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‘‘(4) SUBCONTRACTOR ADMINISTRATIVE ACTIVI-
TIES.—For the purposes of this subsection, subcon-
tractor administrative activities include— 
‘‘(A) usual and recognized overhead activi-
ties, including established indirect rates for 
agencies; 
‘‘(B) management oversight of specific pro-
grams funded under this title; and 
‘‘(C) other types of program support such 
as quality assurance, quality control, and re-
lated activities. 
‘‘(5) CLINICAL QUALITY MANAGEMENT.— 
‘‘(A) REQUIREMENT.—The chief elected 
official of an eligible area that receives a grant 
under this part shall provide for the establish-
ment of a clinical quality management program 
to assess the extent to which HIV health serv-
ices provided to patients under the grant are 
consistent with the most recent Public Health 
Service guidelines for the treatment of HIV/ 
AIDS and related opportunistic infection, and 
as applicable, to develop strategies for ensuring 
that such services are consistent with the guide-
lines for improvement in the access to and qual-
ity of HIV health services. 
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‘‘(B) USE OF FUNDS.— 
‘‘(i) IN GENERAL.—From amounts re-
ceived under a grant awarded under this 
subpart for a fiscal year, the chief elected 
official of an eligible area may use for ac-
tivities associated with the clinical quality 
management program required in subpara-
graph (A) not to exceed the lesser of— 
‘‘(I) 5 percent of amounts re-
ceived under the grant; or 
‘‘(II) $3,000,000. 
‘‘(ii) RELATION
TO
LIMITATION
ON 
ADMINISTRATIVE EXPENSES.—The costs of 
a clinical quality management program 
under subparagraph (A) may not be con-
sidered administrative expenses for pur-
poses of the limitation established in para-
graph (1). 
‘‘(i) CONSTRUCTION.—A chief elected official may 
not use amounts received under a grant awarded under 
this part to purchase or improve land, or to purchase, con-
struct, or permanently improve (other than minor remod-
eling) any building or other facility, or to make cash pay-
ments to intended recipients of services.’’. 
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SEC. 106. ADDITIONAL AMENDMENTS TO PART A. 
(a) REPORTING OF CASES.—Section 2601(a) of the 
Public Health Service Act (42 U.S.C. 300ff-11(a)) is 
amended by striking ‘‘for the most recent period’’ and in-
serting ‘‘during the most recent period’’. 
(b) PLANNING COUNCIL REPRESENTATION.—Section 
2602(b)(2)(G) of the Public Health Service Act (42 
U.S.C. 300ff-12(b)(2)(G)) is amended by inserting ‘‘, 
members of a Federally recognized Indian tribe as rep-
resented in the population, individuals co-infected with 
hepatitis B or C’’ after ‘‘disease’’. 
(c) APPLICATION FOR GRANT.— 
(1) 
PAYER
OF
LAST
RESORT.—Section 
2605(a)(6)(A) of the Public Health Service Act (42 
U.S.C. 300ff-15(a)(6)(A)) is amended by inserting 
‘‘(except for a program administered by or providing 
the services of the Indian Health Service)’’ before 
the semicolon. 
(2) AUDITS.—Section 2605(a) of the Public 
Health Service Act (42 U.S.C. 300ff-15(a)) is 
amended— 
(A) in paragraph (8), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (9), by striking the pe-
riod and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
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‘‘(10) that the chief elected official will submit 
to the lead State agency under section 2617(b)(4), 
audits, consistent with Office of Management and 
Budget circular A133, regarding funds expended in 
accordance with this part every 2 years and shall in-
clude necessary client-based data to compile unmet 
need calculations and Statewide coordinated state-
ments of need process.’’. 
(3) COORDINATION.—Section 2605(b) of the 
Public Health Service Act (42 U.S.C. 300ff-15(b)) is 
amended— 
(A) in paragraph (3), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (4), by striking the pe-
riod and inserting a semicolon; and 
(C) by adding at the end the following: 
‘‘(5) the manner in which the expected expendi-
tures are related to the planning process for States 
that receive funding under part B (including the 
planning process described in section 2617(b)); and 
‘‘(6) the expected expenditures and how those 
expenditures will improve overall client outcomes, as 
described under the State plan under section 
2617(b), and through additional outcomes measures 
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as identified by the HIV health services planning 
council under section 2602(b).’’. 
SEC. 107. NEW PROGRAM IN PART A; TRANSITIONAL 
GRANTS FOR CERTAIN AREAS INELIGIBLE 
UNDER SECTION 2601. 
(a) IN GENERAL.—Part A of title XXVI of the Public 
Health Service Act (42 U.S.C. 300ff-11) is amended— 
(1) by inserting after the part heading the fol-
lowing: 
‘‘Subpart I—General Grant Provisions’’; and 
(2) by adding at the end the following: 
‘‘Subpart II—Transitional Grants 
‘‘SEC. 2609. ESTABLISHMENT OF PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Administrator of the Health Resources and Services 
Administration, shall make grants for the purpose of pro-
viding services described in section 2604 in transitional 
areas, subject to the same provisions regarding the alloca-
tion of grant funds as apply under subsection (c) of such 
section. 
‘‘(b) TRANSITIONAL AREAS.—For purposes of this 
section, the term ‘transitional area’ means, subject to sub-
section (c), a metropolitan area for which there has been 
reported to and confirmed by the Director of the Centers 
for Disease Control and Prevention a cumulative total of 
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at least 1,000, but fewer than 2,000, cases of AIDS dur-
ing the most recent period of 5 calendar years for which 
such data are available. 
‘‘(c) CERTAIN ELIGIBILITY RULES.— 
‘‘(1) FISCAL
YEAR
2007.—With respect to 
grants under subsection (a) for fiscal year 2007, a 
metropolitan area that received funding under sub-
part I for fiscal year 2006 but does not for fiscal 
year 2007 qualify under such subpart as an eligible 
area and does not qualify under subsection (b) as a 
transitional area shall, notwithstanding subsection 
(b), be considered a transitional area. 
‘‘(2) CONTINUED
STATUS
AS
TRANSITIONAL 
AREA.— 
‘‘(A) IN GENERAL.—Notwithstanding sub-
section (b), a metropolitan area that is a transi-
tional area for a fiscal year continues, except as 
provided in subparagraph (B), to be a transi-
tional area until the metropolitan area fails, for 
three consecutive fiscal years— 
‘‘(i) to qualify under such subsection 
as a transitional area; and 
‘‘(ii) to have a cumulative total of 
1,500 or more living cases of AIDS (re-
ported to and confirmed by the Director of 
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the Centers for Disease Control and Pre-
vention) as of December 31 of the most re-
cent calendar year for which such data is 
available. 
‘‘(B) EXCEPTION REGARDING STATUS AS 
ELIGIBLE AREA.—Subparagraph (A) does not 
apply for a fiscal year if the metropolitan area 
involved qualifies under subpart I as an eligible 
area. 
‘‘(d) APPLICATION OF CERTAIN PROVISIONS OF SUB-
PART I.— 
‘‘(1) ADMINISTRATION; PLANNING COUNCIL.— 
‘‘(A) IN GENERAL.—The provisions of sec-
tion 2602 apply with respect to a grant under 
subsection (a) for a transitional area to the 
same extent and in the same manner as such 
provisions apply with respect to a grant under 
subpart I for an eligible area, except that, sub-
ject to subparagraph (B), the chief elected offi-
cial of the transitional area may elect not to 
comply with the provisions of section 2602(b) if 
the official provides documentation to the Sec-
retary that details the process used to obtain 
community input (particularly from those with 
HIV) in the transitional area for formulating 
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the overall plan for priority setting and allo-
cating funds from the grant under subsection 
(a). 
‘‘(B) EXCEPTION.—For each of the fiscal 
years 2007 through 2009, the exception de-
scribed in subparagraph (A) does not apply if 
the transitional area involved received funding 
under subpart I for fiscal year 2006. 
‘‘(2) TYPE
AND
DISTRIBUTION
OF
GRANTS; 
TIMEFRAME FOR OBLIGATION AND EXPENDITURE OF 
GRANT FUNDS.— 
‘‘(A) FORMULA
GRANTS; SUPPLEMENTAL 
GRANTS.—The provisions of section 2603 apply 
with respect to grants under subsection (a) to 
the same extent and in the same manner as 
such provisions apply with respect to grants 
under subpart I, subject to subparagraphs (B) 
and (C). 
‘‘(B) FORMULA
GRANTS; INCREASE
IN 
GRANT.—For purposes of subparagraph (A), 
section 2603(a)(4) does not apply. 
‘‘(C) SUPPLEMENTAL
GRANTS; 
SINGLE 
PROGRAM
WITH
SUBPART
I
PROGRAM.—With 
respect to section 2603(b) as applied for pur-
poses of subparagraph (A): 
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‘‘(i) The Secretary shall combine 
amounts available pursuant to such sub-
paragraph with amounts available for car-
rying out section 2603(b) and shall admin-
ister the two programs as a single pro-
gram. 
‘‘(ii) In the single program, the Sec-
retary has discretion in allocating amounts 
between eligible areas under subpart I and 
transitional areas under this section, sub-
ject to the eligibility criteria that apply 
under such section, and subject to section 
2603(b)(2)(C) (relating to priority in mak-
ing grants). 
‘‘(iii) Pursuant to section 2603(b)(1), 
amounts for the single program are subject 
to use under sections 2603(a)(4) and 
2610(d)(1). 
‘‘(3) APPLICATION; TECHNICAL
ASSISTANCE; 
DEFINITIONS.—The provisions of sections 2605, 
2606, and 2607 apply with respect to grants under 
subsection (a) to the same extent and in the same 
manner as such provisions apply with respect to 
grants under subpart I.’’. 
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(b) CONFORMING AMENDMENTS.—Subpart I of part 
A of title XXVI of the Public Health Service Act, as des-
ignated by subsection (a)(1) of this section, is amended 
by striking ‘‘this part’’ each place such term appears and 
inserting ‘‘this subpart’’. 
SEC. 108. AUTHORIZATION OF APPROPRIATIONS FOR PART 
A. 
Part A of title XXVI of the Public Health Service 
Act, as amended by section 106(a), is amended by adding 
at the end the following: 
‘‘Subpart III—General Provisions 
‘‘SEC. 2610. AUTHORIZATION OF APPROPRIATIONS. 
‘‘(a) IN GENERAL.—For the purpose of carrying out 
this part, there are authorized to be appropriated 
$604,000,000 for fiscal year 2007, $626,300,000 for fis-
cal year 2008, $649,500,000 for fiscal year 2009, 
$673,600,000 for fiscal year 2010, and $698,500,000 for 
fiscal year 2011. Amounts appropriated under the pre-
ceding sentence for a fiscal year are available for obliga-
tion by the Secretary until the end of the second suc-
ceeding fiscal year. 
‘‘(b) RESERVATION OF AMOUNTS.— 
‘‘(1) FISCAL YEAR 2007.—Of the amount appro-
priated under subsection (a) for fiscal year 2007, 
the Secretary shall reserve— 
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‘‘(A) $458,310,000 for grants under sub-
part I; and 
‘‘(B) $145,690,000 for grants under sec-
tion 2609. 
‘‘(2) SUBSEQUENT
FISCAL
YEARS.—Of the 
amount appropriated under subsection (a) for fiscal 
year 2008 and each subsequent fiscal year— 
‘‘(A) the Secretary shall reserve an amount 
for grants under subpart I; and 
‘‘(B) the Secretary shall reserve an amount 
for grants under section 2609. 
‘‘(c) TRANSFER OF CERTAIN AMOUNTS; CHANGE IN 
STATUS AS ELIGIBLE AREA OR TRANSITIONAL AREA.— 
Notwithstanding subsection (b): 
‘‘(1) If a metropolitan area is an eligible area 
under subpart I for a fiscal year, but for a subse-
quent fiscal year ceases to be an eligible area by rea-
son of section 2601(b)— 
‘‘(A)(i) the amount reserved under para-
graph (1)(A) or (2)(A) of subsection (b) of this 
section for the first such subsequent year of not 
being an eligible area is deemed to be reduced 
by an amount equal to the amount of the grant 
made pursuant to section 2603(a) for the met-
ropolitan area for the preceding fiscal year; and 
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‘‘(ii)(I) if the metropolitan area qualifies 
for such first subsequent fiscal year as a transi-
tional area under 2609, the amount reserved 
under paragraph (1)(B) or (2)(B) of subsection 
(b) for such fiscal year is deemed to be in-
creased by an amount equal to the amount of 
the reduction under subparagraph (A) for such 
year; or 
‘‘(II) if the metropolitan area does not 
qualify for such first subsequent fiscal year as 
a transitional area under 2609, an amount 
equal to the amount of such reduction is, not-
withstanding subsection (a), transferred and 
made available for grants pursuant to section 
2618(a)(1), in addition to amounts available for 
such grants under section 2623; and 
‘‘(B) if a transfer under subparagraph 
(A)(ii)(II) is made with respect to the metro-
politan area for such first subsequent fiscal 
year, then— 
‘‘(i) the amount reserved under para-
graph (1)(A) or (2)(A) of subsection (b) of 
this section for such year is deemed to be 
reduced by an additional $500,000; and 
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‘‘(ii) an amount equal to the amount 
of such additional reduction is, notwith-
standing subsection (a), transferred and 
made available for grants pursuant to sec-
tion 2618(a)(1), in addition to amounts 
available for such grants under section 
2623. 
‘‘(2) If a metropolitan area is a transitional 
area under section 2609 for a fiscal year, but for a 
subsequent fiscal year ceases to be a transitional 
area by reason of section 2609(c)(2) (and does not 
qualify for such subsequent fiscal year as an eligible 
area under subpart I)— 
‘‘(A) the amount reserved under subsection 
(b)(2)(B) of this section for the first such sub-
sequent fiscal year of not being a transitional 
area is deemed to be reduced by an amount 
equal to the total of— 
‘‘(i) the amount of the grant that, 
pursuant to section 2603(a), was made 
under section 2609(d)(2)(A) for the metro-
politan area for the preceding fiscal year; 
and 
‘‘(ii) $500,000; and 
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‘‘(B) an amount equal to the amount of 
the reduction under subparagraph (A) for such 
year is, notwithstanding subsection (a), trans-
ferred and made available for grants pursuant 
to section 2618(a)(1), in addition to amounts 
available for such grants under section 2623. 
‘‘(3) If a metropolitan area is a transitional 
area under section 2609 for a fiscal year, but for a 
subsequent fiscal year qualifies as an eligible area 
under subpart I— 
‘‘(A) the amount reserved under subsection 
(b)(2)(B) of this section for the first such sub-
sequent fiscal year of becoming an eligible area 
is deemed to be reduced by an amount equal to 
the amount of the grant that, pursuant to sec-
tion 
2603(a), 
was 
made 
under 
section 
2609(d)(2)(A) for the metropolitan area for the 
preceding fiscal year; and 
‘‘(B) the amount reserved under subsection 
(b)(2)(A) for such fiscal year is deemed to be 
increased by an amount equal to the amount of 
the reduction under subparagraph (A) for such 
year. 
‘‘(d) CERTAIN TRANSFERS; ALLOCATIONS BETWEEN 
PROGRAMS UNDER SUBPART I.—With respect to para-
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graphs (1)(B)(i) and (2)(A)(ii) of subsection (c), the Sec-
retary shall administer any reductions under such para-
graphs for a fiscal year in accordance with the following: 
‘‘(1) The reductions shall be made from 
amounts available for the single program referred to 
in section 2609(d)(2)(C) (relating to supplemental 
grants). 
‘‘(2) The reductions shall be made before the 
amounts referred to in paragraph (1) are used for 
purposes of section 2603(a)(4). 
‘‘(3) If the amounts referred to in paragraph 
(1) are not sufficient for making all the reductions, 
the reductions shall be reduced until the total 
amount of the reductions equals the total of the 
amounts referred to in such paragraph. 
‘‘(e) RULES OF CONSTRUCTION REGARDING FIRST 
SUBSEQUENT FISCAL YEAR.—Paragraphs (1) and (2) of 
subsection (c) apply with respect to each series of fiscal 
years during which a metropolitan area is an eligible area 
under subpart I or a transitional area under section 2609 
for a fiscal year and then for a subsequent fiscal year 
ceases to be such an area by reason of section 2601(b) 
or 2609(c)(2), respectively, rather than applying to a sin-
gle such series. Paragraph (3) of subsection (c) applies 
with respect to each series of fiscal years during which 
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a metropolitan area is a transitional area under section 
2609 for a fiscal year and then for a subsequent fiscal 
year becomes an eligible area under subpart I, rather than 
applying to a single such series.’’. 
TITLE II—CARE GRANTS 
SEC. 201. GENERAL USE OF GRANTS. 
(a) IN GENERAL.—Section 2612 of the Public Health 
Service Act (42 U.S.C. 300ff–22) is amended to read as 
follows: 
‘‘SEC. 2612. GENERAL USE OF GRANTS. 
‘‘(a) IN GENERAL.—A State may use amounts pro-
vided under grants made under section 2611 for— 
‘‘(1) core medical services described in sub-
section (b); 
‘‘(2) support services described in subsection 
(c); and 
‘‘(3) administrative expenses described in sec-
tion 2618(b)(3). 
‘‘(b) REQUIRED
FUNDING
FOR
CORE
MEDICAL 
SERVICES.— 
‘‘(1) IN GENERAL.—With respect to a grant 
under section 2611 for a State for a grant year, the 
State shall, of the portion of the grant remaining 
after reserving amounts for purposes of subpara-
graphs (A) and (E)(ii)(I) of section 2618(b)(3), use 
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not less than 75 percent to provide core medical 
services that are needed in the State for individuals 
with HIV/AIDS who are identified and eligible 
under this title (including services regarding the co- 
occurring conditions of the individuals). 
‘‘(2) WAIVER.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
waive the application of paragraph (1) with re-
spect to a State for a grant year if the Sec-
retary determines that, within the State— 
‘‘(i) there are no waiting lists for 
AIDS Drug Assistance Program services 
under section 2616; and 
‘‘(ii) core medical services are avail-
able to all individuals with HIV/AIDS 
identified and eligible under this title. 
‘‘(B) NOTIFICATION OF WAIVER STATUS.— 
When informing a State that a grant under sec-
tion 2611 is being made to the State for a fis-
cal year, the Secretary shall inform the State 
whether a waiver under subparagraph (A) is in 
effect for the fiscal year. 
‘‘(3) CORE MEDICAL SERVICES.—For purposes 
of this subsection, the term ‘core medical services’, 
with respect to an individual infected with HIV/ 
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AIDS (including the co-occurring conditions of the 
individual) means the following services: 
‘‘(A) Outpatient and ambulatory health 
services. 
‘‘(B) AIDS Drug Assistance Program 
treatments in accordance with section 2616. 
‘‘(C) AIDS pharmaceutical assistance. 
‘‘(D) Oral health care. 
‘‘(E) Early intervention services described 
in subsection (d). 
‘‘(F) Health insurance premium and cost 
sharing assistance for low-income individuals in 
accordance with section 2615. 
‘‘(G) Home health care. 
‘‘(H) Medical nutrition therapy. 
‘‘(I) Hospice services. 
‘‘(J) Home and community-based health 
services as defined under section 2614(c). 
‘‘(K) Mental health services. 
‘‘(L) Substance abuse outpatient care. 
‘‘(M) Medical case management, including 
treatment adherence services. 
‘‘(c) SUPPORT SERVICES.— 
‘‘(1) IN GENERAL.—For purposes of this sub-
section, the term ‘support services’ means services, 
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subject to the approval of the Secretary, that are 
needed for individuals with HIV/AIDS to achieve 
their medical outcomes (such as respite care for per-
sons caring for individuals with HIV/AIDS, outreach 
services, medical transportation, linguistic services, 
and referrals for health care and support services). 
‘‘(2) DEFINITION OF MEDICAL OUTCOMES.—In 
this subsection, the term ‘medical outcomes’ means 
those outcomes affecting the HIV-related clinical 
status of an individual with HIV/AIDS. 
‘‘(d) EARLY INTERVENTION SERVICES.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘early intervention services’ means 
HIV/AIDS early intervention services described in 
section 2651(e), with follow-up referral provided for 
the purpose of facilitating the access of individuals 
receiving the services to HIV-related health services. 
The entities through which such services may be 
provided under the grant include public health de-
partments, emergency rooms, substance abuse and 
mental health treatment programs, detoxification 
centers, detention facilities, clinics regarding sexu-
ally transmitted diseases, homeless shelters, HIV/ 
AIDS counseling and testing sites, health care 
points of entry specified by States, federally quali-
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fied health centers, and entities described in section 
2652(a) that constitute a point of access to services 
by maintaining referral relationships. 
‘‘(2) CONDITIONS.—With respect to an entity 
that proposes to provide early intervention services 
under paragraph (1), such paragraph shall apply 
only if the entity demonstrates to the satisfaction of 
the chief elected official for the State involved that— 
‘‘(A) Federal, State, or local funds are oth-
erwise inadequate for the early intervention 
services the entity proposes to provide; and 
‘‘(B) the entity will expend funds pursuant 
to such subparagraph to supplement and not 
supplant other funds available to the entity for 
the provision of early intervention services for 
the fiscal year involved. 
‘‘(e) PRIORITY FOR WOMEN, INFANTS, CHILDREN, 
AND YOUTH.— 
‘‘(1) IN GENERAL.—For the purpose of pro-
viding health and support services to infants, chil-
dren, youth, and women with HIV/AIDS, including 
treatment measures to prevent the perinatal trans-
mission of HIV, a State shall for each of such popu-
lations in the eligible area use, from the grants made 
for the area under section 2601(a) for a fiscal year, 
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not less than the percentage constituted by the ratio 
of the population involved (infants, children, youth, 
or women in such area) with HIV/AIDS to the gen-
eral population in such area of individuals with HIV/ 
AIDS. 
‘‘(2) WAIVER.—With respect to the population 
involved, the Secretary may provide to a State a 
waiver of the requirement of paragraph (1) if such 
State demonstrates to the satisfaction of the Sec-
retary that the population is receiving HIV-related 
health services through the State medicaid program 
under title XIX of the Social Security Act, the State 
children’s health insurance program under title XXI 
of such Act, or other Federal or State programs. 
‘‘(f) CONSTRUCTION.—A State may not use amounts 
received under a grant awarded under section 2611 to 
purchase or improve land, or to purchase, construct, or 
permanently improve (other than minor remodeling) any 
building or other facility, or to make cash payments to 
intended recipients of services.’’. 
(b) HIV CARE CONSORTIA.—Section 2613 of the 
Public Health Service Act (42 U.S.C. 300ff-23) is amend-
ed— 
(1) in subsection (a), in the matter preceding 
paragraph (1)— 
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(A) by striking ‘‘may use’’ and inserting 
‘‘may, subject to subsection (f), use’’; and 
(B) by striking ‘‘section 2612(a)(1)’’ and 
inserting ‘‘section 2612(a)’’; and 
(2) by adding at the end the following sub-
section: 
‘‘(f) ALLOCATION OF FUNDS; TREATMENT AS SUP-
PORT SERVICES.—For purposes of the requirement of sec-
tion 2612(b)(1), expenditures of grants under section 
2611 for or through consortia under this section are 
deemed to be support services, not core medical services. 
The preceding sentence may not be construed as having 
any legal effect on the provisions of subsection (a) that 
relate to authorized expenditures of the grant.’’. 
(c) TECHNICAL AMENDMENTS.—Part B of title 
XXVI of the Public Health Service Act (42 U.S.C. 300ff- 
21 et seq.) is amended— 
(1) in section 2611— 
(A) in subsection (a), by striking the sub-
section designation and heading; and 
(B) by striking subsection (b); 
(2) in section 2614— 
(A) in subsection (a), in the matter pre-
ceding paragraph (1), by striking ‘‘section 
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2612(a)(2)’’ 
and 
inserting 
‘‘section 
2612(b)(3)(J)’’; and 
(B) in subsection (c)(2)(B), by striking 
‘‘homemaker or’’; 
(3) in section 2615(a) by striking ‘‘section 
2612(a)(3)’’ and inserting ‘‘section 2612(b)(3)(F)’’; 
and 
(4) in section 2616(a) by striking ‘‘section 
2612(a)(5)’’ and inserting ‘‘section 2612(b)(3)(B)’’. 
SEC. 202. AIDS DRUG ASSISTANCE PROGRAM. 
(a) REQUIREMENT OF MINIMUM DRUG LIST.—Sec-
tion 2616 of the Public Health Service Act (42 U.S.C. 
300ff-26) is amended— 
(1) in subsection (c), by striking paragraph (1) 
and inserting the following: 
‘‘(1) ensure that the therapeutics included on 
the list of classes of core antiretroviral therapeutics 
established by the Secretary under subsection (e) 
are, at a minimum, the treatments provided by the 
State pursuant to this section;’’; 
(2) by redesignating subsection (e) as sub-
section (f); and 
(3) by inserting after subsection (d) the fol-
lowing: 
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‘‘(e) LIST OF CLASSES OF CORE ANTIRETROVIRAL 
THERAPEUTICS.—For purposes of subsection (c)(1), the 
Secretary shall develop and maintain a list of classes of 
core antiretroviral therapeutics, which list shall be based 
on the therapeutics included in the guidelines of the Sec-
retary known as the Clinical Practice Guidelines for Use 
of HIV/AIDS Drugs, relating to drugs needed to manage 
symptoms associated with HIV. The preceding sentence 
does not affect the authority of the Secretary to modify 
such Guidelines.’’. 
(b) DRUG REBATE PROGRAM.—Section 2616 of the 
Public Health Service Act, as amended by subsection 
(a)(2) of this section, is amended by adding at the end 
the following: 
‘‘(g) DRUG REBATE PROGRAM.—A State shall ensure 
that any drug rebates received on drugs purchased from 
funds provided pursuant to this section are applied to ac-
tivities supported under this subpart, with priority given 
to activities described under this section.’’. 
SEC. 203. DISTRIBUTION OF FUNDS. 
(a) DISTRIBUTION BASED ON LIVING CASES OF HIV/ 
AIDS.— 
(1) STATE
DISTRIBUTION
FACTOR.—Section 
2618(a)(2) of the Public Health Service Act (42 
U.S.C. 300ff–28(a)(2)) is amended— 
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