648
HR 2264 EAS
the amount of the first increase in an annuity under
section 826 or 858 of the Foreign Service Act of 1980.
SEC. 9002. ELIMINATION OF THE ALTERNATIVE-FORM-OF-
ANNUITY 
OPTION 
UNDER 
THE 
FOREIGN
SERVICE RETIREMENT AND DISABILITY SYS-
TEM EXCEPT FOR INDIVIDUALS WITH CRITI-
CAL MEDICAL CONDITIONS.
(a) IN GENERAL.—Section 807(e)(1) of the Foreign
Service Act of 1980 (22 U.S.C. 4047(e)(1)) is amended by
striking ‘‘a participant may,’’ and inserting ‘‘any partici-
pant who has a life-threatening affliction or other critical
medical condition may,’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect January 1, 1994.
TITLE X—COMMITTEE ON
GOVERNMENTAL AFFAIRS
Subtitle A—Civil Service
SEC. 10001. DELAY IN COST-OF-LIVING ADJUSTMENTS IN
FEDERAL EMPLOYEE RETIREMENT BENEFITS
DURING FISCAL YEARS 1994, 1995, AND 1996.
(a) APPLICABILITY.—This section shall apply with re-
spect to any cost-of-living increase scheduled to take effect,
during fiscal year 1994, 1995, or 1996, under—
(1) section 8340(b) or 8462(b) of title 5, United
States Code; or
649
HR 2264 EAS
(2) section 291 of the Central Intelligence Agency
Retirement Act (50 U.S.C. 2131), as set forth in sec-
tion 802 of the CIARDS Technical Corrections Act of
1992 (Public Law 102–496; 106 Stat. 3196).
(b) DELAY IN EFFECTIVE DATE OF ADJUSTMENTS.—
A cost-of-living increase described in subsection (a) shall
not take effect until the first day of the third calendar
month after the date such increase would otherwise take ef-
fect.
(c) RULE OF CONSTRUCTION.—Nothing in this section
shall be considered to affect any determination relating to
eligibility for an annuity increase or the amount of the first
increase in an annuity under section 8340(b) or (c) or sec-
tion 8462 (b) or (c) of title 5, United States Code, or com-
parable provisions of law.
SEC. 10002. PERMANENT ELIMINATION OF THE ALTER-
NATIVE-FORM-OF-ANNUITY OPTION EXCEPT
FOR INDIVIDUALS WITH A CRITICAL MEDICAL
CONDITION.
(a) CIVIL SERVICE RETIREMENT SYSTEM; FEDERAL
EMPLOYEES’ RETIREMENT SYSTEM.—Sections 8343a and
8420a of title 5, United States Code, are each amended—
(1) in subsection (a) by striking ‘‘an employee or
Member may,’’ and inserting ‘‘any employee or Mem-
650
HR 2264 EAS
ber who has a life-threatening affliction or other criti-
cal medical condition may,’’; and
(2) by striking subsection (f).
(b) CENTRAL INTELLIGENCE AGENCY RETIREMENT
AND DISABILITY SYSTEM.—Section 294(a) of the Central
Intelligence Agency Retirement Act (50 U.S.C. 2143(a)), as
set forth in section 802 of the CIARDS Technical Correc-
tions Act of 1992 (Public Law 102–496; 106 Stat. 3196),
is amended by striking ‘‘a participant may,’’ and inserting
‘‘any participant who has a life-threatening affliction or
other critical medical condition may,’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall become effective on October 1, 1995, and shall
apply with respect to any annuity commencing on or after
that date.
SEC. 10003. DISTRICT OF COLUMBIA GOVERNMENT CON-
TRIBUTIONS FOR CERTAIN EMPLOYEE AND
ANNUITANT HEALTH BENEFITS.
(a) CONTRIBUTIONS AFTER 1993.—
(1) IN
GENERAL.—Section 8906(g) of title 5,
United States Code, is amended by adding at the end
thereof the following new paragraph:
‘‘(3) The Government contributions authorized
by this section for health benefits for an annuitant
shall be paid by the government of the District of Co-
651
HR 2264 EAS
lumbia, in the case of an annuitant whose eligibility
for an annuity is based on a separation from service
with such government, or who is a survivor of such
an annuitant or a survivor of an employee who died
while employed by such government.’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall take effect on October 1, 1993,
and shall apply with respect to amounts payable for
periods beginning on or after that date.
(b) CONTRIBUTIONS FOR PERIOD BETWEEN 1975 AND
1993.—
(1) IN GENERAL.—The government of the Dis-
trict of Columbia shall pay into the Employees
Health Benefit Fund, as payment for any amounts
which would, for the period beginning on January 1,
1975 through September 30, 1993, have been payable
under the provisions of section 8906(g)(3) of title 5,
United States Code (as added by subsection (a)(1) of
this section) if such provision had been in effect as of
January 1, 1975, of which—
(A) at least 25 percent of the total of such
amounts shall be paid no later than January 1,
1994;
652
HR 2264 EAS
(B) at least 25 percent of the total of such
amounts shall be paid no later than January 1,
1995;
(C) at least 25 percent of the total of such
amounts shall be paid no later than January 1,
1996; and
(D) any remaining balance shall be paid no
later than January 1, 1997.
(2) PRORATED PAYMENTS.—In determining any
amount for which the government of the District of
Columbia is liable under paragraph (1), the amount
of the liability shall be prorated to reflect only that
portion of total service which is attributable to civil-
ian service performed (by the former employee of the
government of the District of Columbia or by the de-
ceased individual referred to under section 8906
(g)(3) of title 5, United States Code, as the case may
be) during the period beginning on January 1, 1975,
through September 30, 1993, as estimated by the Of-
fice of Personnel Management.
Subtitle B—Postal Service
SEC. 10101. PAYMENTS TO BE MADE BY THE UNITED STATES
POSTAL SERVICE.
(a) RELATING
TO CORRECTED CALCULATIONS
FOR
PAST RETIREMENT COLAS.—In addition to any other
653
HR 2264 EAS
payments required under section 8348(m) of title 5, United
States Code, or any other provision of law, the United
States Postal Service shall pay into the Civil Service Re-
tirement and Disability Fund a total of $693,000,000, of
which—
(1) at least one-third shall be paid not later than
September 30, 1996;
(2) at least two-thirds shall be paid not later
than September 30, 1997; and
(3) any remaining balance shall be paid not
later than September 30, 1998.
(b) RELATING
TO CORRECTED CALCULATIONS
FOR
PAST HEALTH BENEFITS.—In addition to any other pay-
ments required under section 8906(g)(2) of title 5, United
States Code, or any other provision of law, the United
States Postal Service shall pay into the Employees Health
Benefits Fund a total of $348,000,000, of which—
(1) at least one-third shall be paid not later than
September 30, 1996;
(2) at least two-thirds shall be paid not later
than September 30, 1997; and
(3) any remaining balance shall be paid not
later than September 30, 1998.
654
HR 2264 EAS
Subtitle C—Miscellaneous
SEC. 10201. FEDERAL EMPLOYEES’ SURVIVOR ANNUITY IM-
PROVEMENTS.
(a) CIVIL SERVICE RETIREMENT SYSTEM.—
(1) REDUCTION FOR SPOUSAL ANNUITY.—Section
8339(j) of title 5, United States Code, is amended—
(A) in paragraph (3)—
(i) in the second sentence, by striking
out ‘‘, within such 2-year period,’’; and
(ii) by striking out the fourth sentence
and inserting in lieu thereof the following:
‘‘The Office shall, by regulation, provide for
payment of the deposit required under this
paragraph by a reduction in the annuity of
the employee or Member. The reduction
shall, to the extent practicable, be designed
so that the present value of the future reduc-
tion is actuarially equivalent to the deposit
required under this paragraph, except that
the total reductions in the annuity of an
employee or Member to pay deposits re-
quired by the provisions of this paragraph,
paragraph (5), or subsection (k)(2) shall not
exceed 25 percent of the annuity computed
under subsections (a) through (i), (n), and
655
HR 2264 EAS
(q), including adjustments under section
8340. The reduction, which shall be effective
on the same date as the election under this
paragraph, shall be permanent and unaf-
fected by any future termination of the enti-
tlement of the former spouse. Such reduction
shall be independent of and in addition to
the reduction required under the first sen-
tence of this paragraph.’’; and
(B) in paragraph (5)(C)—
(i) in clause (ii), by striking out ‘‘,
within 2 years after the date of the remar-
riage or, if later, the death or remarriage of
the former spouse (or of the last such surviv-
ing former spouse),’’; and
(ii) by amending clause (iii) to read as
follows:
‘‘(iii) The Office shall, by regulation, pro-
vide for payment of the deposit required under
clause (ii) by a reduction in the annuity of the
employee or Member. The reduction shall, to the
extent practicable, be designed so that the present
value of the future reduction is actuarially
equivalent to the deposit required under clause
(ii), except that total reductions in the annuity
656
HR 2264 EAS
of an employee or Member to pay deposits re-
quired by the provisions of this paragraph or
paragraph (3) shall not exceed 25 percent of the
annuity computed under subsections (a) through
(i), (n), and (q), including adjustments under
section 8340. The reduction required by this
clause, which shall be effective on the same date
as the election under clause (i), shall be perma-
nent and unaffected by any future termination
of the marriage. Such reduction shall be inde-
pendent of and in addition to the reduction re-
quired under clause (i).’’.
(2) 
REDUCTION
RELATING
TO
FORMER
SPOUSE.—Section 8339(k)(2) of title 5, United States
Code, is amended—
(A) in subparagraph (B)(ii), by striking
out ‘‘Within 2 years after the date of the mar-
riage, the’’ and inserting in lieu thereof ‘‘The’’;
and
(B) by amending subparagraph (C) to read
as follows:
‘‘(C) The Office shall, by regulation, provide for
payment of the deposit required under subparagraph
(B)(ii) by a reduction in the annuity of the employee
or Member. The reduction shall, to the extent prac-
657
HR 2264 EAS
ticable, be designed so that the present value of the fu-
ture reduction is actuarially equivalent to the deposit
required under subparagraph (B)(ii), except that total
reductions in the annuity of an employee or Member
to pay deposits required by this subsection or sub-
section (j)(3) shall not exceed 25 percent of the annu-
ity computed under subsections (a) through (i), (n),
and (q), including adjustments under section 8340.
The reduction required by this subparagraph, which
shall be effective on the same date as the election
under subparagraph (A), shall be permanent and un-
affected by any future termination of the marriage.
Such reduction shall be independent of and in addi-
tion to the reduction required under subparagraph
(A).’’.
(3) DEPOSITS.—Section 8334(h) of title 5, Unit-
ed States Code, is amended by striking out ‘‘and by
section 8339(j)(5)(C) and the last sentence of section
8339(k)(2) of this title’’.
(b) FEDERAL EMPLOYEES RETIREMENT SYSTEM.—
Section 8418 of title 5, United States Code, is amended—
(1) in subsection (a)(1), by striking out ‘‘, before
the expiration of the 2-year period involved,’’; and
(2) by amending subsection (b) to read as fol-
lows:
658
HR 2264 EAS
‘‘(b) The Office shall, by regulation, provide for pay-
ment of the deposit required under subsection (a) by a re-
duction in the annuity of the employee or Member. The re-
duction shall, to the extent practicable, be designed so that
the present value of the future reduction is actuarially
equivalent to the deposit required under subsection (a), ex-
cept that the total reductions in the annuity of an employee
or Member to pay deposits required by this section shall
not exceed 25 percent of the annuity computed under section
8415 or section 8452, including adjustments under section
8462. The reduction required by this subsection, which shall
be effective at the same time as the election under section
8416 (b) and (c) or section 8417(b), shall be permanent and
unaffected by any future termination of the marriage or
the entitlement of the former spouse. Such reduction shall
be independent of and in addition to the reduction required
under section 8416 (b) and (c) or section 8417(b).’’.
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall take effect on the first day of the
first month beginning 30 days after the date of the
enactment of this Act and shall apply to all deposits
required 
under 
section 
8339(j) 
(3) 
and 
(5),
8339(k)(2), or 8418 of title 5, United States Code, on
659
HR 2264 EAS
which no payment has been made prior to such effec-
tive date.
(2) PARTIAL
DEPOSIT.—For any deposit re-
quired under section 8339(j) (3) and (5), 8339(k)(2),
or 8418 of title 5, United States Code, or section 4
(b) and (c) of the Civil Service Retirement Spouse
Equity Act of 1984 that has been partially, but not
fully, paid before the effective date of this Act, the Of-
fice shall by regulation provide for determining the
remaining portion of the deposit and for payment of
the remaining portion of the deposit by a prospective
reduction in the annuity of the employee or Member.
The reduction shall be similar to the reductions pro-
vided pursuant to the amendments made under this
section.
TITLE XI—JUDICIARY
SEC. 11001. PATENT AND TRADEMARK FEES.
Section 10101 of the Omnibus Budget Reconciliation
Act of 1990 (35 U.S.C. 41 note) is amended—
(1) in subsection (a) by striking ‘‘1995’’ and in-
serting ‘‘1998’’;
(2) in subsection (b)(2) by striking ‘‘1995’’ and
inserting ‘‘1998’’; and
(3) in subsection (c)—
660
HR 2264 EAS
(A) by striking ‘‘through 1995’’ and insert-
ing ‘‘through 1998’’; and
(B) by adding at the end the following:
‘‘(6) $111,000,000 in fiscal year 1996.
‘‘(7) $115,000,000 in fiscal year 1997.
‘‘(8) $119,000,000 in fiscal year 1998.’’.
TITLE XII—COMMITTEE ON
LABOR AND HUMAN RESOURCES
Subtitle A—Student Loan
Provisions
SEC. 12001. SHORT TITLE; REFERENCES.
(a) SHORT TITLE.—This subtitle may be cited as the
‘‘Student Loan Reform Act of 1993’’.
(b) REFERENCES.—References in this subtitle to ‘‘the
Act’’ are references to the Higher Education Act of 1965
(20 U.S.C. 1001 et seq.).
CHAPTER 1—FEDERAL DIRECT STUDENT
LOAN PROGRAM
SEC. 12011. FEDERAL DIRECT STUDENT LOAN PROGRAM.
Part D of title IV (20 U.S.C. 1087a) is amended to
read as follows:
‘‘PART D—FEDERAL DIRECT STUDENT
LOAN PROGRAM
‘‘SEC. 451. PURPOSE; PROGRAM AUTHORIZATION.
‘‘(a) PURPOSE.—It is the purpose of this part—
661
HR 2264 EAS
‘‘(1) to simplify the delivery of student loans to
borrowers and eliminate borrower confusion;
‘‘(2) to provide a variety of repayment plans, in-
cluding income contingent repayment, to borrowers so
that borrowers have flexibility in managing their stu-
dent loan repayment obligations, and so that those ob-
ligations do not foreclose careers in community or
public service for those borrowers;
‘‘(3) to replace, through an orderly transition,
the Federal Family Education Loan Program under
part B of this title with the Federal Direct Student
Loan Program under this part;
‘‘(4) to avoid the unnecessary cost, to taxpayers
and borrowers, and administrative complexity associ-
ated with the Federal Family Education Loan Pro-
gram under part B of this title through the use of a
direct student loan program; and
‘‘(5) to create a more streamlined student loan
program that can be managed more effectively at the
Federal level.
‘‘(b) PROGRAM AUTHORITY.—There are hereby made
available, in accordance with the provisions of this part,
such sums as may be necessary to make loans to all eligible
students in attendance at participating institutions of high-
er education selected by the Secretary (and the eligible par-
662
HR 2264 EAS
ents of such students), to enable such students to pursue
their courses of study at such institutions during the period
beginning July 1, 1994. Such loans shall be made by par-
ticipating institutions, or consortia thereof, that have agree-
ments with the Secretary to originate loans, or by alter-
native originators designated by the Secretary to make
loans for students in attendance at participating institu-
tions (and their parents).
‘‘SEC. 452. FUNDS FOR ORIGINATION OF DIRECT STUDENT
LOANS.
‘‘(a) IN GENERAL.—The Secretary shall provide funds
for student and parent loans under this part—
‘‘(1) directly to an institution of higher edu-
cation that has an agreement with the Secretary
under section 454(a) to participate in the direct stu-
dent loan program under this part and that also has
an agreement with the Secretary under section 454(b)
to originate loans under this part; or
‘‘(2) through an alternative originator des-
ignated by the Secretary, on the basis of the need and
the eligibility of students at each participating insti-
tution, and parents of such students, for such loans.
‘‘(b) FEES FOR ORIGINATION SERVICES.—
‘‘(1) FEES
FOR
INSTITUTIONS.—The Secretary
shall pay fees to institutions of higher education or
663
HR 2264 EAS
consortia thereof having agreements under section
454(b), in an amount established by the Secretary, to
assist in meeting the costs of loan origination. Such
fees—
‘‘(A) shall be paid by the Secretary based on
all the loans made under this part to a particu-
lar borrower in the same academic year;
‘‘(B) shall be subject to a sliding scale that
decreases the amount of such fees as the number
of borrowers increases; and
‘‘(C)(i) for academic year 1994–1995, shall
not exceed a program-wide average of $10 per
borrower for all the loans made under this part
to such borrower in the same academic year; and
‘‘(ii) for succeeding academic years, the Sec-
retary shall establish such average fee pursuant
to regulations.
‘‘(2) FEES
FOR
ALTERNATIVE
ORIGINATORS.—
The Secretary shall pay fees for loan origination serv-
ices to alternative originators of loans made under
this part in an amount established by the Secretary
in accordance with the terms of the contract described
in section 456(b) between the Secretary and each such
alternative originator.
664
HR 2264 EAS
‘‘(c) NO ENTITLEMENT TO PARTICIPATE OR ORIGI-
NATE.—No institution of higher education shall have a
right to participate in the program authorized by this part,
originate loans, or perform any program function under
this part. Nothing in this subsection shall be construed so
as to limit the entitlement of an eligible student attending
a participating institution (or the eligible parent of such
student) to borrow under this part nor limit the borrower’s
contractual right against the United States to receive any
loan for which the student (or parent) is eligible.
‘‘(d) DELIVERY OF LOAN FUNDS.—Loan funds shall
be paid and delivered to an institution by the Secretary
prior to the beginning of the payment period established
by the Secretary in a manner that is consistent with pay-
ment and delivery of basic grants under subpart 1 of part
A.
‘‘SEC. 453. SELECTION OF INSTITUTIONS FOR PARTICIPA-
TION AND ORIGINATION.
‘‘(a) PHASE-IN OF PROGRAM.—
‘‘(1) GENERAL AUTHORITY.—The Secretary shall
enter into agreements pursuant to section 454(a) with
institutions of higher education to participate in the
direct student loan program under this part, and
agreements pursuant to section 454(b) with institu-
tions of higher education, or consortia thereof, to
665
HR 2264 EAS
originate loans in such program, for academic years
beginning on or after July 1, 1994. Alternative origi-
nation services, through which an entity other than
the participating institution at which the student is
in attendance originates the loan, shall be provided
by the Secretary, through 1 or more contracts under
section 456(b) or such other means as the Secretary
may provide, for students attending participating in-
stitutions that do not originate direct student loans
under this part. Such agreements for the academic
year 1994–1995 shall, to the extent feasible, be entered
into not later than January 1, 1994.
‘‘(2) TRANSITION PROVISIONS.—In order to en-
sure an expeditious but orderly transition from the
loan programs under part B of this title to the direct
student loan program under this part, the Secretary
shall, in the exercise of the Secretary’s discretion, de-
termine the number of institutions with which the
Secretary whall enter into agreements under sub-
sections (a) and (b) of section 454 for any academic
year, except that the Secretary shall exercise such dis-
cretion so as to achieve the following goals:
‘‘(A) For academic year 1994–1995, loans
made under this part shall represent 5 percent of
the new student loan volume for such year.
666
HR 2264 EAS
‘‘(B) For academic year 1995–1996, loans
made under this part shall represent 30 percent
of the new student loan volume for such year.
‘‘(C) For academic year 1996–1997, loans
made under this part shall represent 40 percent
of the new student loan volume for such year.
‘‘(D) For academic year 1997–1998 and fis-
cal year 1998, loans made under this part shall
represent 50 percent of the new student loan vol-
ume for such years.
‘‘(3) NEW
STUDENT
LOAN
VOLUME.—For the
purpose of this part, the term ‘new student loan vol-
ume’ means the estimated sum of all loans that will
be made, insured or guaranteed under this part and
part B in the year for which the determination is
made. The Secretary shall base the estimate described
in the preceding sentence on the most recent program
data available.
‘‘(4) CASH MANAGEMENT.—The requirements of
sections 3335, 6501, and 6503 of title 31, United
States Code (the Cash Management Improvement Act
of 1990) shall apply to the program under this part
only to the extent specified in a schedule established
by the Secretaries of Education and the Treasury, ex-
cept that such schedule shall provide for the applica-
667
HR 2264 EAS
tion of all such requirements not later than July 1,
1998.
‘‘(b) SELECTION CRITERIA.—
‘‘(1) APPLICATION.—Each institution of higher
education desiring to participate in the direct student
loan program under this part shall submit an appli-
cation satisfactory to the Secretary containing such
information and assurances as the Secretary may re-
quire.
‘‘(2) SELECTION CRITERIA.—The Secretary shall
select institutions for participation in the direct stu-
dent loan program under this part, and shall enter
into agreements with such institutions under section
454(a), from among those institutions that submit the
applications described in paragraph (1), and meet
such other eligibility requirements as the Secretary
shall prescribe, by, to the extent possible—
‘‘(A)(i) categorizing such institutions ac-
cording to anticipated loan volume, length of
academic program, control of the institution,
highest degree offered, size of student enrollment,
percentage of students borrowing under part B,
geographic location, annual loan volume, default
experience and composition of the student body;
and
668
HR 2264 EAS
‘‘(ii) beginning in academic year 1995–
1996 selecting institutions that are reasonably
representative of each of the categories described
pursuant to clause (i); and
‘‘(B) if the Secretary determines it nec-
essary to carry out the purposes of this part, se-
lecting additional institutions.
‘‘(c) SELECTION CRITERIA FOR ORIGINATION.—
‘‘(1) IN
GENERAL.—The Secretary may enter
into a supplemental agreement with an institution
(or a consortium of such institutions) that—
‘‘(A) has an agreement under subsection
454(a);
‘‘(B) desires to originate loans under this
part; and
‘‘(C) meets the criteria described in para-
graph (2).
‘‘(2) TRANSITION
SELECTION
CRITERIA.—For
academic year 1994–1995, the Secretary may approve
an institution to originate loans only if such institu-
tion—
‘‘(A) made loans under part E of this title
in academic year 1993–1994 and did not exceed
the applicable maximum default rate under sec-
669
HR 2264 EAS
tion 462(g) for the most recent fiscal year for
which data are available;
‘‘(B) is not on the reimbursement system of
payment for any of the programs under subpart
1 or 3 of part A, part C, or part E;
‘‘(C) is not overdue on program or financial
reports or audits required under this title;
‘‘(D) is not subject to an emergency action,
or a limitation, suspension, or termination
under section 428(b)(1)(T), 432(h), or 487(c);
‘‘(E) in the opinion of the Secretary, has
not had significant deficiencies identified by a
State postsecondary review entity under subpart
1 of part H of this title;
‘‘(F) in the opinion of the Secretary, has
not had severe performance deficiencies for any
of the programs under this title, including such
deficiencies demonstrated by audits or program
reviews submitted or conducted during the 5 cal-
endar years immediately preceding the date of
application;
‘‘(G) provides an assurance that such insti-
tution has no delinquent outstanding debts to the
Federal Government, unless such debts are being
repaid under or in accordance with a repayment
670
HR 2264 EAS
arrangement satisfactory to the Federal Govern-
ment, or the Secretary in the Secretary’s discre-
tion determines that the existence or amount of
such debts has not been finally determined by the
cognizant Federal agency; and
‘‘(H) meets such other criteria as the Sec-
retary may establish to protect the financial in-
terest of the United States and to promote the
purposes of this part.
‘‘(3) REGULATIONS GOVERNING APPROVAL AFTER
TRANSACTION.—For academic year 1995–1996 and
subsequent academic years, the Secretary shall pro-
mulgate and publish in the Federal Register regula-
tions governing the approval of institutions to origi-
nate loans under this part in accordance with section
458(a)(2).
‘‘(d) CONSORTIA.—Subject to such requirements as the
Secretary may prescribe, eligible institutions of higher edu-
cation with agreements under section 454(a) may apply to
the Secretary as consortia to originate loans under this part
for students in attendance at such institutions. Such insti-
tutions shall each be required to meet the requirements of
subsection (c) with respect to loan origination.
671
HR 2264 EAS
‘‘SEC. 454. AGREEMENTS WITH INSTITUTIONS.
‘‘(a) PARTICIPATION AGREEMENTS.—An agreement
with any institution of higher education for participation
in the direct student loan program under this part shall—
‘‘(1) provide for the establishment and mainte-
nance of a direct student loan program at the institu-
tion under which the institution will—
‘‘(A) identify eligible students who seek stu-
dent financial assistance at such institution in
accordance with section 484;
‘‘(B) estimate the need of each such student
as required by part F of this title for an aca-
demic year, except that, any loan obtained by a
student under this part with the same terms as
loans made under section 428H (except as other-
wise provided in this part), or a loan obtained
by a parent under this part with the same terms
as loans made under section 428B (except as oth-
erwise provided in this part), or obtained under
any State-sponsored or private loan program,
may be used to offset the expected family con-
tribution of the student for that year;
‘‘(C) provide a statement that certifies the
eligibility of any student to receive a loan under
this part that is not in excess of the annual or
aggregate limit applicable to such loan, except
672
HR 2264 EAS
that the institution may, in exceptional cir-
cumstances identified by the Secretary, refuse to
certify a statement that permits a student to re-
ceive a loan under this part, or certify a loan
amount that is less than the student’s determina-
tion of need (as determined under part F of this
title), if the reason for such action is documented
and provided in written form to such student;
‘‘(D) set forth a schedule for disbursement of
the proceeds of the loan in installments, consist-
ent with the requirements of section 428G (other
than subsection (b)(1) of such section); and
‘‘(E) provide timely and accurate informa-
tion—
‘‘(i) concerning the status of student
borrowers (and students on whose behalf
parents borrow under this part) while such
students are in attendance at the institution
and concerning any new information of
which the institution becomes aware for
such students (or their parents) after such
borrowers leave the institution, to the Sec-
retary for the servicing and collecting of
loans made under this part; and
675
HR 2264 EAS
‘‘(3) provide that the institution or consortium
will originate loans to eligible students and parents
in accordance with this part; and
‘‘(4) provide that the note or evidence of obliga-
tion on the loan shall be the property of the Secretary.
‘‘(c) 
WITHDRAWAL
AND
TERMINATION
PROCE-
DURES.—The Secretary shall establish procedures by which
institutions or consortia may withdraw or be terminated
from the program under this part.
‘‘SEC. 455. TERMS AND CONDITIONS OF LOANS.
‘‘(a) IN GENERAL.—
‘‘(1) PARALLEL TERMS, CONDITIONS, BENEFITS,
AND
AMOUNTS.—Unless otherwise specified in this
part, loans made to borrowers under this part shall
have the same terms, conditions, and benefits as loans
made to borrowers under sections 428, 428B, and
428H of this title.
‘‘(2) DESIGNATION OF LOANS.—Loans made to
borrowers under this part that, except as otherwise
specified in this part, have the same terms, condi-
tions, and benefits as loans made to borrowers
under—
‘‘(A) section 428 shall be known as ‘Federal
Direct Stafford Loans’;
676
HR 2264 EAS
‘‘(B) section 428B shall be known as ‘Fed-
eral Direct PLUS Loans’; and
‘‘(C) section 428H shall be known as ‘Fed-
eral Direct Unsubsidized Stafford Loans’.
‘‘(b) INTEREST RATE.—
‘‘(1) RATES
FOR
FDSL
AND
FDUSL.—(A) For
Federal Direct Stafford Loans and Federal Direct
Unsubsidized Stafford Loans for which the first dis-
bursement is made on or after July 1, 1994, the ap-
plicable rate of interest shall, during any 12-month
period beginning on July 1 and ending on June 30,
be determined on the preceding June 1 and be equal
to—
‘‘(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction held
prior to such June 1; plus
‘‘(ii) 3.1 percent,
except that such rate shall not exceed 8.25 percent.
‘‘(B)(i) Notwithstanding the provisions of sub-
paragraph (A), with respect to any Federal Direct
Stafford Loan or Federal Direct Unsubsidized Staf-
ford Loan for which the first disbursement is made on
or after July 1, 1994, the applicable rate of interest
for interest which accrues—
677
HR 2264 EAS
‘‘(I) prior to the beginning of the repayment
period of the loan; or
‘‘(II) during the period in which principal
need not be paid (whether or not such principal
is in fact paid) by reason of a provision de-
scribed in section 428(b)(1)(M) or 427(a)(2)(C),
shall not exceed the rate determined under clause (ii).
‘‘(ii) For purposes of clause (i) the rate deter-
mined under this clause shall, during any 12-month
period beginning on July 1 and ending on June 30,
be determined on the preceding June 1 and be equal
to—
‘‘(I) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
prior to such June 1; plus
‘‘(II) 2.5 percent,
except that such rate shall not exceed 8.25 percent.
‘‘(2) RATES FOR FDPLUS.—For Federal Direct
PLUS Loans for which the first disbursement is made
on or after July 1, 1994, the applicable rate of inter-
est shall, during any 12-month period beginning on
July 1 and ending on June 30, be determined on the
preceding June 1 and be equal to—
678
HR 2264 EAS
‘‘(A) the bond equivalent rate of 52-week
Treasury bills auctioned at final auction held
prior to such June 1; plus
‘‘(B) 3.1 percent,
except that such rate shall not exceed 9 percent.
‘‘(3) PUBLICATION.—The Secretary shall deter-
mine the applicable rates of interest under this sub-
section after consultation with the Secretary of Treas-
ury and shall publish such rate in the Federal Reg-
ister as soon as practicable after the date of deter-
mination.
‘‘(c) ORIGINATION FEE.—The Secretary shall charge
the borrower of a loan made under this part an origination
fee of 4.0 percent of the principal amount of the loan.
‘‘(d) REPAYMENT PLANS.—
‘‘(1) DESIGN AND SELECTION.—Consistent with
criteria established by the Secretary, the Secretary
shall offer a borrower of a loan made under this part
a variety of plans for repayment of such loan, includ-
ing principal and interest on the loan. The borrower
shall be entitled to accelerate, without penalty, repay-
ment on the borrowers loans under this part. The bor-
rower may choose—
679
HR 2264 EAS
‘‘(A) a standard repayment plan, with a
fixed annual repayment amount paid over a
fixed period of time;
‘‘(B) an extended repayment plan, with a
fixed annual repayment amount paid over an
extended period of time, except that the borrower
shall annually repay a minimum amount deter-
mined by the Secretary in accordance with sec-
tion 428(b)(1)(L);
‘‘(C) a graduated repayment plan, with an-
nual repayment amounts established at 2 or
more graduated levels and paid over a fixed or
extended period of time, except that the borrow-
er’s scheduled payments shall not be less than 50
percent, nor more than 150 percent, of what the
amortized payment on the amount owed would
be if the loan were repaid under the standard re-
payment plan; and
‘‘(D) an income contingent repayment plan,
with varying annual repayment amounts based
on the income of the borrower, paid over an ex-
tended period of time, not to exceed 20 years, ex-
cept that the plan described in this subpara-
graph shall not be available to the borrower of a
Federal Direct PLUS loan.
680
HR 2264 EAS
‘‘(2) SELECTION BY SECRETARY.—If a borrower
of a loan made under this part does not select a re-
payment plan described in paragraph (1), the Sec-
retary may provide the borrower with a repayment
plan described in subparagraph (A), (B), or (C) of
paragraph (1).
‘‘(3) CHANGES IN SELECTIONS.—The borrower of
a loan made under this part may change the borrow-
er’s selection of a repayment plan under paragraph
(1), or the Secretary’s selection of a plan for the bor-
rower under paragraph (2), as the case may be, under
such terms and conditions as may be established by
the Secretary.
‘‘(4) ALTERNATIVE
REPAYMENT
PLANS.—The
Secretary may provide, on a case by case basis, an
alternative repayment plan to a borrower of a loan
made under this part who demonstrates to the satis-
faction of the Secretary that the terms and conditions
of the repayment plans available under paragraph (1)
are not adequate to accommodate the borrower’s ex-
ceptional circumstances. In designing such alternative
repayment plans, the Secretary shall ensure that such
plans do not exceed the cost to the Federal Govern-
ment, as determined on the basis of the present value
681
HR 2264 EAS
of future payments by such borrowers, of loans made
using the plans available under paragraph (1).
‘‘(5) REPAYMENT
AFTER
DEFAULT.—The Sec-
retary may require any borrower who has defaulted
on a loan made under this part to—
‘‘(A) pay all reasonable collection costs asso-
ciated with such loan; and
‘‘(B) repay the loan pursuant to an income
contingent repayment plan.
‘‘(e) INCOME CONTINGENT REPAYMENT.—
‘‘(1) INFORMATION AND PROCEDURES.—The Sec-
retary may obtain such information as is reasonably
necessary regarding the income of a borrower (and the
borrower’s spouse, if applicable) of a loan made under
this part that is, or may be, repaid pursuant to in-
come contingent repayment, for the purpose of deter-
mining the annual repayment obligation of the bor-
rower. Return and return information (as defined in
section 6103 of the Internal Revenue Code of 1986)
may be obtained under the preceding sentence only to
the extent authorized by section 6103(l)(13) of such
Code. The Secretary shall establish procedures for de-
termining the borrower’s repayment obligation on
that loan for such year, and such other procedures as
682
HR 2264 EAS
are necessary to implement effectively income contin-
gent repayment.
‘‘(2) REPAYMENT BASED ON ADJUSTED GROSS
INCOME.—A repayment schedule for a loan made
under this part and repaid pursuant to income con-
tingent repayment shall be based on the adjusted gross
income (as defined in section 62 of the Internal Reve-
nue Code of 1986) of the borrower or, if the borrower
is married and files a Federal income tax return
jointly with the borrower’s spouse, on the adjusted
gross income of the borrower and the borrower’s
spouse.
‘‘(3) ADDITIONAL DOCUMENTS.—A borrower who
chooses, or is required, to repay a loan made under
this part pursuant to income contingent repayment,
and for whom adjusted gross income is unavailable or
does not reasonably reflect the borrower’s current in-
come, shall provide to the Secretary other documenta-
tion of income satisfactory to the Secretary, which
documentation the Secretary may use to determine an
appropriate repayment schedule.
‘‘(4) REPAYMENT SCHEDULES.—Income contin-
gent repayment schedules shall be established by regu-
lations promulgated by the Secretary and shall re-
quire payments that vary in relation to the appro-
683
HR 2264 EAS
priate portion of the annual income of the borrower
(and the borrower’s spouse, if applicable) as deter-
mined by the Secretary.
‘‘(5) CALCULATION OF BALANCE DUE.—The bal-
ance due on a loan made under this part that is re-
paid pursuant to income contingent repayment shall
equal the unpaid principal amount of the loan, any
accrued interest, and any fees, such as late charges,
assessed on such loan. The Secretary may promulgate
regulations limiting the amount of interest that may
be capitalized on such loan, and the timing of any
such capitalization.
‘‘(6) NOTIFICATION TO BORROWERS.—The Sec-
retary shall establish procedures under which a bor-
rower of a loan made under this part who chooses or
is required to repay such loan pursuant to income
contingent repayment is notified of the terms and
conditions of such plan, including notification of such
borrower—
‘‘(A) that the Internal Revenue Service will
disclose to the Secretary tax return information
as authorized under section 6103(l)(13) of the
Internal Revenue Code of 1986; and
‘‘(B) that if a borrower considers that spe-
cial circumstances, such as a loss of employment
684
HR 2264 EAS
by the borrower or the borrower’s spouse, war-
rant an adjustment in the borrower’s loan repay-
ment as determined using the information de-
scribed in subparagraph (A), or the alternative
documentation described in paragraph (3), the
borrower may contact the Secretary, who shall
determine whether such adjustment is appro-
priate, in accordance with criteria established by
the Secretary.
‘‘(f) DEFERMENT.—
‘‘(1) EFFECT ON PRINCIPAL AND INTEREST.—A
borrower of a loan made under this part who meets
the requirements described in paragraph (2) shall be
eligible for a deferment, during which periodic in-
stallments of principal need not be paid, and inter-
est—
‘‘(A) shall not accrue, in the case of a Fed-
eral Direct Stafford Loan or a Federal Direct
Consolidation Loan that consolidated only Fed-
eral Direct Stafford Loans, or a combination of
such loans and Federal Stafford Loans for which
the student borrower received an interest subsidy
under section 428; or
‘‘(B) shall accrue and be capitalized or paid
by the borrower, in the case of a Federal Direct
685
HR 2264 EAS
PLUS Loan, a Federal Direct Unsubsidized
Stafford Loan, or a Federal Direct Consolidation
Loan other than loans described in subparagraph
(A).
‘‘(2) ELIGIBILITY.—A borrower of a loan made
under this part shall be eligible for a deferment dur-
ing any period—
‘‘(A) during which the borrower—
‘‘(i) is carrying at least one-half the
normal full-time work load for the course of
study that the borrower is pursuing, as de-
termined by the eligible institution (as such
term is defined in section 435) the borrower
is attending; or
‘‘(ii) is pursuing a course of study
pursuant to a graduate fellowship program
approved by the Secretary, or pursuant to
a rehabilitation training program for indi-
viduals with disabilities approved by the
Secretary,
except that no borrower shall be eligible for a
deferment under this subparagraph, or a loan
made under this part (other than a Federal Di-
rect PLUS Loan or a Federal Direct Consolida-
686
HR 2264 EAS
tion Loan), while serving in a medical intern-
ship or residency program;
‘‘(B) not in excess of 3 years during which
the borrower is seeking and unable to find full-
time employment;
‘‘(C) not in excess of 3 years during which
the Secretary determines, in accordance with
regulations prescribed under section 435(o), that
the borrower has experienced or will experience
an economic hardship, regardless of the reason
for such hardship.
‘‘(g) FEDERAL DIRECT CONSOLIDATION LOANS.—A
borrower of a loan made under this part may consolidate
such loan with the loans described in section 428C(a)(4)
and section 428C(d)(1)(C) only under such terms and con-
ditions as the Secretary shall establish pursuant to regula-
tions promulgated under this part. Loans made under this
subsection shall be known as ‘Federal Direct Consolidation
Loans’.
‘‘(h) BORROWER DEFENSES.—Notwithstanding any
other provision of law, the Secretary shall specify in regula-
tions (except as authorized under section 458(a)), which
acts or omissions of an institution of higher education a
borrower may assert as a defense to repayment of a loan
made under this part, except that in no event may a bor-
687
HR 2264 EAS
rower recover from the Secretary, in any action arising
from or relating to a loan made under this part, an amount
in excess of the amount such borrower has repaid on such
loan.
‘‘(i) OPTICALLY IMAGED DOCUMENTS.—Records main-
tained in accordance with section 484A(c) may be used in
any proceeding, as permitted pursuant to section 484A(c),
with respect to a loan made under this part.
‘‘(j) NONDISCHARGEABILITY
IN BANKRUPTCY.—Not-
withstanding any other provision of law, a loan made
under this part shall not be dischargeable in any Federal
or State bankruptcy proceeding.
‘‘(k) LOAN APPLICATION AND PROMISSORY NOTE.—
The common financial reporting form required in 483(a)(1)
shall constitute the application for loans made under this
part. The Secretary shall develop, print, and distribute to
participating institutions a standard promissory note and
loan disclosure form.
‘‘(l) LOAN DISBURSEMENT.—
‘‘(1) IN GENERAL.—Payments of loan proceeds to
students under this part shall be made by crediting
the student’s account for tuition and fees, and, in the
case of institutionally owned housing, room and
board. The student may elect to have the institution
provide other such goods and services by crediting the
688
HR 2264 EAS
student’s account. Loan proceeds that remain after
the application of the previous sentences shall be de-
livered to the borrower in accordance with section
427(a)(3).
‘‘(2) PAYMENT
PERIODS.—The Secretary shall
establish periods for the payments described in para-
graph (2) in a manner that is consistent with pay-
ment of basic grants under subpart 1 of part A.
‘‘(m) FISCAL CONTROL AND FUND ACCOUNTABILITY.—
‘‘(1) IN
GENERAL.—(A) An institution shall
maintain financial records in a manner consistent
with records maintained for other programs under
title IV.
‘‘(B) An institution may maintain loan funds
under this part in the same account as other Federal
student financial assistance.
‘‘(2) PAYMENTS; REFUNDS; ENROLLMENT
STA-
TUS.—Payments, refunds and enrollment status shall
be reconciled in a manner and schedule that is con-
sistent with the manner and schedule set forth for the
quarterly submission of a payment summary report
required of institutions participating in the program
assisted under subpart 1 of part A.
‘‘(3) TRANSACTION HISTORIES.—All transaction
histories under this part shall be maintained using
689
HR 2264 EAS
the same system designated by the Secretary for the
provision of basic grants under subpart 1 of part A.
‘‘(n) ENTITLEMENT PROVISION.—Except as provided
in section 454(a)(1)(C), an eligible student in attendance
at a participating institution (or a parent borrower) shall
have a contractual right against the United States to receive
any loan under this part for which such student (or parent)
is eligible.
‘‘SEC. 456. CONTRACTS.
‘‘(a) CONTRACTS FOR SUPPLIES AND SERVICES.—
‘‘(1) IN GENERAL.—The Secretary may award 1
or more contracts for services and supplies described
in subsection (b). The entities with which the Sec-
retary may enter into such contracts shall include en-
tities which the Secretary determines are qualified to
provide such services and supplies and will comply
with the procedures applicable to the award of such
contracts. In the case of awarding contracts for the
servicing of loans under this part, the Secretary shall
only enter into contracts with entities that have ex-
tensive experience and a demonstrated record in loan
servicing and collection.
‘‘(2) EXEMPTION.—The Secretary may award,
through June 30, 1998, contracts under this section
without regard to the requirements in section 303 of
690
HR 2264 EAS
the Federal Property and Administrative Services Act
of 1949, section 18 of the Office of Federal Procure-
ment Policy Act, and section 8(e) of the Small Busi-
ness Act, and the corresponding requirements of the
Federal Acquisition Regulations, if the Secretary de-
termines, on a case-by-case basis, that exemption from
such requirements is in the public interest and nec-
essary for the orderly transition from the loan pro-
grams under part B to the direct student loan pro-
gram under this part.
‘‘(3) APPLICATION OF REQUIREMENTS.—On and
after July 1, 1998, all statutory and regulatory re-
quirements described in paragraph (2) shall apply to
the award of a contract under this section.
‘‘(b) CONTRACTS FOR ORIGINATION, SERVICING, AND
DATA SYSTEMS.—The Secretary may enter into 1 or more
contracts for—
‘‘(1) the alternative origination of loans to stu-
dents attending institutions with agreements to par-
ticipate in the program under this part (or their par-
ents), if such institutions do not have agreements with
the Secretary under section 454(b);
‘‘(2) the servicing and collection of loans made
under this part;
691
HR 2264 EAS
‘‘(3) the establishment and operation of 1 or
more data systems for the maintenance of records on
all loans made under this part;
‘‘(4) services to assist in the orderly transition
from the loan programs under part B to the direct
student loan program under this part; and
‘‘(5) such other aspects of the direct student loan
program as the Secretary determines are necessary to
ensure the successful operation of the program.
‘‘SEC. 457. PLAN FOR IRS PARTICIPATION AND OTHER RE-
PAYMENT OPTIONS.
‘‘(a) IN GENERAL.—The Secretaries of Education and
the Treasury shall, within 6 months of the date of enact-
ment of this part, submit a plan to the President that—
‘‘(1) provides for—
‘‘(A) repayment of loans made under this
part through wage withholding by the Internal
Revenue Service;
‘‘(B) procedures for the resolution of dis-
putes through the Secretary of Education; and
‘‘(C) an alternate system of fees and pen-
alties, which shall not include the seizure of real
property, by the Internal Revenue Service for the
nonpayment of amounts due; and
692
HR 2264 EAS
‘‘(2) evaluates the feasibility of other wage-with-
holding repayment options for such loans.
‘‘(b) PRESIDENTIAL DETERMINATION.—If the Presi-
dent determines that the implementation of 1 or more re-
payment options contained in the plan described in sub-
section (a) would further the purposes of this part, the Sec-
retaries of Education and the Treasury shall be authorized
to take such actions as are reasonable and necessary to im-
plement such repayment options, including entering into
an agreement pursuant to section 6306 of the Internal Reve-
nue Code of 1986.
‘‘(c) FUNDING.—The Secretary of Education may use
such amounts as the Secretary of Education determines nec-
essary from the funds made available under section 460 to
implement the repayment options selected by the President
under subsection (b) and shall make available to the Sec-
retary of the Treasury such amounts from the funds made
available under section 460 as the Secretaries determine to
be necessary to implement the repayment options carried
out by the Internal Revenue Service.
‘‘SEC. 458. SECRETARIAL ACTIVITIES.
‘‘(a) REGULATORY ACTIVITIES.—
‘‘(1) NOTICE
IN
LIEU
OF
REGULATIONS
FOR
FIRST YEAR OF PROGRAM.—The Secretary shall pub-
lish in the Federal Register whatever standards, cri-
693
HR 2264 EAS
teria, and procedures, consistent with the provisions
of this part, that the Secretary, in consultation with
members of the higher education community, deter-
mine are reasonable and necessary to the successful
implementation of the direct student loan program
under this part in academic year 1994–1995. Section
431 of the General Education Provisions Act shall not
apply to the publication of such standards, criteria,
and procedures.
‘‘(2) 
NEGOTIATED
RULEMAKING.—Beginning
with academic year 1995–1996, all standards, cri-
teria, procedures and regulations implementing this
part shall be subject to negotiated rulemaking, includ-
ing all such standards, criteria, procedures and regu-
lations promulgated from the date of enactment of
this part.
‘‘(b) CLOSING DATE FOR APPLICATIONS FROM INSTI-
TUTIONS.—The Secretary shall establish a date not later
than October 1, 1993, as the closing date for receiving ap-
plications from institutions of higher education desiring to
participate in the direct loan program under this part in
academic year 1994–1995.
‘‘(c) PUBLICATION OF LIST OF PARTICIPATING INSTI-
TUTIONS AND CONTROL GROUP.—Not later than January
1, 1994, the Secretary shall publish in the Federal Register
694
HR 2264 EAS
a list of the institutions of higher education selected to par-
ticipate in the direct loan program under this part in aca-
demic year 1994–1995.
‘‘SEC. 459. REPORTS.
‘‘(a) ANNUAL REPORTS.—The Secretary shall submit
to the Congress not later than July 1, 1994, and each July
1 for the 4 succeeding years an annual report describing
the progress and status of the direct loan program.
‘‘(b) RESEARCH, DEMONSTRATION, 
AND
EVALUA-
TION.—The Secretary may use a portion of the funds made
available pursuant to section 460 for research on, or the
demonstration or evaluation of, any aspects of the program
authorized by this part, including flexible repayment plans.
‘‘(c) GAO INTERIM FINAL REPORT.—The Comptroller
General shall submit to the Congress not later than January
1, 1997, an interim final report evaluating the experience
of the Department of Education, the participating institu-
tions of higher education, students, and parents with respect
to the direct student loan program. The report shall in-
clude—
‘‘(1) the administrative costs, including costs per
loan, incurred by participating institutions of higher
education in administering the direct student loan
program;
695
HR 2264 EAS
‘‘(2) the administrative costs, including costs per
loan, incurred by the Department of Education and
its contractors in carrying out its responsibilities, in-
cluding the costs of origination, data systems, servic-
ing, and collection;
‘‘(3) an evaluation of the effectiveness of the di-
rect student loan program in providing services to
students and parents, including loan application,
loan origination, student financial aid packaging,
tracking of student status, responsiveness to student
inquiries and processing of deferments, forbearances,
and repayments;
‘‘(4) the frequency and cost of borrower delin-
quency and default under the direct student loan pro-
gram and losses incurred by institutions of higher
education and servicers, including losses caused by
improper origination or servicing of loans;
‘‘(5) the timeliness of capital availability to in-
stitutions of higher education and of loans to students
and parents and the cost of loan capital;
‘‘(6) an evaluation of the effectiveness of the in-
come contingent repayment option;
‘‘(7) a comparison of the experience of institu-
tions of higher education, students, and parents par-
ticipating in direct student loan program with the ex-
696
HR 2264 EAS
perience of institutions, students, and parents in the
control group described in subsection (e) with respect
to the subjects indicated in paragraphs (1) through
(6) of this subsection;
‘‘(8) an evaluation of the administrative per-
formance of the Department;
‘‘(9) an analysis of the reasons institutions se-
lected by the Secretary to participate in the direct
student loan program chose not to participate and the
reasons institutions withdrew or were terminated
from such program;
‘‘(10) an analysis of the experience of borrowers
with loans under both this part and part B and rec-
ommendations for the most effective repayment proce-
dures for such borrowers;
‘‘(11) a comparison of the cost of loan capital for
loans for the direct student loan program with the
cost of loan capital for the comparable programs in
part B of this title;
‘‘(12) an analysis, where practicable, of the expe-
rience of institutions which participate as part of a
consortia; and
‘‘(13) recommendations for modifications, con-
tinuation, expansion, suspension, or termination of
697
HR 2264 EAS
the direct student loan program or replacement of all
or some of the programs authorized by part B.
‘‘(d) GAO FINAL REPORT.—The Comptroller General
shall submit to the Congress not later than May 1, 1998,
a final report evaluating the experience of the Department
of Education, the participating institutions of higher edu-
cation, and students with respect to the direct student loan
program. The report shall include the same matters pro-
vided for in subsection (c) of this section.
‘‘(e) CONTROL GROUP.—To assist the Comptroller
General in preparing the reports required by subsections
(c) and (d) of this section, the Secretary shall select a con-
trol group of institutions of higher education, which rep-
resent a cross-section of all institutions of higher education
participating in part B of this title and which is com-
parable to the cross-section of institutions of higher edu-
cation selected for participating in the direct student loan
program. The Secretary shall select the control groups in
the same manner that the institutions of higher education
are selected to participate in the direct student loan pro-
gram.
‘‘(f) TREATMENT OF COSTS.—In reporting with re-
spect to costs in the reports required by subsections (c) and
(d) of this section, the Comptroller General shall report sep-
arately the nonrecurrent costs such as start-up costs associ-
698
HR 2264 EAS
ated with the direct student loan program, the administra-
tive costs incurred by institutions of higher education in
providing information to enable the Comptroller General to
prepare the reports required by subsections (c) and (d) of
this section and the normal costs of operating the direct
student loan program.
‘‘SEC. 460. FUNDS FOR ADMINISTRATIVE EXPENSES.
‘‘(a) IN GENERAL.—In each fiscal year beginning with
fiscal year 1994, there shall be available to the Secretary
of Education from funds not otherwise appropriated, funds
to be obligated for administrative costs under this part, in-
cluding the costs of the transition from the loan programs
under part B to the direct student loan program under this
part and transition support for the expenses of guaranty
agencies in servicing outstanding loans in their portfolios
and in guaranteeing new loans, not to exceed $20,000,000
in fiscal year 1994, $70,000,000 in fiscal year 1995,
$170,000,000 in fiscal year 1996, $305,000,000 in fiscal
year 1997, and $480,000,000 in fiscal year 1998. If in any
fiscal year, the Secretary determines that additional funds
for administrative expenses are needed as a result of such
transition, or the expansion of the direct student loan pro-
gram under this part, the Secretary is authorized to use
funds available under this section for any succeeding fiscal
year for such expenses, except that the total expenditures
699
HR 2264 EAS
by the Secretary shall not exceed $1,045,000,000 in fiscal
years 1994 through 1998.
‘‘(b) AVAILABILITY.—Funds made available under sub-
section (a) shall remain available until expended.
‘‘(c) BUDGET JUSTIFICATION.—The Secretary shall in-
clude in the Department of Education’s annual budget jus-
tification to Congress a detailed description of the specific
activities for which the funds made available by this section
have been used in the prior and current years (if applica-
ble), the activities and costs planned for the budget year,
and the projection of activities and costs for each remaining
year for which administrative expenses under this section
are made available.
‘‘(d) NOTIFICATION.—In the event the Secretary finds
it necessary to use the authority provided to the Secretary
under subsection (a) to draw funds for administrative ex-
penses from a future year’s funds, the Secretary shall imme-
diately notify the Committees on Appropriations of the Sen-
ate and of the House of Representatives, and the Labor and
Human Resources Committee of the Senate and the Edu-
cation and Labor Committee of the House of Representa-
tives, of such action and explain the reasons for such action.
700
HR 2264 EAS
‘‘SEC. 460A. NATIONAL STUDENT LOAN REFORM COMMIS-
SION.
‘‘(a) ESTABLISHMENT.—There is hereby established a
bipartisan commission to be known as the National Student
Loan Reform Commission (hereafter in this section referred
to as the ‘Commission’).
‘‘(b) MEMBERSHIP.—
‘‘(1) IN
GENERAL.—The Commission shall be
composed of 15 members appointed by the President
with the advice and consent of the Senate who are
representative of a broad combination of types of in-
stitutions of higher education, of whom at least 8
members shall be financial aid administrators.
‘‘(2) PERIOD
OF
APPOINTMENT; VACANCIES.—
Members shall be appointed for the life of the Com-
mission. Any vacancy in the Commission shall not af-
fect its powers, but shall be filled in the same manner
as the original appointment.
‘‘(3) INITIAL MEETING.—Not later than 30 days
after the date on which all members of the Commis-
sion have been appointed, the Commission shall hold
its first meeting.
‘‘(4) MEETINGS.—The Commission shall meet at
the call of the Chairman.
701
HR 2264 EAS
‘‘(5) QUORUM.—A majority of the members of
the Commission shall constitute a quorum, but a less-
er number of members may hold hearings.
‘‘(6) CHAIRMAN AND VICE CHAIRMAN.—The Com-
mission shall select a Chairman and Vice Chairman
from among its members.
‘‘(c) DUTIES.—The Commission shall—
‘‘(1) advise the President and the Congress on
the operation of the Federal Direct Student Loan Pro-
gram and the Federal Family Education Loan Pro-
gram;
‘‘(2) evaluate and report to the Congress regard-
ing such programs on not less than an annual basis;
and
‘‘(3) not later than January 1, 1997, report to
the President and the Congress with final rec-
ommendations on the advisability of replacing the
Federal Family Education Loan Program with direct
lending.
‘‘(d) POWERS OF THE COMMISSION.—
‘‘(1) HEARINGS.—The Commission may hold
such hearings, sit and act at such times and places,
take such testimony, and receive such evidence as the
Commission considers advisable to carry out the pur-
poses of this section.
702
HR 2264 EAS
‘‘(2) INFORMATION FROM FEDERAL AGENCIES.—
The Commission may secure directly from any Fed-
eral department or agency such information as the
Commission considers necessary to carry out the pro-
visions of this section. Upon request of the Chairman
of the Commission, the head of such department or
agency shall furnish such information to the Commis-
sion.
‘‘(3) POSTAL SERVICES.—The Commission may
use the United States mails in the same manner and
under the same conditions as other departments and
agencies of the Federal Government.
‘‘(4) GIFTS.—The Commission may accept, use,
and dispose of gifts or donations of services or prop-
erty.
‘‘(e) COMMISSION PERSONNEL MATTERS.—
‘‘(1) COMPENSATION OF MEMBERS.—Each mem-
ber of the Commission who is not an officer or em-
ployee of the Federal Government shall be com-
pensated at a rate equal to the daily equivalent of the
annual rate of basic pay prescribed for level IV of the
Executive Schedule under section 5315 of title 5,
United States Code, for each day (including travel
time) during which such member is engaged in the
performance of the duties of the Commission. All
703
HR 2264 EAS
members of the Commission who are officers or em-
ployees of the United States shall serve without com-
pensation in addition to that received for their serv-
ices as officers or employees of the United States.
‘‘(2) TRAVEL EXPENSES.—The members of the
Commission shall be allowed travel expenses, includ-
ing per diem in lieu of subsistence, at rates author-
ized for employees of agencies under subchapter I of
chapter 57 of title 5, United States Code, while away
from their homes or regular places of business in the
performance of services for the Commission.
‘‘(3) STAFF.—
‘‘(A) IN GENERAL.—The Chairman of the
Commission may, without regard to the civil
service laws and regulations, appoint and termi-
nate an executive director and such other addi-
tional personnel as may be necessary to enable
the Commission to perform its duties. The em-
ployment of an executive director shall be subject
to confirmation by the Commission.
‘‘(B) COMPENSATION.—The Chairman of
the Commission may fix the compensation of the
executive director and other personnel without
regard to the provisions of chapter 51 and sub-
chapter III of chapter 53 of title 5, United States
704
HR 2264 EAS
Code, relating to classification of positions and
General Schedule pay rates, except that the rate
of pay for the executive director and other per-
sonnel may not exceed the rate payable for level
V of the Executive Schedule under section 5316
of such title.
‘‘(4) DETAIL
OF
GOVERNMENT
EMPLOYEES.—
Any Federal Government employee may be detailed to
the Commission without reimbursement, and such de-
tail shall be without interruption or loss of civil serv-
ice status or privilege.
‘‘(5) PROCUREMENT OF TEMPORARY AND INTER-
MITTENT SERVICES.—The Chairman of the Commis-
sion may procure temporary and intermittent services
under section 3109(b) of title 5, United States Code,
at rates for individuals which do not exceed the daily
equivalent of the annual rate of basic pay prescribed
for level V of the Executive Schedule under section
5316 of such title.
‘‘(6) AUTHORITY TO CONTRACT.—Subject to the
Federal Property and Administrative Services Act of
1949, the Commission is authorized to enter into con-
tracts with Federal and State agencies, private firms,
institutions and individuals for the conduct of activi-
705
HR 2264 EAS
ties necessary to the discharge of its duties and re-
sponsibilities.
‘‘(7) SOURCE OF ADMINISTRATIVE SUPPORT.—
Financial and administrative support services (in-
cluding those related to budget and accounting, finan-
cial reporting, payroll, and personnel) shall be pro-
vided to the Commission by the General Services Ad-
ministration (or other organization the Commission
determines appropriate) for which payment shall be
made in advance or by reimbursement, from funds of
the Commission, in such amounts as may be agreed
by the Chairman of the Commission and the Admin-
istrator of General Services (or head of another orga-
nization the Commission determines appropriate).
‘‘(f) TERMINATION OF THE COMMISSION.—The Com-
mission shall terminate 18 months after the date on which
the Commission submits its report under subsection (c)(3).
‘‘(g) FUNDS FOR EXPENSES OF THE COMMISSION.—
In each fiscal year beginning with fiscal year 1994, there
shall be available to the Secretary from funds not otherwise
appropriated, funds to be obligated for the costs of activities
assisted under this section, not to exceed $2,000,000 in each
of the fiscal years 1994, 1995, 1996, 1997 and 1998.’’.
706
HR 2264 EAS
CHAPTER 2—STUDENT LOAN SAVINGS
SEC. 12021. SECRETARY’S EQUITABLE SHARE.
Section 428(c)(6)(A)(ii) of the Act (20 U.S.C.
1078(c)(6)(A)(ii)) is amended by striking ‘‘30 percent’’ and
inserting ‘‘27 percent’’.
SEC. 12022. INTEREST RATES.
Section 427A of the Higher Education Act of 1965 (20
U.S.C. 1077a) is amended—
(1) in subsection (c)(4), by adding at the end the
following new subparagraph:
‘‘(E) Notwithstanding subparagraphs (A)
and (D) for any loan made pursuant to section
428B for which the first disbursement is made
on or after July 1, 1994—
‘‘(i) subparagraph (B) shall be applied
by substituting ‘‘3.1’’ for ‘‘3.25’’; and
‘‘(ii) the interest rate shall not exceed
9 percent.’’;
(2) by redesignating subsections (f), (g) and (h)
as subsections (g), (h) and (j), respectively;
(3) by adding after subsection (e) the following
new subsection:
‘‘(f) INTEREST RATES FOR NEW LOANS AFTER JULY
1, 1994.—
707
HR 2264 EAS
‘‘(1) IN GENERAL.—Notwithstanding subsections
(a), (b), (d) and (e) of this section, with respect to
any loan made, insured, or guaranteed under this
part (other than a loan made pursuant to sections
428B and 428C) for which the first disbursement is
made on or after July 1, 1994, the applicable rate of
interest shall, during any 12-month period beginning
on July 1 and ending on June 30, be determined on
the preceding June 1 and be equal to—
‘‘(A) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction held
prior to such June 1; plus
‘‘(B) 3.10 percent,
except that such rate shall not exceed 8.25 percent.
‘‘(2) CONSULTATION.—The Secretary shall deter-
mine the applicable rate of interest under paragraph
(1) after consultation with the Secretary of the Treas-
ury and shall publish such rate in the Federal Reg-
ister as soon as practicable after the date of deter-
mination.’’; and
(4) by inserting after subsection (h) (as redesig-
nated in paragraph (2)) the following new subsection:
‘‘(i) IN-SCHOOL
AND
GRACE
PERIOD
INTEREST
RATES.—
708
HR 2264 EAS
‘‘(1) APPLICABLE RATE.—Notwithstanding any
other provision of this section, with respect to any
loan for which the first disbursement is made on or
after October 1, 1993, the applicable rate of interest
for interest which accrues—
‘‘(A) prior to the beginning of the repay-
ment period of the loan; or
‘‘(B) during the period in which principal
need not be paid (whether or not such principal
is in fact paid) by reason of a provision de-
scribed in section 428(b)(1)(M) or 427(a)(2)(C),
shall not exceed the rate determined under paragraph
(2).
‘‘(2) METHOD OF CALCULATION.—For purposes
of paragraph (1) the rate determined under this para-
graph shall, during any 12-month period beginning
on July 1 and ending on June 30, be determined on
the preceding June 1 and be equal to—
‘‘(A) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
prior to such June 1; plus
‘‘(B) 2.5 percent,
except that such rate shall not exceed 8.25 percent.’’.
709
HR 2264 EAS
SEC. 12023. LENDER AND STUDENT LOAN FEES.
Section 438 of the Act (20 U.S.C. 1087–1) is amend-
ed—
(1) in the heading of subsection (c) by inserting
‘‘FROM STUDENTS’’ after ‘‘ORIGINATION FEES’’;
(2) in subsection (c)—
(A) in paragraph (2)—
(i) by striking ‘‘428B,’’;
(ii) by inserting ‘‘, and part D’’ after
‘‘439(o)’’; and
(iii) by striking ‘‘5 percent’’ and in-
serting ‘‘3.0 percent’’;
(B) in paragraph (6), by striking ‘‘5 per-
cent’’ and inserting ‘‘3.0 percent’’;
(3) by redesignating subsections (d) and (e) as
subsections (e) and (f), respectively; and
(4) by inserting after subsection (c) the following
new subsection:
‘‘(d) LOAN FEES FROM LENDERS.—
‘‘(1) DEDUCTION FROM INTEREST AND SPECIAL
ALLOWANCE SUBSIDIES.—Notwithstanding subsection
(b), the total amount of interest and special allowance
payable under section 428(a)(3)(A) and subsection (b)
of this section, respectively, to any holder shall be re-
duced by the Secretary by a loan fee in an amount
determined in accordance with paragraph (2) of this
710
HR 2264 EAS
subsection. If the total amount of interest and special
allowance payable under section 428(a)(3)(A) and
subsection (b) of this section, respectively, is less than
the amount of such loan fee, then the Secretary shall
deduct such excess amount from subsequent quarters’
payments until the total amount has been deducted.
‘‘(2) AMOUNT OF LOAN FEES.—With respect to
any loan under this part (other than loans made
under sections 428B, 428C and 439(o)) for which a
note or other written evidence of the loan was sent or
delivered to the borrower for signing on or after Octo-
ber 1, 1993, the amount of the loan fee which shall
be deducted under paragraph (1) shall be equal to .50
percent of the principal amount of the loan.
‘‘(3) PLUS, CONSOLIDATION, SLMA
LOANS.—
With respect to any loans made under section 428B,
428C, and 439 on or after October 1, 1993, each eligi-
ble lender under this part shall pay to the Secretary
a loan fee of .50 percent of the principal amount of
the loan.
‘‘(4) DISTRIBUTION OF LOAN FEES.—The Sec-
retary shall deposit all fees collected pursuant to
paragraph (3) into the insurance fund established in
section 431.’’.
711
HR 2264 EAS
SEC. 12024. OFFSET FEE.
Subsection (h) of section 439 of the Act (20 U.S.C.
1087–2(h)) is amended by adding at the end the following
new paragraph:
‘‘(6) OFFSET
FEE.—(A) The Association shall
pay to the Secretary, on a monthly basis, an offset fee
calculated on an annual basis in an amount equal to
0.30 percent of the principal amount of each loan
made, insured or guaranteed under this part which
the Association holds on or after the date of enactment
of this paragraph.
‘‘(B) The Secretary shall deposit all fees collected
pursuant to subparagraph (A) into the insurance
fund established in section 431.’’.
SEC. 12025. ELIMINATION OF TAX EXEMPT FLOOR.
Section 438(b)(2)(B) of the Act (20 U.S.C. 1087–
1(b)(2)(B)) is amended by adding at the end the following
new clause:
‘‘(iv) Notwithstanding clauses (i) and (ii), the
quarterly rate of the special allowance for holders of
loans which are financed with funds obtained by the
holder from the issuance of obligations originally is-
sued on or after October 1, 1993, the income from
which is excluded from gross income under the Inter-
nal Revenue Code of 1986, shall be 85 percent of the
quarterly rate of the special allowance established
712
HR 2264 EAS
under subparagraph (A). Such rate shall also apply
to holders of loans which were made or purchased
with funds obtained by the holder from collections or
default reimbursements on, or interests or other in-
come pertaining to, eligible loans made or purchased
with funds described in the preceding sentence of this
subparagraph or from income on the investment of
such funds.’’.
SEC. 12026. REDUCTION IN INTEREST RATE FOR CONSOLI-
DATION LOANS; REBATE FEE.
(a) AMENDMENT.—Section 428C of the Act (20 U.S.C.
1078–3) is amended—
(1) in paragraph (1) of subsection (c)—
(A) in subparagraph (A), by striking ‘‘or
(C)’’;
(B) by amending subparagraph (B) to read
as follows:
‘‘(B) A consolidation loan made on or after
October 1, 1993, shall bear interest on the un-
paid principal balance of the loan, during any
12-month period beginning on July 1 and end-
ing on June 30, determined on the preceding
June 1, which interest shall be equal to—
713
HR 2264 EAS
‘‘(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auc-
tion held prior to such June 1; plus
‘‘(ii) 3.10 percent,
except that such rate shall not exceed 9 percent.’’;
and
(C) by striking subparagraph (C); and
(2) by adding at the end the following new sub-
section:
‘‘(f) INTEREST PAYMENT REBATE FEE.—
‘‘(1) IN GENERAL.—Each holder of a consolida-
tion loan under this section shall pay to the Sec-
retary, on a monthly basis and in such manner as the
Secretary shall prescribe, a rebate fee calculated on an
annual basis equal to 0.70 percent of the principal
plus accrued unpaid interest on such loan.
‘‘(2) DEPOSIT.—The Secretary shall deposit all
fees collected pursuant to subsection (a) into the in-
surance fund established in section 431.’’.
(b) ENFORCEMENT.—Subsection (d) of section 435 of
the Act (20 U.S.C. 1085(d)) is amended—
(1) in the matter preceding subparagraph (A) of
paragraph (1), by striking ‘‘(5)’’ and inserting ‘‘(6)’’;
and
714
HR 2264 EAS
(2) by adding at the end the following new para-
graph:
‘‘(6) REBATE FEE REQUIREMENT.—To be an eli-
gible lender under this part, an eligible lender shall
pay rebate fees in accordance with section 428C(f).’’.
SEC. 12027. INSURANCE PREMIUM.
(a) INSURANCE PREMIUM.—Section 428(b)(1)(H) of
the Act (20 U.S.C. 1078(b)(1)(H)) is amended by striking
‘‘3 percent’’ and inserting ‘‘1 percent’’.
(b) REINSURANCE FEES.—Section 428(c) of the Act is
amended—
(1) by striking paragraph (9); and
(2) by redesignating paragraph (10) as para-
graph (9).
(c) EFFECTIVE DATE.—The amendments made by this
section shall be effective on July 1, 1994.
SEC. 12028. LOAN TRANSFER FEE.
Section 428(b)(2) of the Act (20 U.S.C. 1078(b)(2)) is
amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (E);
(2) by striking the period at the end of subpara-
graph (F) and inserting ‘‘; and’’; and
(3) by adding at the end thereof the following
new subparagraph:
715
HR 2264 EAS
‘‘(G) provide that, if a lender or holder, on
or after October 1, 1993, sells, transfers, or as-
signs a loan under this part, then the transferee
shall pay to the Secretary a transfer fee in an
amount equal to 0.25 percent the principal and
accrued unpaid interest of the loan, which trans-
fer fee shall be deposited into the insurance fund
established in section 431, except that the provi-
sions of this subparagraph shall not apply to
any such sale, transfer or assignment by a lender
or holder to such lender’s or holder’s affiliate or
pursuant to—
‘‘(i) a merger or other consolidation
transaction; or
‘‘(ii) a sale or other transfer of all or
any substantial portion of such lender’s or
holder’s business or student lending busi-
ness.’’.
SEC. 12029. RISK SHARING.
(a) GUARANTY
AGENCY
REINSURANCE
PERCENT-
AGE.—Section 428(c)(1) of the Act (20 U.S.C. 1078(c)(1))
is amended—
(1) in subparagraph (A), by striking ‘‘100 per-
cent’’ and inserting ‘‘98 percent’’;
716
HR 2264 EAS
(2) in subparagraph (B)(i), by striking ‘‘90 per-
cent’’ and inserting ‘‘88 percent’’;
(3) in subparagraph (B)(ii), by striking ‘‘80 per-
cent’’ and inserting ‘‘78 percent’’; and
(4) by adding at the end the following new sub-
paragraphs:
‘‘(E) Notwithstanding any other provisions
of this section, in the case of a loan made pursu-
ant to a lender of last resort program, the Sec-
retary shall apply the provisions of—
‘‘(i) the fourth sentence of subpara-
graph (A) by substituting ‘100 percent’ for
‘98 percent’;
‘‘(ii) subparagraph (B)(i) by substitut-
ing ‘100 percent’ for ‘88 percent’; and
‘‘(iii) subparagraph (B)(ii) by sub-
stituting ‘100 percent’ for ‘78 percent’.
‘‘(F) Notwithstanding any other provisions
of this section, in the case of an outstanding loan
transferred to a guaranty agency from another
guaranty agency pursuant to a plan approved
by the Secretary in response to the insolvency of
the latter such guarantee agency, the Secretary
shall apply the provision of—
717
HR 2264 EAS
‘‘(i) the fourth sentence of subpara-
graph (A) by substituting ‘100 percent’ for
‘98 percent’;
‘‘(ii) subparagraph (B)(i) by substitut-
ing ‘90 percent’ for ‘88 percent’; and
‘‘(iii) subparagraph (B)(ii) by sub-
stituting ‘80 percent’ for ‘78 percent’.’’.
(b) RISK SHARING BY THE STUDENT LOAN MARKET-
ING ASSOCIATION.—Section 428(b)(1)(G) of the Act (20
U.S.C. 1078(b)(1)(G)) is amended by inserting before the
semicolon at the end thereof the following: ‘‘, except that
for loans held by the Student Loan Marketing Association
(other than loans made with advances to guaranty agencies
pursuant to section 439(p)) such percentage shall be 95 per-
cent’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to any loan made on or after October
1, 1993.
SEC. 12030. PLUS LOAN AMOUNTS AND DISBURSEMENTS.
(a) LOAN AMOUNTS.—
(1) AMENDMENT.—Section 428B(b) of the Act
(20 U.S.C. 1078–2(b)) is amended to read as follows:
‘‘(b) LIMITATIONS ON AMOUNTS OF LOANS.—
‘‘(1) ANNUAL LIMIT.—Subject to paragraph (2),
the maximum amount parents may borrow for one
718
HR 2264 EAS
student in any academic year or its equivalent (as
defined by regulation of the Secretary) is $10,000.
‘‘(2) LIMITATION BASED ON NEED.—Any loan
under this section may be counted as part of the ex-
pected family contribution in the determination of
need under this title, but no loan may be made to any
parent under this section for any academic year in
excess of (A) the student’s estimated cost of attend-
ance, minus (B) other financial aid as certified by the
eligible institution under section 428(a)(2)(A). The
annual insurable limit on account of any student
shall not be deemed to be exceeded by a line of credit
under which actual payments to the borrower will not
be made in any year in excess of the annual limit.’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall be effective for loans made on or
after July 1, 1994.
(b) MULTIPLE DISBURSEMENT REQUIRED.—
(1) AMENDMENT.—The matter preceding para-
graph (1) of section 428B(c) of the Act (20 U.S.C.
1078–2(c)) is amended by inserting ‘‘shall be dis-
bursed in accordance with the requirements of section
428G and’’ after ‘‘under this section’’.
719
HR 2264 EAS
(2) 
CONFORMING
AMENDMENTS.—Section
428G(e) of the Act (20 U.S.C. 1078–7(e) is amend-
ed—
(A) by striking ‘‘PLUS, CONSOLIDATION,’’
and inserting ‘‘CONSOLIDATION’’; and
(B) by striking ‘‘section 428B or 428C’’ and
inserting ‘‘section 428C’’.
CHAPTER 3—CONFORMING AMENDMENTS
Subchapter A—Conforming Amendments to
the Higher Education Act of 1965
SEC. 12041. PRESERVING LOAN ACCESS.
(a) PURPOSE.—It is the purpose of the amendments
made by this section to provide the Secretary with flexible
authority as needed to preserve access to student and parent
loans under part B of title IV of the Act during the transi-
tion from the Federal Family Education Loan Program
under such part to the Federal Direct Student Loan Pro-
gram under part D of such title.
(b) ADVANCES TO GUARANTY AGENCIES FOR LENDER-
OF-LAST-RESORT SERVICES.—
(1) AMENDMENT.—Section 428(j) of the Act (20
U.S.C. 1078(j)) is amended by adding at the end the
following new paragraph:
‘‘(4) ADVANCES TO GUARANTY AGENCIES FOR LENDER-
OF-LAST-RESORT SERVICES DURING TRANSITION TO DIRECT
720
HR 2264 EAS
LENDING.—(A) In order to ensure the availability of loan
capital during the transition from the Federal Family Edu-
cation Loan Program under this part to the Federal Direct
Student Loan Program under part D of this title, the Sec-
retary is authorized to provide a guaranty agency with ad-
ditional advance funds in accordance with section
422(c)(7), with such restrictions on the use of such funds
as are determined appropriate by the Secretary, in order
to ensure that the guaranty agency will make loans as the
lender-of-last-resort. Such agency shall make such loans in
accordance with this subsection and the requirements of the
Secretary.
‘‘(B) Notwithstanding any other provision in this
part, a guaranty agency serving as a lender-of-last-resort
under this paragraph shall be paid a fee, established by the
Secretary, for making such loans in lieu of interest and spe-
cial allowance subsidies, and shall be required to assign
such loans to the Secretary on demand. Upon such assign-
ment, the portion of the advance represented by the loans
assigned shall be considered repaid by such guaranty agen-
cy.’’.
(2) 
CONFORMING
AMENDMENT.—Section
422(c)(7) of the Act (20 U.S.C. 1072(c)(7)) is amend-
ed by striking all beginning with ‘‘to a guaranty
721
HR 2264 EAS
agency’’ through the period and inserting ‘‘to a guar-
anty agency—
‘‘(A) in accordance with section 428(j), in order
to ensure that the guaranty agency shall make loans
as the lender-of-last-resort during the transition from
the Federal Family Education Loan Program under
this part to the Federal Direct Student Loan Pro-
gram under part D of this title; or
‘‘(B) if the Secretary is seeking to terminate the
guaranty agency’s agreement, or assuming the guar-
anty agency’s functions, in accordance with section
428(c)(10)(F)(v), in order to assist the agency in
meeting its immediate cash needs, ensure the uninter-
rupted payment of claims, or ensure that the guar-
anty agency shall make loans as described in sub-
paragraph (A);’’.
(c) LENDER REFERRAL SERVICES.—Section 428(e) of
the Act (20 U.S.C. 1078(e)) is amended—
(1) in paragraph (1)—
(A) by amending the paragraph heading to
read as follows: ‘‘IN
GENERAL; AGREEMENTS
WITH GUARANTY AGENCIES.—’’;
(B) by inserting the subparagraph designa-
tion ‘‘(A)’’ immediately before ‘‘The Secretary’’;
722
HR 2264 EAS
(C) by striking ‘‘in any State’’ and insert-
ing ‘‘with which the Secretary has an agreement
under subparagraph (B)’’; and
(D) by adding at the end the following new
subparagraph:
‘‘(B)(i) The Secretary may enter into agree-
ments with guaranty agencies that meet stand-
ards established by the Secretary to provide lend-
er referral services in geographic areas specified
by the Secretary. Such guaranty agencies shall
be paid in accordance with paragraph (3) for
such services.
‘‘(ii) The Secretary shall publish in the
Federal Register whatever standards, criteria,
and procedures, consistent with the provisions of
this part and part D of this title, the Secretary
determines are reasonable and necessary to pro-
vide lender referral services under this subsection
and ensure loan access to student and parent
borrowers during the transition from the loan
programs under this part to the direct student
loan programs under part D of this title. Section
431 of the General Education Provisions Act
shall not apply to the publication of such stand-
ards, criteria, and procedures.’’;
723
HR 2264 EAS
(2) in paragraph (2)—
(A) in the matter preceding subparagraph
(A), by striking ‘‘in a State’’ and inserting
‘‘with which the Secretary has an agreement
under paragraph (1)(B)’’;
(B) by amending subparagraph (A) to read
as follows:
‘‘(A)(i) such student is either a resident of,
or is accepted for enrollment in, or is attending,
an eligible institution located in a geographic
area for which the Secretary (I) determines that
loans are not available to all eligible students,
and (II) has entered into an agreement with a
guaranty agency under paragraph (1)(B) to pro-
vide lender referral services; and’’;
(3) in paragraph (3), by striking ‘‘The’’ and in-
serting ‘‘From funds available for costs of transition
under section 460 of the Act, the’’; and
(4) by striking paragraph (5).
(d) STUDENT LOAN MARKETING ASSOCIATION.—Sec-
tion 439(q) of the Act (20 U.S.C. 1087–2(q)) is amended—
(1) in paragraph (1)(A)—
(A) in the first sentence, by striking ‘‘the
Association or its designated agent may begin
making loans’’ and inserting ‘‘the Association or
724
HR 2264 EAS
its designated agent shall, not later than July 1,
1994, begin making loans to such eligible bor-
rowers’’; and
(B) by striking the second sentence;
(2) in paragraph (2)(A), by striking ‘‘the Asso-
ciation or its designated agent may’’ and inserting
‘‘the Association or its designated agent shall, not
later than July 1, 1994,’’; and
(3) in paragraph (3), by striking all beginning
with ‘‘that—’’ through the period at the end of sub-
paragraph (B) and inserting ‘‘that the conditions
that caused the implementation of this subsection
have ceased to exist.’’.
SEC. 12042. GUARANTY AGENCY RESERVES.
Section 422 of the Act (20 U.S.C. 1072) is amended
by adding at the end the following new subsection:
‘‘(g) PRESERVATION
OF
GUARANTY
AGENCY
RE-
SERVES.—
‘‘(1) AUTHORITY TO RECOVER FUNDS.—Notwith-
standing any other provision of law, the reserve funds
of the guaranty agencies, and any assets purchased
with such reserve funds, regardless of who holds or
controls the reserves or assets, shall be considered to
be the property of the United States to be used in the
operation of the program authorized by this part or
725
HR 2264 EAS
the program authorized by part D of this title. How-
ever, the Secretary may not require the return of all
reserve funds of a guaranty agency to the Secretary
unless the Secretary determines that such return is in
the best interest of the operation of the program au-
thorized by this part or the program authorized by
part D of this title, or to ensure the proper mainte-
nance of such agency’s funds or assets or the orderly
termination of the guaranty agency’s operations and
the liquidation of its assets. The reserves shall be
maintained by each guaranty agency to pay program
expenses and contingent liabilities, as authorized by
the Secretary, except that the Secretary may—
‘‘(A) direct a guaranty agency to return to
the Secretary a portion of its reserve fund which
the Secretary determines is unnecessary to pay
the program expenses and contingent liabilities
of the guaranty agency;
‘‘(B) direct the guaranty agency to require
the return, to the guaranty agency or to the Sec-
retary, of any reserve funds or assets held by, or
under the control of, any other entity, which the
Secretary determines are necessary to pay the
program expenses and contingent liabilities of
the guaranty agency, or which are required for
726
HR 2264 EAS
the orderly termination of the guaranty agency’s
operations and the liquidation of its assets; and
‘‘(C) direct a guaranty agency, or such
agency’s officers or directors, to cease any activi-
ties involving expenditure, use or transfer of the
guaranty agency’s reserve funds or assets which
the Secretary determines is a misapplication,
misuse, or improper expenditure of such funds or
assets.
‘‘(2) TERMINATION PROVISIONS IN CONTRACTS.—
(A) To ensure that the funds and assets of the guar-
anty agency are preserved, any contract with respect
to the administration of a guaranty agency’s reserve
funds, or the administration of any assets purchased
or acquired with the reserve funds of the guaranty
agency, that is entered into or extended by the guar-
anty agency, or any other party on behalf of or with
the concurrence of the guaranty agency, after the date
of enactment of this subsection shall provide that the
contract is terminable by the Secretary upon 30 days
notice to the contracting parties if the Secretary de-
termines that such contract includes an impermissible
transfer of the reserve funds or assets, or is otherwise
inconsistent with the terms or purposes of this section.
727
HR 2264 EAS
‘‘(B) The Secretary may direct a guaranty agen-
cy to suspend or cease activities under any contract
entered into by or on behalf of such agency after Jan-
uary 1, 1993, if the Secretary determines that the
misuse or improper expenditure of such guaranty
agency’s funds or assets or such contract provides un-
necessary or improper benefits to such agency’s offi-
cers or directors.
‘‘(3) PENALTIES.—Violation of any direction is-
sued by the Secretary under this subsection may be
subject to the penalties described in section 490 of this
Act.’’.
SEC. 12043. TERMS OF LOANS.
(a) AMENDMENT.—Section 428 of the Act (20 U.S.C.
1078) is amended—
(1) in subsection (b)(1)(D), by striking ‘‘be sub-
ject to’’ through the semicolon and inserting ‘‘be sub-
ject to income contingent repayment in accordance
with subsection (m);’’; and
(2) in subsection (m)—
(A) by amending paragraph (1) to read as
follows:
‘‘(1) AUTHORITY OF SECRETARY TO REQUIRE.—
The Secretary may require any borrower who has de-
faulted on a loan made under this part that is as-
728
HR 2264 EAS
signed to the Secretary under subsection (c)(8) to
repay that loan under an income contingent repay-
ment plan, the terms and conditions of which shall be
established by the Secretary and the same as, or simi-
lar to, an income contingent repayment plan estab-
lished for purposes of part D of this title.’’; and
(B) by striking paragraphs (2), (3), and (4)
and inserting the following new paragraph:
‘‘(2) LOANS
FOR
WHICH
INCOME
CONTINGENT
REPAYMENT MAY BE REQUIRED.—A loan made under
this part may be required to be repaid under this sub-
section if the note or other evidence of the loan has
been assigned to the Secretary pursuant to subsection
(c)(8).’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall be effective for loans made in accordance with
section 428 for periods of instruction beginning on or after
July 1, 1993, or made on or after July 1, 1993, in the case
of loans made in accordance with section 428B or 428C
of the Act.
SEC. 12044. ASSIGNMENT OF LOANS.
Section 428(c)(8) of the Act (20 U.S.C. 1078(c)(8)) is
amended—
(1) in the first sentence, by inserting the sub-
paragraph designation ‘‘(A)’’ before ‘‘If the’’;
729
HR 2264 EAS
(2) by striking the second and third sentences;
and
(3) by adding at the end the following new sub-
paragraph:
‘‘(B) An orderly transition from the Federal
Family Education Loan Program under this
part to the Federal Direct Student Loan Pro-
gram under part D of this title shall be deemed
to be in the Federal fiscal interest, and a guar-
anty agency shall promptly assign loans to the
Secretary under this paragraph upon the Sec-
retary’s request.’’.
SEC. 12045. TERMINATION OF GUARANTY AGENCY AGREE-
MENTS; ASSUMPTION OF GUARANTY AGENCY
FUNCTIONS BY THE SECRETARY.
Section 428(c)(9) of the Act (as redesignated by section
12027(b)(2)) (20 U.S.C. 1078(c)(10)) is amended—
(1) in subparagraph (C), by inserting ‘‘, as ap-
propriate,’’ after ‘‘the Secretary shall require’’;
(2) in subparagraph (D)—
(A) by inserting the clause designation ‘‘(i)’’
before ‘‘Each’’;
(B) by striking ‘‘Each’’ and inserting ‘‘If
the Secretary is not seeking to terminate the
guaranty agency’s agreement under subpara-
730
HR 2264 EAS
graph (E), or assuming the guaranty agency’s
functions under subparagraph (F), a’’;
(C) by adding at the end the following new
clause:
‘‘(ii) If the Secretary is seeking to ter-
minate the guaranty agency’s agreement
under subparagraph (E), or assuming the
guaranty agency’s functions under subpara-
graph (F), a management plan described in
subparagraph (C) shall include the means
by which the Secretary and the guaranty
agency shall work together to ensure the or-
derly termination of the operations, and liq-
uidation of the assets, of the guaranty agen-
cy.’’;
(3) in subparagraph (E)—
(A) in clause (ii), by striking ‘‘or’’ after the
semicolon;
(B) in clause (iii), by striking the period
and inserting a semicolon; and
(C) by adding at the end the following new
clauses:
‘‘(iv) the Secretary determines that
such action is necessary to protect the Fed-
eral fiscal interest;
731
HR 2264 EAS
‘‘(v) the Secretary determines that such
action is necessary to ensure the continued
availability of loans to student or parent
borrowers; or
‘‘(vi) the Secretary determines that
such action is necessary to ensure an or-
derly transition from the loan programs
under this part to the direct student loan
programs under part D of this title.’’;
(4) in subparagraph (F)—
(A) in the matter preceding clause (i), by
striking ‘‘Except as provided in subparagraph
(G), if’’ and inserting ‘‘If’’;
(B) by amending clause (v) to read as fol-
lows:
‘‘(v) provide the guaranty agency with
additional advance funds in accordance
with section 422(c)(7), with such restric-
tions on the use of such funds as is deter-
mined appropriate by the Secretary, in
order to—
‘‘(I) meet the immediate cash
needs of the guaranty agency;
‘‘(II) ensure the uninterrupted
payment of claims; or
732
HR 2264 EAS
‘‘(III) ensure that the guaranty
agency will make loans as the lender-
of-last-resort, in accordance with sub-
section (j)(4);’’;
(C) in clause (vi)—
(i) by striking ‘‘and to avoid’’ and in-
serting ‘‘, to avoid’’;
(ii) by striking the period and insert-
ing a comma and ‘‘and to ensure an orderly
transition from the loan programs under
this part to the direct student loan pro-
grams under part D of this title.’’; and
(iii) by redesignating such clause as
clause (vii); and
(D) by inserting after clause (v) the follow-
ing new clause:
‘‘(vi) use all funds and assets of the
guaranty agency to assist in the activities
undertaken in accordance with this sub-
paragraph and take appropriate action to
require the return, to the guaranty agency
or the Secretary, of any funds or assets pro-
vided by the guaranty agency, under con-
tract or otherwise, to any person or organi-
zation; or’’;
733
HR 2264 EAS
(5) by striking subparagraph (G);
(6) by redesignating subparagraphs (H), (I), and
(J) as subparagraphs (I), (J), and (K), respectively;
(7) by inserting after subparagraph (F) the fol-
lowing new subparagraphs:
‘‘(G) Notwithstanding any other provision
of law, if the Secretary has terminated or is seek-
ing to terminate a guaranty agency’s agreement
under subparagraph (E), or has assumed a guar-
anty agency’s functions under subparagraph
(F)—
‘‘(i) such guaranty agency may not file
for bankruptcy;
‘‘(ii) no State court may issue any
order affecting the Secretary’s actions with
respect to such guaranty agency;
‘‘(iii) any contract with respect to the
administration of a guaranty agency’s re-
serve funds, or the administration of any
assets purchased or acquired with the re-
serve funds of the guaranty agency, that is
entered into or extended by the guaranty
agency, or any other party on behalf of or
with the concurrence of the guaranty agen-
cy, after the date of enactment of this sub-
734
HR 2264 EAS
paragraph shall provide that the contract is
terminable by the Secretary upon 30 days
notice to the contracting parties if the Sec-
retary determines that such contract in-
cludes an impermissible transfer of the re-
serve funds or assets, or is otherwise incon-
sistent with the terms or purposes of this
section; and
‘‘(iv) no provision of State law shall
apply to the actions of the Secretary in ter-
minating the operations of a guaranty
agency;
‘‘(H) Notwithstanding any other provision
of law, the Secretary’s liability for any outstand-
ing liabilities of a guaranty agency (other than
outstanding student loan guarantees under this
part), the functions of which the Secretary has
assumed, shall not exceed the fair market value
of the reserves of the guaranty agency, minus
any necessary liquidation or other administra-
tive costs.’’; and
(8) in subparagraph (K) (as redesignated by
paragraph (5)), by striking all beginning with ‘‘sys-
tem, together’’ through the period and inserting ‘‘sys-
tem and the progress of the transition from the loan
735
HR 2264 EAS
programs under this part to the direct student loan
programs under part D of this title.’’.
SEC. 12046. CONSOLIDATION LOANS.
(a) AMENDMENT.—Section 428C of the Act (20 U.S.C.
1078–3) is amended—
(1) in subsection (a)(3)(A), by striking all begin-
ning with ‘‘(A)’’ through the period at the end of
clause (ii) and inserting ‘‘(A) For the purpose of this
section, the term ‘eligible borrower’ means a borrower
who, at the time of application for a consolidation
loan is in repayment status, or in a grace period pre-
ceding repayment, or is a delinquent or defaulted bor-
rower who will reenter repayment through loan con-
solidation.’’;
(2) in subsection (b)—
(A) in paragraph (1)—
(i) in subparagraph (A)(ii), by insert-
ing 
‘‘with 
income-sensitive 
repayment
terms’’ after ‘‘obtain a consolidation loan’’;
(ii) by redesignating subparagraph (E)
as subparagraph (F); and
(iii) by inserting after subparagraph
(D) the following new subparagraph:
‘‘(E) that the lender shall offer an income-
sensitive repayment schedule, established by the
736
HR 2264 EAS
lender in accordance with the regulations pro-
mulgated by the Secretary, to the borrower of
any consolidation loan made by the lender on or
after July 1, 1994; and’’;
(B) in paragraph (4), by amending sub-
paragraph (C) to read as follows:
‘‘(C)(i) provides that periodic installments
of principal need not be paid, but interest shall
accrue and be paid in accordance with clause
(ii), during any period for which the borrower
would be eligible for a deferral under section
428(b)(1)(M), and that any such period shall not
be included in determining the repayment sched-
ule pursuant to subsection (c)(2) of this section;
and
‘‘(ii) provides that interest shall accrue and
be paid—
‘‘(I) by the Secretary, in the case of a
consolidation loan that consolidated only
Federal Stafford Loans for which the stu-
dent borrower received an interest subsidy
under section 428: or
‘‘(II) by the borrower, or capitalized,
in the case of a consolidation loan other
737
HR 2264 EAS
than a loan described in subclause (I);’’;
and
(C) by adding at the end the following new
paragraph:
‘‘(5) DIRECT LOANS.—In the event that a bor-
rower is unable to obtain a consolidation loan from
a lender with an agreement under subsection (a)(1),
the Secretary shall offer any such borrower who ap-
plies for it, a direct consolidation loan to be repaid
pursuant to income contingent repayment under part
D of this title or pursuant to any other repayment
provision under this section, except that the Secretary
shall not offer such loans if, in the Secretary’s judg-
ment, the Department of Education does not have the
necessary origination and servicing arrangements in
place for such loans.’’; and
(3) in subsection (c)—
(A) in paragraph (2)—
(i) in subparagraph (A)—
(I) in the matter preceding clause
(i), by striking ‘‘income sensitive re-
payment schedules. Such repayment
terms’’ and inserting ‘‘income sensitive
repayment schedules, established by the
lender in accordance with the regula-
738
HR 2264 EAS
tions of the Secretary. Except as re-
quired by such income sensitive repay-
ment schedules, or by the terms of re-
payment pursuant to income contin-
gent repayment offered by the Sec-
retary under subsection (b)(5), such re-
payment terms’’;
(II) by redesignating clauses (i),
(ii), (iii), (iv), and (v) as clauses (ii),
(iii), (iv), (v), and (vi), respectively;
and
(III) by inserting before clause
(ii) (as redesignated by subclause (II))
the following new clause:
‘‘(i) is less than $7,500, then such con-
solidation loan shall be repaid in not more
than 10 years;’’;
(ii) by striking subparagraph (B); and
(iii) by redesignating subparagraph
(C) as subparagraph (B); and
(B) in paragraph (3)(A), by inserting ‘‘ex-
cept as required by the terms of repayment pur-
suant to income contingent repayment offered by
the Secretary under subsection (b)(5),’’ before
‘‘the lender’’.
739
HR 2264 EAS
(b) EFFECTIVE DATE.—The amendments made by this
section shall be effective for loans made on or after July
1, 1994.
SEC. 12047. AUTHORITY TO USE OPTICALLY IMAGED DOCU-
MENTS.
(a) GENERAL AUTHORITY.—Section 484A of the Act
(20 U.S.C. 1091a) is amended—
(1) in the section heading, by inserting ‘‘; OPTI-
CALLY
IMAGED
DOCUMENTS’’ after ‘‘LIMITA-
TIONS’’; and
(2) by adding at the end the following new sub-
section:
‘‘(c) OPTICALLY IMAGED DOCUMENTS.—
‘‘(1) PURPOSE.—It is the purpose of this sub-
section to—
‘‘(A) allow the Secretary to use optical im-
aging technology to store and retrieve documents
and records, including promissory notes and re-
payment agreements, required for the adminis-
tration of the programs authorized under part D
of this title, or for the administration of loans
made under part B of this title that have been
assigned to the Secretary;
‘‘(B) permit the Secretary to destroy origi-
nals of such documents and records, including
740
HR 2264 EAS
promissory notes and repayment agreements,
after such documents and records have been opti-
cally imaged, thereby achieving significant sav-
ings in storage and retrieval costs; and
‘‘(C) ensure that the Secretary may intro-
duce as evidence in any proceeding with respect
to the programs or loans described in subpara-
graph (A) optically imaged documents and
records, including promissory notes and repay-
ment agreements.
‘‘(2) EVIDENCE.—Notwithstanding any other
provision of law, an optically imaged copy of any
document or record, including a promissory note or
repayment agreement, may be introduced as evidence
in any proceeding with respect to the programs or
loans described in paragraph (1)(A) in any Federal
or State court, or other tribunal, and such optically
imaged copy shall be admissible in any court or tri-
bunal of the United States or any State as if such
copy were the original document or record and have
the same force and effect as the original.
‘‘(3) CONSTRUCTION.—(A) Nothing in this sub-
section shall be interpreted to preclude the admissibil-
ity of a duplicate of a document or record required
for the administration of the programs or loans de-
741
HR 2264 EAS
scribed in paragraph (1)(A) made by a technology
other than optical imaging consistent with the Fed-
eral Rules of Evidence and section 1732 of title 28,
United States Code, or applicable State law.
‘‘(B) Nothing in this subsection shall be inter-
preted to preclude the admissibility of an optically
imaged copy of any document or record in a proceed-
ing outside the scope of this subsection consistent with
the Federal Rules of Evidence and section 1732 of
title 28 of the United States Code, or applicable State
law.’’.
(b) OPTICALLY IMAGED DOCUMENTS.—Section 432 of
the Act (20 U.S.C. 1082) is amended by adding at the end
the following new subsection:
‘‘(q) 
OPTICALLY
IMAGED
DOCUMENTS.—Records
maintained in accordance with section 484A(c) may be
used in any proceeding, as permitted by section 484A(c),
with respect to a loan that was made under this part and
has been assigned to the Secretary.’’.
(c) CONFORMING AMENDMENT.—Section 487 of the Act
(20 U.S.C. 1094) is amended by adding at the end the fol-
lowing new subsection:
‘‘(f) USE OF OPTICALLY IMAGED DOCUMENTS.—In
any proceeding with respect to a program or activity under
part D of this title, or with respect to a loan made under
742
HR 2264 EAS
part B of this title that has been assigned to the Secretary,
records maintained in accordance with section 484A may
be used as provided in that section.’’.
SEC. 12048. CONSOLIDATION OF PROGRAMS.
(a) IN GENERAL.—Section 428H of the Act (20 U.S.C.
1078–9) is amended—
(1) in the matter preceding paragraph (1) of
subsection (b), by inserting ‘‘(including graduate and
professional students as defined in regulations pro-
mulgated by the Secretary)’’ after ‘‘484’’;
(2) in subsection (d), by inserting ‘‘, except
that—
‘‘(1) the maximum annual amount of loans
under this section an independent student (or a stu-
dent whose parents are unable to borrow under the
Federal Direct PLUS Loan Program) may borrow in
any academic year or its equivalent or in any period
of 7 consecutive months, whichever is longer, shall be
as follows:
‘‘(A) In the case of such a student attending
an eligible institution who has not completed
such student’s first 2 years of undergraduate
study, the amount determined in accordance
with section 428(b)(1), plus—
743
HR 2264 EAS
‘‘(i) $4,000, if such student is enrolled
in a program whose length is at least one
academic year in length (as determined
under section 481);
‘‘(ii) $2,500, if such student is enrolled
in a program whose length is less than one
academic year, but at least 2⁄3 of such an
academic year; and
‘‘(iii) $1,500, if such student is en-
rolled in a program whose length is less
than 2⁄3, but at least 1⁄3, of such an aca-
demic year.
‘‘(B) In the case of such a student attending
an eligible institution who has completed the
first 2 years of undergraduate study but who has
not completed the remainder of a program of un-
dergraduate study, the amount determined in ac-
cordance with section 428(b)(1), plus—
‘‘(i) $5,000, if such student is enrolled
in a program whose length is at least one
academic year in length (as determined
under section 481);
‘‘(ii) $3,325, if such student is enrolled
in a program whose length is less than one
744
HR 2264 EAS
academic year, but at least 2⁄3 of such an
academic year; and
‘‘(iii) $1,675, if such student is en-
rolled in a program whose length is less
than 2⁄3, but at least 1⁄3, of such an aca-
demic year.
‘‘(C) In the case of such a student who is
a graduate or professional student attending an
eligible institution, the amount determined in
accordance with section 428(b)(1), plus $10,000;
and
‘‘(2) the maximum aggregate amount of such
loans such student may borrow shall be adjusted to
reflect the increased annual limits described in para-
graph (1)’’ before the period;
(3) in subsection (e), by adding at the end the
following new paragraphs:
‘‘(5) AMORTIZATION.—The amount of the peri-
odic payment and the repayment schedule for any
loan made pursuant to this section shall be estab-
lished by assuming an interest rate equal to the ap-
plicable rate of interest at the time the repayment of
the principal amount of the loan commences. At the
option of the lender, the note or other written evidence
of the loan may require that—
745
HR 2264 EAS
‘‘(A) the amount of the periodic payment
will be adjusted annually; or
‘‘(B) the period of repayment of principal
will be lengthened or shortened,
in order to reflect adjustments in interest rates occur-
ring as a consequence of section 427A(c)(4).
‘‘(6) REPAYMENT PERIOD.—For purposes of cal-
culating the 10-year repayment period under section
428(b)(1)(D), such period shall commence at the time
the first payment of principal is due from the bor-
rower.’’; and
(4) by adding at the end the following new sub-
section:
‘‘(h) REFINANCING.—
‘‘(1) REFINANCING TO SECURE COMBINED PAY-
MENT.—An eligible lender may at any time consoli-
date loans held by such lender which are made under
this section to a borrower, including loans which were
made under sections 428A and 428B as such sections
were in effect prior to the date of enactment of the
Higher Education Amendments of 1986, under a sin-
gle repayment schedule which provides for a single
principal payment and a single payment of interest,
and shall calculate the repayment period for each in-
cluded loan from the date of the commencement of re-
746
HR 2264 EAS
payment of the most recent included loan. Unless the
consolidated loan is obtained by a borrower who is
electing to obtain variable interest under paragraph
(2) or (3), such consolidated loan shall bear interest
at the weighted average of the rates of all included
loans rounded to the nearest whole percent. The exten-
sion of any repayment period of an included loan
pursuant to this paragraph shall be reported (if re-
quired by such loan) to the Secretary or guaranty
agency insuring the loan, as the case may be, but no
additional insurance premiums shall be payable with
respect to any such extension. The extension of the re-
payment period of any included loan shall not re-
quire the formal extension of the promissory note evi-
dencing the included loan or the execution of a new
promissory note, but shall be treated as an adminis-
trative forbearance of the repayment terms of the in-
cluded loan.
‘‘(2) REFINANCING TO SECURE VARIABLE INTER-
EST RATE.—An eligible lender may reissue a loan
which was made under this section before July 1,
1987, or under sections 428A and 428B as such sec-
tions were in effect prior to the date of enactment of
the Higher Education Amendments of 1986 in order
to permit the borrower to obtain the interest rate pro-
747
HR 2264 EAS
vided under section 427A(c)(4). A lender offering to
reissue a loan or loans for such purpose may charge
a borrower an amount not to exceed $100 to cover the
administrative costs of reissuing such loan or loans,
not more than one-half of which shall be paid to the
guarantor of the loan being reissued to recover costs
of reissuance. Reissuance of a loan under this para-
graph shall not affect any insurance applicable with
respect to the loan, and no additional insurance fee
may be charged to the borrower with respect to the
loan.
‘‘(3) REFINANCING BY DISCHARGE OF PREVIOUS
LOAN.—A borrower who has applied to an original
lender for reissuance of a loan under paragraph (2)
and who is denied such reissuance may obtain a loan
from another lender for the purpose of discharging the
loan from such original lender. A loan made for such
purpose—
‘‘(A) shall bear interest at the applicable
rate 
of 
interest 
provided 
under 
section
427A(c)(4);
‘‘(B) shall not result in the extension of the
duration of the note (other than as permitted
under subsection (e)(5)(B));
748
HR 2264 EAS
‘‘(C) may be subject to an additional insur-
ance fee but shall not be subject to the adminis-
trative cost charge permitted by paragraph (2) of
this subsection; and
‘‘(D) shall be applied to discharge the bor-
rower from any remaining obligation to the
original lender with respect to the original loan.
‘‘(4) CERTIFICATION
IN
LIEU
OF
PROMISSORY
NOTE PRESENTATION.—Each new lender may accept
certification from the original lender of the borrower’s
original loan in lieu of presentation of the original
promissory note.
‘‘(5) NOTIFICATION TO BORROWERS OF AVAIL-
ABILITY OF REFINANCING OPTIONS.—Each holder of a
loan made under this section or under section 428B
as in effect prior to the date of enactment of this Act
shall, not later than October 1, 1993, in the case of
loans made before the date of enactment of this para-
graph, notify the borrower of such loan—
‘‘(A) of the refinancing options for which
the borrower is eligible under this subsection;
‘‘(B) of those options which will be made
available by the holder and of the practical con-
sequences of such options in terms of interest
749
HR 2264 EAS
rates and monthly and total payments for a set
of loan examples; and
‘‘(C) that, with respect to any option that
the holder will not make available, the holder
will, to the extent practicable, refer the borrower
to an eligible lender offering such option.’’.
(b) REPEAL.—
(1) REPEALER.—Section 428A of the Act is re-
pealed.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall be effective on July 1, 1994.
(c) TERMS, CONDITIONS
AND BENEFITS.—Notwith-
standing the amendments made by this section, with respect
to loans provided under sections 428A and 428H of the
Higher Education Act of 1965 (as such sections existed on
the date preceding the date of enactment of this Act) the
terms, conditions and benefits applicable to such loans
under such sections shall continue to apply to such loans
after the date of enactment of this Act.
SEC. 12049. ORIGINATION FEE; INSURANCE PREMIUM.
Section 428H of the Act (20 U.S.C. 1078–8) is amend-
ed—
(1) in subsection (f)—
750
HR 2264 EAS
(A) in the subsection heading, by striking
‘‘INSURANCE PREMIUM’’ and inserting ‘‘ORIGI-
NATION FEE’’;
(B) in the heading of paragraph (1), by
striking ‘‘/INSURANCE PREMIUM’’;
(C) in paragraph (1)—
(i) by striking ‘‘a combined origination
fee and insurance premium in the amount
of 6.5 percent’’ and inserting ‘‘an origina-
tion fee in the amount of 3.0 percent’’; and
(ii) by striking the second sentence;
(D) in paragraph (2), by striking ‘‘com-
bined fee and premium’’ and inserting ‘‘origina-
tion fee’’;
(E) in paragraph (3), by striking ‘‘com-
bined origination fee and insurance premium’’
and inserting ‘‘origination fee’’;
(F) in paragraph (4)—
(i) in the heading, by striking ‘‘INSUR-
ANCE PREMIUM’’ and inserting ‘‘ORIGINA-
TION FEE’’;
(ii) by striking ‘‘combined origination
fee and insurance premiums’’ and inserting
‘‘origination fees’’; and
751
HR 2264 EAS
(iii) by striking ‘‘and premiums to
pay’’ and inserting ‘‘to pay’’; and
(G) in paragraph (5)—
(i) in the heading, by inserting ‘‘ORIGI-
NATION FEE AND’’ before ‘‘INSURANCE’’; and
(ii) in the second sentence—
(I) by striking ‘‘6.5 percent insur-
ance premium’’ and inserting ‘‘com-
bined origination fee under this sub-
section and the insurance premium
under subsection (h)’’; and
(II) by inserting ‘‘origination fee
and’’ before ‘‘insurance’’; and
(2) by adding at the end the following new sub-
section:
‘‘(h) INSURANCE PREMIUM.—Each State or nonprofit
private institution or organization having an agreement
with the Secretary under section 428(b)(1) may charge a
borrower under this section an insurance premium equal
to not more than 1 percent of the principal amount of the
loan, if such premium will not be used for incentive pay-
ments to lenders.’’
SEC. 12050. DISBURSEMENTS FOR FIRST YEAR STUDENTS.
Section 428(G) of the Act (20 U.S.C. 1078–7) is
amended—
752
HR 2264 EAS
(1) in the heading for subsection (b), by striking
‘‘AND ENDORSEMENT’’; and
(2) in subsection (b)—
(A) by striking paragraph (1);
(B) in paragraph (2)—
(i) by striking ‘‘other than a student
described in paragraph (1)’’; and
(ii) by striking ‘‘(2) OTHER
STU-
DENTS.—’’.
Subchapter B—Amendments to Other Laws
SEC. 12055. DISCLOSURE OF TAX RETURN INFORMATION.
(a) RETURNS AND RETURN INFORMATION.—Section
6103(a)(3) of the Internal Revenue Code of 1986 (hereafter
referred to in this part as ‘‘the Code’’) is amended by strik-
ing ‘‘(l)(12)’’ and inserting ‘‘(l)(10), (12), or (13)’’.
(b) INCOME CONTINGENT REPAYMENT OF STUDENT
LOANS.—Section 6103(l) of the Code is amended—
(1) in paragraph (10)(B), by striking ‘‘officers
and employees of an agency receiving return informa-
tion under subparagraph (A) shall use such informa-
tion’’ and inserting ‘‘return information disclosed
under subparagraph (A) may be used by officers and
employees of an agency, and by officers, employees,
and agents of the Department of Education,’’; and
753
HR 2264 EAS
(2) at the end, by adding a new paragraph to
read as follows:
‘‘(13) DISCLOSURE OF RETURN INFORMATION TO
CARRY OUT INCOME CONTINGENT REPAYMENT OF STU-
DENT LOANS.—
‘‘(A) IN
GENERAL.—The Secretary may,
upon written request from the Secretary of Edu-
cation, disclose to officers and employees of the
Department of Education return information
with respect to a taxpayer who has received a
Federal loan under a student loan program and
whose loan repayment amounts are based in
whole or in part on the taxpayer’s income. Such
return information shall be limited to—
‘‘(i) taxpayer identity information
with respect to such taxpayer;
‘‘(ii) the filing status of such taxpayer;
and
‘‘(iii) the adjusted gross income of such
taxpayer (as defined in section 62).
‘‘(B) RESTRICTION ON USE OF DISCLOSED
INFORMATION.—Return 
information 
disclosed
under subparagraph (A) may be used by officers,
employees, and agents of the Department of Edu-
cation only for the purposes of, and to the extent
754
HR 2264 EAS
necessary in, establishing an appropriate income
contingent repayment level under a student loan
program.
‘‘(C) DEFINITIONS.—For purposes of this
paragraph, the term ‘student loan program’
means the program authorized under part D of
title IV of the Higher Education Act of 1965 and
includes loans under parts B and E of title IV
the Higher Education Act of 1965 that are in de-
fault and have been assigned to the Department
of Education.’’.
(c) DISCLOSURE OF TAXPAYER IDENTITY INFORMA-
TION.—Section 6103(m)(4) of the Code is amended—
(1) in the heading, by inserting ‘‘OWE
AN
OVERPAYMENT ON FEDERAL PELL GRANTS OR’’
immediately after ‘‘INDIVIDUALS WHO’’;
(2) in subparagraph (A)—
(A) by redesignating clauses (i) and (ii) as
subclauses (I) and (II); and
(B) by striking ‘‘of any taxpayer who has
defaulted on a loan—’’ and inserting ‘‘of any
taxpayer—
‘‘(i) who owes an overpayment of a
grant awarded to that taxpayer under sub-
755
HR 2264 EAS
part 1 of part A of title IV of the Higher
Education Act of 1965, or
‘‘(ii) who has defaulted on a loan—’’;
(3) in subparagraph (B)—
(A) in clause (i), by striking ‘‘under part
B’’ and inserting ‘‘under part B or D’’; and
(B) in clause (ii), by striking ‘‘under part
E’’ and inserting ‘‘under subpart 1 of part A,
part D, or part E’’;
(d) 
PROCEDURE
AND
RECORDKEEPING.—Section
6103(p) of the Code is amended—
(1) in paragraph (3)(A), by striking ‘‘(11), or
(12), (m)’’ and inserting ‘‘(11), (12), or (13), (m)’’;
(2) in paragraph (4)—
(A) in the matter preceding subparagraph
(A), by striking ‘‘(10), or (11),’’ and inserting
‘‘(10), (11), or (13),’’;
(B) in subparagraph (F)(ii), by striking
‘‘(11), or (12),’’ and inserting ‘‘(11), (12), or
(13),’’; and
(C) in the flush left material after subpara-
graph 
(F), 
by 
striking 
‘‘under 
subsection
(l)(12)(B)’’ and inserting ‘‘under paragraph
(10), (12)(B), or (13) of subsection (l)’’.
756
HR 2264 EAS
(e) COLLECTION OF PAYMENTS.—(1) Subchapter A of
chapter 64 of the Code is amended by adding at the end
the following new section:
‘‘SEC. 6306. COLLECTION OF PAYMENTS ON FEDERAL DI-
RECT STUDENT LOANS.
‘‘Upon a determination by the President under section
457(b) of the Higher Education Act of 1965 concerning the
implementation of a plan for the repayment of Federal Di-
rect Stafford Loans through wage withholding or other
means by the Internal Revenue Service, the Secretary of the
Treasury may enter into an agreement with the Secretary
of Education to provide for the collection of payments on
loans made pursuant to part D of title IV of such Act. The
Secretary of the Treasury may assess and collect such pay-
ments as though they were additional income taxes due, and
shall establish such procedures and conventions as are nec-
essary under such agreement, including—
‘‘(1) procedures for the resolution of disputes
through the Secretary of Education;
‘‘(2) an alternate system of fees and penalties,
which system shall not include the seizure of real
property by the Internal Revenue Service, for the
nonpayment of amounts due; and
‘‘(3) provisions related to withholding, payment
of estimated tax and allocation of payments.’’.
757
HR 2264 EAS
(2) The table of sections for subchapter A of chapter
64 of the Code is amended by adding at the end the follow-
ing new item:
‘‘Sec. 6306. Collection of payments on Federal direct Stafford loans.’’.
(f) UNAUTHORIZED DISCLOSURE.—Section 7213(a)(2)
of the Code is amended by striking ‘‘(10) or (12)’’ and in-
serting ‘‘(10), (12), or (13),’’.
(g) EFFECTIVE DATE.—The amendments made by this
section shall be effective during the period beginning on the
date of enactment of this Act and ending on December 30,
1998.
CHAPTER 4—COST SHARING BY STATES
SEC. 12061. COST SHARING BY STATES.
(a) AMENDMENT.—Section 428 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1078) is amended by adding
at the end the following new subsection:
‘‘(n) STATE SHARE OF DEFAULT COSTS.—
‘‘(1) IN GENERAL.—In the case of any State in
which there are located any institutions of higher edu-
cation with cohort default rates that exceed 20 per-
cent, such State shall pay to the Secretary an amount
equal to—
‘‘(A) the new loan volume attributable to all
institutions in the State for the current fiscal
year; multiplied by
758
HR 2264 EAS
‘‘(B) the percentage specified in paragraph
(2); multiplied by
‘‘(C) the quotient of—
‘‘(i) the sum of the amounts calculated
under paragraph (3) for each such institu-
tion in the State; divided by
‘‘(ii) the total amount of loan volume
attributable to current and former students
of institutions located in that State entering
repayment in the period used to calculate
the cohort default rate.
‘‘(2) PERCENTAGE.—For purposes of paragraph
(1)(B), the percentage used shall be—
‘‘(A) 12.5 percent for fiscal year 1995;
‘‘(B) 20 percent for fiscal year 1996; and
‘‘(C) 50 percent for fiscal year 1997 and
succeeding fiscal years.
‘‘(3) CALCULATION.—For purposes of paragraph
(1)(C)(i), the amount shall be determined by calculat-
ing for each institution the amount by which—
‘‘(A) the amount of the loans received for at-
tendance by such institution’s current and
former students who (i) enter repayment during
the fiscal year used for the calculation of the co-
759
HR 2264 EAS
hort default rate, and (ii) default before the end
of the following fiscal year; exceeds
‘‘(B) 20 percent of the loans received for at-
tendance by all the current and former students
who enter repayment during the fiscal year used
for the calculation of the cohort default rate.
‘‘(4) FEE.—A State shall charge a fee to an in-
stitution of higher education that participates in the
program under this part and is located in that State
according to a fee structure, approved by the Sec-
retary, that is based on the institution’s cohort default
rate and the State’s risk of loss under this subsection.
Such fee structure shall include a process by which an
institution with a high cohort default rate is exempt
from any fees under this paragraph if such institu-
tion demonstrates to the satisfaction of the State that
exceptional mitigating circumstances, as determined
by the State and approved by the Secretary, contrib-
uted to its cohort default rate.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall be effective on October 1, 1994.
760
HR 2264 EAS
CHAPTER 5—GENERAL EFFECTIVE DATE
SEC. 12071. GENERAL EFFECTIVE DATE.
Except as otherwise provided in this subtitle, this sub-
title and the amendments made by this subtitle shall be ef-
fective on October 1, 1993.
Subtitle B—Public Health Service
Act Provisions
SEC. 12101. HEALTH COVERAGE CLEARINGHOUSE.
(a) IN GENERAL.—The Public Health Service Act is
amended—
(1) by redesignating title XXVII (42 U.S.C.
300cc et seq.) as title XXVIII; and
(2) by inserting after title XXVI the following
new title:
‘‘TITLE XXVII—HEALTH
COVERAGE CLEARINGHOUSE
‘‘SEC. 2701. ESTABLISHMENT OF CLEARINGHOUSE.
‘‘(a) IN GENERAL.—The Secretary shall establish and
operate a Health Coverage Clearinghouse (in this title re-
ferred to as the ‘Clearinghouse’) for the purpose of identify-
ing, for beneficiaries under a covered health program (as
defined in subsection (c)), third parties (which may include
a covered health program) which may be liable for payment
for health care items and services furnished to such bene-
ficiaries under such program.
761
HR 2264 EAS
‘‘(b) DIRECTOR.—The Clearinghouse shall be headed
by a Director (in this title referred to as the ‘Director’) ap-
pointed by the Secretary.
‘‘(c) COVERED HEALTH PROGRAM DEFINED.—As used
in this title, the term ‘covered health program’ means any
of the following under which health care items or services
are furnished to a beneficiary—
‘‘(1) a migrant health center receiving assistance
under section 329;
‘‘(2) a community health center receiving assist-
ance under section 330;
‘‘(3) an entity receiving assistance under section
340;
‘‘(4) an alcohol or drug treatment entity or men-
tal health entity receiving assistance under title V or
title XIX;
‘‘(5) a family planning project described in sec-
tion 1001;
‘‘(6) an entity receiving assistance under title
XXVI;
‘‘(7) a black lung clinic authorized under this
Act;
‘‘(8) a clinic that treats sexually transmitted dis-
eases and is authorized under section 318;
762
HR 2264 EAS
‘‘(9) an entity receiving funds to provide pri-
mary health services to residents of public housing
under section 340A;
‘‘(10) a non-Federal entity authorized under the
Indian Self-Determination Act;
‘‘(11) a tuberculosis clinic receiving assistance
under section 317(j)(2) or 317(k)(2); or
‘‘(12) any other Federally funded program that
provides payments for medical services provided to an
individual which are or may be covered under a pri-
vate health insurance policy.
‘‘(d) OTHER DEFINITIONS.—As used in this title:
‘‘(1) ADMINISTRATOR.—The term ‘administrator’
means, with respect to a covered health program de-
scribed in paragraphs (1) through (12) of subsection
(c), the individual responsible for the overall adminis-
tration of the program under which an entity de-
scribed in such paragraphs receives Federal funds.
‘‘(2) GROUP HEALTH PLAN.—The term ‘group
health plan’ has the same meaning given the term
‘employee welfare benefit plan’ in section 3(1) of the
Employee Retirement Income Security Act of 1974
(29 U.S.C. 1002(1)).
‘‘(3) QUALIFIED EMPLOYER.—The term ‘quali-
fied employer’ has the same meaning given the term
763
HR 2264 EAS
‘employer’ in section 3(5) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(1)).
‘‘SEC. 2702. PROVISION OF INFORMATION
‘‘(a) REQUEST FOR INFORMATION.—An administrator
of a covered health program may request from the Director
information concerning the employment and group health
coverage of a program beneficiary, the beneficiary’s spouse,
and (if the beneficiary is a dependent child) the bene-
ficiary’s parents. The Director shall provide such informa-
tion if the request—
‘‘(1) is in such form and manner and at such a
time as the Director may require, and
‘‘(2) specifies the name and tax identification
number of the beneficiary.
‘‘(b) DATA MATCHING PROGRAM.—
‘‘(1) REQUEST
BY
DIRECTOR.—The Director
shall, at such intervals as the Director finds appro-
priate, transmit to the Secretary of the Treasury the
names and tax identification numbers of beneficiaries
with respect to whom a request has been made pursu-
ant to subsection (a), and request that such Secretary
disclose to the Secretary of Health and Human Serv-
ices the following information:
764
HR 2264 EAS
‘‘(A) Whether the beneficiary is married
and, if so, the name of the spouse and such
spouse’s tax identification number.
‘‘(B) If the beneficiary is a dependent child,
the name of and tax identification numbers of
the beneficiary’s parents.
‘‘(2) INFORMATION FROM SECRETARY.—The Sec-
retary shall, upon written request from the Director,
disclose to the Director, the following information:
‘‘(A) For each individual who is identified
as having received wages (as defined in section
3401(a) of the Internal Revenue Code of 1986)
from an employer in a previous year—
‘‘(i) the name and taxpayer identifica-
tion number of the individual; and
‘‘(ii) the name, address, and taxpayer
identification number of the employer, and
whether such employer is a qualified em-
ployer.
‘‘(B) For each individual who is identified
as married and whose spouse is identified as
having received wages (as defined in section
3401(a) of the Internal Revenue Code of 1986)
from an employer in a previous year—
765
HR 2264 EAS
‘‘(i) the name and taxpayer identifica-
tion number of the individual and of the in-
dividual’s spouse; and
‘‘(ii) the name, address, and taxpayer
identification number of the spouse’s em-
ployer, and whether such employer is a
qualified employer.
‘‘(C) For each individual who is identified
as a dependent child and whose parent is identi-
fied as having received wages (as defined in sec-
tion 3401(a) of the Internal Revenue Code of
1986) from an employer in a previous year—
‘‘(i) the name and taxpayer identifica-
tion number of the individual and of the in-
dividual’s parent; and
‘‘(ii) the name, address, and taxpayer
identification number of the parent’s em-
ployer, and whether such employer is a
qualified employer.
‘‘(3) INFORMATION FROM EMPLOYERS.—The Di-
rector shall—
‘‘(A) request, from the employer of each in-
dividual (including each spouse) with respect to
whom information was received from the Sec-
retary pursuant to paragraph (2), information
766
HR 2264 EAS
concerning coverage of such individual (and of
the individual’s spouse and dependent children)
under the employer’s group health plan, specifi-
cally the period and nature of the coverage, and
the name, address, and identifying number of the
plan, and
‘‘(B) furnish the information received in re-
sponse to such request with respect to an individ-
ual (or such individual’s spouse or dependent
children) to the administrator requesting such
information pursuant to subsection (a).
Under no circumstances shall the information re-
quested pertain in any way to the health status of the
individual, spouse or dependent children, to the cost
of such coverage, or to the beneficiary-specific limita-
tions on such coverage.
‘‘SEC. 2703. REQUIREMENT THAT EMPLOYERS FURNISH IN-
FORMATION.
‘‘(a) IN GENERAL.—An employer shall furnish to the
Director the information requested pursuant to section
2702(b)(3) within 90 days after receipt of such a request.
‘‘(b) CIVIL MONEY PENALTY FOR FAILURE TO CO-
OPERATE.—
‘‘(1) IN GENERAL.—An employer (other than a
Federal or other governmental entity) who willfully or
767
HR 2264 EAS
repeatedly fails to provide timely and accurate re-
sponse to a request for information pursuant to sec-
tion 2702(b)(3) shall be subject, in addition to any
other penalties that may be prescribed by law, to a
civil money penalty of not to exceed $500 for each in-
dividual with respect to whom such a request is made.
‘‘(2) ENFORCEMENT
AUTHORITY.—In cases of
failure to respond to the Director in accordance with
subsection (a) to inquiries relating to requests pursu-
ant to section 2702, the provisions of section
353(h)(3), regarding procedures for the imposition of
civil money penalties developed by the Secretary, shall
apply in the same manner as such provisions apply
to penalties or proceedings under section 353.
‘‘SEC. 2704. DATA BANK.
‘‘(a) MAINTENANCE OF INFORMATION.—The Clearing-
house shall maintain a data bank, containing information
on individuals obtained pursuant to this title. Individual
information in the data bank shall be retained for not less
than one year after the date the information was obtained.
‘‘(b) DISCLOSURE OF INFORMATION IN DATA BANK.—
‘‘(1) IN GENERAL.—The Director is authorized
(subject to paragraph (2)) to disclose any information
in the data bank established pursuant to subsection
768
HR 2264 EAS
(a) with respect to an individual (or an individual’s
spouse or parent)—
‘‘(A) to the Secretary, administrators, em-
ployers, and insurers, to the extent necessary to
assist such administrators;
‘‘(B) to Federal and State law enforcement
officials responsible for enforcement of civil or
criminal laws, in connection with investigations
or administrative or judicial law enforcement
proceedings relating to a covered health program;
and
‘‘(C) for research or statistical purposes.
‘‘(2) RESTRICTIONS ON DISCLOSURE.—Informa-
tion in the data bank may be disclosed under this
subsection only for purposes of, and to the extent nec-
essary in, determining the extent to which an individ-
ual is covered under any group health plan.
‘‘(c) USE OF CONTRACTORS.—The responsibilities of
the Clearinghouse under this section may be carried out by
contract.
‘‘(d) FEES.—The Clearinghouse shall—
‘‘(1) establish fees for services under this section
designed to cover the full costs to the Clearinghouse of
providing such services, and
769
HR 2264 EAS
‘‘(2) require the payment of such fees to provide
such services.’’.
(b) CONFORMING AMENDMENTS.—
(1) Sections 2701 through 2714 of the Public
Health Service Act (42 U.S.C. 300cc through 300cc–
15) are redesignated as sections 2801 through 2814,
respectively.
(2) Sections 465(f) and 497 of such Act (42
U.S.C. 286(f) and 289(f)) are amended by striking
out ‘‘2701’’ each place that such appears and insert-
ing in lieu thereof ‘‘2801’’.
(c) ERISA AMENDMENT.—Section 101 of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C.
1021) is amended by adding at the end thereof the following
new subsection:
‘‘(g) COMPLIANCE WITH HEALTH COVERAGE CLEAR-
INGHOUSE REQUIREMENTS.—In addition to providing the
information required under this section, the administrator
of each employee benefit plan shall comply with the require-
ments of section 2703(a) of the Public Health Service Act.
The enforcement provisions of this Act shall apply to an
administrator that fails to comply with this subsection in
the same manner as such provisions otherwise apply to such
administrators under this section.’’.
770
HR 2264 EAS
(d) EFFECTIVE DATE.—The amendments made by
subsections (a), (b), and (c) shall take effect on April 1,
1995.
SEC. 12102. PHYSICIAN OWNERSHIP STUDY.
(a) STUDY.—The Secretary of Health and Human
Services shall conduct a study concerning—
(1) the desirability of establishing a Federal pro-
hibition on the referral of a patient by a health care
provider to an entity in which the provider has a fi-
nancial interest or from which the provider receives
a financial benefit for such referral; and
(2) different options with respect to the scope of
any prohibition recommended under paragraph (1),
including options for the application of rules defining
prohibited activities that are similar to those imple-
mented under title XVIII of the Social Security Act,
and for the methods of enforcing such a prohibition.
(b) LIMITATION.—The study conducted under sub-
section (a) shall be restricted to determining the desirability
of establishing a prohibition of the type described in such
subsection with respect to patients for whom the health care
services involved are not provided or paid for under a Fed-
eral or State program.
(c) REPORT.—Not later than 6 months after the date
of enactment of this Act, the Secretary of Health and
771
HR 2264 EAS
Human Services shall prepare and submit to the President
and the appropriate committees of Congress a report con-
cerning the results of the study conducted under subsection
(a).
SEC. 12103. DELAY IN COST-OF-LIVING ADJUSTMENTS IN
FEDERAL EMPLOYEE RETIREMENT BENEFITS
DURING FISCAL YEARS 1994, 1995, AND 1996.
(a) APPLICABILITY.—
(1) IN GENERAL.—This section shall apply with
respect to any cost-of-living increase for any person
described under paragraph (2) scheduled to take
effect, during fiscal year 1994, 1995, or 1996, under
section 8340(b) or 8462(b) of title 5, United States
Code.
(2) ANNUITANTS.—The provisions of paragraph
(1) shall apply to any annuitant who on the date pre-
ceding the date of retirement was a member of the
National Health Service Corps.
(b) DELAY IN EFFECTIVE DATE OF ADJUSTMENTS.—
A cost-of-living increase described in subsection (a) shall
not take effect until the first day of the third calendar
month after the date such increase would otherwise take ef-
fect.
(c) RULE OF CONSTRUCTION.—Nothing in this section
shall be considered to affect any determination relating to
772
HR 2264 EAS
eligibility for an annuity increase or the amount of the first
increase in an annuity under section 8340(b) or (c) or sec-
tion 8462 (b) or (c) of title 5, United States Code, or com-
parable provisions of law.
SEC. 12104. PERMANENT ELIMINATION OF THE ALTER-
NATIVE-FORM-OF-ANNUITY OPTION EXCEPT
FOR INDIVIDUALS WITH A CRITICAL MEDICAL
CONDITION.
(a) CIVIL SERVICE RETIREMENT SYSTEM; FEDERAL
EMPLOYEES’ RETIREMENT SYSTEM.—A member of the Na-
tional Health Service Corps who is covered under chapter
83 or 84 of title 5, United States Code, and has a life-threat-
ening affliction or other critical medical condition may
elect annuity benefits under section 8343a or 8420a of title
5, United States Code, as the case may be.
(b) EFFECTIVE DATE.—The amendments made by this
section shall become effective on October 1, 1995, and shall
apply with respect to any annuity commencing on or after
that date.
SEC. 12105. FEDERAL TORT CLAIMS AMENDMENTS.
(a) CLARIFICATION OF COVERAGE OF OFFICERS AND
EMPLOYEES
OF CLINICS.—The first sentence of section
224(g)(1) of the Public Health Service Act (42 U.S.C.
233(g)(1)) is amended by striking ‘‘officer, employee, or
773
HR 2264 EAS
contractor’’ and inserting the following: ‘‘officer or employee
of such an entity, and any contractor’’.
(b) COVERAGE FOR SERVICES FURNISHED TO INDIVID-
UALS OTHER THAN PATIENTS OF CLINIC.—Section 224(g)
of such Act (42 U.S.C. 233(g)(1)), as amended by para-
graph (1), is further amended—
(1) in the first sentence of paragraph (1), by in-
serting after ‘‘Service’’ the following: ‘‘with respect to
services provided to patients of the entity and (subject
to paragraph (7)) to certain other individuals’’; and
(2) by adding at the end the following new para-
graph:
‘‘(7) For purposes of paragraph (1), an officer, em-
ployee, or contractor described in such paragraph may be
deemed to be an employee of the Public Health Service with
respect to services provided to individuals who are not pa-
tients of an entity described in paragraph (4) only if the
Secretary determines—
‘‘(A) that the provision of the services to such in-
dividuals benefits health center patients and general
populations that could be served by the health center
through community-wide intervention efforts within
the communities served by such health center, and fa-
cilitates the provision of services to health center pa-
tients; or
774
HR 2264 EAS
‘‘(B) that such services are otherwise required to
be provided to such individuals under an employment
contract (or other similar arrangement) between the
individual and the entity.’’.
(c) DETERMINING COMPLIANCE OF ENTITY WITH RE-
QUIREMENTS FOR COVERAGE.—
(1) IN GENERAL.—Section 224(h) of such Act (42
U.S.C. 233(h)), as added by section 2(b) of the Feder-
ally Supported Health Centers Assistance Act of 1992,
is amended by striking ‘‘the entity—’’ and inserting
the following: ‘‘the Secretary, after receiving such as-
surances and conducting such investigation as the
Secretary considers necessary, finds that the entity—
’’.
(2) FINDING.—Section 224 of such Act (42
U.S.C. 233) is amended by adding at the end thereof
the following new subsection:
‘‘(i) With respect to subsection (h), the finding of the
Secretary that an entity meets all of the requirements under
such subsection shall apply for the period specified by the
Secretary, and shall be binding for all parties unless the
Secretary reverses such finding for good cause shown at a
later date.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall take effect as if included in the enactment of
775
HR 2264 EAS
the Federally Supported Health Centers Assistance Act of
1992.
Subtitle 
C—Improved 
Immuniza-
tion Delivery and Monitoring
SEC. 12201. SHORT TITLE, REFERENCES AND PURPOSE.
(a) SHORT TITLE.—This subtitle may be cited as the
‘‘Comprehensive Child Immunization Act of 1993’’.
(b) REFERENCES.—Except as otherwise expressly pro-
vided, whenever in this subtitle an amendment or repeal
is expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Public
Health Service Act (42 U.S.C. 201 et seq.).
(c) PURPOSE.—It is the purpose of this subtitle to en-
sure that children in the United States are appropriately
immunized against vaccine preventable infectious diseases
at the earliest appropriate age.
SEC. 12202. MONITORING OF CHILDHOOD IMMUNIZATIONS.
Title XXI of the Public Health Service Act (42 U.S.C.
300aa–1 et seq.) is amended by adding at the end thereof
the following new subtitle:
776
HR 2264 EAS
‘‘Subtitle 3—Improved Immuniza-
tion Delivery and Monitoring
Systems
‘‘Part A—List of Vaccines and Administration
‘‘SEC. 2141. LIST OF PEDIATRIC VACCINES; SCHEDULE FOR
ADMINISTRATION.
‘‘(a) RECOMMENDED PEDIATRIC VACCINES.—
‘‘(1) IN GENERAL.—The Secretary shall establish
a list of the vaccines that the Secretary recommends
for administration to all children for the purpose of
immunizing the children, subject to such contra-
indications for particular medical categories of chil-
dren as the Secretary may establish under subsection
(b)(1)(D). The Secretary shall periodically review the
list, and shall revise the list as appropriate.
‘‘(2) RULE OF CONSTRUCTION.—
‘‘(A) The list of vaccines specified in sub-
paragraph (B) is deemed to be the list of vac-
cines maintained under paragraph (1).
‘‘(B) The list of vaccines specified in this
subparagraph is the list of vaccines that, for pur-
poses of paragraph (1), is established (and peri-
odically reviewed and as appropriate revised) by
the Advisory Committee on Immunization Prac-
tices, an advisory committee established by the
777
HR 2264 EAS
Secretary, acting through the Director of the
Centers for Disease Control and Prevention.
‘‘(b) RECOMMENDED SCHEDULE
FOR ADMINISTRA-
TION.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), in
the case of a pediatric vaccine, the Secretary shall es-
tablish (and periodically review and as appropriate
revise) a schedule of nonbinding recommendations for
the following:
‘‘(A) The number of immunizations with
the vaccine that children should receive.
‘‘(B) The ages at which children should re-
ceive the immunizations.
‘‘(C) The dose of vaccine that should be ad-
ministered in the immunizations.
‘‘(D) Any contraindications regarding ad-
ministration of the vaccine.
‘‘(E) Such other guidelines as the Secretary
determines to be appropriate with respect to ad-
ministering the vaccine to children.
‘‘(2) VARIATIONS IN MEDICAL PRACTICE.—In es-
tablishing and revising a schedule under paragraph
(1), the Secretary shall ensure that, in the case of the
pediatric vaccine involved, the schedule provides for
the full range of variations in medical judgment re-
778
HR 2264 EAS
garding the administration of the vaccine, subject to
remaining within medical norms.
‘‘(3) RULE OF CONSTRUCTION.—
‘‘(A) The schedule specified in subparagraph
(B) is deemed to be the schedule maintained
under paragraph (1).
‘‘(B) 
The 
schedule 
specified 
in 
this
subparagraph is the schedule that, for purposes
of paragraph (1), is established (and periodi-
cally reviewed and as appropriate revised) by
the advisory committee specified in subsection
(a)(2)(B).
‘‘(c) GENERALLY APPLICABLE RULES OF CONSTRUC-
TION.—This section does not supersede any State law or
requirements with respect to receiving immunizations (in-
cluding any such law relating to religious exemptions or
other exemptions under such State laws).
‘‘(d) ISSUANCE OF LIST AND SCHEDULES.— Not later
than 180 days after the date of the enactment of this section,
the Secretary shall establish the initial list required in sub-
section (a) and the schedule required in subsection (b).
779
HR 2264 EAS
‘‘Part B—State Registry System for Immunization
Information
‘‘SEC. 2145. PURPOSE.
‘‘It is the purpose of this part to authorize the Sec-
retary, in consultation with State public health officials,
to establish State registry systems to monitor the immuni-
zation status of all children.
‘‘SEC. 2146. GRANTS FOR IMMUNIZATION REGISTRIES.
‘‘(a) IN GENERAL.—For the purpose described in sec-
tion 2145, the Secretary, acting through the Director of the
Centers for Disease Control and Prevention, shall make an
allotment each fiscal year for each State in an amount de-
termined in accordance with section 2151. The Secretary
shall make a grant to the State of the allotment made for
the State for the fiscal year if the State submits to the Sec-
retary an application in accordance with section 2150 on
behalf of the chief executive officer of such State.
‘‘(b) DESIGN OF STATE REGISTRIES.—To carry out
the purpose described in section 2145, a State registry es-
tablished under this part shall be designed to—
‘‘(1) provide accurate and up to date surveil-
lance data regarding immunization rates at the State
and local levels;
‘‘(2) assist in identifying localities with inad-
equate immunization rates to target for necessary re-
medial assistance;
780
HR 2264 EAS
‘‘(3) assist in the effective administration and
management of immunization programs at State and
local levels by providing data to guide immunization
program efforts;
‘‘(4) assist the State in providing and receiving
information on the immunization status of children
who move across geographic boundaries that are cov-
ered by different State or local registries; and
‘‘(5) facilitate the linkage of vaccine dosage in-
formation to adverse events reported to the Centers for
Disease Control and Prevention under section 2125(b)
and disease outbreak patterns, for the purpose of mon-
itoring vaccine safety and effectiveness.
‘‘(c) ELIGIBLE USE OF FUNDS.—The Secretary may
make a grant under subsection (a) only if the State agrees
to expend the grant for the purpose of—
‘‘(1) collecting the data described in section 2147;
‘‘(2) operating registries to maintain the data
(and establishing such registries, in the case of a
State that is not operating such a registry);
‘‘(3) utilizing the data to monitor the extent to
which children have received immunizations in ac-
cordance with the schedule established under section
2141;
781
HR 2264 EAS
‘‘(4) notifying parents, as appropriate, if chil-
dren have not received immunizations in accordance
with such schedule;
‘‘(5) coordinating and exchanging information
with other State registries to allow the monitoring of
the immunization status of children changing State of
residence; and
‘‘(6) such other activities as the Secretary may
authorize with respect to achieving the objectives es-
tablished by the Secretary for the year 2000 for the
immunization status of children in the United States.
‘‘(d) REQUIREMENT REGARDING STATE LAW.—
‘‘(1) IN GENERAL.—The Secretary may make a
grant under subsection (a) only if the State in-
volved—
‘‘(A) provides assurances satisfactory to the
Secretary that, not later than October 1, 1996,
the State will be operating a registry in accord-
ance with this part, including having in effect
such laws and regulations as may be necessary
to so operate such a registry; and
‘‘(B) agrees that, prior to such date, the
State will make such efforts to operate a registry
in accordance with this part as may be author-
ized in the law and regulations of the State.
782
HR 2264 EAS
‘‘(2) RULES OF CONSTRUCTION.—
‘‘(A) With respect to the agreements made
by a State under this part, other than para-
graph (1)(B), the Secretary may require compli-
ance with the agreements only to the extent con-
sistent with such paragraph.
‘‘(B) The provisions of this part do not au-
thorize the Secretary, as a condition of the re-
ceipt of a grant under subsection (a) by a State,
to prohibit the State from providing any parent,
upon the request of the parent, with an exemp-
tion from the requirements established by the
State pursuant to this part for the collection of
data regarding any child of the parent.
‘‘SEC. 2147. REGISTRY DATA.
‘‘(a) 
IN
GENERAL.—For 
purposes 
of 
section
2146(c)(1), the data described in this section are the data
described in subsection (b) and the data described in sub-
section (c).
‘‘(b) DATA REGARDING BIRTH OF CHILD.—With re-
spect to the birth of a child, the data described in this sub-
section is as follows:
‘‘(1) The name of each child born in the State
involved after the date of the implementation of the
783
HR 2264 EAS
registry (in no event shall such date be later than Oc-
tober 1, 1996).
‘‘(2) Demographic data on the child.
‘‘(3) The name of one or both of the parents of
the child. If the child has been given up for adoption,
any information regarding the identity of the birth
parent or parents of the child may not be entered into
the registry, or if entered, shall be deleted.
‘‘(4) The address, as of the date of the birth of
the child, of each parent whose name is received in
the registry pursuant to paragraph (3).
‘‘(c) 
DATA
REGARDING
INDIVIDUAL
IMMUNIZA-
TIONS.—With respect to a child to whom a pediatric vac-
cine is administered in the State involved, the data de-
scribed in this subsection is as follows:
‘‘(1) The name, age, and address of the child.
‘‘(2) The date on which the vaccine was adminis-
tered to the child.
‘‘(3) The name and business address of the health
care provider that administered the vaccine.
‘‘(4) The address of the facility at which the vac-
cine was administered.
‘‘(5) The name and address of one or both par-
ents of the child as of the date on which the vaccine
784
HR 2264 EAS
was administered, if such information is available to
the health care provider.
‘‘(6) The type of vaccine.
‘‘(7) The lot number or other information identi-
fying the particular manufacturing batch of the vac-
cine.
‘‘(8) The dose of vaccine that was administered.
‘‘(9) A notation of the presence of any adverse
medical reactions that the child experienced in rela-
tion to the vaccine and of which the health care pro-
vider is aware, in accordance with section 2125.
‘‘(10) The presence of contraindications noted by
the health care provider with respect to administra-
tion of the vaccine to the child.
‘‘(11) Such other data regarding immunizations
for the child, including identifying data, as the Sec-
retary, in consultation with State public health offi-
cials, may require consistent with applicable law (in-
cluding social security account numbers furnished
pursuant to section 205(c)(2)(E) of the Social Secu-
rity Act).
‘‘(d) LIMITATION.—The Secretary may not establish
information reporting requirements in addition to those de-
scribed in subsection (c) if such requirements are unduly
burdensome.
785
HR 2264 EAS
‘‘(e) DATE CERTAIN FOR SUBMISSION TO REGISTRY.—
The Secretary may make a grant under section 2146 only
if the State involved agrees to ensure that, with respect to
a child—
‘‘(1) the data described in subsection (b) are sub-
mitted to the registry under such section as soon as
possible but in no event later than 8 weeks after the
date on which the child is born; and
‘‘(2) the data described in subsection (c) with re-
spect to a vaccine are submitted to such registry as
soon as possible but in no event later than 4 weeks
after the date on which the vaccine is administered to
the child.
‘‘(f) UNIFORMITY IN METHODOLOGIES.—The Secretary
shall, in consultation with State public health officials, es-
tablish standards regarding the methodologies used in estab-
lishing and operating registries under section 2146, and
may make a grant under such section only if the State
agrees to comply with the standards. The Secretary shall
provide maximum flexibility to the States while also retain-
ing a reasonable degree of uniformity among the States in
such methodologies for the purpose of ensuring the utility,
comparability, and exchange of the data maintained in
such registries.
786
HR 2264 EAS
‘‘(g) COORDINATION AMONG STATES.—The Secretary
may make a grant under section 2146 to a State only if,
with respect to the operation of the registry of the State
under such section, the State agrees to transfer that infor-
mation contained in the State registry pursuant to section
2146 to other States upon the request of such States for such
information.
‘‘SEC. 2148. FEDERAL STANDARDS ON CONFIDENTIALITY.
‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the States, shall by regulation establish
standards providing for maintaining the confidential-
ity of the identity of individuals with respect to
whom data are maintained in registries under section
2146. Such standards shall, with respect to a State,
provide that the State is to have in effect laws or reg-
ulations regarding such confidentiality, including ap-
propriate penalties for violation of the laws. The Sec-
retary may make a grant under such section only if
the State involved agrees to comply with the stand-
ards.
‘‘(2) USE OF DISCLOSURE.—
‘‘(A) No personally identifiable information
relating to a child or to the parent or guardian
of such child that is collected or maintained by
787
HR 2264 EAS
the State registry may be used or disclosed by
any holder of such information except as per-
mitted for—
‘‘(i) the monitoring of a child’s immu-
nization status;
‘‘(ii) oversight, audit, and evaluation
of the immunization delivery and registry
systems;
‘‘(iii) activities relating to establishing
and maintaining a safe and effective supply
of recommended childhood vaccine;
‘‘(iv) processing of insurance claims for
payment for vaccine administration (but
only to the extent necessary for processing
claims); and
‘‘(v) administration of the National
Vaccine Injury Compensation Program
under subtitle 2.
‘‘(B) Information regarding immunizations
provided as described in subparagraph (A)(i)
may be used or disclosed only with the written
authorization of the individual to whom it refers
or to the parent with custody of such individual.
‘‘(b) USE OF SOCIAL SECURITY ACCOUNT NUMBERS.—
Any usage or disclosure of data in registries under section
788
HR 2264 EAS
2146 that consists of social security account numbers and
related information which is otherwise permitted under this
part may be exercised only to the extent permitted under
section 205(c)(2)(E) of the Social Security Act. For pur-
poses of the preceding sentence, the term ‘related informa-
tion’ has the meaning given such term in clause (iv)(II)
of such section.
‘‘SEC. 2149. PROVIDER PARTICIPATION.
‘‘(a) IN GENERAL.—The State shall monitor and en-
force compliance by health care providers with the require-
ments of sections 2147 and 2148 and section 2155(b) for
all doses of pediatric vaccine administered in the State. The
State shall establish procedures satisfactory to the Secretary
for discontinuing the distribution of federally purchased or
State purchased vaccine for any health care provider who
fails to comply with the requirements of section 2147 and
for reinstating such vaccine supply to such provider upon
receiving from such provider—
‘‘(1) the reports necessary to make current and
complete the information that would have been fur-
nished to the State registry between the dates of the
provider’s termination and reinstatement; and
‘‘(2) satisfactory assurances regarding the pro-
vider’s future compliance.
789
HR 2264 EAS
‘‘(b) REPORTS TO SECRETARY.—The Secretary may
make a grant under section 2146 only if the State involved
agrees to submit to the Secretary such reports as the Sec-
retary determines to be appropriate with respect to the ac-
tivities of the State under this part.
‘‘SEC. 2150. APPLICATION FOR GRANT.
‘‘An application by a State for a grant under section
2146 is in accordance with this section if the application—
‘‘(1) is submitted not later than the date speci-
fied by the Secretary;
‘‘(2) contains each agreement required in this
part;
‘‘(3) contains any information required in this
part to be submitted to the Secretary; and
‘‘(4) is in such form, is made in such manner,
and contains such agreements, assurances, and infor-
mation as the Secretary determines to be necessary to
carry out this part.
‘‘SEC. 2151. DETERMINATION OF AMOUNT OF ALLOTMENT.
‘‘The Secretary shall determine the amount of the allot-
ments required in section 2146 for States for a fiscal year
in accordance with a formula established by the Secretary
that allots the amounts appropriated under section 2152
for the fiscal year on the basis of the costs of the States
in establishing and operating registries under section 2146.
790
HR 2264 EAS
‘‘SEC. 2152. AUTHORIZATION OF APPROPRIATIONS.
‘‘For the purpose of carrying out this part, other than
section 2153, there are authorized to be appropriated
$152,000,000 for fiscal year 1994, $125,000,000 for fiscal
year 1995, and $35,000,000 for each of the fiscal years 1996
through 1999.
‘‘SEC. 2153. NATIONAL IMMUNIZATION SURVEILLANCE PRO-
GRAM.
‘‘(a) IN GENERAL.—The Secretary shall establish a na-
tional immunization surveillance program for the purpose
of assessing the effects of the programs and activities pro-
vided for in this subtitle towards appropriately immuniz-
ing children and facilitating State immunization registries.
The national immunization surveillance program shall—
‘‘(1) provide technical assistance to States for the
development of vaccination registries and monitoring
systems; and
‘‘(2) receive aggregate epidemiologic data (that is
in a format that is not person specific) collected by
States as provided for in section 2147 at intervals de-
termined appropriate by the Secretary for the purpose
of—
‘‘(A) compiling accurate and up-to-date
surveillance data regarding immunization rates
at the State level in order to assess the progress
791
HR 2264 EAS
made towards achieving nationally established
immunization goals;
‘‘(B) assisting in the effective administra-
tion and management of immunization pro-
grams at the State level by providing technical
assistance to guide immunization program ef-
forts at the request of the State;
‘‘(C) providing technical assistance to
States and localities to facilitate monitoring the
immunization status of children who move across
geographic boundaries that are covered by dif-
ferent State or local registries at the request of
such States or localities; and
‘‘(D) monitoring the safety and effectiveness
of vaccines by linking vaccine dosage informa-
tion with adverse events reporting under section
2125(b) and disease outbreak patterns.
‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sub-
title shall be construed to authorize the release of person
specific information to the Secretary for the purpose of im-
munization surveillance.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are
authorized to be appropriated such sums as may be nec-
essary to carry out this section in each of the fiscal years
1994 through 1999.
792
HR 2264 EAS
‘‘SEC. 2154. REPORT.
‘‘Not later than January 1, 1995, and biennially there-
after, the Secretary shall prepare and submit to the appro-
priate committees of Congress a report concerning the plan-
ning, development, operation and effectiveness of the na-
tional immunization surveillance program and the State
immunization registries.
‘‘Part C—Distribution of Vaccines, Public Outreach
and Education
‘‘SEC. 2155. DISTRIBUTION OF VACCINES.
‘‘(a) IN GENERAL.—
‘‘(1) HEALTH CARE PROVIDERS.—The Secretary
shall provide for the distribution, without charge, of
recommended pediatric vaccines (in accordance with
section 2141) purchased by the Secretary to health
care providers who serve children and who—
‘‘(A) are members of a uniformed service, or
are officers or employees of the United States;
‘‘(B) are health centers (as defined in sec-
tion 2162(2)); or
‘‘(C) provide services under section 503 of
the Indian Health Care Improvement Act or
pursuant to a contract under section 102 of the
Indian Self Determination Act.
‘‘(2) STATES.—The Secretary shall provide for
the distribution, without charge, of those rec-
793
HR 2264 EAS
ommended pediatric vaccines that are purchased by
the Secretary and provided to States for the purposes
of immunizing medicaid-eligible children, and addi-
tional vaccines that may be purchased by the Sec-
retary for children within those States.
‘‘(b) DUTIES OF HEALTH CARE PROVIDERS.—
‘‘(1) FREE PROVISION TO CHILDREN.—A health
care provider or entity receiving vaccine under this
section may use such vaccine only for administration
to children and may not impose a charge for such
vaccine. A provider or health care entity may impose
a fee that reflects actual regional costs as determined
by the Secretary for the administration of such vac-
cine, except that a provider may not deny a child a
vaccination due to the inability of the child’s parent
to pay an administration fee.
‘‘(2) REPORTING REQUIREMENTS.—A health care
provider receiving vaccine under this section shall re-
port the information required under section 2147 to
the applicable State registry operated pursuant to a
grant under section 2146 if such State registry exists.
The provider shall additionally report to such State
registry any occurrence reported to the Secretary pur-
suant to section 2125(b). The provider shall also pro-
vide regular and periodic estimates to the State of the
794
HR 2264 EAS
provider’s future dosage needs for recommended child-
hood vaccines distributed under this section. All re-
ports shall be made with such frequency and in such
detail as the Secretary, in consultation with State
public health officials, may prescribe.
‘‘SEC. 2156. IMPROVED IMMUNIZATION DELIVERY, OUT-
REACH AND EDUCATION.
‘‘(a) FEDERAL
EFFORTS.—The Secretary, acting
through the Centers for Disease Control and Prevention and
in conjunction with State health officials and other appro-
priate public and private organizations, shall conduct the
following activities to improve Federal, State and local vac-
cine delivery systems and immunization outreach and edu-
cation efforts:
‘‘(1) NATIONAL PUBLIC AWARENESS CAMPAIGN.—
‘‘(A) IN GENERAL.—The Secretary, in con-
junction with State health officials and other ap-
propriate public and private organizations, shall
develop and implement a National Immuniza-
tion Public Awareness Campaign to assist fami-
lies (through bilingual means if necessary) of
children under the age of 2 years, and expectant
parents, in obtaining knowledge concerning the
importance of having their children immunized
and in identifying the vaccines, schedules for im-
795
HR 2264 EAS
munization, and vaccine provider locations, ap-
propriate with respect to their children.
‘‘(B) IMPLEMENTATION.—In implementing
the Campaign under subparagraph (A), the Sec-
retary shall ensure that—
‘‘(i) new and innovative methods are
developed and utilized to publicly advertise
the need to have children immunized in a
timely manner;
‘‘(ii) print, radio and television media
are utilized to convey immunization infor-
mation to the public; and
‘‘(iii) with respect to immunization in-
formation, efforts are made to target preg-
nant women and the parents of children
under the age of 2.
‘‘(2) INTERAGENCY
COMMITTEE
ON
IMMUNIZA-
TION.—The Secretary, in conjunction with the Sec-
retary of Agriculture, the Secretary of Housing and
Urban Development, and the Secretary of Education,
shall carry out activities through the Interagency
Committee on Immunization to incorporate immuni-
zation status assessments and referral services as an
integral part of the process by which individuals
apply for assistance under—
796
HR 2264 EAS
‘‘(A) the food stamp program under the
Food Stamp Act of 1977;
‘‘(B) section 17 of the Child Nutrition Act
of 1966;
‘‘(C) the Head Start Act;
‘‘(D) part A of title IV of the Social Secu-
rity Act;
‘‘(E) title XIX of the Social Security Act;
‘‘(F) any of the housing assistance laws of
the United States; and
‘‘(G) other programs determined appro-
priate by any of the Secretaries described in this
paragraph.
‘‘(3) EXPANDED
OPPORTUNITY
FOR
NATIONAL
SERVICE.—The Secretary, in conjunction with the
Commission on National and Community Service
and other independent agencies, is encouraged to de-
velop opportunities for participants in national and
community service programs to contribute to local
initiatives for the improvement of immunization serv-
ices, including public outreach and education efforts.
‘‘(b) GRANTS TO STATES.—
‘‘(1) IN GENERAL.—
‘‘(A) The Secretary may award grants to
States to enable such State to develop, revise and
797
HR 2264 EAS
implement immunization improvement plans as
described in paragraph (2).
‘‘(B) To be eligible to receive a grant under
subparagraph (A), a State shall prepare and
submit to the Secretary an application at such
time, in such manner, and containing such in-
formation as the Secretary may require.
‘‘(2) DESIGN.—A State immunization improve-
ment plan shall be designed to improve immunization
delivery, outreach, education and coordination within
the State. Such plan shall provide for the creation
of—
‘‘(A) a vaccine provider education cam-
paign and the distribution of any other mate-
rials determined to be appropriate by State
health officials—
‘‘(i) to enable such providers to make
the best use of vaccination opportunities;
and
‘‘(ii) to educate such providers concern-
ing their obligation to report immunization
information with respect to their patients to
State registries;
‘‘(B) expanded capacity for the delivery of
immunizations through—
798
HR 2264 EAS
‘‘(i) increasing the number or type of
facilities through which vaccines may be
made available and the capacity of such fa-
cilities to immunize more children;
‘‘(ii) developing alternative methods of
delivering vaccines, such as mobile health
clinics;
‘‘(iii) increasing the number of hours
during which vaccines are made available
by providers within the State; or
‘‘(iv) coordinating with federally quali-
fied health centers to reach and immunize
underserved children through education,
outreach, tracking, and the provision of
services;
except that, the Secretary may waive any spe-
cific requirement of this subparagraph if the Sec-
retary determines that State immunization de-
livery efforts are sufficient without the imposi-
tion of such requirement;
‘‘(C) population-based assessment criteria
through which the State is able to assess the ef-
fectiveness of immunization activities in the
State, which may be fulfilled through the imple-
799
HR 2264 EAS
mentation of a State immunization registry
under section 2146;
‘‘(D) a public awareness campaign, in con-
junction with the National Campaign established
under subsection (a)(1), to provide parents with
information about the importance of immuniza-
tion, the types and schedules for the administra-
tion of vaccines, and the locations of vaccines
providers;
‘‘(E) coordinated community outreach ac-
tivities among public or private health pro-
grams, including local health departments and
health centers, and other public or private enti-
ties, to encourage and facilitate the ability of
parents to obtain immunization services for their
children; and
‘‘(F) other activities that are not inconsist-
ent with the purposes of this subtitle, subject to
the approval of the Secretary.
‘‘(3) IMMUNIZATION
IMPROVEMENT
PLAN
AP-
PROVAL.—
‘‘(A) GOALS.—As part of the immunization
improvement plan of a State, the State shall es-
tablish immunization rate goals for children re-
siding within the State.
800
HR 2264 EAS
‘‘(B) APPROVAL.—The immunization im-
provement plan developed by a State under this
subsection shall be submitted to the Secretary for
approval prior to the distribution of grant funds
to the States under this subsection. The Secretary
shall periodically review the progress that the
State has made under such plan in achieving the
goals established under subparagraph (A).
‘‘(C) 
DISTRIBUTION
OF
GRANTS.—In
awarding grants under this section, the Sec-
retary shall ensure that grant awards will be eq-
uitably distributed between rural and urban
areas. In determining such distribution, the Sec-
retary shall take into account the added costs of
supporting the health care delivery infrastruc-
ture in sparsely populated areas.
‘‘(D) REPORTING.—A State shall annually
prepare and submit to the Director of the Cen-
ters for Disease Control and Prevention a report
concerning the implementation of the State im-
munization improvement plan. If the Director or
the Secretary, in reviewing the reports submitted
under this subparagraph determine that the
State has exceeded the goals established under
subparagraph (A), the Secretary may award a
801
HR 2264 EAS
bonus to the State in an amount not to exceed
5 percent of the amount the State received under
the grant for the purposes of the grant.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are
authorized to be appropriated to carry out this section,
$250,000,000 for fiscal year 1994, and such sums as may
be necessary for each of the fiscal years 1995 through 1999.
‘‘Part D—General Provisions
‘‘SEC. 2161. REPORT.
‘‘Not later than October 1, 1995, and biennially there-
after, the Secretary shall prepare and submit to the appro-
priate committees of Congress a report concerning the costs,
efficiency, and effectiveness of procedures established to de-
liver vaccine to health care providers.
‘‘SEC. 2162. NATIONAL VACCINE PROGRAM.
‘‘The Secretary shall authorize a report to be prepared
by the National Academy of Sciences concerning the role
of the National Vaccine Program established under this title
in achieving progress towards the nationally established im-
munization goals for the year 2000, and recommendations
with respect to the changes in such Program that would
facilitate greater progress towards achieving such goals.
‘‘SEC. 2163. DEFINITIONS.
‘‘For purposes of this subtitle—
802
HR 2264 EAS
‘‘(1) 
HEALTH
CARE
PROVIDER.—The 
term
‘health care provider’, with respect to the administra-
tion of vaccines to children, means an entity that is
licensed or otherwise authorized for such administra-
tion under the law of the State in which the entity
administers the vaccine, subject to section 333(e).
‘‘(2) HEALTH CENTER.—The term ‘health center’
means—
‘‘(A) a federally-qualified health center, as
defined in section 1905(l)(2) of the Social Secu-
rity Act; or
‘‘(B) a public or nonprofit private entity
receiving Federal funds under—
‘‘(i) section 329, 330 or 340;
‘‘(ii) section 340A (relating to grants
for health services for residents of public
housing); or
‘‘(iii) section 501(a)(2) of the Social
Security Act (relating to special projects of
regional and national significance).
‘‘(3) IMMUNIZATION.—The term ‘immunization’
means an immunization against a vaccine-prevent-
able disease.
‘‘(4) PARENT.—The term ‘parent’, with respect
to a child, means a legal guardian of the child.
803
HR 2264 EAS
‘‘(5) PEDIATRIC VACCINE.—The term ‘pediatric
vaccine’ means a vaccine included on the list estab-
lished under section 2141.
‘‘(6) STATE.—The term ‘State’ means the 50
States, the District of Columbia, the Commonwealth
of Puerto Rico, Guam, American Samoa, the U.S.
Virgin Islands, the Republic of the Marshall Islands,
Micronesia, the Northern Mariana Islands, and
Palau.’’.
SEC. 12203. NATIONAL VACCINE INJURY COMPENSATION
PROGRAM AMENDMENTS.
(a) AMENDMENT OF VACCINE INJURY TABLE.—
(1) ADDITION OF VACCINES.—Section 2114 (42
U.S.C. 300aa–14) is amended by adding at the end
thereof the following new subsection:
‘‘(f) ADDITION OF VACCINES TO TABLE.—
‘‘(1) IN
GENERAL.—The Vaccine Injury table
contained in subsection (a) shall also include any rec-
ommended childhood vaccine included in the list pro-
mulgated by the Secretary under section 2141.
‘‘(2) REVIEW OF INFORMATION AND REVISION.—
Not later than 2 years after the addition of a new
vaccine to the table contained in subsection (a), and
on a regular basis thereafter, the Secretary shall re-
view information obtained under sections 2125 and
804
HR 2264 EAS
part B of subtitle 3, and based on such review (and
other relevant information) shall, as appropriate, de-
velop with respect to such new vaccine—
‘‘(A) revisions with respect to illnesses, dis-
abilities, injuries or conditions covered by such
table;
‘‘(B) appropriate specifications of the time
period for the first symptom or manifestation of
onset or of significant aggravation of such ill-
nesses, disabilities, injuries or condition after
vaccine administration, for purposes of receiving
compensation under the Program; and
‘‘(C) recommendations as to the amount of
tax that should be imposed under section 4131 of
the Internal Revenue Code of 1986 for each dose
of vaccine.
‘‘(3) LIMITATION.—The Secretary may modify
the table contained in subsection (a) pursuant to
paragraphs (1) and (2) only in accordance with sub-
section (c).
‘‘(4) 
REVISION.—For 
purposes 
of 
section
2116(b), the addition of vaccine to the table contained
in subsection (a) by operation of this subsection shall
constitute a revision of the table.’’.
805
HR 2264 EAS
(2) ATTORNEYS
FEES.—Section 2115(e) (42
U.S.C. 300aa–15(e)) is amended by adding at the end
thereof the following new paragraph:
‘‘(4) The special master may award reasonable
attorneys fees whether or not an election has been
made under section 2121(a) to file a civil action con-
cerning such petition.’’.
(3) CONSENT FOR ANNUITY.—Subparagraphs (A)
and (B) of section 2115(f)(4) are amended by striking
‘‘, with the consent of the petitioner,’’ each place that
such appears.
(4) TIME PERIODS FOR FEES AND COSTS.—
(A) IN
GENERAL.—Section 2115(e) (42
U.S.C. 300aa–15(e)) (as amended by paragraph
(3)) is further amended by adding at the end
thereof the following new paragraph:
‘‘(5) With respect to a petitioners’ application
for attorneys’ fees and costs—
‘‘(A) if the respondent enters no objection to
such application within 21 days of the date on
which the application was filed (unless such time
period is extended by the special master with the
consent of the petitioner) the special master shall
enter a decision on such application within 30
days of such filing;
806
HR 2264 EAS
‘‘(B) if the respondent files an objection to
such application and the special master does not
enter a decision with respect to the application
within 60 days after the date on which the objec-
tion is filed, the special master involved shall,
upon the written request of the petitioner, enter
a decision within 15 days after the filing of such
request; and
‘‘(C) if the respondent files an objection to
such application and the petitioner moves to re-
duce costs and fees as provided for in the objec-
tion, the special master shall enter a decision
within 5 days after the receipt of the petitioner’s
motion.
The chief special master, upon the request of a special
master, may waive the time limitations applicable to
the special master under this paragraph if the special
master demonstrates that complicating factors exist
with respect to the issues involved to which the time
limitation applies.’’.
(B) APPLICATION.—The amendment made
by subparagraph (A) shall apply to all petition-
ers’ applications for attorneys’ fees and costs
filed under section 2115(e) of the Public Health
807
HR 2264 EAS
Service Act which are pending on the date of en-
actment of this Act.
(5) AUTHORIZATION OF APPROPRIATIONS.—Sec-
tion 2115(j) (42 U.S.C. 300aa–15(j)) is amended by
striking ‘‘$80,000,000 for each succeeding fiscal year’’
and inserting in lieu thereof ‘‘$110,000,000 for each
succeeding fiscal year’’.
(6) LIMITATION OF ACTIONS.—Section 2116(b)
(42 U.S.C. 300aa–16(b)) is amended by striking
‘‘such person may file’’ and inserting ‘‘or to signifi-
cantly increase the likelihood of obtaining compensa-
tion, such person may, notwithstanding section
2111(b)(2), file’’.
(b) EXTENSION OF TIME FOR DECISION.—
(1) JURISDICTION.—Section 2112(d)(3)(D) (42
U.S.C. 300aa–12(d)(3)(D)) is amended by striking
‘‘540 days’’ and inserting ‘‘30 months (but for not
more than 6 months at a time)’’.
(2) REPORT
ON
COLLECTIONS.—Section 2117
(42 U.S.C. 300aa–17) is amended by adding at the
end thereof the following new subsection:
‘‘(c) REPORT.—The Attorney General shall, on Janu-
ary 1 of each year, prepare and submit to the appropriate
committees of Congress a report concerning amounts col-
lected under this section.’’.
808
HR 2264 EAS
(3) INCREASED RESPONSIBILITIES OF COMMIS-
SION.—Section 2119(f) (42 U.S.C. 300aa–19(f)) is
amended—
(A) by striking ‘‘and’’ at the end of para-
graph (4);
(B) by striking the period at the end of
paragraph (5) and inserting ‘‘, and’’; and
(C) by adding at the end thereof the follow-
ing new paragraph:
‘‘(6) monitor the balance of the Vaccine Injury
Trust Fund established by section 9510 of the Inter-
nal Revenue Code and, as appropriate, recommend
changes in the tax per dose of vaccine imposed under
section 4131 of such Code.’’.
(c) SIMPLIFICATION OF VACCINE INFORMATION MATE-
RIALS.—
(1) INFORMATION.—Section 2126(b) (42 U.S.C.
300aa–26(b)) is amended—
(A) by striking ‘‘by rule’’ in the matter pre-
ceding paragraph (1);
(B) in paragraph (1), by striking ‘‘90’’ and
inserting ‘‘30’’; and
(C) in paragraph (2), by striking ‘‘, appro-
priate health care providers and parent organi-
zations’’.
809
HR 2264 EAS
(2) 
REQUIREMENTS.—Section 
2126(c) 
(42
U.S.C. 300aa–26(c)) is amended—
(A) in the matter preceding paragraph (1),
by inserting ‘‘shall be based on available data
and information,’’ after ‘‘such materials’’; and
(B) by striking out paragraphs (1) through
(10) and inserting in lieu thereof the following
new paragraphs:
‘‘(1) a concise description of the benefits of the
vaccine;
‘‘(2) a concise description of the risks associated
with the vaccine;
‘‘(3) a statement of the availability of the Na-
tional Vaccine Injury Compensation Program;
‘‘(4) a statement of the availability from the Sec-
retary of more detailed written information concern-
ing the information required under paragraphs (1),
(2), and (3), that shall be made available to the par-
ent, legal guardian, or other responsible person upon
request; and
‘‘(5) such other relevant information as deter-
mined appropriate by the Secretary.’’.
(3) OTHER INDIVIDUALS.—Subsections (a) and
(d) of section 2126 (42 U.S.C. 300aa–26(a) and (d))
are amended by inserting ‘‘or to any other individ-
810
HR 2264 EAS
ual’’ immediately after ‘‘to the legal representative of
any child’’ each place that such occurs.
(4) PROVIDER DUTIES.—Subsection (d) of sec-
tion 2126 (42 U.S.C. 300aa–26(d)) is amended—
(A) by striking all after ‘‘subsection (a),’’
the second place it appears in the first sentence
and inserting ‘‘supplemented with visual presen-
tations or oral explanations, in appropriate
cases.’’; and
(B) by striking ‘‘or other information’’ in
the last sentence.
(d) AUTHORIZATION OF APPROPRIATIONS.—Part A of
subtitle 2 of title XXI (42 U.S.C. 300aa–10 et seq.) is
amended by adding at the end thereof the following new
section:
‘‘AUTHORIZATION OF APPROPRIATIONS
‘‘SEC. 2120. (a) SECRETARY.—For purposes of admin-
istering this part, there are authorized to be appropriated
from the Vaccine Injury Compensation Trust Fund estab-
lished under section 9510(c) of the Internal Revenue Code
of 1986, to the Secretary, $3,000,000 for each of the fiscal
years 1994, 1995 and 1996.
‘‘(b) ATTORNEY GENERAL.—For purposes of admin-
istering this part, there are authorized to be appropriated
from the Vaccine Injury Compensation Trust Fund de-
811
HR 2264 EAS
scribed in subsection (a), to the Attorney General,
$3,000,000 for each of the fiscal years 1994, 1995 and 1996.
‘‘(c) COURT OF FEDERAL CLAIMS.—For purposes of
administering this part, there are authorized to be appro-
priated from the Vaccine Injury Compensation Trust Fund
described in subsection (a), to the Court of Federal Claims,
$3,000,000 for each of the fiscal years 1994, 1995 and
1996.’’.
SEC. 12204. MISCELLANEOUS PROVISIONS.
Section 317(k) (42 U.S.C. 247b(k)) is amended—
(1) by striking out paragraph (1); and
(2) by redesignating paragraphs (2) through (5)
as paragraphs (1) and (4), respectively.
SEC. 12205. PERFORMANCE BASED GRANT PROGRAM.
(a) ANNUAL REPORT.—Not later than July 1 of each
year, a State shall prepare and submit to the Director of
the Center for Disease Control and Prevention a report that
contains an estimate (based on a base population sample)
of the percentage of 2 year old residents of the State who
have been fully immunized as described in subsection (c).
(b) PAYMENTS TO STATES.—
(1) IN GENERAL.—Subject to the availability of
appropriations, the Secretary of Health and Human
Services shall provide to a State that has submitted
an annual report under subsection (a) that dem-
812
HR 2264 EAS
onstrates that the State has fully immunized at least
50 percent of the 2 year old residents of that State,
with respect to the year for which the report was pre-
pared, a payment in an amount equal to—
(A) with respect to a State that has dem-
onstrated the full immunization of at least 50
and less than 65 percent of all 2 year old resi-
dents of the State, $50 multiplied by the number
of fully immunized 2 year old resident children
in excess of the number of children equaling such
50 percent amount;
(B) with respect to a State that has dem-
onstrated the full immunization of at least 65
and less than 70 percent of all 2 year old resi-
dents of the State, $75 multiplied by the number
of fully immunized 2 year old resident children
in excess of the number of children equaling such
65 percent amount; and
(C) with respect to a State that has dem-
onstrated the full immunization of at least 70
and less than 91 percent of all 2 year old resi-
dents of the State, $100 multiplied by the num-
ber of fully immunized 2 year old resident chil-
dren in excess of the number of children equaling
such 70 percent amount.
813
HR 2264 EAS
(2) As a condition of receiving amounts under
this section—
(i) States which combine State and Federal
funds to reach immunization goals shall agree to
reinvest in activities related to improving immu-
nization services that percentage of the payment
under subsection (b)(1) which is equal to the
Federal contribution to immunization services in
the State proportional to the State contribution
to such services.
(ii) States which verify that State-only
funds are responsible for the increase in immu-
nization rates that qualifies such State for pay-
ment under subsection (b)(1) may use amounts
awarded under this section for other purposes at
the State’s discretion.
(3) VERIFICATION.—Prior to making a payment
to a State under this subsection, the Secretary of
Health and Human Services shall, in collaboration
with the Centers for Disease Control and Prevention,
verify the accuracy of the State report involved.
(c) DEFINITION.—For purposes of this section, the
term ‘‘fully immunized’’ means a 2 year old child that has
received four doses of DTP vaccine (diphtheria, tetanus,
814
HR 2264 EAS
pertussis), three doses of polio vaccine, and one dose of
MMR (measles, mumps, rubella) vaccine.
Subtitle D—ERISA Amendments
CHAPTER 1—GROUP HEALTH AMENDMENTS
SEC. 12301. COORDINATION OF ERISA PREEMPTION RULES
WITH SOCIAL SECURITY ACT PROVISIONS
PROVIDING FOR LIABILITY OF THIRD PAR-
TIES AND CHILD HEALTH INSURANCE SUP-
PORT ENFORCEMENT.
(a) IN GENERAL.—Paragraph (8) of section 514(b) of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1144(b)(8)) is amended to read as follows:
‘‘(8)(A) Subsection (a) of this section shall not apply
to any State law to the extent necessary to permit the State
to comply with the following requirements for the receipt
of Federal financial assistance under title XIX of the Social
Security Act:
‘‘(i) subparagraphs (A), (B), and (I) of section
1902(a)(25) of such Act (relating to third-party li-
ability) and section 1903(o) of such Act (relating to
medicaid as secondary payor), as in effect on October
1, 1993; and
‘‘(ii) sections 1902(a)(60) and 1908 of such Act
(relating to assignment of rights of payment and
child health insurance support), as in effect on the
815
HR 2264 EAS
date of the enactment of the Omnibus Budget Rec-
onciliation Act of 1993.
‘‘(B) Paragraph (2)(B) shall not apply to any State
law to the extent necessary to permit the compliance of the
State with any of the requirements described in subpara-
graph (A).’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect October 1, 1993.
SEC. 12302. CONTINUED COVERAGE OF COSTS OF A PEDI-
ATRIC 
VACCINE 
UNDER 
GROUP 
HEALTH
PLANS.
(a) IN GENERAL.—Part 6 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1161 et seq.) is amended by adding at the end the
following new section:
‘‘SEC. 609. CONTINUED COVERAGE OF COSTS OF A PEDI-
ATRIC 
VACCINE 
UNDER 
GROUP 
HEALTH
PLANS.
‘‘A group health plan may not reduce its coverage of
the costs of pediatric vaccines (as defined under section
2162 of the Public Health Service Act) below the coverage
it provided as of May 1, 1993.’’.
816
HR 2264 EAS
(b) CONFORMING AMENDMENT.—The table of contents
in section 1 of such Act is amended by adding after the
item relating to section 608 the following new item:
‘‘Sec. 609. Continued coverage of costs of a pediatric vaccine under group health
plans.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to plan years beginning
after the date of the enactment of this Act.
CHAPTER 3—PUBLIC HEALTH SERVICE ACT
SEC. 12321. PROHIBITION ON REDUCTION IN COVERAGE OF
PEDIATRIC VACCINE.
Part D of subtitle 2 of title XXI of the Public Health
Service Act (42 U.S.C. 300aa–31 et seq.) is amended by
adding at the end thereof the following new section:
‘‘SEC. 2135. PROHIBITION ON REDUCTION IN COVERAGE OF
PEDIATRIC VACCINE.
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, a health insurance policy in effect prior to May
1, 1993, may not reduce the level of coverage for the costs
of pediatric vaccines below the level of coverage provided
on the date of enactment of this section.
‘‘(b) CIVIL MONEY PENALTY.—
‘‘(1) IN GENERAL.—An entity that fails to com-
ply with subsection (a) shall be subject, in addition
to any other penalties that may be prescribed by law,
to a civil money penalty of not to exceed $1,000 for
817
HR 2264 EAS
each individual with respect to whom such a failure
occurs.
‘‘(2) ENFORCEMENT.—With respect to an entity
that offers a health insurance policy in violation of
subsection (a), the provisions of section 353(h)(3), re-
garding procedures for the imposition of civil money
penalties developed by the Secretary, shall apply in
the same manner as such provisions apply to pen-
alties or proceedings under section 353.
‘‘(c) DEFINITIONS.—As used in this section:
‘‘(1) HEALTH
INSURANCE
POLICY.—The term
‘health insurance policy’ has the same meaning given
the term ‘employee welfare benefit plan’ in section
3(1) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1002(1)) and includes any other
policy or plan which provides coverage for the provi-
sion of health care services (including a health main-
tenance organization agreement).
‘‘(2) PEDIATRIC VACCINES.—The term ‘pediatric
vaccines’ has the same meaning given such term in
section 2163.’’.
818
HR 2264 EAS
TITLE XIII—VETERANS’
PROGRAMS
SEC. 13001. PERMANENT EXTENSION OF LIMITATION ON
PENSION FOR CERTAIN RECIPIENTS OF MED-
ICAID-COVERED NURSING HOME CARE.
Section 5503(f) of title 38, United States Code, is
amended by striking out paragraph (7).
SEC. 13002. POLICY REGARDING COST-OF-LIVING ADJUST-
MENT IN COMPENSATION RATES.
The fiscal year 1994 cost-of-living adjustments in the
rates of and limitations for compensation payable under
chapter 11 of title 38, United States Code, and of depend-
ency and indemnity compensation payable under chapter
13 of such title will be no more than a percentage equal
to the percentage by which benefit amounts payable under
title II of the Social Security Act (42 U.S.C. 401 et seq.)
are increased effective December 1, 1993, as a result of a
determination under section 215(i) of such Act (42 U.S.C.
415(i)), with all increased monthly rates and limitations
(other than increased rates or limitations equal to a whole
dollar amount) rounded down to the next lower dollar. The
effective date of such adjustments shall not be earlier than
December 4, 1993.
819
HR 2264 EAS
SEC. 13003. REDUCTION IN BASIC PAY AND INCENTIVES OF
MONTGOMERY GI BILL PARTICIPANTS.
(a) ACTIVE DUTY.—Section 3011(b) of title 38, United
States Code, is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’;
(2) by designating the second sentence as para-
graph (2); and
(3) in paragraph (1), as so designated, by strik-
ing out ‘‘shall be reduced by’’ and all that follows
through the period and inserting in lieu thereof ‘‘shall
be reduced by—
‘‘(A) in the case of an individual who first enters
on active duty before October 1, 1993, $100 for each
of the first 12 months that such individual is entitled
to such pay;
‘‘(B) in the case of an individual who first enters
on active duty during the fiscal year beginning on
October 1, 1993, $137 for each of the first 12 months
that such individual is entitled to such pay; and
‘‘(C) in the case of an individual who first enters
on active duty during any fiscal year beginning after
September 30, 1994, an amount for each of the first
12 months that such individual is entitled to such
pay that is equal to the amount of the monthly pay
reduction of an individual under this paragraph dur-
ing the previous fiscal year increased by the same
820
HR 2264 EAS
percentage, if any, as the percentage by which month-
ly rates of educational assistance are increased for
such fiscal year under section 3015(g)(3) of this
title.’’.
(b) SELECTED RESERVE.—Section 3012(c) of such
title is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(c)’’;
(2) by designating the second sentence as para-
graph (2); and
(3) in paragraph (1), as so designated, by strik-
ing out ‘‘shall be reduced by’’ and all that follows
through the period and inserting in lieu thereof ‘‘shall
be reduced by—
‘‘(A) in the case of an individual who first enters
on active duty before October 1, 1993, $100 for each
of the first 12 months that such individual is entitled
to such pay;
‘‘(B) in the case of an individual who first enters
on active duty during the fiscal year beginning on
October 1, 1993, $137 for each of the first 12 months
that such individual is entitled to such pay; and
‘‘(C) in the case of an individual who first enters
on active duty during any fiscal year beginning after
September 30, 1994, an amount for each of the first
12 months that such individual is entitled to such
821
HR 2264 EAS
pay that is equal to the amount of the monthly pay
reduction of an individual under this paragraph dur-
ing the previous fiscal year increased by the same
percentage, if any, as the percentage by which month-
ly rates of educational assistance are increased for
such fiscal year under section 3015(g)(3) of this
title.’’.
(c) ENROLLMENT BEFORE INVOLUNTARY SEPARA-
TION.—Section 3018A(b) of such title is amended by strik-
ing out ‘‘$1,200’’ and inserting in lieu thereof ‘‘an amount
equal to 12 times the amount of the monthly pay reduction
determined for the individual in accordance with section
3011(b)(1) or section 3012(c)(1) of this title. For the pur-
poses of such determination, the date of the individual’s
election to receive assistance under subsection (a)(5) shall
be considered the date that the individual first enters on
active duty.’’.
(d) ENROLLMENT BY VOLUNTARY SEPARATION INCEN-
TIVE RECIPIENTS.—Section 3018B(b)(1) of such title is
amended by striking out ‘‘$1,200’’ and inserting in lieu
thereof ‘‘an amount equal to 12 times the amount of the
monthly pay reduction determined for the individual in ac-
cordance with section 3011(b)(1) or section 3012(c)(1) of
this title. For the purposes of such determination, the date
of the individual’s election to receive assistance under sub-
823
HR 2264 EAS
(4) in subparagraph (C), by striking out ‘‘0.50
percent’’ and inserting in lieu thereof ‘‘1.25 percent’’;
and
(5) in subparagraph (D)—
(i) by striking out ‘‘two percent’’ in clause
(i) and inserting in lieu thereof ‘‘2.75 percent’’;
(ii) by striking out ‘‘one percent’’ in clause
(ii) and inserting in lieu thereof ‘‘1 percent’’;
(iii) by striking out ‘‘1.50 percent’’ in
clause (iii)(I) and inserting in lieu thereof ‘‘2.25
percent’’; and
(iv) by striking out ‘‘1.25 percent’’ in clause
(iii)(II) and inserting in lieu thereof ‘‘2 per-
cent’’.
(b) FEE FOR MANUFACTURED HOMES.—Such para-
graph is further amended—
(1) in subparagraph (A), by striking out ‘‘or for
any purpose specified in section 3712 of this title
(other than section 3712(a)(1)(F))’’;
(2) by striking out ‘‘and’’ at the end of subpara-
graph (D);
(3) by striking out the period at the end of sub-
paragraph (E) and inserting in lieu thereof ‘‘; and’’;
and
(4) by adding at the end the following:
824
HR 2264 EAS
‘‘(F) in the case of a loan made for any purpose
specified in section 3712 of this title (other than sub-
section (a)(1)(F) of such section), the amount of such
fee shall be one percent of the total loan amount.’’.
(c) REPEAL OF TEMPORARY INCREASE IN FEES.—
Such section is further amended—
(1) in paragraph (2), by striking out ‘‘Except as
provided in paragraph (6) of this subsection, the’’ in
the matter above subparagraph (A) and inserting in
lieu thereof ‘‘The’’; and
(2) by striking out paragraph (6).
SEC. 13006. PERMANENT EXTENSION OF MEDICAL CARE
COST RECOVERY AUTHORITY.
Section 1729(a)(2)(E) of title 38, United States Code,
is amended by striking out ‘‘before August 1, 1994,’’.
SEC. 13007. PERMANENT EXTENSION OF REQUIREMENT
THAT 
CERTAIN 
VETERANS 
MAKE
COPAYMENTS FOR HEALTH-CARE SERVICES.
(a) MEDICATION COPAYMENT REQUIREMENT.—Sec-
tion 1722A of title 38, United States Code, is amended by
striking out subsection (c).
(b) HEALTH-CARE CATEGORIES AND COPAYMENTS.—
Section 8013 of the Omnibus Budget Reconciliation Act of
1990 (38 U.S.C. 1710 note) is amended by striking out sub-
section (e).
825
HR 2264 EAS
SEC. 13008. PERMANENT AUTHORITY TO VERIFY INCOME
ELIGIBILITY FOR NEED-BASED BENEFITS.
(a) AUTHORITY FOR SECRETARY OF VETERANS AF-
FAIRS TO OBTAIN INFORMATION.—Section 5317 of title 38,
United States Code, is amended by striking out subsection
(g).
(b) AUTHORITY FOR SECRETARY OF TREASURY TO
PROVIDE INFORMATION.—Section 6103(l)(7)(D) of the In-
ternal Revenue Code of 1986 is amended by striking out
the last sentence.
TITLE XIV—ENFORCEMENT
PROCEDURES
Part A—Extension of Budget
Enforcement
SEC. 14001. PURPOSE.
The Congress declares that it is essential to—
(1) preserve the deficit reduction achieved by this
Act;
(2) extend the system of discretionary spending
limits for the single discretionary category set forth in
section 601 of the Congressional Budget Act of 1974;
(3) extend the pay-as-you-go enforcement system;
and
(4) prohibit the consideration of direct spending
or receipts legislation that would decrease the pay-as-
you-go surplus achieved by this Act and created under
826
HR 2264 EAS
section 252 of the Balanced Budget and Emergency
Deficit Control Act of 1985.
SEC. 14002. DISCRETIONARY SPENDING LIMITS.
(a) DEFINITION
OF
‘‘DISCRETIONARY
SPENDING
LIMIT’’.—Section 601(a)(2) of the Congressional Budget
Act of 1974 is amended—
(1) in subparagraph (D) by striking the word
‘‘and’’; and
(2) by inserting after subparagraph (E) the fol-
lowing:
‘‘and
‘‘(F) with respect to fiscal years 1996, 1997,
and 1998, for the discretionary category, the
amounts set forth for those years in section
12(b)(1) of House Concurrent Resolution 64
(One Hundred Third Congress);’’.
(b) POINT
OF ORDER
IN
THE SENATE.—Section
601(b)(1) of the Congressional Budget Act of 1974 is
amended to read as follows:
‘‘(1) Except as otherwise provided in this sub-
section, it shall not be in order in the Senate to con-
sider any concurrent resolution on the budget for fis-
cal year 1995, 1996, 1997, or 1998 (or amendment,
motion, or conference report on such a resolution)
827
HR 2264 EAS
that would exceed any of the discretionary spending
limits in this section.’’.
(c) CONFORMING AMENDMENTS.—(1) Section 251 of
the Balanced Budget and Emergency Deficit Control Act
of 1985 is amended—
(A) in subsection (a) by striking ‘‘FISCAL YEARS
1991–1995 ENFORCEMENT.—’’ and inserting ‘‘FISCAL
YEARS 1991–1998 ENFORCEMENT.—‘‘;
(B) in subsection (b)(1)—
(i) in the matter before subparagraph (A),
by—
(I) striking ‘‘When the President sub-
mits the budget under section 1105(a) of
title 31, United States Code, for budget year
1992, 1993, 1994, or 1995’’ and inserting
‘‘When the President submits the budget
under section 1105(a) of title 31, United
States Code, for budget year 1992, 1993,
1994, 1995, 1996, 1997, or 1998’’; and
(II) striking ‘‘the budget shall include,
adjustments to discretionary spending lim-
its (and those limits as cumulatively ad-
justed) for the budget year and each outyear
through 1995’’ and inserting ‘‘the budget
shall include, adjustments to discretionary
828
HR 2264 EAS
spending limits (and those limits as cumu-
latively adjusted) for the budget year and
each outyear through 1998’’;
(ii) in paragraph (1)(B), by inserting at
the end thereof the following new clause:
‘‘(iii) For a budget submitted for budg-
et year 1996, 1997, or 1998, the adjust-
ments shall be those necessary to reflect
changes in inflation estimates since those of
March 31, 1993, set forth on page 46 of
House Conference Report 103–48.’’;
(iii) in the matter before subparagraph (A)
in paragraph (2) by—
(I) striking ‘‘When OMB submits a se-
questration report under section 254 (g) or
(h) for fiscal year 1991, 1992, 1993, 1994,
or 1995’’ and inserting ‘‘When OMB sub-
mits a sequestration report under section
254 (g) or (h) for fiscal year 1991, 1992,
1993, 1994, 1995, 1996, 1997, or 1998’’;
and
(II) striking ‘‘for the fiscal year and
each succeeding year through 1995,’’ and
inserting ‘‘for the fiscal year and each suc-
ceeding year through 1998,’’;
829
HR 2264 EAS
(iv) in paragraph (2)(D)(i), by striking
‘‘for fiscal year 1991, 1992, 1993, 1994, or
1995,’’ and inserting ‘‘for any fiscal year,’’;
(v) in paragraph (2)(E), by—
(I) striking the final word ‘‘and’’ in
subparagraph (ii); and
(II) inserting before the final period
the following:
‘‘; and
‘‘(iv) if, for fiscal years 1994, 1995,
1996, 1997, and 1998, the amount of new
budget authority provided in appropriation
Acts exceeds the discretionary spending
limit on new budget authority due to tech-
nical estimates made by the director of the
Office of Management and Budget, the ad-
justment is the amount of the excess, but not
to exceed an amount (for any one fiscal
year) equal to 0.1 percent of the adjusted
descretionary spending limit on new budget
authority for that fiscal year’’; and
(vi) in paragraph (2)(F), by inserting im-
mediately before the final period the following: ‘‘,
and not to exceed 0.5 percent of the adjusted
830
HR 2264 EAS
descretionary spending limit on outlays for the
fiscal year in fiscal year 1996, 1997, or 1998’’.
(2) REPORTS.—Sections 254(d)(2) and 254(g)(2)(A) of
the Balanced Budget and Emergency Deficit Control Act
of 1985 are each amended by striking ‘‘1995’’ and inserting
‘‘1998’’.
(3) EXPIRATION.—(A) Notwithstanding section 275(b)
of the Balanced Budget and Emergency Deficit Control Act
of 1985, sections 250, 251, 252, and 254 through 258C of
that Act shall expire on September 30, 1998.
(B) Section 607 of the Congressional Budget Act of
1974 is amended by striking ‘‘shall apply to fiscal years
1991 to 1995’’ and inserting ‘‘shall apply to fiscal years
1991 to 1998’’.
SEC. 14003. ENFORCING PAY-AS-YOU-GO.
(a) Section 252 of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 is amended—
(1) in subsection (a), by striking ‘‘FISCAL YEAR
1992–1995 ENFORCEMENT.’’ and inserting ‘‘FISCAL
YEAR 1992–1998 ENFORCEMENT.’’;
(2) in subsection (d), by striking ‘‘estimate of the
amount of change in outlays or receipts, as the case
may be, in each fiscal year through fiscal year 1995’’
both places that it appears and inserting ‘‘estimate of
the amount of change in outlays or receipts, as the
831
HR 2264 EAS
case may be, in each fiscal year through fiscal year
1998’’ both places; and
(3) in subsection (e), by striking ‘‘for fiscal year
1991, 1992, 1993, 1994, or 1995,’’ and inserting ‘‘for
any fiscal year from 1991 through 1998,’’.
(b) Section 254(g)(3) of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended by strik-
ing ‘‘1995’’ and inserting ‘‘1998’’.
(c) Upon enactment of this Act, the director of the Of-
fice of Management and Budget shall reduce the balances
of direct spending and receipts legislation applicable to each
fiscal year under section 252 of the Balanced Budget and
Emergency Deficit Control Act of 1985 by an amount equal
to the net deficit reduction achieved through the enactment
in this Act of direct spending and receipts legislation for
that year.
SEC. 14004. EXERCISE OF RULE-MAKING POWERS.
The Congress enacts the provisions of this part—
(1) as an exercise of the rule-making power of
the Senate and the House of Representatives, respec-
tively, and as such these provisions shall be consid-
ered as part of the rules of each House, respectively,
or of that House to which they specifically apply, and
such rules shall supersede other rules only to the ex-
tent that they are inconsistent therewith; and