qualified health centers, and entities described in 
section 2652(a) that constitute a point of access to 
services by maintaining referral relationships. 
‘‘(2) CONDITIONS.—With respect to an entity 
that proposes to provide early intervention services 
under paragraph (1), such paragraph shall apply 
only if the entity demonstrates to the satisfaction of 
the chief elected official for the eligible area involved 
that—
‘‘(A) Federal, State, or local funds are oth-
erwise inadequate for the early intervention 
services the entity proposes to provide; and 
‘‘(B) the entity will expend funds pursuant 
to such paragraph to supplement and not sup-
plant other funds available to the entity for the 
provision of early intervention services for the 
fiscal year involved. 
‘‘(f) PRIORITY FOR WOMEN, INFANTS, CHILDREN, 
AND YOUTH.—
‘‘(1) IN GENERAL.—For the purpose of pro-
viding health and support services to infants, chil-
dren, youth, and women with HIV/AIDS, including 
treatment measures to prevent the perinatal trans-
mission of HIV, the chief elected official of an eligi-
ble area, in accordance with the established priorities
of the planning council, shall for each of such popu-
lations in the eligible area use, from the grants made 
for the area under section 2601(a) for a fiscal year, 
not less than the percentage constituted by the ratio 
of the population involved (infants, children, youth, 
or women in such area) with HIV/AIDS to the gen-
eral population in such area of individuals with HIV/
AIDS. 
‘‘(2) WAIVER.—With respect to the population 
involved, the Secretary may provide to the chief 
elected official of an eligible area a waiver of the re-
quirement of paragraph (1) if such official dem-
onstrates to the satisfaction of the Secretary that 
the population is receiving HIV-related health serv-
ices through the State medicaid program under title 
XIX of the Social Security Act, the State children’s 
health insurance program under title XXI of such 
Act, or other Federal or State programs. 
‘‘(g) REQUIREMENT OF STATUS AS MEDICAID PRO-
VIDER.—
‘‘(1) PROVISION OF SERVICE.—Subject to para-
graph (2), the Secretary may not make a grant 
under section 2601(a) for the provision of services 
under this section in a State unless, in the case of 
any such service that is available pursuant to the
State plan approved under title XIX of the Social 
Security Act for the State—
‘‘(A) the political subdivision involved will 
provide the service directly, and the political 
subdivision has entered into a participation 
agreement under the State plan and is qualified 
to receive payments under such plan; or 
‘‘(B) the political subdivision will enter 
into an agreement with a public or nonprofit 
private entity under which the entity will pro-
vide the service, and the entity has entered into 
such a participation agreement and is qualified 
to receive such payments. 
‘‘(2) WAIVER.—
‘‘(A) IN GENERAL.—In the case of an enti-
ty making an agreement pursuant to paragraph 
(1)(B) regarding the provision of services, the 
requirement established in such paragraph shall 
be waived by the HIV health services planning 
council for the eligible area if the entity does 
not, in providing health care services, impose a 
charge or accept reimbursement available from 
any third-party payor, including reimbursement 
under any insurance policy or under any Fed-
eral or State health benefits program.
‘‘(B) DETERMINATION.—A determination 
by the HIV health services planning council of 
whether an entity referred to in subparagraph 
(A) meets the criteria for a waiver under such 
subparagraph shall be made without regard to 
whether the entity accepts voluntary donations 
for the purpose of providing services to the pub-
lic. 
‘‘(h) ADMINISTRATION.—
‘‘(1) LIMITATION.—The chief elected official of 
an eligible area shall not use in excess of 10 percent 
of amounts received under a grant under this part 
for administrative expenses. 
‘‘(2) ALLOCATIONS BY CHIEF ELECTED OFFI-
CIAL.—In the case of entities and subcontractors to 
which the chief elected official of an eligible area al-
locates amounts received by the official under a 
grant under this part, the official shall ensure that, 
of the aggregate amount so allocated, the total of 
the expenditures by such entities for administrative 
expenses does not exceed 10 percent (without regard 
to whether particular entities expend more than 10 
percent for such expenses).
‘‘(3) ADMINISTRATIVE
ACTIVITIES.—For pur-
poses of paragraph (1), amounts may be used for 
administrative activities that include—
‘‘(A) routine grant administration and 
monitoring activities, including the development 
of applications for part A funds, the receipt and 
disbursal of program funds, the development 
and establishment of reimbursement and ac-
counting systems, the development of a clinical 
quality management program as described in 
paragraph (5), the preparation of routine pro-
grammatic and financial reports, and compli-
ance with grant conditions and audit require-
ments; and 
‘‘(B) all activities associated with the 
grantee’s contract award procedures, including 
the activities carried out by the HIV health 
services planning council as established under 
section 2602(b), the development of requests 
for proposals, contract proposal review activi-
ties, negotiation and awarding of contracts, 
monitoring of contracts through telephone con-
sultation, written documentation or onsite vis-
its, reporting on contracts, and funding re-
allocation activities.
‘‘(4) SUBCONTRACTOR ADMINISTRATIVE ACTIVI-
TIES.—For the purposes of this subsection, subcon-
tractor administrative activities include—
‘‘(A) usual and recognized overhead activi-
ties, including established indirect rates for 
agencies; 
‘‘(B) management oversight of specific pro-
grams funded under this title; and 
‘‘(C) other types of program support such 
as quality assurance, quality control, and re-
lated activities. 
‘‘(5) CLINICAL QUALITY MANAGEMENT.—
‘‘(A) REQUIREMENT.—The chief elected 
official of an eligible area that receives a grant 
under this part shall provide for the establish-
ment of a clinical quality management program 
to assess the extent to which HIV health serv-
ices provided to patients under the grant are 
consistent with the most recent Public Health 
Service guidelines for the treatment of HIV/
AIDS and related opportunistic infection, and 
as applicable, to develop strategies for ensuring 
that such services are consistent with the guide-
lines for improvement in the access to and qual-
ity of HIV health services.
‘‘(B) USE OF FUNDS.—
‘‘(i) IN GENERAL.—From amounts re-
ceived under a grant awarded under this 
subpart for a fiscal year, the chief elected 
official of an eligible area may use for ac-
tivities associated with the clinical quality 
management program required in subpara-
graph (A) not to exceed the lesser of—
‘‘(I) 5 percent of amounts re-
ceived under the grant; or 
‘‘(II) $3,000,000. 
‘‘(ii) RELATION
TO
LIMITATION
ON 
ADMINISTRATIVE EXPENSES.—The costs of 
a clinical quality management program 
under subparagraph (A) may not be con-
sidered administrative expenses for pur-
poses of the limitation established in para-
graph (1). 
‘‘(i) CONSTRUCTION.—A chief elected official may 
not use amounts received under a grant awarded under 
this part to purchase or improve land, or to purchase, con-
struct, or permanently improve (other than minor remod-
eling) any building or other facility, or to make cash pay-
ments to intended recipients of services.’’.
SEC. 106. ADDITIONAL AMENDMENTS TO PART A. 
(a) REPORTING OF CASES.—Section 2601(a) of the 
Public Health Service Act (42 U.S.C. 300ff-11(a)) is 
amended by striking ‘‘for the most recent period’’ and in-
serting ‘‘during the most recent period’’. 
(b) PLANNING COUNCIL REPRESENTATION.—Section 
2602(b)(2)(G) of the Public Health Service Act (42 
U.S.C. 300ff-12(b)(2)(G)) is amended by inserting ‘‘, 
members of a Federally recognized Indian tribe as rep-
resented in the population, individuals co-infected with 
hepatitis B or C’’ after ‘‘disease’’. 
(c) APPLICATION FOR GRANT.—
(1) 
PAYER
OF
LAST
RESORT.—Section 
2605(a)(6)(A) of the Public Health Service Act (42 
U.S.C. 300ff-15(a)(6)(A)) is amended by inserting 
‘‘(except for a program administered by or providing 
the services of the Indian Health Service)’’ before 
the semicolon. 
(2) AUDITS.—Section 2605(a) of the Public 
Health Service Act (42 U.S.C. 300ff-15(a)) is 
amended—
(A) in paragraph (8), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (9), by striking the pe-
riod and inserting ‘‘; and’’; and 
(C) by adding at the end the following:
‘‘(10) that the chief elected official will submit 
to the lead State agency under section 2617(b)(4), 
audits, consistent with Office of Management and 
Budget circular A133, regarding funds expended in 
accordance with this part every 2 years and shall in-
clude necessary client-based data to compile unmet 
need calculations and Statewide coordinated state-
ments of need process.’’. 
(3) COORDINATION.—Section 2605(b) of the 
Public Health Service Act (42 U.S.C. 300ff-15(b)) is 
amended—
(A) in paragraph (3), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (4), by striking the pe-
riod and inserting a semicolon; and 
(C) by adding at the end the following: 
‘‘(5) the manner in which the expected expendi-
tures are related to the planning process for States 
that receive funding under part B (including the 
planning process described in section 2617(b)); and 
‘‘(6) the expected expenditures and how those 
expenditures will improve overall client outcomes, as 
described under the State plan under section 
2617(b), and through additional outcomes measures
as identified by the HIV health services planning 
council under section 2602(b).’’. 
SEC. 107. NEW PROGRAM IN PART A; TRANSITIONAL 
GRANTS FOR CERTAIN AREAS INELIGIBLE 
UNDER SECTION 2601. 
(a) IN GENERAL.—Part A of title XXVI of the Public 
Health Service Act (42 U.S.C. 300ff-11) is amended—
(1) by inserting after the part heading the fol-
lowing: 
‘‘Subpart I—General Grant Provisions’’; and 
(2) by adding at the end the following: 
‘‘Subpart II—Transitional Grants 
‘‘SEC. 2609. ESTABLISHMENT OF PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Administrator of the Health Resources and Services 
Administration, shall make grants for the purpose of pro-
viding services described in section 2604 in transitional 
areas, subject to the same provisions regarding the alloca-
tion of grant funds as apply under subsection (c) of such 
section. 
‘‘(b) TRANSITIONAL AREAS.—For purposes of this 
section, the term ‘transitional area’ means, subject to sub-
section (c), a metropolitan area for which there has been 
reported to and confirmed by the Director of the Centers 
for Disease Control and Prevention a cumulative total of
at least 1,000, but fewer than 2,000, cases of AIDS dur-
ing the most recent period of 5 calendar years for which 
such data are available. 
‘‘(c) CERTAIN ELIGIBILITY RULES.—
‘‘(1) FISCAL
YEAR
2007.—With respect to 
grants under subsection (a) for fiscal year 2007, a 
metropolitan area that received funding under sub-
part I for fiscal year 2006 but does not for fiscal 
year 2007 qualify under such subpart as an eligible 
area and does not qualify under subsection (b) as a 
transitional area shall, notwithstanding subsection 
(b), be considered a transitional area. 
‘‘(2) CONTINUED
STATUS
AS
TRANSITIONAL 
AREA.—
‘‘(A) IN GENERAL.—Notwithstanding sub-
section (b), a metropolitan area that is a transi-
tional area for a fiscal year continues, except as 
provided in subparagraph (B), to be a transi-
tional area until the metropolitan area fails, for 
three consecutive fiscal years—
‘‘(i) to qualify under such subsection 
as a transitional area; and 
‘‘(ii) to have a cumulative total of 
1,500 or more living cases of AIDS (re-
ported to and confirmed by the Director of
the Centers for Disease Control and Pre-
vention) as of December 31 of the most re-
cent calendar year for which such data is 
available. 
‘‘(B) EXCEPTION REGARDING STATUS AS 
ELIGIBLE AREA.—Subparagraph (A) does not 
apply for a fiscal year if the metropolitan area 
involved qualifies under subpart I as an eligible 
area. 
‘‘(d) APPLICATION OF CERTAIN PROVISIONS OF SUB-
PART I.—
‘‘(1) ADMINISTRATION; PLANNING COUNCIL.—
‘‘(A) IN GENERAL.—The provisions of sec-
tion 2602 apply with respect to a grant under 
subsection (a) for a transitional area to the 
same extent and in the same manner as such 
provisions apply with respect to a grant under 
subpart I for an eligible area, except that, sub-
ject to subparagraph (B), the chief elected offi-
cial of the transitional area may elect not to 
comply with the provisions of section 2602(b) if 
the official provides documentation to the Sec-
retary that details the process used to obtain 
community input (particularly from those with 
HIV) in the transitional area for formulating
the overall plan for priority setting and allo-
cating funds from the grant under subsection 
(a). 
‘‘(B) EXCEPTION.—For each of the fiscal 
years 2007 through 2009, the exception de-
scribed in subparagraph (A) does not apply if 
the transitional area involved received funding 
under subpart I for fiscal year 2006. 
‘‘(2) TYPE
AND
DISTRIBUTION
OF
GRANTS; 
TIMEFRAME FOR OBLIGATION AND EXPENDITURE OF 
GRANT FUNDS.—
‘‘(A) FORMULA
GRANTS; SUPPLEMENTAL 
GRANTS.—The provisions of section 2603 apply 
with respect to grants under subsection (a) to 
the same extent and in the same manner as 
such provisions apply with respect to grants 
under subpart I, subject to subparagraphs (B) 
and (C). 
‘‘(B) FORMULA
GRANTS; INCREASE
IN 
GRANT.—For purposes of subparagraph (A), 
section 2603(a)(4) does not apply. 
‘‘(C) SUPPLEMENTAL
GRANTS; 
SINGLE 
PROGRAM
WITH
SUBPART
I
PROGRAM.—With 
respect to section 2603(b) as applied for pur-
poses of subparagraph (A):
‘‘(i) The Secretary shall combine 
amounts available pursuant to such sub-
paragraph with amounts available for car-
rying out section 2603(b) and shall admin-
ister the two programs as a single pro-
gram. 
‘‘(ii) In the single program, the Sec-
retary has discretion in allocating amounts 
between eligible areas under subpart I and 
transitional areas under this section, sub-
ject to the eligibility criteria that apply 
under such section, and subject to section 
2603(b)(2)(C) (relating to priority in mak-
ing grants). 
‘‘(iii) Pursuant to section 2603(b)(1), 
amounts for the single program are subject 
to use under sections 2603(a)(4) and 
2610(d)(1). 
‘‘(3) APPLICATION; TECHNICAL
ASSISTANCE; 
DEFINITIONS.—The provisions of sections 2605, 
2606, and 2607 apply with respect to grants under 
subsection (a) to the same extent and in the same 
manner as such provisions apply with respect to 
grants under subpart I.’’.
(b) CONFORMING AMENDMENTS.—Subpart I of part 
A of title XXVI of the Public Health Service Act, as des-
ignated by subsection (a)(1) of this section, is amended 
by striking ‘‘this part’’ each place such term appears and 
inserting ‘‘this subpart’’. 
SEC. 108. AUTHORIZATION OF APPROPRIATIONS FOR PART 
A. 
Part A of title XXVI of the Public Health Service 
Act, as amended by section 106(a), is amended by adding 
at the end the following: 
‘‘Subpart III—General Provisions 
‘‘SEC. 2610. AUTHORIZATION OF APPROPRIATIONS. 
‘‘(a) IN GENERAL.—For the purpose of carrying out 
this part, there are authorized to be appropriated 
$604,000,000 for fiscal year 2007, $626,300,000 for fis-
cal year 2008, $649,500,000 for fiscal year 2009, 
$673,600,000 for fiscal year 2010, and $698,500,000 for 
fiscal year 2011. Amounts appropriated under the pre-
ceding sentence for a fiscal year are available for obliga-
tion by the Secretary until the end of the second suc-
ceeding fiscal year. 
‘‘(b) RESERVATION OF AMOUNTS.—
‘‘(1) FISCAL YEAR 2007.—Of the amount appro-
priated under subsection (a) for fiscal year 2007, 
the Secretary shall reserve—
‘‘(A) $458,310,000 for grants under sub-
part I; and 
‘‘(B) $145,690,000 for grants under sec-
tion 2609. 
‘‘(2) SUBSEQUENT
FISCAL
YEARS.—Of the 
amount appropriated under subsection (a) for fiscal 
year 2008 and each subsequent fiscal year—
‘‘(A) the Secretary shall reserve an amount 
for grants under subpart I; and 
‘‘(B) the Secretary shall reserve an amount 
for grants under section 2609. 
‘‘(c) TRANSFER OF CERTAIN AMOUNTS; CHANGE IN 
STATUS AS ELIGIBLE AREA OR TRANSITIONAL AREA.—
Notwithstanding subsection (b): 
‘‘(1) If a metropolitan area is an eligible area 
under subpart I for a fiscal year, but for a subse-
quent fiscal year ceases to be an eligible area by rea-
son of section 2601(b)—
‘‘(A)(i) the amount reserved under para-
graph (1)(A) or (2)(A) of subsection (b) of this 
section for the first such subsequent year of not 
being an eligible area is deemed to be reduced 
by an amount equal to the amount of the grant 
made pursuant to section 2603(a) for the met-
ropolitan area for the preceding fiscal year; and
‘‘(ii)(I) if the metropolitan area qualifies 
for such first subsequent fiscal year as a transi-
tional area under 2609, the amount reserved 
under paragraph (1)(B) or (2)(B) of subsection 
(b) for such fiscal year is deemed to be in-
creased by an amount equal to the amount of 
the reduction under subparagraph (A) for such 
year; or 
‘‘(II) if the metropolitan area does not 
qualify for such first subsequent fiscal year as 
a transitional area under 2609, an amount 
equal to the amount of such reduction is, not-
withstanding subsection (a), transferred and 
made available for grants pursuant to section 
2618(a)(1), in addition to amounts available for 
such grants under section 2623; and 
‘‘(B) if a transfer under subparagraph 
(A)(ii)(II) is made with respect to the metro-
politan area for such first subsequent fiscal 
year, then—
‘‘(i) the amount reserved under para-
graph (1)(A) or (2)(A) of subsection (b) of 
this section for such year is deemed to be 
reduced by an additional $500,000; and
‘‘(ii) an amount equal to the amount 
of such additional reduction is, notwith-
standing subsection (a), transferred and 
made available for grants pursuant to sec-
tion 2618(a)(1), in addition to amounts 
available for such grants under section 
2623. 
‘‘(2) If a metropolitan area is a transitional 
area under section 2609 for a fiscal year, but for a 
subsequent fiscal year ceases to be a transitional 
area by reason of section 2609(c)(2) (and does not 
qualify for such subsequent fiscal year as an eligible 
area under subpart I)—
‘‘(A) the amount reserved under subsection 
(b)(2)(B) of this section for the first such sub-
sequent fiscal year of not being a transitional 
area is deemed to be reduced by an amount 
equal to the total of—
‘‘(i) the amount of the grant that, 
pursuant to section 2603(a), was made 
under section 2609(d)(2)(A) for the metro-
politan area for the preceding fiscal year; 
and 
‘‘(ii) $500,000; and
‘‘(B) an amount equal to the amount of 
the reduction under subparagraph (A) for such 
year is, notwithstanding subsection (a), trans-
ferred and made available for grants pursuant 
to section 2618(a)(1), in addition to amounts 
available for such grants under section 2623. 
‘‘(3) If a metropolitan area is a transitional 
area under section 2609 for a fiscal year, but for a 
subsequent fiscal year qualifies as an eligible area 
under subpart I—
‘‘(A) the amount reserved under subsection 
(b)(2)(B) of this section for the first such sub-
sequent fiscal year of becoming an eligible area 
is deemed to be reduced by an amount equal to 
the amount of the grant that, pursuant to sec-
tion 
2603(a), 
was 
made 
under 
section 
2609(d)(2)(A) for the metropolitan area for the 
preceding fiscal year; and 
‘‘(B) the amount reserved under subsection 
(b)(2)(A) for such fiscal year is deemed to be 
increased by an amount equal to the amount of 
the reduction under subparagraph (A) for such 
year. 
‘‘(d) CERTAIN TRANSFERS; ALLOCATIONS BETWEEN 
PROGRAMS UNDER SUBPART I.—With respect to para-
graphs (1)(B)(i) and (2)(A)(ii) of subsection (c), the Sec-
retary shall administer any reductions under such para-
graphs for a fiscal year in accordance with the following: 
‘‘(1) The reductions shall be made from 
amounts available for the single program referred to 
in section 2609(d)(2)(C) (relating to supplemental 
grants). 
‘‘(2) The reductions shall be made before the 
amounts referred to in paragraph (1) are used for 
purposes of section 2603(a)(4). 
‘‘(3) If the amounts referred to in paragraph 
(1) are not sufficient for making all the reductions, 
the reductions shall be reduced until the total 
amount of the reductions equals the total of the 
amounts referred to in such paragraph. 
‘‘(e) RULES OF CONSTRUCTION REGARDING FIRST 
SUBSEQUENT FISCAL YEAR.—Paragraphs (1) and (2) of 
subsection (c) apply with respect to each series of fiscal 
years during which a metropolitan area is an eligible area 
under subpart I or a transitional area under section 2609 
for a fiscal year and then for a subsequent fiscal year 
ceases to be such an area by reason of section 2601(b) 
or 2609(c)(2), respectively, rather than applying to a sin-
gle such series. Paragraph (3) of subsection (c) applies 
with respect to each series of fiscal years during which
a metropolitan area is a transitional area under section 
2609 for a fiscal year and then for a subsequent fiscal 
year becomes an eligible area under subpart I, rather than 
applying to a single such series.’’. 
TITLE II—CARE GRANTS 
SEC. 201. GENERAL USE OF GRANTS. 
(a) IN GENERAL.—Section 2612 of the Public Health 
Service Act (42 U.S.C. 300ff–22) is amended to read as 
follows: 
‘‘SEC. 2612. GENERAL USE OF GRANTS. 
‘‘(a) IN GENERAL.—A State may use amounts pro-
vided under grants made under section 2611 for—
‘‘(1) core medical services described in sub-
section (b); 
‘‘(2) support services described in subsection 
(c); and 
‘‘(3) administrative expenses described in sec-
tion 2618(b)(3). 
‘‘(b) REQUIRED
FUNDING
FOR
CORE
MEDICAL 
SERVICES.—
‘‘(1) IN GENERAL.—With respect to a grant 
under section 2611 for a State for a grant year, the 
State shall, of the portion of the grant remaining 
after reserving amounts for purposes of subpara-
graphs (A) and (E)(ii)(I) of section 2618(b)(3), use
not less than 75 percent to provide core medical 
services that are needed in the State for individuals 
with HIV/AIDS who are identified and eligible 
under this title (including services regarding the co-
occurring conditions of the individuals). 
‘‘(2) WAIVER.—
‘‘(A) IN
GENERAL.—The Secretary shall 
waive the application of paragraph (1) with re-
spect to a State for a grant year if the Sec-
retary determines that, within the State—
‘‘(i) there are no waiting lists for 
AIDS Drug Assistance Program services 
under section 2616; and 
‘‘(ii) core medical services are avail-
able to all individuals with HIV/AIDS 
identified and eligible under this title. 
‘‘(B) NOTIFICATION OF WAIVER STATUS.—
When informing a State that a grant under sec-
tion 2611 is being made to the State for a fis-
cal year, the Secretary shall inform the State 
whether a waiver under subparagraph (A) is in 
effect for the fiscal year. 
‘‘(3) CORE MEDICAL SERVICES.—For purposes 
of this subsection, the term ‘core medical services’, 
with respect to an individual infected with HIV/
AIDS (including the co-occurring conditions of the 
individual) means the following services: 
‘‘(A) Outpatient and ambulatory health 
services. 
‘‘(B) AIDS Drug Assistance Program 
treatments in accordance with section 2616. 
‘‘(C) AIDS pharmaceutical assistance. 
‘‘(D) Oral health care. 
‘‘(E) Early intervention services described 
in subsection (d). 
‘‘(F) Health insurance premium and cost 
sharing assistance for low-income individuals in 
accordance with section 2615. 
‘‘(G) Home health care. 
‘‘(H) Medical nutrition therapy. 
‘‘(I) Hospice services. 
‘‘(J) Home and community-based health 
services as defined under section 2614(c). 
‘‘(K) Mental health services. 
‘‘(L) Substance abuse outpatient care. 
‘‘(M) Medical case management, including 
treatment adherence services. 
‘‘(c) SUPPORT SERVICES.—
‘‘(1) IN GENERAL.—For purposes of this sub-
section, the term ‘support services’ means services,
subject to the approval of the Secretary, that are 
needed for individuals with HIV/AIDS to achieve 
their medical outcomes (such as respite care for per-
sons caring for individuals with HIV/AIDS, outreach 
services, medical transportation, linguistic services, 
and referrals for health care and support services). 
‘‘(2) DEFINITION OF MEDICAL OUTCOMES.—In 
this subsection, the term ‘medical outcomes’ means 
those outcomes affecting the HIV-related clinical 
status of an individual with HIV/AIDS. 
‘‘(d) EARLY INTERVENTION SERVICES.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘early intervention services’ means 
HIV/AIDS early intervention services described in 
section 2651(e), with follow-up referral provided for 
the purpose of facilitating the access of individuals 
receiving the services to HIV-related health services. 
The entities through which such services may be 
provided under the grant include public health de-
partments, emergency rooms, substance abuse and 
mental health treatment programs, detoxification 
centers, detention facilities, clinics regarding sexu-
ally transmitted diseases, homeless shelters, HIV/
AIDS counseling and testing sites, health care 
points of entry specified by States, federally quali-
fied health centers, and entities described in section 
2652(a) that constitute a point of access to services 
by maintaining referral relationships. 
‘‘(2) CONDITIONS.—With respect to an entity 
that proposes to provide early intervention services 
under paragraph (1), such paragraph shall apply 
only if the entity demonstrates to the satisfaction of 
the chief elected official for the State involved that—
‘‘(A) Federal, State, or local funds are oth-
erwise inadequate for the early intervention 
services the entity proposes to provide; and 
‘‘(B) the entity will expend funds pursuant 
to such subparagraph to supplement and not 
supplant other funds available to the entity for 
the provision of early intervention services for 
the fiscal year involved. 
‘‘(e) PRIORITY FOR WOMEN, INFANTS, CHILDREN, 
AND YOUTH.—
‘‘(1) IN GENERAL.—For the purpose of pro-
viding health and support services to infants, chil-
dren, youth, and women with HIV/AIDS, including 
treatment measures to prevent the perinatal trans-
mission of HIV, a State shall for each of such popu-
lations in the eligible area use, from the grants made 
for the area under section 2601(a) for a fiscal year,
not less than the percentage constituted by the ratio 
of the population involved (infants, children, youth, 
or women in such area) with HIV/AIDS to the gen-
eral population in such area of individuals with HIV/
AIDS. 
‘‘(2) WAIVER.—With respect to the population 
involved, the Secretary may provide to a State a 
waiver of the requirement of paragraph (1) if such 
State demonstrates to the satisfaction of the Sec-
retary that the population is receiving HIV-related 
health services through the State medicaid program 
under title XIX of the Social Security Act, the State 
children’s health insurance program under title XXI 
of such Act, or other Federal or State programs. 
‘‘(f) CONSTRUCTION.—A State may not use amounts 
received under a grant awarded under section 2611 to 
purchase or improve land, or to purchase, construct, or 
permanently improve (other than minor remodeling) any 
building or other facility, or to make cash payments to 
intended recipients of services.’’. 
(b) HIV CARE CONSORTIA.—Section 2613 of the 
Public Health Service Act (42 U.S.C. 300ff-23) is amend-
ed—
(1) in subsection (a), in the matter preceding 
paragraph (1)—
(A) by striking ‘‘may use’’ and inserting 
‘‘may, subject to subsection (f), use’’; and 
(B) by striking ‘‘section 2612(a)(1)’’ and 
inserting ‘‘section 2612(a)’’; and 
(2) by adding at the end the following sub-
section: 
‘‘(f) ALLOCATION OF FUNDS; TREATMENT AS SUP-
PORT SERVICES.—For purposes of the requirement of sec-
tion 2612(b)(1), expenditures of grants under section 
2611 for or through consortia under this section are 
deemed to be support services, not core medical services. 
The preceding sentence may not be construed as having 
any legal effect on the provisions of subsection (a) that 
relate to authorized expenditures of the grant.’’. 
(c) TECHNICAL AMENDMENTS.—Part B of title 
XXVI of the Public Health Service Act (42 U.S.C. 300ff-
21 et seq.) is amended—
(1) in section 2611—
(A) in subsection (a), by striking the sub-
section designation and heading; and 
(B) by striking subsection (b); 
(2) in section 2614—
(A) in subsection (a), in the matter pre-
ceding paragraph (1), by striking ‘‘section
2612(a)(2)’’ 
and 
inserting 
‘‘section 
2612(b)(3)(J)’’; and 
(B) in subsection (c)(2)(B), by striking 
‘‘homemaker or’’; 
(3) in section 2615(a) by striking ‘‘section 
2612(a)(3)’’ and inserting ‘‘section 2612(b)(3)(F)’’; 
and 
(4) in section 2616(a) by striking ‘‘section 
2612(a)(5)’’ and inserting ‘‘section 2612(b)(3)(B)’’. 
SEC. 202. AIDS DRUG ASSISTANCE PROGRAM. 
(a) REQUIREMENT OF MINIMUM DRUG LIST.—Sec-
tion 2616 of the Public Health Service Act (42 U.S.C. 
300ff-26) is amended—
(1) in subsection (c), by striking paragraph (1) 
and inserting the following: 
‘‘(1) ensure that the therapeutics included on 
the list of classes of core antiretroviral therapeutics 
established by the Secretary under subsection (e) 
are, at a minimum, the treatments provided by the 
State pursuant to this section;’’; 
(2) by redesignating subsection (e) as sub-
section (f); and 
(3) by inserting after subsection (d) the fol-
lowing:
‘‘(e) LIST OF CLASSES OF CORE ANTIRETROVIRAL 
THERAPEUTICS.—For purposes of subsection (c)(1), the 
Secretary shall develop and maintain a list of classes of 
core antiretroviral therapeutics, which list shall be based 
on the therapeutics included in the guidelines of the Sec-
retary known as the Clinical Practice Guidelines for Use 
of HIV/AIDS Drugs, relating to drugs needed to manage 
symptoms associated with HIV. The preceding sentence 
does not affect the authority of the Secretary to modify 
such Guidelines.’’. 
(b) DRUG REBATE PROGRAM.—Section 2616 of the 
Public Health Service Act, as amended by subsection 
(a)(2) of this section, is amended by adding at the end 
the following: 
‘‘(g) DRUG REBATE PROGRAM.—A State shall ensure 
that any drug rebates received on drugs purchased from 
funds provided pursuant to this section are applied to ac-
tivities supported under this subpart, with priority given 
to activities described under this section.’’. 
SEC. 203. DISTRIBUTION OF FUNDS. 
(a) DISTRIBUTION BASED ON LIVING CASES OF HIV/
AIDS.—
(1) STATE
DISTRIBUTION
FACTOR.—Section 
2618(a)(2) of the Public Health Service Act (42 
U.S.C. 300ff–28(a)(2)) is amended—
(A) in subparagraph (B), by striking ‘‘esti-
mated number of living cases of acquired im-
mune deficiency syndrome in the eligible area 
involved’’ and inserting ‘‘number of living cases 
of HIV/AIDS in the State involved’’; and 
(B) by amending subparagraph (D) to 
read as follows: 
‘‘(D) LIVING CASES OF HIV/AIDS.—
‘‘(i) REQUIREMENT OF NAMES-BASED 
REPORTING.—Except as provided in clause 
(ii), the number determined under this 
subparagraph for a State for a fiscal year 
for purposes of subparagraph (B) is the 
number of living names-based cases of 
HIV/AIDS in the State that, as of Decem-
ber 31 of the most recent calendar year for 
which such data is available, have been re-
ported to and confirmed by the Director of 
the Centers for Disease Control and Pre-
vention. 
‘‘(ii) TRANSITION
PERIOD; EXEMP-
TION
REGARDING
NON-AIDS
CASES.—For 
each of the fiscal years 2007 through 
2010, a State is, subject to clauses (iii) 
through (v), exempt from the requirement
under clause (i) that living non-AIDS 
names-based cases of HIV be reported un-
less—
‘‘(I) a system was in operation as 
of December 31, 2005, that provides 
sufficiently 
accurate 
and 
reliable 
names-based reporting of such cases 
throughout the State, subject to 
clause (vii); or 
‘‘(II) no later than the beginning 
of fiscal year 2008, 2009, or 2010, 
the Secretary, after consultation with 
the chief executive of the State, deter-
mines that a system has become oper-
ational in the State that provides suf-
ficiently accurate and reliable names-
based 
reporting 
of 
such 
cases 
throughout the State. 
‘‘(iii) REQUIREMENTS
FOR
EXEMP-
TION FOR FISCAL YEAR 2007.—For fiscal 
year 2007, an exemption under clause (ii) 
for a State applies only if, by October 1, 
2006—
‘‘(I)(aa) the State had submitted 
to the Secretary a plan for making
the transition to sufficiently accurate 
and reliable names-based reporting of 
living non-AIDS cases of HIV; or 
‘‘(bb) all statutory changes nec-
essary to provide for sufficiently accu-
rate and reliable reporting of such 
cases had been made; and 
‘‘(II) the State had agreed that, 
by April 1, 2008, the State will begin 
accurate and reliable names-based re-
porting of such cases, except that 
such agreement is not required to pro-
vide that, as of such date, the system 
for such reporting be fully sufficient 
with respect to accuracy and reli-
ability throughout the area. 
‘‘(iv) REQUIREMENT FOR EXEMPTION 
AS OF FISCAL YEAR 2008.—For each of the 
fiscal years 2008 through 2010, an exemp-
tion under clause (ii) for a State applies 
only if, as of April 1, 2008, the State is 
substantially in compliance with the agree-
ment under clause (iii)(II). 
‘‘(v) 
PROGRESS
TOWARD
NAMES-
BASED REPORTING.—For fiscal year 2009
or 2010, the Secretary may terminate an 
exemption under clause (ii) for a State if 
the State submitted a plan under clause 
(iii)(I)(aa) and the Secretary determines 
that the State is not substantially following 
the plan. 
‘‘(vi) COUNTING OF CASES IN AREAS 
WITH EXEMPTIONS.—
‘‘(I) IN GENERAL.—With respect 
to a State that is under a reporting 
system for living non-AIDS cases of 
HIV that is not names-based (referred 
to in this subparagraph as ‘code-based 
reporting’), the Secretary shall, for 
purposes of this subparagraph, modify 
the number of such cases reported for 
the State in order to adjust for dupli-
cative reporting in and among systems 
that use code-based reporting. 
‘‘(II) ADJUSTMENT
RATE.—The 
adjustment rate under subclause (I) 
for a State shall be a reduction of 5 
percent in the number of living non-
AIDS cases of HIV reported for the 
State.
‘‘(vii) LIST
OF
STATES
MEETING 
STANDARD
REGARDING
DECEMBER
31, 
2005.—
‘‘(I) IN GENERAL.—If a State is 
specified in subclause (II), the State 
shall be considered to meet the stand-
ard described in clause (ii)(I). No 
other State may be considered to meet 
such standard. 
‘‘(II) RELEVANT
STATES.—For 
purposes of subclause (I), the States 
specified in this subclause are the fol-
lowing: Alaska, Alabama, Arkansas, 
Arizona, Colorado, Florida, Indiana, 
Iowa, 
Idaho, 
Kansas, 
Louisiana, 
Michigan, Minnesota, Missouri, Mis-
sissippi, North Carolina, North Da-
kota, Nebraska, New Jersey, New 
Mexico, New York, Nevada, Ohio, 
Oklahoma, South Carolina, South Da-
kota, Tennessee, Texas, Utah, Vir-
ginia, Wisconsin, West Virginia, Wyo-
ming, Guam, and the Virgin Islands. 
‘‘(viii) RULES OF CONSTRUCTION RE-
GARDING ACCEPTANCE OF REPORTS.—
‘‘(I) CASES OF AIDS.—With re-
spect to a State that is subject to the 
requirement under clause (i) and is 
not in compliance with the require-
ment for names-based reporting of liv-
ing non-AIDS cases of HIV, the Sec-
retary shall, notwithstanding such 
noncompliance, accept reports of liv-
ing cases of AIDS that are in accord-
ance with such clause. 
‘‘(II) APPLICABILITY OF EXEMP-
TION
REQUIREMENTS.—The 
provi-
sions of clauses (ii) through (vii) may 
not be construed as having any legal 
effect for fiscal year 2011 or any sub-
sequent fiscal year, and accordingly, 
the status of a State for purposes of 
such clauses may not be considered 
after fiscal year 2010. 
‘‘(ix) PROGRAM FOR DETECTING INAC-
CURATE
OR
FRAUDULENT
COUNTING.—
The Secretary shall carry out a program to 
monitor the reporting of names-based 
cases for purposes of this subparagraph
and to detect instances of inaccurate re-
porting, including fraudulent reporting.’’. 
(2) NON-EMA DISTRIBUTION FACTOR.—Section 
2618(a)(2)(C) of the Public Health Service Act (42 
U.S.C. 300ff–28(a)(2)(C)) is amended—
(A) in clause (i), by striking ‘‘estimated 
number of living cases of acquired immune defi-
ciency syndrome’’ each place such term appears 
and inserting ‘‘number of living cases of HIV/
AIDS’’; and 
(B) in clause (ii), by amending such clause 
to read as follows: 
‘‘(ii) a number equal to the sum of—
‘‘(I) the total number of living 
cases of HIV/AIDS that are within 
areas in such State that are eligible 
areas under subpart I of part A for 
the fiscal year involved, which indi-
vidual number for an area is the num-
ber that applies under section 2601 
for the area for such fiscal year; and 
‘‘(II) the total number of such 
cases that are within areas in such 
State that are transitional areas 
under section 2609 for such fiscal
year, which individual number for an 
area is the number that applies under 
such section for the fiscal year.’’. 
(b) FORMULA AMENDMENTS GENERALLY.—Section 
2618(a)(2) of the Public Health Service Act (42 U.S.C. 
300ff-28(a)(2)) is amended—
(1) in subparagraph (A)—
(A) by striking ‘‘The amount referred to’’ 
in the matter preceding clause (i) and all that 
follows through the end of clause (i) and insert-
ing the following: ‘‘For purposes of paragraph 
(1), the amount referred to in this paragraph 
for a State (including a territory) for a fiscal 
year is, subject to subparagraphs (E) and 
(F)—
‘‘(i) an amount equal to the amount 
made available under section 2623 for the 
fiscal year involved for grants pursuant to 
paragraph (1), subject to subparagraph 
(G); and’’; and 
(B) in clause (ii)—
(i) in subclause (I)—
(I) by striking ‘‘.80’’ and insert-
ing ‘‘0.75’’; and 
(II) by striking ‘‘and’’ at the end;
(ii) in subclause (II)—
(I) by inserting ‘‘non-EMA’’ after 
‘‘respective’’; and 
(II) by striking the period and 
inserting ‘‘; and’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(III) if the State does not for 
such fiscal year contain any area that 
is an eligible area under subpart I of 
part A or any area that is a transi-
tional area under section 2609 (re-
ferred to in this subclause as a ‘no-
EMA State’), the product of 0.05 and 
the ratio of the number of cases that 
applies for the State under subpara-
graph (D) to the sum of the respective 
numbers of cases that so apply for all 
no-EMA States.’’; 
(2) by striking subparagraphs (E) through (H); 
(3) by inserting after subparagraph (D) the fol-
lowing subparagraphs: 
‘‘(E) CODE-BASED STATES; LIMITATION ON 
INCREASE IN GRANT.—
‘‘(i) IN GENERAL.—For each of the 
fiscal years 2007 through 2010, if code-
based reporting (within the meaning of 
subparagraph (D)(vi)) applies in a State as 
of the beginning of the fiscal year involved, 
then notwithstanding any other provision 
of this paragraph, the amount of the grant 
pursuant to paragraph (1) for the State 
may not for the fiscal year involved exceed 
by more than 5 percent the amount of the 
grant pursuant to this paragraph for the 
State for the preceding fiscal year, except 
that the limitation under this clause may 
not result in a grant pursuant to para-
graph (1) for a fiscal year that is less than 
the minimum amount that applies to the 
State under such paragraph for such fiscal 
year. 
‘‘(ii) USE OF AMOUNTS INVOLVED.—
For each of the fiscal years 2007 through 
2010, amounts available as a result of the 
limitation under clause (i) shall be made 
available by the Secretary as additional 
amounts for grants pursuant to section 
2620, subject to subparagraph (H).
‘‘(F) SEVERITY OF NEED.—
‘‘(i) FISCAL YEARS BEGINNING WITH 
2011.—If, by January 1, 2010, the Sec-
retary notifies the appropriate committees 
of Congress that the Secretary has devel-
oped a severity of need index in accordance 
with clause (v), the provisions of subpara-
graphs (A) through (E) shall not apply for 
fiscal year 2011 or any fiscal year there-
after, and the Secretary shall use the se-
verity of need index (as defined in clause 
(iv)) for the determination of the formula 
allocations, subject to the Congressional 
Review Act. 
‘‘(ii) SUBSEQUENT
FISCAL
YEARS.—
If, on or before any January 1 that is sub-
sequent to the date referred to in clause 
(i), the Secretary notifies the appropriate 
committees of Congress that the Secretary 
has developed a severity of need index, in 
accordance with clause (v), for each suc-
ceeding fiscal year, the provisions of sub-
paragraphs (A) through (D) shall not 
apply for the subsequent fiscal year or any 
fiscal year thereafter, and the Secretary
shall use the severity of need index (as de-
fined in clause (iv)) for the determination 
of the formula allocations, subject to the 
Congressional Review Act. 
‘‘(iii) FISCAL
YEAR
2013.—The Sec-
retary shall notify the appropriate commit-
tees of Congress that the Secretary has de-
veloped a severity of need index by Janu-
ary 1, 2012, in accordance with clause (v), 
and the provisions of subparagraphs (A) 
through (D) shall not apply for fiscal year 
2013 or any fiscal year thereafter, and the 
Secretary shall use the severity of need 
index (as defined in clause (iv)) for the de-
termination of the formula allocations, sub-
ject to the Congressional Review Act. 
‘‘(iv) DEFINITION
OF
SEVERITY
OF 
NEED INDEX.—In this subparagraph, the 
term ‘severity of need index’ means the 
index of the relative needs of individuals 
within the State, as identified by a variety 
of different factors, and is a factor that is 
multiplied by the number of living HIV/
AIDS cases in the State, providing dif-
ferent weights to those cases based on 
their needs. 
‘‘(v) REQUIREMENTS
FOR
SECRE-
TARIAL
NOTIFICATION.—When the Sec-
retary notifies the appropriate committees 
of Congress that the Secretary has devel-
oped a severity of need index, the Sec-
retary shall provide the following: 
‘‘(I) Methodology for and ration-
ale behind developing the severity of 
need index, including information re-
lated to the field testing of the sever-
ity of need index. 
‘‘(II) An independent contractor 
analysis of activities carried out under 
subclause (I). 
‘‘(III) Expected changes in fund-
ing allocations, given the application 
of the severity of need index and the 
elimination of the provisions of sub-
paragraphs (A) through (D). 
‘‘(IV) Information regarding the 
process by which the Secretary re-
ceived community input regarding the
application and development of the se-
verity of need index. 
‘‘(V) Timeline and process for 
the implementation of the severity of 
need index to ensure that it is applied 
in the following fiscal year. 
‘‘(vi) ANNUAL
REPORTS.—Not later 
than 1 year after the date of enactment of 
the Ryan White HIV/AIDS Treatment 
Modernization Act of 2006, and annually 
thereafter until the Secretary notifies Con-
gress that the Secretary has developed a 
severity of need index in accordance with 
this subparagraph, the Secretary shall pre-
pare and submit to the appropriate com-
mittees of Congress a report—
‘‘(I) that updates progress to-
ward having client level data; 
‘‘(II) that updates the progress 
toward having a severity of need 
index, including information related to 
the methodology and process for ob-
taining community input; and 
‘‘(III) that, as applicable, states 
whether the Secretary could develop a
severity of need index before fiscal 
year 2010.’’; and 
(4) by redesignating subparagraph (I) as sub-
paragraph (G). 
(c) 
SEPARATE
ADAP 
GRANTS.—Section 
2618(a)(2)(G) of the Public Health Service Act (42 
U.S.C. 300ff-28(a)(2)(G)), as redesignated by subsection 
(b)(4) of this section, is amended—
(1) in clause (i)—
(A) in the matter preceding subclause (I), 
by striking ‘‘section 2677’’ and inserting ‘‘sec-
tion 2623’’; 
(B) in subclause (II), by striking the pe-
riod at the end and inserting a semicolon; and 
(C) by adding after and below subclause 
(II) the following: 
‘‘which product shall then, as applicable, 
be increased under subparagraph (H).’’; 
(2) in clause (ii)—
(A) by striking subclauses (I) through (III) 
and inserting the following: 
‘‘(I) 
IN
GENERAL.—From 
amounts made available under sub-
clause (V), the Secretary shall award 
supplemental grants to States de-
scribed in subclause (II) to enable 
such States to purchase and distribute 
to eligible individuals under section 
2616(b) pharmaceutical therapeutics 
described under subsections (c)(2) and 
(e) of such section. 
‘‘(II) ELIGIBLE
STATES.—For 
purposes of subclause (I), a State 
shall be an eligible State if the State 
did not have unobligated funds sub-
ject to reallocation under section 
2618(d) in the previous fiscal year 
and, in accordance with criteria estab-
lished by the Secretary, demonstrates 
a severe need for a grant under this 
clause. For purposes of determining 
severe need, the Secretary shall con-
sider eligibility standards, formulary 
composition, the number of eligible in-
dividuals to whom a State is unable to 
provide therapeutics described in sec-
tion 2616(a), and an unanticipated in-
crease of eligible individuals with 
HIV/AIDS.
‘‘(III) STATE REQUIREMENTS.—
The Secretary may not make a grant 
to a State under this clause unless the 
State agrees that the State will make 
available (directly or through dona-
tions of public or private entities) 
non-Federal contributions toward the 
activities to be carried out under the 
grant in an amount equal to $1 for 
each $4 of Federal funds provided in 
the grant, except that the Secretary 
may waive this subclause if the State 
has otherwise fully complied with sec-
tion 2617(d) with respect to the grant 
year involved. The provisions of this 
subclause shall apply to States that 
are not required to comply with such 
section 2617(d).’’. 
(B) in subclause (IV), by moving the sub-
clause two ems to the left; 
(C) in subclause (V), by striking ‘‘3 per-
cent’’ and inserting ‘‘5 percent’’; and 
(D) by striking subclause (VI); and 
(3) by adding at the end the following clause:
‘‘(iii) CODE-BASED
STATES; LIMITA-
TION ON INCREASE IN FORMULA GRANT.—
The limitation under subparagraph (E)(i) 
applies to grants pursuant to clause (i) of 
this subparagraph to the same extent and 
in the same manner as such limitation ap-
plies to grants pursuant to paragraph (1), 
except that the reference to minimum 
grants does not apply for purposes of this 
clause. Amounts available as a result of 
the limitation under the preceding sentence 
shall be made available by the Secretary as 
additional amounts for grants under clause 
(ii) of this subparagraph.’’. 
(d) HOLD HARMLESS.—Section 2618(a)(2) of the 
Public Health Service Act (42 U.S.C. 300ff-28(a)(2)), as 
amended by subsection (b)(4) of this section, is amended 
by adding at the end the following subparagraph: 
‘‘(H) INCREASE IN FORMULA GRANTS.—
‘‘(i) IN GENERAL.—For each of the 
fiscal years 2007 through 2009, the Sec-
retary shall ensure, subject to clauses (ii) 
through (iv), that the total for a State of 
the grant pursuant to paragraph (1) and 
the grant pursuant to subparagraph (G) is