tients would be notified that they are receiving 
health care services that fall within such scope. 
‘‘(5) PREFERENCE IN AWARDING DEMONSTRA-
TION
GRANTS.—In awarding grants under sub-
section (a), the Secretary shall give preference to 
States— 
‘‘(A) that have developed the proposed al-
ternative through substantive consultation with 
relevant stakeholders; and 
‘‘(B) in which State law at the time of the 
application would not prohibit the adoption of 
an alternative to current tort litigation. 
‘‘(d) MODELS.— 
‘‘(1) IN GENERAL.—Any State desiring a grant 
under subsection (a) that proposes an alternative de-
scribed in paragraph (2), (3), or (4) shall be deemed 
to meet the criteria under subsection (c)(2). 
‘‘(2) EARLY DISCLOSURE AND COMPENSATION 
MODEL.—In the early disclosure and compensation 
model, the State shall— 
‘‘(A) require that health care providers or 
health care organizations notify a patient (or an 
immediate family member or designee of the 
patient) of an adverse event that results in seri-
ous injury to the patient, and that such notifi-
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cation shall not constitute an acknowledgment 
or an admission of liability; 
‘‘(B) provide immunity from tort liability 
to any health care provider or health care orga-
nization that offers in good faith to pay com-
pensation in accordance with this section to a 
patient for an injury incurred in the provision 
of health care services (limited to claims arising 
out of the same nucleus of operative facts as 
the injury, and except in cases of fraud related 
to the provision of health care services, or in 
cases of criminal or intentional harm); 
‘‘(C) set a limited time period during 
which a health care provider or health care or-
ganization may make an offer of compensation 
benefits under subparagraph (B), with consider-
ation for instances where prompt recognition of 
an injury is unlikely or impossible; 
‘‘(D) require that the compensation pro-
vided under subparagraph (B) include— 
‘‘(i) payment for the net economic loss 
of the patient, on a periodic basis, reduced 
by any payments received by the patient 
under— 
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‘‘(I) any health or accident insur-
ance; 
‘‘(II) any wage or salary continu-
ation plan; or 
‘‘(III) any disability income in-
surance; 
‘‘(ii) payment for the non-economic 
damages of the patient, if appropriate for 
the injury, based on a defined payment 
schedule developed by the State in con-
sultation with relevant experts and with 
the Secretary in accordance with sub-
section (g); and 
‘‘(iii) reasonable attorney’s fees; 
‘‘(E) not abridge the right of an injured 
patient to seek redress through the State tort 
system if a health care provider does not enter 
into a compensation agreement with the patient 
in accordance with subparagraph (B) or if the 
compensation offered does not meet the require-
ments of subparagraph (D) or is not offered in 
good faith; 
‘‘(F) permit a health care provider or 
health care organization that offers in good 
faith to pay compensation benefits to an indi-
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vidual under subparagraph (B) to join in the 
payment of the compensation benefits any 
health care provider or health care organization 
that is potentially liable, in whole or in part, for 
the injury; and 
‘‘(G) permit any health care provider or 
health care organization to contribute volun-
tarily in the payment of compensation benefits 
to an individual under subparagraph (B). 
‘‘(3) ADMINISTRATIVE
DETERMINATION
OF 
COMPENSATION MODEL.— 
‘‘(A) IN GENERAL.—In the administrative 
determination of compensation model— 
‘‘(i) the State shall— 
‘‘(I) designate an administrative 
entity (in this paragraph referred to 
as the ‘Board’) that shall include rep-
resentatives of— 
‘‘(aa) relevant State licens-
ing boards; 
‘‘(bb) 
patient 
advocacy 
groups; 
‘‘(cc) health care providers 
and health care organizations; 
and 
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‘‘(dd) attorneys in relevant 
practice areas; 
‘‘(II) set up classes of avoidable 
injuries, in consultation with relevant 
experts and with the Secretary in ac-
cordance with subsection (g), that will 
be used by the Board to determine 
compensation under clause (ii)(II); 
‘‘(III) 
modify 
tort 
liability, 
through statute or contract, to bar 
negligence claims in court against 
health care providers and health care 
organizations for the classes of inju-
ries established under subclause (II), 
except in cases of fraud related to an 
injury, or in cases of criminal or in-
tentional harm; 
‘‘(IV) outline a procedure for in-
forming patients about the modified 
liability system described in this para-
graph and, in systems where partici-
pation by the health care provider, 
health care organization, or patient is 
voluntary, allow for the decision by 
the provider, organization, or patient 
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of whether to participate to be made 
prior to the provision of, use of, or 
payment for the health care service; 
‘‘(V) provide for an appeals proc-
ess to allow for review of decisions; 
and 
‘‘(VI) establish procedures to co-
ordinate settlement payments with 
other sources of payment; 
‘‘(ii) the Board shall— 
‘‘(I) resolve health care liability 
claims for certain classes of avoidable 
injuries as determined by the State 
and determine compensation for such 
claims; 
‘‘(II) develop a schedule of com-
pensation to be used in making such 
determinations that includes— 
‘‘(aa) payment for the net 
economic loss of the patient, on a 
periodic basis, reduced by any 
payments received by the patient 
under any health or accident in-
surance, any wage or salary con-
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tinuation plan, or any disability 
income insurance; 
‘‘(bb) payment for the non- 
economic damages of the patient, 
if appropriate for the injury, 
based on a defined payment 
schedule developed by the State 
in consultation with relevant ex-
perts and with the Secretary in 
accordance with subsection (g); 
and 
‘‘(cc) reasonable attorney’s 
fees; and 
‘‘(III) update the schedule under 
subclause (II) on a regular basis. 
‘‘(B) APPEALS.—The State, in establishing 
the appeals process described in subparagraph 
(A)(i)(V), may choose whether to allow for de 
novo review, review with deference, or some op-
portunity for parties to reject determinations by 
the Board and elect to file a civil action after 
such rejection. Any State desiring to adopt the 
model described in this paragraph shall indicate 
how such review method meets the criteria 
under subsection (c)(2). 
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‘‘(C) TIMELINESS.—The State shall estab-
lish timeframes to ensure that claims handled 
under the system described in this paragraph 
provide for adjudication that is more timely and 
expedited than adjudication in a traditional tort 
system. 
‘‘(4) SPECIAL HEALTH CARE COURT MODEL.— 
In the special health care court model, the State 
shall— 
‘‘(A) establish a special court for the time-
ly adjudication of disputes over injuries alleg-
edly caused by health care providers or health 
care organizations in the provision of health 
care services; 
‘‘(B) ensure that such court is presided 
over by judges with health care expertise who 
meet applicable State standards for judges and 
who agree to preside over such court volun-
tarily; 
‘‘(C) provide authority to such judges to 
make binding rulings on causation, compensa-
tion, standards of care, and related issues with 
reliance on independent expert witnesses com-
missioned by the court; 
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‘‘(D) provide for an appeals process to 
allow for review of decisions; and 
‘‘(E) at its option, establish an administra-
tive entity similar to the entity described in 
paragraph (3)(A)(i)(I) to provide advice and 
guidance to the special court. 
‘‘(e) APPLICATION.— 
‘‘(1) IN
GENERAL.—Each State desiring a 
grant under subsection (a) shall submit to the Sec-
retary an application, at such time, in such manner, 
and containing such information as the Secretary 
may require. 
‘‘(2) REVIEW PANEL.— 
‘‘(A) IN GENERAL.—In reviewing applica-
tions under paragraph (1), the Secretary shall 
consult with a review panel composed of rel-
evant experts appointed by the Comptroller 
General. 
‘‘(B) COMPOSITION.— 
‘‘(i) NOMINATIONS.—The Comptroller 
General shall solicit nominations from the 
public for individuals to serve on the re-
view panel. 
‘‘(ii) 
APPOINTMENT.—The 
Comp-
troller General shall appoint, at least 11 
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but not more than 15, highly qualified and 
knowledgeable individuals to serve on the 
review panel and shall ensure that the fol-
lowing entities receive fair representation 
on such panel: 
‘‘(I) Patient advocates. 
‘‘(II) Health care providers and 
health care organizations. 
‘‘(III) Attorneys with expertise in 
representing patients and health care 
providers. 
‘‘(IV) Insurers. 
‘‘(V) State officials. 
‘‘(C) 
CHAIRPERSON.—The 
Comptroller 
General, or an individual within the Govern-
ment Accountability Office designated by the 
Comptroller General, shall be the chairperson of 
the review panel. 
‘‘(D) AVAILABILITY
OF
INFORMATION.— 
The Comptroller General shall make available 
to the review panel such information, personnel, 
and administrative services and assistance as 
the review panel may reasonably require to 
carry out its duties. 
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‘‘(E) INFORMATION FROM AGENCIES.—The 
review panel may request directly from any de-
partment or agency of the United States any 
information that such panel considers necessary 
to carry out its duties. To the extent consistent 
with applicable laws and regulations, the head 
of such department or agency shall furnish the 
requested information to the review panel. 
‘‘(f) REPORT.—Each State receiving a grant under 
subsection (a) shall submit to the Secretary a report evalu-
ating the effectiveness of activities funded with grants 
awarded under such subsection at such time and in such 
manner as the Secretary may require. 
‘‘(g) TECHNICAL ASSISTANCE.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
technical assistance to the States awarded grants 
under subsection (a). 
‘‘(2) 
REQUIREMENTS.—Technical 
assistance 
under paragraph (1) shall include— 
‘‘(A) the development of a defined payment 
schedule for non-economic damages (including 
guidance on the consideration of individual 
facts and circumstances in determining appro-
priate payment), the development of classes of 
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avoidable injuries, and guidance on early disclo-
sure to patients of adverse events; and 
‘‘(B) the development, in consultation with 
States, of common definitions, formats, and 
data collection infrastructure for States receiv-
ing grants under this section to use in reporting 
to facilitate aggregation and analysis of data 
both within and between States. 
‘‘(3) USE OF COMMON DEFINITIONS, FORMATS, 
AND DATA COLLECTION INFRASTRUCTURE.—States 
not receiving grants under this section may also use 
the common definitions, formats, and data collection 
infrastructure developed under paragraph (2)(B). 
‘‘(h) EVALUATION.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the review panel established under sub-
section (e)(2), shall enter into a contract with an ap-
propriate research organization to conduct an overall 
evaluation of the effectiveness of grants awarded 
under subsection (a) and to annually prepare and 
submit a report to the appropriate committees of 
Congress. Such an evaluation shall begin not later 
than 18 months following the date of implementa-
tion of the first program funded by a grant under 
subsection (a). 
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‘‘(2) CONTENTS.—The evaluation under para-
graph (1) shall include— 
‘‘(A) an analysis of the effect of the grants 
awarded under subsection (a) on the number, 
nature, and costs of health care liability claims; 
‘‘(B) a comparison of the claim and cost 
information of each State receiving a grant 
under subsection (a); and 
‘‘(C) a comparison between States receiv-
ing a grant under this section and States that 
did not receive such a grant, matched to ensure 
similar legal and health care environments, and 
to determine the effects of the grants and sub-
sequent reforms on— 
‘‘(i) the liability environment; 
‘‘(ii) health care quality; 
‘‘(iii) patient safety; and 
‘‘(iv) patient and health care provider 
and organization satisfaction with the re-
forms. 
‘‘(i) OPTION TO PROVIDE FOR INITIAL PLANNING 
GRANTS.—Of the funds appropriated pursuant to sub-
section (k), the Secretary may use a portion not to exceed 
$500,000 per State to provide planning grants to such 
States for the development of demonstration project appli-
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cations meeting the criteria described in subsection (c). 
In selecting States to receive such planning grants, the 
Secretary shall give preference to those States in which 
State law at the time of the application would not prohibit 
the adoption of an alternative to current tort litigation. 
‘‘(j) DEFINITIONS.—In this section: 
‘‘(1) HEALTH
CARE
SERVICES.—The term 
‘health care services’ means any services provided by 
a health care provider, or by any individual working 
under the supervision of a health care provider, that 
relate to— 
‘‘(A) the diagnosis, prevention, or treat-
ment of any human disease or impairment; or 
‘‘(B) the assessment of the health of 
human beings. 
‘‘(2) HEALTH CARE ORGANIZATION.—The term 
‘health care organization’ means any individual or 
entity which is obligated to provide, pay for, or ad-
minister health benefits under any health plan. 
‘‘(3) HEALTH
CARE
PROVIDER.—The term 
‘health care provider’ means any individual or enti-
ty— 
‘‘(A) licensed, registered, or certified under 
Federal or State laws or regulations to provide 
health care services; or 
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‘‘(B) required to be so licensed, registered, 
or certified but that is exempted by other stat-
ute or regulation. 
‘‘(4) NET ECONOMIC LOSS.—The term ‘net eco-
nomic loss’ means— 
‘‘(A) reasonable expenses incurred for 
products, services, and accommodations needed 
for health care, training, and other remedial 
treatment and care of an injured individual; 
‘‘(B) reasonable and appropriate expenses 
for rehabilitation treatment and occupational 
training; 
‘‘(C) 100 percent of the loss of income 
from work that an injured individual would 
have performed if not injured, reduced by any 
income from substitute work actually per-
formed; and 
‘‘(D) reasonable expenses incurred in ob-
taining ordinary and necessary services to re-
place services an injured individual would have 
performed for the benefit of the individual or 
the family of such individual if the individual 
had not been injured. 
‘‘(5) NON-ECONOMIC
DAMAGES.—The term 
‘non-economic damages’ means losses for physical 
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and emotional pain, suffering, inconvenience, phys-
ical impairment, mental anguish, disfigurement, loss 
of enjoyment of life, loss of society and companion-
ship, loss of consortium (other than loss of domestic 
service), injury to reputation, and all other non-pe-
cuniary losses of any kind or nature, to the extent 
permitted under State law. 
‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary. Amounts appropriated 
pursuant to this subsection shall remain available until ex-
pended.’’. 
SEC. 329. AFFIRMATIVE DEFENSE BASED ON COMPLIANCE 
WITH BEST PRACTICE GUIDELINES. 
(a) SELECTION AND ISSUANCE OF BEST PRACTICES 
GUIDELINES.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the 
‘‘Secretary’’) shall provide for the selection and 
issuance of best practice guidelines (each in this sub-
section referred to as a ‘‘guideline’’) in accordance 
with paragraphs (2) and (3). 
(2) DEVELOPMENT PROCESS.—Not later than 
90 days after the date of the enactment of this Act, 
the Secretary shall enter into a contract with a 
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qualified physician consensus-building organization 
(such as the Physician Consortium for Performance 
Improvement), in concert and agreement with physi-
cian specialty organizations, to develop guidelines for 
treatment of medical conditions for application 
under subsection (b). Under the contract, the orga-
nization shall take into consideration any endorsed 
performance-based quality measures utilized under 
title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.). Under the contract and not later than 
18 months after the date of the enactment of this 
Act, the organization shall submit best practice 
guidelines for issuance as guidelines under para-
graph (3). 
(3) ISSUANCE.— 
(A) IN GENERAL.—Not later than 2 years 
after the date of the enactment of this Act, the 
Secretary shall issue, by regulation, after notice 
and opportunity for public comment, guidelines 
that have been recommended under paragraph 
(2) for application under subsection (b). 
(B) LIMITATION.—The Secretary may not 
issue guidelines unless they have been approved 
or endorsed by qualified physician consensus- 
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building organization involved and physician 
specialty organizations. 
(C) DISSEMINATION.—The Secretary shall 
broadly disseminate the guidelines so issued. 
(b) LIMITATION ON DAMAGES.— 
(1) LIMITATION ON NONECONOMIC DAMAGES.— 
In any health care lawsuit, no noneconomic damages 
may awarded with respect to treatment that is with-
in a guideline issued under subsection (a). 
(2) LIMITATION
ON
PUNITIVE
DAMAGES.—In 
any health care lawsuit, no punitive damages may be 
awarded against a health care practitioner based on 
a claim that such treatment caused the claimant 
harm if— 
(A) such treatment was subject to the 
quality review by a qualified physician con-
sensus-building organization; 
(B) such treatment was approved in a 
guideline that underwent full review by such or-
ganization, public comment, approval by the 
Secretary, and dissemination as described in 
subparagraph (a); and 
(C) such medical treatment is generally 
recognized among qualified experts (including 
medical providers and relevant physician spe-
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cialty organizations) as safe, effective, and ap-
propriate. 
(c) USE.— 
(1) INTRODUCTION AS EVIDENCE.—Guidelines 
under subsection (a) may not be introduced as evi-
dence of negligence or deviation in the standard of 
care in any civil action unless they have previously 
been introduced by the defendant. 
(2) NO PRESUMPTION OF NEGLIGENCE.—There 
would be no presumption of negligence if a partici-
pating physician does not adhere to such guidelines. 
(d) CONSTRUCTION.—Nothing in this section shall be 
construed as preventing a State from— 
(1) replacing their current medical malpractice 
rules with rules that rely, as a defense, upon a 
health care provider’s compliance with a guideline 
issued under subsection (a); or 
(2) applying additional guidelines or safe-har-
bors that are in addition to, but not in lieu of, the 
guidelines issued under subsection (a). 
SEC. 330. MEDICAL MALPRACTICE REFORM STATE INCEN-
TIVE FUND. 
(a) GRANTS.—The Secretary of Health and Human 
Services (referred to in this section as the ‘‘Secretary’’) 
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shall award grants to eligible States to assist such States 
in implementing State-based medical malpractice reforms. 
(b) ELIGIBILITY.— 
(1) IN GENERAL.—To be eligible to receive a 
grant under subsection (a), a State shall— 
(A) submit to the Secretary an application, 
at such time, in such manner, and containing 
such information as the Secretary may require; 
and 
(B) shall certify, as part of the application 
under subparagraph (A), that the State has 
carried out activities, including enacting State 
laws, that have been demonstrated to lower 
medical malpractice claim or premiums costs 
for physicians or to lower health care costs for 
patients. 
(2) STUDY.—As part of a certification provided 
under paragraph (1)(B), the State shall include the 
results of at least one longitudinal, empirically based 
study or data based on an actuarial analysis that 
demonstrates cost reductions of the type described in 
such paragraph. Such results shall be provided in a 
manner that enables the Comptroller General of the 
United States to make a determination as to wheth-
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er such results are the reasonable and demonstrable 
conclusion of the State activities involved. 
(3) TYPES OF LAWS.—Laws described in para-
graph (1)(B) may include caps on non-economic 
damages, the establishment of health courts, the es-
tablishment of a comprehensive patient compensa-
tion program, providing for administrative deter-
minations of compensation, providing for early of-
fers, establishing safe harbors for the practice of evi-
dence-based medicine, or other demonstrated meth-
ods to reduce costs. 
(c) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section— 
(1) $500,000,000 for the period of fiscal years 
2016 through 2020; and 
(2) $500,000,000 for the period of fiscal years 
2021 through 2025. 
(d) SUNSET.—The authority established under this 
section shall not apply after September 30, 2026. 
SEC. 331. SENSE OF CONGRESS CONCERNING ADDITIONAL 
REFORMS. 
It is the sense of Congress that Congress should ex-
plore other options for health care-related tort reform, in-
cluding statutory caps on punitive and non-economic dam-
ages and measures to ensure savings resulting from tort 
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reforms go to reducing health care costs, as well as meas-
ures to encourage the reduction of medical errors. 
SEC. 332. APPLICABILITY; EFFECTIVE DATE. 
This subtitle shall apply to any health care lawsuit 
brought in a Federal or State court, or subject to an alter-
native dispute resolution system, that is initiated on or 
after the date of the enactment of this Act, except that 
any health care lawsuit arising from an injury occurring 
prior to the date of the enactment of this Act shall be 
governed by the applicable statute of limitations provisions 
in effect at the time the injury occurred. 
TITLE IV—SOCIAL SECURITY 
SAVINGS 
SEC. 401. ADJUSTMENTS IN SUPPLEMENTAL SECURITY IN-
COME BENEFITS FOR CERTAIN LONG-TIME 
BENEFICIARIES. 
(a) IN GENERAL.—Title XVI of the Social Security 
Act (42 U.S.C. 1381 et seq.) is amended by inserting after 
section 1617 the following: 
‘‘ADJUSTMENTS IN BENEFITS FOR CERTAIN LONG-TIME 
BENEFICIARIES 
‘‘SEC. 1617A. 
‘‘(a) In the case of an eligible individual to whom ben-
efits under this title (or under section 211 of Public Law 
93–66) have been payable for at least 240 months (wheth-
er or not consecutive) and whose benefits under this title 
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(or under such section 211) have been increased under 
this section fewer than 5 times, whenever benefit amounts 
under title II are increased by any percentage effective 
with any month as a result of a determination made under 
section 215(i) of this Act— 
‘‘(1) each of the dollar amounts in effect for the 
month with respect to the eligible individual under 
subsections (a)(1)(A), (a)(2)(A), (b)(1), and (b)(2) 
of section 1611 of this title, and subsection 
(a)(1)(A) of section 211 of Public Law 93–66, as 
specified in such subsections or as previously in-
creased under section 1617 of this title or this sec-
tion, shall be increased by the amount (if any) by 
which— 
‘‘(A) the amount which would have been in 
effect under such subsections for the month 
with respect to the individual but for the round-
ing of the amount pursuant to section 
1617(a)(2) of this title or paragraph (2) of this 
subsection, exceeds 
‘‘(B) the amount in effect for the month 
under such subsections with respect to the indi-
vidual; and 
‘‘(2) the amount obtained under paragraph (1) 
with respect to each subsection with respect to the 
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individual shall be further increased by 1 percent of 
the amount so obtained with respect to the indi-
vidual the 1st time this section is applied with re-
spect to the individual, (and rounded, when not a 
multiple of $12, to the next lower multiple of $12), 
effective with respect to benefits for months after 
the month. 
‘‘(b) The new dollar amounts to be in effect under 
section 1611 of this title and under section 211 of Public 
Law 93–66 by reason of the application of subsection (a) 
of this section with respect to eligible individuals shall be 
published in the Federal Register together with, and at 
the same time as, the material required by section 
215(i)(2)(D) of this Act to be published therein by reason 
of the determination involved.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsections (a)(1)(A), (a)(2)(A), (b)(1), 
(b)(2), and (b)(6) of section 1611 of such Act (42 
U.S.C. 1382) are each amended by inserting ‘‘or 
1617A’’ after ‘‘1617’’. 
(2) Section 1617(a)(1) of such Act (42 U.S.C. 
1382f(a)(1)) is amended— 
(A) in the matter preceding subparagraph 
(A), by inserting ‘‘or section 1617A’’ after ‘‘this 
section’’; and 
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(B) in subparagraph (A), by inserting ‘‘or 
section 1617A(a)(2))’’ after ‘‘paragraph (2)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to benefits payable 
for months beginning after calendar year in which this Act 
is enacted. 
TITLE V—OTHER MANDATORY 
SAVINGS AND RECEIPTS 
SEC. 501. CONVERSION TO CHAINED CPI. 
(a) CONSUMER PRICE INDEX ADJUSTMENTS APPLI-
CABLE
TO
THE
INTERNAL
REVENUE
CODE
PROVI-
SIONS.— 
(1) IN
GENERAL.—Paragraph (3) of section 
1(f) of the Internal Revenue Code of 1986 is amend-
ed to read as follows: 
‘‘(3) COST-OF-LIVING ADJUSTMENT.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (2), the cost-of-living adjustment for any 
calendar year is— 
‘‘(i) for adjustments first beginning 
before 2017, the product of— 
‘‘(I) the CPI fraction for cal-
endar years before 2017, multiplied 
by 
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‘‘(II) the Chained CPI fraction 
for calendar years after 2016, 
reduced by 1, and 
‘‘(ii) for adjustments first beginning 
after 2016, the Chained CPI fraction for 
years after 2016. 
‘‘(B) 
CPI 
FRACTION
FOR
CALENDAR 
YEARS BEFORE 2017.—The CPI fraction for cal-
endar years before 2017 is the fraction— 
‘‘(i) the numerator of which is the 
CPI for the calendar year 2015; and 
‘‘(ii) the denominator of which is the 
CPI for the calendar year 1992. 
‘‘(C) CHAINED
CPI
FRACTION
FOR
CAL-
ENDAR YEARS AFTER 2016.—The Chained CPI 
fraction for calendar years after 2016 is the 
fraction— 
‘‘(i) the numerator of which is the 
Chained CPI for the preceding calendar 
year, and 
‘‘(ii) the denominator of which is the 
Chained CPI for the calendar year 2015.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (4) of section 1(f) of such 
Code is amended to read as follows: 
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‘‘(4) CPI AND
CHAINED
CPI
FOR
ANY
CAL-
ENDAR YEAR.—For purposes of paragraph (3)— 
‘‘(A) CPI.—The CPI for any calendar year 
is the average of the Consumer Price Index as 
of the close of the 12-month period ending on 
August 31 of such calendar year. 
‘‘(B) CHAINED CPI.—The Chained CPI for 
any calendar year is the average of the Chained 
Consumer Price Index as of the close of the 12- 
month period ending on August 31 of such cal-
endar year.’’. 
(B) Paragraph (5) of section 1(f) of such 
Code is amended to read as follows: 
‘‘(5) CONSUMER PRICE INDEX AND CHAINED 
CONSUMER
PRICE
INDEX.—For purposes of para-
graph (4)— 
‘‘(A) CONSUMER PRICE INDEX.—The term 
‘Consumer Price Index’ means the last Con-
sumer Price Index for all urban consumers pub-
lished by the Department of Labor. For pur-
poses of the preceding sentence, the revision of 
the Consumer Price Index which is most con-
sistent with the Consumer Price Index for cal-
endar year 1986 shall be used. 
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‘‘(B) CHAINED CONSUMER PRICE INDEX.— 
The term ‘Chained Consumer Price Index’ 
means the most recent estimate of the Chained 
Consumer Price Index for all urban consumers 
published by the Department of Labor.’’. 
(C) 
Subclause 
(II) 
of 
section 
36B(b)(3)(A)(ii) of such Code is amended by 
striking ‘‘consumer price index’’ and inserting 
‘‘Chained Consumer Price Index (as defined in 
section 1(f)(5)(B))’’. 
(D) 
Subclause 
(II) 
of 
section 
36B(f)(2)(B)(ii) of such Code is amended by 
striking ‘‘by substituting ‘calendar year 2017’ 
for ‘calendar year 1992’ in subparagraph (B) 
thereof’’ and inserting ‘‘by substituting ‘cal-
endar year 2017’ for ‘calendar year 2015’ in 
subparagraph (C) thereof’’. 
(E) Clause (ii) of section 45R(d)(3)(B) of 
such Code is amended by striking ‘‘by sub-
stituting ‘calendar year 2016’ for ‘calendar year 
1992’ in subparagraph (B) thereof’’ and insert-
ing ‘‘by substituting ‘calendar year 2016’ for 
‘calendar year 2015’ in subparagraph (C) there-
of’’. 
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(F) Subparagraph (B) of section 125(i)(2) 
of such Code is amended by striking ‘‘by sub-
stituting ‘calendar year 2016’ for ‘calendar year 
1992’ in subparagraph (B) thereof’’ and insert-
ing ‘‘by substituting ‘calendar year 2016’ for 
‘calendar year 2015’ in subparagraph (C) there-
of’’. 
(G) 
Subclause 
(II) 
of 
section 
4980I(b)(3)(C)(v) of such Code is amended by 
striking ‘‘for ‘1992’ in subparagraph (B) there-
of’’ and inserting ‘‘for ‘2015’ in subparagraph 
(C) thereof’’. 
(H) Clause (ii) of section 5000A(c)(3)(D) 
of such Code is amended by striking ‘‘by sub-
stituting ‘calendar year 2015’ for ‘calendar year 
1992’ in subparagraph (B) thereof’’ and insert-
ing ‘‘by substituting ‘calendar year 2015’ for 
‘calendar year 2015’ in subparagraph (C) there-
of’’. 
(I) Paragraph (1) of section 6721(f) of 
such Code is amended by striking ‘‘determined 
by substituting ‘calendar year 2015’ for ‘cal-
endar year 1992’ in subparagraph (B) thereof’’. 
(J) Paragraph (1) of section 6722(f) of 
such Code is amended by striking ‘‘determined 
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by substituting ‘calendar year 2015’ for ‘cal-
endar year 1992’ in subparagraph (B) thereof’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after December 31, 2016. 
(b) MODIFICATIONS
TO
COST-OF-LIVING
INDEX-
ATION OF SOCIAL SECURITY BENEFITS.— 
(1) IN GENERAL.—Section 215(i)(1)(D) of the 
Social Security Act (42 U.S.C. 415(i)(1)(D)) is 
amended to read as follows: 
‘‘(D) the term ‘CPI increase percentage’, with 
respect to a base quarter or cost-of-living computa-
tion quarter in any calendar year, means the per-
centage (rounded to the nearest one-tenth of 1 per-
cent) by which the Chained Consumer Price Index 
for All Urban Consumers (as published in its initial 
form by the Bureau of Labor Statistics of the De-
partment of Labor) for such base quarter or cost-of- 
living computation quarter exceeds such index for 
the later of— 
‘‘(i) the most recent calendar quarter 
(prior to such base quarter or cost-of-living 
computation quarter) which was a base quarter 
under subparagraph (A)(ii); or 
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‘‘(ii) the most recent cost-of-living com-
putation quarter under subparagraph (B);’’. 
(2) DEFINITIONS.—Section 215(i)(1)(G) of 
such Act (42 U.S.C. 415(i)(1)(G)) is amended to 
read as follows: 
‘‘(G) the Chained Consumer Price Index for All 
Urban Consumers for a base quarter, a cost-of-living 
computation quarter, or any other calendar quarter 
shall be the arithmetical mean of such index (as 
published in its initial form by the Bureau of Labor 
Statistics of the Department of Labor as of the end 
of such quarter) for the 12-month period ending 
with such quarter.’’. 
(3) CONFORMING
CHANGES
FOR
PRE-1977 
LAW.— 
(A) Section 215(i)(1) of such Act, as in ef-
fect in December 1978, and as applied in cer-
tain cases under the provisions of such Act as 
in effect after December 1978, is amended— 
(i) in subparagraph (B), by striking 
‘‘and’’ after the semicolon; 
(ii) in subparagraph (C), by striking 
‘‘for the 3 months in such quarter.’’ and 
inserting ‘‘for the 12 months in the 12- 
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month period ending with such quarter; 
and’’; and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) the term ‘Consumer Price Index’ means 
the Chained Consumer Price Index for All Urban 
Consumers (C–CPI–U), as published in its initial 
form by the Bureau of Labor Statistics of the De-
partment of Labor.’’. 
(B) Section 215(i)(4) of the Social Secu-
rity Act (42 U.S.C. 415(i)(4)) is amended by 
inserting ‘‘ and by section 501(b) of the Amer-
ica First Act’’ after ‘‘1986,’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to in-
creases described in section 215(i) of the Social Se-
curity Act, and to increases under programs depend-
ent on Social Security cost-of-living adjustments, ef-
fective with the month of December for years after 
2015. 
(c) ADJUSTMENTS OF PROVISIONS UTILIZING THE 
CONSUMER PRICE INDEX.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, and except as provided in this sec-
tion, for purposes of determining the amount of any 
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cost-of-living increase or similar adjustment under a 
Federal program or law effective in the month of 
December 2016 and thereafter, any such increase 
for the period for which the percentage change is de-
termined shall be deemed to be, in lieu of the in-
crease otherwise determined under applicable law, 
the increase determined under such applicable law 
by substituting the Chained CPI for the CPI. 
(2) INCREASES
DETERMINED
FROM
A
CON-
STANT BASE YEAR.— 
(A) IN GENERAL.—In any case in which 
the amount of a cost-of-living increase effective 
in the month of December 2015 and thereafter 
is determined under applicable law by reference 
to a change in the CPI over a period which is 
determined by reference to a base period which 
remains constant from year to year, any such 
increase for any period shall be deemed to be, 
in lieu of the increase otherwise determined 
under applicable law, the increase, expressed as 
a percentage increase, equal to the product of— 
(i) the CPI fraction prior to 2017; 
multiplied by 
(ii) the Chained CPI fraction after 
2016, 
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reduced by 1. 
(B) CPI FRACTION PRIOR TO 2017.—The 
CPI fraction prior to 2017 is the fraction— 
(i) the numerator of which is the CPI 
for the period, ending with or during 2015, 
which corresponds to the base period; and 
(ii) the denominator of which is the 
CPI for the base period. 
(C) CHAINED CPI FRACTION AFTER 2016.— 
The Chained CPI fraction after 2016 is the 
fraction— 
(i) the numerator of which is the 
Chained CPI for the period, ending with or 
during the year preceding the year in 
which the determination takes effect, which 
corresponds to the base period; and 
(ii) the denominator of which is the 
most recently published estimate of the 
Chained CPI for the period, ending with or 
during 2015, which corresponds to the 
base period. 
(3) SPECIAL PROVISIONS AND EXCEPTIONS.— 
(A) PROGRAMS
TIED
TO
SOCIAL
SECU-
RITY.—Subject to subparagraph (B) and the ef-
fective date under subsection (b)(4), this section 
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and the amendments made by this section shall 
apply to any cost-of-living increase or other ad-
justment which is determined by reference to an 
adjustment made under section 215(i) of the 
Social Security Act (42 U.S.C. 415(i)). 
(B) NONAPPLICATION TO COST-OF-LIVING 
INDEXATION OF SSI BENEFITS.— 
(i) IN GENERAL.—Section 1617 of the 
Social Security Act (42 U.S.C. 1382f) is 
amended— 
(I) in subsection (a), in the mat-
ter preceding paragraph (1), by strik-
ing ‘‘Whenever’’ and inserting ‘‘Sub-
ject to subsection (d), whenever’’; and 
(II) by adding at the end the fol-
lowing: 
‘‘(d)(1) Notwithstanding subsection (a), with respect 
to benefits payable under this title for December 2016 and 
months thereafter, whenever benefit amounts under title 
II are increased by any percentage effective with any 
month as a result of a determination made under section 
215(i), each of the dollar amounts in effect for such month 
under subsections (a)(1)(A), (a)(2)(A), (b)(1), and (b)(2) 
of section 1611, and subsection (a)(1)(A) of section 211 
of Public Law 93–66, as specified in such subsections or 
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as previously increased under this section, shall be in-
creased by 1⁄12 of the cost-of-living adjustment determined 
under paragraph (2) for the most recent prior calendar 
year (and rounded, when not a multiple of $12, to the 
next lower multiple of $12). 
‘‘(2) The cost-of-living adjustment determined under 
this paragraph is, with respect to a calendar year, the per-
centage equal to the sum of— 
‘‘(A) the Chained CPI increase percentage de-
termined under paragraph (3) for the year; and 
‘‘(B) the difference of— 
‘‘(i) the product of the CPI increase per-
centage determined under paragraph (4) for the 
year and the applicable transition factor under 
paragraph (5); and 
‘‘(ii) the product of the Chained CPI in-
crease percentage determined under paragraph 
(3) for the year and the applicable transition 
factor under paragraph (5). 
‘‘(3) The Chained CPI increase percentage deter-
mined under this paragraph for a calendar year is the 
fraction (expressed as a percentage)— 
‘‘(A) the numerator of which is the Chained 
Consumer Price Index for All Urban Consumers for 
the preceding calendar year (as published by the Bu-
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‘‘(C) for benefits effective for months beginning 
after November 30, 2018, and before December 1, 
2019, 0.4; 
‘‘(D) for benefits effective for months beginning 
after November 30, 2019, and before December 1, 
2020, 0.2; and 
‘‘(E) for benefits effective for months beginning 
after November 30, 2020, 0.0.’’. 
(ii) CONFORMING AMENDMENT.—Sec-
tion 1617(b) of such Act (42 U.S.C. 
1382f(b)) is amended by inserting ‘‘or 
(d)’’after ‘‘subsection (a)’’. 
(C) POVERTY LINE.—This subsection shall 
apply to revisions to the poverty line made pur-
suant to 42 U.S.C. 9902(2), and any programs 
for which adjustments or eligibility thresholds 
are based upon the poverty line as defined in 
that section. 
(4) CPI AND CHAINED CPI.—For purposes of 
this subsection— 
(A) the CPI for any period means the av-
erage monthly Consumer Price Index for such 
period, or a component thereof, as determined 
under the applicable law in connection with any 
cost-of-living increase or similar adjustment re-
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quired for such period (without regard to this 
subsection); and 
(B) the Chained CPI for any period 
means, except as provided in paragraph 
(2)(C)(ii), the Chained Consumer Price Index 
for all urban consumers (as published in its ini-
tial form by the Bureau of Labor Statistics of 
the Department of Labor) for such period, or a 
component thereof, determined under applicable 
law in the same manner as the CPI for such pe-
riod would be determined. 
(d) CHANGE TO 12-MONTH PERIOD FOR COST-OF- 
LIVING INDEXATION FOR FEDERAL CIVIL SERVICE AND 
MILITARY RETIREMENT PROGRAMS.— 
(1) IN GENERAL.— 
(A) FEDERAL
CIVIL
SERVICE.—Sections 
8340(a)(2) and 8462(a)(2) of title 5, United 
States Code, are each amended by striking ‘‘3 
months comprising such quarter’’ and inserting 
‘‘12-month period ending with such quarter’’. 
(B) MILITARY.—Section 1401a(h) of title 
10, United States Code, is amended by striking 
‘‘three months comprising that quarter’’ and in-
serting ‘‘12-month period ending with such 
quarter’’. 
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(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to cost- 
of-living increases effective with the month of De-
cember of years after 2015. 
SEC. 502. ADJUSTMENT FOR INFLATION OF FEES FOR CER-
TAIN CUSTOMS SERVICES. 
(a) IN GENERAL.—Section 13031 of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 
58c) is amended by adding at the end the following: 
‘‘(l) ADJUSTMENT OF FEES FOR INFLATION.— 
‘‘(1) IN
GENERAL.—The Secretary of the 
Treasury shall adjust the fees established under sub-
section (a), and the limitations on such fees under 
paragraphs (2), (3), (5), (6), (8), and (9) of sub-
section (b), on October 1, 2015, and annually there-
after, to reflect the percentage (if any) of the in-
crease in the average of the chained Consumer Price 
Index for the preceding 12-month period compared 
to the chained Consumer Price Index for fiscal year 
2014. 
‘‘(2) SPECIAL RULES FOR CALCULATION OF AD-
JUSTMENT.—In adjusting under paragraph (1) the 
amount of the fees established under subsection (a), 
and the limitations on such fees under paragraphs 
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100 
(2), (3), (5), (6), (8), and (9) of subsection (b), the 
Secretary— 
‘‘(A) shall round the amount of any in-
crease in the Consumer Price Index to the near-
est dollar; and 
‘‘(B) may ignore any such increase of less 
than 1 percent. 
‘‘(3) CHAINED
CONSUMER
PRICE
INDEX
DE-
FINED.—For purposes of this subsection, the term 
‘chained Consumer Price Index’ means the Chained 
Consumer Price Index for All Urban Consumers (C– 
CPI–U), as published in its initial form by the Bu-
reau of Labor Statistics of the Department of 
Labor.’’. 
(b) DEPOSITS
INTO
CUSTOMS
USER
FEE
AC-
COUNT.—Section 13031(f) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(f)) is 
amended— 
(1) in paragraph (1), in the matter preceding 
subparagraph (A), by striking ‘‘all fees collected 
under subsection (a)’’ and inserting ‘‘the amount of 
fees collected under subsection (a) (determined with-
out regard to any adjustment made under subsection 
(l))’’; and 
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101 
(2) in paragraph (3)(A), in the matter pre-
ceding clause (i)— 
(A) by striking ‘‘fees collected’’ and insert-
ing ‘‘amount of fees collected’’; and 
(B) by striking ‘‘), each appropriation’’ 
and inserting ‘‘, and determined without regard 
to any adjustment made under subsection (l)), 
each appropriation’’. 
(c) CONFORMING AMENDMENTS.—Section 13031 of 
the Consolidated Omnibus Budget Reconciliation Act of 
1985 (19 U.S.C. 58c), as amended by subsections (a) and 
(b), is further amended— 
(1) in subsection (a), in the matter preceding 
paragraph (1), by inserting ‘‘(subject to adjustment 
under subsection (l))’’ after ‘‘following fees’’; and 
(2) in subsection (b)— 
(A) in paragraph (2), by inserting ‘‘(sub-
ject to adjustment under subsection (l))’’ after 
‘‘in fees’’; 
(B) in paragraph (3), by inserting ‘‘(sub-
ject to adjustment under subsection (l))’’ after 
‘‘in fees’’; 
(C) in paragraph (5)(A), by inserting 
‘‘(subject to adjustment under subsection (l))’’ 
after ‘‘in fees’’; 
VerDate Sep 11 2014 
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102 
(D) in paragraph (6), by inserting ‘‘(sub-
ject to adjustment under subsection (l))’’ after 
‘‘in fees’’; 
(E) in paragraph (8)(A)— 
(i) in clause (i), by inserting ‘‘or (l)’’ 
after ‘‘subsection (a)(9)(B)’’; and 
(ii) in clause (ii), by inserting ‘‘(sub-
ject to adjustment under subsection (l))’’ 
after ‘‘$3’’; and 
(F) in paragraph (9)— 
(i) in subparagraph (A)— 
(I) in the matter preceding clause 
(i), by inserting ‘‘and subject to ad-
justment under subsection (l)’’ after 
‘‘Tariff Act of 1930’’; and 
(II) in clause (ii)(I), by inserting 
‘‘(subject to adjustment under sub-
section (l))’’ after ‘‘bill of lading’’; and 
(ii) in subparagraph (B)(i), by insert-
ing ‘‘(subject to adjustment under sub-
section (l))’’ after ‘‘bill of lading’’. 
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104 
(c) CHAINED CONSUMER PRICE INDEX.—Such sec-
tion is further amended by adding at the end the following 
new subsection: 
‘‘(j) CALCULATION OF CHAINED CONSUMER PRICE 
INDEX.— 
‘‘(1) SPECIAL RULES FOR CALCULATION OF AD-
JUSTMENT.—In calculating the amount of the fee 
under subsection (c) and the fiscal year amounts 
under subsection (i)(4)(K), the Under Secretary— 
‘‘(A) shall round the amount of any in-
crease in the Consumer Price Index to the near-
est dollar; and 
‘‘(B) may ignore any such increase of less 
than 1 percent. 
‘‘(2) CHAINED
CONSUMER
PRICE
INDEX
DE-
FINED.—For purposes of this section, the term 
‘chained Consumer Price Index’ means the Chained 
Consumer Price Index for All Urban Consumers (C– 
CPI–U), as published in its initial form by the Bu-
reau of Labor Statistics of the Department of 
Labor.’’. 
SEC. 504. DIVIDENDS AND SURPLUS FUNDS OF RESERVE 
BANKS. 
Section 7(a)(1)(A) of the Federal Reserve Act (12 
U.S.C. 289(a)(1)(A)) is amended by striking ‘‘6 percent’’ 
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and inserting ‘‘6 percent (1.5 percent in the case of a 
stockholder having total consolidated assets of more than 
$1,000,000,000 (determined as of September 30 of the 
preceding fiscal year))’’. 
SEC. 505. COST-SAVING REFORMS FOR FEDERAL CROP IN-
SURANCE PROGRAM. 
(a) REDUCTION IN PREMIUM SUBSIDY FOR HARVEST 
PRICE POLICIES.—Section 508(e) of the Federal Crop In-
surance Act (7 U.S.C. 1508(e)) is amended by adding at 
the end the following new paragraph: 
‘‘(9) REDUCED
PREMIUM
SUBSIDY
FOR
HAR-
VEST PRICE POLICIES.—Notwithstanding any other 
provision of this subsection regarding payment of a 
portion of premiums, effective beginning with the 
2016 reinsurance year, the level of premium subsidy 
for revenue-based plans of insurance that provide 
protection for upward price movements at harvest 
time shall be at least 10 percentage points less than 
the premium subsidy available for the same coverage 
for the 2015 reinsurance year.’’. 
(b) ADJUSTMENT IN PREVENTED PLANTING PAY-
MENT COVERAGE LEVELS.—Section 508(i) of the Federal 
Crop Insurance Act (7 U.S.C. 1508(i)) is amended by add-
ing at the end the following new paragraph: 
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106 
‘‘(5) ADJUSTMENT
IN
PREVENTED
PLANTING 
PAYMENT
COVERAGE
LEVELS.—The Corporation 
shall adjust, as soon as practicable, prevented plant-
ing coverage levels on a crop-by-crop basis to im-
prove the actuarial soundness of the insurance oper-
ations of the Corporation.’’. 
(c) ELIMINATION OF OPTIONAL ADDITIONAL PRE-
VENTED PLANTING COVERAGE.—Section 508(l) of the 
Federal Crop Insurance Act (7 U.S.C. 1508(l)) is amend-
ed— 
(1) by striking ‘‘The Corporation’’ and insert-
ing the following: 
‘‘(1) IN GENERAL.—The Corporation’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) LIMITATION
ON
OPTIONAL
ADDITIONAL 
PREVENTED
PLANTING
COVERAGE.—The Corpora-
tion may not provide an option for producers to pur-
chase additional prevented planting coverage levels 
in excess of the base coverage provided in the pol-
icy.’’. 
(d) CONSISTENT CALCULATION OF ACTUAL PRODUC-
TION HISTORY FOR PRODUCERS THAT RECEIVE A PRE-
VENTING PLANTING PAYMENT.—Section 508A(c)(3) of 
the Federal Crop Insurance Act (7 U.S.C. 1508a(c)(3)) 
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107 
is amended by striking ‘‘make an election under paragraph 
(1)(B) for a crop year,’’ and inserting ‘‘collects an indem-
nity under prevented planting coverage for a first crop for 
a crop year, whether or not the producer elects to plant 
a second crop,’’ 
(e) APPLICATION OF AMENDMENTS.—The amend-
ments made by this section shall apply beginning with the 
2016 reinsurance year. 
SEC. 506. FEDERAL EMPLOYEE ANNUITIES. 
(a) CIVIL SERVICE RETIREMENT SYSTEM.—Section 
8334(c) of title 5, United States Code, is amended to read 
as follows: 
‘‘(c) Each employee or Member credited with civilian 
service after July 31, 1920, for which retirement deduc-
tions or deposits have not been made, may deposit with 
interest an amount equal to the following percentages of 
his basic pay received for that service: 
‘‘Employee 
January 1, 2001 to December 31, 2016. 
7.5 
January 1, 2017 to December 31, 2017. 
7.9 
January 1, 2018 to December 31, 2018. 
8.3 
After December 31, 2018. 
Member or employee 
for congressional 
service 
7.5 
January 1, 2001 to December 31, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2018. 
Member for Member 
service 
January 1, 2001 to December 31, 2016. 
8.5 
January 1, 2017 to December 31, 2017. 
8.9 
January 1, 2018 to December 31, 2018. 
9.3 
After December 31, 2018. 
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108 
Law enforcement offi-
cer for law enforce-
ment service, mem-
ber of the Supreme 
Court Police for 
Supreme Court Po-
lice service, and 
firefighter for fire-
fighter service 
7.5 
January 1, 2001 to December 31, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2018. 
Bankruptcy judge 
January 1, 2001 to December 31, 2016. 
8.5 
January 1, 2017 to December 31, 2017. 
8.9 
January 1, 2018 to December 31, 2018. 
9.3 
After December 31, 2018. 
Judge of the United 
States Court of Ap-
peals for the Armed 
Forces for service 
as a judge of that 
court 
January 1, 2001 to December 31, 2016. 
8.5 
January 1, 2017 to December 31, 2017. 
8.9 
January 1, 2018 to December 31, 2018. 
9.3 
After December 31, 2018. 
United States Mag-
istrate judge 
January 1, 2001 to December 31, 2016. 
8.5 
January 1, 2017 to December 31, 2017. 
8.9 
January 1, 2018 to December 31, 2018. 
9.3 
After December 31, 2018. 
Court of Federal 
Claims Judge 
January 1, 2001 to December 31, 2016. 
8.5 
January 1, 2017 to December 31, 2017. 
8.9 
January 1, 2018 to December 31, 2018. 
9.3 
After December 31, 2018. 
Member of the Capitol 
Police 
7.5 
January 1, 2001 to December 31, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2018. 
Nuclear materials 
courier 
7.5 
January 1, 2001 to December 31, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2018. 
Customs and border 
protection officer 
7.5 
June 30, 2008 to December 30, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2018.’’. 
(b) FEDERAL EMPLOYEES’ RETIREMENT SYSTEM.— 
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109 
(1) 
INDIVIDUAL
CONTRIBUTIONS.—Section 
8422(a)(3)(A) of title 5, United States Code, is 
amended to read as follows: 
‘‘(3)(A) The applicable percentage under this 
paragraph for civilian service by employees or Mem-
bers other than revised annuity employees or further 
revised annuity employees shall be as follows: 
‘‘Employee 
January 1, 2001 to December 31, 2016. 
7.5 
January 1, 2017 to December 31, 2017. 
7.9 
January 1, 2018 to December 31, 2018. 
8.3 
After December 31, 2018. 
Congressional em-
ployee 
7.5 
January 1, 2001 to December 31, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2018. 
Member 
7.5 
January 31, 2000 to December 31, 2016. 
January 1, 2016 to December 31, 2017. 
8.4 
January 1, 2017 to December 31, 2018. 
8.8 
After December 31, 2018. 
Law enforcement offi-
cer, firefighter, 
member of the Cap-
itol Police, member 
of the Supreme 
Court Police, or air 
traffic controller 
7.5 
December 31, 2000 to December 31, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2018. 
Nuclear materials 
courier 
7.5 
December 31, 2000 to December 31, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2019. 
Customs and border 
protection officer 
7.5 
June 30, 2008 to December 31, 2016. 
January 1, 2017 to December 31, 2017. 
8.4 
January 1, 2018 to December 31, 2018. 
8.8 
After December 31, 2018.’’. 
(2) GOVERNMENT
CONTRIBUTIONS.—Section 
8423(a)(2)(B)(i) of title 5, United States Code, is 
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110 
amended by inserting after ‘‘2013’’ the following: 
‘‘and section 506 of the America First Act’’. 
(c) FOREIGN SERVICE PENSION SYSTEM.— 
(1) 
EMPLOYEE
CONTRIBUTIONS.—Section 
856(a)(2)(A) of the Foreign Service Act of 1980 (22 
U.S.C. 4071e(a)(2)(A)) is amended to read as fol-
lows: 
‘‘(2)(A) The applicable percentage for a partici-
pant other than a revised annuity participant or a 
further revised annuity participant shall be as fol-
lows: 
‘‘
7.55 
January 12, 2003 to December 31, 2016. 
8.05 
January 1, 2017 to December 31, 2017. 
8.45 
January 1, 2018 to December 31, 2018. 
8.85 
After December 31, 2018.’’. 
(2) GOVERNMENT
CONTRIBUTIONS.—Section 
857 of the Foreign Service Act of 1980 (22 U.S.C. 
4071f) is amended by inserting after ‘‘2013’’ the fol-
lowing: ‘‘and section 506 of the America First Act’’. 
SEC. 507. REPAYMENT PLANS. 
Section 455(d)(1) of the Higher Education Act of 
1965 (20 U.S.C. 1087e(d)(1)) is amended— 
(1) in subparagraph (D)— 
(A) by inserting before the semicolon at 
the end the following: ‘‘, and with respect to 
loans made on or after July 1, 2016, the re-
vised pay as you earn repayment plan under 
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section 493E shall be the only income contin-
gent repayment plan’’; and 
(B) by striking ‘‘and’’ at the end; and 
(2) in subparagraph (E), by inserting ‘‘and only 
for loans made before July 1, 2016,’’ after ‘‘2009,’’. 
SEC. 508. REPAYE. 
Part G of title IV of the Higher Education Act of 
1965 is amended by adding at the end the following: 
‘‘SEC. 493E. REVISED PAY AS YOU EARN REPAYMENT PLAN. 
‘‘(a) DEFINITIONS.— 
‘‘(1) ELIGIBLE LOAN.—The term ‘eligible loan’ 
means any outstanding loan made under part D or 
part B, except for a defaulted loan, an excepted 
PLUS loan, or an excepted consolidation loan. 
‘‘(2) EXCEPTED PLUS LOAN; EXCEPTED CON-
SOLIDATION LOAN.—The terms ‘excepted plus loan’ 
and ‘excepted consolidation loan’ have the meanings 
given such terms in section 493C. 
‘‘(3) PARTIAL
FINANCIAL
HARDSHIP.—The 
term ‘partial financial hardship’— 
‘‘(A) when used with respect to an unmar-
ried borrower— 
‘‘(i) means that for such borrower the 
annual amount due on the total amount of 
eligible loans, as calculated under the 
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112 
standard repayment plan under section 
455(d)(1)(A), based on a 10-year repay-
ment period, and using the greater of— 
‘‘(I) the amount due on such 
loans at the time the borrower entered 
repayment for such loans; or 
‘‘(II) the amount due on such 
loans at the time the borrower elected 
the plan under this section; exceeds 
‘‘(ii) 10 percent of the result obtained 
by calculating, on at least an annual basis, 
the amount by which— 
‘‘(I) 
the 
borrower’s 
adjusted 
gross income; exceeds 
‘‘(II) 150 percent of the poverty 
line applicable to the borrower’s fam-
ily size as determined under section 
673(2) of the Community Services 
Block Grant Act (42 U.S.C. 9902(2)); 
and 
‘‘(B) when used with respect to a married 
borrower— 
‘‘(i) means that for such borrower the 
annual amount due on the total amount of 
the borrower’s eligible loans, and, if appli-
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113 
cable, the borrower’s spouse’s eligible 
loans, as calculated under the standard re-
payment plan under section 455(d)(1)(A), 
based on a 10-year repayment period, and 
using the greater of— 
‘‘(I) the amount due on such 
loans at the time the borrower or bor-
rower’s spouse entered repayment on 
such loans; or 
‘‘(II) the amount due on such 
loans at the time the borrower or the 
borrower’s spouse elected the plan 
under this section; exceeds 
‘‘(ii) 10 percent of the result obtained 
by calculating, on at least an annual basis, 
the amount by which— 
‘‘(I) the difference between the 
borrower’s and borrower’s spouse’s 
adjusted gross income; exceeds 
‘‘(II) 150 percent of the poverty 
line applicable to the borrower’s fam-
ily size as determined under section 
673(2) of the Community Services 
Block Grant Act (42 U.S.C. 9902(2)). 
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114 
‘‘(4) PAY AS YOU EARN REPAYMENT PLAN.— 
The term ‘Pay As You Earn repayment plan’ means 
the Pay As You Earn repayment plan described in 
section 685.209 of title 34, Code of Federal Regula-
tions (as in effect on the date of enactment of Amer-
ica First Act). 
‘‘(b) REVISED PAY AS YOU EARN REPAYMENT PLAN 
AUTHORIZED.—Notwithstanding any other provision of 
this Act, the Secretary shall carry out a program that 
meets the following requirements: 
‘‘(1) MONTHLY PAYMENT AMOUNT.—Except as 
otherwise provided in this subsection, a borrower of 
any eligible loan may elect to have the borrower’s 
aggregate monthly payment for all such loans not to 
exceed the result described in subsection (a)(3) di-
vided by 12. 
‘‘(2) 
ADJUSTED
MONTHLY
PAYMENT 
AMOUNT.—The Secretary adjusts the aggregate 
monthly payment under paragraph (1), if— 
‘‘(A) the borrower’s eligible loans are not 
solely loans made under part D, in which case 
the Secretary determines the borrower’s ad-
justed monthly payment by multiplying the ag-
gregate monthly payment by the percentage of 
the total outstanding principal amount of the 
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115 
borrower’s eligible loans that are loans made 
under part D; 
‘‘(B) the borrower and borrower’s spouse 
have eligible loans, in which case the Secretary 
determines— 
‘‘(i) each borrower’s percentage of the 
couple’s total eligible loan debt; 
‘‘(ii) the adjusted monthly payment 
for each borrower by multiplying the cal-
culated payment by the percentage deter-
mined under clause (i) applicable to the 
borrower; and 
‘‘(iii) if the borrower’s loans are held 
by multiple holders, the borrower’s ad-
justed monthly payment for part D loans 
by multiplying the adjusted monthly pay-
ment determined under clause (ii) by the 
percentage of the total outstanding prin-
cipal amount of the borrower’s eligible 
loans that are made under part D; 
‘‘(C) the calculated monthly payment 
amount under paragraph (1) or this paragraph 
is less than $5.00, in which case the borrower’s 
monthly payment is $0.00; or 
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116 
‘‘(D) the calculated monthly payment 
amount under paragraph (1) or this paragraph 
or is equal to or greater than $5.00 but less 
than $10.00, in which case the borrower’s 
monthly payment is $10.00. 
‘‘(3) ACCRUED INTEREST.— 
‘‘(A) IN
GENERAL.—If the borrower’s 
monthly payment amount under paragraph (1) 
or (2) is not sufficient to pay the accrued inter-
est on the borrower’s loan— 
‘‘(i) for a subsidized loan made under 
part D or the subsidized portion of a Fed-
eral Direct Consolidation Loan— 
‘‘(I) the Secretary does not 
charge the borrower the remaining ac-
crued interest for a period not to ex-
ceed three consecutive years from the 
established repayment period start 
date on that loan; and 
‘‘(II) after the three-year period, 
the Secretary charges the borrower 50 
percent of the remaining accrued in-
terest on such subsidized loan or por-
tion of a Federal Direct Consolidation 
Loan; and 
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‘‘(ii) for an unsubsidized loan made 
under part D, a Federal Direct PLUS 
Loan made to a graduate or professional 
student, or the unsubsidized portion of a 
Federal Direct Consolidation Loan, or for 
a subsidized loan made under part D or 
the subsidized portion of a Federal Direct 
Consolidation Loan for which the borrower 
has become responsible for accruing inter-
est in accordance with section 455(q)(2), 
the Secretary charges the borrower 50 per-
cent of the remaining accrued interest. 
‘‘(B) THREE-YEAR
PERIOD
DEFINED.— 
The three-year period described in subpara-
graph (A)(i)— 
‘‘(i) does not include any period dur-
ing which the borrower receives an eco-
nomic hardship deferment; 
‘‘(ii) includes any prior period of re-
payment under an income-based repayment 
plan under section 493C or the Pay-As- 
You-Earn repayment plan; and 
‘‘(iii) for a Federal Direct Consolida-
tion Loan, includes any period in which the 
underlying loans were repaid under a plan 
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118 
described in clause (ii) of this subpara-
graph. 
‘‘(C) CAPITALIZATION OF ACCRUED INTER-
EST.— 
‘‘(i) TIMING.—Accrued interest is cap-
italized— 
‘‘(I) when the Secretary deter-
mines that a borrower does not have 
a partial financial hardship; or 
‘‘(II) at the time a borrower 
leaves the program under this section. 
‘‘(ii) CAPITALIZATION.— 
‘‘(I) LIMITATION.—The amount 
of accrued interest capitalized under 
clause (i)(I) is limited to 10 percent of 
the original principal balance at the 
time the borrower entered repayment 
under the program under this section. 
‘‘(II) PARTICIPATION.—After the 
amount of accrued interest reaches 
the limit described in subclause (I), 
interest continues to accrue, but is not 
capitalized while the borrower partici-
pates in the program under this sec-
tion. 
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119 
‘‘(4) POSTPONEMENT
OF
PRINCIPAL
PAY-
MENT.—If the borrower’s monthly payment amount 
is not sufficient to pay any of the principal due, the 
payment of that principal is postponed until the bor-
rower leaves the program under this section or the 
Secretary determines the borrower does not have a 
partial financial hardship. 
‘‘(5) SELECTION
OF
DIFFERENT
REPAYMENT 
PLAN.—A borrower who no longer wishes to repay 
under the program under this section may change to 
a different repayment plan in accordance with sec-
tion 455(d)(3). 
‘‘(6) PAYMENT
APPLICATION
AND
PREPAY-
MENT.— 
‘‘(A) IN GENERAL.—The Secretary applies 
any payment made under the program under 
this section in the following order: 
‘‘(i) Accrued interest. 
‘‘(ii) Collection costs. 
‘‘(iii) Late charges. 
‘‘(iv) Loan principal. 
‘‘(B) 
PREPAYMENT
AUTHORIZED.—The 
borrower may prepay all or part of a loan at 
any time without penalty, as authorized under 
section 455(d)(1). 
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‘‘(C) APPLICATION
OF
PREPAYMENT.—If 
the prepayment amount equals or exceeds— 
‘‘(i) a monthly payment amount of 
$10.00 or more under the repayment 
schedule established for the loan, the Sec-
retary applies the prepayment consistent 
with the requirements of section 455(d)(1); 
or 
‘‘(ii) a monthly payment amount of 
$0.00 under the repayment schedule estab-
lished for the loan, the Secretary applies 
the prepayment consistent with the re-
quirements of subparagraph (A). 
‘‘(7) 
ELIGIBILITY
DOCUMENTATION, 
VERIFICATION, AND NOTIFICATIONS.— 
‘‘(A) DOCUMENTATION.— 
‘‘(i) AGI.—The Secretary requires the 
borrower to provide documentation, accept-
able to the Secretary, of the borrower’s ad-
justed gross income. 
‘‘(ii) 
OTHER
DOCUMENTATION.—If 
the borrower’s adjusted gross income is not 
available, or if the Secretary believes that 
the borrower’s reported adjusted gross in-
come does not reasonably reflect the bor-
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121 
rower’s current income, the borrower must 
provide other documentation to verify in-
come. 
‘‘(iii) FAMILY SIZE.—Unless otherwise 
directed by the Secretary, the borrower 
must annually certify the borrower’s family 
size. If the borrower fails to certify family 
size, the Secretary assumes a family size of 
one for the applicable year. 
‘‘(B) NOTIFICATIONS.— 
‘‘(i) IN
GENERAL.—Each year that 
the borrower participates in the program 
under this section, the Secretary sends the 
borrower a written notification that pro-
vides the borrower with— 
‘‘(I) the borrower’s monthly pay-
ment amount, as calculated under 
paragraph (1) or (2), and the time pe-
riod during which such monthly pay-
ment amount will apply (annual pay-
ment period); 
‘‘(II) information about the re-
quirement for the borrower to annu-
ally provide the information described 
in subparagraph (A), and an expla-
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122 
nation that the borrower will be noti-
fied in advance of the date by which 
the Secretary must receive this infor-
mation; 
‘‘(III) an explanation of the con-
sequences, as described under sub-
paragraph (F), if the borrower does 
not provide the required information; 
and 
‘‘(IV) information about the bor-
rower’s option to request, at any time 
during the borrower’s annual payment 
period, that the Secretary recalculate 
the 
borrower’s 
monthly 
payment 
amount if the borrower’s financial cir-
cumstances have changed and the in-
come amount that was used to cal-
culate the borrower’s current monthly 
payment no longer reflects the bor-
rower’s current income. 
‘‘(ii) RECALCULATION.—If the Sec-
retary recalculates the borrower’s monthly 
payment amount based on the borrower’s 
request, the Secretary sends the borrower 
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123 
a written notification that includes the in-
formation described in this subparagraph. 
‘‘(C) SUBSEQUENT YEARS.— 
‘‘(i) IN GENERAL.—For each year fol-
lowing the first year in which a borrower 
participating in the plan under this sec-
tion, the Secretary notifies the borrower in 
writing of the requirements of subpara-
graph (A) not later than 60 days and not 
earlier than 90 days prior to the date spec-
ified in clause (ii)(I). 
‘‘(ii) 
CONTENTS.—The 
notification 
under clause (i) shall provide the borrower 
with— 
‘‘(I) the date, no earlier than 35 
days before the end of the borrower’s 
annual payment period, by which the 
Secretary must receive all of the docu-
mentation described in subparagraph 
(A) (annual deadline); and 
‘‘(II) the consequences if the Sec-
retary does not receive the informa-
tion within 10 days following the an-
nual deadline specified in the notice, 
as described under subparagraph (F). 
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‘‘(D) NO
PARTIAL
FINANCIAL
HARD-
SHIP.—Each time the Secretary makes a deter-
mination that a borrower does not have a par-
tial financial hardship for each year following 
the first year for which borrower wishes to par-
ticipate in the program under this section, the 
Secretary sends the borrower a written notifica-
tion that unpaid interest will be capitalized in 
accordance with paragraph (3)(C). 
‘‘(E) NO DOCUMENTATION PROVIDED.—If 
a borrower who is currently repaying under an-
other repayment plan elects the program under 
this section but does not provide the docu-
mentation described in subparagraph (A), the 
borrower remains on his or her current repay-
ment plan. 
‘‘(F) ALTERNATE REPAYMENT PLAN.— 
‘‘(i) IN GENERAL.—If a borrower who 
is currently repaying under the program 
under this section elects to participate in 
such program for a subsequent year but 
the Secretary does not receive the docu-
mentation described in subparagraph (A) 
not later than 10 days after the specified 
annual deadline, the Secretary removes the 
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125 
borrower from the program under this sec-
tion and places the borrower on an alter-
native repayment plan under which the 
borrower’s required monthly payment is 
the amount necessary to repay the bor-
rower’s eligible loans in full within the ear-
lier of— 
‘‘(I) 10 years from the date the 
borrower begins repayment under the 
alternative repayment plan; or 
‘‘(II) the ending date of the 20- 
year period as described in paragraph 
(8)(A)(i)(II). 
‘‘(ii) NOTIFICATION.—If the Secretary 
places the borrower on an alternative re-
payment plan in accordance with clause 
(i), the Secretary sends the borrower a 
written notification informing the borrower 
that— 
‘‘(I) the borrower has been 
placed on an alternative repayment 
plan; 
‘‘(II) the borrower’s monthly pay-
ment amount has been recalculated 
under clause (i); or 
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‘‘(III) the borrower may change 
to another repayment plan in accord-
ance with section 455(d)(3). 
‘‘(iii) RETURN TO PROGRAM.—A bor-
rower who has been removed from the pro-
gram under this section or changes to an-
other repayment plan may return to the 
program under this section if the borrower 
provides the documentation under subpara-
graph (A), necessary for the Secretary to 
calculate the borrower’s current monthly 
payment amount and the monthly amount 
the borrower would have been required to 
pay under the program during the period 
when the borrower was on the alternative 
repayment plan or any other repayment 
plan. 
‘‘(iv) ADJUSTMENT OF MONTHLY PAY-
MENT
AMOUNT.—If the Secretary deter-
mines that the total amount of the pay-
ments the borrower was required to make 
while on the alternative repayment plan or 
any other repayment plan are less than the 
total amount the borrower would have been 
required to make under the program dur-
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127 
ing that period, the Secretary will adjust 
the borrower’s monthly payment amount to 
ensure that the difference between the two 
amounts is paid in full by the end of the 
20-year period described in paragraph 
(8)(A)(i)(II). 
‘‘(v) APPLICATION OF LOAN FORGIVE-
NESS.—If the borrower returns to the pro-
gram under this section or changes to the 
Pay As You Earn Repayment plan, the in-
come-contingent repayment plan; or the in-
come-based repayment plan, any payments 
that the borrower made under the alter-
native repayment plan after the borrower 
was removed from the program under this 
section will count towards forgiveness 
under such program or such other repay-
ment plans. 
‘‘(vi) PSLF.—Payments made under 
the alternative repayment plan described in 
clause (i) will not count towards public 
service loan forgiveness under section 
455(m). 
‘‘(vii) 
EXCEPTION.—The 
Secretary 
does not take the action described in clause 
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128 
(i) if the Secretary receives the documenta-
tion described in subparagraph (A) more 
than 10 days after the specified annual 
deadline, but is able to determine the bor-
rower’s new monthly payment amount be-
fore the end of the borrower’s current an-
nual payment period. 
‘‘(viii) 
MONTHLY
PAYMENT 
AMOUNT.—If the Secretary receives the 
documentation described in subparagraph 
(A) within 10 days of the specified annual 
deadline— 
‘‘(I) the Secretary promptly de-
termines the borrower’s new scheduled 
monthly payment amount and main-
tains the borrower’s current scheduled 
monthly payment amount until the 
new 
scheduled 
monthly 
payment 
amount is determined; 
‘‘(II) if the new monthly payment 
amount is less than the borrower’s 
previously calculated plan monthly 
payment amount, and the borrower 
made payments at the previously cal-
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129 
culated amount after the end of the 
most recent annual payment period— 
‘‘(aa) the Secretary makes 
the appropriate adjustment to 
the borrower’s account; and 
‘‘(bb) unless the borrower 
requests otherwise, the Secretary 
applies 
the 
excess 
payment 
amounts made after the end of 
the most recent annual payment 
period in accordance with the re-
quirements of paragraph (6)(A); 
‘‘(III) if the new monthly pay-
ment amount is equal to or greater 
than the borrower’s previously cal-
culated monthly payment amount, and 
the borrower made payments at the 
previously calculated payment amount 
after the end of the most recent an-
nual payment period, the Secretary 
does not make any adjustment to the 
borrower’s account; 
‘‘(IV) any payments that the bor-
rower continued to make at the pre-
viously calculated payment amount 
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130 
after the end of the prior annual pay-
ment period and before the new 
monthly payment amount is calculated 
are considered to be qualifying pay-
ments for purposes of public service 
loan 
forgiveness 
under 
section 
455(m), provided that the payments 
otherwise meet the requirements de-
scribed in such section 455(m); and 
‘‘(V) the new annual payment pe-
riod begins on the day after the end 
of the most recent annual payment 
period. 
‘‘(8) LOAN FORGIVENESS.— 
‘‘(A) IN GENERAL.— 
‘‘(i) CANCELLATION.—The Secretary 
cancels any remaining outstanding balance 
of principal and accrued interest on a bor-
rower’s loans made under part D that are 
being repaid under the program under this 
section after— 
‘‘(I) the borrower has made the 
equivalent of 240 qualifying monthly 
payments as defined in subparagraph 
(B); and 
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131 
‘‘(II) 20 years have elapsed, be-
ginning on the date determined in ac-
cordance with subparagraph (C). 
‘‘(ii) 
DETERMINATION.—The 
Sec-
retary determines when a borrower has 
met the loan forgiveness requirements 
under clause (i) and does not require the 
borrower to submit a request for loan for-
giveness. 
‘‘(B) QUALIFYING MONTHLY PAYMENT DE-
FINED.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, a qualifying monthly pay-
ment is— 
‘‘(I) a monthly payment under 
the program under this section, in-
cluding a monthly payment amount of 
$0.00, as provided under paragraph 
(2)(C); or 
‘‘(II) a month during which the 
borrower was not required to make a 
payment due to receiving an economic 
hardship deferment on his or her eli-
gible loans that are made under part 
D. 
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132 
‘‘(ii) 
DEFAULTED
LOANS
EX-
CLUDED.—Any payments made on a de-
faulted loan are not qualifying monthly 
payments and are not counted toward the 
20-year forgiveness period. 
‘‘(C) 
DETERMINATION
OF
BEGINNING 
DATE.—For a borrower who qualifies for the 
program under this section, the beginning date 
for the 20-year repayment period is— 
‘‘(i) for a borrower who has an eligible 
Federal Direct Consolidation Loan, the 
date the borrower made a qualifying 
monthly payment on the consolidation 
loan, before the date the borrower qualified 
for the program under this section; 
‘‘(ii) for a borrower who has one or 
more other eligible Direct Loans, the date 
the borrower made a qualifying monthly 
payment on that loan, before the date the 
borrower qualified for the program under 
this section; 
‘‘(iii) for a borrower who did not make 
a qualifying monthly payment under clause 
(i) or (ii), the date the borrower made a 
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133 
payment on the loan under the program 
under this section; or 
‘‘(iv) if the borrower consolidates his 
or her eligible loans, the date the borrower 
made a qualifying monthly payment on the 
Federal Direct Consolidation Loan. 
‘‘(D) NOTIFICATION.— 
‘‘(i) PRIOR
TO
LOAN
CANCELLA-
TION.—Not later than 6 months prior to 
the anticipated date that the borrower will 
meet the forgiveness requirements, the 
Secretary sends the borrower a written no-
tice that includes— 
‘‘(I) an explanation that the bor-
rower is approaching the date that the 
borrower is expected to meet the re-
quirements to receive loan forgiveness; 
‘‘(II) a reminder that the bor-
rower must continue to make the bor-
rower’s scheduled monthly payments; 
and 
‘‘(III) general information on the 
current treatment of the forgiveness 
amount for tax purposes, and instruc-
tions for the borrower to contact the 
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134 
Internal Revenue Service for more in-
formation. 
‘‘(ii) AFTER LOAN CANCELLATION.— 
After determining that a borrower has sat-
isfied the loan forgiveness requirements, 
the Secretary— 
‘‘(I) notifies the borrower that 
the borrower’s obligation on the loans 
is satisfied; 
‘‘(II) provides the borrower with 
the information described in clause 
(i)(III); and 
‘‘(III) returns to the sender any 
payment received on a loan after loan 
forgiveness has been granted.’’. 
SEC. 509. PUBLIC SERVICE LOAN FORGIVENESS. 
Section 455(m)(2) of the Higher Education Act of 
1965 (20 U.S.C. 1087e(m)(2)) is amended— 
(1) by striking ‘‘After’’ and inserting the fol-
lowing: 
‘‘(A) IN
GENERAL.—Except as provided 
under subparagraph (B), after’’; and 
(2) by adding at the end the following: 
‘‘(B) UNDERGRADUATE
CAP.—The Sec-
retary shall not cancel under this paragraph an 
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135 
amount greater than $57,500 of principal and 
interest due on an eligible Federal Direct Loan 
made to a borrower for a program of under-
graduate education’’. 
Æ 
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