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section (a) for which data is available, more
than 2 percent of grant funds under such sub-
section canceled or covered by any waivers under
subsection (c)(3).’’; and
(2) in paragraph (2)—
(A) in subparagraph (A), by striking ‘‘se-
vere need’’ and inserting ‘‘demonstrated need’’;
(B) by striking subparagraph (B) and in-
serting the following:
‘‘(B) DEMONSTRATED
NEED.—The factors
considered by the Secretary in determining
whether an eligible area has a demonstrated need
for purposes of paragraph (1)(B) may include
any or all of the following:
‘‘(i) The unmet need for such services,
as determined under section 2602(b)(4) or
other community input process as defined
under section 2609(d)(1)(A).
‘‘(ii) An increasing need for HIV/
AIDS-related services, including relative
rates of increase in the number of cases of
HIV/AIDS.
‘‘(iii) The relative rates of increase in
the number of cases of HIV/AIDS within
new or emerging subpopulations.
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‘‘(iv) The current prevalence of HIV/
AIDS.
‘‘(v) Relevant factors related to the cost
and complexity of delivering health care to
individuals with HIV/AIDS in the eligible
area.
‘‘(vi) The impact of co-morbid factors,
including co-occurring conditions, deter-
mined relevant by the Secretary.
‘‘(vii) The prevalence of homelessness.
‘‘(viii) The prevalence of individuals
described under section 2602(b)(2)(M).
‘‘(ix) The relevant factors that limit
access to health care, including geographic
variation, adequacy of health insurance cov-
erage, and language barriers.
‘‘(x) The impact of a decline in the
amount received pursuant to subsection (a)
on services available to all individuals with
HIV/AIDS identified and eligible under this
title.’’; and
(C) by striking subparagraphs (C) and (D)
and inserting the following:
‘‘(C) PRIORITY
IN
MAKING
GRANTS.—The
Secretary shall provide funds under this sub-
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section to an eligible area to address the decline
or disruption of all EMA-provided services re-
lated to the decline in the amounts received pur-
suant to subsection (a) consistent with the grant
award for the eligible area for fiscal year 2006,
to the extent that the factor under subparagraph
(B)(x) (relating to a decline in funding) applies
to the eligible area.’’.
SEC. 104. TIMEFRAME FOR OBLIGATION AND EXPENDITURE
OF GRANT FUNDS.
Section 2603 of the Public Health Service Act (42
U.S.C. 300ff–13) is amended—
(1) by redesignating subsection (c) as subsection
(d);
(2) by inserting after subsection (b) the fol-
lowing:
‘‘(c) TIMEFRAME FOR OBLIGATION AND EXPENDITURE
OF GRANT FUNDS.—
‘‘(1) OBLIGATION BY END OF GRANT YEAR.—Ef-
fective for fiscal year 2007 and subsequent fiscal
years, funds from a grant award made pursuant to
subsection (a) or (b) for a fiscal year are available for
obligation by the eligible area involved through the
end of the one-year period beginning on the date in
such fiscal year on which funds from the award first
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become available to the area (referred to in this sub-
section as the ‘grant year for the award’), except as
provided in paragraph (3)(A).
‘‘(2) SUPPLEMENTAL GRANTS; CANCELLATION OF
UNOBLIGATED BALANCE OF GRANT AWARD.—Effective
for fiscal year 2007 and subsequent fiscal years, if a
grant award made pursuant to subsection (b) for an
eligible area for a fiscal year has an unobligated bal-
ance as of the end of the grant year for the award—
‘‘(A) the Secretary shall cancel that unobli-
gated balance of the award, and shall require the
eligible area to return any amounts from such
balance that have been disbursed to the area; and
‘‘(B) the funds involved shall be made avail-
able by the Secretary as additional amounts for
grants pursuant to subsection (b) for the first fis-
cal year beginning after the fiscal year in which
the Secretary obtains the information necessary
for determining that the balance is required
under subparagraph (A) to be canceled, except
that the availability of the funds for such grants
is subject to subsection (a)(4) and section
2610(d)(2) as applied for such year.
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‘‘(3) FORMULA GRANTS; CANCELLATION OF UN-
OBLIGATED BALANCE OF GRANT AWARD; WAIVER PER-
MITTING CARRYOVER.—
‘‘(A) IN GENERAL.—Effective for fiscal year
2007 and subsequent fiscal years, if a grant
award made pursuant to subsection (a) for an
eligible area for a fiscal year has an unobligated
balance as of the end of the grant year for the
award, the Secretary shall cancel that unobli-
gated balance of the award, and shall require the
eligible area to return any amounts from such
balance that have been disbursed to the area,
unless—
‘‘(i) before the end of the grant year,
the chief elected official of the area submits
to the Secretary a written application for a
waiver of the cancellation, which applica-
tion includes a description of the purposes
for which the area intends to expend the
funds involved; and
‘‘(ii) the Secretary approves the waiv-
er.
‘‘(B) EXPENDITURE BY END OF CARRYOVER
YEAR.—With respect to a waiver under subpara-
graph (A) that is approved for a balance that is