[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2433 Engrossed in Senate (ES)]

103d CONGRESS

  2d Session

                                S. 2433

_______________________________________________________________________

                                 AN ACT

To amend title VIII of the Public Health Service Act to consolidate and 
reauthorize nursing education programs under such title, and for other 
                               purposes.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
103d CONGRESS
  2d Session
                                S. 2433

_______________________________________________________________________

                                 AN ACT


 
To amend title VIII of the Public Health Service Act to consolidate and 
reauthorize nursing education programs under such title, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nursing Education Consolidation and 
Reauthorization Act of 1994''.

SEC. 2. PURPOSE.

    It is the purpose of this Act to restructure the nurse education 
authorities of title VIII of the Public Health Service Act to permit a 
comprehensive, flexible, and effective approach to Federal support for 
nursing workforce development.

SEC. 3. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

    Title VIII of the Public Health Service Act (42 U.S.C. 296k et 
seq.) is amended--
            (1) by striking the title heading and all that follows 
        except for subparts II and III of part B and section 855; and 
        inserting the following:

             ``TITLE VIII--NURSING WORKFORCE DEVELOPMENT'';

            (2) in subpart II of part B, by striking the subpart 
        heading and inserting the following:

                        ``PART E--STUDENT LOANS

                    ``Subpart I--General Program'';

            (3) by redesignating subpart III as subpart II;
            (4) by striking section 837;
            (5) in section 846, by striking subsection (d) and 
        inserting the following new subsection:
    ``(d) Breach of Agreements for Obligated Service.--
            ``(1) In general.--In the case of any program under this 
        section under which an individual makes an agreement to provide 
        health services for a period of time in accordance with such 
        program in consideration of receiving an award of Federal funds 
        regarding education as a nurse (including an award for the 
        repayment of loans), the following applies if the agreement 
        provides that this subsection is applicable:
                    ``(A) In the case of a program under this section 
                that makes an award of Federal funds for attending an 
                accredited program of nursing (in this subsection 
                referred to as a `nursing program'), the individual is 
                liable to the Federal Government for the amount of such 
                award (including amounts provided for expenses related 
                to such attendance), and for interest on such amount at 
                the maximum legal prevailing rate, if the individual--
                            ``(i) fails to maintain an acceptable level 
                        of academic standing in the nursing program (as 
                        indicated by the program in accordance with 
                        requirements established by the Secretary);
                            ``(ii) is dismissed from the nursing 
                        program for disciplinary reasons; or
                            ``(iii) voluntarily terminates the nursing 
                        program.
                    ``(B) The individual is liable to the Federal 
                Government for the amount of such award (including 
                amounts provided for expenses related to such 
                attendance), and for interest on such amount at the 
                maximum legal prevailing rate, if the individual fails 
                to provide health services in accordance with the 
                program under this section for the period of time 
                applicable under the program.
            ``(2) Waiver or suspension of liability.--In the case of an 
        individual or health facility making an agreement for purposes 
        of paragraph (1), the Secretary shall provide for the waiver or 
        suspension of liability under such paragraph if compliance by 
        the individual or the health facility, as the case may be, with 
        the agreements involved is impossible, or would involve extreme 
        hardship to the individual or facility, and if enforcement of 
        the agreements with respect to the individual or facility would 
        be unconscionable.
            ``(3) Date certain for recovery.--Subject to paragraph (2), 
        any amount that the Federal Government is entitled to recover 
        under paragraph (1) shall be paid to the United States not 
        later than the expiration of the 3-year period beginning on the 
        date the United States becomes so entitled.
            ``(4) Availability.--Amounts recovered under paragraph (1) 
        with respect to a program under this section shall be available 
        for the purposes of such program, and shall remain available 
        for such purposes until expended.'';
            (6) by inserting after the title heading the following new 
        parts:

                      ``PART A--GENERAL PROVISIONS

``SEC. 801. DEFINITIONS.

    ``As used in this title:
            ``(1) Eligible entities.--The term `eligible entities' 
        means schools of nursing, nursing centers, State or local 
        governments, and other public or nonprofit private entities 
        determined appropriate by the Secretary that submit to the 
        Secretary an application in accordance with section 802.
            ``(2) School of nursing.--The term `school of nursing' 
        means a collegiate, associate degree, or diploma school of 
        nursing in a State.
            ``(3) Collegiate school of nursing.--The term `collegiate 
        school of nursing' means a department, division, or other 
        administrative unit in a college or university which provides 
        primarily or exclusively a program of education in professional 
        nursing and related subjects leading to the degree of bachelor 
        of arts, bachelor of science, bachelor of nursing, or to an 
        equivalent degree, or to a graduate degree in nursing, and 
        including advanced training related to such program of 
        education provided by such school, but only if such program, or 
        such unit, college or university is accredited.
            ``(4) Associate degree school of nursing.--The term 
        `associate degree school of nursing' means a department, 
        division, or other administrative unit in a junior college, 
        community college, college, or university which provides 
        primarily or exclusively a two-year program of education in 
        professional nursing and allied subjects leading to an 
        associate degree in nursing or to an equivalent degree, but 
        only if such program, or such unit, college, or university is 
        accredited.
            ``(5) Diploma school of nursing.--The term `diploma school 
        of nursing' means a school affiliated with a hospital or 
        university, or an independent school, which provides primarily 
        or exclusively a program of education in professional nursing 
        and allied subjects leading to a diploma or to equivalent 
        indicia that such program has been satisfactorily completed, 
        but only if such program, or such affiliated school or such 
        hospital or university or such independent school is 
        accredited.
            ``(6) Accredited.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `accredited' when applied to 
                any program of nurse education means a program 
                accredited by a recognized body or bodies, or by a 
                State agency, approved for such purpose by the 
                Secretary of Education and when applied to a hospital, 
                school, college, or university (or a unit thereof) 
                means a hospital, school, college, or university (or a 
                unit thereof) which is accredited by a recognized body 
                or bodies, or by a State agency, approved for such 
                purpose by the Secretary of Education. For the purpose 
                of this paragraph, the Secretary of Education shall 
                publish a list of recognized accrediting bodies, and of 
                State agencies, which the Secretary of Education 
                determines to be reliable authority as to the quality 
                of education offered.
                    ``(B) New programs.--A new school of nursing that, 
                by reason of an insufficient period of operation, is 
                not, at the time of the submission of an application 
                for a grant or contract under this title, eligible for 
                accreditation by such a recognized body or bodies or 
                State agency, shall be deemed accredited for purposes 
                of this title if the Secretary of Education finds, 
                after consultation with the appropriate accreditation 
                body or bodies, that there is reasonable assurance that 
                the school will meet the accreditation standards of 
                such body or bodies prior to the beginning of the 
                academic year following the normal graduation date of 
                students of the first entering class in such school.
            ``(7) Nonprofit.--The term `nonprofit' as applied to any 
        school, agency, organization, or institution means one which is 
        a corporation or association, or is owned and operated by one 
        or more corporations or associations, no part of the net 
        earnings of which inures, or may lawfully inure, to the benefit 
        of any private shareholder or individual.
            ``(8) State.--The term `State' means a State, the 
        Commonwealth of Puerto Rico, the District of Columbia, the 
        Commonwealth of the Northern Mariana Islands, Guam, American 
        Samoa, the Virgin Islands, or the Trust Territory of the 
        Pacific Islands.

``SEC. 802. APPLICATION.

    ``(a) In General.--To be eligible to receive a grant or contract 
under this title, an eligible entity shall prepare and submit to the 
Secretary an application that meets the requirements of this section, 
at such time, in such manner, and containing such information as the 
Secretary may require.
    ``(b) Plan.--An application submitted under this section shall 
contain the plan of the applicant for carrying out a project with 
amounts received under this title. Such plan shall be consistent with 
relevant Federal, State, or regional program plans.
    ``(c) Performance Outcome Standards.--An application submitted 
under this section shall contain a specification by the applicant 
entity of performance outcome standards that the project to be funded 
under the grant or contract will be measured against. Such standards 
shall address relevant national nursing needs that the project will 
meet. The recipient of a grant or contract under this section shall 
meet the standards set forth in the grant or contract application.
    ``(d) Linkages.--An application submitted under this section shall 
contain a description of the linkages with relevant educational and 
health care entities, including training programs for other health 
professionals as appropriate, that the project to be funded under the 
grant or contract will establish.

``SEC. 803. USE OF FUNDS.

    ``(a) In General.--Amounts provided under a grant or contract 
awarded under this title may be used for training program development 
and support, faculty development, model demonstrations, trainee support 
including tuition, books, program fees and reasonable living expenses 
during the period of training, technical assistance, workforce 
analysis, and dissemination of information, as appropriate to meet 
recognized nursing objectives, in accordance with this title.
    ``(b) Maintenance of Effort.--With respect to activities for which 
a grant awarded under this title is to be expended, the entity shall 
agree to maintain expenditures of non-Federal amounts for such 
activities at a level that is not less than the level of such 
expenditures maintained by the entity for the fiscal year preceding the 
fiscal year for which the entity receives such a grant.

``SEC. 804. MATCHING REQUIREMENT.

    ``The Secretary may require that an entity that applies for a grant 
or contract under this title provide non-Federal matching funds, as 
appropriate, to ensure the institutional commitment of the entity to 
the projects funded under the grant. Such non-Federal matching funds 
may be provided directly or through donations from public or private 
entities and may be in cash or in-kind, fairly evaluated, including 
plant, equipment, or services.

``SEC. 805. PREFERENCE.

    ``In awarding grants or contracts under this title, the Secretary 
shall give preference to applicants with projects that will 
substantially benefit rural or underserved populations.

``SEC. 806. GENERALLY APPLICABLE PROVISIONS.

    ``(a) Awarding of Grants and Contracts.--The Secretary shall ensure 
that grants and contracts under this title are awarded on a competitive 
basis to carry out innovative demonstration projects or provide for 
strategic workforce supplementation activities as needed to meet 
national nursing service goals and in accordance with this title.
    ``(b) Information Requirements.--Recipients of grants and contracts 
under this title shall meet information requirements as specified by 
the Secretary.
    ``(c) Training Programs.--Training programs conducted with amounts 
received under this title shall meet applicable accreditation and 
quality standards.
    ``(d) Duration of Assistance.--
            ``(1) In general.--Subject to paragraph (2), in the case of 
        an award to an entity of a grant, cooperative agreement, or 
        contract under this title, the period during which payments are 
        made to the entity under the award may not exceed 5 years. The 
        provision of payments under the award shall be subject to 
        annual approval by the Secretary of the payments and subject to 
        the availability of appropriations for the fiscal year involved 
        to make the payments. This paragraph may not be construed as 
        limiting the number of awards under the program involved that 
        may be made to the entity.
            ``(2) Limitation.--In the case of an award to an entity of 
        a grant, cooperative agreement, or contract under this title, 
        paragraph (1) shall apply only to the extent not inconsistent 
        with any other provision of this title that relates to the 
        period during which payments may be made under the award.
    ``(e) Peer Review Regarding Certain Programs.--Each application for 
a grant under this title, except advanced nurse traineeship grants 
under section 811(a)(2), shall be submitted to a peer review group for 
an evaluation of the merits of the proposals made in the application. 
The Secretary may not approve such an application unless a peer review 
group has recommended the application for approval. Each peer review 
group under this subsection shall be composed principally of 
individuals who are not officers or employees of the Federal 
Government. This subsection shall be carried out by the Secretary 
acting through the Administrator of the Health Resources and Services 
Administration.

``SEC. 807. NATIONAL ADVISORY COUNCIL ON NURSE EDUCATION AND PRACTICE.

    ``(a) Establishment.--There is hereby established a National 
Advisory Council on Nurse Education and Practice (in this section 
referred to as the `Council'), consisting of the Secretary or the 
delegate of the Secretary (who shall be an ex officio member and shall 
serve as the Chairperson), and 15 members appointed by the Secretary 
without regard to the Federal civil service laws, of which--
            ``(1) 2 shall be selected from full-time students enrolled 
        in schools of nursing;
            ``(2) 3 shall be selected from the general public;
            ``(3) 2 shall be selected from practicing professional 
        nurses; and
            ``(4) 8 shall be selected from among the leading 
        authorities in the various fields of nursing, higher, and 
        secondary education, and from representatives of hospitals and 
        other institutions and organizations which provide nursing 
        services.
A majority of the members shall be nurses. The student-members of the 
Council shall be appointed for terms of one year and shall be eligible 
for reappointment to the Council.
    ``(b) Duties.--The Council shall advise the Secretary in the 
preparation of general regulations and with respect to policy matters 
arising in the administration of this title, including the range of 
issues relating to nurse supply, education and practice improvement.
    ``(c) Funding.--Amounts appropriated under this title may be 
utilized by the Secretary to support the nurse education and practice 
activities of the Council.

``SEC. 808. TECHNICAL ASSISTANCE.

    ``Funds appropriated under this title may be used by the Secretary 
to provide technical assistance in relation to any of the authorities 
under this title.

``SEC. 809. RECOVERY FOR CONSTRUCTION ASSISTANCE.

    ``(a) In General.--If at any time within 20 years (or within such 
shorter period as the Secretary may prescribe by regulation for an 
interim facility) after the completion of construction of a facility 
with respect to which funds have been paid under subpart I of part A 
(as such subpart was in effect on September 30, 1985)--
            ``(1) the owner of the facility ceases to be a public or 
        nonprofit school,
            ``(2) the facility ceases to be used for the training 
        purposes for which it was constructed, or
            ``(3) the facility is used for sectarian instruction or as 
        a place for religious worship,
the United States shall be entitled to recover from the owner of the 
facility the base amount prescribed by subsection (c)(1) plus the 
interest (if any) prescribed by subsection (c)(2).
    ``(b) Notice of Change in Status.--The owner of a facility which 
ceases to be a public or nonprofit school as described in paragraph (1) 
of subsection (a), or the owner of a facility the use of which changes 
as described in paragraph (2) or (3) of such subsection shall provide 
the Secretary written notice of such cessation or change of use within 
10 days after the date on which such cessation or change of use occurs 
or within 30 days after the date of enactment of the Health Professions 
Training Assistance Act of 1985, whichever is later.
    ``(c) Amount of Recovery.--
            ``(1) Base amount.--The base amount that the United States 
        is entitled to recover under subsection (a) is the amount 
        bearing the same ratio to the then value (as determined by the 
        agreement of the parties or in an action brought in the 
        district court of the United States for the district in which 
        the facility is situated) of the facility as the amount of the 
        Federal participation bore to the cost of the construction.
            ``(2) Interest.--
                    ``(A) In general.--The interest that the United 
                States is entitled to recover under subsection (a) is 
                the interest for the period (if any) described in 
                subparagraph (B) at a rate (determined by the 
                Secretary) based on the average of the bond equivalent 
                rates of 91-day Treasury bills auctioned during such 
                period.
                    ``(B) Time period.--The period referred to in 
                subparagraph (A) is the period beginning--
                            ``(i) if notice is provided as prescribed 
                        by subsection (b), 191 days after the date on 
                        which the owner of the facility ceases to be a 
                        public or nonprofit school as described in 
                        paragraph (1) of subsection (a), or 191 days 
                        after the date on which the use of the facility 
                        changes as described in paragraph (2) or (3) of 
                        such subsection, or
                            ``(ii) if notice is not provided as 
                        prescribed by subsection (b), 11 days after the 
                        date on which such cessation or change of use 
                        occurs,
                and ending on the date the amount the United States is 
                entitled to recover if collected.
    ``(d) Waiver of Rights.--The Secretary may waive the recovery 
rights of the United States under subsection (a)(2) with respect to a 
facility (under such conditions as the Secretary may establish by 
regulation) if the Secretary determines that there is good cause for 
waiving such rights.
    ``(e) Limitation on Liens.--The right of recovery of the United 
States under subsection (a) shall not, prior to judgment, constitute a 
lien on any facility.

   ``PART B--NURSE PRACTITIONERS, NURSE MIDWIVES, AND OTHER ADVANCED 
                            PRACTICE NURSES

``SEC. 811. ADVANCED PRACTICE NURSING GRANTS.

    ``(a) In General.--The Secretary may award grants to and enter into 
contracts with eligible entities to meet the costs of--
            ``(1) projects that support the enhancement of advanced 
        practice nursing education and practice; and
            ``(2) traineeships for individuals in advanced practice 
        nursing programs.
    ``(b) Definition of Advanced Practice Nurses.--For purposes of this 
section, the term `advanced practice nurses' means nurses trained in 
advanced degree programs including individuals in combined R.N./
Master's degree programs, post-nursing master's certificate programs, 
or, in the case of nurse midwives or nurse anesthetists, in certificate 
programs that received funding under this title on the date that is one 
day prior to the date of enactment of this section, to serve as nurse 
practitioners, nurse midwives, nurse anesthetists, nurse educators, or 
public health nurses, or in other nurse specialties determined by the 
secretary to require advanced education.
    ``(c) Authorized Nurse Practitioner and Nurse-Midwifery Programs.--
            ``(1) In general.--Nurse practitioner and nurse midwifery 
        programs eligible for support under this section are 
        educational programs for registered nurses (irrespective of the 
        type of school of nursing in which the nurses received their 
        training) that--
                    ``(A) meet guidelines prescribed by the Secretary 
                in accordance with paragraph (2); and
                    ``(B) have as their objective the education of 
                nurses who will upon completion of their studies in 
                such programs, be qualified to effectively provide 
                primary health care, including primary health care in 
                homes and in ambulatory care facilities, long-term care 
                facilities and other health care institutions.
            ``(2) Guidelines.--After consultation with appropriate 
        educational organizations and professional nursing and medical 
        organizations, the Secretary shall prescribe guidelines for 
        programs described in paragraph (1). Such guidelines shall, as 
        a minimum, require that such a program--
                    ``(A) extend for at least one academic year and 
                consist of--
                            ``(i) supervised clinical practice directed 
                        toward preparing nurses to deliver primary 
                        health care; and
                            ``(ii) at least four months (in the 
                        aggregate) of classroom instruction that is so 
                        directed; and
                    ``(B) have an enrollment of not less than six full-
                time equivalent students.
    ``(d) Other Authorized Educational Programs.--The Secretary shall 
prescribe guidelines as appropriate for other advanced practice nurse 
education programs eligible for support under this section.
    ``(e) Traineeships.--
            ``(1) In general.--The Secretary may not award a grant to 
        an applicant under subsection (a) unless the applicant involved 
        agrees that traineeships provided with the grant will pay all 
        or part of the costs of--
                    ``(A) the tuition, books, and fees of the program 
                of advanced nursing practice with respect to which the 
                traineeship is provided; and
                    ``(B) the reasonable living expenses of the 
                individual during the period for which the traineeship 
                is provided.
            ``(2) Doctoral programs.--The Secretary may not obligate 
        more than 10 percent of the traineeships under subsection (a) 
        for individuals in doctorate degree programs.
            ``(3) Special consideration.--In making awards of grants 
        and contracts under subsection (a)(2), the Secretary shall give 
        special consideration to an eligible entity that agrees to 
        expend the award to train advanced practice nurses who will 
        practice in health professional shortage areas designated under 
        section 332.
    ``(f) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        to carry out this section, $50,000,000 for fiscal year 1995, 
        and such sums as may be necessary for each of the fiscal years 
        1996 and 1997.
            ``(2) Set asides.--Of the amount appropriated under 
        paragraph (1) for a fiscal year--
                    ``(A) not less than 60 percent of such amount shall 
                be made available for projects to enhance the training 
                and practice of nurse practitioners and nurse midwives; 
                and
                    ``(B) not less than 6 percent of such amounts shall 
                be made available for projects to enhance the training 
                and practice of nurse anesthetists.

            ``PART C--INCREASING NURSING WORKFORCE DIVERSITY

``SEC. 821. WORKFORCE DIVERSITY GRANTS.

    ``(a) In General.--The Secretary may award grants to and enter into 
contracts with eligible entities to meet the costs of special projects 
to increase nursing education opportunities for individuals who are 
from disadvantaged racial and ethnic backgrounds underrepresented among 
registered nurses by providing student scholarships or stipends, pre-
entry preparation, and retention activities.
    ``(b) Guidance.--In carrying out subsection (a), the Secretary 
shall take into consideration the recommendations of the First and 
Second Invitational Congresses for Minority Nurse Leaders on `Caring 
for the Emerging Majority,' in 1992 and 1993, and consult with nursing 
associations including the American Nurses Association, the National 
League for Nursing, the American Association of Colleges of Nursing, 
the Black Nurses Association, the Association of Hispanic Nurses, the 
Association of Asian American and Pacific Islander Nurses, the National 
Nurses Association, the Native American Indian and Alaskan Nurses 
Association.
    ``(c) Required Information and Conditions for Award Recipients.--
            ``(1) In general.--Recipients of awards under this section 
        may be required, where requested, to report to the Secretary 
        concerning the annual admission, retention, and graduation 
        rates for ethnic and racial minorities in the school or schools 
        involved in the projects.
            ``(2) Falling rates.--If any of the rates reported under 
        paragraph (1) fall below the average of the two previous years, 
        the grant or contract recipient shall provide the Secretary 
        with plans for immediately improving such rates.
            ``(3) Ineligibility.--A recipient described in paragraph 
        (2) shall be ineligible for continued funding under this 
        section if the plan of the recipient fails to improve the rates 
        within the 1-year period beginning on the date such plan is 
        implemented.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $5,000,000 for fiscal year 
1995, and such sums as may be necessary for each of the fiscal years 
1996 and 1997.

``PART D--STRENGTHENING CAPACITY FOR BASIC NURSE EDUCATION AND PRACTICE

``SEC. 831. BASIC NURSE EDUCATION AND PRACTICE GRANTS.

    ``(a) In General.--The Secretary may award grants to and enter into 
contracts with eligible entities for projects to strengthen capacity 
for basic nurse education and practice.
    ``(b) Priority Areas.--In awarding grants or contracts under this 
section the Secretary shall give priority to entities that will use 
amounts provided under such a grant or contract to enhance the 
education mix and utilization of the basic nursing workforce by 
strengthening programs that provide basic nurse education for purposes 
of--
            ``(1) improving nursing services in schools and other 
        community settings;
            ``(2) providing care for underserved populations and other 
        high-risk groups such as the elderly, individuals with HIV-
        AIDS, substance abusers, homeless, and battered women;
            ``(3) providing case management, quality improvement, 
        delegation and supervision, other skills needed under new 
        health care systems;
            ``(4) developing cultural competencies among nurses;
            ``(5) providing emergency health services;
            ``(6) promoting career mobility for nursing personnel in a 
        variety of training settings and cross training or specialty 
        training among diverse population groups; or
            ``(7) other priority areas as determined by the Secretary.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $12,000,000 for fiscal year 
1995, and such sums as may be necessary for each of the fiscal years 
1996 and 1997.''; and
            (7) by redesignating section 855 as section 810, and 
        transferring such section so as to appear after section 809 (as 
        added by the amendment made by paragraph (6)).

SEC. 4. SAVINGS PROVISION AND TECHNICAL AMENDMENTS.

    (a) Savings Provision.--In the case of any authority for making 
awards of grants or contracts that is terminated by the amendment made 
by section 3, the Secretary of Health and Human Services may, 
notwithstanding the termination of the authority, continue in effect 
any grant or contract made under the authority that is in effect on the 
day before the date of the enactment of this Act, subject to the 
duration of any such grant or contract not exceeding the period 
determined by the Secretary in first approving such financial 
assistance, or in approving the most recent request made (before the 
date of such enactment) for continuation of such assistance, as the 
case may be.
    (b) Clinical Researchers.--Paragraph (3) of section 487E(a) of the 
Public Health Service Act (42 U.S.C. 288-5(a)(3)) is amended to read as 
follows:
            ``(3) Applicability of certain provisions regarding 
        obligated service.--With respect to the National Health Service 
        Corps loan repayment program established in subpart III of part 
        D of title III, the provisions of such subpart shall, except as 
        inconsistent with this section, apply to the program 
        established in subsection (a) in the same manner and to the 
        same extent as such provisions apply to the National Health 
        Service Corps loan repayment programs.''.
    (c) Technical Amendments.--Section 839 of such Act (42 U.S.C. 297e) 
is amended--
            (1) in subsection (a)--
                    (A) by striking the matter preceding paragraph (1) 
                and inserting the following:
    ``(a) If a school terminates a loan fund established under an 
agreement pursuant to section 835(b), or if the Secretary for good 
cause terminates the agreement with the school, there shall be a 
capital distribution as follows:''; and
                    (B) in paragraph (1), by striking ``at the close of 
                September 30, 1999,'' and inserting ``on the date of 
                termination of the fund''; and
            (2) in subsection (b), to read as follows:
    ``(b) If a capital distribution is made under subsection (a), the 
school involved shall, after such capital distribution, pay to the 
Secretary, not less often than quarterly, the same proportionate share 
of amounts received by the school in payment of principal or interest 
on loans made from the loan fund established under section 835(b) as 
determined by the Secretary under subsection (a).''.

SEC. 5. EFFECTIVE DATE.

    This Act shall take effect on October 1, 1994, or the date of 
enactment of this Act, whichever is later.

            Passed the Senate October 6 (legislative day, September 
      12), 1994.

            Attest:






                                                             Secretary.

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