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fication, respectively, within three years after the date of 
such adoption. 
(c) APPLICATION OF DEFINITIONS.—The definitions 
contained in section 3000 of the Public Health Service Act, 
as added by section 13101, shall apply for purposes of this 
part. 
SEC. 13112. APPLICATION TO PRIVATE ENTITIES. 
Each agency (as defined in such Executive Order 
issued on August 22, 2006, relating to promoting quality 
and efficient health care in Federal government adminis-
tered or sponsored health care programs) shall require in 
contracts or agreements with health care providers, health 
plans, or health insurance issuers that as each provider, 
plan, or issuer implements, acquires, or upgrades health in-
formation technology systems, it shall utilize, where avail-
able, health information technology systems and products 
that meet standards and implementation specifications 
adopted under section 3004(b) of the Public Health Service 
Act, as added by section 13101. 
SEC. 13113. STUDY AND REPORTS. 
(a) REPORT ON ADOPTION OF NATIONWIDE SYSTEM.— 
Not later than 2 years after the date of the enactment of 
this Act and annually thereafter, the Secretary of Health 
and Human Services shall submit to the appropriate com-
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mittees of jurisdiction of the House of Representatives and 
the Senate a report that— 
(1) describes the specific actions that have been 
taken by the Federal Government and private entities 
to facilitate the adoption of a nationwide system for 
the electronic use and exchange of health information; 
(2) describes barriers to the adoption of such a 
nationwide system; and 
(3) contains recommendations to achieve full im-
plementation of such a nationwide system. 
(b) REIMBURSEMENT INCENTIVE STUDY
AND RE-
PORT.— 
(1) STUDY.—The Secretary of Health and 
Human Services shall carry out, or contract with a 
private entity to carry out, a study that examines 
methods to create efficient reimbursement incentives 
for improving health care quality in Federally quali-
fied health centers, rural health clinics, and free clin-
ics. 
(2) REPORT.—Not later than 2 years after the 
date of the enactment of this Act, the Secretary of 
Health and Human Services shall submit to the ap-
propriate committees of jurisdiction of the House of 
Representatives and the Senate a report on the study 
carried out under paragraph (1). 
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(c) AGING SERVICES TECHNOLOGY STUDY AND RE-
PORT.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall carry out, or contract with a 
private entity to carry out, a study of matters relat-
ing to the potential use of new aging services tech-
nology to assist seniors, individuals with disabilities, 
and their caregivers throughout the aging process. 
(2) MATTERS TO BE STUDIED.—The study under 
paragraph (1) shall include— 
(A) an evaluation of— 
(i) methods for identifying current, 
emerging, and future health technology that 
can be used to meet the needs of seniors and 
individuals with disabilities and their care-
givers across all aging services settings, as 
specified by the Secretary; 
(ii) methods for fostering scientific in-
novation with respect to aging services tech-
nology within the business and academic 
communities; and 
(iii) developments in aging services 
technology in other countries that may be 
applied in the United States; and 
(B) identification of— 
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(i) barriers to innovation in aging 
services technology and devising strategies 
for removing such barriers; and 
(ii) barriers to the adoption of aging 
services technology by health care providers 
and consumers and devising strategies to re-
moving such barriers. 
(3) REPORT.—Not later than 24 months after the 
date of the enactment of this Act, the Secretary shall 
submit to the appropriate committees of jurisdiction 
of the House of Representatives and of the Senate a 
report on the study carried out under paragraph (1). 
(4) DEFINITIONS.—For purposes of this sub-
section: 
(A) AGING
SERVICES
TECHNOLOGY.—The 
term ‘‘aging services technology’’ means health 
technology that meets the health care needs of 
seniors, individuals with disabilities, and the 
caregivers of such seniors and individuals. 
(B) SENIOR.—The term ‘‘senior’’ has such 
meaning as specified by the Secretary. 
GENERAL PROVISIONS—HOPE FOR HOMEOWNERS 
AMENDMENTS 
SEC. 1211. Section 257 of the National Housing Act 
(12 U.S.C. 1715z–23), as amended by the Emergency Eco-
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nomic Stabilization Act of 2008 (Public Law 110–343), is 
amended— 
(1) in subsection (e)(1)(B), by inserting after 
‘‘being reset,’’ the following: ‘‘or has, due to a decrease 
in income,’’; 
(2) in subsection (k)(2), by striking ‘‘and the 
mortgagor’’ and all that follows through the end and 
inserting ‘‘shall, upon any sale or disposition of the 
property to which the mortgage relates, be entitled to 
25 percent of appreciation, up to the appraised value 
of the home at the time when the mortgage being refi-
nanced under this section was originally made. The 
Secretary may share any amounts received under this 
paragraph with the holder of the eligible mortgage re-
financed under this section.’’; 
(3) in subsection (i)— 
(A) by inserting ‘‘, after weighing maxi-
mization of participation with consideration for 
the solvency of the program,’’ after ‘‘Secretary 
shall’’; 
(B) in paragraph (1), by striking ‘‘equal to 
3 percent’’ and inserting ‘‘not more than 2 per-
cent’’; and 
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(C) in paragraph (2), by striking ‘‘equal to 
1.5 percent’’ and inserting ‘‘not more than 1 per-
cent’’; and 
(4) by adding at the end the following: 
‘‘(x) AUCTIONS.—The Board shall, if feasible, establish 
a structure and organize procedures for an auction to refi-
nance eligible mortgages on a wholesale or bulk basis. 
‘‘(y) COMPENSATION OF SERVICERS.—To provide in-
centive for participation in the program under this section, 
each servicer of an eligible mortgage insured under this sec-
tion shall be paid $1,000 for performing services associated 
with refinancing such mortgage, or such other amount as 
the Board determines is warranted. Funding for such com-
pensation shall be provided by funds realized through the 
HOPE bond under subsection (w).’’. 
Subtitle B—Testing of Health 
Information Technology 
SEC. 13201. NATIONAL INSTITUTE FOR STANDARDS AND 
TECHNOLOGY TESTING. 
(a) PILOT TESTING OF STANDARDS AND IMPLEMENTA-
TION SPECIFICATIONS.—In coordination with the HIT 
Standards Committee established under section 3003 of the 
Public Health Service Act, as added by section 13101, with 
respect to the development of standards and implementation 
specifications under such section, the Director of the Na-
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tional Institute for Standards and Technology shall test 
such standards and implementation specifications, as ap-
propriate, in order to assure the efficient implementation 
and use of such standards and implementation specifica-
tions. 
(b) VOLUNTARY TESTING PROGRAM.—In coordination 
with the HIT Standards Committee established under sec-
tion 3003 of the Public Health Service Act, as added by 
section 13101, with respect to the development of standards 
and implementation specifications under such section, the 
Director of the National Institute of Standards and Tech-
nology shall support the establishment of a conformance 
testing infrastructure, including the development of tech-
nical test beds. The development of this conformance testing 
infrastructure may include a program to accredit inde-
pendent, non-Federal laboratories to perform testing. 
SEC. 13202. RESEARCH AND DEVELOPMENT PROGRAMS. 
(a) HEALTH CARE INFORMATION ENTERPRISE INTE-
GRATION RESEARCH CENTERS.— 
(1) IN GENERAL.—The Director of the National 
Institute of Standards and Technology, in consulta-
tion with the Director of the National Science Foun-
dation and other appropriate Federal agencies, shall 
establish a program of assistance to institutions of 
higher education (or consortia thereof which may in-
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clude nonprofit entities and Federal Government lab-
oratories) to establish multidisciplinary Centers for 
Health Care Information Enterprise Integration. 
(2) REVIEW; COMPETITION.—Grants shall be 
awarded under this subsection on a merit-reviewed, 
competitive basis. 
(3) PURPOSE.—The purposes of the Centers de-
scribed in paragraph (1) shall be— 
(A) to generate innovative approaches to 
health care information enterprise integration by 
conducting cutting-edge, multidisciplinary re-
search on the systems challenges to health care 
delivery; and 
(B) the development and use of health infor-
mation technologies and other complementary 
fields. 
(4) RESEARCH AREAS.—Research areas may in-
clude— 
(A) interfaces between human information 
and communications technology systems; 
(B) voice-recognition systems; 
(C) software that improves interoperability 
and connectivity among health information sys-
tems; 
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(D) software dependability in systems crit-
ical to health care delivery; 
(E) measurement of the impact of informa-
tion technologies on the quality and productivity 
of health care; 
(F) health information enterprise manage-
ment; 
(G) health information technology security 
and integrity; and 
(H) relevant health information technology 
to reduce medical errors. 
(5) APPLICATIONS.—An institution of higher 
education (or a consortium thereof) seeking funding 
under this subsection shall submit an application to 
the Director of the National Institute of Standards 
and Technology at such time, in such manner, and 
containing such information as the Director may re-
quire. The application shall include, at a minimum, 
a description of— 
(A) the research projects that will be under-
taken by the Center established pursuant to as-
sistance under paragraph (1) and the respective 
contributions of the participating entities; 
(B) how the Center will promote active col-
laboration among scientists and engineers from 
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different disciplines, such as information tech-
nology, biologic sciences, management, social 
sciences, and other appropriate disciplines; 
(C) technology transfer activities to dem-
onstrate and diffuse the research results, tech-
nologies, and knowledge; and 
(D) how the Center will contribute to the 
education and training of researchers and other 
professionals in fields relevant to health informa-
tion enterprise integration. 
(b) NATIONAL INFORMATION TECHNOLOGY RESEARCH 
AND DEVELOPMENT PROGRAM.—The National High-Per-
formance Computing Program established by section 101 of 
the High-Performance Computing Act of 1991 (15 U.S.C. 
5511) may review Federal research and development pro-
grams related to the development and deployment of health 
information technology, including activities related to— 
(1) computer infrastructure; 
(2) data security; 
(3) development of large-scale, distributed, reli-
able computing systems; 
(4) wired, wireless, and hybrid high-speed net-
working; 
(5) development of software and software-inten-
sive systems; 
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(6) human-computer interaction and informa-
tion management technologies; and 
(7) the social and economic implications of in-
formation technology. 
Subtitle C—Incentives for the Use of 
Health Information Technology 
PART I—GRANTS AND LOANS FUNDING 
SEC. 13301. GRANT, LOAN, AND DEMONSTRATION PRO-
GRAMS. 
Title XXX of the Public Health Service Act, as added 
by section 13101, is amended by adding at the end the fol-
lowing new subtitle: 
‘‘Subtitle B—Incentives for the Use 
of Health Information Technology 
‘‘SEC. 3011. IMMEDIATE FUNDING TO STRENGTHEN THE 
HEALTH INFORMATION TECHNOLOGY INFRA-
STRUCTURE. 
‘‘(a) IN GENERAL.—The Secretary of Health and 
Human Services shall, using amounts appropriated under 
section 3018, invest in the infrastructure necessary to allow 
for and promote the electronic exchange and use of health 
information for each individual in the United States con-
sistent with the goals outlined in the strategic plan devel-
oped by the National Coordinator (and, as available) under 
section 3001. To the greatest extent practicable, the Sec-
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retary shall ensure that any funds so appropriated shall 
be used for the acquisition of health information technology 
that meets standards and certification criteria adopted be-
fore the date of the enactment of this title until such date 
as the standards are adopted under section 3004. The Sec-
retary shall invest funds through the different agencies with 
expertise in such goals, such as the Office of the National 
Coordinator for Health Information Technology, the Health 
Resources and Services Administration, the Agency for 
Healthcare Research and Quality, the Centers of Medicare 
& Medicaid Services, the Centers for Disease Control and 
Prevention, and the Indian Health Service to support the 
following: 
‘‘(1) Health information technology architecture 
that will support the nationwide electronic exchange 
and use of health information in a secure, private, 
and accurate manner, including connecting health in-
formation exchanges, and which may include updat-
ing and implementing the infrastructure necessary 
within different agencies of the Department of Health 
and Human Services to support the electronic use 
and exchange of health information. 
‘‘(2) Development and adoption of appropriate 
certified electronic health records for categories of pro-
viders not eligible for support under title XVIII or 
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XIX of the Social Security Act for the adoption of 
such records. 
‘‘(3) Training on and dissemination of informa-
tion on best practices to integrate health information 
technology, including electronic health records, into a 
provider’s delivery of care, consistent with best prac-
tices learned from the Health Information Technology 
Research Center developed under section 3012, includ-
ing community health centers receiving assistance 
under section 330 of the Public Health Service Act, 
covered entities under section 340B of such Act, and 
providers participating in one or more of the pro-
grams under titles XVIII, XIX, and XXI of the Social 
Security Act (relating to Medicare, Medicaid, and the 
State Children’s Health Insurance Program). 
‘‘(4) Infrastructure and tools for the promotion 
of telemedicine, including coordination among Fed-
eral agencies in the promotion of telemedicine. 
‘‘(5) Promotion of the interoperability of clinical 
data repositories or registries. 
‘‘(6) Promotion of technologies and best practices 
that enhance the protection of health information by 
all holders of individually identifiable health informa-
tion. 
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‘‘(7) Improve and expand the use of health infor-
mation technology by public health departments. 
‘‘(8) Provide $300,000,000 to support regional or 
sub-national efforts towards health information ex-
change. 
‘‘(b) COORDINATION.—The Secretary shall ensure 
funds under this section are used in a coordinated manner 
with other health information promotion activities. 
‘‘(c) ADDITIONAL USE OF FUNDS.—In addition to 
using funds as provided in subsection (a), the Secretary 
may use amounts appropriated under section 3018 to carry 
out activities that are provided for under laws in effect on 
the date of enactment of this title. 
‘‘SEC. 3012. HEALTH INFORMATION TECHNOLOGY IMPLE-
MENTATION ASSISTANCE. 
‘‘(a) HEALTH INFORMATION TECHNOLOGY EXTENSION 
PROGRAM.—To assist health care providers to adopt, imple-
ment, and effectively use certified EHR technology that al-
lows for the electronic exchange and use of health informa-
tion, the Secretary, acting through the Office of the National 
Coordinator, shall establish a health information technology 
extension program to provide health information technology 
assistance services to be carried out through the Department 
of Health and Human Services. The National Coordinator 
shall consult with other Federal agencies with demonstrated 
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experience and expertise in information technology services, 
such as the National Institute of Standards and Tech-
nology, in developing and implementing this program. 
‘‘(b) HEALTH INFORMATION TECHNOLOGY RESEARCH 
CENTER.— 
‘‘(1) IN GENERAL.—The Secretary shall create a 
Health Information Technology Research Center (in 
this section referred to as the ‘Center’) to provide tech-
nical assistance and develop or recognize best prac-
tices to support and accelerate efforts to adopt, imple-
ment, and effectively utilize health information tech-
nology that allows for the electronic exchange and use 
of information in compliance with standards, imple-
mentation specifications, and certification criteria 
adopted under section 3004(b). 
‘‘(2) INPUT.—The Center shall incorporate input 
from— 
‘‘(A) other Federal agencies with dem-
onstrated experience and expertise in informa-
tion technology services such as the National In-
stitute of Standards and Technology; 
‘‘(B) users of health information technology, 
such as providers and their support and clerical 
staff and others involved in the care and care co-
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ordination of patients, from the health care and 
health information technology industry; and 
‘‘(C) others as appropriate. 
‘‘(3) PURPOSES.—The purposes of the Center are 
to— 
‘‘(A) provide a forum for the exchange of 
knowledge and experience; 
‘‘(B) accelerate the transfer of lessons 
learned from existing public and private sector 
initiatives, including those currently receiving 
Federal financial support; 
‘‘(C) assemble, analyze, and widely dissemi-
nate evidence and experience related to the adop-
tion, implementation, and effective use of health 
information technology that allows for the elec-
tronic exchange and use of information includ-
ing through the regional centers described in sub-
section (c); 
‘‘(D) provide technical assistance for the es-
tablishment and evaluation of regional and local 
health information networks to facilitate the elec-
tronic exchange of information across health care 
settings and improve the quality of health care; 
‘‘(E) provide technical assistance for the de-
velopment and dissemination of solutions to bar-
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riers to the exchange of electronic health informa-
tion; and 
‘‘(F) learn about effective strategies to adopt 
and utilize health information technology in 
medically underserved communities. 
‘‘(c) HEALTH INFORMATION TECHNOLOGY REGIONAL 
EXTENSION CENTERS.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
assistance for the creation and support of regional 
centers (in this subsection referred to as ‘regional cen-
ters’) to provide technical assistance and disseminate 
best practices and other information learned from the 
Center to support and accelerate efforts to adopt, im-
plement, and effectively utilize health information 
technology that allows for the electronic exchange and 
use of information in compliance with standards, im-
plementation specifications, and certification criteria 
adopted under section 3004. Activities conducted 
under this subsection shall be consistent with the stra-
tegic plan developed by the National Coordinator 
(and, as available) under section 3001. 
‘‘(2) AFFILIATION.—Regional centers shall be af-
filiated with any United States-based nonprofit insti-
tution or organization, or group thereof, that applies 
and is awarded financial assistance under this sec-
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tion. Individual awards shall be decided on the basis 
of merit. 
‘‘(3) OBJECTIVE.—The objective of the regional 
centers is to enhance and promote the adoption of 
health information technology through— 
‘‘(A) assistance with the implementation, ef-
fective use, upgrading, and ongoing maintenance 
of health information technology, including elec-
tronic health records, to healthcare providers na-
tionwide; 
‘‘(B) broad participation of individuals 
from industry, universities, and State govern-
ments; 
‘‘(C) active dissemination of best practices 
and research on the implementation, effective 
use, upgrading, and ongoing maintenance of 
health information technology, including elec-
tronic health records, to health care providers in 
order to improve the quality of healthcare and 
protect the privacy and security of health infor-
mation; 
‘‘(D) participation, to the extent prac-
ticable, in health information exchanges; 
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‘‘(E) utilization, when appropriate, of the 
expertise and capability that exists in federal 
agencies other than the Department; and 
‘‘(F) integration of health information tech-
nology, including electronic health records, into 
the initial and ongoing training of health profes-
sionals and others in the healthcare industry 
that would be instrumental to improving the 
quality of healthcare through the smooth and ac-
curate electronic use and exchange of health in-
formation. 
‘‘(4) REGIONAL
ASSISTANCE.—Each regional 
center shall aim to provide assistance and education 
to all providers in a region, but shall prioritize any 
direct assistance first to the following: 
‘‘(A) Public or not-for-profit hospitals or 
critical access hospitals. 
‘‘(B) Federally qualified health centers (as 
defined in section 1861(aa)(4) of the Social Se-
curity Act). 
‘‘(C) Entities that are located in rural and 
other areas that serve uninsured, underinsured, 
and medically underserved individuals (regard-
less of whether such area is urban or rural). 
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‘‘(D) Individual or small group practices 
(or a consortium thereof) that are primarily fo-
cused on primary care. 
‘‘(5) FINANCIAL SUPPORT.—The Secretary may 
provide financial support to any regional center cre-
ated under this subsection for a period not to exceed 
four years. The Secretary may not provide more than 
50 percent of the capital and annual operating and 
maintenance funds required to create and maintain 
such a center, except in an instance of national eco-
nomic conditions which would render this cost-share 
requirement detrimental to the program and upon no-
tification to Congress as to the justification to waive 
the cost-share requirement. 
‘‘(6) NOTICE
OF
PROGRAM
DESCRIPTION
AND 
AVAILABILITY OF FUNDS.—The Secretary shall pub-
lish in the Federal Register, not later than 90 days 
after the date of the enactment of this Act, a draft de-
scription of the program for establishing regional cen-
ters under this subsection. Such description shall in-
clude the following: 
‘‘(A) A detailed explanation of the program 
and the programs goals. 
‘‘(B) Procedures to be followed by the appli-
cants. 
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‘‘(C) Criteria for determining qualified ap-
plicants. 
‘‘(D) Maximum support levels expected to be 
available to centers under the program. 
‘‘(7) APPLICATION REVIEW.—The Secretary shall 
subject each application under this subsection to 
merit review. In making a decision whether to ap-
prove such application and provide financial support, 
the Secretary shall consider at a minimum the merits 
of the application, including those portions of the ap-
plication regarding— 
‘‘(A) the ability of the applicant to provide 
assistance under this subsection and utilization 
of health information technology appropriate to 
the needs of particular categories of health care 
providers; 
‘‘(B) the types of service to be provided to 
health care providers; 
‘‘(C) geographical diversity and extent of 
service area; and 
‘‘(D) the percentage of funding and amount 
of in-kind commitment from other sources. 
‘‘(8) BIENNIAL EVALUATION.—Each regional cen-
ter which receives financial assistance under this sub-
section shall be evaluated biennially by an evaluation 
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panel appointed by the Secretary. Each evaluation 
panel shall be composed of private experts, none of 
whom shall be connected with the center involved, and 
of Federal officials. Each evaluation panel shall meas-
ure the involved center’s performance against the ob-
jective specified in paragraph (3). The Secretary shall 
not continue to provide funding to a regional center 
unless its evaluation is overall positive. 
‘‘(9) CONTINUING
SUPPORT.—After the second 
year of assistance under this subsection a regional 
center may receive additional support under this sub-
section if it has received positive evaluations and a 
finding by the Secretary that continuation of Federal 
funding to the center was in the best interest of provi-
sion of health information technology extension serv-
ices. 
‘‘SEC. 3013. STATE GRANTS TO PROMOTE HEALTH INFORMA-
TION TECHNOLOGY. 
‘‘(a) IN GENERAL.—The Secretary, acting through the 
National Coordinator, shall establish a program in accord-
ance with this section to facilitate and expand the electronic 
movement and use of health information among organiza-
tions according to nationally recognized standards. 
‘‘(b) PLANNING GRANTS.—The Secretary may award 
a grant to a State or qualified State-designated entity (as 
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described in subsection (d)) that submits an application to 
the Secretary at such time, in such manner, and containing 
such information as the Secretary may specify, for the pur-
pose of planning activities described in subsection (b). 
‘‘(c) IMPLEMENTATION GRANTS.—The Secretary may 
award a grant to a State or qualified State designated enti-
ty that— 
‘‘(1) has submitted, and the Secretary has ap-
proved, a plan described in subsection (c) (regardless 
of whether such plan was prepared using amounts 
awarded under paragraph (1)); and 
‘‘(2) submits an application at such time, in 
such manner, and containing such information as the 
Secretary may specify. 
‘‘(d) USE
OF FUNDS.—Amounts received under a 
grant under subsection (a)(3) shall be used to conduct ac-
tivities to facilitate and expand the electronic movement 
and use of health information among organizations accord-
ing to nationally recognized standards through activities 
that include— 
‘‘(1) enhancing broad and varied participation 
in the authorized and secure nationwide electronic use 
and exchange of health information; 
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‘‘(2) identifying State or local resources available 
towards a nationwide effort to promote health infor-
mation technology; 
‘‘(3) complementing other Federal grants, pro-
grams, and efforts towards the promotion of health 
information technology; 
‘‘(4) providing technical assistance for the devel-
opment and dissemination of solutions to barriers to 
the exchange of electronic health information; 
‘‘(5) promoting effective strategies to adopt and 
utilize health information technology in medically un-
derserved communities; 
‘‘(6) assisting patients in utilizing health infor-
mation technology; 
‘‘(7) encouraging clinicians to work with Health 
Information Technology Regional Extension Centers 
as described in section 3012, to the extent they are 
available and valuable; 
‘‘(8) supporting public health agencies’ author-
ized use of and access to electronic health information; 
‘‘(9) promoting the use of electronic health 
records for quality improvement including through 
quality measures reporting; 
‘‘(10) establishing and supporting health record 
banking models to further consumer-based consent 
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models that promote lifetime access to qualified health 
records, if such activities are included in the plan de-
scribed in subsection (e), and may contain smart card 
functionality; and 
‘‘(11) such other activities as the Secretary may 
specify. 
‘‘(e) PLAN.— 
‘‘(1) IN GENERAL.—A plan described in this sub-
section is a plan that describes the activities to be 
carried out by a State or by the qualified State-des-
ignated entity within such State to facilitate and ex-
pand the electronic movement and use of health infor-
mation among organizations according to nationally 
recognized standards and implementation specifica-
tions. 
‘‘(2) REQUIRED ELEMENTS.—A plan described 
in paragraph (1) shall— 
‘‘(A) be pursued in the public interest; 
‘‘(B) be consistent with the strategic plan 
developed by the National Coordinator (and, as 
available) under section 3001; 
‘‘(C) include a description of the ways the 
State or qualified State-designated entity will 
carry out the activities described in subsection 
(b); and 
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‘‘(D) contain such elements as the Secretary 
may require. 
‘‘(f) QUALIFIED STATE-DESIGNATED ENTITY.—For 
purposes of this section, to be a qualified State-designated 
entity, with respect to a State, an entity shall— 
‘‘(1) be designated by the State as eligible to re-
ceive awards under this section; 
‘‘(2) be a not-for-profit entity with broad stake-
holder representation on its governing board; 
‘‘(3) demonstrate that one of its principal goals 
is to use information technology to improve health 
care quality and efficiency through the authorized 
and secure electronic exchange and use of health in-
formation; 
‘‘(4) adopt nondiscrimination and conflict of in-
terest policies that demonstrate a commitment to 
open, fair, and nondiscriminatory participation by 
stakeholders; and 
‘‘(5) conform to such other requirements as the 
Secretary may establish. 
‘‘(g) REQUIRED CONSULTATION.—In carrying out ac-
tivities described in subsections (a)(2) and (a)(3), a State 
or qualified State-designated entity shall consult with and 
consider the recommendations of— 
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‘‘(1) health care providers (including providers 
that provide services to low income and underserved 
populations); 
‘‘(2) health plans; 
‘‘(3) patient or consumer organizations that rep-
resent the population to be served; 
‘‘(4) health information technology vendors; 
‘‘(5) health care purchasers and employers; 
‘‘(6) public health agencies; 
‘‘(7) health professions schools, universities and 
colleges; 
‘‘(8) clinical researchers; 
‘‘(9) other users of health information technology 
such as the support and clerical staff of providers and 
others involved in the care and care coordination of 
patients; and 
‘‘(10) such other entities, as may be determined 
appropriate by the Secretary. 
‘‘(h) CONTINUOUS
IMPROVEMENT.—The Secretary 
shall annually evaluate the activities conducted under this 
section and shall, in awarding grants under this section, 
implement the lessons learned from such evaluation in a 
manner so that awards made subsequent to each such eval-
uation are made in a manner that, in the determination 
of the Secretary, will lead towards the greatest improvement 
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in quality of care, decrease in costs, and the most effective 
authorized and secure electronic exchange of health informa-
tion. 
‘‘(i) REQUIRED MATCH.— 
‘‘(1) IN GENERAL.—For a fiscal year (beginning 
with fiscal year 2011), the Secretary may not make 
a grant under subsection (a) to a State unless the 
State agrees to make available non-Federal contribu-
tions (which may include in-kind contributions) to-
ward the costs of a grant awarded under subsection 
(a)(3) in an amount equal to— 
‘‘(A) for fiscal year 2011, not less than $1 
for each $10 of Federal funds provided under the 
grant; 
‘‘(B) for fiscal year 2012, not less than $1 
for each $7 of Federal funds provided under the 
grant; and 
‘‘(C) for fiscal year 2013 and each subse-
quent fiscal year, not less than $1 for each $3 of 
Federal funds provided under the grant. 
‘‘(2) AUTHORITY TO REQUIRE STATE MATCH FOR 
FISCAL YEARS BEFORE FISCAL YEAR 2011.—For any 
fiscal year during the grant program under this sec-
tion before fiscal year 2011, the Secretary may deter-
mine the extent to which there shall be required a 
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non-Federal contribution from a State receiving a 
grant under this section. 
‘‘SEC. 3014. COMPETITIVE GRANTS TO STATES AND INDIAN 
TRIBES FOR THE DEVELOPMENT OF LOAN 
PROGRAMS TO FACILITATE THE WIDESPREAD 
ADOPTION OF CERTIFIED EHR TECHNOLOGY. 
‘‘(a) IN GENERAL.—The National Coordinator may 
award competitive grants to eligible entities for the estab-
lishment of programs for loans to health care providers to 
conduct the activities described in subsection (e). 
‘‘(b) ELIGIBLE ENTITY DEFINED.—For purposes of 
this subsection, the term ‘eligible entity’ means a State or 
Indian tribe (as defined in the Indian Self-Determination 
and Education Assistance Act) that— 
‘‘(1) submits to the National Coordinator an ap-
plication at such time, in such manner, and con-
taining such information as the National Coordinator 
may require; 
‘‘(2) submits to the National Coordinator a stra-
tegic plan in accordance with subsection (d) and pro-
vides to the National Coordinator assurances that the 
entity will update such plan annually in accordance 
with such subsection; 
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‘‘(3) provides assurances to the National Coordi-
nator that the entity will establish a Loan Fund in 
accordance with subsection (c); 
‘‘(4) provides assurances to the National Coordi-
nator that the entity will not provide a loan from the 
Loan Fund to a health care provider unless the pro-
vider agrees to— 
‘‘(A) submit reports on quality measures 
adopted by the Federal Government (by not later 
than 90 days after the date on which such meas-
ures are adopted), to— 
‘‘(i) the Director of the Centers for 
Medicare & Medicaid Services (or his or her 
designee), in the case of an entity partici-
pating in the Medicare program under title 
XVIII of the Social Security Act or the 
Medicaid program under title XIX of such 
Act; or 
‘‘(ii) the Secretary in the case of other 
entities; 
‘‘(B) demonstrate to the satisfaction of the 
Secretary (through criteria established by the 
Secretary) that any certified EHR technology 
purchased, improved, or otherwise financially 
supported under a loan under this section is 
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used to exchange health information in a man-
ner that, in accordance with law and standards 
(as adopted under section 3005) applicable to the 
exchange of information, improves the quality of 
health care, such as promoting care coordination; 
‘‘(C) comply with such other requirements 
as the entity or the Secretary may require; 
‘‘(D) include a plan on how healthcare pro-
viders involved intend to maintain and support 
the certified EHR technology over time; and 
‘‘(E) include a plan on how the healthcare 
providers involved intend to maintain and sup-
port the certified EHR technology that would be 
purchased with such loan, including the type of 
resources expected to be involved and any such 
other information as the State or Indian tribe, 
respectively, may require; and 
‘‘(5) agrees to provide matching funds in accord-
ance with subsection (i). 
‘‘(c) ESTABLISHMENT OF FUND.—For purposes of sub-
section (b)(3), an eligible entity shall establish a certified 
EHR technology loan fund (referred to in this subsection 
as a ‘Loan Fund’) and comply with the other requirements 
contained in this section. A grant to an eligible entity under 
this section shall be deposited in the Loan Fund established 
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by the eligible entity. No funds authorized by other provi-
sions of this title to be used for other purposes specified in 
this title shall be deposited in any Loan Fund. 
‘‘(d) STRATEGIC PLAN.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(b)(2), a strategic plan of an eligible entity under this 
subsection shall identify the intended uses of amounts 
available to the Loan Fund of such entity. 
‘‘(2) CONTENTS.—A strategic plan under para-
graph (1), with respect to a Loan Fund of an eligible 
entity, shall include for a year the following: 
‘‘(A) A list of the projects to be assisted 
through the Loan Fund during such year. 
‘‘(B) A description of the criteria and meth-
ods established for the distribution of funds from 
the Loan Fund during the year. 
‘‘(C) A description of the financial status of 
the Loan Fund as of the date of submission of 
the plan. 
‘‘(D) The short-term and long-term goals of 
the Loan Fund. 
‘‘(e) USE OF FUNDS.—Amounts deposited in a Loan 
Fund, including loan repayments and interest earned on 
such amounts, shall be used only for awarding loans or loan 
guarantees, making reimbursements described in subsection 
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(g)(4)(A), or as a source of reserve and security for lever-
aged loans, the proceeds of which are deposited in the Loan 
Fund established under subsection (a). Loans under this 
section may be used by a health care provider to— 
‘‘(1) facilitate the purchase of certified EHR 
technology; 
‘‘(2) enhance the utilization of certified EHR 
technology (which may include costs associated with 
upgrading health information technology so that it 
meets criteria necessary to be a certified EHR tech-
nology); 
‘‘(3) train personnel in the use of such tech-
nology; or 
‘‘(4) improve the secure electronic exchange of 
health information. 
‘‘(f) TYPES OF ASSISTANCE.—Except as otherwise lim-
ited by applicable State law, amounts deposited into a 
Loan Fund under this subsection may only be used for the 
following: 
‘‘(1) To award loans that comply with the fol-
lowing: 
‘‘(A) The interest rate for each loan shall 
not exceed the market interest rate. 
‘‘(B) The principal and interest payments 
on each loan shall commence not later than 1 
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year after the date the loan was awarded, and 
each loan shall be fully amortized not later than 
10 years after the date of the loan. 
‘‘(C) The Loan Fund shall be credited with 
all payments of principal and interest on each 
loan awarded from the Loan Fund. 
‘‘(2) To guarantee, or purchase insurance for, a 
local obligation (all of the proceeds of which finance 
a project eligible for assistance under this subsection) 
if the guarantee or purchase would improve credit 
market access or reduce the interest rate applicable to 
the obligation involved. 
‘‘(3) As a source of revenue or security for the 
payment of principal and interest on revenue or gen-
eral obligation bonds issued by the eligible entity if 
the proceeds of the sale of the bonds will be deposited 
into the Loan Fund. 
‘‘(4) To earn interest on the amounts deposited 
into the Loan Fund. 
‘‘(5) To make reimbursements described in sub-
section (g)(4)(A). 
‘‘(g) ADMINISTRATION OF LOAN FUNDS.— 
‘‘(1) COMBINED FINANCIAL ADMINISTRATION.— 
An eligible entity may (as a convenience and to avoid 
unnecessary administrative costs) combine, in accord-
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ance with applicable State law, the financial admin-
istration of a Loan Fund established under this sub-
section with the financial administration of any other 
revolving fund established by the entity if otherwise 
not prohibited by the law under which the Loan Fund 
was established. 
‘‘(2) COST OF ADMINISTERING FUND.—Each eli-
gible entity may annually use not to exceed 4 percent 
of the funds provided to the entity under a grant 
under this subsection to pay the reasonable costs of 
the administration of the programs under this section, 
including the recovery of reasonable costs expended to 
establish a Loan Fund which are incurred after the 
date of the enactment of this title. 
‘‘(3) GUIDANCE
AND
REGULATIONS.—The Na-
tional Coordinator shall publish guidance and pro-
mulgate regulations as may be necessary to carry out 
the provisions of this section, including— 
‘‘(A) provisions to ensure that each eligible 
entity commits and expends funds allotted to the 
entity under this subsection as efficiently as pos-
sible in accordance with this title and applicable 
State laws; and 
‘‘(B) guidance to prevent waste, fraud, and 
abuse. 
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‘‘(4) PRIVATE SECTOR CONTRIBUTIONS.— 
‘‘(A) IN
GENERAL.—A Loan Fund estab-
lished under this subsection may accept contribu-
tions from private sector entities, except that 
such entities may not specify the recipient or re-
cipients of any loan issued under this subsection. 
An eligible entity may agree to reimburse a pri-
vate sector entity for any contribution made 
under this subparagraph, except that the amount 
of such reimbursement may not be greater than 
the principal amount of the contribution made. 
‘‘(B) AVAILABILITY OF INFORMATION.—An 
eligible entity shall make publicly available the 
identity of, and amount contributed by, any pri-
vate sector entity under subparagraph (A) and 
may issue letters of commendation or make other 
awards (that have no financial value) to any 
such entity. 
‘‘(h) MATCHING REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—The National Coordinator 
may not make a grant under subsection (a) to an eli-
gible entity unless the entity agrees to make available 
(directly or through donations from public or private 
entities) non-Federal contributions in cash to the costs 
of carrying out the activities for which the grant is 
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awarded in an amount equal to not less than $1 for 
each $5 of Federal funds provided under the grant. 
‘‘(2) DETERMINATION OF AMOUNT OF NON-FED-
ERAL CONTRIBUTION.—In determining the amount of 
non-Federal contributions that an eligible entity has 
provided pursuant to subparagraph (A), the National 
Coordinator may not include any amounts provided 
to the entity by the Federal Government. 
‘‘(i) EFFECTIVE DATE.—The Secretary may not make 
an award under this section prior to January 1, 2010. 
‘‘SEC. 3015. DEMONSTRATION PROGRAM TO INTEGRATE IN-
FORMATION TECHNOLOGY INTO CLINICAL 
EDUCATION. 
‘‘(a) IN GENERAL.—The Secretary may award grants 
under this section to carry out demonstration projects to 
develop academic curricula integrating certified EHR tech-
nology in the clinical education of health professionals. 
Such awards shall be made on a competitive basis and pur-
suant to peer review. 
‘‘(b) ELIGIBILITY.—To be eligible to receive a grant 
under subsection (a), an entity shall— 
‘‘(1) submit to the Secretary an application at 
such time, in such manner, and containing such in-
formation as the Secretary may require; 
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‘‘(2) submit to the Secretary a strategic plan for 
integrating certified EHR technology in the clinical 
education of health professionals to reduce medical er-
rors, increase access to prevention, reduce chronic dis-
eases, and enhance health care quality; 
‘‘(3) be— 
‘‘(A) a school of medicine, osteopathic medi-
cine, dentistry, or pharmacy, a graduate pro-
gram in behavioral or mental health, or any 
other graduate health professions school; 
‘‘(B) a graduate school of nursing or physi-
cian assistant studies; 
‘‘(C) a consortium of two or more schools 
described in subparagraph (A) or (B); or 
‘‘(D) an institution with a graduate med-
ical education program in medicine, osteopathic 
medicine, dentistry, pharmacy, nursing, or phy-
sician assistance studies. 
‘‘(4) provide for the collection of data regarding 
the effectiveness of the demonstration project to be 
funded under the grant in improving the safety of pa-
tients, the efficiency of health care delivery, and in 
increasing the likelihood that graduates of the grantee 
will adopt and incorporate certified EHR technology, 
in the delivery of health care services; and 
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‘‘(5) provide matching funds in accordance with 
subsection (d). 
‘‘(c) USE OF FUNDS.— 
‘‘(1) IN
GENERAL.—With respect to a grant 
under subsection (a), an eligible entity shall— 
‘‘(A) use grant funds in collaboration with 
2 or more disciplines; and 
‘‘(B) use grant funds to integrate certified 
EHR technology into community-based clinical 
education. 
‘‘(2) LIMITATION.—An eligible entity shall not 
use amounts received under a grant under subsection 
(a) to purchase hardware, software, or services. 
‘‘(d) FINANCIAL SUPPORT.—The Secretary may not 
provide more than 50 percent of the costs of any activity 
for which assistance is provided under subsection (a), except 
in an instance of national economic conditions which would 
render the cost-share requirement under this subsection det-
rimental to the program and upon notification to Congress 
as to the justification to waive the cost-share requirement. 
‘‘(e) EVALUATION.—The Secretary shall take such ac-
tion as may be necessary to evaluate the projects funded 
under this section and publish, make available, and dis-
seminate the results of such evaluations on as wide a basis 
as is practicable. 
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‘‘(f) REPORTS.—Not later than 1 year after the date 
of enactment of this title, and annually thereafter, the Sec-
retary shall submit to the Committee on Health, Education, 
Labor, and Pensions and the Committee on Finance of the 
Senate, and the Committee on Energy and Commerce of 
the House of Representatives a report that— 
‘‘(1) describes the specific projects established 
under this section; and 
‘‘(2) contains recommendations for Congress 
based on the evaluation conducted under subsection 
(e). 
‘‘SEC. 3016. INFORMATION TECHNOLOGY PROFESSIONALS 
ON HEALTH CARE. 
‘‘(a) IN GENERAL.—The Secretary, in consultation 
with the Director of the National Science Foundation, shall 
provide assistance to institutions of higher education (or 
consortia thereof) to establish or expand medical health 
informatics education programs, including certification, 
undergraduate, and masters degree programs, for both 
health care and information technology students to ensure 
the rapid and effective utilization and development of 
health information technologies (in the United States health 
care infrastructure). 
‘‘(b) ACTIVITIES.—Activities for which assistance may 
be provided under subsection (a) may include the following: 
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‘‘(1) Developing and revising curricula in med-
ical health informatics and related disciplines. 
‘‘(2) Recruiting and retaining students to the 
program involved. 
‘‘(3) Acquiring equipment necessary for student 
instruction in these programs, including the installa-
tion of testbed networks for student use. 
‘‘(4) Establishing or enhancing bridge programs 
in the health informatics fields between community 
colleges and universities. 
‘‘(c) PRIORITY.—In providing assistance under sub-
section (a), the Secretary shall give preference to the fol-
lowing: 
‘‘(1) Existing education and training programs. 
‘‘(2) Programs designed to be completed in less 
than six months. 
‘‘(d) FINANCIAL SUPPORT.—The Secretary may not 
provide more than 50 percent of the costs of any activity 
for which assistance is provided under subsection (a), except 
in an instance of national economic conditions which would 
render the cost-share requirement under this subsection det-
rimental to the program and upon notification to Congress 
as to the justification to waive the cost-share requirement. 
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‘‘SEC. 3017. GENERAL GRANT AND LOAN PROVISIONS. 
‘‘(a) REPORTS.—The Secretary may require that an 
entity receiving assistance under this title shall submit to 
the Secretary, not later than the date that is 1 year after 
the date of receipt of such assistance, a report that in-
cludes— 
‘‘(1) an analysis of the effectiveness of such ac-
tivities for which the entity receives such assistance, 
as compared to the goals for such activities; and 
‘‘(2) an analysis of the impact of the project on 
healthcare quality and safety. 
‘‘(b) REQUIREMENT TO IMPROVE QUALITY OF CARE 
AND DECREASE IN COSTS.—The National Coordinator shall 
annually evaluate the activities conducted under this title 
and shall, in awarding grants, implement the lessons 
learned from such evaluation in a manner so that awards 
made subsequent to each such evaluation are made in a 
manner that, in the determination of the National Coordi-
nator, will result in the greatest improvement in the quality 
and efficiency of health care. 
‘‘SEC. 3018. AUTHORIZATION FOR APPROPRIATIONS. 
‘‘For the purposes of carrying out this subtitle, there 
is authorized to be appropriated such sums as may be nec-
essary for each of the fiscal years 2009 through 2013. 
Amounts so appropriated shall remain available until ex-
pended.’’. 
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Subtitle D—Privacy 
SEC. 13400. DEFINITIONS. 
In this subtitle, except as specified otherwise: 
(1) BREACH.—The term ‘‘breach’’ means the un-
authorized acquisition, access, use, or disclosure of 
protected health information which compromises the 
security, privacy, or integrity of protected health in-
formation maintained by or on behalf of a person. 
Such term does not include any unintentional acqui-
sition, access, use, or disclosure of such information 
by an employee or agent of the covered entity or busi-
ness associate involved if such acquisition, access, use, 
or disclosure, respectively, was made in good faith 
and within the course and scope of the employment 
or other contractual relationship of such employee or 
agent, respectively, with the covered entity or business 
associate and if such information is not further ac-
quired, accessed, used, or disclosed by such employee 
or agent. 
(2) BUSINESS ASSOCIATE.—The term ‘‘business 
associate’’ has the meaning given such term in section 
160.103 of title 45, Code of Federal Regulations. 
(3) COVERED ENTITY.—The term ‘‘covered enti-
ty’’ has the meaning given such term in section 
160.103 of title 45, Code of Federal Regulations. 
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(4) DISCLOSE.—The terms ‘‘disclose’’ and ‘‘dis-
closure’’ have the meaning given the term ‘‘disclosure’’ 
in section 160.103 of title 45, Code of Federal Regula-
tions. 
(5) ELECTRONIC
HEALTH
RECORD.—The term 
‘‘electronic health record’’ means an electronic record 
of health-related information on an individual that is 
created, gathered, managed, and consulted by author-
ized health care clinicians and staff. 
(6) HEALTH
CARE
OPERATIONS.—The term 
‘‘health care operation’’ has the meaning given such 
term in section 164.501 of title 45, Code of Federal 
Regulations. 
(7) HEALTH CARE PROVIDER.—The term ‘‘health 
care provider’’ has the meaning given such term in 
section 160.103 of title 45, Code of Federal Regula-
tions. 
(8) HEALTH PLAN.—The term ‘‘health plan’’ has 
the meaning given such term in section 1171(5) of the 
Social Security Act. 
(9) NATIONAL
COORDINATOR.—The term ‘‘Na-
tional Coordinator’’ means the head of the Office of 
the National Coordinator for Health Information 
Technology established under section 3001(a) of the 
Public Health Service Act, as added by section 13101. 
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(10) PAYMENT.—The term ‘‘payment’’ has the 
meaning given such term in section 164.501 of title 
45, Code of Federal Regulations. 
(11) PERSONAL
HEALTH
RECORD.—The term 
‘‘personal health record’’ means an electronic record of 
individually identifiable health information on an in-
dividual that can be drawn from multiple sources and 
that is managed, shared, and controlled by or for the 
individual. 
(12) PROTECTED
HEALTH
INFORMATION.—The 
term ‘‘protected health information’’ has the meaning 
given such term in section 160.103 of title 45, Code 
of Federal Regulations. 
(13) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(14) SECURITY.—The term ‘‘security’’ has the 
meaning given such term in section 164.304 of title 
45, Code of Federal Regulations. 
(15) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands. 
(16) TREATMENT.—The term ‘‘treatment’’ has 
the meaning given such term in section 164.501 of 
title 45, Code of Federal Regulations. 
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(17) USE.—The term ‘‘use’’ has the meaning 
given such term in section 160.103 of title 45, Code 
of Federal Regulations. 
(18) 
VENDOR
OF
PERSONAL
HEALTH 
RECORDS.—The term ‘‘vendor of personal health 
records’’ means an entity, other than a covered entity 
(as defined in paragraph (3)), that offers or main-
tains a personal health record. 
PART I—IMPROVED PRIVACY PROVISIONS AND 
SECURITY PROVISIONS 
SEC. 13401. APPLICATION OF SECURITY PROVISIONS AND 
PENALTIES TO BUSINESS ASSOCIATES OF 
COVERED ENTITIES; ANNUAL GUIDANCE ON 
SECURITY PROVISIONS. 
(a) APPLICATION OF SECURITY PROVISIONS.—Sections 
164.308, 164.310, 164.312, and 164.316 of title 45, Code 
of Federal Regulations, shall apply to a business associate 
of a covered entity in the same manner that such sections 
apply to the covered entity. The additional requirements of 
this title that relate to security and that are made applica-
ble with respect to covered entities shall also be applicable 
to such a business associate and shall be incorporated into 
the business associate agreement between the business asso-
ciate and the covered entity. 
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(b) APPLICATION
OF CIVIL
AND CRIMINAL PEN-
ALTIES.—In the case of a business associate that violates 
any security provision specified in subsection (a), sections 
1176 and 1177 of the Social Security Act (42 U.S.C. 
1320d–5, 1320d–6) shall apply to the business associate 
with respect to such violation in the same manner such sec-
tions apply to a covered entity that violates such security 
provision. 
(c) ANNUAL GUIDANCE.—For the first year beginning 
after the date of the enactment of this Act and annually 
thereafter, the Secretary of Health and Human Services 
shall, in consultation with industry stakeholders, annually 
issue guidance on the most effective and appropriate tech-
nical safeguards for use in carrying out the sections referred 
to in subsection (a) and the security standards in subpart 
C of part 164 of title 45, Code of Federal Regulations, as 
such provisions are in effect as of the date before the enact-
ment of this Act. 
SEC. 13402. NOTIFICATION IN THE CASE OF BREACH. 
(a) IN GENERAL.—A covered entity that accesses, 
maintains, retains, modifies, records, stores, destroys, or 
otherwise holds, uses, or discloses unsecured protected health 
information (as defined in subsection (h)(1)) shall, in the 
case of a breach of such information that is discovered by 
the covered entity, notify each individual whose unsecured 
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protected health information has been, or is reasonably be-
lieved by the covered entity to have been, accessed, acquired, 
or disclosed as a result of such breach. 
(b) NOTIFICATION OF COVERED ENTITY BY BUSINESS 
ASSOCIATE.—A business associate of a covered entity that 
accesses, maintains, retains, modifies, records, stores, de-
stroys, or otherwise holds, uses, or discloses unsecured pro-
tected health information shall, following the discovery of 
a breach of such information, notify the covered entity of 
such breach. Such notice shall include the identification of 
each individual whose unsecured protected health informa-
tion has been, or is reasonably believed by the business asso-
ciate to have been, accessed, acquired, or disclosed during 
such breach. 
(c) BREACHES TREATED AS DISCOVERED.—For pur-
poses of this section, a breach shall be treated as discovered 
by a covered entity or by a business associate as of the first 
day on which such breach is known to such entity or asso-
ciate, respectively, (including any person, other than the in-
dividual committing the breach, that is an employee, officer, 
or other agent of such entity or associate, respectively) or 
should reasonably have been known to such entity or asso-
ciate (or person) to have occurred. 
(d) TIMELINESS OF NOTIFICATION.— 
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(1) IN GENERAL.—Subject to subsection (g), all 
notifications required under this section shall be made 
without unreasonable delay and in no case later than 
60 calendar days after the discovery of a breach by 
the covered entity involved (or business associate in-
volved in the case of a notification required under 
subsection (b)). 
(2) BURDEN OF PROOF.—The covered entity in-
volved (or business associate involved in the case of a 
notification required under subsection (b)), shall have 
the burden of demonstrating that all notifications 
were made as required under this part, including evi-
dence demonstrating the necessity of any delay. 
(e) METHODS OF NOTICE.— 
(1) INDIVIDUAL NOTICE.—Notice required under 
this section to be provided to an individual, with re-
spect to a breach, shall be provided promptly and in 
the following form: 
(A) Written notification by first-class mail 
to the individual (or the next of kin of the indi-
vidual if the individual is deceased) at the last 
known address of the individual or the next of 
kin, respectively, or, if specified as a preference 
by the individual, by electronic mail. The notifi-
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cation may be provided in one or more mailings 
as information is available. 
(B) In the case in which there is insuffi-
cient, or out-of-date contact information (includ-
ing a phone number, email address, or any other 
form of appropriate communication) that pre-
cludes direct written (or, if specified by the indi-
vidual under subparagraph (A), electronic) noti-
fication to the individual, a substitute form of 
notice shall be provided, including, in the case 
that there are 10 or more individuals for which 
there is insufficient or out-of-date contact infor-
mation, a conspicuous posting for a period deter-
mined by the Secretary on the home page of the 
Web site of the covered entity involved or notice 
in major print or broadcast media, including 
major media in geographic areas where the indi-
viduals affected by the breach likely reside. Such 
a notice in media or web posting will include a 
toll-free phone number where an individual can 
learn whether or not the individual’s unsecured 
protected health information is possibly included 
in the breach. 
(C) In any case deemed by the covered enti-
ty involved to require urgency because of possible 
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imminent misuse of unsecured protected health 
information, the covered entity, in addition to 
notice provided under subparagraph (A), may 
provide information to individuals by telephone 
or other means, as appropriate. 
(2) MEDIA NOTICE.—Notice shall be provided to 
prominent media outlets serving a State or jurisdic-
tion, following the discovery of a breach described in 
subsection (a), if the unsecured protected health infor-
mation of more than 500 residents of such State or 
jurisdiction is, or is reasonably believed to have been, 
accessed, acquired, or disclosed during such breach. 
(3) NOTICE TO SECRETARY.—Notice shall be pro-
vided to the Secretary by covered entities of unsecured 
protected health information that has been acquired 
or disclosed in a breach. If the breach was with re-
spect to 500 or more individuals than such notice 
must be provided immediately. If the breach was with 
respect to less than 500 individuals, the covered entity 
may maintain a log of any such breach occurring 
and annually submit such a log to the Secretary doc-
umenting such breaches occurring during the year in-
volved. 
(4) POSTING
ON
HHS
PUBLIC
WEBSITE.—The 
Secretary shall make available to the public on the 
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Internet website of the Department of Health and 
Human Services a list that identifies each covered en-
tity involved in a breach described in subsection (a) 
in which the unsecured protected health information 
of more than 500 individuals is acquired or disclosed. 
(f) CONTENT
OF NOTIFICATION.—Regardless of the 
method by which notice is provided to individuals under 
this section, notice of a breach shall include, to the extent 
possible, the following: 
(1) A brief description of what happened, includ-
ing the date of the breach and the date of the dis-
covery of the breach, if known. 
(2) A description of the types of unsecured pro-
tected health information that were involved in the 
breach (such as full name, Social Security number, 
date of birth, home address, account number, or dis-
ability code). 
(3) The steps individuals should take to protect 
themselves from potential harm resulting from the 
breach. 
(4) A brief description of what the covered entity 
involved is doing to investigate the breach, to mitigate 
losses, and to protect against any further breaches. 
(5) Contact procedures for individuals to ask 
questions or learn additional information, which shall 
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include a toll-free telephone number, an e-mail ad-
dress, Web site, or postal address. 
(g) DELAY OF NOTIFICATION AUTHORIZED FOR LAW 
ENFORCEMENT PURPOSES.—If a law enforcement official 
determines that a notification, notice, or posting required 
under this section would impede a criminal investigation 
or cause damage to national security, such notification, no-
tice, or posting shall be delayed in the same manner as pro-
vided under section 164.528(a)(2) of title 45, Code of Fed-
eral Regulations, in the case of a disclosure covered under 
such section. 
(h) UNSECURED
PROTECTED
HEALTH
INFORMA-
TION.— 
(1) DEFINITION.— 
(A) IN GENERAL.—Subject to subparagraph 
(B), for purposes of this section, the term ‘‘unse-
cured protected health information’’ means pro-
tected health information that is not secured 
through the use of a technology or methodology 
specified by the Secretary in the guidance issued 
under paragraph (2). 
(B) EXCEPTION IN CASE TIMELY GUIDANCE 
NOT ISSUED.—In the case that the Secretary does 
not issue guidance under paragraph (2) by the 
date specified in such paragraph, for purposes of 
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this section, the term ‘‘unsecured protected health 
information’’ shall mean protected health infor-
mation that is not secured by a technology 
standard that renders protected health informa-
tion unusable, unreadable, or indecipherable to 
unauthorized individuals and is developed or en-
dorsed by a standards developing organization 
that is accredited by the American National 
Standards Institute. 
(2) GUIDANCE.—For purposes of paragraph (1) 
and section 13407(f)(3), not later than the date that 
is 60 days after the date of the enactment of this Act, 
the Secretary shall, after consultation with stake-
holders, issue (and annually update) guidance speci-
fying the technologies and methodologies that render 
protected health information unusable, unreadable, or 
indecipherable to unauthorized individuals. 
(i) REPORT TO CONGRESS ON BREACHES.— 
(1) IN
GENERAL.—Not later than 12 months 
after the date of the enactment of this Act and annu-
ally thereafter, the Secretary shall prepare and sub-
mit to the Committee on Finance and the Committee 
on Health, Education, Labor, and Pensions of the 
Senate and the Committee on Ways and Means and 
the Committee on Energy and Commerce of the House 
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of Representatives a report containing the informa-
tion described in paragraph (2) regarding breaches 
for which notice was provided to the Secretary under 
subsection (e)(3). 
(2) INFORMATION.—The information described 
in this paragraph regarding breaches specified in 
paragraph (1) shall include— 
(A) the number and nature of such breaches; 
and 
(B) actions taken in response to such 
breaches. 
(j) REGULATIONS; EFFECTIVE DATE.—To carry out 
this section, the Secretary of Health and Human Services 
shall promulgate interim final regulations by not later than 
the date that is 180 days after the date of the enactment 
of this title. The provisions of this section shall apply to 
breaches that are discovered on or after the date that is 30 
days after the date of publication of such interim final regu-
lations. 
SEC. 13403. EDUCATION ON HEALTH INFORMATION PRI-
VACY. 
(a) REGIONAL OFFICE PRIVACY ADVISORS.—Not later 
than 6 months after the date of the enactment of this Act, 
the Secretary shall designate an individual in each regional 
office of the Department of Health and Human Services to 
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offer guidance and education to covered entities, business 
associates, and individuals on their rights and responsibil-
ities related to Federal privacy and security requirements 
for protected health information. 
(b) EDUCATION INITIATIVE ON USES OF HEALTH IN-
FORMATION.—Not later than 12 months after the date of 
the enactment of this Act, the Office for Civil Rights within 
the Department of Health and Human Services shall de-
velop and maintain a multi-faceted national education ini-
tiative to enhance public transparency regarding the uses 
of protected health information, including programs to edu-
cate individuals about the potential uses of their protected 
health information, the effects of such uses, and the rights 
of individuals with respect to such uses. Such programs 
shall be conducted in a variety of languages and present 
information in a clear and understandable manner. 
SEC. 13404. APPLICATION OF PRIVACY PROVISIONS AND 
PENALTIES TO BUSINESS ASSOCIATES OF 
COVERED ENTITIES. 
(a) APPLICATION OF CONTRACT REQUIREMENTS.—In 
the case of a business associate of a covered entity that ob-
tains or creates protected health information pursuant to 
a written contract (or other written arrangement) described 
in section 164.502(e)(2) of title 45, Code of Federal Regula-
tions, with such covered entity, the business associate may 
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use and disclose such protected health information only if 
such use or disclosure, respectively, is in compliance with 
each applicable requirement of section 164.504(e) of such 
title. The additional requirements of this subtitle that relate 
to privacy and that are made applicable with respect to 
covered entities shall also be applicable to such a business 
associate and shall be incorporated into the business asso-
ciate agreement between the business associate and the cov-
ered entity. 
(b) APPLICATION OF KNOWLEDGE ELEMENTS ASSOCI-
ATED WITH CONTRACTS.—Section 164.504(e)(1)(ii) of title 
45, Code of Federal Regulations, shall apply to a business 
associate described in subsection (a), with respect to compli-
ance with such subsection, in the same manner that such 
section applies to a covered entity, with respect to compli-
ance with the standards in sections 164.502(e) and 
164.504(e) of such title, except that in applying such section 
164.504(e)(1)(ii) each reference to the business associate, 
with respect to a contract, shall be treated as a reference 
to the covered entity involved in such contract. 
(c) APPLICATION
OF
CIVIL
AND
CRIMINAL
PEN-
ALTIES.—In the case of a business associate that violates 
any provision of subsection (a) or (b), the provisions of sec-
tions 1176 and 1177 of the Social Security Act (42 U.S.C. 
1320d–5, 1320d–6) shall apply to the business associate 
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with respect to such violation in the same manner as such 
provisions apply to a person who violates a provision of 
part C of title XI of such Act. 
SEC. 13405. RESTRICTIONS ON CERTAIN DISCLOSURES AND 
SALES OF HEALTH INFORMATION; ACCOUNT-
ING OF CERTAIN PROTECTED HEALTH INFOR-
MATION DISCLOSURES; ACCESS TO CERTAIN 
INFORMATION IN ELECTRONIC FORMAT. 
(a) REQUESTED RESTRICTIONS ON CERTAIN DISCLO-
SURES OF HEALTH INFORMATION.—In the case that an in-
dividual requests under paragraph (a)(1)(i)(A) of section 
164.522 of title 45, Code of Federal Regulations, that a cov-
ered entity restrict the disclosure of the protected health in-
formation of the individual, notwithstanding paragraph 
(a)(1)(ii) of such section, the covered entity must comply 
with the requested restriction if— 
(1) except as otherwise required by law, the dis-
closure is to a health plan for purposes of carrying 
out payment or health care operations (and is not for 
purposes of carrying out treatment); and 
(2) the protected health information pertains 
solely to a health care item or service for which the 
health care provider involved has been paid out of 
pocket in full. 
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(b) DISCLOSURES REQUIRED TO BE LIMITED TO THE 
LIMITED DATA SET OR THE MINIMUM NECESSARY.— 
(1) IN GENERAL.— 
(A) IN GENERAL.—Subject to subparagraph 
(B), a covered entity shall be treated as being in 
compliance with section 164.502(b)(1) of title 45, 
Code of Federal Regulations, with respect to the 
use, disclosure, or request of protected health in-
formation described in such section, only if the 
covered entity limits such protected health infor-
mation, to the extent practicable, to the limited 
data set (as defined in section 164.514(e)(2) of 
such title) or, if needed by such entity, to the 
minimum necessary to accomplish the intended 
purpose of such use, disclosure, or request, re-
spectively. 
(B) GUIDANCE.—Not later than 18 months 
after the date of the enactment of this section, the 
Secretary shall issue guidance on what con-
stitutes ‘‘minimum necessary’’ for purposes of 
subpart E of part 164 of title 45, Code of Fed-
eral Regulation. In issuing such guidance the 
Secretary shall take into consideration the guid-
ance under section 13424(c) and the information 
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necessary to improve patient outcomes and to de-
tect, prevent, and manage chronic disease. 
(C) SUNSET.—Subparagraph (A) shall not 
apply on and after the effective date on which 
the Secretary issues the guidance under subpara-
graph (B). 
(2) DETERMINATION OF MINIMUM NECESSARY.— 
For purposes of paragraph (1), in the case of the dis-
closure of protected health information, the covered 
entity or business associate disclosing such informa-
tion shall determine what constitutes the minimum 
necessary to accomplish the intended purpose of such 
disclosure. 
(3) APPLICATION OF EXCEPTIONS.—The excep-
tions described in section 164.502(b)(2) of title 45, 
Code of Federal Regulations, shall apply to the re-
quirement under paragraph (1) as of the effective date 
described in section 13423 in the same manner that 
such exceptions apply to section 164.502(b)(1) of such 
title before such date. 
(4) RULE OF CONSTRUCTION.—Nothing in this 
subsection shall be construed as affecting the use, dis-
closure, or request of protected health information 
that has been de-identified. 
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(c) ACCOUNTING OF CERTAIN PROTECTED HEALTH IN-
FORMATION DISCLOSURES REQUIRED IF COVERED ENTITY 
USES ELECTRONIC HEALTH RECORD.— 
‘‘(1) IN GENERAL.—In applying section 164.528 
of title 45, Code of Federal Regulations, in the case 
that a covered entity uses or maintains an electronic 
health record with respect to protected health informa-
tion— 
‘‘(A) 
the 
exception 
under 
paragraph 
(a)(1)(i) of such section shall not apply to disclo-
sures through an electronic health record made 
by such entity of such information; and 
‘‘(B) an individual shall have a right to re-
ceive an accounting of disclosures described in 
such paragraph of such information made by 
such covered entity during only the three years 
prior to the date on which the accounting is re-
quested. 
‘‘(2) REGULATIONS.—The Secretary shall pro-
mulgate regulations on what disclosures must be in-
cluded in an accounting referred to in paragraph 
(1)(A) and what information must be collected about 
each such disclosure not later than 18 months after 
the date on which the Secretary adopts standards on 
accounting for disclosure described in the section 
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3002(b)(2)(B)(iv) of the Public Health Service Act, as 
added by section 13101. Such regulations shall only 
require such information to be collected through an 
electronic health record in a manner that takes into 
account the interests of individuals in learning when 
their protected health information was disclosed and 
to whom it was disclosed, and the usefulness of such 
information to the individual, and takes into account 
the administrative and cost burden of accounting for 
such disclosures. 
‘‘(3) CONSTRUCTION.—Nothing in this subsection 
shall be construed as— 
‘‘(A) requiring a covered entity to account 
for disclosures of protected health information 
that are not made by such covered entity; or 
‘‘(B) requiring a business associate of a cov-
ered entity to account for disclosures of protected 
health information that are not made by such 
business associate. 
‘‘(4) REASONABLE FEE.—A covered entity may 
impose a reasonable fee on an individual for an ac-
counting performed under paragraph (1)(B). Any 
such fee shall not be greater than the entity’s labor 
costs in responding to the request. 
‘‘(5) EFFECTIVE DATE.— 
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‘‘(A) CURRENT
USERS
OF
ELECTRONIC 
RECORDS.—In the case of a covered entity inso-
far as it acquired an electronic health record as 
of January 1, 2009, paragraph (1) shall apply 
to disclosures, with respect to protected health in-
formation, made by the covered entity from such 
a record on and after January 1, 2014. 
‘‘(B) OTHERS.—In the case of a covered en-
tity insofar as it acquires an electronic health 
record after January 1, 2009, paragraph (1) 
shall apply to disclosures, with respect to pro-
tected health information, made by the covered 
entity from such record on and after the later of 
the following: 
‘‘(i) January 1, 2011; or 
‘‘(ii) the date that it acquires an elec-
tronic health record. 
‘‘(C) LATER DATE.—The Secretary may set 
an effective date that is later that the date speci-
fied under subparagraph (A) or (B) if the Sec-
retary determines that such later date it nec-
essary, but in no case may the date specified 
under— 
‘‘(i) subparagraph (A) be later than 
2018; or 
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‘‘(ii) subparagraph (B) be later than 
2014. 
(d) REVIEW OF HEALTH CARE OPERATIONS.—Not 
later than 18 months after the date of the enactment of this 
title, the Secretary shall review and evaluate the definition 
of health care operations under section 164.501 of title 45, 
Code of Federal Regulations, and to the extent appropriate, 
eliminate by regulation activities that can reasonably and 
efficiently be conducted through the use of information that 
is de-identified (in accordance with the requirements of sec-
tion 164.514(b) of such title) or that should require a valid 
authorization for use or disclosure. In promulgating such 
regulations, the Secretary shall not require that data be de- 
identified or require valid authorization for use or disclo-
sure for activities within a covered entity described in para-
graph (1) of the definition of health care operations under 
such section 164.501. In promulgating such regulations, the 
Secretary may choose to narrow or clarify activities that 
the Secretary chooses to retain in the definition of health 
care operations and the Secretary shall take into account 
the report under section 13424(d). In such regulations the 
Secretary shall specify the date on which such regulations 
shall apply to disclosures made by a covered entity, but in 
no case would such date be sooner than the date that is 
24 months after the date of the enactment of this section. 
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Nothing in this subsection may be construed to supersede 
any provision under subsection (e) or section 13406(a). 
(e) PROHIBITION ON SALE OF ELECTRONIC HEALTH 
RECORDS
OR PROTECTED HEALTH INFORMATION OB-
TAINED FROM ELECTRONIC HEALTH RECORDS.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), a covered entity or business associate shall 
not directly or indirectly receive remuneration in ex-
change for any protected health information of an in-
dividual unless the covered entity obtained from the 
individual, in accordance with section 164.508 of title 
45, Code of Federal Regulations, a valid authoriza-
tion that includes, in accordance with such section, a 
specification of whether the protected health informa-
tion can be further exchanged for remuneration by the 
entity receiving protected health information of that 
individual. 
(2) EXCEPTIONS.—Paragraph (1) shall not 
apply in the following cases: 
(A) The purpose of the exchange is for re-
search or public health activities (as described in 
sections 164.501, 164.512(i), and 164.512(b) of 
title 45, Code of Federal Regulations). 
(B) The purpose of the exchange is for the 
treatment of the individual, subject to any regu-
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lation that the Secretary may promulgate to pre-
vent protected health information from inappro-
priate access, use, or disclosure. 
(C) The purpose of the exchange is the 
health care operation specifically described in 
subparagraph (iv) of paragraph (6) of the defini-
tion of healthcare operations in section 164.501 
of title 45, Code of Federal Regulations. 
(D) The purpose of the exchange is for re-
muneration that is provided by a covered entity 
to a business associate for activities involving the 
exchange of protected health information that the 
business associate undertakes on behalf of and at 
the specific request of the covered entity pursuant 
to a business associate agreement. 
(E) The purpose of the exchange is to pro-
vide an individual with a copy of the individ-
ual’s protected health information pursuant to 
section 164.524 of title 45, Code of Federal Regu-
lations. 
(F) The purpose of the exchange is otherwise 
determined by the Secretary in regulations to be 
similarly necessary and appropriate as the ex-
ceptions provided in subparagraphs (A) through 
(E). 
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(3) REGULATIONS.—Not later than 18 months 
after the date of enactment of this title, the Secretary 
shall promulgate regulations to carry out this sub-
section. In promulgating such regulations, the Sec-
retary— 
(A) shall evaluate the impact of restricting 
the exception described in paragraph (2)(A) to 
require that the price charged for the purposes 
described in such paragraph reflects the costs of 
the preparation and transmittal of the data for 
such purpose, on research or public health activi-
ties, including those conducted by or for the use 
of the Food and Drug Administration; and 
(B) may further restrict the exception de-
scribed in paragraph (2)(A) to require that the 
price charged for the purposes described in such 
paragraph reflects the costs of the preparation 
and transmittal of the data for such purpose, if 
the Secretary finds that such further restriction 
will not impede such research or public health 
activities. 
(4) EFFECTIVE
DATE.—Paragraph (1) shall 
apply to exchanges occurring on or after the date that 
is 6 months after the date of the promulgation of final 
regulations implementing this subsection. 
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(f) ACCESS TO CERTAIN INFORMATION IN ELECTRONIC 
FORMAT.—In applying section 164.524 of title 45, Code of 
Federal Regulations, in the case that a covered entity uses 
or maintains an electronic health record with respect to 
protected health information of an individual— 
(1) the individual shall have a right to obtain 
from such covered entity a copy of such information 
in an electronic format; and 
(2) notwithstanding paragraph (c)(4) of such 
section, any fee that the covered entity may impose 
for providing such individual with a copy of such in-
formation (or a summary or explanation of such in-
formation) if such copy (or summary or explanation) 
is in an electronic form shall not be greater than the 
entity’s labor costs in responding to the request for the 
copy (or summary or explanation). 
SEC. 13406. CONDITIONS ON CERTAIN CONTACTS AS PART 
OF HEALTH CARE OPERATIONS. 
(a) MARKETING.— 
(1) IN GENERAL.—A communication by a cov-
ered entity or business associate that is about a prod-
uct or service and that encourages recipients of the 
communication to purchase or use the product or 
service shall not be considered a health care operation 
for purposes of subpart E of part 164 of title 45, Code 
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of Federal Regulations, unless the communication is 
made as described in subparagraph (i), (ii), or (iii) 
of paragraph (1) of the definition of marketing in sec-
tion 164.501 of such title. 
(2) PAYMENT FOR CERTAIN COMMUNICATIONS.— 
A communication by a covered entity or business as-
sociate that is described in subparagraph (i), (ii), or 
(iii) of paragraph (1) of the definition of marketing 
in section 164.501 of title 45, Code of Federal Regula-
tions, shall not be considered a health care operation 
for purposes of subpart E of part 164 of title 45, Code 
of Federal Regulations if the covered entity receives or 
has received direct or indirect payment in exchange 
for making such communication, except where— 
(A) such communication describes only a 
health care item or service that has previously 
been prescribed for or administered to the recipi-
ent of the communication, or a family member 
of such recipient; 
(B) each of the following conditions apply— 
(i) the communication is made by the 
covered entity; and 
(ii) the covered entity making such 
communication obtains from the recipient 
of the communication, in accordance with 
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section 164.508 of title 45, Code of Federal 
Regulations, a valid authorization (as de-
scribed in paragraph (b) of such section) 
with respect to such communication; or 
(C) each of the following conditions apply— 
(i) the communication is made on be-
half of the covered entity; 
(ii) the communication is consistent 
with the written contract (or other written 
arrangement 
described 
in 
section 
164.502(e)(2) of such title) between such 
business associate and covered entity; and 
(iii) the business associate making such 
communication, or the covered entity on be-
half of which the communication is made, 
obtains from the recipient of the commu-
nication, 
in 
accordance 
with 
section 
164.508 of title 45, Code of Federal Regula-
tions, a valid authorization (as described in 
paragraph (b) of such section) with respect 
to such communication. 
(c) EFFECTIVE DATE.—This section shall apply to 
contracting occurring on or after the effective date specified 
under section 13423. 
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SEC. 13407. TEMPORARY BREACH NOTIFICATION REQUIRE-
MENT FOR VENDORS OF PERSONAL HEALTH 
RECORDS AND OTHER NON-HIPAA COVERED 
ENTITIES. 
(a) IN GENERAL.—In accordance with subsection (c), 
each vendor of personal health records, following the dis-
covery of a breach of security of unsecured PHR identifiable 
health information that is in a personal health record 
maintained or offered by such vendor, and each entity de-
scribed in clause (ii) or (iii) of section 13424(b)(1)(A), fol-
lowing the discovery of a breach of security of such informa-
tion that is obtained through a product or service provided 
by such entity, shall— 
(1) notify each individual who is a citizen or 
resident of the United States whose unsecured PHR 
identifiable health information was acquired by an 
unauthorized person as a result of such a breach of 
security; and 
(2) notify the Federal Trade Commission. 
(b) NOTIFICATION BY THIRD PARTY SERVICE PRO-
VIDERS.—A third party service provider that provides serv-
ices to a vendor of personal health records or to an entity 
described in clause (ii) or (iii) of section 13424(b)(1)(A) 
in connection with the offering or maintenance of a per-
sonal health record or a related product or service and that 
accesses, maintains, retains, modifies, records, stores, de-
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stroys, or otherwise holds, uses, or discloses unsecured PHR 
identifiable health information in such a record as a result 
of such services shall, following the discovery of a breach 
of security of such information, notify such vendor or enti-
ty, respectively, of such breach. Such notice shall include 
the identification of each individual whose unsecured PHR 
identifiable health information has been, or is reasonably 
believed to have been, accessed, acquired, or disclosed during 
such breach. 
(c) APPLICATION OF REQUIREMENTS FOR TIMELINESS, 
METHOD, AND CONTENT OF NOTIFICATIONS.—Subsections 
(c), (d), (e), and (f) of section 13402 shall apply to a notifi-
cation required under subsection (a) and a vendor of per-
sonal health records, an entity described in subsection (a) 
and a third party service provider described in subsection 
(b), with respect to a breach of security under subsection 
(a) of unsecured PHR identifiable health information in 
such records maintained or offered by such vendor, in a 
manner specified by the Federal Trade Commission. 
(d) NOTIFICATION OF THE SECRETARY.—Upon receipt 
of a notification of a breach of security under subsection 
(a)(2), the Federal Trade Commission shall notify the Sec-
retary of such breach. 
(e) ENFORCEMENT.—A violation of subsection (a) or 
(b) shall be treated as an unfair and deceptive act or prac-
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tice in violation of a regulation under section 18(a)(1)(B) 
of the Federal Trade Commission Act (15 U.S.C. 
57a(a)(1)(B)) regarding unfair or deceptive acts or prac-
tices. 
(f) DEFINITIONS.—For purposes of this section: 
(1) BREACH OF SECURITY.—The term ‘‘breach of 
security’’ means, with respect to unsecured PHR 
identifiable health information of an individual in a 
personal health record, acquisition of such informa-
tion without the authorization of the individual. 
(2) PHR IDENTIFIABLE HEALTH INFORMATION.— 
The term ‘‘PHR identifiable health information’’ 
means individually identifiable health information, 
as defined in section 1171(6) of the Social Security 
Act (42 U.S.C. 1320d(6)), and includes, with respect 
to an individual, information— 
(A) that is provided by or on behalf of the 
individual; and 
(B) that identifies the individual or with 
respect to which there is a reasonable basis to be-
lieve that the information can be used to identify 
the individual. 
(3) UNSECURED PHR IDENTIFIABLE HEALTH IN-
FORMATION.— 
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(A) IN GENERAL.—Subject to subparagraph 
(B), the term ‘‘unsecured PHR identifiable 
health information’’ means PHR identifiable 
health information that is not protected through 
the use of a technology or methodology specified 
by the Secretary in the guidance issued under 
section 13402(h)(2). 
(B) EXCEPTION IN CASE TIMELY GUIDANCE 
NOT ISSUED.—In the case that the Secretary does 
not issue guidance under section 13402(h)(2) by 
the date specified in such section, for purposes of 
this section, the term ‘‘unsecured PHR identifi-
able health information’’ shall mean PHR iden-
tifiable health information that is not secured by 
a technology standard that renders protected 
health information unusable, unreadable, or in-
decipherable to unauthorized individuals and 
that is developed or endorsed by a standards de-
veloping organization that is accredited by the 
American National Standards Institute. 
(g) REGULATIONS; EFFECTIVE DATE; SUNSET.— 
(1) REGULATIONS; EFFECTIVE DATE.—To carry 
out this section, the Federal Trade Commission shall, 
in accordance with section 553 of title 5, United 
States Code, promulgate interim final regulations by 
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not later than the date that is 180 days after the date 
of the enactment of this section. The provisions of this 
section shall apply to breaches of security that are 
discovered on or after the date that is 30 days after 
the date of publication of such interim final regula-
tions. 
(2) SUNSET.—The provisions of this section shall 
not apply to breaches of security occurring on or after 
the earlier of the following the dates: 
(A) The date on which a standard relating 
to requirements for entities that are not covered 
entities that includes requirements relating to 
breach notification has been promulgated by the 
Secretary. 
(B) The date on which a standard relating 
to requirements for entities that are not covered 
entities that includes requirements relating to 
breach notification has been promulgated by the 
Federal Trade Commission and has taken effect. 
SEC. 13408. BUSINESS ASSOCIATE CONTRACTS REQUIRED 
FOR CERTAIN ENTITIES. 
Each organization, with respect to a covered entity, 
that provides data transmission of protected health infor-
mation to such entity (or its business associate) and that 
requires access on a routine basis to such protected health 
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information, such as a Health Information Exchange Orga-
nization, Regional Health Information Organization, E- 
prescribing Gateway, or each vendor that contracts with a 
covered entity to allow that covered entity to offer a per-
sonal health record to patients as part of its electronic 
health record, is required to enter into a written contract 
(or other written arrangement) described in section 
164.502(e)(2) of title 45, Code of Federal Regulations and 
a written contract (or other arrangement) described in sec-
tion 164.308(b) of such title, with such entity and shall be 
treated as a business associate of the covered entity for pur-
poses of the provisions of this subtitle and subparts C and 
E of part 164 of title 45, Code of Federal Regulations, as 
such provisions are in effect as of the date of enactment 
of this title. 
SEC. 13409. CLARIFICATION OF APPLICATION OF WRONG-
FUL DISCLOSURES CRIMINAL PENALTIES. 
Section 1177(a) of the Social Security Act (42 U.S.C. 
1320d–6(a)) is amended by adding at the end the following 
new sentence: ‘‘For purposes of the previous sentence, a per-
son (including an employee or other individual) shall be 
considered to have obtained or disclosed individually identi-
fiable health information in violation of this part if the in-
formation is maintained by a covered entity (as defined in 
the HIPAA privacy regulation described in section 
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1180(b)(3)) and the individual obtained or disclosed such 
information without authorization.’’. 
SEC. 13410. IMPROVED ENFORCEMENT. 
(a) IN GENERAL.—Section 1176 of the Social Security 
Act (42 U.S.C. 1320d–5) is amended— 
(1) in subsection (b)(1), by striking ‘‘the act con-
stitutes an offense punishable under section 1177’’ 
and inserting ‘‘a penalty has been imposed under sec-
tion 1177 with respect to such act’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(c) NONCOMPLIANCE DUE TO WILLFUL NEGLECT.— 
‘‘(1) IN GENERAL.—A violation of a provision of 
this part due to willful neglect is a violation for 
which the Secretary is required to impose a penalty 
under subsection (a)(1). 
‘‘(2) REQUIRED INVESTIGATION.—For purposes 
of paragraph (1), the Secretary shall formally inves-
tigate any complaint of a violation of a provision of 
this part if a preliminary investigation of the facts 
of the complaint indicate such a possible violation 
due to willful neglect.’’. 
(b) EFFECTIVE DATE; REGULATIONS.— 
(1) The amendments made by subsection (a) 
shall apply to penalties imposed on or after the date 
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that is 24 months after the date of the enactment of 
this title. 
(2) Not later than 18 months after the date of the 
enactment of this title, the Secretary of Health and 
Human Services shall promulgate regulations to im-
plement such amendments. 
(c) DISTRIBUTION OF CERTAIN CIVIL MONETARY PEN-
ALTIES COLLECTED.— 
(1) IN GENERAL.—Subject to the regulation pro-
mulgated pursuant to paragraph (3), any civil mone-
tary penalty or monetary settlement collected with re-
spect to an offense punishable under this subtitle or 
section 1176 of the Social Security Act (42 U.S.C. 
1320d–5) insofar as such section relates to privacy or 
security shall be transferred to the Office of Civil 
Rights of the Department of Health and Human 
Services to be used for purposes of enforcing the pro-
visions of this subtitle and subparts C and E of part 
164 of title 45, Code of Federal Regulations, as such 
provisions are in effect as of the date of enactment of 
this Act. 
(2) GAO
REPORT.—Not later than 18 months 
after the date of the enactment of this title, the Comp-
troller General shall submit to the Secretary a report 
including recommendations for a methodology under 
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which an individual who is harmed by an act that 
constitutes an offense referred to in paragraph (1) 
may receive a percentage of any civil monetary pen-
alty or monetary settlement collected with respect to 
such offense. 
(3) ESTABLISHMENT OF METHODOLOGY TO DIS-
TRIBUTE
PERCENTAGE
OF
CMPS
COLLECTED
TO 
HARMED INDIVIDUALS.—Not later than 3 years after 
the date of the enactment of this title, the Secretary 
shall establish by regulation and based on the rec-
ommendations submitted under paragraph (2), a 
methodology under which an individual who is 
harmed by an act that constitutes an offense referred 
to in paragraph (1) may receive a percentage of any 
civil monetary penalty or monetary settlement col-
lected with respect to such offense. 
(4) APPLICATION OF METHODOLOGY.—The meth-
odology under paragraph (3) shall be applied with re-
spect to civil monetary penalties or monetary settle-
ments imposed on or after the effective date of the reg-
ulation. 
(d) TIERED INCREASE IN AMOUNT OF CIVIL MONE-
TARY PENALTIES.— 
(1) IN GENERAL.—Section 1176(a)(1) of the So-
cial Security Act (42 U.S.C. 1320d–5(a)(1)) is 
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amended by striking ‘‘who violates a provision of this 
part a penalty of not more than’’ and all that follows 
and inserting the following: ‘‘who violates a provision 
of this part— 
‘‘(A) in the case of a violation of such pro-
vision in which it is established that the person 
did not know (and by exercising reasonable dili-
gence would not have known) that such person 
violated such provision, a penalty for each such 
violation of an amount that is at least the 
amount described in paragraph (3)(A) but not to 
exceed the amount described in paragraph 
(3)(D); 
‘‘(B) in the case of a violation of such pro-
vision in which it is established that the viola-
tion was due to reasonable cause and not to will-
ful neglect, a penalty for each such violation of 
an amount that is at least the amount described 
in paragraph (3)(B) but not to exceed the 
amount described in paragraph (3)(D); and 
‘‘(C) in the case of a violation of such provi-
sion in which it is established that the violation 
was due to willful neglect— 
‘‘(i) if the violation is corrected as de-
scribed in subsection (b)(3)(A), a penalty in 
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an amount that is at least the amount de-
scribed in paragraph (3)(C) but not to ex-
ceed the amount described in paragraph 
(3)(D); and 
‘‘(ii) if the violation is not corrected as 
described in such subsection, a penalty in 
an amount that is at least the amount de-
scribed in paragraph (3)(D). 
In determining the amount of a penalty under 
this section for a violation, the Secretary shall 
base such determination on the nature and ex-
tent of the violation and the nature and extent 
of the harm resulting from such violation.’’. 
(2) TIERS OF PENALTIES DESCRIBED.—Section 
1176(a) of such Act (42 U.S.C. 1320d–5(a)) is further 
amended by adding at the end the following new 
paragraph: 
‘‘(3) TIERS
OF
PENALTIES
DESCRIBED.—For 
purposes of paragraph (1), with respect to a violation 
by a person of a provision of this part— 
‘‘(A) the amount described in this subpara-
graph is $100 for each such violation, except that 
the total amount imposed on the person for all 
such violations of an identical requirement or 
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prohibition during a calendar year may not ex-
ceed $25,000; 
‘‘(B) the amount described in this subpara-
graph is $1,000 for each such violation, except 
that the total amount imposed on the person for 
all such violations of an identical requirement or 
prohibition during a calendar year may not ex-
ceed $100,000; 
‘‘(C) the amount described in this subpara-
graph is $10,000 for each such violation, except 
that the total amount imposed on the person for 
all such violations of an identical requirement or 
prohibition during a calendar year may not ex-
ceed $250,000; and 
‘‘(D) the amount described in this subpara-
graph is $50,000 for each such violation, except 
that the total amount imposed on the person for 
all such violations of an identical requirement or 
prohibition during a calendar year may not ex-
ceed $1,500,000.’’. 
(3) 
CONFORMING
AMENDMENTS.—Section 
1176(b) of such Act (42 U.S.C. 1320d–5(b)) is amend-
ed— 
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(A) by striking paragraph (2) and redesig-
nating paragraphs (3) and (4) as paragraphs 
(2) and (3), respectively; and 
(B) in paragraph (2), as so redesignated— 
(i) in subparagraph (A), by striking 
‘‘in subparagraph (B), a penalty may not 
be imposed under subsection (a) if’’ and all 
that follows through ‘‘the failure to comply 
is corrected’’ and inserting ‘‘in subpara-
graph (B) or subsection (a)(1)(C), a penalty 
may not be imposed under subsection (a) if 
the failure to comply is corrected’’; and 
(ii) in subparagraph (B), by striking 
‘‘(A)(ii)’’ and inserting ‘‘(A)’’ each place it 
appears. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to violations occurring 
after the date of the enactment of this title. 
(e) ENFORCEMENT THROUGH STATE ATTORNEYS GEN-
ERAL.— 
(1) IN GENERAL.—Section 1176 of the Social Se-
curity Act (42 U.S.C. 1320d–5) is amended by add-
ing at the end the following new subsection: 
‘‘(d) ENFORCEMENT
BY STATE ATTORNEYS GEN-
ERAL.— 
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‘‘(1) CIVIL ACTION.—Except as provided in sub-
section (b), in any case in which the attorney general 
of a State has reason to believe that an interest of one 
or more of the residents of that State has been or is 
threatened or adversely affected by any person who 
violates a provision of this part, the attorney general 
of the State, as parens patriae, may bring a civil ac-
tion on behalf of such residents of the State in a dis-
trict court of the United States of appropriate juris-
diction— 
‘‘(A) to enjoin further such violation by the 
defendant; or 
‘‘(B) to obtain damages on behalf of such 
residents of the State, in an amount equal to the 
amount determined under paragraph (2). 
‘‘(2) STATUTORY DAMAGES.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1)(B), the amount determined under this 
paragraph is the amount calculated by multi-
plying the number of violations by up to $100. 
For purposes of the preceding sentence, in the 
case of a continuing violation, the number of vio-
lations shall be determined consistent with the 
HIPAA privacy regulations (as defined in sec-
tion 1180(b)(3)) for violations of subsection (a). 
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‘‘(B) LIMITATION.—The total amount of 
damages imposed on the person for all violations 
of an identical requirement or prohibition dur-
ing a calendar year may not exceed $25,000. 
‘‘(C) REDUCTION OF DAMAGES.—In assess-
ing damages under subparagraph (A), the court 
may consider the factors the Secretary may con-
sider in determining the amount of a civil 
money penalty under subsection (a) under the 
HIPAA privacy regulations. 
‘‘(3) ATTORNEY FEES.—In the case of any suc-
cessful action under paragraph (1), the court, in its 
discretion, may award the costs of the action and rea-
sonable attorney fees to the State. 
‘‘(4) NOTICE TO SECRETARY.—The State shall 
serve prior written notice of any action under para-
graph (1) upon the Secretary and provide the Sec-
retary with a copy of its complaint, except in any 
case in which such prior notice is not feasible, in 
which case the State shall serve such notice imme-
diately upon instituting such action. The Secretary 
shall have the right— 
‘‘(A) to intervene in the action; 
‘‘(B) upon so intervening, to be heard on all 
matters arising therein; and 
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‘‘(C) to file petitions for appeal. 
‘‘(5) CONSTRUCTION.—For purposes of bringing 
any civil action under paragraph (1), nothing in this 
section shall be construed to prevent an attorney gen-
eral of a State from exercising the powers conferred 
on the attorney general by the laws of that State. 
‘‘(6) VENUE; SERVICE OF PROCESS.— 
‘‘(A) VENUE.—Any action brought under 
paragraph (1) may be brought in the district 
court of the United States that meets applicable 
requirements relating to venue under section 
1391 of title 28, United States Code. 
‘‘(B) SERVICE OF PROCESS.—In an action 
brought under paragraph (1), process may be 
served in any district in which the defendant— 
‘‘(i) is an inhabitant; or 
‘‘(ii) maintains a physical place of 
business. 
‘‘(7) LIMITATION ON STATE ACTION WHILE FED-
ERAL ACTION IS PENDING.—If the Secretary has insti-
tuted an action against a person under subsection (a) 
with respect to a specific violation of this part, no 
State attorney general may bring an action under 
this subsection against the person with respect to such 
violation during the pendency of that action. 
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‘‘(8) APPLICATION OF CMP STATUTE OF LIMITA-
TION.—A civil action may not be instituted with re-
spect to a violation of this part unless an action to 
impose a civil money penalty may be instituted 
under subsection (a) with respect to such violation 
consistent with the second sentence of section 
1128A(c)(1).’’. 
(2) CONFORMING AMENDMENTS.—Subsection (b) 
of such section, as amended by subsection (d)(3), is 
amended— 
(A) in paragraph (1), by striking ‘‘A pen-
alty may not be imposed under subsection (a)’’ 
and inserting ‘‘No penalty may be imposed 
under subsection (a) and no damages obtained 
under subsection (d)’’; 
(B) in paragraph (2)(A)— 
(i) after ‘‘subsection (a)(1)(C),’’, by 
striking ‘‘a penalty may not be imposed 
under subsection (a)’’ and inserting ‘‘no 
penalty may be imposed under subsection 
(a) and no damages obtained under sub-
section (d)’’; and 
(ii) in clause (ii), by inserting ‘‘or 
damages’’ after ‘‘the penalty’’; 
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(C) in paragraph (2)(B)(i), by striking 
‘‘The period’’ and inserting ‘‘With respect to the 
imposition of a penalty by the Secretary under 
subsection (a), the period’’; and 
(D) in paragraph (3), by inserting ‘‘and 
any damages under subsection (d)’’ after ‘‘any 
penalty under subsection (a)’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to violations occurring 
after the date of the enactment of this Act. 
(f) ALLOWING CONTINUED USE OF CORRECTIVE AC-
TION.—Such section is further amended by adding at the 
end the following new subsection: 
‘‘(e) ALLOWING CONTINUED USE OF CORRECTIVE AC-
TION.—Nothing in this section shall be construed as pre-
venting the Office of Civil Rights of the Department of 
Health and Human Services from continuing, in its discre-
tion, to use corrective action without a penalty in cases 
where the person did not know (and by exercising reason-
able diligence would not have known) of the violation in-
volved.’’. 
SEC. 13411. AUDITS. 
The Secretary shall provide for periodic audits to en-
sure that covered entities and business associates that are 
subject to the requirements of this subtitle and subparts C 
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and E of part 164 of title 45, Code of Federal Regulations, 
as such provisions are in effect as of the date of enactment 
of this Act, comply with such requirements. 
PART II—RELATIONSHIP TO OTHER LAWS; REGU-
LATORY REFERENCES; EFFECTIVE DATE; RE-
PORTS 
SEC. 13421. RELATIONSHIP TO OTHER LAWS. 
(a) APPLICATION OF HIPAA STATE PREEMPTION.— 
Section 1178 of the Social Security Act (42 U.S.C. 1320d– 
7) shall apply to a provision or requirement under this sub-
title in the same manner that such section applies to a pro-
vision or requirement under part C of title XI of such Act 
or a standard or implementation specification adopted or 
established under sections 1172 through 1174 of such Act. 
(b) HEALTH INSURANCE PORTABILITY AND ACCOUNT-
ABILITY ACT.—The standards governing the privacy and 
security of individually identifiable health information pro-
mulgated by the Secretary under sections 262(a) and 264 
of the Health Insurance Portability and Accountability Act 
of 1996 shall remain in effect to the extent that they are 
consistent with this subtitle. The Secretary shall by rule 
amend such Federal regulations as required to make such 
regulations consistent with this subtitle. In carrying out the 
preceding sentence, the Secretary shall revise the definition 
of ‘‘psychotherapy notes’’ in section 164.501 of title 45, Code 
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of Federal Regulations, to include test data that is related 
to direct responses, scores, items, forms, protocols, manuals, 
or other materials that are part of a mental health evalua-
tion, as determined by the mental health professional pro-
viding treatment or evaluation. 
SEC. 13422. REGULATORY REFERENCES. 
Each reference in this subtitle to a provision of the 
Code of Federal Regulations refers to such provision as in 
effect on the date of the enactment of this title (or to the 
most recent update of such provision). 
SEC. 13423. EFFECTIVE DATE. 
Except as otherwise specifically provided, the provi-
sions of part I shall take effect on the date that is 12 months 
after the date of the enactment of this title. 
SEC. 13424. STUDIES, REPORTS, GUIDANCE. 
(a) REPORT ON COMPLIANCE.— 
(1) IN GENERAL.—For the first year beginning 
after the date of the enactment of this Act and annu-
ally thereafter, the Secretary shall prepare and sub-
mit to the Committee on Health, Education, Labor, 
and Pensions of the Senate and the Committee on 
Ways and Means and the Committee on Energy and 
Commerce of the House of Representatives a report 
concerning complaints of alleged violations of law, in-
cluding the provisions of this subtitle as well as the 
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provisions of subparts C and E of part 164 of title 
45, Code of Federal Regulations, (as such provisions 
are in effect as of the date of enactment of this Act) 
relating to privacy and security of health information 
that are received by the Secretary during the year for 
which the report is being prepared. Each such report 
shall include, with respect to such complaints received 
during the year— 
(A) the number of such complaints; 
(B) the number of such complaints resolved 
informally, a summary of the types of such com-
plaints so resolved, and the number of covered 
entities that received technical assistance from 
the Secretary during such year in order to 
achieve compliance with such provisions and the 
types of such technical assistance provided; 
(C) the number of such complaints that 
have resulted in the imposition of civil monetary 
penalties or have been resolved through monetary 
settlements, including the nature of the com-
plaints involved and the amount paid in each 
penalty or settlement; 
(D) the number of compliance reviews con-
ducted and the outcome of each such review; 
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(E) the number of subpoenas or inquiries 
issued; 
(F) the Secretary’s plan for improving com-
pliance with and enforcement of such provisions 
for the following year; and 
(G) the number of audits performed and a 
summary of audit findings pursuant to section 
13411. 
(2) AVAILABILITY
TO
PUBLIC.—Each report 
under paragraph (1) shall be made available to the 
public on the Internet website of the Department of 
Health and Human Services. 
(b) STUDY AND REPORT ON APPLICATION OF PRIVACY 
AND SECURITY REQUIREMENTS TO NON-HIPAA COVERED 
ENTITIES.— 
(1) STUDY.—Not later than one year after the 
date of the enactment of this title, the Secretary, in 
consultation with the Federal Trade Commission, 
shall conduct a study, and submit a report under 
paragraph (2), on privacy and security requirements 
for entities that are not covered entities or business 
associates as of the date of the enactment of this title, 
including— 
(A) requirements relating to security, pri-
vacy, and notification in the case of a breach of 
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security or privacy (including the applicability 
of an exemption to notification in the case of in-
dividually identifiable health information that 
has been rendered unusable, unreadable, or inde-
cipherable through technologies or methodologies 
recognized by appropriate professional organiza-
tion or standard setting bodies to provide effec-
tive security for the information) that should be 
applied to— 
(i) vendors of personal health records; 
(ii) entities that offer products or serv-
ices through the website of a vendor of per-
sonal health records; 
(iii) entities that are not covered enti-
ties and that offer products or services 
through the websites of covered entities that 
offer individuals personal health records; 
(iv) entities that are not covered enti-
ties and that access information in a per-
sonal health record or send information to 
a personal health record; and 
(v) third party service providers used 
by a vendor or entity described in clause 
(i), (ii), (iii), or (iv) to assist in providing 
personal health record products or services; 
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(B) a determination of which Federal gov-
ernment agency is best equipped to enforce such 
requirements recommended to be applied to such 
vendors, entities, and service providers under 
subparagraph (A); and 
(C) a timeframe for implementing regula-
tions based on such findings. 
(2) REPORT.—The Secretary shall submit to the 
Committee on Finance, the Committee on Health, 
Education, Labor, and Pensions, and the Committee 
on Commerce of the Senate and the Committee on 
Ways and Means and the Committee on Energy and 
Commerce of the House of Representatives a report on 
the findings of the study under paragraph (1) and 
shall include in such report recommendations on the 
privacy and security requirements described in such 
paragraph. 
(c) GUIDANCE ON IMPLEMENTATION SPECIFICATION 
TO DE-IDENTIFY PROTECTED HEALTH INFORMATION.— 
Not later than 12 months after the date of the enactment 
of this title, the Secretary shall, in consultation with stake-
holders, issue guidance on how best to implement the re-
quirements for the de-identification of protected health in-
formation under section 164.514(b) of title 45, Code of Fed-
eral Regulations. 
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(d) GAO REPORT ON TREATMENT DISCLOSURES.—Not 
later than one year after the date of the enactment of this 
title, the Comptroller General of the United States shall sub-
mit to the Committee on Health, Education, Labor, and 
Pensions of the Senate and the Committee on Ways and 
Means and the Committee on Energy and Commerce of the 
House of Representatives a report on the best practices re-
lated to the disclosure among health care providers of pro-
tected health information of an individual for purposes of 
treatment of such individual. Such report shall include an 
examination of the best practices implemented by States 
and by other entities, such as health information exchanges 
and regional health information organizations, an exam-
ination of the extent to which such best practices are suc-
cessful with respect to the quality of the resulting health 
care provided to the individual and with respect to the abil-
ity of the health care provider to manage such best prac-
tices, and an examination of the use of electronic informed 
consent for disclosing protected health information for treat-
ment, payment, and health care operations. 
(e) REPORT REQUIRED.—Not later than 1 year after 
the date of enactment of this section, the Government Ac-
countability Office shall submit to Congress and the Sec-
retary of Health and Human Services a report on the im-
pact of any of the provisions of, or amendments made by, 
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this division or division B that are related to the Health 
Insurance Portability and Accountability Act of 1996 and 
section 552a of title 5, United States Code, on health insur-
ance premiums and overall health care costs. 
TITLE XIV—STATE FISCAL 
STABILIZATION 
DEPARTMENT OF EDUCATION 
STATE FISCAL STABILIZATION FUND 
For necessary expenses for a State Fiscal Stabilization 
Fund, $39,000,000,000, which shall be administered by the 
Department of Education, and shall be available through 
September 30, 2010. 
GENERAL PROVISIONS—THIS TITLE 
SEC. 1401. ALLOCATIONS. 
(a) OUTLYING AREAS.—The Secretary of Education 
shall first allocate one-half of 1 percent to the outlying areas 
on the basis of their respective needs, as determined by the 
Secretary, for activities consistent with this title under such 
terms and conditions as the Secretary may determine. 
(b) ADMINISTRATION AND OVERSIGHT.—The Secretary 
may reserve up to $25,000,000 for administration and over-
sight of this title, including for program evaluation. 
(c) RESERVATION FOR ADDITIONAL PROGRAMS.—After 
reserving funds under subsections (a) and (b), the Secretary 
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shall reserve $7,500,000,000 for grants under sections 1406 
and 1407. 
(d) STATE ALLOCATIONS.—After carrying out sub-
sections (a), (b), and (c), the Secretary shall allocate the 
remaining funds made available to carry out this title to 
the States as follows: 
(1) 61 percent on the basis of their relative popu-
lation of individuals aged 5 through 24. 
(2) 39 percent on the basis of their relative total 
population. 
(e) STATE GRANTS.—From funds allocated under sub-
section (d), the Secretary shall make grants to the Governor 
of each State. 
(f) REALLOCATION.—The Governor shall return to the 
Secretary any funds received under subsection (e) that the 
Governor does not obligate within 1 year of receiving a 
grant, and the Secretary shall reallocate such funds to the 
remaining States in accordance with subsection (d). 
SEC. 1402. STATE USES OF FUNDS. 
EDUCATION FUND.—(a) IN GENERAL.—The Governor 
shall use the State’s allocation under section 1401 for the 
support of elementary, secondary, and postsecondary edu-
cation and, as applicable, early childhood education pro-
grams and services. 
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(b) RESTORING
2008
STATE
SUPPORT
FOR
EDU-
CATION.— 
(1) IN GENERAL.—The Governor shall first use the 
funds described in subsection (a)— 
(A) to provide the amount of funds, through 
the State’s principal elementary and secondary 
funding formula, that is needed to restore State 
support for elementary and secondary education 
to the fiscal year 2008 level; and where applica-
ble, to allow existing State formula increases for 
fiscal years 2009, 2010, and 2011 to be imple-
mented and allow funding for phasing in State 
equity and adequacy adjustments that were en-
acted prior to July 1, 2008; and 
(B) to provide the amount of funds to pub-
lic institutions of higher education in the State 
that is needed to restore State support for post-
secondary education to the fiscal year 2008 level. 
(2) SHORTFALL.—If the Governor determines that the 
amount of funds available under subsection (a) is insuffi-
cient to restore State support for education to the levels de-
scribed in subparagraphs (A) and (B) of paragraph (1), 
the Governor shall allocate those funds between those clauses 
in proportion to the relative shortfall in State support for 
the education sectors described in those clauses. 
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(c) SUBGRANTS TO IMPROVE BASIC PROGRAMS OPER-
ATED BY LOCAL EDUCATIONAL AGENCIES.—After carrying 
out subsection (b), the Governor shall use any funds remain-
ing under subsection (a) to provide local educational agen-
cies in the State with subgrants based on their relative 
shares of funding under part A of title I of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 6311 et 
seq.) for the most recent year for which data are available. 
SEC. 1403. USES OF FUNDS BY LOCAL EDUCATIONAL AGEN-
CIES. 
(1) IN GENERAL.—A local educational agency that re-
ceives funds under this title may use the funds for any ac-
tivity authorized by the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 6301 et seq.) (‘‘ESEA’’), the 
Individuals with Disabilities Education Act (20 U.S.C. 
1400 et seq.) (‘‘IDEA’’), or the Carl D. Perkins Career and 
Technical Education Act of 2006 (20 U.S.C. 2301 et seq.) 
(‘‘the Perkins Act’’). 
(b) PROHIBITION.—A local educational agency may 
not use funds received under this title for capital projects 
unless authorized by ESEA, IDEA, or the Perkins Act. 
SEC. 1404. USES OF FUNDS BY INSTITUTIONS OF HIGHER 
EDUCATION. 
(a) IN GENERAL.—A public institution of higher edu-
cation that receives funds under this title shall use the funds 
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for education and general expenditures, and in such a way 
as to mitigate the need to raise tuition and fees for in-State 
students. 
(b) PROHIBITION.—An institution of higher education 
may not use funds received under this title to increase its 
endowment. 
(c) ADDITIONAL PROHIBITION.—An institution of 
higher education may not use funds received under this title 
for construction, renovation, or facility repair. 
SEC. 1405. STATE APPLICATIONS. 
(a) IN GENERAL.—The Governor of a State desiring 
to receive an allocation under section 1401 shall submit an 
application at such time, in such manner, and containing 
such information as the Secretary may reasonably require. 
(b) APPLICATION.—The Governor shall— 
(1) include the assurances described in subsection 
(d); 
(2) provide baseline data that demonstrates the 
State’s current status in each of the areas described 
in such assurances; and 
(3) describe how the State intends to use its allo-
cation. 
(c) INCENTIVE GRANT APPLICATION.—The Governor of 
a State seeking a grant under section 1406 shall— 
(1) submit an application for consideration; 
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(2) describe the status of the State’s progress in 
each of the areas described in subsection (d); 
(3) describe the achievement and graduation 
rates of public elementary and secondary school stu-
dents in the State, and the strategies the State is em-
ploying to help ensure that all subgroups of students 
identified in 1111(b)(2) of ESEA in the State con-
tinue making progress toward meeting the State’s stu-
dent academic achievement standards; 
(4) describe how the State would use its grant 
funding to improve student academic achievement in 
the State, including how it will allocate the funds to 
give priority to high-need schools and local edu-
cational agencies; and 
(5) include a plan for evaluating its progress in 
closing achievement gaps. 
(d) ASSURANCES.—An application under subsection 
(b) shall include the following assurances: 
(1) MAINTENANCE OF EFFORT.— 
(A) ELEMENTARY
AND
SECONDARY
EDU-
CATION.—The State will, in each of fiscal years 
2009 and 2010, maintain State support for ele-
mentary and secondary education at least at the 
level of such support in fiscal year 2006. 
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(B) HIGHER EDUCATION.—The State will, 
in each of fiscal years 2009 and 2010, maintain 
State support for public institutions of higher 
education (not including support for capital 
projects or for research and development) at least 
at the level of such support in fiscal year 2006. 
(2) ACHIEVING EQUITY IN TEACHER DISTRIBU-
TION.—The State will take action, including activi-
ties outlined in section 2113(c) of ESEA, to increase 
the number, and improve the distribution, of effective 
teachers and principals in high-poverty schools and 
local educational agencies throughout the State. 
(3) IMPROVING
COLLECTION
AND
USE
OF 
DATA.—The State will establish a longitudinal data 
system that includes the elements described in section 
6401(e)(2)(D) of the America COMPETES Act (20 
U.S.C. 9871). 
(4) 
STANDARDS
AND
ASSESSMENTS.—The 
State— 
(A) will enhance the quality of academic as-
sessments described in section 1111(b)(3) of 
ESEA (20 U.S.C. 6311(b)(3)) through activities 
such as those described in section 6112(a) of such 
Act (20 U.S.C. 7301a(a)); 
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(B) will comply with the requirements of 
paragraphs (3)(C)(ix) and (6) of section 1111(b) 
of ESEA (20 U.S.C. 6311(b)) and section 
612(a)(16) of IDEA (20 U.S.C. 1412(a)(16)) re-
lated to the inclusion of children with disabilities 
and limited English proficient students in State 
assessments, the development of valid and reli-
able assessments for those students, and the pro-
vision of accommodations that enable their par-
ticipation in State assessments; and 
(C) will take steps to improve State aca-
demic content standards and student academic 
achievement 
standards 
consistent 
with 
6401(e)(1)(A)(ii) of the America COMPETES 
Act. 
(5) will ensure compliance with the requirements 
of section 1116(a)(7)(C)(iv) and section 1116(a)(8)(B) 
with respect to schools identified under such sections. 
SEC. 1406. STATE INCENTIVE GRANTS. 
(a) IN GENERAL.—From the total amount reserved 
under section 1401(c) that is not used for section 1407, the 
Secretary shall, in fiscal year 2010, make grants to States 
that have made significant progress in meeting the objec-
tives of paragraphs (2), (3), (4), and (5) of section 1405(d). 
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(b) BASIS FOR GRANTS.—The Secretary shall deter-
mine which States receive grants under this section, and 
the amount of those grants, on the basis of information pro-
vided in State applications under section 1405 and such 
other criteria as the Secretary determines appropriate. 
(c) SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES.— 
Each State receiving a grant under this section shall use 
at least 50 percent of the grant to provide local educational 
agencies in the State with subgrants based on their relative 
shares of funding under part A of title I of ESEA (20 
U.S.C. 6311 et seq.) for the most recent year. 
SEC. 1407. INNOVATION FUND. 
(a) IN GENERAL.— 
(1) ELIGIBLE ENTITY.—For the purposes of this 
section, the term ‘‘eligible entity’’ means— 
(A) A local educational agency; or 
(B) a partnership between a nonprofit orga-
nization and— 
(i) one or more local educational agen-
cies; 
(ii) or a consortium of schools. 
(2) PROGRAM
ESTABLISHED.—From the total 
amount reserved under section 1401(c), the Secretary 
may reserve up to $650,000,000 to establish an Inno-
vation Fund, which shall consist of academic achieve-
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ment awards that recognize eligible entities that meet 
the requirements described in subsection (b). 
(3) BASIS
FOR
AWARDS.—The Secretary shall 
make awards to eligible entities that have made sig-
nificant gains in closing the achievement gap as de-
scribed in subsection (b)(1)— 
(A) to allow such eligible entities to expand 
their work and serve as models for best practices; 
(B) to allow such eligible entities to work in 
partnership with the private sector and the phil-
anthropic community; and 
(C) to identify and document best practices 
that can be shared, and taken to scale based on 
demonstrated success. 
(b) ELIGIBILITY.—To be eligible for such an award, 
an eligible entity shall— 
(1) have significantly closed the achievement 
gaps between groups of students described in section 
1111(b)(2) of ESEA (20 U.S.C. 6311(b)(2)); 
(2) have exceeded the State’s annual measurable 
objectives consistent with such section 1111(b)(2) for 
2 or more consecutive years or have demonstrated suc-
cess in significantly increasing student academic 
achievement for all groups of students described in 
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such section through another measure, such as meas-
ures described in section 1111(c)(2) of ESEA; 
(3) have made significant improvement in other 
areas, such as graduation rates or increased recruit-
ment and placement of high-quality teachers and 
school leaders, as demonstrated with meaningful data; 
and 
(4) demonstrate that they have established part-
nerships with the private sector, which may include 
philanthropic organizations, and that the private sec-
tor will provide matching funds in order to help 
bring results to scale. 
SEC. 1408. STATE REPORTS. 
A State receiving funds under this title shall submit 
a report to the Secretary, at such time and in such manner 
as the Secretary may require, that describes— 
(1) the uses of funds provided under this title 
within the State; 
(2) how the State distributed the funds it re-
ceived under this title; 
(3) the number of jobs that the Governor esti-
mates were saved or created with funds the State re-
ceived under this title; 
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(4) tax increases that the Governor estimates 
were averted because of the availability of funds from 
this title; 
(5) the State’s progress in reducing inequities in 
the distribution of teachers, in implementing a State 
student longitudinal data system, and in developing 
and implementing valid and reliable assessments for 
limited English proficient students and children with 
disabilities; 
(6) the tuition and fee increases for in-State stu-
dents imposed by public institutions of higher edu-
cation in the State during the period of availability 
of funds under this title, and a description of any ac-
tions taken by the State to limit those increases; and 
(7) the extent to which public institutions of 
higher education maintained, increased, or decreased 
enrollment of in-State students, including students el-
igible for Pell Grants or other need-based financial 
assistance. 
SEC. 1409. EVALUATION. 
The Comptroller General of the United States shall 
conduct evaluations of the programs under sections 1406 
and 1407 which shall include, but not be limited to, the 
criteria used for the awards made, the States selected for 
awards, award amounts, how each State used the award 
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received, and the impact of this funding on the progress 
made toward closing achievement gaps. 
SEC. 1410. SECRETARY’S REPORT TO CONGRESS. 
The Secretary shall submit a report to the Committee 
on Education and Labor of the House of Representatives, 
the Committee on Health, Education, Labor, and Pensions 
of the Senate, and the Committees on Appropriations of the 
House of Representatives and of the Senate, not less than 
6 months following the submission of the State reports, that 
evaluates the information provided in the State reports 
under section 1408. 
SEC. 1411. PROHIBITION ON PROVISION OF CERTAIN AS-
SISTANCE. 
No recipient of funds under this title shall use such 
funds to provide financial assistance to students to attend 
private elementary or secondary schools, unless such funds 
are used to provide special education and related services 
to children with disabilities, as authorized by the Individ-
uals with Disabilities Education Act (20 U.S.C. 1400 et 
seq.). 
SEC. 1412. DEFINITIONS. 
Except as otherwise provided in this title, as used in 
this title— 
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(1) the term ‘‘institution of higher education’’ 
has the meaning given such term in section 101 of the 
Higher Education Act of 1965 (20 U.S.C. 1001); 
(2) the term ‘‘Secretary’’ means the Secretary of 
Education; 
(3) the term ‘‘State’’ means each of the 50 States, 
the District of Columbia, and the Commonwealth of 
Puerto Rico; and 
(4) any other term that is defined in section 
9101 of ESEA (20 U.S.C. 7801) shall have the mean-
ing given the term in such section. 
SEC. 1413. REGULATORY RELIEF. 
(a) WAIVER AUTHORITY.—Subject to subsections (b) 
and (c), the Secretary of Education may, as applicable, 
waive or modify, in order to ease fiscal burdens, any re-
quirement relating to the following: 
(1) Maintenance of effort. 
(2) The use of Federal funds to supplement, not 
supplant, non-Federal funds. 
(b) DURATION.—A waiver under this section shall be 
for fiscal years 2009 and 2010. 
(c) LIMITATIONS.— 
(1) RELATION TO IDEA.—Nothing in this section 
shall be construed to permit the Secretary to waive or 
modify any provision of the Individuals with Disabil-
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ities Education Act (20 U.S.C. 1400 et seq.), except 
as described in a(1) and a(2). 
(2) MAINTENANCE OF EFFORT.—If the Secretary 
grants a waiver or modification under this section 
waiving or modifying a requirement relating to 
maintenance of effort for fiscal years 2009 and 2010, 
the level of effort required for fiscal year 2011 shall 
not be reduced because of the waiver or modification. 
TITLE XV—RECOVERY ACCOUNT-
ABILITY AND TRANSPARENCY 
BOARD AND RECOVERY INDE-
PENDENT ADVISORY PANEL 
SEC. 1501. DEFINITIONS. 
In this title: 
(1) AGENCY.—The term ‘‘agency’’ has the mean-
ing given under section 551 of title 5, United States 
Code. 
(2) BOARD.—The term ‘‘Board’’ means the Re-
covery Accountability and Transparency Board estab-
lished in section 1511. 
(3) CHAIRPERSON.—The term ‘‘Chairperson’’ 
means the Chairperson of the Board. 
(4) COVERED FUNDS.—The term ‘‘covered funds’’ 
means any funds that are expended or obligated— 
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(A) from appropriations made under this 
Act; and 
(B) under any other authorities provided 
under this Act. 
(5) PANEL.—The term ‘‘Panel’’ means the Recov-
ery Independent Advisory Panel established in section 
1531. 
Subtitle A—Recovery Accountability 
and Transparency Board 
SEC. 1511. ESTABLISHMENT OF THE RECOVERY ACCOUNT-
ABILITY AND TRANSPARENCY BOARD. 
There is established the Recovery Accountability and 
Transparency Board to coordinate and conduct oversight 
of covered funds to prevent fraud, waste, and abuse. 
SEC. 1512. COMPOSITION OF BOARD. 
(a) CHAIRPERSON.— 
(1) DESIGNATION OR APPOINTMENT.—The Presi-
dent shall— 
(A) designate the Deputy Director for Man-
agement of the Office of Management and Budget 
to serve as Chairperson of the Board; 
(B) designate another Federal officer who 
was appointed by the President to a position 
that required the advice and consent of the Sen-
ate, to serve as Chairperson of the Board; or 
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(C) appoint an individual as the Chair-
person of the Board, by and with the advice and 
consent of the Senate. 
(2) COMPENSATION.— 
(A) DESIGNATION OF FEDERAL OFFICER.— 
If the President designates a Federal officer 
under paragraph (1)(A) or (B) to serve as 
Chairperson, that Federal officer may not receive 
additional compensation for services performed 
as Chairperson. 
(B) APPOINTMENT OF NON-FEDERAL OFFI-
CER.—If the President appoints an individual 
as Chairperson under paragraph (1)(C), that in-
dividual shall be compensated at the rate of basic 
pay prescribed for level IV of the Executive 
Schedule under section 5315 of title 5, United 
States Code. 
(b) MEMBERS.—The members of the Board shall in-
clude— 
(1) the Inspectors General of the Departments of 
Agriculture, Commerce, Education, Energy, Health 
and Human Services, Homeland Security, Justice, 
Transportation, Treasury, and the Treasury Inspector 
General for Tax Administration; and 
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(2) any other Inspector General as designated by 
the President from any agency that expends or obli-
gates covered funds. 
SEC. 1513. FUNCTIONS OF THE BOARD. 
(a) FUNCTIONS.— 
(1) IN GENERAL.—The Board shall coordinate 
and conduct oversight of covered funds in order to 
prevent fraud, waste, and abuse. 
(2) SPECIFIC FUNCTIONS.—The functions of the 
Board shall include— 
(A) reviewing whether the reporting of con-
tracts and grants using covered funds meets ap-
plicable standards and specifies the purpose of 
the contract or grant and measures of perform-
ance; 
(B) reviewing whether competition require-
ments applicable to contracts and grants using 
covered funds have been satisfied; 
(C) auditing and investigating covered 
funds to determine whether wasteful spending, 
poor contract or grant management, or other 
abuses are occurring; 
(D) reviewing whether there are sufficient 
qualified acquisition and grant personnel over-
seeing covered funds; 
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(E) reviewing whether personnel whose du-
ties involve acquisitions or grants made with 
covered funds receive adequate training; and 
(F) reviewing whether there are appropriate 
mechanisms for interagency collaboration relat-
ing to covered funds. 
(b) REPORTS.— 
(1) QUARTERLY REPORTS.—The Board shall sub-
mit quarterly reports to the President and Congress, 
including the Committees on Appropriations of the 
Senate and House of Representatives, summarizing 
the findings of the Board and the findings of inspec-
tors general of agencies. The Board may submit addi-
tional reports as appropriate. 
(2) ANNUAL REPORTS.—The Board shall submit 
annual reports to the President and the Committees 
on Appropriations of the Senate and House of Rep-
resentatives, consolidating applicable quarterly re-
ports on the use of covered funds. 
(3) PUBLIC AVAILABILITY.— 
(A) IN
GENERAL.—All reports submitted 
under this subsection shall be made publicly 
available and posted on a website established by 
the Board. 
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(B) REDACTIONS.—Any portion of a report 
submitted under this subsection may be redacted 
when made publicly available, if that portion 
would disclose information that is not subject to 
disclosure under section 552 of title 5, United 
States Code (commonly known as the Freedom of 
Information Act). 
(c) RECOMMENDATIONS.— 
(1) IN GENERAL.—The Board shall make rec-
ommendations to agencies on measures to prevent 
fraud, waste, and abuse relating to covered funds. 
(2) RESPONSIVE REPORTS.—Not later than 30 
days after receipt of a recommendation under para-
graph (1), an agency shall submit a report to the 
President, the congressional committees of jurisdic-
tion, including the Committees on Appropriations of 
the Senate and House of Representatives, and the 
Board on— 
(A) whether the agency agrees or disagrees 
with the recommendations; and 
(B) any actions the agency will take to im-
plement the recommendations. 
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SEC. 1514. POWERS OF THE BOARD. 
(a) IN GENERAL.—The Board shall conduct, supervise, 
and coordinate audits and investigations by inspectors gen-
eral of agencies relating to covered funds. 
(b) AUDITS AND INVESTIGATIONS.—The Board may— 
(1) conduct its own independent audits and in-
vestigations relating to covered funds; and 
(2) collaborate on audits and investigations re-
lating to covered funds with any inspector general of 
an agency. 
(c) AUTHORITIES.— 
(1) AUDITS
AND
INVESTIGATIONS.—In con-
ducting audits and investigations, the Board shall 
have the authorities provided under section 6 of the 
Inspector General Act of 1978 (5 U.S.C. App.). 
(2) STANDARDS AND GUIDELINES.—The Board 
shall carry out the powers under subsections (a) and 
(b) in accordance with section 4(b)(1) of the Inspector 
General Act of 1978 (5 U.S.C. App.). 
(d) PUBLIC HEARINGS.—The Board may hold public 
hearings and Board personnel may conduct investigative 
depositions. The head of each agency shall make all officers 
and employees of that agency available to provide testimony 
to the Board and Board personnel. The Board may issue 
subpoenas to compel the testimony of persons who are not 
Federal officers or employees. Any such subpoenas may be 
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enforced as provided under section 6 of the Inspector Gen-
eral Act of 1978 (5 U.S.C. App.). 
(e) CONTRACTS.—The Board may enter into contracts 
to enable the Board to discharge its duties under this sub-
title, including contracts and other arrangements for au-
dits, studies, analyses, and other services with public agen-
cies and with private persons, and make such payments as 
may be necessary to carry out the duties of the Board. 
(f) TRANSFER OF FUNDS.—The Board may transfer 
funds appropriated to the Board for expenses to support 
administrative support services and audits or investiga-
tions of covered funds to any office of inspector general, the 
Office of Management and Budget, the General Services Ad-
ministration, and the Panel. 
SEC. 1515. EMPLOYMENT, PERSONNEL, AND RELATED AU-
THORITIES. 
(a) EMPLOYMENT AND PERSONNEL AUTHORITIES.— 
(1) IN GENERAL.— 
(A) AUTHORITIES.—Subject to paragraph 
(2), the Board may exercise the authorities of 
subsections (b) through (i) of section 3161 of title 
5, United States Code (without regard to sub-
section (a) of that section). 
(B) APPLICATION.—For purposes of exer-
cising the authorities described under subpara-
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graph (A), the term ‘‘Chairperson of the Board’’ 
shall be substituted for the term ‘‘head of a tem-
porary organization’’. 
(C) CONSULTATION.—In exercising the au-
thorities described under subparagraph (A), the 
Chairperson shall consult with members of the 
Board. 
(2) EMPLOYMENT AUTHORITIES.—In exercising 
the employment authorities under subsection (b) of 
section 3161 of title 5, United States Code, as pro-
vided under paragraph (1) of this subsection— 
(A) paragraph (2) of subsection (b) of sec-
tion 3161 of that title (relating to periods of ap-
pointments) shall not apply; and 
(B) no period of appointment may exceed 
the date on which the Board terminates under 
section 1521. 
(b) INFORMATION AND ASSISTANCE.— 
(1) IN GENERAL.—Upon request of the Board for 
information or assistance from any agency or other 
entity of the Federal Government, the head of such en-
tity shall, insofar as is practicable and not in con-
travention of any existing law, furnish such informa-
tion or assistance to the Board, or an authorized des-
ignee. 
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(2) REPORT OF REFUSALS.—Whenever informa-
tion or assistance requested by the Board is, in the 
judgment of the Board, unreasonably refused or not 
provided, the Board shall report the circumstances to 
the congressional committees of jurisdiction, including 
the Committees on Appropriations of the Senate and 
House of Representatives, without delay. 
(c) ADMINISTRATIVE SUPPORT.—The General Services 
Administration shall provide the Board with administra-
tive support services, including the provision of office space 
and facilities. 
SEC. 1516. INDEPENDENCE OF INSPECTORS GENERAL. 
(a) INDEPENDENT AUTHORITY.—Nothing in this sub-
title shall affect the independent authority of an inspector 
general to determine whether to conduct an audit or inves-
tigation of covered funds. 
(b) REQUESTS BY BOARD.—If the Board requests that 
an inspector general conduct or refrain from conducting an 
audit or investigation and the inspector general rejects the 
request in whole or in part, the inspector general shall, not 
later than 30 days after rejecting the request, submit a re-
port to the Board, the head of the applicable agency, and 
the congressional committees of jurisdiction, including the 
Committees on Appropriations of the Senate and House of 
Representatives. The report shall state the reasons that the 
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inspector general has rejected the request in whole or in 
part. 
SEC. 1517. COORDINATION WITH THE COMPTROLLER GEN-
ERAL AND STATE AUDITORS. 
The Board shall coordinate its oversight activities with 
the Comptroller General of the United States and State 
auditor generals. 
SEC. 1518. PROTECTING STATE AND LOCAL GOVERNMENT 
AND CONTRACTOR WHISTLEBLOWERS. 
(a) PROHIBITION
OF REPRISALS.—An employee of 
any non-Federal employer receiving covered funds may not 
be discharged, demoted, or otherwise discriminated against 
as a reprisal for disclosing to the Board, an inspector gen-
eral, the Comptroller General, a member of Congress, or a 
the head of a Federal agency, or their representatives, infor-
mation that the employee reasonably believes is evidence 
of— 
(1) gross mismanagement of an agency contract 
or grant relating to covered funds; 
(2) a gross waste of covered funds; 
(3) a substantial and specific danger to public 
health or safety; or 
(4) a violation of law related to an agency con-
tract (including the competition for or negotiation of 
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a contract) or grant, awarded or issued relating to 
covered funds. 
(b) INVESTIGATION OF COMPLAINTS.— 
(1) IN GENERAL.—A person who believes that the 
person has been subjected to a reprisal prohibited by 
subsection (a) may submit a complaint to the appro-
priate inspector general. Unless the inspector general 
determines that the complaint is frivolous, the inspec-
tor general shall investigate the complaint and, upon 
completion of such investigation, submit a report of 
the findings of the investigation to the person, the 
person’s employer, the head of the appropriate agency, 
and the Board. 
(2) TIME LIMITATIONS FOR ACTIONS.— 
(A) IN
GENERAL.—Except as provided 
under subparagraph (B), the inspector general 
shall make a determination that a complaint is 
frivolous or submit a report under paragraph (1) 
within 180 days after receiving the complaint. 
(B) EXTENSION.—If the inspector general is 
unable to complete an investigation in time to 
submit a report within the 180-day period speci-
fied under subparagraph (A) and the person sub-
mitting the complaint agrees to an extension of 
time, the inspector general shall submit a report 
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under paragraph (1) within such additional pe-
riod of time as shall be agreed upon between the 
inspector general and the person submitting the 
complaint. 
(c) REMEDY AND ENFORCEMENT AUTHORITY.— 
(1) AGENCY ACTION.—Not later than 30 days 
after receiving an inspector general report under sub-
section (b), the head of the agency concerned shall de-
termine whether there is sufficient basis to conclude 
that the non-Federal employer has subjected the com-
plainant to a reprisal prohibited by subsection (a) 
and shall either issue an order denying relief or shall 
take 1 or more of the following actions: 
(A) Order the employer to take affirmative 
action to abate the reprisal. 
(B) Order the employer to reinstate the per-
son to the position that the person held before the 
reprisal, together with the compensation (includ-
ing back pay), employment benefits, and other 
terms and conditions of employment that would 
apply to the person in that position if the re-
prisal had not been taken. 
(C) Order the employer to pay the com-
plainant an amount equal to the aggregate 
amount of all costs and expenses (including at-
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torneys’ fees and expert witnesses’ fees) that were 
reasonably incurred by the complainant for, or 
in connection with, bringing the complaint re-
garding the reprisal, as determined by the head 
of the agency. 
(2) CIVIL ACTION.—If the head of an agency 
issues an order denying relief under paragraph (1) or 
has not issued an order within 210 days after the 
submission of a complaint under subsection (b), or in 
the case of an extension of time under subsection 
(b)(2)(B), not later than 30 days after the expiration 
of the extension of time, and there is no showing that 
such delay is due to the bad faith of the complainant, 
the complainant shall be deemed to have exhausted all 
administrative remedies with respect to the com-
plaint, and the complainant may bring a de novo ac-
tion at law or equity against the employer to seek 
compensatory damages and other relief available 
under this section in the appropriate district court of 
the United States, which shall have jurisdiction over 
such an action without regard to the amount in con-
troversy. Such an action shall, at the request of either 
party to the action, be tried by the court with a jury. 
(3) EVIDENCE.—An inspector general determina-
tion and an agency head order denying relief under 
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paragraph (2) shall be admissible in evidence in any 
de novo action at law or equity brought in accordance 
with this subsection. 
(4) JUDICIAL ENFORCEMENT OF ORDER.—When-
ever a person fails to comply with an order issued 
under paragraph (1), the head of the agency shall file 
an action for enforcement of such order in the United 
States district court for a district in which the re-
prisal was found to have occurred. In any action 
brought under this paragraph, the court may grant 
appropriate relief, including injunctive relief and 
compensatory and exemplary damages. 
(5) JUDICIAL REVIEW.—Any person adversely af-
fected or aggrieved by an order issued under para-
graph (1) may obtain review of the order’s conform-
ance with this subsection, and any regulations issued 
to carry out this section, in the United States court 
of appeals for a circuit in which the reprisal is al-
leged in the order to have occurred. No petition seek-
ing such review may be filed more than 60 days after 
issuance of the order by the head of the agency. Re-
view shall conform to chapter 7 of title 5, United 
States Code. 
(d) RULE OF CONSTRUCTION.—Nothing in this section 
may be construed to authorize the discharge of, demotion 
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of, or discrimination against an employee for a disclosure 
other than a disclosure protected by subsection (a) or to 
modify or derogate from a right or remedy otherwise avail-
able to the employee. 
SEC. 1519. BOARD WEBSITE. 
(a) ESTABLISHMENT.—The Board shall establish and 
maintain a user-friendly, public-facing website to foster 
greater accountability and transparency in the use of cov-
ered funds. 
(b) PURPOSE.—The website established and main-
tained under subsection (a) shall be a portal or gateway 
to key information relating to this Act and provide connec-
tions to other Government websites with related informa-
tion. 
(c) CONTENT
AND FUNCTION.—In establishing the 
website established and maintained under subsection (a), 
the Board shall ensure the following: 
(1) The website shall provide materials explain-
ing what this Act means for citizens. The materials 
shall be easy to understand and regularly updated. 
(2) The website shall provide accountability in-
formation, including a database of findings from au-
dits, inspectors general, and the Government Account-
ability Office. 
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(3) The website shall provide data on relevant 
economic, financial, grant, and contract information 
in user-friendly visual presentations to enhance pub-
lic awareness of the use of covered funds. 
(4) The website shall provide detailed data on 
contracts awarded by the Government that expend 
covered funds, including information about the com-
petitiveness of the contracting process, notification of 
solicitations for contracts to be awarded, and infor-
mation about the process that was used for the award 
of contracts. 
(5) The website shall include printable reports on 
covered funds obligated by month to each State and 
congressional district. 
(6) The website shall provide a means for the 
public to give feedback on the performance of con-
tracts that expend covered funds. 
(7) The website shall be enhanced and updated 
as necessary to carry out the purposes of this subtitle. 
(d) WAIVER.—The Board may exclude posting con-
tractual or other information on the website on a case-by- 
case basis when necessary to protect national security. 
SEC. 1520. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such sums as 
necessary to carry out this subtitle. 
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SEC. 1521. TERMINATION OF THE BOARD. 
The Board shall terminate on September 30, 2012. 
Subtitle B—Recovery Independent 
Advisory Panel 
SEC. 1531. ESTABLISHMENT OF RECOVERY INDEPENDENT 
ADVISORY PANEL. 
(a) ESTABLISHMENT.—There is established the Recov-
ery Independent Advisory Panel. 
(b) MEMBERSHIP.—The Panel shall be composed of 5 
members who shall be appointed by the President. 
(c) QUALIFICATIONS.—Members shall be appointed on 
the basis of expertise in economics, public finance, con-
tracting, accounting, or any other relevant field. 
(d) INITIAL MEETING.—Not later than 30 days after 
the date on which all members of the Panel have been ap-
pointed, the Panel shall hold its first meeting. 
(e) MEETINGS.—The Panel shall meet at the call of 
the Chairperson of the Panel. 
(f) QUORUM.—A majority of the members of the Panel 
shall constitute a quorum, but a lesser number of members 
may hold hearings. 
(g) CHAIRPERSON
AND VICE CHAIRPERSON.—The 
Panel shall select a Chairperson and Vice Chairperson from 
among its members. 
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SEC. 1532. DUTIES OF THE PANEL. 
The Panel shall make recommendations to the Board 
on actions the Board could take to prevent fraud, waste, 
and abuse relating to covered funds. 
SEC. 1533. POWERS OF THE PANEL. 
(a) HEARINGS.—The Panel may hold such hearings, 
sit and act at such times and places, take such testimony, 
and receive such evidence as the Panel considers advisable 
to carry out this subtitle. 
(b) INFORMATION FROM FEDERAL AGENCIES.—The 
Panel may secure directly from any agency such informa-
tion as the Panel considers necessary to carry out this sub-
title. Upon request of the Chairperson of the Panel, the head 
of such agency shall furnish such information to the Panel. 
(c) POSTAL SERVICES.—The Panel may use the 
United States mails in the same manner and under the 
same conditions as agencies of the Federal Government. 
(d) GIFTS.—The Panel may accept, use, and dispose 
of gifts or donations of services or property. 
SEC. 1534. PANEL PERSONNEL MATTERS. 
(a) COMPENSATION OF MEMBERS.—Each member of 
the Panel who is not an officer or employee of the Federal 
Government shall be compensated at a rate equal to the 
daily equivalent of the annual rate of basic pay prescribed 
for level IV of the Executive Schedule under section 5315 
of title 5, United States Code, for each day (including travel 
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time) during which such member is engaged in the perform-
ance of the duties of the Panel. All members of the Panel 
who are officers or employees of the United States shall serve 
without compensation in addition to that received for their 
services as officers or employees of the United States. 
(b) TRAVEL EXPENSES.—The members of the Panel 
shall be allowed travel expenses, including per diem in lieu 
of subsistence, at rates authorized for employees of agencies 
under subchapter I of chapter 57 of title 5, United States 
Code, while away from their homes or regular places of 
business in the performance of services for the Panel. 
(c) STAFF.— 
(1) IN GENERAL.—The Chairperson of the Panel 
may, without regard to the civil service laws and reg-
ulations, appoint and terminate an executive director 
and such other additional personnel as may be nec-
essary to enable the Panel to perform its duties. The 
employment of an executive director shall be subject 
to confirmation by the Panel. 
(2) COMPENSATION.—The Chairperson of the 
Panel may fix the compensation of the executive di-
rector and other personnel without regard to chapter 
51 and subchapter III of chapter 53 of title 5, United 
States Code, relating to classification of positions and 
General Schedule pay rates, except that the rate of 
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pay for the executive director and other personnel 
may not exceed the rate payable for level V of the Ex-
ecutive Schedule under section 5316 of such title. 
(3) PERSONNEL AS FEDERAL EMPLOYEES.— 
(A) IN
GENERAL.—The executive director 
and any personnel of the Panel who are employ-
ees shall be employees under section 2105 of title 
5, United States Code, for purposes of chapters 
63, 81, 83, 84, 85, 87, 89, 89A, 89B, and 90 of 
that title. 
(B) MEMBERS
OF
PANEL.—Subparagraph 
(A) shall not be construed to apply to members 
of the Panel. 
(d) DETAIL OF GOVERNMENT EMPLOYEES.—Any Fed-
eral Government employee may be detailed to the Panel 
without reimbursement, and such detail shall be without 
interruption or loss of civil service status or privilege. 
(e) PROCUREMENT OF TEMPORARY AND INTERMIT-
TENT SERVICES.—The Chairperson of the Panel may pro-
cure temporary and intermittent services under section 
3109(b) of title 5, United States Code, at rates for individ-
uals which do not exceed the daily equivalent of the annual 
rate of basic pay prescribed for level V of the Executive 
Schedule under section 5316 of such title. 
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(f) ADMINISTRATIVE SUPPORT.—The General Services 
Administration shall provide the Board with administra-
tive support services, including the provision of office space 
and facilities. 
SEC. 1535. TERMINATION OF THE PANEL. 
The Panel shall terminate on September 30, 2012. 
SEC. 1536. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such sums as 
necessary to carry out this subtitle. 
Subtitle C—Reports of the Council 
of Economic Advisers 
SEC. 1541. REPORTS OF THE COUNCIL OF ECONOMIC ADVIS-
ERS. 
(a) IN GENERAL.—In consultation with the Director 
of the Office of Management and Budget and the Secretary 
of the Treasury, the Chairperson of the Council of Economic 
Advisers shall submit to the Committees on Appropriations 
of the Senate and House of Representatives quarterly re-
ports based on the reports required under section 1551 that 
detail the impact of programs funded through covered funds 
on employment, estimated economic growth, and other key 
economic indicators. 
(b) SUBMISSION OF REPORTS.— 
(1) FIRST REPORT.—The first report submitted 
under subsection (a) shall be submitted not later than 
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45 days after the end of the first full quarter following 
the date of enactment of this Act. 
(2) LAST REPORT.—The last report required to 
be submitted under subsection (a) shall apply to the 
quarter in which the Board terminates under section 
1521. 
Subtitle D—Reports on Use of 
Funds 
SEC. 1551. REPORTS ON USE OF FUNDS. 
(a) SHORT TITLE.—This section may be cited as the 
‘‘Jobs Accountability Act’’. 
(b) DEFINITIONS.—In this section: 
(1) AGENCY.—The term ‘‘agency’’ has the mean-
ing given under section 551 of title 5, United States 
Code. 
(2) RECIPIENT.—The term ‘‘recipient’’— 
(A) means any entity that receives recovery 
funds (including recovery funds received through 
grant, loan, or contract) other than an indi-
vidual; and 
(B) includes a State that receives recovery 
funds. 
(3) RECOVERY
FUNDS.—The term ‘‘recovery 
funds’’ means any funds that are made available— 
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(A) from appropriations made under this 
Act; and 
(B) under any other authorities provided 
under this Act. 
(c) RECIPIENT REPORTS.—Not later than 10 days 
after the end of each calendar quarter, each recipient that 
received recovery funds from an agency shall submit a re-
port to that agency that contains— 
(1) the total amount of recovery funds received 
from that agency; 
(2) the amount of recovery funds received that 
were expended or obligated to projects or activities; 
and 
(3) a detailed list of all projects or activities for 
which recovery funds were expended or obligated, in-
cluding— 
(A) the name of the project or activity; 
(B) a description of the project or activity; 
(C) an evaluation of the completion status 
of the project or activity; and 
(D) an analysis of the number of jobs cre-
ated and the number of jobs retained by the 
project or activity. 
(d) AGENCY REPORTS.—Not later than 30 days after 
the end of each calendar quarter, each agency that made 
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recovery funds available to any recipient shall make the in-
formation in reports submitted under subsection (c) pub-
licly available by posting the information on a website. 
(e) OTHER REPORTS.—The Congressional Budget Of-
fice and the Government Accountability Office shall com-
ment on the information described in subsection (c)(3)(D) 
for any reports submitted under subsection (c). Such com-
ments shall be due within 7 days after such reports are sub-
mitted. 
TITLE XVI—GENERAL PROVISIONS—THIS ACT 
EMERGENCY DESIGNATION 
SEC. 1601. Each amount in this Act is designated as 
an emergency requirement and necessary to meet emergency 
needs pursuant to section 204(a) of S. Con. Res. 21 (110th 
Congress) and section 301(b)(2) of S. Con. Res. 70 (110th 
Congress), the concurrent resolutions on the budget for fiscal 
years 2008 and 2009. 
AVAILABILITY 
SEC. 1602. No part of any appropriation contained 
in this Act shall remain available for obligation beyond the 
current fiscal year unless expressly so provided herein. 
RELATIONSHIP TO OTHER APPROPRIATIONS 
SEC. 1603. Each amount appropriated or made avail-
able in this Act is in addition to amounts otherwise appro-
priated for the fiscal year involved. Enactment of this Act 
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shall have no effect on the availability of amounts under 
the Continuing Appropriations Resolution, 2009 (division 
A of Public Law 110–329). 
BUY AMERICAN 
SEC. 1604. USE OF AMERICAN IRON, STEEL, AND 
MANUFACTURED GOODS. (a) None of the funds appro-
priated or otherwise made available by this Act may be used 
for a project for the construction, alteration, maintenance, 
or repair of a public building or public work unless all of 
the iron, steel, and manufactured goods used in the project 
are produced in the United States. 
(b) Subsection (a) shall not apply in any case in which 
the head of the Federal department or agency involved finds 
that— 
(1) applying subsection (a) would be inconsistent 
with the public interest; 
(2) iron, steel, and the relevant manufactured 
goods are not produced in the United States if suffi-
cient and reasonably available quantities and of a 
satisfactory quality; or 
(3) inclusion of iron, steel, and manufactured 
goods produced in the United States will increase the 
cost of the overall project by more than 25 percent. 
(c) If the head of a Federal department or agency de-
termines that it is necessary to waive the application of 
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subsection (a) based on a finding under subsection (b), the 
head of the department or agency shall publish in the Fed-
eral Register a detailed written jurisdiction as to why the 
provision is being waived. 
(d) This section shall be applied in a manner con-
sistent with United States obligations under international 
agreements. 
CERTIFICATION 
SEC. 1605. With respect to funds in titles I though XVI 
of this Act made available to State, or local government 
agencies, the Governor, mayor, or other chief executive, as 
appropriate, shall certify that the infrastructure investment 
has received the full review and vetting required by law and 
that the chief executive accepts responsibility that the infra-
structure investment is an appropriate use of taxpayer dol-
lars. A State or local agency may not receive infrastructure 
investment funding from funds made available in this Act 
unless this certification is made. 
ECONOMIC STABILIZATION CONTRACTING 
SEC. 1606. REFORM OF CONTRACTING PROCEDURES 
UNDER EESA. Section 107(b) of the Emergency Economic 
Stabilization Act of 2008 (12 U.S.C. 5217(b)) is amended 
by inserting ‘‘and individuals with disabilities and busi-
nesses owned by individuals with disabilities (for purposes 
of this subsection the term ‘individual with disability’ has 
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the same meaning as the term ‘handicapped individual’ as 
that term is defined in section 3(f) of the Small Business 
Act (15 U.S.C. 632(f)),’’ after ‘‘(12 U.S.C. 1441a(r)(4)),’’. 
SEC. 1607. FINDINGS.— 
(1) The National Environmental Policy Act pro-
tects public health, safety and environmental quality: 
by ensuring transparency, accountability and public 
involvement in federal actions and in the use of pub-
lic funds; 
(2) When President Nixon signed the National 
Environmental Policy Act into law on January 1, 
1970, he said that the Act provided the ‘‘direction’’ 
for the country to ‘‘regain a productive harmony be-
tween man and nature’’; 
(3) The National Environmental Policy Act 
helps to provide an orderly process for considering 
federal actions and funding decisions and prevents li-
gation and delay that would otherwise be inevitable 
and existed prior to the establishment of the National 
Environmental Policy Act. 
(a) Adequate resources within this bill must be devoted 
to ensuring that applicable environmental reviews under 
the National Environmental Policy Act are completed on 
an expeditious basis and that the shortest existing applica-
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ble process under the National Environmental Policy Act 
shall be utilized. 
(b) The President shall report to the Senate Environ-
ment and Public Works Committee and the House Natural 
Resources Committee every 90 days following the date of 
enactment until September 30, 2011 on the status and 
progress of projects and activities funded by this Act with 
respect to compliance with National Environmental Policy 
Act requirements and documentation. 
PROHIBITION ON NO-BID CONTRACTS AND EARMARKS 
SEC. 1608. (a) Notwithstanding any other provision 
of this Act, none of the funds appropriated or otherwise 
made available by this Act may be used to make any pay-
ment in connection with a contract unless the contract is 
awarded using competitive procedures in accordance with 
the requirements of section 303 of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 253), sec-
tion 2304 of title 10, United States Code, and the Federal 
Acquisition Regulation. 
(b) Notwithstanding any other provision of this Act, 
none of the funds appropriated or otherwise made available 
by this Act may be awarded by grant or cooperative agree-
ment unless the process used to award such grant or cooper-
ative agreement uses competitive procedures to select the 
grantee or award recipient. 
SEC. 1609. LIMIT ON FUNDS. 
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None of the amounts appropriated or otherwise made 
available by this Act may be used for any casino or other 
gambling establishment, aquarium, zoo, golf course, swim-
ming pool, stadium, community park, museum, theater, art 
center, and highway beautification project. 
SEC. 1610. HIRING AMERICAN WORKERS IN COMPANIES RE-
CEIVING TARP FUNDING. 
(a) SHORT TITLE.—This section may be cited as the 
‘‘Employ American Workers Act’’. 
(b) PROHIBITION.— 
(1) IN
GENERAL.—Notwithstanding any other 
provision of law, it shall be unlawful for any recipi-
ent of funding under title I of the Emergency Eco-
nomic Stabilization Act of 2008 (Public Law 110– 
343) or section 13 of the Federal Reserve Act (12 
U.S.C. 342 et seq.) to hire any nonimmigrant de-
scribed in section 101(a)(15)(h)(i)(b) of the Immigra-
tion 
and 
Nationality 
Act 
(8 
U.S.C. 
1101(a)(15)(h)(i)(b)) unless the recipient is in com-
pliance with the requirements for an H–1B dependent 
employer (as defined in section 212(n)(3) of such Act 
(8 U.S.C. 1182(n)(3))), except that the second sen-
tence of section 212(n)(1)(E)(ii) of such Act shall not 
apply. 
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(2) DEFINED
TERM.—In this subsection, the 
term ‘‘hire’’ means to permit a new employee to com-
mence a period of employment. 
(c) SUNSET PROVISION.—This section shall be effective 
during the 2-year period beginning on the date of the enact-
ment of this Act. 
DIVISION 
B—TAX, 
UNEMPLOY-
MENT, HEALTH, STATE FIS-
CAL RELIEF, AND OTHER PRO-
VISIONS 
TITLE I—TAX PROVISIONS 
SEC. 1000. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This title may be cited as the 
‘‘American Recovery and Reinvestment Tax Act of 2009’’. 
(b) REFERENCE.—Except as otherwise expressly pro-
vided, whenever in this title an amendment or repeal is ex-
pressed in terms of an amendment to, or repeal of, a section 
or other provision, the reference shall be considered to be 
made to a section or other provision of the Internal Revenue 
Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this title is as follows: 
TITLE I—TAX PROVISIONS 
Sec. 1000. Short title, etc. 
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SEC. 1012. EXTENSION OF INCREASED ALTERNATIVE MIN-
IMUM TAX EXEMPTION AMOUNT. 
(a) IN GENERAL.—Paragraph (1) of section 55(d) (re-
lating to exemption amount) is amended— 
(1) by striking ‘‘($69,950 in the case of taxable 
years beginning in 2008)’’ in subparagraph (A) and 
inserting ‘‘($70,950 in the case of taxable years begin-
ning in 2009)’’, and 
(2) by striking ‘‘($46,200 in the case of taxable 
years beginning in 2008)’’ in subparagraph (B) and 
inserting ‘‘($46,700 in the case of taxable years begin-
ning in 2009)’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
Subtitle B—Energy Incentives 
PART I—RENEWABLE ENERGY INCENTIVES 
SEC. 1101. EXTENSION OF CREDIT FOR ELECTRICITY PRO-
DUCED 
FROM 
CERTAIN 
RENEWABLE 
RE-
SOURCES. 
(a) IN GENERAL.—Subsection (d) of section 45 is 
amended— 
(1) by striking ‘‘2010’’ in paragraph (1) and in-
serting ‘‘2013’’, 
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sortium for Energy Efficiency, as in effect on 
January 1, 2009.’’. 
(2) CENTRAL
AIR
CONDITIONERS.—Subpara-
graph (C) of section 25C(d)(3) is amended by striking 
‘‘2006’’ and inserting ‘‘2009’’. 
(3) WATER
HEATERS.—Subparagraph (D) of 
section 25C(d)(3) is amended to read as follows: 
‘‘(E) a natural gas, propane, or oil water 
heater which has either an energy factor of at 
least 0.82 or a thermal efficiency of at least 90 
percent.’’. 
(4) WOOD STOVES.—Subparagraph (E) of sec-
tion 25C(d)(3) is amended by inserting ‘‘, as meas-
ured using a lower heating value’’ after ‘‘75 percent’’. 
(c) MODIFICATIONS OF STANDARDS FOR OIL FUR-
NACES AND HOT WATER BOILERS.— 
(1) IN
GENERAL.—Paragraph (4) of section 
25C(d) is amended to read as follows: 
‘‘(4) QUALIFIED NATURAL GAS, PROPANE, AND 
OIL FURNACES AND HOT WATER BOILERS.— 
‘‘(A) QUALIFIED NATURAL GAS FURNACE.— 
The term ‘qualified natural gas furnace’ means 
any natural gas furnace which achieves an an-
nual fuel utilization efficiency rate of not less 
than 95. 
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‘‘(B) QUALIFIED NATURAL GAS HOT WATER 
BOILER.—The term ‘qualified natural gas hot 
water boiler’ means any natural gas hot water 
boiler which achieves an annual fuel utilization 
efficiency rate of not less than 90. 
‘‘(C) QUALIFIED PROPANE FURNACE.—The 
term ‘qualified propane furnace’ means any pro-
pane furnace which achieves an annual fuel uti-
lization efficiency rate of not less than 95. 
‘‘(D) QUALIFIED
PROPANE
HOT
WATER 
BOILER.—The term ‘qualified propane hot water 
boiler’ means any propane hot water boiler 
which achieves an annual fuel utilization effi-
ciency rate of not less than 90. 
‘‘(E) QUALIFIED OIL FURNACES.—The term 
‘qualified oil furnace’ means any oil furnace 
which achieves an annual fuel utilization effi-
ciency rate of not less than 90. 
‘‘(F) QUALIFIED OIL HOT WATER BOILER.— 
The term ‘qualified oil hot water boiler’ means 
any oil hot water boiler which achieves an an-
nual fuel utilization efficiency rate of not less 
than 90.’’. 
(2) CONFORMING
AMENDMENT.—Clause (ii) of 
section 25C(d)(2)(A) is amended to read as follows: 
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