[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3369 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 3369

To close the GI Bill loophole and update the 80/20 rule for proprietary 
                   institutions of higher education.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 19, 2019

   Ms. Shalala (for herself, Ms. Wasserman Schultz, Mr. Moulton, Mr. 
    Cisneros, Ms. Houlahan, Ms. Mucarsel-Powell, Mr. Lujan, and Ms. 
  Sherrill) introduced the following bill; which was referred to the 
                    Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
To close the GI Bill loophole and update the 80/20 rule for proprietary 
                   institutions of higher education.

    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 ``Defending All Veterans In Education 
Act'' or the ``DAVIE Act''.

SEC. 2. CLOSING THE GI BILL LOOPHOLE AND UPDATING THE 80/20 RULE FOR 
              PROPRIETARY INSTITUTIONS OF HIGHER EDUCATION.

    (a) In General.--Section 102(b) of the Higher Education Act of 1965 
(20 U.S.C. 1002(b)), is further amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (D), by striking ``and'' after 
                the semicolon;
                    (B) in subparagraph (E), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(F) meets the requirements of paragraph (2).'';
            (2) by redesignating paragraph (2) as paragraph (3); and
            (3) by inserting after paragraph (1) the following:
            ``(2) Revenue sources.--
                    ``(A) In general.--In order to qualify as a 
                proprietary institution of higher education under this 
                subsection, an institution shall derive not less than 
                20 percent of the institution's revenues from sources 
                other than Federal funds, as calculated in accordance 
                with subparagraphs (B) and (C).
                    ``(B) Federal funds.--In this paragraph, the term 
                `Federal funds' means any Federal funds provided, under 
                this Act or any other Federal law, through a grant, 
                contract, subsidy, loan, guarantee, insurance, or other 
                means to a proprietary institution, including Federal 
                funds disbursed or delivered to an institution or on 
                behalf of a student or to a student to be used to 
                attend the institution, except that such term shall not 
                include any monthly housing stipend provided under the 
                Post-9/11 Educational Assistance Program under chapter 
                33 of title 38, United States Code.
                    ``(C) Implementation of non-federal revenue 
                requirement.--In making calculations under subparagraph 
                (A), an institution of higher education shall--
                            ``(i) use the cash basis of accounting;
                            ``(ii) consider as revenue only those funds 
                        generated by the institution from--
                                    ``(I) tuition, fees, and other 
                                institutional charges for students 
                                enrolled in programs eligible for 
                                assistance under title IV;
                                    ``(II) activities conducted by the 
                                institution that are necessary for the 
                                education and training of the 
                                institution's students, if such 
                                activities are--
                                            ``(aa) conducted on campus 
                                        or at a facility under the 
                                        control of the institution;
                                            ``(bb) performed under the 
                                        supervision of a member of the 
                                        institution's faculty; and
                                            ``(cc) required to be 
                                        performed by all students in a 
                                        specific educational program at 
                                        the institution; and
                                    ``(III) a contractual arrangement 
                                with a Federal agency for the purpose 
                                of providing job training to low-income 
                                individuals who are in need of such 
                                training;
                            ``(iii) presume that any Federal education 
                        assistance funds that are disbursed or 
                        delivered to an institution on behalf of a 
                        student or directly to a student will be used 
                        to pay the student's tuition, fees, or other 
                        institutional charges, regardless of whether 
                        the institution credits such funds to the 
                        student's account or pays such funds directly 
                        to the student, except to the extent that the 
                        student's tuition, fees, or other institutional 
                        charges are satisfied by--
                                    ``(I) grant funds provided by an 
                                outside source that--
                                            ``(aa) has no affiliation 
                                        with the institution; and
                                            ``(bb) shares no employees, 
                                        executives, or board members 
                                        with the institution;
                                    ``(II) funds provided under a 
                                contractual arrangement with a Federal, 
                                State, or local government agency for 
                                the purpose of providing job training 
                                to low-income individuals who are in 
                                need of that training; or
                                    ``(III) institutional scholarships 
                                described in clause (v);
                            ``(iv) include no loans made by an 
                        institution of higher education as revenue to 
                        the school, except for payments made by 
                        students on such loans;
                            ``(v) include a scholarship provided by the 
                        institution--
                                    ``(I) only if the scholarship is in 
                                the form of monetary aid based upon the 
                                academic achievements or financial need 
                                of students, disbursed to qualified 
                                student recipients during each fiscal 
                                year from an established restricted 
                                account; and
                                    ``(II) only to the extent that 
                                funds in that account represent 
                                designated funds, or income earned on 
                                such funds, from an outside source 
                                that--
                                            ``(aa) has no affiliation 
                                        with the institution; and
                                            ``(bb) shares no employees, 
                                        executives, or board members 
                                        with the institution; and
                            ``(vi) exclude from revenues--
                                    ``(I) the amount of funds the 
                                institution received under part C of 
                                title IV, unless the institution used 
                                those funds to pay a student's 
                                institutional charges;
                                    ``(II) the amount of funds the 
                                institution received under subpart 4 of 
                                part A of title IV;
                                    ``(III) the amount of funds 
                                provided by the institution as matching 
                                funds for any Federal program;
                                    ``(IV) the amount of Federal 
                                education assistance funds provided to 
                                the institution to pay institutional 
                                charges for a student that were 
                                refunded or returned; and
                                    ``(V) the amount charged for books, 
                                supplies, and equipment, unless the 
                                institution includes that amount as 
                                tuition, fees, or other institutional 
                                charges.
                    ``(D) Report to congress.--Not later than July 1, 
                2020, and by July 1 of each succeeding year, the 
                Secretary shall submit to the authorizing committees a 
                report that contains, for each proprietary institution 
                of higher education that receives assistance under 
                title IV and as provided in the audited financial 
                statements submitted to the Secretary by each 
                institution pursuant to the requirements of section 
                487(c)--
                            ``(i) the amount and percentage of such 
                        institution's revenues received from Federal 
                        education assistance funds; and
                            ``(ii) the amount and percentage of such 
                        institution's revenues received from other 
                        sources.''.
    (b) Repeal of Existing Requirements.--Section 487 of the Higher 
Education Act of 1965 (20 U.S.C. 1094) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (24);
                    (B) by redesignating paragraphs (25) through (29) 
                as paragraphs (24) through (28), respectively;
                    (C) in paragraph (24)(A)(ii) (as redesignated by 
                subparagraph (B)), by striking ``subsection (e)'' and 
                inserting ``subsection (d)''; and
                    (D) in paragraph (26) (as redesignated by 
                subparagraph (B)), by striking ``subsection (h)'' and 
                inserting ``subsection (g)'';
            (2) by striking subsection (d);
            (3) by redesignating subsections (e) through (j) as 
        subsections (d) through (i), respectively;
            (4) in subsection (d) (as redesignated by paragraph (3)), 
        by striking ``(a)(25)'' and inserting ``(a)(24)'';
            (5) in subsection (f)(1) (as redesignated by paragraph 
        (3)), by striking ``subsection (e)(2)'' and inserting 
        ``subsection (d)(2)''; and
            (6) in subsection (g)(1) (as redesignated by paragraph 
        (3)), by striking ``subsection (a)(27)'' in the matter 
        preceding subparagraph (A) and inserting ``subsection 
        (a)(26)''.
    (c) Conforming Amendments.--The Higher Education Act of 1965 (20 
U.S.C. 1001 et seq.) is amended--
            (1) in section 152 (20 U.S.C. 1019a)--
                    (A) in subsection (a)(1)(A), by striking 
                ``subsections (a)(27) and (h) of section 487'' and 
                inserting ``subsections (a)(26) and (g) of section 
                487''; and
                    (B) in subsection (b)(1)(B)(i)(I), by striking 
                ``section 487(e)'' and inserting ``section 487(d)'';
            (2) in section 153(c)(3) (20 U.S.C. 1019b(c)(3)), by 
        striking ``section 487(a)(25)'' each place the term appears and 
        inserting ``section 487(a)(24)'';
            (3) in section 496(c)(3)(A) (20 U.S.C. 1099b(c)(3)(A)), by 
        striking ``section 487(f)'' and inserting ``section 487(e)''; 
        and
            (4) in section 498(k)(1) (20 U.S.C. 1099c(k)(1)), by 
        striking ``section 487(f)'' and inserting ``section 487(e)''.

SEC. 3. EFFECTIVE DATE.

    The amendments made by section 2 shall take effect one year after 
the date of the enactment of this Act.
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