non-emergency 
                services, of the following:
                            ``(i) The hospital may require the payment 
                        of the State specified cost sharing before the 
                        service can be provided.
                            ``(ii) The name and location of an 
                        alternate non-emergency services provider 
                        (described in subparagraph (A)) that is 
                        actually available and accessible (as described 
                        in such subparagraph).
                            ``(iii) The fact that such alternate 
                        provider can provide the services without the 
                        imposition of the increase in cost sharing 
                        described in clause (i).
                            ``(iv) The hospital provides a referral to 
                        coordinate scheduling of this treatment.
                Nothing in this subsection shall be construed as 
                preventing a State from applying (or waiving) cost 
                sharing otherwise permissible under this section to 
                services described in clause (iii).
            ``(2) Limitations.--
                    ``(A) For poorest beneficiaries.--In the case of an 
                individual described in subsection (b)(1), the cost 
                sharing imposed under this subsection may not exceed 
                twice the amount determined to be nominal under this 
                section, subject to the percent of income limitation 
                otherwise applicable under subsection (b)(1).
                    ``(B) Application to exempt populations.--In the 
                case of an individual who is otherwise not subject to 
                cost sharing under subsection (b)(3), a State may 
                impose cost sharing under paragraph (1) for care in an 
                amount that does not exceed a nominal amount (as 
                otherwise determined under subsection (b)) so long as 
                no cost sharing is imposed to receive such care through 
                an outpatient department or other alternative health 
                care provider in the geographic area of the hospital 
                emergency department involved.
                    ``(C) Continued application of aggregate cap.--In 
                addition to the limitations imposed under subparagraphs 
                (A) and (B), any increase in cost sharing under 
                paragraph (1) continues to be subject to the aggregate 
                cap on cost sharing applied under paragraph (1) or (2) 
                of subsection (b), as the case may be.
            ``(3) Construction.--Nothing in this section shall be 
        construed--
                    ``(A) to limit a hospital's obligations with 
                respect to screening and stabilizing treatment of an 
                emergency medical condition under section 1867; or
                    ``(B) to modify any obligations under either State 
                or Federal standards relating to the application of a 
                prudent-layperson standard with respect to payment or 
                coverage of emergency services by any managed care 
                organization.
            ``(4) Determination standard.--No hospital or physician 
        that makes a determination with respect to the imposition of 
        cost sharing under this subsection shall be liable in any civil 
        action or proceeding for such determination absent a finding by 
        clear and convincing evidence of gross negligence by the 
        hospital or physician. The previous sentence shall not affect 
        any liability under section 1867 or otherwise applicable under 
        State law based upon the provision (or failure to provide) 
        care.
            ``(5) Definitions.--For purposes of this subsection:
                    ``(A) Non-emergency services.--The term `non-
                emergency services' means any care or services 
                furnished in a emergency department of a hospital that 
                the physician determines do not constitute an 
                appropriate medical screening examination or 
                stabilizing examination and treatment screening 
                required to be provided by the hospital under section 
                1867.
                    ``(B) Alternate non-emergency services provider.--
                The term `alternative non-emergency services provider' 
                means, with respect to non-emergency services for the 
                diagnosis or treatment of a condition, a health care 
                provider, such as a physician's office, health care 
                clinic, community health center, hospital outpatient 
                department, or similar health care provider, that 
                provides clinically appropriate services for such 
                diagnosis or treatment of the condition within a 
                clinically appropriate time of the provision of such 
                non-emergency services and that is participating in the 
                program under this title.''.
    (b) Grant Funds for Establishment of Alternate Non-Emergency 
Services Providers.--Section 1903 of the Social Security Act (42 U.S.C. 
1396b) is amended by adding at the end the following new subsection:
    ``(x) Payments for Establishment of Alternate Non-Emergency 
Services Providers.--
            ``(1) Payments.--In addition to the payments otherwise 
        provided under subsection (a), subject to paragraph (2), the 
        Secretary shall provide for payments to States under such 
        subsection for the establishment of alternate non-emergency 
        service providers (as defined in section 1916A(f)(5)(B)), or 
        networks of such providers.
            ``(2) Limitation.--The total amount of payments under this 
        subsection shall be equal to, and shall not exceed, 
        $100,000,000 during the four-year period beginning with 2006. 
        This subsection constitutes budget authority in advance of 
        appropriations Acts and represents the obligation of the 
        Secretary to provide for the payment of amounts provided under 
        this subsection.
            ``(3) Preference.--In providing for payments to States 
        under this subsection, the Secretary shall provide preference 
        to States that establish, or provide for, alternate non-
        emergency services providers or networks of such providers 
        that--
                    ``(A) serve rural or underserved areas where 
                beneficiaries under this title may not have regular 
                access to providers of primary care services; or
                    ``(B) are in partnership with local community 
                hospitals.
            ``(4) Form and manner of payment.--Payment to a State under 
        this subsection shall be made only upon the filing of such 
        application in such form and in such manner as the Secretary 
        shall specify. Payment to a State under this subsection shall 
        be made in the same manner as other payments under section 
        1903(a).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to non-emergency services furnished on or after the date of the 
enactment of this Act.

SEC. 3124. USE OF BENCHMARK BENEFIT PACKAGES.

    Title XIX of the Social Security Act is amended by redesignating 
section 1936 as section 1937 and by inserting after section 1935 the 
following new section:

                ``state flexibility in benefit packages

    ``Sec. 1936. (a) State Option of Providing Benchmark Benefits.--
            ``(1) Authority.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this title, a State, at its option as a 
                State plan amendment, may provide for medical 
                assistance under this title to individuals within one 
                or more groups of individuals specified by the State 
                through enrollment in coverage that provides--
                            ``(i) benchmark coverage described in 
                        subsection (b)(1) and, for a qualifying child, 
                        benchmark dental coverage as defined in 
                        subparagraph (F); or
                            ``(ii) benchmark equivalent coverage 
                        described in subsection (b)(2)and, for a 
                        qualifying child, benchmark dental coverage as 
                        defined in subparagraph (F).
                    ``(B) Limitation.--The State may only exercise the 
                option under subparagraph (A) for eligibility 
                categories that had been established before the date of 
                the enactment of this section.
                    ``(C) Option of wrap-around benefits.--In the case 
                of coverage described in subparagraph (A), a State, at 
                its option, may provide such wrap-around or additional 
                benefits as the State may specify.
                    ``(D) Treatment as medical assistance.--Payment of 
                premiums for such coverage under this subsection shall 
                be treated as payment of other insurance premiums 
                described in the third sentence of section 1905(a).
                    ``(E) Qualifying child defined.--For purposes of 
                subparagraph (A), the term `qualifying child' means a 
                child under 18 years of age with a family income below 
                133 percent of the poverty line applicable to a family 
                of the size involved.
                    ``(F) Benchmark dental coverage.--For purposes of 
                subparagraph (A), the term `benchmark dental coverage' 
                means, with respect to a State, dental benefits 
                coverage that is equivalent to or better than the 
                dental coverage offered under the dental benefit plan 
                that covers the greatest number of individuals in the 
                State who are not entitled to medical assistance under 
                this title.
            ``(2) Application.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a State may require that a full-
                benefit eligible individual (as defined in subparagraph 
                (C)) within a group obtain benefits under this title 
                through enrollment in coverage described in paragraph 
                (1)(A). A State may apply the previous sentence to 
                individuals within one or more groups of such 
                individuals.
                    ``(B) Limitation on application.--A State may not 
                require under subparagraph (A) an individual to obtain 
                benefits through enrollment described in paragraph 
                (1)(A) if the individual is within one of the following 
                categories of individuals:
                            ``(i) Mandatory pregnant women and 
                        children.--The individual is a pregnant woman 
                        or child under 18 years of age who is required 
                        to be covered under the State plan under 
                        section 1902(a)(10)(A)(i).
                            ``(ii) Dual eligibles.--The individual is 
                        entitled to benefits under any part of title 
                        XVIII.
                            ``(iii) Terminally ill hospice patients.--
                        The individual is terminally ill and is 
                        receiving benefits for hospice care under this 
                        title.
                            ``(iv) Eligible on basis of 
                        institutionalization.--The individual is an 
                        inpatient in a hospital, nursing facility, 
                        intermediate care facility for the mentally 
                        retarded, or other medical institution, and is 
                        required, as a condition of receiving services 
                        in such institution under the State plan, to 
                        spend for costs of medical care all but a 
                        minimal amount of the individual's income 
                        required for personal needs.
                            ``(v) Medically frail and special medical 
                        needs individuals.--The individual is medically 
                        frail or otherwise an individual with special 
                        medical needs (as identified in accordance with 
                        regulations of the Secretary).
                            ``(vi) Beneficiaries qualifying for long-
                        term care services.--The individual qualifies 
                        based on medical condition for medical 
                        assistance for long-term care services 
                        described in section 1917(c)(1)(C).
                    ``(C) Full-benefit eligible individuals.--
                            ``(i) In general.--For purposes of this 
                        paragraph, subject to clause (ii), the term 
                        `full-benefit eligible individual' means for a 
                        State for a month an individual who is 
                        determined eligible by the State for medical 
                        assistance for all services defined in section 
                        1905(a) which are covered under the State plan 
                        under this title for such month under section 
                        1902(a)(10)(A) or under any other category of 
                        eligibility for medical assistance for all such 
                        services under this title, as determined by the 
                        Secretary.
                            ``(ii) Exclusion of medically needy and 
                        spend-down populations.--Such term shall not 
                        include an individual determined to be eligible 
                        by the State for medical assistance under 
                        section 1902(a)(10)(C) or by reason of section 
                        1902(f) or otherwise eligible based on a 
                        reduction of income based on costs incurred for 
                        medical or other remedial care.
    ``(b) Benchmark Benefit Packages.--
            ``(1) In general.--For purposes of subsection (a)(1), each 
        of the following coverage shall be considered to be benchmark 
        coverage:
                    ``(A) FEHBP-equivalent health insurance coverage.--
                The standard Blue Cross/Blue Shield preferred provider 
                option service benefit plan, described in and offered 
                under section 8903(1) of title 5, United States Code.
                    ``(B) State employee coverage.--A health benefits 
                coverage plan that is offered and generally available 
                to State employees in the State involved.
                    ``(C) Coverage offered through hmo.--The health 
                insurance coverage plan that--
                            ``(i) is offered by a health maintenance 
                        organization (as defined in section 2791(b)(3) 
                        of the Public Health Service Act), and
                            ``(ii) has the largest insured commercial, 
                        non-medicaid enrollment of covered lives of 
                        such coverage plans offered by such a health 
                        maintenance organization in the State involved.
            ``(2) Benchmark-equivalent coverage.--For purposes of 
        subsection (a)(1), coverage that meets the following 
        requirement shall be considered to be benchmark-equivalent 
        coverage:
                    ``(A) Inclusion of basic services.--The coverage 
                includes benefits for items and services within each of 
                the following categories of basic services:
                            ``(i) Inpatient and outpatient hospital 
                        services.
                            ``(ii) Physicians' surgical and medical 
                        services.
                            ``(iii) Laboratory and x-ray services.
                            ``(iv) Well-baby and well-child care, 
                        including age-appropriate immunizations.
                            ``(v) Other appropriate preventive 
                        services, as designated by the Secretary.
                    ``(B) Aggregate actuarial value equivalent to 
                benchmark package.--The coverage has an aggregate 
                actuarial value that is at least actuarially equivalent 
                to one of the benchmark benefit packages described in 
                paragraph (1).
                    ``(C) Substantial actuarial value for additional 
                services included in benchmark package.--With respect 
                to each of the following categories of additional 
                services for which coverage is provided under the 
                benchmark benefit package used under subparagraph (B), 
                the coverage has an actuarial value that is equal to at 
                least 75 percent of the actuarial value of the coverage 
                of that category of services in such package:
                            ``(i) Coverage of prescription drugs.
                            ``(ii) Mental health services.
                            ``(iii) Vision services.
                            ``(iv) Hearing services.
            ``(3) Determination of actuarial value.--The actuarial 
        value of coverage of benchmark benefit packages shall be set 
        forth in an actuarial opinion in an actuarial report that has 
        been prepared--
                    ``(A) by an individual who is a member of the 
                American Academy of Actuaries;
                    ``(B) using generally accepted actuarial principles 
                and methodologies;
                    ``(C) using a standardized set of utilization and 
                price factors;
                    ``(D) using a standardized population that is 
                representative of the population involved;
                    ``(E) applying the same principles and factors in 
                comparing the value of different coverage (or 
                categories of services);
                    ``(F) without taking into account any differences 
                in coverage based on the method of delivery or means of 
                cost control or utilization used; and
                    ``(G) taking into account the ability of a State to 
                reduce benefits by taking into account the increase in 
                actuarial value of benefits coverage offered under this 
                title that results from the limitations on cost sharing 
                under such coverage.
        The actuary preparing the opinion shall select and specify in 
        the memorandum the standardized set and population to be used 
        under subparagraphs (C) and (D).
            ``(4) Coverage of rural health clinic and fqhc services.--
        Notwithstanding the previous provisions of this section, a 
        State may not provide for medical assistance through enrollment 
        of an individual with benchmark coverage or benchmark 
        equivalent coverage under this section unless--
                    ``(A) the individual has access, through such 
                coverage or otherwise, to services described in 
                subparagraphs (B) and (C) of section 1905(a)(2); and
                    ``(B) payment for such services is made in 
                accordance with the requirements of section 
                1902(bb).''.

SEC. 3125. STATE OPTION TO ESTABLISH NON-EMERGENCY MEDICAL 
              TRANSPORTATION PROGRAM.

    (a) In General.--Section 1902(a) of the Social Security Act (42 
U.S.C. 1396a(a)) is amended--
            (1) in paragraph (66), by striking ``and'' at the end;
            (2) in paragraph (67) by striking the period at the end and 
        inserting ``; and''; and
            (3) by inserting after paragraph (67) the following:
            ``(68) at the option of the State and notwithstanding 
        paragraph (10)(B) or (23), provide for the establishment of a 
        non-emergency medical transportation brokerage program in order 
        to more cost-effectively provide transportation for individuals 
        eligible for medical assistance under the State plan who need 
        access to medical care or services and have no other means of 
        transportation which--
                    ``(A) may include a wheelchair van, taxi, stretcher 
                car, bus passes and tickets, secured transportation, 
                and such other transportation as the Secretary 
                determines appropriate; and
                    ``(B) may be conducted under contract with a broker 
                who--
                            ``(i) is selected through a competitive 
                        bidding process based on the State's evaluation 
                        of the broker's experience, performance, 
                        references, resources, qualifications, and 
                        costs;
                            ``(ii) has oversight procedures to monitor 
                        beneficiary access and complaints and ensure 
                        that transport personnel are licensed, 
                        qualified, competent, and courteous;
                            ``(iii) is subject to regular auditing and 
                        oversight by the State in order to ensure the 
                        quality of the transportation services provided 
                        and the adequacy of beneficiary access to 
                        medical care and services; and
                            ``(iv) complies with such requirements 
                        related to prohibitions on referrals and 
                        conflict of interest as the Secretary shall 
                        establish (based on the prohibitions on 
                        physician referrals under section 1877 and such 
                        other prohibitions and requirements as the 
                        Secretary determines to be appropriate).''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on the date of the enactment of this Act.
    (c) IG Report on Utilization.--Not later than January 1, 2007, the 
Inspector General of the Department of Health and Human Services shall 
submit to Congress a report that examines the non-emergency medical 
transportation brokerage programs implemented under section 1902(a)(68) 
of the Social Security Act, as inserted by subsection (a). The report 
shall include findings regarding conflicts of interest and improper 
utilization of transportation services under such programs, as well as 
recommendations for improvements in such programs.

SEC. 3126. EXEMPTING WOMEN COVERED UNDER BREAST OR CERVICAL CANCER 
              PROGRAM.

    Notwithstanding any other provision of law, none of provisions of 
the previous sections of this chapter, or amendments made by such 
sections, shall apply to women who are receiving medical assistance by 
virtue of the application of sections 1902(a)(10)(A)(ii)(XVIII) and 
1902(aa) of the Social Security Act (42 U.S.C. 
1396a(a)(10)(A)(ii)(XVIII), 1396a(aa)).

             CHAPTER 4--EXPANDED ACCESS TO CERTAIN BENEFITS

SEC. 3131. EXPANDED ACCESS TO HOME AND COMMUNITY-BASED SERVICES FOR THE 
              ELDERLY AND DISABLED.

    (a) In General.--Section 1905(a) of the Social Security Act (42 
U.S.C. 1396d(a)) is amended--
            (1) in paragraph (27), by striking ``and'' at the end;
            (2) by redesignating paragraph (28) as paragraph (29); and
            (3) by inserting after paragraph (27) the following new 
        paragraph:
            ``(28) subject to section 1902(cc), home and community-
        based services (within the scope of services described in 
        paragraph (4)(B) of section 1915(c) for which the Secretary has 
        the authority to approve a waiver and not including room and 
        board) provided pursuant to a written plan of care for 
        individuals--
                    ``(A) who are 65 years of age or older, who are 
                disabled (as defined under the State plan), who are 
                persons with developmental disabilities or mental 
                retardation or persons with related conditions, or who 
                are within a subgroup thereof under the State plan;
                    ``(B) with respect to whom there has been a 
                determination, in the manner described in paragraph (1) 
                of such section, that but for the provision of such 
                services the individuals would require the level of 
                care provided in a hospital, a nursing facility, or an 
                intermediate care facility for the mentally retarded 
                the cost of which could be reimbursed under the State 
                plan; and
                    ``(C) who qualify for medical assistance under the 
                eligibility standards in effect in the State (which may 
                include standards in effect under an approved waiver) 
                as of the date of the enactment of this paragraph; 
                and''.
    (b) Conditions.--Section 1902 of such Act (42 U.S.C. 1396a) is 
amended by adding at the end the following new subsection:
    ``(cc) Provision of Home and Community-Based Services Under State 
Plan.--
            ``(1) Conditions.--A State may provide home and community-
        based services under section 1905(a)(28), other than through a 
        waiver or demonstration project under section 1915 or 1115, 
        only if the following conditions are met:
                    ``(A) Expiration of previous waiver.--Any State 
                waiver or demonstration project under either such 
                section with respect to services for individuals 
                described in such section has expired.
                    ``(B) Information.--The State must monitor and 
                report to the Secretary, in a form and manner specified 
                by the Secretary and on a quarterly basis, enrollment 
                and expenditures for provision of such services under 
                such section.
            ``(2) Options.--Notwithstanding any other provision of this 
        title, in a State's provision of services under section 
        1905(a)(28)--
                    ``(A) a State is not required to comply with the 
                requirements of section 1902(a)(1) (relating to 
                statewideness), section 1902(a)(10)(B) (relating to 
                comparability), and section 1902(a)(10)(C)(i)(III) 
                (relating to income and resource rules applicable in 
                the community);
                    ``(B) a State may limit the number of individuals 
                who are eligible for such services and may establish 
                waiting lists for the receipt of such services; and
                    ``(C) a State may limit the amount, duration, and 
                scope of such services.
        Nothing in this section shall be construed as applying the 
        previous sentence to any items or services other than home and 
        community-based services provided under section 1905(a)(28).
            ``(3) Use of electronic data.--The State shall permit 
        health care providers to comply with documentation and data 
        requirements imposed with respect to home and community-based 
        services through the maintenance of data in electronic form 
        rather than in paper form.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to home and community-based services furnished on or after 
October 1, 2006.

SEC. 3132. OPTIONAL CHOICE OF SELF-DIRECTED PERSONAL ASSISTANCE 
              SERVICES (CASH AND COUNSELING).

    (a) Exemption From Certain Requirements.--Section 1915 of the 
Social Security Act (42 U.S.C. 1396n) is amended by adding at the end 
the following new subsection:
    ``(i)(1) A State may provide, as `medical assistance', payment for 
part or all of the cost of self-directed personal assistance services 
(other than room and board) under the plan which are provided pursuant 
to a written plan of care to individuals with respect to whom there has 
been a determination that, but for the provision of such services, the 
individuals would require and receive personal care services under the 
plan, or home and community-based services provided pursuant to a 
waiver under subsection (c). Self-directed personal assistance services 
may not be provided under this subsection to individuals who reside in 
a home or property that is owned, operated, or controlled by a provider 
of services, not related by blood or marriage.
    ``(2) The Secretary shall not grant approval for a State self-
directed personal assistance services program under this section unless 
the State provides assurances satisfactory to the Secretary of the 
following:
            ``(A) Necessary safeguards have been taken to protect the 
        health and welfare of individuals provided services under the 
        program, and to assure financial accountability for funds 
        expended with respect to such services.
            ``(B) The State will provide, with respect to individuals 
        who--
                    ``(i) are entitled to medical assistance for 
                personal care services under the plan, or receive home 
                and community-based services under a waiver granted 
                under subsection (c);
                    ``(ii) may require self-directed personal 
                assistance services; and
                    ``(iii) may be eligible for self-directed personal 
                assistance services,
        an evaluation of the need for personal care under the plan, or 
        personal services under a waiver granted under subsection (c).
            ``(C) Such individuals who are determined to be likely to 
        require personal care under the plan, or home and community-
        based services under a waiver granted under subsection (c) are 
        informed of the feasible alternatives, if available under the 
        State's self-directed personal assistance services program, at 
        the choice of such individuals, to the provision of personal 
        care services under the plan, or personal assistance services 
        under a waiver granted under subsection (c).
            ``(D) The State will provide for a support system that 
        ensures participants in the self-directed personal assistance 
        services program are appropriately assessed and counseled prior 
        to enrollment and are able to manage their budgets. Additional 
        counseling and management support may be provided at the 
        request of the participant.
            ``(E) The State will provide to the Secretary an annual 
        report on the number of individuals served and total 
        expenditures on their behalf in the aggregate. The State shall 
        also provide an evaluation of overall impact on the health and 
        welfare of participating individuals compared to non-
        participants every three years.
    ``(3) A State may provide self-directed personal assistance 
services under the State plan without regard to the requirements of 
section 1902(a)(1) and may limit the population eligible to receive 
these services and limit the number of persons served without regard to 
section 1902(a)(10)(B).
    ``(4)(A) For purposes of this subsection, the term `self-directed 
personal assistance services' means personal care and related services, 
or home and community-based services otherwise available under the plan 
under this title or subsection (c), that are provided to an eligible 
participant under a self-directed personal assistance services program 
under this section, under which individuals, within an approved self-
directed services plan and budget, purchase personal assistance and 
related services, and permits participants to hire, fire, supervise, 
and manage the individuals providing such services.
    ``(B) At the election of the State--
            ``(i) a participant may choose to use any individual 
        capable of providing the assigned tasks including legally 
        liable relatives as paid providers of the services; and
            ``(ii) the individual may use the individual's budget to 
        acquire items that increase independence or substitute (such as 
        a microwave oven or an accessibility ramp) for human 
        assistance, to the extent that expenditures would otherwise be 
        made for the human assistance.
    ``(5) For purpose of this section, the term `approved self-directed 
services plan and budget' means, with respect to a participant, the 
establishment of a plan and budget for the provision of self-directed 
personal assistance services, consistent with the following 
requirements:
            ``(A) Self-direction.--The participant (or in the case of a 
        participant who is a minor child, the participant's parent or 
        guardian, or in the case of an incapacitated adult, another 
        individual recognized by State law to act on behalf of the 
        participant) exercises choice and control over the budget, 
        planning, and purchase of self-directed personal assistance 
        services, including the amount, duration, scope, provider, and 
        location of service provision.
            ``(B) Assessment of needs.--There is an assessment of the 
        needs, strengths, and preferences of the participants for such 
        services.
            ``(C) Service plan.--A plan for such services (and supports 
        for such services) for the participant has been developed and 
        approved by the State based on such assessment through a 
        person-centered process that--
                    ``(i) builds upon the participant's capacity to 
                engage in activities that promote community life and 
                that respects the participant's preferences, choices, 
                and abilities; and
                    ``(ii) involves families, friends, and 
                professionals in the planning or delivery of services 
                or supports as desired or required by the participant.
            ``(D) Service budget.--A budget for such services and 
        supports for the participant has been developed and approved by 
        the State based on such assessment and plan and on a 
        methodology that uses valid, reliable cost data, is open to 
        public inspection, and includes a calculation of the expected 
        cost of such services if those services were not self-directed. 
        The budget may not restrict access to other medically necessary 
        care and services furnished under the plan and approved by the 
        State but not included in the budget.
            ``(E) Application of quality assurance and risk 
        management.--There are appropriate quality assurance and risk 
        management techniques used in establishing and implementing 
        such plan and budget that recognize the roles and 
        responsibilities in obtaining services in a self-directed 
        manner and assure the appropriateness of such plan and budget 
        based upon the participant's resources and capabilities.
    ``(6) A State may employ a financial management entity to make 
payments to providers, track costs, and make reports under the program. 
Payment for the activities of the financial management entity shall be 
at the administrative rate established in section 1903(a).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 2006.

SEC. 3133. EXPANSION OF STATE LONG-TERM CARE PARTNERSHIP PROGRAM.

    (a) In General.--Section 1917(b)(1)(C) of the Social Security Act 
(42 U.S.C. 1396p(b)(1)(C)) is amended--
            (1) in clause (ii), by inserting ``or which has a State 
        plan amendment that provides for a qualified State long-term 
        care insurance partnership (as defined in clause (iii))'' after 
        ``1993,''; and
            (2) by adding at the end the following new clauses:
            ``(iii) For purposes of this paragraph, the term `qualified 
        State long-term care insurance partnership' means an approved 
        State plan amendment under this title that provides for the 
        disregard of any assets or resources in an amount equal to the 
        insurance benefit payments that are made to or on behalf of an 
        individual who is a beneficiary under a long-term care 
        insurance policy (including a certificate issued under a group 
        insurance contract), if the following requirements are met:
                    ``(I) The policy covers an insured who was a 
                resident of such State when coverage first became 
                effective under the policy.
                    ``(II) The policy is a qualified long-term care 
                insurance policy (as defined in section 7702B(b) of the 
                Internal Revenue Code of 1986) issued on or after the 
                first day of the first calendar quarter in which the 
                plan amendment was submitted to the Secretary.
                    ``(III) If the policy does not provide some level 
                of inflation protection, the insured was offered, 
                before the policy was sold, a long-term care insurance 
                policy that provides some level of inflation 
                protection.
                    ``(IV) The State Medicaid agency under section 
                1902(a)(5) provides information and technical 
                assistance to the State insurance department on the 
                insurance department's role of assuring that any 
                individual who sells a long-term care insurance policy 
                under the partnership receives training or demonstrates 
                evidence of an understanding of such policies and how 
                they relate to other public and private coverage of 
                long-term care.
                    ``(V) The issuer of the policy provides regular 
                reports to the Secretary that include, in accordance 
                with regulations of the Secretary (promulgated after 
                consultation with the States), notification regarding 
                when all benefits provided under the policy have been 
                paid and the amount of such benefits paid, when the 
                policy otherwise terminates, and such other information 
                as the Secretary determines may be appropriate to the 
                administration of such partnerships.
                    ``(VI) The State does not impose any requirement 
                affecting the terms or benefits of such a policy unless 
                the State imposes such requirement on long-term care 
                insurance policies without regard to whether the policy 
                is covered under the partnership or is offered in 
                connection with such a partnership.
        In the case of a long-term care insurance policy which is 
        exchanged for another such policy, subclause (I) shall be 
        applied based on the coverage of the first such policy that was 
        exchanged.
            ``(iv) The Secretary--
                    ``(I) as appropriate, shall provide copies of the 
                reports described in clause (iii)(V) to the State 
                involved; and
                    ``(II) shall promote the education of consumers 
                regarding qualified State long-term care insurance 
                partnerships.
            ``(v) The Secretary, in consultation with other appropriate 
        Federal agencies, issuers of long-term care insurance, the 
        National Association of Insurance Commissioners, and State 
        insurance commissioners, shall develop recommendations for 
        Congress to authorize and fund a uniform minimum data set to be 
        reported electronically by all issuers of long-term care 
        insurance policies under qualified State long-term care 
        insurance partnerships to a secure, centralized electronic 
        query and report-generating mechanism that the State, the 
        Secretary, and other Federal agencies can access.''.
    (b) Construction.--Nothing in the amendments made by subsection (a) 
shall be construed as affecting the treatment of long-term care 
insurance policies that will be, are, or were provided under a State 
plan amendment described in section 1917(b)(1)(C)(ii) of the Social 
Security Act that was approved as of May 14, 1993.
    (c) Effective Date.--A State plan amendment that provides for a 
qualified State long-term care insurance partnership under the 
amendments made by subsection (a) may provide that such amendment is 
effective for long-term care insurance policies issued on or after a 
date, specified in the amendment, that is not earlier than the first 
day of the first calendar quarter in which the plan amendment was 
submitted to the Secretary of Health and Human Services.
    (d) Standards for Reciprocal Recognition Among Partnership 
States.--In order to permit portability in long-term care insurance 
policies purchased under State long-term care insurance partnerships, 
the Secretary of Health and Human Services may develop, in consultation 
with the States and the National Association of Insurance 
Commissioners, uniform standards for reciprocal recognition of such 
policies among States with qualified State long-term care insurance 
partnerships.

SEC. 3134. HEALTH OPPORTUNITY ACCOUNTS.

    Title XIX of the Social Security Act, as amended by section 3124, 
is amended--
            (1) by redesignating section 1937 as section 1938; and
            (2) by inserting after section 1936 the following new 
        section:

                     ``health opportunity accounts

    ``Sec. 1937. (a) Authority.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, the Secretary shall establish a demonstration 
        program under which States may provide under their State plans 
        under this title (including such a plan operating under a 
        statewide waiver under section 1115) in accordance with this 
        section for the provision of alternative benefits consistent 
        with subsection (c) for eligible population groups in one or 
        more geographic areas of the State specified by the State. An 
        amendment under the previous sentence is referred to in this 
        section as a `State demonstration program'.
            ``(2) Initial demonstration.--The demonstration program 
        under this section shall begin on January 1, 2006. During the 
        first 5 years of such program, the Secretary shall not approve 
        more than 10 State demonstration programs, with each State 
        demonstration program covering one or more geographic areas 
        specified by the State. After such 5-year period--
                    ``(A) unless the Secretary finds, taking into 
                account cost-effectiveness, quality of care, and other 
                criteria that the Secretary specifies, that a State 
                demonstration program previously implemented has been 
                unsuccessful, such a demonstration program may be 
                extended or made permanent in the State; and
                    ``(B) unless the Secretary finds, taking into 
                account cost-effectiveness, quality of care, and other 
                criteria that the Secretary specifies, that all State 
                demonstration programs previously implemented were 
                unsuccessful, other States may implement State 
                demonstration programs.
            ``(3) Approval.--The Secretary shall not approve a State 
        demonstration program under paragraph (1) unless the program 
        includes the following:
                    ``(A) Creating patient awareness of the high cost 
                of medical care.
                    ``(B) Providing incentives to patients to seek 
                preventive care services.
                    ``(C) Reducing inappropriate use of health care 
                services.
                    ``(D) Enabling patients to take responsibility for 
                health outcomes.
                    ``(E) Providing enrollment counselors and ongoing 
                education activities.
                    ``(F) Providing transactions involving health 
                opportunity accounts to be conducted electronically and 
                without cash.
                    ``(G) Providing access to negotiated provider 
                payment rates consistent with this section.
        Nothing in this section shall be construed as preventing a 
        State demonstration program from providing incentives for 
        patients obtaining appropriate preventive care (as defined for 
        purposes of section 223(c)(2)(C) of the Internal Revenue Code 
        of 1986), such as additional account contributions for an 
        individual demonstrating healthy prevention practices.
            ``(4) No requirement for statewideness.--Nothing in this 
        section or any other provision of law shall be construed to 
        require that a State must provide for the implementation of a 
        State demonstration program on a Statewide basis.
            ``(5) Reports.--The Secretary shall periodically submit to 
        Congress reports regarding the success of State demonstration 
        programs.
    ``(b) Eligible Population Groups.--
            ``(1) In general.--A State demonstration program under this 
        section shall specify the eligible population groups consistent 
        with paragraphs (2) and (3).
            ``(2) Eligibility limitations during initial demonstration 
        period.--During the initial 5 years of the demonstration 
        program under this section, a State demonstration program shall 
        not apply to any of the following individuals:
                    ``(A) Individuals who are 65 years of age or older.
                    ``(B) Individuals who are disabled, regardless of 
                whether or not their eligibility for medical assistance 
                under this title is based on such disability.
                    ``(C) Individuals who are eligible for medical 
                assistance under this title only because they are (or 
                were within the previous 60 days) pregnant.
                    ``(D) Individuals who have been eligible for 
                medical assistance for a continuous period of less than 
                3 months.
            ``(3) Additional limitations.--A State demonstration 
        program shall not apply to any individual within a category of 
        individuals described in section 1936(a)(2)(B).
            ``(4) Limitations.--
                    ``(A) State option.--This subsection shall not be 
                construed as preventing a State from further limiting 
                eligibility.
                    ``(B) On enrollees in medicaid managed care 
                organizations.--Insofar as the State provides for 
                eligibility of individuals who are enrolled in medicaid 
                managed care organizations, such individuals may 
                participate in the State demonstration program only if 
                the State provides assurances satisfactory to the 
                Secretary that the following conditions are met with 
                respect to any such organization:
                            ``(i) In no case may the number of such 
                        individuals enrolled in the organization who 
                        participate in the program exceed 5 percent of 
                        the total number of individuals enrolled in 
                        such organization.
                            ``(ii) The proportion of enrollees in the 
                        organization who so participate is not 
                        significantly disproportionate to the 
                        proportion of such enrollees in other such 
                        organizations who participate.
                            ``(iii) The State has provided for an 
                        appropriate adjustment in the per capita 
                        payments to the organization to account for 
                        such participation, taking into account 
                        differences in the likely use of health 
                        services between enrollees who so participate 
                        and enrollees who do not so participate.
            ``(5) Voluntary participation.--An eligible individual 
        shall be enrolled in a State demonstration program only if the 
        individual voluntarily enrolls. Except in such hardship cases 
        as the Secretary shall specify, such an enrollment shall be 
        effective for a period of 12 months, but may be extended for 
        additional periods of 12 months each with the consent of the 
        individual.
    ``(c) Alternative Benefits.--
            ``(1) In general.--The alternative benefits provided under 
        this section shall consist, consistent with this subsection, of 
        at least--
                    ``(A) coverage for medical expenses in a year for 
                items and services for which benefits are otherwise 
                provided under this title after an annual deductible 
                described in paragraph (2) has been met; and
                    ``(B) contribution into a health opportunity 
                account.
        Nothing in subparagraph (A) shall be construed as preventing a 
        State from providing for coverage of preventive care (referred 
        to in subsection (a)(3)) within the alternative benefits 
        without regard to the annual deductible.
            ``(2) Annual deductible.--The amount of the annual 
        deductible described in paragraph (1)(A) shall be at least 100 
        percent, but no more than 110 percent, of the annualized amount 
        of contributions to the health opportunity account under 
        subsection (d)(2)(A)(i), determined without regard to any 
        limitation described in subsection (d)(2)(C)(i)(II).
            ``(3) Access to negotiated provider payment rates.--
                    ``(A) Fee-for-service enrollees.--In the case of an 
                individual who is participating in a State 
                demonstration program and who is not enrolled with a 
                medicaid managed care organization, the State shall 
                provide that the individual may obtain demonstration 
                program medicaid services from--
                            ``(i) any participating provider under this 
                        title at the same payment rates that would be 
                        applicable to such services if the deductible 
                        described in paragraph (1)(A) was not 
                        applicable; or
                            ``(ii) any provider at payment rates that 
                        do not exceed 125 percent of the payment rate 
                        that would be applicable to such services 
                        furnished by a participating provider under 
                        this title if the deductible described in 
                        paragraph (1)(A) was not applicable.
                    ``(B) Treatment under medicaid managed care 
                plans.--In the case of an individual who is 
                participating in a State demonstration program and is 
                enrolled with a medicaid managed care organization, the 
                State shall enter into an arrangement with the 
                organization under which the individual may obtain 
                demonstration program medicaid services from any 
                provider under such organization at payment rates that 
                do not exceed the payment rate that would be applicable 
                to such services if the deductible described in 
                paragraph (1)(A) was not applicable.
                    ``(C) Computation.--The payment rates described in 
                subparagraphs (A) and (B) shall be computed without 
                regard to any cost sharing that would be otherwise 
                applicable under sections 1916 and 1916A.
                    ``(D) Definitions.--For purposes of this paragraph:
                            ``(i) The term `demonstration program 
                        medicaid services' means, with respect to an 
                        individual participating in a State 
                        demonstration program, services for which the 
                        individual would be provided medical assistance 
                        under this title but for the application of the 
                        deductible described in paragraph (1)(A).
                            ``(ii) The term `participating provider' 
                        means--
                                    ``(I) with respect to an individual 
                                described in subparagraph (A), a health 
                                care provider that has entered into a 
                                participation agreement with the State 
                                for the provision of services to 
                                individuals entitled to benefits under 
                                the State plan; or
                                    ``(II) with respect to an 
                                individual described in subparagraph 
                                (B) who is enrolled in a medicaid 
                                managed care organization, a health 
                                care provider that has entered into an 
                                arrangement for the provision of 
                                services to enrollees of the 
                                organization under this title.
            ``(4) No effect on subsequent benefits.--Except as provided 
        under paragraphs (1) and (2), alternative benefits for an 
        eligible individual shall consist of the benefits otherwise 
        provided to the individual, including cost sharing relating to 
        such benefits.
            ``(5) Overriding cost sharing and comparability 
        requirements for alternative benefits.--The provisions of this 
        title relating to cost sharing for benefits (including sections 
        1916 and 1916A) shall not apply with respect to benefits to 
        which the annual deductible under paragraph (1)(A) applies. The 
        provisions of section 1902(a)(10)(B) (relating to 
        comparability) shall not apply with respect to the provision of 
        alternative benefits (as described in this subsection).
            ``(6) Treatment as medical assistance.--Subject to 
        subparagraphs (D) and (E) of subsection (d)(2), payments for 
        alternative benefits under this section (including 
        contributions into a health opportunity account) shall be 
        treated as medical assistance for purposes of section 1903(a).
            ``(7) Use of tiered deductible and cost sharing.--
                    ``(A) In general.--A State--
                            ``(i) may vary the amount of the annual 
                        deductible applied under paragraph (1)(A) based 
                        on the income of the family involved so long as 
                        it does not favor families with higher income 
                        over those with lower income; and
                            ``(ii) may vary the amount of the maximum 
                        out-of-pocket cost sharing (as defined in 
                        subparagraph (B)) based on the income of the 
                        family involved so long as it does not favor 
                        families with higher income over those with 
                        lower income.
                    ``(B) Maximum out-of-pocket cost sharing.--For 
                purposes of subparagraph (A)(ii), the term `maximum 
                out-of-pocket cost sharing' means, for an individual or 
                family, the amount by which the annual deductible level 
                applied under paragraph (1)(A) to the individual or 
                family exceeds the balance in the health opportunity 
                account for the individual or family.
            ``(8) Contributions by employers.--Nothing in this section 
        shall be construed as preventing an employer from providing 
        health benefits coverage consisting of the coverage described 
        in paragraph (1)(A) to individuals who are provided alternative 
        benefits under this section.
    ``(d) Health Opportunity Account.--
            ``(1) In general.--For purposes of this section, the term 
        `health opportunity account' means an account that meets the 
        requirements of this subsection.
            ``(2) Contributions.--
                    ``(A) In general.--No contribution may be made into 
                a health opportunity account except--
                            ``(i) contributions by the State under this 
                        title; and
                            ``(ii) contributions by other persons and 
                        entities, such as charitable organizations.
                    ``(B) State contribution.--A State shall specify 
                the contribution amount that shall be deposited under 
                subparagraph (A)(i) into a health opportunity account.
                    ``(C) Limitation on annual state contribution 
                provided and permitting imposition of maximum account 
                balance.--
                            ``(i) In general.--A State--
                                    ``(I) may impose limitations on the 
                                maximum contributions that may be 
                                deposited under subparagraph (A)(i) 
                                into a health opportunity account in a 
                                year;
                                    ``(II) may limit contributions into 
                                such an account once the balance in the 
                                account reaches a level specified by 
                                the State; and
                                    ``(III) subject to clauses (ii) and 
                                (iii) and subparagraph (D)(i), may not 
                                provide contributions described in 
                                subparagraph (A)(i) to a health 
                                opportunity account on behalf of an 
                                individual or family to the extent the 
                                amount of such contributions (including 
                                both State and Federal shares) exceeds, 
                                on an annual basis, $2,500 for each 
                                individual (or family member) who is an 
                                adult and $1,000 for each individual 
                                (or family member) who is a child.
                            ``(ii) Indexing of dollar limitations.--For 
                        each year after 2006, the dollar amounts 
                        specified in clause (i)(III) shall be annually 
                        increased by the Secretary by a percentage that 
                        reflects the annual percentage increase in the 
                        medical care component of the consumer price 
                        index for all urban consumers.
                            ``(iii) Budget neutral adjustment.--A State 
                        may provide for dollar limitations in excess of 
                        those specified in clause (i)(III) (as 
                        increased under clause (ii)) for specified 
                        individuals if the State provides assurances 
                        satisfactory to the Secretary that 
                        contributions otherwise made to other 
                        individuals will be reduced in a manner so as 
                        to provide for aggregate contributions that do 
                        not exceed the aggregate contributions that 
                        would otherwise be permitted under this 
                        subparagraph.
                    ``(D) Limitations on federal matching.--
                            ``(i) State contribution.--A State may 
                        contribute under subparagraph (A)(i) amounts to 
                        a health opportunity account in excess of the 
                        limitations provided under subparagraph 
                        (C)(i)(III), but no Federal financial 
                        participation shall be provided under section 
                        1903(a) with respect to contributions in excess 
                        of such limitations.
                            ``(ii) No ffp for private contributions.--
                        No Federal financial participation shall be 
                        provided under section 1903(a) with respect to 
                        any contributions described in subparagraph 
                        (A)(ii) to a health opportunity account.
                    ``(E) Application of different matching rates.--The 
                Secretary shall provide a method under which, for 
                expenditures made from a health opportunity account for 
                medical care for which the Federal matching rate under 
                section 1903(a) exceeds the Federal medical assistance 
                percentage, a State may obtain payment under such 
                section at such higher matching rate for such 
                expenditures.
            ``(3) Use.--
                    ``(A) General uses.--
                            ``(i) In general.--Subject to the 
                        succeeding provisions of this paragraph, 
                        amounts in a health opportunity account may be 
                        used for payment of such health care 
                        expenditures as the State specifies.
                            ``(ii) General limitation.--In no case 
                        shall such account be used for payment for 
                        health care expenditures that are not payment 
                        of medical care (as defined by section 213(d) 
                        of the Internal Revenue Code of 1986).
                            ``(iii) State restrictions.--In applying 
                        clause (i), a State may restrict payment for--
                                    ``(I) providers of items and 
                                services to providers that are licensed 
                                or otherwise authorized under State law 
                                to provide the item or service and may 
                                deny payment for such a provider on the 
                                basis that the provider has been found, 
                                whether with respect to this title or 
                                any other health benefit program, to 
                                have failed to meet quality standards 
                                or to have committed one or more acts 
                                of fraud or abuse; and
                                    ``(II) items and services insofar 
                                as the State finds they are not 
                                medically appropriate or necessary.
                            ``(iv) Electronic withdrawals.--The State 
                        demonstration program shall provide for a 
                        method whereby withdrawals may be made from the 
                        account for such purposes using an electronic 
                        system and shall not permit withdrawals from 
                        the account in cash.
                    ``(B) Maintenance of health opportunity account 
                after becoming ineligible for public benefit.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of law, if an account holder of 
                        a health opportunity account becomes ineligible 
                        for benefits under this title because of an 
                        increase in income or assets--
                                    ``(I) no additional contribution 
                                shall be made into the account under 
                                paragraph (2)(A)(i);
                                    ``(II) subject to clause (iii), the 
                                balance in the account shall be reduced 
                                by 25 percent; and
                                    ``(III) subject to the succeeding 
                                provisions of this subparagraph, the 
                                account shall remain available to the 
                                account holder for withdrawals under 
                                the same terms and conditions as if the 
                                account holder remained eligible for 
                                such benefits.
                            ``(ii) Special rules.--Withdrawals under 
                        this subparagraph from an account--
                                    ``(I) shall be available for the 
                                purchase of health insurance coverage; 
                                and
                                    ``(II) may, subject to clause (iv), 
                                be made available (at the option of the 
                                State) for such additional expenditures 
                                (such as job training and tuition 
                                expenses) specified by the State (and 
                                approved by the Secretary) as the State 
                                may specify.
                            ``(iii) Exception from 25 percent savings 
                        to government for private contributions.--
                        Clause (i)(II) shall not apply to the portion 
                        of the account that is attributable to 
                        contributions described in paragraph 
                        (2)(A)(ii). For purposes of accounting for such 
                        contributions, withdrawals from a health 
                        opportunity account shall first be attributed 
                        to contributions described in paragraph 
                        (2)(A)(i).
                            ``(iv) Condition for non-health 
                        withdrawals.--No withdrawal may be made from an 
                        account under clause (ii)(II) unless the 
                        accountholder has participated in the program 
                        under this section for at least 1 year.
                            ``(v) No requirement for continuation of 
                        coverage.--An account holder of a health 
                        opportunity account, after becoming ineligible 
                        for medical assistance under this title, is not 
                        required to purchase high-deductible or other 
                        insurance as a condition of maintaining or 
                        using the account.
            ``(4) Administration.--A State may coordinate 
        administration of health opportunity accounts through the use 
        of a third party administrator and reasonable expenditures for 
        the use of such administrator shall be reimbursable to the 
        State in the same manner as other administrative expenditures 
        under section 1903(a)(7).
            ``(5) Treatment.--Amounts in, or contributed to, a health 
        opportunity account shall not be counted as income or assets 
        for purposes of determining eligibility for benefits under this 
        title.
            ``(6) Unauthorized withdrawals.--A State may establish 
        procedures--
                    ``(A) to penalize or remove an individual from the 
                health opportunity account based on nonqualified 
                withdrawals by the individual from such an account; and
                    ``(B) to recoup costs that derive from such 
                nonqualified withdrawals.''.

                      CHAPTER 5--OTHER PROVISIONS

SEC. 3141. INCREASE IN MEDICAID PAYMENTS TO INSULAR AREAS.

    Section 1108(g) of the Social Security Act (42 U.S.C. 1308(g)) is 
amended--
            (1) in paragraph (2), by inserting ``and subject to 
        paragraph (3)'' after ``subsection (f)''; and
            (2) by adding at the end the following new paragraph:
            ``(3) Fiscal years 2006 and 2007 for certain insular 
        areas.--The amounts otherwise determined under this subsection 
        for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana 
        Islands, and American Samoa for fiscal year 2006 and fiscal 
        year 2007 shall be increased by the following amounts:
                    ``(A) For Puerto Rico, $12,000,000 for fiscal year 
                2006 and $12,000,000 for fiscal year 2007.
                    ``(B) For the Virgin Islands, $2,500,000 for fiscal 
                year 2006 and $5,000,000 for fiscal year 2007.
                    ``(C) For Guam, $2,500,000 for fiscal year 2006 and 
                $5,000,000 for fiscal year 2007.
                    ``(D) For the Northern Mariana Islands, $1,000,000 
                for fiscal year 2006 and $2,000,000 for fiscal year 
                2007.
                    ``(E) For American Samoa, $2,000,000 for fiscal 
                year 2006 and $4,000,000 for fiscal year 2007.
        Such amounts shall not be taken into account in applying 
        paragraph (2) for fiscal year 2007 but shall be taken into 
        account in applying such paragraph for fiscal year 2008 and 
        subsequent fiscal years.''.

SEC. 3142. MANAGED CARE ORGANIZATION PROVIDER TAX REFORM.

    (a) In General.--Section 1903(w)(7)(A)(viii) of the Social Security 
Act (42 U.S.C. 1396b(w)(7)(A)(viii)) is amended to read as follows:
                    ``(viii) Services of managed care organizations 
                (including health maintenance organizations, preferred 
                provider organizations, and such other similar 
                organizations as the Secretary may specify by 
                regulation).''.
    (b) Effective Date.--
            (1) In general.--Subject to paragraph (2), the amendment 
        made by subsection (a) shall be effective as of the date of the 
        enactment of this Act.
            (2) Grandfather.--
                    (A) In general.--Subject to subparagraph (B), in 
                the case of a State that has had approved as of the 
                date of the enactment of this Act a provider tax on 
                services described in section 1903(w)(7)(A)(viii) of 
                the Social Security Act, as amended by subsection (a), 
                such amendment shall be effective as of October 1, 
                2008.
                    (B) Transition rule for fiscal year 2009.--In the 
                case of a State described in subparagraph (A), the 
                amount of any reduction in payment under subsection 
                (a)(1) of section 1903 of the Social Security Act (42 
                U.S.C. 1396b) that would otherwise be required under 
                subsection (w) of such section for calendar quarters in 
                fiscal year 2009 because of the amendment made by 
                section (a) shall be reduced by one-half.

SEC. 3143. MEDICAID TRANSFORMATION GRANTS.

    (a) In General.--Section 1903 of the Social Security Act (42 U.S.C. 
1396b), as amended by section 3123, is amended by adding at the end the 
following new subsection:
    ``(y) Medicaid Transformation Payments.--
            ``(1) In general.--In addition to the payments provided 
        under subsection (a), subject to paragraph (4), the Secretary 
        shall provide for payments to States for the adoption of 
        innovative methods to improve the effectiveness and efficiency 
        in providing medical assistance under this title.
            ``(2) Permissible uses of funds.--The following are 
        examples of innovative methods for which funds provided under 
        this subsection may be used:
                    ``(A) Methods for reducing patient error rates 
                through the implementation and use of electronic health 
                records, electronic clinical decision support tools, or 
                e-prescribing programs.
                    ``(B) Methods for improving rates of collection 
                from estates of amounts owed under this title.
                    ``(C) Methods for reducing waste, fraud, and abuse 
                under the program under this title, such as reducing 
                improper payment rates as measured by annual payment 
                error rate measurement (PERM) project rates.
                    ``(D) Implementation of a medication risk 
                management program as part of a drug use review program 
                under section 1927(g).
                    ``(E) Methods in reducing, in clinically 
                appropriate ways, expenditures under this title for 
                covered outpatient drugs, particularly in the 
                categories of greatest drug utilization, by increasing 
                the utilization of generic drugs through the use of 
                education programs and other incentives to promote 
                greater use of generic drugs.
            ``(3) Application; terms and conditions.--
                    ``(A) In general.--No payments shall be made to a 
                State under this subsection unless the State applies to 
                the Secretary for such payments in a form, manner, and 
                time specified by the Secretary.
                    ``(B) Terms and conditions.--Such payments are made 
                under such terms and conditions consistent with this 
                subsection as the Secretary prescribes.
                    ``(C) Annual report.--Payment to a State under this 
                subsection is conditioned on the State submitting to 
                the Secretary an annual report on the programs 
                supported by such payment. Such report shall include 
                information on--
                    ``(A) the specific uses of such payment;
                    ``(B) an assessment of quality improvements and 
                clinical outcomes under such programs; and
                    ``(C) estimates of cost savings resulting from such 
                programs.
            ``(4) Funding.--
                    ``(A) Limitation on funds.--The total amount of 
                payments under this subsection shall be equal to, and 
                shall not exceed--
                            ``(i) $50,000,000 for fiscal year 2007; and
                            ``(ii) $50,000,000 for fiscal year 2008.
                This subsection constitutes budget authority in advance 
                of appropriations Acts and represents the obligation of 
                the Secretary to provide for the payment of amounts 
                provided under this subsection.
                    ``(B) Allocation of funds.--The Secretary shall 
                specify a method for allocating the funds made 
                available under this subsection among States. Such 
                method shall provide preference for States that design 
                programs that target health providers that treat 
                significant numbers of medicaid beneficiaries. Such 
                method shall provide that not less than 25 percent of 
                such funds shall be allocated among States the 
                population of which (as determined according to data 
                collected by the United States Census Bureau) as of 
                July 1, 2004, was more than 105 percent of the 
                population of the respective State (as so determined) 
                as of April 1, 2000.
                    ``(C) Form and manner of payment.--Payment to a 
                State under this subsection shall be made in the same 
                manner as other payments under section 1903(a). There 
                is no requirement for State matching funds to receive 
                payments under this subsection.
            ``(5) Medication risk management program.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `medication risk management program' means a 
                program for targeted beneficiaries that ensures that 
                covered outpatient drugs are appropriately used to 
                optimize therapeutic outcomes through improved 
                medication use and to reduce the risk of adverse 
                events.
                    ``(B) Elements.--Such program may include the 
                following elements:
                            ``(i) The use of established principles and 
                        standards for drug utilization review and best 
                        practices to analyze prescription drug claims 
                        of targeted beneficiaries and identify outlier 
                        physicians.
                            ``(ii) On an ongoing basis provide outlier 
                        physicians--
                                    ``(I) a comprehensive pharmacy 
                                claims history for each targeted 
                                beneficiary under their care;
                                    ``(II) information regarding the 
                                frequency and cost of relapses and 
                                hospitalizations of targeted 
                                beneficiaries under the physician's 
                                care; and
                                    ``(III) applicable best practice 
                                guidelines and empirical references.
                            ``(iii) Monitor outlier physician's 
                        prescribing, such as failure to refill, dosage 
                        strengths, and provide incentives and 
                        information to encourage the adoption of best 
                        clinical practices.
                    ``(C) Targeted beneficiaries.--For purposes of this 
                paragraph, the term `targeted beneficiaries' means 
                medicaid eligible beneficiaries who are identified as 
                having high prescription drug costs and medical costs, 
                such as individuals with behavioral disorders or 
                multiple chronic diseases who are taking multiple 
                medications.''.

SEC. 3144. ENHANCING THIRD PARTY IDENTIFICATION AND PAYMENT.

    (a) Clarification of Third Parties Legally Responsible for Payment 
of a Claim for a Health Care Item or Service.--Section 1902(a)(25) of 
the Social Security Act (42 U.S.C. 1396a(a)(25)) is amended--
            (1) in subparagraph (A), in the matter preceding clause 
        (i)--
                    (A) by inserting ``, including self-insured plans'' 
                after ``health insurers''; and
                    (B) by striking ``and health maintenance 
                organizations'' and inserting ``health maintenance 
                organizations, pharmacy benefit managers, or other 
                parties that are, by statute, contract, or agreement, 
                legally responsible for payment of a claim for a health 
                care item or service''; and
            (2) in subparagraph (G)--
                    (A) by inserting ``a self-insured plan,'' after 
                ``1974,''; and
                    (B) by striking ``and a health maintenance 
                organization'' and inserting ``a health maintenance 
                organization, a pharmacy benefit manager, or other 
                party that is, by statute, contract, or agreement, 
                legally responsible for payment of a claim for a health 
                care item or service''.
    (b) Requirement for Third Parties to Provide the State With 
Coverage Eligibility and Claims Data.--Section 1902(a)(25) of such Act 
(42 U.S.C. 1396a(a)(25)) is amended--
            (1) in subparagraph (G), by striking ``and'' at the end;
            (2) in subparagraph (H), by adding ``and'' after the 
        semicolon at the end; and
            (3) by inserting after subparagraph (H), the following:
                    ``(I) that the State shall provide assurances 
                satisfactory to the Secretary that the State has in 
                effect laws requiring health insurers, including self-
                insured plans, group health plans (as defined in 
                section 607(1) of the Employee Retirement Income 
                Security Act of 1974), service benefit plans, health 
                maintenance organizations, pharmacy benefit managers, 
                or other parties that are, by statute, contract, or 
                agreement, legally responsible for payment of a claim 
                for a health care item or service, as a condition of 
                doing business in the State, to--
                            ``(i) provide eligibility and claims 
                        payment data with respect to an individual who 
                        is eligible for, or is provided, medical 
                        assistance under the State plan, upon the 
                        request of the State;
                            ``(ii) accept the subrogation of the State 
                        to any right of an individual or other entity 
                        to payment from the party for an item or 
                        service for which payment has been made under 
                        the State plan;
                            ``(iii) respond to any inquiry by the State 
                        regarding a claim for payment for any health 
                        care item or service submitted not later than 3 
                        years after the date of the provision of such 
                        health care item or service; and
                            ``(iv) agree not to deny a claim submitted 
                        by the State solely on the basis of the date of 
                        submission of the claim;''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section take effect on January 1, 2006.
            (2) Delayed effective date.--In the case of a State plan 
        under title XIX of the Social Security Act which the Secretary 
        determines requires State legislation in order for the plan to 
        meet the additional requirements imposed by the amendments made 
        by this section, the State plan shall not be regarded as 
        failing to comply with the requirements of such Act solely on 
        the basis of its failure to meet these additional requirements 
        before the first day of the first calendar quarter beginning 
        after the close of the first regular session of the State 
        legislature that begins after the date of enactment of this 
        Act. For purposes of the previous sentence, in the case of a 
        State that has a 2-year legislative session, each year of the 
        session shall be considered to be a separate regular session of 
        the State legislature.

SEC. 3145. IMPROVED ENFORCEMENT OF DOCUMENTATION REQUIREMENTS.

    (a) In General.--Section 1903 of the Social Security Act (42 U.S.C. 
1396b) is amended--
            (1) in subsection (i), as amended by section 104 of Public 
        Law 109-91--
                    (A) by striking the period at the end of paragraph 
                (21) and inserting ``; or''; and
                    (B) by inserting after paragraph (21) the following 
                new paragraph:
            ``(22) with respect to amounts expended for medical 
        assistance for an individual who declares under section 
        1137(d)(1)(A) to be a citizen or national of the United States 
        for purposes of establishing eligibility for benefits under 
        this title, unless the requirement of subsection (z) is met.''; 
        and
            (2) by adding at the end, as amended by sections 3123 and 
        3143, the following new subsection:
    ``(z)(1) For purposes of subsection (i)(22), the requirement of 
this subsection is, with respect to an individual declaring to be a 
citizen or national of the United States, that, subject to paragraph 
(2), there is presented satisfactory documentary evidence of 
citizenship or nationality (as defined in paragraph (3)) of the 
individual.
    ``(2) The requirement of paragraph (1) shall not apply to an alien 
who is eligible for medical assistance under this title--
            ``(A) and is entitled to or enrolled for benefits under any 
        part of title XVIII;
            ``(B) on the basis of receiving supplemental security 
        income benefits under title XVI; or
            ``(C) on such other basis as the Secretary may specify 
        under which satisfactory documentary evidence of citizenship or 
        nationality had been previously presented.
    ``(3)(A) For purposes of this subsection, the term `satisfactory 
documentary evidence of citizenship or nationality' means--
            ``(i) any document described in subparagraph (B); or
            ``(ii) a document described in subparagraph (C) and a 
        document described in subparagraph (D).
    ``(B) The following are documents described in this subparagraph:
            ``(i) A United State passport.
            ``(ii) Form N-550 or N-570 (Certificate of Naturalization).
            ``(iii) Form N-560 or N-561 (Certificate of United States 
        Citizenship).
            ``(iv) Such other document as the Secretary may specify, by 
        regulation, that provides proof of United States citizenship or 
        nationality and that provides a reliable means of documentation 
        of personal identity.
    ``(C) The following are documents described in this subparagraph:
            ``(i) A certificate of birth in the United States.
            ``(ii) Form FS-545 or Form DS-1350 (Certification of Birth 
        Abroad).
            ``(iii) Form I-97 (United States Citizen Identification 
        Card).
            ``(iv) Form FS-240 (Report of Birth Abroad of a Citizen of 
        the United States).
            ``(v) Such other document (not described in subparagraph 
        (B)(iv)) as the Secretary may specify that provides proof of 
        United States citizenship or nationality.
    ``(D) The following are documents described in this subparagraph:
            ``(i) Any identity document described in section 
        274A(b)(1)(D) of the Immigration and Nationality Act.
            ``(ii) Any other documentation of personal identity of such 
        other type as the Secretary finds, by regulation, provides a 
        reliable means of identification.
    ``(E) A reference in this paragraph to a form includes a reference 
to any successor form.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to determinations of initial eligibility for medical assistance 
made on or after July 1, 2006, and to redeterminations of eligibility 
made on or after such date in the case of individuals for whom the 
requirement of section 1903(z) of the Social Security Act, as added by 
such amendments, was not previously met.

SEC. 3146. REFORMS OF TARGETED CASE MANAGEMENT.

    (a) In General.--Section 1915(g) of the Social Security Act (42 
U.S.C. 1396n(g)) is amended by striking paragraph (2) and inserting the 
following:
    ``(2) For purposes of this subsection:
            ``(A)(i) The term `case management services' means services 
        which will assist individuals eligible under the plan in 
        gaining access to needed medical, social, educational, and 
        other services.
            ``(ii) Such term includes the following:
                    ``(I) Assessment of an eligible individual to 
                determine service needs, including activities that 
                focus on needs identification, to determine the need 
                for any medical, educational, social, or other 
                services. Such assessment activities include the 
                following:
                            ``(aa) Taking client history.
                            ``(bb) Identifying the needs of the 
                        individual, and completing related 
                        documentation.
                            ``(cc) Gathering information from other 
                        sources such as family members, medical 
                        providers, social workers, and educators, if 
                        necessary, to form a complete assessment of the 
                        eligible individual.
                    ``(II) Development of a specific care plan based on 
                the information collected through an assessment, that 
                specifies the goals and actions to address the medical, 
                social, educational, and other services needed by the 
                eligible individual, including activities such as 
                ensuring the active participation of the eligible 
                individual and working with the individual (or the 
                individual's authorized health care decision maker) and 
                others to develop such goals and identify a course of 
                action to respond to the assessed needs of the eligible 
                individual.
                    ``(III) Referral and related activities to help an 
                individual obtain needed services, including activities 
                that help link eligible individuals with medical, 
                social, educational providers or other programs and 
                services that are capable of providing needed services, 
                such as making referrals to providers for needed 
                services and scheduling appointments for the 
                individual.
                    ``(IV) Monitoring and follow-up activities, 
                including activities and contacts that are necessary to 
                ensure the care plan is effectively implemented and 
                adequately addressing the needs of the eligible 
                individual, and which may be with the individual, 
                family members, providers, or other entities and 
                conducted as frequently as necessary to help determine 
                such matters as--
                            ``(aa) whether services are being furnished 
                        in accordance with an individual's care plan;
                            ``(bb) whether the services in the care 
                        plan are adequate; and
                            ``(cc) whether there are changes in the 
                        needs or status of the eligible individual, and 
                        if so, making necessary adjustments in the care 
                        plan and service arrangements with providers.
            ``(iii) Such term does not include the direct delivery of 
        an underlying medical, educational, social, or other service to 
        which an eligible individual has been referred, including, with 
        respect to the direct delivery of foster care services, 
        services such as (but not limited to) the following:
                    ``(I) Research gathering and completion of 
                documentation required by the foster care program.
                    ``(II) Assessing adoption placements.
                    ``(III) Recruiting or interviewing potential foster 
                care parents.
                    ``(IV) Serving legal papers.
                    ``(V) Home investigations.
                    ``(VI) Providing transportation.
                    ``(VII) Administering foster care subsidies.
                    ``(VIII) Making placement arrangements.
            ``(B) The term `targeted case management services' means 
        case management services that are furnished without regard to 
        the requirements of section 1902(a)(1) and section 
        1902(a)(10)(B) to specific classes of individuals or to 
        individuals who reside in specified areas.
    ``(3) With respect to contacts with individuals who are not 
eligible for medical assistance under the State plan or, in the case of 
targeted case management services, individuals who are eligible for 
such assistance but are not part of the target population specified in 
the State plan, such contacts--
            ``(A) are considered an allowable case management activity, 
        when the purpose of the contact is directly related to the 
        management of the eligible individual's care; and
            ``(B) are not considered an allowable case management 
        activity if such contacts relate directly to the identification 
        and management of the noneligible or nontargeted individual's 
        needs and care.
    ``(4)(A) In accordance with section 1902(a)(25), Federal financial 
participation only is available under this title for case management 
services or targeted case management services if there are no other 
third parties liable to pay for such services, including as 
reimbursement under a medical, social, educational, or other program.
    ``(B) A State shall allocate the costs of any part of such services 
which are reimbursable under another federally funded program in 
accordance with OMB Circular A-87 (or any related or successor guidance 
or regulations regarding allocation of costs among federally funded 
programs) under an approved cost allocation program.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2006.

SEC. 3147. EMERGENCY SERVICES FURNISHED BY NON-CONTRACT PROVIDERS FOR 
              MEDICAID MANAGED CARE ENROLLEES.

    (a) In General.--Section 1932(b)(2) of the Social Security Act (42 
U.S.C. 1396u-2(b)(2)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Emergency services furnished by non-contract 
                providers.--Any provider of emergency services that 
                does not have in effect a contract with a medicaid 
                managed care entity that establishes payment amounts 
                for services furnished to a beneficiary enrolled in the 
                entity's medicaid managed care plan must accept as 
                payment in full the amounts (less any payments for 
                indirect costs of medical education and direct costs of 
                graduate medical education) that it could collect if 
                the beneficiary received medical assistance under this 
                title other than through enrollment in such an 
                entity.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2007.

SEC. 3148. ADJUSTMENT IN COMPUTATION OF MEDICAID FMAP TO DISREGARD AN 
              EXTRAORDINARY EMPLOYER PENSION CONTRIBUTION.

    (a) In General.--Only for purposes of computing the Federal medical 
assistance percentage under section 1905(b) of the Social Security Act 
(42 U.S.C. 1396d(b)) for a State for a fiscal year (beginning with 
fiscal year 2006), any significantly disproportionate employer pension 
contribution described in subsection (b) shall be disregarded in 
computing the per capita income of such State, but shall not be 
disregarded in computing the per capita income for the continental 
United States (and Alaska) and Hawaii.
    (b) Significantly Disproportionate Employer Pension Contribution.--
For purposes of subsection (a), a significantly disproportionate 
employer pension contribution described in this subsection with respect 
to a State for a fiscal year is an employer contribution towards 
pensions that is allocated to such State for a period if the aggregate 
amount so allocated exceeds 50 percent of the total increase in 
personal income in that State for the period involved.

                 Subtitle B--Katrina Health Care Relief

SEC. 3201. TARGETED MEDICAID RELIEF FOR STATES AFFECTED BY HURRICANE 
              KATRINA.

    (a) 100 Percent Federal Matching Payments for Medical Assistance 
Provided in Katrina Impacted Areas.--
            (1) In general.--Notwithstanding section 1905(b) of the 
        Social Security Act (42 U.S.C. 1396d(b)), for items and 
        services furnished during the period that begins on August 28, 
        2005, and ends on May 15, 2006, the Federal matching rate for 
        providing medical assistance for such items and services under 
        a State Medicaid plan to any individual residing in a Katrina 
        impacted parish or county (as defined in subsection (c)(1)) or 
        to a Katrina Survivor (as defined in subsection (b)), and for 
        costs directly attributable to all administrative activities 
        that relate to the provision of such medical assistance, shall 
        be 100 percent.
            (2) Application to child health assistance.--
        Notwithstanding section 2105(b) of the Social Security Act (42 
        U.S.C. 1397ee(b)), for items and services furnished during the 
        period described in paragraph (1), the Federal matching rate 
        for providing child health assistance for such items and 
        services under a State child health plan under title XXI of 
        such Act in a Katrina impacted parish or county or to a Katrina 
        Survivor, and for costs directly attributable to all 
        administrative activities that relate to the provision of such 
        child health assistance, shall be 100 percent.
    (b) Katrina Survivor.--For purposes of subsection (a), the term 
``Katrina Survivor'' means an individual who, on any day during the 
week preceding August 28, 2005, had a primary residence in a major 
disaster parish or county (as defined in subsection (c)).
    (c) Definitions.--For purposes of this section:
            (1) Katrina impacted parish or county.--The term ``Katrina 
        impacted parish or county'' means any parish in the State of 
        Louisiana, any county in the State of Mississippi, and any 
        major disaster parish or county in the State of Alabama.
            (2) Major disaster parish or county.--A major disaster 
        parish or county is a parish of the State of Louisiana or a 
        county of the State of Mississippi or Alabama for which a major 
        disaster has been declared in accordance with section 401 of 
        the Robert T. Stafford Disaster Relief and Emergency Assistance 
        Act (42 U.S.C. 5170) as a result of Hurricane Katrina and which 
        the President has determined, as of September 14, 2005, 
        warrants individual assistance from the Federal Government 
        under such Act.

SEC. 3202. STATE HIGH RISK HEALTH INSURANCE POOL FUNDING.

    There are hereby authorized and appropriated $90,000,000 for fiscal 
year 2006 for grants under subsection (b)(1) of section 2745 of the 
Public Health Service Act (42 U.S.C. 300gg-45). The amount so 
appropriated shall be treated as if it had been appropriated under 
subsection (c)(2) of such section.

SEC. 3203. RECOMPUTATION OF HPSA, MUA, AND MUP DESIGNATIONS WITHIN 
              HURRICANE KATRINA AFFECTED AREAS.

    (a) In General.--For purposes of the Public Health Service Act (42 
U.S.C. 201 et seq.), the Secretary of Health and Human Services shall 
conduct a review of all Hurricane Katrina disaster areas and, as 
appropriate taking into account the lack of availability of health care 
providers and services due to Hurricane Katrina--
            (1) shall designate such areas as health professional 
        shortage areas or medically underserved areas; and
            (2) shall designate one of more populations of each such 
        area as a medically underserved population.
    (b) Hurricane Katrina Disaster Area Defined.--For purposes of this 
section, the term ``Hurricane Katrina disaster area'' means an area for 
which a major disaster has been declared in accordance with section 401 
of the Robert T. Stafford Disaster Relief and Emergency Assistance Act 
(42 U.S.C. 5170) as a result of Hurricane Katrina and which the 
President has determined, before September 14, 2005, warrants 
individual and public assistance from the Federal Government under such 
Act.

SEC. 3204. WAIVER OF CERTAIN REQUIREMENTS APPLICABLE TO THE PROVISION 
              OF HEALTH CARE IN AREAS IMPACTED BY HURRICANE KATRINA.

    (a) Eligible Area.--
            (1) Definition.--In this section, the term ``eligible 
        area'' means an area identified by the Secretary of Health and 
        Human Services pursuant to paragraph (2).
            (2) Identification.--Not later than 30 days after the date 
        of the enactment of this Act, the Secretary of Health and Human 
        Services shall identify areas that--
                    (A) have been directly impacted by Hurricane 
                Katrina; or
                    (B) are located in a State which has absorbed a 
                significant number of Hurricane Katrina evacuees.
    (b) Health Centers.--For the purpose of determining whether an 
entity located in an eligible area qualifies as a health center under 
section 330 of the Public Health Service Act (42 U.S.C. 254b):
            (1) Board composition.--
                    (A) Waiver.--The Secretary of Health and Human 
                Services shall waive any requirement that a majority of 
                the governing board of the entity be consumers of the 
                entity's health care services.
                    (B) Rule of construction.--This paragraph shall not 
                be construed as requiring the Secretary of Health and 
                Human Services to waive a requirement that the 
                governing board of the entity include representation of 
                the consumers of the entity's health care services.
            (2) Medically underserved population.--
                    (A) Determination.--At the request of the entity, 
                the Secretary of Health and Human Services shall 
                determine whether, taking into consideration any change 
                in population associated with Hurricane Katrina, the 
                entity serves a medically underserved population (as 
                that term is defined in section 330(b)(3) of the Public 
                Health Service Act (42 U.S.C. 254b(b)(3))).
                    (B) Deadline.--The Secretary of Health and Human 
                Services shall make a determination under subparagraph 
                (A) not later than 60 days after the date on which the 
                Secretary receives the request for the determination.
                    (C) Restriction.--The Secretary of Health and Human 
                Services shall not make any determination under this 
                paragraph on whether a population has ceased to qualify 
                as a medically underserved population under section 330 
                of the Public Health Service Act (42 U.S.C. 254b).
            (3) Required primary health services.--The Secretary of 
        Health and Human Services shall waive any requirement for the 
        entity to provide primary health services described in clause 
        (iii), (iv), or (v) of section 330(b)(1) of the Public Health 
        Service Act (42 U.S.C. 254b(b)(1)).
    (c) National Health Service Corps.--Notwithstanding the provisions 
of subpart II of part D of title III of the Public Health Service Act 
(42 U.S.C. 254d et seq.) requiring that members of the National Health 
Service Corps be assigned to health professional shortage areas, the 
Secretary of Health and Human Services may assign members of the 
National Health Service Corps to any eligible area.
    (d) Termination of Authority.--The authority vested by this section 
in the Secretary of Health and Human Services and the Secretary of 
Homeland Security shall terminate on the date that is 2 years after 
enactment of this Act. The Secretary of Health and Human Services may 
not grant any waiver under subsection (b)(1) or (b)(3) and may not make 
any assignment of personnel under subsection (c), and the Secretary of 
Homeland Security may not allow any agreement under subsection (d), for 
a period extending beyond such date.

SEC. 3205. FMAP HOLD HARMLESS FOR KATRINA IMPACT.

    Notwithstanding any other provision of law, for purposes of titles 
XIX and XXI of the Social Security Act, the Secretary of Health and 
Human Services in computing the Federal medical assistance percentage 
under section 1905(b) of such (42 U.S.C. 1396d(b)) for any year after 
2006 for a State that the Secretary determines has a significant number 
of evacuees who were evacuated to, and live in, the State as a result 
of Hurricane Katrina as of October 1, 2005, the Secretary shall 
disregard such evacuees (and income attributable to such evacuees).

               Subtitle C--Katrina and Rita Energy Relief

SEC. 3301. HURRICANES KATRINA AND RITA ENERGY RELIEF.

    (a) Findings.--The Congress finds the following:
            (1) Hurricanes Katrina and Rita severely disrupted crude 
        oil and natural gas production in the Gulf of Mexico. The 
        Energy Information Administration estimates that as a result of 
        these two hurricanes, the amount of shut in crude oil 
        production nearly doubled to almost 1,600,000 barrels per day, 
        and the amount of natural gas production shut in also doubled 
        to about 8,000,000,000 cubic feet per day. The hurricanes also 
        initially shut down most of the crude oil refinery capacity in 
        the Gulf of Mexico region. These disruptions led to 
        significantly higher prices for crude oil, refined oil 
        products, and natural gas.
            (2) These production and supply disruptions are expected to 
        lead to significantly higher heating costs for consumers this 
        winter. The Energy Information Administration projects an 
        increase in residential natural gas heating expenditures of 32 
        percent to 61 percent over last winter, with the Midwest seeing 
        the largest increase. Winter heating oil expenditures are 
        projected to increase by 30 percent to 41 percent over last 
        winter, again with the Midwest seeing the largest increase. 
        Propane expenditures for home heating are projected to increase 
        20 percent to 36 percent over last winter, with the Midwest 
        seeing the largest projected increase. Expenditures for home 
        heating using electricity are expected to increase by 2 percent 
        to 9 percent over last winter, with the South seeing the 
        largest increase. Overall, average home heating expenditures 
        this winter are projected to increase about 33 percent, 
        assuming a normal winter. These significant increases in home 
        heating costs this winter will particularly harm low-income 
        consumers. The Low-Income Home Energy Assistance Program is 
        designed to assist these low income consumers in this 
        situation. Accordingly, Congress seeks a one-time only 
        supplement to the Low-Income Home Energy Assistance Program 
        fund to assist low income consumers with the additional home 
        heating expenditures that they will face this winter as a 
        result of Hurricanes Katrina and Rita.
    (b) Relief.--In addition to amounts otherwise made available, there 
shall be directly available to the Secretary of Health and Human 
Services for a 1-time only obligation and expenditure $1,000,000,000 
for fiscal year 2006 for allocation under section 2604(a) through (d) 
of the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8623(a) 
through (d)), for the sole purpose of providing assistance to offset 
the anticipated higher energy costs caused by Hurricane Katrina and 
Hurricane Rita.
    (c) Sunset.--The provisions of this section shall terminate, be 
null and void, and have no force and effect whatsoever after September 
30, 2006. No monies provided for under this section shall be available 
after such date.

               Subtitle D--Digital Television Transition

SEC. 3401. SHORT TITLE.

    This subtitle may be cited as the ``Digital Television Transition 
Act of 2005''.

SEC. 3402. FINDINGS.

    The Congress finds the following:
            (1) A loophole in current law is stalling the digital 
        television (DTV) transition and preventing the return of 
        spectrum for critical public safety and wireless broadband 
        uses.
                    (A) In 1996, to facilitate the DTV transition, 
                Congress gave each full-power television broadcaster an 
                extra channel of spectrum to broadcast in digital 
                format while continuing to broadcast in analog format 
                on its original channel. Each broadcaster was supposed 
                to eventually return either the original or additional 
                channel and broadcast exclusively in digital format on 
                the remaining channel.
                    (B) In 1997, Congress earmarked for public safety 
                use some of the spectrum the broadcasters are supposed 
                to return. Congress designated the rest of the spectrum 
                to be auctioned for advanced commercial applications, 
                such as wireless broadband services. Congress set 
                December 31, 2006, as the deadline for broadcasters to 
                return the spectrum for public safety and wireless use.
                    (C) A loophole, however, allows broadcasters in a 
                market to delay the return of the spectrum until more 
                than 85 percent of television households in that market 
                have at least one television with access to digital 
                broadcast channels using a digital television receiver, 
                a digital-to-analog converter box, or cable or 
                satellite service. Experts forecast it will take many 
                more years to meet the 85-percent test nationwide.
            (2) Eliminating the 85-percent test and setting a ``hard 
        deadline'' will close the loophole, making possible the 
        nationwide clearing necessary to complete the DTV transition 
        and free the spectrum for public safety use.
                    (A) Some police officers, firefighters, and rescue 
                personnel already have equipment to communicate over 
                the spectrum the broadcasters are supposed to return, 
                and are just awaiting the turnover. Many more public 
                safety officials cannot purchase equipment or begin 
                planning without a date certain for the availability of 
                the spectrum.
                    (B) Five years to the day before September 11, 
                2001, an advisory committee report to the Federal 
                Communications Commission (FCC) noted that public 
                safety officials desperately needed more spectrum to 
                better communicate with each other in times of 
                emergency. The 9/11 Commission has specifically 
                recognized the importance of clearing for public safety 
                use the spectrum at issue here, especially following 
                the terrorist attacks on the Pentagon and the World 
                Trade Center. The spectrum is also important for 
                communications during natural disasters.
            (3) The certainty of a nationwide hard deadline will enable 
        consumers, industry, and government to take the necessary steps 
        to make the transition as smooth as possible.
                    (A) Under existing law, once a market meets the 85-
                percent penetration test, the remaining 15 percent of 
                households in the market would lose access to broadcast 
                programming unless they obtain a digital television 
                receiver, a digital-to-analog converter box, or cable 
                or satellite service.
                    (B) Determining when the 85-percent test in current 
                law has been met in a particular market would be 
                extremely difficult for the FCC to accomplish. 
                Moreover, because no one can predict precisely when any 
                market will meet the 85-percent test, and because 
                different markets will meet the test at different 
                times, consumers, industry, and government cannot 
                adequately plan on a either a local or nationwide 
                basis.
                    (C) With a hard deadline, government, industry, and 
                consumer groups can develop concrete plans for consumer 
                education. Manufacturers can build large quantities of 
                low-cost digital-to-analog converter boxes for 
                consumers who wish to continue using their analog 
                televisions. Clearing the spectrum on a unified, 
                nationwide basis will also enable the government to 
                maximize the revenue from the auction. Some of that 
                revenue can be used to help make the converter boxes 
                available.
                    (D) The deadline will have little impact on most 
                television households. The vast majority of households 
                already subscribe to cable or satellite services. 
                Allowing cable and satellite operators to convert 
                digital broadcasts into an analog-viewable format will 
                enable their subscribers that wish to continue using 
                analog televisions to do so.
            (4) Setting a hard deadline will bring consumers and the 
        economy the benefits of the DTV transition faster.
                    (A) DTV offers sharper and wider pictures, and CD-
                quality sound. Even consumers with analog televisions 
                connected to a converter box or cable or satellite 
                service will receive better service than they did 
                before the transition.
                    (B) Once the transition is complete, broadcasters 
                can redirect the resources they currently expend 
                running both analog and digital stations and focus on 
                programming that capitalizes on the advanced features 
                of digital transmissions. Manufacturers can also 
                increase the production of televisions and other 
                consumer electronics equipment that takes advantage of 
                these features, which will also drive down prices.
                    (C) The cleared spectrum can be used to bring 
                cutting-edge wireless services to public safety 
                officials and consumers. This spectrum travels greater 
                distances at lower costs, and more easily penetrates 
                buildings and foliage. Consequently, it is ideal to 
                bring mobile broadband services not only to urban 
                areas, but to rural areas as well, which currently have 
                very few cost-effective broadband options.
                    (D) The increase in DTV programming, services, and 
                equipment, and the provision of products and services 
                that use the cleared spectrum, will improve America's 
                global competitiveness and result in significant 
                investment and innovation, boosting our economy and 
                fostering new jobs.

SEC. 3403. ANALOG SPECTRUM RECOVERY: HARD DEADLINE.

    (a) Amendments.--Section 309(j)(14) of the Communications Act of 
1934 (47 U.S.C. 309(j)(14)) is amended--
            (1) in subparagraph (A), by striking ``December 31, 2006'' 
        and inserting ``December 31, 2008'';
            (2) by striking subparagraph (B);
            (3) in subparagraph (C)(i)(I), by striking ``or (B)'';
            (4) in subparagraph (D), by striking ``subparagraph 
        (C)(i)'' and inserting ``subparagraph (B)(i)''; and
            (5) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (B) and (C), respectively.
    (b) Implementation.--
            (1) DTV allotment table of in-core channels for full-power 
        stations.--The Federal Communications Commission shall--
                    (A) release by December 31, 2006, a report and 
                order in MB Docket No. 03-15 assigning all full-power 
                broadcast television stations authorized in the digital 
                television service a channel between channels 2 and 36, 
                inclusive, or 38 and 51, inclusive (between frequencies 
                54 and 698 megahertz, inclusive);
                    (B) release by July 31, 2007, any reconsideration 
                of such report and order; and
                    (C) not adopt any further changes between July 31, 
                2007, and January 1, 2009, to the channels assigned to 
                full-power broadcast television stations for the 
                provision of digital television service unless doing so 
                is necessary for reasons of public safety or necessary 
                to prevent a delay in the end of broadcasting by full-
                power stations in the analog television service.
            (2) Status reports.--Beginning with a report on January 31, 
        2006, and ending with a report on July 31, 2007, the Commission 
        shall submit reports to the Committee on Energy and Commerce of 
        the House of Representatives and the Committee on Commerce, 
        Science, and Transportation of the Senate every six months on 
        the status of international coordination with Canada and Mexico 
        of the digital television service table of allotments.
            (3) Terminations of analog licenses and broadcasting.--The 
        Federal Communications Commission shall take such actions as 
        are necessary to terminate all licenses for full-power 
        television stations in the analog television service and to 
        require the cessation of broadcasting by full-power stations in 
        the analog television service by January 1, 2009.
            (4) Additional unlicensed spectrum for wireless 
        broadband.--The Commission shall, within one year after the 
        date of enactment of this Act, issue a final order in the 
        matter of Unlicensed Operation in the TV Broadcast Bands (ET 
        Docket No. 04-186).
    (c) Technical Amendment.--Paragraph (15) of section 309(j) of the 
Communications Act of 1934 (47 U.S.C. 309(j)), as added by section 
203(b) of the Commercial Spectrum Enhancement Act (Public Law 108-494; 
118 Stat. 3993), is redesignated as paragraph (16) of such section.

SEC. 3404. AUCTION OF RECOVERED SPECTRUM.

    (a) Deadline for Auction.--Section 309(j)(15)(C) of the 
Communications Act of 1934 (47 U.S.C. 309(j)(15)(C)) is amended by 
adding at the end the following new clauses:
                            ``(v) Additional deadlines for recovered 
                        analog spectrum.--Notwithstanding subparagraph 
                        (B), the Commission shall conduct the auction 
                        of the licenses for recovered analog spectrum 
                        by commencing the bidding not later than 
                        January 7, 2008, and shall deposit the proceeds 
                        of such auction in accordance with paragraph 
                        (8)(E)(i) not later than June 30, 2008.
                            ``(vi) Recovered analog spectrum.--For 
                        purposes of clause (v), the term `recovered 
                        analog spectrum' means the spectrum between 
                        channels 52 and 69, inclusive (between 
                        frequencies 698 and 806 megahertz, inclusive) 
                        reclaimed from analog television service 
                        broadcasting under paragraph (14), other than--
                                    ``(I) the spectrum required by 
                                section 337 to be made available for 
                                public safety services; and
                                    ``(II) the spectrum auctioned prior 
                                to the date of enactment of the Digital 
                                Television Transition Act of 2005.''.
    (b) Extension of Auction Authority.--Paragraph (11) of section 
309(j) of such Act is repealed.
    (c) Study of Auction Authority.--
            (1) Inquiry and study required.--Within 120 days after the 
        date of enactment of this Act, the Federal Communications 
        Commission shall initiate an ongoing inquiry and study--
                    (A) to evaluate the participation of women, 
                minorities, and small businesses in the auction 
                process, including the percentage of winning bidders 
                that are women, minorities, and small businesses; and
                    (B) to assess the efforts made by the Commission to 
                ensure that women, minorities, and small businesses are 
                able to successfully participate in the auction 
                process.
            (2) Report.--The Commission shall submit a report to the 
        Congress on the results of the inquiry and study required by 
        paragraph (1) at least biennially beginning not later than one 
        year after the date of enactment of this Act.

SEC. 3405. DIGITAL TELEVISION CONVERSION FUND.

    (a) Reservation of Auction Proceeds to Assist Conversion.--Section 
309(j)(8) of the Communications Act of 1934 (47 U.S.C. 309(j)(8)) is 
amended--
            (1) in subparagraph (A), by striking ``subparagraph (B) or 
        subparagraph (D)'' and inserting ``subparagraphs (B), (D), and 
        (E)'';
            (2) in subparagraph (C)(i), by inserting before the 
        semicolon at the end the following: ``, except as otherwise 
        provided in subparagraph (E)(i)''; and
            (3) by adding at the end the following new subparagraph:
                    ``(E) Transfer of revenues for digital television 
                conversion.--
                            ``(i) Proceeds for dtv conversion fund.--
                        Notwithstanding subparagraph (A), of the 
                        proceeds (including deposits and upfront 
                        payments from successful bidders) from the use 
                        of a competitive bidding system under this 
                        subsection with respect to recovered analog 
                        spectrum--
                                    ``(I) $990,000,000 shall be 
                                deposited in a separate fund in the 
                                Treasury to be known as the `Digital 
                                Television Conversion Fund', and be 
                                available exclusively to carry out 
                                section 159 of the National 
                                Telecommunications and Information 
                                Administration Organization Act;
                                    ``(II) $500,000,000 shall be 
                                deposited in a separate fund in the 
                                Treasury to be known as the `Public 
                                Safety Interoperable Communications 
                                Fund', and be available exclusively to 
                                carry out section 160 of such Act;
                                    ``(III) $30,000,000 shall be 
                                deposited in a separate fund in the 
                                Treasury to be known as the `NYC 9/11 
                                Digital Transition Fund', and be 
                                available exclusively to carry out 
                                section 161 of such Act;
                                    ``(IV) $3,000,000 shall be 
                                deposited in a separate fund in the 
                                Treasury to be known as the `Low-Power 
                                Digital-to-Analog Conversion Fund', and 
                                be available exclusively to carry out 
                                section 162 of such Act; and
                                    ``(V) the remainder of such 
                                proceeds shall be deposited in the 
                                Treasury in accordance with chapter 33 
                                of title 31, United States Code.
                            ``(ii) Recovered analog spectrum.--For 
                        purposes of clause (i), the term `recovered 
                        analog spectrum' has the meaning provided in 
                        paragraph (15)(C)(vi).''.
    (b) Converter Box Program.--Part C of the National 
Telecommunications and Information Administration Organization Act is 
amended by adding at the end the following new section:

``SEC. 159. DIGITAL-TO-ANALOG CONVERTER BOX PROGRAM.

    ``(a) Creation of Program.--The Assistant Secretary--
            ``(1) shall use the funds available under subsection (d) of 
        this section to implement and administer a program through 
        which households in the United States may obtain, upon request, 
        up to two coupons that can be applied toward the purchase of 
        digital-to-analog converter boxes, subject to the restrictions 
        in this section and the regulations created thereunder; and
            ``(2) may award one or more contracts (including a contract 
        with another Federal agency) for the administration of some or 
        all of the program.
    ``(b) Program Specifications.--
            ``(1) Form of coupon request.--The regulations under this 
        section shall prescribe the contents of the coupon request form 
        and the information any household seeking a coupon shall 
        provide on the form. The coupon request form shall be required 
        to include instructions for its use and also describe, at a 
        minimum, the requirements and limitations of the program, the 
        ways in which the form and the information the household 
        provides will be used, and to whom the form and the information 
        will be disclosed.
            ``(2) Distribution of coupon request forms.--
                    ``(A) Paper and electronic forms.--The Assistant 
                Secretary shall provide for the distribution of paper 
                coupon request forms at Government buildings, including 
                post offices. The Assistant Secretary shall provide for 
                the availability to households of electronic coupon 
                request forms, and may permit such forms to be 
                submitted electronically.
                    ``(B) Additional distribution.--If the Assistant 
                Secretary determines that doing so would make the 
                program more successful and easier for consumers to 
                participate in, paper and electronic coupon request 
                forms shall also be distributed by such private 
                entities as the Assistant Secretary shall specify (such 
                as retailers, manufacturers, broadcasters, religious 
                organizations, and consumer groups) and shall be 
                distributed in the manner specified by the Assistant 
                Secretary.
            ``(3) Limitations.--
                    ``(A) Two-per-household maximum.--A household may 
                obtain coupons only by making a request as required by 
                the regulations under this section. Any request must be 
                made between January 1, 2008, and January 31, 2009, 
                inclusive. The Assistant Secretary shall ensure that 
                each requesting household receives no more than two 
                coupons.
                    ``(B) No combinations of coupons.--Two coupons may 
                not be used in combination toward the purchase of a 
                single digital-to-analog converter box.
                    ``(C) Duration.--All coupons shall expire 3 months 
                after issuance.
            ``(4) Distribution of coupons.--
                    ``(A) Coupons shall be distributed to requesting 
                households by mail and each coupon shall be issued in 
                the name of a member of the requesting household, and 
                shall include a unique identification number as well as 
                any other measures the Assistant Secretary deems 
                necessary to minimize fraud, counterfeiting, 
                duplication, and other unauthorized use.
                    ``(B) Included on or provided with each coupon 
                shall be, at a minimum, instructions for the coupon's 
                use and a description of the coupon's limitations.
                    ``(C) The Assistant Secretary shall expend not more 
                than $160,000,000 on administrative expenses and shall 
                ensure that the sum of all administrative expenses for 
                the program and the total maximum value of all the 
                coupons redeemed, and issued but not expired, does not 
                exceed $990,000,000.
                    ``(D) The Assistant Secretary may expend up to 
                $5,000,000 of the administrative expenses on the public 
                outreach program required by section 330(d)(4) of the 
                Communications Act of 1934 (47 U.S.C. 330(d)(4)). Such 
                funds may be used for grants to the Association of 
                Public Television Stations, in partnership with 
                noncommercial educational television broadcast stations 
                (as defined section 397(6) of the Communications Act of 
                1934 (47 U.S.C. 397(6))) to carry out such public 
                outreach.
            ``(5) Qualifying purchases.--
                    ``(A) Qualifying box.--The regulations shall 
                specify methods for determining and identifying the 
                converter boxes that meet the definition in subsection 
                (g).
                    ``(B) Coupon value.--The value of each coupon shall 
                be $40.
            ``(6) Redemption of coupons.--No coupon shall be redeemed 
        except upon submission of reasonable proof that the individual 
        redeeming the coupon is the individual named on the coupon, and 
        such additional information as is required by the regulations 
        under this section. In the case of retail distribution of 
        digital-to-analog converter boxes over the Internet or by 
        telephone, submission of a valid credit card number issued in 
        the name of the household member, the unique identification 
        number on the coupon, the address of the household, and such 
        other information as is required by the regulations under this 
        section shall be reasonable proof of identity, except that the 
        redemption of coupons over the Internet or by telephone shall 
        be prohibited if the Assistant Secretary determines that such 
        redemption would be unreasonably susceptible to fraud or other 
        abuse.
            ``(7) Retailer certification.--
                    ``(A) Any retailer desiring to qualify for coupon 
                reimbursement under this section shall, in accordance 
                with the regulations under this section, be required to 
                undergo a certification process to qualify for 
                participation in the program.
                    ``(B) As part of the certification process, 
                retailers shall be informed of the program's details 
                and their rights and obligations, including their 
                obligations to honor all valid coupons that are 
                tendered in the authorized manner, and to keep a 
                reasonable number of eligible converter boxes in stock.
            ``(8) Coupon reimbursement and retailer auditing.--
                    ``(A) Reimbursement.--The regulations under this 
                section shall establish the process by which retailers 
                may seek and obtain reimbursement for the coupons, and 
                shall include the option for retailers to seek and 
                obtain reimbursement electronically.
                    ``(B) Audits.--Such regulations shall establish 
                procedures for the auditing of retailer reimbursements.
            ``(9) Appeals.--The regulations under this section shall 
        establish an appeals process for the review and resolution of 
        complaints--
                    ``(A) by a household alleging that--
                            ``(i) the household was improperly denied a 
                        coupon;
                            ``(ii) a valid coupon properly tendered was 
                        not honored; or
                            ``(iii) the household was otherwise harmed 
                        by another violation of this section or such 
                        regulations; or
                    ``(B) by a retailer of digital-to-analog converter 
                boxes alleging that the retailer was improperly denied 
                reimbursement for a valid coupon properly tendered and 
                accepted under this section or such regulations.
        All such complaints shall be resolved within 30 days after 
        receipt of the complaint.
            ``(10) Enforcement.--The regulations under this section 
        shall provide for the termination of eligibility to participate 
        in the program for retailers or households that engage in 
        fraud, misrepresentation, or other misconduct in connection 
        with the program, or that otherwise violate this section or 
        such regulations.
            ``(11) Progress report.--Beginning with a report on March 
        31, 2008, and ending with a report on June 30, 2009, the 
        Assistant Secretary shall submit reports to the Committee on 
        Energy and Commerce of the House of Representatives and the 
        Committee on Commerce, Science, and Transportation of the 
        Senate, every three months summarizing the progress of coupon 
        distribution and redemption, including how many coupons are 
        being distributed and redeemed, and how quickly.
    ``(c) Privacy.--The program under this section shall ensure that 
personally identifiable information collected in connection with the 
program under this section is not used or shared for any other purpose 
than as described in this section, except as otherwise required or 
authorized by law. For purposes of this subsection, the term 
`personally identifiable information' shall have the same meaning as 
provided in section 338(i)(2).
    ``(d) Availability of Funds.--
            ``(1) In general.--From the Digital Television Conversion 
        Fund established by section 309(j)(8)(E)(i)(I) of the 
        Communications Act of 1934, there shall be available to carry 
        out this section such sums as may be necessary for fiscal years 
        2008 and 2009. Any sums that remain unexpended in the Fund at 
        the end of fiscal year 2009 shall revert to and be deposited in 
        the general fund of the Treasury.
            ``(2) Credit.--The Assistant Secretary may borrow from the 
        Treasury such sums as may be necessary not to exceed 
        $990,000,000 to implement and administer the program in 
        accordance with this section. The Assistant Secretary shall 
        reimburse the Treasury, without interest, as funds are 
        deposited into the Digital Television Conversion Fund under 
        section 309(j)(8)(E) of such Act.
    ``(e) Energy Standards Required.--
            ``(1) Standard.--The maximum energy consumption for the 
        passive standby mode of a digital-to-analog converter box shall 
        be no more than 9 watts.
            ``(2) Enforcement.--The Secretary of Energy shall enforce 
        the requirements of paragraph (1). Any converter box that the 
        Secretary of Energy determines is not in compliance with the 
        requirements of paragraph (1) shall not be eligible for 
        purchase with assistance made available under this section.
            ``(3) Preemption.--No State or any political subdivision 
        thereof may establish or enforce any law, rule, regulation, or 
        other provision having the force of law that regulates the 
        energy output, usage, or consumption standards for a digital-
        to-analog converter box.
    ``(f) Implementation.--The Secretary of Commerce shall promulgate, 
within 9 months after the date of enactment of the Digital Television 
Transition Act of 2005, such regulations as are necessary to carry out 
this section.
    ``(g) Definition.--For purposes of this section:
            ``(1) Digital-to-analog converter box.--The term `digital-
        to-analog converter box' means a stand-alone device that does 
        not contain features or functions except those necessary to 
        enable a consumer to convert any channel broadcast in the 
        digital television service into a format that the consumer can 
        display on television receivers designed to receive and display 
        signals only in the analog television service.
            ``(2) Household.--The term `household' means the residents 
        at a residential street or rural route address, and shall not 
        include a post office box.
            ``(3) Standby passive mode.--The term `standby passive 
        mode' means a low power state the digital-to-analog converter 
        device enters while connected to a power source which fulfills 
        not the main function but can be switched into another mode by 
        means of an internal or external signal.''.

SEC. 3406. PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS FUND.

    Part C of the National Telecommunications and Information 
Administration Organization Act is amended by adding after section 159 
(as added by section 3405(b) of this Act) the following new section:

``SEC. 160. PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS FUND.

    ``(a) Program Authorized.--From the funds available under 
subsection (f), the Assistant Secretary shall carry out a grant program 
to assist public safety agencies in the acquisition of, deployment of, 
or training for the use of interoperable communications systems that 
utilize, or enable interoperability with communications systems that 
can utilize, reallocated public safety spectrum for radio 
communications.
    ``(b) Terms and Conditions of Grants.--In order to obtain a grant 
under this section, a public safety agency shall--
            ``(1) submit an application to the Assistant Secretary at 
        such time, in such form, and containing or accompanied by such 
        information and assurances as the Assistant Secretary shall 
        require;
            ``(2) agree that, if awarded a grant, the public safety 
        agency will submit annual reports to the Assistant Secretary 
        for the duration of the grant award period with respect to--
                    ``(A) the expenditure of grant funds; and
                    ``(B) progress toward acquiring and deploying 
                interoperable communications systems funded by the 
                grant;
            ``(3) agree to provide, from non-Federal sources, not less 
        than 20 percent of the costs of acquiring and deploying the 
        interoperable communications systems acquired and deployed with 
        funds provided under this section; and
            ``(4) agree to remit to the Assistant Secretary any grant 
        funds that remain unexpended at the end of the 3-year period of 
        the grant.
    ``(c) Duration of Grant; Recovery of Unused Funds.--Grants under 
this section shall be awarded in the form of a single grant for a 
period of not more that 3 years. At the end of 3 years, any grant funds 
that remain unexpended shall be remitted by the grantee to the 
Assistant Secretary, and, subject to subsection (f)(2), may be awarded 
to other eligible grant recipients. At the end of fiscal year 2010, any 
such reawarded grant funds that remain unexpended shall be remitted by 
the grantee to the Assistant Secretary and may not be reawarded to 
other grantees.
    ``(d) Oversight of Expenditures.--The Assistant Secretary shall 
submit to the Committee on Commerce, Science, and Transportation of the 
Senate and the Committee on Energy and Commerce, not later than 6 
months after the first award of a grant under this section and every 6 
months thereafter until October 1, 2010, a report--
            ``(1) identifying, on a State-by-State basis, using the 
        information submitted under subsection (b)(2), the results of 
        the program, including an identification, on a State-by-State 
        basis, of--
                    ``(A) the public safety agencies awarded a grant;
                    ``(B) the amount of the grant;
                    ``(C) the specified use for the grant; and
                    ``(D) how each such grant was spent; and
            ``(2) stating the cumulative total of the amount of grants 
        awarded, and the balance, if any, remaining in the Public 
        Safety Interoperable Communications Fund; and
            ``(3) in the final such report, stating the amount in the 
        Fund that reverted to the general fund of the Treasury.
    ``(e) Regulations.--The Secretary is authorized to prescribe such 
regulations as are necessary to carry out this section.
    ``(f) Availability of Funds.--
            ``(1) Availability.--From the Public Safety Interoperable 
        Communications Fund established by section 309(j)(8)(E)(i)(II) 
        of the Communications Act of 1934, there shall be available to 
        carry out this section such sums as may be necessary for fiscal 
        years 2008, 2009, and 2010.
            ``(2) Reversion.--Any sums that remain unexpended in the 
        Fund at the end of fiscal year 2010 shall revert to and be 
        deposited in the general fund of the Treasury.
    ``(g) Definitions.--For purposes of this section:
            ``(1) Public safety agency.--The term `public safety 
        agency' means any State or local government entity, or 
        nongovernmental organization authorized by such entity, whose 
        sole or principal purpose is to protect the safety of life, 
        health, or property.
            ``(2) Interoperable communications systems.--The term 
        `interoperable communications systems' means communications 
        systems which enable public safety agencies to share 
        information amongst local, State, and Federal public safety 
        agencies in the same area via voice or data signals.
            ``(3) Reallocated public safety spectrum.--The term 
        `reallocated public safety spectrum' means the bands of 
        spectrum located at 764 -776 megahertz and 794-806 megahertz, 
        inclusive.''.

SEC. 3407. NYC 9/11 DIGITAL TRANSITION FUND.

    Part C of the National Telecommunications and Information 
Administration Organization Act is amended by adding after section 160 
(as added by section 3406 of this Act) the following new section:

``SEC. 161. NYC 9/11 DIGITAL TRANSITION FUND.

    ``(a) Funds Available.--From the NYC 9/11 Digital Transition Fund 
established by section 309(j)(8)(E)(i)(III) of the Communications Act 
of 1934, there shall be available to carry out this section such sums 
as may be necessary for fiscal years 2006 through 2008. Any sums that 
remain unexpended in the Fund at the end of fiscal year 2008 shall 
revert to and be deposited in the general fund of the Treasury. The 
Assistant Secretary may borrow from the Treasury such sums as may be 
necessary not to exceed $30,000,000 to implement and administer the 
program in accordance with this section. The Assistant Secretary shall 
reimburse the Treasury, without interest, as funds are deposited into 
the NYC 9/11 Digital Transition Fund under section 309(j)(8)(E) of such 
Act.
    ``(b) Use of Funds.--The sums available under subsection (a) shall 
be made available by the Assistant Secretary by grant to be used to 
reimburse the Metropolitan Television Alliance for costs incurred in 
the design and deployment of a temporary digital television broadcast 
system to ensure that, until a permanent facility atop the Freedom 
Tower is constructed, the members of the Metropolitan Television 
Alliance can provide the New York City area with an adequate digital 
television signal as determined by the Federal Communications 
Commission.
    ``(c) Rule of Construction.--Nothing in this section shall be 
construed to alter or otherwise affect the Federal Communications 
Commission's authority with respect to licensing and interference 
regulation.
    ``(d) Definitions.--For purposes of this section:
            ``(1) The term `Metropolitan Television Alliance' means the 
        organization formed by New York City television broadcast 
        station licensees to locate new shared facilities as a result 
        of the attacks on September 11, 2001 and the loss of use of 
        shared facilities that housed broadcast equipment.
            ``(2) The term `New York City area' means the five counties 
        comprising New York City and counties of northern New Jersey in 
        immediate proximity to New York City (Bergen, Essex, Union and 
        Hudson Counties) .''.

SEC. 3408. LOW-POWER TELEVISION TRANSITION PROVISIONS.

    (a) Removal and Relocation.--Section 337(e) of the Communications 
Act of 1934 (47 U.S.C. 337(e)) is amended--
            (1) in paragraph (1), by striking ``person who'' and 
        inserting ``full-power television station licensee that'';
            (2) in paragraph (2), by striking ``746 megahertz'' and 
        inserting ``698 megahertz''; and
            (3) by adding at the end the following new paragraph:
            ``(3) Continuation of low-power broadcasting.--Subject to 
        section 336(f) of the Communications Act (47 U.S.C. 336(f)), a 
        low-power television station, television translator station, or 
        television booster station (as defined by Commission 
        regulations) may operate above 698 megahertz on a secondary 
        basis in accordance with Commission rules, including rules 
        governing completion of the digital television service 
        transition for low-power broadcasters.''.
    (b) Exemption From Deadline.--Section 309(j)(14)(A) of such Act (47 
U.S.C. 309(j)(14)(A)) is amended by inserting ``full-power'' before 
``television broadcast license''.
    (c) Advanced Television Services.--Section 336(f)(4) of such Act 
(47 U.S.C. 336(f)(4)) is amended by inserting ``or other low-power 
station'' after ``television translator station'' in the first 
sentence.
    (d) Low-Power Television Digital-to-Analog Conversion.--Part C of 
the National Telecommunications and Information Administration 
Organization Act is amended by adding after section 161 (as added by 
section 3407 of this Act) the following new section:

``SEC. 162. LOW-POWER TELEVISION DIGITAL-TO-ANALOG CONVERSION.

    ``(a) Creation of Program.--The Assistant Secretary shall use the 
funds available under subsection (d) from the Low-Power Digital-to-
Analog Conversion Fund to implement and administer a program through 
which each eligible low-power television station may receive 
compensation toward the cost of the purchase of a digital-to-analog 
conversion device that enables it to convert the incoming digital 
signal of its corresponding full-power television station to analog 
format for transmission on the low-power television station's analog 
channel. An eligible low-power television station may receive such 
compensation only if it submits a request for such compensation on or 
before December 31, 2008.
    ``(b) Eligible Stations.--For purposes of this section, an eligible 
low-power television station shall be a low-power television broadcast 
station, Class A television station, television translator station, or 
television booster station--
            ``(1) that is itself broadcasting exclusively in analog 
        format; and
            ``(2) that has not purchased a digital-to-analog conversion 
        device prior to enactment of this section.
    ``(c) Qualifying Devices and Amounts.--The Assistant Secretary--
            ``(1) may determine the types of digital-to-analog 
        conversion devices for which an eligible low-power broadcast 
        television station may receive compensation under this section; 
        and
            ``(2) shall determine the maximum amount of compensation 
        such a low-power television broadcast station may receive based 
        on the average cost of such digital-to-analog conversion 
        devices during the time period such low-power broadcast 
        television station purchased the digital-to-analog conversion 
        device, but in no case shall such compensation exceed $400.
    ``(d) Funds Available.--From the Low-Power Digital-to-Analog 
Conversion Fund established by section 309(j)(8)(E)(i)(IV) of the 
Communications Act of 1934, there shall be available to carry out this 
section such sums as may be necessary for fiscal years 2008 and 2009. 
Any sums that remain unexpended in such Fund at the end of fiscal year 
2009 shall revert to and be deposited in the general fund of the 
Treasury.''.
    (e) Report and Order Required.--The Federal Communications 
Commission shall, not later than December 31, 2008, issue a report and 
order specifying the methods and schedule by which the Commission will 
complete the digital television service transition for low-power 
broadcasters.

SEC. 3409. CONSUMER EDUCATION REGARDING ANALOG TELEVISIONS.

    (a) Commission Authority.--Section 303 of the Communications Act of 
1934 (47 U.S.C. 303) is amended by adding at the end the following new 
subsection:
    ``(z) Require the consumer education measures specified in section 
330(d) in the case of apparatus designed to receive television signals 
that--
            ``(1) are shipped in interstate commerce or manufactured in 
        the United States;
            ``(2) have an integrated display screen or are sold in a 
        bundle with a display screen; and
            ``(3) are not capable of receiving broadcast signals in the 
        digital television service.''.
    (b) Consumer Education Requirements.--Section 330 of the 
Communications Act of 1934 (47 U.S.C. 330) is amended--
            (1) in subsection (d), by striking ``sections 303(s), 
        303(u), and 303(x)'' and inserting ``subsections (s), (u), (x), 
        and (z) of section 303'';
            (2) by redesignating subsection (d) as subsection (e); and
            (3) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Consumer Education Regarding Analog Television Receivers.--
            ``(1) Requirements for manufacturers.--Any manufacturer of 
        any apparatus described in section 303(z) shall--
                    ``(A) place in a conspicuous place on any such 
                apparatus that such manufacturer ships in interstate 
                commerce or manufactures in the United States after 180 
                days after the date of enactment of the Digital 
                Television Transition Act of 2005, a label containing, 
                in clear and conspicuous print, the warning language 
                required by paragraph (3); and
                    ``(B) also include after 180 days after the date of 
                enactment of the Digital Television Transition Act of 
                2005, such warning language on the outside of the 
                retail packaging of such apparatus, in a conspicuous 
                place and in clear and conspicuous print, in a manner 
                that cannot be removed.
            ``(2) Requirements for retail distributors.--Any retail 
        distributor shall place conspicuously in the vicinity of each 
        apparatus described in section 303(z) that such distributor 
        displays for sale or rent after 45 days after the date of 
        enactment of the Digital Television Transition Act of 2005, a 
        sign containing, in clear and conspicuous print, the warning 
        language required by paragraph (3). In the case of a retail 
        distributor vending such apparatus via direct mail, catalog, or 
        electronic means, such as displays on the Internet, the warning 
        language required by such paragraph shall be prominently 
        displayed, in clear and conspicuous print, in the vicinity of 
        any language describing the product.
            ``(3) Warning language.--The warning language required by 
        this paragraph shall read as follows: `This television has only 
        an analog broadcast tuner. After December 31, 2008, television 
        broadcasters will broadcast only in digital format. You will 
        then need to connect this television to a digital-to-analog 
        converter box or cable or satellite service if you wish to 
        receive broadcast programming. The device, if any, that a cable 
        or satellite subscriber will need to connect to an analog 
        television will depend on the cable or satellite service 
        provider. The television should continue to work as before, 
        however, with devices such as VCRs, digital video recorders, 
        DVD players, and video game systems. For more information, call 
        the Federal Communications Commission at 1-888-225-5322 (TTY: 
        1-888-835-5322) or visit the Commission's website at: 
        www.fcc.gov.'.
            ``(4) Commission and ntia outreach.--Beginning within one 
        month after the date of enactment of the Digital Television 
        Transition Act of 2005, the Commission and the National 
        Telecommunications and Information Administration shall engage, 
        either jointly or separately, in a public outreach program, 
        including the distribution of materials on their web sites and 
        in Government buildings, such as post offices, to educate 
        consumers regarding the digital television transition. The 
        Commission and the National Telecommunications and Information 
        Administration may seek public comment in crafting their public 
        outreach program, and may seek the assistance of private 
        entities, such as broadcasters, manufacturers, retailers, cable 
        and satellite operators, and consumer groups in administering 
        the public outreach program. The program shall educate 
        consumers about--
                    ``(A) the deadline for termination of analog 
                television broadcasting;
                    ``(B) the options consumers have after such 
                termination to continue to receive broadcast 
                programming; and
                    ``(C) the converter box program under section 159 
                of the National Telecommunications and Information 
                Administration Organization Act.
            ``(5) Additional disclosures.--
                    ``(A) Announcements and notices required.--From 
                January 1, 2008, through December 31, 2008--
                            ``(i) each television broadcaster shall 
                        air, at a minimum, two 60-second public service 
                        announcements per day, one during the 8 to 9 
                        a.m. hour and one during the 8 to 9 p.m. hour; 
                        and
                            ``(ii) each multichannel video program 
                        distributor (as such term is defined in section 
                        602 of this Act) shall include a notice in any 
                        periodic bill.
                    ``(B) Contents of announcements and notices.--The 
                announcements and notices required by subparagraphs 
                (A)(i) and (A)(ii), respectively, shall state, at a 
                minimum, that: `After December 31, 2008, television 
                broadcasters will broadcast only in digital format. You 
                will then no longer be able to receive broadcast 
                programming on analog-only televisions unless those 
                televisions are connected to a digital-to-analog 
                converter box or a cable or satellite service. The 
                device, if any, that a cable or satellite subscriber 
                will need to connect to an analog television will 
                depend on the cable or satellite service provider. 
                Analog-only televisions should continue to work as 
                before, however, with devices such as VCRs, digital 
                video recorders, DVD players, and video game systems. 
                You may be eligible for up to two coupons toward the 
                purchase of up to two converter-boxes. For more 
                information, call the Federal Communications Commission 
                at 1-888-225-5322 (TTY: 1-888-835-5322) or visit the 
                Commission's website at: www.fcc.gov.'.
            ``(6) Report required.--Beginning January 31, 2006, and 
        ending July 31, 2008, the Commission and the National 
        Telecommunications and Information Administration, either 
        jointly or separately, shall submit reports every six months to 
        the Committee on Energy and Commerce of the House of 
        Representatives and the Committee on Commerce, Science, and 
        Transportation of the Senate, on the Commission's and such 
        Administration's consumer education efforts, as well as the 
        consumer education efforts of broadcasters, cable and satellite 
        operators, consumer electronics manufacturers, retailers, and 
        consumer groups. The Commission and such Administration may 
        solicit public comment in preparing their reports.''.
    (c) Preserving and Expediting Tuner Mandates.--The Federal 
Communications Commission--
            (1) shall, within 30 days after the date of enactment of 
        this Act revise the digital television reception capability 
        implementation schedule under section 15.117(i) of its 
        regulations (47 CFR 15.117(i)) to require, in the case of 
        television reception devices that have, or are sold in a bundle 
        with, display screens sized 13 to 24 inches, inclusive, that 
        100 percent of all such units must include digital television 
        tuners effective March 1, 2007; and
            (2) shall not make any other changes that extend or 
        otherwise delay the digital television reception capability 
        implementation schedule for television reception devices that 
        have, or are sold in a bundle with, display screens.

SEC. 3410. ADDITIONAL PROVISIONS.

    (a) Digital-to-Analog Conversion.--Section 614(b) of the 
Communications Act of 1934 (47 U.S.C. 534(b)) is amended by adding at 
the end the following new paragraphs:
            ``(11) Carriage of digital formats.--
                    ``(A) Primary video stream.--With respect to any 
                television station that is transmitting broadcast 
                programming exclusively in the digital television 
                service in a local market, a cable operator of a cable 
                system in that market shall carry the station's primary 
                video stream and program-related material in the 
                digital format transmitted by that station, without 
                material degradation, if the licensee for that 
                station--
                            ``(i) relies on this section or section 615 
                        to obtain carriage of the primary video stream 
                        and program-related material on that cable 
                        system in that market; and
                            ``(ii) permits the cable system to carry 
                        without compensation any other programming 
                        broadcast by that station that is carried on 
                        that system.
                    ``(B) Multiple formats permitted.--A cable operator 
                of a cable system may offer the primary video stream 
                and program-related material of a local television 
                station described in subparagraph (A) in any analog or 
                digital format or formats, whether or not doing so 
                requires conversion from the format transmitted by the 
                local television station, so long as--
                            ``(i) the cable operator offers the primary 
                        video stream and program-related material in 
                        the converted analog or digital format or 
                        formats without material degradation; and
                            ``(ii) also offers the primary video stream 
                        and program-related material in the manner or 
                        manners required by this paragraph.
                    ``(C) Transitional conversions.--Notwithstanding 
                the requirement in subparagraph (A) to carry the 
                primary video stream and program-related material in 
                the digital format transmitted by the local television 
                station, but subject to the prohibition on material 
                degradation, until January 1, 2014--
                            ``(i) a cable operator--
                                    ``(I) shall offer the primary video 
                                stream and program-related material in 
                                the format or formats necessary for 
                                such stream and material to be viewable 
                                on analog and digital televisions; and
                                    ``(II) may convert the primary 
                                video stream and program-related 
                                material to standard-definition digital 
                                format in lieu of offering it in the 
                                digital format transmitted by the local 
                                television station;
                            ``(ii) notwithstanding clause (i), a cable 
                        operator of a cable system with an activated 
                        capacity of 550 megahertz or less--
                                    ``(I) shall offer the primary video 
                                stream and program-related material of 
                                the local television station described 
                                in subparagraph (A), converted to an 
                                analog format; and
                                    ``(II) may, but shall not be 
                                required to, offer the primary video 
                                stream and program-related material in 
                                any digital format or formats.
                    ``(D) Location and method of conversion.--
                            ``(i) A cable operator of a cable system 
                        may perform any conversion permitted or 
                        required by this paragraph at any location, 
                        from the cable head-end to the customer 
                        premises, inclusive.
                            ``(ii) Notwithstanding any other provision 
                        of this Act other than the prohibition on 
                        material degradation, a cable operator may use 
                        switched digital video technology to accomplish 
                        any conversion or transmission permitted or 
                        required by this paragraph.
                    ``(E) Conversions not treated as degradation.--Any 
                conversion permitted or required by this paragraph 
                shall not, by itself, be treated as a material 
                degradation.
                    ``(F) Carriage of program-related material.--The 
                obligation to carry program-related material under this 
                paragraph is effective only to the extent technically 
                feasible.
                    ``(G) Definition of standard-definition format.--
                For purposes of this paragraph, a stream shall be in 
                standard definition digital format if such stream meets 
                the criteria for such format as specified in the 
                standard recognized by the Commission in section 73.682 
                of its rules (47 CFR 73.682) or a successor 
                regulation.''.
    (b) Tiering.--Clause (iii) of section 623(b)(7)(A) of such Act (47 
U.S.C. 543(b)(7)(A)(iii)) is amended to read as follows:
                            ``(iii) Both of the following signals:
                                    ``(I) the primary video stream and 
                                program-related material of any 
                                television broadcast station that is 
                                provided by the cable operator to any 
                                subscriber in an analog format, and
                                    ``(II) the primary video stream and 
                                program-related material--
                                            ``(aa) of any television 
                                        broadcast station that is 
                                        transmitting exclusively in 
                                        digital format, and
                                            ``(bb) that is provided by 
                                        the cable operator to any 
                                        subscriber in a digital format,
                        but excluding a signal that is secondarily 
                        transmitted by a satellite carrier beyond the 
                        local service area of such station.''.
    (c) Comparable Treatment of Satellite Carriers.--Section 338 of the 
Communications Act of 1934 (47 U.S.C. 338) is amended--
            (1) by adding at the end the following new subsection:
    ``(l) Specific Carriage Obligations After Digital Transition.--
            ``(1) Carriage of digital formats.--With respect to any 
        television station that requests carriage under this section 
        and that is transmitting broadcast programming exclusively in 
        the digital television service in a local market in the 
        contiguous United States (hereafter in this paragraph referred 
        to as an eligible requesting station), a satellite carrier 
        carrying the digital signal of any other local television 
        station in that local market shall carry the eligible 
        requesting station's primary video stream and program-related 
        material, without material degradation, if the licensee for 
        that eligible requesting station--
                    ``(A) relies on this section to obtain carriage of 
                the primary video stream and program-related material 
                by that satellite carrier in that market; and
                    ``(B) permits the satellite carrier to carry 
                without compensation any other programming broadcast by 
                that local station that is carried on that system.
            ``(2) Formatting of primary video stream.--A satellite 
        carrier must offer the primary video stream and program-related 
        material of an eligible requesting station in the digital 
        format transmitted by the station if the satellite carrier 
        carries the primary video stream of any other local television 
        station in that local market in the same digital format.
            ``(3) Multiple formats permitted.--A satellite carrier may 
        offer the primary video stream and program-related material of 
        an eligible requesting station in any analog or digital format 
        or formats, whether or not doing so requires conversion from 
        the format transmitted by that eligible requesting station, so 
        long as--
                    ``(A) the satellite carrier offers the primary 
                video stream and program-related material in the 
                converted analog or digital format or formats without 
                material degradation; and
                    ``(B) also offers the primary video stream and 
                program-related material in the manner or manners 
                required by this subsection.
            ``(4) Transitional conversions.--Notwithstanding any 
        requirement in paragraphs (1) and (2) to carry the primary 
        video stream and program-related material in the digital format 
        transmitted by the local television station, but subject to the 
        prohibition on material degradation, until January 1, 2014, a 
        satellite carrier--
                    ``(A) shall offer the primary video stream and 
                program-related material of any local television 
                broadcast station required to be carried under 
                paragraph (1) in the format necessary for such stream 
                to be viewable on analog and digital televisions; and
                    ``(B) may convert the primary video stream and 
                program-related material to standard-definition format 
                in lieu of offering it in the digital format 
                transmitted by the local television station.
            ``(5) Location and method of conversion.--A satellite 
        carrier may perform any conversion permitted or required by 
        this subsection at any location, from the local receive 
        facility to the customer premises, inclusive.
            ``(6) Conversions not treated as degradation.--Any 
        conversion permitted or required by this subsection shall not, 
        by itself, be treated as a material degradation.
            ``(7) Carriage of program-related material.--The obligation 
        to carry program-related material under this subsection is 
        effective only to the extent technically feasible.
            ``(8) Definition of standard-definition format.--For 
        purposes of this subsection, a stream shall be in standard 
        definition digital format if such stream meets the criteria for 
        such format as specified in the standard recognized by the 
        Commission in section 73.682 of its rules (47 CFR 73.682) or a 
        successor regulation.'';
            (2) in subsection (b)(1), by striking ``subsection (a)'' 
        and inserting ``subsection (a) or (l)'';
            (3) in subsection (c)(1), by striking ``subsection (a)(1)'' 
        and inserting ``subsections (a)(1) and (l)''; and
            (4) in subsection (c)(2), by striking ``subsection (a)'' 
        and inserting ``subsections (a) and (l)''.
    (d) Deadline.--The Federal Communications Commission shall revise 
its regulations to implement the amendments made by this section within 
one year after the date of enactment of this Act.

SEC. 3411. DEPLOYMENT OF BROADBAND WIRELESS TECHNOLOGIES.

     Not later than 45 days after the effective date of this Act, the 
Commission shall initiate a rulemaking to assess the necessity of 
rechannelizing the spectrum located between 767-773 megahertz and 797-
803 megahertz to accommodate broadband applications. Such rulemaking 
shall be completed within 180 days.

SEC. 3412. SENSE OF CONGRESS.

    (a) Findings.--The Congress finds the following:
            (1) The wireless communications industry in the United 
        States is becoming increasingly concentrated: there are 
        currently no ownership limitations on wireless companies, and 
        the five largest wireless carriers in the United States control 
        nearly 90 percent of United States wireless subscribership.
            (2) Over 90 percent of households receive their broadband 
        services through either cable or digital subscriber line (DSL) 
        service, and most cable and DSL providers are heavily 
        concentrated within their geographic markets.
            (3) Under the Omnibus Budget and Reconciliation Act of 
        1993, Congress tasked the Federal Communications Commission to 
        promote economic opportunity by disseminating wireless 
        communications licenses among a wide variety of applicants, 
        including small businesses and rural telephone companies.
            (4) Upcoming auctions for the returned analog broadcast 
        spectrum in the 700 megahertz band that will be cleared 
        following the transition from analog to digital broadcast 
        television and Advanced Wireless Services (AWS) in the 1710-
        1755 megahertz and 2110-2155 megahertz bands will likely be the 
        last reallocation opportunities for commercial wireless 
        communications services and wireless broadband services in the 
        foreseeable future.
            (5) In the near term, wireless broadband presents the most 
        promising opportunity to provide a third option (other than 
        cable modem or DSL service) for broadband Internet access for 
        most consumers, and the spectrum in the 700 megahertz band is 
        considered ``beachfront'' property by telecommunications 
        carriers because wireless signals at this frequency range pass 
        easily through buildings, trees, and other interference.
            (6) The 700 megahertz band offers a historic opportunity to 
        provide the equivalent of a ``third wire'' into the home - an 
        alternative to telephone or cable broadband access that will 
        create new competition and incentives for new entrants, 
        innovation, and broader service offerings.
    (b) Sense of the Congress.--It is the sense of the Congress that 
the Federal Communications Commission should disseminate wireless 
communications licenses consistent with the findings in subsection (a) 
and do so utilizing its existing authority under section 309(j) of the 
Communications Act of 1934, which requires the Commission to promote 
the following objectives:
            (1) the development and rapid deployment of new 
        technologies, products, and services for the benefit of the 
        public, including those residing in rural areas, without 
        administrative or judicial delays;
            (2) promoting economic opportunity and competition and 
        ensuring that new and innovative technologies are readily 
        accessible to the American people by avoiding excessive 
        concentration of licenses and by disseminating licenses among a 
        wide variety of applicants, including small businesses and 
        rural telephone companies;
            (3) recovery for the public of a portion of the value of 
        the public spectrum resource made available for commercial use 
        and avoidance of unjust enrichment through the methods employed 
        to award uses of that resource; and
            (4) efficient and intensive use of the electromagnetic 
        spectrum.

SEC. 3413. BAND PLAN REVISION REQUIRED.

    (a) Proceeding Required.--The Federal Communications Commission 
shall commence a proceeding no later than June 1, 2006, to reevaluate 
the band plan for the auction of the unauctioned portions of the lower 
700 megahertz band (currently designated as Blocks A, B, and E).
    (b) Reconfiguration Required.--The Federal Communications 
Commission shall reconfigure the band plan to license spectrum for 
Block B of such portion according to Cellular Market Areas (i.e., 
Metropolitan Statistical Areas (``MSAs'') and Rural Service Areas 
(``RSAs'')) to facilitate the offering of competitive wireless services 
by regional and smaller wireless carriers.

               TITLE IV--COMMITTEE ON FINANCIAL SERVICES

SECTION 4000. TABLE OF CONTENTS.

    The table of contents for this title is as follows:

Sec. 4000. Table of contents.

                  Subtitle A--Deposit Insurance Reform

Sec. 4001. Short title.
Sec. 4002. Merging the BIF and SAIF.
Sec. 4003. Increase in deposit insurance coverage.
Sec. 4004. Setting assessments and repeal of special rules relating to 
                            minimum assessments and free deposit 
                            insurance.
Sec. 4005. Replacement of fixed designated reserve ratio with reserve 
                            range.
Sec. 4006. Requirements applicable to the risk-based assessment system.
Sec. 4007. Refunds, dividends, and credits from Deposit Insurance Fund.
Sec. 4008. Deposit Insurance Fund restoration plans.
Sec. 4009. Regulations required.
Sec. 4010. Studies of FDIC structure and expenses and certain 
                            activities and further possible changes to 
                            deposit insurance system.
Sec. 4011. Bi-annual FDIC survey and report on increasing the deposit 
                            base by encouraging use of depository 
                            institutions by the unbanked.
Sec. 4012. Technical and conforming amendments to the Federal Deposit 
                            Insurance Act relating to the merger of the 
                            BIF and SAIF.
Sec. 4013. Other technical and conforming amendments relating to the 
                            merger of the BIF and SAIF.

                   Subtitle B--FHA Asset Disposition

Sec. 4101. Short title.
Sec. 4102. Definitions.
Sec. 4103. Appropriated funds requirement for below market sales.
Sec. 4104. Up-front grants.

                  Subtitle A--Deposit Insurance Reform

SEC. 4001. SHORT TITLE.

    This subtitle may be cited as the ``Federal Deposit Insurance 
Reform Act of 2005''.

SEC. 4002. MERGING THE BIF AND SAIF.

    (a) In General.--
            (1) Merger.--The Bank Insurance Fund and the Savings 
        Association Insurance Fund shall be merged into the Deposit 
        Insurance Fund.
            (2) Disposition of assets and liabilities.--All assets and 
        liabilities of the Bank Insurance Fund and the Savings 
        Association Insurance Fund shall be transferred to the Deposit 
        Insurance Fund.
            (3) No separate existence.--The separate existence of the 
        Bank Insurance Fund and the Savings Association Insurance Fund 
        shall cease on the effective date of the merger thereof under 
        this section.
    (b) Repeal of Outdated Merger Provision.--Section 2704 of the 
Deposit Insurance Funds Act of 1996 (12 U.S.C. 1821 note) is repealed.
    (c) Effective Date.--This section shall take effect on the first 
day of the first calendar quarter that begins after the end of the 90-
day period beginning on the date of the enactment of this Act.

SEC. 4003. INCREASE IN DEPOSIT INSURANCE COVERAGE.

    (a) In General.--Section 11(a)(1) of the Federal Deposit Insurance 
Act (12 U.S.C. 1821(a)(1)) is amended--
            (1) by striking subparagraph (B) and inserting the 
        following new subparagraph:
                    ``(B) Net amount of insured deposit.--The net 
                amount due to any depositor at an insured depository 
                institution shall not exceed the standard maximum 
                deposit insurance amount as determined in accordance 
                with subparagraphs (C), (D), (E) and (F) and paragraph 
                (3).''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(E) Standard maximum deposit insurance amount 
                defined.--For purposes of this Act, the term `standard 
                maximum deposit insurance amount' means--
                            ``(i) until the effective date of final 
                        regulations prescribed pursuant to section 
                        4009(a)(2) of the Federal Deposit Insurance 
                        Reform Act of 2005, $100,000; and
                            ``(ii) on and after such effective date, 
                        $130,000, adjusted as provided under 
                        subparagraph (F).
                    ``(F) Inflation adjustment.--
                            ``(i) In general.--By April 1 of 2007, and 
                        the 1st day of each subsequent 5-year period, 
                        the Board of Directors and the National Credit 
                        Union Administration Board shall jointly 
                        prescribe the amount by which the standard 
                        maximum deposit insurance amount and the 
                        standard maximum share insurance amount (as 
                        defined in section 207(k) of the Federal Credit 
                        Union Act) applicable to any depositor at an 
                        insured depository institution shall be 
                        increased by calculating the product of--
                                    ``(I) $130,000; and
                                    ``(II) the ratio of the value of 
                                the Personal Consumption Expenditures 
                                Chain-Type Index (or any successor 
                                index thereto), published by the 
                                Department of Commerce, as of December 
                                31 of the year preceding the year in 
                                which the adjustment is calculated 
                                under this clause, to the value of such 
                                index as of the date this subparagraph 
                                takes effect.
                            ``(ii) Rounding.--If the amount determined 
                        under clause (ii) for any period is not a 
                        multiple of $10,000, the amount so determined 
                        shall be rounded to the nearest $10,000.
                            ``(iii) Publication and report to the 
                        congress.--Not later than April 5 of any 
                        calendar year in which an adjustment is 
                        required to be calculated under clause (i) to 
                        the standard maximum deposit insurance amount 
                        and the standard maximum share insurance amount 
                        under such clause, the Board of Directors and 
                        the National Credit Union Administration Board 
                        shall--
                                    ``(I) publish in the Federal 
                                Register the standard maximum deposit 
                                insurance amount, the standard maximum 
                                share insurance amount, and the amount 
                                of coverage under paragraph (3)(A) and 
                                section 207(k)(3) of the Federal Credit 
                                Union Act, as so calculated; and
                                    ``(II) jointly submit a report to 
                                the Congress containing the amounts 
                                described in subclause (I).
                            ``(iv) 6-month implementation period.--
                        Unless an Act of Congress enacted before July 1 
                        of the calendar year in which an adjustment is 
                        required to be calculated under clause (i) 
                        provides otherwise, the increase in the 
                        standard maximum deposit insurance amount and 
                        the standard maximum share insurance amount 
                        shall take effect on January 1 of the year 
                        immediately succeeding such calendar year.''.
    (b) Coverage for Certain Employee Benefit Plan Deposits.--Section 
11(a)(1)(D) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(a)(1)(D)) is amended to read as follows:
                    ``(D) Coverage for certain employee benefit plan 
                deposits.--
                            ``(i) Pass-through insurance.--The 
                        Corporation shall provide pass-through deposit 
                        insurance for the deposits of any employee 
                        benefit plan.
                            ``(ii) Prohibition on acceptance of benefit 
                        plan deposits.--An insured depository 
                        institution that is not well capitalized or 
                        adequately capitalized may not accept employee 
                        benefit plan deposits.
                            ``(iii) Definitions.--For purposes of this 
                        subparagraph, the following definitions shall 
                        apply:
                                    ``(I) Capital standards.--The terms 
                                `well capitalized' and `adequately 
                                capitalized' have the same meanings as 
                                in section 38.
                                    ``(II) Employee benefit plan.--The 
                                term `employee benefit plan' has the 
                                same meaning as in paragraph 
                                (8)(B)(ii), and includes any eligible 
                                deferred compensation plan described in 
                                section 457 of the Internal Revenue 
                                Code of 1986.
                                    ``(III) Pass-through deposit 
                                insurance.--The term `pass-through 
                                deposit insurance' means, with respect 
                                to an employee benefit plan, deposit 
                                insurance coverage provided on a pro 
                                rata basis to the participants in the 
                                plan, in accordance with the interest 
                                of each participant.''.
    (c) Doubling of Deposit Insurance for Certain Retirement 
Accounts.--Section 11(a)(3)(A) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(a)(3)(A)) is amended by striking ``$100,000'' and inserting 
``2 times the standard maximum deposit insurance amount (as determined 
under paragraph (1))''.
    (d) Increased Insurance Coverage for Municipal Deposits.--Section 
11(a)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(2)) is 
amended--
            (1) in subparagraph (A)--
                    (A) by moving the margins of clauses (i) through 
                (v) 4 ems to the right;
                    (B) by striking, in the matter following clause 
                (v), ``such depositor shall'' and all that follows 
                through the period; and
                    (C) by striking the semicolon at the end of clause 
                (v) and inserting a period;
            (2) by striking ``(2)(A) Notwithstanding'' and all that 
        follows through ``a depositor who is--'' and inserting the 
        following:
            ``(2) Municipal depositors.--
                    ``(A) In general.--Notwithstanding any limitation 
                in this Act or in any other provision of law relating 
                to the amount of deposit insurance available to any 1 
                depositor--
                            ``(i) a municipal depositor shall, for the 
                        purpose of determining the amount of insured 
                        deposits under this subsection, be deemed to be 
                        a depositor separate and distinct from any 
                        other officer, employee, or agent of the United 
                        States or any public unit referred to in 
                        subparagraph (E); and
                            ``(ii) except as provided in subparagraph 
                        (B), the deposits of a municipal depositor 
                        shall be insured in an amount equal to the 
                        standard maximum deposit insurance amount (as 
                        determined under paragraph (1)).
                    ``(B) In-state municipal depositors.--In the case 
                of the deposits of an in-State municipal depositor 
                described in clause (ii), (iii), (iv), or (v) of 
                subparagraph (E) at an insured depository institution, 
                such deposits shall be insured in an amount not to 
                exceed the lesser of--
                            ``(i) $2,000,000; or
                            ``(ii) the sum of the standard maximum 
                        deposit insurance amount and 80 percent of the 
                        amount of any deposits in excess of the 
                        standard maximum deposit insurance amount.
                    ``(C) Municipal deposit parity.--No State may deny 
                to insured depository institutions within its 
                jurisdiction the authority to accept deposits insured 
                under this paragraph, or prohibit the making of such 
                deposits in such institutions by any in-State municipal 
                depositor.
                    ``(D) In-state municipal depositor defined.--For 
                purposes of this paragraph, the term `in-State 
                municipal depositor' means a municipal depositor that 
                is located in the same State as the office or branch of 
                the insured depository institution at which the 
                deposits of that depositor are held.
                    ``(E) Municipal depositor.--In this paragraph, the 
                term `municipal depositor' means a depositor that is--
                '';
            (3) by striking ``(B) The'' and inserting the following:
                    ``(F) Authority to limit deposits.--The''; and
            (4) by striking ``depositor referred to in subparagraph (A) 
        of this paragraph'' each place such term appears and inserting 
        ``municipal depositor''.
    (e) Technical and Conforming Amendment Relating to Insurance of 
Trust Funds.--Paragraphs (1) and (3) of section 7(i) of the Federal 
Deposit Insurance Act (12 U.S.C. 1817(i)) are each amended by striking 
``$100,000'' and inserting ``the standard maximum deposit insurance 
amount (as determined under section 11(a)(1))''.
    (f) Other Technical and Conforming Amendments.--
            (1) Section 11(m)(6) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1821(m)(6)) is amended by striking ``$100,000'' and 
        inserting ``an amount equal to the standard maximum deposit 
        insurance amount''.
            (2) Subsection (a) of section 18 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1828(a)) is amended to read as 
        follows:
    ``(a) Insurance Logo.--
            ``(1) Insured depository institutions.--
                    ``(A) In general.--Each insured depository 
                institution shall display at each place of business 
                maintained by that institution a sign or signs relating 
                to the insurance of the deposits of the institution, in 
                accordance with regulations to be prescribed by the 
                Corporation.
                    ``(B) Statement to be included.--Each sign required 
                under subparagraph (A) shall include a statement that 
                insured deposits are backed by the full faith and 
                credit of the United States Government.
            ``(2) Regulations.--The Corporation shall prescribe 
        regulations to carry out this subsection, including regulations 
        governing the substance of signs required by paragraph (1) and 
        the manner of display or use of such signs.
            ``(3) Penalties.--For each day that an insured depository 
        institution continues to violate this subsection or any 
        regulation issued under this subsection, it shall be subject to 
        a penalty of not more than $100, which the Corporation may 
        recover for its use.''.
            (3) Section 43(d) of the Federal Deposit Insurance Act (12 
        U.S.C. 1831t(d)) is amended by striking ``$100,000'' and 
        inserting ``an amount equal to the standard maximum deposit 
        insurance amount''.
            (4) Section 6 of the International Banking Act of 1978 (12 
        U.S.C. 3104) is amended--
                    (A) by striking ``$100,000'' each place such term 
                appears and inserting ``an amount equal to the standard 
                maximum deposit insurance amount''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(e) Standard Maximum Deposit Insurance Amount Defined.--For 
purposes of this section, the term `standard maximum deposit insurance 
amount' means the amount of the maximum amount of deposit insurance as 
determined under section 11(a)(1) of the Federal Deposit Insurance 
Act.''.
    (g) Conforming Change to Credit Union Share Insurance Fund.--
            (1) In general.--Section 207(k) of the Federal Credit Union 
        Act (12 U.S.C. 1787(k)) is amended--
                    (A) by striking ``(k)(1)'' and all that follows 
                through the end of paragraph (1) and inserting the 
                following:
    ``(k) Insured Amounts Payable.--
            ``(1) Net insured amount.--
                    ``(A) In general.--Subject to the provisions of 
                paragraph (2), the net amount of share insurance 
                payable to any member at an insured credit union shall 
                not exceed the total amount of the shares or deposits 
                in the name of the member (after deducting offsets), 
                less any part thereof which is in excess of the 
                standard maximum share insurance amount, as determined 
                in accordance with this paragraph and paragraphs (5) 
                and (6), and consistently with actions taken by the 
                Federal Deposit Insurance Corporation under section 
                11(a) of the Federal Deposit Insurance Act.
                    ``(B) Aggregation.--Determination of the net amount 
                of share insurance under subparagraph (A), shall be in 
                accordance with such regulations as the Board may 
                prescribe, and, in determining the amount payable to 
                any member, there shall be added together all accounts 
                in the credit union maintained by that member for that 
                member's own benefit, either in the member's own name 
                or in the names of others.
                    ``(C) Authority to define the extent of coverage.--
                The Board may define, with such classifications and 
                exceptions as it may prescribe, the extent of the share 
                insurance coverage provided for member accounts, 
                including member accounts in the name of a minor, in 
                trust, or in joint tenancy.'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in clauses (i) through (v), by 
                                moving the margins 4 ems to the right;
                                    (II) in the matter following clause 
                                (v), by striking ``his account'' and 
                                all that follows through the period; 
                                and
                                    (III) by striking the semicolon at 
                                the end of clause (v) and inserting a 
                                period;
                            (ii) by striking ``(2)(A) Notwithstanding'' 
                        and all that follows through ``a depositor or 
                        member who is--'' and inserting the following:
            ``(2) Municipal depositors or members.--
                    ``(A) In general.--Notwithstanding any limitation 
                in this Act or in any other provision of law relating 
                to the amount of insurance available to any 1 depositor 
                or member, deposits or shares of a municipal depositor 
                or member shall be insured in an amount equal to the 
                standard maximum share insurance amount (as determined 
                under paragraph (5)), except as provided in 
                subparagraph (B).
                    ``(B) In-state municipal depositors.--In the case 
                of the deposits of an in-State municipal depositor 
                described in clause (ii), (iii), (iv), or (v) of 
                subparagraph (E) at an insured credit union, such 
                deposits shall be insured in an amount equal to the 
                lesser of--
                            ``(i) $2,000,000; or
                            ``(ii) the sum of the standard maximum 
                        deposit insurance amount and 80 percent of the 
                        amount of any deposits in excess of the 
                        standard maximum deposit insurance amount.
                    ``(C) Rule of construction.--No provision of this 
                paragraph shall be construed as authorizing an insured 
                credit union to accept the deposits of a municipal 
                depositor in an amount greater than such credit union 
                is authorized to accept under any other provision of 
                Federal or State law.
                    ``(D) In-state municipal depositor defined.--For 
                purposes of this paragraph, the term `in-State 
                municipal depositor' means a municipal depositor that 
                is located in the same State as the office or branch of 
                the insured credit union at which the deposits of that 
                depositor are held.
                    ``(E) Municipal depositor.--In this paragraph, the 
                term `municipal depositor' means a depositor that is--
                '';
                            (iii) by striking ``(B) The'' and inserting 
                        the following:
                    ``(F) Authority to limit deposits.--The''; and
                            (iv) by striking ``depositor or member 
                        referred to in subparagraph (A)'' and inserting 
                        ``municipal depositor or member''; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(4) Coverage for certain employee benefit plan 
        deposits.--
                    ``(A) Pass-through insurance.--The Administration 
                shall provide pass-through share insurance for the 
                deposits or shares of any employee benefit plan.
                    ``(B) Prohibition on acceptance of deposits.--An 
                insured credit union that is not well capitalized or 
                adequately capitalized may not accept employee benefit 
                plan deposits.
                    ``(C) Definitions.--For purposes of this paragraph, 
                the following definitions shall apply:
                            ``(i) Capital standards.--The terms `well 
                        capitalized' and `adequately capitalized' have 
                        the same meanings as in section 216(c).
                            ``(ii) Employee benefit plan.--The term 
                        `employee benefit plan'--
                                    ``(I) has the meaning given to such 
                                term in section 3(3) of the Employee 
                                Retirement Income Security Act of 1974;
                                    ``(II) includes any plan described 
                                in section 401(d) of the Internal 
                                Revenue Code of 1986; and
                                    ``(III) includes any eligible 
                                deferred compensation plan described in 
                                section 457 of the Internal Revenue 
                                Code of 1986.
                            ``(iii) Pass-through share insurance.--The 
                        term `pass-through share insurance' means, with 
                        respect to an employee benefit plan, insurance 
                        coverage provided on a pro rata basis to the 
                        participants in the plan, in accordance with 
                        the interest of each participant.
                    ``(D) Rule of construction.--No provision of this 
                paragraph shall be construed as authorizing an insured 
                credit union to accept the deposits of an employee 
                benefit plan in an amount greater than such credit 
                union is authorized to accept under any other provision 
                of Federal or State law.
            ``(5) Standard maximum share insurance amount defined.--For 
        purposes of this Act, the term `standard maximum share 
        insurance amount' means--
                    ``(A) until the effective date of final regulations 
                prescribed pursuant to section 4009(a)(2) of the 
                Federal Deposit Insurance Reform Act of 2005, $100,000; 
                and
                    ``(B) on and after such effective date, $130,000, 
                adjusted as provided under section 11(a)(1)(F) of the 
                Federal Deposit Insurance Act.''.
            (2) Doubling of share insurance for certain retirement 
        accounts.--Section 207(k)(3) of the Federal Credit Union Act 
        (12 U.S.C. 1787(k)(3)) is amended by striking ``$100,000'' and 
        inserting ``2 times the standard maximum share insurance amount 
        (as determined under paragraph (1))''.
    (h) Effective Date.--This section and the amendments made by this 
section shall take effect on the date the final regulations required 
under section 4009(a)(2) take effect.

SEC. 4004. SETTING ASSESSMENTS AND REPEAL OF SPECIAL RULES RELATING TO 
              MINIMUM ASSESSMENTS AND FREE DEPOSIT INSURANCE.

    (a) Setting Assessments.--Section 7(b)(2) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
            (1) by striking subparagraphs (A) and (B) and inserting the 
        following new subparagraphs:
                    ``(A) In general.--The Board of Directors shall set 
                assessments for insured depository institutions in such 
                amounts as the Board of Directors may determine to be 
                necessary or appropriate, subject to subparagraph (D).
                    ``(B) Factors to be considered.--In setting 
                assessments under subparagraph (A), the Board of 
                Directors shall consider the following factors:
                            ``(i) The estimated operating expenses of 
                        the Deposit Insurance Fund.
                            ``(ii) The estimated case resolution 
                        expenses and income of the Deposit Insurance 
                        Fund.
                            ``(iii) The projected effects of the 
                        payment of assessments on the capital and 
                        earnings of insured depository institutions.
                            ``(iv) the risk factors and other factors 
                        taken into account pursuant to paragraph (1) 
                        under the risk-based assessment system, 
                        including the requirement under such paragraph 
                        to maintain a risk-based system.
                            ``(v) Any other factors the Board of 
                        Directors may determine to be appropriate.''; 
                        and
            (2) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) Base rate for assessments.--
                            ``(i) In general.--In setting assessment 
                        rates pursuant to subparagraph (A), the Board 
                        of Directors shall establish a base rate of not 
                        more than 1 basis point (exclusive of any 
                        credit or dividend) for those insured 
                        depository institutions in the lowest-risk 
                        category under the risk-based assessment system 
                        established pursuant to paragraph (1). No 
                        insured depository institution shall be barred 
                        from the lowest-risk category solely because of 
                        size.
                            ``(ii) Suspension.--Clause (i) shall not 
                        apply during any period in which the reserve 
                        ratio of the Deposit Insurance Fund is less 
                        than the amount which is equal to 1.15 percent 
                        of the aggregate estimated insured deposits.''.
    (b) Assessment Recordkeeping Period Shortened.--Paragraph (5) of 
section 7(b) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)) 
is amended to read as follows:
            ``(5) Depository institution required to maintain 
        assessment-related records.--Each insured depository 
        institution shall maintain all records that the Corporation may 
        require for verifying the correctness of any assessment on the 
        insured depository institution under this subsection until the 
        later of--
                    ``(A) the end of the 3-year period beginning on the 
                due date of the assessment; or
                    ``(B) in the case of a dispute between the insured 
                depository institution and the Corporation with respect 
                to such assessment, the date of a final determination 
                of any such dispute.''.
    (c) Increase in Fees for Late Assessment Payments.--Subsection (h) 
of section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828(h)) 
is amended to read as follows:
    ``(h) Penalty for Failure to Timely Pay Assessments.--
            ``(1) In general.--Subject to paragraph (3), any insured 
        depository institution which fails or refuses to pay any 
        assessment shall be subject to a penalty in an amount not more 
        than 1 percent of the amount of the assessment due for each day 
        that such violation continues.
            ``(2) Exception in case of dispute.--Paragraph (1) shall 
        not apply if--
                    ``(A) the failure to pay an assessment is due to a 
                dispute between the insured depository institution and 
                the Corporation over the amount of such assessment; and
                    ``(B) the insured depository institution deposits 
                security satisfactory to the Corporation for payment 
                upon final determination of the issue.
            ``(3) Special rule for small assessment amounts.--If the 
        amount of the assessment which an insured depository 
        institution fails or refuses to pay is less than $10,000 at the 
        time of such failure or refusal, the amount of any penalty to 
        which such institution is subject under paragraph (1) shall not 
        exceed $100 for each day that such violation continues.
            ``(4) Authority to modify or remit penalty.--The 
        Corporation, in the sole discretion of the Corporation, may 
        compromise, modify or remit any penalty which the Corporation 
        may assess or has already assessed under paragraph (1) upon a 
        finding that good cause prevented the timely payment of an 
        assessment.''.
    (d) Assessments for Lifeline Accounts.--
            (1) In general.--Section 232 of the Federal Deposit 
        Insurance Corporation Improvement Act of 1991 (12 U.S.C. 1834) 
        is amended by striking subsection (c).
            (2) Clarification of rate applicable to deposits 
        attributable to lifeline accounts.--Section 7(b)(2)(H) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(H)) is 
        amended by striking ``at a rate determined in accordance with 
        such Act'' and inserting ``at \1/2\ the assessment rate 
        otherwise applicable for such insured depository institution''.
            (3) Regulations.--Section 232(a)(1) of the Federal Deposit 
        Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
        1834(a)(1)) is amended by striking ``Board of Governors of the 
        Federal Reserve System, and the''.
    (e) Technical and Conforming Amendments.--
            (1) Paragraph (3) of section 7(a) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1817(a)(3)) is amended by striking the 
        3d sentence and inserting the following: ``Such reports of 
        condition shall be the basis for the certified statements to be 
        filed pursuant to subsection (c).''.
            (2) Subparagraphs (B)(ii) and (C) of section 7(b)(1) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1817(b)(1)) are each 
        amended by striking ``semiannual'' where such term appears in 
        each such subparagraph.
            (3) Section 7(b)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1817(b)(2)) is amended--
                    (A) by striking subparagraphs (E), (F), and (G);
                    (B) in subparagraph (C), by striking 
                ``semiannual''; and
                    (C) by redesignating subparagraph (H) (as amended 
                by subsection (e)(2) of this section) as subparagraph 
                (E).
            (4) Section 7(b) of the Federal Deposit Insurance Act (12 
        U.S.C. 1817(b)) is amended by striking paragraph (4) and 
        redesignating paragraphs (5) (as amended by subsection (b) of 
        this section), (6), and (7) as paragraphs (4), (5), and (6) 
        respectively.
            (5) Section 7(c) of the Federal Deposit Insurance Act (12 
        U.S.C. 1817(c)) is amended--
                    (A) in paragraph (1)(A), by striking 
                ``semiannual'';
                    (B) in paragraph (2)(A), by striking 
                ``semiannual''; and
                    (C) in paragraph (3), by striking ``semiannual 
                period'' and inserting ``initial assessment period''.
            (6) Section 8(p) of the Federal Deposit Insurance Act (12 
        U.S.C. 1818(p)) is amended by striking ``semiannual''.
            (7) Section 8(q) of the Federal Deposit Insurance Act (12 
        U.S.C. 1818(q)) is amended by striking ``semiannual period'' 
        and inserting ``assessment period''.
            (8) Section 13(c)(4)(G)(ii)(II) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)(II)) is amended by 
        striking ``semiannual period'' and inserting ``assessment 
        period''.
            (9) Section 232(a) of the Federal Deposit Insurance 
        Corporation Improvement Act of 1991 (12 U.S.C. 1834(a)) is 
        amended--
                    (A) in the matter preceding subparagraph (A) of 
                paragraph (2), by striking ``the Board and'';
                    (B) in subparagraph (J) of paragraph (2), by 
                striking ``the Board'' and inserting ``the 
                Corporation'';
                    (C) by striking subparagraph (A) of paragraph (3) 
                and inserting the following new subparagraph:
                    ``(A) Corporation.--The term `Corporation' means 
                the Federal Deposit Insurance Corporation.''; and
                    (D) in subparagraph (C) of paragraph (3), by 
                striking ``Board'' and inserting ``Corporation''.
    (f) Effective Date.--This section and the amendments made by this 
section shall take effect on the date that the final regulations 
required under section 4009(a)(5) take effect.

SEC. 4005. REPLACEMENT OF FIXED DESIGNATED RESERVE RATIO WITH RESERVE 
              RANGE.

    (a) In General.--Section 7(b)(3) of the Federal Deposit Insurance 
Act (12 U.S.C. 1817(b)(3)) is amended to read as follows:
            ``(3) Designated reserve ratio.--
                    ``(A) Establishment.--
                            ``(i) In general.--The Board of Directors 
                        shall designate, by regulation after notice and 
                        opportunity for comment, the reserve ratio 
                        applicable with respect to the Deposit 
                        Insurance Fund.
                            ``(ii) Not less than annual 
                        redetermination.--A determination under clause 
                        (i) shall be made by the Board of Directors at 
                        least before the beginning of each calendar 
                        year, for such calendar year, and at such other 
                        times as the Board of Directors may determine 
                        to be appropriate.
                    ``(B) Range.--The reserve ratio designated by the 
                Board of Directors for any year--
                            ``(i) may not exceed 1.4 percent of 
                        estimated insured deposits; and
                            ``(ii) may not be less than 1.15 percent of 
                        estimated insured deposits.
                    ``(C) Factors.--In designating a reserve ratio for 
                any year, the Board of Directors shall--
                            ``(i) take into account the risk of losses 
                        to the Deposit Insurance Fund in such year and 
                        future years, including historic experience and 
                        potential and estimated losses from insured 
                        depository institutions;
                            ``(ii) take into account economic 
                        conditions generally affecting insured 
                        depository institutions so as to allow the 
                        designated reserve ratio to increase during 
                        more favorable economic conditions and to 
                        decrease during less favorable economic 
                        conditions, notwithstanding the increased risks 
                        of loss that may exist during such less 
                        favorable conditions, as determined to be 
                        appropriate by the Board of Directors;
                            ``(iii) seek to prevent sharp swings in the 
                        assessment rates for insured depository 
                        institutions; and
                            ``(iv) take into account such other factors 
                        as the Board of Directors may determine to be 
                        appropriate, consistent with the requirements 
                        of this subparagraph.
                    ``(D) Publication of proposed change in ratio.--In 
                soliciting comment on any proposed change in the 
                designated reserve ratio in accordance with 
                subparagraph (A), the Board of Directors shall include 
                in the published proposal a thorough analysis of the 
                data and projections on which the proposal is based.''.
    (b) Technical and Conforming Amendment.--Section 3(y) of the 
Federal Deposit Insurance Act (12 U.S.C. 1813(y)) is amended--
            (1) by striking ``(y) The term'' and inserting(y) 
        Definitions Relating to Deposit Insurance Fund.--
            ``(1) Deposit insurance fund.--The term''; and
            (2) by inserting after paragraph (1) (as so designated by 
        paragraph (1) of this subsection) the following new paragraph:
            ``(2) Designated reserve ratio.--The term `designated 
        reserve ratio' means the reserve ratio designated by the Board 
        of Directors in accordance with section 7(b)(3).''.
    (c) Effective Date.--This section and the amendments made by this 
section shall take effect on the date that the final regulations 
required under section 4009(a)(1) take effect.

SEC. 4006. REQUIREMENTS APPLICABLE TO THE RISK-BASED ASSESSMENT SYSTEM.

    Section 7(b)(1) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(b)(1)) is amended by adding at the end the following new 
subparagraphs:
                    ``(E) Information concerning risk of loss and 
                economic conditions.--
                            ``(i) Sources of information.--For purposes 
                        of determining risk of losses at insured 
                        depository institutions and economic conditions 
                        generally affecting depository institutions, 
                        the Corporation shall collect information, as 
                        appropriate, from all sources the Board of 
                        Directors considers appropriate, such as 
                        reports of condition, inspection reports, and 
                        other information from all Federal banking 
                        agencies, any information available from State 
                        bank supervisors, State insurance and 
                        securities regulators, the Securities and 
                        Exchange Commission (including information 
                        described in section 35), the Secretary of the 
                        Treasury, the Commodity Futures Trading 
                        Commission, the Farm Credit Administration, the 
                        Federal Trade Commission, any Federal reserve 
                        bank or Federal home loan bank, and other 
                        regulators of financial institutions, and any 
                        information available from credit rating 
                        entities, and other private economic or 
                        business analysts.
                            ``(ii) Consultation with federal banking 
                        agencies.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), in 
                                assessing the risk of loss to the 
                                Deposit Insurance Fund with respect to 
                                any insured depository institution, the 
                                Corporation shall consult with the 
                                appropriate Federal banking agency of 
                                such institution.
                                    ``(II) Treatment on aggregate 
                                basis.--In the case of insured 
                                depository institutions that are well 
                                capitalized (as defined in section 38) 
                                and, in the most recent examination, 
                                were found to be well managed, the 
                                consultation under subclause (I) 
                                concerning the assessment of the risk 
                                of loss posed by such institutions may 
                                be made on an aggregate basis.
                            ``(iii) Rule of construction.--No provision 
                        of this paragraph shall be construed as 
                        providing any new authority for the Corporation 
                        to require submission of information by insured 
                        depository institutions to the Corporation.
                    ``(F) Modifications to the risk-based assessment 
                system allowed only after notice and comment.--In 
                revising or modifying the risk-based assessment system 
                at any time after the date of the enactment of the 
                Federal Deposit Insurance Reform Act of 2005, the Board 
                of Directors may implement such revisions or 
                modification in final form only after notice and 
                opportunity for comment.''.

SEC. 4007. REFUNDS, DIVIDENDS, AND CREDITS FROM DEPOSIT INSURANCE FUND.

    (a) In General.--Subsection (e) of section 7 of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(e)) is amended to read as follows:
    ``(e) Refunds, Dividends, and Credits.--
            ``(1) Refunds of overpayments.--In the case of any payment 
        of an assessment by an insured depository institution in excess 
        of the amount due to the Corporation, the Corporation may--
                    ``(A) refund the amount of the excess payment to 
                the insured depository institution; or
                    ``(B) credit such excess amount toward the payment 
                of subsequent assessments until such credit is 
                exhausted.
            ``(2) Dividends from excess amounts in deposit insurance 
        fund.--
                    ``(A) Reserve ratio in excess of 1.4 percent of 
                estimated insured deposits.--Whenever the reserve ratio 
                of the Deposit Insurance Fund exceeds 1.4 percent of 
                estimated insured deposits, the Corporation shall 
                declare the amount in the Fund in excess of the amount 
                required to maintain the reserve ratio at 1.4 percent 
                of estimated insured deposits, as dividends to be paid 
                to insured depository institutions.
                    ``(B) Reserve ratio equal to or in excess of 1.35 
                percent of estimated insured deposits and not more than 
                1.4 percent.--Whenever the reserve ratio of the Deposit 
                Insurance Fund equals or exceeds 1.35 percent of 
                estimated insured deposits and is not more than 1.4 
                percent of such deposits, the Corporation shall declare 
                the amount in the Fund that is equal to 50 percent of 
                the amount in excess of the amount required to maintain 
                the reserve ratio at 1.35 percent of the estimated 
                insured deposits as dividends to be paid to insured 
                depository institutions.
                    ``(C) Basis for distribution of dividends.--
                            ``(i) In general.--Solely for the purposes 
                        of dividend distribution under this paragraph 
                        and credit distribution under paragraph (3)(B), 
                        the Corporation shall determine each insured 
                        depository institution's relative contribution 
                        to the Deposit Insurance Fund (or any 
                        predecessor deposit insurance fund) for 
                        calculating such institution's share of any 
                        dividend or credit declared under this 
                        paragraph or paragraph (3)(B), taking into 
                        account the factors described in clause (ii).
                            ``(ii) Factors for distribution.--In 
                        implementing this paragraph and paragraph 
                        (3)(B) in accordance with regulations, the 
                        Corporation shall take into account the 
                        following factors:
                                    ``(I) The ratio of the assessment 
                                base of an insured depository 
                                institution (including any predecessor) 
                                on December 31, 1996, to the assessment 
                                base of all eligible insured depository 
                                institutions on that date.
                                    ``(II) The total amount of 
                                assessments paid on or after January 1, 
                                1997, by an insured depository 
                                institution (including any predecessor) 
                                to the Deposit Insurance Fund (and any 
                                predecessor deposit insurance fund).
                                    ``(III) That portion of assessments 
                                paid by an insured depository 
                                institution (including any predecessor) 
                                that reflects higher levels of risk 
                                assumed by such institution.
                                    ``(IV) Such other factors as the 
                                Corporation may determine to be 
                                appropriate.
                    ``(D) Notice and opportunity for comment.--The 
                Corporation shall prescribe by regulation, after notice 
                and opportunity for comment, the method for the 
                calculation, declaration, and payment of dividends 
                under this paragraph.
            ``(3) Credit pool.--
                    ``(A) One-time credit based on total assessment 
                base at year-end 1996.--
                            ``(i) In general.--Before the end of the 
                        270-day period beginning on the date of the 
                        enactment of the Federal Deposit Insurance 
                        Reform Act of 2005, the Board of Directors 
                        shall, by regulation, provide for a credit to 
                        each eligible insured depository institution, 
                        based on the assessment base of the institution 
                        (including any predecessor institution) on 
                        December 31, 1996, as compared to the combined 
                        aggregate assessment base of all eligible 
                        insured depository institutions, taking into 
                        account such factors as the Board of Directors 
                        may determine to be appropriate.
                            ``(ii) Credit limit.--The aggregate amount 
                        of credits available under clause (i) to all 
                        eligible insured depository institutions shall 
                        equal the amount that the Corporation could 
                        collect if the Corporation imposed an 
                        assessment of 12 basis points on the combined 
                        assessment base of the Bank Insurance Fund and 
                        the Savings Association Insurance Fund as of 
                        December 31, 2001.
                            ``(iii) Eligible insured depository 
                        institution defined.--For purposes of this 
                        paragraph, the term `eligible insured 
                        depository institution' means any insured 
                        depository institution that--
                                    ``(I) was in existence on December 
                                31, 1996, and paid a deposit insurance 
                                assessment prior to that date; or
                                    ``(II) is a successor to any 
                                insured depository institution 
                                described in subclause (I).
                            ``(iv) Application of credits.--
                                    ``(I) In general.--The amount of a 
                                credit to any eligible insured 
                                depository institution under this 
                                paragraph shall be applied by the 
                                Corporation, subject to subsection 
                                (b)(3)(E), to the assessments imposed 
                                on such institution under subsection 
                                (b) that become due for assessment 
                                periods beginning after the effective 
                                date of regulations prescribed under 
                                clause (i).
                                    ``(II) Regulations.--The 
                                regulations prescribed under clause (i) 
                                shall establish the qualifications and 
                                procedures governing the application of 
                                assessment credits pursuant to 
                                subclause (I).
                            ``(v) Limitation on amount of credit for 
                        certain depository institutions.--In the case 
                        of an insured depository institution that 
                        exhibits financial, operational, or compliance 
                        weaknesses ranging from moderately severe to 
                        unsatisfactory, or is not adequately 
                        capitalized (as defined in section 38) at the 
                        beginning of an assessment period, the amount 
                        of any credit allowed under this paragraph 
                        against the assessment on that depository 
                        institution for such period may not exceed the 
                        amount calculated by applying to that 
                        depository institution the average assessment 
                        rate on all insured depository institutions for 
                        such assessment period.
                            ``(vi) Predecessor defined.--For purposes 
                        of this paragraph, the term `predecessor', when 
                        used with respect to any insured depository 
                        institution, includes any other insured 
                        depository institution acquired by or merged 
                        with such insured depository institution.
                    ``(B) On-going credit pool.--
                            ``(i) In general.--In addition to the 
                        credit provided pursuant to subparagraph (A) 
                        and subject to the limitation contained in 
                        clause (v) of such subparagraph, the 
                        Corporation shall, by regulation, establish an 
                        on-going system of credits to be applied 
                        against future assessments under subsection 
                        (b)(1) on the same basis as the dividends 
                        provided under paragraph (2)(C).
                            ``(ii) Limitation on credits under certain 
                        circumstances.--No credits may be awarded by 
                        the Corporation under this subparagraph during 
                        any period in which--
                                    ``(I) the reserve ratio of the 
                                Deposit Insurance Fund is less than the 
                                designated reserve ratio of such Fund; 
                                or
                                    ``(II) the reserve ratio of the 
                                Fund is less than 1.25 percent of the 
                                amount of estimated insured deposits.
                            ``(iii) Criteria for determination.--In 
                        determining the amounts of any assessment 
                        credits under this subparagraph, the Board of 
                        Directors shall take into account the factors 
                        for designating the reserve ratio under 
                        subsection (b)(3) and the factors for setting 
                        assessments under subsection (b)(2)(B).
            ``(4) Administrative review.--
                    ``(A) In general.--The regulations prescribed under 
                paragraph (2)(D) and subparagraphs (A) and (B) of 
                paragraph (3) shall include provisions allowing an 
                insured depository institution a reasonable opportunity 
                to challenge administratively the amount of the credit 
                or dividend determined under paragraph (2) or (3) for 
                such institution.
                    ``(B) Administrative review.--Any review under 
                subparagraph (A) of any determination of the 
                Corporation under paragraph (2) or (3) shall be final 
                and not subject to judicial review.''.
    (b) Definition of Reserve Ratio.--Section 3(y) of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(y)) (as amended by section 
4005(b) of this subtitle) is amended by adding at the end the following 
new paragraph:
            ``(3) Reserve ratio.--The term `reserve ratio', when used 
        with regard to the Deposit Insurance Fund other than in 
        connection with a reference to the designated reserve ratio, 
        means the ratio of the net worth of the Deposit Insurance Fund 
        to the value of the aggregate estimated insured deposits.''.

SEC. 4008. DEPOSIT INSURANCE FUND RESTORATION PLANS.

    Section 7(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(b)(3)) (as amended by section 4005(a) of this subtitle) is amended 
by adding at the end the following new subparagraph:
                    ``(E) Dif restoration plans.--
                            ``(i) In general.--Whenever--
                                    ``(I) the Corporation projects that 
                                the reserve ratio of the Deposit 
                                Insurance Fund will, within 6 months of 
                                such determination, fall below the 
                                minimum amount specified in 
                                subparagraph (B)(ii) for the designated 
                                reserve ratio; or
                                    ``(II) the reserve ratio of the 
                                Deposit Insurance Fund actually falls 
                                below the minimum amount specified in 
                                subparagraph (B)(ii) for the designated 
                                reserve ratio without any determination 
                                under subclause (I) having been made,
                        the Corporation shall establish and implement a 
                        Deposit Insurance Fund restoration plan within 
                        90 days that meets the requirements of clause 
                        (ii) and such other conditions as the 
                        Corporation determines to be appropriate.
                            ``(ii) Requirements of restoration plan.--A 
                        Deposit Insurance Fund restoration plan meets 
                        the requirements of this clause if the plan 
                        provides that the reserve ratio of the Fund 
                        will meet or exceed the minimum amount 
                        specified in subparagraph (B)(ii) for the 
                        designated reserve ratio before the end of the 
                        10-year period beginning upon the 
                        implementation of the plan.
                            ``(iii) Restriction on assessment 
                        credits.--As part of any restoration plan under 
                        this subparagraph, the Corporation may elect to 
                        restrict the application of assessment credits 
                        provided under subsection (e)(3) for any period 
                        that the plan is in effect.
                            ``(iv) Limitation on restriction.--
                        Notwithstanding clause (iii), while any 
                        restoration plan under this subparagraph is in 
                        effect, the Corporation shall apply credits 
                        provided to an insured depository institution 
                        under subsection (e)(3) against any assessment 
                        imposed on the institution for any assessment 
                        period in an amount equal to the lesser of--
                                    ``(I) the amount of the assessment; 
                                or
                                    ``(II) the amount equal to 3 basis 
                                points of the institution's assessment 
                                base.
                            ``(v) Transparency.--Not more than 30 days 
                        after the Corporation establishes and 
                        implements a restoration plan under clause (i), 
                        the Corporation shall publish in the Federal 
                        Register a detailed analysis of the factors 
                        considered and the basis for the actions taken 
                        with regard to the plan.''.

SEC. 4009. REGULATIONS REQUIRED.

    (a) In General.--Not later than 270 days after the date of the 
enactment of this Act, the Board of Directors of the Federal Deposit 
Insurance Corporation shall prescribe final regulations, after notice 
and opportunity for comment--
            (1) designating the reserve ratio for the Deposit Insurance 
        Fund in accordance with section 7(b)(3) of the Federal Deposit 
        Insurance Act (as amended by section 4005 of this subtitle);
            (2) implementing increases in deposit insurance coverage in 
        accordance with the amendments made by section 4003 of this 
        subtitle;
            (3) implementing the dividend requirement under section 
        7(e)(2) of the Federal Deposit Insurance Act (as amended by 
        section 4007 of this subtitle);
            (4) implementing the 1-time assessment credit to certain 
        insured depository institutions in accordance with section 
        7(e)(3) of the Federal Deposit Insurance Act, as amended by 
        section 4007 of this subtitle, including the qualifications and 
        procedures under which the Corporation would apply assessment 
        credits; and
            (5) providing for assessments under section 7(b) of the 
        Federal Deposit Insurance Act, as amended by this subtitle.
    (b) Rule of Construction.--No provision of this subtitle or any 
amendment made by this subtitle shall be construed as affecting the 
authority of the Corporation to set or collect deposit insurance 
assessments before the effective date of the final regulations 
prescribed under subsection (a).

SEC. 4010. STUDIES OF FDIC STRUCTURE AND EXPENSES AND CERTAIN 
              ACTIVITIES AND FURTHER POSSIBLE CHANGES TO DEPOSIT 
              INSURANCE SYSTEM.

    (a) Study by Comptroller General.--
            (1) Study required.--The Comptroller General shall conduct 
        a study of the following issues:
                    (A) The efficiency and effectiveness of the 
                administration of the prompt corrective action program 
                under section 38 of the Federal Deposit Insurance Act 
                by the Federal banking agencies (as defined in section 
                3 of such Act), including the degree of effectiveness 
                of such agencies in identifying troubled depository 
                institutions and taking effective action with respect 
                to such institutions, and the degree of accuracy of the 
                risk assessments made by the Corporation.
                    (B) The appropriateness of the organizational 
                structure of the Federal Deposit Insurance Corporation 
                for the mission of the Corporation taking into 
                account--
                            (i) the current size and complexity of the 
                        business of insured depository institutions (as 
                        such term is defined in section 3 of the 
                        Federal Deposit Insurance Act);
                            (ii) the extent to which the organizational 
                        structure contributes to or reduces operational 
                        inefficiencies that increase operational costs; 
                        and
                            (iii) the effectiveness of internal 
                        controls.
            (2) Report to the congress.--The Comptroller General shall 
        submit a report to the Congress before the end of the 1-year 
        period beginning on the date of the enactment of this Act 
        containing the findings and conclusions of the Comptroller 
        General with respect to the study required under paragraph (1) 
        together with such recommendations for legislative or 
        administrative action as the Comptroller General may determine 
        to be appropriate.
    (b) Study of Further Possible Changes to Deposit Insurance 
System.--
            (1) Study required.--The Board of Directors of the Federal 
        Deposit Insurance Corporation and the National Credit Union 
        Administration Board shall each conduct a study of the 
        following:
                    (A) The feasibility of establishing a voluntary 
                deposit insurance system for deposits in excess of the 
                maximum amount of deposit insurance for any depositor 
                and the potential benefits and the potential adverse 
                consequences that may result from the establishment of 
                any such system.
                    (B) The feasibility of privatizing all deposit 
                insurance at insured depository institutions and 
                insured credit unions.
            (2) Report.--Before the end of the 1-year period beginning 
        on the date of the enactment of this Act, the Board of 
        Directors of the Federal Deposit Insurance Corporation and the 
        National Credit Union Administration Board shall each submit a 
        report to the Congress on the study required under paragraph 
        (1) containing the findings and conclusions of the reporting 
        agency together with such recommendations for legislative or 
        administrative changes as the agency may determine to be 
        appropriate.
    (c) Study Regarding Appropriate Deposit Base in Designating Reserve 
Ratio.--
            (1) Study required.--The Federal Deposit Insurance 
        Corporation shall conduct a study of the feasibility of using 
        actual domestic deposits rather than estimated insured deposits 
        in calculating the reserve ratio of the Deposit Insurance Fund 
        and designating a reserve ratio for such Fund.
            (2) Report.--The Federal Deposit Insurance Corporation 
        shall submit a report to the Congress before the end of the 1-
        year period beginning on the date of the enactment of this Act 
        containing the findings and conclusions of the Corporation with 
        respect to the study required under paragraph (1) together with 
        such recommendations for legislative or administrative action 
        as the Board of Directors of the Corporation may determine to 
        be appropriate.
    (d) Study of Reserve Methodology and Accounting for Loss.--
            (1) Study required.--The Federal Deposit Insurance 
        Corporation shall conduct a study of the reserve methodology 
        and loss accounting used by the Corporation during the period 
        beginning on January 1, 1992, and ending December 31, 2004, 
        with respect to insured depository institutions in a troubled 
        condition (as defined in the regulations prescribed pursuant to 
        section 32(f) of the Federal Deposit Insurance Act). The 
        Corporation shall obtain comments on the design of the study 
        from the Comptroller General.
            (2) Factors to be included.--In conducting the study 
        pursuant to paragraph (1), the Federal Deposit Insurance 
        Corporation shall--
                    (A) consider the overall effectiveness and accuracy 
                of the methodology used by the Corporation for 
                establishing and maintaining reserves and estimating 
                and accounting for losses at insured depository 
                institutions, during the period described in such 
                paragraph;
                    (B) consider the appropriateness and reliability of 
                information and criteria used by the Corporation in 
                determining--
                            (i) whether an insured depository 
                        institution was in a troubled condition; and
                            (ii) the amount of any loss anticipated at 
                        such institution;
                    (C) analyze the actual historical loss experience 
                over the period described in paragraph (1) and the 
                causes of the exceptionally high rate of losses 
                experienced by the Corporation in the final 3 years of 
                that period; and
                    (D) rate the efforts of the Corporation to reduce 
                losses in such 3-year period to minimally acceptable 
                levels and to historical levels.
            (3) Report required.--The Board of Directors of the Federal 
        Deposit Insurance Corporation shall submit a report to the 
        Congress before the end of the 6-month period beginning on the 
        date of the enactment of this Act, containing the findings and 
        conclusions of the Corporation with respect to the study 
        required under paragraph (1), together with such 
        recommendations for legislative or administrative action as the 
        Board of Directors may determine to be appropriate. Before 
        submitting the report to Congress, the Board of Directors shall 
        provide a draft of the report to the Comptroller General for 
        comment.

SEC. 4011. BI-ANNUAL FDIC SURVEY AND REPORT ON INCREASING THE DEPOSIT 
              BASE BY ENCOURAGING USE OF DEPOSITORY INSTITUTIONS BY THE 
              UNBANKED.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended by adding at the end the following new section:

``SEC. 49. BI-ANNUAL FDIC SURVEY AND REPORT ON ENCOURAGING USE OF 
              DEPOSITORY INSTITUTIONS BY THE UNBANKED.

    ``(a) Survey Required.--
            ``(1) In general.--The Corporation shall conduct a bi-
        annual survey on efforts by insured depository institutions to 
        bring those individuals and families who have rarely, if ever, 
        held a checking account, a savings account or other type of 
        transaction or check cashing account at an insured depository 
        institution (hereafter in this section referred to as the 
        `unbanked') into the conventional finance system.
            ``(2) Factors and questions to consider.--In conducting the 
        survey, the Corporation shall take the following factors and 
        questions into account:
                    ``(A) To what extent do insured depository 
                institutions promote financial education and financial 
                literacy outreach?
                    ``(B) Which financial education efforts appear to 
                be the most effective in bringing `unbanked' 
                individuals and families into the conventional finance 
                system?
                    ``(C) What efforts are insured institutions making 
                at converting `unbanked' money order, wire transfer, 
                and international remittance customers into 
                conventional account holders?
                    ``(D) What cultural, language and identification 
                issues as well as transaction costs appear to most 
                prevent `unbanked' individuals from establishing 
                conventional accounts?
                    ``(E) What is a fair estimate of the size and worth 
                of the `unbanked' market in the United States?
    ``(b) Reports.--The Chairperson of the Board of Directors shall 
submit a bi-annual report to the Committee on Financial Services of the 
House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate containing the Corporation's findings and 
conclusions with respect to the survey conducted pursuant to subsection 
(a), together with such recommendations for legislative or 
administrative action as the Chairperson may determine to be 
appropriate.''.

SEC. 4012. TECHNICAL AND CONFORMING AMENDMENTS TO THE FEDERAL DEPOSIT 
              INSURANCE ACT RELATING TO THE MERGER OF THE BIF AND SAIF.

    (a) In General.--The Federal Deposit Insurance Act (12 U.S.C. 1811 
et seq.) is amended--
            (1) in section 3 (12 U.S.C. 1813)--
                    (A) by striking subparagraph (B) of subsection 
                (a)(1) and inserting the following new subparagraph:
                    ``(B) includes any former savings association.''; 
                and
                    (B) by striking paragraph (1) of subsection (y) (as 
                so designated by section 4005(b) of this subtitle) and 
                inserting the following new paragraph:
            ``(1) Deposit insurance fund.--The term `Deposit Insurance 
        Fund' means the Deposit Insurance Fund established under 
        section 11(a)(4).'';
            (2) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), by striking 
        ``the Bank Insurance Fund or the Savings Association Insurance 
        Fund,'' and inserting ``the Deposit Insurance Fund,'';
            (3) in section 5(c)(4), by striking ``deposit insurance 
        fund'' and inserting ``Deposit Insurance Fund'';
            (4) in section 5(d) (12 U.S.C. 1815(d)), by striking 
        paragraphs (2) and (3) (and any funds resulting from the 
        application of such paragraph (2) prior to its repeal shall be 
        deposited into the general fund of the Deposit Insurance Fund);
            (5) in section 5(d)(1) (12 U.S.C. 1815(d)(1))--
                    (A) in subparagraph (A), by striking ``reserve 
                ratios in the Bank Insurance Fund and the Savings 
                Association Insurance Fund as required by section 7'' 
                and inserting ``the reserve ratio of the Deposit 
                Insurance Fund'';
                    (B) by striking subparagraph (B) and inserting the 
                following:
            ``(2) Fee credited to the deposit insurance fund.--The fee 
        paid by the depository institution under paragraph (1) shall be 
        credited to the Deposit Insurance Fund.'';
                    (C) by striking ``(1) uninsured institutions.--''; 
                and
                    (D) by redesignating subparagraphs (A) and (C) as 
                paragraphs (1) and (3), respectively, and moving the 
                left margins 2 ems to the left;
            (6) in section 5(e) (12 U.S.C. 1815(e))--
                    (A) in paragraph (5)(A), by striking ``Bank 
                Insurance Fund or the Savings Association Insurance 
                Fund'' and inserting ``Deposit Insurance Fund'';
                    (B) by striking paragraph (6); and
                    (C) by redesignating paragraphs (7), (8), and (9) 
                as paragraphs (6), (7), and (8), respectively;
            (7) in section 6(5) (12 U.S.C. 1816(5)), by striking ``Bank 
        Insurance Fund or the Savings Association Insurance Fund'' and 
        inserting ``Deposit Insurance Fund'';
            (8) in section 7(b) (12 U.S.C. 1817(b))--
                    (A) in paragraph (1)(C), by striking ``deposit 
                insurance fund'' each place that term appears and 
                inserting ``Deposit Insurance Fund'';
                    (B) in paragraph (1)(D), by striking ``each deposit 
                insurance fund'' and inserting ``the Deposit Insurance 
                Fund''; and
                    (C) in paragraph (5) (as so redesignated by section 
                4004(e)(4) of this subtitle)--
                            (i) by striking ``any such assessment'' and 
                        inserting ``any such assessment is necessary'';
                            (ii) by striking subparagraph (B);
                            (iii) in subparagraph (A)--
                                    (I) by striking ``(A) is 
                                necessary--'';
                                    (II) by striking ``Bank Insurance 
                                Fund members'' and inserting ``insured 
                                depository institutions''; and
                                    (III) by redesignating clauses (i), 
                                (ii), and (iii) as subparagraphs (A), 
                                (B), and (C), respectively, and moving 
                                the margins 2 ems to the left; and
                            (iv) in subparagraph (C) (as so 
                        redesignated)--
                                    (I) by inserting ``that'' before 
                                ``the Corporation''; and
                                    (II) by striking ``; and'' and 
                                inserting a period;
            (9) in section 7(j)(7)(F) (12 U.S.C. 1817(j)(7)(F)), by 
        striking ``Bank Insurance Fund or the Savings Association 
        Insurance Fund'' and inserting ``Deposit Insurance Fund'';
            (10) in section 8(t)(2)(C) (12 U.S.C. 1818(t)(2)(C)), by 
        striking ``deposit insurance fund'' and inserting ``Deposit 
        Insurance Fund'';
            (11) in section 11 (12 U.S.C. 1821)--
                    (A) by striking ``deposit insurance fund'' each 
                place that term appears and inserting ``Deposit 
                Insurance Fund'';
                    (B) by striking paragraph (4) of subsection (a) and 
                inserting the following new paragraph:
            ``(4) Deposit insurance fund.--
                    ``(A) Establishment.--There is established the 
                Deposit Insurance Fund, which the Corporation shall--
                            ``(i) maintain and administer;
                            ``(ii) use to carry out its insurance 
                        purposes, in the manner provided by this 
                        subsection; and
                            ``(iii) invest in accordance with section 
                        13(a).
                    ``(B) Uses.--The Deposit Insurance Fund shall be 
                available to the Corporation for use with respect to 
                insured depository institutions the deposits of which 
                are insured by the Deposit Insurance Fund.
                    ``(C) Limitation on use.--Notwithstanding any 
                provision of law other than section 13(c)(4)(G), the 
                Deposit Insurance Fund shall not be used in any manner 
                to benefit any shareholder or affiliate (other than an 
                insured depository institution that receives assistance 
                in accordance with the provisions of this Act) of--
                            ``(i) any insured depository institution 
                        for which the Corporation has been appointed 
                        conservator or receiver, in connection with any 
                        type of resolution by the Corporation;
                            ``(ii) any other insured depository 
                        institution in default or in danger of default, 
                        in connection with any type of resolution by 
                        the Corporation; or
                            ``(iii) any insured depository institution, 
                        in connection with the provision of assistance 
                        under this section or section 13 with respect 
                        to such institution, except that this clause 
                        shall not prohibit any assistance to any 
                        insured depository institution that is not in 
                        default, or that is not in danger of default, 
                        that is acquiring (as defined in section 
                        13(f)(8)(B)) another insured depository 
                        institution.
                    ``(D) Deposits.--All amounts assessed against 
                insured depository institutions by the Corporation 
                shall be deposited into the Deposit Insurance Fund.'';
                    (C) by striking paragraphs (5), (6), and (7) of 
                subsection (a); and
                    (D) by redesignating paragraph (8) of subsection 
                (a) as paragraph (5);
            (12) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), by 
        striking ``, except that--'' and all that follows through the 
        end of the paragraph and inserting a period;
            (13) in section 11(i)(3) (12 U.S.C. 1821(i)(3))--
                    (A) by striking subparagraph (B);
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B); and
                    (C) in subparagraph (B) (as so redesignated), by 
                striking ``subparagraphs (A) and (B)'' and inserting 
                ``subparagraph (A)'';
            (14) in section 11(p)(2)(B) (12 U.S.C. 1821(p)(2)(B)), by 
        striking ``institution, any'' and inserting ``institution, 
        the'';
            (15) in section 11A(a) (12 U.S.C. 1821a(a))--
                    (A) in paragraph (2), by striking ``liabilities.--
                '' and all that follows through ``Except'' and 
                inserting ``liabilities.--Except'';
                    (B) by striking paragraph (2)(B); and
                    (C) in paragraph (3), by striking ``the Bank 
                Insurance Fund, the Savings Association Insurance 
                Fund,'' and inserting ``the Deposit Insurance Fund'';
            (16) in section 11A(b) (12 U.S.C. 1821a(b)), by striking 
        paragraph (4);
            (17) in section 11A(f) (12 U.S.C. 1821a(f)), by striking 
        ``Savings Association Insurance Fund'' and inserting ``Deposit 
        Insurance Fund'';
            (18) in section 12(f)(4)(E)(iv) (12 U.S.C. 
        1822(f)(4)(E)(iv)), by striking ``Federal deposit insurance 
        funds'' and inserting ``the Deposit Insurance Fund (or any 
        predecessor deposit insurance fund)'';
            (19) in section 13 (12 U.S.C. 1823)--
                    (A) by striking ``deposit insurance fund'' each 
                place that term appears and inserting ``Deposit 
                Insurance Fund'';
                    (B) in subsection (a)(1), by striking ``Bank 
                Insurance Fund, the Savings Association Insurance 
                Fund,'' and inserting ``Deposit Insurance Fund'';
                    (C) in subsection (c)(4)(E)--
                            (i) in the subparagraph heading, by 
                        striking ``funds'' and inserting ``fund''; and
                            (ii) in clause (i), by striking ``any 
                        insurance fund'' and inserting ``the Deposit 
                        Insurance Fund'';
                    (D) in subsection (c)(4)(G)(ii)--
                            (i) by striking ``appropriate insurance 
                        fund'' and inserting ``Deposit Insurance 
                        Fund'';
                            (ii) by striking ``the members of the 
                        insurance fund (of which such institution is a 
                        member)'' and inserting ``insured depository 
                        institutions'';
                            (iii) by striking ``each member's'' and 
                        inserting ``each insured depository 
                        institution's''; and
                            (iv) by striking ``the member's'' each 
                        place that term appears and inserting ``the 
                        institution's'';
                    (E) in subsection (c), by striking paragraph (11);
                    (F) in subsection (h), by striking ``Bank Insurance 
                Fund'' and inserting ``Deposit Insurance Fund'';
                    (G) in subsection (k)(4)(B)(i), by striking 
                ``Savings Association Insurance Fund member'' and 
                inserting ``savings association''; and
                    (H) in subsection (k)(5)(A), by striking ``Savings 
                Association Insurance Fund members'' and inserting 
                ``savings associations'';
            (20) in section 14(a) (12 U.S.C. 1824(a)), in the 5th 
        sentence--
                    (A) by striking ``Bank Insurance Fund or the 
                Savings Association Insurance Fund'' and inserting 
                ``Deposit Insurance Fund''; and
                    (B) by striking ``each such fund'' and inserting 
                ``the Deposit Insurance Fund'';
            (21) in section 14(b) (12 U.S.C. 1824(b)), by striking 
        ``Bank Insurance Fund or Savings Association Insurance Fund'' 
        and inserting ``Deposit Insurance Fund'';
            (22) in section 14(c) (12 U.S.C. 1824(c)), by striking 
        paragraph (3);
            (23) in section 14(d) (12 U.S.C. 1824(d))--
                    (A) by striking ``Bank Insurance Fund member'' each 
                place that term appears and inserting ``insured 
                depository institution'';
                    (B) by striking ``Bank Insurance Fund members'' 
                each place that term appears and inserting ``insured 
                depository institutions'';
                    (C) by striking ``Bank Insurance Fund'' each place 
                that term appears (other than in connection with a 
                reference to a term amended by subparagraph (A) or (B) 
                of this paragraph) and inserting ``Deposit Insurance 
                Fund'';
                    (D) by striking the subsection heading and 
                inserting the following:
    ``(d) Borrowing for the Deposit Insurance Fund From Insured 
Depository Institutions.--'';
                    (E) in paragraph (3), in the paragraph heading, by 
                striking ``bif'' and inserting ``the deposit insurance 
                fund''; and
                    (F) in paragraph (5), in the paragraph heading, by 
                striking ``bif members'' and inserting ``insured 
                depository institutions'';
            (24) in section 14 (12 U.S.C. 1824), by adding at the end 
        the following new subsection:
    ``(e) Borrowing for the Deposit Insurance Fund From Federal Home 
Loan Banks.--
            ``(1) In general.--The Corporation may borrow from the 
        Federal home loan banks, with the concurrence of the Federal 
        Housing Finance Board, such funds as the Corporation considers 
        necessary for the use of the Deposit Insurance Fund.
            ``(2) Terms and conditions.--Any loan from any Federal home 
        loan bank under paragraph (1) to the Deposit Insurance Fund 
        shall--
                    ``(A) bear a rate of interest of not less than the 
                current marginal cost of funds to that bank, taking 
                into account the maturities involved;
                    ``(B) be adequately secured, as determined by the 
                Federal Housing Finance Board;
                    ``(C) be a direct liability of the Deposit 
                Insurance Fund; and
                    ``(D) be subject to the limitations of section 
                15(c).'';
            (25) in section 15(c)(5) (12 U.S.C. 1825(c)(5))--
                    (A) by striking ``the Bank Insurance Fund or 
                Savings Association Insurance Fund, respectively'' each 
                place that term appears and inserting ``the Deposit 
                Insurance Fund''; and
                    (B) in subparagraph (B), by striking ``the Bank 
                Insurance Fund or the Savings Association Insurance 
                Fund, respectively'' and inserting ``the Deposit 
                Insurance Fund'';
            (26) in section 17(a) (12 U.S.C. 1827(a))--
                    (A) in the subsection heading, by striking ``BIF, 
                SAIF,'' and inserting ``the Deposit Insurance Fund''; 
                and
                    (B) in paragraph (1)--
                            (i) by striking ``the Bank Insurance Fund, 
                        the Savings Association Insurance Fund,'' each 
                        place that term appears and inserting ``the 
                        Deposit Insurance Fund''; and
                            (ii) in subparagraph (D), by striking 
                        ``each insurance fund'' and inserting ``the 
                        Deposit Insurance Fund'';
            (27) in section 17(d) (12 U.S.C. 1827(d)), by striking ``, 
        the Bank Insurance Fund, the Savings Association Insurance 
        Fund,'' each place that term appears and inserting ``the 
        Deposit Insurance Fund'';
            (28) in section 18(m)(3) (12 U.S.C. 1828(m)(3))--
                    (A) by striking ``Savings Association Insurance 
                Fund'' in the 1st sentence of subparagraph (A) and 
                inserting ``Deposit Insurance Fund'';
                    (B) by striking ``Savings Association Insurance 
                Fund member'' in the last sentence of subparagraph (A) 
                and inserting ``savings association''; and
                    (C) by striking ``Savings Association Insurance 
                Fund or the Bank Insurance Fund'' in subparagraph (C) 
                and inserting ``Deposit Insurance Fund'';
            (29) in section 18(o) (12 U.S.C. 1828(o)), by striking 
        ``deposit insurance funds'' and ``deposit insurance fund'' each 
        place those terms appear and inserting ``Deposit Insurance 
        Fund'';
            (30) in section 18(p) (12 U.S.C. 1828(p)), by striking 
        ``deposit insurance funds'' and inserting ``Deposit Insurance 
        Fund'';
            (31) in section 24 (12 U.S.C. 1831a)--
                    (A) in subsections (a)(1) and (d)(1)(A), by 
                striking ``appropriate deposit insurance fund'' each 
                place that term appears and inserting ``Deposit 
                Insurance Fund'';
                    (B) in subsection (e)(2)(A), by striking ``risk 
                to'' and all that follows through the period and 
                inserting ``risk to the Deposit Insurance Fund.''; and
                    (C) in subsections (e)(2)(B)(ii) and (f)(6)(B), by 
                striking ``the insurance fund of which such bank is a 
                member'' each place that term appears and inserting 
                ``the Deposit Insurance Fund'';
            (32) in section 28 (12 U.S.C. 1831e), by striking 
        ``affected deposit insurance fund'' each place that term 
        appears and inserting ``Deposit Insurance Fund'';
            (33) by striking section 31 (12 U.S.C. 1831h);
            (34) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)), by 
        striking ``affected deposit insurance fund'' and inserting 
        ``Deposit Insurance Fund'';
            (35) in section 37(a)(1)(C) (12 U.S.C. 1831n(a)(1)(C)), by 
        striking ``insurance funds'' and inserting ``Deposit Insurance 
        Fund'';
            (36) in section 38 (12 U.S.C. 1831o), by striking ``the 
        deposit insurance fund'' each place that term appears and 
        inserting ``the Deposit Insurance Fund'';
            (37) in section 38(a) (12 U.S.C. 1831o(a)), in the 
        subsection heading, by striking ``Funds'' and inserting 
        ``Fund'';
            (38) in section 38(k) (12 U.S.C. 1831o(k))--
                    (A) in paragraph (1), by striking ``a deposit 
                insurance fund'' and inserting ``the Deposit Insurance 
                Fund'';
                    (B) in paragraph (2), by striking ``A deposit 
                insurance fund'' and inserting ``The Deposit Insurance 
                Fund''; and
                    (C) in paragraphs (2)(A) and (3)(B), by striking 
                ``the deposit insurance fund's outlays'' each place 
                that term appears and inserting ``the outlays of the 
                Deposit Insurance Fund''; and
            (39) in section 38(o) (12 U.S.C. 1831o(o))--
                    (A) by striking ``associations.--'' and all that 
                follows through ``Subsections (e)(2)'' and inserting 
                ``associations.--Subsections (e)(2)'';
                    (B) by redesignating subparagraphs (A), (B), and 
                (C) as paragraphs (1), (2), and (3), respectively, and 
                moving the margins 2 ems to the left; and
                    (C) in paragraph (1) (as so redesignated), by 
                redesignating clauses (i) and (ii) as subparagraphs (A) 
                and (B), respectively, and moving the margins 2 ems to 
                the left.
    (b) Effective Date.--This section and the amendments made by this 
section shall take effect on the first day of the first calendar 
quarter that begins after the end of the 90-day period beginning on the 
date of the enactment of this Act.

SEC. 4013. OTHER TECHNICAL AND CONFORMING AMENDMENTS RELATING TO THE 
              MERGER OF THE BIF AND SAIF.

    (a) Section 5136 of the Revised Statutes.--The paragraph designated 
the ``Eleventh'' of section 5136 of the Revised Statutes of the United 
States (12 U.S.C. 24) is amended in the 5th sentence, by striking 
``affected deposit insurance fund'' and inserting ``Deposit Insurance 
Fund''.
    (b) Investments Promoting Public Welfare; Limitations on Aggregate 
Investments.--The 23d undesignated paragraph of section 9 of the 
Federal Reserve Act (12 U.S.C. 338a) is amended in the 4th sentence, by 
striking ``affected deposit insurance fund'' and inserting ``Deposit 
Insurance Fund''.
    (c) Advances to Critically Undercapitalized Depository 
Institutions.--Section 10B(b)(3)(A)(ii) of the Federal Reserve Act (12 
U.S.C. 347b(b)(3)(A)(ii)) is amended by striking ``any deposit 
insurance fund in'' and inserting ``the Deposit Insurance Fund of''.
    (d) Amendments to the Balanced Budget and Emergency Deficit Control 
Act of 1985.--Section 255(g)(1)(A) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amended--
            (1) by striking ``Bank Insurance Fund'' and inserting 
        ``Deposit Insurance Fund''; and
            (2) by striking ``Federal Deposit Insurance Corporation, 
        Savings Association Insurance Fund (51-4066-0-3-373);''.
    (e) Amendments to the Federal Home Loan Bank Act.--The Federal Home 
Loan Bank Act (12 U.S.C. 1421 et seq.) is amended--
            (1) in section 11(k) (12 U.S.C. 1431(k))--
                    (A) in the subsection heading, by striking ``SAIF'' 
                and inserting ``the Deposit Insurance Fund''; and
                    (B) by striking ``Savings Association Insurance 
                Fund'' each place such term appears and inserting 
                ``Deposit Insurance Fund'';
            (2) in section 21 (12 U.S.C. 1441)--
                    (A) in subsection (f)(2), by striking ``, except 
                that'' and all that follows through the end of the 
                paragraph and inserting a period; and
                    (B) in subsection (k), by striking paragraph (4);
            (3) in section 21A(b)(4)(B) (12 U.S.C. 1441a(b)(4)(B)), by 
        striking ``affected deposit insurance fund'' and inserting 
        ``Deposit Insurance Fund'';
            (4) in section 21A(b)(6)(B) (12 U.S.C. 1441a(b)(6)(B))--
                    (A) in the subparagraph heading, by striking 
                ``Saif-insured banks'' and inserting ``Charter 
                conversions''; and
                    (B) by striking ``Savings Association Insurance 
                Fund member'' and inserting ``savings association'';
            (5) in section 21A(b)(10)(A)(iv)(II) (12 U.S.C. 
        1441a(b)(10)(A)(iv)(II)), by striking ``Savings Association 
        Insurance Fund'' and inserting ``Deposit Insurance Fund'';
            (6) in section 21A(n)(6)(E)(iv) (12 U.S.C. 
        1441(n)(6)(E)(iv)), by striking ``Federal deposit insurance 
        funds'' and inserting ``the Deposit Insurance Fund'';
            (7) in section 21B(e) (12 U.S.C. 1441b(e))--
                    (A) in paragraph (5), by inserting ``as of the date 
                of funding'' after ``Savings Association Insurance Fund 
                members'' each place that term appears; and
                    (B) by striking paragraphs (7) and (8); and
            (8) in section 21B(k) (12 U.S.C. 1441b(k))--
                    (A) by inserting before the colon ``, the following 
                definitions shall apply'';
                    (B) by striking paragraph (8); and
                    (C) by redesignating paragraphs (9) and (10) as 
                paragraphs (8) and (9), respectively.
    (f) Amendments to the Home Owners' Loan Act.--The Home Owners' Loan 
Act (12 U.S.C. 1461 et seq.) is amended--
            (1) in section 5 (12 U.S.C. 1464)--
                    (A) in subsection (c)(5)(A), by striking ``that is 
                a member of the Bank Insurance Fund'';
                    (B) in subsection (c)(6), by striking ``As used in 
                this subsection--'' and inserting ``For purposes of 
                this subsection, the following definitions shall 
                apply:'';
                    (C) in subsection (o)(1), by striking ``that is a 
                Bank Insurance Fund member'';
                    (D) in subsection (o)(2)(A), by striking ``a Bank 
                Insurance Fund member until such time as it changes its 
                status to a Savings Association Insurance Fund member'' 
                and inserting ``insured by the Deposit Insurance 
                Fund'';
                    (E) in subsection (t)(5)(D)(iii)(II), by striking 
                ``affected deposit insurance fund'' and inserting 
                ``Deposit Insurance Fund'';
                    (F) in subsection (t)(7)(C)(i)(I), by striking 
                ``affected deposit insurance fund'' and inserting 
                ``Deposit Insurance Fund''; and
                    (G) in subsection (v)(2)(A)(i), by striking ``the 
                Savings Association Insurance Fund'' and inserting ``or 
                the Deposit Insurance Fund''; and
            (2) in section 10 (12 U.S.C. 1467a)--
                    (A) in subsection (c)(6)(D), by striking ``this 
                title'' and inserting ``this Act'';
                    (B) in subsection (e)(1)(B), by striking ``Savings 
                Association Insurance Fund or Bank Insurance Fund'' and 
                inserting ``Deposit Insurance Fund'';
                    (C) in subsection (e)(2), by striking ``Savings 
                Association Insurance Fund or the Bank Insurance Fund'' 
                and inserting ``Deposit Insurance Fund'';
                    (D) in subsection (e)(4)(B), by striking 
                ``subsection (1)'' and inserting ``subsection (l)'';
                    (E) in subsection (g)(3)(A), by striking ``(5) of 
                this section'' and inserting ``(5) of this 
                subsection'';
                    (F) in subsection (i), by redesignating paragraph 
                (5) as paragraph (4);
                    (G) in subsection (m)(3), by striking subparagraph 
                (E) and by redesignating subparagraphs (F), (G), and 
                (H) as subparagraphs (E), (F), and (G), respectively;
                    (H) in subsection (m)(7)(A), by striking ``during 
                period'' and inserting ``during the period''; and
                    (I) in subsection (o)(3)(D), by striking ``sections 
                5(s) and (t) of this Act'' and inserting ``subsections 
                (s) and (t) of section 5''.
    (g) Amendments to the National Housing Act.--The National Housing 
Act (12 U.S.C. 1701 et seq.) is amended--
            (1) in section 317(b)(1)(B) (12 U.S.C. 1723i(b)(1)(B)), by 
        striking ``Bank Insurance Fund for banks or through the Savings 
        Association Insurance Fund for savings associations'' and 
        inserting ``Deposit Insurance Fund''; and
            (2) in section 536(b)(1)(B)(ii) (12 U.S.C. 1735f-
        14(b)(1)(B)(ii)), by striking ``Bank Insurance Fund for banks 
        and through the Savings Association Insurance Fund for savings 
        associations'' and inserting ``Deposit Insurance Fund''.
    (h) Amendments to the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989.--The Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 1811 note) is amended--
            (1) in section 951(b)(3)(B) (12 U.S.C. 1833a(b)(3)(B)), by 
        inserting ``and after the merger of such funds, the Deposit 
        Insurance Fund,'' after ``the Savings Association Insurance 
        Fund,''; and
            (2) in section 1112(c)(1)(B) (12 U.S.C. 3341(c)(1)(B)), by 
        striking ``Bank Insurance Fund, the Savings Association 
        Insurance Fund,'' and inserting ``Deposit Insurance Fund''.
    (i) Amendment to the Bank Holding Company Act of 1956.--The Bank 
Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended--
            (1) in section 2(j)(2) (12 U.S.C. 1841(j)(2)), by striking 
        ``Savings Association Insurance Fund'' and inserting ``Deposit 
        Insurance Fund''; and
            (2) in section 3(d)(1)(D)(iii) (12 U.S.C. 
        1842(d)(1)(D)(iii)), by striking ``appropriate deposit 
        insurance fund'' and inserting ``Deposit Insurance Fund''.
    (j) Amendments to the Gramm-Leach-Bliley Act.--Section 114 of the 
Gramm-Leach-Bliley Act (12 U.S.C. 1828a) is amended by striking ``any 
Federal deposit insurance fund'' in subsection (a)(1)(B), paragraphs 
(2)(B) and (4)(B) of subsection (b), and subsection (c)(1)(B), each 
place that term appears and inserting ``the Deposit Insurance Fund''.
    (k) Effective Date.--This section and the amendments made by this 
section shall take effect on the first day of the first calendar 
quarter that begins after the end of the 90-day period beginning on the 
date of the enactment of this Act.

                   Subtitle B--FHA Asset Disposition

SEC. 4101. SHORT TITLE.

    This subtitle may be cited as the ``FHA Asset Disposition Act of 
2005''.

SEC. 4102. DEFINITIONS.

    For purposes of this subtitle, the following definitions shall 
apply:
            (1) The term ``affordability requirements'' means any 
        requirements or restrictions imposed by the Secretary, at the 
        time of sale, on a multifamily real property or a multifamily 
        loan, such as use restrictions, rent restrictions, and 
        rehabilitation requirements.
            (2) The term ``discount sale'' means the sale of a 
        multifamily real property in a transaction, such as a 
        negotiated sale, in which the sale price is lower than the 
        property market value and is set outside of a competitive 
        bidding process that has no affordability requirements.
            (3) The term ``discount loan sale'' means the sale of a 
        multifamily loan in a transaction, such as a negotiated sale, 
        in which the sale price is lower than the loan market value and 
        is set outside of a competitive bidding process that has no 
        affordability requirements.
            (4) The term ``loan market value'' means the value of a 
        multifamily loan, without taking into account any affordability 
        requirements.
            (5) The term ``multifamily real property'' means any rental 
        or cooperative housing project of 5 or more units owned by the 
        Secretary that prior to acquisition by the Secretary was 
        security for a loan or loans insured under title II of the 
        National Housing Act.
            (6) The term ``multifamily loan'' means a loan held by the 
        Secretary and secured by a multifamily rental or cooperative 
        housing project of 5 or more units that was formerly insured 
        under title II of the National Housing Act.
            (7) The term ``property market value'' means the value of a 
        multifamily real property for its current use, without taking 
        into account any affordability requirements.
            (8) The term ``Secretary'' means the Secretary of Housing 
        and Urban Development.

SEC. 4103. APPROPRIATED FUNDS REQUIREMENT FOR BELOW MARKET SALES.

    (a) Discount Sales.--Notwithstanding any other provision of law, 
except for affordability requirements for the elderly and disabled 
required by statute, disposition by the Secretary of a multifamily real 
property during fiscal years 2006 through 2010 through a discount sale 
under sections 207(l) or 246 of the National Housing Act (12 U.S.C. 
1713(l), 1715z-11), section 203 of the Housing and Community 
Development Amendments of 1978 (12 U.S.C. 1701z-11), or section 204 of 
the Departments of Veterans Affairs and Housing and Urban Development, 
and Independent Agencies Appropriations Act, 1997 (12 U.S.C. 1715z-
11a), shall be subject to the availability of appropriations to the 
extent that the property value exceeds the sale proceeds. If the 
multifamily real property is sold, during such fiscal years, for an 
amount equal to or greater than the property market value then the 
transaction is not subject to the availability of appropriations.
    (b) Discount Loan Sales.--Notwithstanding any other provision of 
law and in accordance with the Federal Credit Reform Act of 1990 (2 
U.S.C. 661 et seq.), a discount loan sale during fiscal years 2006 
through 2010 under section 207(k) of the National Housing Act (12 
U.S.C. 1713(k)), section 203(k) of the Housing and Community 
Development Amendments of 1978 (12 U.S.C. 1701z-11(k)), or section 
204(a) of the Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act, 1997 (12 
U.S.C. 1715z-11a(a)), shall be subject to the availability of 
appropriations to the extent that the loan value exceeds the sale 
proceeds. If the multifamily loan is sold, during such fiscal years, 
for an amount equal to or greater than the loan market value then the 
transaction is not subject to the availability of appropriations.
    (c) Applicability.--This section shall not apply to any transaction 
that formally commences within one year prior to the enactment of this 
section.

SEC. 4104. UP-FRONT GRANTS.

    (a) 1997 Act.--Section 204(a) of the Departments of Veterans 
Affairs and Housing And Urban Development, and Independent Agencies 
Appropriations Act, 1997 (12 U.S.C. 1715z-11a(a))) is amended by adding 
at the end the following new sentence: ``A grant provided under this 
subsection during fiscal years 2006 through 2010 shall be available 
only to the extent that appropriations are made in advance for such 
purposes and shall not be derived from the General Insurance Fund.''.
    (b) 1978 Act.--Section 203(f)(4) of the Housing and Community 
Development Amendments of 1978 (12 USC 1701z-11(f)(4)) is amended by 
adding at the end the following new sentence: ``This paragraph shall be 
effective during fiscal years 2006 through 2010 only to the extent that 
such budget authority is made available for use under this paragraph in 
advance in appropriation Acts.''.
    (c) Applicability.--The amendments made by this section shall not 
apply to any transaction that formally commences within one year prior 
to the enactment of this section.

                    TITLE V--COMMITTEE ON JUDICIARY

SEC. 5001. TABLE OF CONTENTS.

                    TITLE V--COMMITTEE ON JUDICIARY

Sec. 5001. Table of contents.

                         Subtitle A--Visa Fees

Sec. 5101. Fees with respect to immigration services for intracompany 
                            transferees.

              Subtitle B--Circuit and District Judgeships

Sec. 5201. Short title.
Sec. 5202. Circuit judges for the circuit courts of appeals.
Sec. 5203. District judges for the district courts.
Sec. 5204. Establishment of Article III court in the Virgin Islands.
Sec. 5205. Effective date.

                   Subtitle C--Bankruptcy Judgeships

Sec. 5301. Short title.
Sec. 5302. Authorization for additional bankruptcy judgeships.
Sec. 5303. Temporary bankruptcy judgeships.
Sec. 5304. Conversion of existing temporary bankruptcy judgeships.
Sec. 5305. General provisions.
Sec. 5306. Effective date.

                Subtitle D--Ninth Circuit Reorganization

Sec. 5401. Short title.
Sec. 5402. Definitions.
Sec. 5403. Number and composition of circuits.
Sec. 5404. Number of circuit judges.
Sec. 5405. Places of circuit court.
Sec. 5406. Assignment of circuit judges.
Sec. 5407. Election of assignment by senior judges.
Sec. 5408. Seniority of judges.
Sec. 5409. Application to cases.
Sec. 5410. Temporary assignment of circuit judges among circuits.
Sec. 5411. Temporary assignment of district judges among circuits.
Sec. 5412. Administration.
Sec. 5413. Effective date.

              Subtitle E--Authorization of Appropriations

Sec. 5501. Authorization of appropriations.

                         Subtitle A--Visa Fees

SEC. 5101. FEES WITH RESPECT TO IMMIGRATION SERVICES FOR INTRACOMPANY 
              TRANSFEREES.

    Section 214(c) of the Immigration and Nationality Act (8 U.S.C. 
1184(c)) is amended by adding at the end the following:
    ``(15)(A) The Secretary of State shall impose a fee on an employer 
when an alien files an application abroad for a visa authorizing 
initial admission to the United States as a nonimmigrant described in 
section 101(a)(15)(L) in order to be employed by the employer, if the 
alien is covered under a blanket petition described in paragraph 
(2)(A).
    ``(B) The Secretary of Homeland Security shall impose a fee on an 
employer filing a petition under paragraph (1) initially to grant an 
alien nonimmigrant status described in section 101(a)(15)(L) or to 
extend for the first time the stay of an alien having such status.
    ``(C) The amount of the fee imposed under subparagraph (A) or (B) 
shall be $1,500.
    ``(D) The fees imposed under subparagraphs (A) and (B) shall only 
apply to principal aliens and not to spouses or children who are 
accompanying or following to join such principal aliens.
    ``(E) Fees collected under this paragraph shall be deposited as 
offsetting receipts in the Treasury, and shall not be available for 
expenditure until appropriated.
    ``(F)(i) An employer may not require an alien who is the 
beneficiary of the visa or petition for which a fee is imposed under 
this paragraph to reimburse, or otherwise compensate, the employer for 
part or all of the cost of such fee.
    ``(ii) Section 274A(g)(2) shall apply to a violation of clause (i) 
in the same manner as it applies to a violation of section 
274A(g)(1).''.

              Subtitle B--Circuit and District Judgeships

SEC. 5201. SHORT TITLE.

    This subtitle may be cited as the ``Federal Judgeship Act of 
2005''.

SEC. 5202. CIRCUIT JUDGES FOR THE CIRCUIT COURTS OF APPEALS.

    (a) In General.--The President shall appoint, by and with the 
advice and consent of the Senate--
            (1) 1 additional circuit judge for the first circuit court 
        of appeals;
            (2) 2 additional circuit judges for the second circuit 
        court of appeals;
            (3) 1 additional circuit judge for the sixth circuit court 
        of appeals; and
            (4) 5 additional circuit judges for the ninth circuit court 
        of appeals, whose official duty station shall be in California.
    (b) Temporary Judgeships.--
            (1) In general.--The President shall appoint, by and with 
        the advice and consent of the Senate--
                    (A) 1 additional circuit judge for the eighth 
                circuit court of appeals; and
                    (B) 2 additional circuit judges for the ninth 
                circuit court of appeals, whose official duty station 
                shall be in California.
            (2) Vacancies.--
                    (A) Eighth circuit.--The first vacancy in the 
                office of circuit judge in the eighth circuit court of 
                appeals, occurring 10 years or more after the 
                confirmation date of the judge named to fill the 
                circuit judgeship created in that circuit by paragraph 
                (1)(A) shall not be filled.
                    (B) Ninth circuit.--The first 2 vacancies in the 
                office of circuit judge in the ninth circuit court of 
                appeals, occurring 10 years or more after judges are 
                first confirmed to fill both temporary circuit 
                judgeships created by paragraph (1)(B) shall not be 
                filled.
    (c) Table of judgeships.--In order that the table contained in 
section 44 of title 28, United States Code, will, with respect to each 
judicial circuit, reflect the changes in the total number of permanent 
circuit judgeships authorized under subsection (a) of this section, 
such table is amended to read as follows:

  
                                                              Number of
``Circuits
                                                                 Judges
        District of Columbia...............................       12   
        First..............................................        7   
        Second.............................................       15   
        Third..............................................       14   
        Fourth.............................................       15   
        Fifth..............................................       17   
        Sixth..............................................       17   
        Seventh............................................       11   
        Eighth.............................................       11   
        Ninth..............................................       33   
        Tenth..............................................       12   
        Eleventh...........................................       12   
        Federal............................................    12.''.  

SEC. 5203. DISTRICT JUDGES FOR THE DISTRICT COURTS.

    (a) In General.--The President shall appoint, by and with the 
advice and consent of the Senate--
            (1) 1 additional district judge for the northern district 
        of Alabama;
            (2) 4 additional district judges for the district of 
        Arizona;
            (3) 3 additional district judges for the northern district 
        of California;
            (4) 4 additional district judges for the eastern district 
        of California;
            (5) 4 additional district judges for the central district 
        of California;
            (6) 1 additional district judge for the southern district 
        of California;
            (7) 1 additional district judge for the district of 
        Colorado;
            (8) 4 additional district judges for the middle district of 
        Florida;
            (9) 3 additional district judges for the southern district 
        of Florida;
            (10) 1 additional district judge for the district of Idaho;
            (11) 1 additional district judge for the northern district 
        of Illinois;
            (12) 1 additional district judge for the southern district 
        of Indiana;
            (13) 1 additional district judge for the western district 
        of Missouri;
            (14) 1 additional district judge for the district of 
        Nebraska;
            (15) 1 additional district judge for the district of 
        Nevada;
            (16) 1 additional district judge for the district of New 
        Mexico;
            (17) 3 additional district judges for the eastern district 
        of New York;
            (18) 1 additional district judge for the western district 
        of New York;
            (19) 1 additional district judge for the district of 
        Oregon;
            (20) 1 additional district judge for the district of South 
        Carolina;
            (21) 3 additional district judges for the southern district 
        of Texas;
            (22) 2 additional district judges for the eastern district 
        of Virginia; and
            (23) 1 additional district judge for the western district 
        of Washington.
    (b) Temporary Judgeships.--
            (1) In general.--The President shall appoint, by and with 
        the advice and consent of the Senate--
                    (A) 1 additional district judge for the middle 
                district of Alabama;
                    (B) 1 additional district judge for the district of 
                Arizona;
                    (C) 1 additional district judge for the northern 
                district of California;
                    (D) 1 additional district judge for the district of 
                Colorado;
                    (E) 1 additional district judge for the middle 
                district of Florida;
                    (F) 1 additional district judge for the northern 
                district of Iowa;
                    (G) 1 additional district judge for the district of 
                Minnesota;
                    (H) 1 additional district judge for the district of 
                New Jersey;
                    (I) 1 additional district judge for the district of 
                New Mexico;
                    (J) 1 additional district judge for the southern 
                district of Ohio;
                    (K) 1 additional district judge for the district of 
                Oregon; and
                    (L) 1 additional district judge for the district of 
                Utah.
            (2) Vacancies not filled.--The first vacancy in the office 
        of district judge in each of the judicial districts named in 
        paragraph (1) occurring 10 years or more after the confirmation 
        date of the judge named to fill the district judgeship created 
        in that district by paragraph (1) shall not be filled.
    (c) Existing Judgeships.--
            (1) Permanent judgeships.--The existing judgeships for the 
        district of Hawaii, the district of Kansas, and the eastern 
        district of Missouri authorized by section 203(c) of the 
        Judicial Improvements Act of 1990 (Public Law 101-650; 28 
        U.S.C. 133 note) shall, as of the effective date of this Act, 
        be authorized under section 133 of title 28, United States 
        Code, and the incumbents in those offices shall hold the office 
        under section 133 of title 28, United States Code, as amended 
        by this Act.
            (2) Extension of temporary judgeship.--Section 203(c) of 
        the Judicial Improvements Act of 1990 (Public Law 101-650; 28 
        U.S.C. 133 note) is amended in the fifth sentence (relating to 
        the northern district of Ohio) by striking ``15 years'' and 
        inserting ``20 years''.
    (d) Table of Judgeships.--In order that the table contained in 
section 133(a) of title 28, United States Code, will, with respect to 
each judicial district, reflect the changes in the total number of 
permanent district judgeships authorized under subsections (a) and (c) 
of this section, such table is amended to read as follows:

``Districts
                                                               Judges  
``Alabama:
        ``Northern.........................................      8     
        ``Middle...........................................      3     
        ``Southern.........................................      3     
``Alaska...................................................      3     
``Arizona..................................................     16     
``Arkansas:
        ``Eastern..........................................      5     
        ``Western..........................................      3     
``California:
        ``Northern.........................................     17     
        ``Eastern..........................................     10     
        ``Central..........................................     31     
        ``Southern.........................................     14     
``Colorado.................................................      8     
``Connecticut..............................................      8     
``Delaware.................................................      4     
``District of Columbia.....................................     15     
``Florida:
        ``Northern.........................................      4     
        ``Middle...........................................     19     
        ``Southern.........................................     20     
``Georgia:
        ``Northern.........................................     11     
        ``Middle...........................................      4     
        ``Southern.........................................      3     
``Hawaii...................................................      4     
``Idaho....................................................      3     
``Illinois:
        ``Northern.........................................     23     
        ``Central..........................................      4     
        ``Southern.........................................      4     
``Indiana:
        ``Northern.........................................      5     
        ``Southern.........................................      6     
``Iowa:
        ``Northern.........................................      2     
        ``Southern.........................................      3     
``Kansas...................................................      6     
``Kentucky:
        ``Eastern..........................................      5     
        ``Western..........................................      4     
        ``Eastern and Western..............................      1     
``Louisiana:
        ``Eastern..........................................     12     
        ``Middle...........................................      3     
        ``Western..........................................      7     
``Maine....................................................      3     
``Maryland.................................................     10     
``Massachusetts............................................     13     
``Michigan:
        ``Eastern..........................................     15     
        ``Western..........................................      4     
``Minnesota................................................      7     
``Mississippi:
        ``Northern.........................................      3     
        ``Southern.........................................      6     
``Missouri:
        ``Eastern..........................................      7     
        ``Western..........................................      6     
        ``Eastern and Western..............................      2     
``Montana..................................................      3     
``Nebraska.................................................      4     
``Nevada...................................................      8     
``New Hampshire............................................      3     
``New Jersey...............................................     17     
``New Mexico...............................................      7     
``New York:
        ``Northern.........................................      5     
        ``Southern.........................................     28     
        ``Eastern..........................................     18     
        ``Western..........................................      5     
``North Carolina:
        ``Eastern..........................................      4     
        ``Middle...........................................      4     
        ``Western..........................................      4     
``North Dakota.............................................      2     
``Ohio:
        ``Northern.........................................     11     
        ``Southern.........................................      8     
``Oklahoma:
        ``Northern.........................................      3     
        ``Eastern..........................................      1     
        ``Western..........................................      6     
        ``Northern, Eastern, and Western...................      1     
``Oregon...................................................      7     
``Pennsylvania:
        ``Eastern..........................................     22     
        ``Middle...........................................      6     
        ``Western..........................................     10     
``Puerto Rico..............................................      7     
``Rhode Island.............................................      3     
``South Carolina...........................................     11     
``South Dakota.............................................      3     
``Tennessee:
        ``Eastern..........................................      5     
        ``Middle...........................................      4     
        ``Western..........................................      5     
``Texas:
        ``Northern.........................................     12     
        ``Southern.........................................     22     
        ``Eastern..........................................      7     
        ``Western..........................................     13     
``Utah.....................................................      5     
``Vermont..................................................      2     
``Virginia:
        ``Eastern..........................................     13     
        ``Western..........................................      4     
``Washington:
        ``Eastern..........................................      4     
        ``Western..........................................      8     
``West Virginia:
        ``Northern.........................................      3     
        ``Southern.........................................      5     
``Wisconsin:
        ``Eastern..........................................      5     
        ``Western..........................................      2     
``Wyoming..................................................   3.''.    

SEC. 5204. ESTABLISHMENT OF ARTICLE III COURT IN THE VIRGIN ISLANDS.

    (a) Establishment of Judicial District.--
            (1) Virgin islands.--Chapter 5 of title 28, United States 
        Code, is amended by inserting after section 126 the following 
        new section:
``Sec. 126A. Virgin Islands
    ``The Virgin Islands constitutes 1 judicial district comprising 2 
divisions.
            ``(1) The Saint Croix Division comprises the Island of 
        Saint Croix and adjacent islands and cays.
                    ``Court for the Saint Croix Division shall be held 
                at Christiansted.
            ``(2) The Saint Thomas and Saint John Division comprises 
        the Islands of Saint Thomas and Saint John and adjacent islands 
        and cays.
                    ``Court for the Saint Thomas and Saint John 
                Division shall be held at Charlotte-Amalie.''.
            (2) Technical and conforming amendment.--The table of 
        contents for chapter 5 of title 28, United States Code, is 
        amended by inserting after the item relating to section 126 the 
        following:

``126A. Virgin Islands.''.
    (b) Number of Judges.--The table contained in section 133(a) of 
title 28, United States Code, is amended by inserting after the item 
relating to Vermont the following:

``Virgin Islands............................................       2''.
    (c) Bankruptcy Judges.--The table contained in section 152(a)(2) of 
title 28, United States Code, is amended by inserting after the item 
relating to Vermont the following:

``Virgin Islands............................................       0''.
    (d) Judicial Conferences of Circuits.--Section 333 of title 28, 
United States Code, is amended in the third sentence of the first 
undesignated paragraph--
            (1) by striking ``, the District Court of the Virgin 
        Islands,''; and
            (2) by striking ``to the conferences of their respective 
        circuits'' and inserting ``to the conference of the ninth 
        circuit''.
    (e) Judges in Territories and Possessions.--Section 373 of title 
28, United States Code, is amended--
            (1) in subsection (a), by striking ``, the District Court 
        of the Northern Mariana Islands, or the District Court of the 
        Virgin Islands'' and inserting ``or the District Court of the 
        Northern Mariana Islands''; and
            (2) in subsection (e), by striking ``, the District Court 
        of the Northern Mariana Islands, or the District Court of the 
        Virgin Islands'' and inserting ``or the District Court of the 
        Northern Mariana Islands''.
    (f) Annuities for Survivors of Certain Judicial Officials of the 
United States.--Section 376(a) of title 28, United States Code, is 
amended--
            (1) in paragraph (1)(B), by striking ``, the District Court 
        of the Northern Mariana Islands, or the District Court of the 
        Virgin Islands'' and inserting ``or the District Court of the 
        Northern Mariana Islands''; and
            (2) in paragraph (2)(B), by striking ``, the District Court 
        of the Northern Mariana Islands, or the District Court of the 
        Virgin Islands'' and inserting ``or the District Court of the 
        Northern Mariana Islands''.
    (g) Authority of Attorney General.--Section 526(a)(2) of title 28, 
United States Code, is amended by striking ``and of the district court 
of the Virgin Islands''.
    (h) Courts Defined.--Section 610 of title 28, United States Code, 
is amended--
            (1) by striking ``the United States District Court for the 
        District of the Canal Zone,''; and
            (2) by striking ``the District Court of the Virgin 
        Islands,''.
    (i) United States Magistrate Judges.--Section 631(a) of title 28, 
United States Code, is amended--
            (1) in the first sentence, by striking ``the Virgin 
        Islands, Guam,'' and inserting ``Guam''; and
            (2) in the second sentence, by striking ``the Virgin 
        Islands, Guam,'' and inserting ``Guam''.
    (j) Court Reporters.--Section 753(a) of title 28, United States 
Code, is amended by striking ``, the United States District Court for 
the District of the Canal Zone, the District Court of Guam, and the 
District Court of the Virgin Islands'' and inserting ``and the District 
Court of Guam''.
    (k) Final Decisions of District Courts.--Section 1291 of title 28, 
United States Code, is amended by striking ``, the United States 
District Court for the District of the Canal Zone, the District Court 
of Guam, and the District Court of the Virgin Islands,'' and inserting 
``and the District Court of Guam,''.
    (l) Interlocutory Decisions.--Section 1292 of title 28, United 
States Code, is amended--
            (1) in subsection (a), by striking ``, the United States 
        District Court for the District of the Canal Zone, the District 
        Court of Guam, and the District Court of the Virgin Islands,'' 
        and inserting ``and the District Court of Guam,''; and
            (2) in subsection (d)(4)(A), by striking ``the District 
        Court of the Virgin Islands,''.
    (m) Jurisdiction of the United States Court of Appeals for the 
Federal Circuit.--Section 1295(a) of title 28, United States Code, is 
amended in paragraphs (1) and (2)--
            (1) by striking ``the United States District Court for the 
        District of the Canal Zone,''; and
            (2) by striking ``the District Court of the Virgin 
        Islands,''.
    (n) United States as Defendant.--Section 1346(b)(1) of title 28, 
United States Code, is amended by striking ``, together with the United 
States District Court for the District of the Canal Zone and the 
District Court of the Virgin Islands,''.
    (o) Adequate Representation of Defendants.--Section 3006A(j) of 
title 18, United States Code, is amended by striking ``the District 
Court of the Virgin Islands,''.
    (p) Savings Provisions.--
            (1) Tenure of incumbent judges.--A judge of the District 
        Court of the Virgin Islands in office on the effective date of 
        this section shall continue in office until the expiration of 
        the term for which the judge was appointed, or until the judge 
        dies, resigns, or is removed from office, whichever occurs 
        first. When a vacancy occurs on the court on or after the 
        effective date of this section, the President, in accordance 
        with section 133(a) of title 28, United States Code, shall 
        appoint, by and with the advice and consent of the Senate, a 
        district judge for the District of the Virgin Islands.
            (2) Retirement rights and benefits.--The amendments made by 
        this section shall not affect the rights under sections 373 and 
        376 of title 28, United States Code, of any judge of the 
        District Court of the Virgin Islands who retires on or before 
        the effective date of this section or who continues in office 
        after that date under paragraph (1) of this subsection. Service 
        as a judge of the District Court of the Virgin Islands 
        appointed under section 24 of the Revised Organic Act of the 
        Virgin Islands (48 U.S.C. 1614) shall be included in 
        calculating service under sections 371 and 372 of title 28, 
        United States Code, and shall not be counted for purposes of 
        section 373 of that title, if the judge is reappointed, after 
        the effective date of this section, under section 133(a) of 
        title 28, United States Code, as district judge for the 
        District of the Virgin Islands.
    (q) Amendments to Revised Organic Act of the Virgin Islands.--
            (1) Repeals.--Sections 24, 25, 26, and 27 of the Revised 
        Organic Act of the Virgin Islands (48 U.S.C. 1614, 1615, 1616 
        and 1617) are repealed.
            (2) Rights and prohibitions.--Section 3 of the Revised 
        Organic Act of the Virgin Islands (48 U.S.C. 1561) is amended 
        in the 23d undesignated paragraph--
                    (A) by inserting ``article III;'' after ``section 
                9, clauses 2 and 3;'' and
                    (B) by striking ``That all offenses against the 
                laws of the United States'' and all that follows 
                through ``section 22(b) of this Act or'' and inserting 
                ``That all offenses against the laws of the Virgin 
                Islands which are prosecuted''.
            (3) Jurisdiction.--Section 21 of the Revised Organic Act of 
        the Virgin Islands (48 U.S.C. 1611) is amended to read as 
        follows:

``SEC. 21. JURISDICTION OF THE COURTS OF THE VIRGIN ISLANDS.

    ``(a) Jurisdiction of the Courts of the Virgin Islands.--The 
judicial power of the Virgin Islands shall be vested in such trial and 
appellate courts as may have been or may hereafter be established by 
local law. The local courts of the Virgin Islands shall have 
jurisdiction over all causes of action in the Virgin Islands over which 
any court established by the Constitution and laws of the United States 
does not have exclusive jurisdiction.
    ``(b) Practice and Procedure.--The rules governing the practice and 
procedure of the courts established by local law and those prescribing 
the qualifications and duties of the judges and officers thereof, oaths 
and bonds, and the times and places of holding court shall be governed 
by local law or the rules promulgated by those courts.''.
            (4) Income tax matters.--Section 22 of the Revised Organic 
        Act of the Virgin Islands (48 U.S.C. 1612) is amended to read 
        as follows:

``SEC. 22. JURISDICTION OVER INCOME TAX MATTERS.

    ``The United States District Court for the District of the Virgin 
Islands shall have exclusive jurisdiction over all criminal and civil 
proceedings in the Virgin Islands with respect to the income tax laws 
applicable to the Virgin Islands, except the ancillary laws relating to 
the income tax enacted by the legislature of the Virgin Islands. Any 
act or failure to act with respect to the income tax laws applicable to 
the Virgin Islands which would constitute a criminal offense described 
in chapter 75 of subtitle F of the Internal Revenue Code of 1986 shall 
constitute an offense against the Government of the Virgin Islands and 
may be prosecuted in the name of the Government of the Virgin Islands 
by the appropriate officers thereof in the United States District Court 
for the District of the Virgin Islands without the request or consent 
of the United States attorney for the Virgin Islands.''.
            (5) Appellate jurisdiction.--Section 23A of the Revised 
        Organic Act of the Virgin Islands (48 U.S.C. 1613a) is 
        amended--
                    (A) by striking ``District Court of the Virgin 
                Islands'' each place it appears and inserting ``United 
                States District Court for the District of the Virgin 
                Islands''; and
                    (B) in subsection (b), by striking ``pursuant to 
                section 24(a) of this Act: Provided, That no more than 
                one of them may be a judge of a court established by 
                local law.'' and inserting ``pursuant to chapter 13 of 
                title 28, United States Code, or a recalled senior 
                judge of the former District Court of the Virgin 
                Islands. The chief judge of the United States Court of 
                Appeals for the Third Circuit may assign to the 
                appellate division a judge of a court of record of the 
                Virgin Islands, except that no more than 1 of the 
                judges sitting in the appellate division at any session 
                may be a judge of a court established by local law.''.
    (r) Additional References.--Any reference in any provision of law 
to the ``District Court of the Virgin Islands'' shall, on and after the 
effective date of this section, be deemed to be a reference to the 
United States District Court for the District of the Virgin Islands.
    (s) Effective Date.--This section and the amendments made by this 
section shall take effect at the end of the 90-day period beginning on 
the date of the enactment of this Act. Any complaint or proceeding 
pending in the District Court of the Virgin Islands on the effective 
date of this section may be pursued to final determination in the 
United States District Court for the District of the Virgin Islands, 
the United States Court of Appeals for the Third Circuit, the United 
States Court of Appeals for the Federal Circuit, and the Supreme Court 
of the United States.

SEC. 5205. EFFECTIVE DATE.

    Except as provided in section 5204(s), this subtitle and the 
amendments made by this subtitle shall take effect on the date of the 
enactment of this Act.

                   Subtitle C--Bankruptcy Judgeships

SEC. 5301. SHORT TITLE.

    This subtitle may be cited as the ``Enhanced Bankruptcy Judgeship 
Act of 2005''.

SEC. 5302. AUTHORIZATION FOR ADDITIONAL BANKRUPTCY JUDGESHIPS.

    The following judgeships shall be filled in the manner prescribed 
in section 152(a)(1) of title 28, United States Code, for the 
appointment of bankruptcy judges provided for in section 152(a)(2) of 
such title:
            (1) 1 additional bankruptcy judgeship for the eastern and 
        western districts of Arkansas.
            (2) 1 additional bankruptcy judgeship for the eastern 
        district of California.
            (3) 2 additional bankruptcy judgeships for the middle 
        district of Florida.
            (4) 2 additional bankruptcy judgeships for the northern 
        district of Georgia.
            (5) 1 additional bankruptcy judgeship for the southern 
        district of Georgia.
            (6) 1 additional bankruptcy judgeship for the eastern 
        district of Kentucky.
            (7) 1 additional bankruptcy judgeship for the district of 
        Maryland.
            (8) 3 additional bankruptcy judgeships for the eastern 
        district of Michigan.
            (9) 1 additional bankruptcy judgeship for the southern 
        district of New York.
            (10) 1 additional bankruptcy judgeship for the western 
        district of Pennsylvania.
            (11) 1 additional bankruptcy judgeship for the western 
        district of Tennessee.
            (12) 1 additional bankruptcy judgeship for the eastern 
        district of Texas.
            (13) 1 additional bankruptcy judgeship for the district of 
        Utah.

SEC. 5303. TEMPORARY BANKRUPTCY JUDGESHIPS.

    (a) Authorization for Additional Temporary Bankruptcy Judgeships.--
The following judgeships shall be filled in the manner prescribed in 
section 152(a)(1) of title 28, United States Code, for the appointment 
of bankruptcy judges provided for in section 152(a)(2) of such title:
            (1) 1 additional bankruptcy judgeship for the northern 
        district of Florida.
            (2) 2 additional bankruptcy judgeships for the middle 
        district of Florida.
            (3) 1 additional bankruptcy judgeship for the northern 
        district of Indiana.
            (4) 1 additional bankruptcy judgeship for the northern 
        district of Mississippi.
            (5) 1 additional bankruptcy judgeship for the district of 
        Nevada.
            (6) 1 additional bankruptcy judgeship for the western 
        district of North Carolina.
            (7) 1 additional bankruptcy judgeship for the southern 
        district of Ohio.
    (b) Vacancies.--
            (1) Districts with single appointments.--Except as provided 
        in paragraph (2), the first vacancy occurring in the office of 
        bankruptcy judge in each of the judicial districts set forth in 
        subsection (a)--
                    (A) occurring 5 years or more after the appointment 
                date of the bankruptcy judge appointed under subsection 
                (a) to such office, and
                    (B) resulting from the death, retirement, 
                resignation, or removal of a bankruptcy judge,
        shall not be filled.
            (2) Middle district of florida.--The 1st and 2d vacancies 
        in the office of bankruptcy judge in the middle district of 
        Florida--
                    (A) occurring 5 years or more after the respective 
                1st and 2d appointment dates of the bankruptcy judges 
                appointed under subsection (a)(2), and
                    (B) resulting from the death, retirement, 
                resignation, or removal of a bankruptcy judge,
        shall not be filled.
    (c) Eligibility for Subsequent Appointments.--A judge holding 
office in any of the districts enumerated in subsection (a) shall, at 
the expiration of the term of the judge (other than by reason of 
paragraph (1)(B) or (2)(B) of subsection (b)), be eligible for 
reappointment as a bankruptcy judge in that district.

SEC. 5304. CONVERSION OF EXISTING TEMPORARY BANKRUPTCY JUDGESHIPS.

    (a) Judgeships Authorized by Public Law 102-361.--The following 
temporary bankruptcy judgeships authorized by the following paragraphs 
of section 3(a) of Public Law 102-361, as amended by section 307 of 
Public Law 104-317 (28 U.S.C. 152 note), are converted to permanent 
bankruptcy judgeships under section 152(a)(2) of title 28, United 
States Code:
            (1) The temporary bankruptcy judgeship for the district of 
        Delaware authorized by paragraph (3).
            (2) The temporary bankruptcy judgeship for the southern 
        district of Illinois authorized by paragraph (4).
            (3) The temporary bankruptcy judgeship for the district of 
        Puerto Rico authorized by paragraph (7).
    (b) Judgeships Authorized by Public Law 109-8.--The following 
temporary bankruptcy judgeships authorized by the following 
subparagraphs of section 1223(b)(1) of the Bankruptcy Abuse Prevention 
and Consumer Protection Act of 2005 (Public Law 109-8), are converted 
to permanent bankruptcy judgeships under section 152(a)(2) of title 28, 
United States Code:
            (1) The 4 temporary bankruptcy judgeships for the district 
        of Delaware authorized by subparagraph (C).
            (2) The temporary bankruptcy judgeship for the southern 
        district of Georgia authorized by subparagraph (E).
            (3) One of the 3 temporary bankruptcy judgeships for the 
        district of Maryland authorized by subparagraph (F).
            (4) The temporary bankruptcy judgeship for the eastern 
        district of Michigan authorized by subparagraph (G).
            (5) The temporary bankruptcy judgeship for the district of 
        New Jersey authorized by subparagraph (I).
            (6) The temporary bankruptcy judgeship for the northern 
        district of New York authorized by subparagraph (K).
            (7) The temporary bankruptcy judgeship for the southern 
        district of New York authorized by subparagraph (L).
            (8) The temporary bankruptcy judgeship for the eastern 
        district of North Carolina authorized by subparagraph (M).
            (9) The temporary bankruptcy judgeship for the eastern 
        district of Pennsylvania authorized by subparagraph (N).
            (10) The temporary bankruptcy judgeship for the district of 
        South Carolina authorized by subparagraph (S).
            (11) The temporary bankruptcy judgeship for the western 
        district of Tennessee authorized by subparagraph (Q).

SEC. 5305. GENERAL PROVISIONS.

    (a) Table of judgeships.--In order that the table contained in 
section 152(a)(2) of title 28, United States Code, will, with respect 
to each judicial district, reflect the changes in the total number of 
bankruptcy judgeships authorized under sections 5302 and 5304, such 
table is amended to read as follows:

``Districts
                                                               Judges  
``Alabama:
        ``Northern ........................................      5     
        ``Middle ..........................................      2     
        ``Southern ........................................      2     
``Alaska ..................................................      2     
``Arizona .................................................      7     
``Arkansas:
        ``Eastern and Western .............................      4     
``California:
        ``Northern.........................................      9     
        ``Eastern..........................................      7     
        ``Central .........................................     21     
        ``Southern ........................................      4     
``Colorado.................................................      5     
``Connecticut..............................................      3     
``Delaware.................................................      6     
``District of Columbia.....................................      1     
``Florida:
        ``Northern.........................................      1     
        ``Middle...........................................     10     
        ``Southern.........................................      5     
``Georgia:
        ``Northern.........................................     10     
        ``Middle...........................................      3     
        ``Southern ........................................      4     
``Hawaii...................................................      1     
``Idaho....................................................      2     
``Illinois:
        ``Northern.........................................     10     
        ``Central..........................................      3     
        ``Southern.........................................      2     
``Indiana:
        ``Northern.........................................      3     
        ``Southern.........................................      4     
``Iowa:
        ``Northern.........................................      2     
        ``Southern.........................................      2     
``Kansas...................................................      4     
``Kentucky:
        ``Eastern..........................................      3     
        ``Western..........................................      3     
``Louisiana:
        ``Eastern..........................................      2     
        ``Middle...........................................      1     
        ``Western..........................................      3     
``Maine....................................................      2     
``Maryland.................................................      6     
``Massachusetts............................................      5     
``Michigan:
        ``Eastern..........................................      8     
        ``Western..........................................      3     
``Minnesota................................................      4     
``Mississippi:
        ``Northern.........................................      1     
        ``Southern.........................................      2     
``Missouri:
        ``Eastern..........................................      3     
        ``Western..........................................      3     
``Montana..................................................      1     
``Nebraska.................................................      2     
``Nevada...................................................      3     
``New Hampshire............................................      1     
``New Jersey...............................................      9     
``New Mexico...............................................      2     
``New York:
        ``Northern.........................................      3     
        ``Southern.........................................     11     
        ``Eastern..........................................      6     
        ``Western..........................................      3     
``North Carolina:
        ``Eastern..........................................      3     
        ``Middle...........................................      2     
        ``Western..........................................      2     
``North Dakota.............................................      1     
``Ohio:
        ``Northern.........................................      8     
        ``Southern.........................................      7     
``Oklahoma:
        ``Northern.........................................      2     
        ``Eastern..........................................      1     
        ``Western..........................................      3     
``Oregon...................................................      5     
``Pennsylvania:
        ``Eastern..........................................      6     
        ``Middle...........................................      2     
        ``Western..........................................      5     
``Puerto Rico..............................................      3     
``Rhode Island.............................................      1     
``South Carolina...........................................      3     
``South Dakota.............................................      2     
``Tennessee:
        ``Eastern..........................................      3     
        ``Middle...........................................      3     
        ``Western..........................................      6     
``Texas:
        ``Northern.........................................      6     
        ``Eastern..........................................      3     
        ``Southern.........................................      6     
        ``Western..........................................      4     
``Utah.....................................................      4     
``Vermont..................................................      1     
``Virgin Islands...........................................      0     
``Virginia:
        ``Eastern..........................................      5     
        ``Western..........................................      3     
``Washington:
        ``Eastern..........................................      2     
        ``Western..........................................      5     
``West Virginia:
        ``Northern.........................................      1     
        ``Southern.........................................      1     
``Wisconsin:
        ``Eastern..........................................      4     
        ``Western..........................................      2     
``Wyoming..................................................   1.''.    
    (b) Sense of Congress.--It is the sense of the Congress that 
bankruptcy judges in the eastern district of California should conduct 
bankruptcy proceedings on a daily basis in Bakersfield, California.

SEC. 5306. EFFECTIVE DATE.

    This subtitle and the amendments made by this subtitle shall take 
effect on the date of the enactment of this Act.

                Subtitle D--Ninth Circuit Reorganization

SEC. 5401. SHORT TITLE.

    This subtitle may be cited as the ``Judicial Administration and 
Improvements Act of 2005''.

SEC. 5402. DEFINITIONS.

    In this subtitle:
            (1) Former ninth circuit.--The term ``former ninth 
        circuit'' means the ninth judicial circuit of the United States 
        as in existence on the day before the effective date of this 
        subtitle.
            (2) New ninth circuit.--The term ``new ninth circuit'' 
        means the ninth judicial circuit of the United States 
        established by the amendment made by section 5403(2)(A).
            (3) Twelfth circuit.--The term ``twelfth circuit'' means 
        the twelfth judicial circuit of the United States established 
        by the amendment made by section 5403(2)(B).

SEC. 5403. NUMBER AND COMPOSITION OF CIRCUITS.

    Section 41 of title 28, United States Code, is amended--
            (1) in the matter preceding the table, by striking 
        ``thirteen'' and inserting ``fourteen''; and
            (2) in the table--
                    (A) by striking the item relating to the ninth 
                circuit and inserting the following:

    ``Ninth........................
                                        California, Guam, Hawaii, 
                                                Northern Mariana 
                                                Islands.'';
    and
                    (B) by inserting after the item relating to the 
                eleventh circuit the following:

    ``Twelfth......................
                                        Alaska, Arizona, Idaho, 
                                                Montana, Nevada, 
                                                Oregon, Washington.''.

SEC. 5404. NUMBER OF CIRCUIT JUDGES.

    The table contained in section 44(a) of title 28, United States 
Code, as amended by section 5202(c) of this Act, is further amended--
            (1) by striking the item relating to the ninth circuit and 
        inserting the following:

``Ninth.....................................................      19'';
    and
            (2) by inserting after the item relating to the eleventh 
        circuit the following:

``Twelfth...................................................      14''.

SEC. 5405. PLACES OF CIRCUIT COURT.

    The table contained in section 48(a) of title 28, United States 
Code, is amended--
            (1) by striking the item relating to the ninth circuit and 
        inserting the following:

    ``Ninth........................
                                        Honolulu, Pasadena, San 
                                                Francisco.'';
    and
            (2) by inserting after the item relating to the eleventh 
        circuit the following:

    ``Twelfth......................
                                        Las Vegas, Missoula, Phoenix, 
                                                Portland, Seattle.''.

SEC. 5406. ASSIGNMENT OF CIRCUIT JUDGES.

    Each circuit judge of the former ninth circuit who is in regular 
active service and whose official duty station on the day before the 
effective date of this subtitle--
            (1) is in California, Guam, Hawaii, or the Northern Mariana 
        Islands shall be a circuit judge of the new ninth circuit as of 
        such effective date; and
            (2) is in Alaska, Arizona, Idaho, Montana, Nevada, Oregon, 
        or Washington shall be a circuit judge of the twelfth circuit 
        as of such effective date.

SEC. 5407. ELECTION OF ASSIGNMENT BY SENIOR JUDGES.

    Each judge who is a senior circuit judge of the former ninth 
circuit on the day before the effective date of this subtitle may elect 
to be assigned to the new ninth circuit or the twelfth circuit as of 
such effective date and shall notify the Director of the Administrative 
Office of the United States Courts of such election.

SEC. 5408. SENIORITY OF JUDGES.

    The seniority of each judge--
            (1) who is assigned under section 5406, or
            (2) who elects to be assigned under section 5407,
shall run from the date of commission of such judge as a judge of the 
former ninth circuit.

SEC. 5409. APPLICATION TO CASES.

    The following apply to any case in which, on the day before the 
effective date of this subtitle, an appeal or other proceeding has been 
filed with the former ninth circuit:
            (1) Except as provided in paragraph (3), if the matter has 
        been submitted for decision, further proceedings with respect 
        to the matter shall be had in the same manner and with the same 
        effect as if this subtitle had not been enacted.
            (2) If the matter has not been submitted for decision, the 
        appeal or proceeding, together with the original papers, 
        printed records, and record entries duly certified, shall, by 
        appropriate orders, be transferred to the court to which the 
        matter would have been submitted had this subtitle been in full 
        force and effect at the time such appeal was taken or other 
        proceeding commenced, and further proceedings with respect to 
        the case shall be had in the same manner and with the same 
        effect as if the appeal or other proceeding had been filed in 
        such court.
            (3) If a petition for rehearing en banc is pending on or 
        after the effective date of this subtitle, the petition shall 
        be considered by the court of appeals to which it would have 
        been submitted had this subtitle been in full force and effect 
        at the time that the appeal or other proceeding was filed with 
        the court of appeals.

SEC. 5410. TEMPORARY ASSIGNMENT OF CIRCUIT JUDGES AMONG CIRCUITS.

    Section 291 of title 28, United States Code, is amended by adding 
at the end the following:
    ``(c) The chief judge of the Ninth Circuit may, in the public 
interest and upon request by the chief judge of the Twelfth Circuit, 
designate and assign temporarily any circuit judge of the Ninth Circuit 
to act as circuit judge in the Twelfth Circuit.
    ``(d) The chief judge of the Twelfth Circuit may, in the public 
interest and upon request by the chief judge of the Ninth Circuit, 
designate and assign temporarily any circuit judge of the Twelfth 
Circuit to act as circuit judge in the Ninth Circuit.''.

SEC. 5411. TEMPORARY ASSIGNMENT OF DISTRICT JUDGES AMONG CIRCUITS.

    Section 292 of title 28, United States Code, is amended by adding 
at the end the following:
    ``(f) The chief judge of the United States Court of Appeals for the 
Ninth Circuit may, in the public interest--
            ``(1) upon request by the chief judge of the Twelfth 
        Circuit, designate and assign 1 or more district judges within 
        the Ninth Circuit to sit upon the Court of Appeals of the 
        Twelfth Circuit, or a division thereof, whenever the business 
        of that court so requires; and
            ``(2) designate and assign temporarily any district judge 
        within the Ninth Circuit to hold a district court in any 
        district within the Twelfth Circuit.
    ``(g) The chief judge of the United States Court of Appeals for the 
Twelfth Circuit may in the public interest--
            ``(1) upon request by the chief judge of the Ninth Circuit, 
        designate and assign 1 or more district judges within the 
        Twelfth Circuit to sit upon the Court of Appeals of the Ninth 
        Circuit, or a division thereof, whenever the business of that 
        court so requires; and
            ``(2) designate and assign temporarily any district judge 
        within the Twelfth Circuit to hold a district court in any 
        district within the Ninth Circuit.
    ``(h) Any designations or assignments under subsection (f) or (g) 
shall be in conformity with the rules or orders of the court of appeals 
of, or the district within, as applicable, the circuit to which the 
judge is designated or assigned.''.

SEC. 5412. ADMINISTRATION.

    The court of appeals for the ninth circuit as constituted on the 
day before the effective date of this subtitle may take such 
administrative action as may be required to carry out this subtitle and 
the amendments made by this subtitle. Such court shall cease to exist 
for administrative purposes 2 years after the date of the enactment of 
this Act.

SEC. 5413. EFFECTIVE DATE.

    This subtitle and the amendments made by this subtitle shall take 
effect no later than December 31, 2006.

              Subtitle E--Authorization of Appropriations

SEC. 5501. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated for each of fiscal years 
2006 through 2009 such sums as are necessary to carry out subtitles B, 
C, and D of this title, including such sums as may be necessary to 
provide appropriate space and facilities for the judicial positions 
created by this title. Funds appropriated pursuant to this section in 
any fiscal year shall remain available until expended.

                    TITLE VI--COMMITTEE ON RESOURCES

        Subtitle A--Miscellaneous Amendments Relating to Mining

Sec. 6101. Fees for recordation and location of mining claims.
Sec. 6102. Patents for mining or mill site claims.
Sec. 6103. Mineral examinations for mining on certain lands.
Sec. 6104. Mineral development lands available for purchase.
Sec. 6105. National mining and minerals policy to encourage and promote 
                            the productive second use of lands.
Sec. 6106. Regulations.
Sec. 6107. Protection of national parks and wilderness areas.

                  Subtitle B--Disposal of Public Lands

         Chapter 1--Disposal of Certain Public Lands in Nevada

Sec. 6201. Short title.
Sec. 6202. Definitions.
Sec. 6203. Land conveyance.
Sec. 6204. Disposition of proceeds.

          Chapter 2--Disposal of Certain Public Lands in Idaho

Sec. 6211. Short title.
Sec. 6212. Definitions.
Sec. 6213. Land conveyance.
Sec. 6214. Disposition of proceeds.

                         Subtitle C--Oil shale

Sec. 6301. Oil shale and tar sands amendments.

            Subtitle D--Sale and Conveyance of Federal Land

Sec. 6401. Collection of receipts from the sale of Federal lands.

        Subtitle A--Miscellaneous Amendments Relating to Mining

SEC. 6101. FEES FOR RECORDATION AND LOCATION OF MINING CLAIMS.

    (a) Dimensions of Mining Claims.--Section 2320 of the Revised 
Statutes (30 U.S.C. 23) is amended by striking the second and third 
sentences and inserting the following: ``A mining claim located after 
May 10, 1872, whether located by one or more persons, and including a 
claim located before exposure of the vein or lode, may equal, but shall 
not exceed, 1,500 feet in length along the vein or lode, and shall 
extend no more than 300 feet on each side of the middle of the vein at 
the surface, nor shall any claim be limited by any mining regulation to 
less than 25 feet on each side of the middle of the vein at the 
surface, except where adverse rights existing on May 10, 1872, render 
such limitation necessary.''.
    (b) Rights Secured by Claim Maintenance Fees.--Section 2322 of the 
Revised Statutes (30 U.S.C. 26) is amended by inserting ``(a) Rights of 
Locators, Generally.--'' before the first sentence, and by adding at 
the end the following:
    ``(b) Rights Secured by Maintenance Fees.--Prior to issuance of a 
patent, timely payment of the claim maintenance fee secures the rights 
of the holder of a mining claim, mill site, or tunnel site, both prior 
to and after discovery of valuable mineral deposits, to use and occupy 
public lands under the provisions of the general mining law of the 
United States (as that term is defined in section 2324 of the Revised 
Statutes) for mineral prospecting, exploration, development, mining, 
milling, and processing of minerals, reclamation of the claimed lands, 
and uses reasonably incident thereto. Except for the location fee and 
the maintenance fees in section 2324 of the Revised Statutes (30 U.S.C. 
28), and the patent prices in sections 2325, 2326, 2333, and 2337 of 
the Revised Statutes (30 U.S.C. 29, 30, 37, and 42), no other fees or 
fair market value assessments shall be applied to prospecting, 
exploration, development, mining, processing, or reclamation, and uses 
reasonably incident thereto.''.
    (c) Patent Requirements.--Section 2325 of the Revised Statutes (30 
U.S.C. 29) is amended--
            (1) in the second sentence by striking ``, or at any time'' 
        and inserting ``shall include a processing fee of $2,500 for 
        the first claim or site, and $50 for each additional claim 
        contained therein, and at any time''; and
            (2) in the fourth sentence by inserting ``and if the 
        applicant has complied with the law of discovery'' after 
        ``publication''.
    (d) Mining District Regulations by Miners.--Section 2324 of the 
Revised Statutes (30 U.S.C. 28) is amended to read as follows:
    ``Sec. 2324. (a) Authority to Make Regulations.--The miners of each 
mining district may make regulations not in conflict with the laws of 
the United States, or with the laws of the State or Territory in which 
the district is situated, governing the location, manner of recording, 
amount of work necessary to hold possession of a mining claim, subject 
to the following requirements:
            ``(1) The location must be distinctly marked on the ground 
        so that its boundaries can be readily traced.
            ``(2) All records of mining claims made after May 10, 1872, 
        shall contain the name or names of the locators, the date of 
        the location, and such a description of the claim or claims 
        located by reference to some natural object or permanent 
        monument as will identify the claim.
    ``(b) Recordation of Mining Claims and Abandonment.--The locator of 
an unpatented lode or placer mining claim, mill site, or tunnel site 
located after October 21, 1976, pursuant to the general mining law of 
the United States shall, within 90 days after the date of location of 
such claim, file in the office designated by the Secretary of the 
Interior a copy of the official record of the notice of location or 
certificate of location, including a description of the location of the 
mining claim or mill or tunnel site sufficient to locate the claimed 
lands on the ground. The failure to file such instruments as required 
by this subsection is deemed conclusively to constitute an abandonment 
of the mining claim, mill site, or tunnel site by the owner. Such 
recordation by itself shall not render valid any claim that would not 
be otherwise valid under applicable law.
    ``(c) Location Fee.--Notwithstanding any other provision of law, 
for every mining claim, mill site, or tunnel site located after the 
date of the enactment of this subsection pursuant to the general mining 
law of the United States, the locator shall, at the time the location 
notice is recorded pursuant to subsection (b), pay a location fee of 
$100 per claim. This fee shall be in addition to the first year's claim 
maintenance fee required by subsection (d). Payment of the location fee 
required by this subsection and the maintenance fee required by 
subsection (d) secures to the locator the right to use and occupy the 
public lands for purposes of the general mining law of the United 
States.
    ``(d) Schedule of Claim Maintenance Fees.--(1) The holder of each 
unpatented mining claim, mill site, or tunnel site located pursuant to 
the general mining law of the United States on or after the date of the 
enactment of this subsection shall pay to the Secretary of the 
Interior, on or before September 1 of each year, a claim maintenance 
fee per claim. Except as provided in paragraph (2), such claim 
maintenance fee shall be paid in the following amounts:
            ``(A) $35 per claim for each of the first through fifth 
        maintenance years, beginning with the year the claim was 
        recorded.
            ``(B) $70 per claim for each of the sixth through tenth 
        maintenance years.
            ``(C) $125 per claim for each of the eleventh through 
        fifteenth maintenance years.
            ``(D) $150 per claim for the sixteenth maintenance year and 
        each year thereafter.
    ``(2) Notwithstanding any other provision of law, for each 
unpatented mining claim located after the date of enactment of this 
subsection pursuant to the general mining law of the United States from 
which minerals are produced, and in lieu of the fee otherwise required 
by paragraph (1), the holder shall pay to the Secretary of the Interior 
an annual maintenance fee of $200 per claim.
    ``(3) The holder of each unpatented mining claim, mill site, or 
tunnel site located pursuant to the general mining law of the United 
States before the date of enactment of this subsection shall pay to the 
Secretary of the Interior for such claim--
            ``(A) except as provided in subparagraph (B), the claim 
        maintenance fee that applied before such date of enactment; or
            ``(B) the claim maintenance fee that applies under 
        paragraph (1) or (2), based on the number of years since the 
        original location of the claim, if before the date the payment 
        is due the claim holder--
                    ``(i) notifies the Secretary; and
                    ``(ii) pays to the Secretary a transfer fee of 
                $100.
    ``(e) Adjustment of Claim Maintenance Fees.--Claim maintenance fees 
under subsection (d) shall not be subject to adjustment.
    ``(f) Work Requirement.--(1) The holder of each unpatented mining 
claim, mill site, or tunnel site located pursuant to the general mining 
law of the United States after the date of enactment of this 
subsection, and any holder of a claim that has transferred such claim 
to the claim maintenance fee schedule under subsection (d), shall 
conduct physical evaluation and development of the claim or of any 
contiguous block of claims of which the claim is a part. Exploration 
and mining activities conducted pursuant to a notice, approved plan of 
operations, or, in the case of split estate lands, a comparable State 
or county notice or approval, demonstrates compliance with this 
section.
    ``(2) If physical evaluation of the claim is not carried out in 
accordance with paragraph (1) before the end of the fifth, tenth, or 
fifteenth maintenance year (beginning with the maintenance year in 
which the claim is filed), respectively, the claim holder shall be 
required to pay in the next maintenance year the location fee described 
in subsection (c), in addition to the annual claim maintenance fee 
required to be paid for the next maintenance year.
    ``(g) Waiver of Claim Maintenance Fee Adjustments and Work 
Requirement.--If a delay in meeting the work requirements under 
subsection (f) is the result of pending administrative proceedings, 
rights-of-way disputes, or litigation concerning issuance or validity 
of any permit or authorization required under Federal, State, or local 
law for physical evaluation and development of the claim--
            ``(1) any increase in the claim maintenance fee that would 
        otherwise apply under subsection (d) and the work requirements 
        under subsection (f) shall be suspended for the claim; and
            ``(2) claim maintenance fees required to be paid each year 
        for the claim shall be the same as the fee that applied for the 
        year in which the delay first occurred, and no additional 
        location fee will be owed.
    ``(h) Time of Payment.--The claim maintenance fee required under 
subsection (d) for any maintenance year shall be paid before the 
commencement of the maintenance year, except that, for the maintenance 
year in which the location is made the locator shall pay the claim 
maintenance fee and the location fee imposed under subsection (c) at 
the time the location notice is recorded with the Bureau of Land 
Management. The Director of the Bureau of Land Management, after 
consultation with the Governor of Alaska and by not later than 1 year 
after the date of enactment of this subsection, may establish a claim 
maintenance fee filing date for Alaska claim holders that is not later 
than 60 days after September 1.
    ``(i) Small Miner Claim Maintenance Fee.--(1) In the case of a 
claim for which the holder certifies in writing to the Secretary that, 
on the date the payment of any claim maintenance fee under this section 
was due, the claim holder and all related parties held not more than 10 
mining claims, mill sites, or tunnel sites, or any combination thereof, 
on public lands--
                    ``(A) the claim maintenance fee shall be $25 per 
                claim per year for the life of the claim or site held 
                by the claim holder; and
                    ``(B) subsection (f) shall not apply.
    ``(2) In this subsection:
            ``(A) With respect to any claim holder, the term `related 
        party' means--
                    ``(i) the spouse and dependent children (as defined 
                in section 152 of the Internal Revenue Code of 1986 (26 
                U.S.C. 152), as in effect on the date of the enactment 
                of this paragraph of the claim holder; and
                    ``(ii) a person who controls, is controlled by, or 
                is under common control with the claim holder.
            ``(B) The terms `control', `controls', and `controlled' 
        include actual control, legal control, and the power to 
        exercise control, through or by common directors, officers, 
        stockholders, a voting trust, or a holding company or 
        investment company, or any other means.
    ``(j) Failure to Pay.--(1) Failure to pay a claim maintenance fee 
or a location fee for an unpatented mining claim as required by this 
section shall subject an unpatented mining claim, mill site, or tunnel 
site to forfeiture by the claim holder as provided in this subsection.
    ``(2) The Secretary of the Interior shall provide the claim holder 
with notice of the failure and the opportunity to cure within 45 
calendar days after the claim holder's receipt of the notice.
    ``(3) The claim holder must, within such 45-day period, pay twice 
the amount of maintenance fee that would otherwise have been required 
to be timely paid. The Secretary of the Interior shall specify the 
amount that must be paid in the notice under paragraph (2).
    ``(4) Failure by the claim holder to make a timely and proper 
payment in the amount specified in the notice by the Secretary of the 
Interior, within 45 days after the claim holder's receipt of the 
notice, shall constitute a forfeiture of the mining claim, mill site, 
or tunnel site by the claim holder by operation of law.
    ``(k) Failure of Co-Owner to Contribute.--Upon the failure of any 
one of several co-owners of a claim to contribute the co-owner's 
proportion of any claim maintenance fee required by this section, the 
co-owners who have paid the claim maintenance fee, at the expiration of 
the year in which any unpaid amount was due, may give such delinquent 
co-owner personal notice in writing or notice by publication in the 
newspaper of record for the county in which the land that is subject to 
the claim or mill site is located, at least once a week for 90 days. If 
at the expiration of such 90-day period such delinquent co-owner fails 
or refuses to contribute the co-owner's proportion of the claim 
maintenance fee required by this section, the co-owner's interest in 
the claim shall become the property of the other co-owners who have 
paid the claim maintenance fee. The co-owners who have assumed the 
interest in the claims shall notify the Secretary of the Interior 
within 30 days of the assumption.
    ``(l) Oil Shale Claims Subject to Claim Maintenance Fees Under 
Energy Policy Act of 1992.--This section shall not apply to any oil 
shale claim for which a fee is required to be paid under section 
2511(e)(2) of the Energy Policy Act of 1992 (30 U.S.C. 242).
    ``(m) General Mining Law of the United States Defined; Rule of 
Construction.--(1) In this section the term `general mining law of the 
United States' means the provisions of law codified in chapters 2, 12, 
12A, 15, and 16 of title 30, United States Code, and in sections 161 
and 162 of such title.
    ``(2) Subsections (b) and (c) shall be construed in accordance with 
judicial decisions under section 314 of the Federal Land Policy and 
Management Act of 1976, as in effect before the enactment of those 
subsections.''.
    (e) Conforming Amendments.--
            (1) The Federal Land Policy and Management Act of 1976 is 
        amended--
                    (A) by striking section 314 (43 U.S.C. 1744);
                    (B) in the table of contents preceding title I by 
                striking the item relating to section 314; and
                    (C) in section 302(a) by striking ``section 314, 
                section 603,'' and inserting ``section 603''.
            (2) Section 22 of the Alaska Native Claims Settlement Act 
        is amended by striking ``and section 314 of the Federal Land 
        Policy and Management Act of 1976 (43 U.S.C. 1744)''.
            (3) Section 31(f) of the Mineral Leasing Act (30 U.S.C. 
        188(f)) is amended by striking ``section 314 of the Federal 
        Land Policy and Management Act of 1976 (43 U.S.C. 1744)'' and 
        inserting ``subsections (b) and (c) of section 2320 of the 
        Revised Statutes (30 U.S.C. 23)''.
            (4) Section 2511(e) of the Energy Policy Act of 1992 (30 
        U.S.C. 242(e)) is amended by striking the last sentence.

SEC. 6102. PATENTS FOR MINING OR MILL SITE CLAIMS.

    (a) Repeal of Limitation on Use of Funds for Applications for 
Patent.--Section 408(a) of the Department of the Interior, Environment, 
and Related Agencies Appropriations Act, 2006 (Public Law 109-54) is 
repealed.
    (b) Payment Amounts.--The Revised Statutes are amended--
            (1) in section 2325 (30 U.S.C. 29) by striking ``five 
        dollars per acre'' and inserting ``$1,000 per acre or fair 
        market value, whichever is greater'';
            (2) in section 2326 (30 U.S.C. 30) by striking ``five 
        dollars per acre'' and inserting ``$1,000 per acre or fair 
        market value, whichever is greater;'';
            (3) in section 2333 (30 U.S.C. 37)--
                    (A) by striking ``five dollars per acre'' and 
                inserting ``$1,000 per acre or fair market value, 
                whichever is greater;''; and
                    (B) by striking ``two dollars and fifty cents per 
                acre'' and inserting ``$1,000 per acre or fair market 
                value, whichever is greater'';
            (4) in section 2337 (30 U.S.C. 42)--
                    (A) in subsection (a) by striking ``made at the 
                same rate'' and all that follows through the end of 
                that sentence and inserting ``at the rate of $1,000 per 
                acre or fair market value, whichever is greater.''; and
                    (B) in subsection (b) by striking ``made at the 
                rate'' and all that follows through the end of that 
                sentence and inserting ``at the rate of $1,000 per acre 
                or fair market value, whichever is greater.''; and
            (5) in section 2325 (30 U.S.C. 29) by adding at the end the 
        following: ``For purposes of this section and sections 2326, 
        2333, and 2337 of the Revised Statutes, fair market value for 
        the patenting of mining claims or mill sites shall be 
        determined by appraisals prepared by an appraiser certified or 
        qualified under applicable professional criteria or State law, 
        in accordance with the Uniform Appraisal Standards for Federal 
        Land Acquisitions and the Uniform Standards of Professional 
        Appraisal Practice, submitted by the applicant for a patent to 
        the Secretary of the Interior upon application for patent, that 
        is completed within 120 days prior to submission of the 
        application for patent.''.
    (c) Mineral Development Work Requirements.--Section 2325 of the 
Revised Statutes (30 U.S.C. 29) is amended--
            (1) by striking ``five hundred dollars' '' and inserting 
        ``$7,500''; and
            (2) by striking ``labor has been expended'' and inserting 
        ``mineral development work has been performed''.
    (d) Patent Applicants in Limbo.--If the holder of an unpatented 
mining claim or mill site submitted an application for a mineral patent 
and paid the patent service charges required by regulation at the time 
the application was submitted, and the Secretary of the Interior did 
not complete all actions to process the application before April 26, 
1996, the holder of such claim may, at the holder's election, have such 
application processed under rules that applied before the date of the 
enactment of this Act.
    (e) Alternative Valuable Mineral Deposit Criteria.--Section 2325 of 
the Revised Statutes is further amended by inserting ``(a) Manner for 
Obtaining Patent, Generally.--'' before the first sentence, and by 
adding at the end the following:
    ``(b) Alternative Valuable Mineral Deposit Criteria.--
            ``(1) Claims subject to ongoing activities.--The holder of 
        an unpatented mining claim or mill site who is conducting 
        mining activities that meet the definition of a mine under 
        section 3(h) of the Federal Mine Safety and Health Act of 1972 
        (30 U.S.C. 802(h)) and whose activities with respect to that 
        claim or site are described in section 4 of such Act (30 U.S.C. 
        803) may receive a patent for any unpatented mining claims on 
        which mining activities are occurring or any mill sites, within 
        the boundaries of an approved plan of operations or a 
        comparable State or county approval. Upon confirmation by the 
        Secretary that minerals being mined are locatable in accordance 
        with Federal law and that actual sales of minerals have taken 
        place, all Federal lands within those boundaries are eligible 
        for patent upon compliance with this section and sections 2327 
        and 2329 of the Revised Statutes (30 U.S.C. 34, 35).
            ``(2) Disclosed claims and mill sites.--The holder of an 
        unpatented mining claim or mill site whose proven and probable 
        reserves are publicly disclosed in compliance with the 
        Securities Act of 1933 (15 U.S.C. 77a) or the Securities 
        Exchange Act of 1934 (15 U.S.C. 78a) may receive a patent for 
        any such unpatented mining claim containing such reserves or 
        for any mill site within the boundaries of a plan of operations 
        or a comparable State or county approval for such reserves. All 
        Federal lands within those boundaries are eligible for patent 
        upon compliance with this section and sections 2327 and 2329 of 
        the Revised Statutes (30 U.S.C. 34, 35).
    ``(c) Mineral Examinations.--
            ``(1) In general.--In order to process patent applications 
        in a timely and responsible manner, upon the request of a 
        patent applicant, the Secretary of the Interior shall allow the 
        applicant to fund a qualified third-party examiner from a list 
        maintained by the Bureau of Land Management to conduct a 
        mineral examination of the mining claims or mill sites 
        contained in a patent application as set forth in this section 
        and sections 2333 and 2337 of the Revised Statutes (30 U.S.C. 
        37, 42). The Bureau of Land Management shall have the sole 
        responsibility to maintain the list of qualified third-party 
        examiners.
            ``(2) Training.--The Director of the Bureau of Land 
        Management shall provide training in the conduct of mineral 
        examinations to qualified individuals. The Director may charge 
        fees to cover the costs of the training.
            ``(3) Qualified third-party examiner defined.--In this 
        subsection the term `qualified third-party examiner' means a 
        person who is a registered geologist or registered professional 
        mining engineer licensed to practice within the State in which 
        the claims are located.
    ``(d) Disposition of Proceeds.--The gross proceeds of conveyances 
of land under this section and sections 2319, 2330, 2332, 2333, and 
2337 of the Revised Statutes (30 U.S.C. 22, 36, 37, 38, 42) shall be 
used as follows:
            ``(1) 10 percent shall be deposited into the Federal Energy 
        and Mineral Resource Professional Development Fund.
            ``(2) 20 percent shall be available to the Secretary of the 
        Army for use, through the Corps of Engineers, for the 
        Restoration of Abandoned Mine Sites Program and section 560 of 
        the Water Resources Development Act of 1999.
            ``(3) 70 percent shall be deposited into the General Fund 
        of the Treasury.
    ``(e) Issuing Patents.--If no adverse claim has been filed with the 
register and the receiver of the proper land office at the expiration 
of the 60-day period beginning on the date of publication of the notice 
that an application for mineral patent has been filed under section 
2325, 2333 and 2337 of the Revised Statutes (30 U.S.C. 29, 37, 42), the 
Secretary shall issue the patent not later than 24 months after the 
date on which the application for patent was filed.
    ``(f) Small Miner Patent Adjudication and Mineral Development Work 
Requirements.--The holder of 10 claims or less who applies for a 
mineral patent under this section or a direct purchase under section 
2319 of the Revised Statutes (30 U.S.C. 22) shall pay one-fifth of the 
processing fees and perform one-fifth of the mineral development work 
required under this section and section 2319 (30 U.S.C. 22).''.

SEC. 6103. MINERAL EXAMINATIONS FOR MINING ON CERTAIN LANDS.

    Section 302 of the Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1732) is amended by adding at the end the following:
    ``(e) The Secretary shall not require a mineral examination report, 
otherwise required to be prepared under regulations promulgated 
pursuant to this Act, to approve a plan of operations under such 
regulations for mining claims and mill sites located on withdrawn lands 
if such mining claims, mill sites, and blocks of such mining claims and 
mill sites are contiguous to patented or unpatented mining claims or 
mill sites where mineral development activities, including mining, have 
been conducted as authorized by law or regulation.''.

SEC. 6104. MINERAL DEVELOPMENT LANDS AVAILABLE FOR PURCHASE.

    Section 2319 of the Revised Statutes (30 U.S.C. 22) is amended--
            (1) by inserting ``(a) Lands Open to Purchase by 
        Citizens.--'' before the first sentence; and
            (2) by adding at the end the following:
    ``(b) Availability for Purchase.--Notwithstanding any other 
provision of law and in compliance with subsection (c), the Secretary 
of the Interior shall make mineral deposits and the lands that contain 
them, including lands in which the valuable mineral deposit has been 
depleted, available for purchase to facilitate sustainable economic 
development. This subsection shall not apply with respect to any unit 
of the National Park System, National Wildlife Refuge System, National 
Wild and Scenic Rivers System, or National Trails System, or to any 
National Conservation Area, any National Recreation Area, any National 
Monument, or any unit of the National Wilderness Preservation System.
    ``(c) Application.--The holder of mining claims, mill sites, and 
blocks of such mining claims and mill sites contiguous to patented or 
unpatented mining claims or mill sites where mineral development 
activities, including mining, have been conducted as authorized by law 
or regulation and on which mineral development work has been performed 
may apply to purchase Federal lands that are subject to the claims. The 
filing of the proper application shall include such processing fees as 
are required by section 2325 of the Revised Statutes (30 U.S.C. 29). 
The applicant or applicants, or their predecessors must present 
evidence of mineral development work performed on the Federal lands 
identified and submitted for purchase. Mineral development work upon 
aggregation must average not less than $7,500 per mining claim or mill 
site within the Federal lands identified and applied for.
    ``(d) Land Surveys.--For the purpose of this section, and 
notwithstanding section 2334 of the Revised Statutes (30 U.S.C. 39), 
land surveys of the Federal lands applied for shall be paid for by the 
applicant and shall be completed either by a land surveyor registered 
in the State where the land is situated, or by such a surveyor also 
designated by the Bureau of Land Management as a mineral surveyor, if 
such mineral surveyors are available, willing, and able to complete 
such surveys without delay at a cost comparable to the charges of 
ordinary registered land surveyors.
    ``(e) Deadline for Conveyance; Price.--Notwithstanding any other 
provision of law, and not later than one year after the date of the 
approval of any survey required under subsection (d), the Secretary of 
the Interior shall convey to the applicant, in return for a payment of 
$1,000 per acre or fair market value, whichever is greater, all right, 
title, and interest in and to the Federal land, subject to valid 
existing rights and the terms and conditions of the Act of August 30, 
1890 (26 Stat. 391). For purposes of this subsection, fair market value 
for mineral development lands available for purchase shall be 
determined by appraisals prepared by an appraiser certified or 
qualified under applicable professional criteria or State law, in 
accordance with the Uniform Appraisal Standards for Federal Land 
Acquisitions and the Uniform Standards of Professional Appraisal 
Practice, submitted by the applicant to the Secretary of the Interior 
upon application for purchase, that is completed within 120 days prior 
to submission of the application. Fair market value for the interest in 
the land owned by the United States shall be exclusive of, and without 
regard to, the mineral deposits in the land or the use of such land for 
mineral activities.
    ``(f) Environmental Liability.--Notwithstanding any other Federal, 
State or local law, the United States shall not be responsible for--
            ``(1) investigating or disclosing the condition of any 
        property to be conveyed under this section; and
            ``(2) environmental remediation, waste management, or 
        environmental compliance activities arising from its ownership, 
        occupancy, or management of land and interests therein conveyed 
        under this section with respect to conditions existing at or on 
        the land at the time of the conveyance.
    ``(g) Mineral Development Work Defined.--In this section the term 
`mineral development work' means geologic, geochemical or geophysical 
surveys; road building; exploration drilling, trenching, and 
exploratory sampling by any other means; construction of underground 
workings for the purpose of conducting exploration; mine development 
work; mineral production from underground or surface mines; 
environmental baseline studies; construction of environmental 
protection and monitoring systems; environmental reclamation; 
construction of power and water distribution facilities; engineering, 
metallurgical, geotechnical, and economic feasibility studies; land 
surveys; and any other work reasonably incident to mineral 
development.''.

SEC. 6105. NATIONAL MINING AND MINERALS POLICY TO ENCOURAGE AND PROMOTE 
              THE PRODUCTIVE SECOND USE OF LANDS.

    Section 101 of the Mining and Minerals Policy Act of 1970 (30 
U.S.C. 21a) is amended--
            (1) in the first sentence--
                    (A) in clause (2) by inserting ``including through 
                remining where appropriate'' after ``needs,'';
                    (B) in clause (3) by striking ``and'' after the 
                comma at the end; and
                    (C) by striking the period at the end and inserting 
                the following: ``, and (5) facilitate the productive 
                second use of lands used for mining and energy 
                production.'';
            (2) in the second sentence by striking ``oil shale and 
        uranium'' and inserting ``oil shale, and uranium, whether 
        located onshore or offshore''; and
            (3) in the third sentence--
                    (A) by striking ``the Secretary of the Interior'' 
                and inserting ``the head of each Federal department and 
                of each independent agency''; and
                    (B) by striking ``his''.

SEC. 6106. REGULATIONS.

    The Secretary of the Interior shall issue final regulations 
implementing this subtitle by not later than 180 days after the date of 
the enactment of this Act.

SEC. 6107. PROTECTION OF NATIONAL PARKS AND WILDERNESS AREAS.

    Subject to valid existing rights, nothing in sections 6202, 6203, 
6204, 6205, and 6206 of this subtitle shall be construed as affecting 
any lands within the boundary of any unit of the National Park System, 
National Wildlife Refuge System, National Wild and Scenic Rivers 
System, or National Trails System, or any National Conservation Area, 
any National Recreation Area, any National Monument, or any unit of the 
National Wilderness Preservation System as of the date of the enactment 
of this Act.

                  Subtitle B--Disposal of Public Lands

         CHAPTER 1--DISPOSAL OF CERTAIN PUBLIC LANDS IN NEVADA

SEC. 6201. SHORT TITLE.

    This chapter may be cited as the ``Northern Nevada Sustainable 
Development in Mining Act''.

SEC. 6202. DEFINITIONS.

    In this chapter:
            (1) Claimant.--The term ``Claimant'' means Coeur Rochester, 
        Inc.
            (2) County.--The term ``County'' means Pershing County, 
        Nevada.
            (3) General mining law.--The term ``general mining law'' 
        means the provisions of law codified in chapters 2, 12, 12A, 
        15, and 16 of title 30, United States Code, and in sections 161 
        and 162 of such title.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 6203. LAND CONVEYANCE.

    (a) Conveyance of Land.--Notwithstanding any other provision of 
law, and not later than 90 days after the date of the enactment of this 
Act, the Secretary shall convey to the Claimant, in return for a 
payment of $500 per acre, all right, title, and interest, subject to 
the terms and conditions of subsection (c), in the approximately 7,000 
acres of Federal lands subject to Claimant's mining claims maintained 
under the general mining law and depicted on the Rochester Sustainable 
Development Project map on file with the Committee on Resources of the 
House of Representatives.
    (b) Exemption From Review, Etc.--Any conveyance of land under this 
chapter is not subject to review, consultation, or approval under any 
other Federal law.
    (c) Terms and Conditions of Conveyance.--
            (1) No impact on legal obligations.--Conveyance of the 
        lands pursuant to subsection (a) shall not affect Claimant's 
        legal obligations to comply with applicable Federal mine 
        closure or mine land reclamation laws, or with any other 
        applicable Federal or State requirement relating to closure of 
        the Rochester Mine and use of the land comprising such mine, 
        including any requirement to prepare any environmental impact 
        statement under the National Environmental Policy Act of 1969. 
        Federal reclamation and closure obligations shall not be 
        construed to require removal of infrastructure identified by 
        Claimant as being usable by a post-mining land use.
            (2) Title to materials and minerals.--Notwithstanding any 
        other provision of law, Claimant shall own and have title to 
        all spent ore, waste rock and tailings, and other materials 
        located on lands conveyed pursuant to subsection (a).
            (3) Valid existing rights.--All lands conveyed pursuant to 
        subsection (a) shall be subject to valid existing rights 
        existing as of the date of transfer of title, and Claimant 
        shall succeed to the rights and obligations of the United 
        States with respect to any mining claim, mill site claim, 
        lease, right-of-way, permit, or other valid existing right to 
        which the property is subject.
            (4) Environmental liability.--Notwithstanding any other 
        Federal, State or local law, the United States shall not be 
        responsible for--
                    (A) investigating or disclosing the condition of 
                any property to be conveyed under this chapter; and
                    (B) environmental remediation, waste management, or 
                environmental compliance activities arising from its 
                ownership, occupancy, or management of land and 
                interests therein conveyed under this chapter with 
                respect to conditions existing at or on the land at the 
                time of the conveyance.

SEC. 6204. DISPOSITION OF PROCEEDS.

    The gross proceeds of conveyances of land under this chapter shall 
be used as follows:
            (1) Such sums as are necessary shall be used to cover 100 
        percent of the administrative costs, not to exceed $20,000, 
        incurred by the Nevada State Office and the Winnemucca Field 
        Office of the Bureau of Land Management in conducting the 
        conveyance under this chapter.
            (2) $500,000 shall be paid directly to the State of Nevada 
        for use in the State's abandoned mined land program.
            (3) $100,000 shall be paid directly to Pershing County, 
        Nevada.
            (4) Proceeds remaining after the payments pursuant to 
        paragraphs (1) through (3) shall be deposited in the general 
        fund of the Treasury.

          CHAPTER 2--DISPOSAL OF CERTAIN PUBLIC LANDS IN IDAHO

SEC. 6211. SHORT TITLE.

    This chapter may be cited as the ``Central Idaho Sustainable 
Development in Mining Act''.

SEC. 6212. DEFINITIONS.

    In this chapter:
            (1) Claimant.--The term ``Claimant'' means TDS LLC, an 
        affiliated company of L&W Stone Corporation.
            (2) County.--The term ``County'' means Custer County, 
        Idaho.
            (3) General mining law.--The term ``general mining law'' 
        means the provisions of law codified in chapters 2, 12A, 15, 
        and 16 of title 30, United States Code, and in sections 161 and 
        162 of such title.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 6213. LAND CONVEYANCE.

    (a) Conveyance of Land.--Notwithstanding any other provision of 
law, and not later than 90 days after the date of the enactment of this 
Act, the Secretary shall convey to the Claimant, in return for a 
payment of $1,000 per acre, all right, title, and interest, subject to 
the terms and conditions of subsection (c), in the approximately 519.7 
acres of Federal lands subject to Claimant's mining claims maintained 
under the general mining law and depicted as ``proposed land exchange 
alignment'' on the Central Idaho Sustainable Development Project map on 
file with the Committee on Resources of the House of Representatives.
    (b) Exemption From Review, Etc.--Any conveyance of land under this 
chapter is not subject to review, consultation, or approval under any 
other Federal law.
    (c) Terms and Conditions of Conveyance.--
            (1) Transfer of fee title in federal lands.--
        Notwithstanding any other provision of law, full fee title in 
        approximately 519.7 acres of Federal lands described in 
        subsection (a) shall be transferred to Claimant as depicted as 
        ``proposed land exchange alignment'' on the Central Idaho 
        Sustainable Development Project map.
            (2) Valid existing rights.--All lands conveyed pursuant to 
        subsection (a) shall be subject to valid existing rights 
        existing as of the date of transfer of title, and Claimant 
        shall succeed to the rights and obligations of the United 
        States with respect to any mining claim, mill site claim, 
        lease, right-of-way, permit, or other valid existing right to 
        which the property is subject.
            (3) Environmental liability.--Notwithstanding any other 
        Federal, State, or local law, the United States shall not be 
        responsible for--
                    (A) investigating or disclosing the condition of 
                any property to be conveyed under this chapter; and
                    (B) environmental remediation, waste management, or 
                environmental compliance activities arising from its 
                ownership, occupancy, or management of land and 
                interests therein conveyed under this chapter with 
                respect to conditions existing at or on the land at the 
                time of the conveyance.

SEC. 6214. DISPOSITION OF PROCEEDS.

    Within one year of the completion of the conveyance under this 
chapter, the gross proceeds of the conveyance shall be used as follows:
            (1) Such sums as are necessary shall be used to cover 100 
        percent of the administrative costs, not to exceed $15,000, 
        incurred by the Idaho State Office and the Challis Field Office 
        of the Bureau of Land Management in conducting conveyances 
        under this chapter.
            (2) $200,000 shall be paid directly to the State of Idaho 
        for use in the State Parks program.
            (3) $200,000 shall be paid directly to Custer County, 
        Idaho.
            (4) Proceeds remaining after the payments pursuant to 
        paragraphs (1) through (3) shall be deposited in the general 
        fund of the Treasury.

                         Subtitle C--Oil Shale

SEC. 6301. OIL SHALE AND TAR SANDS AMENDMENTS.

    (a) Commercial Leasing of Oil Shale and Tar Sands.--Section 369(e) 
of the Energy Policy Act of 2005 (Public Law 109-58) is amended to read 
as follows:
    ``(e) Commencement of Commercial Leasing of Oil Shale and Tar 
Sand.--Not later than 365 days after publication of the final 
regulation required by subsection (d), the Secretary shall hold the 
first oil shale and tar sands lease sales under the regulation, 
offering for lease a minimum of 35 percent of the Federal lands that 
are geologically prospective for oil shale and tar sands within 
Colorado, Utah, and Wyoming. The environmental impact statement 
developed in support of the commercial leasing program for oil shale 
and tar sands as required by subsection (c) is deemed to provide 
adequate environmental analysis for all oil shale and tar sands lease 
sales conducted within the first 10 years after promulgation of the 
regulation, and such sales shall not be subject to further 
environmental analysis.''.
    (b) Repeal of Requirement to Establish Payments.--Section 369(o) of 
the Energy Policy Act of 2005 (Public Law 109-58; 119 Stat. 728; 42 
U.S.C. 15927) is repealed.
    (c) Treatment of Revenues.--Section 21 of the Mineral Leasing Act 
(30 U.S.C. 241) is amended by adding at the end the following:
    ``(e) Revenues.--
            ``(1) In general.--Notwithstanding the provisions of 
        section 35, all revenues received from and under an oil shale 
        or tar sands lease shall be disposed of as provided in this 
        subsection.
            ``(2) Royalty rates for commercial leases.--
                    ``(A) Initial production.--For the first 10 years 
                after initial production under each oil shale or tar 
                sands lease issued under the commercial leasing program 
                established under subsection (d), the Secretary shall 
                set the royalty rate at not less than 1 percent nor 
                more than 3 percent of the gross value of production. 
                However, the initial production period royalty rate set 
                by the Secretary shall not apply to production 
                occurring more than 15 years after the date of issuance 
                of the lease.
                    ``(B) Subsequent periods.--After the periods of 
                time specified in subparagraph (A), the Secretary shall 
                set the royalty rate on each oil shale or tar sands 
                lease issued under the commercial leasing program 
                established under subsection (d) at not less than 6 
                percent nor more than 9 percent of the gross value of 
                production.
                    ``(C) Reduction.--The Secretary shall reduce any 
                royalty otherwise required to be paid under 
                subparagraphs (A) and (B) under any oil shale or tar 
                sands lease on a sliding scale based upon market price, 
                with a 10 percent reduction if the monthly average 
                price of NYMEX West Texas Intermediate crude oil at 
                Cushing, Oklahoma, (WTI) drops below $50 (in 2005 
                dollars) for the month in which the production is sold, 
                and an 80 percent reduction if the monthly average 
                price of WTI drops below $30 (in 2005 dollars) for the 
                month in which the production is sold.
            ``(3) Disposition of revenues.--
                    ``(A) Deposit.--The Secretary shall deposit into a 
                separate account in the Treasury all revenues derived 
                from any oil shale or tar sands lease.
                    ``(B) Allocations to states and local political 
                subdivisions.--The Secretary shall allocate 50 percent 
                of the revenues deposited into the account established 
                under subparagraph (A) to the State within the 
                boundaries of which the leased lands are located, with 
                a portion of that to be paid directly by the Secretary 
                to the State's local political subdivisions as provided 
                in this paragraph.
                    ``(C) Transmission of allocations.--
                            ``(i) In general.--Not later than the last 
                        business day of the month after the month in 
                        which the revenues were received, the Secretary 
                        shall transmit--
                                    ``(I) to each State two-thirds of 
                                such State's allocations under 
                                subparagraph (B), and in accordance 
                                with clauses (ii) and (iii) to certain 
                                county-equivalent and municipal 
                                political subdivisions of such State a 
                                total of one-third of such State's 
                                allocations under subparagraph (B), 
                                together with all accrued interest 
                                thereon; and
                                    ``(II) the remaining balance of 
                                such revenues deposited into the 
                                account that are not allocated under 
                                subparagraph (B), together with 
                                interest thereon, shall be transmitted 
                                to the miscellaneous receipts account 
                                of the Treasury, except that until a 
                                lease has been in production for 10 
                                years 80 percent of such remaining 
                                balance derived from a lease shall be 
                                paid in accordance with subclause (I).
                            ``(ii) Allocations to certain county-
                        equivalent political subdivisions.--The 
                        Secretary shall under clause (i)(I) make 
                        equitable allocations of the revenues to 
                        county-equivalent political subdivisions that 
                        the Secretary determines are closely associated 
                        with the leasing and production of oil shale 
                        and tar sands, under a formula that the 
                        Secretary shall determine by regulation.
                            ``(iii) Allocations to municipal political 
                        subdivisions.--The initial allocation to each 
                        county-equivalent political subdivision under 
                        clause (ii) shall be further allocated to the 
                        county-equivalent political subdivision and any 
                        municipal political subdivisions located 
                        partially or wholly within the boundaries of 
                        the county-equivalent political subdivision on 
                        an equitable basis under a formula that the 
                        Secretary shall determine by regulation.
                    ``(D) Investment of deposits.--The deposits in the 
                Treasury account established under this section shall 
                be invested by the Secretary of the Treasury in 
                securities backed by the full faith and credit of the 
                United States having maturities suitable to the needs 
                of the account and yielding the highest reasonably 
                available interest rates as determined by the Secretary 
                of the Treasury.
                    ``(E) Use of funds.--A recipient of funds under 
                this subsection may use the funds for any lawful 
                purpose as determined by State law. Funds allocated 
                under this subsection to States and local political 
                subdivisions may be used as matching funds for other 
                Federal programs without limitation. Funds allocated to 
                local political subdivisions under this subsection may 
                not be used in calculation of payments to such local 
                political subdivisions under programs for payments in 
                lieu of taxes or other similar programs.
                    ``(F) No accounting required.--No recipient of 
                funds under this subsection shall be required to 
                account to the Federal Government for the expenditure 
                of such funds, except as otherwise may be required by 
                law.
            ``(4) Definitions.--In this subsection:
                    ``(A) County-equivalent political subdivision.--The 
                term `county-equivalent political subdivision' means a 
                political jurisdiction immediately below the level of 
                State government, including a county, parish, borough 
                in Alaska, independent municipality not part of a 
                county, parish, or borough in Alaska, or other 
                equivalent subdivision of a State.
                    ``(B) Municipal political subdivision.--The term 
                `municipal political subdivision' means a municipality 
                located within and part of a county, parish, borough in 
                Alaska, or other equivalent subdivision of a State.''.

            Subtitle D--Sale and Conveyance of Federal Land

SEC. 6401. COLLECTION OF RECEIPTS FROM THE SALE OF FEDERAL LANDS.

    (a) In General.--Notwithstanding any other law, the Secretary shall 
make the lands described in subsection (b) available for immediate sale 
through a competitive sale process at fair market value. Requirements 
under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
seq.) shall not apply to the sale of lands under this section.
    (b) Lands Described.--The lands referred to in subsection (a) are 
the following:
            (1) Poplar Point (Transfer and Conveyance of Properties in 
        the District of Columbia, Map Number 869/80460, Dated July 
        2005, p. 28 of 28).
            (2) U.S. Reservations 44, 45, 46, 47, 48 and 49 (Map Number 
        869/80460, Dated July 2005, p. 13 of 28).
            (3) U.S. Reservation 251 (Map Number 869/80460, Dated July 
        2005, p. 14 of 28).
            (4) U.S. Reservation 8 (Map Number 869/80460, Dated July 
        2005, p. 15 of 28).
            (5) U.S. Reservation 17A (Map Number 869/80460, Dated July 
        2005, p. 20 of 28).
            (6) U.S. Reservation 484 (Map Number 869/80460, Dated July 
        2005, p. 21 of 28).
            (7) U.S. Reservation 721, 722 and 723 (Map Number 869/
        80460, Dated July 2005, p. 25 of 28).
            (8) Certain land adjacent to Robert F. Kennedy Stadium 
        Parking Lot (Transfer and Conveyance of Properties in the 
        District of Columbia, Map Number 869/80460, Dated July 2005, p. 
        26 of 28).
            (9) United States Reservation 243, 244, 245, and 247 
        (Transfer and Conveyance of Properties in the District of 
        Columbia, Map Number 869/80460, Dated July 2005, p. 22 of 28).
The Secretary may retain from sale proceeds and spend without further 
appropriation up to $1,000,000 each year to implement land sales under 
this subsection, including hiring contractors and appraisers
    (c) Poplar Point.--
            (1) Retention of funds.--The Secretary may retain 
        $10,000,000 from funds received from the sale of land under 
        subsection (b)(1) and spend such funds without further 
        appropriations for the purposes of complying with subparagraph 
        (2).
            (2) Continuity of operation.--Before the sale and 
        development of land referred to in subparagraph (b)(1), the 
        Secretary shall ensure that the existing facilities and related 
        properties (including necessary easements and utilities related 
        thereto) occupied or otherwise used by the National Park 
        Service are either withheld from any sale and remain in 
        operation at its current location or will be relocated to 
        suitable replacement facilities along the Anacostia River in 
        the District of Columbia using funds made available by 
        subparagraph (c)(1).
    (d) Conveyance of Lands to the District of Columbia.--
            (1) In general.--Notwithstanding any other law, the 
        Secretary shall immediately convey all right, title, and 
        interest of the United States in the lands described in this 
        subsection to the District of Columbia upon enactment of this 
        section. Requirements under the National Environmental Policy 
        Act (42 U.S.C. 4321 et seq.) shall not apply to the conveyance 
        of lands under this subsection.
            (2) Lands described.--The lands referred to in this 
        subsection are as follows:
                    (A) United States Reservation 128, 129, 130, 298 
                and 299 (Transfer and Conveyance of Properties in the 
                District of Columbia, Map Number 869/80460, Dated July 
                2005, p. 23 of 28).
                    (B) United States Reservation 174 (Map Number 869/
                80460, Dated July 2005, p. 27 of 28).
                    (C) United States Reservation 277A and 277C (Map 
                Number 869/80460, Dated July 2005, p. 16 of 28).
                    (D) United States Reservation 343D and 343E (Map 
                Number 869/80460, Dated July 2005, p. 24 or 28).
                    (E) United States Reservation 404 (Map Number 869/
                80460, Dated July 2005, p. 12 of 28).
                    (F) United States Reservation 451 (Map Number 869/
                80460, Dated July 2005, p. 11 of 28).
                    (G) United States Reservation 470 (Transfer and 
                Conveyance of Properties in the District of Columbia, 
                Map Number 869/80460, Dated July 2005, p. 17 of 28).
    (e) Transfer of Administrative Jurisdiction Over Certain 
Properties.--
            (1) In general.--Upon the date of the enactment of this 
        subsection, administrative jurisdiction over each of the 
        following properties (owned by the United States and as 
        depicted on listed maps) is hereby transferred from the 
        District of Columbia to the United States for administration by 
        the Secretary of the Interior through the Director of the 
        National Park Service:
                    (A) An unimproved portion of Audubon Terrace 
                Northwest, located east of Linnean Avenue Northwest, 
                that is within U.S. Reservation 402 (Audubon Terrace, 
                NW, Transfer and Conveyance of Properties in the 
                District of Columbia, Map Number 869/80460, Dated July 
                2005, p. 2 of 28) .
                    (B) An unimproved portion of Barnaby Street 
                Northwest, north of Aberfoyle Place Northwest, that 
                abuts U.S. Reservation 545 (Barnaby Avenue, NW, Map 
                Number 869/80460, Dated July 2005, p. 3 of 28).
                    (C) A portion of Canal Street Southwest, and a 
                portion of V Street Southwest, each which abuts U.S. 
                Reservation (Canal and V Streets, SW, Map Number 869/
                80460, Dated July 2005, p. 3 of 28).
                    (D) Unimproved streets and alleys at Fort Circle 
                Park located within the boundaries of U.S. Reservation 
                497 (Fort Circle Park, Map Number 869/80460, Dated July 
                2005, p. 5 of 28)''.
                    (E) An unimproved portion of Western Avenue 
                Northwest, north of Oregon Avenue Northwest, that abuts 
                U.S. Reservation 339 (Western Avenue, NW, Map Number 
                869/80460, Dated July 2005, p. 6 of 28).
                    (F) An unimproved portion of 17th Street Northwest, 
                south of Shepard Street Northwest, that abuts U.S. 
                Reservation 339 (17th Street, NW, Map Number 869/80460, 
                Dated July 2005, p. 7 of 28).
                    (G) An unimproved portion of 30th Street Northwest, 
                north of Broad Branch Road, Northwest, that is within 
                the boundaries of U.S. Reservation 515 (30th Street, 
                NW, Map Number 869/80460, Dated July 2005, p. 8 of 28).
                    (H) Land over I-395 at Washington Avenue, Southwest 
                (Lands over I-395 at Washington Avenue, SW, Map Number 
                869/80460, Dated July 2005, p. 9 of 28).
                    (I) A portion of U.S. Reservation 357 at Whitehaven 
                Parkway Northwest, previously transferred to the 
                District of Columbia in conjunction with the former 
                proposal for a residence for the Mayor of the District 
                of Columbia (Portion of U.S. Reservation 357, Transfer 
                and Conveyance of Properties in the District of 
                Columbia, Map Number 869/80460, Dated July 2005, p. 10 
                of 28).
            (2) Use of certain property for memorial.--In the case of 
        the property for which administrative jurisdiction is 
        transferred under paragraph (1)(H), the property shall be used 
        as the site for the establishment of a memorial to honor 
        disabled veterans of the United States Armed Forces authorized 
        to be established by the Disabled Veterans' LIFE Memorial 
        Foundation by Public Law 106-348 (114 Stat. 1358; 40 U.S.C. 
        8903 note), except that the District of Columbia shall retain 
        administrative jurisdiction over the subsurface area beneath 
        the site for tunnels, walls, footings, and related facilities.

       TITLE VII--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

SEC. 7001. EXTENSION OF VESSEL TONNAGE DUTIES.

    (a) Extension of Duties.--Section 36 of the Act entitled ``An Act 
to provide revenue, equalize duties and encourage the industries of the 
United States, and for other purposes'', approved August 5, 1909 (36 
Stat. 111; 46 U.S.C. App. 121), is amended--
            (1) by striking ``9 cents per ton'' and all that follows 
        through ``2002,'' the first place it appears and inserting 
        ``4.5 cents per ton, not to exceed in the aggregate 22.5 cents 
        per ton in any one year, for fiscal years 2006 through 2010,''; 
        and
            (2) by striking ``27 cents per ton'' and all that follows 
        through ``2002,'' and inserting ``13.5 cents per ton, not to 
        exceed 67.5 cents per ton per annum, for fiscal years 2006 
        through 2010,''.
    (b) Conforming Amendment.--The Act entitled ``An Act concerning 
tonnage duties on vessels entering otherwise than by sea'', approved 
March 8, 1910 (36 Stat. 234; 46 U.S.C. App. 132), is amended by 
striking ``9 cents per ton'' and all that follows through ``and 2 
cents'' and inserting ``4.5 cents per ton, not to exceed in the 
aggregate 22.5 cents per ton in any one year, for fiscal years 2006 
through 2010, and 2 cents''.
    (c) Offsetting Receipts.--Increased tonnage charges collected as a 
result of the amendments made by subsection (a) shall be deposited in 
the general fund of the Treasury as offsetting receipts of the 
department in which the Coast Guard is operating and ascribed to Coast 
Guard activities related to marine safety, search and rescue, and aids 
to navigation.

                TITLE VIII--COMMITTEE ON WAYS AND MEANS

SEC. 8001. SHORT TITLE.

    This title may be cited as the ``Work, Marriage, and Family 
Promotion Reconciliation Act of 2005''.

SEC. 8002. TABLE OF CONTENTS.

    The table of contents of this title is as follows:

Sec. 8001. Short title.
Sec. 8002. Table of contents.
Sec. 8003. References.
Sec. 8004. Findings.

                            Subtitle A--TANF

Sec. 8101. Purposes.
Sec. 8102. Family assistance grants.
Sec. 8103. Promotion of family formation and healthy marriage.
Sec. 8104. Supplemental grant for population increases in certain 
                            States.
Sec. 8105. Elimination of high performance bonus.
Sec. 8106. Contingency fund.
Sec. 8107. Use of funds.
Sec. 8108. Repeal of Federal loan for State welfare programs.
Sec. 8109. Universal engagement and family self-sufficiency plan 
                            requirements.
Sec. 8110. Work participation requirements.
Sec. 8111. Maintenance of effort.
Sec. 8112. Performance improvement.
Sec. 8113. Data collection and reporting.
Sec. 8114. Direct funding and administration by Indian tribes.
Sec. 8115. Research, evaluations, and national studies.
Sec. 8116. Study by the Census Bureau.
Sec. 8117. Definition of assistance.
Sec. 8118. Technical corrections.
Sec. 8119. Fatherhood program.
Sec. 8120. State option to make TANF programs mandatory partners with 
                            one-stop employment training centers.
Sec. 8121. Sense of the Congress.
Sec. 8122. Drug testing of applicants for and recipients of assistance.

                         Subtitle B--Child care

Sec. 8201. Entitlement funding.

                       Subtitle C--Child support

Sec. 8301. Federal matching funds for limited pass through of child 
                            support payments to families receiving 
                            TANF.
Sec. 8302. State option to pass through all child support payments to 
                            families that formerly received TANF.
Sec. 8303. Mandatory review and adjustment of child support orders for 
                            families receiving TANF.
Sec. 8304. Mandatory fee for successful child support collection for 
                            family that has never received TANF.
Sec. 8305. Report on undistributed child support payments.
Sec. 8306. Decrease in amount of child support arrearage triggering 
                            passport denial.
Sec. 8307. Use of tax refund intercept program to collect past-due 
                            child support on behalf of children who are 
                            not minors.
Sec. 8308. Garnishment of compensation paid to veterans for service-
                            connected disabilities in order to enforce 
                            child support obligations.
Sec. 8309. Maintenance of technical assistance funding.
Sec. 8310. Maintenance of Federal Parent Locator Service funding.
Sec. 8311. Information comparisons with insurance data.
Sec. 8312. Tribal access to the Federal Parent Locator Service.
Sec. 8313. Reimbursement of Secretary's costs of information 
                            comparisons and disclosure for enforcement 
                            of obligations on Higher Education Act 
                            loans and grants.
Sec. 8314. Technical amendment relating to cooperative agreements 
                            between States and Indian tribes.
Sec. 8315. State option to use statewide automated data processing and 
                            information retrieval system for interstate 
                            cases.
Sec. 8316. Modification of rule requiring assignment of support rights 
                            as a condition of receiving TANF.
Sec. 8317. State option to discontinue certain support assignments.
Sec. 8318. Technical correction.
Sec. 8319. Reduction in rate of reimbursement of child support 
                            administrative expenses.
Sec. 8320. Incentive payments.

                       Subtitle D--Child welfare

Sec. 8401. Extension of authority to approve demonstration projects.
Sec. 8402. Elimination of limitation on number of waivers.
Sec. 8403. Elimination of limitation on number of States that may be 
                            granted waivers to conduct demonstration 
                            projects on same topic.
Sec. 8404. Elimination of limitation on number of waivers that may be 
                            granted to a single State for demonstration 
                            projects.
Sec. 8405. Streamlined process for consideration of amendments to and 
                            extensions of demonstration projects 
                            requiring waivers.
Sec. 8406. Availability of reports.
Sec. 8407. Clarification of eligibility for foster care maintenance 
                            payments and adoption assistance.
Sec. 8408. Clarification regarding Federal matching of certain 
                            administrative costs under the foster care 
                            maintenance payments program.
Sec. 8409. Technical correction.
Sec. 8410. Technical correction.

                Subtitle E--Supplemental security income

Sec. 8501. Review of State agency blindness and disability 
                            determinations.
Sec. 8502. Payment of certain lump sum benefits in installments under 
                            the Supplemental Security Income program.

                Subtitle F--State and local flexibility

Sec. 8601. Program coordination demonstration projects.

       Subtitle G--Repeal of continued dumping and subsidy offset

Sec. 8701. Repeal of continued dumping and subsidy offset.

                       Subtitle H--Effective date

Sec. 8801. Effective date.

SEC. 8003. REFERENCES.

    Except as otherwise expressly provided, wherever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the amendment or repeal shall be 
considered to be made to a section or other provision of the Social 
Security Act.

SEC. 8004. FINDINGS.

    The Congress makes the following findings:
            (1) The Temporary Assistance for Needy Families (TANF) 
        Program established by the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (Public Law 104-193) has 
        succeeded in moving families from welfare to work and reducing 
        child poverty.
                    (A) There has been a dramatic increase in the 
                employment of current and former welfare recipients. 
                The percentage of working recipients reached an all-
                time high in fiscal year 1999 and continued steady in 
                fiscal years 2000 and 2001. In fiscal year 2003, 31.3 
                percent of adult recipients were counted as meeting the 
                work participation requirements. All States but one met 
                the overall participation rate standard in fiscal year 
                2003, as did the District of Columbia and Puerto Rico.
                    (B) Earnings for welfare recipients remaining on 
                the rolls have also increased significantly, as have 
                earnings for female-headed households. The increases 
                have been particularly large for the bottom 2 income 
                quintiles, that is, those women who are most likely to 
                be former or present welfare recipients.
                    (C) Welfare dependency has plummeted. As of June 
                2004, 1,969,909 families and 4,727,291 individuals were 
                receiving assistance. Accordingly, the number of 
                families in the welfare caseload and the number of 
                individuals receiving cash assistance declined 55 
                percent and 61 percent, respectively, since the 
                enactment of TANF.
                    (D) The child poverty rate continued to decline 
                between 1996 and 2003, falling 14 percent from 20.5 to 
                17.6 percent. Child poverty rates for African-American 
                and Hispanic children have also fallen dramatically 
                during the past 7 years.
            (2) As a Nation, we have made substantial progress in 
        reducing teen pregnancies and births, slowing increases in 
        nonmarital childbearing, and improving child support 
        collections and paternity establishment.
                    (A) The birth rate to teenagers declined 30 percent 
                from its high in 1991 to 2002. The 2002 teenage birth 
                rate of 43.0 per 1,000 women aged 15-19 is the lowest 
                recorded birth rate for teenagers.
                    (B) During the period from 1991 through 2001, 
                teenage birth rates fell in all States and the District 
                of Columbia, Puerto Rico, Guam, and the Virgin Islands. 
                Declines also have spanned age, racial, and ethnic 
                groups. There has been success in lowering the birth 
                rate for both younger and older teens. The birth rate 
                for those 15-17 years of age has declined 40 percent 
                since 1991, and the rate for those 18 and 19 has 
                declined 23 percent. The rate for African American 
                teens--until recently the highest--has declined the 
                most--42 percent from 1991 through 2002.
                    (C) Since the enactment of the Personal 
                Responsibility and Work Opportunity Reconciliation Act 
                of 1996, child support collections within the child 
                support enforcement system have grown every year, 
                increasing from $12,000,000,000 in fiscal year 1996 to 
                over $21,000,000,000 in fiscal year 2003. The number of 
                paternities established or acknowledged in fiscal year 
                2003 (over 1,500,000) includes a more than 100 percent 
                increase through in-hospital acknowledgement programs--
                862,043 in 2003 compared to 324,652 in 1996. Child 
                support collections were made in nearly 8,000,000 cases 
                in fiscal year 2003, significantly more than the almost 
                4,000,000 cases having a collection in 1996.
            (3) The Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 gave States great flexibility in the 
        use of Federal funds to develop innovative programs to help 
        families leave welfare and begin employment and to encourage 
        the formation of 2-parent families.
                    (A) Total Federal and State TANF expenditures in 
                fiscal year 2003 were $26,300,000,000, up from 
                $25,400,000,000 in fiscal year 2002 and $22,600,000,000 
                in fiscal year 1999. This increased spending is 
                attributable to significant new investments in 
                supportive services in the TANF program, such as child 
                care and activities to support work.
                    (B) Since the welfare reform effort began there has 
                been a dramatic increase in work participation 
                (including employment, community service, and work 
                experience) among welfare recipients, as well as an 
                unprecedented reduction in the caseload because 
                recipients have left welfare for work.
                    (C) States are making policy choices and investment 
                decisions best suited to the needs of their citizens.
                            (i) To expand aid to working families, 
                        almost all States disregard a portion of a 
                        family's earned income when determining benefit 
                        levels.
                            (ii) Most States increased the limits on 
                        countable assets above the former Aid to 
                        Families with Dependent Children (AFDC) 
                        program. Every State has increased the vehicle 
                        asset level above the prior AFDC limit for a 
                        family's primary automobile.
                            (iii) States are experimenting with 
                        programs to promote marriage and paternal 
                        involvement. Over half of the States have 
                        eliminated restrictions on 2-parent families. 
                        Many States use TANF, child support, or State 
                        funds to support community-based activities to 
                        help fathers become more involved in their 
                        children's lives or strengthen relationships 
                        between mothers and fathers.
            (4) However, despite this success, there is still progress 
        to be made. Policies that support and promote more work, 
        strengthen families, and enhance State flexibility are 
        necessary to continue to build on the success of welfare 
        reform.
                    (A) Significant numbers of welfare recipients still 
                are not engaged in employment-related activities. While 
                all States have met the overall work participation 
                rates required by law, in an average month, only 41 
                percent of all families with an adult participated in 
                work activities that were countable toward the State's 
                participation rate. In fiscal year 2003, four 
                jurisdictions failed to meet the more rigorous 2-parent 
                work requirements, and 25 jurisdictions (States and 
                territories) are not subject to the 2-parent 
                requirements, most because they moved their 2-parent 
                cases to separate State programs where they are not 
                subject to a penalty for failing the 2-parent rates.
                    (B) In 2002, 34 percent of all births in the U.S. 
                were to unmarried women. And, with fewer teens entering 
                marriage, the proportion of births to unmarried teens 
                has increased dramatically (80 percent in 2002 versus 
                30 percent in 1970). The negative consequences of out-
                of-wedlock birth on the mother, the child, the family, 
                and society are well documented. These include 
                increased likelihood of welfare dependency, increased 
                risks of low birth weight, poor cognitive development, 
                child abuse and neglect, and teen parenthood, and 
                decreased likelihood of having an intact marriage 
                during adulthood.
                    (C) There has been a dramatic rise in cohabitation 
                as marriages have declined. It is estimated that 40 
                percent of children are expected to live in a 
                cohabiting-parent family at some point during their 
                childhood. Children in single-parent households and 
                cohabiting-parent households are at much higher risk of 
                child abuse than children in intact married families.
                    (D) Children who live apart from their biological 
                fathers, on average, are more likely to be poor, 
                experience educational, health, emotional, and 
                psychological problems, be victims of child abuse, 
                engage in criminal behavior, and become involved with 
                the juvenile justice system than their peers who live 
                with their married, biological mother and father. A 
                child living with a single mother is nearly 5 times as 
                likely to be poor as a child living in a married-couple 
                family. In 2003, in married-couple families, the child 
                poverty rate was 8.6 percent, and in households headed 
                by a single mother the poverty rate was 41.7 percent.
            (5) Therefore, it is the sense of the Congress that 
        increasing success in moving families from welfare to work, as 
        well as in promoting healthy marriage and other means of 
        improving child well-being, are very important Government 
        interests and the policy contained in part A of title IV of the 
        Social Security Act (as amended by this title) is intended to 
        serve those ends.

                            Subtitle A--TANF

SEC. 8101. PURPOSES.

    Section 401(a) (42 U.S.C. 601(a)) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``increase'' and inserting ``improve child well-being by 
        increasing'';
            (2) in paragraph (1), by inserting ``and services'' after 
        ``assistance'';
            (3) in paragraph (2), by striking ``parents on government 
        benefits'' and inserting ``families on government benefits and 
        reduce poverty''; and
            (4) in paragraph (4), by striking ``two-parent families'' 
        and inserting ``healthy, 2-parent married families, and 
        encourage responsible fatherhood''.

SEC. 8102. FAMILY ASSISTANCE GRANTS.

    (a) Extension of Authority.--Section 403(a)(1)(A) (42 U.S.C. 
603(a)(1)(A)) is amended--
            (1) by striking ``1996, 1997, 1998, 1999, 2000, 2001, 2002, 
        and 2003'' and inserting ``2006 through 2010''; and
            (2) by inserting ``payable to the State for the fiscal 
        year'' before the period.
    (b) State Family Assistance Grant.--Section 403(a)(1)(C) (42 U.S.C. 
603(a)(1)(C)) is amended by striking ``fiscal year 2003'' and inserting 
``each of fiscal years 2006 through 2010''.
    (c) Matching Grants for the Territories.--Section 1108(b)(2) (42 
U.S.C. 1308(b)(2)) is amended by striking ``1997 through 2003'' and 
inserting ``2006 through 2010''.

SEC. 8103. PROMOTION OF FAMILY FORMATION AND HEALTHY MARRIAGE.

    (a) State Plans.--Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is 
amended by adding at the end the following:
                            ``(vii) Encourage equitable treatment of 
                        married, 2-parent families under the program 
                        referred to in clause (i).''.
    (b) Healthy Marriage Promotion Grants; Repeal of Bonus for 
Reduction of Illegitimacy Ratio.--Section 403(a)(2) (42 U.S.C. 
603(a)(2)) is amended to read as follows:
            ``(2) Healthy marriage promotion grants.--
                    ``(A) Authority.--The Secretary shall award 
                competitive grants to States, territories, and tribal 
                organizations for not more than 50 percent of the cost 
                of developing and implementing innovative programs to 
                promote and support healthy, married, 2-parent 
                families.
                    ``(B) Healthy marriage promotion activities.--Funds 
                provided under subparagraph (A) shall be used to 
                support any of the following programs or activities:
                            ``(i) Public advertising campaigns on the 
                        value of marriage and the skills needed to 
                        increase marital stability and health.
                            ``(ii) Education in high schools on the 
                        value of marriage, relationship skills, and 
                        budgeting.
                            ``(iii) Marriage education, marriage 
                        skills, and relationship skills programs, that 
                        may include parenting skills, financial 
                        management, conflict resolution, and job and 
                        career advancement, for non-married pregnant 
                        women and non-married expectant fathers.
                            ``(iv) Pre-marital education and marriage 
                        skills training for engaged couples and for 
                        couples or individuals interested in marriage.
                            ``(v) Marriage enhancement and marriage 
                        skills training programs for married couples.
                            ``(vi) Divorce reduction programs that 
                        teach relationship skills.
                            ``(vii) Marriage mentoring programs which 
                        use married couples as role models and mentors 
                        in at-risk communities.
                            ``(viii) Programs to reduce the 
                        disincentives to marriage in means-tested aid 
                        programs, if offered in conjunction with any 
                        activity described in this subparagraph.
                    ``(C) Voluntary participation.--
                            ``(i) In general.--Participation in a 
                        program or activity described in any of clauses 
                        (iii) through (viii) of subparagraph (B) shall 
                        be voluntary.
                            ``(ii) Requirements for receipt of funds.--
                        The Secretary may not award a grant under this 
                        paragraph to an applicant for the grant, 
                        unless--
                                    ``(I) the application for the grant 
                                describes--
                                            ``(aa) how the programs or 
                                        activities proposed in the 
                                        application will address, as 
                                        appropriate, issues of domestic 
                                        violence; and
                                            ``(bb) what the applicant 
                                        will do, to the extent 
                                        relevant, to ensure that 
                                        participation in the programs 
                                        or activities is voluntary, and 
                                        to inform potential 
                                        participants that their 
                                        participation is voluntary; and
                                    ``(II) the applicant agrees that, 
                                as a condition of receipt of the grant, 
                                the applicant will consult with experts 
                                in domestic violence or relevant 
                                community domestic violence coalitions 
                                in developing the programs and 
                                activities funded with the grant.
                    ``(D) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for each of fiscal 
                years 2006 through 2010 $100,000,000 for grants under 
                this paragraph.''.
    (c) Counting of Spending on Non-Eligible Families to Prevent and 
Reduce Incidence of Out-of-Wedlock Births, Encourage Formation and 
Maintenance of Healthy, 2-Parent Married Families, or Encourage 
Responsible Fatherhood.--Section 409(a)(7)(B)(i) (42 U.S.C. 
609(a)(7)(B)(i)) is amended by adding at the end the following:
                                    ``(V) Counting of spending on non-
                                eligible families to prevent and reduce 
                                incidence of out-of-wedlock births, 
                                encourage formation and maintenance of 
                                healthy, 2-parent married families, or 
                                encourage responsible fatherhood.--The 
                                term `qualified State expenditures' 
                                includes the total expenditures by the 
                                State during the fiscal year under all 
                                State programs for a purpose described 
                                in paragraph (3) or (4) of section 
                                401(a).''.

SEC. 8104. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN CERTAIN 
              STATES.

    Section 403(a)(3) (42 U.S.C. 603(a)(3)) is amended--
            (1) in subparagraph (E)--
                    (A) by striking ``1998, 1999, 2000, and 2001'' and 
                inserting ``2006 through 2009''; and
                    (B) by striking ``, in a total amount not to exceed 
                $800,000,000'';
            (2) in subparagraph (G), by striking ``2001'' and inserting 
        ``2009''; and
            (3) by striking subparagraph (H) and inserting the 
        following:
                    ``(H) Further preservation of grant amounts.--A 
                State that was a qualifying State under this paragraph 
                for fiscal year 2004 or any prior fiscal year shall be 
                entitled to receive from the Secretary for each of 
                fiscal years 2006 through 2009 a grant in an amount 
                equal to the amount required to be paid to the State 
                under this paragraph for the most recent fiscal year 
                for which the State was a qualifying State.''.

SEC. 8105. ELIMINATION OF HIGH PERFORMANCE BONUS.

    Section 403(a) (42 U.S.C. 603(a)) is amended by striking paragraph 
(4).

SEC. 8106. CONTINGENCY FUND.

    (a) Deposits Into Fund.--Section 403(b)(2) (42 U.S.C. 603(b)(2)) is 
amended--
            (1) by striking ``1997, 1998, 1999, 2000, 2001, 2002, and 
        2003'' and inserting ``2006 through 2010''; and
            (2) by striking all that follows ``$2,000,000,000'' and 
        inserting a period.
    (b) Grants.--Section 403(b)(3)(C)(ii) (42 U.S.C. 603(b)(3)(C)(ii)) 
is amended by striking ``fiscal years 1997 through 2006'' and inserting 
``fiscal years 2006 through 2010''.
    (c) Definition of Needy State.--Clauses (i) and (ii) of section 
403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are amended by inserting after 
``1996'' the following: ``and the Food Stamp Act of 1977 as in effect 
during the corresponding 3-month period in the fiscal year preceding 
such most recently concluded 3-month period''.
    (d) Annual Reconciliation: Federal Matching of State Expenditures 
Above ``Maintenance of Effort'' Level.--Section 403(b)(6) (42 U.S.C. 
603(b)(6)) is amended--
            (1) in subparagraph (A)(ii)--
                    (A) by adding ``and'' at the end of subclause (I);
                    (B) by striking ``; and'' at the end of subclause 
                (II) and inserting a period; and
                    (C) by striking subclause (III);
            (2) in subparagraph (B)(i)(II), by striking all that 
        follows ``section 409(a)(7)(B)(iii))'' and inserting a period;
            (3) by amending subparagraph (B)(ii)(I) to read as follows:
                                    ``(I) the qualified State 
                                expenditures (as defined in section 
                                409(a)(7)(B)(i)) for the fiscal year; 
                                plus''; and
            (4) by striking subparagraph (C).
    (e) Consideration of Certain Child Care Expenditures in Determining 
State Compliance With Contingency Fund Maintenance of Effort 
Requirement.--Section 409(a)(10) (42 U.S.C. 609(a)(10)) is amended--
            (1) by striking ``(other than the expenditures described in 
        subclause (I)(bb) of that paragraph)) under the State program 
        funded under this part'' and inserting a close parenthesis; and
            (2) by striking ``excluding any amount expended by the 
        State for child care under subsection (g) or (i) of section 402 
        (as in effect during fiscal year 1994) for fiscal year 1994,''.
    (f) Effective Date.--The amendments made by subsections (c), (d), 
and (e) shall take effect on October 1, 2007.

SEC. 8107. USE OF FUNDS.

    (a) General Rules.--Section 404(a)(2) (42 U.S.C. 604(a)(2)) is 
amended by striking ``in any manner that'' and inserting ``for any 
purposes or activities for which''.
    (b) Treatment of Interstate Immigrants.--
            (1) State plan provision.--Section 402(a)(1)(B) (42 U.S.C. 
        602(a)(1)(B)) is amended by striking clause (i) and 
        redesignating clauses (ii) through (iv) as clauses (i) through 
        (iii), respectively.
            (2) Use of funds.--Section 404 (42 U.S.C. 604) is amended 
        by striking subsection (c).
    (c) Increase in Amount Transferable to Child Care.--Section 
404(d)(1) (42 U.S.C. 604(d)(1)) is amended by striking ``30'' and 
inserting ``50''.
    (d) Increase in Amount Transferable to Title XX Programs.--Section 
404(d)(2)(B) (42 U.S.C. 604(d)(2)(B)) is amended to read as follows:
                    ``(B) Applicable percent.--For purposes of 
                subparagraph (A), the applicable percent is 10 percent 
                for fiscal year 2006 and each succeeding fiscal 
                year.''.
    (e) Clarification of Authority of States to Use TANF Funds Carried 
Over From Prior Years to Provide TANF Benefits and Services.--Section 
404(e) (42 U.S.C. 604(e)) is amended to read as follows:
    ``(e) Authority to Carryover or Reserve Certain Amounts for 
Benefits or Services or for Future Contingencies.--
            ``(1) Carryover.--A State or tribe may use a grant made to 
        the State or tribe under this part for any fiscal year to 
        provide, without fiscal year limitation, any benefit or service 
        that may be provided under the State or tribal program funded 
        under this part.
            ``(2) Contingency reserve.--A State or tribe may designate 
        any portion of a grant made to the State or tribe under this 
        part as a contingency reserve for future needs, and may use any 
        amount so designated to provide, without fiscal year 
        limitation, any benefit or service that may be provided under 
        the State or tribal program funded under this part. If a State 
        or tribe so designates a portion of such a grant, the State 
        shall, on an annual basis, include in its report under section 
        411(a) the amount so designated.''.

SEC. 8108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.

    (a) Repeal.--Effective as of October 1, 2006, section 406 (42 
U.S.C. 606) is repealed.
    (b) Conforming Amendments.--
            (1) Section 409(a) (42 U.S.C. 609(a)) is amended by 
        striking paragraph (6).
            (2) Section 412 (42 U.S.C. 612) is amended by striking 
        subsection (f) and redesignating subsections (g) through (i) as 
        subsections (f) through (h), respectively.
            (3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by 
        striking ``406,''.

SEC. 8109. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY PLAN 
              REQUIREMENTS.

    (a) Modification of State Plan Requirements.--Section 402(a)(1)(A) 
(42 U.S.C. 602(a)(1)(A)) is amended by striking clauses (ii) and (iii) 
and inserting the following:
                            ``(ii) Require a parent or caretaker 
                        receiving assistance under the program to 
                        engage in work or alternative self-sufficiency 
                        activities (as defined by the State), 
                        consistent with section 407(e)(2).
                            ``(iii) Require families receiving 
                        assistance under the program to engage in 
                        activities in accordance with family self-
                        sufficiency plans developed pursuant to section 
                        408(b).''.
    (b) Establishment of Family Self-Sufficiency Plans.--
            (1) In general.--Section 408(b) (42 U.S.C. 608(b)) is 
        amended to read as follows:
    ``(b) Family Self-Sufficiency Plans.--
            ``(1) In general.--A State to which a grant is made under 
        section 403 shall--
                    ``(A) assess, in the manner deemed appropriate by 
                the State, the skills, prior work experience, and 
                employability of each work-eligible individual (as 
                defined in section 407(b)(2)(C)) receiving assistance 
                under the State program funded under this part;
                    ``(B) establish for each family that includes such 
                an individual, in consultation as the State deems 
                appropriate with the individual, a self-sufficiency 
                plan that specifies appropriate activities described in 
                the State plan submitted pursuant to section 402, 
                including direct work activities as appropriate 
                designed to assist the family in achieving their 
                maximum degree of self-sufficiency, and that provides 
                for the ongoing participation of the individual in the 
                activities;
                    ``(C) require, at a minimum, each such individual 
                to participate in activities in accordance with the 
                self-sufficiency plan;
                    ``(D) monitor the participation of each such 
                individual in the activities specified in the self-
                sufficiency plan, and regularly review the progress of 
                the family toward self-sufficiency;
                    ``(E) upon such a review, revise the self-
                sufficiency plan and activities as the State deems 
                appropriate.
            ``(2) Timing.--The State shall comply with paragraph (1) 
        with respect to a family--
                    ``(A) in the case of a family that, as of October 
                1, 2005, is not receiving assistance from the State 
                program funded under this part, not later than 60 days 
                after the family first receives assistance on the basis 
                of the most recent application for the assistance; or
                    ``(B) in the case of a family that, as of such 
                date, is receiving the assistance, not later than 12 
                months after the date of enactment of this subsection.
            ``(3) State discretion.--A State shall have sole 
        discretion, consistent with section 407, to define and design 
        activities for families for purposes of this subsection, to 
        develop methods for monitoring and reviewing progress pursuant 
        to this subsection, and to make modifications to the plan as 
        the State deems appropriate to assist the individual in 
        increasing their degree of self-sufficiency.
            ``(4) Rule of interpretation.--Nothing in this part shall 
        preclude a State from--
                    ``(A) requiring participation in work and any other 
                activities the State deems appropriate for helping 
                families achieve self-sufficiency and improving child 
                well-being; or
                    ``(B) using job search or other appropriate job 
                readiness or work activities to assess the 
                employability of individuals and to determine 
                appropriate future engagement activities.''.
            (2) Penalty for failure to establish family self-
        sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is 
        amended--
                    (A) in the paragraph heading, by inserting ``or 
                establish family self-sufficiency plan'' after 
                ``rates''; and
                    (B) in subparagraph (A), by inserting ``or 408(b)'' 
                after ``407(a)''.

SEC. 8110. WORK PARTICIPATION REQUIREMENTS.

    (a) In General.--Section 407 (42 U.S.C. 607) is amended by striking 
all that precedes subsection (b)(3) and inserting the following:

``SEC. 407. WORK PARTICIPATION REQUIREMENTS.

    ``(a) Participation Rate Requirements.--A State to which a grant is 
made under section 403 for a fiscal year shall achieve a minimum 
participation rate equal to not less than--
            ``(1) 50 percent for fiscal year 2006;
            ``(2) 55 percent for fiscal year 2007;
            ``(3) 60 percent for fiscal year 2008;
            ``(4) 65 percent for fiscal year 2009; and
            ``(5) 70 percent for fiscal year 2010 and each succeeding 
        fiscal year.
    ``(b) Calculation of Participation Rates.--
            ``(1) Average monthly rate.--For purposes of subsection 
        (a), the participation rate of a State for a fiscal year is the 
        average of the participation rates of the State for each month 
        in the fiscal year.
            ``(2) Monthly participation rates; incorporation of 40-hour 
        work week standard.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the participation rate of a State for a month is--
                            ``(i) the total number of countable hours 
                        (as defined in subsection (c)) with respect to 
                        the counted families for the State for the 
                        month; divided by
                            ``(ii) 160 multiplied by the number of 
                        counted families for the State for the month.
                    ``(B) Counted families defined.--
                            ``(i) In general.--In subparagraph (A), the 
                        term `counted family' means, with respect to a 
                        State and a month, a family that includes a 
                        work-eligible individual and that receives 
                        assistance in the month under the State program 
                        funded under this part, subject to clause (ii).
                            ``(ii) State option to exclude certain 
                        families.--At the option of a State, the term 
                        `counted family' shall not include--
                                    ``(I) a family in the first month 
                                for which the family receives 
                                assistance from a State program funded 
                                under this part on the basis of the 
                                most recent application for such 
                                assistance;
                                    ``(II) on a case-by-case basis, a 
                                family in which the youngest child has 
                                not attained 12 months of age; or
                                    ``(III) a family that is subject to 
                                a sanction under this part or part D, 
                                but that has not been subject to such a 
                                sanction for more than 3 months 
                                (whether or not consecutive) in the 
                                preceding 12-month period.
                            ``(iii) State option to include individuals 
                        receiving assistance under a tribal family 
                        assistance plan or tribal work program.--At the 
                        option of a State, the term `counted family' 
                        may include families in the State that are 
                        receiving assistance under a tribal family 
                        assistance plan approved under section 412 or 
                        under a tribal work program to which funds are 
                        provided under this part.
                    ``(C) Work-eligible individual defined.--In this 
                section, the term `work-eligible individual' means an 
                individual--
                            ``(i) who is married or a single head of 
                        household; and
                            ``(ii) whose needs are (or, but for 
                        sanctions under this part or part D, would be) 
                        included in determining the amount of cash 
                        assistance to be provided to the family under 
                        the State program funded under this part.''.
    (b) Recalibration of Caseload Reduction Credit.--
            (1) In general.--Section 407(b)(3)(A)(ii) (42 U.S.C. 
        607(b)(3)(A)(ii)) is amended to read as follows:
                            ``(ii) the average monthly number of 
                        families that received assistance under the 
                        State program funded under this part during the 
                        base year.''.
            (2) Conforming amendment.--Section 407(b)(3)(B) (42 U.S.C. 
        607(b)(3)(B)) is amended by striking ``and eligibility 
        criteria'' and all that follows through the close parenthesis 
        and inserting ``and the eligibility criteria in effect during 
        the then applicable base year''.
            (3) Base year defined.--Section 407(b)(3) (42 U.S.C. 
        607(b)(3)) is amended by adding at the end the following:
                    ``(C) Base year defined.--In this paragraph, the 
                term `base year' means, with respect to a fiscal year--
                            ``(i) if the fiscal year is fiscal year 
                        2006, fiscal year 1996;
                            ``(ii) if the fiscal year is fiscal year 
                        2007, fiscal year 1998;
                            ``(iii) if the fiscal year is fiscal year 
                        2008, fiscal year 2001; or
                            ``(iv) if the fiscal year is fiscal year 
                        2009 or any succeeding fiscal year, the then 
                        4th preceding fiscal year.''.
    (c) Superachiever Credit.--Section 407(b) (42 U.S.C. 607(b)) is 
amended by striking paragraphs (4) and (5) and inserting the following:
            ``(4) Superachiever credit.--
                    ``(A) In general.--The participation rate, 
                determined under paragraphs (1) and (2) of this 
                subsection, of a superachiever State for a fiscal year 
                shall be increased by the lesser of--
                            ``(i) the amount (if any) of the 
                        superachiever credit applicable to the State; 
                        or
                            ``(ii) the number of percentage points (if 
                        any) by which the minimum participation rate 
                        required by subsection (a) for the fiscal year 
                        exceeds 50 percent.
                    ``(B) Superachiever state.--For purposes of 
                subparagraph (A), a State is a superachiever State if 
                the State caseload for fiscal year 2001 has declined by 
                at least 60 percent from the State caseload for fiscal 
                year 1995.
                    ``(C) Amount of credit.--The superachiever credit 
                applicable to a State is the number of percentage 
                points (if any) by which the decline referred to in 
                subparagraph (B) exceeds 60 percent.
                    ``(D) Definitions.--In this paragraph:
                            ``(i) State caseload for fiscal year 
                        2001.--The term `State caseload for fiscal year 
                        2001' means the average monthly number of 
                        families that received assistance during fiscal 
                        year 2001 under the State program funded under 
                        this part.
                            ``(ii) State caseload for fiscal year 
                        1995.--The term `State caseload for fiscal year 
                        1995' means the average monthly number of 
                        families that received aid under the State plan 
                        approved under part A (as in effect on 
                        September 30, 1995) during fiscal year 1995.''.
    (d) Countable Hours.--Section 407 (42 U.S.C. 607) is amended by 
striking subsections (c) and (d) and inserting the following:
    ``(c) Countable Hours.--
            ``(1) Definition.--In subsection (b)(2), the term 
        `countable hours' means, with respect to a family for a month, 
        the total number of hours in the month in which any member of 
        the family who is a work-eligible individual is engaged in a 
        direct work activity or other activities specified by the State 
        (excluding an activity that does not address a purpose 
        specified in section 401(a)), subject to the other provisions 
        of this subsection.
            ``(2) Limitations.--Subject to such regulations as the 
        Secretary may prescribe:
                    ``(A) Minimum weekly average of 24 hours of direct 
                work activities required.--If the work-eligible 
                individuals in a family are engaged in a direct work 
                activity for an average total of fewer than 24 hours 
                per week in a month, then the number of countable hours 
                with respect to the family for the month shall be zero.
                    ``(B) Maximum weekly average of 16 hours of other 
                activities.--An average of not more than 16 hours per 
                week of activities specified by the State (subject to 
                the exclusion described in paragraph (1)) may be 
                considered countable hours in a month with respect to a 
                family.
            ``(3) Special rules.--For purposes of paragraph (1):
                    ``(A) Participation in qualified activities.--
                            ``(i) In general.--If, with the approval of 
                        the State, the work-eligible individuals in a 
                        family are engaged in 1 or more qualified 
                        activities for an average total of at least 24 
                        hours per week in a month, then all such 
                        engagement in the month shall be considered 
                        engagement in a direct work activity, subject 
                        to clause (iii).
                            ``(ii) Qualified activity defined.--The 
                        term `qualified activity' means an activity 
                        specified by the State (subject to the 
                        exclusion described in paragraph (1)) that 
                        meets such standards and criteria as the State 
                        may specify, including--
                                    ``(I) substance abuse counseling or 
                                treatment;
                                    ``(II) rehabilitation treatment and 
                                services;
                                    ``(III) work-related education or 
                                training directed at enabling the 
                                family member to work;
                                    ``(IV) job search or job readiness 
                                assistance; and
                                    ``(V) any other activity that 
                                addresses a purpose specified in 
                                section 401(a).
                            ``(iii) Limitation.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), clause (i) 
                                shall not apply to a family for more 
                                than 3 months in any period of 24 
                                consecutive months.
                                    ``(II) Special rule applicable to 
                                education and training.--A State may, 
                                on a case-by-case basis, apply clause 
                                (i) to a work-eligible individual so 
                                that participation by the individual in 
                                education or training, if needed to 
                                permit the individual to complete a 
                                certificate program or other work-
                                related education or training directed 
                                at enabling the individual to fill a 
                                known job need in a local area, may be 
                                considered countable hours with respect 
                                to the family of the individual for not 
                                more than 4 months in any period of 24 
                                consecutive months.
                    ``(B) School attendance by teen head of 
                household.--The work-eligible members of a family shall 
                be considered to be engaged in a direct work activity 
                for an average of 40 hours per week in a month if the 
                family includes an individual who is married, or is a 
                single head of household, who has not attained 20 years 
                of age, and the individual--
                            ``(i) maintains satisfactory attendance at 
                        secondary school or the equivalent in the 
                        month; or
                            ``(ii) participates in education directly 
                        related to employment for an average of at 
                        least 20 hours per week in the month.
    ``(d) Direct Work Activity.--In this section, the term `direct work 
activity' means--
            ``(1) unsubsidized employment;
            ``(2) subsidized private sector employment;
            ``(3) subsidized public sector employment;
            ``(4) on-the-job training;
            ``(5) supervised work experience; or
            ``(6) supervised community service.''.
    (e) Penalties Against Individuals.--Section 407(e)(1) (42 U.S.C. 
607(e)(1)) is amended to read as follows:
            ``(1) Reduction or termination of assistance.--
                    ``(A) In general.--Except as provided in paragraph 
                (2), if an individual in a family receiving assistance 
                under a State program funded under this part fails to 
                engage in activities required in accordance with this 
                section, or other activities required by the State 
                under the program, and the family does not otherwise 
                engage in activities in accordance with the self-
                sufficiency plan established for the family pursuant to 
                section 408(b), the State shall--
                            ``(i) if the failure is partial or persists 
                        for not more than 1 month--
                                    ``(I) reduce the amount of 
                                assistance otherwise payable to the 
                                family pro rata (or more, at the option 
                                of the State) with respect to any 
                                period during a month in which the 
                                failure occurs; or
                                    ``(II) terminate all assistance to 
                                the family, subject to such good cause 
                                exceptions as the State may establish; 
                                or
                            ``(ii) if the failure is total and persists 
                        for at least 2 consecutive months, terminate 
                        all cash payments to the family including 
                        qualified State expenditures (as defined in 
                        section 409(a)(7)(B)(i)) for at least 1 month 
                        and thereafter until the State determines that 
                        the individual has resumed full participation 
                        in the activities, subject to such good cause 
                        exceptions as the State may establish.
                    ``(B) Special rule.--
                            ``(i) In general.--In the event of a 
                        conflict between a requirement of clause 
                        (i)(II) or (ii) of subparagraph (A) and a 
                        requirement of a State constitution, or of a 
                        State statute that, before 1966, obligated 
                        local government to provide assistance to needy 
                        parents and children, the State constitutional 
                        or statutory requirement shall control.
                            ``(ii) Limitation.--Clause (i) of this 
                        subparagraph shall not apply after the 1-year 
                        period that begins with the date of the 
                        enactment of this subparagraph.''.
    (f) Conforming Amendments.--
            (1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of 
        paragraphs (1) and (2) by striking ``work activity described in 
        subsection (d)'' and inserting ``direct work activity''.
            (2) The heading of section 409(a)(14) (42 U.S.C. 
        609(a)(14)) is amended by inserting ``or refusing to engage in 
        activities under a family self-sufficiency plan'' after 
        ``work''.

SEC. 8111. MAINTENANCE OF EFFORT.

    (a) In General.--Section 409(a)(7) (42 U.S.C. 609(a)(7)) is 
amended--
            (1) in subparagraph (A), by striking ``fiscal year 1998, 
        1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, or 2007'' and 
        inserting ``fiscal year 2006, 2007, 2008, 2009, 2010, or 
        2011''; and
            (2) in subparagraph (B)(ii)--
                    (A) by inserting ``preceding'' before ``fiscal 
                year''; and
                    (B) by striking ``for fiscal years 1997 through 
                2006,''.
    (b) State Spending on Promoting Healthy Marriage.--
            (1) In general.--Section 404 (42 U.S.C. 604) is amended by 
        adding at the end the following:
    ``(l) Marriage Promotion.--A State, territory, or tribal 
organization to which a grant is made under section 403(a)(2) may use a 
grant made to the State, territory, or tribe under any other provision 
of section 403 for marriage promotion activities, and the amount of any 
such grant so used shall be considered State funds for purposes of 
section 403(a)(2).''.
            (2) Federal tanf funds used for marriage promotion 
        disregarded for purposes of maintenance of effort 
        requirement.--Section 409(a)(7)(B)(i) (42 U.S.C. 
        609(a)(7)(B)(i)), as amended by section 8103(c) of this Act, is 
        amended by adding at the end the following:
                                    ``(VI) Exclusion of federal tanf 
                                funds used for marriage promotion 
                                activities.--Such term does not include 
                                the amount of any grant made to the 
                                State under section 403 that is 
                                expended for a marriage promotion 
                                activity.''.

SEC. 8112. PERFORMANCE IMPROVEMENT.

    (a) State Plans.--Section 402(a) (42 U.S.C. 602(a)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) by redesignating clause (vi) and clause 
                        (vii) (as added by section 8103(a) of this Act) 
                        as clauses (vii) and (viii), respectively; and
                            (ii) by striking clause (v) and inserting 
                        the following:
                            ``(v) The document shall--
                                    ``(I) describe how the State will 
                                pursue ending dependence of needy 
                                families on government benefits and 
                                reducing poverty by promoting job 
                                preparation and work;
                                    ``(II) describe how the State will 
                                encourage the formation and maintenance 
                                of healthy 2-parent married families, 
                                encourage responsible fatherhood, and 
                                prevent and reduce the incidence of 
                                out-of-wedlock pregnancies;
                                    ``(III) include specific, 
                                numerical, and measurable performance 
                                objectives for accomplishing subclauses 
                                (I) and (II); and
                                    ``(IV) describe the methodology 
                                that the State will use to measure 
                                State performance in relation to each 
                                such objective.
                            ``(vi) Describe any strategies and programs 
                        the State may be undertaking to address--
                                    ``(I) employment retention and 
                                advancement for recipients of 
                                assistance under the program, including 
                                placement into high-demand jobs, and 
                                whether the jobs are identified using 
                                labor market information;
                                    ``(II) efforts to reduce teen 
                                pregnancy;
                                    ``(III) services for struggling and 
                                noncompliant families, and for clients 
                                with special problems; and
                                    ``(IV) program integration, 
                                including the extent to which 
                                employment and training services under 
                                the program are provided through the 
                                One-Stop delivery system created under 
                                the Workforce Investment Act of 1998, 
                                and the extent to which former 
                                recipients of such assistance have 
                                access to additional core, intensive, 
                                or training services funded through 
                                such Act.''; and
                    (B) in subparagraph (B), by striking clause (iii) 
                (as so redesignated by section 8107(b)(1) of this Act) 
                and inserting the following:
                            ``(iii) The document shall describe 
                        strategies and programs the State is 
                        undertaking to engage religious organizations 
                        in the provision of services funded under this 
                        part and efforts related to section 104 of the 
                        Personal Responsibility and Work Opportunity 
                        Reconciliation Act of 1996.
                            ``(iv) The document shall describe 
                        strategies to improve program management and 
                        performance.''; and
            (2) in paragraph (4), by inserting ``and tribal'' after 
        ``that local''.
    (b) Consultation With State Regarding Plan and Design of Tribal 
Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(G) provides an assurance that the State in which 
                the tribe is located has been consulted regarding the 
                plan and its design.''.
    (c) Performance Measures.--Section 413 (42 U.S.C. 613) is amended 
by adding at the end the following:
    ``(k) Performance Improvement.--The Secretary, in consultation with 
the States, shall develop uniform performance measures designed to 
assess the degree of effectiveness, and the degree of improvement, of 
State programs funded under this part in accomplishing the purposes of 
this part.''.
    (d) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C. 
613(d)(1)) is amended by striking ``long-term private sector jobs'' and 
inserting ``private sector jobs, the success of the recipients in 
retaining employment, the ability of the recipients to increase their 
wages''.

SEC. 8113. DATA COLLECTION AND REPORTING.

    (a) Contents of Report.--Section 411(a)(1)(A) (42 U.S.C. 
611(a)(1)(A)) is amended--
            (1) in the matter preceding clause (i), by inserting ``and 
        on families receiving assistance under State programs funded 
        with other qualified State expenditures (as defined in section 
        409(a)(7)(B))'' before the colon;
            (2) in clause (vii), by inserting ``and minor parent'' 
        after ``of each adult'';
            (3) in clause (viii), by striking ``and educational 
        level'';
            (4) in clause (ix), by striking ``, and if the latter 2, 
        the amount received'';
            (5) in clause (x)--
                    (A) by striking ``each type of''; and
                    (B) by inserting before the period ``and, if 
                applicable, the reason for receipt of the assistance 
                for a total of more than 60 months'';
            (6) in clause (xi), by striking the subclauses and 
        inserting the following:
                                    ``(I) Subsidized private sector 
                                employment.
                                    ``(II) Unsubsidized employment.
                                    ``(III) Public sector employment, 
                                supervised work experience, or 
                                supervised community service.
                                    ``(IV) On-the-job training.
                                    ``(V) Job search and placement.
                                    ``(VI) Training.
                                    ``(VII) Education.
                                    ``(VIII) Other activities directed 
                                at the purposes of this part, as 
                                specified in the State plan submitted 
                                pursuant to section 402.'';
            (7) in clause (xii), by inserting ``and progress toward 
        universal engagement'' after ``participation rates'';
            (8) in clause (xiii), by striking ``type and'';
            (9) in clause (xvi), by striking subclause (II) and 
        redesignating subclauses (III) through (V) as subclauses (II) 
        through (IV), respectively; and
            (10) by adding at the end the following:
                            ``(xviii) The date the family first 
                        received assistance from the State program on 
                        the basis of the most recent application for 
                        such assistance.
                            ``(xix) Whether a self-sufficiency plan is 
                        established for the family in accordance with 
                        section 408(b).
                            ``(xx) With respect to any child in the 
                        family, the marital status of the parents at 
                        the birth of the child, and if the parents were 
                        not then married, whether the paternity of the 
                        child has been established.''.
    (b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C. 611(a)(1)(B)) 
is amended--
            (1) in clause (i)--
                    (A) by striking ``a sample'' and inserting 
                ``samples''; and
                    (B) by inserting before the period ``, except that 
                the Secretary may designate core data elements that 
                must be reported on all families''; and
            (2) in clause (ii), by striking ``funded under this part'' 
        and inserting ``described in subparagraph (A)''.
    (c) Report on Families That Become Ineligible to Receive 
Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
            (1) by striking paragraph (5);
            (2) by redesignating paragraph (6) as paragraph (5); and
            (3) by inserting after paragraph (5) (as so redesignated) 
        the following:
            ``(6) Report on families that become ineligible to receive 
        assistance.--The report required by paragraph (1) for a fiscal 
        quarter shall include for each month in the quarter the number 
        of families and total number of individuals that, during the 
        month, became ineligible to receive assistance under the State 
        program funded under this part (broken down by the number of 
        families that become so ineligible due to earnings, changes in 
        family composition that result in increased earnings, 
        sanctions, time limits, or other specified reasons).''.
    (d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7)) is 
amended--
            (1) by inserting ``and to collect the necessary data'' 
        before ``with respect to which reports'';
            (2) by striking ``subsection'' and inserting ``section''; 
        and
            (3) by striking ``in defining the data elements'' and all 
        that follows and inserting ``, the National Governors' 
        Association, the American Public Human Services Association, 
        the National Conference of State Legislatures, and others in 
        defining the data elements.''.
    (e) Additional Reports by States.--Section 411 (42 U.S.C. 611) is 
amended--
            (1) by redesignating subsection (b) as subsection (e); and
            (2) by inserting after subsection (a) the following:
    ``(b) Annual Reports on Program Characteristics.--Not later than 90 
days after the end of fiscal year 2006 and each succeeding fiscal year, 
each eligible State shall submit to the Secretary a report on the 
characteristics of the State program funded under this part and other 
State programs funded with qualified State expenditures (as defined in 
section 409(a)(7)(B)(i)). The report shall include, with respect to 
each such program, the program name, a description of program 
activities, the program purpose, the program eligibility criteria, the 
sources of program funding, the number of program beneficiaries, 
sanction policies, and any program work requirements.
    ``(c) Monthly Reports on Caseload.--Not later than 3 months after 
the end of a calendar month that begins 1 year or more after the 
enactment of this subsection, each eligible State shall submit to the 
Secretary a report on the number of families and total number of 
individuals receiving assistance in the calendar month under the State 
program funded under this part.
    ``(d) Annual Report on Performance Improvement.--Beginning with 
fiscal year 2007, not later than January 1 of each fiscal year, each 
eligible State shall submit to the Secretary a report on achievement 
and improvement during the preceding fiscal year under the numerical 
performance goals and measures under the State program funded under 
this part with respect to each of the matters described in section 
402(a)(1)(A)(v).''.
    (f) Annual Reports to Congress by the Secretary.--Section 411(e), 
as so redesignated by subsection (e) of this section, is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``and each fiscal year thereafter'' and inserting ``and by July 
        1 of each fiscal year thereafter'';
            (2) in paragraph (2), by striking ``families applying for 
        assistance,'' and by striking the last comma; and
            (3) in paragraph (3), by inserting ``and other programs 
        funded with qualified State expenditures (as defined in section 
        409(a)(7)(B)(i))'' before the semicolon.
    (g) Increased Analysis of State Single Audit Reports.--Section 411 
(42 U.S.C. 611) is amended by adding at the end the following:
    ``(f) Increased Analysis of State Single Audit Reports.--
            ``(1) In general.--Within 3 months after a State submits to 
        the Secretary a report pursuant to section 7502(a)(1)(A) of 
        title 31, United States Code, the Secretary shall analyze the 
        report for the purpose of identifying the extent and nature of 
        problems related to the oversight by the State of 
        nongovernmental entities with respect to contracts entered into 
        by such entities with the State program funded under this part, 
        and determining what additional actions may be appropriate to 
        help prevent and correct the problems.
            ``(2) Inclusion of program oversight section in annual 
        report to the congress.--The Secretary shall include in each 
        report under subsection (e) a section on oversight of State 
        programs funded under this part, including findings on the 
        extent and nature of the problems referred to in paragraph (1), 
        actions taken to resolve the problems, and to the extent the 
        Secretary deems appropriate make recommendations on changes 
        needed to resolve the problems.''.

SEC. 8114. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

    (a) Tribal Family Assistance Grant.--Section 412(a)(1)(A) (42 
U.S.C. 612(a)(1)(A)) is amended by striking ``1997, 1998, 1999, 2000, 
2001, 2002, and 2003'' and inserting ``2006 through 2010''.
    (b) Grants for Indian Tribes That Received JOBS Funds.--Section 
412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by striking ``1997, 
1998, 1999, 2000, 2001, 2002, and 2003'' and inserting ``2006 through 
2010''.

SEC. 8115. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

    (a) Secretary's Fund for Research, Demonstrations, and Technical 
Assistance.--Section 413 (42 U.S.C. 613), as amended by section 8112(c) 
of this Act, is further amended by adding at the end the following:
    ``(l) Funding for Research, Demonstrations, and Technical 
Assistance.--
            ``(1) Appropriation.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated $102,000,000 for each of fiscal years 2006 through 
        2010, which shall be available to the Secretary for the purpose 
        of conducting and supporting research and demonstration 
        projects by public or private entities, and providing technical 
        assistance to States, Indian tribal organizations, and such 
        other entities as the Secretary may specify that are receiving 
        a grant under this part, which shall be expended primarily on 
        activities described in section 403(a)(2)(B), and which shall 
        be in addition to any other funds made available under this 
        part. The Secretary may not provide an entity with funds made 
        available under this paragraph unless the entity agrees that, 
        as a condition of receipt of the funds for a program or 
        activity described in any of clauses (iii) through (viii) of 
        section 403(a)(2)(B), the entity will comply with subclauses 
        (I) and (II) of section 403(a)(2)(C)(ii).
            ``(2) Set aside for demonstration projects for coordination 
        of provision of child welfare and tanf services to tribal 
        families at risk of child abuse or neglect.--
                    ``(A) In general.--Of the amounts made available 
                under paragraph (1) for a fiscal year, $2,000,000 shall 
                be awarded on a competitive basis to fund demonstration 
                projects designed to test the effectiveness of tribal 
                governments or tribal consortia in coordinating the 
                provision to tribal families at risk of child abuse or 
                neglect of child welfare services and services under 
                tribal programs funded under this part.
                    ``(B) Use of funds.--A grant made to such a project 
                shall be used--
                            ``(i) to improve case management for 
                        families eligible for assistance from such a 
                        tribal program;
                            ``(ii) for supportive services and 
                        assistance to tribal children in out-of-home 
                        placements and the tribal families caring for 
                        such children, including families who adopt 
                        such children; and
                            ``(iii) for prevention services and 
                        assistance to tribal families at risk of child 
                        abuse and neglect.
                    ``(C) Reports.--The Secretary may require a 
                recipient of funds awarded under this paragraph to 
                provide the Secretary with such information as the 
                Secretary deems relevant to enable the Secretary to 
                facilitate and oversee the administration of any 
                project for which funds are provided under this 
                paragraph.''.
    (b) Funding of Studies and Demonstrations.--Section 413(h)(1) (42 
U.S.C. 613(h)(1)) is amended in the matter preceding subparagraph (A) 
by striking ``1997 through 2002'' and inserting ``2006 through 2010''.
    (c) Report on Enforcement of Certain Affidavits of Support and 
Sponsor Deeming.--Not later than March 31, 2006, the Secretary of 
Health and Human Services, in consultation with the Attorney General, 
shall submit to the Congress a report on the enforcement of affidavits 
of support and sponsor deeming as required by section 421, 422, and 432 
of the Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996.
    (d) Report on Coordination.--Not later than 6 months after the date 
of the enactment of this Act, the Secretary of Health and Human 
Services and the Secretary of Labor shall jointly submit a report to 
the Congress describing common or conflicting data elements, 
definitions, performance measures, and reporting requirements in the 
Workforce Investment Act of 1998 and part A of title IV of the Social 
Security Act, and, to the degree each Secretary deems appropriate, at 
the discretion of either Secretary, any other program administered by 
the respective Secretary, to allow greater coordination between the 
welfare and workforce development systems.

SEC. 8116. STUDY BY THE CENSUS BUREAU.

    (a) In General.--Section 414(a) (42 U.S.C. 614(a)) is amended to 
read as follows:
    ``(a) In General.--The Bureau of the Census shall implement or 
enhance a longitudinal survey of program participation, developed in 
consultation with the Secretary and made available to interested 
parties, to allow for the assessment of the outcomes of continued 
welfare reform on the economic and child well-being of low-income 
families with children, including those who received assistance or 
services from a State program funded under this part, and, to the 
extent possible, shall provide State representative samples. The 
content of the survey should include such information as may be 
necessary to examine the issues of out-of-wedlock childbearing, 
marriage, welfare dependency and compliance with work requirements, the 
beginning and ending of spells of assistance, work, earnings and 
employment stability, and the well-being of children.''.
    (b) Appropriation.--Section 414(b) (42 U.S.C. 614(b)) is amended--
            (1) by striking ``1996,'' and all that follows through 
        ``2003'' and inserting ``2006 through 2010''; and
            (2) by adding at the end the following: ``Funds 
        appropriated under this subsection shall remain available 
        through fiscal year 2010 to carry out subsection (a).''.

SEC. 8117. DEFINITION OF ASSISTANCE.

    (a) In General.--Section 419 (42 U.S.C. 619) is amended by adding 
at the end the following:
            ``(6) Assistance.--
                    ``(A) In general.--The term `assistance' means 
                payment, by cash, voucher, or other means, to or for an 
                individual or family for the purpose of meeting a 
                subsistence need of the individual or family (including 
                food, clothing, shelter, and related items, but not 
                including costs of transportation or child care).
                    ``(B) Exception.--The term `assistance' does not 
                include a payment described in subparagraph (A) to or 
                for an individual or family on a short-term, 
                nonrecurring basis (as defined by the State in 
                accordance with regulations prescribed by the 
                Secretary).''.
    (b) Conforming Amendments.--
            (1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by 
        striking ``assistance'' and inserting ``aid''.
            (2) Section 404(f) (42 U.S.C. 604(f)) is amended by 
        striking ``assistance'' and inserting ``benefits or services''.
            (3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is 
        amended in the heading by striking ``assistance'' and inserting 
        ``aid''.
            (4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by 
        striking ``assistance'' and inserting ``aid''.

SEC. 8118. TECHNICAL CORRECTIONS.

    (a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by inserting 
a comma after ``appropriate''.
    (b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 611(a)(1)(A)(ii)(III)) 
is amended by striking the last close parenthesis.
    (c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is amended by 
striking ``section'' and inserting ``sections''.
    (d)(1) Section 413 (42 U.S.C. 613) is amended by striking 
subsection (g) and redesignating subsections (h) through (j) and 
subsections (k) and (l) (as added by sections 8112(c) and 8115(a) of 
this Act, respectively) as subsections (g) through (k), respectively.
    (2) Each of the following provisions is amended by striking 
``413(j)'' and inserting ``413(i)'':
            (A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 
        603(a)(5)(A)(ii)(III)).
            (B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
            (C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
            (D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).

SEC. 8119. FATHERHOOD PROGRAM.

    (a) Short Title.--This section may be cited as the ``Promotion and 
Support of Responsible Fatherhood and Healthy Marriage Act of 2005''.
    (b) Fatherhood Program.--
            (1) In general.--Title I of the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996 (Public Law 104-
        193) is amended by adding at the end the following:

``SEC. 117. FATHERHOOD PROGRAM.

    ``(a) In General.--Title IV (42 U.S.C. 601-679b) is amended by 
inserting after part B the following:

                      `PART C--FATHERHOOD PROGRAM

`SEC. 441. FINDINGS AND PURPOSES.

    `(a) Findings.--The Congress finds that there is substantial 
evidence strongly indicating the urgent need to promote and support 
involved, committed, and responsible fatherhood, and to encourage and 
support healthy marriages between parents raising children, including 
data demonstrating the following:
            `(1) In approximately 84 percent of cases where a parent is 
        absent, that parent is the father.
            `(2) If current trends continue, half of all children born 
        today will live apart from one of their parents, usually their 
        father, at some point before they turn 18.
            `(3) Where families (whether intact or with a parent 
        absent) are living in poverty, a significant factor is the 
        father's lack of job skills.
            `(4) Committed and responsible fathering during infancy and 
        early childhood contributes to the development of emotional 
        security, curiosity, and math and verbal skills.
            `(5) An estimated 19,400,000 children (27 percent) live 
        apart from their biological father.
            `(6) Forty percent of children under age 18 not living with 
        their biological father had not seen their father even once in 
        the last 12 months, according to national survey data.
    `(b) Purposes.--The purposes of this part are:
            `(1) To provide for projects and activities by public 
        entities and by nonprofit community entities, including 
        religious organizations, designed to test promising approaches 
        to accomplishing the following objectives:
                    `(A) Promoting responsible, caring, and effective 
                parenting through counseling, mentoring, and parenting 
                education, dissemination of educational materials and 
                information on parenting skills, encouragement of 
                positive father involvement, including the positive 
                involvement of nonresident fathers, and other methods.
                    `(B) Enhancing the abilities and commitment of 
                unemployed or low-income fathers to provide material 
                support for their families and to avoid or leave 
                welfare programs by assisting them to take full 
                advantage of education, job training, and job search 
                programs, to improve work habits and work skills, to 
                secure career advancement by activities such as 
                outreach and information dissemination, coordination, 
                as appropriate, with employment services and job 
                training programs, including the One-Stop delivery 
                system established under title I of the Workforce 
                Investment Act of 1998, encouragement and support of 
                timely payment of current child support and regular 
                payment toward past due child support obligations in 
                appropriate cases, and other methods.
                    `(C) Improving fathers' ability to effectively 
                manage family business affairs by means such as 
                education, counseling, and mentoring in matters 
                including household management, budgeting, banking, and 
                handling of financial transactions, time management, 
                and home maintenance.
                    `(D) Encouraging and supporting healthy marriages 
                and married fatherhood through such activities as 
                premarital education, including the use of premarital 
                inventories, marriage preparation programs, skills-
                based marriage education programs, marital therapy, 
                couples counseling, divorce education and reduction 
                programs, divorce mediation and counseling, 
                relationship skills enhancement programs, including 
                those designed to reduce child abuse and domestic 
                violence, and dissemination of information about the 
                benefits of marriage for both parents and children.
            `(2) Through the projects and activities described in 
        paragraph (1), to improve outcomes for children with respect to 
        measures such as increased family income and economic security, 
        improved school performance, better health, improved emotional 
        and behavioral stability and social adjustment, and reduced 
        risk of delinquency, crime, substance abuse, child abuse and 
        neglect, teen sexual activity, and teen suicide.
            `(3) To evaluate the effectiveness of various approaches 
        and to disseminate findings concerning outcomes and other 
        information in order to encourage and facilitate the 
        replication of effective approaches to accomplishing these 
        objectives.

`SEC. 442. DEFINITIONS.

    `In this part, the terms ``Indian tribe'' and ``tribal 
organization'' have the meanings given them in subsections (e) and (l), 
respectively, of section 4 of the Indian Self-Determination and 
Education Assistance Act.

`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

    `(a) In General.--The Secretary may make grants for fiscal years 
2006 through 2010 to public and nonprofit community entities, including 
religious organizations, and to Indian tribes and tribal organizations, 
for demonstration service projects and activities designed to test the 
effectiveness of various approaches to accomplish the objectives 
specified in section 441(b)(1).
    `(b) Eligibility Criteria for Full Service Grants.--In order to be 
eligible for a grant under this section, except as specified in 
subsection (c), an entity shall submit an application to the Secretary 
containing the following:
            `(1) Project description.--A statement including--
                    `(A) a description of the project and how it will 
                be carried out, including the geographical area to be 
                covered and the number and characteristics of clients 
                to be served, and how it will address each of the 4 
                objectives specified in section 441(b)(1); and
                    `(B) a description of the methods to be used by the 
                entity or its contractor to assess the extent to which 
                the project was successful in accomplishing its 
                specific objectives and the general objectives 
                specified in section 441(b)(1).
            `(2) Experience and qualifications.--A demonstration of 
        ability to carry out the project, by means such as 
        demonstration of experience in successfully carrying out 
        projects of similar design and scope, and such other 
        information as the Secretary may find necessary to demonstrate 
        the entity's capacity to carry out the project, including the 
        entity's ability to provide the non-Federal share of project 
        resources.
            `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
            `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
            `(5) Coordination with specified programs.--An undertaking 
        to coordinate, as appropriate, with State and local entities 
        responsible for the programs under parts A, B, and D of this 
        title, including programs under title I of the Workforce 
        Investment Act of 1998 (including the One-Stop delivery 
        system), and such other programs as the Secretary may require.
            `(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits as the Secretary may find necessary for 
        purposes of oversight of project activities and expenditures.
            `(7) Self-initiated evaluation.--If the entity elects to 
        contract for independent evaluation of the project (part or all 
        of the cost of which may be paid for using grant funds), a 
        commitment to submit to the Secretary a copy of the evaluation 
        report within 30 days after completion of the report and not 
        more than 1 year after completion of the project.
            `(8) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the Secretary's 
        evaluation of projects assisted under this section, by means 
        including random assignment of clients to service recipient and 
        control groups, if determined by the Secretary to be 
        appropriate, and affording the Secretary access to the project 
        and to project-related records and documents, staff, and 
        clients.
    `(c) Eligibility Criteria for Limited Purpose Grants.--In order to 
be eligible for a grant under this section in an amount under $25,000 
per fiscal year, an entity shall submit an application to the Secretary 
containing the following:
            `(1) Project description.--A description of the project and 
        how it will be carried out, including the number and 
        characteristics of clients to be served, the proposed duration 
        of the project, and how it will address at least 1 of the 4 
        objectives specified in section 441(b)(1).
            `(2) Qualifications.--Such information as the Secretary may 
        require as to the capacity of the entity to carry out the 
        project, including any previous experience with similar 
        activities.
            `(3) Coordination with related programs.--As required by 
        the Secretary in appropriate cases, an undertaking to 
        coordinate and cooperate with State and local entities 
        responsible for specific programs relating to the objectives of 
        the project including, as appropriate, jobs programs and 
        programs serving children and families.
            `(4) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits as the Secretary may find necessary for 
        purposes of oversight of project activities and expenditures.
            `(5) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the Secretary's 
        evaluation of projects assisted under this section, by means 
        including affording the Secretary access to the project and to 
        project-related records and documents, staff, and clients.
    `(d) Considerations in Awarding Grants.--
            `(1) Diversity of projects.--In awarding grants under this 
        section, the Secretary shall seek to achieve a balance among 
        entities of differing sizes, entities in differing geographic 
        areas, entities in urban and in rural areas, and entities 
        employing differing methods of achieving the purposes of this 
        section, including working with the State agency responsible 
        for the administration of part D to help fathers satisfy child 
        support arrearage obligations.
            `(2) Preference for projects serving low-income fathers.--
        In awarding grants under this section, the Secretary may give 
        preference to applications for projects in which a majority of 
        the clients to be served are low-income fathers.
    `(e) Federal Share.--
            `(1) In general.--Grants for a project under this section 
        for a fiscal year shall be available for a share of the cost of 
        such project in such fiscal year equal to--
                    `(A) up to 80 percent (or up to 90 percent, if the 
                entity demonstrates to the Secretary's satisfaction 
                circumstances limiting the entity's ability to secure 
                non-Federal resources) in the case of a project under 
                subsection (b); and
                    `(B) up to 100 percent, in the case of a project 
                under subsection (c).
            `(2) Non-federal share.--The non-Federal share may be in 
        cash or in kind. In determining the amount of the non-Federal 
        share, the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

    `(a) In General.--The Secretary may make grants under this section 
for fiscal years 2006 through 2010 to eligible entities (as specified 
in subsection (b)) for 2 multicity, multistate projects demonstrating 
approaches to achieving the objectives specified in section 441(b)(1). 
One of the projects shall test the use of married couples to deliver 
program services.
    `(b) Eligible Entities.--An entity eligible for a grant under this 
section must be a national nonprofit fatherhood promotion organization 
that meets the following requirements:
            `(1) Experience with fatherhood programs.--The organization 
        must have substantial experience in designing and successfully 
        conducting programs that meet the purposes described in section 
        441.
            `(2) Experience with multicity, multistate programs and 
        government coordination.--The organization must have experience 
        in simultaneously conducting such programs in more than 1 major 
        metropolitan area in more than 1 State and in coordinating such 
        programs, where appropriate, with State and local government 
        agencies and private, nonprofit agencies (including community-
        based and religious organizations), including State or local 
        agencies responsible for child support enforcement and 
        workforce development.
    `(c) Application Requirements.--In order to be eligible for a grant 
under this section, an entity must submit to the Secretary an 
application that includes the following:
            `(1) Qualifications.--
                    `(A) Eligible entity.--A demonstration that the 
                entity meets the requirements of subsection (b).
                    `(B) Other.--Such other information as the 
                Secretary may find necessary to demonstrate the 
                entity's capacity to carry out the project, including 
                the entity's ability to provide the non-Federal share 
                of project resources.
            `(2) Project description.--A description of and commitments 
        concerning the project design, including the following:
                    `(A) In general.--A detailed description of the 
                proposed project design and how it will be carried out, 
                which shall--
                            `(i) provide for the project to be 
                        conducted in at least 3 major metropolitan 
                        areas;
                            `(ii) state how it will address each of the 
                        4 objectives specified in section 441(b)(1);
                            `(iii) demonstrate that there is a 
                        sufficient number of potential clients to allow 
                        for the random selection of individuals to 
                        participate in the project and for comparisons 
                        with appropriate control groups composed of 
                        individuals who have not participated in such 
                        projects; and
                            `(iv) demonstrate that the project is 
                        designed to direct a majority of project 
                        resources to activities serving low-income 
                        fathers (but the project need not make services 
                        available on a means-tested basis).
                    `(B) Oversight, evaluation, and adjustment 
                component.--An agreement that the entity--
                            `(i) in consultation with the evaluator 
                        selected pursuant to section 445, and as 
                        required by the Secretary, will modify the 
                        project design, initially and (if necessary) 
                        subsequently throughout the duration of the 
                        project, in order to facilitate ongoing and 
                        final oversight and evaluation of project 
                        operation and outcomes (by means including, to 
                        the maximum extent feasible, random assignment 
                        of clients to service recipient and control 
                        groups), and to provide for mid-course 
                        adjustments in project design indicated by 
                        interim evaluations;
                            `(ii) will submit to the Secretary revised 
                        descriptions of the project design as modified 
                        in accordance with clause (i); and
                            `(iii) will cooperate fully with the 
                        Secretary's ongoing oversight and ongoing and 
                        final evaluation of the project, by means 
                        including affording the Secretary access to the 
                        project and to project-related records and 
                        documents, staff, and clients.
            `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
            `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
            `(5) Coordination with specified programs.--An undertaking 
        to coordinate, as appropriate, with State and local entities 
        responsible for the programs funded under parts A, B, and D of 
        this title, programs under title I of the Workforce Investment 
        Act of 1998 (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
            `(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate with 
        such reviews or audits (in addition to those required under the 
        preceding provisions of paragraph (2)) as the Secretary may 
        find necessary for purposes of oversight of project activities 
        and expenditures.
    `(d) Federal Share.--
            `(1) In general.--Grants for a project under this section 
        for a fiscal year shall be available for up to 80 percent of 
        the cost of such project in such fiscal year.
            `(2) Non-federal share.--The non-Federal share may be in 
        cash or in kind. In determining the amount of the non-Federal 
        share, the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 445. EVALUATION.

    `(a) In General.--The Secretary, directly or by contract or 
cooperative agreement, shall evaluate the effectiveness of service 
projects funded under sections 443 and 444 from the standpoint of the 
purposes specified in section 441(b)(1).
    `(b) Evaluation Methodology.--Evaluations under this section 
shall--
            `(1) include, to the maximum extent feasible, random 
        assignment of clients to service delivery and control groups 
        and other appropriate comparisons of groups of individuals 
        receiving and not receiving services;
            `(2) describe and measure the effectiveness of the projects 
        in achieving their specific project goals; and
            `(3) describe and assess, as appropriate, the impact of 
        such projects on marriage, parenting, domestic violence, child 
        abuse and neglect, money management, employment and earnings, 
        payment of child support, and child well-being, health, and 
        education.
    `(c) Evaluation Reports.--The Secretary shall publish the following 
reports on the results of the evaluation:
            `(1) An implementation evaluation report covering the first 
        24 months of the activities under this part to be completed by 
        36 months after initiation of such activities.
            `(2) A final report on the evaluation to be completed by 
        September 30, 2013.

`SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.

    `The Secretary is authorized, by grant, contract, or cooperative 
agreement, to carry out projects and activities of national 
significance relating to fatherhood promotion, including--
            `(1) Collection and dissemination of information.--
        Assisting States, communities, and private entities, including 
        religious organizations, in efforts to promote and support 
        marriage and responsible fatherhood by collecting, evaluating, 
        developing, and making available (through the Internet and by 
        other means) to all interested parties information regarding 
        approaches to accomplishing the objectives specified in section 
        441(b)(1).
            `(2) Media campaign.--Developing, promoting, and 
        distributing to interested States, local governments, public 
        agencies, and private nonprofit organizations, including 
        charitable and religious organizations, a media campaign that 
        promotes and encourages involved, committed, and responsible 
        fatherhood and married fatherhood.
            `(3) Technical assistance.--Providing technical assistance, 
        including consultation and training, to public and private 
        entities, including community organizations and faith-based 
        organizations, in the implementation of local fatherhood 
        promotion programs.
            `(4) Research.--Conducting research related to the purposes 
        of this part.

`SEC. 447. NONDISCRIMINATION.

    `The projects and activities assisted under this part shall be 
available on the same basis to all fathers and expectant fathers able 
to benefit from such projects and activities, including married and 
unmarried fathers and custodial and noncustodial fathers, with 
particular attention to low-income fathers, and to mothers and 
expectant mothers on the same basis as to fathers.

`SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN 
              PURPOSE.

    `(a) Authorization.--There are authorized to be appropriated 
$20,000,000 for each of fiscal years 2006 through 2010 to carry out the 
provisions of this part.
    `(b) Reservation.--Of the amount appropriated under this section 
for each fiscal year, not more than 15 percent shall be available for 
the costs of the multicity, multicounty, multistate demonstration 
projects under section 444, evaluations under section 445, and projects 
of national significance under section 446.'.
    ``(b) Inapplicability of Effective Date Provisions.--Section 116 
shall not apply to the amendment made by subsection (a) of this 
section.''.
            (2) Clerical amendment.--Section 2 of such Act is amended 
        in the table of contents by inserting after the item relating 
        to section 116 the following new item:

``Sec. 117. Fatherhood program.''.

SEC. 8120. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY PARTNERS WITH 
              ONE-STOP EMPLOYMENT TRAINING CENTERS.

    Section 408 of the Social Security Act (42 U.S.C. 608) is amended 
by adding at the end the following:
    ``(h) State Option to Make TANF Programs Mandatory Partners With 
One-Stop Employment Training Centers.--For purposes of section 121(b) 
of the Workforce Investment Act of 1998, a State program funded under 
part A of title IV of the Social Security Act shall be considered a 
program referred to in paragraph (1)(B) of such section, unless, after 
the date of the enactment of this subsection, the Governor of the State 
notifies the Secretaries of Health and Human Services and Labor in 
writing of the decision of the Governor not to make the State program a 
mandatory partner.''.

SEC. 8121. SENSE OF THE CONGRESS.

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

SEC. 8122. DRUG TESTING OF APPLICANTS FOR AND RECIPIENTS OF ASSISTANCE.

    (a) Requirement.--Section 408(a) (42 U.S.C. 608(a)) is amended by 
adding at the end the following:
            ``(12) Drug testing requirements.--A State to which a grant 
        is made under section 403(a) for a fiscal year shall--
                    ``(A) require an individual who has applied for, or 
                is a recipient of, assistance from the State program 
                funded under this part to undergo a physical test 
                designed to detect the use by the individual of any 
                controlled substance (as defined in section 102(6) of 
                the Controlled Substances Act) if the State has reason 
                to believe that the person has unlawfully used such a 
                substance recently;
                    ``(B) if a test administered pursuant to this 
                paragraph indicates that an individual has so used such 
                a substance recently, or if the State otherwise 
                determines (on the basis of such indicators as the 
                State may establish) that an individual is likely to 
                have so used such a substance recently--
                            ``(i) ensure that the self-sufficiency plan 
                        developed under section 408(b) with respect to 
                        the individual addresses the use of the 
                        substance;
                            ``(ii) suspend the provision of cash 
                        assistance under the program to the family of 
                        the individual until a subsequent such test 
                        indicates that the individual has not been 
                        using the substance; and
                            ``(iii) require, as a condition of 
                        providing any benefit under the program to the 
                        family of the individual, that the individual 
                        comply with the self-sufficiency plan, 
                        including the provisions of the plan that 
                        address the use of the substance, and undergo 
                        additional such tests every 30 or 60 days, as 
                        the State deems appropriate; and
                    ``(C) terminate for 3 years the participation in 
                the program of the family of any individual who tests 
                positive for such use of such a substance in such 
                number of consecutive tests administered pursuant to 
                this paragraph (which shall be not less than 3 and not 
                more than 6) as the State deems appropriate.''.
    (b) Penalty for Noncompliance.--Section 409(a) (42 U.S.C. 609(a)) 
is amended by adding at the end the following:
            ``(15) Penalty for failure to comply with drug testing 
        requirements.--If the Secretary determines that a State has not 
        complied with section 408(a)(12) during a fiscal year, the 
        Secretary shall reduce the grant payable to the State under 
        section 403(a)(1) for the immediately succeeding fiscal year by 
        an amount equal to not less than 5 percent and not more than 10 
        percent of the State family assistance grant, as the Secretary 
        deems appropriate based on the frequency and severity of the 
        noncompliance.''.

                         Subtitle B--Child Care

SEC. 8201. ENTITLEMENT FUNDING.

    Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting a semicolon; and
            (3) by adding at the end the following:
                    ``(G) $2,717,000,000 for fiscal year 2006;
                    ``(H) $2,767,000,000 for fiscal year 2007;
                    ``(I) $2,817,000,000 for fiscal year 2008;
                    ``(J) $2,867,000,000 for fiscal year 2009; and
                    ``(K) $2,917,000,000 for fiscal year 2010.''.

                       Subtitle C--Child Support

SEC. 8301. FEDERAL MATCHING FUNDS FOR LIMITED PASS THROUGH OF CHILD 
              SUPPORT PAYMENTS TO FAMILIES RECEIVING TANF.

    (a) In General.--Section 457(a) (42 U.S.C. 657(a)) is amended--
            (1) in paragraph (1)(A), by inserting ``subject to 
        paragraph (7)'' before the semicolon; and
            (2) by adding at the end the following:
            ``(7) Federal matching funds for limited pass through of 
        child support payments to families receiving tanf.--
        Notwithstanding paragraph (1), a State shall not be required to 
        pay to the Federal Government the Federal share of an amount 
        collected during a month on behalf of a family that is a 
        recipient of assistance under the State program funded under 
        part A, to the extent that--
                    ``(A) the State distributes the amount to the 
                family;
                    ``(B) the total of the amounts so distributed to 
                the family during the month--
                            ``(i) exceeds the amount (if any) that, as 
                        of December 31, 2001, was required under State 
                        law to be distributed to a family under 
                        paragraph (1)(B); and
                            ``(ii) does not exceed the greater of--
                                    ``(I) $100; or
                                    ``(II) $50 plus the amount 
                                described in clause (i); and
                    ``(C) the amount is disregarded in determining the 
                amount and type of assistance provided to the family 
                under the State program funded under part A.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply to amounts distributed on or after October 1, 2008.

SEC. 8302. STATE OPTION TO PASS THROUGH ALL CHILD SUPPORT PAYMENTS TO 
              FAMILIES THAT FORMERLY RECEIVED TANF.

    (a) In General.--Section 457(a) (42 U.S.C. 657(a)), as amended by 
section 8301(a) of this Act, is amended--
            (1) in paragraph (2)(B), in the matter preceding clause 
        (i), by inserting ``, except as provided in paragraph (8),'' 
        after ``shall''; and
            (2) by adding at the end the following:
            ``(8) State option to pass through all child support 
        payments to families that formerly received tanf.--In lieu of 
        applying paragraph (2) to any family described in paragraph 
        (2), a State may distribute to the family any amount collected 
        during a month on behalf of the family.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply to amounts distributed on or after October 1, 2008.

SEC. 8303. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT ORDERS FOR 
              FAMILIES RECEIVING TANF.

    (a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C. 
666(a)(10)(A)(i)) is amended--
            (1) by striking ``parent, or,'' and inserting ``parent 
        or''; and
            (2) by striking ``upon the request of the State agency 
        under the State plan or of either parent,''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2007.

SEC. 8304. MANDATORY FEE FOR SUCCESSFUL CHILD SUPPORT COLLECTION FOR 
              FAMILY THAT HAS NEVER RECEIVED TANF.

    (a) In General.--Section 454(6)(B) (42 U.S.C. 654(6)(B)) is 
amended--
            (1) by inserting ``(i)'' after ``(B)'';
            (2) by redesignating clauses (i) and (ii) as subclauses (I) 
        and (II), respectively;
            (3) by adding ``and'' after the semicolon; and
            (4) by adding after and below the end the following new 
        clause:
                    ``(ii) in the case of an individual who has never 
                received assistance under a State program funded under 
                part A and for whom the State has collected at least 
                $500 of support, the State shall impose an annual fee 
                of $25 for each case in which services are furnished, 
                which shall be retained by the State from support 
                collected on behalf of the individual (but not from the 
                1st $500 so collected), paid by the individual applying 
                for the services, recovered from the absent parent, or 
                paid by the State out of its own funds (the payment of 
                which from State funds shall not be considered as an 
                administrative cost of the State for the operation of 
                the plan, and such fees shall be considered income to 
                the program);''.
    (b) Conforming Amendment.--Section 457(a)(3) (42 U.S.C. 657(a)(3)) 
is amended to read as follows:
            ``(3) Families that never received assistance.--In the case 
        of any other family, the State shall distribute to the family 
        the portion of the amount so collected that remains after 
        withholding any fee pursuant to section 454(6)(B)(ii).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2006.

SEC. 8305. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

    Not later than 6 months after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall submit to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a report on the procedures that the 
States use generally to locate custodial parents for whom child support 
has been collected but not yet distributed. The report shall include an 
estimate of the total amount of undistributed child support and the 
average length of time it takes undistributed child support to be 
distributed. To the extent the Secretary deems appropriate, the 
Secretary shall include in the report recommendations as to whether 
additional procedures should be established at the State or Federal 
level to expedite the payment of undistributed child support.

SEC. 8306. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING 
              PASSPORT DENIAL.

    (a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) is amended 
by striking ``$5,000'' and inserting ``$2,500''.
    (b) Conforming Amendment.--Section 454(31) (42 U.S.C. 654(31)) is 
amended by striking ``$5,000'' and inserting ``$2,500''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2006.

SEC. 8307. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE 
              CHILD SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.

    (a) In General.--Section 464 (42 U.S.C. 664) is amended--
            (1) in subsection (a)(2)(A), by striking ``(as that term is 
        defined for purposes of this paragraph under subsection (c))''; 
        and
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1) Except as provided in 
                        paragraph (2), as used in'' and inserting 
                        ``In''; and
                            (ii) by inserting ``(whether or not a 
                        minor)'' after ``a child'' each place it 
                        appears; and
                    (B) by striking paragraphs (2) and (3).
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2007.

SEC. 8308. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-
              CONNECTED DISABILITIES IN ORDER TO ENFORCE CHILD SUPPORT 
              OBLIGATIONS.

    (a) In General.--Section 459(h) (42 U.S.C. 659(h)) is amended--
            (1) in paragraph (1)(A)(ii)(V), by striking all that 
        follows ``Armed Forces'' and inserting a semicolon; and
            (2) by adding at the end the following:
            ``(3) Limitations with respect to compensation paid to 
        veterans for service-connected disabilities.--Notwithstanding 
        any other provision of this section:
                    ``(A) Compensation described in paragraph 
                (1)(A)(ii)(V) shall not be subject to withholding 
                pursuant to this section--
                            ``(i) for payment of alimony; or
                            ``(ii) for payment of child support if the 
                        individual is fewer than 60 days in arrears in 
                        payment of the support.
                    ``(B) Not more than 50 percent of any payment of 
                compensation described in paragraph (1)(A)(ii)(V) may 
                be withheld pursuant to this section.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on October 1, 2007.

SEC. 8309. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

    Section 452(j) (42 U.S.C. 652(j)) is amended by inserting ``or the 
amount appropriated under this paragraph for fiscal year 2002, 
whichever is greater,'' before ``which shall be available''.

SEC. 8310. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE FUNDING.

    Section 453(o) (42 U.S.C. 653(o)) is amended--
            (1) in the 1st sentence, by inserting ``or the amount 
        appropriated under this paragraph for fiscal year 2002, 
        whichever is greater,'' before ``which shall be available''; 
        and
            (2) in the 2nd sentence, by striking ``for each of fiscal 
        years 1997 through 2001''.

SEC. 8311. INFORMATION COMPARISONS WITH INSURANCE DATA.

    (a) Duties of the Secretary.--Section 452 (42 U.S.C. 652) is 
amended by adding at the end the following:
    ``(m) Comparisons With Insurance Information.--
            ``(1) In general.--The Secretary, through the Federal 
        Parent Locator Service, may--
                    ``(A) compare information concerning individuals 
                owing past-due support with information maintained by 
                insurers (or their agents) concerning insurance claims, 
                settlements, awards, and payments, and
                    ``(B) furnish information resulting from such a 
                comparison to the State agencies responsible for 
                collecting child support from such individuals.
            ``(2) Liability.--An insurer (including any agent of an 
        insurer) shall not be liable under any Federal or State law to 
        any person for any disclosure provided for under this 
        subsection, or for any other action taken in good faith in 
        accordance with this subsection.''.
    (b) State Reimbursement of Federal Costs.--Section 453(k)(3) (42 
U.S.C. 653(k)(3)) is amended by inserting ``or section 452(m)'' after 
``this section''.

SEC. 8312. TRIBAL ACCESS TO THE FEDERAL PARENT LOCATOR SERVICE.

    Section 453(c)(1) (42 U.S.C. 653(c)(1)) is amended by inserting 
``or of any Indian tribe or tribal organization'' after ``any agent or 
attorney of any State''.

SEC. 8313. REIMBURSEMENT OF SECRETARY'S COSTS OF INFORMATION 
              COMPARISONS AND DISCLOSURE FOR ENFORCEMENT OF OBLIGATIONS 
              ON HIGHER EDUCATION ACT LOANS AND GRANTS.

    Section 453(j)(6)(F) (42 U.S.C. 653(j)(6)(F)) is amended by 
striking ``additional''.

SEC. 8314. TECHNICAL AMENDMENT RELATING TO COOPERATIVE AGREEMENTS 
              BETWEEN STATES AND INDIAN TRIBES.

    Section 454(33) (42 U.S.C. 654(33)) is amended by striking ``that 
receives funding pursuant to section 428 and''.

SEC. 8315. STATE OPTION TO USE STATEWIDE AUTOMATED DATA PROCESSING AND 
              INFORMATION RETRIEVAL SYSTEM FOR INTERSTATE CASES.

    Section 466(a)(14)(A)(iii) (42 U.S.C. 666(a)(14)(A)(iii)) is 
amended by inserting ``(but the assisting State may establish a 
corresponding case based on such other State's request for 
assistance)'' before the semicolon.

SEC. 8316. MODIFICATION OF RULE REQUIRING ASSIGNMENT OF SUPPORT RIGHTS 
              AS A CONDITION OF RECEIVING TANF.

    (a) In General.--Section 408(a)(3) (42 U.S.C. 608(a)(3)) is amended 
to read as follows:
            ``(3) No assistance for families not assigning certain 
        support rights to the state.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                State to which a grant is made under section 403 shall 
                require, as a condition of providing assistance to a 
                family under the State program funded under this part, 
                that a member of the family assign to the State any 
                rights the family member may have (on behalf of the 
                family member or of any other person for whom the 
                family member has applied for or is receiving such 
                assistance) to--
                            ``(i) support from any other person which 
                        accrues during the period that the family 
                        receives assistance under the program; and
                            ``(ii) at the option of the State, support 
                        from any other person which has accrued before 
                        such period.
                    ``(B) Limitation.--The total amount of support that 
                may be required to be provided with respect to rights 
                assigned to a State by a family member pursuant to 
                subparagraph (A) shall not exceed the total amount of 
                assistance provided by the State to the family.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2008.

SEC. 8317. STATE OPTION TO DISCONTINUE CERTAIN SUPPORT ASSIGNMENTS.

    Section 457(b) (42 U.S.C. 657(b)) is amended by striking ``shall'' 
and inserting ``may''.

SEC. 8318. TECHNICAL CORRECTION.

    The second paragraph (7) of section 453(j) (42 U.S.C. 653(j)) is 
amended by striking ``(7)'' and inserting ``(9)''.

SEC. 8319. REDUCTION IN RATE OF REIMBURSEMENT OF CHILD SUPPORT 
              ADMINISTRATIVE EXPENSES.

    Section 455(a)(2) (42 U.S.C. 655(a)(2)) is amended--
            (1) in subparagraph (B), by striking ``, and'' and 
        inserting a semicolon;
            (2) in subparagraph (C), by striking ``fiscal year 1990 and 
        each fiscal year thereafter.'' and inserting ``fiscal years 
        1990 through 2006;''; and
            (3) by adding at the end the following:
            ``(D) 62 percent for fiscal year 2007;
            ``(E) 58 percent for fiscal year 2008;
            ``(F) 54 percent for fiscal year 2009; and
            ``(G) 50 percent for fiscal year 2010 and each fiscal year 
        thereafter.''.

SEC. 8320. INCENTIVE PAYMENTS.

    (a) In General.--Section 455(a)(1) (42 U.S.C. 655(a)(1)) is amended 
by inserting ``from amounts paid to the State under section 458 or'' 
before ``to carry out an agreement''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2007.

                       Subtitle D--Child Welfare

SEC. 8401. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION PROJECTS.

    Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking 
``2003'' and inserting ``2010''.

SEC. 8402. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS.

    Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking 
``not more than 10''.

SEC. 8403. ELIMINATION OF LIMITATION ON NUMBER OF STATES THAT MAY BE 
              GRANTED WAIVERS TO CONDUCT DEMONSTRATION PROJECTS ON SAME 
              TOPIC.

    Section 1130 (42 U.S.C. 1320a-9) is amended by adding at the end 
the following:
    ``(h) No Limit on Number of States That May Be Granted Waivers to 
Conduct Same or Similar Demonstration Projects.--The Secretary shall 
not refuse to grant a waiver to a State under this section on the 
grounds that a purpose of the waiver or of the demonstration project 
for which the waiver is necessary would be the same as or similar to a 
purpose of another waiver or project that is or may be conducted under 
this section.''.

SEC. 8404. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS THAT MAY BE 
              GRANTED TO A SINGLE STATE FOR DEMONSTRATION PROJECTS.

    Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at 
the end the following:
    ``(i) No Limit on Number of Waivers Granted to, or Demonstration 
Projects That May Be Conducted by, a Single State.--The Secretary shall 
not impose any limit on the number of waivers that may be granted to a 
State, or the number of demonstration projects that a State may be 
authorized to conduct, under this section.''.

SEC. 8405. STREAMLINED PROCESS FOR CONSIDERATION OF AMENDMENTS TO AND 
              EXTENSIONS OF DEMONSTRATION PROJECTS REQUIRING WAIVERS.

    Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at 
the end the following:
    ``(j) Streamlined Process for Consideration of Amendments and 
Extensions.--The Secretary shall develop a streamlined process for 
consideration of amendments and extensions proposed by States to 
demonstration projects conducted under this section.''.

SEC. 8406. AVAILABILITY OF REPORTS.

    Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at 
the end the following:
    ``(k) Availability of Reports.--The Secretary shall make available 
to any State or other interested party any report provided to the 
Secretary under subsection (f)(2), and any evaluation or report made by 
the Secretary with respect to a demonstration project conducted under 
this section, with a focus on information that may promote best 
practices and program improvements.''.

SEC. 8407. CLARIFICATION OF ELIGIBILITY FOR FOSTER CARE MAINTENANCE 
              PAYMENTS AND ADOPTION ASSISTANCE.

    (a) Foster Care Maintenance Payments.--Section 472(a) (42 U.S.C. 
672(a)) is amended to read as follows:
    ``(a) In General.--
            ``(1) Eligibility.--Each State with a plan approved under 
        this part shall make foster care maintenance payments on behalf 
        of each child who has been removed from the home of a relative 
        specified in section 406(a) (as in effect on July 16, 1996) 
        into foster care if--
                    ``(A) the removal and foster care placement met, 
                and the placement continues to meet, the requirements 
                of paragraph (2); and
                    ``(B) the child, while in the home, would have met 
                the AFDC eligibility requirement of paragraph (3).
            ``(2) Removal and foster care placement requirements.--The 
        removal and foster care placement of a child meet the 
        requirements of this paragraph if--
                    ``(A) the removal and foster care placement are in 
                accordance with--
                            ``(i) a voluntary placement agreement 
                        entered into by a parent or legal guardian of 
                        the child who is the relative referred to in 
                        paragraph (1); or
                            ``(ii) a judicial determination to the 
                        effect that continuation in the home from which 
                        removed would be contrary to the welfare of the 
                        child and that reasonable efforts of the type 
                        described in section 471(a)(15) for a child 
                        have been made;
                    ``(B) the child's placement and care are the 
                responsibility of--
                            ``(i) the State agency administering the 
                        State plan approved under section 471; or
                            ``(ii) any other public agency with which 
                        the State agency administering or supervising 
                        the administration of the State plan has made 
                        an agreement which is in effect; and
                    ``(C) the child has been placed in a foster family 
                home or child-care institution.
            ``(3) AFDC eligibility requirement.--
                    ``(A) In general.--A child in the home referred to 
                in paragraph (1) would have met the AFDC eligibility 
                requirement of this paragraph if the child--
                            ``(i) would have received aid under the 
                        State plan approved under section 402 (as in 
                        effect on July 16, 1996) in the home, in or for 
                        the month in which the agreement was entered 
                        into or court proceedings leading to the 
                        determination referred to in paragraph 
                        (2)(A)(ii) of this subsection were initiated; 
                        or
                            ``(ii)(I) would have received the aid in 
                        the home, in or for the month referred to in 
                        clause (i), if application had been made 
                        therefor; or
                            ``(II) had been living in the home within 6 
                        months before the month in which the agreement 
                        was entered into or the proceedings were 
                        initiated, and would have received the aid in 
                        or for such month, if, in such month, the child 
                        had been living in the home with the relative 
                        referred to in paragraph (1) and application 
                        for the aid had been made.
                    ``(B) Resources determination.--For purposes of 
                subparagraph (A), in determining whether a child would 
                have received aid under a State plan approved under 
                section 402 (as in effect on July 16, 1996), a child 
                whose resources (determined pursuant to section 
                402(a)(7)(B), as so in effect) have a combined value of 
                not more than $10,000 shall be considered a child whose 
                resources have a combined value of not more than $1,000 
                (or such lower amount as the State may determine for 
                purposes of section 402(a)(7)(B)).
            ``(4) Eligibility of certain alien children.--Subject to 
        title IV of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, if the child is an alien 
        disqualified under section 245A(h) or 210(f) of the Immigration 
        and Nationality Act from receiving aid under the State plan 
        approved under section 402 in or for the month in which the 
        agreement described in paragraph (2)(A)(i) was entered into or 
        court proceedings leading to the determination described in 
        paragraph (2)(A)(ii) were initiated, the child shall be 
        considered to satisfy the requirements of paragraph (3), with 
        respect to the month, if the child would have satisfied the 
        requirements but for the disqualification.''.
    (b) Adoption Assistance.--Section 473(a)(2) (42 U.S.C. 673(a)(2)) 
is amended to read as follows:
    ``(2)(A) For purposes of paragraph (1)(B)(ii), a child meets the 
requirements of this paragraph if the child--
            ``(i)(I)(aa) was removed from the home of a relative 
        specified in section 406(a) (as in effect on July 16, 1996) and 
        placed in foster care in accordance with a voluntary placement 
        agreement with respect to which Federal payments are provided 
        under section 474 (or section 403, as such section was in 
        effect on July 16, 1996), or in accordance with a judicial 
        determination to the effect that continuation in the home would 
        be contrary to the welfare of the child; and
            ``(bb) met the requirements of section 472(a)(3) with 
        respect to the home referred to in item (aa) of this subclause;
            ``(II) meets all of the requirements of title XVI with 
        respect to eligibility for supplemental security income 
        benefits; or
            ``(III) is a child whose costs in a foster family home or 
        child-care institution are covered by the foster care 
        maintenance payments being made with respect to the minor 
        parent of the child as provided in section 475(4)(B); and
            ``(ii) has been determined by the State, pursuant to 
        subsection (c) of this section, to be a child with special 
        needs.
    ``(B) Section 472(a)(4) shall apply for purposes of subparagraph 
(A) of this paragraph, in any case in which the child is an alien 
described in such section.
    ``(C) A child shall be treated as meeting the requirements of this 
paragraph for the purpose of paragraph (1)(B)(ii) if the child--
            ``(i) meets the requirements of subparagraph (A)(ii);
            ``(ii) was determined eligible for adoption assistance 
        payments under this part with respect to a prior adoption;
            ``(iii) is available for adoption because--
                    ``(I) the prior adoption has been dissolved, and 
                the parental rights of the adoptive parents have been 
                terminated; or
                    ``(II) the child's adoptive parents have died; and
            ``(iv) fails to meet the requirements of subparagraph (A) 
        but would meet such requirements if--
                    ``(I) the child were treated as if the child were 
                in the same financial and other circumstances the child 
                was in the last time the child was determined eligible 
                for adoption assistance payments under this part; and
                    ``(II) the prior adoption were treated as never 
                having occurred.''.

SEC. 8408. CLARIFICATION REGARDING FEDERAL MATCHING OF CERTAIN 
              ADMINISTRATIVE COSTS UNDER THE FOSTER CARE MAINTENANCE 
              PAYMENTS PROGRAM.

    (a) Administrative Costs Relating to Unlicensed Care.--Section 472 
(42 U.S.C. 672) is amended by inserting after subsection (h) the 
following:
    ``(i) Administrative Costs Associated With Otherwise Eligible 
Children not in Licensed Foster Care Settings.--Expenditures by a State 
that would be considered administrative expenditures for purposes of 
section 474(a)(3) if made with respect to a child who was residing in a 
foster family home or child-care institution shall be so considered 
with respect to a child not residing in such a home or institution--
            ``(1) in the case of a child who has been removed in 
        accordance with subsection (a) of this section from the home of 
        a relative specified in section 406(a) (as in effect on July 
        16, 1996), only for expenditures--
                    ``(A) with respect to a period of not more than the 
                lesser of 12 months or the average length of time it 
                takes for the State to license or approve a home as a 
                foster home, in which the child is in the home of a 
                relative and an application is pending for licensing or 
                approval of the home as a foster family home; or
                    ``(B) with respect to a period of not more than 1 
                calendar month when a child moves from a facility not 
                eligible for payments under this part into a foster 
                family home or child care institution licensed or 
                approved by the State; and
            ``(2) in the case of any other child who is potentially 
        eligible for benefits under a State plan approved under this 
        part and at imminent risk of removal from the home, only if--
                    ``(A) reasonable efforts are being made in 
                accordance with section 471(a)(15) to prevent the need 
                for, or if necessary to pursue, removal of the child 
                from the home; and
                    ``(B) the State agency has made, not less often 
                than every 6 months, a determination (or 
                redetermination) as to whether the child remains at 
                imminent risk of removal from the home.''.
    (b) Conforming Amendment.--Section 474(a)(3) of such Act (42 U.S.C. 
674(a)(3)) is amended by inserting ``subject to section 472(i)'' before 
``an amount equal to''.

SEC. 8409. TECHNICAL CORRECTION.

    Section 1130(b)(1) (42 U.S.C. 1320a-9(b)(1)) is amended by striking 
``422(b)(9)'' and inserting ``422(b)(10)''.

SEC. 8410. TECHNICAL CORRECTION.

    Section 470 (42 U.S.C. 670) is amended by striking ``June 1, 1995'' 
and inserting ``July 16, 1996''.

                Subtitle E--Supplemental Security Income

SEC. 8501. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY 
              DETERMINATIONS.

    Section 1633 (42 U.S.C. 1383b) is amended by adding at the end the 
following:
    ``(e)(1) The Commissioner of Social Security shall review 
determinations, made by State agencies pursuant to subsection (a) in 
connection with applications for benefits under this title on the basis 
of blindness or disability, that individuals who have attained 18 years 
of age are blind or disabled as of a specified onset date. The 
Commissioner of Social Security shall review such a determination 
before any action is taken to implement the determination.
    ``(2)(A) In carrying out paragraph (1), the Commissioner of Social 
Security shall review--
            ``(i) at least 20 percent of all determinations referred to 
        in paragraph (1) that are made in fiscal year 2006;
            ``(ii) at least 40 percent of all such determinations that 
        are made in fiscal year 2007; and
            ``(iii) at least 50 percent of all such determinations that 
        are made in fiscal year 2008 or thereafter.
    ``(B) In carrying out subparagraph (A), the Commissioner of Social 
Security shall, to the extent feasible, select for review the 
determinations which the Commissioner of Social Security identifies as 
being the most likely to be incorrect.''.

SEC. 8502. PAYMENT OF CERTAIN LUMP SUM BENEFITS IN INSTALLMENTS UNDER 
              THE SUPPLEMENTAL SECURITY INCOME PROGRAM.

    (a) In General.--Section 1631(a)(10)(A)(i) (42 U.S.C. 
1383(a)(10)(A)(i)) is amended by striking ``12'' and inserting ``3''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect 3 months after the date of the enactment of this Act.

                Subtitle F--State and Local Flexibility

SEC. 8601. PROGRAM COORDINATION DEMONSTRATION PROJECTS.

    (a) Purpose.--The purpose of this section is to establish a program 
of demonstration projects in a State or portion of a State to 
coordinate multiple public assistance, workforce development, and other 
programs, for the purpose of supporting working individuals and 
families, helping families escape welfare dependency, promoting child 
well-being, or helping build stronger families, using innovative 
approaches to strengthen service systems and provide more coordinated 
and effective service delivery.
    (b) Definitions.--In this section:
            (1) Administering secretary.--The term ``administering 
        Secretary'' means, with respect to a qualified program, the 
        head of the Federal agency responsible for administering the 
        program.
            (2) Qualified program.--The term ``qualified program'' 
        means--
                    (A) a program under part A of title IV of the 
                Social Security Act; or
                    (B) the program under title XX of such Act.
    (c) Application Requirements.--The head of a State entity or of a 
sub-State entity administering 2 or more qualified programs proposed to 
be included in a demonstration project under this section shall (or, if 
the project is proposed to include qualified programs administered by 2 
or more such entities, the heads of the administering entities (each of 
whom shall be considered an applicant for purposes of this section) 
shall jointly) submit to the administering Secretary of each such 
program an application that contains the following:
            (1) Programs included.--A statement identifying each 
        qualified program to be included in the project, and describing 
        how the purposes of each such program will be achieved by the 
        project.
            (2) Population served.--A statement identifying the 
        population to be served by the project and specifying the 
        eligibility criteria to be used.
            (3) Description and justification.--A detailed description 
        of the project, including--
                    (A) a description of how the project is expected to 
                improve or enhance achievement of the purposes of the 
                programs to be included in the project, from the 
                standpoint of quality, of cost-effectiveness, or of 
                both; and
                    (B) a description of the performance objectives for 
                the project, including any proposed modifications to 
                the performance measures and reporting requirements 
                used in the programs.
            (4) Waivers requested.--A description of the statutory and 
        regulatory requirements with respect to which a waiver is 
        requested in order to carry out the project, and a 
        justification of the need for each such waiver.
            (5) Cost neutrality.--Such information and assurances as 
        necessary to establish to the satisfaction of the administering 
        Secretary, in consultation with the Director of the Office of 
        Management and Budget, that the proposed project is reasonably 
        expected to meet the applicable cost neutrality requirements of 
        subsection (d)(4).
            (6) Evaluation and reports.--An assurance that the 
        applicant will conduct ongoing and final evaluations of the 
        project, and make interim and final reports to the 
        administering Secretary, at such times and in such manner as 
        the administering Secretary may require.
            (7) Other information and assurances.--Such other 
        information and assurances as the administering Secretary may 
        require.
    (d) Approval of Applications.--
            (1) In general.--The administering Secretary with respect 
        to a qualified program that is identified in an application 
        submitted pursuant to subsection (c) may approve the 
        application and, except as provided in paragraph (2), waive any 
        requirement applicable to the program, to the extent consistent 
        with this section and necessary and appropriate for the conduct 
        of the demonstration project proposed in the application, if 
        the administering Secretary determines that the project--
                    (A) has a reasonable likelihood of achieving the 
                objectives of the programs to be included in the 
                project;
                    (B) may reasonably be expected to meet the 
                applicable cost neutrality requirements of paragraph 
                (4), as determined by the Director of the Office of 
                Management and Budget; and
                    (C) includes the coordination of 2 or more 
                qualified programs.
            (2) Provisions excluded from waiver authority.--A waiver 
        shall not be granted under paragraph (1) with respect to any 
        provision of law relating to--
                    (A) civil rights or prohibition of discrimination;
                    (B) purposes or goals of any program;
                    (C) maintenance of effort requirements;
                    (D) health or safety;
                    (E) labor standards under the Fair Labor Standards 
                Act of 1938; or
                    (F) environmental protection;
            (3) Agreement of each administering secretary required.--
                    (A) In general.--An applicant may not conduct a 
                demonstration project under this section unless each 
                administering Secretary with respect to any program 
                proposed to be included in the project has approved the 
                application to conduct the project.
                    (B) Agreement with respect to funding and 
                implementation.--Before approving an application to 
                conduct a demonstration project under this section, an 
                administering Secretary shall have in place an 
                agreement with the applicant with respect to the 
                payment of funds and responsibilities required of the 
                administering Secretary with respect to the project.
            (4) Cost-neutrality requirement.--
                    (A) General rule.--Notwithstanding any other 
                provision of law (except subparagraph (B)), the total 
                of the amounts that may be paid by the Federal 
                Government for a fiscal year with respect to the 
                programs in the State in which an entity conducting a 
                demonstration project under this section is located 
                that are affected by the project shall not exceed the 
                estimated total amount that the Federal Government 
                would have paid for the fiscal year with respect to the 
                programs if the project had not been conducted, as 
                determined by the Director of the Office of Management 
                and Budget.
                    (B) Special rule.--If an applicant submits to the 
                Director of the Office of Management and Budget a 
                request to apply the rules of this subparagraph to the 
                programs in the State in which the applicant is located 
                that are affected by a demonstration project proposed 
                in an application submitted by the applicant pursuant 
                to this section, during such period of not more than 5 
                consecutive fiscal years in which the project is in 
                effect, and the Director determines, on the basis of 
                supporting information provided by the applicant, to 
                grant the request, then, notwithstanding any other 
                provision of law, the total of the amounts that may be 
                paid by the Federal Government for the period with 
                respect to the programs shall not exceed the estimated 
                total amount that the Federal Government would have 
                paid for the period with respect to the programs if the 
                project had not been conducted.
            (5) 90-day approval deadline.--
                    (A) In general.--If an administering Secretary 
                receives an application to conduct a demonstration 
                project under this section and does not disapprove the 
                application within 90 days after the receipt, then--
                            (i) the administering Secretary is deemed 
                        to have approved the application for such 
                        period as is requested in the application, 
                        except to the extent inconsistent with 
                        subsection (e); and
                            (ii) any waiver requested in the 
                        application which applies to a qualified 
                        program that is identified in the application 
                        and is administered by the administering 
                        Secretary is deemed to be granted, except to 
                        the extent inconsistent with paragraph (2) or 
                        (4) of this subsection.
                    (B) Deadline extended if additional information is 
                sought.--The 90-day period referred to in subparagraph 
                (A) shall not include any period that begins with the 
                date the Secretary requests the applicant to provide 
                additional information with respect to the application 
                and ends with the date the additional information is 
                provided.
    (e) Duration of Projects.--A demonstration project under this 
section may be approved for a term of not more than 5 years.
    (f) Reports to Congress.--
            (1) Report on disposition of applications.--Within 90 days 
        after an administering Secretary receives an application 
        submitted pursuant to this section, the administering Secretary 
        shall submit to each Committee of the Congress which has 
        jurisdiction over a qualified program identified in the 
        application notice of the receipt, a description of the 
        decision of the administering Secretary with respect to the 
        application, and the reasons for approving or disapproving the 
        application.
            (2) Reports on projects.--Each administering Secretary 
        shall provide annually to the Congress a report concerning 
        demonstration projects approved under this section, including--
                    (A) the projects approved for each applicant;
                    (B) the number of waivers granted under this 
                section, and the specific statutory provisions waived;
                    (C) how well each project for which a waiver is 
                granted is improving or enhancing program achievement 
                from the standpoint of quality, cost-effectiveness, or 
                both;
                    (D) how well each project for which a waiver is 
                granted is meeting the performance objectives specified 
                in subsection (c)(3)(B);
                    (E) how each project for which a waiver is granted 
                is conforming with the cost-neutrality requirements of 
                subsection (d)(4); and
                    (F) to the extent the administering Secretary deems 
                appropriate, recommendations for modification of 
                programs based on outcomes of the projects.

       Subtitle G--Repeal of Continued Dumping and Subsidy Offset

SEC. 8701. REPEAL OF CONTINUED DUMPING AND SUBSIDY OFFSET.

    (a) Repeal.--Section 754 of the Tariff Act of 1930 (19 U.S.C. 
1675c), and the item relating to section 754 in the table of contents 
for title VII of that Act, are repealed.
    (b) Existing Accounts.--All amounts remaining, upon the enactment 
of this title, in any special account established under section 
754(e)(1) of the Tariff Act of 1930 (as in effect on the day before the 
date of the enactment of this title) shall be deposited in the general 
fund of the Treasury.

                       Subtitle H--Effective Date

SEC. 8801. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this title, this 
title and the amendments made by this title shall be effective as of 
October 1, 2005.
    (b) Exception.--In the case of a State plan under title IV of the 
Social Security Act which the Secretary determines requires State 
legislation in order for the plan to meet the additional requirements 
imposed by the amendments made by this title, the effective date of the 
amendments imposing the additional requirements shall be 3 months after 
the first day of the first calendar quarter beginning after the close 
of the first regular session of the State legislature that begins after 
the date of the enactment of this Act. For purposes of the preceding 
sentence, in the case of a State that has a 2-year legislative session, 
each year of the session shall be considered to be a separate regular 
session of the State legislature.
            Attest:

                                                                          Clerk.
109th CONGRESS

  1st Session

                                S. 1932

_______________________________________________________________________

                               AMENDMENT
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