‘‘(i) the school of nursing involved
will, for each year for which the individual
involved serves as a member of the faculty
under the contract with the school, make
payments of the principal and interest due
on the educational loans of the individual
for such year in an amount equal to the
amount of such payments made by the
Secretary for the year;
‘‘(ii) the payments made by the school
pursuant to clause (i) on behalf of the indi-
vidual will be in addition to the pay that
the individual would otherwise receive for
serving as a member of such faculty; and
‘‘(iii) the school, in making a deter-
mination of the amount of compensation to
be provided by the school to the individual
for serving as a member of the faculty, will
make the determination without regard to
the amount of payments made (or to be
made) to the individual by the Federal
Government under subsection (a)(2).
‘‘(B) WAIVER
REGARDING
SCHOOL
CON-
TRIBUTIONS.—The Secretary may waive the re-
quirement established in subparagraph (A) if
the Secretary determines that the requirement
will impose an undue financial hardship on the
school of nursing involved.
‘‘(d) USE OF SCHOLARSHIP.—A scholarship under
subsection (a)(1) may be expended only for tuition ex-
penses, other reasonable educational expenses, and reason-
able living expenses incurred in attending the doctoral pro-
gram involved.
‘‘(e) APPLICABILITY
OF CERTAIN PROVISIONS.—
With respect to the National Health Service Corps
Schlolarship and Loan Repayment Programs established
in subpart III of part D of title III, the provisions of such
subpart shall, except as inconsistent with this section,
apply to the programs established in subsections (a)(1)
and (a)(2) of this section, respectively, in the same man-
ner and to the same extent as such provisions apply to
such Health Service Corps Scholarship and Loan Repay-
ment Programs.
‘‘SEC. 866. AUTHORIZATION OF APPROPRIATIONS.
‘‘For the purpose of carrying out this part, there is
authorized to be appropriated $46,000,000 for each of the
fiscal years 2002 through 2004.’’.
Subtitle B—National Nursing Serv-
ice Corps Scholarship Program
SEC. 111. ESTABLISHMENT OF PROGRAM.
Title VIII of the Public Health Service Act, as
amended by section 101 of this Act, is amended by adding
at the end the following::
‘‘PART J—NATIONAL NURSING SERVICE CORPS
SCHOLARSHIP PROGRAM
‘‘SEC. 871. NATIONAL NURSING SERVICE CORPS SCHOLAR-
SHIP PROGRAM.
‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall
establish a National Nurse Service Corps Scholarship pro-
gram (referred to in this section as the ‘program’) that
provides scholarships to individuals seeking nursing edu-
cation in exchange for service by such individuals in areas
with nursing shortages.
‘‘(b) PREFERENCE.—In awarding scholarships under
this section, the Secretary shall give preference to appli-
cants with the greatest financial need, and applicants who
agree to serve in health facilities located in areas with
nursing shortages.
‘‘(c) REQUIREMENTS.—To be eligible to participate
in the program, an individual must—
‘‘(1) be accepted for enrollment, or be enrolled,
in a school of nursing, to take courses leading to a
baccalaureate or associate degree in nursing (or an
equivalent degree), or a diploma in nursing;
‘‘(2) submit an application to participate in the
program; and
‘‘(3) enter into an agreement with the Sec-
retary, at the time of submittal of such application,
to—
‘‘(A) accept payment of a scholarship and
remain enrolled in a nursing school;
‘‘(B) maintain an acceptable level of aca-
demic standing; and
‘‘(C) serve as a nurse for a period of not
less than 2 years in an Indian Health Service
health center, a Native Hawaiian health center,
tribal health center, urban Indian health center,
a public or nonprofit private hospital, a health
center under section 330, a rural health clinic,
a public or nonprofit private nursing home,
home health agency, or hospice facility (includ-
ing a home setting), or a public or nonprofit
private health facility determined by the Sec-
retary to have a critical shortage of nurses.
‘‘(d) APPLICATIONS.—
‘‘(1) IN GENERAL.—The application forms for
the programs shall include—
‘‘(A) a fair summary of the rights and li-
abilities of an individual whose application is
approved by the Secretary; and
‘‘(B) information respecting meeting a
service obligation and such other information as
may be necessary for the individual to under-
stand the program.
‘‘(2) ACCESSIBILITY.—The application form
and all other information furnished by the Secretary
shall be written so that it may be understood by the
average individual applying to participate in the pro-
gram. The Secretary shall make such application
forms, and other information available to individuals
desiring to participate in the program, on a date
sufficiently early to ensure that such individuals
have adequate time to carefully review and evaluate
such forms and information.
‘‘(3) DISTRIBUTION.—The Secretary shall dis-
tribute to nursing schools materials providing infor-
mation on the program and shall encourage the
schools to disseminate the materials to students of
the schools.
‘‘(e) SCHOLARSHIP.—
‘‘(1) IN GENERAL.—A scholarship provided to a
student for a school year under a written contract
under the program shall consist of—
‘‘(A) payment to, or (in accordance with
paragraph (2)) on behalf of the student of—
‘‘(i) the tuition of the student in such
school year; and
‘‘(ii) all other reasonable educational
expenses, including fees, books, laboratory
expenses, and living expenses incurred by
the student in such school year; and
‘‘(B) payment to the student of a stipend
of $400 per month for each 12 consecutive
months beginning with the first month of the
school year.
‘‘(2) CONTRACT.—The Secretary may contract
with a nursing school, in which a participant in the
program is enrolled, for the payment to the nursing
school of the amounts of tuition and other reason-
able educational expenses described in paragraph
(1)(A).
‘‘(f) BREACH OF AGREEMENT.—
‘‘(1) IN GENERAL.—In the case of an individual
who enters into an agreement under this section to
provide service as a nurse in consideration for re-
ceiving a scholarship, such individual is liable to the
Federal Government for the amount of such scholar-
ship, and for interest on such scholarship at the
maximum legal prevailing rate, if the individual—
‘‘(A) fails to maintain an acceptable level
of academic standing in the nursing program;
‘‘(B) is dismissed from the nursing pro-
gram for disciplinary reasons;
‘‘(C) voluntarily terminates the nursing
program; or
‘‘(D) fails to provide services in accordance
with the program under this section for the pe-
riod of time applicable under the program.
‘‘(2) WAIVER OR SUSPENSION OF LIABILITY.—
The Secretary shall provide for the waiver or sus-
pension of liability under this section if compliance
by the individual with the agreement is impossible,
or would involve extreme hardship to the individual,
or if enforcement of the agreement with respect to
the individual would be unconscionable.
‘‘(3) DATE CERTAIN FOR RECOVERY.—Subject
to paragraph (2), any amount that the Federal Gov-
ernment is entitled to recover under paragraph (1)
shall be paid to the United States not later than the
expiration of the 3-year period beginning on the date
the United States becomes so entitled.
‘‘(4) AVAILABILITY.—Amounts recovered under
paragraph (1) with respect to a program under this
section shall be available for the purposes of such
program, and shall remain available for such pur-
poses until expended.
‘‘(g) DEFINITIONS.—In this section:
‘‘(1) COMMUNITY HEALTH CENTER.—The term
‘‘community health center’’ has the meaning given
such term in section 330(a).
‘‘(2) RURAL HEALTH CLINIC.—The term ‘‘rural
health clinic’’ has the meaning given such term in
section 1861(aa)(2) of the Social Security Act.
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—For the
purpose of payments under agreements entered into under
subsection (a), there is authorized to be appropriated
$50,000,000 for each of the fiscal years 2002 through
2004.’’.
SEC. 112. INTERNAL REVENUE CODE; EXCLUSION OF CER-
TAIN AMOUNTS RECEIVED UNDER THE NA-
TIONAL NURSING SERVICE CORPS SCHOLAR-
SHIP PROGRAM.
(a) IN GENERAL.—Section 117(c) of the Internal
Revenue Code of 1986 (relating to the exclusion from
gross income amounts received as a qualified scholarship)
is amended—
(1) by striking ‘‘Subsections (a)’’ and inserting
the following:
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), subsections (a)’’, and
(2) by adding at the end the following new
paragraph:
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not
apply to any amount received by an individual under
the National Nursing Service Corps Scholarship pro-
gram under part J of title VIII of the Public Health
Service Act.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to amounts received in taxable
years beginning after December 31, 2001.
TITLE II—AMENDMENTS TO
SOCIAL SECURITY ACT
Subtitle A—Amendments to
Medicare Program
SEC. 201. EXPANSION OF NURSING TRAINING EDUCATION
PAYMENTS 
TO 
QUALIFIED 
NONHOSPITAL
PROVIDERS.
Section 1861(v)(1) of the Social Security Act (42
U.S.C. 1395x(v)(1)) is amended by adding at the end the
following new subparagraph:
‘‘(V)(i) For portions of cost reporting periods begin-
ning on or after October 1, 2001, the Secretary shall es-
tablish rules for making payments to qualified nonhospital
providers for the reasonable costs of providing nursing
training if such costs are incurred in the operation of a
training program that is operated by a hospital.
‘‘(ii) The rules established under clause (i) shall—
‘‘(I) be similar to rules for payments to hos-
pitals under this subsection for such reasonable
costs; and
‘‘(II) specify the form and manner in which
such payments will be made and the portion of such
payments that will be made from each of the trust
funds under this title.
‘‘REIMBURSEMENT OF THE COSTS OF PROVIDING NURS-
ING TRAINING EDUCATION BY HOSPICE AND HOME
HEALTH PROVIDERS
‘‘SEC. 1897. (a) PAYMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish rules for making payments to qualified entities
for the reasonable costs of providing nursing train-
ing during fiscal years 2002 through 2006. Subject
to subsection (c), such payments shall be in addition
to payments otherwise made to such entities under
this title.
‘‘(2) RULES.—The rules established under
paragraph (1) shall ensure that reimbursement is
made for the costs of training nurses to furnish
items and services which are specific to the qualified
entity.
‘‘(3) QUALIFIED ENTITY DEFINED.—For pur-
poses of this section, the term ‘qualified entity’
means—
‘‘(A) a hospice program providing hospice
care; and
‘‘(B) a home health agency (as defined in
section 1861(o)).
‘‘(b) MAINTENANCE
OF EFFORT.—The Secretary
shall ensure that a qualified entity does not use amounts
received under this section to reduce or eliminate staffing
problems that the entity may have.
‘‘(c) PROHIBITION ON DOUBLE PAYMENTS.—No pay-
ment shall be made to a qualified entity under this section
for the reasonable costs of providing nursing training to
the extent that such costs are otherwise reimbursed under
this title or under any other Federal program.
‘‘(d) FUNDING.—For purposes of making payments
under this section, there are appropriated, out of any
money in the Treasury not otherwise appropriated, such
sums as may be necessary for each of fiscal years 2002
through 2006.’’.
Subtitle B—Amendment to
Medicaid Program
SEC. 211. TEMPORARY INCREASE IN FEDERAL MATCHING
RATE FOR MEDICAID NURSE AIDE TRAINING
AND COMPETENCY EVALUATION PROGRAMS.
Section 1903(a)(2)(B) of the Social Security Act (42
U.S.C. 1396b(a)(2)(B)) is amended by striking ‘‘(or, for
calendar quarters beginning on or after July 1, 1988, and
before October 1, 1990, the lesser of 90 percent or the
Federal medical assistance percentage plus 25 percentage
points)’’ and inserting ‘‘(or, for calendar quarters begin-
ning on or after October 1, 2001, and before October 1,
2006, 90 percent)’’.
Æ