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(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 
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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 
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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 
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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. 
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‘‘(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.— 
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‘‘(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 
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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 
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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; 
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(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.— 
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‘‘(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). 
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‘‘(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 
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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-
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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 
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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 
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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-
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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. 
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‘‘(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: 
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‘‘(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 
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not less than 95 percent of such total for 
the State for the preceding fiscal year, ex-
cept that any increase under this clause— 
‘‘(I) may not result in a grant 
pursuant to paragraph (1) that is 
more than 95 percent of the amount 
of such grant for the preceding fiscal 
year; and 
‘‘(II) may not result in a grant 
pursuant to subparagraph (G) that is 
more than 95 percent of the amount 
of such grant for such preceding fiscal 
year. 
‘‘(ii) FISCAL
YEAR
2007.—For pur-
poses of clause (i) as applied for fiscal year 
2007, the references in such clause to sub-
paragraph (G) are deemed to be references 
to subparagraph (I) as such subparagraph 
was in effect for fiscal year 2006. 
‘‘(iii) SOURCE
OF
FUNDS
FOR
IN-
CREASE.— 
‘‘(I) IN
GENERAL.—From the 
amount 
reserved 
under 
section 
2623(b)(2) for a fiscal year, and from 
amounts available for such section 
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pursuant to subsection (d) of this sec-
tion, the Secretary shall make avail-
able such amounts as may be nec-
essary to comply with clause (i). 
‘‘(II) PRO RATA REDUCTION.—If 
the amounts referred to in subclause 
(I) for a fiscal year are insufficient to 
fully comply with clause (i) for the 
year, the Secretary, in order to pro-
vide the additional funds necessary for 
such compliance, shall reduce on a pro 
rata basis the amount of each grant 
pursuant to paragraph (1) for the fis-
cal year, other than grants for States 
for which increases under clause (i) 
apply and other than States described 
in paragraph (1)(A)(i)(I). A reduction 
under the preceding sentence may not 
be made in an amount that would re-
sult in the State involved becoming el-
igible for such an increase. 
‘‘(iv) 
APPLICABILITY.—This 
para-
graph may not be construed as having any 
applicability after fiscal year 2009.’’. 
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(e) ADMINISTRATIVE EXPENSES; CLINICAL QUALITY 
MANAGEMENT.—Section 2618(b) of the Public Health 
Service Act (42 U.S.C. 300ff-28(b)) is amended— 
(1) by redesignating paragraphs (2) through 
(7) as paragraphs (1) through (6); 
(2) in paragraph (2) (as so redesignated)— 
(A) by striking ‘‘paragraph (5)’’ and in-
serting ‘‘paragraph (4)’’; and 
(B) by striking ‘‘paragraph (6)’’ and in-
serting ‘‘paragraph (5)’’; 
(3) in paragraph (3) (as so redesignated)— 
(A) by amending subparagraph (A) to read 
as follows: 
‘‘(A) IN GENERAL.—Subject to paragraph 
(4,) and except as provided in paragraph (5), a 
State may not use more than 10 percent of 
amounts received under a grant awarded under 
section 2611 for administration.’’; 
(B) by redesignating subparagraphs (B) 
and (C) as subparagraphs (C) and (D), respec-
tively; 
(C) by inserting after subparagraph (A) 
the following: 
‘‘(B) ALLOCATIONS.—In the case of enti-
ties and subcontractors to which a State allo-
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cates amounts received by the State under a 
grant under section 2611, the State shall en-
sure that, of the aggregate amount so allocated, 
the total of the expenditures by such entities for 
administrative expenses does not exceed 10 per-
cent (without regard to whether particular enti-
ties expend more than 10 percent for such ex-
penses).’’; 
(D) in subparagraph (C) (as so redesig-
nated), by inserting before the period the fol-
lowing: ‘‘, including a clinical quality manage-
ment program under subparagraph (E)’’; and 
(E) by adding at the end the following: 
‘‘(E) CLINICAL QUALITY MANAGEMENT.— 
‘‘(i) REQUIREMENT.—Each State that 
receives a grant under section 2611 shall 
provide for the establishment of a clinical 
quality management program to assess the 
extent to which HIV health services pro-
vided to patients under the grant are con-
sistent with the most recent Public Health 
Service guidelines for the treatment of 
HIV/AIDS and related opportunistic infec-
tion, and as applicable, to develop strate-
gies for ensuring that such services are 
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consistent with the guidelines for improve-
ment in the access to and quality of HIV 
health services. 
‘‘(ii) USE OF FUNDS.— 
‘‘(I) 
IN
GENERAL.—From 
amounts received under a grant 
awarded under section 2611 for a fis-
cal year, a State may use for activities 
associated with the clinical quality 
management program required in 
clause (i) not to exceed the lesser of— 
‘‘(aa) 5 percent of amounts 
received under the grant; or 
‘‘(bb) $3,000,000. 
‘‘(II) RELATION TO LIMITATION 
ON ADMINISTRATIVE EXPENSES.—The 
costs of a clinical quality management 
program under clause (i) may not be 
considered administrative expenses for 
purposes of the limitation established 
in subparagraph (A).’’; 
(4) in paragraph (4) (as so redesignated)— 
(A) by striking ‘‘paragraph (6)’’ and in-
serting ‘‘paragraph (5)’’; and 
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(B) by striking ‘‘paragraphs (3) and (4)’’ 
and inserting ‘‘paragraphs (2) and (3)’’; and 
(5) in paragraph (5) (as so redesignated), by 
striking ‘‘paragraphs (3)’’ and all that follows 
through ‘‘(5),’’ and inserting the following: ‘‘para-
graphs (2) and (3), may, notwithstanding para-
graphs (2) through (4),’’. 
(f) REALLOCATION FOR SUPPLEMENTAL GRANTS.— 
Section 2618(d) of the Public Health Service Act (42 
U.S.C. 300ff-28(d)) is amended to read as follows: 
‘‘(d) REALLOCATION.—Any portion of a grant made 
to a State under section 2611 for a fiscal year that has 
not been obligated as described in subsection (c) ceases 
to be available to the State and shall be made available 
by the Secretary for grants under section 2620, in addi-
tion to amounts made available for such grants under sec-
tion 2623(b)(2).’’. 
(g) DEFINITIONS; OTHER
TECHNICAL
AMEND-
MENTS.—Section 2618(a) of the Public Health Service 
Act (42 U.S.C. 300ff–28(a)) is amended— 
(1) in paragraph (1), in the matter preceding 
subparagraph (A), by striking ‘‘section 2677’’ and 
inserting ‘‘section 2623’’; 
(2) in paragraph (1)(A)— 
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(A) in the matter preceding clause (i), by 
striking ‘‘each of the several States and the 
District of Columbia’’ and inserting ‘‘each of 
the 50 States, the District of Columbia, Guam, 
and the Virgin Islands (referred to in this para-
graph as a ‘covered State’)’’; and 
(B) in clause (i)— 
(i) in subclause (I), by striking ‘‘State 
or District’’ and inserting ‘‘covered State’’; 
and 
(ii) in subclause (II)— 
(I) by striking ‘‘State or Dis-
trict’’ and inserting ‘‘covered State’’; 
and 
(II) by inserting ‘‘and’’ after the 
semicolon; and 
(3) in paragraph (1)(B), by striking ‘‘each ter-
ritory of the United States, as defined in paragraph 
(3),’’ and inserting ‘‘each territory other than Guam 
and the Virgin Islands’’; 
(4) in paragraph (2)(C)(i), by striking ‘‘or ter-
ritory’’; and 
(5) by striking paragraph (3). 
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