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SEC. 30024. PUBLIC SERVICE LOAN FORGIVENESS. 
(a) 
REPAYMENT
ASSISTANCE
PLAN.—Section 
455(m)(1)(A) of the Higher Education Act of 1965 (20 
U.S.C. 1087e(m)(1)(A)) is amended—
(1) in clause (iii), by striking ‘‘; or’’ and insert-
ing a semicolon; 
(2) in clause (iv), by striking ‘‘; and’’ and in-
serting ‘‘(as in effect on the day before the date of 
the repeal of subsection (e) of this section); or’’; and 
(3) by adding at the end the following new 
clause: 
‘‘(v) on-time payments under the Re-
payment Assistance Plan under section 
455(q); and’’. 
(b) PUBLIC SERVICE JOB.—Section 455(m)(3)(B) of 
the Higher Education Act of 1965 (20 U.S.C. 
1087e(m)(3)(B)) is amended—
(1) by redesignating clauses (i) and (ii) as sub-
clauses (I) and (II), respectively, and adjusting the 
margins accordingly; 
(2) by striking ‘‘The term’’ and inserting the 
following: 
‘‘(i) IN GENERAL.—The term’’; and 
(3) by adding at the end the following: 
‘‘(ii) EXCLUSION.—The term ‘public 
service job’ does not include time served in
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a medical or dental internship or residency 
program (as such program is described in 
section 428(c)(3)(A)(i)(I)) by an individual 
who, as of June 30, 2025, has not bor-
rowed a Federal Direct PLUS Loan or a 
Federal 
Direct 
Unsubsidized 
Stafford 
Loan for a program of study that awards 
a graduate credential upon completion of 
such program.’’. 
SEC. 30025. STUDENT LOAN SERVICING. 
Paragraph (1) of section 458(a) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087h(a)(1)) is amended 
to read as follows: 
‘‘(1) ADDITIONAL MANDATORY FUNDS FOR FIS-
CAL YEARS 2025 AND 2026.—For each of the fiscal 
years 2025 and 2026 there shall be available to the 
Secretary (in addition to any other amounts appro-
priated under any appropriations Act for administra-
tive costs under this part and part B and out of any 
money in the Treasury not otherwise appropriated) 
funds to be obligated for administrative costs under 
this part and part B, including the costs of the di-
rect student loan programs under this part, not to 
exceed $500,000,000 in each such fiscal year.’’.
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Subtitle D—Pell Grants 
SEC. 30031. ELIGIBILITY. 
(a) FOREIGN INCOME AND FEDERAL PELL GRANT 
ELIGIBILITY.—
(1) ADJUSTED GROSS INCOME DEFINED.—Sec-
tion 401(a)(2)(A) of the Higher Education Act of 
1965 (20 U.S.C. 1070a(a)(2)(A)) is amended to 
read as follows: 
‘‘(A) the term ‘adjusted gross income’ 
means—
‘‘(i) in the case of a dependent stu-
dent, for the second tax year preceding the 
academic year—
‘‘(I) the adjusted gross income 
(as defined in section 62 of the Inter-
nal Revenue Code of 1986) of the stu-
dent’s parents; plus 
‘‘(II) the foreign income (as de-
scribed in section 480(b)(5)) of the 
student’s parents; and 
‘‘(ii) in the case of an independent 
student, for the second tax year preceding 
the academic year—
‘‘(I) the adjusted gross income 
(as defined in section 62 of the Inter-
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nal Revenue Code of 1986) of the stu-
dent (and the student’s spouse, if ap-
plicable); plus 
‘‘(II) the foreign income (as de-
scribed in section 480(b)(5)) of the 
student (and the student’s spouse, if 
applicable);’’. 
(2) SUNSET.—Section 401(b)(1)(D) of the 
Higher 
Education 
Act 
of 
1965 
(20 
U.S.C. 
1070a(b)(1)(D)) is amended by striking ‘‘A student’’ 
and inserting ‘‘For each academic year beginning be-
fore July 1, 2026, a student’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
479A(b)(1)(B) of the Higher Education Act of 1965 
(20 U.S.C. 1087tt(b)(1)(B)) is amended—
(A) by striking clause (v); and 
(B) by redesignating clauses (vi) and (vii) 
as clauses (v) and (vi), respectively. 
(b) DEFINITION OF FULL TIME ENROLLMENT FOR 
FEDERAL PELL GRANT ELIGIBILITY.—Section 401(a)(2) 
of the Higher Education Act of 1965 (20 U.S.C. 
1070a(a)(2)) is further amended—
(1) in subparagraph (E), by striking ‘‘and’’ 
after the semicolon;
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(2) in subparagraph (F), by striking the period 
and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(G) 
notwithstanding 
section 
481(a)(2)(A)(iii), the terms ‘full time’ and ‘full-
time’ (except with respect to subsection (d)(4) 
when used as part of the term ‘normal full-time 
workload’) mean, with respect to a student en-
rolled in an undergraduate course of study, the 
student is expected to complete at least 30 se-
mester or trimester hours or 45 quarter credit 
hours (or the clock hour equivalent) in each 
award year a student is enrolled in the course 
of study.’’. 
(c) FEDERAL PELL GRANT INELIGIBILITY DUE TO 
A HIGH STUDENT AID INDEX.—Section 401(b)(1) of the 
Higher Education Act of 1965 (20 U.S.C. 1070a–1(b)(1)) 
is amended by adding at the end the following: 
‘‘(F) INELIGIBILITY OF STUDENTS WITH A 
HIGH STUDENT AID INDEX.—Notwithstanding 
subparagraphs (A) through (E), a student shall 
not be eligible for a Federal Pell Grant under 
this subsection for an academic year in which 
the student has a student aid index that equals
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or exceeds twice the amount of the total max-
imum Federal Pell Grant for such academic 
year.’’. 
(d) NO FEDERAL PELL GRANT ELIGIBILITY FOR 
STUDENTS ENROLLED LESS THAN HALF TIME.—Section 
401 of the Higher Education Act of 1965 (20 U.S.C. 
1070a) is further amended—
(1) in subsection (b)—
(A) by striking ‘‘(2) LESS’’ and inserting 
‘‘(2)(A) LESS’’; and 
(B) by inserting after subparagraph (A) 
(as so designated by subparagraph (A) of this 
subsection) the following new subparagraph: 
‘‘(B) LESS THAN HALF-TIME ENROLLMENT.—
Notwithstanding subparagraph (A), a student who 
first receives a Federal Pell Grant on or after July 
1, 2026, shall not be eligible for an award under this 
subsection for any award year beginning after such 
date in which the student is enrolled in an eligible 
program of an institution of higher education on less 
than a half-time basis. The Secretary shall update 
the schedule of reductions described in subparagraph 
(A) in accordance with this subparagraph, including 
for students receiving the minimum Federal Pell 
Grant.’’;
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(2) in subsection (c)(6)(A), by inserting ‘‘, and 
the eligibility requirement of enrollment on at least 
a half-time basis under subsection (b)(2),’’ after 
‘‘(b)(1)’’; and 
(3) in subsection (d)(5)(A), by inserting ‘‘(and 
at least half time, in the case of a student who first 
receives a Federal Pell Grant under subsection (b) 
on or after July 1, 2026)’’ after ‘‘full time’’. 
(e) EFFECTIVE
DATE
AND
APPLICATION.—The 
amendments made by this section shall take effect on July 
1, 2026, and shall apply with respect to award year 2026–
2027 and each subsequent award year. 
SEC. 30032. WORKFORCE PELL GRANTS. 
(a) IN GENERAL.—Section 401 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1070a) is amended by add-
ing at the end the following:—
‘‘(k) WORKFORCE PELL GRANT PROGRAM.—
‘‘(1) IN GENERAL.—For the award year begin-
ning on July 1, 2026, and each subsequent award 
year, the Secretary shall award grants (to be known 
as ‘Workforce Pell Grants’) to eligible students 
under paragraph (2) in accordance with this sub-
section. 
‘‘(2) ELIGIBLE STUDENTS.—To be eligible to 
receive a Workforce Pell Grant under this subsection
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for any period of enrollment, a student shall meet 
the eligibility requirements for a Federal Pell Grant 
under this section, except that the student—
‘‘(A) shall be enrolled, or accepted for en-
rollment, in an eligible program under section 
481(b)(3) (hereinafter referred to as an ‘eligible 
workforce program’); and 
‘‘(B) may not—
‘‘(i) be enrolled, or accepted for enroll-
ment, in a program of study that leads to 
a graduate credential; or 
‘‘(ii) have attained such a credential. 
‘‘(3) TERMS AND CONDITIONS OF AWARDS.—
The Secretary shall award Workforce Pell Grants 
under this subsection in the same manner and with 
the same terms and conditions as the Secretary 
awards Federal Pell Grants under this section, ex-
cept that—
‘‘(A) each use of the term ‘eligible pro-
gram’ (except in subsections (b)(9)(A) and 
(d)(2)) shall be substituted by ‘eligible work-
force program under section 481(b)(3)’; and 
‘‘(B) a student who is eligible for a grant 
equal to less than the amount of the minimum 
Federal Pell Grant because the eligible work-
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force program in which the student is enrolled 
or accepted for enrollment is less than an aca-
demic year (in hours of instruction or weeks of 
duration) may still be eligible for a Workforce 
Pell Grant in an amount that is prorated based 
on the length of the program. 
‘‘(4) PREVENTION OF DOUBLE BENEFITS.—No 
eligible student described in paragraph (2) may con-
currently receive a grant under both this subsection 
and—
‘‘(A) subsection (b); or 
‘‘(B) subsection (c). 
‘‘(5) DURATION LIMIT.—Any period of study 
covered by a Workforce Pell Grant awarded under 
this subsection shall be included in determining a 
student’s duration limit under subsection (d)(5).’’. 
(b) PROGRAM ELIGIBILITY FOR WORKFORCE PELL 
GRANTS.—Section 481(b) of the Higher Education Act of 
1965 (20 U.S.C. 1088(b)) is amended—
(1) by redesignating paragraphs (3) and (4) as 
paragraphs (4) and (5), respectively; and 
(2) by inserting after paragraph (2) the fol-
lowing:
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‘‘(3)(A) A program is an eligible program for pur-
poses of the Workforce Pell Grant program under section 
401(k) only if—
‘‘(i) it is a program of at least 150 clock hours 
of instruction, but less than 600 clock hours of in-
struction, or an equivalent number of credit hours, 
offered by an eligible institution during a minimum 
of 8 weeks, but less than 15 weeks; 
‘‘(ii) it is not offered as a correspondence 
course, as defined in 600.2 of title 34, Code of Fed-
eral Regulations (as in effect on September 20, 
2020); 
‘‘(iii) the Governor of a State, after consulta-
tion with the State board, determines that the pro-
gram—
‘‘(I) provides an education aligned with the 
requirements of high-skill, high-wage (as identi-
fied by the State pursuant to section 122 of the 
Carl D. Perkins Career and Technical Edu-
cation Act (20 U.S.C. 2342)), or in-demand in-
dustry sectors or occupations; 
‘‘(II) meets the hiring requirements of po-
tential employers in the sectors or occupations 
described in subclause (I); 
‘‘(III) either—
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‘‘(aa) leads to a recognized postsec-
ondary credential that is stackable and 
portable across more than one employer; or 
‘‘(bb) with respect to students en-
rolled in the program—
‘‘(AA) prepares such students for 
employment in an occupation for 
which there is only one recognized 
postsecondary credential; and 
‘‘(BB) provides such students 
with such a credential upon comple-
tion of such program; and 
‘‘(IV) prepares students to pursue 1 or 
more certificate or degree programs at 1 or 
more institutions of higher education (which 
may include the eligible institution providing 
the program), including by ensuring—
‘‘(aa) that a student, upon completion 
of the program and enrollment in such a 
related certificate or degree program, will 
receive academic credit for the Workforce 
Pell program that will be accepted toward 
meeting such certificate or degree program 
requirements; and
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‘‘(bb) the acceptability of such credit 
toward meeting such certificate or degree 
program requirements; and 
‘‘(iv) after the Governor of such State makes 
the determination that the program meets the re-
quirements under clause (iii), the Secretary deter-
mines that—
‘‘(I) the program has been offered by the 
eligible institution for not less than 1 year prior 
to the date on which the Secretary makes a de-
termination under this clause; 
‘‘(II) for each award year, the program has 
a verified completion rate of at least 70 percent, 
within 150 percent of the normal time for com-
pletion; 
‘‘(III) for each award year, the program 
has a verified job placement rate of at least 70 
percent, measured 180 days after completion; 
and 
‘‘(IV) for each award year, the median 
value-added earnings (as defined in section 
420W) of students who completed such pro-
gram for the most recent year for which data 
is available exceeds the median total price (as
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defined in section 454(d)(3)(D)) charged to stu-
dents in such award year. 
‘‘(B) In this paragraph: 
‘‘(i) The term ‘eligible institution’ means 
an institution of higher education (as defined in 
section 102), or any other entity that has en-
tered into a program participation agreement 
with the Secretary under section 487(a) (with-
out regard to whether that entity is accredited 
by a national recognized accrediting agency or 
association), which has not been subject, during 
any of the preceding 3 years, to—
‘‘(I) any suspension, emergency ac-
tion, or termination under this title; 
‘‘(II) in the case of an institution of 
higher education, any adverse action by the 
institution’s accrediting agency or associa-
tion that revokes or denies accreditation 
for the institution; or 
‘‘(III) any final action by the State in 
which the institution or other entity holds 
its legal domicile, authorization, or accredi-
tation that revokes the institution’s or enti-
ty’s license or other authority to operate in 
such State.
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‘‘(ii) The term ‘Governor’ means the chief 
executive of a State. 
‘‘(iii) The terms ‘industry or sector part-
nership’, ‘in-demand industry sector or occupa-
tion’, ‘recognized postsecondary credential’, and 
‘State board’ have the meanings given such 
terms in section 3 of the Workforce Innovation 
and Opportunity Act.’’. 
(c) STUDENT ELIGIBILITY.—Section 484(a)(1) of the 
Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)) is 
amended by inserting ‘‘or, for purposes of section 401(k), 
at an entity (other than an institution of higher education) 
that meets the requirements of section 481(b)(3)(B)(i)’’ 
after ‘‘section 487’’. 
(d) EFFECTIVE DATE; APPLICABILITY.—The amend-
ments made by this section shall take effect on July 1, 
2026, and shall apply with respect to award year 2026–
2027 and each succeeding award year. 
SEC. 30033. PELL SHORTFALL. 
Section 401(b)(7)(A) of the Higher Education Act of 
1965 (20 U.S.C. 1070a(b)(7)(A)) is amended—
(1) in clause (iii)—
(A) by striking ‘‘$2,170,000,000’’ and in-
serting ‘‘$5,351,000,000’’; and 
(B) by striking ‘‘and’’ at the end;
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(2) in clause (iv)—
(A) by striking ‘‘$1,236,000,000’’ and in-
serting ‘‘$6,058,000,000’’; and 
(B) by striking ‘‘ and each succeeding fis-
cal year.’’ and inserting a semicolon; and 
(3) by adding at the end the following: 
‘‘(v) $3,743,000,000 for fiscal year 
2028; and 
‘‘(vi) $1,236,000,000 for each suc-
ceeding fiscal year.’’. 
Subtitle E—Accountability 
SEC. 30041. AGREEMENTS WITH INSTITUTIONS. 
Section 454 of the Higher Education Act of 1965 (20 
U.S.C. 1087d) is amended—
(1) in subsection (a)—
(A) in paragraph (5), by striking ‘‘and’’ 
after the semicolon; 
(B) by redesignating paragraph (6) as 
paragraph (7); and 
(C) by inserting after paragraph (5) the 
following new paragraph: 
‘‘(6) provide annual reimbursements to the Sec-
retary in accordance with the requirements under 
subsection (d); and’’; and
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(2) by adding at the end the following new sub-
section: 
‘‘(d) REIMBURSEMENT REQUIREMENTS.—
‘‘(1) ANNUAL REIMBURSEMENTS REQUIRED.—
Beginning in award year 2028–2029, each institu-
tion of higher education participating in the direct 
student loan program under this part shall, for 
qualifying student loans, remit to the Secretary, at 
such time as the Secretary may specify, an annual 
reimbursement for each student cohort of the insti-
tution, based on the non-repayment balance of such 
cohort and calculated in accordance with paragraph 
(3). 
‘‘(2) STUDENT COHORTS.—
‘‘(A) COHORTS ESTABLISHED.—For each 
institution of higher education participating in 
the direct student loan program under this 
part, the Secretary shall establish student co-
horts, beginning with award year 2027–2028, 
as follows: 
‘‘(i) 
COMPLETING
STUDENT
CO-
HORT.—For each program of study at 
such institution, a student cohort com-
prised of all students who received Federal 
financial assistance under this title and
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who completed such program during such 
award year. 
‘‘(ii) 
UNDERGRADUATE
NON-COM-
PLETING STUDENT COHORT.—For such in-
stitution, a student cohort comprised of all 
students who received Federal financial as-
sistance under this title, who were enrolled 
in the institution during the previous 
award year in a program of study leading 
to an undergraduate credential, and who at 
the time the cohort is established—
‘‘(I) have not completed such 
program of study; and 
‘‘(II) are not enrolled at the in-
stitution in any program of study 
leading to an undergraduate creden-
tial. 
‘‘(iii) GRADUATE
NON-COMPLETING 
STUDENT COHORT.—For each program of 
study leading to a graduate credential at 
such institution, a student cohort com-
prised of all students who received Federal 
financial assistance under this title, who 
were enrolled in such program during the
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previous award year, and who at the time 
the cohort is established—
‘‘(I) have not completed such 
program of study; and 
‘‘(II) are not enrolled in such 
program. 
‘‘(B) QUALIFYING
STUDENT
LOAN.—For 
the purposes of this subsection, the term ‘quali-
fying student loan’ means a loan made under 
this part on or after July 1, 2027, that—
‘‘(i) was made to a student included 
in a student cohort of an institution or to 
a parent on behalf of such a student; 
‘‘(ii) except in the case of a loan de-
scribed in clause (i) or (ii) of subparagraph 
(C), is not included in any other student 
cohort of any institution of higher edu-
cation; 
‘‘(iii) is not in—
‘‘(I) a medical or dental intern-
ship or residency forbearance de-
scribed in section 428(c)(3)(A)(i)(I), 
section 428B(a)(2), section 428H(a), 
or section 685.205(a)(3) of title 34, 
Code of Federal Regulations;
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‘‘(II) 
a 
graduate 
fellowship 
deferment 
described 
in 
section 
455(f)(2)(A)(ii); 
‘‘(III) rehabilitation training pro-
gram deferment described under sec-
tion 455(f)(2)(A)(ii); 
‘‘(IV) an in-school deferment de-
scribed under section 455(f)(2)(A)(i); 
‘‘(V) a cancer deferment de-
scribed under section 455(f)(3); 
‘‘(VI) 
a 
military 
service 
deferment described under section 
455(f)(2)(C); or 
‘‘(VII) a post-active duty student 
deferment described under section 
493D; and 
‘‘(iv) is not in default. 
‘‘(C) SPECIAL CIRCUMSTANCES.—
‘‘(i) 
MULTIPLE
CREDENTIALS.—In 
the case of a student who completes two or 
more programs of study during the same 
award year, each qualifying student loan of 
the student shall be included in the student 
cohort for each of such program of study 
for such award year.
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‘‘(ii) TREATMENT OF CERTAIN CON-
SOLIDATION
LOANS.—A Federal Direct 
Consolidation loan made under this title 
shall not be considered a qualifying stu-
dent loan for a student cohort for an 
award year if all of the loans included in 
such consolidation loan are attributable to 
another student cohort. 
‘‘(iii) CONSOLIDATION AFTER INCLU-
SION IN A STUDENT COHORT.—If a quali-
fying student loan is consolidated into a 
consolidation loan under this title after 
such qualifying student loan has been in-
cluded in a student cohort, the percentage 
of the consolidation loan that was attrib-
utable to such student cohort at the time 
of consolidation shall remain attributable 
to the student cohort for the life of the 
consolidation loan. 
‘‘(3) CALCULATION OF REIMBURSEMENT.—
‘‘(A) REIMBURSEMENT
PAYMENT
FOR-
MULA.—For each student cohort of an institu-
tion of higher education established under this 
subsection, the annual reimbursement for such 
cohort shall be equal to—
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‘‘(i) the reimbursement percentage for 
the cohort, determined in accordance with 
subparagraph (B); multiplied by 
‘‘(ii) the non-repayment balance for 
the cohort for the award year, determined 
in accordance with subparagraph (C). 
‘‘(B) REIMBURSEMENT
PERCENTAGE.—
The reimbursement percentage of a student co-
hort of an institution shall be determined by the 
Secretary when the cohort is established, shall 
remain constant for the life of the student co-
hort, and shall be determined as follows: 
‘‘(i) 
COMPLETING
STUDENT
CO-
HORTS.—The reimbursement percentage of 
a completing student cohort shall be equal 
to the percentage determined by—
‘‘(I) subtracting from one the 
quotient of—
‘‘(aa) the median value-
added earnings of students who 
completed such program of study 
in the most recent award year for 
which such earnings data is 
available; divided by
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‘‘(bb) the median total price 
charged to students included in 
such cohort; and 
‘‘(II) multiplying the difference 
determined under subclause (I) by 
100. 
‘‘(ii) SPECIAL
CIRCUMSTANCES
FOR 
COMPLETING STUDENT COHORTS.—
‘‘(I) HIGH-RISK COHORTS.—Not-
withstanding clause (i), if the median 
value-added earnings of a completing 
student cohort under clause (i)(I)(aa) 
is negative, the reimbursement per-
centage of the student cohort shall be 
100 percent. 
‘‘(II) LOW-RISK COHORTS.—Not-
withstanding clause (i), if the median 
value-added earnings of a completing 
student cohort under clause (i)(I)(aa) 
exceeds the median total price of such 
cohort under clause (i)(I)(bb), the re-
imbursement percentage of the stu-
dent cohort shall be 0 percent. 
‘‘(iii) NON-COMPLETING STUDENT CO-
HORTS.—The reimbursement percentage of
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a non-completing student cohort shall be 
determined based on the most recent data 
available in the award year in which the 
cohort is established, and—
‘‘(I) for an undergraduate non-
completing student cohort, shall be 
equal to the percentage of under-
graduate students who received Fed-
eral financial assistance under this 
title at such institution who—
‘‘(aa) did not complete an 
undergraduate program of study 
at the institution within 150 per-
cent of the program length of 
such program; or 
‘‘(bb) only in the case of a 
two-year institution, did not, 
within 6 years after first enroll-
ing at the two-year institution, 
complete a program of study at a 
four-year institution for which a 
bachelor’s degree (or substan-
tially 
similar 
credential) 
is 
awarded; and
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‘‘(II) for a graduate non-com-
pleting student cohort, shall be equal 
to the percentage of students who re-
ceived Federal financial assistance 
under this title at the institution for 
the applicable graduate program of 
study and who did not complete such 
program of study within 150 percent 
of the program length. 
‘‘(C) NON-REPAYMENT LOAN BALANCE.—
‘‘(i) IN
GENERAL.—For each award 
year, the Secretary shall determine the 
non-repayment loan balance for such 
award year for each student cohort of an 
institution of higher education by calcu-
lating the sum of—
‘‘(I) for loans in such cohort, the 
difference between the total amount of 
payments due from all borrowers on 
such loans during such year and the 
total amount of payments made by all 
such borrowers on such loans during 
such year; plus 
‘‘(II) the total amount of interest 
waived, paid, or otherwise not charged
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by the Secretary during such year 
under the income-based repayment 
plan described in section 455(q); plus 
‘‘(III) the total amount of prin-
cipal and interest forgiven, cancelled, 
waived, discharged, repaid, or other-
wise reduced by the Secretary under 
any act during such year that is not 
included in subclause (II) and was not 
discharged or forgiven under section 
437(a), 428J, or section 455(m). 
‘‘(ii) SPECIAL CIRCUMSTANCES.—For 
the purpose of calculating the non-repay-
ment loan balance of student cohorts under 
this paragraph, the Secretary shall—
‘‘(I) for each qualifying student 
loan in a student cohort that is in-
cluded in another student cohort be-
cause the student who borrowed such 
loan completed two or more programs 
of study during the same award year, 
the sum of the amounts described in 
subclauses (I) through (III) of clause 
(i) for such qualifying student loan 
shall be divided equally among each of
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the student cohorts in which such loan 
is included; and 
‘‘(II) for each consolidation loan 
in a student cohort—
‘‘(aa) determine the percent-
age of the outstanding principal 
balance of the consolidation loan 
attributable to such student co-
hort—
‘‘(AA) at the time of 
that loan was included in 
such cohort, in the case of a 
loan consolidated before in-
clusion in such cohort; or 
‘‘(BB) at the time of 
consolidation, in the case of 
a loan consolidated after in-
clusion in such cohort; and 
‘‘(bb) include in the calcula-
tions under clause (i) for such 
student cohort only the percent-
age of the sum of the amounts 
described 
in 
subclauses 
(I) 
through (III) of clause (i) for the 
consolidation loan for such year
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that is equal to the percentage of 
the consolidation loan determined 
under item (aa). 
‘‘(D) TOTAL
PRICE.—With respect to a 
student who received Federal financial assist-
ance under this title and who completes a pro-
gram of study, the term ‘total price’ means the 
total amount, before Federal financial assist-
ance under this title was applied, a student was 
required to pay to complete the program of 
study. A student’s total price shall be calculated 
by the Secretary as the difference between—
‘‘(i) the total amount of tuition and 
fees that were charged to such student be-
fore the application of any Federal finan-
cial assistance provided under this title; 
minus 
‘‘(ii) the total amount of grants and 
scholarships described in section 480(i) 
awarded to such student from non-Federal 
sources for such program of study. 
‘‘(4) NOTIFICATION AND REMITTANCE.—Begin-
ning with the first award year for which reimburse-
ments are required under this subsection, and for 
each succeeding award year, the Secretary shall—
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‘‘(A) notify each institution of higher edu-
cation of the amounts and due dates of each 
annual reimbursement calculated under para-
graph (3) for each student cohort of the institu-
tion within 30 days of calculating such 
amounts; and 
‘‘(B) require the institution to remit such 
payments within 90 days of such notification. 
‘‘(5) PENALTY FOR LATE PAYMENTS.—
‘‘(A) THREE-MONTH
DELINQUENCY.—If 
an institution fails to remit to the Secretary a 
reimbursement for a student cohort as required 
under this subsection within 90 days of receiv-
ing notification from the Secretary in accord-
ance with paragraph (4), the institution shall 
pay to the Secretary, in addition to such reim-
bursement, interest on such reimbursement 
payment, at a rate that is the average rate ap-
plicable to the loans in such student cohort. 
‘‘(B) TWELVE-MONTH
DELINQUENCY.—If 
an institution fails to remit to the Secretary a 
reimbursement for a student cohort as required 
under this subsection, plus interest owed in 
under subparagraph (A), within 12 months of 
receiving notification from the Secretary in ac-
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cordance with paragraph (4), the institution 
shall be ineligible to make direct loans to any 
student enrolled in the program of study for 
which the institution has failed to make the re-
imbursement payments until such payment is 
made. 
‘‘(C) EIGHTEEN-MONTH DELINQUENCY.—
If an institution fails to remit to the Secretary 
a reimbursement for a student cohort as re-
quired under this subsection, plus interest owed 
under subparagraph (A), within 18 months of 
receiving notification from the Secretary in ac-
cordance with paragraph (4), the institution 
shall be ineligible to make direct loans or award 
Federal Pell Grants under section 401 to any 
student enrolled in the institution until such 
payment is made. 
‘‘(D) TWO-YEAR DELINQUENCY.—If an in-
stitution fails to remit to the Secretary a reim-
bursement for a student cohort as required 
under this subsection, plus interest owed under 
subparagraph (A), within 2 years of receiving 
notification from the Secretary in accordance 
with paragraph (4), the institution shall be in-
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eligible to participate in any program under this 
title for a period of not less than 10 years. 
‘‘(6) RELIEF FOR VOLUNTARY CESSATION OF 
FEDERAL
DIRECT
LOANS
FOR
A
PROGRAM
OF 
STUDY.—The Secretary shall, upon the request of an 
institution that voluntarily ceases to make Federal 
Direct loans to students enrolled in a specific pro-
gram of study, reduce the amount of the annual re-
imbursement owed by the institution for each stu-
dent cohort associated with such program by 50 per-
cent if the institution assures the Secretary that the 
institution will not make Federal Direct loans to any 
student enrolled in such program of study (or any 
substantially similar program of study, as deter-
mined by the Secretary) for a period of not less than 
10 award years, beginning with the first award year 
that begins after the date on which the Secretary re-
duces such reimbursement. 
‘‘(7) RESERVATION
OF
FUNDS
FOR
PROMISE 
GRANTS.—Notwithstanding any other provision of 
this Act, the Secretary shall reserve the funds remit-
ted to the Secretary as reimbursements in accord-
ance with this subsection, and such funds shall be 
made available to the Secretary only for the purpose
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of awarding PROMISE grants in accordance with 
subpart 11 of part A of this title.’’. 
SEC. 30042. CAMPUS-BASED AID PROGRAMS. 
(a) PROMISE GRANTS.—Part A of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1070c et seq.) 
is amended by adding at the end the following: 
‘‘Subpart 11—Promoting Real Opportunities to 
Maximize Investments and Savings in Education 
‘‘SEC. 420S. PROMISE GRANTS. 
‘‘For award year 2028–2029 and each succeeding 
award year, from reserved funds remitted to the Secretary 
in accordance with section 454(d) and additional funds 
made available under section 420V, as necessary, the Sec-
retary shall award PROMISE grants to eligible institu-
tions to carry out the activities described in section 
420U(c). PROMISE grants awarded under this subpart 
shall be awarded on a noncompetitive basis to each eligible 
institution that submits a satisfactory application under 
section 420T for a 6-year period in an amount that is de-
termined in accordance with section 420U. 
‘‘SEC. 420T. ELIGIBLE INSTITUTIONS; APPLICATION. 
‘‘(a) ELIGIBLE INSTITUTION.—To be eligible for a 
PROMISE grant under this subpart, an institution 
shall—
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‘‘(1) be an institution of higher education under 
section 102, except that an institution described in 
section 102(a)(1)(C) shall not be an eligible institu-
tion under this subpart; and 
‘‘(2) meet the maximum total price guarantee 
requirements under subsection (c). 
‘‘(b) APPLICATION.—An eligible institution seeking a 
PROMISE grant under this subpart (including a renewal 
of such a grant) shall submit to the Secretary an applica-
tion, at such time as the Secretary may require, containing 
the information required under this subsection. Such ap-
plication shall—
‘‘(1) demonstrate that the institution—
‘‘(A) meets the maximum total price guar-
antee requirements under subsection (c); and 
‘‘(B) will continue to meet the maximum 
total price guarantee requirements for each 
award year during the grant period with respect 
to students first enrolling at the institution for 
each such award year; 
‘‘(2) describe how grant funds awarded under 
this subpart will be used by the institution to carry 
out activities related to—
‘‘(A) 
increasing 
postsecondary 
afford-
ability, including—
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•HR 1 EH1S 
‘‘(i) the expansion and continuation of 
the maximum total price guarantee re-
quirements under subsection (c); and 
‘‘(ii) any other activities to be carried 
out by the institution to increase postsec-
ondary affordability and minimize the max-
imum total price for completion paid by 
students receiving need-based student aid; 
‘‘(B) 
increasing 
postsecondary 
access, 
which may include—
‘‘(i) the activities described in section 
485E of this Act; and 
‘‘(ii) any other activities to be carried 
out by the institution to increase postsec-
ondary access and expand opportunities for 
low- and middle-income students; and 
‘‘(C) increasing postsecondary student suc-
cess, which may include—
‘‘(i) activities to improve completion 
rates and reduce time to credential; 
‘‘(ii) activities to align programs of 
study with the needs of employers, includ-
ing with respect to in-demand industry sec-
tors or occupations (as defined in section 3
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•HR 1 EH1S 
of the Workforce Innovation and Oppor-
tunity Act (29 U.S.C. 3102)); and 
‘‘(iii) any other activities to be carried 
out by the institution to increase value-
added earnings and postsecondary student 
success; 
‘‘(3) describe—
‘‘(A) how the institution will evaluate the 
effectiveness of the institution’s use of grant 
funds awarded under this subpart; and 
‘‘(B) how the institution will collect and 
disseminate information on promising practices 
developed with the use of such grant funds; and 
‘‘(4) in the case of an institution that has pre-
viously received a grant under this subpart, contain 
the evaluation required under paragraph (3) for 
each previous grant. 
‘‘(c) MAXIMUM TOTAL PRICE GUARANTEE REQUIRE-
MENTS.—As a condition of eligibility for a PROMISE 
grant under this subpart, an institution shall—
‘‘(1) for each award year beginning after the 
date of enactment of this subpart, not later than 1 
year before the start of each such award year (ex-
cept that, for the first award year beginning after 
such date of enactment, the institution shall meet
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•HR 1 EH1S 
these requirements as soon as practicable after such 
date of enactment), determine the maximum total 
price for completion, in accordance with subsection 
(e), for each program of study at the institution ap-
plicable to students in each income category and stu-
dent aid index category (as determined by the Sec-
retary) and publish such information on the institu-
tion’s website and in the institution’s catalog, mar-
keting materials, or other official publications; 
‘‘(2) for the award year for which the institu-
tion is applying for a PROMISE grant, and at least 
1 award year preceding such award year, provide to 
each student who first enrolls, or plans to enroll, in 
the institution during the award year and who re-
ceives Federal financial aid under this title a max-
imum total price guarantee, in accordance with this 
section, for the minimum guarantee period applica-
ble to the student; and 
‘‘(3) provide to the Secretary an assurance that 
the institution will continue to meet each of the 
maximum total price guarantee requirements under 
this subsection for students who first enroll, or plan 
to enroll, in the institution during each award year 
included in the grant period.
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‘‘(d) DURATION
OF
MINIMUM
GUARANTEE
PE-
RIOD.—
‘‘(1) IN GENERAL.—The minimum period dur-
ing which a student shall be provided a guarantee 
under subsection (c) with respect to the maximum 
total price for completion of a program of study at 
an institution shall be the average, for the 3 most 
recent award years for which data are available, of 
the median time to credential of students who com-
pleted any undergraduate program of study at the 
institution during each such award year, except that 
such minimum guarantee period shall not be less 
than the program length of the program of study in 
which the student is enrolled. 
‘‘(2) LIMITATION.—An institution shall not be 
required to provide a maximum total price guarantee 
under subsection (c) to a student after the conclu-
sion of the 6-year period beginning on the first day 
on which the student enrolled at such institution. 
‘‘(e) DETERMINATION OF MAXIMUM TOTAL PRICE 
FOR COMPLETION.—
‘‘(1) IN GENERAL.—For the purposes of sub-
section (c), an institution shall determine, prior to 
the first award year in which a student enrolls at 
the institution, the maximum total price that may be
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•HR 1 EH1S 
charged to the student for completion of a program 
of study at the institution for the minimum guar-
antee period applicable to a student, before applica-
tion of any Federal Pell Grants or other Federal fi-
nancial aid under this title. Such a maximum total 
price for completion shall be determined for students 
in each income category and student aid index cat-
egory (as determined by the Secretary). In deter-
mining the maximum total price for completion to be 
charged to each such category of students, the insti-
tution may consider the ability of a category of stu-
dents to pay tuition and fees, but may not include 
in such consideration any Federal Pell Grants or 
other Federal financial aid awards that may be 
available to such category of students under this 
title. 
‘‘(2) MULTIPLE MAXIMUM TOTAL PRICE GUAR-
ANTEES.—In the event that a student receives more 
than 1 maximum total price guarantee because the 
student is included in more than 1 category of stu-
dents for which the institution determines a max-
imum total price guarantee amount for the purposes 
of subsection (c), the maximum total price guarantee 
applicable to such student for the purposes of this
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•HR 1 EH1S 
section shall be equal to the lowest such guarantee 
amount. 
‘‘SEC. 420U. GRANT AMOUNTS; FLEXIBLE USE OF FUNDS. 
‘‘(a) GRANT AMOUNT FORMULA.—
‘‘(1) FORMULA.—Subject to subsection (b) and 
section 420V(b), the amount of a PROMISE grant 
for an eligible institution for each year of the grant 
period shall be calculated by the Secretary annually 
and shall be equal to the amount determined by 
multiplying—
‘‘(A) the lesser of—
‘‘(i) the difference determined by sub-
tracting one from the quotient of—
‘‘(I) the average, for the 3 most 
recent award years for which data are 
available, of the median value-added 
earnings for each such award year of 
students who completed any program 
of study of the institution; divided by 
‘‘(II) the average, for the 3 most 
recent award years for which data are 
available, of the maximum total price 
for completion determined under sec-
tion 420T(e) applicable for each such 
award year to students enrolled in the
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•HR 1 EH1S 
institution in any program of study 
who received financial aid under this 
title; or 
‘‘(ii) the number two; 
‘‘(B) the average, for the 3 most recent 
award years for which data are available, of the 
total dollar amount of Federal Pell Grants 
awarded to students enrolled in the institution 
in each such award year; and 
‘‘(C) the average, for the 3 most recent 
award years for which data are available, of the 
percentage of low-income students who received 
Federal financial assistance under this title who 
were enrolled in the institution in each such 
award year who—
‘‘(i) completed a program of study at 
the institution within 100 percent of the 
program length of such program; or 
‘‘(ii) only in the case of a two-year in-
stitution or a less than two-year institu-
tion—
‘‘(I) transfer to a four-year insti-
tution; and 
‘‘(II) within 4 years after first 
enrolling at the two-year or less than
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•HR 1 EH1S 
two-year institution, complete a pro-
gram of study at the four-year institu-
tion for which a bachelor’s degree (or 
substantially similar credential) is 
awarded. 
‘‘(2) DEFINITION
OF
LOW-INCOME.—In this 
section, the term ‘low-income’, when used with re-
spect to a student, means that the student’s family 
income does not exceed the maximum income in the 
lowest income category (as determined by the Sec-
retary). 
‘‘(b) MAXIMUM GRANT AMOUNT.—Notwithstanding 
subsection (a), the maximum amount an eligible institu-
tion may receive annually for a grant under this subpart 
shall be the amount equal to—
‘‘(1) the average, for the 3 most recent award 
years, of the number of students enrolled in the in-
stitution in an award year who receive Federal fi-
nancial aid under this title; multiplied by 
‘‘(2) $5,000. 
‘‘(c) FLEXIBLE USE
OF FUNDS.—A PROMISE 
grant awarded under this subpart shall be used by an eli-
gible institution to—
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•HR 1 EH1S 
‘‘(1) carry out activities included in the institu-
tion’s application for such grant related to postsec-
ondary affordability, access, and student success; 
‘‘(2) evaluate the effectiveness of the activities 
carried out with such grant in accordance with sec-
tion 420T(b)(3)(A); and 
‘‘(3) collect and disseminate promising practices 
related to the activities carried out with such grant, 
in accordance with section 420T(b)(3)(B). 
‘‘SEC. 420V. AVAILABILITY OF FUNDS. 
‘‘(a) USED OF RESERVED FUNDS.—
‘‘(1) PRIMARY FUNDS.—To carry out this sub-
part, there shall be available to the Secretary any 
funds remitted to the Secretary as reimbursements 
in accordance with section 454(d) for any award 
year. 
‘‘(2) SECONDARY
FUNDS.—Beginning award 
year 2028–2029, if the amounts made available to 
the Secretary under paragraph (1) to carry out this 
subpart in any award year are insufficient to fully 
fund the PROMISE grants awarded under this sub-
part in such award year, there shall be available to 
the Secretary, in addition to such amounts, any 
funds returned to the Secretary under section 484B 
in the previous award year.
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•HR 1 EH1S 
‘‘(b) REDUCTION OF GRANT AMOUNT IN CASE OF IN-
SUFFICIENT FUNDS.—
‘‘(1) IN GENERAL.—If the amounts made avail-
able to the Secretary under subsection (a) to carry 
out this subpart for an award year are not sufficient 
to provide grants to each eligible institution in the 
amount determined under section 420U for such 
award year, the Secretary shall reduce each such 
grant amount by the applicable percentage described 
in paragraph (2). 
‘‘(2) APPLICABLE PERCENTAGE.—The applica-
ble percentage described in this paragraph is the 
percentage determined by dividing—
‘‘(A) the amounts made available under 
subsection (a) for the award year described in 
paragraph (1); by 
‘‘(B) the total amount that would be nec-
essary to provide grants to all eligible institu-
tions in the amounts determined under section 
420U for such award year. 
‘‘SEC. 420W. DEFINITIONS. 
‘‘In this title: 
‘‘(1) VALUE-ADDED EARNINGS.—
‘‘(A) IN GENERAL.—With respect to a stu-
dent who received Federal financial aid under
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•HR 1 EH1S 
this title and who completed a program of study 
offered by an institution of higher education, 
the term ‘value-added earnings’ means—
‘‘(i) the annual earnings of such stu-
dent measured during the applicable earn-
ings measurement period for such program 
(as determined under subparagraph (C)); 
minus 
‘‘(ii) in the case of a student who 
completed a program of study that 
awards—
‘‘(I) an undergraduate credential, 
150 percent of the poverty line appli-
cable to a single individual as deter-
mined under section 673(2) of the 
Community Services Block Grant Act 
(42 U.S.C. 9902(2)) for such year; or 
‘‘(II) a graduate credential, 300 
percent of the poverty line applicable 
to a single individual as determined 
under section 673(2) of the Commu-
nity Services Block Grant Act (42 
U.S.C. 9902(2)) for such year. 
‘‘(B) GEOGRAPHIC ADJUSTMENT.—
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•HR 1 EH1S 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the Secretary shall use 
the geographic location of the institution at 
which a student completed a program of 
study to adjust the value-added earnings of 
the student calculated under subparagraph 
(A) by dividing—
‘‘(I) 
the 
difference 
between 
clauses (i) and (ii) of such subpara-
graph; by 
‘‘(II) the most recent regional 
price parity index of the Bureau of 
Economics Analysis for the State or, 
as applicable, metropolitan area in 
which such institution is located. 
‘‘(ii) EXCEPTION.—The value-added 
earnings of a student calculated under sub-
paragraph (A) shall not be adjusted based 
on geographic location in accordance with 
clause (i) if such student attended prin-
cipally through distance education. 
‘‘(C) EARNINGS MEASUREMENT PERIOD.—
‘‘(i) IN GENERAL.—For the purpose 
of calculating the value-added earnings of 
a student, except as provided in clause (ii),
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•HR 1 EH1S 
the annual earnings of a student shall be 
measured—
‘‘(I) in the case of a program of 
study that awards an undergraduate 
certificate, post baccalaureate certifi-
cate, or graduate certificate, 1 year 
after the student completes such pro-
gram; 
‘‘(II) in the case of a program of 
study that awards an associate’s de-
gree or master’s degree, 2 years after 
the student completes such program; 
and 
‘‘(III) in the case of a program of 
study that awards a bachelor’s degree, 
doctoral degree, or professional de-
gree, 4 years after the student com-
pletes such program. 
‘‘(ii) 
EXCEPTION.—The 
Secretary 
may, as the Secretary determines appro-
priate based on the characteristics of a 
program of study, extend an earnings 
measurement period described in clause (i) 
for a program of study that—
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•HR 1 EH1S 
‘‘(I) requires completion of an 
additional educational program (such 
as a residency or fellowship) after 
completion of the program of study in 
order to obtain licensure or board cer-
tification associated with the creden-
tial awarded for such program of 
study; and 
‘‘(II) when combined with the 
program length of such additional 
educational program for licensure or 
board certification, has a total pro-
gram length that exceeds the relevant 
earnings measurement period pre-
scribed for such program of study 
under clause (i), 
except that in no case shall the annual 
earnings of a student be measured more 
than 1 year after the student completes 
such additional educational program. 
‘‘(2) PROGRAM LENGTH.—The term ‘program 
length’ means the minimum amount of time in 
weeks, months, or years that is specified in the cata-
log, marketing materials, or other official publica-
tions of an institution of higher education for a full-
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•HR 1 EH1S 
time student to complete the requirements for a spe-
cific program of study.’’. 
(b) INSTITUTIONAL REFUNDS.—Section 484B of the 
Higher Education Act of 1965 (20 U.S.C. 1091b) is 
amended by adding at the end the following: 
‘‘(f) RESERVATION
OF
FUNDS
FOR
PROMISE 
GRANTS.—Notwithstanding any other provision of this 
Act, the Secretary shall reserve the funds returned to the 
Secretary under this section for 1 year after the return 
of such funds for the purpose of awarding PROMISE 
grants in accordance with subpart 4 of part A of this 
title.’’. 
Subtitle F—Regulatory Relief 
SEC. 30051. REGULATORY RELIEF. 
(a) 90/10 RULE.—Section 487 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1094) is amended—
(1) in subsection (a), by repealing paragraph 
(24); and 
(2) by repealing subsection (d). 
(b) GAINFUL EMPLOYMENT.—The Higher Education 
Act of 1965 (20 U.S.C. 1001 et seq.) is amended—
(1) in section 101(b)(1), by striking ‘‘gainful 
employment in’’; 
(2) in section 102—
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•HR 1 EH1S 
(A) in subsection (b)(1)(A)(i), by striking 
‘‘gainful employment in’’; and 
(B) in subsection (c)(1)(A), by striking 
‘‘gainful employment in’’; and 
(3) in section 481(b)(1)(A)(i), by striking 
‘‘gainful employment in’’. 
(c) OTHER REPEALS.—The following regulations (in-
cluding any supplement or revision to such regulations) 
are repealed and shall have no legal effect: 
(1) CLOSED
SCHOOL
DISCHARGES.—Sections 
674.33(g), 682.402(d), and 685.214 of title 34, 
Code of Federal Regulations (relating to closed 
school discharges), as added or amended by the final 
regulations published by the Department of Edu-
cation in the Federal Register on November 1, 2022 
(87 Fed. Reg. 65904 et seq.). 
(2) BORROWER
DEFENSE
TO
REPAYMENT.—
Subpart D of part 685 of title 34, Code of Federal 
Regulations (relating to borrower defense to repay-
ment), as added or amended by the final regulations 
published by the Department of Education in the 
Federal Register on November 1, 2022 (87 Fed. 
Reg. 65904 et seq.). 
(d) EFFECT OF REPEALS.—Any regulations relating 
to closed school discharges or borrower defense to repay-
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•HR 1 EH1S 
ment that took effect on July 1, 2020, are restored and 
revived as such regulations were in effect on such date. 
(e) PROHIBITION.—The Secretary of Education may 
not implement any rule, regulation, policy, or executive ac-
tion specified in this section (or a substantially similar 
rule, regulation, policy, or executive action) unless author-
ity for such implementation is explicitly provided in an Act 
of Congress. 
Subtitle G—Limitation on 
Authority 
SEC. 30061. LIMITATION ON AUTHORITY OF THE SEC-
RETARY TO PROPOSE OR ISSUE REGULA-
TIONS AND EXECUTIVE ACTIONS. 
Part G of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1088 et seq.) is amended by inserting 
after section 492 the following: 
‘‘SEC. 492A. LIMITATION ON AUTHORITY OF THE SEC-
RETARY TO PROPOSE OR ISSUE REGULA-
TIONS AND EXECUTIVE ACTIONS. 
‘‘(a) DRAFT REGULATIONS.—Beginning on the date 
of enactment of this section, a draft regulation imple-
menting this title (as described in section 492(b)(1)) that 
is determined by the Secretary to be economically signifi-
cant shall be subject to the following requirements (re-
gardless of whether negotiated rulemaking occurs):
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‘‘(1) The Secretary shall determine whether the 
draft regulation, if implemented, would result in an 
increase in a subsidy cost. 
‘‘(2) If the Secretary determines under para-
graph (1) that the draft regulation would result in 
an increase in a subsidy cost, then the Secretary 
may not take any further action with respect to such 
regulation. 
‘‘(b) PROPOSED OR FINAL REGULATIONS AND EXEC-
UTIVE ACTIONS.—Beginning on the date of enactment of 
this section, the Secretary may not issue a proposed rule, 
final regulation, or executive action implementing this title 
if the Secretary determines that the rule, regulation, or 
executive action—
‘‘(1) is economically significant; and 
‘‘(2) would result in an increase in a subsidy 
cost. 
‘‘(c) RELATIONSHIP TO OTHER REQUIREMENTS.—
The analyses required under subsections (a) and (b) shall 
be in addition to any other cost analysis required under 
law for a regulation implementing this title, including any 
cost analysis that may be required pursuant to Executive 
Order 12866 (58 Fed. Reg. 51735; relating to regulatory 
planning and review), Executive Order 13563 (76 Fed.
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•HR 1 EH1S 
Reg. 3821; relating to improving regulation and regu-
latory review), or any related or successor orders. 
‘‘(d) DEFINITION.—In this section, the term ‘eco-
nomically significant’, when used with respect to a draft, 
proposed, or final regulation or executive action, means 
that the regulation or executive action is likely, as deter-
mined by the Secretary—
‘‘(1) to have an annual effect on the economy 
of $100,000,000 or more; or 
‘‘(2) to adversely affect in a material way the 
economy, a sector of the economy, productivity, com-
petition, jobs, the environment, public health or safe-
ty, or State, local, or tribal governments or commu-
nities.’’. 
TITLE IV—ENERGY AND 
COMMERCE 
Subtitle A—Energy 
SEC. 41001. RESCISSIONS RELATING TO CERTAIN INFLA-
TION REDUCTION ACT PROGRAMS. 
(a) STATE-BASED HOME ENERGY EFFICIENCY CON-
TRACTOR TRAINING GRANTS.—The unobligated balance 
of any amounts made available under subsection (a) of 
section 50123 of Public Law 117–169 (42 U.S.C. 18795b) 
is rescinded.
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•HR 1 EH1S 
(b) FUNDING FOR DEPARTMENT OF ENERGY LOAN 
PROGRAMS OFFICE.—The unobligated balance of any 
amounts made available under subsection (b) of section 
50141 of Public Law 117–169 (136 Stat. 2042) is re-
scinded. 
(c) ADVANCED TECHNOLOGY VEHICLE MANUFAC-
TURING.—The unobligated balance of any amounts made 
available under subsection (a) of section 50142 of Public 
Law 117–169 (136 Stat. 2044) is rescinded. 
(d) ENERGY INFRASTRUCTURE REINVESTMENT FI-
NANCING.—The unobligated balance of any amounts made 
available under subsection (a) of section 50144 of Public 
Law 117–169 (136 Stat. 2044) is rescinded. 
(e) TRIBAL ENERGY LOAN GUARANTEE PROGRAM.—
The unobligated balance of any amounts made available 
under subsection (a) of section 50145 of Public Law 117–
169 (136 Stat. 2045) is rescinded. 
(f) TRANSMISSION FACILITY FINANCING.—The un-
obligated balance of any amounts made available under 
subsection (a) of section 50151 of Public Law 117–169 
(42 U.S.C. 18715) is rescinded. 
(g) GRANTS TO FACILITATE THE SITING OF INTER-
STATE ELECTRICITY TRANSMISSION LINES.—The unobli-
gated balance of any amounts made available under sub-
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section (a) of section 50152 of Public Law 117–169 (42 
U.S.C. 18715a) is rescinded. 
(h) INTERREGIONAL AND OFFSHORE WIND ELEC-
TRICITY
TRANSMISSION
PLANNING, MODELING, AND 
ANALYSIS.—The unobligated balance of any amounts 
made available under subsection (a) of section 50153 of 
Public Law 117–169 (42 U.S.C. 18715b) is rescinded. 
(i) ADVANCED INDUSTRIAL FACILITIES DEPLOY-
MENT
PROGRAM.—The unobligated balance of any 
amounts made available under subsection (a) of section 
50161 of Public Law 117–169 (42 U.S.C. 17113a) is re-
scinded. 
SEC. 41002. NATURAL GAS EXPORTS AND IMPORTS. 
Section 3 of the Natural Gas Act (15 U.S.C. 717b) 
is amended by adding at the end the following: 
‘‘(g) CHARGE FOR EXPORTATION OR IMPORTATION 
OF NATURAL GAS.—The Secretary of Energy shall, by 
rule, impose and collect, for each application to export nat-
ural gas from the United States to a foreign country with 
which there is not in effect a free trade agreement requir-
ing national treatment for trade in natural gas, or to im-
port natural gas from such a foreign country, a non-
refundable charge of $1,000,000, and, for purposes of sub-
section (a), the importation or exportation of natural gas 
that is proposed in an application for which such a non-
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refundable charge was imposed and collected shall be 
deemed to be in the public interest, and such an applica-
tion shall be granted without modification or delay.’’. 
SEC. 41003. FUNDING FOR DEPARTMENT OF ENERGY LOAN 
GUARANTEE EXPENSES. 
In addition to amounts otherwise available, there is 
appropriated to the Secretary of Energy, out of any money 
in the Treasury not otherwise appropriated, $5,000,000, 
to remain available for a period of five years for adminis-
trative expenses associated with carrying out section 116 
of the Alaska Natural Gas Pipeline Act (15 U.S.C. 720n). 
SEC. 41004. EXPEDITED PERMITTING. 
The Natural Gas Act is amended by adding after sec-
tion 15 (15 U.S.C. 717n) the following: 
‘‘SEC. 15A. EXPEDITED PERMITTING. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) COVERED APPLICATION.—The term ‘cov-
ered application’ means an application for an au-
thorization under section 3 or a certificate of public 
convenience and necessity under section 7, as appli-
cable, for activities that include construction. 
‘‘(2) FEDERAL
AUTHORIZATION.—The term 
‘Federal authorization’ has the meaning given such 
term in section 15(a). 
‘‘(b) EXPEDITED REVIEW.—
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•HR 1 EH1S 
‘‘(1) NOTIFICATION
OF
ELECTION
AND
PAY-
MENT OF FEE.—Prior to submitting a covered appli-
cation, an applicant may elect to obtain an expedited 
review of authorizations pursuant to Sections 3 and 
7 of the Natural Gas Act for the approval of such 
covered application by—
‘‘(A) submitting to the Commission a writ-
ten notification—
‘‘(i) of the election; and 
‘‘(ii) that identifies each Federal au-
thorization required for the approval of the 
covered application and each Federal, 
State, or interstate agency that will con-
sider an aspect of each such Federal au-
thorization; and 
‘‘(B) making a payment to the Secretary 
of the Treasury in an amount that is the lesser 
of—
‘‘(i) one percent of the expected cost 
of the applicable construction, as deter-
mined by the applicant; or 
‘‘(ii) $10,000,000 (adjusted for infla-
tion, as the Secretary of the Treasury de-
termines necessary).
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•HR 1 EH1S 
‘‘(2) SUBMISSION
AND
REVIEW
OF
APPLICA-
TIONS.—
‘‘(A) APPLICATION.—Not later than 60 
days after the date on which an applicant elects 
to obtain an expedited review under paragraph 
(1), the applicant shall submit to the Commis-
sion the covered application for which such elec-
tion for an expedited review was made, which 
shall include—
‘‘(i) the scope of the applicable activi-
ties, including capital investment, siting, 
temporary construction, and final work-
force numbers; 
‘‘(ii) the industrial sector of the appli-
cant, as classified by the North American 
Industry Classification System; and 
‘‘(iii) a list of the statutes and regula-
tions that are relevant to the covered appli-
cation. 
‘‘(B) APPROVAL.—
‘‘(i) STANDARD
DEADLINE.—Except 
as provided in clause (ii), not later than 
one year after the date on which an appli-
cant submits a covered application pursu-
ant to subparagraph (A)—
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‘‘(I) each Federal, State, or 
interstate agency identified under 
paragraph (1)(A)(ii) shall—
‘‘(aa) review the relevant 
Natural Gas Act sections 3 or 7 
authorization 
identified 
under 
such paragraph; and 
‘‘(bb) subject to any condi-
tions determined by such agency 
to be necessary to comply with 
the requirements of the Federal 
law under which such approval is 
required, approve such Federal 
authorization; and 
‘‘(II) the Commission shall—
‘‘(aa) review the covered ap-
plication; and 
‘‘(bb) subject to any condi-
tions determined by the Commis-
sion to be necessary to comply 
with the requirements of this 
Act, approve the covered applica-
tion. 
‘‘(ii) EXTENDED DEADLINE.—
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‘‘(I) EXTENSION.—With respect 
to a covered application submitted 
pursuant to subparagraph (A), the 
Commission may approve a request by 
an agency identified under paragraph 
(1)(A)(ii) for an extension of the one-
year deadline imposed by clause (i) of 
this subparagraph for a period of 6 
months if the Commission receives 
consent from the relevant applicant. 
‘‘(II) 
APPLICABILITY.—If 
the 
Commission approves a request for an 
extension under subclause (I), such 
extension shall apply to the applicable 
covered application and the Federal 
authorization for which the extension 
was requested. 
‘‘(C) EFFECT OF FAILURE TO MEET DEAD-
LINE.—
‘‘(i) DEEMED
APPROVAL.—Any cov-
ered application submitted pursuant to 
subparagraph (A), or Federal authoriza-
tion that is required with respect to such 
covered application, that is not approved 
by the applicable deadline under subpara-
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•HR 1 EH1S 
graph (B) shall be deemed approved in 
perpetuity. 
‘‘(ii) COMPLIANCE.—A person car-
rying out activities under a covered appli-
cation or Federal authorization that has 
been deemed approved under clause (i) 
shall comply with the requirements of the 
Natural Gas Act. 
‘‘(c) JUDICIAL REVIEW.—
‘‘(1) REVIEWABLE CLAIMS.—
‘‘(A) IN GENERAL.—No court shall have 
jurisdiction to review a claim with respect to 
the approval of a covered application or Federal 
authorization under subparagraph (B) or (C)(i) 
of subsection (b)(2), except for a claim under 
chapter 7 of title 5, United States Code, filed 
not later than 180 days after the date of such 
approval by—
‘‘(i) the applicant; or 
‘‘(ii) a person who has suffered, or 
likely and imminently will suffer, direct 
and irreparable economic harm from the 
approval. 
‘‘(B) CLAIMS
BY
CERTAIN
NON-APPLI-
CANTS.—An association may only bring a claim
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•HR 1 EH1S 
on behalf of one or more of its members pursu-
ant to subparagraph (A)(ii) if each member of 
the association has suffered, or likely and immi-
nently will suffer, the harm described in sub-
paragraph (A)(ii). 
‘‘(2) STANDARD OF REVIEW.—If an applicant 
or other person brings a claim described in para-
graph (1) with respect to the approval of a covered 
application or Federal authorization under sub-
section (b)(2)(B), the court shall hold unlawful and 
set aside any agency actions, findings, and conclu-
sions in accordance with section 706(2) of title 5, 
United States Code, except that, for purposes of the 
application of subparagraph (E) of such section, the 
court shall apply such subparagraph by substituting 
‘clear and convincing evidence’ for ‘substantial evi-
dence’. 
‘‘(3) EXCLUSIVE
JURISDICTION.—The United 
States Court of Appeals for the District of Columbia 
Circuit shall have original and exclusive jurisdiction 
over any claim—
‘‘(A) alleging the invalidity of subsection 
(b); or 
‘‘(B) that an agency action relating to a 
covered application or Federal authorization
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•HR 1 EH1S 
under subsection (b) is beyond the scope of au-
thority conferred by the Federal law under 
which such agency action is made.’’. 
SEC. 41005. DE-RISKING COMPENSATION PROGRAM. 
(a) APPROPRIATION.—In addition to amounts other-
wise available, there is appropriated to the Secretary for 
fiscal year 2025, out of any money in the Treasury not 
otherwise appropriated, $10,000,000, to remain available 
through September 30, 2034, to carry out this section: 
Provided, That no disbursements may be made under this 
section after September 30, 2034. 
(b) DE-RISKING COMPENSATION PROGRAM.—
(1) ESTABLISHMENT.—There is established in 
the Department of Energy a program, to be known 
as the De-Risking Compensation Program, to pro-
vide compensation to sponsors, with respect to cov-
ered energy projects, that suffer unrecoverable losses 
due to qualifying Federal actions. 
(2) ELIGIBILITY.—A sponsor may enroll in the 
program with respect to a covered energy project 
if—
(A) all approvals or permits required or 
authorized under Federal law for the covered 
energy project have been received, regardless of
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•HR 1 EH1S 
whether a court order subsequently remands or 
vacates such approvals or permits; 
(B) the sponsor commenced construction of 
the covered energy project or made capital ex-
penditures with respect to the covered energy 
project in reliance on such approvals or per-
mits; and 
(C) at the time of enrollment, no quali-
fying Federal action has been issued or taken 
that has an effect described in subsection 
(g)(4)(B) on the covered energy project. 
(3) APPLICATION.—A sponsor may apply to en-
roll with respect to a covered energy project in the 
program by submitting to the Secretary an applica-
tion containing such information as the Secretary 
may require. 
(4) ENROLLMENT.—Not later than 90 days 
after the date on which the Secretary receives an ap-
plication submitted under paragraph (3), the Sec-
retary shall enroll the sponsor in the program for 
the covered energy project with respect to which the 
application was submitted if the Secretary deter-
mines that the sponsor meets the requirements of 
paragraph (2) with respect to the covered energy 
project.
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•HR 1 EH1S 
(c) FEES AND PREMIUMS.—
(1) ENROLLMENT
FEE.—Not later than 60 
days after the date on which a sponsor is enrolled 
in the program under subsection (b)(4), the sponsor 
shall pay to the Secretary a one-time enrollment fee 
equal to 5 percent of the sponsor capital contribu-
tion for the applicable covered energy project. 
(2) ANNUAL PREMIUMS.—
(A) IN GENERAL.—The Secretary shall es-
tablish and annually collect a premium from 
each sponsor enrolled in the program for each 
covered energy project with respect to which the 
sponsor is enrolled. 
(B) REQUIREMENTS.—A premium estab-
lished and collected from a sponsor under sub-
paragraph (A) shall—
(i) be equal to 1.5 percent of the 
sponsor capital contribution for the appli-
cable covered energy project; and 
(ii) be paid beginning with the year of 
enrollment and continuing until the earlier 
of—
(I) fiscal year 2033; or 
(II) the year in which the spon-
sor withdraws from the program with
257
•HR 1 EH1S 
respect to the applicable covered en-
ergy project. 
(C) ADJUSTMENT.—The Secretary may 
adjust the percentage required by subparagraph 
(B)(i) once every two fiscal years to ensure 
Fund solvency, except that—
(i) the Secretary may not vary such 
percentage between sponsors or projects; 
and 
(ii) such percentage may not exceed 5 
percent. 
(D) PUBLICATION.—The Secretary shall 
publish in the Federal Register not later than 
60 days prior to the start of each fiscal year a 
list of each premium to be collected for the fis-
cal year. 
(d) COMPENSATION.—
(1) IN GENERAL.—Using amounts available in 
the Fund, and subject to paragraph (5), the Sec-
retary shall provide compensation to a sponsor en-
rolled in the program with respect to a covered en-
ergy project if—
(A) the sponsor paid the enrollment fee 
and the premium for each year the sponsor was
258
•HR 1 EH1S 
enrolled in the program with respect to the cov-
ered energy project; and 
(B) the sponsor demonstrates, in a request 
submitted to the Secretary, that a qualifying 
Federal action has been issued or taken that 
has an effect described in subsection (g)(4)(B) 
on the covered energy project. 
(2) REQUEST FOR COMPENSATION.—A request 
under paragraph (1) shall contain the following: 
(A) Information on each Federal approval 
or permit relating to the covered energy project, 
including the date on which such approval or 
permit was issued. 
(B) A certified accounting of capital ex-
penditures made in reliance on each such Fed-
eral approval or permit. 
(C) A description of, and, if applicable, a 
citation to, the applicable qualifying Federal ac-
tion. 
(D) A causal statement showing how the 
qualifying Federal action directly resulted in 
unrecoverable losses or cessation of the covered 
energy project and that absent the qualifying 
Federal action the project would have otherwise 
been viable.
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•HR 1 EH1S 
(E) Any supporting economic analysis 
demonstrating the financial effects of the cov-
ered energy project being rendered unviable. 
(3) APPROVAL.—The Secretary shall approve a 
request submitted under paragraph (1) and, subject 
to paragraph (5), provide compensation to the appli-
cable sponsor if the Secretary determines that such 
request is complete and in compliance with the re-
quirements of this section. 
(4) LIMITATIONS ON DENIALS.—The Secretary 
may not deny a request submitted under paragraph 
(1) based on—
(A) the merit of the applicable covered en-
ergy project, as determined by the Secretary; or 
(B) the type of technology used in the ap-
plicable covered energy project. 
(5) 
LIMITATIONS
ON
COMPENSATION 
AMOUNT.—
(A) SPONSORS.—The amount of compensa-
tion provided to a sponsor under this subsection 
with respect to a covered energy project shall 
not exceed the sponsor capital contribution for 
the covered energy project.
260
•HR 1 EH1S 
(B) AVAILABLE
FUNDS.—In determining 
the amount of compensation to be provided to 
a sponsor under this subsection—
(i) such amount may be any amount, 
including zero, that is less than or equal to 
the amount of the sponsor capital con-
tribution for the covered energy project, re-
gardless of the amount of capital expendi-
tures made by the sponsor (as certified 
and included in the request pursuant to 
paragraph (2)(B)); and 
(ii) the Secretary shall determine such 
amount in a manner that ensures no funds 
will be obligated or expended in amounts 
that exceed the amounts in the Fund at 
the time of approval of the applicable re-
quest submitted under paragraph (1). 
(e) DE-RISKING COMPENSATION FUND.—
(1) ESTABLISHMENT.—There is established a 
fund, to be known as the De-Risking Compensation 
Fund, consisting of such amounts as are deposited 
in the Fund under this subsection or credited to the 
Fund under subsection (f). 
(2) USE OF FUNDS.—Amounts in the Fund—
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•HR 1 EH1S 
(A) shall remain available until September 
30, 2034; and 
(B) may be used, without further appro-
priation—
(i) to make compensation payments to 
sponsors under this section; and 
(ii) to administer the program. 
(3) LIMITATION
ON
ADMINISTRATIVE
EX-
PENSES.—Not more than 3 percent of amounts in 
the Fund may be used to administer the program. 
(4) DEPOSITS.—The Secretary shall deposit the 
fees and premiums received under subsection (c) 
into the Fund. 
(f) FUND MANAGEMENT
AND INVESTMENT.—The 
Fund shall be managed and invested as follows: 
(1) The Fund shall be maintained and adminis-
tered by the Secretary. 
(2) Amounts in the Fund shall be invested in 
obligations of the United States in accordance with 
the requirements of section 9702 of title 31, United 
States Code. 
(3) The interest on such investments shall be 
credited to the Fund. 
(g) DEFINITIONS.—For purposes of this section:
262
•HR 1 EH1S 
(1) COVERED
ENERGY
PROJECT.—The term 
‘‘covered energy project’’ means a project located in 
the United States for the development, extraction, 
processing, transportation, or use of coal, coal by-
products, critical minerals, oil, natural gas, or nu-
clear energy with a total projected capital expendi-
ture of not less than $30,000,000, as certified by the 
Secretary. 
(2) FUND.—The term ‘‘Fund’’ means the De-
Risking Compensation Fund established in sub-
section (e)(1). 
(3) PROGRAM.—The term ‘‘program’’ means 
the De-Risking Compensation Program established 
in subsection (b)(1). 
(4) QUALIFYING FEDERAL ACTION.—The term 
‘‘qualifying Federal action’’ means a regulation, ad-
ministrative decision, or executive action—
(A) issued or taken after a sponsor re-
ceived a Federal approval or permit for a cov-
ered energy project; and 
(B) that revokes such approval or permit 
or cancels, delays, or renders unviable the cov-
ered energy project regardless of whether the 
regulation, administrative decision, or executive 
action is responsive to a court order.
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•HR 1 EH1S 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
(6) SPONSOR.—The term ‘‘sponsor’’ means an 
entity incorporated and headquartered in the United 
States with an ownership or development interest in 
a covered energy project. 
(7) SPONSOR
CAPITAL
CONTRIBUTION.—The 
term ‘‘sponsor capital contribution’’ means the pro-
jected capital expenditure of a sponsor for a covered 
energy project, as certified by the Secretary at the 
time of enrollment in the program, which shall in-
clude verifiable development, construction, permit-
ting, and financing costs directly related to the cov-
ered energy project. 
SEC. 41006. STRATEGIC PETROLEUM RESERVE. 
(a) APPROPRIATIONS.—In addition to amounts other-
wise available, there is appropriated to the Department 
of Energy for fiscal year 2025, out of any money in the 
Treasury not otherwise appropriated, to remain available 
until September 30, 2029—
(1) $218,000,000 for maintenance of, including 
repairs to, storage facilities and related facilities (as 
such terms are defined in section 152 of the Energy 
Policy and Conservation Act (42 U.S.C. 6232)) of 
the Strategic Petroleum Reserve; and
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•HR 1 EH1S 
(2) $1,321,000,000 to acquire, by purchase, pe-
troleum products for storage in the Strategic Petro-
leum Reserve. 
(b) REPEAL OF STRATEGIC PETROLEUM RESERVE 
DRAWDOWN
AND SALE MANDATE.—Section 20003 of 
Public Law 115–97 (42 U.S.C. 6241 note) is repealed. 
Subtitle B—Environment 
PART 1—REPEALS AND RESCISSIONS 
SEC. 42101. REPEAL AND RESCISSION RELATING TO CLEAN 
HEAVY-DUTY VEHICLES. 
(a) REPEAL.—Section 132 of the Clean Air Act (42 
U.S.C. 7432) is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 132 of the Clean 
Air Act (42 U.S.C. 7432) (as in effect on the day before 
the date of enactment of this Act) is rescinded. 
SEC. 
42102. 
REPEAL 
AND 
RESCISSION 
RELATING 
TO 
GRANTS TO REDUCE AIR POLLUTION AT 
PORTS. 
(a) REPEAL.—Section 133 of the Clean Air Act (42 
U.S.C. 7433) is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 133 of the Clean 
Air Act (42 U.S.C. 7433) (as in effect on the day before 
the date of enactment of this Act) is rescinded.
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•HR 1 EH1S 
SEC. 
42103. 
REPEAL 
AND 
RESCISSION 
RELATING 
TO 
GREENHOUSE GAS REDUCTION FUND. 
(a) REPEAL.—Section 134 of the Clean Air Act (42 
U.S.C. 7434) is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 134 of the Clean 
Air Act (42 U.S.C. 7434) (as in effect on the day before 
the date of enactment of this Act) is rescinded. 
SEC. 42104. REPEAL AND RESCISSION RELATING TO DIESEL 
EMISSIONS REDUCTIONS. 
(a) REPEAL.—Section 60104 of Public Law 117–169 
is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60104 of Public 
Law 117–169 (as in effect on the day before the date of 
enactment of this Act) is rescinded. 
SEC. 42105. REPEAL AND RESCISSION RELATING TO FUND-
ING TO ADDRESS AIR POLLUTION. 
(a) REPEAL.—Section 60105 of Public Law 117–169 
is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60105 of Public 
Law 117–169 (as in effect on the day before the date of 
enactment of this Act) is rescinded.
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•HR 1 EH1S 
SEC. 42106. REPEAL AND RESCISSION RELATING TO FUND-
ING 
TO 
ADDRESS 
AIR 
POLLUTION 
AT 
SCHOOLS. 
(a) REPEAL.—Section 60106 of Public Law 117–169 
is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60106 of Public 
Law 117–169 (as in effect on the day before the date of 
enactment of this Act) is rescinded. 
SEC. 42107. REPEAL AND RESCISSION RELATING TO LOW 
EMISSIONS ELECTRICITY PROGRAM. 
(a) REPEAL.—Section 135 of the Clean Air Act (42 
U.S.C. 7435) is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 135 of the Clean 
Air Act (42 U.S.C. 7435) (as in effect on the day before 
the date of enactment of this Act) is rescinded. 
SEC. 42108. REPEAL AND RESCISSION RELATING TO FUND-
ING FOR SECTION 211(o) OF THE CLEAN AIR 
ACT. 
(a) REPEAL.—Section 60108 of Public Law 117–169 
is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60108 of Public 
Law 117–169 (as in effect on the day before the date of 
enactment of this Act) is rescinded.
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•HR 1 EH1S 
SEC. 42109. REPEAL AND RESCISSION RELATING TO FUND-
ING FOR IMPLEMENTATION OF THE AMER-
ICAN 
INNOVATION 
AND 
MANUFACTURING 
ACT. 
(a) REPEAL.—Section 60109 of Public Law 117–169 
is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60109 of Public 
Law 117–169 (as in effect on the day before the date of 
enactment of this Act) is rescinded. 
SEC. 42110. REPEAL AND RESCISSION RELATING TO FUND-
ING FOR ENFORCEMENT TECHNOLOGY AND 
PUBLIC INFORMATION. 
(a) REPEAL.—Section 60110 of Public Law 117–169 
is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60110 of Public 
Law 117–169 (as in effect on the day before the date of 
enactment of this Act) is rescinded. 
SEC. 
42111. 
REPEAL 
AND 
RESCISSION 
RELATING 
TO 
GREENHOUSE GAS CORPORATE REPORTING. 
(a) REPEAL.—Section 60111 of Public Law 117–169 
is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60111 of Public
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•HR 1 EH1S 
Law 117–169 (as in effect on the day before the date of 
enactment of this Act) is rescinded. 
SEC. 42112. REPEAL AND RESCISSION RELATING TO ENVI-
RONMENTAL PRODUCT DECLARATION AS-
SISTANCE. 
(a) REPEAL.—Section 60112 of Public Law 117–169 
(42 U.S.C. 4321 note) is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60112 of Public 
Law 117–169 (42 U.S.C. 4321 note) (as in effect on the 
day before the date of enactment of this Act) is rescinded. 
SEC. 42113. REPEAL OF FUNDING FOR METHANE EMIS-
SIONS AND WASTE REDUCTION INCENTIVE 
PROGRAM FOR PETROLEUM AND NATURAL 
GAS SYSTEMS. 
(a) REPEAL AND RESCISSION.—Subsections (a) and 
(b) of section 136 of the Clean Air Act (42 U.S.C. 7436) 
are repealed and the unobligated balances of amounts 
made available under those subsections (as in effect on 
the day before the date of enactment of this Act) are re-
scinded. 
(b) CONFORMING AMENDMENTS.—Section 136 of the 
Clean Air Act (42 U.S.C. 7436) is amended—
(1) by redesignating subsections (c) through (i) 
as subsections (a) through (g), respectively;
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•HR 1 EH1S 
(2) by striking ‘‘subsection (c)’’ each place it 
appears and inserting ‘‘subsection (a)’’; 
(3) by striking ‘‘subsection (d)’’ each place it 
appears and inserting ‘‘subsection (b)’’; 
(4) by striking ‘‘subsection (f)’’ each place it 
appears and inserting ‘‘subsection (d)’’; 
(5) in subsection (e) (as so redesignated), by 
striking ‘‘calendar year 2024’’ and inserting ‘‘cal-
endar year 2034’’; and 
(6) in subsection (f) (as so redesignated)—
(A) by striking ‘‘subsections (e) and (f)’’ 
and inserting ‘‘subsections (c) and (d)’’; and 
(B) by striking ‘‘including data collected 
pursuant to subsection (a)(4),’’. 
SEC. 
42114. 
REPEAL 
AND 
RESCISSION 
RELATING 
TO 
GREENHOUSE GAS AIR POLLUTION PLANS 
AND IMPLEMENTATION GRANTS. 
(a) REPEAL.—Section 137 of the Clean Air Act (42 
U.S.C. 7437) is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 137 of the Clean 
Air Act (42 U.S.C. 7437) (as in effect on the day before 
the date of enactment of this Act) is rescinded.
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•HR 1 EH1S 
SEC. 42115. REPEAL AND RESCISSION RELATING TO ENVI-
RONMENTAL 
PROTECTION 
AGENCY 
EFFI-
CIENT, ACCURATE, AND TIMELY REVIEWS. 
(a) REPEAL.—Section 60115 of Public Law 117–169 
is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60115 of Public 
Law 117–169 (as in effect on the day before the date of 
enactment of this Act) is rescinded. 
SEC. 42116. REPEAL AND RESCISSION RELATING TO LOW-
EMBODIED CARBON LABELING FOR CON-
STRUCTION MATERIALS. 
(a) REPEAL.—Section 60116 of Public Law 117–169 
(42 U.S.C. 4321 note) is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 60116 of Public 
Law 117–169 (42 U.S.C. 4321 note) (as in effect on the 
day before the date of enactment of this Act) is rescinded. 
SEC. 42117. REPEAL AND RESCISSION RELATING TO ENVI-
RONMENTAL AND CLIMATE JUSTICE BLOCK 
GRANTS. 
(a) REPEAL.—Section 138 of the Clean Air Act (42 
U.S.C. 7438) is repealed. 
(b) RESCISSION.—The unobligated balance of any 
amounts made available under section 138 of the Clean
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Air Act (42 U.S.C. 7438) (as in effect on the day before 
the date of enactment of this Act) is rescinded. 
PART 2—REPEAL OF EPA RULES RELATING TO 
GREENHOUSE GAS AND MULTI-POLLUTANT 
EMISSIONS STANDARDS 
SEC. 42201. REPEAL OF EPA RULES RELATING TO GREEN-
HOUSE GAS AND MULTI-POLLUTANT EMIS-
SIONS STANDARDS. 
The final rules issued by the Environmental Protec-
tion Agency relating to ‘‘Revised 2023 and Later Model 
Year Light-Duty Vehicle Greenhouse Gas Emissions 
Standards’’ (86 Fed. Reg. 74434 (December 30, 2021)) 
and ‘‘Multi-Pollutant Emissions Standards for Model 
Years 2027 and Later Light-Duty and Medium-Duty Ve-
hicles’’ (89 Fed. Reg. 27842 (April 18, 2024)) shall have 
no force or effect. 
PART 3—REPEAL OF NHTSA RULES RELATING TO 
CAFE STANDARDS 
SEC. 42301. REPEAL OF NHTSA RULES RELATING TO CAFE 
STANDARDS. 
The final rules issued by the National Highway Traf-
fic Safety Administration relating to ‘‘Corporate Average 
Fuel Economy Standards for Model Years 2024–2026 
Passenger Cars and Light Trucks’’ (87 Fed. Reg. 25710 
(May 2, 2022)) and ‘‘Corporate Average Fuel Economy
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Standards for Passenger Cars and Light Trucks for Model 
Years 2027 and Beyond and Fuel Efficiency Standards 
for Heavy-Duty Pickup Trucks and Vans for Model Years 
2030 and Beyond’’ (89 Fed. Reg. 52540 (June 24, 2024)) 
shall have no force or effect. 
Subtitle C—Communications 
PART 1—SPECTRUM AUCTIONS 
SEC. 43101. IDENTIFICATION AND AUCTION OF SPECTRUM. 
(a) IDENTIFICATION.—
(1) IN GENERAL.—Not later than 2 years after 
the date of the enactment of this Act, the Assistant 
Secretary and the Commission shall identify, from 
spectrum in the covered band that is allocated for 
Federal use, non-Federal use, or shared Federal and 
non-Federal use, a total of not less than 600 mega-
hertz of spectrum for reallocation for non-Federal 
use on an exclusive, licensed basis for mobile 
broadband services, fixed broadband services, mobile 
and fixed broadband services, or a combination 
thereof. 
(2) WITHDRAWAL OR MODIFICATION OF FED-
ERAL GOVERNMENT ASSIGNMENTS.—The President, 
acting through the Assistant Secretary, shall—
(A) withdraw or modify the assignments to 
Federal Government stations of spectrum iden-
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tified under paragraph (1) as necessary for the 
Commission to comply with subsection (b); and 
(B) not later than 30 days after com-
pleting any necessary withdrawal or modifica-
tion under subparagraph (A), notify the Com-
mission that the withdrawal or modification is 
complete. 
(3) RULE OF CONSTRUCTION.—Nothing in this 
subsection may be construed to change the respec-
tive authorities of the Assistant Secretary and the 
Commission with respect to spectrum allocated for 
Federal use, non-Federal use, or shared Federal and 
non-Federal use. 
(b) AUCTION.—
(1) IN
GENERAL.—The Commission shall, 
through 1 or more systems of competitive bidding 
under section 309(j) of the Communications Act of 
1934 (47 U.S.C. 309(j)), grant licenses for the use 
of the spectrum identified under subsection (a) on 
an exclusive, licensed basis for mobile broadband 
services, fixed broadband services, mobile and fixed 
broadband services, or a combination thereof. 
(2) SCHEDULE.—Notwithstanding paragraph 
(15)(A) of section 309(j) of the Communications Act 
of 1934 (47 U.S.C. 309(j)), the Commission shall
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auction spectrum under paragraph (1) of this sub-
section according to the following schedule: 
(A) Not later than 3 years after the date 
of the enactment of this Act, the Commission 
shall complete 1 or more systems of competitive 
bidding for not less than 200 megahertz of such 
spectrum. 
(B) Not later than 6 years after the date 
of the enactment of this Act, the Commission 
shall complete 1 or more systems of competitive 
bidding for any remaining spectrum required to 
be auctioned under paragraph (1) after compli-
ance with subparagraph (A) of this paragraph. 
(c) AUCTION PROCEEDS TO COVER 110 PERCENT OF 
FEDERAL RELOCATION OR SHARING COSTS.—Nothing in 
this section may be construed to relieve the Commission 
from the requirements of section 309(j)(16)(B) of the 
Communications Act of 1934 (47 U.S.C. 309(j)(16)(B)). 
(d) AUCTION AUTHORITY.—Section 309(j)(11) of the 
Communications Act of 1934 (47 U.S.C. 309(j)(11)) is 
amended by striking ‘‘grant a license or permit under this 
subsection shall expire March 9, 2023’’ and all that fol-
lows and inserting ‘‘complete a system of competitive bid-
ding under this subsection shall expire September 30, 
2034.’’.
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(e) DEFINITIONS.—In this section: 
(1) ASSISTANT SECRETARY.—The term ‘‘Assist-
ant Secretary’’ means the Assistant Secretary of 
Commerce for Communications and Information. 
(2) COMMISSION.—The term ‘‘Commission’’ 
means the Federal Communications Commission. 
(3) COVERED BAND.—
(A) IN
GENERAL.—The term ‘‘covered 
band’’ means the band of frequencies between 
1.3 gigahertz and 10 gigahertz, inclusive. 
(B) 
EXCLUSION.—The 
term 
‘‘covered 
band’’ does not include the following: 
(i) The band of frequencies between 
3.1 gigahertz and 3.45 gigahertz, inclusive. 
(ii) The band of frequencies between 
5.925 gigahertz and 7.125 gigahertz, inclu-
sive. 
PART 2—ARTIFICIAL INTELLIGENCE AND 
INFORMATION TECHNOLOGY MODERNIZATION 
SEC. 43201. ARTIFICIAL INTELLIGENCE AND INFORMATION 
TECHNOLOGY MODERNIZATION INITIATIVE. 
(a) APPROPRIATION OF FUNDS.—There is hereby ap-
propriated to the Department of Commerce for fiscal year 
2025, out of any funds in the Treasury not otherwise ap-
propriated, $500,000,000, to remain available until Sep-
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tember 30, 2034, to modernize and secure Federal infor-
mation technology systems through the deployment of 
commercial artificial intelligence, the deployment of auto-
mation technologies, and the replacement of antiquated 
business systems in accordance with subsection (b). 
(b) AUTHORIZED USES.—The Secretary of Com-
merce shall use the funds appropriated under subsection 
(a) for the following: 
(1) To replace or modernize, within the Depart-
ment of Commerce, legacy business systems with 
state-of-the-art commercial artificial intelligence sys-
tems and automated decision systems. 
(2) To facilitate, within the Department of 
Commerce, the adoption of artificial intelligence 
models that increase operational efficiency and serv-
ice delivery. 
(3) To improve, within the Department of Com-
merce, the cybersecurity posture of Federal informa-
tion technology systems through modernized archi-
tecture, automated threat detection, and integrated 
artificial intelligence solutions. 
(c) MORATORIUM.—
(1) IN GENERAL.—Except as provided in para-
graph (2), no State or political subdivision thereof 
may enforce, during the 10-year period beginning on
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the date of the enactment of this Act, any law or 
regulation of that State or a political subdivision 
thereof limiting, restricting, or otherwise regulating 
artificial intelligence models, artificial intelligence 
systems, or automated decision systems entered into 
interstate commerce. 
(2) RULE OF CONSTRUCTION.—Paragraph (1) 
may not be construed to prohibit the enforcement 
of—
(A) any law or regulation that—
(i) the primary purpose and effect of 
which is to—
(I) remove legal impediments to, 
or facilitate the deployment or oper-
ation of, an artificial intelligence 
model, artificial intelligence system, or 
automated decision system; or 
(II) streamline licensing, permit-
ting, routing, zoning, procurement, or 
reporting procedures in a manner that 
facilitates the adoption of artificial in-
telligence models, artificial intelligence 
systems, or automated decision sys-
tems;
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(ii) does not impose any substantive 
design, performance, data-handling, docu-
mentation, civil liability, taxation, fee, or 
other requirement on artificial intelligence 
models, artificial intelligence systems, or 
automated decision systems unless such re-
quirement—
(I) is imposed under Federal law; 
or 
(II) in the case of a requirement 
imposed under a generally applicable 
law, is imposed in the same manner 
on models and systems, other than ar-
tificial intelligence models, artificial 
intelligence systems, and automated 
decision systems, that provide com-
parable functions to artificial intel-
ligence models, artificial intelligence 
systems, or automated decision sys-
tems; and 
(iii) does not impose a fee or bond un-
less—
(I) such fee or bond is reasonable 
and cost-based; and
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(II) under such fee or bond, arti-
ficial intelligence models, artificial in-
telligence systems, and automated de-
cision systems are treated in the same 
manner as other models and systems 
that perform comparable functions; or 
(B) any provision of a law or regulation to 
the extent that the violation of such provision 
carries a criminal penalty. 
(d) DEFINITIONS.—In this section: 
(1) ARTIFICIAL INTELLIGENCE.—The term ‘‘ar-
tificial intelligence’’ has the meaning given such 
term in section 5002 of the National Artificial Intel-
ligence Initiative Act of 2020 (15 U.S.C. 9401). 
(2) ARTIFICIAL
INTELLIGENCE
MODEL.—The 
term ‘‘artificial intelligence model’’ means a software 
component of an information system that imple-
ments artificial intelligence technology and uses 
computational, statistical, or machine-learning tech-
niques to produce outputs from a defined set of in-
puts. 
(3) ARTIFICIAL INTELLIGENCE SYSTEM.—The 
term ‘‘artificial intelligence system’’ means any data 
system, hardware, tool, or utility that operates, in 
whole or in part, using artificial intelligence.
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(4) AUTOMATED DECISION SYSTEM.—The term 
‘‘automated decision system’’ means any computa-
tional process derived from machine learning, statis-
tical modeling, data analytics, or artificial intel-
ligence that issues a simplified output, including a 
score, classification, or recommendation, to materi-
ally influence or replace human decision making. 
Subtitle D—Health 
PART 1—MEDICAID 
Subpart A—Reducing Fraud and Improving 
Enrollment Processes 
SEC. 44101. MORATORIUM ON IMPLEMENTATION OF RULE 
RELATING TO ELIGIBILITY AND ENROLL-
MENT IN MEDICARE SAVINGS PROGRAMS. 
The Secretary of Health and Human Services shall 
not, during the period beginning on the date of the enact-
ment of this section and ending January 1, 2035, imple-
ment, administer, or enforce the provisions of the final 
rule published by the Centers for Medicare & Medicaid 
Services on September 21, 2023, and titled ‘‘Streamlining 
Medicaid; Medicare Savings Program Eligibility Deter-
mination and Enrollment’’ (88 Fed. Reg. 65230).
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SEC. 44102. MORATORIUM ON IMPLEMENTATION OF RULE 
RELATING TO ELIGIBILITY AND ENROLL-
MENT FOR MEDICAID, CHIP, AND THE BASIC 
HEALTH PROGRAM. 
The Secretary of Health and Human Services shall 
not, during the period beginning on the date of the enact-
ment of this section and ending January 1, 2035, imple-
ment, administer, or enforce the provisions of the final 
rule published by the Centers for Medicare & Medicaid 
Services on April 2, 2024, and titled ‘‘Medicaid Program; 
Streamlining the Medicaid, Children’s Health Insurance 
Program, and Basic Health Program Application, Eligi-
bility Determination, Enrollment, and Renewal Processes’’ 
(89 Fed. Reg. 22780). 
SEC. 
44103. 
ENSURING 
APPROPRIATE 
ADDRESS 
VERIFICATION UNDER THE MEDICAID AND 
CHIP PROGRAMS. 
(a) MEDICAID.—
(1) IN GENERAL.—Section 1902 of the Social 
Security Act (42 U.S.C. 1396a) is amended—
(A) in subsection (a)—
(i) in paragraph (86), by striking 
‘‘and’’ at the end; 
(ii) in paragraph (87), by striking the 
period and inserting ‘‘; and’’; and
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(iii) by inserting after paragraph (87) 
the following new paragraph: 
‘‘(88) provide—
‘‘(A) beginning not later than January 1, 
2027, in the case of 1 of the 50 States and the 
District of Columbia, for a process to regularly 
obtain address information for individuals en-
rolled under such plan (or a waiver of such 
plan) in accordance with subsection (vv); and 
‘‘(B) beginning not later than October 1, 
2029—
‘‘(i) for the State to submit to the sys-
tem established by the Secretary under 
subsection (uu), with respect to an indi-
vidual enrolled or seeking to enroll under 
such plan, not less frequently than once 
each month and during each determination 
or redetermination of the eligibility of such 
individual for medical assistance under 
such plan (or waiver of such plan)—
‘‘(I) the social security number of 
such individual, if such individual has 
a social security number and is re-
quired to provide such number to en-
roll under such plan (or waiver); and
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‘‘(II) such other information with 
respect to such individual as deter-
mined necessary by the Secretary for 
purposes of preventing individuals 
from simultaneously being enrolled 
under State plans (or waivers of such 
plans) of multiple States; 
‘‘(ii) for the use of such system to 
prevent such simultaneous enrollment; and 
‘‘(iii) in the case that such system in-
dicates that an individual enrolled or seek-
ing to enroll under such plan (or wavier of 
such plan) is enrolled under a State plan 
(or waiver of such a plan) of another 
State, for the taking of appropriate action 
(as determined by the Secretary) to iden-
tify whether such an individual resides in 
the State and disenroll an individual from 
the State plan of such State if such indi-
vidual does not reside in such State (unless 
such individual meets such an exception as 
the Secretary may specify).’’; and 
(B) by adding at the end the following new 
subsections:
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‘‘(uu) PREVENTION OF ENROLLMENT UNDER MUL-
TIPLE STATE PLANS.—
‘‘(1) IN GENERAL.—Not later than October 1, 
2029, the Secretary shall establish a system to be 
utilized by the Secretary and States to prevent an 
individual from being simultaneously enrolled under 
the State plans (or waivers of such plans) of mul-
tiple States. Such system shall—
‘‘(A) provide for the receipt of information 
submitted 
by 
a 
State 
under 
subsection 
(a)(88)(B)(i); and 
‘‘(B) not less than once each month, notify 
or transmit information to a State (or allow the 
Secretary to notify or transmit information to a 
State) regarding whether an individual enrolled 
or seeking to enroll under the State plan of 
such State (or waiver of such plan) is enrolled 
under the State plan (or waiver of such plan) 
of another State. 
‘‘(2) STANDARDS.—The Secretary shall estab-
lish such standards as determined necessary by the 
Secretary to limit and protect information submitted 
under such system and ensure the privacy of such 
information, consistent with subsection (a)(7).
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‘‘(3) IMPLEMENTATION
FUNDING.—There are 
appropriated to the Secretary, out of amounts in the 
Treasury not otherwise appropriated, in addition to 
amounts otherwise available—
‘‘(A) for fiscal year 2026, $10,000,000 for 
purposes of establishing the system required 
under this subsection, to remain available until 
expended; and 
‘‘(B) for fiscal year 2029, $20,000,000 for 
purposes of maintaining such system, to remain 
available until expended. 
‘‘(vv) PROCESS TO OBTAIN ENROLLEE ADDRESS IN-
FORMATION.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(88)(A), a process to regularly obtain address in-
formation for individuals enrolled under a State plan 
(or a waiver of such plan) shall obtain address infor-
mation from reliable data sources described in para-
graph (2) and take such actions as the Secretary 
shall specify with respect to any changes to such ad-
dress based on such information. 
‘‘(2) RELIABLE DATA SOURCES DESCRIBED.—
For purposes of paragraph (1), the reliable data 
sources described in this paragraph are the fol-
lowing:
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‘‘(A) Mail returned to the State by the 
United States Postal Service with a forwarding 
address. 
‘‘(B) The National Change of Address 
Database maintained by the United States 
Postal Service. 
‘‘(C) A managed care entity (as defined in 
section 1932(a)(1)(B)) or prepaid inpatient 
health plan or prepaid ambulatory health plan 
(as 
such 
terms 
are 
defined 
in 
section 
1903(m)(9)(D)) that has a contract under the 
State plan if the address information is pro-
vided to such entity or plan directly from, or 
verified by such entity or plan directly with, 
such individual. 
‘‘(D) Other data sources as identified by 
the State and approved by the Secretary.’’. 
(2) CONFORMING AMENDMENTS.—
(A) PARIS.—Section 1903(r)(3) of the 
Social Security Act (42 U.S.C. 1396b(r)(3)) is 
amended—
(i) by striking ‘‘In order’’ and insert-
ing ‘‘(A) In order’’; 
(ii) by striking ‘‘through the Public’’ 
and inserting ‘‘through—
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‘‘(i) the Public’’; 
(iii) by striking the period at the end 
and inserting ‘‘; and 
‘‘(ii) beginning October 1, 2029, the sys-
tem established by the Secretary under section 
1902(uu).’’; and 
(iv) by adding at the end the following 
new subparagraph: 
‘‘(B) Beginning October 1, 2029, the Secretary 
may determine that a State is not required to have 
in operation an eligibility determination system 
which provides for data matching through the sys-
tem described in subparagraph (A)(i) to meet the re-
quirements of this paragraph.’’. 
(B) MANAGED CARE.—Section 1932 of the 
Social Security Act (42 U.S.C. 1396u–2) is 
amended by adding at the end the following 
new subsection: 
‘‘(j) TRANSMISSION OF ADDRESS INFORMATION.—
Beginning January 1, 2027, each contract under a State 
plan with a managed care entity (as defined in section 
1932(a)(1)(B)) or with a prepaid inpatient health plan or 
prepaid ambulatory health plan (as such terms are defined 
in section 1903(m)(9)(D)), shall provide that such entity 
or plan shall promptly transmit to the State any address
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information for an individual enrolled with such entity or 
plan that is provided to such entity or plan directly from, 
or verified by such entity or plan directly with, such indi-
vidual.’’. 
(b) CHIP.—
(1) IN
GENERAL.—Section 2107(e)(1) of the 
Social Security Act (42 U.S.C. 1397gg(e)(1)) is 
amended—
(A) by redesignating subparagraphs (H) 
through (U) as subparagraphs (I) through (V), 
respectively; and 
(B) by inserting after subparagraph (G) 
the following new subparagraph: 
‘‘(H) Section 1902(a)(88) (relating to ad-
dress information for enrollees and prevention 
of simultaneous enrollments).’’. 
(2) MANAGED CARE.—Section 2103(f)(3) of the 
Social Security Act (42 U.S.C. 1397cc(f)(3)) is 
amended by striking ‘‘and (e)’’ and inserting ‘‘(e), 
and (j)’’.
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SEC. 44104. MODIFYING CERTAIN STATE REQUIREMENTS 
FOR ENSURING DECEASED INDIVIDUALS DO 
NOT REMAIN ENROLLED. 
Section 1902 of the Social Security Act (42 U.S.C. 
1396a), as amended by section 44103, is further amend-
ed—
(1) in subsection (a)—
(A) in paragraph (87), by striking ‘‘; and’’ 
and inserting a semicolon; 
(B) in paragraph (88), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (88) the 
following new paragraph: 
‘‘(89) provide that the State shall comply with 
the eligibility verification requirements under sub-
section (ww), except that this paragraph shall apply 
only in the case of the 50 States and the District 
of Columbia.’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(ww) VERIFICATION OF CERTAIN ELIGIBILITY CRI-
TERIA.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(89), the eligibility verification requirements, be-
ginning January 1, 2028, are as follows:
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‘‘(A) QUARTERLY SCREENING TO VERIFY 
ENROLLEE STATUS.—The State shall, not less 
frequently than quarterly, review the Death 
Master File (as such term is defined in section 
203(d) of the Bipartisan Budget Act of 2013) 
to determine whether any individuals enrolled 
for medical assistance under the State plan (or 
waiver of such plan) are deceased. 
‘‘(B) 
DISENROLLMENT
UNDER
STATE 
PLAN.—If the State determines, based on infor-
mation obtained from the Death Master File, 
that an individual enrolled for medical assist-
ance under the State plan (or waiver of such 
plan) is deceased, the State shall—
‘‘(i) treat such information as factual 
information confirming the death of a ben-
eficiary for purposes of section 431.213(a) 
of title 42, Code of Federal Regulations; 
‘‘(ii) disenroll such individual from the 
State plan (or waiver of such plan); and 
‘‘(iii) discontinue any payments for 
medical assistance under this title made on 
behalf of such individual (other than pay-
ments for any items or services furnished
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to such individual prior to the death of 
such individual). 
‘‘(C) REINSTATEMENT
OF
COVERAGE
IN 
THE EVENT OF ERROR.—If a State determines 
that an individual was misidentified as deceased 
based on information obtained from the Death 
Master File and was erroneously disenrolled 
from medical assistance under the State plan 
(or waiver of such plan) based on such 
misidentification, the State shall immediately 
re-enroll such individual under the State plan 
(or waiver of such plan), retroactive to the date 
of such disenrollment. 
‘‘(2) RULE OF CONSTRUCTION.—Nothing under 
this subsection shall be construed to preclude the 
ability of a State to use other electronic data sources 
to timely identify potentially deceased beneficiaries, 
so long as the State is also in compliance with the 
requirements of this subsection (and all other re-
quirements under this title relating to Medicaid eli-
gibility determination and redetermination).’’. 
SEC. 44105. MEDICAID PROVIDER SCREENING REQUIRE-
MENTS. 
Section 1902(kk)(1) of the Social Security Act (42 
U.S.C. 1396a(kk)(1)) is amended—
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(1) by striking ‘‘The State’’ and inserting: 
‘‘(A) IN GENERAL.—The State’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) ADDITIONAL
PROVIDER
SCREEN-
ING.—Beginning January 1, 2028, as part of 
the enrollment (or reenrollment or revalidation 
of enrollment) of a provider or supplier under 
this title, and not less frequently than monthly 
during the period that such provider or supplier 
is so enrolled, the State conducts a check of any 
database or similar system developed pursuant 
to section 6401(b)(2) of the Patient Protection 
and Affordable Care Act to determine whether 
the Secretary has terminated the participation 
of such provider or supplier under title XVIII, 
or whether any other State has terminated the 
participation of such provider or supplier under 
such other State’s State plan under this title 
(or waiver of the plan), or such other State’s 
State child health plan under title XXI (or 
waiver of the plan).’’.
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SEC. 44106. ADDITIONAL MEDICAID PROVIDER SCREENING 
REQUIREMENTS. 
Section 1902(kk)(1) of the Social Security Act (42 
U.S.C. 1396a(kk)(1)), as amended by section 44105, is 
further amended by adding at the end the following new 
subparagraph: 
‘‘(C) 
PROVIDER
SCREENING
AGAINST 
DEATH MASTER FILE.—Beginning January 1, 
2028, as part of the enrollment (or reenroll-
ment or revalidation of enrollment) of a pro-
vider or supplier under this title, and not less 
frequently than quarterly during the period that 
such provider or supplier is so enrolled, the 
State conducts a check of the Death Master 
File (as such term is defined in section 203(d) 
of the Bipartisan Budget Act of 2013) to deter-
mine whether such provider or supplier is de-
ceased.’’. 
SEC. 44107. REMOVING GOOD FAITH WAIVER FOR PAYMENT 
REDUCTION RELATED TO CERTAIN ERRO-
NEOUS EXCESS PAYMENTS UNDER MEDICAID. 
(a) IN GENERAL.—Section 1903(u)(1) of the Social 
Security Act (42 U.S.C. 1396b(u)(1)) is amended—
(1) in subparagraph (B)—
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(A) by striking ‘‘The Secretary’’ and in-
serting ‘‘(i) Subject to clause (ii), the Sec-
retary’’; and 
(B) by adding at the end the following new 
clause: 
‘‘(ii) The amount waived under clause (i) for a 
fiscal year may not exceed an amount equal to the 
difference between—
‘‘(I) the amount of the reduction required 
under subparagraph (A) for such fiscal year 
(without application of this subparagraph); and 
‘‘(II) the sum of the erroneous excess pay-
ments for medical assistance described in sub-
clauses (I) and (III) of subparagraph (D)(i) 
made for such fiscal year.’’; 
(2) in subparagraph (C), by striking ‘‘he’’ in 
each place it appears and inserting ‘‘the Secretary’’ 
in each such place; and 
(3) in subparagraph (D)—
(A) in clause (i)—
(i) in subclause (I), by striking ‘‘and’’ 
at the end; 
(ii) in subclause (II), by striking the 
period at the end and inserting ‘‘, and’’; 
and
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(iii) by adding at the end the fol-
lowing new subclause: 
‘‘(III) payments (other than payments de-
scribed in subclause (I)) for items and services fur-
nished to an eligible individual who is not eligible for 
medical assistance under the State plan (or a waiver 
of such plan) with respect to such items and serv-
ices.’’; and 
(B) by adding at the end the following new 
clause: 
‘‘(vi) In determining the amount of erroneous excess 
payments for medical assistance under clause (i), the Sec-
retary shall include any payments described in such clause 
that are identified under the payment error rate measure-
ment (PERM) program, the Medicaid Eligibility Quality 
Control (MEQC) program, an audit conducted by the In-
spector General of the Department of Health and Human 
Services, or any other independent audit made by the Sec-
retary.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply beginning with respect to fiscal 
year 2030.
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SEC. 44108. INCREASING FREQUENCY OF ELIGIBILITY RE-
DETERMINATIONS FOR CERTAIN INDIVID-
UALS. 
Section 1902(e)(14) of the Social Security Act (42 
U.S.C. 1396a(e)(14)) is amended by adding at the end 
the following new subparagraph: 
‘‘(L) FREQUENCY OF ELIGIBILITY REDE-
TERMINATIONS
FOR
CERTAIN
INDIVIDUALS.—
With respect to redeterminations of eligibility 
for medical assistance under a State plan (or 
waiver of such plan) scheduled on or after De-
cember 31, 2026, a State shall make such a re-
determination once every 6 months for the fol-
lowing individuals: 
‘‘(i) Individuals enrolled under sub-
section (a)(10)(A)(i)(VIII). 
‘‘(ii) Individuals described in such 
subsection who are otherwise enrolled 
under a waiver of such plan that provides 
coverage that is equivalent to minimum es-
sential coverage (as described in section 
5000A(f)(1)(A) of the Internal Revenue 
Code of 1986 and determined in accord-
ance with standards prescribed by the Sec-
retary in regulations) to all individuals de-
scribed in subsection (a)(10)(A)(i)(VIII).’’.
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SEC. 44109. REVISING HOME EQUITY LIMIT FOR DETER-
MINING ELIGIBILITY FOR LONG-TERM CARE 
SERVICES UNDER THE MEDICAID PROGRAM. 
(a) 
REVISING
HOME
EQUITY
LIMIT.—Section 
1917(f)(1) of the Social Security Act (42 U.S.C. 
1396p(f)(1)) is amended—
(1) in subparagraph (B)—
(A) by striking ‘‘A State’’ and inserting 
‘‘(i) A State’’; 
(B) in clause (i), as inserted by subpara-
graph (A)—
(i) by striking ‘‘ ‘$500,000’ ’’ and in-
serting ‘‘the amount specified in subpara-
graph (A)’’; and 
(ii) by inserting ‘‘, in the case of an 
individual’s home that is located on a lot 
that is zoned for agricultural use,’’ after 
‘‘apply subparagraph (A)’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(ii) A State may elect, without regard to the 
requirements of section 1902(a)(1) (relating to 
statewideness) and section 1902(a)(10)(B) (relating 
to comparability), to apply subparagraph (A), in the 
case of an individual’s home that is not described in 
clause (i), by substituting for the amount specified
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in such subparagraph, an amount that exceeds such 
amount, but does not exceed $1,000,000.’’; and 
(2) in subparagraph (C)—
(A) by inserting ‘‘(other than the amount 
specified in subparagraph (B)(ii) (relating to 
certain non-agricultural homes))’’ after ‘‘speci-
fied in this paragraph’’; and 
(B) by adding at the end the following new 
sentence: ‘‘In the case that application of the 
preceding sentence would result in a dollar 
amount (other than the amount specified in 
subparagraph (B)(i) (relating to certain agricul-
tural homes)) exceeding $1,000,000, such 
amount shall be deemed to be equal to 
$1,000,000.’’. 
(b) CLARIFICATION.—Section 1902 of the Social Se-
curity Act (42 U.S.C. 1396a) is amended—
(1) in subsection (r)(2), by adding at the end 
the following new subparagraph: 
‘‘(C) This paragraph shall not be construed as per-
mitting a State to determine the eligibility of an individual 
for medical assistance with respect to nursing facility serv-
ices or other long-term care services without application 
of the limit under section 1917(f)(1).’’; and 
(2) in subsection (e)(14)(D)(iv)—
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(A) by striking ‘‘Subparagraphs’’ and in-
serting 
‘‘(I) 
IN
GENERAL.—Subpara-
graphs’’; and 
(B) by adding at the end the following new 
subclause: 
‘‘(II) APPLICATION OF HOME EQ-
UITY
INTEREST
LIMIT.—Section 
1917(f) shall apply for purposes of de-
termining the eligibility of an indi-
vidual for medical assistance with re-
spect to nursing facility services or 
other long-term care services.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply beginning on January 1, 2028. 
SEC. 44110. PROHIBITING FEDERAL FINANCIAL PARTICIPA-
TION UNDER MEDICAID AND CHIP FOR INDI-
VIDUALS WITHOUT VERIFIED CITIZENSHIP, 
NATIONALITY, OR SATISFACTORY IMMIGRA-
TION STATUS. 
(a) IN GENERAL.—
(1) MEDICAID.—Section 1903(i)(22) of the So-
cial Security Act (42 U.S.C. 1396b(i)(22)) is amend-
ed—
(A) by adding ‘‘and’’ at the end;
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(B) by striking ‘‘to amounts’’ and inserting 
‘‘to—
‘‘(A) amounts’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(B) in the case that the State elects 
under section 1902(a)(46)(C) to provide for 
making medical assistance available to an indi-
vidual during—
‘‘(i) the period in which the individual 
is provided the reasonable opportunity to 
present satisfactory documentary evidence 
of citizenship or nationality under section 
1902(ee)(2)(C) or subsection (x)(4); 
‘‘(ii) the 90-day period described in 
section 1902(ee)(1)(B)(ii)(II); or 
‘‘(iii) the period in which the indi-
vidual is provided the reasonable oppor-
tunity to submit evidence indicating a sat-
isfactory immigration status under section 
1137(d)(4), 
amounts expended for such medical assistance, 
unless the citizenship or nationality of such in-
dividual or the satisfactory immigration status
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of such individual (as applicable) is verified by 
the end of such period;’’. 
(2) CHIP.—Section 2107(e)(1)(N) of the So-
cial Security Act (42 U.S.C. 1397gg(e)(1)(N)) is 
amended by striking ‘‘and (17)’’ and inserting 
‘‘(17), and (22)’’. 
(b) ELIMINATING STATE REQUIREMENT TO PROVIDE 
MEDICAL ASSISTANCE DURING REASONABLE OPPOR-
TUNITY PERIOD.—
(1) DOCUMENTARY EVIDENCE OF CITIZENSHIP 
OR NATIONALITY.—Section 1903(x)(4) of the Social 
Security Act (42 U.S.C. 1396b(x)) is amended—
(A) by striking ‘‘under clauses (i) and (ii) 
of section 1137(d)(4)(A)’’ and inserting ‘‘under 
section 1137(d)(4)’’; and 
(B) by inserting ‘‘, except that the State 
shall not be required to make medical assist-
ance available to such individual during the pe-
riod in which such individual is provided such 
reasonable opportunity if the State has not 
elected 
the 
option 
under 
section 
1902(a)(46)(C)’’ before the period at the end. 
(2) SOCIAL SECURITY DATA MATCH.—Section 
1902(ee) of the Social Security Act (42 U.S.C. 
1396a(ee)) is amended—
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(A) in paragraph (1)(B)(ii)—
(i) in subclause (II), by striking ‘‘(and 
continues to provide the individual with 
medical assistance during such 90-day pe-
riod)’’ and inserting ‘‘and, if the State has 
elected 
the 
option 
under 
subsection 
(a)(46)(C), continues to provide the indi-
vidual with medical assistance during such 
90-day period’’; and 
(ii) in subclause (III), by inserting ‘‘, 
or denies eligibility for medical assistance 
under this title for such individual, as ap-
plicable’’ after ‘‘under this title’’; and 
(B) in paragraph (2)(C)—
(i) by striking ‘‘under clauses (i) and 
(ii) of section 1137(d)(4)(A)’’ and insert-
ing ‘‘under section 1137(d)(4)’’; and 
(ii) by inserting ‘‘, except that the 
State shall not be required to make med-
ical assistance available to such individual 
during the period in which such individual 
is provided such reasonable opportunity if 
the State has not elected the option under 
section 1902(a)(46)(C)’’ before the period 
at the end.
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(3) INDIVIDUALS
WITH
SATISFACTORY
IMMI-
GRATION STATUS.—Section 1137(d)(4) of the Social 
Security Act (42 U.S.C. 1320b–7(d)(4)) is amend-
ed—
(A) in subparagraph (A)(ii), by inserting 
‘‘(except that such prohibition on delay, denial, 
reduction, or termination of eligibility for bene-
fits under the Medicaid program under title 
XIX shall apply only if the State has elected 
the option under section 1902(a)(46)(C))’’ after 
‘‘has been provided’’; and 
(B) in subparagraph (B)(ii), by inserting 
‘‘(except that such prohibition on delay, denial, 
reduction, or termination of eligibility for bene-
fits under the Medicaid program under title 
XIX shall apply only if the State has elected 
the option under section 1902(a)(46)(C))’’ after 
‘‘status’’. 
(c) OPTION TO CONTINUE PROVIDING MEDICAL AS-
SISTANCE
DURING
REASONABLE
OPPORTUNITY
PE-
RIOD.—
(1) MEDICAID.—Section 1902(a)(46) of the So-
cial Security Act (42 U.S.C. 1396a(a)(46)) is 
amended—
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(A) in subparagraph (A), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (B)(ii), by adding 
‘‘and’’ at the end; and 
(C) by inserting after subparagraph (B)(ii) 
the following new subparagraph: 
‘‘(C) provide, at the option of the State, for 
making medical assistance available—
‘‘(i) to an individual described in subpara-
graph (B) during the period in which such indi-
vidual is provided the reasonable opportunity to 
present satisfactory documentary evidence of 
citizenship or nationality under subsection 
(ee)(2)(C) or section 1903(x)(4), or during the 
90-day 
period 
described 
in 
subsection 
(ee)(1)(B)(ii)(II); or 
‘‘(ii) to an individual who is not a citizen 
or national of the United States during the pe-
riod in which such individual is provided the 
reasonable opportunity to submit evidence indi-
cating a satisfactory immigration status under 
section 1137(d)(4);’’. 
(2) CHIP.—Section 2105(c)(9) of the Social 
Security Act (42 U.S.C. 1397ee(c)(9)) is amended
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by adding at the end the following new subpara-
graph: 
‘‘(C) OPTION
TO
CONTINUE
PROVIDING 
CHILD HEALTH ASSISTANCE DURING REASON-
ABLE
OPPORTUNITY
PERIOD.—Section 
1902(a)(46)(C) shall apply to States under this 
title in the same manner as it applies to a State 
under title XIX.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply beginning October 1, 2026. 
SEC. 44111. REDUCING EXPANSION FMAP FOR CERTAIN 
STATES PROVIDING PAYMENTS FOR HEALTH 
CARE FURNISHED TO CERTAIN INDIVIDUALS. 
Section 1905 of the Social Security Act (42 U.S.C. 
1395d) is amended—
(1) in subsection (y)—
(A) in paragraph (1)(E), by inserting ‘‘(or, 
for calendar quarters beginning on or after Oc-
tober 1, 2027, in the case such State is a speci-
fied State with respect to such calendar quar-
ter, 80 percent)’’ after ‘‘thereafter’’; and 
(B) in paragraph (2), by adding at the end 
the following new subparagraph:
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‘‘(C) SPECIFIED STATE.—The term ‘speci-
fied State’ means, with respect to a quarter, a 
State that—
‘‘(i) provides any form of financial as-
sistance during such quarter, in whole or 
in part, whether or not made under a 
State plan (or waiver of such plan) under 
this title or under another program estab-
lished by the State, and regardless of the 
source of funding for such assistance, to or 
on behalf of an alien who is not a qualified 
alien and is not a child or pregnant woman 
who is lawfully residing in the United 
States and receiving medical assistance 
pursuant to section 1903(v)(4), for the 
purchasing of health insurance coverage 
(as defined in section 2791(b)(1) of the 
Public Health Service Act) for an alien 
who is not a qualified alien and is not such 
a child or pregnant woman; or 
‘‘(ii) provides any form of comprehen-
sive health benefits coverage during such 
quarter, whether or not under a State plan 
(or wavier of such plan) under this title or 
under another program established by the
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State, and regardless of the source of 
funding for such coverage, to an alien who 
is not a qualified alien and is not such a 
child or pregnant woman. 
‘‘(D) IMMIGRATION TERMS.—
‘‘(i) ALIEN.—The term ‘alien’ has the 
meaning given such term in section 101(a) 
of the Immigration and Nationality Act. 
‘‘(ii) QUALIFIED
ALIEN.—The term 
‘qualified alien’ has the meaning given 
such term in section 431 of the Personal 
Responsibility and Work Opportunity Rec-
onciliation Act of 1996, except that—
‘‘(I) such term does not include 
an alien described in subsection (b)(4) 
of such section (other than a qualified 
alien under section 402(b)(2) of such 
Act); 
‘‘(II) the reference to ‘at the time 
the alien applies for, receives, or at-
tempts to receive a Federal public 
benefit’ in subsection (b) of such sec-
tion 431 shall be treated as a ref-
erence to ‘at the time the alien is pro-
vided comprehensive health benefits
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coverage described in clause (ii) of 
section 1905(y)(C) of the Social Secu-
rity Act or is provided with financial 
assistance described in clause (i) of 
such section, as applicable’; and 
‘‘(III) the references to ‘(in the 
opinion of the agency providing such 
benefits)’ in subsection (c) of such 
section 431 shall be treated as ref-
erences to ‘(in the opinion of the 
State in which such comprehensive 
health benefits coverage or such finan-
cial assistance is provided, as applica-
ble)’.’’; and 
(2) in subsection (z)(2)—
(A) in subparagraph (A), by striking ‘‘for 
such year’’ and inserting ‘‘for such quarter’’; 
and 
(B) in subparagraph (B)(i)—
(i) in the matter preceding subclause 
(I), by striking ‘‘for a year’’ and inserting 
‘‘for a calendar quarter in a year’’; and 
(ii) in subclause (II), by striking ‘‘for 
the year’’ and inserting ‘‘for the quarter 
for the State’’.
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Subpart B—Preventing Wasteful Spending 
SEC. 44121. MORATORIUM ON IMPLEMENTATION OF RULE 
RELATING TO STAFFING STANDARDS FOR 
LONG-TERM CARE FACILITIES UNDER THE 
MEDICARE AND MEDICAID PROGRAMS. 
The Secretary of Health and Human Services shall 
not, during the period beginning on the date of the enact-
ment of this section and ending January 1, 2035, imple-
ment, administer, or enforce the provisions of the final 
rule published by the Centers for Medicare & Medicaid 
Services on May 10, 2024, and titled ‘‘Medicare and Med-
icaid Programs; Minimum Staffing Standards for Long-
Term Care Facilities and Medicaid Institutional Payment 
Transparency Reporting’’ (89 Fed. Reg. 40876). 
SEC. 44122. MODIFYING RETROACTIVE COVERAGE UNDER 
THE MEDICAID AND CHIP PROGRAMS. 
(a) IN GENERAL.—Section 1902(a)(34) of the Social 
Security Act (42 U.S.C. 1396a(a)(34)) is amended—
(1) by striking ‘‘him’’ and inserting ‘‘the indi-
vidual’’; 
(2) by striking ‘‘the third month’’ and inserting 
‘‘the month’’; 
(3) by striking ‘‘he’’ and inserting ‘‘the indi-
vidual’’; and 
(4) by striking ‘‘his’’ and inserting ‘‘the individ-
ual’s’’.
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(b) DEFINITION OF MEDICAL ASSISTANCE.—Section 
1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) 
is amended by striking ‘‘in or after the third month before 
the month in which the recipient makes application for 
assistance’’ and inserting ‘‘in or after the month before 
the month in which the recipient makes application for 
assistance’’. 
(c) CHIP.—Section 2102(b)(1)(B) of the Social Se-
curity Act (42 U.S.C. 1397bb(b)(1)(B)) is amended—
(1) in clause (iv), by striking ‘‘and’’ at the end; 
(2) in clause (v), by striking the period and in-
serting ‘‘; and’’; and 
(3) by adding at the end the following new 
clause: 
‘‘(vi) shall, in the case that the State 
elects to provide child health or pregnancy-
related assistance to an individual for any 
period prior to the month in which the in-
dividual made application for such assist-
ance (or application was made on behalf of 
the individual), provide that such assist-
ance is not made available to such indi-
vidual for items and services included 
under the State child health plan (or waiv-
er of such plan) that are furnished before
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•HR 1 EH1S 
the month preceding the month in which 
such individual made application (or appli-
cation was made on behalf of such indi-
vidual) for such assistance.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to medical assistance and child 
health assistance, and pregnancy-related assistance with 
respect to individuals whose eligibility for such medical as-
sistance, child health assistance, or pregnancy-related as-
sistance is based on an application made on or after De-
cember 31, 2026. 
SEC. 44123. ENSURING ACCURATE PAYMENTS TO PHAR-
MACIES UNDER MEDICAID. 
(a) IN GENERAL.—Section 1927(f) of the Social Se-
curity Act (42 U.S.C. 1396r–8(f)) is amended—
(1) in paragraph (1)(A)—
(A) by redesignating clause (ii) as clause 
(iii); and 
(B) by striking ‘‘and’’ after the semicolon 
at the end of clause (i) and all that precedes it 
through ‘‘(1)’’ and inserting the following: 
‘‘(1) DETERMINING PHARMACY ACTUAL ACQUI-
SITION COSTS.—The Secretary shall conduct a sur-
vey of retail community pharmacy drug prices and 
applicable non-retail pharmacy drug prices to deter-
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mine national average drug acquisition cost bench-
marks (as such term is defined by the Secretary) as 
follows: 
‘‘(A) USE
OF
VENDOR.—The Secretary 
may contract services for—
‘‘(i) with respect to retail community 
pharmacies, the determination of retail 
survey prices of the national average drug 
acquisition cost for covered outpatient 
drugs that represent a nationwide average 
of consumer purchase prices for such 
drugs, net of all discounts, rebates, and 
other price concessions (to the extent any 
information with respect to such discounts, 
rebates, and other price concessions is 
available) based on a monthly survey of 
such pharmacies; 
‘‘(ii) with respect to applicable non-re-
tail pharmacies—
‘‘(I) the determination of survey 
prices, separate from the survey prices 
described in clause (i), of the non-re-
tail national average drug acquisition 
cost for covered outpatient drugs that 
represent a nationwide average of con-
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•HR 1 EH1S 
sumer purchase prices for such drugs, 
net of all discounts, rebates, and other 
price concessions (to the extent any 
information with respect to such dis-
counts, rebates, and other price con-
cessions is available) based on a 
monthly survey of such pharmacies; 
and 
‘‘(II) at the discretion of the Sec-
retary, for each type of applicable 
non-retail pharmacy, the determina-
tion of survey prices, separate from 
the survey prices described in clause 
(i) or subclause (I) of this clause, of 
the national average drug acquisition 
cost for such type of pharmacy for 
covered outpatient drugs that rep-
resent a nationwide average of con-
sumer purchase prices for such drugs, 
net of all discounts, rebates, and other 
price concessions (to the extent any 
information with respect to such dis-
counts, rebates, and other price con-
cessions is available) based on a
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•HR 1 EH1S 
monthly survey of such pharmacies; 
and’’; 
(2) in subparagraph (B) of paragraph (1), by 
striking ‘‘subparagraph (A)(ii)’’ and inserting ‘‘sub-
paragraph (A)(iii)’’; 
(3) in subparagraph (D) of paragraph (1), by 
striking clauses (ii) and (iii) and inserting the fol-
lowing: 
‘‘(ii) The vendor must update the Sec-
retary no less often than monthly on the 
survey prices for covered outpatient drugs. 
‘‘(iii) The vendor must differentiate, 
in collecting and reporting survey data, for 
all cost information collected, whether a 
pharmacy is a retail community pharmacy 
or an applicable non-retail pharmacy, in-
cluding whether such pharmacy is an affil-
iate (as defined in subsection (k)(14)), 
and, in the case of an applicable non-retail 
pharmacy, which type of applicable non-re-
tail pharmacy it is using the relevant phar-
macy type indicators included in the guid-
ance required by subsection (d)(2) of sec-
tion 44123 of the Act titled ‘An Act to
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•HR 1 EH1S 
provide for reconciliation pursuant to title 
II of H. Con. Res. 14’.’’; 
(4) by adding at the end of paragraph (1) the 
following: 
‘‘(F) SURVEY
REPORTING.—In order to 
meet the requirement of section 1902(a)(54), a 
State shall require that any retail community 
pharmacy or applicable non-retail pharmacy in 
the State that receives any payment, reimburse-
ment, administrative fee, discount, rebate, or 
other price concession related to the dispensing 
of covered outpatient drugs to individuals re-
ceiving benefits under this title, regardless of 
whether such payment, reimbursement, admin-
istrative fee, discount, rebate, or other price 
concession is received from the State or a man-
aged care entity or other specified entity (as 
such 
terms 
are 
defined 
in 
section 
1903(m)(9)(D)) directly or from a pharmacy 
benefit manager or another entity that has a 
contract with the State or a managed care enti-
ty or other specified entity (as so defined), shall 
respond to surveys conducted under this para-
graph.
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‘‘(G) SURVEY INFORMATION.—Information 
on national drug acquisition prices obtained 
under this paragraph shall be made publicly 
available in a form and manner to be deter-
mined by the Secretary and shall include at 
least the following: 
‘‘(i) The monthly response rate to the 
survey including a list of pharmacies not in 
compliance with subparagraph (F). 
‘‘(ii) The sampling methodology and 
number of pharmacies sampled monthly. 
‘‘(iii) Information on price concessions 
to pharmacies, including discounts, re-
bates, and other price concessions, to the 
extent that such information may be pub-
licly released and has been collected by the 
Secretary as part of the survey. 
‘‘(H) PENALTIES.—
‘‘(i) IN GENERAL.—Subject to clauses 
(ii), (iii), and (iv), the Secretary shall en-
force the provisions of this paragraph with 
respect to a pharmacy through the estab-
lishment of civil money penalties applicable 
to a retail community pharmacy or an ap-
plicable non-retail pharmacy.
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‘‘(ii) BASIS
FOR
PENALTIES.—The 
Secretary shall impose a civil money pen-
alty established under this subparagraph 
on a retail community pharmacy or appli-
cable non-retail pharmacy if—
‘‘(I) the retail pharmacy or appli-
cable non-retail pharmacy refuses or 
otherwise fails to respond to a request 
for information about prices in con-
nection with a survey under this sub-
section; 
‘‘(II) knowingly provides false in-
formation in response to such a sur-
vey; or 
‘‘(III) otherwise fails to comply 
with the requirements established 
under this paragraph. 
‘‘(iii) 
PARAMETERS
FOR
PEN-
ALTIES.—
‘‘(I) IN GENERAL.—A civil money 
penalty established under this sub-
paragraph may be assessed with re-
spect to each violation, and with re-
spect to each non-compliant retail 
community pharmacy (including a
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pharmacy that is part of a chain) or 
non-compliant 
applicable 
non-retail 
pharmacy (including a pharmacy that 
is part of a chain), in an amount not 
to exceed $100,000 for each such vio-
lation. 
‘‘(II) CONSIDERATIONS.—In de-
termining the amount of a civil money 
penalty imposed under this subpara-
graph, the Secretary may consider the 
size, business structure, and type of 
pharmacy involved, as well as the type 
of violation and other relevant factors, 
as determined appropriate by the Sec-
retary. 
‘‘(iv) RULE
OF
APPLICATION.—The 
provisions of section 1128A (other than 
subsections (a) and (b)) shall apply to a 
civil money penalty under this subpara-
graph in the same manner as such provi-
sions apply to a civil money penalty or pro-
ceeding under section 1128A(a). 
‘‘(I) LIMITATION ON USE OF APPLICABLE 
NON-RETAIL
PHARMACY
PRICING
INFORMA-
TION.—No State shall use pricing information
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•HR 1 EH1S 
reported by applicable non-retail pharmacies 
under subparagraph (A)(ii) to develop or inform 
payment methodologies for retail community 
pharmacies.’’; 
(5) in paragraph (2)—
(A) in subparagraph (A), by inserting ‘‘, 
including payment rates and methodologies for 
determining 
ingredient 
cost 
reimbursement 
under managed care entities or other specified 
entities (as such terms are defined in section 
1903(m)(9)(D)),’’ after ‘‘under this title’’; and 
(B) in subparagraph (B), by inserting 
‘‘and the basis for such dispensing fees’’ before 
the semicolon; 
(6) by redesignating paragraph (4) as para-
graph (5); 
(7) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) OVERSIGHT.—
‘‘(A) IN GENERAL.—The Inspector General 
of the Department of Health and Human Serv-
ices shall conduct periodic studies of the survey 
data reported under this subsection, as appro-
priate, including with respect to substantial 
variations in acquisition costs or other applica-
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•HR 1 EH1S 
ble costs, as well as with respect to how internal 
transfer prices and related party transactions 
may influence the costs reported by pharmacies 
that are affiliates (as defined in subsection 
(k)(13)) or are owned by, controlled by, or re-
lated under a common ownership structure with 
a wholesaler, distributor, or other entity that 
acquires covered outpatient drugs relative to 
costs reported by pharmacies not affiliated with 
such entities. The Inspector General shall pro-
vide periodic updates to Congress on the results 
of such studies, as appropriate, in a manner 
that does not disclose trade secrets or other 
proprietary information. 
‘‘(B) APPROPRIATION.—There is appro-
priated to the Inspector General of the Depart-
ment of Health and Human Services, out of 
any money in the Treasury not otherwise ap-
propriated, $5,000,000 for fiscal year 2026, to 
remain available until expended, to carry out 
this paragraph.’’; and 
(8) in paragraph (5), as so redesignated—
(A) by inserting ‘‘, and $8,000,000 for 
each of fiscal years 2026 through 2033,’’ after 
‘‘2010’’; and
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(B) by inserting ‘‘Funds appropriated 
under this paragraph for each of fiscal years 
2026 through 2033 shall remain available until 
expended.’’ after the period. 
(b) DEFINITIONS.—Section 1927(k) of the Social Se-
curity Act (42 U.S.C. 1396r–8(k)) is amended—
(1) in the matter preceding paragraph (1), by 
striking ‘‘In the section’’ and inserting ‘‘In this sec-
tion’’; and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(12) APPLICABLE NON-RETAIL PHARMACY.—
The term ‘applicable non-retail pharmacy’ means a 
pharmacy that is licensed as a pharmacy by the 
State and that is not a retail community pharmacy, 
including a pharmacy that dispenses prescription 
medications to patients primarily through mail and 
specialty pharmacies. Such term does not include 
nursing home pharmacies, long-term care facility 
pharmacies, hospital pharmacies, clinics, charitable 
or not-for-profit pharmacies, government phar-
macies, or low dispensing pharmacies (as defined by 
the Secretary). 
‘‘(13) AFFILIATE.—The term ‘affiliate’ means 
any entity that is owned by, controlled by, or related
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under a common ownership structure with a phar-
macy benefit manager or a managed care entity or 
other specified entity (as such terms are defined in 
section 1903(m)(9)(D)).’’. 
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Subject to paragraph (2), 
the amendments made by this section shall apply be-
ginning on the first day of the first quarter that be-
gins on or after the date that is 6 months after the 
date of enactment of this section. 
(2) DELAYED
APPLICATION
TO
APPLICABLE 
NON-RETAIL
PHARMACIES.—The pharmacy survey 
requirements established by the amendments to sec-
tion 1927(f) of the Social Security Act (42 U.S.C. 
1396r–8(f)) made by this section shall apply to re-
tail community pharmacies beginning on the effec-
tive date described in paragraph (1), but shall not 
apply to applicable non-retail pharmacies until the 
first day of the first quarter that begins on or after 
the date that is 18 months after the date of enact-
ment of this section. 
(d) IDENTIFICATION OF APPLICABLE NON-RETAIL 
PHARMACIES.—
(1) IN GENERAL.—Not later than January 1, 
2027, the Secretary of Health and Human Services
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shall publish guidance specifying pharmacies that 
meet the definition of applicable non-retail phar-
macies (as such term is defined in subsection 
(k)(12) of section 1927 of the Social Security Act 
(42 U.S.C. 1396r–8), as added by subsection (b)), 
and that will be subject to the survey requirements 
under subsection (f)(1) of such section, as amended 
by subsection (a). 
(2) INCLUSION
OF
PHARMACY
TYPE
INDICA-
TORS.—The guidance published under paragraph (1) 
shall include pharmacy type indicators to distinguish 
between different types of applicable non-retail phar-
macies, such as pharmacies that dispense prescrip-
tions primarily through the mail and pharmacies 
that dispense prescriptions that require special han-
dling or distribution. An applicable non-retail phar-
macy may be identified through multiple pharmacy 
type indicators. 
(e) 
IMPLEMENTATION.—Implementation 
of 
the 
amendments made by this section shall be exempt from 
the requirements of section 553 of title 5, United States 
Code. 
(f) NONAPPLICATION OF PAPERWORK REDUCTION 
ACT.—Chapter 35 of title 44, United States Code, shall 
not apply to any data collection undertaken by the Sec-
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retary of Health and Human Services under section 
1927(f) of the Social Security Act (42 U.S.C. 1396r–8(f)), 
as amended by this section. 
SEC. 44124. PREVENTING THE USE OF ABUSIVE SPREAD 
PRICING IN MEDICAID. 
(a) IN GENERAL.—Section 1927 of the Social Secu-
rity Act (42 U.S.C. 1396r–8) is amended—
(1) in subsection (e), by adding at the end the 
following new paragraph: 
‘‘(6) TRANSPARENT PRESCRIPTION DRUG PASS-
THROUGH PRICING REQUIRED.—
‘‘(A) IN
GENERAL.—A contract between 
the State and a pharmacy benefit manager (re-
ferred to in this paragraph as a ‘PBM’), or a 
contract between the State and a managed care 
entity or other specified entity (as such terms 
are defined in section 1903(m)(9)(D) and col-
lectively referred to in this paragraph as the 
‘entity’) that includes provisions making the en-
tity responsible for coverage of covered out-
patient drugs dispensed to individuals enrolled 
with the entity, shall require that payment for 
such drugs and related administrative services 
(as applicable), including payments made by a 
PBM on behalf of the State or entity, is based
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on a transparent prescription drug pass-
through pricing model under which—
‘‘(i) any payment made by the entity 
or the PBM (as applicable) for such a 
drug—
‘‘(I) is limited to—
‘‘(aa) ingredient cost; and 
‘‘(bb) a professional dis-
pensing fee that is not less than 
the professional dispensing fee 
that the State would pay if the 
State were making the payment 
directly in accordance with the 
State plan; 
‘‘(II) is passed through in its en-
tirety (except as reduced under Fed-
eral or State laws and regulations in 
response to instances of waste, fraud, 
or abuse) by the entity or PBM to the 
pharmacy or provider that dispenses 
the drug; and 
‘‘(III) is made in a manner that 
is consistent with sections 447.502, 
447.512, 447.514, and 447.518 of 
title 42, Code of Federal Regulations
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as if such requirements applied di-
rectly to the entity or the PBM, ex-
cept that any payment by the entity 
or the PBM for the ingredient cost of 
such drug purchased by a covered en-
tity 
(as 
defined 
in 
subsection 
(a)(5)(B)) may exceed the actual ac-
quisition cost (as defined in 447.502 
of title 42, Code of Federal Regula-
tions) for such drug if—
‘‘(aa) such drug was subject 
to an agreement under section 
340B of the Public Health Serv-
ice Act; 
‘‘(bb) such payment for the 
ingredient cost of such drug does 
not exceed the maximum pay-
ment that would have been made 
by the entity or the PBM for the 
ingredient cost of such drug if 
such drug had not been pur-
chased by such covered entity; 
and 
‘‘(cc) such covered entity re-
ports to the Secretary (in a form
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and manner specified by the Sec-
retary), on an annual basis and 
with respect to payments for the 
ingredient costs of such drugs so 
purchased by such covered entity 
that are in excess of the actual 
acquisition costs for such drugs, 
the aggregate amount of such ex-
cess; 
‘‘(ii) payment to the entity or the 
PBM (as applicable) for administrative 
services performed by the entity or PBM is 
limited to an administrative fee that re-
flects the fair market value (as defined by 
the Secretary) of such services; 
‘‘(iii) the entity or the PBM (as appli-
cable) makes available to the State, and 
the Secretary upon request in a form and 
manner specified by the Secretary, all costs 
and payments related to covered outpatient 
drugs and accompanying administrative 
services (as described in clause (ii)) in-
curred, received, or made by the entity or 
the PBM, broken down (as specified by the 
Secretary), to the extent such costs and
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payments are attributable to an individual 
covered outpatient drug, by each such 
drug, including any ingredient costs, pro-
fessional dispensing fees, administrative 
fees (as described in clause (ii)), post-sale 
and post-invoice fees, discounts, or related 
adjustments such as direct and indirect re-
muneration fees, and any and all other re-
muneration, as defined by the Secretary; 
and 
‘‘(iv) any form of spread pricing 
whereby any amount charged or claimed by 
the entity or the PBM (as applicable) that 
exceeds the amount paid to the pharmacies 
or providers on behalf of the State or enti-
ty, including any post-sale or post-invoice 
fees, discounts, or related adjustments 
such as direct and indirect remuneration 
fees or assessments, as defined by the Sec-
retary, (after allowing for an administra-
tive fee as described in clause (ii)) is not 
allowable for purposes of claiming Federal 
matching payments under this title. 
‘‘(B) PUBLICATION
OF
INFORMATION.—
The Secretary shall publish, not less frequently
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than on an annual basis and in a manner that 
does not disclose the identity of a particular 
covered entity or organization, information re-
ceived by the Secretary pursuant to subpara-
graph (A)(iii)(III) that is broken out by State 
and by each of the following categories of cov-
ered entity within each such State: 
‘‘(i) Covered entities described in sub-
paragraph (A) of section 340B(a)(4) of the 
Public Health Service Act. 
‘‘(ii) Covered entities described in sub-
paragraphs (B) through (K) of such sec-
tion. 
‘‘(iii) Covered entities described in 
subparagraph (L) of such section. 
‘‘(iv) Covered entities described in 
subparagraph (M) of such section. 
‘‘(v) Covered entities described in sub-
paragraph (N) of such section. 
‘‘(vi) Covered entities described in 
subparagraph (O) of such section.’’; and 
(2) in subsection (k), as previously amended by 
this subtitle, by adding at the end the following new 
paragraph:
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‘‘(14) PHARMACY
BENEFIT
MANAGER.—The 
term ‘pharmacy benefit manager’ means any person 
or entity that, either directly or through an inter-
mediary, acts as a price negotiator or group pur-
chaser on behalf of a State, managed care entity (as 
defined in section 1903(m)(9)(D)), or other specified 
entity (as so defined), or manages the prescription 
drug benefits provided by a State, managed care en-
tity, or other specified entity, including the proc-
essing and payment of claims for prescription drugs, 
the performance of drug utilization review, the proc-
essing of drug prior authorization requests, the man-
aging of appeals or grievances related to the pre-
scription drug benefits, contracting with pharmacies, 
controlling the cost of covered outpatient drugs, or 
the provision of services related thereto. Such term 
includes any person or entity that acts as a price ne-
gotiator (with regard to payment amounts to phar-
macies and providers for a covered outpatient drug 
or the net cost of the drug) or group purchaser on 
behalf of a State, managed care entity, or other 
specified entity or that carries out 1 or more of the 
other activities described in the preceding sentence, 
irrespective of whether such person or entity calls 
itself a pharmacy benefit manager.’’.
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(b) CONFORMING AMENDMENTS.—Section 1903(m) 
of such Act (42 U.S.C. 1396b(m)) is amended—
(1) in paragraph (2)(A)(xiii)—
(A) by striking ‘‘and (III)’’ and inserting 
‘‘(III)’’; 
(B) by inserting before the period at the 
end the following: ‘‘, and (IV) if the contract in-
cludes provisions making the entity responsible 
for coverage of covered outpatient drugs, the 
entity shall comply with the requirements of 
section 1927(e)(6)’’; and 
(C) by moving the left margin 2 ems to the 
left; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(10) No payment shall be made under this 
title to a State with respect to expenditures incurred 
by the State for payment for services provided by an 
other specified entity (as defined in paragraph 
(9)(D)(iii)) unless such services are provided in ac-
cordance with a contract between the State and such 
entity which satisfies the requirements of paragraph 
(2)(A)(xiii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contracts between States and
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managed care entities, other specified entities, or phar-
macy benefit managers that have an effective date begin-
ning on or after the date that is 18 months after the date 
of enactment of this section. 
(d) 
IMPLEMENTATION.—Implementation 
of 
the 
amendments made by this section shall be exempt from 
the requirements of section 553 of title 5, United States 
Code. 
(e) NONAPPLICATION OF PAPERWORK REDUCTION 
ACT.—Chapter 35 of title 44, United States Code, shall 
not apply to any data collection undertaken by the Sec-
retary of Health and Human Services under section 
1927(e) of the Social Security Act (42 U.S.C. 1396r–
8(e)), as amended by this section. 
SEC. 44125. PROHIBITING FEDERAL MEDICAID AND CHIP 
FUNDING FOR GENDER TRANSITION PROCE-
DURES. 
(a) MEDICAID.—Section 1903(i) of the Social Secu-
rity Act (42 U.S.C. 1396b(i)) is amended—
(1) in paragraph (26), by striking ‘‘; or’’ and 
inserting a semicolon; 
(2) in paragraph (27), by striking the period at 
the end and inserting ‘‘; or’’; 
(3) by inserting after paragraph (27) the fol-
lowing new paragraph:
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‘‘(28) with respect to any amount expended for 
specified gender transition procedures (as defined in 
section 1905(kk)) furnished to an individual enrolled 
in a State plan (or waiver of such plan).’’; and 
(4) in the flush left matter at the end, by strik-
ing ‘‘and (18),’’ and inserting ‘‘(18), and (28)’’. 
(b) CHIP.—Section 2107(e)(1)(N) of the Social Se-
curity Act (42 U.S.C. 1397gg(e)(1)(N)) is amended by 
striking ‘‘and (17)’’ and inserting ‘‘(17), and (28)’’. 
(c) SPECIFIED GENDER TRANSITION PROCEDURES 
DEFINED.—Section 1905 of the Social Security Act (42 
U.S.C. 1396d) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(kk) SPECIFIED
GENDER
TRANSITION
PROCE-
DURES.—
‘‘(1) IN
GENERAL.—For purposes of section 
1903(i)(28), except as provided in paragraph (2), 
the term ‘specified gender transition procedure’ 
means, with respect to an individual, any of the fol-
lowing when performed for the purpose of inten-
tionally changing the body of such individual (in-
cluding by disrupting the body’s development, inhib-
iting its natural functions, or modifying its appear-
ance) to no longer correspond to the individual’s sex: 
‘‘(A) Performing any surgery, including—
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‘‘(i) castration; 
‘‘(ii) sterilization; 
‘‘(iii) orchiectomy; 
‘‘(iv) scrotoplasty; 
‘‘(v) vasectomy; 
‘‘(vi) tubal ligation; 
‘‘(vii) hysterectomy; 
‘‘(viii) oophorectomy; 
‘‘(ix) ovariectomy; 
‘‘(x) metoidioplasty; 
‘‘(xi) clitoroplasty; 
‘‘(xii) reconstruction of the fixed part 
of 
the 
urethra 
with 
or 
without 
a 
metoidioplasty or a phalloplasty; 
‘‘(xiii) penectomy; 
‘‘(xiv) phalloplasty; 
‘‘(xv) vaginoplasty; 
‘‘(xvi) vaginectomy; 
‘‘(xvii) vulvoplasty; 
‘‘(xviii) reduction thyrochondroplasty; 
‘‘(xix) chondrolaryngoplasty; 
‘‘(xx) mastectomy; and 
‘‘(xxi) any plastic, cosmetic, or aes-
thetic 
surgery 
that 
feminizes 
or
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masculinizes the facial or other body fea-
tures of an individual. 
‘‘(B) Any placement of chest implants to 
create feminine breasts or any placement of 
erection or testicular prostheses. 
‘‘(C) Any placement of fat or artificial im-
plants in the gluteal region. 
‘‘(D) Administering, prescribing, or dis-
pensing to an individual medications, includ-
ing—
‘‘(i) gonadotropin-releasing hormone 
(GnRH) analogues or other puberty-block-
ing drugs to stop or delay normal puberty; 
and 
‘‘(ii) testosterone, estrogen, or other 
androgens to an individual at doses that 
are supraphysiologic than would normally 
be produced endogenously in a healthy in-
dividual of the same age and sex. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply to the following when furnished to an indi-
vidual by a health care provider with the consent of 
such individual’s parent or legal guardian: 
‘‘(A) Puberty suppression or blocking pre-
scription drugs for the purpose of normalizing
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puberty for an individual experiencing pre-
cocious puberty. 
‘‘(B) Medically necessary procedures or 
treatments to correct for—
‘‘(i) a medically verifiable disorder of 
sex development, including—
‘‘(I) 46,XX chromosomes with 
virilization; 
‘‘(II) 46,XY chromosomes with 
undervirilization; and 
‘‘(III) both ovarian and testicular 
tissue; 
‘‘(ii) sex chromosome structure, sex 
steroid hormone production, or sex hor-
mone action, if determined to be abnormal 
by a physician through genetic or bio-
chemical testing; 
‘‘(iii) infection, disease, injury, or dis-
order caused or exacerbated by a previous 
procedure described in paragraph (1), or a 
physical disorder, physical injury, or phys-
ical illness that would, as certified by a 
physician, place the individual in imminent 
danger of death or impairment of a major 
bodily function unless the procedure is per-
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formed, not including procedures per-
formed for the alleviation of mental dis-
tress; or 
‘‘(iv) procedures to restore or recon-
struct the body of the individual in order 
to correspond to the individual’s sex after 
one or more previous procedures described 
in paragraph (1), which may include the 
removal of a pseudo phallus or breast aug-
mentation. 
‘‘(3) SEX.—For purposes of paragraph (1), the 
term ‘sex’ means either male or female, as bio-
logically determined and defined in paragraphs (4) 
and (5), respectively. 
‘‘(4) FEMALE.—For purposes of paragraph (3), 
the term ‘female’ means an individual who naturally 
has, had, will have, or would have, but for a develop-
mental or genetic anomaly or historical accident, the 
reproductive system that at some point produces, 
transports, and utilizes eggs for fertilization. 
‘‘(5) MALE.—For purposes of paragraph (3), 
the term ‘male’ means an individual who naturally 
has, had, will have, or would have, but for a develop-
mental or genetic anomaly or historical accident, the
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reproductive system that at some point produces, 
transports, and utilizes sperm for fertilization.’’. 
SEC. 44126. FEDERAL PAYMENTS TO PROHIBITED ENTI-
TIES. 
(a) IN GENERAL.—No Federal funds that are consid-
ered direct spending and provided to carry out a State 
plan under title XIX of the Social Security Act or a waiver 
of such a plan shall be used to make payments to a prohib-
ited entity for items and services furnished during the 10-
year period beginning on the date of the enactment of this 
Act, including any payments made directly to the prohib-
ited entity or under a contract or other arrangement be-
tween a State and a covered organization. 
(b) DEFINITIONS.—In this section: 
(1) PROHIBITED ENTITY.—The term ‘‘prohib-
ited entity’’ means an entity, including its affiliates, 
subsidiaries, successors, and clinics—
(A) that, as of the date of enactment of 
this Act—
(i) is an organization described in sec-
tion 501(c)(3) of the Internal Revenue 
Code of 1986 and exempt from tax under 
section 501(a) of such Code; 
(ii) is an essential community provider 
described in section 156.235 of title 45,
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•HR 1 EH1S 
Code of Federal Regulations (as in effect 
on the date of enactment of this Act), that 
is primarily engaged in family planning 
services, reproductive health, and related 
medical care; and 
(iii) provides for abortions, other than 
an abortion—
(I) if the pregnancy is the result 
of an act of rape or incest; or 
(II) in the case where a woman 
suffers from a physical disorder, phys-
ical injury, or physical illness, includ-
ing a life-endangering physical condi-
tion caused by or arising from the 
pregnancy itself, that would, as cer-
tified by a physician, place the woman 
in danger of death unless an abortion 
is performed; and 
(B) for which the total amount of Federal 
and State expenditures under the Medicaid pro-
gram under title XIX of the Social Security Act 
in fiscal year 2024 made directly, or by a cov-
ered organization, to the entity or to any affili-
ates, subsidiaries, successors, or clinics of the 
entity, or made to the entity or to any affiliates,
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subsidiaries, successors, or clinics of the entity 
as part of a nationwide health care provider 
network, exceeded $1,000,000. 
(2) DIRECT
SPENDING.—The term ‘‘direct 
spending’’ has the meaning given that term under 
section 250(c) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 (2 U.S.C. 900(c)). 
(3) COVERED ORGANIZATION.—The term ‘‘cov-
ered organization’’ means a managed care entity (as 
defined in section 1932(a)(1)(B) of the Social Secu-
rity Act (42 U.S.C. 1396u–2(a)(1)(B))) or a prepaid 
inpatient health plan or prepaid ambulatory health 
plan (as such terms are defined in section 
1903(m)(9)(D) 
of 
such 
Act 
(42 
U.S.C. 
1396b(m)(9)(D))). 
(4) STATE.—The term ‘‘State’’ has the mean-
ing given such term in section 1101 of the Social Se-
curity Act (42 U.S.C. 1301). 
Subpart C—Stopping Abusive Financing Practices 
SEC. 44131. SUNSETTING ELIGIBILITY FOR INCREASED 
FMAP FOR NEW EXPANSION STATES. 
Section 1905(ii)(3) of the Social Security Act (42 
U.S.C. 1396d(ii)(3)) is amended—
(1) by striking ‘‘which has not’’ and inserting 
the following: ‘‘which—
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‘‘(A) has not’’; 
(2) in subparagraph (A), as so inserted, by 
striking the period at the end and inserting ‘‘; and’’; 
and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) begins to expend amounts for all such 
individuals prior to January 1, 2026.’’. 
SEC. 44132. MORATORIUM ON NEW OR INCREASED PRO-
VIDER TAXES. 
Section 1903(w)(1)(A)(iii) of the Social Security Act 
(42 U.S.C. 1396b(w)(1)(A)(iii)) is amended—
(1) by striking ‘‘or’’ at the end; 
(2) by striking ‘‘if there’’ and inserting ‘‘if—
‘‘(I) there’’; and 
(3) by adding at the end the following new sub-
clauses: 
‘‘(II) the tax is first imposed by the State 
(or by a unit of local government in the State) 
on or after the date of the enactment of this 
subclause (other than such a tax for which the 
legislation or regulations providing for the im-
position of such tax were enacted or adopted 
prior to such date of enactment); or
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‘‘(III) on or after the date of the enact-
ment of this subclause, the State (or unit of 
local government) increases the amount or rate 
of tax imposed with respect to a class of health 
care items or services (or with respect to a type 
of provider or activity within such a class), or 
increases the base of the tax such that the tax 
is imposed with respect to a class of items or 
services (or with respect to a type of provider 
or activity within such a class) to which the tax 
did not previously apply, but only to the extent 
that such revenues are attributable to such in-
crease and only if such increase was not pro-
vided for in legislation or regulations enacted or 
adopted prior to such date of enactment; or’’. 
SEC. 44133. REVISING PAYMENTS FOR CERTAIN STATE DI-
RECTED PAYMENTS. 
(a) IN GENERAL.—Subject to subsection (b), the Sec-
retary of Health and Human Services (in this section re-
ferred to as the Secretary) shall revise section 
438.6(c)(2)(iii) of title 42, Code of Federal Regulations 
such that, with respect to a payment described in such 
section made for a service furnished during a rating period 
beginning on or after the date of the enactment of this 
Act, the total payment rate for such service is limited to—
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(1) in the case of a State that provides coverage 
to 
all 
individuals 
described 
in 
section 
1902(a)(10)(A)(i)(VIII) of the Social Security Act 
(42 U.S.C. 1396a(a)(10)(A)(i)(VIII)) that is equiva-
lent to minimum essential coverage (as described in 
section 5000A(f)(1)(A) of the Internal Revenue 
Code of 1986 and determined in accordance with 
standards prescribed by the Secretary in regula-
tions) under the State plan (or waiver of such plan) 
of such State under title XIX of such Act, 100 per-
cent of the specified total published Medicare pay-
ment rate (or, in the absence of a specified total 
published Medicare payment rate, an equivalent 
Medicare payment rate); or 
(2) in the case of a State other than a State 
described in paragraph (1), 110 percent of the speci-
fied total published Medicare payment rate (or, in 
the absence of a specified total published Medicare 
payment rate, an equivalent Medicare payment 
rate). 
(b) GRANDFATHERING CERTAIN PAYMENTS.—In the 
case of a payment described in section 438.6(c)(2)(iii) of 
title 42, Code of Federal Regulations for which written 
prior approval was made before the date of the enactment 
of this Act for the rating period occurring as of such date
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of enactment, or a payment so described for such rating 
period for which a preprint was submitted to the Secretary 
prior to such date of enactment, the revisions described 
in subsection (a) shall not apply to such payment for such 
rating period and for any subsequent rating period if the 
amount of such payment does not exceed the amount of 
such payment so approved. 
(c) TREATMENT OF EXPANSION STATES.—The revi-
sions described in subsection (a) shall provide that, with 
respect to a State that begins providing the coverage de-
scribed in paragraph (1) of such subsection on or after 
the date of the enactment of this Act, the limitation de-
scribed in such paragraph shall apply to such State with 
respect to a payment described in section 438.6(c)(2)(iii) 
of title 42, Code of Federal Regulations for a service fur-
nished during a rating period beginning on or after the 
date on which such State begins providing such coverage, 
including with respect to a payment so described for which 
written prior approval was made before such date. 
(d) DEFINITIONS.—In this section: 
(1) EQUIVALENT MEDICARE PAYMENT RATE.—
The term ‘‘equivalent Medicare payment rate’’ 
means amounts calculated as payment for specific 
services comparable to the service furnished that 
have been developed under part A or part B of title
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XVIII of the Social Security Act (42 U.S.C. 1396 et 
seq.). 
(2) RATING
PERIOD.—The term ‘‘rating pe-
riod’’ has the meaning given such term in section 
438.2 of title 42, Code of Federal Regulations. 
(3) TOTAL
PUBLISHED
MEDICARE
PAYMENT 
RATE.—The term ‘‘total published Medicare pay-
ment rate’’ means amounts calculated as payment 
for specific services including the service furnished 
that have been developed under part A or part B of 
title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.). 
(4) WRITTEN
PRIOR
APPROVAL.—The term 
‘‘written prior approval’’ has the meaning given such 
term in section 438.6(c)(2)(i) of title 42, Code of 
Federal Regulations. 
(e) FUNDING.—There are appropriated out of any 
monies in the Treasury not otherwise appropriated 
$7,000,000 for each of fiscal years 2026 through 2033 
for purposes of carrying out this section. 
SEC. 44134. REQUIREMENTS REGARDING WAIVER OF UNI-
FORM TAX REQUIREMENT FOR MEDICAID 
PROVIDER TAX. 
(a) IN GENERAL.—Section 1903(w) of the Social Se-
curity Act (42 U.S.C. 1396b(w)) is amended—
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(1) in paragraph (3)(E), by inserting after 
clause (ii)(II) the following new clause: 
‘‘(iii) For purposes of clause (ii)(I), a tax is not con-
sidered to be generally redistributive if any of the following 
conditions apply: 
‘‘(I) Within a permissible class, the tax rate im-
posed on any taxpayer or tax rate group (as defined 
in paragraph (7)(J)) explicitly defined by its rel-
atively lower volume or percentage of Medicaid tax-
able units (as defined in paragraph (7)(H)) is lower 
than the tax rate imposed on any other taxpayer or 
tax rate group explicitly defined by its relatively 
higher volume or percentage of Medicaid taxable 
units. 
‘‘(II) Within a permissible class, the tax rate 
imposed on any taxpayer or tax rate group (as so 
defined) based upon its Medicaid taxable units (as 
so defined) is higher than the tax rate imposed on 
any taxpayer or tax rate group based upon its non-
Medicaid taxable unit (as defined in paragraph 
(7)(I)). 
‘‘(III) The tax excludes or imposes a lower tax 
rate on a taxpayer or tax rate group (as so defined) 
based on or defined by any description that results 
in the same effect as described in subclause (I) or
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(II) for a taxpayer or tax rate group. Characteristics 
that may indicate such type of exclusion include the 
use of terminology to establish a tax rate group—
‘‘(aa) based on payments or expenditures 
made under the program under this title with-
out mentioning the term ‘Medicaid’ (or any 
similar term) to accomplish the same effect as 
described in subclause (I) or (II); or 
‘‘(bb) that closely approximates a taxpayer 
or tax rate group under the program under this 
title, to the same effect as described in sub-
clause (I) or (II).’’; and 
(2) in paragraph (7), by adding at the end the 
following new subparagraphs: 
‘‘(H) The term ‘Medicaid taxable unit’ means a 
unit that is being taxed within a health care related 
tax that is applicable to the program under this title. 
Such term includes a unit that is used as the basis 
for—
‘‘(i) payment under the program under this 
title (such as Medicaid bed days); 
‘‘(ii) Medicaid revenue; 
‘‘(iii) costs associated with the program 
under this title (such as Medicaid charges, 
claims, or expenditures); and
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‘‘(iv) other units associated with the pro-
gram under this title, as determined by the Sec-
retary. 
‘‘(I) The term ‘non-Medicaid taxable unit’ 
means a unit that is being taxed within a health 
care related tax that is not applicable to the pro-
gram under this title. Such term includes a unit that 
is used as the basis for—
‘‘(i) payment by non-Medicaid payers (such 
as non-Medicaid bed days); 
‘‘(ii) non-Medicaid revenue; 
‘‘(iii) costs that are not associated with the 
program under this title (such as non-Medicaid 
charges, non-Medicaid claims, or non-Medicaid 
expenditures); and 
‘‘(iv) other units not associated with the 
program under this title, as determined by the 
Secretary. 
‘‘(J) The term ‘tax rate group’ means a group 
of entities contained within a permissible class of a 
health care related tax that are taxed at the same 
rate.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect upon the date of enactment 
of this Act, subject to any applicable transition period de-
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termined appropriate by the Secretary of Health and 
Human Services, not to exceed 3 fiscal years. 
SEC. 44135. REQUIRING BUDGET NEUTRALITY FOR MED-
ICAID DEMONSTRATION PROJECTS UNDER 
SECTION 1115. 
Section 1115 of the Social Security Act (42 U.S.C. 
1315) is amended by adding at the end the following new 
subsection: 
‘‘(g) REQUIREMENT OF BUDGET NEUTRALITY FOR 
MEDICAID DEMONSTRATION PROJECTS.—
‘‘(1) IN GENERAL.—Beginning on the date of 
the enactment of this subsection, the Secretary may 
not approve an application for (or renewal or 
amendment of) an experimental, pilot, or demonstra-
tion project undertaken under subsection (a) to pro-
mote the objectives of title XIX in a State (in this 
subsection referred to as a ‘Medicaid demonstration 
project’) unless the Secretary certifies that such 
project is not expected to result in an increase in the 
amount of expenditures compared to the amount 
that such expenditures would otherwise be in the ab-
sence of such project. 
‘‘(2) TREATMENT OF SAVINGS.—In the event 
that expenditures with respect to a State under a 
Medicaid demonstration project are, during an ap-
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proval period for such project, less than the amount 
of such expenditures that would have otherwise been 
made in the absence of such project, the Secretary 
shall specify the methodology to be used with respect 
to any subsequent approval period for such project 
for purposes of taking the difference between such 
expenditures into account.’’. 
Subpart D—Increasing Personal Accountability 
SEC. 44141. REQUIREMENT FOR STATES TO ESTABLISH 
MEDICAID COMMUNITY ENGAGEMENT RE-
QUIREMENTS FOR CERTAIN INDIVIDUALS. 
(a) IN GENERAL.—Section 1902 of the Social Secu-
rity Act (42 U.S.C. 1396a), as amended by sections 44103 
and 44104, is further amended by adding at the end the 
following new subsection: 
‘‘(xx) COMMUNITY ENGAGEMENT REQUIREMENT FOR 
APPLICABLE INDIVIDUALS.—
‘‘(1) IN GENERAL.—Beginning not later than 
December 31, 2026, or, at the option of the State, 
such earlier date as the State may specify, subject 
to the succeeding provisions of this subsection, a 
State shall provide, as a condition of eligibility for 
medical assistance for an applicable individual, that 
such individual is required to demonstrate commu-
nity engagement under paragraph (2)—
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‘‘(A) in the case of an applicable individual 
who has filed an application for medical assist-
ance under a State plan (or a waiver of such 
plan) under this title, for 1 or more (as speci-
fied by the State) consecutive months imme-
diately preceding the month during which such 
individual applies for such medical assistance; 
and 
‘‘(B) in the case of an applicable individual 
enrolled and receiving medical assistance under 
a State plan (or under a waiver of such plan) 
under this title, for 1 or more (as specified by 
the State) months, whether or not consecu-
tive—
‘‘(i) during the period between such 
individual’s most recent determination (or 
redetermination, as applicable) of eligibility 
and such individual’s next regularly sched-
uled redetermination of eligibility (as 
verified by the State as part of such regu-
larly scheduled redetermination of eligi-
bility); or 
‘‘(ii) in the case of a State that has 
elected under paragraph (4) to conduct 
more frequent verifications of compliance
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with the requirement to demonstrate com-
munity engagement, during the period be-
tween the most recent and next such 
verification with respect to such individual. 
‘‘(2) COMMUNITY
ENGAGEMENT
COMPLIANCE 
DESCRIBED.—Subject to paragraph (3), an applica-
ble individual demonstrates community engagement 
under this paragraph for a month if such individual 
meets 1 or more of the following conditions with re-
spect to such month, as determined in accordance 
with criteria established by the Secretary through 
regulation: 
‘‘(A) The individual works not less than 80 
hours. 
‘‘(B) The individual completes not less 
than 80 hours of community service. 
‘‘(C) The individual participates in a work 
program for not less than 80 hours. 
‘‘(D) The individual is enrolled in an edu-
cational program at least half-time. 
‘‘(E) The individual engages in any com-
bination of the activities described in subpara-
graphs (A) through (D), for a total of not less 
than 80 hours.
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‘‘(F) The individual has a monthly income 
that is not less than the applicable minimum 
wage requirement under section 6 of the Fair 
Labor Standards Act of 1938, multiplied by 80 
hours. 
‘‘(3) EXCEPTIONS.—
‘‘(A) MANDATORY
EXCEPTION
FOR
CER-
TAIN INDIVIDUALS.—The State shall deem an 
applicable individual to have demonstrated com-
munity engagement under paragraph (2) for a 
month if—
‘‘(i) for part or all of such month, the 
individual—
‘‘(I) was a specified excluded in-
dividual (as defined in paragraph 
(9)(A)(ii)); or 
‘‘(II) was—
‘‘(aa) under the age of 19; 
‘‘(bb) pregnant or entitled to 
postpartum medical assistance 
under paragraph (5) or (16) of 
subsection (e); 
‘‘(cc) entitled to, or enrolled 
for, benefits under part A of title
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XVIII, or enrolled for benefits 
under part B of title XVIII; or 
‘‘(dd) described in any of 
subclauses (I) through (VII) of 
subsection (a)(10)(A)(i); or 
‘‘(ii) at any point during the 3-month 
period ending on the first day of such 
month, the individual was an inmate of a 
public institution. 
‘‘(B) OPTIONAL EXCEPTION FOR SHORT-
TERM HARDSHIP EVENTS.—
‘‘(i) IN GENERAL.—The State plan (or 
waiver of such plan) may provide, in the 
case of an applicable individual who experi-
ences a short-term hardship event during a 
month, that the State shall, upon the re-
quest of such individual under procedures 
established by the State (in accordance 
with standards specified by the Secretary), 
deem such individual to have demonstrated 
community engagement under paragraph 
(2) for such month. 
‘‘(ii) SHORT-TERM HARDSHIP EVENT 
DEFINED.—For purposes of this subpara-
graph, an applicable individual experiences
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a short-term hardship event during a 
month if, for part or all of such month—
‘‘(I) such individual receives in-
patient hospital services, nursing facil-
ity services, services in an inter-
mediate care facility for individuals 
with intellectual disabilities, inpatient 
psychiatric hospital services, or such 
other services of similar acuity (in-
cluding outpatient care relating to 
other services specified in this sub-
clause) as the Secretary determines 
appropriate; or 
‘‘(II) such individual resides in a 
county (or equivalent unit of local 
government)—
‘‘(aa) in which there exists 
an emergency or disaster de-
clared by the President pursuant 
to the National Emergencies Act 
or the Robert T. Stafford Dis-
aster Relief and Emergency As-
sistance Act; or 
‘‘(bb) that, subject to a re-
quest from the State to the Sec-
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retary, made in such form, at 
such time, and containing such 
information as the Secretary may 
require, has an unemployment 
rate that is at or above the lesser 
of—
‘‘(AA) 8 percent; or 
‘‘(BB) 1.5 times the 
national unemployment rate. 
‘‘(4) OPTION
TO
CONDUCT
MORE
FREQUENT 
COMPLIANCE
VERIFICATIONS.—With respect to an 
applicable individual enrolled and receiving medical 
assistance under a State plan (or a waiver of such 
plan) under this title, the State shall verify (in ac-
cordance with procedures specified by the Secretary) 
that each such individual has met the requirement 
to demonstrate community engagement under para-
graph (1) during each such individual’s regularly 
scheduled redetermination of eligibility, except that a 
State may provide for such verifications more fre-
quently. 
‘‘(5) EX PARTE VERIFICATIONS.—For purposes 
of verifying that an applicable individual has met the 
requirement to demonstrate community engagement 
under paragraph (1), the State shall, in accordance
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with standards established by the Secretary, estab-
lish processes and use reliable information available 
to the State (such as payroll data) without requir-
ing, where possible, the applicable individual to sub-
mit additional information. 
‘‘(6) PROCEDURE IN THE CASE OF NONCOMPLI-
ANCE.—
‘‘(A) IN GENERAL.—If a State is unable to 
verify that an applicable individual has met the 
requirement to demonstrate community engage-
ment under paragraph (1) (including, if appli-
cable, by verifying that such individual was 
deemed to have demonstrated community en-
gagement under paragraph (3)) the State shall 
(in accordance with standards specified by the 
Secretary)—
‘‘(i) provide such individual with the 
notice of noncompliance described in sub-
paragraph (B); 
‘‘(ii) (I) provide such individual with a 
period of 30 calendar days, beginning on 
the date on which such notice of non-
compliance is received by the individual, 
to—
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‘‘(aa) make a satisfactory show-
ing to the State of compliance with 
such requirement (including, if appli-
cable, by showing that such individual 
was deemed to have demonstrated 
community engagement under para-
graph (3)); or 
‘‘(bb) make a satisfactory show-
ing to the State that such require-
ment does not apply to such indi-
vidual on the basis that such indi-
vidual does not meet the definition of 
applicable individual under paragraph 
(9)(A); and 
‘‘(II) if such individual is enrolled 
under the State plan (or a waiver of such 
plan) under this title, continue to provide 
such individual with medical assistance 
during such 30-calendar-day period; and 
‘‘(iii) if no such satisfactory showing 
is made and the individual is not a speci-
fied excluded individual described in para-
graph (9)(A)(ii), deny such individual’s ap-
plication for medical assistance under the 
State plan (or waiver of such plan) or, as
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applicable, disenroll such individual from 
the plan (or waiver of such plan) not later 
than the end of the month following the 
month in which such 30-calendar-day pe-
riod ends, provided that—
‘‘(I) the State first determines 
whether, with respect to the indi-
vidual, there is any other basis for eli-
gibility for medical assistance under 
the State plan (or waiver of such 
plan) or for another insurance afford-
ability program; and 
‘‘(II) the individual is provided 
written notice and granted an oppor-
tunity for a fair hearing in accordance 
with subsection (a)(3). 
‘‘(B) NOTICE.—The notice of noncompli-
ance provided to an applicable individual under 
subparagraph (A)(i) shall include information 
(in accordance with standards specified by the 
Secretary) on—
‘‘(i) how such individual may make a 
satisfactory showing of compliance with 
such requirement (as described in subpara-
graph (A)(ii)) or make a satisfactory show-
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ing that such requirement does not apply 
to such individual on the basis that such 
individual does not meet the definition of 
applicable 
individual 
under 
paragraph 
(9)(A); and 
‘‘(ii) how such individual may reapply 
for medical assistance under the State plan 
(or a waiver of such plan) under this title 
in the case that such individuals’ applica-
tion is denied or, as applicable, in the case 
that such individual is disenrolled from the 
plan (or waiver). 
‘‘(7) TREATMENT OF NONCOMPLIANT INDIVID-
UALS
IN
RELATION
TO
CERTAIN
OTHER
PROVI-
SIONS.—
‘‘(A) CERTAIN FMAP INCREASES.—A State 
shall not be treated as not providing medical as-
sistance to all individuals described in section 
1902(a)(10)(A)(i)(VIII), or as not expending 
amounts for all such individuals under the 
State plan (or waiver of such plan), solely be-
cause such an individual is determined ineligible 
for medical assistance under the State plan (or 
waiver) on the basis of a failure to meet the re-
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quirement to demonstrate community engage-
ment under paragraph (1). 
‘‘(B) OTHER
PROVISIONS.—For purposes 
of section 36B(c)(2)(B) of the Internal Revenue 
Code of 1986, an individual shall be deemed to 
be eligible for minimum essential coverage de-
scribed in section 5000A(f)(1)(A)(ii) of such 
Code for a month if such individual would have 
been eligible for medical assistance under a 
State plan (or a waiver of such plan) under this 
title but for a failure to meet the requirement 
to demonstrate community engagement under 
paragraph (1). 
‘‘(8) OUTREACH.—
‘‘(A) IN
GENERAL.—In accordance with 
standards specified by the Secretary, beginning 
not later than the date that precedes December 
31, 2026 (or, if the State elects under para-
graph (1) to specify an earlier date, such earlier 
date) by the number of months specified by the 
State under paragraph (1)(A) plus 3 months, 
and periodically thereafter, the State shall no-
tify applicable individuals enrolled under a 
State plan (or waiver) under this title of the re-
quirement to demonstrate community engage-
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ment under this subsection. Such notice shall 
include information on—
‘‘(i) how to comply with such require-
ment, including an explanation of the ex-
ceptions to such requirement under para-
graph (3) and the definition of the term 
‘applicable individual’ under paragraph 
(9)(A); 
‘‘(ii) the consequences of noncompli-
ance with such requirement; and 
‘‘(iii) how to report to the State any 
change in the individual’s status that could 
result in—
‘‘(I) the applicability of an excep-
tion under paragraph (3) (or the end 
of the applicability of such an excep-
tion); or 
‘‘(II) the individual qualifying as 
a specified excluded individual under 
paragraph (9)(A)(ii). 
‘‘(B) FORM OF OUTREACH NOTICE.—A no-
tice required under subparagraph (A) shall be 
delivered—
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‘‘(i) by regular mail (or, if elected by 
the individual, in an electronic format); 
and 
‘‘(ii) in 1 or more additional forms, 
which may include telephone, text message, 
an internet website, other commonly avail-
able electronic means, and such other 
forms as the Secretary determines appro-
priate. 
‘‘(9) DEFINITIONS.—In this subsection: 
‘‘(A) APPLICABLE INDIVIDUAL.—
‘‘(i) IN GENERAL.—The term ‘applica-
ble individual’ means an individual (other 
than a specified excluded individual (as de-
fined in clause (ii)))—
‘‘(I) who is eligible to enroll (or 
is enrolled) under the State plan 
under subsection (a)(10)(A)(i)(VIII); 
or 
‘‘(II) who—
‘‘(aa) is otherwise eligible to 
enroll (or is enrolled) under a 
waiver of such plan that provides 
coverage that is equivalent to 
minimum essential coverage (as
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•HR 1 EH1S 
described 
in 
section 
5000A(f)(1)(A) of the Internal 
Revenue Code of 1986 and as de-
termined 
in 
accordance 
with 
standards prescribed by the Sec-
retary in regulations); and 
‘‘(bb) has attained the age 
of 19 and is under 65 years of 
age, is not pregnant, is not enti-
tled to, or enrolled for, benefits 
under part A of title XVIII, or 
enrolled for benefits under part 
B of title XVIII, and is not oth-
erwise eligible to enroll under 
such plan. 
‘‘(ii) SPECIFIED
EXCLUDED
INDI-
VIDUAL.—For purposes of clause (i), the 
term ‘specified excluded individual’ means 
an individual, as determined by the State 
(in accordance with standards specified by 
the Secretary)—
‘‘(I) who is described in sub-
section (a)(10)(A)(i)(IX); 
‘‘(II) who—
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•HR 1 EH1S 
‘‘(aa) is an Indian or an 
Urban Indian (as such terms are 
defined in paragraphs (13) and 
(28) of section 4 of the Indian 
Health Care Improvement Act); 
‘‘(bb) is a California Indian 
described in section 809(a) of 
such Act; or 
‘‘(cc) has otherwise been de-
termined eligible as an Indian for 
the Indian Health Service under 
regulations promulgated by the 
Secretary; 
‘‘(III) who is the parent, guard-
ian, or caretaker relative of a disabled 
individual or a dependent child; 
‘‘(IV) who is a veteran with a 
disability rated as total under section 
1155 of title 38, United States Code; 
‘‘(V) who is medically frail or 
otherwise has special medical needs 
(as defined by the Secretary), includ-
ing an individual—
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•HR 1 EH1S 
‘‘(aa) who is blind or dis-
abled (as defined in section 
1614); 
‘‘(bb) with a substance use 
disorder; 
‘‘(cc) with a disabling men-
tal disorder; 
‘‘(dd) with a physical, intel-
lectual 
or 
developmental 
dis-
ability that significantly impairs 
their ability to perform 1 or more 
activities of daily living; or 
‘‘(ee) with a serious or com-
plex medical condition; 
‘‘(VI) who—
‘‘(aa) is in compliance with 
any requirements imposed by the 
State pursuant to section 407; or 
‘‘(bb) is a member of a 
household that receives supple-
mental nutrition assistance pro-
gram benefits under the Food 
and Nutrition Act of 2008 and is 
not exempt from a work require-
ment under such Act;
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‘‘(VII) who is participating in a 
drug addiction or alcoholic treatment 
and rehabilitation program (as defined 
in section 3(h) of the Food and Nutri-
tion Act of 2008); or 
‘‘(VIII) who is an inmate of a 
public institution. 
‘‘(B) EDUCATIONAL PROGRAM.—The term 
‘educational program’ includes—
‘‘(i) an institution of higher education 
(as defined in section 101 of the Higher 
Education Act of 1965); and 
‘‘(ii) a program of career and tech-
nical education (as defined in section 3 of 
the Carl D. Perkins Career and Technical 
Education Act of 2006). 
‘‘(C) STATE.—The term ‘State’ means 1 of 
the 50 States or the District of Columbia. 
‘‘(D) WORK
PROGRAM.—The term ‘work 
program’ has the meaning given such term in 
section 6(o)(1) of the Food and Nutrition Act 
of 2008. 
‘‘(10) PROHIBITING
WAIVER
OF
COMMUNITY 
ENGAGEMENT
REQUIREMENTS.—Notwithstanding
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section 1115(a), the provisions of this subsection 
may not be waived.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1902(a)(10)(A)(i)(VIII) of the Social Security Act (42 
U.S.C. 1396a(a)(10)(A)(i)(VIII)) is amended by striking 
‘‘subject to subsection (k)’’ and inserting ‘‘subject to sub-
sections (k) and (xx)’’. 
(c) GUIDANCE.—Not later than December 31, 2025, 
the Secretary of Health and Human Services shall issue 
guidance relating to the initial implementation of the 
amendments made by this section. 
(d) DEVELOPMENT OF GOVERNMENT EFFICIENCY 
GRANTS TO STATES.—
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall, out of amounts appropriated 
under paragraph (3), award to each State a grant 
equal to the amount specified in paragraph (2) for 
such State for purposes of establishing systems nec-
essary to carry out the provisions of, and amend-
ments made by, this section. 
(2) AMOUNT
SPECIFIED.—For purposes of 
paragraph (2), the amount specified in this para-
graph is an amount that bears the same ratio to the 
amount appropriated under paragraph (3) as the 
number of applicable individuals (as defined in sec-
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•HR 1 EH1S 
tion 1902(xx) of the Social Security Act, as added 
by subsection (a)) residing in such State bears to 
the total number of such individuals residing in all 
States. 
(3) FUNDING.—There are appropriated, out of 
any monies in the Treasury not otherwise appro-
priated, $100,000,000 for fiscal year 2026 for pur-
poses of awarding grants under paragraph (1). 
(4) DEFINITION.—In this subsection, the term 
‘‘State’’ means 1 of the 50 States and the District 
of Columbia. 
(e) IMPLEMENTATION FUNDING.—For the purposes 
of carrying out the provisions of, and the amendments 
made by, this section, there are appropriated, out of any 
monies in the Treasury not otherwise appropriated, to the 
Secretary of Health and Human Services, $50,000,000 for 
fiscal year 2026, to remain available until expended. 
SEC. 44142. MODIFYING COST SHARING REQUIREMENTS 
FOR 
CERTAIN 
EXPANSION 
INDIVIDUALS 
UNDER THE MEDICAID PROGRAM. 
(a) IN GENERAL.—Section 1916 of the Social Secu-
rity Act (42 U.S.C. 1396o) is amended—
(1) in subsection (a), in the matter preceding 
paragraph (1), by inserting ‘‘(other than, beginning
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October 1, 2028, specified individuals (as defined in 
subsection (k)(3)))’’ after ‘‘individuals’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(k) SPECIAL RULES FOR CERTAIN EXPANSION IN-
DIVIDUALS.—
‘‘(1) PREMIUMS.—Beginning October 1, 2028, 
the State plan shall provide that in the case of a 
specified individual (as defined in paragraph (3)) 
who is eligible under the plan, no enrollment fee, 
premium, or similar charge will be imposed under 
the plan. 
‘‘(2) REQUIRED
IMPOSITION
OF
COST
SHAR-
ING.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) and subsection (j), in the case of a 
specified individual, the State plan shall, begin-
ning October 1, 2028, provide for the imposi-
tion of such deductions, cost sharing, or similar 
charges determined appropriate by the State (in 
an amount greater than $0) with respect to 
medical assistance furnished to such an indi-
vidual. 
‘‘(B) LIMITATIONS.—
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‘‘(i) EXCLUSION
OF
CERTAIN
SERV-
ICES.—In no case may a deduction, cost 
sharing, or similar charge be imposed 
under the State plan with respect to serv-
ices described in any of subparagraphs (B) 
through (J) of subsection (a)(2), or any 
primary care services, mental health care 
services, or substance use disorder services, 
furnished to a specified individual. 
‘‘(ii) ITEM
AND
SERVICE
LIMITA-
TION.—
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), in no case 
may a deduction, cost sharing, or 
similar charge imposed under the 
State plan with respect to an item or 
service furnished to a specified indi-
vidual exceed $35. 
‘‘(II) SPECIAL RULES FOR PRE-
SCRIPTION DRUGS.—In no case may a 
deduction, cost sharing, or similar 
charge imposed under the State plan 
with respect to a prescription drug 
furnished to a specified individual ex-
ceed the limit that would be applicable
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under paragraph (2)(A)(i) or (2)(B) 
of section 1916A(c) with respect to 
such drug and individual if such drug 
so furnished were subject to cost shar-
ing under such section. 
‘‘(iii) MAXIMUM LIMIT ON COST SHAR-
ING.—The total aggregate amount of de-
ductions, cost sharing, or similar charges 
imposed under the State plan for all indi-
viduals in the family may not exceed 5 per-
cent of the family income of the family in-
volved, as applied on a quarterly or month-
ly basis (as specified by the State). 
‘‘(C) CASES OF NONPAYMENT.—Notwith-
standing subsection (e), 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 a specified individual enti-
tled to medical assistance under this title for 
such care, items, or services, the payment of 
any deductions, cost sharing, or similar charges 
authorized to be imposed with respect to such 
care, items, or services. Nothing in this sub-
paragraph shall be construed as preventing a 
provider from reducing or waiving the applica-
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•HR 1 EH1S 
tion of such deductions, cost sharing, or similar 
charges on a case-by-case basis. 
‘‘(3) SPECIFIED
INDIVIDUAL
DEFINED.—For 
purposes of this subsection, the term ‘specified indi-
vidual’ means an individual who has a family income 
(as 
determined 
in 
accordance 
with 
section 
1902(e)(14)) that exceeds the poverty line (as de-
fined in section 2110(c)(5)) applicable to a family of 
the size involved and—
‘‘(A) 
is 
enrolled 
under 
section 
1902(a)(10)(A)(i)(VIII); or 
‘‘(B) is described in such subsection and 
otherwise enrolled under a waiver of such plan 
that provides coverage that is equivalent to 
minimum essential coverage (as described in 
section 5000A(f)(1)(A) of the Internal Revenue 
Code of 1986 and determined in accordance 
with standards prescribed by the Secretary in 
regulations) to all individuals described in sec-
tion 1902(a)(10)(A)(i)(VIII).’’. 
(b) CONFORMING AMENDMENTS.—
(1) 
REQUIRED
APPLICATION.—Section 
1902(a)(14) of the Social Security Act (42 U.S.C. 
1396a(a)(14)) is amended by inserting ‘‘and provide 
for imposition of such deductions, cost sharing, or
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similar charges for medical assistance furnished to 
specified individuals (as defined in paragraph (3) of 
section 1916(k)) in accordance with paragraph (2) 
of such section’’ after ‘‘section 1916’’. 
(2) NONAPPLICABILITY OF ALTERNATIVE COST 
SHARING.—Section 1916A(a)(1) of the Social Secu-
rity Act (42 U.S.C. 1396o–1(a)(1)) is amended, in 
the second sentence, by striking ‘‘or (j)’’ and insert-
ing ‘‘(j), or (k)’’. 
PART 2—AFFORDABLE CARE ACT 
SEC. 44201. ADDRESSING WASTE, FRAUD, AND ABUSE IN 
THE ACA EXCHANGES. 
(a) CHANGES TO ENROLLMENT PERIODS FOR EN-
ROLLING IN EXCHANGES.—Section 1311 of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18031) is 
amended—
(1) in subsection (c)(6)—
(A) by striking subparagraph (A); 
(B) by striking ‘‘The Secretary’’ and in-
serting the following: 
‘‘(A) IN GENERAL.—The Secretary’’; 
(C) by redesignating subparagraphs (B) 
through (D) as clauses (i) through (iii), respec-
tively, and adjusting the margins accordingly;
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(D) in clause (i), as so redesignated, by 
striking ‘‘periods, as determined by the Sec-
retary for calendar years after the initial enroll-
ment period;’’ and inserting the following: ‘‘pe-
riods for plans offered in the individual mar-
ket—
‘‘(I) for enrollment for plan years 
beginning before January 1, 2026, as 
determined by the Secretary; and 
‘‘(II) for enrollment for plan 
years beginning on or after January 
1, 2026, beginning on November 1 
and ending on December 15 of the 
preceding calendar year;’’; 
(E) in clause (ii), as so redesignated, by 
inserting ‘‘subject to subparagraph (B),’’ before 
‘‘special enrollment periods specified’’; and 
(F) by adding at the end the following new 
subparagraph: 
‘‘(B) PROHIBITED SPECIAL ENROLLMENT 
PERIOD.—With respect to plan years beginning 
on or after January 1, 2026, the Secretary may 
not require an Exchange to provide for a spe-
cial enrollment period for an individual on the 
basis of the relationship of the income of such
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•HR 1 EH1S 
individual to the poverty line, other than a spe-
cial enrollment period based on a change in cir-
cumstances or the occurrence of a specific 
event.’’; and 
(2) in subsection (d), by adding at the end the 
following new paragraphs: 
‘‘(8) PROHIBITED ENROLLMENT PERIODS.—An 
Exchange may not provide for, with respect to en-
rollment for plan years beginning on or after Janu-
ary 1, 2026—
‘‘(A) an annual open enrollment period 
other than the period described in subpara-
graph (A)(i) of subsection (c)(6); or 
‘‘(B) a special enrollment period described 
in subparagraph (B) of such subsection. 
‘‘(9) VERIFICATION OF ELIGIBILITY FOR SPE-
CIAL ENROLLMENT PERIODS.—
‘‘(A) IN GENERAL.—With respect to enroll-
ment for plan years beginning on or after Janu-
ary 1, 2026, an Exchange shall verify that each 
individual seeking to enroll in a qualified health 
plan offered by the Exchange during a special 
enrollment period selected under subparagraph 
(B) is eligible to enroll during such special en-
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rollment period prior to enrolling such indi-
vidual in such plan. 
‘‘(B) SELECTED
SPECIAL
ENROLLMENT 
PERIODS.—For purposes of subparagraph (A), 
an Exchange shall select one or more special 
enrollment periods for a plan year with respect 
to which such Exchange shall conduct the 
verification required under subparagraph (A) 
such 
that 
the 
Exchange 
conducts 
such 
verification for not less than 75 percent of all 
individuals enrolling in a qualified health plan 
offered by the Exchange during any special en-
rollment period with respect to such plan 
year.’’. 
(b) VERIFYING INCOME FOR INDIVIDUALS ENROLL-
ING IN A QUALIFIED HEALTH PLAN THROUGH AN EX-
CHANGE.—
(1) IN
GENERAL.—Section 1411(e)(4) of the 
Patient Protection and Affordable Care Act (42 
U.S.C. 18081(e)(4)) is amended—
(A) by redesignating subparagraph (C) as 
subparagraph (E); and 
(B) by inserting after subparagraph (B) 
the following new subparagraphs:
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‘‘(C) REQUIRING
VERIFICATION
OF
IN-
COME AND FAMILY SIZE WHEN TAX DATA IS 
UNAVAILABLE.—For plan years beginning on or 
after January 1, 2026, for purposes of subpara-
graph (A), in the case that the Exchange re-
quests data from the Secretary of the Treasury 
regarding an individual’s household income and 
the Secretary of the Treasury does not return 
such data, such information may not be verified 
solely on the basis of the attestation of such in-
dividual with respect to such household income, 
and the Exchange shall take the actions de-
scribed in subparagraph (A). 
‘‘(D) REQUIRING
VERIFICATION
OF
IN-
COME IN THE CASE OF CERTAIN INCOME DIS-
CREPANCIES.—
‘‘(i) IN GENERAL.—Subject to clause 
(iii), for plan years beginning on or after 
January 1, 2026, for purposes of subpara-
graph (A), in the case that a specified in-
come discrepancy described in clause (ii) of 
this subparagraph exists with respect to 
the information provided by an applicant 
under subsection (b)(3), the household in-
come of such individual shall be treated as
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inconsistent 
with 
information 
in 
the 
records maintained by persons under sub-
section (c), or as not verified under sub-
section (d), and the Exchange shall take 
the actions described in such subparagraph 
(A). 
‘‘(ii) SPECIFIED
INCOME
DISCREP-
ANCY.—For purposes of clause (i), a speci-
fied income discrepancy exists with respect 
to the information provided by an appli-
cant under subsection (b)(3) if—
‘‘(I) the applicant attests to a 
projected annual household income 
that would qualify such applicant to 
be an applicable taxpayer under sec-
tion 36B(c)(1)(A) of the Internal Rev-
enue Code of 1986 with respect to the 
taxable year involved; 
‘‘(II) the Exchange receives data 
from the Secretary of the Treasury or 
other reliable, third party data, that 
indicates that the household income of 
such applicant is less than the house-
hold income that would qualify such 
applicant to be an applicable taxpayer
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•HR 1 EH1S 
under such section 36B(c)(1)(A) with 
respect to the taxable year involved; 
‘‘(III) such attested projected an-
nual household income exceeds the in-
come reflected in the data described in 
subclause (II) by a reasonable thresh-
old established by the Exchange and 
approved by the Secretary (which 
shall be not less than 10 percent, and 
may also be a dollar amount); and 
‘‘(IV) the Exchange has not as-
sessed or determined based on the 
data described in subclause (II) that 
the household income of the applicant 
meets the applicable income-based eli-
gibility standard for the Medicaid pro-
gram under title XIX of the Social 
Security Act or the State children’s 
health insurance program under title 
XXI of such Act. 
‘‘(iii) EXCLUSION OF CERTAIN INDI-
VIDUALS
INELIGIBLE
FOR
MEDICAID.—
This subparagraph shall not apply in the 
case of an applicant who is an alien law-
fully present in the United States, who is
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•HR 1 EH1S 
not eligible for the Medicaid program 
under title XIX of the Social Security Act 
by reason of such alien status.’’. 
(2) REQUIRING
INDIVIDUALS
ON
WHOSE
BE-
HALF ADVANCE PAYMENTS OF THE PREMIUM TAX 
CREDITS ARE MADE TO FILE AND RECONCILE ON AN 
ANNUAL
BASIS.—Section 1412(b) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 
18082(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(3) ANNUAL REQUIREMENT TO FILE AND REC-
ONCILE.—
‘‘(A) IN GENERAL.—For plan years begin-
ning on or after January 1, 2026, in the case 
of an individual with respect to whom any ad-
vance payment of the premium tax credit allow-
able under section 36B of the Internal Revenue 
Code of 1986 was made under this section to 
the issuer of a qualified health plan for the rel-
evant prior tax year, an advance determination 
of eligibility for such premium tax credit may 
not be made under this subsection with respect 
to such individual and such plan year if the Ex-
change determines, based on information pro-
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•HR 1 EH1S 
vided by the Secretary of the Treasury, that 
such individual—
‘‘(i) has not filed an income tax re-
turn, as required under sections 6011 and 
6012 of such Code (and implementing reg-
ulations), for the relevant prior tax year; 
or 
‘‘(ii) as necessary, has not reconciled 
(in accordance with subsection (f) of such 
section 36B) the advance payment of the 
premium tax credit made with respect to 
such individual for such relevant prior tax 
year. 
‘‘(B) RELEVANT
PRIOR
TAX
YEAR.—For 
purposes of subparagraph (A), the term ‘rel-
evant prior tax year’ means, with respect to the 
advance determination of eligibility made under 
this subsection with respect to an individual, 
the taxable year for which tax return data 
would be used for purposes of verifying the 
household income and family size of such indi-
vidual (as described in section 1411(b)(3)(A)). 
‘‘(C) PRELIMINARY ATTESTATION.—If an 
individual subject to subparagraph (A) attests 
that such individual has fulfilled the require-
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•HR 1 EH1S 
ments to file an income tax return for the rel-
evant prior tax year and, as necessary, to rec-
oncile the advance payment of the premium tax 
credit made with respect to such individual for 
such relevant prior tax year (as described in 
clauses (i) and (ii) of such subparagraph), the 
Secretary may make an initial advance deter-
mination of eligibility with respect to such indi-
vidual and may delay for a reasonable period 
(as determined by the Secretary) any deter-
mination based on information provided by the 
Secretary of the Treasury that such individual 
has not fulfilled such requirements. 
‘‘(D) NOTICE.—If the Secretary deter-
mines that an individual did not meet the re-
quirements described in subparagraph (A) with 
respect to the relevant prior tax year and noti-
fies the Exchange of such determination, the 
Exchange shall comply with the notification re-
quirement described in section 155.305(f)(4)(i) 
of title 45, Code of Federal Regulations (as in 
effect with respect to plan year 2025).’’. 
(3) REMOVING AUTOMATIC EXTENSION OF PE-
RIOD TO RESOLVE INCOME INCONSISTENCIES.—The 
Secretary of Health and Human Services shall revise
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•HR 1 EH1S 
section 155.315(f) of title 45, Code of Federal Regu-
lations, to remove paragraph (7) of such section 
such that, with respect to enrollment for plan years 
beginning on or after January 1, 2026, in the case 
that an Exchange established under subtitle D of 
title I of the Patient Protection and Affordable Care 
Act (42 U.S.C. 18021 et seq.) provides an individual 
applying for enrollment in a qualified health plan 
with a 90-day period to resolve an inconsistency in 
the application of such individual pursuant to sec-
tion 1411(e)(4)(A)(ii)(II) of such Act, the Exchange 
may not provide for an automatic extension to such 
90-day period on the basis that such individual is re-
quired to present satisfactory documentary evidence 
to verify household income. 
(c) REVISING RULES ON ALLOWABLE VARIATION IN 
ACTUARIAL VALUE OF HEALTH PLANS.—The Secretary 
of Health and Human Services shall—
(1) revise section 156.140(c) of title 45, Code 
of Federal Regulations, to provide that, for plan 
years beginning on or after January 1, 2026, the al-
lowable variation in the actuarial value of a health 
plan applicable under such section shall be the allow-
able variation for such plan applicable under such 
section for plan year 2022;
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•HR 1 EH1S 
(2) revise section 156.200(b)(3) of title 45, 
Code of Federal Regulations, to provide that, for 
plan years beginning on or after January 1, 2026, 
the requirement for a qualified health plan issuer de-
scribed in such section is that the issuer ensures 
that each qualified health plan complies with benefit 
design standards, as defined in section 156.20 of 
such title; and 
(3) revise section 156.400 of title 45, Code of 
Federal Regulations, to provide that, for plan years 
beginning on or after January 1, 2026, the term ‘‘de 
minimis variation for a silver plan variation’’ means 
a minus 1 percentage point and plus 1 percentage 
point allowable actuarial value variation. 
(d) UPDATING PREMIUM ADJUSTMENT PERCENTAGE 
METHODOLOGY.—Section 1302(c)(4) of the Patient Pro-
tection and Affordable Care Act (42 U.S.C. 18022(c)(4)) 
is amended—
(1) by striking ‘‘For purposes’’ and inserting: 
‘‘(A) IN GENERAL.—For purposes’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) UPDATE
TO
METHODOLOGY.—For 
calendar years beginning with 2026, the pre-
mium adjustment percentage under this para-
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•HR 1 EH1S 
graph for such calendar year shall be deter-
mined consistent with the methodology pub-
lished in the Federal Register on April 25, 
2019 (84 Fed. Reg. 17537 through 17541).’’. 
(e) ELIMINATING THE FIXED-DOLLAR AND GROSS-
PERCENTAGE THRESHOLDS APPLICABLE TO EXCHANGE 
ENROLLMENTS.—The Secretary of Health and Human 
Services shall revise section 155.400(g) of title 45, Code 
of Federal Regulations to eliminate, for plan years begin-
ning on or after January 1, 2026, the gross premium per-
centage-based premium payment threshold policy de-
scribed in paragraph (2) of such section and the fixed-
dollar premium payment threshold policy described in 
paragraph (3) of such section. 
(f) PROHIBITING AUTOMATIC REENROLLMENT FROM 
BRONZE TO SILVER LEVEL QUALIFIED HEALTH PLANS 
OFFERED BY EXCHANGES.—The Secretary of Health and 
Human Services shall revise section 155.335(j) of title 45, 
Code of Federal Regulations to remove paragraph (4) of 
such section such that, with respect to reenrollments for 
plan years beginning on or after January 1, 2026, an Ex-
change established under subtitle D of title I of the Pa-
tient Protection and Affordable Care Act (42 U.S.C. 
18021 et seq.) may not reenroll an individual who was 
enrolled in a bronze level qualified health plan in a silver
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•HR 1 EH1S 
level qualified health plan (as such terms are defined in 
section 1301(a) and described in 1302(d) of such Act) un-
less otherwise permitted under section 155.335(j) of title 
45, Code of Federal Regulations, as in effect on the day 
before the date of the enactment of this section. 
(g) REDUCING ADVANCE PAYMENTS OF PREMIUM 
TAX CREDITS FOR CERTAIN INDIVIDUALS REENROLLED 
IN EXCHANGES.—Section 1412 of the Patient Protection 
and Affordable Care Act (42 U.S.C. 18082) is amended—
(1) in subsection (a)(3), by inserting ‘‘, subject 
to subsection (c)(2)(C),’’ after ‘‘qualified health 
plans’’; and 
(2) in subsection (c)(2)—
(A) in subparagraph (A), by striking 
‘‘The’’ and inserting ‘‘Subject to subparagraph 
(C), the’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(C) REDUCTION
IN
ADVANCE
PAYMENT 
FOR SPECIFIED REENROLLED INDIVIDUALS.—
‘‘(i) IN GENERAL.—The amount of an 
advance payment made under subpara-
graph (A) to reduce the premium payable 
for a qualified health plan that provides 
coverage to a specified reenrolled individual
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•HR 1 EH1S 
for an applicable month shall be an 
amount equal to the amount that would 
otherwise be made under such subpara-
graph reduced by $5 (or such higher 
amount as the Secretary determines appro-
priate). 
‘‘(ii) DEFINITIONS.—In this subpara-
graph: 
‘‘(I) APPLICABLE
MONTH.—The 
term ‘applicable month’ means, with 
respect to a specified reenrolled indi-
vidual, any month during a plan year 
beginning on or after January 1, 
2027 (or, in the case of an individual 
reenrolled in a qualified health plan 
by an Exchange established pursuant 
to section 1321(c), January 1, 2026) 
if, prior to the first day of such 
month, such individual has failed to 
confirm or update such information as 
is necessary to redetermine the eligi-
bility of such individual for such plan 
year pursuant to section 1411(f). 
‘‘(II) SPECIFIED
REENROLLED 
INDIVIDUAL.—The term ‘specified re-
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•HR 1 EH1S 
enrolled individual’ means an indi-
vidual who is reenrolled in a qualified 
health plan and with respect to whom 
the advance payment made under sub-
paragraph (A) would, without applica-
tion of any reduction under this sub-
paragraph, reduce the premium pay-
able for a qualified health plan that 
provides coverage to such an indi-
vidual to $0.’’. 
(h) PROHIBITING COVERAGE OF GENDER TRANSI-
TION PROCEDURES AS AN ESSENTIAL HEALTH BENEFIT 
UNDER PLANS OFFERED BY EXCHANGES.—
(1) IN GENERAL.—Section 1302(b)(2) of the 
Patient Protection and Affordable Care Act (42 
U.S.C. 18022(b)(2)) is amended by adding at the 
end the following new subparagraph: 
‘‘(C) 
GENDER
TRANSITION
PROCE-
DURES.—For plan years beginning on or after 
January 1, 2027, the essential health benefits 
defined pursuant to paragraph (1) may not in-
clude items and services furnished for a gender 
transition procedure.’’. 
(2) GENDER
TRANSITION
PROCEDURE
DE-
FINED.—Section 1304 of the Patient Protection and