tains the information necessary for 
determining that such balance was 
unobligated as of the end of the grant 
year (which requirement for a reduc-
tion applies without regard to whether 
a waiver under subparagraph (A) has 
been approved with respect to such 
balance); and 
‘‘(II) the grant funds involved in 
such reduction shall be made available 
by the Secretary as additional funds 
for grants pursuant to subsection (b) 
for such first fiscal year, subject to 
subsection 
(a)(4) 
and 
section 
2610(d)(2); 
except that this clause does not apply to 
the eligible area if the amount of the unob-
ligated balance was 2 percent or less. 
‘‘(ii) RELATION
TO
INCREASES
IN 
GRANT.—A reduction under clause (i) for 
an eligible area for a fiscal year may not 
be taken into account in applying sub-
section (a)(4) with respect to the area for 
the subsequent fiscal year.’’. 
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SEC. 105. USE OF AMOUNTS. 
Section 2604 of the Public Health Service Act (42 
U.S.C. 300ff–14) is amended to read as follows: 
‘‘SEC. 2604. USE OF AMOUNTS. 
‘‘(a) REQUIREMENTS.—The Secretary may not make 
a grant under section 2601(a) to the chief elected official 
of an eligible area unless such political subdivision agrees 
that— 
‘‘(1) subject to paragraph (2), the allocation of 
funds and services within the eligible area will be 
made in accordance with the priorities established, 
pursuant to section 2602(b)(4)(C), by the HIV 
health services planning council that serves such eli-
gible area; 
‘‘(2) funds provided under section 2601 will be 
expended only for— 
‘‘(A) core medical services described in 
subsection (c); 
‘‘(B) support services described in sub-
section (d); and 
‘‘(C) administrative expenses described in 
subsection (h); and 
‘‘(3) the use of such funds will comply with the 
requirements of this section. 
‘‘(b) DIRECT FINANCIAL ASSISTANCE
TO APPRO-
PRIATE ENTITIES.— 
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‘‘(1) IN GENERAL.—The chief elected official of 
an eligible area shall use amounts from a grant 
under section 2601 to provide direct financial assist-
ance to entities described in paragraph (2) for the 
purpose of providing core medical services and sup-
port services. 
‘‘(2) APPROPRIATE ENTITIES.—Direct financial 
assistance may be provided under paragraph (1) to 
public or nonprofit private entities, or private for- 
profit entities if such entities are the only available 
provider of quality HIV care in the area. 
‘‘(c) REQUIRED FUNDING FOR CORE MEDICAL SERV-
ICES.— 
‘‘(1) IN GENERAL.—With respect to a grant 
under section 2601 for an eligible area for a grant 
year, the chief elected official of the area shall, of 
the portion of the grant remaining after reserving 
amounts for purposes of paragraphs (1) and 
(5)(B)(i) of subsection (h), use not less than 75 per-
cent to provide core medical services that are needed 
in the eligible area for individuals with HIV/AIDS 
who are identified and eligible under this title (in-
cluding services regarding the co-occurring condi-
tions of the individuals). 
‘‘(2) WAIVER.— 
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‘‘(A) IN
GENERAL.—The Secretary shall 
waive the application of paragraph (1) with re-
spect to a chief elected official for a grant year 
if the Secretary determines that, within the eli-
gible area involved— 
‘‘(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 the chief elected official of an 
eligible area that a grant under section 2601 is 
being made for the area for a grant year, the 
Secretary shall inform the official whether a 
waiver under subparagraph (A) is in effect for 
such year. 
‘‘(3) CORE MEDICAL SERVICES.—For purposes 
of this subsection, the term ‘core medical services’, 
with respect to an individual with HIV/AIDS (in-
cluding the co-occurring conditions of the indi-
vidual), means the following services: 
‘‘(A) Outpatient and ambulatory health 
services. 
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‘‘(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 (e). 
‘‘(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. 
‘‘(d) SUPPORT SERVICES.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘support services’ means services, sub-
ject to the approval of the Secretary, that are need-
ed for individuals with HIV/AIDS to achieve their 
medical outcomes (such as respite care for persons 
caring for individuals with HIV/AIDS, outreach 
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