[Congressional Record Volume 151, Number 62 (Thursday, May 12, 2005)]
[Senate]
[Pages S5073-S5171]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. JEFFORDS:
S. 1011. A bill to establish a national historic country store
preservation program; to the Committee on Commerce, Science, and
Transportation.
Mr. JEFFORDS. Mr. President, I have long been a proponent of measures
that support historic preservation and economic development, and it is
in keeping with that tradition that I rise today to introduce the
National Historic Country Store Preservation Act of 2005.
This bill establishes a national program to support historic country
store preservation that will aid in the revitalization of rural
villages and community centers nationwide.
For many Americans, the country store invokes an image of a simpler
life before much of this country became stamped with shopping malls and
the ``big-box'' store.
But for thousands of people living in Vermont and for millions more
living in rural communities across the United States, a visit to the
local country store is a regular part of one's daily life.
They are centers of commercial activity in the towns they serve and
embody the core of American small business entrepreneurship.
Many of these vital small businesses have been passed down among
family members for generations. They are operated in buildings that
have existed for as long as 150 years.
In fact, by one of the more vigorous standards in Vermont, a country
store is only considered historic if it was built before the Winooski
River Flood of 1927.
In my hometown of Shrewsbury, VT, the Pierce Store was the hub of our
small community when my wife Liz and I settled there in 1963.
Run by the four Pierce siblings, Marjorie, Glendon, Marion and
Gordon, the store was the place to go for a neighborly chat as much as
for your milk and butter.
Children would get off the bus to buy their penny candy. Glendon
Pierce could tell a great tale, and the political banter was endless.
With its antique cash register and woodstove, this was the
quintessential general store.
Unfortunately, the Pierce Store closed its doors some years back and
Shrewsbury lost a vital part of its identity.
There has been a recent attempt to revive the store, and I hope, for
the sake of my community, it proves successful.
Despite their small relative size and market share, historic country
stores have demonstrated incredible resiliency, surviving floods and
fires, overcoming economic downturns, and reformulating their
inventories to meet modern needs.
According to the Vermont Grocers' Association, country stores account
for an estimated $55 million annually in retail sales in Vermont.
Nonetheless, competition from larger chain stores continues to
increase.
When coupled with the additional cost and expertise required to
maintain their aging structures and external facades, today's remaining
country stores are hard-pressed to overcome these unprecedented
challenges.
In Vermont, a handful of historic country stores close each year and
the cumulative impact of those losses is experienced throughout the
State.
The National Trust for Historic Preservation has listed the entire
State of Vermont among America's ``Eleven Most Endangered Places,''
That is due to the threat that large-scale development poses to
Vermont's small, independent retailers.
Yet country stores remain fixtures of Vermont's landscape. The
Vermont Alliance of Independent Country Stores estimates that more than
115 historic country stores are scattered about the State.
Across the country, thousands of these establishments help to define
the character of rural life.
These country stores draw local customers and tourists alike,
offering convenient access to newspapers, groceries and local specialty
foods in a typically neighborly atmosphere.
Many stores also double as local post offices or outdoor camping and
home hardware goods suppliers. It is not unusual, and highly
recommended, that customers buy a fresh whole wedge of cheddar cheese
from a 38-pound wheel next to the cash register.
Fathers can buy earthworms and tackle and take their daughters to the
nearby fishing hole for an afternoon excursion.
The National Historic Country Store Preservation Act of 2005 is
designed to build upon the momentum that country store preservation
work has generated in Vermont and to gather useful models and
information to develop a program that supports historic, rural country
stores nationwide.
My legislation authorizes the U.S. Economic Development
Administration to make grants to national, State
[[Page S5074]]
and local agencies and non-profit organizations to support historic
country store preservation efforts.
The bill promotes the study of best practices for preserving
structures, improving profitability and promoting collaboration among
country store proprietors.
In addition, the bill establishes a revolving loan fund. The fund
will be used for research and restoration work.
It will be used to improve our understanding of existing needs and
provide the assistance required to address them.
This bill seeks to sustain America's rural heritage by uniting small
business development and historic preservation.
I encourage my colleagues to join me in my efforts to protect our
Nation's historic country stores and revitalize our rural communities.
I ask that a summary of the legislation be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1011
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 ``National Historic Country
Store Preservation Act of 2005''.
SEC. 2. FINDINGS.
Congress finds that--
(1) historic country stores are lasting icons of rural
tradition in the United States;
(2) historic country stores are valuable contributors to
the civic and economic vitality of their local communities;
(3) historic country stores demonstrate innovative
approaches to historic preservation and small business
practices;
(4) historic country stores are threatened by larger
competitors and the costs associated with maintaining older
structures; and
(5) the United States should--
(A) collect and disseminate information concerning the
number, condition, and variety of historic country stores;
(B) develop opportunities for cooperation among proprietors
of historic country stores; and
(C) promote the long-term economic viability of historic
country stores.
SEC. 3. DEFINITIONS.
In this Act:
(1) Country store.--
(A) In general.--The term ``country store'' means a
structure independently owned and formerly or currently
operated as a business that--
(i) sells or sold grocery items and other small retail
goods; and
(ii) is located in a nonmetropolitan area, as defined by
the Secretary.
(B) Inclusion.--The term ``country store'' includes a
cooperative.
(2) Eligible applicant.--The term ``eligible applicant''
means--
(A) a State department of commerce or economic development;
(B) a national or State nonprofit organization that--
(i) is described in section 501(c)(3), and exempt from
Federal tax under section 501(a), of the Internal Revenue
Code of 1986; and
(ii) has experience or expertise, as determined by the
Secretary, in the identification, evaluation, rehabilitation,
or preservation of historic country stores;
(C) a national or State nonprofit trade organization that--
(i) is described in section 501(c)(3), and exempt from
Federal tax under section 501(a), of the Internal Revenue
Code of 1986; and
(ii) acts as a cooperative to promote and enhance country
stores; and
(D) a State historic preservation office.
(3) Fund.--The term ``Fund'' means the Historic Country
Store Revolving Loan Fund established by section 5(a).
(4) Historic country store.--The term ``historic country
store'' means a country store that--
(A) has operated at the same location for at least 50
years; and
(B) retains sufficient integrity of design, materials, and
construction to clearly identify the structure as a country
store.
(5) Secretary.--The term ``Secretary'' means the Secretary
of Commerce, acting through the Assistant Secretary for
Economic Development.
SEC. 4. HISTORIC COUNTRY STORE PRESERVATION PROGRAM.
(a) Establishment.--The Secretary shall establish a
historic country store preservation program--
(1) to collect and disseminate information on historic
country stores;
(2) to promote State and regional partnerships among
proprietors of historic country stores; and
(3) to sponsor and conduct research on--
(A) the economic impact of historic country stores;
(B) best practices to--
(i) improve the profitability of historic country stores;
and
(ii) protect historic country stores from foreclosure or
seizure; and
(C) best practices for developing cooperative organizations
that address the economic and historic preservation needs of
historic country stores.
(b) Grants.--
(1) In general.--The Secretary may make grants to, or enter
into contracts or cooperative agreements with, eligible
applicants to carry out an eligible project under paragraph
(2).
(2) Eligible projects.--A grant under this subsection may
be made to an eligible entity for a project--
(A) to rehabilitate or repair a historic country store;
(B) to identify, document, and conduct research on historic
country stores; and
(C) to develop and evaluate appropriate techniques or best
practices for protecting historic country stores.
(3) Requirements.--An eligible applicant that receives a
grant for an eligible project under paragraph (1) shall
comply with all applicable requirements for historic
preservation projects under Federal, State, and local law.
(c) Country Store Alliance Pilot Project.--The Secretary
shall carry out a pilot project in the State of Vermont under
which the Secretary shall conduct demonstration activities to
preserve historic country stores, including--
(1) the collection and dissemination of information on
historic country stores in the State;
(2) the development of collaborative country store
marketing and purchasing techniques; and
(3) the development of best practices for historic country
store proprietors and communities facing transitions involved
in the sale or closure of a historic country store.
SEC. 5. HISTORIC COUNTRY STORE REVOLVING LOAN FUND.
(a) Establishment.--There is established in the Treasury of
the United States a revolving fund, to be known as the
``Historic Country Store Revolving Loan Fund'', consisting
of--
(1) such amounts as are appropriated to the Fund under
subsection (b);
(2) \1/3\ of the amounts appropriated under section 7(a);
and
(3) any interest earned on investment of amounts in the
Fund under subsection (d).
(b) Transfers to Fund.--There are appropriated to the Fund
amounts equivalent to--
(1) the amounts repaid on loans under section 6; and
(2) the amounts of the proceeds from the sales of notes,
bonds, obligations, liens, mortgages and property delivered
or assigned to the Secretary pursuant to loans made under
section 6.
(c) Expenditures From Fund.--
(1) In general.--Subject to paragraph (2), on request by
the Secretary, the Secretary of the Treasury shall transfer
from the Fund to the Secretary such amounts as the Secretary
determines are necessary to provide loans under section 6.
(2) Administrative expenses.--An amount not exceeding 10
percent of the amounts in the Fund shall be available for
each fiscal year to pay the administrative expenses necessary
to carry out this Act.
(d) Investment of Amounts.--
(1) In general.--The Secretary of the Treasury shall invest
such portion of the Fund as is not, in the judgment of the
Secretary of the Treasury, required to meet current
withdrawals.
(2) Interest-bearing obligations.--Investments may be made
only in interest-bearing obligations of the United States.
(3) Acquisition of obligations.--For the purpose of
investments under paragraph (1), obligations may be
acquired--
(A) on original issue at the issue price; or
(B) by purchase of outstanding obligations at the market
price.
(4) Sale of obligations.--Any obligation acquired by the
Fund may be sold by the Secretary of the Treasury at the
market price.
(5) Credits to fund.--The interest on, and the proceeds
from the sale or redemption of, any obligations held in the
Fund shall be credited to and form a part of the Fund.
(e) Transfers of Amounts.--
(1) In general.--The amounts required to be transferred to
the Fund under this section shall be transferred at least
monthly from the general fund of the Treasury to the Fund on
the basis of estimates made by the Secretary of the Treasury.
(2) Adjustments.--Proper adjustment shall be made in
amounts subsequently transferred to the extent prior
estimates were in excess of or less than the amounts required
to be transferred.
SEC. 6. LOANS FOR HISTORIC COUNTRY STORE REHABILITATION OR
REPAIR PROJECTS.
(a) In General.--Using amounts in the Fund, the Secretary
may make loans to historic country store proprietors and
eligible applicants for projects to purchase, rehabilitate,
or repair historic country stores.
(b) Applications.--
(1) In general.--To be eligible for a loan under this
section, a country store proprietor or eligible applicant
shall submit to the Secretary an application for a loan.
(2) Considerations for approval or disapproval.--In
determining whether to approve or disapprove an application
for a loan submitted under paragraph (1), the Secretary shall
consider--
(A) the demonstrated need for the purchase, construction,
reconstruction, or renovation of the historic country store
based on the condition of the historic country store;
[[Page S5075]]
(B) the age of the historic country store; and
(C) the extent to which the project to purchase,
rehabilitate, or repair the historic country store includes
collaboration among historic country store proprietors and
other eligible applicants.
(c) Requirements.--An eligible applicant that receives a
loan for a project under this section shall comply with all
applicable standards for historic preservation projects under
Federal, State, and local law.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There is authorized to be appropriated to
carry out this Act, $50,000,000 for the period of fiscal
years 2006 through 2011, to remain available until expended.
(b) Country Store Alliance Pilot Project.--Of the amount
made available under subsection (a), not less than $250,000
shall be made available to carry out section 4(c).
Senator James M. Jeffords Summary
national historic country store preservation act of 2005--may 12, 2005
The National Historic Country Store Preservation Act of
2005 authorizes the Secretary of the Economic Development
Administration to establish a National Historic Country Store
Preservation Program. This program will sponsor and conduct
research on the economic impact of historic country stores
and on best practices for improving profitability and
addressing their historic preservation and small business
development needs. The National Historic Country Store
Preservation Program will offer small grants and revolving
loans to State and local agencies, non-profit organizations,
and historic country store proprietors for the purpose of
historic country store preservation projects. In addition,
the bill authorizes a Country Store Alliance Pilot Project to
be conducted in Vermont. The bill authorizes $50 million to
be appropriated for the period of fiscal years 2006 through
2010.
______
By Mr. KENNEDY (for himself, Mr. Harkin, Ms. Mikulski, Mrs.
Murray, Mr. Reed, Mr. Levin, Mr. Lautenberg, Mrs. Boxer, Mr.
Dorgan, Mr. Schumer, Ms. Cantwell, Mr. Corzine, Mr. Dayton, and
Ms. Stabenow):
S. 1012. A bill to amend the Public Health Service Act, the Employee
Retirement Income Security Act of 1974, and the Internal Revenue Code
of 1986 to protect consumers in managed care plans and other health
coverage; to the Committee on Finance.
Mr. KENNEDY. Mr. President, it is time for a new effort in Congress
to enact the Patients' Bill of Rights. The Senate has approved major
bipartisan legislation to end the abuses of managed care and HMOs
before, but final enactment of this important measure was blocked by
the HMOs and the vested interests of the corporate world that deny
working Americans their basic rights and a needed voice in challenging
decisions that deny them basic medical care. It was blocked too by an
administration that professes to support patients' rights, but does all
it can to block legislation to guarantee those rights.
Despite our outstanding researchers and professionals, families
across the country are overwhelmingly and justifiably concerned that
medical decisions are too often made by insurance industry accountants,
and not their doctors. HMO profits too often take priority over patient
needs. It is time for Congress to end the abuses of patients and
physicians by HMOs and the insurance industry. Too often, managed care
is mismanaged care. No amount of distortions or smokescreens by
insurance companies can change the facts.
The Patients' Bill of Rights can stop these abuses. For millions of
Americans who rely on health insurance to protect them when serious
illness strikes, the Patients' Bill of Rights is literally a matter of
life and death.
It's important to remember what this debate is really about. It's not
about lawyers. It's not about insurance companies. It's about
patients--mothers and daughters, fathers and sons, sisters and
brothers. It's about families around the country who will someday face
the challenge of serious illness and deserve the best in health care--
the same care that all members of the Senate want for ourselves and our
loved ones. But too many families are denied the care they need and
deserve because of abuses by HMOs and other insurance companies.
The legislation we are introducing today will end those abuses.
Several of its provisions are especially important--specialty care,
clinical trials, and prescription drugs.
In each of these areas, care is too often delayed or denied by
insurance companies more interested in profits than patients. Access to
specialty care for serious and complex illnesses is a critical element
of good health care. Yet denial of needed specialists is one of the
most common abuses in the current system.
Patients with cancer and other serious illnesses need specialty care.
Often, their best hope for a cure or for precious extra years of life
is participation in a clinical trial. But too often, both are lacking.
Patients with cancer or other serious illnesses and their physicians
must fight HMOs to take advantage of this opportunity.
Traditionally, insurance companies have paid for the routine costs of
doctors and hospitals in clinical trials. But HMOs frequently refuse to
do so, with devastating effects on patients and research alike. Our
legislation will end this abuse.
Another abuse that will be ended by our plan is the denial of
medically necessary drugs not on an HMO plan's list. One group that
suffers from this denial is the mentally ill. Some of the most dramatic
advances in medicine in recent years have been the development of
effective drugs to treat persons with serious mental illness. Too
often, however, they're told to settle for older, cheaper, less
effective drugs with harmful side effects, because an HMO refuses to
pay for the best standard of care.
Our legislation guarantees that patients can get medically necessary
drugs, even if they are not on the HMO's list. Equally important, our
bill guarantees that these drugs will be provided at a cost no greater
than the normal cost-sharing for other medications. Access to needed
drugs is a concern for every family, particularly when new cures are
increasingly based on new drugs today.
The list of abuses goes on and on. People across the country know
these abuses are wrong. Managed care practices that cause these
tragedies cost lives, and ending these abuses is a matter of simple
justice and common decency.
The Patients' Bill of Rights will protect families from insurance
company bureaucracies that rob them of their peace of mind, their
health, or even their lives. The bill is a guarantee that medical
decisions will be made by doctors and patients, not managed care
accountants. It is actively supported by doctors, nurses, patients,
small businesses, religious organizations, and working families. The
support is impressive in its breadth, its depth and its diversity.
It is time to guarantee these basic rights for patients. It is time
for Congress to pass this bill. Every doctor knows it. Every nurse
knows it. Every patient knows it. And every Senator knows it too.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1012
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Patients'
Bill of Rights Act of 2005''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Utilization Review; Claims; and Internal and External
Appeals
Sec. 101. Utilization review activities.
Sec. 102. Procedures for initial claims for benefits and prior
authorization determinations.
Sec. 103. Internal appeals of claims denials.
Sec. 104. Independent external appeals procedures.
Sec. 105. Health Care Consumer Assistance Fund.
Subtitle B--Access to Care
Sec. 111. Consumer choice option.
Sec. 112. Choice of health care professional.
Sec. 113. Access to emergency care.
Sec. 114. Timely access to specialists.
Sec. 115. Patient access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Access to needed prescription drugs.
Sec. 119. Coverage for individuals participating in approved clinical
trials.
Sec. 120. Required coverage for minimum hospital stay for mastectomies
and lymph node dissections for the treatment of breast
cancer and coverage for secondary consultations.
[[Page S5076]]
Subtitle C--Access to Information
Sec. 121. Patient access to information.
Subtitle D--Protecting the Doctor-Patient Relationship
Sec. 131. Prohibition of interference with certain medical
communications.
Sec. 132. Prohibition of discrimination against providers based on
licensure.
Sec. 133. Prohibition against improper incentive arrangements.
Sec. 134. Payment of claims.
Sec. 135. Protection for patient advocacy.
Subtitle E--Definitions
Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.
Sec. 153. Exclusions.
Sec. 154. Treatment of excepted benefits.
Sec. 155. Regulations.
Sec. 156. Incorporation into plan or coverage documents.
Sec. 157. Preservation of protections.
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT
Sec. 201. Application to group health plans and group health insurance
coverage.
Sec. 202. Application to individual health insurance coverage.
Sec. 203. Cooperation between Federal and State authorities.
TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL
HEALTH INSURANCE PROGRAMS
Sec. 301. Application of patient protection standards to Federal health
insurance programs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Sec. 401. Application of patient protection standards to group health
plans and group health insurance coverage under the
Employee Retirement Income Security Act of 1974.
Sec. 402. Availability of civil remedies.
Sec. 403. Cooperation between Federal and State authorities.
TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Application of Patient Protection Provisions
Sec. 501. Application to group health plans under the Internal Revenue
Code of 1986.
Sec. 502. Conforming enforcement for women's health and cancer rights.
Subtitle B--Health Care Coverage Access Tax Incentives
Sec. 511. Credit for health insurance expenses of small businesses.
Sec. 512. Certain grants by private foundations to qualified health
benefit purchasing coalitions.
Sec. 513. State grant program for market innovation.
Sec. 514. Grant program to facilitate health benefits information for
small employers.
Sec. 515. State grant program for market innovation.
TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
Sec. 601. Effective dates.
Sec. 602. Coordination in implementation.
Sec. 603. Severability.
TITLE VII--MISCELLANEOUS PROVISIONS
Sec. 701. No impact on Social Security Trust Fund.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Utilization Review; Claims; and Internal and External
Appeals
SEC. 101. UTILIZATION REVIEW ACTIVITIES.
(a) Compliance With Requirements.--
(1) In general.--A group health plan, and a health
insurance issuer that provides health insurance coverage,
shall conduct utilization review activities in connection
with the provision of benefits under such plan or coverage
only in accordance with a utilization review program that
meets the requirements of this section and section 102.
(2) Use of outside agents.--Nothing in this section shall
be construed as preventing a group health plan or health
insurance issuer from arranging through a contract or
otherwise for persons or entities to conduct utilization
review activities on behalf of the plan or issuer, so long as
such activities are conducted in accordance with a
utilization review program that meets the requirements of
this section.
(3) Utilization review defined.--For purposes of this
section, the terms ``utilization review'' and ``utilization
review activities'' mean procedures used to monitor or
evaluate the use or coverage, clinical necessity,
appropriateness, efficacy, or efficiency of health care
services, procedures or settings, and includes prospective
review, concurrent review, second opinions, case management,
discharge planning, or retrospective review.
(b) Written Policies and Criteria.--
(1) Written policies.--A utilization review program shall
be conducted consistent with written policies and procedures
that govern all aspects of the program.
(2) Use of written criteria.--
(A) In general.--Such a program shall utilize written
clinical review criteria developed with input from a range of
appropriate actively practicing health care professionals, as
determined by the plan, pursuant to the program. Such
criteria shall include written clinical review criteria that
are based on valid clinical evidence where available and that
are directed specifically at meeting the needs of at-risk
populations and covered individuals with chronic conditions
or severe illnesses, including gender-specific criteria and
pediatric-specific criteria where available and appropriate.
(B) Continuing use of standards in retrospective review.--
If a health care service has been specifically pre-authorized
or approved for a participant, beneficiary, or enrollee under
such a program, the program shall not, pursuant to
retrospective review, revise or modify the specific
standards, criteria, or procedures used for the utilization
review for procedures, treatment, and services delivered to
the enrollee during the same course of treatment.
(C) Review of sample of claims denials.--Such a program
shall provide for a periodic evaluation of the clinical
appropriateness of at least a sample of denials of claims for
benefits.
(c) Conduct of Program Activities.--
(1) Administration by health care professionals.--A
utilization review program shall be administered by qualified
health care professionals who shall oversee review decisions.
(2) Use of qualified, independent personnel.--
(A) In general.--A utilization review program shall provide
for the conduct of utilization review activities only through
personnel who are qualified and have received appropriate
training in the conduct of such activities under the program.
(B) Prohibition of contingent compensation arrangements.--
Such a program shall not, with respect to utilization review
activities, permit or provide compensation or anything of
value to its employees, agents, or contractors in a manner
that encourages denials of claims for benefits.
(C) Prohibition of conflicts.--Such a program shall not
permit a health care professional who is providing health
care services to an individual to perform utilization review
activities in connection with the health care services being
provided to the individual.
(3) Accessibility of review.--Such a program shall provide
that appropriate personnel performing utilization review
activities under the program, including the utilization
review administrator, are reasonably accessible by toll-free
telephone during normal business hours to discuss patient
care and allow response to telephone requests, and that
appropriate provision is made to receive and respond promptly
to calls received during other hours.
(4) Limits on frequency.--Such a program shall not provide
for the performance of utilization review activities with
respect to a class of services furnished to an individual
more frequently than is reasonably required to assess whether
the services under review are medically necessary and
appropriate.
SEC. 102. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND
PRIOR AUTHORIZATION DETERMINATIONS.
(a) Procedures of Initial Claims for Benefits.--
(1) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall--
(A) make a determination on an initial claim for benefits
by a participant, beneficiary, or enrollee (or authorized
representative) regarding payment or coverage for items or
services under the terms and conditions of the plan or
coverage involved, including any cost-sharing amount that the
participant, beneficiary, or enrollee is required to pay with
respect to such claim for benefits; and
(B) notify a participant, beneficiary, or enrollee (or
authorized representative) and the treating health care
professional involved regarding a determination on an initial
claim for benefits made under the terms and conditions of the
plan or coverage, including any cost-sharing amounts that the
participant, beneficiary, or enrollee may be required to make
with respect to such claim for benefits, and of the right of
the participant, beneficiary, or enrollee to an internal
appeal under section 103.
(2) Access to information.--
(A) Timely provision of necessary information.--With
respect to an initial claim for benefits, the participant,
beneficiary, or enrollee (or authorized representative) and
the treating health care professional (if any) shall provide
the plan or issuer with access to information requested by
the plan or issuer that is necessary to make a determination
relating to the claim. Such access shall be provided not
later than 5 days after the date on which the request for
information is received, or, in a case described in
subparagraph (B) or (C) of subsection (b)(1), by such earlier
time as may be necessary to comply with the applicable
timeline under such subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary, or
enrollee to comply with the requirements of subparagraph (A)
shall not remove the obligation of the plan or issuer to make
a decision in accordance with the medical exigencies of the
case and as soon as possible, based on the available
information, and failure to comply with the time limit
established by this paragraph shall not remove the obligation
of the plan or issuer to comply with the requirements of this
section.
[[Page S5077]]
(3) Oral requests.--In the case of a claim for benefits
involving an expedited or concurrent determination, a
participant, beneficiary, or enrollee (or authorized
representative) may make an initial claim for benefits
orally, but a group health plan, or health insurance issuer
offering health insurance coverage, may require that the
participant, beneficiary, or enrollee (or authorized
representative) provide written confirmation of such request
in a timely manner on a form provided by the plan or issuer.
In the case of such an oral request for benefits, the making
of the request (and the timing of such request) shall be
treated as the making at that time of a claim for such
benefits without regard to whether and when a written
confirmation of such request is made.
(b) Timeline for Making Determinations.--
(1) Prior authorization determination.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall
make a prior authorization determination on a claim for
benefits (whether oral or written) in accordance with the
medical exigencies of the case and as soon as possible, but
in no case later than 14 days from the date on which the plan
or issuer receives information that is reasonably necessary
to enable the plan or issuer to make a determination on the
request for prior authorization and in no case later than 28
days after the date of the claim for benefits is received.
(B) Expedited determination.--Notwithstanding subparagraph
(A), a group health plan, and a health insurance issuer
offering health insurance coverage, shall expedite a prior
authorization determination on a claim for benefits described
in such subparagraph when a request for such an expedited
determination is made by a participant, beneficiary, or
enrollee (or authorized representative) at any time during
the process for making a determination and a health care
professional certifies, with the request, that a
determination under the procedures described in subparagraph
(A) would seriously jeopardize the life or health of the
participant, beneficiary, or enrollee or the ability of the
participant, beneficiary, or enrollee to maintain or regain
maximum function. Such determination shall be made in
accordance with the medical exigencies of the case and as
soon as possible, but in no case later than 72 hours after
the time the request is received by the plan or issuer under
this subparagraph.
(C) Ongoing care.--
(i) Concurrent review.--
(I) In general.--Subject to clause (ii), in the case of a
concurrent review of ongoing care (including
hospitalization), which results in a termination or reduction
of such care, the plan or issuer must provide by telephone
and in printed form notice of the concurrent review
determination to the individual or the individual's designee
and the individual's health care provider in accordance with
the medical exigencies of the case and as soon as possible,
with sufficient time prior to the termination or reduction to
allow for an appeal under section 103(b)(3) to be completed
before the termination or reduction takes effect.
(II) Contents of notice.--Such notice shall include, with
respect to ongoing health care items and services, the number
of ongoing services approved, the new total of approved
services, the date of onset of services, and the next review
date, if any, as well as a statement of the individual's
rights to further appeal.
(ii) Rule of construction.--Clause (i) shall not be
construed as requiring plans or issuers to provide coverage
of care that would exceed the coverage limitations for such
care.
(2) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on a claim for
benefits in accordance with the medical exigencies of the
case and as soon as possible, but not later than 30 days
after the date on which the plan or issuer receives
information that is reasonably necessary to enable the plan
or issuer to make a determination on the claim, or, if
earlier, 60 days after the date of receipt of the claim for
benefits.
(c) Notice of a Denial of a Claim for Benefits.--Written
notice of a denial made under an initial claim for benefits
shall be issued to the participant, beneficiary, or enrollee
(or authorized representative) and the treating health care
professional in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than 2
days after the date of the determination (or, in the case
described in subparagraph (B) or (C) of subsection (b)(1),
within the 72-hour or applicable period referred to in such
subparagraph).
(d) Requirements of Notice of Determinations.--The written
notice of a denial of a claim for benefits determination
under subsection (c) shall be provided in printed form and
written in a manner calculated to be understood by the
participant, beneficiary, or enrollee and shall include--
(1) the specific reasons for the determination (including a
summary of the clinical or scientific evidence used in making
the determination);
(2) the procedures for obtaining additional information
concerning the determination; and
(3) notification of the right to appeal the determination
and instructions on how to initiate an appeal in accordance
with section 103.
(e) Definitions.--For purposes of this part:
(1) Authorized representative.--The term ``authorized
representative'' means, with respect to an individual who is
a participant, beneficiary, or enrollee, any health care
professional or other person acting on behalf of the
individual with the individual's consent or without such
consent if the individual is medically unable to provide such
consent.
(2) Claim for benefits.--The term ``claim for benefits''
means any request for coverage (including authorization of
coverage), for eligibility, or for payment in whole or in
part, for an item or service under a group health plan or
health insurance coverage.
(3) Denial of claim for benefits.--The term ``denial''
means, with respect to a claim for benefits, a denial (in
whole or in part) of, or a failure to act on a timely basis
upon, the claim for benefits and includes a failure to
provide benefits (including items and services) required to
be provided under this title.
(4) Treating health care professional.--The term ``treating
health care professional'' means, with respect to services to
be provided to a participant, beneficiary, or enrollee, a
health care professional who is primarily responsible for
delivering those services to the participant, beneficiary, or
enrollee.
SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS.
(a) Right to Internal Appeal.--
(1) In general.--A participant, beneficiary, or enrollee
(or authorized representative) may appeal any denial of a
claim for benefits under section 102 under the procedures
described in this section.
(2) Time for appeal.--
(A) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage, shall
ensure that a participant, beneficiary, or enrollee (or
authorized representative) has a period of not less than 180
days beginning on the date of a denial of a claim for
benefits under section 102 in which to appeal such denial
under this section.
(B) Date of denial.--For purposes of subparagraph (A), the
date of the denial shall be deemed to be the date as of which
the participant, beneficiary, or enrollee knew of the denial
of the claim for benefits.
(3) Failure to act.--The failure of a plan or issuer to
issue a determination on a claim for benefits under section
102 within the applicable timeline established for such a
determination under such section is a denial of a claim for
benefits for purposes this subtitle as of the date of the
applicable deadline.
(4) Plan waiver of internal review.--A group health plan,
or health insurance issuer offering health insurance
coverage, may waive the internal review process under this
section. In such case the plan or issuer shall provide notice
to the participant, beneficiary, or enrollee (or authorized
representative) involved, the participant, beneficiary, or
enrollee (or authorized representative) involved shall be
relieved of any obligation to complete the internal review
involved, and may, at the option of such participant,
beneficiary, enrollee, or representative proceed directly to
seek further appeal through external review under section 104
or otherwise.
(b) Timelines for Making Determinations.--
(1) Oral requests.--In the case of an appeal of a denial of
a claim for benefits under this section that involves an
expedited or concurrent determination, a participant,
beneficiary, or enrollee (or authorized representative) may
request such appeal orally. A group health plan, or health
insurance issuer offering health insurance coverage, may
require that the participant, beneficiary, or enrollee (or
authorized representative) provide written confirmation of
such request in a timely manner on a form provided by the
plan or issuer. In the case of such an oral request for an
appeal of a denial, the making of the request (and the timing
of such request) shall be treated as the making at that time
of a request for an appeal without regard to whether and when
a written confirmation of such request is made.
(2) Access to information.--
(A) Timely provision of necessary information.--With
respect to an appeal of a denial of a claim for benefits, the
participant, beneficiary, or enrollee (or authorized
representative) and the treating health care professional (if
any) shall provide the plan or issuer with access to
information requested by the plan or issuer that is necessary
to make a determination relating to the appeal. Such access
shall be provided not later than 5 days after the date on
which the request for information is received, or, in a case
described in subparagraph (B) or (C) of paragraph (3), by
such earlier time as may be necessary to comply with the
applicable timeline under such subparagraph.
(B) Limited effect of failure on plan or issuer's
obligations.--Failure of the participant, beneficiary, or
enrollee to comply with the requirements of subparagraph (A)
shall not remove the obligation of the plan or issuer to make
a decision in accordance with the medical exigencies of the
case and as soon as possible, based on the available
information, and failure to comply with the time limit
established by this paragraph shall not remove the obligation
of the plan or issuer to comply with the requirements of this
section.
[[Page S5078]]
(3) Prior authorization determinations.--
(A) In general.--Except as provided in this paragraph or
paragraph (4), a group health plan, and a health insurance
issuer offering health insurance coverage, shall make a
determination on an appeal of a denial of a claim for
benefits under this subsection in accordance with the medical
exigencies of the case and as soon as possible, but in no
case later than 14 days from the date on which the plan or
issuer receives information that is reasonably necessary to
enable the plan or issuer to make a determination on the
appeal and in no case later than 28 days after the date the
request for the appeal is received.
(B) Expedited determination.--Notwithstanding subparagraph
(A), a group health plan, and a health insurance issuer
offering health insurance coverage, shall expedite a prior
authorization determination on an appeal of a denial of a
claim for benefits described in subparagraph (A), when a
request for such an expedited determination is made by a
participant, beneficiary, or enrollee (or authorized
representative) at any time during the process for making a
determination and a health care professional certifies, with
the request, that a determination under the procedures
described in subparagraph (A) would seriously jeopardize the
life or health of the participant, beneficiary, or enrollee
or the ability of the participant, beneficiary, or enrollee
to maintain or regain maximum function. Such determination
shall be made in accordance with the medical exigencies of
the case and as soon as possible, but in no case later than
72 hours after the time the request for such appeal is
received by the plan or issuer under this subparagraph.
(C) Ongoing care determinations.--
(i) In general.--Subject to clause (ii), in the case of a
concurrent review determination described in section
102(b)(1)(C)(i)(I), which results in a termination or
reduction of such care, the plan or issuer must provide
notice of the determination on the appeal under this section
by telephone and in printed form to the individual or the
individual's designee and the individual's health care
provider in accordance with the medical exigencies of the
case and as soon as possible, with sufficient time prior to
the termination or reduction to allow for an external appeal
under section 104 to be completed before the termination or
reduction takes effect.
(ii) Rule of construction.--Clause (i) shall not be
construed as requiring plans or issuers to provide coverage
of care that would exceed the coverage limitations for such
care.
(4) Retrospective determination.--A group health plan, and
a health insurance issuer offering health insurance coverage,
shall make a retrospective determination on an appeal of a
denial of a claim for benefits in no case later than 30 days
after the date on which the plan or issuer receives necessary
information that is reasonably necessary to enable the plan
or issuer to make a determination on the appeal and in no
case later than 60 days after the date the request for the
appeal is received.
(c) Conduct of Review.--
(1) In general.--A review of a denial of a claim for
benefits under this section shall be conducted by an
individual with appropriate expertise who was not involved in
the initial determination.
(2) Peer review of medical decisions by health care
professionals.--A review of an appeal of a denial of a claim
for benefits that is based on a lack of medical necessity and
appropriateness, or based on an experimental or
investigational treatment, or requires an evaluation of
medical facts--
(A) shall be made by a physician (allopathic or
osteopathic); or
(B) in a claim for benefits provided by a non-physician
health professional, shall be made by reviewer (or reviewers)
including at least one practicing non-physician health
professional of the same or similar specialty;
with appropriate expertise (including, in the case of a
child, appropriate pediatric expertise) and acting within the
appropriate scope of practice within the State in which the
service is provided or rendered, who was not involved in the
initial determination.
(d) Notice of Determination.--
(1) In general.--Written notice of a determination made
under an internal appeal of a denial of a claim for benefits
shall be issued to the participant, beneficiary, or enrollee
(or authorized representative) and the treating health care
professional in accordance with the medical exigencies of the
case and as soon as possible, but in no case later than 2
days after the date of completion of the review (or, in the
case described in subparagraph (B) or (C) of subsection
(b)(3), within the 72-hour or applicable period referred to
in such subparagraph).
(2) Final determination.--The decision by a plan or issuer
under this section shall be treated as the final
determination of the plan or issuer on a denial of a claim
for benefits. The failure of a plan or issuer to issue a
determination on an appeal of a denial of a claim for
benefits under this section within the applicable timeline
established for such a determination shall be treated as a
final determination on an appeal of a denial of a claim for
benefits for purposes of proceeding to external review under
section 104.
(3) Requirements of notice.--With respect to a
determination made under this section, the notice described
in paragraph (1) shall be provided in printed form and
written in a manner calculated to be understood by the
participant, beneficiary, or enrollee and shall include--
(A) the specific reasons for the determination (including a
summary of the clinical or scientific evidence used in making
the determination);
(B) the procedures for obtaining additional information
concerning the determination; and
(C) notification of the right to an independent external
review under section 104 and instructions on how to initiate
such a review.
SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCEDURES.
(a) Right to External Appeal.--A group health plan, and a
health insurance issuer offering health insurance coverage,
shall provide in accordance with this section participants,
beneficiaries, and enrollees (or authorized representatives)
with access to an independent external review for any denial
of a claim for benefits.
(b) Initiation of the Independent External Review
Process.--
(1) Time to file.--A request for an independent external
review under this section shall be filed with the plan or
issuer not later than 180 days after the date on which the
participant, beneficiary, or enrollee receives notice of the
denial under section 103(d) or notice of waiver of internal
review under section 103(a)(4) or the date on which the plan
or issuer has failed to make a timely decision under section
103(d)(2) and notifies the participant or beneficiary that it
has failed to make a timely decision and that the beneficiary
must file an appeal with an external review entity within 180
days if the participant or beneficiary desires to file such
an appeal.
(2) Filing of request.--
(A) In general.--Subject to the succeeding provisions of
this subsection, a group health plan, or health insurance
issuer offering health insurance coverage, may--
(i) except as provided in subparagraph (B)(i), require that
a request for review be in writing;
(ii) limit the filing of such a request to the participant,
beneficiary, or enrollee involved (or an authorized
representative);
(iii) except if waived by the plan or issuer under section
103(a)(4), condition access to an independent external review
under this section upon a final determination of a denial of
a claim for benefits under the internal review procedure
under section 103;
(iv) except as provided in subparagraph (B)(ii), require
payment of a filing fee to the plan or issuer of a sum that
does not exceed $25; and
(v) require that a request for review include the consent
of the participant, beneficiary, or enrollee (or authorized
representative) for the release of necessary medical
information or records of the participant, beneficiary, or
enrollee to the qualified external review entity only for
purposes of conducting external review activities.
(B) Requirements and exception relating to general rule.--
(i) Oral requests permitted in expedited or concurrent
cases.--In the case of an expedited or concurrent external
review as provided for under subsection (e), the request for
such review may be made orally. A group health plan, or
health insurance issuer offering health insurance coverage,
may require that the participant, beneficiary, or enrollee
(or authorized representative) provide written confirmation
of such request in a timely manner on a form provided by the
plan or issuer. Such written confirmation shall be treated as
a consent for purposes of subparagraph (A)(v). In the case of
such an oral request for such a review, the making of the
request (and the timing of such request) shall be treated as
the making at that time of a request for such a review
without regard to whether and when a written confirmation of
such request is made.
(ii) Exception to filing fee requirement.--
(I) Indigency.--Payment of a filing fee shall not be
required under subparagraph (A)(iv) where there is a
certification (in a form and manner specified in guidelines
established by the appropriate Secretary) that the
participant, beneficiary, or enrollee is indigent (as defined
in such guidelines).
(II) Fee not required.--Payment of a filing fee shall not
be required under subparagraph (A)(iv) if the plan or issuer
waives the internal appeals process under section 103(a)(4).
(III) Refunding of fee.--The filing fee paid under
subparagraph (A)(iv) shall be refunded if the determination
under the independent external review is to reverse or modify
the denial which is the subject of the review.
(IV) Collection of filing fee.--The failure to pay such a
filing fee shall not prevent the consideration of a request
for review but, subject to the preceding provisions of this
clause, shall constitute a legal liability to pay.
(c) Referral to Qualified External Review Entity Upon
Request.--
(1) In general.--Upon the filing of a request for
independent external review with the group health plan, or
health insurance issuer offering health insurance coverage,
the plan or issuer shall immediately refer such request, and
forward the plan or issuer's initial decision (including the
information described in section 103(d)(3)(A)), to a
qualified external review entity selected in accordance with
this section.
(2) Access to plan or issuer and health professional
information.--With respect to an independent external review
conducted
[[Page S5079]]
under this section, the participant, beneficiary, or enrollee
(or authorized representative), the plan or issuer, and the
treating health care professional (if any) shall provide the
external review entity with information that is necessary to
conduct a review under this section, as determined and
requested by the entity. Such information shall be provided
not later than 5 days after the date on which the request for
information is received, or, in a case described in clause
(ii) or (iii) of subsection (e)(1)(A), by such earlier time
as may be necessary to comply with the applicable timeline
under such clause.
(3) Screening of requests by qualified external review
entities.--
(A) In general.--With respect to a request referred to a
qualified external review entity under paragraph (1) relating
to a denial of a claim for benefits, the entity shall refer
such request for the conduct of an independent medical review
unless the entity determines that--
(i) any of the conditions described in clauses (ii) or
(iii) of subsection (b)(2)(A) have not been met;
(ii) the denial of the claim for benefits does not involve
a medically reviewable decision under subsection (d)(2);
(iii) the denial of the claim for benefits relates to a
decision regarding whether an individual is a participant,
beneficiary, or enrollee who is enrolled under the terms and
conditions of the plan or coverage (including the
applicability of any waiting period under the plan or
coverage); or
(iv) the denial of the claim for benefits is a decision as
to the application of cost-sharing requirements or the
application of a specific exclusion or express limitation on
the amount, duration, or scope of coverage of items or
services under the terms and conditions of the plan or
coverage unless the decision is a denial described in
subsection (d)(2).
Upon making a determination that any of clauses (i) through
(iv) applies with respect to the request, the entity shall
determine that the denial of a claim for benefits involved is
not eligible for independent medical review under subsection
(d), and shall provide notice in accordance with subparagraph
(C).
(B) Process for making determinations.--
(i) No deference to prior determinations.--In making
determinations under subparagraph (A), there shall be no
deference given to determinations made by the plan or issuer
or the recommendation of a treating health care professional
(if any).
(ii) Use of appropriate personnel.--A qualified external
review entity shall use appropriately qualified personnel to
make determinations under this section.
(C) Notices and general timelines for determination.--
(i) Notice in case of denial of referral.--If the entity
under this paragraph does not make a referral to an
independent medical reviewer, the entity shall provide notice
to the plan or issuer, the participant, beneficiary, or
enrollee (or authorized representative) filing the request,
and the treating health care professional (if any) that the
denial is not subject to independent medical review. Such
notice--
(I) shall be written (and, in addition, may be provided
orally) in a manner calculated to be understood by a
participant or enrollee;
(II) shall include the reasons for the determination;
(III) include any relevant terms and conditions of the plan
or coverage; and
(IV) include a description of any further recourse
available to the individual.
(ii) General timeline for determinations.--Upon receipt of
information under paragraph (2), the qualified external
review entity, and if required the independent medical
reviewer, shall make a determination within the overall
timeline that is applicable to the case under review as
described in subsection (e), except that if the entity
determines that a referral to an independent medical reviewer
is not required, the entity shall provide notice of such
determination to the participant, beneficiary, or enrollee
(or authorized representative) within such timeline and
within 2 days of the date of such determination.
(d) Independent Medical Review.--
(1) In general.--If a qualified external review entity
determines under subsection (c) that a denial of a claim for
benefits is eligible for independent medical review, the
entity shall refer the denial involved to an independent
medical reviewer for the conduct of an independent medical
review under this subsection.
(2) Medically reviewable decisions.--A denial of a claim
for benefits is eligible for independent medical review if
the benefit for the item or service for which the claim is
made would be a covered benefit under the terms and
conditions of the plan or coverage but for one (or more) of
the following determinations:
(A) Denials based on medical necessity and
appropriateness.--A determination that the item or service is
not covered because it is not medically necessary and
appropriate or based on the application of substantially
equivalent terms.
(B) Denials based on experimental or investigational
treatment.--A determination that the item or service is not
covered because it is experimental or investigational or
based on the application of substantially equivalent terms.
(C) Denials otherwise based on an evaluation of medical
facts.--A determination that the item or service or condition
is not covered based on grounds that require an evaluation of
the medical facts by a health care professional in the
specific case involved to determine the coverage and extent
of coverage of the item or service or condition.
(3) Independent medical review determination.--
(A) In general.--An independent medical reviewer under this
section shall make a new independent determination with
respect to whether or not the denial of a claim for a benefit
that is the subject of the review should be upheld, reversed,
or modified.
(B) Standard for determination.--The independent medical
reviewer's determination relating to the medical necessity
and appropriateness, or the experimental or investigational
nature, or the evaluation of the medical facts, of the item,
service, or condition involved shall be based on the medical
condition of the participant, beneficiary, or enrollee
(including the medical records of the participant,
beneficiary, or enrollee) and valid, relevant scientific
evidence and clinical evidence, including peer-reviewed
medical literature or findings and including expert opinion.
(C) No coverage for excluded benefits.--Nothing in this
subsection shall be construed to permit an independent
medical reviewer to require that a group health plan, or
health insurance issuer offering health insurance coverage,
provide coverage for items or services for which benefits are
specifically excluded or expressly limited under the plan or
coverage in the plain language of the plan document (and
which are disclosed under section 121(b)(1)(C)).
Notwithstanding any other provision of this Act, any
exclusion of an exact medical procedure, any exact time limit
on the duration or frequency of coverage, and any exact
dollar limit on the amount of coverage that is specifically
enumerated and defined (in the plain language of the plan or
coverage documents) under the plan or coverage offered by a
group health plan or health insurance issuer offering health
insurance coverage and that is disclosed under section
121(b)(1) shall be considered to govern the scope of the
benefits that may be required: Provided, That the terms and
conditions of the plan or coverage relating to such an
exclusion or limit are in compliance with the requirements of
law.
(D) Evidence and information to be used in medical
reviews.--In making a determination under this subsection,
the independent medical reviewer shall also consider
appropriate and available evidence and information, including
the following:
(i) The determination made by the plan or issuer with
respect to the claim upon internal review and the evidence,
guidelines, or rationale used by the plan or issuer in
reaching such determination.
(ii) The recommendation of the treating health care
professional and the evidence, guidelines, and rationale used
by the treating health care professional in reaching such
recommendation.
(iii) Additional relevant evidence or information obtained
by the reviewer or submitted by the plan, issuer,
participant, beneficiary, or enrollee (or an authorized
representative), or treating health care professional.
(iv) The plan or coverage document.
(E) Independent determination.--In making determinations
under this section, a qualified external review entity and an
independent medical reviewer shall--
(i) consider the claim under review without deference to
the determinations made by the plan or issuer or the
recommendation of the treating health care professional (if
any); and
(ii) consider, but not be bound by, the definition used by
the plan or issuer of ``medically necessary and
appropriate'', or ``experimental or investigational'', or
other substantially equivalent terms that are used by the
plan or issuer to describe medical necessity and
appropriateness or experimental or investigational nature of
the treatment.
(F) Determination of independent medical reviewer.--An
independent medical reviewer shall, in accordance with the
deadlines described in subsection (e), prepare a written
determination to uphold, reverse, or modify the denial under
review. Such written determination shall include--
(i) the determination of the reviewer;
(ii) the specific reasons of the reviewer for such
determination, including a summary of the clinical or
scientific evidence used in making the determination; and
(iii) with respect to a determination to reverse or modify
the denial under review, a timeframe within which the plan or
issuer must comply with such determination.
(G) Nonbinding nature of additional recommendations.--In
addition to the determination under subparagraph (F), the
reviewer may provide the plan or issuer and the treating
health care professional with additional recommendations in
connection with such a determination, but any such
recommendations shall not affect (or be treated as part of)
the determination and shall not be binding on the plan or
issuer.
(e) Timelines and Notifications.--
(1) Timelines for independent medical review.--
(A) Prior authorization determination.--
(i) In general.--The independent medical reviewer (or
reviewers) shall make a determination on a denial of a claim
for benefits that is referred to the reviewer under
subsection (c)(3) in accordance with the medical
[[Page S5080]]
exigencies of the case and as soon as possible, but in no
case later than 14 days after the date of receipt of
information under subsection (c)(2) if the review involves a
prior authorization of items or services and in no case later
than 21 days after the date the request for external review
is received.
(ii) Expedited determination.--Notwithstanding clause (i)
and subject to clause (iii), the independent medical reviewer
(or reviewers) shall make an expedited determination on a
denial of a claim for benefits described in clause (i), when
a request for such an expedited determination is made by a
participant, beneficiary, or enrollee (or authorized
representative) at any time during the process for making a
determination, and a health care professional certifies, with
the request, that a determination under the timeline
described in clause (i) would seriously jeopardize the life
or health of the participant, beneficiary, or enrollee or the
ability of the participant, beneficiary, or enrollee to
maintain or regain maximum function. Such determination shall
be made in accordance with the medical exigencies of the case
and as soon as possible, but in no case later than 72 hours
after the time the request for external review is received by
the qualified external review entity.
(iii) Ongoing care determination.--Notwithstanding clause
(i), in the case of a review described in such clause that
involves a termination or reduction of care, the notice of
the determination shall be completed not later than 24 hours
after the time the request for external review is received by
the qualified external review entity and before the end of
the approved period of care.
(B) Retrospective determination.--The independent medical
reviewer (or reviewers) shall complete a review in the case
of a retrospective determination on an appeal of a denial of
a claim for benefits that is referred to the reviewer under
subsection (c)(3) in no case later than 30 days after the
date of receipt of information under subsection (c)(2) and in
no case later than 60 days after the date the request for
external review is received by the qualified external review
entity.
(2) Notification of determination.--The external review
entity shall ensure that the plan or issuer, the participant,
beneficiary, or enrollee (or authorized representative) and
the treating health care professional (if any) receives a
copy of the written determination of the independent medical
reviewer prepared under subsection (d)(3)(F). Nothing in this
paragraph shall be construed as preventing an entity or
reviewer from providing an initial oral notice of the
reviewer's determination.
(3) Form of notices.--Determinations and notices under this
subsection shall be written in a manner calculated to be
understood by a participant.
(f) Compliance.--
(1) Application of determinations.--
(A) External review determinations binding on plan.--The
determinations of an external review entity and an
independent medical reviewer under this section shall be
binding upon the plan or issuer involved.
(B) Compliance with determination.--If the determination of
an independent medical reviewer is to reverse or modify the
denial, the plan or issuer, upon the receipt of such
determination, shall authorize coverage to comply with the
medical reviewer's determination in accordance with the
timeframe established by the medical reviewer.
(2) Failure to comply.--
(A) In general.--If a plan or issuer fails to comply with
the timeframe established under paragraph (1)(B) with respect
to a participant, beneficiary, or enrollee, where such
failure to comply is caused by the plan or issuer, the
participant, beneficiary, or enrollee may obtain the items or
services involved (in a manner consistent with the
determination of the independent external reviewer) from any
provider regardless of whether such provider is a
participating provider under the plan or coverage.
(B) Reimbursement.--
(i) In general.--Where a participant, beneficiary, or
enrollee obtains items or services in accordance with
subparagraph (A), the plan or issuer involved shall provide
for reimbursement of the costs of such items or services.
Such reimbursement shall be made to the treating health care
professional or to the participant, beneficiary, or enrollee
(in the case of a participant, beneficiary, or enrollee who
pays for the costs of such items or services).
(ii) Amount.--The plan or issuer shall fully reimburse a
professional, participant, beneficiary, or enrollee under
clause (i) for the total costs of the items or services
provided (regardless of any plan limitations that may apply
to the coverage of such items or services) so long as the
items or services were provided in a manner consistent with
the determination of the independent medical reviewer.
(C) Failure to reimburse.--Where a plan or issuer fails to
provide reimbursement to a professional, participant,
beneficiary, or enrollee in accordance with this paragraph,
the professional, participant, beneficiary, or enrollee may
commence a civil action (or utilize other remedies available
under law) to recover only the amount of any such
reimbursement that is owed by the plan or issuer and any
necessary legal costs or expenses (including attorney's fees)
incurred in recovering such reimbursement.
(D) Available remedies.--The remedies provided under this
paragraph are in addition to any other available remedies.
(3) Penalties against authorized officials for refusing to
authorize the determination of an external review entity.--
(A) Monetary penalties.--
(i) In general.--In any case in which the determination of
an external review entity is not followed by a group health
plan, or by a health insurance issuer offering health
insurance coverage, any person who, acting in the capacity of
authorizing the benefit, causes such refusal may, in the
discretion of a court of competent jurisdiction, be liable to
an aggrieved participant, beneficiary, or enrollee for a
civil penalty in an amount of up to $1,000 a day from the
date on which the determination was transmitted to the plan
or issuer by the external review entity until the date the
refusal to provide the benefit is corrected.
(ii) Additional penalty for failing to follow timeline.--In
any case in which treatment was not commenced by the plan in
accordance with the determination of an independent external
reviewer, the Secretary shall assess a civil penalty of
$10,000 against the plan and the plan shall pay such penalty
to the participant, beneficiary, or enrollee involved.
(B) Cease and desist order and order of attorney's fees.--
In any action described in subparagraph (A) brought by a
participant, beneficiary, or enrollee with respect to a group
health plan, or a health insurance issuer offering health
insurance coverage, in which a plaintiff alleges that a
person referred to in such subparagraph has taken an action
resulting in a refusal of a benefit determined by an external
appeal entity to be covered, or has failed to take an action
for which such person is responsible under the terms and
conditions of the plan or coverage and which is necessary
under the plan or coverage for authorizing a benefit, the
court shall cause to be served on the defendant an order
requiring the defendant--
(i) to cease and desist from the alleged action or failure
to act; and
(ii) to pay to the plaintiff a reasonable attorney's fee
and other reasonable costs relating to the prosecution of the
action on the charges on which the plaintiff prevails.
(C) Additional civil penalties.--
(i) In general.--In addition to any penalty imposed under
subparagraph (A) or (B), the appropriate Secretary may assess
a civil penalty against a person acting in the capacity of
authorizing a benefit determined by an external review entity
for one or more group health plans, or health insurance
issuers offering health insurance coverage, for--
(I) any pattern or practice of repeated refusal to
authorize a benefit determined by an external appeal entity
to be covered; or
(II) any pattern or practice of repeated violations of the
requirements of this section with respect to such plan or
coverage.
(ii) Standard of proof and amount of penalty.--Such penalty
shall be payable only upon proof by clear and convincing
evidence of such pattern or practice and shall be in an
amount not to exceed the lesser of--
(I) 25 percent of the aggregate value of benefits shown by
the appropriate Secretary to have not been provided, or
unlawfully delayed, in violation of this section under such
pattern or practice; or
(II) $500,000.
(D) Removal and disqualification.--Any person acting in the
capacity of authorizing benefits who has engaged in any such
pattern or practice described in subparagraph (C)(i) with
respect to a plan or coverage, upon the petition of the
appropriate Secretary, may be removed by the court from such
position, and from any other involvement, with respect to
such a plan or coverage, and may be precluded from returning
to any such position or involvement for a period determined
by the court.
(4) Protection of legal rights.--Nothing in this subsection
or subtitle shall be construed as altering or eliminating any
cause of action or legal rights or remedies of participants,
beneficiaries, enrollees, and others under State or Federal
law (including sections 502 and 503 of the Employee
Retirement Income Security Act of 1974), including the right
to file judicial actions to enforce rights.
(g) Qualifications of Independent Medical Reviewers.--
(1) In general.--In referring a denial to 1 or more
individuals to conduct independent medical review under
subsection (c), the qualified external review entity shall
ensure that--
(A) each independent medical reviewer meets the
qualifications described in paragraphs (2) and (3);
(B) with respect to each review at least 1 such reviewer
meets the requirements described in paragraphs (4) and (5);
and
(C) compensation provided by the entity to the reviewer is
consistent with paragraph (6).
(2) Licensure and expertise.--Each independent medical
reviewer shall be a physician (allopathic or osteopathic) or
health care professional who--
(A) is appropriately credentialed or licensed in 1 or more
States to deliver health care services; and
(B) typically treats the condition, makes the diagnosis, or
provides the type of treatment under review.
(3) Independence.--
(A) In general.--Subject to subparagraph (B), each
independent medical reviewer in a case shall--
(i) not be a related party (as defined in paragraph (7));
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(ii) not have a material familial, financial, or
professional relationship with such a party; and
(iii) not otherwise have a conflict of interest with such a
party (as determined under regulations).
(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
(i) prohibit an individual, solely on the basis of
affiliation with the plan or issuer, from serving as an
independent medical reviewer if--
(I) a non-affiliated individual is not reasonably
available;
(II) the affiliated individual is not involved in the
provision of items or services in the case under review;
(III) the fact of such an affiliation is disclosed to the
plan or issuer and the participant, beneficiary, or enrollee
(or authorized representative) and neither party objects; and
(IV) the affiliated individual is not an employee of the
plan or issuer and does not provide services exclusively or
primarily to or on behalf of the plan or issuer;
(ii) prohibit an individual who has staff privileges at the
institution where the treatment involved takes place from
serving as an independent medical reviewer merely on the
basis of such affiliation if the affiliation is disclosed to
the plan or issuer and the participant, beneficiary, or
enrollee (or authorized representative), and neither party
objects; or
(iii) prohibit receipt of compensation by an independent
medical reviewer from an entity if the compensation is
provided consistent with paragraph (6).
(4) Practicing health care professional in same field.--
(A) In general.--In a case involving treatment, or the
provision of items or services--
(i) by a physician, a reviewer shall be a practicing
physician (allopathic or osteopathic) of the same or similar
specialty, as a physician who, acting within the appropriate
scope of practice within the State in which the service is
provided or rendered, typically treats the condition, makes
the diagnosis, or provides the type of treatment under
review; or
(ii) by a non-physician health care professional, a
reviewer (or reviewers) shall include at least one practicing
non-physician health care professional of the same or similar
specialty as the non-physician health care professional who,
acting within the appropriate scope of practice within the
State in which the service is provided or rendered, typically
treats the condition, makes the diagnosis, or provides the
type of treatment under review.
(B) Practicing defined.--For purposes of this paragraph,
the term ``practicing'' means, with respect to an individual
who is a physician or other health care professional that the
individual provides health care services to individual
patients on average at least 2 days per week.
(5) Pediatric expertise.--In the case of an external review
relating to a child, a reviewer shall have expertise under
paragraph (2) in pediatrics.
(6) Limitations on reviewer compensation.--Compensation
provided by a qualified external review entity to an
independent medical reviewer in connection with a review
under this section shall--
(A) not exceed a reasonable level; and
(B) not be contingent on the decision rendered by the
reviewer.
(7) Related party defined.--For purposes of this section,
the term ``related party'' means, with respect to a denial of
a claim under a plan or coverage relating to a participant,
beneficiary, or enrollee, any of the following:
(A) The plan, plan sponsor, or issuer involved, or any
fiduciary, officer, director, or employee of such plan, plan
sponsor, or issuer.
(B) The participant, beneficiary, or enrollee (or
authorized representative).
(C) The health care professional that provides the items or
services involved in the denial.
(D) The institution at which the items or services (or
treatment) involved in the denial are provided.
(E) The manufacturer of any drug or other item that is
included in the items or services involved in the denial.
(F) Any other party determined under any regulations to
have a substantial interest in the denial involved.
(h) Qualified External Review Entities.--
(1) Selection of qualified external review entities.--
(A) Limitation on plan or issuer selection.--The
appropriate Secretary shall implement procedures--
(i) to assure that the selection process among qualified
external review entities will not create any incentives for
external review entities to make a decision in a biased
manner; and
(ii) for auditing a sample of decisions by such entities to
assure that no such decisions are made in a biased manner.
No such selection process under the procedures implemented by
the appropriate Secretary may give either the patient or the
plan or issuer any ability to determine or influence the
selection of a qualified external review entity to review the
case of any participant, beneficiary, or enrollee.
(B) State authority with respect to qualified external
review entities for health insurance issuers.--With respect
to health insurance issuers offering health insurance
coverage in a State, the State may provide for external
review activities to be conducted by a qualified external
appeal entity that is designated by the State or that is
selected by the State in a manner determined by the State to
assure an unbiased determination.
(2) Contract with qualified external review entity.--Except
as provided in paragraph (1)(B), the external review process
of a plan or issuer under this section shall be conducted
under a contract between the plan or issuer and 1 or more
qualified external review entities (as defined in paragraph
(4)(A)).
(3) Terms and conditions of contract.--The terms and
conditions of a contract under paragraph (2) shall--
(A) be consistent with the standards the appropriate
Secretary shall establish to assure there is no real or
apparent conflict of interest in the conduct of external
review activities; and
(B) provide that the costs of the external review process
shall be borne by the plan or issuer.
Subparagraph (B) shall not be construed as applying to the
imposition of a filing fee under subsection (b)(2)(A)(iv) or
costs incurred by the participant, beneficiary, or enrollee
(or authorized representative) or treating health care
professional (if any) in support of the review, including the
provision of additional evidence or information.
(4) Qualifications.--
(A) In general.--In this section, the term ``qualified
external review entity'' means, in relation to a plan or
issuer, an entity that is initially certified (and
periodically recertified) under subparagraph (C) as meeting
the following requirements:
(i) The entity has (directly or through contracts or other
arrangements) sufficient medical, legal, and other expertise
and sufficient staffing to carry out duties of a qualified
external review entity under this section on a timely basis,
including making determinations under subsection (b)(2)(A)
and providing for independent medical reviews under
subsection (d).
(ii) The entity is not a plan or issuer or an affiliate or
a subsidiary of a plan or issuer, and is not an affiliate or
subsidiary of a professional or trade association of plans or
issuers or of health care providers.
(iii) The entity has provided assurances that it will
conduct external review activities consistent with the
applicable requirements of this section and standards
specified in subparagraph (C), including that it will not
conduct any external review activities in a case unless the
independence requirements of subparagraph (B) are met with
respect to the case.
(iv) The entity has provided assurances that it will
provide information in a timely manner under subparagraph
(D).
(v) The entity meets such other requirements as the
appropriate Secretary provides by regulation.
(B) Independence requirements.--
(i) In general.--Subject to clause (ii), an entity meets
the independence requirements of this subparagraph with
respect to any case if the entity--
(I) is not a related party (as defined in subsection
(g)(7));
(II) does not have a material familial, financial, or
professional relationship with such a party; and
(III) does not otherwise have a conflict of interest with
such a party (as determined under regulations).
(ii) Exception for reasonable compensation.--Nothing in
clause (i) shall be construed to prohibit receipt by a
qualified external review entity of compensation from a plan
or issuer for the conduct of external review activities under
this section if the compensation is provided consistent with
clause (iii).
(iii) Limitations on entity compensation.--Compensation
provided by a plan or issuer to a qualified external review
entity in connection with reviews under this section shall--
(I) not exceed a reasonable level; and
(II) not be contingent on any decision rendered by the
entity or by any independent medical reviewer.
(C) Certification and recertification process.--
(i) In general.--The initial certification and
recertification of a qualified external review entity shall
be made--
(I) under a process that is recognized or approved by the
appropriate Secretary; or
(II) by a qualified private standard-setting organization
that is approved by the appropriate Secretary under clause
(iii).
In taking action under subclause (I), the appropriate
Secretary shall give deference to entities that are under
contract with the Federal Government or with an applicable
State authority to perform functions of the type performed by
qualified external review entities.
(ii) Process.--The appropriate Secretary shall not
recognize or approve a process under clause (i)(I) unless the
process applies standards (as promulgated in regulations)
that ensure that a qualified external review entity--
(I) will carry out (and has carried out, in the case of
recertification) the responsibilities of such an entity in
accordance with this section, including meeting applicable
deadlines;
(II) will meet (and has met, in the case of
recertification) appropriate indicators of fiscal integrity;
[[Page S5082]]
(III) will maintain (and has maintained, in the case of
recertification) appropriate confidentiality with respect to
individually identifiable health information obtained in the
course of conducting external review activities; and
(IV) in the case of recertification, shall review the
matters described in clause (iv).
(iii) Approval of qualified private standard-setting
organizations.--For purposes of clause (i)(II), the
appropriate Secretary may approve a qualified private
standard-setting organization if such Secretary finds that
the organization only certifies (or recertifies) external
review entities that meet at least the standards required for
the certification (or recertification) of external review
entities under clause (ii).
(iv) Considerations in recertifications.--In conducting
recertifications of a qualified external review entity under
this paragraph, the appropriate Secretary or organization
conducting the recertification shall review compliance of the
entity with the requirements for conducting external review
activities under this section, including the following:
(I) Provision of information under subparagraph (D).
(II) Adherence to applicable deadlines (both by the entity
and by independent medical reviewers it refers cases to).
(III) Compliance with limitations on compensation (with
respect to both the entity and independent medical reviewers
it refers cases to).
(IV) Compliance with applicable independence requirements.
(V) Compliance with the requirement of subsection (d)(1)
that only medically reviewable decisions shall be the subject
of independent medical review and with the requirement of
subsection (d)(3) that independent medical reviewers may not
require coverage for specifically excluded benefits.
(v) Period of certification or recertification.--A
certification or recertification provided under this
paragraph shall extend for a period not to exceed 2 years.
(vi) Revocation.--A certification or recertification under
this paragraph may be revoked by the appropriate Secretary or
by the organization providing such certification upon a
showing of cause. The Secretary, or organization, shall
revoke a certification or deny a recertification with respect
to an entity if there is a showing that the entity has a
pattern or practice of ordering coverage for benefits that
are specifically excluded under the plan or coverage.
(vii) Petition for denial or withdrawal.--An individual may
petition the Secretary, or an organization providing the
certification involves, for a denial of recertification or a
withdrawal of a certification with respect to an entity under
this subparagraph if there is a pattern or practice of such
entity failing to meet a requirement of this section.
(viii) Sufficient number of entities.--The appropriate
Secretary shall certify and recertify a number of external
review entities which is sufficient to ensure the timely and
efficient provision of review services.
(D) Provision of information.--
(i) In general.--A qualified external review entity shall
provide to the appropriate Secretary, in such manner and at
such times as such Secretary may require, such information
(relating to the denials which have been referred to the
entity for the conduct of external review under this section)
as such Secretary determines appropriate to assure compliance
with the independence and other requirements of this section
to monitor and assess the quality of its external review
activities and lack of bias in making determinations. Such
information shall include information described in clause
(ii) but shall not include individually identifiable medical
information.
(ii) Information to be included.--The information described
in this subclause with respect to an entity is as follows:
(I) The number and types of denials for which a request for
review has been received by the entity.
(II) The disposition by the entity of such denials,
including the number referred to a independent medical
reviewer and the reasons for such dispositions (including the
application of exclusions), on a plan or issuer-specific
basis and on a health care specialty-specific basis.
(III) The length of time in making determinations with
respect to such denials.
(IV) Updated information on the information required to be
submitted as a condition of certification with respect to the
entity's performance of external review activities.
(iii) Information to be provided to certifying
organization.--
(I) In general.--In the case of a qualified external review
entity which is certified (or recertified) under this
subsection by a qualified private standard-setting
organization, at the request of the organization, the entity
shall provide the organization with the information provided
to the appropriate Secretary under clause (i).
(II) Additional information.--Nothing in this subparagraph
shall be construed as preventing such an organization from
requiring additional information as a condition of
certification or recertification of an entity.
(iv) Use of information.--Information provided under this
subparagraph may be used by the appropriate Secretary and
qualified private standard-setting organizations to conduct
oversight of qualified external review entities, including
recertification of such entities, and shall be made available
to the public in an appropriate manner.
(E) Limitation on liability.--No qualified external review
entity having a contract with a plan or issuer, and no person
who is employed by any such entity or who furnishes
professional services to such entity (including as an
independent medical reviewer), shall be held by reason of the
performance of any duty, function, or activity required or
authorized pursuant to this section, to be civilly liable
under any law of the United States or of any State (or
political subdivision thereof) if there was no actual malice
or gross misconduct in the performance of such duty,
function, or activity.
(5) Report.--Not later than 12 months after the general
effective date referred to in section 601, the General
Accounting Office shall prepare and submit to the appropriate
committees of Congress a report concerning--
(A) the information that is provided under paragraph
(3)(D);
(B) the number of denials that have been upheld by
independent medical reviewers and the number of denials that
have been reversed by such reviewers; and
(C) the extent to which independent medical reviewers are
requiring coverage for benefits that are specifically
excluded under the plan or coverage.
SEC. 105. HEALTH CARE CONSUMER ASSISTANCE FUND.
(a) Grants.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
establish a fund, to be known as the ``Health Care Consumer
Assistance Fund'', to be used to award grants to eligible
States to carry out consumer assistance activities (including
programs established by States prior to the enactment of this
Act) designed to provide information, assistance, and
referrals to consumers of health insurance products.
(2) State eligibility.--To be eligible to receive a grant
under this subsection a State shall prepare and submit to the
Secretary an application at such time, in such manner, and
containing such information as the Secretary may require,
including a State plan that describes--
(A) the manner in which the State will ensure that the
health care consumer assistance office (established under
paragraph (4)) will educate and assist health care consumers
in accessing needed care;
(B) the manner in which the State will coordinate and
distinguish the services provided by the health care consumer
assistance office with the services provided by Federal,
State and local health-related ombudsman, information,
protection and advocacy, insurance, and fraud and abuse
programs;
(C) the manner in which the State will provide information,
outreach, and services to underserved, minority populations
with limited English proficiency and populations residing in
rural areas;
(D) the manner in which the State will oversee the health
care consumer assistance office, its activities, product
materials and evaluate program effectiveness;
(E) the manner in which the State will ensure that funds
made available under this section will be used to supplement,
and not supplant, any other Federal, State, or local funds
expended to provide services for programs described under
this section and those described in subparagraphs (C) and
(D);
(F) the manner in which the State will ensure that health
care consumer office personnel have the professional
background and training to carry out the activities of the
office; and
(G) the manner in which the State will ensure that
consumers have direct access to consumer assistance personnel
during regular business hours.
(3) Amount of grant.--
(A) In general.--From amounts appropriated under subsection
(b) for a fiscal year, the Secretary shall award a grant to a
State in an amount that bears the same ratio to such amounts
as the number of individuals within the State covered under a
group health plan or under health insurance coverage offered
by a health insurance issuer bears to the total number of
individuals so covered in all States (as determined by the
Secretary). Any amounts provided to a State under this
subsection that are not used by the State shall be remitted
to the Secretary and reallocated in accordance with this
subparagraph.
(B) Minimum amount.--In no case shall the amount provided
to a State under a grant under this subsection for a fiscal
year be less than an amount equal to 0.5 percent of the
amount appropriated for such fiscal year to carry out this
section.
(C) Non-federal contributions.--A State will provide for
the collection of non-Federal contributions for the operation
of the office in an amount that is not less than 25 percent
of the amount of Federal funds provided to the State under
this section.
(4) Provision of funds for establishment of office.--
(A) In general.--From amounts provided under a grant under
this subsection, a State shall, directly or through a
contract with an independent, nonprofit entity with
demonstrated experience in serving the needs of health care
consumers, provide for the establishment and operation of a
State health care consumer assistance office.
(B) Eligibility of entity.--To be eligible to enter into a
contract under subparagraph (A), an entity shall demonstrate
that it has
[[Page S5083]]
the technical, organizational, and professional capacity to
deliver the services described in subsection (b) to all
public and private health insurance participants,
beneficiaries, enrollees, or prospective enrollees.
(C) Existing state entity.--Nothing in this section shall
prevent the funding of an existing health care consumer
assistance program that otherwise meets the requirements of
this section.
(b) Use of Funds.--
(1) By state.--A State shall use amounts provided under a
grant awarded under this section to carry out consumer
assistance activities directly or by contract with an
independent, non-profit organization. An eligible entity may
use some reasonable amount of such grant to ensure the
adequate training of personnel carrying out such activities.
To receive amounts under this subsection, an eligible entity
shall provide consumer assistance services, including--
(A) the operation of a toll-free telephone hotline to
respond to consumer requests;
(B) the dissemination of appropriate educational materials
on available health insurance products and on how best to
access health care and the rights and responsibilities of
health care consumers;
(C) the provision of education on effective methods to
promptly and efficiently resolve questions, problems, and
grievances;
(D) the coordination of educational and outreach efforts
with health plans, health care providers, payers, and
governmental agencies;
(E) referrals to appropriate private and public entities to
resolve questions, problems and grievances; and
(F) the provision of information and assistance, including
acting as an authorized representative, regarding internal,
external, or administrative grievances or appeals procedures
in nonlitigative settings to appeal the denial, termination,
or reduction of health care services, or the refusal to pay
for such services, under a group health plan or health
insurance coverage offered by a health insurance issuer.
(2) Confidentiality and access to information.--
(A) State entity.--With respect to a State that directly
establishes a health care consumer assistance office, such
office shall establish and implement procedures and protocols
in accordance with applicable Federal and State laws.
(B) Contract entity.--With respect to a State that, through
contract, establishes a health care consumer assistance
office, such office shall establish and implement procedures
and protocols, consistent with applicable Federal and State
laws, to ensure the confidentiality of all information shared
by a participant, beneficiary, enrollee, or their personal
representative and their health care providers, group health
plans, or health insurance insurers with the office and to
ensure that no such information is used by the office, or
released or disclosed to State agencies or outside persons or
entities without the prior written authorization (in
accordance with section 164.508 of title 45, Code of Federal
Regulations) of the individual or personal representative.
The office may, consistent with applicable Federal and State
confidentiality laws, collect, use or disclose aggregate
information that is not individually identifiable (as defined
in section 164.501 of title 45, Code of Federal Regulations).
The office shall provide a written description of the
policies and procedures of the office with respect to the
manner in which health information may be used or disclosed
to carry out consumer assistance activities. The office shall
provide health care providers, group health plans, or health
insurance issuers with a written authorization (in accordance
with section 164.508 of title 45, Code of Federal
Regulations) to allow the office to obtain medical
information relevant to the matter before the office.
(3) Availability of services.--The health care consumer
assistance office of a State shall not discriminate in the
provision of information, referrals, and services regardless
of the source of the individual's health insurance coverage
or prospective coverage, including individuals covered under
a group health plan or health insurance coverage offered by a
health insurance issuer, the medicare or medicaid programs
under title XVIII or XIX of the Social Security Act (42
U.S.C. 1395 and 1396 et seq.), or under any other Federal or
State health care program.
(4) Designation of responsibilities.--
(A) Within existing state entity.--If the health care
consumer assistance office of a State is located within an
existing State regulatory agency or office of an elected
State official, the State shall ensure that--
(i) there is a separate delineation of the funding,
activities, and responsibilities of the office as compared to
the other funding, activities, and responsibilities of the
agency; and
(ii) the office establishes and implements procedures and
protocols to ensure the confidentiality of all information
shared by a participant, beneficiary, or enrollee or their
personal representative and their health care providers,
group health plans, or health insurance issuers with the
office and to ensure that no information is disclosed to the
State agency or office without the written authorization of
the individual or their personal representative in accordance
with paragraph (2).
(B) Contract entity.--In the case of an entity that enters
into a contract with a State under subsection (a)(3), the
entity shall provide assurances that the entity has no
conflict of interest in carrying out the activities of the
office and that the entity is independent of group health
plans, health insurance issuers, providers, payers, and
regulators of health care.
(5) Subcontracts.--The health care consumer assistance
office of a State may carry out activities and provide
services through contracts entered into with 1 or more
nonprofit entities so long as the office can demonstrate that
all of the requirements of this section are complied with by
the office.
(6) Term.--A contract entered into under this subsection
shall be for a term of 3 years.
(c) Report.--Not later than 1 year after the Secretary
first awards grants under this section, and annually
thereafter, the Secretary shall prepare and submit to the
appropriate committees of Congress a report concerning the
activities funded under this section and the effectiveness of
such activities in resolving health care-related problems and
grievances.
(d) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
this section.
Subtitle B--Access to Care
SEC. 111. CONSUMER CHOICE OPTION.
(a) In General.--If--
(1) a health insurance issuer providing health insurance
coverage in connection with a group health plan offers to
enrollees health insurance coverage which provides for
coverage of services (including physician pathology services)
only if such services are furnished through health care
professionals and providers who are members of a network of
health care professionals and providers who have entered into
a contract with the issuer to provide such services, or
(2) a group health plan offers to participants or
beneficiaries health benefits which provide for coverage of
services only if such services are furnished through health
care professionals and providers who are members of a network
of health care professionals and providers who have entered
into a contract with the plan to provide such services,
then the issuer or plan shall also offer or arrange to be
offered to such enrollees, participants, or beneficiaries (at
the time of enrollment and during an annual open season as
provided under subsection (c)) the option of health insurance
coverage or health benefits which provide for coverage of
such services which are not furnished through health care
professionals and providers who are members of such a network
unless such enrollees, participants, or beneficiaries are
offered such non-network coverage through another group
health plan or through another health insurance issuer in the
group market.
(b) Additional Costs.--The amount of any additional premium
charged by the health insurance issuer or group health plan
for the additional cost of the creation and maintenance of
the option described in subsection (a) and the amount of any
additional cost sharing imposed under such option shall be
borne by the enrollee, participant, or beneficiary unless it
is paid by the health plan sponsor or group health plan
through agreement with the health insurance issuer.
(c) Open Season.--An enrollee, participant, or beneficiary,
may change to the offering provided under this section only
during a time period determined by the health insurance
issuer or group health plan. Such time period shall occur at
least annually.
SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.
(a) Primary Care.--If a group health plan, or a health
insurance issuer that offers health insurance coverage,
requires or provides for designation by a participant,
beneficiary, or enrollee of a participating primary care
provider, then the plan or issuer shall permit each
participant, beneficiary, and enrollee to designate any
participating primary care provider who is available to
accept such individual.
(b) Specialists.--
(1) In general.--Subject to paragraph (2), a group health
plan and a health insurance issuer that offers health
insurance coverage shall permit each participant,
beneficiary, or enrollee to receive medically necessary and
appropriate specialty care, pursuant to appropriate referral
procedures, from any qualified participating health care
professional who is available to accept such individual for
such care.
(2) Limitation.--Paragraph (1) shall not apply to specialty
care if the plan or issuer clearly informs participants,
beneficiaries, and enrollees of the limitations on choice of
participating health care professionals with respect to such
care.
(3) Construction.--Nothing in this subsection shall be
construed as affecting the application of section 114
(relating to access to specialty care).
SEC. 113. ACCESS TO EMERGENCY CARE.
(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health
insurance coverage offered by a health insurance issuer,
provides or covers any benefits with respect to services in
an emergency department of a hospital, the plan or issuer
shall cover emergency services (as defined in paragraph
(2)(B))--
(A) without the need for any prior authorization
determination;
(B) whether the health care provider furnishing such
services is a participating provider with respect to such
services;
(C) in a manner so that, if such services are provided to a
participant, beneficiary, or enrollee--
[[Page S5084]]
(i) by a nonparticipating health care provider with or
without prior authorization, or
(ii) by a participating health care provider without prior
authorization,
the participant, beneficiary, or enrollee is not liable for
amounts that exceed the amounts of liability that would be
incurred if the services were provided by a participating
health care provider with prior authorization; and
(D) without regard to any other term or condition of such
coverage (other than exclusion or coordination of benefits,
or an affiliation or waiting period, permitted under section
2701 of the Public Health Service Act, section 701 of the
Employee Retirement Income Security Act of 1974, or section
9801 of the Internal Revenue Code of 1986, and other than
applicable cost-sharing).
(2) Definitions.--In this section:
(A) Emergency medical condition.--The term ``emergency
medical condition'' means a medical condition manifesting
itself by acute symptoms of sufficient severity (including
severe pain) such that a prudent layperson, who possesses an
average knowledge of health and medicine, could reasonably
expect the absence of immediate medical attention to result
in a condition described in clause (i), (ii), or (iii) of
section 1867(e)(1)(A) of the Social Security Act.
(B) Emergency services.--The term ``emergency services''
means, with respect to an emergency medical condition--
(i) a medical screening examination (as required under
section 1867 of the Social Security Act) that is within the
capability of the emergency department of a hospital,
including ancillary services routinely available to the
emergency department to evaluate such emergency medical
condition, and
(ii) within the capabilities of the staff and facilities
available at the hospital, such further medical examination
and treatment as are required under section 1867 of such Act
to stabilize the patient.
(C) Stabilize.--The term ``to stabilize'', with respect to
an emergency medical condition (as defined in subparagraph
(A)), has the meaning given in section 1867(e)(3) of the
Social Security Act (42 U.S.C. 1395dd(e)(3)).
(b) Reimbursement for Maintenance Care and Post-
stabilization Care.--A group health plan, and health
insurance coverage offered by a health insurance issuer, must
provide reimbursement for maintenance care and post-
stabilization care in accordance with the requirements of
section 1852(d)(2) of the Social Security Act (42 U.S.C.
1395w-22(d)(2)). Such reimbursement shall be provided in a
manner consistent with subsection (a)(1)(C).
(c) Coverage of Emergency Ambulance Services.--
(1) In general.--If a group health plan, or health
insurance coverage provided by a health insurance issuer,
provides any benefits with respect to ambulance services and
emergency services, the plan or issuer shall cover emergency
ambulance services (as defined in paragraph (2)) furnished
under the plan or coverage under the same terms and
conditions under subparagraphs (A) through (D) of subsection
(a)(1) under which coverage is provided for emergency
services.
(2) Emergency ambulance services.--For purposes of this
subsection, the term ``emergency ambulance services'' means
ambulance services (as defined for purposes of section
1861(s)(7) of the Social Security Act) furnished to transport
an individual who has an emergency medical condition (as
defined in subsection (a)(2)(A)) to a hospital for the
receipt of emergency services (as defined in subsection
(a)(2)(B)) in a case in which the emergency services are
covered under the plan or coverage pursuant to subsection
(a)(1) and a prudent layperson, with an average knowledge of
health and medicine, could reasonably expect that the absence
of such transport would result in placing the health of the
individual in serious jeopardy, serious impairment of bodily
function, or serious dysfunction of any bodily organ or part.
SEC. 114. TIMELY ACCESS TO SPECIALISTS.
(a) Timely Access.--
(1) In general.--A group health plan and a health insurance
issuer offering health insurance coverage shall ensure that
participants, beneficiaries, and enrollees receive timely
access to specialists who are appropriate to the condition
of, and accessible to, the participant, beneficiary, or
enrollee, when such specialty care is a covered benefit under
the plan or coverage.
(2) Rule of construction.--Nothing in paragraph (1) shall
be construed--
(A) to require the coverage under a group health plan or
health insurance coverage of benefits or services;
(B) to prohibit a plan or issuer from including providers
in the network only to the extent necessary to meet the needs
of the plan's or issuer's participants, beneficiaries, or
enrollees; or
(C) to override any State licensure or scope-of-practice
law.
(3) Access to certain providers.--
(A) In general.--With respect to specialty care under this
section, if a participating specialist is not available and
qualified to provide such care to the participant,
beneficiary, or enrollee, the plan or issuer shall provide
for coverage of such care by a nonparticipating specialist.
(B) Treatment of nonparticipating providers.--If a
participant, beneficiary, or enrollee receives care from a
nonparticipating specialist pursuant to subparagraph (A),
such specialty care shall be provided at no additional cost
to the participant, beneficiary, or enrollee beyond what the
participant, beneficiary, or enrollee would otherwise pay for
such specialty care if provided by a participating
specialist.
(b) Referrals.--
(1) Authorization.--Subject to subsection (a)(1), a group
health plan or health insurance issuer may require an
authorization in order to obtain coverage for specialty
services under this section. Any such authorization--
(A) shall be for an appropriate duration of time or number
of referrals, including an authorization for a standing
referral where appropriate; and
(B) may not be refused solely because the authorization
involves services of a nonparticipating specialist (described
in subsection (a)(3)).
(2) Referrals for ongoing special conditions.--
(A) In general.--Subject to subsection (a)(1), a group
health plan and a health insurance issuer shall permit a
participant, beneficiary, or enrollee who has an ongoing
special condition (as defined in subparagraph (B)) to receive
a referral to a specialist for the treatment of such
condition and such specialist may authorize such referrals,
procedures, tests, and other medical services with respect to
such condition, or coordinate the care for such condition,
subject to the terms of a treatment plan (if any) referred to
in subsection (c) with respect to the condition.
(B) Ongoing special condition defined.--In this subsection,
the term ``ongoing special condition'' means a condition or
disease that--
(i) is life-threatening, degenerative, potentially
disabling, or congenital; and
(ii) requires specialized medical care over a prolonged
period of time.
(c) Treatment Plans.--
(1) In general.--A group health plan or health insurance
issuer may require that the specialty care be provided--
(A) pursuant to a treatment plan, but only if the treatment
plan--
(i) is developed by the specialist, in consultation with
the case manager or primary care provider, and the
participant, beneficiary, or enrollee, and
(ii) is approved by the plan or issuer in a timely manner,
if the plan or issuer requires such approval; and
(B) in accordance with applicable quality assurance and
utilization review standards of the plan or issuer.
(2) Notification.--Nothing in paragraph (1) shall be
construed as prohibiting a plan or issuer from requiring the
specialist to provide the plan or issuer with regular updates
on the specialty care provided, as well as all other
reasonably necessary medical information.
(d) Specialist Defined.--For purposes of this section, the
term ``specialist'' means, with respect to the condition of
the participant, beneficiary, or enrollee, a health care
professional, facility, or center that has adequate expertise
through appropriate training and experience (including, in
the case of a child, appropriate pediatric expertise) to
provide high quality care in treating the condition.
SEC. 115. PATIENT ACCESS TO OBSTETRICAL AND GYNECOLOGICAL
CARE.
(a) General Rights.--
(1) Direct access.--A group health plan, and a health
insurance issuer offering health insurance coverage,
described in subsection (b) may not require authorization or
referral by the plan, issuer, or any person (including a
primary care provider described in subsection (b)(2)) in the
case of a female participant, beneficiary, or enrollee who
seeks coverage for obstetrical or gynecological care provided
by a participating health care professional who specializes
in obstetrics or gynecology.
(2) Obstetrical and gynecological care.--A group health
plan and a health insurance issuer described in subsection
(b) shall treat the provision of obstetrical and
gynecological care, and the ordering of related obstetrical
and gynecological items and services, pursuant to the direct
access described under paragraph (1), by a participating
health care professional who specializes in obstetrics or
gynecology as the authorization of the primary care provider.
(b) Application of Section.--A group health plan, or health
insurance issuer offering health insurance coverage,
described in this subsection is a group health plan or
coverage that--
(1) provides coverage for obstetric or gynecologic care;
and
(2) requires the designation by a participant, beneficiary,
or enrollee of a participating primary care provider.
(c) Construction.--Nothing in subsection (a) shall be
construed to--
(1) waive any exclusions of coverage under the terms and
conditions of the plan or health insurance coverage with
respect to coverage of obstetrical or gynecological care; or
(2) preclude the group health plan or health insurance
issuer involved from requiring that the obstetrical or
gynecological provider notify the primary care health care
professional or the plan or issuer of treatment decisions.
SEC. 116. ACCESS TO PEDIATRIC CARE.
(a) Pediatric Care.--In the case of a person who has a
child who is a participant, beneficiary, or enrollee under a
group health plan, or health insurance coverage offered by
[[Page S5085]]
a health insurance issuer, if the plan or issuer requires or
provides for the designation of a participating primary care
provider for the child, the plan or issuer shall permit such
person to designate a physician (allopathic or osteopathic)
who specializes in pediatrics as the child's primary care
provider if such provider participates in the network of the
plan or issuer.
(b) Construction.--Nothing in subsection (a) shall be
construed to waive any exclusions of coverage under the terms
and conditions of the plan or health insurance coverage with
respect to coverage of pediatric care.
SEC. 117. CONTINUITY OF CARE.
(a) Termination of Provider.--
(1) In general.--If--
(A) a contract between a group health plan, or a health
insurance issuer offering health insurance coverage, and a
treating health care provider is terminated (as defined in
paragraph (e)(4)), or
(B) benefits or coverage provided by a health care provider
are terminated because of a change in the terms of provider
participation in such plan or coverage,
the plan or issuer shall meet the requirements of paragraph
(3) with respect to each continuing care patient.
(2) Treatment of termination of contract with health
insurance issuer.--If a contract for the provision of health
insurance coverage between a group health plan and a health
insurance issuer is terminated and, as a result of such
termination, coverage of services of a health care provider
is terminated with respect to an individual, the provisions
of paragraph (1) (and the succeeding provisions of this
section) shall apply under the plan in the same manner as if
there had been a contract between the plan and the provider
that had been terminated, but only with respect to benefits
that are covered under the plan after the contract
termination.
(3) Requirements.--The requirements of this paragraph are
that the plan or issuer--
(A) notify the continuing care patient involved, or arrange
to have the patient notified pursuant to subsection (d)(2),
on a timely basis of the termination described in paragraph
(1) (or paragraph (2), if applicable) and the right to elect
continued transitional care from the provider under this
section;
(B) provide the patient with an opportunity to notify the
plan or issuer of the patient's need for transitional care;
and
(C) subject to subsection (c), permit the patient to elect
to continue to be covered with respect to the course of
treatment by such provider with the provider's consent during
a transitional period (as provided for under subsection (b)).
(4) Continuing care patient.--For purposes of this section,
the term ``continuing care patient'' means a participant,
beneficiary, or enrollee who--
(A) is undergoing a course of treatment for a serious and
complex condition from the provider at the time the plan or
issuer receives or provides notice of provider, benefit, or
coverage termination described in paragraph (1) (or paragraph
(2), if applicable);
(B) is undergoing a course of institutional or inpatient
care from the provider at the time of such notice;
(C) is scheduled to undergo non-elective surgery from the
provider at the time of such notice;
(D) is pregnant and undergoing a course of treatment for
the pregnancy from the provider at the time of such notice;
or
(E) is or was determined to be terminally ill (as
determined under section 1861(dd)(3)(A) of the Social
Security Act) at the time of such notice, but only with
respect to a provider that was treating the terminal illness
before the date of such notice.
(b) Transitional Periods.--
(1) Serious and complex conditions.--The transitional
period under this subsection with respect to a continuing
care patient described in subsection (a)(4)(A) shall extend
for up to 90 days (as determined by the treating health care
professional) from the date of the notice described in
subsection (a)(3)(A).
(2) Institutional or inpatient care.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(B) shall extend until the
earlier of--
(A) the expiration of the 90-day period beginning on the
date on which the notice under subsection (a)(3)(A) is
provided; or
(B) the date of discharge of the patient from such care or
the termination of the period of institutionalization, or, if
later, the date of completion of reasonable follow-up care.
(3) Scheduled non-elective surgery.--The transitional
period under this subsection for a continuing care patient
described in subsection (a)(4)(C) shall extend until the
completion of the surgery involved and post-surgical follow-
up care relating to the surgery and occurring within 90 days
after the date of the surgery.
(4) Pregnancy.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(D) shall extend through the provision of
post-partum care directly related to the delivery.
(5) Terminal illness.--The transitional period under this
subsection for a continuing care patient described in
subsection (a)(4)(E) shall extend for the remainder of the
patient's life for care that is directly related to the
treatment of the terminal illness or its medical
manifestations.
(c) Permissible Terms and Conditions.--A group health plan
or health insurance issuer may condition coverage of
continued treatment by a provider under this section upon the
provider agreeing to the following terms and conditions:
(1) The treating health care provider agrees to accept
reimbursement from the plan or issuer and continuing care
patient involved (with respect to cost-sharing) at the rates
applicable prior to the start of the transitional period as
payment in full (or, in the case described in subsection
(a)(2), at the rates applicable under the replacement plan or
coverage after the date of the termination of the contract
with the group health plan or health insurance issuer) and
not to impose cost-sharing with respect to the patient in an
amount that would exceed the cost-sharing that could have
been imposed if the contract referred to in subsection (a)(1)
had not been terminated.
(2) The treating health care provider agrees to adhere to
the quality assurance standards of the plan or issuer
responsible for payment under paragraph (1) and to provide to
such plan or issuer necessary medical information related to
the care provided.
(3) The treating health care provider agrees otherwise to
adhere to such plan's or issuer's policies and procedures,
including procedures regarding referrals and obtaining prior
authorization and providing services pursuant to a treatment
plan (if any) approved by the plan or issuer.
(d) Rules of Construction.--Nothing in this section shall
be construed--
(1) to require the coverage of benefits which would not
have been covered if the provider involved remained a
participating provider; or
(2) with respect to the termination of a contract under
subsection (a) to prevent a group health plan or health
insurance issuer from requiring that the health care
provider--
(A) notify participants, beneficiaries, or enrollees of
their rights under this section; or
(B) provide the plan or issuer with the name of each
participant, beneficiary, or enrollee who the provider
believes is a continuing care patient.
(e) Definitions.--In this section:
(1) Contract.--The term ``contract'' includes, with respect
to a plan or issuer and a treating health care provider, a
contract between such plan or issuer and an organized network
of providers that includes the treating health care provider,
and (in the case of such a contract) the contract between the
treating health care provider and the organized network.
(2) Health care provider.--The term ``health care
provider'' or ``provider'' means--
(A) any individual who is engaged in the delivery of health
care services in a State and who is required by State law or
regulation to be licensed or certified by the State to engage
in the delivery of such services in the State; and
(B) any entity that is engaged in the delivery of health
care services in a State and that, if it is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State, is so
licensed.
(3) Serious and complex condition.--The term ``serious and
complex condition'' means, with respect to a participant,
beneficiary, or enrollee under the plan or coverage--
(A) in the case of an acute illness, a condition that is
serious enough to require specialized medical treatment to
avoid the reasonable possibility of death or permanent harm;
or
(B) in the case of a chronic illness or condition, is an
ongoing special condition (as defined in section
114(b)(2)(B)).
(4) Terminated.--The term ``terminated'' includes, with
respect to a contract, the expiration or nonrenewal of the
contract, but does not include a termination of the contract
for failure to meet applicable quality standards or for
fraud.
SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.
(a) In General.--To the extent that a group health plan, or
health insurance coverage offered by a health insurance
issuer, provides coverage for benefits with respect to
prescription drugs, and limits such coverage to drugs
included in a formulary, the plan or issuer shall--
(1) ensure the participation of physicians and pharmacists
in developing and reviewing such formulary;
(2) provide for disclosure of the formulary to providers;
and
(3) in accordance with the applicable quality assurance and
utilization review standards of the plan or issuer, provide
for exceptions from the formulary limitation when a non-
formulary alternative is medically necessary and appropriate
and, in the case of such an exception, apply the same cost-
sharing requirements that would have applied in the case of a
drug covered under the formulary.
(b) Coverage of Approved Drugs and Medical Devices.--
(1) In general.--A group health plan (and health insurance
coverage offered in connection with such a plan) that
provides any coverage of prescription drugs or medical
devices shall not deny coverage of such a drug or device on
the basis that the use is investigational, if the use--
(A) in the case of a prescription drug--
[[Page S5086]]
(i) is included in the labeling authorized by the
application in effect for the drug pursuant to subsection (b)
or (j) of section 505 of the Federal Food, Drug, and Cosmetic
Act, without regard to any postmarketing requirements that
may apply under such Act; or
(ii) is included in the labeling authorized by the
application in effect for the drug under section 351 of the
Public Health Service Act, without regard to any
postmarketing requirements that may apply pursuant to such
section; or
(B) in the case of a medical device, is included in the
labeling authorized by a regulation under subsection (d) or
(3) of section 513 of the Federal Food, Drug, and Cosmetic
Act, an order under subsection (f) of such section, or an
application approved under section 515 of such Act, without
regard to any postmarketing requirements that may apply under
such Act.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a group health plan (or health
insurance coverage offered in connection with such a plan) to
provide any coverage of prescription drugs or medical
devices.
SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED
CLINICAL TRIALS.
(a) Coverage.--
(1) In general.--If a group health plan, or health
insurance issuer that is providing health insurance coverage,
provides coverage to a qualified individual (as defined in
subsection (b)), the plan or issuer--
(A) may not deny the individual participation in the
clinical trial referred to in subsection (b)(2);
(B) subject to subsection (c), may not deny (or limit or
impose additional conditions on) the coverage of routine
patient costs for items and services furnished in connection
with participation in the trial; and
(C) may not discriminate against the individual on the
basis of the enrollee's participation in such trial.
(2) Exclusion of certain costs.--For purposes of paragraph
(1)(B), routine patient costs do not include the cost of the
tests or measurements conducted primarily for the purpose of
the clinical trial involved.
(3) Use of in-network providers.--If one or more
participating providers is participating in a clinical trial,
nothing in paragraph (1) shall be construed as preventing a
plan or issuer from requiring that a qualified individual
participate in the trial through such a participating
provider if the provider will accept the individual as a
participant in the trial.
(b) Qualified Individual Defined.--For purposes of
subsection (a), the term ``qualified individual'' means an
individual who is a participant or beneficiary in a group
health plan, or who is an enrollee under health insurance
coverage, and who meets the following conditions:
(1)(A) The individual has a life-threatening or serious
illness for which no standard treatment is effective.
(B) The individual is eligible to participate in an
approved clinical trial according to the trial protocol with
respect to treatment of such illness.
(C) The individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual.
(2) Either--
(A) the referring physician is a participating health care
professional and has concluded that the individual's
participation in such trial would be appropriate based upon
the individual meeting the conditions described in paragraph
(1); or
(B) the participant, beneficiary, or enrollee provides
medical and scientific information establishing that the
individual's participation in such trial would be appropriate
based upon the individual meeting the conditions described in
paragraph (1).
(c) Payment.--
(1) In general.--Under this section a group health plan and
a health insurance issuer shall provide for payment for
routine patient costs described in subsection (a)(2) but is
not required to pay for costs of items and services that are
reasonably expected (as determined by the appropriate
Secretary) to be paid for by the sponsors of an approved
clinical trial.
(2) Payment rate.--In the case of covered items and
services provided by--
(A) a participating provider, the payment rate shall be at
the agreed upon rate; or
(B) a nonparticipating provider, the payment rate shall be
at the rate the plan or issuer would normally pay for
comparable services under subparagraph (A).
(d) Approved Clinical Trial Defined.--
(1) In general.--In this section, the term ``approved
clinical trial'' means a clinical research study or clinical
investigation--
(A) approved and funded (which may include funding through
in-kind contributions) by one or more of the following:
(i) the National Institutes of Health;
(ii) a cooperative group or center of the National
Institutes of Health, including a qualified nongovernmental
research entity to which the National Cancer Institute has
awarded a center support grant;
(iii) either of the following if the conditions described
in paragraph (2) are met--
(I) the Department of Veterans Affairs;
(II) the Department of Defense; or
(B) approved by the Food and Drug Administration.
(2) Conditions for departments.--The conditions described
in this paragraph, for a study or investigation conducted by
a Department, are that the study or investigation has been
reviewed and approved through a system of peer review that
the appropriate Secretary determines--
(A) to be comparable to the system of peer review of
studies and investigations used by the National Institutes of
Health; and
(B) assures unbiased review of the highest ethical
standards by qualified individuals who have no interest in
the outcome of the review.
(e) Construction.--Nothing in this section shall be
construed to limit a plan's or issuer's coverage with respect
to clinical trials.
SEC. 120. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR
MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE
TREATMENT OF BREAST CANCER AND COVERAGE FOR
SECONDARY CONSULTATIONS.
(a) Inpatient Care.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, that
provides medical and surgical benefits shall ensure that
inpatient coverage with respect to the treatment of breast
cancer is provided for a period of time as is determined by
the attending physician, in consultation with the patient, to
be medically necessary and appropriate following--
(A) a mastectomy;
(B) a lumpectomy; or
(C) a lymph node dissection for the treatment of breast
cancer.
(2) Exception.--Nothing in this section shall be construed
as requiring the provision of inpatient coverage if the
attending physician and patient determine that a shorter
period of hospital stay is medically appropriate.
(b) Prohibition on Certain Modifications.--In implementing
the requirements of this section, a group health plan, and a
health insurance issuer providing health insurance coverage,
may not modify the terms and conditions of coverage based on
the determination by a participant, beneficiary, or enrollee
to request less than the minimum coverage required under
subsection (a).
(c) Secondary Consultations.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, that
provides coverage with respect to medical and surgical
services provided in relation to the diagnosis and treatment
of cancer shall ensure that full coverage is provided for
secondary consultations by specialists in the appropriate
medical fields (including pathology, radiology, and oncology)
to confirm or refute such diagnosis. Such plan or issuer
shall ensure that full coverage is provided for such
secondary consultation whether such consultation is based on
a positive or negative initial diagnosis. In any case in
which the attending physician certifies in writing that
services necessary for such a secondary consultation are not
sufficiently available from specialists operating under the
plan or coverage with respect to whose services coverage is
otherwise provided under such plan or by such issuer, such
plan or issuer shall ensure that coverage is provided with
respect to the services necessary for the secondary
consultation with any other specialist selected by the
attending physician for such purpose at no additional cost to
the individual beyond that which the individual would have
paid if the specialist was participating in the network of
the plan or issuer.
(2) Exception.--Nothing in paragraph (1) shall be construed
as requiring the provision of secondary consultations where
the patient determines not to seek such a consultation.
(d) Prohibition on Penalties or Incentives.--A group health
plan, and a health insurance issuer providing health
insurance coverage, may not--
(1) penalize or otherwise reduce or limit the reimbursement
of a provider or specialist because the provider or
specialist provided care to a participant, beneficiary, or
enrollee in accordance with this section;
(2) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to keep the
length of inpatient stays of patients following a mastectomy,
lumpectomy, or a lymph node dissection for the treatment of
breast cancer below certain limits or to limit referrals for
secondary consultations; or
(3) provide financial or other incentives to a physician or
specialist to induce the physician or specialist to refrain
from referring a participant, beneficiary, or enrollee for a
secondary consultation that would otherwise be covered by the
plan or coverage involved under subsection (c).
Subtitle C--Access to Information
SEC. 121. PATIENT ACCESS TO INFORMATION.
(a) Requirement.--
(1) Disclosure.--
(A) In general.--A group health plan, and a health
insurance issuer that provides coverage in connection with
health insurance coverage, shall provide for the disclosure
to participants, beneficiaries, and enrollees--
(i) of the information described in subsection (b) at the
time of the initial enrollment of the participant,
beneficiary, or enrollee under the plan or coverage;
(ii) of such information on an annual basis--
(I) in conjunction with the election period of the plan or
coverage if the plan or coverage has such an election period;
or
(II) in the case of a plan or coverage that does not have
an election period, in conjunction with the beginning of the
plan or coverage year; and
[[Page S5087]]
(iii) of information relating to any material reduction to
the benefits or information described in such subsection or
subsection (c), in the form of a notice provided not later
than 30 days before the date on which the reduction takes
effect.
(B) Participants, beneficiaries, and enrollees.--The
disclosure required under subparagraph (A) shall be
provided--
(i) jointly to each participant, beneficiary, and enrollee
who reside at the same address; or
(ii) in the case of a beneficiary or enrollee who does not
reside at the same address as the participant or another
enrollee, separately to the participant or other enrollees
and such beneficiary or enrollee.
(2) Provision of information.--Information shall be
provided to participants, beneficiaries, and enrollees under
this section at the last known address maintained by the plan
or issuer with respect to such participants, beneficiaries,
or enrollees, to the extent that such information is provided
to participants, beneficiaries, or enrollees via the United
States Postal Service or other private delivery service.
(b) Required Information.--The informational materials to
be distributed under this section shall include for each
option available under the group health plan or health
insurance coverage the following:
(1) Benefits.--A description of the covered benefits,
including--
(A) any in- and out-of-network benefits;
(B) specific preventive services covered under the plan or
coverage if such services are covered;
(C) any specific exclusions or express limitations of
benefits described in section 104(d)(3)(C);
(D) any other benefit limitations, including any annual or
lifetime benefit limits and any monetary limits or limits on
the number of visits, days, or services, and any specific
coverage exclusions; and
(E) any definition of medical necessity used in making
coverage determinations by the plan, issuer, or claims
administrator.
(2) Cost sharing.--A description of any cost-sharing
requirements, including--
(A) any premiums, deductibles, coinsurance, copayment
amounts, and liability for balance billing, for which the
participant, beneficiary, or enrollee will be responsible
under each option available under the plan;
(B) any maximum out-of-pocket expense for which the
participant, beneficiary, or enrollee may be liable;
(C) any cost-sharing requirements for out-of-network
benefits or services received from nonparticipating
providers; and
(D) any additional cost-sharing or charges for benefits and
services that are furnished without meeting applicable plan
or coverage requirements, such as prior authorization or
precertification.
(3) Disenrollment.--Information relating to the
disenrollment of a participant, beneficiary, or enrollee.
(4) Service area.--A description of the plan or issuer's
service area, including the provision of any out-of-area
coverage.
(5) Participating providers.--A directory of participating
providers (to the extent a plan or issuer provides coverage
through a network of providers) that includes, at a minimum,
the name, address, and telephone number of each participating
provider, and information about how to inquire whether a
participating provider is currently accepting new patients.
(6) Choice of primary care provider.--A description of any
requirements and procedures to be used by participants,
beneficiaries, and enrollees in selecting, accessing, or
changing their primary care provider, including providers
both within and outside of the network (if the plan or issuer
permits out-of-network services), and the right to select a
pediatrician as a primary care provider under section 116 for
a participant, beneficiary, or enrollee who is a child if
such section applies.
(7) Preauthorization requirements.--A description of the
requirements and procedures to be used to obtain
preauthorization for health services, if such
preauthorization is required.
(8) Experimental and investigational treatments.--A
description of the process for determining whether a
particular item, service, or treatment is considered
experimental or investigational, and the circumstances under
which such treatments are covered by the plan or issuer.
(9) Specialty care.--A description of the requirements and
procedures to be used by participants, beneficiaries, and
enrollees in accessing specialty care and obtaining referrals
to participating and nonparticipating specialists, including
any limitations on choice of health care professionals
referred to in section 112(b)(2) and the right to timely
access to specialists care under section 114 if such section
applies.
(10) Clinical trials.--A description of the circumstances
and conditions under which participation in clinical trials
is covered under the terms and conditions of the plan or
coverage, and the right to obtain coverage for approved
clinical trials under section 119 if such section applies.
(11) Prescription drugs.--To the extent the plan or issuer
provides coverage for prescription drugs, a statement of
whether such coverage is limited to drugs included in a
formulary, a description of any provisions and cost-sharing
required for obtaining on- and off-formulary medications, and
a description of the rights of participants, beneficiaries,
and enrollees in obtaining access to access to prescription
drugs under section 118 if such section applies.
(12) Emergency services.--A summary of the rules and
procedures for accessing emergency services, including the
right of a participant, beneficiary, or enrollee to obtain
emergency services under the prudent layperson standard under
section 113, if such section applies, and any educational
information that the plan or issuer may provide regarding the
appropriate use of emergency services.
(13) Claims and appeals.--A description of the plan or
issuer's rules and procedures pertaining to claims and
appeals, a description of the rights (including deadlines for
exercising rights) of participants, beneficiaries, and
enrollees under subtitle A in obtaining covered benefits,
filing a claim for benefits, and appealing coverage decisions
internally and externally (including telephone numbers and
mailing addresses of the appropriate authority), and a
description of any additional legal rights and remedies
available under section 502 of the Employee Retirement Income
Security Act of 1974 and applicable State law.
(14) Advance directives and organ donation.--A description
of procedures for advance directives and organ donation
decisions if the plan or issuer maintains such procedures.
(15) Information on plans and issuers.--The name, mailing
address, and telephone number or numbers of the plan
administrator and the issuer to be used by participants,
beneficiaries, and enrollees seeking information about plan
or coverage benefits and services, payment of a claim, or
authorization for services and treatment. Notice of whether
the benefits under the plan or coverage are provided under a
contract or policy of insurance issued by an issuer, or
whether benefits are provided directly by the plan sponsor
who bears the insurance risk.
(16) Translation services.--A summary description of any
translation or interpretation services (including the
availability of printed information in languages other than
English, audio tapes, or information in Braille) that are
available for non-English speakers and participants,
beneficiaries, and enrollees with communication disabilities
and a description of how to access these items or services.
(17) Accreditation information.--Any information that is
made public by accrediting organizations in the process of
accreditation if the plan or issuer is accredited, or any
additional quality indicators (such as the results of
enrollee satisfaction surveys) that the plan or issuer makes
public or makes available to participants, beneficiaries, and
enrollees.
(18) Notice of requirements.--A description of any rights
of participants, beneficiaries, and enrollees that are
established by the Patients' Bill of Rights Act of 2005
(excluding those described in paragraphs (1) through (17)) if
such sections apply. The description required under this
paragraph may be combined with the notices of the type
described in sections 711(d), 713(b), or 606(a)(1) of the
Employee Retirement Income Security Act of 1974 and with any
other notice provision that the appropriate Secretary
determines may be combined, so long as such combination does
not result in any reduction in the information that would
otherwise be provided to the recipient.
(19) Availability of additional information.--A statement
that the information described in subsection (c), and
instructions on obtaining such information (including
telephone numbers and, if available, Internet websites),
shall be made available upon request.
(20) Designated decisionmakers.--A description of the
participants and beneficiaries with respect to whom each
designated decisionmaker under the plan has assumed liability
under section 502(o) of the Employee Retirement Income
Security Act of 1974 and the name and address of each such
decisionmaker.
(c) Additional Information.--The informational materials to
be provided upon the request of a participant, beneficiary,
or enrollee shall include for each option available under a
group health plan or health insurance coverage the following:
(1) Status of providers.--The State licensure status of the
plan or issuer's participating health care professionals and
participating health care facilities, and, if available, the
education, training, specialty qualifications or
certifications of such professionals.
(2) Compensation methods.--A summary description by
category of the applicable methods (such as capitation, fee-
for-service, salary, bundled payments, per diem, or a
combination thereof) used for compensating prospective or
treating health care professionals (including primary care
providers and specialists) and facilities in connection with
the provision of health care under the plan or coverage.
(3) Prescription drugs.--Information about whether a
specific prescription medication is included in the formulary
of the plan or issuer, if the plan or issuer uses a defined
formulary.
(4) Utilization review activities.--A description of
procedures used and requirements (including circumstances,
timeframes, and appeals rights) under any utilization review
program under sections 101 and 102, including any drug
formulary program under section 118.
[[Page S5088]]
(5) External appeals information.--Aggregate information on
the number and outcomes of external medical reviews, relative
to the sample size (such as the number of covered lives)
under the plan or under the coverage of the issuer.
(d) Manner of Disclosure.--The information described in
this section shall be disclosed in an accessible medium and
format that is calculated to be understood by a participant
or enrollee.
(e) Rules of Construction.--Nothing in this section shall
be construed to prohibit a group health plan, or a health
insurance issuer in connection with health insurance
coverage, from--
(1) distributing any other additional information
determined by the plan or issuer to be important or necessary
in assisting participants, beneficiaries, and enrollees in
the selection of a health plan or health insurance coverage;
and
(2) complying with the provisions of this section by
providing information in brochures, through the Internet or
other electronic media, or through other similar means, so
long as--
(A) the disclosure of such information in such form is in
accordance with requirements as the appropriate Secretary may
impose, and
(B) in connection with any such disclosure of information
through the Internet or other electronic media--
(i) the recipient has affirmatively consented to the
disclosure of such information in such form,
(ii) the recipient is capable of accessing the information
so disclosed on the recipient's individual workstation or at
the recipient's home,
(iii) the recipient retains an ongoing right to receive
paper disclosure of such information and receives, in advance
of any attempt at disclosure of such information to him or
her through the Internet or other electronic media, notice in
printed form of such ongoing right and of the proper software
required to view information so disclosed, and
(iv) the plan administrator appropriately ensures that the
intended recipient is receiving the information so disclosed
and provides the information in printed form if the
information is not received.
Subtitle D--Protecting the Doctor-patient Relationship
SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.
(a) General Rule.--The provisions of any contract or
agreement, or the operation of any contract or agreement,
between a group health plan or health insurance issuer in
relation to health insurance coverage (including any
partnership, association, or other organization that enters
into or administers such a contract or agreement) and a
health care provider (or group of health care providers)
shall not prohibit or otherwise restrict a health care
professional from advising such a participant, beneficiary,
or enrollee who is a patient of the professional about the
health status of the individual or medical care or treatment
for the individual's condition or disease, regardless of
whether benefits for such care or treatment are provided
under the plan or coverage, if the professional is acting
within the lawful scope of practice.
(b) Nullification.--Any contract provision or agreement
that restricts or prohibits medical communications in
violation of subsection (a) shall be null and void.
SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS
BASED ON LICENSURE.
(a) In General.--A group health plan, and a health
insurance issuer with respect to health insurance coverage,
shall not discriminate with respect to participation or
indemnification as to any provider who is acting within the
scope of the provider's license or certification under
applicable State law, solely on the basis of such license or
certification.
(b) Construction.--Subsection (a) shall not be construed--
(1) as requiring the coverage under a group health plan or
health insurance coverage of a particular benefit or service
or to prohibit a plan or issuer from including providers only
to the extent necessary to meet the needs of the plan's or
issuer's participants, beneficiaries, or enrollees or from
establishing any measure designed to maintain quality and
control costs consistent with the responsibilities of the
plan or issuer;
(2) to override any State licensure or scope-of-practice
law; or
(3) as requiring a plan or issuer that offers network
coverage to include for participation every willing provider
who meets the terms and conditions of the plan or issuer.
SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE
ARRANGEMENTS.
(a) In General.--A group health plan and a health insurance
issuer offering health insurance coverage may not operate any
physician incentive plan (as defined in subparagraph (B) of
section 1852(j)(4) of the Social Security Act) unless the
requirements described in clauses (i), (ii)(I), and (iii) of
subparagraph (A) of such section are met with respect to such
a plan.
(b) Application.--For purposes of carrying out paragraph
(1), any reference in section 1852(j)(4) of the Social
Security Act to the Secretary, a MedicareAdvantage
organization, or an individual enrolled with the organization
shall be treated as a reference to the applicable authority,
a group health plan or health insurance issuer, respectively,
and a participant, beneficiary, or enrollee with the plan or
organization, respectively.
(c) Construction.--Nothing in this section shall be
construed as prohibiting all capitation and similar
arrangements or all provider discount arrangements.
SEC. 134. PAYMENT OF CLAIMS.
A group health plan, and a health insurance issuer offering
health insurance coverage, shall provide for prompt payment
of claims submitted for health care services or supplies
furnished to a participant, beneficiary, or enrollee with
respect to benefits covered by the plan or issuer, in a
manner that is no less protective than the provisions of
section 1842(c)(2) of the Social Security Act (42 U.S.C.
1395u(c)(2)).
SEC. 135. PROTECTION FOR PATIENT ADVOCACY.
(a) Protection for Use of Utilization Review and Grievance
Process.--A group health plan, and a health insurance issuer
with respect to the provision of health insurance coverage,
may not retaliate against a participant, beneficiary,
enrollee, or health care provider based on the participant's,
beneficiary's, enrollee's or provider's use of, or
participation in, a utilization review process or a grievance
process of the plan or issuer (including an internal or
external review or appeal process) under this title.
(b) Protection for Quality Advocacy by Health Care
Professionals.--
(1) In general.--A group health plan and a health insurance
issuer may not retaliate or discriminate against a protected
health care professional because the professional in good
faith--
(A) discloses information relating to the care, services,
or conditions affecting one or more participants,
beneficiaries, or enrollees of the plan or issuer to an
appropriate public regulatory agency, an appropriate private
accreditation body, or appropriate management personnel of
the plan or issuer; or
(B) initiates, cooperates, or otherwise participates in an
investigation or proceeding by such an agency with respect to
such care, services, or conditions.
If an institutional health care provider is a participating
provider with such a plan or issuer or otherwise receives
payments for benefits provided by such a plan or issuer, the
provisions of the previous sentence shall apply to the
provider in relation to care, services, or conditions
affecting one or more patients within an institutional health
care provider in the same manner as they apply to the plan or
issuer in relation to care, services, or conditions provided
to one or more participants, beneficiaries, or enrollees; and
for purposes of applying this sentence, any reference to a
plan or issuer is deemed a reference to the institutional
health care provider.
(2) Good faith action.--For purposes of paragraph (1), a
protected health care professional is considered to be acting
in good faith with respect to disclosure of information or
participation if, with respect to the information disclosed
as part of the action--
(A) the disclosure is made on the basis of personal
knowledge and is consistent with that degree of learning and
skill ordinarily possessed by health care professionals with
the same licensure or certification and the same experience;
(B) the professional reasonably believes the information to
be true;
(C) the information evidences either a violation of a law,
rule, or regulation, of an applicable accreditation standard,
or of a generally recognized professional or clinical
standard or that a patient is in imminent hazard of loss of
life or serious injury; and
(D) subject to subparagraphs (B) and (C) of paragraph (3),
the professional has followed reasonable internal procedures
of the plan, issuer, or institutional health care provider
established for the purpose of addressing quality concerns
before making the disclosure.
(3) Exception and special rule.--
(A) General exception.--Paragraph (1) does not protect
disclosures that would violate Federal or State law or
diminish or impair the rights of any person to the continued
protection of confidentiality of communications provided by
such law.
(B) Notice of internal procedures.--Subparagraph (D) of
paragraph (2) shall not apply unless the internal procedures
involved are reasonably expected to be known to the health
care professional involved. For purposes of this
subparagraph, a health care professional is reasonably
expected to know of internal procedures if those procedures
have been made available to the professional through
distribution or posting.
(C) Internal procedure exception.--Subparagraph (D) of
paragraph (2) also shall not apply if--
(i) the disclosure relates to an imminent hazard of loss of
life or serious injury to a patient;
(ii) the disclosure is made to an appropriate private
accreditation body pursuant to disclosure procedures
established by the body; or
(iii) the disclosure is in response to an inquiry made in
an investigation or proceeding of an appropriate public
regulatory agency and the information disclosed is limited to
the scope of the investigation or proceeding.
(4) Additional considerations.--It shall not be a violation
of paragraph (1) to take an adverse action against a
protected health care professional if the plan, issuer, or
provider taking the adverse action involved demonstrates that
it would have taken the same adverse action even in the
absence of the activities protected under such paragraph.
[[Page S5089]]
(5) Notice.--A group health plan, health insurance issuer,
and institutional health care provider shall post a notice,
to be provided or approved by the Secretary of Labor, setting
forth excerpts from, or summaries of, the pertinent
provisions of this subsection and information pertaining to
enforcement of such provisions.
(6) Constructions.--
(A) Determinations of coverage.--Nothing in this subsection
shall be construed to prohibit a plan or issuer from making a
determination not to pay for a particular medical treatment
or service or the services of a type of health care
professional.
(B) Enforcement of peer review protocols and internal
procedures.--Nothing in this subsection shall be construed to
prohibit a plan, issuer, or provider from establishing and
enforcing reasonable peer review or utilization review
protocols or determining whether a protected health care
professional has complied with those protocols or from
establishing and enforcing internal procedures for the
purpose of addressing quality concerns.
(C) Relation to other rights.--Nothing in this subsection
shall be construed to abridge rights of participants,
beneficiaries, enrollees, and protected health care
professionals under other applicable Federal or State laws.
(7) Protected health care professional defined.--For
purposes of this subsection, the term ``protected health care
professional'' means an individual who is a licensed or
certified health care professional and who--
(A) with respect to a group health plan or health insurance
issuer, is an employee of the plan or issuer or has a
contract with the plan or issuer for provision of services
for which benefits are available under the plan or issuer; or
(B) with respect to an institutional health care provider,
is an employee of the provider or has a contract or other
arrangement with the provider respecting the provision of
health care services.
Subtitle E--Definitions
SEC. 151. DEFINITIONS.
(a) Incorporation of General Definitions.--Except as
otherwise provided, the provisions of section 2791 of the
Public Health Service Act shall apply for purposes of this
title in the same manner as they apply for purposes of title
XXVII of such Act.
(b) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of Health and Human
Services, in consultation with the Secretary of Labor and the
term ``appropriate Secretary'' means the Secretary of Health
and Human Services in relation to carrying out this title
under sections 2706 and 2751 of the Public Health Service Act
and the Secretary of Labor in relation to carrying out this
title under section 714 of the Employee Retirement Income
Security Act of 1974.
(c) Additional Definitions.--For purposes of this title:
(1) Applicable authority.--The term ``applicable
authority'' means--
(A) in the case of a group health plan, the Secretary of
Health and Human Services and the Secretary of Labor; and
(B) in the case of a health insurance issuer with respect
to a specific provision of this title, the applicable State
authority (as defined in section 2791(d) of the Public Health
Service Act), or the Secretary of Health and Human Services,
if such Secretary is enforcing such provision under section
2722(a)(2) or 2761(a)(2) of the Public Health Service Act.
(2) Enrollee.--The term ``enrollee'' means, with respect to
health insurance coverage offered by a health insurance
issuer, an individual enrolled with the issuer to receive
such coverage.
(3) Group health plan.--The term ``group health plan'' has
the meaning given such term in section 733(a) of the Employee
Retirement Income Security Act of 1974, except that such term
includes a employee welfare benefit plan treated as a group
health plan under section 732(d) of such Act or defined as
such a plan under section 607(1) of such Act.
(4) Health care professional.--The term ``health care
professional'' means an individual who is licensed,
accredited, or certified under State law to provide specified
health care services and who is operating within the scope of
such licensure, accreditation, or certification.
(5) Health care provider.--The term ``health care
provider'' includes a physician or other health care
professional, as well as an institutional or other facility
or agency that provides health care services and that is
licensed, accredited, or certified to provide health care
items and services under applicable State law.
(6) Network.--The term ``network'' means, with respect to a
group health plan or health insurance issuer offering health
insurance coverage, the participating health care
professionals and providers through whom the plan or issuer
provides health care items and services to participants,
beneficiaries, or enrollees.
(7) Nonparticipating.--The term ``nonparticipating'' means,
with respect to a health care provider that provides health
care items and services to a participant, beneficiary, or
enrollee under group health plan or health insurance
coverage, a health care provider that is not a participating
health care provider with respect to such items and services.
(8) Participating.--The term ``participating'' means, with
respect to a health care provider that provides health care
items and services to a participant, beneficiary, or enrollee
under group health plan or health insurance coverage offered
by a health insurance issuer, a health care provider that
furnishes such items and services under a contract or other
arrangement with the plan or issuer.
(9) Prior authorization.--The term ``prior authorization''
means the process of obtaining prior approval from a health
insurance issuer or group health plan for the provision or
coverage of medical services.
(10) Terms and conditions.--The term ``terms and
conditions'' includes, with respect to a group health plan or
health insurance coverage, requirements imposed under this
title with respect to the plan or coverage.
SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
(a) Continued Applicability of State Law With Respect to
Health Insurance Issuers.--
(1) In general.--Subject to paragraph (2), this title shall
not be construed to supersede any provision of State law
which establishes, implements, or continues in effect any
standard or requirement solely relating to health insurance
issuers (in connection with group health insurance coverage
or otherwise) except to the extent that such standard or
requirement prevents the application of a requirement of this
title.
(2) Continued preemption with respect to group health
plans.--Nothing in this title shall be construed to affect or
modify the provisions of section 514 of the Employee
Retirement Income Security Act of 1974 with respect to group
health plans.
(3) Construction.--In applying this section, a State law
that provides for equal access to, and availability of, all
categories of licensed health care providers and services
shall not be treated as preventing the application of any
requirement of this title.
(b) Application of Substantially Compliant State Laws.--
(1) In general.--In the case of a State law that imposes,
with respect to health insurance coverage offered by a health
insurance issuer and with respect to a group health plan that
is a non-Federal governmental plan, a requirement that
substantially complies (within the meaning of subsection (c))
with a patient protection requirement (as defined in
paragraph (3)) and does not prevent the application of other
requirements under this Act (except in the case of other
substantially compliant requirements), in applying the
requirements of this title under section 2707 and 2753 (as
applicable) of the Public Health Service Act (as added by
title II), subject to subsection (a)(2)--
(A) the State law shall not be treated as being superseded
under subsection (a); and
(B) the State law shall apply instead of the patient
protection requirement otherwise applicable with respect to
health insurance coverage and non-Federal governmental plans.
(2) Limitation.--In the case of a group health plan covered
under title I of the Employee Retirement Income Security Act
of 1974, paragraph (1) shall be construed to apply only with
respect to the health insurance coverage (if any) offered in
connection with the plan.
(3) Definitions.--In this section:
(A) Patient protection requirement.--The term ``patient
protection requirement'' means a requirement under this
title, and includes (as a single requirement) a group or
related set of requirements under a section or similar unit
under this title.
(B) Substantially compliant.--The terms ``substantially
compliant'', substantially complies'', or ``substantial
compliance'' with respect to a State law, mean that the State
law has the same or similar features as the patient
protection requirements and has a similar effect.
(c) Determinations of Substantial Compliance.--
(1) Certification by states.--A State may submit to the
Secretary a certification that a State law provides for
patient protections that are at least substantially compliant
with one or more patient protection requirements. Such
certification shall be accompanied by such information as may
be required to permit the Secretary to make the determination
described in paragraph (2)(A).
(2) Review.--
(A) In general.--The Secretary shall promptly review a
certification submitted under paragraph (1) with respect to a
State law to determine if the State law substantially
complies with the patient protection requirement (or
requirements) to which the law relates.
(B) Approval deadlines.--
(i) Initial review.--Such a certification is considered
approved unless the Secretary notifies the State in writing,
within 90 days after the date of receipt of the
certification, that the certification is disapproved (and the
reasons for disapproval) or that specified additional
information is needed to make the determination described in
subparagraph (A).
(ii) Additional information.--With respect to a State that
has been notified by the Secretary under clause (i) that
specified additional information is needed to make the
determination described in subparagraph (A), the Secretary
shall make the determination within 60 days after the date on
which such specified additional information is received by
the Secretary.
(3) Approval.--
[[Page S5090]]
(A) In general.--The Secretary shall approve a
certification under paragraph (1) unless--
(i) the State fails to provide sufficient information to
enable the Secretary to make a determination under paragraph
(2)(A); or
(ii) the Secretary determines that the State law involved
does not provide for patient protections that substantially
comply with the patient protection requirement (or
requirements) to which the law relates.
(B) State challenge.--A State that has a certification
disapproved by the Secretary under subparagraph (A) may
challenge such disapproval in the appropriate United States
district court.
(C) Deference to states.--With respect to a certification
submitted under paragraph (1), the Secretary shall give
deference to the State's interpretation of the State law
involved with respect to the patient protection involved.
(D) Public notification.--The Secretary shall--
(i) provide a State with a notice of the determination to
approve or disapprove a certification under this paragraph;
(ii) promptly publish in the Federal Register a notice that
a State has submitted a certification under paragraph (1);
(iii) promptly publish in the Federal Register the notice
described in clause (i) with respect to the State; and
(iv) annually publish the status of all States with respect
to certifications.
(4) Construction.--Nothing in this subsection shall be
construed as preventing the certification (and approval of
certification) of a State law under this subsection solely
because it provides for greater protections for patients than
those protections otherwise required to establish substantial
compliance.
(5) Petitions.--
(A) Petition process.--Effective on the date on which the
provisions of this Act become effective, as provided for in
section 601, a group health plan, health insurance issuer,
participant, beneficiary, or enrollee may submit a petition
to the Secretary for an advisory opinion as to whether or not
a standard or requirement under a State law applicable to the
plan, issuer, participant, beneficiary, or enrollee that is
not the subject of a certification under this subsection, is
superseded under subsection (a)(1) because such standard or
requirement prevents the application of a requirement of this
title.
(B) Opinion.--The Secretary shall issue an advisory opinion
with respect to a petition submitted under subparagraph (A)
within the 60-day period beginning on the date on which such
petition is submitted.
(d) Definitions.--For purposes of this section:
(1) State law.--The term ``State law'' includes all laws,
decisions, rules, regulations, or other State action having
the effect of law, of any State. A law of the United States
applicable only to the District of Columbia shall be treated
as a State law rather than a law of the United States.
(2) State.--The term ``State'' includes a State, the
District of Columbia, Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Northern Mariana Islands, any political
subdivisions of such, or any agency or instrumentality of
such.
SEC. 153. EXCLUSIONS.
(a) No Benefit Requirements.--Nothing in this title shall
be construed to require a group health plan or a health
insurance issuer offering health insurance coverage to
include specific items and services under the terms of such a
plan or coverage, other than those provided under the terms
and conditions of such plan or coverage.
(b) Exclusion From Access to Care Managed Care Provisions
for Fee-for-service Coverage.--
(1) In general.--The provisions of sections 111 through 117
shall not apply to a group health plan or health insurance
coverage if the only coverage offered under the plan or
coverage is fee-for-service coverage (as defined in paragraph
(2)).
(2) Fee-for-service coverage defined.--For purposes of this
subsection, the term ``fee-for-service coverage'' means
coverage under a group health plan or health insurance
coverage that--
(A) reimburses hospitals, health professionals, and other
providers on a fee-for-service basis without placing the
provider at financial risk;
(B) does not vary reimbursement for such a provider based
on an agreement to contract terms and conditions or the
utilization of health care items or services relating to such
provider;
(C) allows access to any provider that is lawfully
authorized to provide the covered services and that agrees to
accept the terms and conditions of payment established under
the plan or by the issuer; and
(D) for which the plan or issuer does not require prior
authorization before providing for any health care services.
SEC. 154. TREATMENT OF EXCEPTED BENEFITS.
(a) In General.--The requirements of this title and the
provisions of sections 502(a)(1)(C), 502(n), and 514(d) of
the Employee Retirement Income Security Act of 1974 (added by
section 402) shall not apply to excepted benefits (as defined
in section 733(c) of such Act), other than benefits described
in section 733(c)(2)(A) of such Act, in the same manner as
the provisions of part 7 of subtitle B of title I of such Act
do not apply to such benefits under subsections (b) and (c)
of section 732 of such Act.
(b) Coverage of Certain Limited Scope Plans.--Only for
purposes of applying the requirements of this title under
sections 2707 and 2753 of the Public Health Service Act,
section 714 of the Employee Retirement Income Security Act of
1974, and section 9813 of the Internal Revenue Code of 1986,
the following sections shall be deemed not to apply:
(1) Section 2791(c)(2)(A) of the Public Health Service Act.
(2) Section 733(c)(2)(A) of the Employee Retirement Income
Security Act of 1974.
(3) Section 9832(c)(2)(A) of the Internal Revenue Code of
1986.
SEC. 155. REGULATIONS.
The Secretaries of Health and Human Services, Labor, and
the Treasury shall issue such regulations as may be necessary
or appropriate to carry out this title. Such regulations
shall be issued consistent with section 104 of Health
Insurance Portability and Accountability Act of 1996. Such
Secretaries may promulgate any interim final rules as the
Secretaries determine are appropriate to carry out this
title.
SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOCUMENTS.
The requirements of this title with respect to a group
health plan or health insurance coverage are, subject to
section 154, deemed to be incorporated into, and made a part
of, such plan or the policy, certificate, or contract
providing such coverage and are enforceable under law as if
directly included in the documentation of such plan or such
policy, certificate, or contract.
SEC. 157. PRESERVATION OF PROTECTIONS.
(a) In General.--The rights under this Act (including the
right to maintain a civil action and any other rights under
the amendments made by this Act) may not be waived, deferred,
or lost pursuant to any agreement not authorized under this
Act.
(b) Exception.--Subsection (a) shall not apply to an
agreement providing for arbitration or participation in any
other nonjudicial procedure to resolve a dispute if the
agreement--
(1) is entered into knowingly and voluntarily by the
parties involved after the dispute has arisen; or
(2) is pursuant to the terms of a collective bargaining
agreement.
Nothing in this subsection shall be construed to permit the
waiver of the requirements of sections 103 and 104 (relating
to internal and external review).
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT
SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH
INSURANCE COVERAGE.
(a) In General.--Subpart 2 of part A of title XXVII of the
Public Health Service Act is amended by adding at the end the
following new section:
``SEC. 2707. PATIENT PROTECTION STANDARDS.
``Each group health plan shall comply with patient
protection requirements under title I of the Patients' Bill
of Rights Act of 2005, and each health insurance issuer shall
comply with patient protection requirements under such title
with respect to group health insurance coverage it offers,
and such requirements shall be deemed to be incorporated into
this subsection.''.
(b) Conforming Amendment.--Section 2721(b)(2)(A) of such
Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting
``(other than section 2707)'' after ``requirements of such
subparts''.
SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSURANCE
COVERAGE.
Part B of title XXVII of the Public Health Service Act is
amended by inserting after section 2752 the following new
section:
``SEC. 2753. PATIENT PROTECTION STANDARDS.
``Each health insurance issuer shall comply with patient
protection requirements under title I of the Patients' Bill
of Rights Act of 2005 with respect to individual health
insurance coverage it offers, and such requirements shall be
deemed to be incorporated into this subsection.''.
SEC. 203. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Part C of title XXVII of the Public Health Service Act (42
U.S.C. 300gg-91 et seq.) is amended by adding at the end the
following:
``SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
``(a) Agreement With States.--A State may enter into an
agreement with the Secretary for the delegation to the State
of some or all of the Secretary's authority under this title
to enforce the requirements applicable under title I of the
Patients' Bill of Rights Act of 2005 with respect to health
insurance coverage offered by a health insurance issuer and
with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this section may,
if authorized under State law and to the extent consistent
with such agreement, exercise the powers of the Secretary
under this title which relate to such authority.''.
[[Page S5091]]
TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL
HEALTH INSURANCE PROGRAMS
SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO
FEDERAL HEALTH INSURANCE PROGRAMS.
(a) Sense of Congress.--It is the sense of Congress that
enrollees in Federal health insurance programs should have
the same rights and privileges as those afforded under title
I and under the amendments made by title IV to participants
and beneficiaries under group health plans.
(b) Conforming Federal Health Insurance Programs.--It is
the sense of Congress that the President should require, by
executive order, the Federal official with authority over
each Federal health insurance program, to the extent
feasible, to take such steps as are necessary to implement
the rights and privileges described in subsection (a) with
respect to such program.
(c) GAO Report on Additional Steps Required.--Not later
than 1 year after the date of the enactment of this Act, the
Comptroller General of the United States shall submit to
Congress a report on statutory changes that are required to
implement such rights and privileges in a manner that is
consistent with the missions of the Federal health insurance
programs and that avoids unnecessary duplication or
disruption of such programs.
(d) Federal Health Insurance Program.--In this section, the
term ``Federal health insurance program'' means a Federal
program that provides creditable coverage (as defined in
section 2701(c)(1) of the Public Health Service Act) and
includes a health program of the Department of Veterans
Affairs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
SEC. 401. APPLICATION OF PATIENT PROTECTION STANDARDS TO
GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE
COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.
Subpart B of part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 is amended by
adding at the end the following new section:
``SEC. 714. PATIENT PROTECTION STANDARDS.
``(a) In General.--Subject to subsection (b), a group
health plan (and a health insurance issuer offering group
health insurance coverage in connection with such a plan)
shall comply with the requirements of title I of the
Patients' Bill of Rights Act of 2005 (as in effect as of the
date of the enactment of such Act), and such requirements
shall be deemed to be incorporated into this subsection.
``(b) Plan Satisfaction of Certain Requirements.--
``(1) Satisfaction of certain requirements through
insurance.--For purposes of subsection (a), insofar as a
group health plan provides benefits in the form of health
insurance coverage through a health insurance issuer, the
plan shall be treated as meeting the following requirements
of title I of the Patients' Bill of Rights Act of 2005 with
respect to such benefits and not be considered as failing to
meet such requirements because of a failure of the issuer to
meet such requirements so long as the plan sponsor or its
representatives did not cause such failure by the issuer:
``(A) Section 111 (relating to consumer choice option).
``(B) Section 112 (relating to choice of health care
professional).
``(C) Section 113 (relating to access to emergency care).
``(D) Section 114 (relating to timely access to
specialists).
``(E) Section 115 (relating to patient access to
obstetrical and gynecological care).
``(F) Section 116 (relating to access to pediatric care).
``(G) Section 117 (relating to continuity of care), but
only insofar as a replacement issuer assumes the obligation
for continuity of care.
``(H) Section 118 (relating to access to needed
prescription drugs).
``(I) Section 119 (relating to coverage for individuals
participating in approved clinical trials).
``(J) Section 120 (relating to required coverage for
minimum hospital stay for mastectomies and lymph node
dissections for the treatment of breast cancer and coverage
for secondary consultations).
``(K) Section 134 (relating to payment of claims).
``(2) Information.--With respect to information required to
be provided or made available under section 121 of the
Patients' Bill of Rights Act of 2005, in the case of a group
health plan that provides benefits in the form of health
insurance coverage through a health insurance issuer, the
Secretary shall determine the circumstances under which the
plan is not required to provide or make available the
information (and is not liable for the issuer's failure to
provide or make available the information), if the issuer is
obligated to provide and make available (or provides and
makes available) such information.
``(3) Internal appeals.--With respect to the internal
appeals process required to be established under section 103
of such Act, in the case of a group health plan that provides
benefits in the form of health insurance coverage through a
health insurance issuer, the Secretary shall determine the
circumstances under which the plan is not required to provide
for such process and system (and is not liable for the
issuer's failure to provide for such process and system), if
the issuer is obligated to provide for (and provides for)
such process and system.
``(4) External appeals.--Pursuant to rules of the
Secretary, insofar as a group health plan enters into a
contract with a qualified external appeal entity for the
conduct of external appeal activities in accordance with
section 104 of such Act, the plan shall be treated as meeting
the requirement of such section and is not liable for the
entity's failure to meet any requirements under such section.
``(5) Application to prohibitions.--Pursuant to rules of
the Secretary, if a health insurance issuer offers health
insurance coverage in connection with a group health plan and
takes an action in violation of any of the following sections
of the Patients' Bill of Rights Act of 2005, the group health
plan shall not be liable for such violation unless the plan
caused such violation:
``(A) Section 131 (relating to prohibition of interference
with certain medical communications).
``(B) Section 132 (relating to prohibition of
discrimination against providers based on licensure).
``(C) Section 133 (relating to prohibition against improper
incentive arrangements).
``(D) Section 135 (relating to protection for patient
advocacy).
``(6) Construction.--Nothing in this subsection shall be
construed to affect or modify the responsibilities of the
fiduciaries of a group health plan under part 4 of subtitle
B.
``(7) Treatment of substantially compliant state laws.--For
purposes of applying this subsection in connection with
health insurance coverage, any reference in this subsection
to a requirement in a section or other provision in the
Patients' Bill of Rights Act of 2005 with respect to a health
insurance issuer is deemed to include a reference to a
requirement under a State law that substantially complies (as
determined under section 152(c) of such Act) with the
requirement in such section or other provisions.
``(8) Application to certain prohibitions against
retaliation.--With respect to compliance with the
requirements of section 135(b)(1) of the Patients' Bill of
Rights Act of 2005, for purposes of this subtitle the term
`group health plan' is deemed to include a reference to an
institutional health care provider.
``(c) Enforcement of Certain Requirements.--
``(1) Complaints.--Any protected health care professional
who believes that the professional has been retaliated or
discriminated against in violation of section 135(b)(1) of
the Patients' Bill of Rights Act of 2005 may file with the
Secretary a complaint within 180 days of the date of the
alleged retaliation or discrimination.
``(2) Investigation.--The Secretary shall investigate such
complaints and shall determine if a violation of such section
has occurred and, if so, shall issue an order to ensure that
the protected health care professional does not suffer any
loss of position, pay, or benefits in relation to the plan,
issuer, or provider involved, as a result of the violation
found by the Secretary.
``(d) Conforming Regulations.--The Secretary shall issue
regulations to coordinate the requirements on group health
plans and health insurance issuers under this section with
the requirements imposed under the other provisions of this
title. In order to reduce duplication and clarify the rights
of participants and beneficiaries with respect to information
that is required to be provided, such regulations shall
coordinate the information disclosure requirements under
section 121 of the Patients' Bill of Rights Act of 2005 with
the reporting and disclosure requirements imposed under part
1, so long as such coordination does not result in any
reduction in the information that would otherwise be provided
to participants and beneficiaries.''.
(b) Satisfaction of ERISA Claims Procedure Requirement.--
Section 503 of such Act (29 U.S.C. 1133) is amended by
inserting ``(a)'' after ``Sec. 503.'' and by adding at the
end the following new subsection:
``(b) In the case of a group health plan (as defined in
section 733), compliance with the requirements of subtitle A
of title I of the Patients' Bill of Rights Act of 2005, and
compliance with regulations promulgated by the Secretary, in
the case of a claims denial, shall be deemed compliance with
subsection (a) with respect to such claims denial.''.
(c) Conforming Amendments.--(1) Section 732(a) of such Act
(29 U.S.C. 1185(a)) is amended by striking ``section 711''
and inserting ``sections 711 and 714''.
(2) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 713
the following new item:
``714. Patient protection standards''.
(3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is
amended by inserting ``(other than section 135(b) of the
Patients' Bill of Rights Act of 2005, as deemed by subsection
(a) of section 714 of this Act to be incorporated into such
subsection)'' after ``part 7''.
SEC. 402. AVAILABILITY OF CIVIL REMEDIES.
(a) Availability of Federal Civil Remedies in Cases Not
Involving Medically Reviewable Decisions.--
(1) In general.--Section 502 of the Employee Retirement
Income Security Act of
[[Page S5092]]
1974 (29 U.S.C. 1132) is amended by adding at the end the
following new subsections:
``(n) Cause of Action Relating to Provision of Health
Benefits.--
``(1) In general.--In any case in which--
``(A) a person who is a fiduciary of a group health plan, a
health insurance issuer offering health insurance coverage in
connection with the plan, or an agent of the plan, issuer, or
plan sponsor, upon consideration of a claim for benefits of a
participant or beneficiary under section 102 of the Patients'
Bill of Rights Act of 2005 (relating to procedures for
initial claims for benefits and prior authorization
determinations) or upon review of a denial of such a claim
under section 103 of such Act (relating to internal appeal of
a denial of a claim for benefits), fails to exercise ordinary
care in making a decision--
``(i) regarding whether an item or service is covered under
the terms and conditions of the plan or coverage,
``(ii) regarding whether an individual is a participant or
beneficiary who is enrolled under the terms and conditions of
the plan or coverage (including the applicability of any
waiting period under the plan or coverage), or
``(iii) as to the application of cost-sharing requirements
or the application of a specific exclusion or express
limitation on the amount, duration, or scope of coverage of
items or services under the terms and conditions of the plan
or coverage, and
``(B) such failure is a proximate cause of personal injury
to, or the death of, the participant or beneficiary,
such plan, plan sponsor, or issuer shall be liable to the
participant or beneficiary (or the estate of such participant
or beneficiary) for economic and noneconomic damages (but not
exemplary or punitive damages) in connection with such
personal injury or death.
``(2) Cause of action must not involve medically reviewable
decision.--
``(A) In general.--A cause of action is established under
paragraph (1)(A) only if the decision referred to in
paragraph (1)(A) does not include a medically reviewable
decision.
``(B) Medically reviewable decision.--For purposes of this
subsection, the term `medically reviewable decision' means a
denial of a claim for benefits under the plan which is
described in section 104(d)(2) of the Patients' Bill of
Rights Act of 2005 (relating to medically reviewable
decisions).
``(3) Limitation regarding certain types of actions saved
from preemption of state law.--A cause of action is not
established under paragraph (1)(A) in connection with a
failure described in paragraph (1)(A) to the extent that a
cause of action under State law (as defined in section
514(c)) for such failure would not be preempted under section
514.
``(4) Definitions and related rules.--For purposes of this
subsection.--
``(A) Ordinary care.--The term `ordinary care' means, with
respect to a determination on a claim for benefits, that
degree of care, skill, and diligence that a reasonable and
prudent individual would exercise in making a fair
determination on a claim for benefits of like kind to the
claims involved.
``(B) Personal injury.--The term `personal injury' means a
physical injury and includes an injury arising out of the
treatment (or failure to treat) a mental illness or disease.
``(C) Claim for benefits; denial.--The terms `claim for
benefits' and `denial of a claim for benefits' have the
meanings provided such terms in section 102(e) of the
Patients' Bill of Rights Act of 2005.
``(D) Terms and conditions.--The term `terms and
conditions' includes, with respect to a group health plan or
health insurance coverage, requirements imposed under title I
of the Patients' Bill of Rights Act of 2005.
``(E) Treatment of excepted benefits.--Under section 154(a)
of the Patients' Bill of Rights Act of 2005, the provisions
of this subsection and subsection (a)(1)(C) do not apply to
certain excepted benefits.
``(5) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan sponsors
precluded.--Subject to subparagraph (B), paragraph (1)(A)
does not authorize a cause of action against an employer or
other plan sponsor maintaining the plan (or against an
employee of such an employer or sponsor acting within the
scope of employment).
``(B) Certain causes of action permitted.--Notwithstanding
subparagraph (A), a cause of action may arise against an
employer or other plan sponsor (or against an employee of
such an employer or sponsor acting within the scope of
employment) under paragraph (1)(A), to the extent there was
direct participation by the employer or other plan sponsor
(or employee) in the decision of the plan under section 102
of the Patients' Bill of Rights Act of 2005 upon
consideration of a claim for benefits or under section 103 of
such Act upon review of a denial of a claim for benefits.
``(C) Direct participation.--
``(i) In general.--For purposes of subparagraph (B), the
term `direct participation' means, in connection with a
decision described in paragraph (1)(A), the actual making of
such decision or the actual exercise of control in making
such decision.
``(ii) Rules of construction.--For purposes of clause (i),
the employer or plan sponsor (or employee) shall not be
construed to be engaged in direct participation because of
any form of decisionmaking or other conduct that is merely
collateral or precedent to the decision described in
paragraph (1)(A) on a particular claim for benefits of a
participant or beneficiary, including (but not limited to)--
``(I) any participation by the employer or other plan
sponsor (or employee) in the selection of the group health
plan or health insurance coverage involved or the third party
administrator or other agent;
``(II) any engagement by the employer or other plan sponsor
(or employee) in any cost-benefit analysis undertaken in
connection with the selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the employer or other plan
sponsor (or employee) in the process of creating, continuing,
modifying, or terminating the plan or any benefit under the
plan, if such process was not substantially focused solely on
the particular situation of the participant or beneficiary
referred to in paragraph (1)(A); and
``(IV) any participation by the employer or other plan
sponsor (or employee) in the design of any benefit under the
plan, including the amount of copayment and limits connected
with such benefit.
``(iii) Irrelevance of certain collateral efforts made by
employer or plan sponsor.--For purposes of this subparagraph,
an employer or plan sponsor shall not be treated as engaged
in direct participation in a decision with respect to any
claim for benefits or denial thereof in the case of any
particular participant or beneficiary solely by reason of--
``(I) any efforts that may have been made by the employer
or plan sponsor to advocate for authorization of coverage for
that or any other participant or beneficiary (or any group of
participants or beneficiaries), or
``(II) any provision that may have been made by the
employer or plan sponsor for benefits which are not covered
under the terms and conditions of the plan for that or any
other participant or beneficiary (or any group of
participants or beneficiaries).
``(D) Application to certain plans.--
``(i) In general.--Notwithstanding any other provision of
this subsection, no group health plan described in clause
(ii) (or plan sponsor of such a plan) shall be liable under
paragraph (1) for the performance of, or the failure to
perform, any non-medically reviewable duty under the plan.
``(ii) Definition.--A group health plan described in this
clause is--
``(I) a group health plan that is self-insured and self
administered by an employer (including an employee of such an
employer acting within the scope of employment); or
``(II) a multiemployer plan as defined in section 3(37)(A)
(including an employee of a contributing employer or of the
plan, or a fiduciary of the plan, acting within the scope of
employment or fiduciary responsibility) that is self-insured
and self-administered.
``(6) Exclusion of physicians and other health care
professionals.--
``(A) In general.--No treating physician or other treating
health care professional of the participant or beneficiary,
and no person acting under the direction of such a physician
or health care professional, shall be liable under paragraph
(1) for the performance of, or the failure to perform, any
non-medically reviewable duty of the plan, the plan sponsor,
or any health insurance issuer offering health insurance
coverage in connection with the plan.
``(B) Definitions.--For purposes of subparagraph (A)--
``(i) Health care professional.--The term `health care
professional' means an individual who is licensed,
accredited, or certified under State law to provide specified
health care services and who is operating within the scope of
such licensure, accreditation, or certification.
``(ii) Non-medically reviewable duty.--The term `non-
medically reviewable duty' means a duty the discharge of
which does not include the making of a medically reviewable
decision.
``(7) Exclusion of hospitals.--No treating hospital of the
participant or beneficiary shall be liable under paragraph
(1) for the performance of, or the failure to perform, any
non-medically reviewable duty (as defined in paragraph
(6)(B)(ii)) of the plan, the plan sponsor, or any health
insurance issuer offering health insurance coverage in
connection with the plan.
``(8) Rule of construction relating to exclusion from
liability of physicians, health care professionals, and
hospitals.--Nothing in paragraph (6) or (7) shall be
construed to limit the liability (whether direct or
vicarious) of the plan, the plan sponsor, or any health
insurance issuer offering health insurance coverage in
connection with the plan.
``(9) Requirement of exhaustion.--
``(A) In general.--A cause of action may not be brought
under paragraph (1) in connection with any denial of a claim
for benefits of any individual until all administrative
processes under sections 102 and 103 of the Patients' Bill of
Rights Act of 2005 (if applicable) have been exhausted.
``(B) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal court
under subsection 502(a)(1)(B) prior to the exhaustion of
administrative remedies under sections 102, 103, or 104 of
the Patients' Bill of Rights Act of 2005 (as required under
subparagraph (A)) if it is demonstrated to the court that the
exhaustion of such remedies would cause irreparable harm to
the health of the participant or beneficiary. Notwithstanding
the awarding of relief under subsection 502(a)(1)(B) pursuant
to this subparagraph, no relief
[[Page S5093]]
shall be available as a result of, or arising under,
paragraph (1)(A) or paragraph (10)(B), with respect to a
participant or beneficiary, unless the requirements of
subparagraph (A) are met.
``(C) Receipt of benefits during appeals process.--Receipt
by the participant or beneficiary of the benefits involved in
the claim for benefits during the pendency of any
administrative processes referred to in subparagraph (A) or
of any action commenced under this subsection--
``(i) shall not preclude continuation of all such
administrative processes to their conclusion if so moved by
any party, and
``(ii) shall not preclude any liability under subsection
(a)(1)(C) and this subsection in connection with such claim.
The court in any action commenced under this subsection shall
take into account any receipt of benefits during such
administrative processes or such action in determining the
amount of the damages awarded.
``(D) Admissible.--Any determination made by a reviewer in
an administrative proceeding under section 103 of the
Patients' Bill of Rights Act of 2005 shall be admissible in
any Federal court proceeding and shall be presented to the
trier of fact.
``(10) Statutory damages.--
``(A) In general.--The remedies set forth in this
subsection (n) shall be the exclusive remedies for causes of
action brought under this subsection.
``(B) Assessment of civil penalties.--In addition to the
remedies provided for in paragraph (1) (relating to the
failure to provide contract benefits in accordance with the
plan), a civil assessment, in an amount not to exceed
$5,000,000, payable to the claimant may be awarded in any
action under such paragraph if the claimant establishes by
clear and convincing evidence that the alleged conduct
carried out by the defendant demonstrated bad faith and
flagrant disregard for the rights of the participant or
beneficiary under the plan and was a proximate cause of the
personal injury or death that is the subject of the claim.
``(11) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other provision of
law, or any arrangement, agreement, or contract regarding an
attorney's fee, the amount of an attorney's contingency fee
allowable for a cause of action brought pursuant to this
subsection shall not exceed \1/3\ of the total amount of the
plaintiff's recovery (not including the reimbursement of
actual out-of-pocket expenses of the attorney).
``(B) Determination by district court.--The last Federal
district court in which the action was pending upon the final
disposition, including all appeals, of the action shall have
jurisdiction to review the attorney's fee to ensure that the
fee is a reasonable one.
``(12) Limitation of action.--Paragraph (1) shall not apply
in connection with any action commenced after 3 years after
the later of--
``(A) the date on which the plaintiff first knew, or
reasonably should have known, of the personal injury or death
resulting from the failure described in paragraph (1), or
``(B) the date as of which the requirements of paragraph
(9) are first met.
``(13) Tolling provision.--The statute of limitations for
any cause of action arising under State law relating to a
denial of a claim for benefits that is the subject of an
action brought in Federal court under this subsection shall
be tolled until such time as the Federal court makes a final
disposition, including all appeals, of whether such claim
should properly be within the jurisdiction of the Federal
court. The tolling period shall be determined by the
applicable Federal or State law, whichever period is greater.
``(14) Purchase of insurance to cover liability.--Nothing
in section 410 shall be construed to preclude the purchase by
a group health plan of insurance to cover any liability or
losses arising under a cause of action under subsection
(a)(1)(C) and this subsection.
``(15) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C), paragraph
(1) shall not apply with respect to a directed recordkeeper
in connection with a group health plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged in
directed recordkeeping activities pursuant to the specific
instructions of the plan or the employer or other plan
sponsor, including the distribution of enrollment information
and distribution of disclosure materials under this Act or
title I of the Patients' Bill of Rights Act of 2005 and whose
duties do not include making decisions on claims for
benefits.
``(C) Limitation.--Subparagraph (A) does not apply in
connection with any directed recordkeeper to the extent that
the directed recordkeeper fails to follow the specific
instruction of the plan or the employer or other plan
sponsor.
``(16) Exclusion of health insurance agents.--Paragraph (1)
does not apply with respect to a person whose sole
involvement with the group health plan is providing advice or
administrative services to the employer or other plan sponsor
relating to the selection of health insurance coverage
offered in connection with the plan.
``(17) No effect on state law.--No provision of State law
(as defined in section 514(c)(1)) shall be treated as
superseded or otherwise altered, amended, modified,
invalidated, or impaired by reason of the provisions of
subsection (a)(1)(C) and this subsection.
``(18) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Notwithstanding the direct participation
(as defined in paragraph (5)(C)(i)) of an employer or plan
sponsor, in any case in which there is (or is deemed under
subparagraph (B) to be) a designated decisionmaker under
subparagraph (B) that meets the requirements of subsection
(o)(1) for an employer or other plan sponsor--
``(i) all liability of such employer or plan sponsor
involved (and any employee of such employer or sponsor acting
within the scope of employment) under this subsection in
connection with any participant or beneficiary shall be
transferred to, and assumed by, the designated decisionmaker,
and
``(ii) with respect to such liability, the designated
decisionmaker shall be substituted for the employer or
sponsor (or employee) in the action and may not raise any
defense that the employer or sponsor (or employee) could not
raise if such a decisionmaker were not so deemed.
``(B) Automatic designation.--A health insurance issuer
shall be deemed to be a designated decisionmaker for purposes
of subparagraph (A) with respect to the participants and
beneficiaries of an employer or plan sponsor, whether or not
the employer or plan sponsor makes such a designation, and
shall be deemed to have assumed unconditionally all liability
of the employer or plan sponsor under such designation in
accordance with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent the
service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For purposes of
this paragraph, the terms `employer' and `plan sponsor', in
connection with the assumption by a designated decisionmaker
of the liability of employer or other plan sponsor pursuant
to this paragraph, shall be construed to include a trust fund
maintained pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway Labor Act
(45 U.S.C. 151 et seq.).
``(19) Previously provided services.--
``(A) In general.--Except as provided in this paragraph, a
cause of action shall not arise under paragraph (1) where the
denial involved relates to an item or service that has
already been fully provided to the participant or beneficiary
under the plan or coverage and the claim relates solely to
the subsequent denial of payment for the provision of such
item or service.
``(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
``(i) prohibit a cause of action under paragraph (1) where
the nonpayment involved results in the participant or
beneficiary being unable to receive further items or services
that are directly related to the item or service involved in
the denial referred to in subparagraph (A) or that are part
of a continuing treatment or series of procedures; or
``(ii) limit liability that otherwise would arise from the
provision of the item or services or the performance of a
medical procedure.
``(20) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an employer or
plan sponsor; or
``(B) a member of an association, committee, employee
organization, joint board of trustees, or other similar group
of representatives of the entities that are the plan sponsor
of plan maintained by two or more employers and one or more
employee organizations;
shall not be personally liable under this subsection for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts
in a fraudulent manner for personal enrichment.
``(o) Requirements for Designated Decisionmakers of Group
Health Plans.--
``(1) In general.--For purposes of subsection (n)(18) and
section 514(d)(9), a designated decisionmaker meets the
requirements of this paragraph with respect to any
participant or beneficiary if--
``(A) such designation is in such form as may be prescribed
in regulations of the Secretary,
``(B) the designated decisionmaker--
``(i) meets the requirements of paragraph (2),
``(ii) assumes unconditionally all liability of the
employer or plan sponsor involved (and any employee of such
employer or sponsor acting within the scope of employment)
either arising under subsection (n) or arising in a cause of
action permitted under section 514(d) in connection with
actions (and failures to act) of the employer or plan sponsor
(or employee) occurring during the period in which the
designation under subsection (n)(18) or section 514(d)(9) is
in effect relating to such participant and beneficiary,
``(iii) agrees to be substituted for the employer or plan
sponsor (or employee) in the action and not to raise any
defense with respect to such liability that the employer or
plan sponsor (or employee) may not raise, and
``(iv) where paragraph (2)(B) applies, assumes
unconditionally the exclusive authority under the group
health plan to make
[[Page S5094]]
medically reviewable decisions under the plan with respect to
such participant or beneficiary, and
``(C) the designated decisionmaker and the participants and
beneficiaries for whom the decisionmaker has assumed
liability are identified in the written instrument required
under section 402(a) and as required under section 121(b)(19)
of the Patients' Bill of Rights Act of 2005.
Any liability assumed by a designated decisionmaker pursuant
to this subsection shall be in addition to any liability that
it may otherwise have under applicable law.
``(2) Qualifications for designated decisionmakers.--
``(A) In general.--Subject to subparagraph (B), an entity
is qualified under this paragraph to serve as a designated
decisionmaker with respect to a group health plan if the
entity has the ability to assume the liability described in
paragraph (1) with respect to participants and beneficiaries
under such plan, including requirements relating to the
financial obligation for timely satisfying the assumed
liability, and maintains with the plan sponsor and the
Secretary certification of such ability. Such certification
shall be provided to the plan sponsor or named fiduciary and
to the Secretary upon designation under subsection (n)(18)(B)
or section 517(d)(9)(B) and not less frequently than annually
thereafter, or if such designation constitutes a multiyear
arrangement, in conjunction with the renewal of the
arrangement.
``(B) Special qualification in the case of certain
reviewable decisions.--In the case of a group health plan
that provides benefits consisting of medical care to a
participant or beneficiary only through health insurance
coverage offered by a single health insurance issuer, such
issuer is the only entity that may be qualified under this
paragraph to serve as a designated decisionmaker with respect
to such participant or beneficiary, and shall serve as the
designated decisionmaker unless the employer or other plan
sponsor acts affirmatively to prevent such service.
``(3) Requirements relating to financial obligations.--For
purposes of paragraph (2)(A), the requirements relating to
the financial obligation of an entity for liability shall
include--
``(A) coverage of such entity under an insurance policy or
other arrangement, secured and maintained by such entity, to
effectively insure such entity against losses arising from
professional liability claims, including those arising from
its service as a designated decisionmaker under this part; or
``(B) evidence of minimum capital and surplus levels that
are maintained by such entity to cover any losses as a result
of liability arising from its service as a designated
decisionmaker under this part.
The appropriate amounts of liability insurance and minimum
capital and surplus levels for purposes of subparagraphs (A)
and (B) shall be determined by an actuary using sound
actuarial principles and accounting practices pursuant to
established guidelines of the American Academy of Actuaries
and in accordance with such regulations as the Secretary may
prescribe and shall be maintained throughout the term for
which the designation is in effect. The provisions of this
paragraph shall not apply in the case of a designated
decisionmaker that is a group health plan, plan sponsor, or
health insurance issuer and that is regulated under Federal
law or a State financial solvency law.
``(4) Limitation on appointment of treating physicians.--A
treating physician who directly delivered the care,
treatment, or provided the patient service that is the
subject of a cause of action by a participant or beneficiary
under subsection (n) or section 514(d) may not be designated
as a designated decisionmaker under this subsection with
respect to such participant or beneficiary.''.
(2) Conforming amendment.--Section 502(a)(1) of such Act
(29 U.S.C. 1132(a)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph (A);
(B) in subparagraph (B), by striking ``plan;'' and
inserting ``plan, or''; and
(C) by adding at the end the following new subparagraph:
``(C) for the relief provided for in subsection (n) of this
section.''.
(b) Rules Relating to ERISA Preemption.--Section 514 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1144) is amended--
(1) by redesignating subsection (d) as subsection (f); and
(2) by inserting after subsection (c) the following new
subsections:
``(d) Preemption Not to Apply to Causes of Action Under
State Law Involving Medically Reviewable Decision.--
``(1) Non-preemption of certain causes of action.--
``(A) In general.--Except as provided in this subsection,
nothing in this title (including section 502) shall be
construed to supersede or otherwise alter, amend, modify,
invalidate, or impair any cause of action under State law of
a participant or beneficiary under a group health plan (or
the estate of such a participant or beneficiary) against the
plan, the plan sponsor, any health insurance issuer offering
health insurance coverage in connection with the plan, or any
managed care entity in connection with the plan to recover
damages resulting from personal injury or for wrongful death
if such cause of action arises by reason of a medically
reviewable decision.
``(B) Medically reviewable decision.--For purposes of
subparagraph (A), the term `medically reviewable decision'
means a denial of a claim for benefits under the plan which
is described in section 104(d)(2) of the Patients' Bill of
Rights Act of 2005 (relating to medically reviewable
decisions).
``(C) Limitation on punitive damages.--
``(i) In general.--Except as provided in clauses (ii) and
(iii), with respect to a cause of action described in
subparagraph (A) brought with respect to a participant or
beneficiary, State law is superseded insofar as it provides
any punitive, exemplary, or similar damages if, as of the
time of the personal injury or death, all the requirements of
the following sections of the Patients' Bill of Rights Act of
2005 were satisfied with respect to the participant or
beneficiary:
``(I) Section 102 (relating to procedures for initial
claims for benefits and prior authorization determinations).
``(II) Section 103 of such Act (relating to internal
appeals of claims denials).
``(III) Section 104 of such Act (relating to independent
external appeals procedures).
``(ii) Exception for certain actions for wrongful death.--
Clause (i) shall not apply with respect to an action for
wrongful death if the applicable State law provides (or has
been construed to provide) for damages in such an action
which are only punitive or exemplary in nature.
``(iii) Exception for willful or wanton disregard for the
rights or safety of others.--Clause (i) shall not apply with
respect to any cause of action described in subparagraph (A)
if, in such action, the plaintiff establishes by clear and
convincing evidence that conduct carried out by the defendant
with willful or wanton disregard for the rights or safety of
others was a proximate cause of the personal injury or
wrongful death that is the subject of the action.
``(2) Definitions and related rules.--For purposes of this
subsection and subsection (e)--
``(A) Treatment of excepted benefits.--Under section 154(a)
of the Patients' Bill of Rights Act of 2005, the provisions
of this subsection do not apply to certain excepted benefits.
``(B) Personal injury.--The term `personal injury' means a
physical injury and includes an injury arising out of the
treatment (or failure to treat) a mental illness or disease.
``(C) Claim for benefit; denial.--The terms `claim for
benefits' and `denial of a claim for benefits' shall have the
meaning provided such terms under section 102(e) of the
Patients' Bill of Rights Act of 2005.
``(D) Managed care entity.--
``(i) In general.--The term `managed care entity' means, in
connection with a group health plan and subject to clause
(ii), any entity that is involved in determining the manner
in which or the extent to which items or services (or
reimbursement therefor) are to be provided as benefits under
the plan.
``(ii) Treatment of treating physicians, other treating
health care professionals, and treating hospitals.--Such term
does not include a treating physician or other treating
health care professional (as defined in section
502(n)(6)(B)(i)) of the participant or beneficiary and also
does not include a treating hospital insofar as it is acting
solely in the capacity of providing treatment or care to the
participant or beneficiary. Nothing in the preceding sentence
shall be construed to preempt vicarious liability of any
plan, plan sponsor, health insurance issuer, or managed care
entity.
``(3) Exclusion of employers and other plan sponsors.--
``(A) Causes of action against employers and plan sponsors
precluded.--Subject to subparagraph (B), paragraph (1) does
not apply with respect to--
``(i) any cause of action against an employer or other plan
sponsor maintaining the plan (or against an employee of such
an employer or sponsor acting within the scope of
employment), or
``(ii) a right of recovery, indemnity, or contribution by a
person against an employer or other plan sponsor (or such an
employee) for damages assessed against the person pursuant to
a cause of action to which paragraph (1) applies.
``(B) Certain causes of action permitted.--Notwithstanding
subparagraph (A), paragraph (1) applies with respect to any
cause of action that is brought by a participant or
beneficiary under a group health plan (or the estate of such
a participant or beneficiary) to recover damages resulting
from personal injury or for wrongful death against any
employer or other plan sponsor maintaining the plan (or
against an employee of such an employer or sponsor acting
within the scope of employment) if such cause of action
arises by reason of a medically reviewable decision, to the
extent that there was direct participation by the employer or
other plan sponsor (or employee) in the decision.
``(C) Direct participation.--
``(i) Direct participation in decisions.--For purposes of
subparagraph (B), the term `direct participation' means, in
connection with a decision described in subparagraph (B), the
actual making of such decision or the actual exercise of
control in making such decision or in the conduct
constituting the failure.
``(ii) Rules of construction.--For purposes of clause (i),
the employer or plan sponsor (or employee) shall not be
construed to be engaged in direct participation because
[[Page S5095]]
of any form of decisionmaking or other conduct that is merely
collateral or precedent to the decision described in
subparagraph (B) on a particular claim for benefits of a
particular participant or beneficiary, including (but not
limited to)--
``(I) any participation by the employer or other plan
sponsor (or employee) in the selection of the group health
plan or health insurance coverage involved or the third party
administrator or other agent;
``(II) any engagement by the employer or other plan sponsor
(or employee) in any cost-benefit analysis undertaken in
connection with the selection of, or continued maintenance
of, the plan or coverage involved;
``(III) any participation by the employer or other plan
sponsor (or employee) in the process of creating, continuing,
modifying, or terminating the plan or any benefit under the
plan, if such process was not substantially focused solely on
the particular situation of the participant or beneficiary
referred to in paragraph (1)(A); and
``(IV) any participation by the employer or other plan
sponsor (or employee) in the design of any benefit under the
plan, including the amount of copayment and limits connected
with such benefit.
``(iv) Irrelevance of certain collateral efforts made by
employer or plan sponsor.--For purposes of this subparagraph,
an employer or plan sponsor shall not be treated as engaged
in direct participation in a decision with respect to any
claim for benefits or denial thereof in the case of any
particular participant or beneficiary solely by reason of--
``(I) any efforts that may have been made by the employer
or plan sponsor to advocate for authorization of coverage for
that or any other participant or beneficiary (or any group of
participants or beneficiaries), or
``(II) any provision that may have been made by the
employer or plan sponsor for benefits which are not covered
under the terms and conditions of the plan for that or any
other participant or beneficiary (or any group of
participants or beneficiaries).
``(4) Requirement of exhaustion.--
``(A) In general.--Except as provided in subparagraph (D),
paragraph (1) shall not apply in connection with any action
in connection with any denial of a claim for benefits of any
individual until all administrative processes under sections
102, 103, and 104 of the Patients' Bill of Rights Act of 2005
(if applicable) have been exhausted.
``(B) Late manifestation of injury.--
``(i) In general.--A participant or beneficiary shall not
be precluded from pursuing a review under section 104 of the
Patients' Bill of Rights Act of 2005 regarding an injury that
such participant or beneficiary has experienced if the
external review entity first determines that the injury of
such participant or beneficiary is a late manifestation of an
earlier injury.
``(ii) Definition.--In this subparagraph, the term `late
manifestation of an earlier injury' means an injury sustained
by the participant or beneficiary which was not known, and
should not have been known, by such participant or
beneficiary by the latest date that the requirements of
subparagraph (A) should have been met regarding the claim for
benefits which was denied.
``(C) Exception for needed care.--A participant or
beneficiary may seek relief exclusively in Federal court
under subsection 502(a)(1)(B) prior to the exhaustion of
administrative remedies under sections 102, 103, or 104 of
the Patients' Bill of Rights Act of 2005 (as required under
subparagraph (A)) if it is demonstrated to the court that the
exhaustion of such remedies would cause irreparable harm to
the health of the participant or beneficiary. Notwithstanding
the awarding of relief under subsection 502(a)(1)(B) pursuant
to this subparagraph, no relief shall be available as a
result of, or arising under, paragraph (1)(A) unless the
requirements of subparagraph (A) are met.
``(D) Failure to review.--
``(i) In general.--If the external review entity fails to
make a determination within the time required under section
104(e)(1)(A)(i) of the Patients' Bill of Rights Act of 2005,
subparagraph (A) shall not apply with respect to the action
after 10 additional days after the date on which such time
period has expired and the filing of such action shall not
affect the duty of the independent medical reviewer (or
reviewers) to make a determination pursuant to such section
104(e)(1)(A)(i).
``(ii) Expedited determination.--If the external review
entity fails to make a determination within the time required
under section 104(e)(1)(A)(ii) of the Patients' Bill of
Rights Act of 2005, subparagraph (A) shall not apply with
respect to the action and the filing of such an action shall
not affect the duty of the independent medical reviewer (or
reviewers) to make a determination pursuant to such section
104(e)(1)(A)(ii).
``(E) Receipt of benefits during appeals process.--Receipt
by the participant or beneficiary of the benefits involved in
the claim for benefits during the pendency of any
administrative processes referred to in subparagraph (A) or
the pendency of any action with respect to which, under this
paragraph, subparagraph (A) does not apply--
``(i) shall not preclude continuation of all such
administrative processes to their conclusion if so moved by
any party, and
``(ii) shall not preclude any liability under subsection
(a)(1)(C) and this subsection in connection with such claim.
``(F) Admissible.--Any determination made by a reviewer in
an administrative proceeding under section 104 of the
Patients' Bill of Rights Act of 2005 shall be admissible in
any Federal or State court proceeding and shall be presented
to the trier of fact.
``(5) Tolling provision.--The statute of limitations for
any cause of action arising under section 502(n) relating to
a denial of a claim for benefits that is the subject of an
action brought in State court shall be tolled until such time
as the State court makes a final disposition, including all
appeals, of whether such claim should properly be within the
jurisdiction of the State court. The tolling period shall be
determined by the applicable Federal or State law, whichever
period is greater.
``(6) Exclusion of directed recordkeepers.--
``(A) In general.--Subject to subparagraph (C), paragraph
(1) shall not apply with respect to any action against a
directed recordkeeper in connection with a group health plan.
``(B) Directed recordkeeper.--For purposes of this
paragraph, the term `directed recordkeeper' means, in
connection with a group health plan, a person engaged in
directed recordkeeping activities pursuant to the specific
instructions of the plan or the employer or other plan
sponsor, including the distribution of enrollment information
and distribution of disclosure materials under this Act or
title I of the Patients' Bill of Rights Act of 2005 and whose
duties do not include making decisions on claims for
benefits.
``(C) Limitation.--Subparagraph (A) does not apply in
connection with any directed recordkeeper to the extent that
the directed recordkeeper fails to follow the specific
instruction of the plan or the employer or other plan
sponsor.
``(7) Construction.--Nothing in this subsection shall be
construed as--
``(A) saving from preemption a cause of action under State
law for the failure to provide a benefit for an item or
service which is specifically excluded under the group health
plan involved, except to the extent that--
``(i) the application or interpretation of the exclusion
involves a determination described in section 104(d)(2) of
the Patients' Bill of Rights Act of 2005, or
``(ii) the provision of the benefit for the item or service
is required under Federal law or under applicable State law
consistent with subsection (b)(2)(B);
``(B) preempting a State law which requires an affidavit or
certificate of merit in a civil action;
``(C) affecting a cause of action or remedy under State law
in connection with the provision or arrangement of excepted
benefits (as defined in section 733(c)), other than those
described in section 733(c)(2)(A); or
``(D) affecting a cause of action under State law other
than a cause of action described in paragraph (1)(A).
``(8) Purchase of insurance to cover liability.--Nothing in
section 410 shall be construed to preclude the purchase by a
group health plan of insurance to cover any liability or
losses arising under a cause of action described in paragraph
(1)(A).
``(9) Relief from liability for employer or other plan
sponsor by means of designated decisionmaker.--
``(A) In general.--Paragraph (1) shall not apply with
respect to any cause of action described in paragraph (1)(A)
under State law insofar as such cause of action provides for
liability with respect to a participant or beneficiary of an
employer or plan sponsor (or an employee of such employer or
sponsor acting within the scope of employment), if with
respect to the employer or plan sponsor there is (or is
deemed under subparagraph (B) to be) a designated
decisionmaker that meets the requirements of section
502(o)(1) with respect to such participant or beneficiary.
Such paragraph (1) shall apply with respect to any cause of
action described in paragraph (1)(A) under State law against
the designated decisionmaker of such employer or other plan
sponsor with respect to the participant or beneficiary.
``(B) Automatic designation.--A health insurance issuer
shall be deemed to be a designated decisionmaker for purposes
of subparagraph (A) with respect to the participants and
beneficiaries of an employer or plan sponsor, whether or not
the employer or plan sponsor makes such a designation, and
shall be deemed to have assumed unconditionally all liability
of the employer or plan sponsor under such designation in
accordance with subsection (o), unless the employer or plan
sponsor affirmatively enters into a contract to prevent the
service of the designated decisionmaker.
``(C) Treatment of certain trust funds.--For purposes of
this paragraph, the terms `employer' and `plan sponsor', in
connection with the assumption by a designated decisionmaker
of the liability of employer or other plan sponsor pursuant
to this paragraph, shall be construed to include a trust fund
maintained pursuant to section 302 of the Labor Management
Relations Act, 1947 (29 U.S.C. 186) or the Railway Labor Act
(45 U.S.C. 151 et seq.).
``(10) Previously provided services.--
``(A) In general.--Except as provided in this paragraph,
paragraph (1) shall not apply with respect to a cause of
action where the denial involved relates to an item or
service that has already been fully provided to the
participant or beneficiary under the plan or coverage and the
claim relates solely to the subsequent denial of payment for
the provision of such item or service.
[[Page S5096]]
``(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
``(i) exclude a cause of action from exemption under
paragraph (1) where the nonpayment involved results in the
participant or beneficiary being unable to receive further
items or services that are directly related to the item or
service involved in the denial referred to in subparagraph
(A) or that are part of a continuing treatment or series of
procedures;
``(ii) exclude a cause of action from exemption under
paragraph (1) relating to quality of care; or
``(iii) limit liability that otherwise would arise from the
provision of the item or services or the performance of a
medical procedure.
``(11) Exemption from personal liability for individual
members of boards of directors, joint boards of trustees,
etc.--Any individual who is--
``(A) a member of a board of directors of an employer or
plan sponsor; or
``(B) a member of an association, committee, employee
organization, joint board of trustees, or other similar group
of representatives of the entities that are the plan sponsor
of plan maintained by two or more employers and one or more
employee organizations;
shall not be personally liable, by reason of the exemption of
a cause of action from preemption under this subsection, for
conduct that is within the scope of employment or of plan-
related duties of the individuals unless the individual acts
in a fraudulent manner for personal enrichment.
``(12) Choice of law.--A cause of action exempted from
preemption under paragraph (1) shall be governed by the law
(including choice of law rules) of the State in which the
plaintiff resides.
``(13) Limitation on attorneys' fees.--
``(A) In general.--Notwithstanding any other provision of
law, or any arrangement, agreement, or contract regarding an
attorney's fee, the amount of an attorney's contingency fee
allowable for a cause of action exemption from preemption
under paragraph (1) shall not exceed \1/3\ of the total
amount of the plaintiff's recovery (not including the
reimbursement of actual out-of-pocket expenses of the
attorney).
``(B) Determination by court.--The last court in which the
action was pending upon the final disposition, including all
appeals, of the action may review the attorney's fee to
ensure that the fee is a reasonable one.
``(C) No preemption of state law.--Subparagraph (A) shall
not apply with respect to a cause of action that is brought
in a State that has a law or framework of laws with respect
to the amount of an attorney's contingency fee that may be
incurred for the representation of a participant or
beneficiary (or the estate of such participant or
beneficiary) who brings such a cause of action.
``(e) Rules of Construction Relating to Health Care.--
Nothing in this title shall be construed as--
``(1) affecting any State law relating to the practice of
medicine or the provision of, or the failure to provide,
medical care, or affecting any action (whether the liability
is direct or vicarious) based upon such a State law,
``(2) superseding any State law permitted under section
152(b)(1)(A) of the Patients' Bill of Rights Act of 2005, or
``(3) affecting any applicable State law with respect to
limitations on monetary damages.
``(f) No Right of Action for Recovery, Indemnity, or
Contribution by Issuers Against Treating Health Care
Professionals and Treating Hospitals.--In the case of any
care provided, or any treatment decision made, by the
treating health care professional or the treating hospital of
a participant or beneficiary under a group health plan which
consists of medical care provided under such plan, any cause
of action under State law against the treating health care
professional or the treating hospital by the plan or a health
insurance issuer providing health insurance coverage in
connection with the plan for recovery, indemnity, or
contribution in connection with such care (or any medically
reviewable decision made in connection with such care) or
such treatment decision is superseded.''.
(c) Effective Date.--The amendments made by this section
shall apply to acts and omissions (from which a cause of
action arises) occurring on or after the applicable effective
date under section 601.
SEC. 403. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
(a) In General.--Subpart C of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1191 et seq.) is amended by adding at the end the
following new section:
``SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE
AUTHORITIES.
``(a) Agreement With States.--A State may enter into an
agreement with the Secretary for the delegation to the State
of some or all of the Secretary's authority under this title
to enforce the requirements applicable under title I of the
Patients' Bill of Rights Act of 2005 with respect to health
insurance coverage offered by a health insurance issuer and
with respect to a group health plan that is a non-Federal
governmental plan.
``(b) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this section may,
if authorized under State law and to the extent consistent
with such agreement, exercise the powers of the Secretary
under this title which relate to such authority.''.
(b) Clerical Amendment.--The table of contents of such Act
is amended by inserting after the item relating to section
734 the following new item:
``Sec. 735. Cooperation between Federal and State authorities''.
TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Application of Patient Protection Provisions
SEC. 501. APPLICATION TO GROUP HEALTH PLANS UNDER THE
INTERNAL REVENUE CODE OF 1986.
Subchapter B of chapter 100 of the Internal Revenue Code of
1986 is amended--
(1) in the table of sections, by inserting after the item
relating to section 9812 the following new item:
``Sec. 9813. Standard relating to patients' bill of rights''; and
(2) by inserting after section 9812 the following:
``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.
``A group health plan shall comply with the requirements of
title I of the Patients' Bill of Rights Act of 2005 (as in
effect as of the date of the enactment of such Act), and such
requirements shall be deemed to be incorporated into this
section.''.
SEC. 502. CONFORMING ENFORCEMENT FOR WOMEN'S HEALTH AND
CANCER RIGHTS.
Subchapter B of chapter 100 of the Internal Revenue Code of
1986, as amended by section 501, is further amended--
(1) in the table of sections, by inserting after the item
relating to section 9813 the following new item:
``Sec. 9814. Standard relating to women's health and cancer rights'';
and
(2) by inserting after section 9813 the following:
``SEC. 9814. STANDARD RELATING TO WOMEN'S HEALTH AND CANCER
RIGHTS.
``The provisions of section 713 of the Employee Retirement
Income Security Act of 1974 (as in effect as of the date of
the enactment of this section) shall apply to group health
plans as if included in this subchapter.''.
Subtitle B--Health Care Coverage Access Tax Incentives
SEC. 511. CREDIT FOR HEALTH INSURANCE EXPENSES OF SMALL
BUSINESSES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business-related credits) is amended by adding at the end the
following:
``SEC. 45J. SMALL BUSINESS HEALTH INSURANCE EXPENSES.
``(a) General Rule.--For purposes of section 38, in the
case of a small employer, the health insurance credit
determined under this section for the taxable year is an
amount equal to the applicable percentage of the expenses
paid by the taxpayer during the taxable year for health
insurance coverage for such year provided under a new health
plan for employees of such employer.
``(b) Applicable Percentage.--For purposes of subsection
(a), the applicable percentage is--
``(1) in the case of insurance purchased as a member of a
qualified health benefit purchasing coalition (as defined in
section 9841), 30 percent, and
``(2) in the case of insurance not described in paragraph
(1), 20 percent.
``(c) Limitations.--
``(1) Per employee dollar limitation.--The amount of
expenses taken into account under subsection (a) with respect
to any employee for any taxable year shall not exceed--
``(A) $2,000 in the case of self-only coverage, and
``(B) $5,000 in the case of family coverage.
In the case of an employee who is covered by a new health
plan of the employer for only a portion of such taxable year,
the limitation under the preceding sentence shall be an
amount which bears the same ratio to such limitation
(determined without regard to this sentence) as such portion
bears to the entire taxable year.
``(2) Period of coverage.--Expenses may be taken into
account under subsection (a) only with respect to coverage
for the 4-year period beginning on the date the employer
establishes a new health plan.
``(d) Definitions.--For purposes of this section--
``(1) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term by
section 9832(b)(1).
``(2) New health plan.--
``(A) In general.--The term `new health plan' means any
arrangement of the employer which provides health insurance
coverage to employees if--
``(i) such employer (and any predecessor employer) did not
establish or maintain such arrangement (or any similar
arrangement) at any time during the 2 taxable years ending
prior to the taxable year in which the credit under this
section is first allowed, and
``(ii) such arrangement provides health insurance coverage
to at least 70 percent of the qualified employees of such
employer.
``(B) Qualified employee.--
``(i) In general.--The term `qualified employee' means any
employee of an employer
[[Page S5097]]
if the annual rate of such employee's compensation (as
defined in section 414(s)) exceeds $10,000.
``(ii) Treatment of certain employees.--The term `employee'
shall include a leased employee within the meaning of section
414(n).
``(3) Small employer.--The term `small employer' has the
meaning given to such term by section 4980D(d)(2); except
that only qualified employees shall be taken into account.
``(e) Special Rules.--
``(1) Certain rules made applicable.--For purposes of this
section, rules similar to the rules of section 52 shall
apply.
``(2) Amounts paid under salary reduction arrangements.--No
amount paid or incurred pursuant to a salary reduction
arrangement shall be taken into account under subsection (a).
``(f) Termination.--This section shall not apply to
expenses paid or incurred by an employer with respect to any
arrangement established on or after January 1, 2014.''.
(b) Credit to Be Part of General Business Credit.--Section
38(b) of such Code (relating to current year business credit)
is amended by striking ``plus'' at the end of paragraph (18),
by striking the period at the end of paragraph (19) and
inserting ``, plus'', and by adding at the end the following:
``(20) in the case of a small employer (as defined in
section 45J(d)(3)), the health insurance credit determined
under section 45J(a).''.
(c) Denial of Double Benefit.--Section 280C of such Code is
amended by adding at the end the following new subsection:
``(e) Credit for Small Business Health Insurance
Expenses.--
``(1) In general.--No deduction shall be allowed for that
portion of the expenses (otherwise allowable as a deduction)
taken into account in determining the credit under section
45J for the taxable year which is equal to the amount of the
credit determined for such taxable year under section 45J(a).
``(2) Controlled groups.--Persons treated as a single
employer under subsection (a) or (b) of section 52 shall be
treated as 1 person for purposes of this section.''.
(d) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following:
``Sec. 45J. Small business health insurance expenses''.
(e) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2006, for arrangements
established after the date of the enactment of this Act.
SEC. 512. CERTAIN GRANTS BY PRIVATE FOUNDATIONS TO QUALIFIED
HEALTH BENEFIT PURCHASING COALITIONS.
(a) In General.--Section 4942 of the Internal Revenue Code
of 1986 (relating to taxes on failure to distribute income)
is amended by adding at the end the following:
``(k) Certain Qualified Health Benefit Purchasing Coalition
Distributions.--
``(1) In general.--For purposes of subsection (g), sections
170, 501, 507, 509, and 2522, and this chapter, a qualified
health benefit purchasing coalition distribution by a private
foundation shall be considered to be a distribution for a
charitable purpose.
``(2) Qualified health benefit purchasing coalition
distribution.--For purposes of paragraph (1)--
``(A) In general.--The term `qualified health benefit
purchasing coalition distribution' means any amount paid or
incurred by a private foundation to or on behalf of a
qualified health benefit purchasing coalition (as defined in
section 9841) for purposes of payment or reimbursement of
amounts paid or incurred in connection with the establishment
and maintenance of such coalition.
``(B) Exclusions.--Such term shall not include any amount
used by a qualified health benefit purchasing coalition (as
so defined)--
``(i) for the purchase of real property,
``(ii) as payment to, or for the benefit of, members (or
employees or affiliates of such members) of such coalition,
or
``(iii) for any expense paid or incurred more than 48
months after the date of establishment of such coalition.
``(3) Termination.--This subsection shall not apply--
``(A) to qualified health benefit purchasing coalition
distributions paid or incurred after December 31, 2013, and
``(B) with respect to start-up costs of a coalition which
are paid or incurred after December 31, 2014.''.
(b) Qualified Health Benefit Purchasing Coalition.--
(1) In general.--Chapter 100 of such Code (relating to
group health plan requirements) is amended by adding at the
end the following new subchapter:
``Subchapter D--Qualified Health Benefit Purchasing Coalition
``Sec. 9841. Qualified health benefit purchasing coalition
``SEC. 9841. QUALIFIED HEALTH BENEFIT PURCHASING COALITION.
``(a) In General.--A qualified health benefit purchasing
coalition is a private not-for-profit corporation which--
``(1) sells health insurance through State licensed health
insurance issuers in the State in which the employers to
which such coalition is providing insurance are located, and
``(2) establishes to the Secretary, under State
certification procedures or other procedures as the Secretary
may provide by regulation, that such coalition meets the
requirements of this section.
``(b) Board of Directors.--
``(1) In general.--Each purchasing coalition under this
section shall be governed by a Board of Directors.
``(2) Election.--The Secretary shall establish procedures
governing election of such Board.
``(3) Membership.--The Board of Directors shall--
``(A) be composed of representatives of the members of the
coalition, in equal number, including small employers and
employee representatives of such employers, but
``(B) not include other interested parties, such as service
providers, health insurers, or insurance agents or brokers
which may have a conflict of interest with the purposes of
the coalition.
``(c) Membership of Coalition.--
``(1) In general.--A purchasing coalition shall accept all
small employers residing within the area served by the
coalition as members if such employers request such
membership.
``(2) Other members.--The coalition, at the discretion of
its Board of Directors, may be open to individuals and large
employers.
``(3) Voting.--Members of a purchasing coalition shall have
voting rights consistent with the rules established by the
State.
``(d) Duties of Purchasing Coalitions.--Each purchasing
coalition shall--
``(1) enter into agreements with small employers (and, at
the discretion of its Board, with individuals and other
employers) to provide health insurance benefits to employees
and retirees of such employers,
``(2) where feasible, enter into agreements with 3 or more
unaffiliated, qualified licensed health plans, to offer
benefits to members,
``(3) offer to members at least 1 open enrollment period of
at least 30 days per calendar year,
``(4) serve a significant geographical area and market to
all eligible members in that area, and
``(5) carry out other functions provided for under this
section.
``(e) Limitation on Activities.--A purchasing coalition
shall not--
``(1) perform any activity (including certification or
enforcement) relating to compliance or licensing of health
plans,
``(2) assume insurance or financial risk in relation to any
health plan, or
``(3) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this section.
``(f) Additional Requirements for Purchasing Coalitions.--
As provided by the Secretary in regulations, a purchasing
coalition shall be subject to requirements similar to the
requirements of a group health plan under this chapter.
``(g) Relation to Other Laws.--
``(1) Preemption of state fictitious group laws.--
Requirements (commonly referred to as fictitious group laws)
relating to grouping and similar requirements for health
insurance coverage are preempted to the extent such
requirements impede the establishment and operation of
qualified health benefit purchasing coalitions.
``(2) Allowing savings to be passed through.--Any State law
that prohibits health insurance issuers from reducing
premiums on health insurance coverage sold through a
qualified health benefit purchasing coalition to reflect
administrative savings is preempted. This paragraph shall not
be construed to preempt State laws that impose restrictions
on premiums based on health status, claims history, industry,
age, gender, or other underwriting factors.
``(3) No waiver of hipaa requirements.--Nothing in this
section shall be construed to change the obligation of health
insurance issuers to comply with the requirements of title
XXVII of the Public Health Service Act with respect to health
insurance coverage offered to small employers in the small
group market through a qualified health benefit purchasing
coalition.
``(h) Definition of Small Employer.--For purposes of this
section--
``(1) In general.--The term `small employer' means, with
respect to any calendar year, any employer if such employer
employed an average of at least 2 and not more than 50
qualified employees on business days during either of the 2
preceding calendar years. For purposes of the preceding
sentence, a preceding calendar year may be taken into account
only if the employer was in existence throughout such year.
``(2) Employers not in existence in preceding year.--In the
case of an employer which was not in existence throughout the
1st preceding calendar year, the determination under
paragraph (1) shall be based on the average number of
qualified employees that it is reasonably expected such
employer will employ on business days in the current calendar
year.''.
(2) Conforming amendment.--The table of subchapters for
chapter 100 of such Code is amended by adding at the end the
following item:
``Subchapter D--Qualified Health Benefit Purchasing Coalition''.
(c) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2006.
SEC. 513. STATE GRANT PROGRAM FOR MARKET INNOVATION.
(a) In General.--The Secretary of Health and Human Services
(in this section referred
[[Page S5098]]
to as the ``Secretary'') shall establish a program (in this
section referred to as the ``program'') to award
demonstration grants under this section to States to allow
States to demonstrate the effectiveness of innovative ways to
increase access to health insurance through market reforms
and other innovative means. Such innovative means may include
(and are not limited to) any of the following:
(1) Alternative group purchasing or pooling arrangements,
such as purchasing cooperatives for small businesses,
reinsurance pools, or high risk pools.
(2) Individual or small group market reforms.
(3) Consumer education and outreach.
(4) Subsidies to individuals, employers, or both, in
obtaining health insurance.
(b) Scope; Duration.--The program shall be limited to not
more than 10 States and to a total period of 5 years,
beginning on the date the first demonstration grant is made.
(c) Conditions for Demonstration Grants.--
(1) In general.--The Secretary may not provide for a
demonstration grant to a State under the program unless the
Secretary finds that under the proposed demonstration grant--
(A) the State will provide for demonstrated increase of
access for some portion of the existing uninsured population
through a market innovation (other than merely through a
financial expansion of a program initiated before the date of
the enactment of this Act);
(B) the State will comply with applicable Federal laws;
(C) the State will not discriminate among participants on
the basis of any health status-related factor (as defined in
section 2791(d)(9) of the Public Health Service Act), except
to the extent a State wishes to focus on populations that
otherwise would not obtain health insurance because of such
factors; and
(D) the State will provide for such evaluation, in
coordination with the evaluation required under subsection
(d), as the Secretary may specify.
(2) Application.--The Secretary shall not provide a
demonstration grant under the program to a State unless--
(A) the State submits to the Secretary such an application,
in such a form and manner, as the Secretary specifies;
(B) the application includes information regarding how the
demonstration grant will address issues such as governance,
targeted population, expected cost, and the continuation
after the completion of the demonstration grant period; and
(C) the Secretary determines that the demonstration grant
will be used consistent with this section.
(3) Focus.--A demonstration grant proposal under section
need not cover all uninsured individuals in a State or all
health care benefits with respect to such individuals.
(d) Evaluation.--The Secretary shall enter into a contract
with an appropriate entity outside the Department of Health
and Human Services to conduct an overall evaluation of the
program at the end of the program period. Such evaluation
shall include an analysis of improvements in access, costs,
quality of care, or choice of coverage, under different
demonstration grants.
(e) Option to Provide for Initial Planning Grants.--
Notwithstanding the previous provisions of this section,
under the program the Secretary may provide for a portion of
the amounts appropriated under subsection (f) (not to exceed
$5,000,000) to be made available to any State for initial
planning grants to permit States to develop demonstration
grant proposals under the previous provisions of this
section.
(f) Authorization of Appropriations.--There are authorized
to be appropriated $100,000,000 for each fiscal year to carry
out this section. Amounts appropriated under this subsection
shall remain available until expended.
(g) State Defined.--For purposes of this section, the term
``State'' has the meaning given such term for purposes of
title XIX of the Social Security Act.
SEC. 514. GRANT PROGRAM TO FACILITATE HEALTH BENEFITS
INFORMATION FOR SMALL EMPLOYERS.
(a) In General.--The Small Business Administration shall
award grants to 1 or more States, local governments, and non-
profit organizations for the purposes of--
(1) demonstrating new and effective ways to provide
information about the benefits of health insurance to small
employers, including tax benefits, increased productivity of
employees, and decreased turnover of employees,
(2) making employers aware of their current rights in the
marketplace under State and Federal health insurance reforms,
and
(3) making employers aware of the tax treatment of
insurance premiums.
(b) Authorization.--There is authorized to be appropriated
$10,000,000 for each of the first 5 fiscal years beginning
after the date of the enactment of this Act for grants under
subsection (a).
SEC. 515. STATE GRANT PROGRAM FOR MARKET INNOVATION.
(a) In General.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
establish a program (in this section referred to as the
``program'') to award demonstration grants under this section
to States to allow States to demonstrate the effectiveness of
innovative ways to increase access to health insurance
through market reforms and other innovative means. Such
innovative means may include (and are not limited to) any of
the following:
(1) Alternative group purchasing or pooling arrangements,
such as purchasing cooperatives for small businesses,
reinsurance pools, or high risk pools.
(2) Individual or small group market reforms.
(3) Consumer education and outreach.
(4) Subsidies to individuals, employers, or both, in
obtaining health insurance.
(b) Scope; Duration.--The program shall be limited to not
more than 10 States and to a total period of 5 years,
beginning on the date the first demonstration grant is made.
(c) Conditions for Demonstration Grants.--
(1) In general.--The Secretary may not provide for a
demonstration grant to a State under the program unless the
Secretary finds that under the proposed demonstration grant--
(A) the State will provide for demonstrated increase of
access for some portion of the existing uninsured population
through a market innovation (other than merely through a
financial expansion of a program initiated before the date of
the enactment of this Act);
(B) the State will comply with applicable Federal laws;
(C) the State will not discriminate among participants on
the basis of any health status-related factor (as defined in
section 2791(d)(9) of the Public Health Service Act), except
to the extent a State wishes to focus on populations that
otherwise would not obtain health insurance because of such
factors; and
(D) the State will provide for such evaluation, in
coordination with the evaluation required under subsection
(d), as the Secretary may specify.
(2) Application.--The Secretary shall not provide a
demonstration grant under the program to a State unless--
(A) the State submits to the Secretary such an application,
in such a form and manner, as the Secretary specifies;
(B) the application includes information regarding how the
demonstration grant will address issues such as governance,
targeted population, expected cost, and the continuation
after the completion of the demonstration grant period; and
(C) the Secretary determines that the demonstration grant
will be used consistent with this section.
(3) Focus.--A demonstration grant proposal under section
need not cover all uninsured individuals in a State or all
health care benefits with respect to such individuals.
(d) Evaluation.--The Secretary shall enter into a contract
with an appropriate entity outside the Department of Health
and Human Services to conduct an overall evaluation of the
program at the end of the program period. Such evaluation
shall include an analysis of improvements in access, costs,
quality of care, or choice of coverage, under different
demonstration grants.
(e) Option to Provide for Initial Planning Grants.--
Notwithstanding the previous provisions of this section,
under the program the Secretary may provide for a portion of
the amounts appropriated under subsection (f) (not to exceed
$5,000,000) to be made available to any State for initial
planning grants to permit States to develop demonstration
grant proposals under the previous provisions of this
section.
(f) Authorization of Appropriations.--There are authorized
to be appropriated $100,000,000 for each fiscal year to carry
out this section. Amounts appropriated under this subsection
shall remain available until expended.
(g) State Defined.--For purposes of this section, the term
``State'' has the meaning given such term for purposes of
title XIX of the Social Security Act.
TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
SEC. 601. EFFECTIVE DATES.
(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2) and subsection
(d), the amendments made by sections 201(a), 401, 501, and
502 (and title I insofar as it relates to such sections)
shall apply with respect to group health plans, and health
insurance coverage offered in connection with group health
plans, for plan years beginning on or after October 1, 2006
(in this section referred to as the ``general effective
date'').
(2) Treatment of collective bargaining agreements.--In the
case of a group health plan maintained pursuant to one or
more collective bargaining agreements between employee
representatives and one or more employers ratified before the
date of the enactment of this Act, the amendments made by
sections 201(a), 401, 501, and 502 (and title I insofar as it
relates to such sections) shall not apply to plan years
beginning before the later of--
(A) the date on which the last collective bargaining
agreements relating to the plan terminates (excluding any
extension thereof agreed to after the date of the enactment
of this Act); or
(B) the general effective date;
but shall apply not later than 1 year after the general
effective date. For purposes of subparagraph (A), any plan
amendment made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to conform
to any requirement added by this Act shall not be treated as
a
[[Page S5099]]
termination of such collective bargaining agreement.
(b) Individual Health Insurance Coverage.--Subject to
subsection (d), the amendments made by section 202 shall
apply with respect to individual health insurance coverage
offered, sold, issued, renewed, in effect, or operated in the
individual market on or after the general effective date.
(c) Treatment of Religious Nonmedical Providers.--
(1) In general.--Nothing in this Act (or the amendments
made thereby) shall be construed to--
(A) restrict or limit the right of group health plans, and
of health insurance issuers offering health insurance
coverage, to include as providers religious nonmedical
providers;
(B) require such plans or issuers to--
(i) utilize medically based eligibility standards or
criteria in deciding provider status of religious nonmedical
providers;
(ii) use medical professionals or criteria to decide
patient access to religious nonmedical providers;
(iii) utilize medical professionals or criteria in making
decisions in internal or external appeals regarding coverage
for care by religious nonmedical providers; or
(iv) compel a participant or beneficiary to undergo a
medical examination or test as a condition of receiving
health insurance coverage for treatment by a religious
nonmedical provider; or
(C) require such plans or issuers to exclude religious
nonmedical providers because they do not provide medical or
other required data, if such data is inconsistent with the
religious nonmedical treatment or nursing care provided by
the provider.
(2) Religious nonmedical provider.--For purposes of this
subsection, the term ``religious nonmedical provider'' means
a provider who provides no medical care but who provides only
religious nonmedical treatment or religious nonmedical
nursing care.
(d) Transition for Notice Requirement.--The disclosure of
information required under section 121 of this Act shall
first be provided pursuant to--
(1) subsection (a) with respect to a group health plan that
is maintained as of the general effective date, not later
than 30 days before the beginning of the first plan year to
which title I applies in connection with the plan under such
subsection; or
(2) subsection (b) with respect to an individual health
insurance coverage that is in effect as of the general
effective date, not later than 30 days before the first date
as of which title I applies to the coverage under such
subsection.
SEC. 602. COORDINATION IN IMPLEMENTATION.
The Secretary of Labor and the Secretary of Health and
Human Services shall ensure, through the execution of an
interagency memorandum of understanding among such
Secretaries, that--
(1) regulations, rulings, and interpretations issued by
such Secretaries relating to the same matter over which such
Secretaries have responsibility under the provisions of this
Act (and the amendments made thereby) are administered so as
to have the same effect at all times; and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have a
coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.
SEC. 603. SEVERABILITY.
If any provision of this Act, an amendment made by this
Act, or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the
remainder of this Act, the amendments made by this Act, and
the application of the provisions of such to any person or
circumstance shall not be affected thereby.
TITLE VII--MISCELLANEOUS PROVISIONS
SEC. 701. NO IMPACT ON SOCIAL SECURITY TRUST FUND.
(a) In General.--Nothing in this Act (or an amendment made
by this Act) shall be construed to alter or amend the Social
Security Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
Act has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of
this Act has a negative impact on the income and balances of
the trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer,
not less frequently than quarterly, from the general revenues
of the Federal Government an amount sufficient so as to
ensure that the income and balances of such trust funds are
not reduced as a result of the enactment of such Act.
______
By Mrs. FEINSTEIN (for herself, Mr. Cornyn, Mr. Lautenberg, Mrs.
Hutchison, Mrs. Boxer, Mr. Corzine, Mr. Schumer, Mrs. Clinton,
Mr. Nelson of Florida, and Mr. Kennedy):
S. 1013. A bill to improve the allocation of grants through the
Department of Homeland Security, and for other purposes; to the
Committee on Homeland Security and Governmental Affairs.
Mrs. FEINSTEIN. Mr. President, I rise today to introduce the Homeland
Security FORWARD Funding Act of 2005. I am pleased to be joined by my
colleague from Texas, Senator John Cornyn, as well as Senators
Lautenberg, Hutchison, Boxer, Corzine, Schumer, Clinton and Senator
Nelson of Florida.
It is time that Congress ensures that funding to bolster the security
of our nation goes to where the threat is the greatest.
Unfortunately, billions of dollars in homeland security funds to
states and local communities--including $3.6 billion in fiscal year
2005--are now being distributed to areas that are not at the greatest
risk of terrorist attack.
To do this, we need to adopt risk-based analysis to determine where
our homeland security funding goes, rather than continue with the
present system of ad hoc determinations, ``small-state minimums'' and
poorly understood decision-making, that leave some targets exposed to
threats while sending resources to places where there is little chance
of terrorist attack.
This legislation will ensure that priorities are set according to
analysis of risk and threat. Specifically it directs the Secretary of
Homeland Security to allocate funding to homeland security grants based
on risk analysis.
This is the core of the bill, and I believe it is so important that I
will quote in full the operative language, which appears in the very
first substantive section of the legislation: ``The Secretary shall
ensure that homeland security grants are allocated based on an
assessment of threat, vulnerability, and consequence to the maximum
extent practicable.''
This direction covers the four major first-responder grant programs
administered by Department of Homeland Security in addition to grants
for seaport and airport security--called ``covered grants'' in the
bill, including: 1. the State Homeland Security Grant Program; 2. the
Urban Area Security Initiative; 3. the Law Enforcement Terrorism
Prevention Program; and 4. the Citizens Corps Program.
Reduces the ``small state minimum'' to 25 percent per State. Current
practice requires each state to get .75 percent of much of the grant
funding. That means 37.5 percent of the funds are marked for
distribution before any risk analysis.
Requires grants be designed to meet ``essential capabilities.''
Essential capabilities are what we get for the money spent--the ability
to address the risk by reducing vulnerability to attack and by
diminishing the consequences of such an attack by effective response.
Ensures that States quickly and effectively pass on Federal funds to
where they are needed so that Federal funds are not held back.
The bottom line is this: if Federal funds are going to be distributed
to improve our national ability to ``prevent, prepare for, respond to,
or mitigate threatened or actual terrorist attacks,'' those funds
should be distributed in accordance with a risk-based analysis.
In this post-Cold War world of asymmetric threat there are two
fundamental principles we should apply to efforts to make our nation
more secure against a terrorist attack: the first is that understanding
and predicting what terrorists will do requires risk analysis.
It is an uncomfortable fact that, even with the best intelligence, we
will never know exactly how, when and where terrorists will strike--the
best we can do is try to assess risks and threats, and make
predictions.
The second principle is that our defense resources are finite.
The total amount of money, time and personnel that can be devoted to
homeland security is limited. That means tough choices have to be made
by both the Congress, and by Executive Branch officials at the Federal,
State and Local level.
Together these two principles define what we need to do for our
Nation: accurately assess the risks of an array of possible terrorist
attacks; measure the vulnerability of all of these possible targets,
and then allocate our resources based on that assessment.
Three years ago, we created the Department of Homeland Security in an
[[Page S5100]]
effort to create an institution that could perform this task.
The core element of the new Department was to be the Information
Assessment and Infrastructure Protection Directorate, which would
``merge under one roof the capability to identify and assess current
and future threats to the homeland, map those threats against our
vulnerabilities, issue timely warnings and take preventive and
protective action.''
We are failing in this effort.
The 9/11 Commission agreed, finding that ``nothing has been harder
for officials--executive or legislative than to set priorities, making
hard choices in allocating limited resources.''
The Commission concluded, ``Homeland security assistance should be
based strictly on an assessment of risks and vulnerabilities.''
This bill does just that.
The New York Times, an editorial published last month, titled ``Real
Security, or Politics as Usual?'' agreed:
Any terrorist who has followed how domestic security money
is distributed in this country must be encouraged by the
government's ineptness . . . The current formula is based in
part on population, rather than risk, and contains state
minimums, so even sparsely populated states that hardly have
a plausible terrorism target are raking in money. This is the
formula that gave Wyoming seven times more domestic security
money per capita than New York . . . If there were a
successful attack on Wall Street or the ports of Los Angeles
and Long Beach, it would be a blow to the whole nation.
Defending places where the terrorist threat is greatest is
not parochialism; it is defending America.
Despite these recommendations, we find again and again that scarce
resources are allocated based on factors unrelated to real security.
For instance, Congress has established a ``small State minimum''
designed to ensure that every State gets a substantial portion of
scarce resources, regardless of the measure of risk or vulnerability.
As a result, in fiscal year 2004 Wyoming spent $37.52 per capita with
homeland security grants, while California and Texas spent $8.75 and
$6.93 respectively.
The problem is not just in Congress. For example, a recent Department
of Homeland Security Inspector General's report found that in the
critical area of port security, grants are ``not well coordinated with
the Information Analysis and Infrastructure Protection.''
The result is the ``funding of projects with low [risk and
vulnerability] scores.''
A recently issued report from the Center for Security Studies and the
Heritage Foundation found that there is:
no funding formula that is based on risk analysis and
divorced from politics . . . [w]ith only limited resources
available to achieve the almost limitless goal of protecting
the entire United States . . . it is critical that we set
priorities.
This bill is a first step to reducing threats of terrorist attack,
but Congress can not do it alone.
The Department of Homeland Security must embrace not only the concept
of risk-based allocation, but also the practical aspects of the
discipline. That means improving the intelligence analysis and
vulnerability assessment functions of the Department.
We also need to follow through on last year's intelligence reform
efforts, since the product of the Intelligence Community--analysis of
the plans, intentions and capabilities of terrorist groups--is the key
element in an effective risk analysis.
This will not be easy. There are lots of vested interests who will
oppose such efforts. But our nation's safety is at sake. It is time to
put aside pork-barrel politics and a Cold War mentality and get to
work.
Last year Representatives Cox and Turner, the Chair and Ranking
Member, respectively, of the other body's Homeland Security Committee
put forth similar legislation.
That effort passed the House of Representatives as part of the
Intelligence Reform Bill, but was dropped at conference--that bill has
been reintroduced, and is scheduled for consideration on the floor of
the House this week.
This bill is based on Chairman Cox's efforts, and with a few
exceptions tracks it closely.
However, unlike the House bill, this bill makes an across-the-board
reduction of the small-State minimum to .25 percent--the House bill
retains a sliding scale that I believe will have the effect of
undercutting its risk-based approach.
In this body, Senators Collins and Lieberman have been working to
craft risk-based legislation, which was recently reported favorably by
the Senate Homeland Security Committee.
I hope that the bill introduced today will be accepted by Senators
Collins and Lieberman in the spirit in which it was drafted--as a
reasoned alternative to their approach, and as a starting point for
further discussions.
It is my hope that Congress will act quickly to pass this
legislation. We cannot afford to wait until it is too late.
Mr. CORNYN. Mr. President, I rise today to join with my colleague,
Senator Dianne Feinstein of California and other of our distinguished
colleagues in introducing The Homeland Security FORWARD Funding Act of
2005.
I would like to thank Senator Feinstein for her collaboration in
crafting this legislation. I know that she has thoughtfully examined
the current state of our Homeland Security Funding and the many other
interrelated issues, and I thank her for her fine leadership as we work
together exploring ways to better protect our country.
We say it often, and it is true: ``9/11 changed everything.'' The
attacks of that day were unprecedented in our history, and they brought
with them the need for similarly unprecedented security measures. In an
effort to respond quickly to the devastation that was wrought upon our
country, the Federal Government created a system that worked to raise
overall national emergency preparedness to ensure we could better guard
against another such terrorist attack.
And so we embarked on the task of shoring up our airline,
transportation, border, and port security. We worked to protect our
critical infrastructure, to protect our cyber security, our agriculture
and food supply systems.
But taxpayer dollars are not limitless, and Congress must work to
ensure every penny be directed where it will do the most good. It is
imperative that we guard the places across our nation where terrorists
may strike and where such strikes could do the most damage to our
people, our government, and our national economy. We believe this is
the most responsible way to prepare for any future terrorist attack.
We need to have a system that will protect our most vulnerable
population centers, and that recognizes the need to protect the
critical infrastructure and vital components of our national economy. I
am reminded of a recent tour I took of several Texas seaports. I
visited with port directors, industry leaders, and emergency responders
in and around the ports of Houston, Beaumont, and Corpus Christi. They
have enormous security needs and the consequences of a terrorist attack
on any of these facilities would be devastating, not only to the local
communities, but to the economic engine of the whole country.
The legislation that Senator Feinstein and I now propose would
require that Federal Homeland Security funds be allocated to states
according to a risk-based assessment. It is vital that we better
allocate our limited resources to the vulnerable places in the country
we most need to protect, and that that these funds are distributed in
an efficient and timely manner.
Senator Feinstein and I have evaluated the 9/11 Commission
recommendations that call for allocation of money based on
vulnerabilities, and our legislation provides for a distribution
formula for homeland security grants based on three main criteria:
Threat, vulnerability, and consequence. This would require states to
quickly pass on federal funds to where they are most needed. This bill
is inspired by the hard work and examination done on this issue by our
colleagues in the House and Senate. We have also taken input from
stakeholders in our respective States and from across the country. It
is our hope and intention that by introducing this bill we can
contribute and enrich the public discourse on this critical issue and
help move the Nation toward a more rational and effective distribution
of our homeland security resources.
Key provisions of this bill include: establishing a First Responder
Grant Board, consisting of Department of
[[Page S5101]]
Homeland Security leadership, that will rank and prioritize grant
applications based on threat and vulnerability. Enabling a region that
encompasses more than one State to apply for funds. The money would
still pass through the States, but would go to the region to better
enable coordination and planning. Provides greater flexibility in using
the funds, allowing a State to use them for other hazards consistent
with federally established capability standards. And it allows States
to retain authority to administer grant programs, but there are
penalties for States that do not pass funds to local governments within
45 days, and if a State fails to pass the funds through, local
governments may petition the Department of Homeland Security to receive
the funds directly.
Continuing to spread Homeland Security funds throughout the Nation
irrespective of the actual risk to particular States and communities
would be to ignore much of what we have learned as part of our effort
to assess our vulnerabilities since the attacks of September 11. So I
would urge that we swiftly work to pass this legislation, to better
ensure the safety of our citizens.
______
By Ms. SNOWE:
S. 1014. A bill to provide additional relief for small business
owners ordered to active duty as members of reserve components of the
Armed Forces, and for other purposes; to the Committee on Small
Business and Entrepreneurship.
Ms. SNOWE. Mr. President, I rise today to offer the Supporting Our
Patriotic Businesses Act. This bill addresses some key concerns I have
regarding the impact that military call-ups have on our Nation's small
businesses.
Today, I am offering my legislation in conjunction with the release
of a Congressional Budget Office Report entitled ``The Impact of
Reserve Call-ups on Civilian Employers.'' I commissioned the Report a
year and a half ago, because I believed then, as I do now, that our
country is not doing enough for the patriotic small businesses that are
owned by or employ our Guard and Reserve members; and which are
negatively effected when these workers are called up in defense of our
Nation.
Although I am still analyzing the Report, three key findings
immediately caught my attention. For instance, the Report concludes
that: 1. Thirty-five percent of Guard and Reserve members work for
small businesses or are self-employed, twenty-six percent work for
large businesses, thirty-six percent work for the government, Federal,
State, or local, and the remainder work for non-profit organizations.
Therefore, the majority of non-government employed Guard and Reserve
members are either self-employed, or work for small businesses. 2. Over
the past decade, the military has dramatically increased its reliance
on Guard and Reserve forces. This trend has accelerated since the
terrorism attacks of September 11, 2001. Guard and Reserve members make
up about thirty-three percent of deployed service members supporting
operations in Iraq and Afghanistan. 3. I am particularly troubled by a
third finding which confirms what I have feared all along--that the
self-employed, and the small businesses that employ Guard and Reserve
members, may be ``paying'' a disproportionate and unfair share of the
burden of increased Guard and Reserve member call-ups. The burden is
further magnified when it is the small business owner, or a key
employee, who is deployed.
As members of this institution charged with the duty of preserving
the public trust, we should work together, on a bipartisan basis, to
help diminish the unfair burden these employers and self-employed
businesses shoulder.
It is difficult enough to leave friends and family behind and enter
harm's way, but asking our military personnel to also jeopardize their
livelihood is unconscionable. By assisting these businesses and the
self-employed, we are helping to diminish important concerns of our
military personnel, improving their morale and positively affecting
retention.
The legislation that I offer today contains multiple provisions in
support of self-employed Guard and Reserve members and the patriotic
businesses that employ Guard and Reserve members.
First, it authorizes increased appropriations for the Small Business
Administration's (SBA) Office of Veteran Business Development, which
offers vital services to our Nation's small businesses that are owned
or employ our veterans. For instance, the office has prepared and
distributed pre- and post-mobilization packets for small businesses,
offers loans, and provides targeted business advice to meet the needs
of our veterans and small businesses.
My bill permanently extends the authority and duties of the SBA's
Advisory Committee on Veterans Business Affairs, which has served as an
invaluable independent source of advice and policy on veterans'
business issues.
My legislation provides that a service member does not need to
satisfy any continuing education requirements, imposed with respect to
their profession or occupation, while they are called up, or within the
120-day period after they are released from the call-up.
I have also included a provision which amends the Small Business Act
by allowing small businesses owned by veterans and service-disabled
veterans to extend their SBA program participation time limitations by
the length of time that their owners are called up in defense of our
Nation. Currently, small business owners who are called up to active
duty in the Guard or Reserve are effectively penalized for serving
because their active duty time is counted against the time limitations
on participation of the Small Business Administration's programs.
Finally, my bill requires that the Department of Defense take
measures to counsel Guard and Reserve members concerning the importance
of notifying their employers in a timely manner after they receive
Orders that they will be called up to active duty. The legislation
further requires that the DoD investigate ways to diminish the lag
between the time when military personnel are notified of their call-up
and the time that military personnel notify their employers.
Enacting this legislation is an important first step in the right
direction toward assisting the brave men and women who serve in our
Guard and Reserve and the businesses that employ them. However, I
realize that this legislation is merely one of many steps that can and
should be taken to this end and welcome new ideas to help this
constituency.
I encourage my colleagues to join me in supporting this bill, and to
continue to work with me, as well as veterans, policymakers,
businesses, and others, to find additional solutions to address these
vital issues.
I ask unanimous consent that the text of the bill and that a section-
by-section summary of the bill be printed in the Record.
Thank you for allowing me the opportunity to discuss this pressing
matter.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1014
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 ``Supporting Our Patriotic
Businesses Act of 2005''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) From September 2001 through November 2004,
approximately 410,000 members of the reserve components of
the Armed Forces, including the National Guard and Reserves,
have been mobilized in support of United States military
operations.
(2) According to 2004 data from the Manpower Data Center of
the Department of Defense, an estimated 35 percent of Guard
members and Reservists are either self-employed or own or are
employed by a small business.
(3) The majority of privately employed National Guard and
Reserve members either work for a small business or are self-
employed.
(4) As a result of activations, many small businesses have
been forced to go without their owners and key personnel for
months, and sometimes years, on end.
(5) The effects have been devastating to such patriotic
small businesses.
(6) The Office of Veterans Business Development of the
Small Business Administration has made a concerted effort to
reach out to small businesses affected by deployments, but
given the sheer numbers of those deployed, their resources
have been stretched thin.
[[Page S5102]]
(7) In addition, the Office of Veterans Business
Development has been required to broaden its delivery of
services, as directed by Executive Order 13360, to provide
procurement training programs for service-disabled veterans.
(8) This Act will help to stem the effects of National
Guard and Reservist deployments on small businesses, and
better assist veterans and service-disabled veterans with
their business needs.
SEC. 3. INCREASED FUNDING FOR THE OFFICE OF VETERANS BUSINESS
DEVELOPMENT.
There is authorized to be appropriated to the Office of
Veterans Business Development of the Small Business
Administration, and to remain available until expended--
(1) $2,000,000 for fiscal year 2006;
(2) $2,100,000 for fiscal year 2007; and
(3) $2,200,000 for fiscal year 2008.
SEC. 4. PERMANENT EXTENSION OF SBA ADVISORY COMMITTEE ON
VETERANS BUSINESS AFFAIRS.
(a) Assumption of Duties.--Section 33 of the Small Business
Act (15 U.S.C. 657c) is amended--
(1) by striking subsection (h); and
(2) by redesignating subsections (i) through (k) as
subsections (h) through (j), respectively.
(b) Permanent Extension of Authority.--Section 203 of the
Veterans Entrepreneurship and Small Business Development Act
of 1999 (15 U.S.C. 657b note) is amended by striking
subsection (h).
SEC. 5. PROFESSIONAL AND OCCUPATIONAL LICENSING.
(a) In General.--Title VII of the Servicemembers Civil
Relief Act (50 U.S.C. App. 591 et seq.) is amended by adding
at the end the following new section:
``SEC. 707. CONTINUING EDUCATION REQUIREMENTS FOR
PROFESSIONAL AND OCCUPATIONAL LICENSES.
``(a) Applicability.--This section applies to any
servicemember who, after the date of enactment of this
section, is ordered to active duty (other than for training)
pursuant to section 688, 12301(a), 12301(g), 12302, 12304,
12306, or 12307 of title 10, United States Code, or who is
ordered to active duty under section 12301(d) of such title,
during a period when members are on active duty pursuant to
any such section.
``(b) Continuing Education Requirements.--A servicemember
described in subsection (a) may not be required to complete
the satisfaction of any continuing education requirements
imposed with respect to the profession or occupation of the
servicemember that accrue during the period of active duty of
the servicemember as described in that subsection--
``(1) during such period of active duty; and
``(2) during the 120-day period beginning on the date of
the release of the servicemember from such period of active
duty.
``(c) Active Duty Defined.--In this section, the term
`active duty' has the meaning given that term in section
101(d) of title 10, United States Code.''.
(b) Clerical Amendment.--The table of contents for such Act
is amended by adding at the end the following new item:
``Sec. 707. Continuing education requirements for professional and
occupational licenses.''.
SEC. 6. RELIEF FROM TIME LIMITATIONS FOR VETERAN-OWNED SMALL
BUSINESSES.
Section 3(q) of the Small Business Act (15 U.S.C. 632(q))
is amended by adding at the end the following:
``(5) Relief from time limitations.--
``(A) In general.--Any time limitation on any
qualification, certification, or period of participation
imposed under this Act on any program available to small
business concerns shall be extended for a small business
concern that--
``(i) is owned and controlled by--
``(I) a veteran who was called or ordered to active duty
under a provision of law specified in section 101(a)(13)(B)
of title 10, United States, on or after September 11, 2001;
or
``(II) a service-disabled veteran who became such a veteran
due to an injury or illness incurred or aggravated in the
active miliary, naval, or air service during a period of
active duty pursuant to a call or order to active duty under
a provision of law referred to in subclause (I) on or after
September 11, 2001; and
``(ii) was subject to the time limitation during such
period of active duty.
``(B) Duration.--Upon submission of proper documentation to
the Administrator, the extension of a time limitation under
subparagraph (A) shall be equal to the period of time that
such veteran who owned or controlled such a concern was on
active duty as described in that subparagraph.''.
SEC. 7. COUNSELING OF MEMBERS OF THE NATIONAL GUARD AND
RESERVES ON NOTIFICATION OF EMPLOYERS REGARDING
MOBILIZATION.
(a) Counseling Required.--The Secretary of each military
department shall provide each member of a reserve component
of the Armed Forces under the jurisdiction of the Secretary
who is on active duty for a period of more than 30 days, or
on the reserve active-status list, counseling on the
importance of notifying such member's employer on a timely
basis of any call or order of such member to active duty
other than for training.
(b) Frequency of Counseling.--Each member of the Armed
Forces described in subsection (a) shall be provided the
counseling required by that subsection not less often than
once each year.
SEC. 8. STUDY ON OPTIONS FOR IMPROVING TIMELY NOTICE OF
EMPLOYERS OF MEMBERS OF THE NATIONAL GUARD AND
RESERVES REGARDING MOBILIZATION.
(a) Study Required.--
(1) In general.--The Secretary of Defense shall conduct a
study of the feasibility and advisability of various options
for improving the time in which employers of members of the
reserve components of the Armed Forces are notified of the
call or order of such members to active duty other than for
training.
(2) Purpose.--The purpose of the study under paragraph (1)
shall be to identify mechanisms, if any, for eliminating or
reducing the time between--
(A) the date of the call or order of members of the reserve
components of the Armed Forces to active duty; and
(B) the date on which employers of such members are
notified of the call or order of such members to active duty.
(b) Report.--Not later than 180 days after the date of the
enactment of this Act, the Secretary shall submit to the
appropriate committees of Congress a report on the study
conducted under subsection (a). The report shall include--
(1) a description of the study, including the options
addressed under the study; and
(2) such recommendations for legislative or administrative
action as the Secretary considers appropriate in light of the
results of the study.
(c) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Committees on Armed Services and Small Business and
Entrepreneurship of the Senate; and
(2) the Committees on Armed Services and Small Business of
the House of Representatives.
Background: From September 2001 through November 2004,
approximately 410,000 National Guard and Reserve personnel
have been mobilized in support of current operations. Thirty-
five percent of Guard and Reserve members work for small
businesses or are self-employed, 26 percent work for large
businesses, 36 percent work for the government, Federal,
State, or local, and the remainder work for non-profits.
Therefore, the majority of non-government employed Guard and
Reserve members are either self-employed, or work for small
businesses. As a result of call-ups, many small businesses
have been forced to go without their owners and key personnel
for months, and sometimes years, on end. The effects have
been devastating to these patriotic small businesses.
This Act will help stem the effects of Guard and Reservist
call-ups on small businesses and better assist veterans and
service-disabled veterans with their business needs.
Section 1.--Title, ``The Supporting Our Patriotic
Businesses Act.''
Section 2.--Findings
Section 3.--Authorizes increased appropriations for the
Small Business Administration's (SBA) Office of Veteran
Business Development to $2 million for Fiscal Year 2006, $2.1
million for Fiscal Year 2007 and $2.2 million for Fiscal Year
2008.
Reasoning: The SBA's Office of Veteran Business Development
has made a concerted effort to reach out to small businesses
affected by military deployments, but given the sheer number
of those deployed, their resources have been stretched thin.
In addition, the Office of Veterans Business Development is
now required to broaden its delivery of services, as directed
by Executive Order 13360, to provide procurement training
programs for service-disabled veterans. This provision will
allow the SBA's Office of Veterans Business Development to
better assist our nation's veterans and provide them the
business services they need.
Section 4.--Permanently extends the authority and duties of
the SBA's Advisory Committee on Veterans Business Affairs.
Reasoning: The SBA's Advisory Committee on Veterans
Business Affairs has served as a valuable independent source
of advice and policy on veterans business issues to: the SBA
Administrator; the SBA's Associate Administrator for Veterans
Business Development; the Congress; the President; and other
U.S. policymakers. The Advisory Committee was commissioned
under P.L. 106-50 and is set to terminate its duties on
September 20, 2006. This provision will help ensure that the
Advisory Committee's vital duties, and the information it
provides, are continued.
Section 5.--Provides that a service member need not satisfy
any continuing education requirements, imposed with respect
to their profession or occupation, while they are called up,
or within the 120-day period after they are released from the
call-up.
Reasoning: Many Guard and Reserve personnel have continuing
education requirements that they are unable to satisfy
because of being called to active duty. These patriotic
individuals should not have to satisfy these continuing
education requirements. NOTE: This provision is a floor, not
a ceiling. It should not discourage State or other entities
from offering extended benefits/breaks to deployed Guard and
Reserve members.
Section 6.--Amends the Small Business Act by allowing small
businesses owned by veterans and service-disabled veterans to
extend their SBA program participation time limitations by
the duration of their owners' active duty service after
September 11, 2001.
[[Page S5103]]
Reasoning: Some of the SBA's contracting and business
development programs have defined time limits for
participation. If the firm's time for participation expires
prematurely, then competitive opportunities, investments, and
jobs become lost. Currently, small business owners who get
called up to active duty in the National Guard or Reserve are
effectively penalized because their active duty time is
counted against the time limitations on participation in the
SBA's programs.
Section 7.--Requires that the Secretary of each military
department ensure that counseling is provided, at least once
a year, to members of the National Guard and Reserves on the
importance of notifying their employers regarding their
mobilization.
Reasoning: Employers often receive little warning of a
guard or reservist's call-up. A survey published by the DoD
in November 2003 (DMDC Report No. 2003-10), which questioned
guard and reservists who had been called up over the previous
24 months, indicated that they notified their civilian
employers an average of 13 days before their call-up began.
The survey also showed that almost 60 percent of Guard and
Reservists gave their employers advance notice of one week or
less. Unfortunately, providing short notice to employers does
not allow them time to adequately plan for a guard member or
Reservist's absence, and ultimately hurts a business's bottom
line. It is important that employers have ample time to make
the adjustments necessary to sustain their business.
Section 8.--Improves the focus upon notifying employers in
a timely manner regarding call-ups.
Reasoning: For the reasons provided under Section 7, this
provision would commission a DoD study on ways to improve the
timely notice of employers regarding call-ups.
______
By Mr. DeMINT:
S. 1015. A bill to amend the Public Health Service Act to provide for
cooperative governing of individual health insurance coverage offered
in interstate commerce; to the Committee on Health, Education, Labor,
and Pensions.
Mr. DeMINT. Mr. President, I rise today to introduce The Health Care
Choice Act of 2005, a bill that would help Americans afford health
insurance.
Approximately 45 million Americans lack health insurance. These
uninsured Americans face significant hurdles in entering the insurance
marketplace, including limited choices of insurers and inflexible
benefit options. For most, the high cost of health insurance is the
biggest impediment to getting coverage. In fact, nearly two-thirds of
the uninsured are the working poor, and they cite the high cost of
insurance as the primary barrier to accessing health coverage.
The cost of insurance is often increased by excessive State
regulations. These State mandates raise the cost of insurance which, in
turn, increases the number of Americans who are priced out of the
health insurance market.
The Health Care Choice Act will allow consumers to shop for health
insurance the same way they do for other insurance products--online, by
mail, over the phone, or in consultation with an insurance agent in
their hometown. The Act empowers consumers by giving them the ability
to purchase an affordable health insurance policy with a range of
options.
Consumers will no longer be limited to picking only those policies
that meet their state's regulations and mandated benefits. Instead,
they can examine the wide array of insurance policies qualified in one
State and offered for sale in multiple states. Consumers can choose the
policy that best suits their needs, and their budget, without regard to
State boundaries. Individuals looking for basic health insurance
coverage can opt for a policy with few benefit mandates, and such a
policy will be more affordable. On the other hand, consumers who have
an interest in a particular benefit, such as infertility treatments,
will be able to purchase a policy which includes that benefit.
The Health Care Choice Act will help the uninsured find affordable
health insurance, while also providing every American with more and
better health insurance choices. The bill harnesses the power of the
marketplace to allow Americans to tailor their insurance choices to
their individual needs.
I am grateful to Congressman Shadegg for introducing the Health Care
Choice Act in the House today, and I urge my Senate colleagues to
support this bill.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1015
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 ``Health Care Choice Act of
2005''.
SEC. 2. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR
ENACTMENT OF LAW.
This Act is enacted pursuant to the power granted Congress
under article I, section 8, clause 3, of the United States
Constitution.
SEC. 3. FINDINGS.
Congress finds the following:
(1) The application of numerous and significant variations
in State law impacts the ability of insurers to offer, and
individuals to obtain, affordable individual health insurance
coverage, thereby impeding commerce in individual health
insurance coverage.
(2) Individual health insurance coverage is increasingly
offered through the Internet, other electronic means, and by
mail, all of which are inherently part of interstate
commerce.
(3) In response to these issues, it is appropriate to
encourage increased efficiency in the offering of individual
health insurance coverage through a collaborative approach by
the States in regulating this coverage.
(4) The establishment of risk-retention groups has provided
a successful model for the sale of insurance across State
lines, as the acts establishing those groups allow insurance
to be sold in multiple States but regulated by a single
State.
SEC. 4. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE
COVERAGE.
(a) In General.--Title XXVII of the Public Health Service
Act (42 U.S.C. 300gg et seq.) is amended by adding at the end
the following new part:
``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE
``SEC. 2795. DEFINITIONS.
``In this part:
``(1) Primary state.--The term `primary State' means, with
respect to individual health insurance coverage offered by a
health insurance issuer, the State designated by the issuer
as the State whose covered laws shall govern the health
insurance issuer in the sale of such coverage under this
part. An issuer, with respect to a particular policy, may
only designate one such State as its primary State with
respect to all such coverage it offers. Such an issuer may
not change the designated primary State with respect to
individual health insurance coverage once the policy is
issued, except that such a change may be made upon renewal of
the policy. With respect to such designated State, the issuer
is deemed to be doing business in that State.
``(2) Secondary state.--The term `secondary State' means,
with respect to individual health insurance coverage offered
by a health insurance issuer, any State that is not the
primary State. In the case of a health insurance issuer that
is selling a policy in, or to a resident of, a secondary
State, the issuer is deemed to be doing business in that
secondary State.
``(3) Health insurance issuer.--The term `health insurance
issuer' has the meaning given such term in section
2791(b)(2), except that such an issuer must be licensed in
the primary State and be qualified to sell individual health
insurance coverage in that State.
``(4) Individual health insurance coverage.--The term
`individual health insurance coverage' means health insurance
coverage offered in the individual market, as defined in
section 2791(e)(1).
``(5) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of this title for the State with respect to the
issuer.
``(6) Hazardous financial condition.--The term `hazardous
financial condition' means that, based on its present or
reasonably anticipated financial condition, a health
insurance issuer is unlikely to be able--
``(A) to meet obligations to policyholders with respect to
known claims and reasonably anticipated claims; or
``(B) to pay other obligations in the normal course of
business.
``(7) Covered laws.--The term `covered laws' means the
laws, rules, regulations, agreements, and orders governing
the insurance business pertaining to--
``(A) individual health insurance coverage issued by a
health insurance issuer;
``(B) the offer, sale, and issuance of individual health
insurance coverage to an individual; and
``(C) the provision to an individual in relation to
individual health insurance coverage of--
``(i) health care and insurance related services;
``(ii) management, operations, and investment activities of
a health insurance issuer; and
``(iii) loss control and claims administration for a health
insurance issuer with respect to liability for which the
issuer provides insurance.
``(8) State.--The term `State' means only the 50 States and
the District of Columbia.
[[Page S5104]]
``(9) Unfair claims settlement practices.--The term `unfair
claims settlement practices' means only the following
practices:
``(A) Knowingly misrepresenting to claimants and insured
individuals relevant facts or policy provisions relating to
coverage at issue.
``(B) Failing to acknowledge with reasonable promptness
pertinent communications with respect to claims arising under
policies.
``(C) Failing to adopt and implement reasonable standards
for the prompt investigation and settlement of claims arising
under policies.
``(D) Failing to effectuate prompt, fair, and equitable
settlement of claims submitted in which liability has become
reasonably clear.
``(E) Refusing to pay claims without conducting a
reasonable investigation.
``(F) Failing to affirm or deny coverage of claims within a
reasonable period of time after having completed an
investigation related to those claims.
``(10) Fraud and abuse.--The term `fraud and abuse' means
an act or omission committed by a person who, knowingly and
with intent to defraud, commits, or conceals any material
information concerning, one or more of the following:
``(A) Presenting, causing to be presented or preparing with
knowledge or belief that it will be presented to or by an
insurer, a reinsurer, broker or its agent, false information
as part of, in support of or concerning a fact material to
one or more of the following:
``(i) An application for the issuance or renewal of an
insurance policy or reinsurance contract.
``(ii) The rating of an insurance policy or reinsurance
contract.
``(iii) A claim for payment or benefit pursuant to an
insurance policy or reinsurance contract.
``(iv) Premiums paid on an insurance policy or reinsurance
contract.
``(v) Payments made in accordance with the terms of an
insurance policy or reinsurance contract.
``(vi) A document filed with the commissioner or the chief
insurance regulatory official of another jurisdiction.
``(vii) The financial condition of an insurer or reinsurer.
``(viii) The formation, acquisition, merger,
reconsolidation, dissolution or withdrawal from one or more
lines of insurance or reinsurance in all or part of a State
by an insurer or reinsurer.
``(ix) The issuance of written evidence of insurance.
``(x) The reinstatement of an insurance policy.
``(B) Solicitation or acceptance of new or renewal
insurance risks on behalf of an insurer reinsurer or other
person engaged in the business of insurance by a person who
knows or should know that the insurer or other person
responsible for the risk is insolvent at the time of the
transaction.
``(C) Transaction of the business of insurance in violation
of laws requiring a license, certificate of authority or
other legal authority for the transaction of the business of
insurance.
``(D) Attempt to commit, aiding or abetting in the
commission of, or conspiracy to commit the acts or omissions
specified in this paragraph.
``SEC. 2796. APPLICATION OF LAW.
``(a) In General.--The covered laws of the primary State
shall apply to individual health insurance coverage offered
by a health insurance issuer in the primary State and in any
secondary State, but only if the coverage and issuer comply
with the conditions of this section with respect to the
offering of coverage in any secondary State.
``(b) Exemptions From Covered Laws in a Secondary State.--
Except as provided in this section, a health insurance issuer
with respect to its offer, sale, renewal, and issuance of
individual health insurance coverage in any secondary State
is exempt from any covered laws of the secondary State (and
any rules, regulations, agreements, or orders sought or
issued by such State under or related to such covered laws)
to the extent that such laws would--
``(1) make unlawful, or regulate, directly or indirectly,
the operation of the health insurance issuer operating in the
secondary State, except that any secondary State may require
such an issuer--
``(A) to pay, on a nondiscriminatory basis, applicable
premium and other taxes (including high risk pool
assessments) which are levied on insurers and surplus lines
insurers, brokers, or policyholders under the laws of the
State;
``(B) to register with and designate the State insurance
commissioner as its agent solely for the purpose of receiving
service of legal documents or process;
``(C) to submit to an examination of its financial
condition by the State insurance commissioner in any State in
which the issuer is doing business to determine the issuer's
financial condition, if--
``(i) the State insurance commissioner of the primary State
has not done an examination within the period recommended by
the National Association of Insurance Commissioners; and
``(ii) any such examination is conducted in accordance with
the examiners' handbook of the National Association of
Insurance Commissioners and is coordinated to avoid
unjustified duplication and unjustified repetition;
``(D) to comply with a lawful order issued--
``(i) in a delinquency proceeding commenced by the State
insurance commissioner if there has been a finding of
financial impairment under subparagraph (C); or
``(ii) in a voluntary dissolution proceeding;
``(E) to comply with an injunction issued by a court of
competent jurisdiction, upon a petition by the State
insurance commissioner alleging that the issuer is in
hazardous financial condition;
``(F) to participate, on a nondiscriminatory basis, in any
insurance insolvency guaranty association or similar
association to which a health insurance issuer in the State
is required to belong;
``(G) to comply with any State law regarding fraud and
abuse (as defined in section 2795(10)), except that if the
State seeks an injunction regarding the conduct described in
this subparagraph, such injunction must be obtained from a
court of competent jurisdiction; or
``(H) to comply with any State law regarding unfair claims
settlement practices (as defined in section 2795(9));
``(2) require any individual health insurance coverage
issued by the issuer to be countersigned by an insurance
agent or broker residing in that Secondary State; or
``(3) otherwise discriminate against the issuer issuing
insurance in both the primary State and in any secondary
State.
``(c) Clear and Conspicuous Disclosure.--A health insurance
issuer shall provide the following notice, in 12-point bold
type, in any insurance coverage offered in a secondary State
under this part by such a health insurance issuer and at
renewal of the policy, with the 5 blank spaces therein being
appropriately filled with the name of the health insurance
issuer, the name of primary State, the name of the secondary
State, the name of the secondary State, and the name of the
secondary State, respectively, for the coverage concerned:
`This policy is issued by _____ and is governed by the laws
and regulations of the State of _____, and it has met all the
laws of that State as determined by that State's Department
of Insurance. This policy may be less expensive than others
because it is not subject to all of the insurance laws and
regulations of the State of _____, including coverage of some
services or benefits mandated by the law of the State of
_____. Additionally, this policy is not subject to all of the
consumer protection laws or restrictions on rate changes of
the State of _____. As with all insurance products, before
purchasing this policy, you should carefully review the
policy and determine what health care services the policy
covers and what benefits it provides, including any
exclusions, limitations, or conditions for such services or
benefits.'.
``(d) Prohibition on Certain Reclassifications and Premium
Increases.--
``(1) In general.--For purposes of this section, a health
insurance issuer that provides individual health insurance
coverage to an individual under this part in a primary or
secondary State may not upon renewal--
``(A) move or reclassify the individual insured under the
health insurance coverage from the class such individual is
in at the time of issue of the contract based on the health-
status related factors of the individual; or
``(B) increase the premiums assessed the individual for
such coverage based on a health status-related factor or
change of a health status-related factor or the past or
prospective claim experience of the insured individual.
``(2) Construction.--Nothing in paragraph (1) shall be
construed to prohibit a health insurance issuer--
``(A) from terminating or discontinuing coverage or a class
of coverage in accordance with subsections (b) and (c) of
section 2742;
``(B) from raising premium rates for all policy holders
within a class based on claims experience;
``(C) from changing premiums or offering discounted
premiums to individuals who engage in wellness activities at
intervals prescribed by the issuer, if such premium changes
or incentives--
``(i) are disclosed to the consumer in the insurance
contract;
``(ii) are based on specific wellness activities that are
not applicable to all individuals; and
``(iii) are not obtainable by all individuals to whom
coverage is offered;
``(D) from reinstating lapsed coverage; or
``(E) from retroactively adjusting the rates charged an
individual insured individual if the initial rates were set
based on material misrepresentation by the individual at the
time of issue.
``(e) Prior Offering of Policy in Primary State.--A health
insurance issuer may not offer for sale individual health
insurance coverage in a secondary State unless that coverage
is currently offered for sale in the primary State.
``(f) Licensing of Agents or Brokers for Health Insurance
Issuers.--Any State may require that a person acting, or
offering to act, as an agent or broker for a health insurance
issuer with respect to the offering of individual health
insurance coverage obtain a license from that State, except
that a State many not impose any qualification or requirement
which discriminates against a nonresident agent or broker.
``(g) Documents for Submission to State Insurance
Commissioner.--Each health insurance issuer issuing
individual health insurance coverage in both primary and
secondary States shall submit--
[[Page S5105]]
``(1) to the insurance commissioner of each State in which
it intends to offer such coverage, before it may offer
individual health insurance coverage in such State--
``(A) a copy of the plan of operation or feasibility study
or any similar statement of the policy being offered and its
coverage (which shall include the name of its primary State
and its principal place of business);
``(B) written notice of any change in its designation of
its primary State; and
``(C) written notice from the issuer of the issuer's
compliance with all the laws of the primary State; and
``(2) to the insurance commissioner of each secondary State
in which it offers individual health insurance coverage, a
copy of the issuer's quarterly financial statement submitted
to the primary State, which statement shall be certified by
an independent public accountant and contain a statement of
opinion on loss and loss adjustment expense reserves made
by--
``(A) a member of the American Academy of Actuaries; or
``(B) a qualified loss reserve specialist.
``(h) Power of Courts To Enjoin Conduct.--Nothing in this
section shall be construed to affect the authority of any
Federal or State court to enjoin--
``(1) the solicitation or sale of individual health
insurance coverage by a health insurance issuer to any person
or group who is not eligible for such insurance; or
``(2) the solicitation or sale of individual health
insurance coverage by, or operation of, a health insurance
issuer that is in hazardous financial condition.
``(i) State Powers To Enforce State Laws.--
``(1) In general.--Subject to the provisions of subsection
(b)(1)(G) (relating to injunctions) and paragraph (2),
nothing in this section shall be construed to affect the
authority of any State to make use of any of its powers to
enforce the laws of such State with respect to which a health
insurance issuer is not exempt under subsection (b).
``(2) Courts of competent jurisdiction.--If a State seeks
an injunction regarding the conduct described in paragraphs
(1) and (2) of subsection (h), such injunction must be
obtained from a Federal or State court of competent
jurisdiction.
``(j) States' Authority To Sue.--Nothing in this section
shall affect the authority of any State to bring action in
any Federal or State court.
``(k) Generally Applicable Laws.--Nothing in this section
shall be construed to affect the applicability of State laws
generally applicable to persons or corporations.
``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE
ISSUER MAY SELL INTO SECONDARY STATES.
``A health insurance issuer may not offer, sell, or issue
individual health insurance coverage in a secondary State if
the primary State does not meet the following requirements:
``(1) The State insurance commissioner must use a risk-
based capital formula for the determination of capital and
surplus requirements for all health insurance issuers.
``(2) The State must have legislation or regulations in
place establishing an independent review process for
individuals who are covered by individual health insurance
coverage unless the issuer provides an independent review
mechanism functionally equivalent (as determined by the
primary State insurance commissioner or official) to that
prescribed in the `Health Carrier External Review Model Act'
of the National Association of Insurance Commissioners for
all individuals who purchase insurance coverage under the
terms of this part.
``SEC. 2798. ENFORCEMENT.
``(a) In General.--Subject to subsection (b), with respect
to specific individual health insurance coverage the primary
State for such coverage has sole jurisdiction to enforce the
primary State's covered laws in the primary State and any
secondary State.
``(b) Secondary State's Authority.--Nothing in subsection
(a) shall be construed to affect the authority of a secondary
State to enforce its laws as set forth in the exception
specified in section 2796(b)(1).
``(c) Court Interpretation.--In reviewing action initiated
by the applicable secondary State authority, the court of
competent jurisdiction shall apply the covered laws of the
primary State.
``(d) Notice of Compliance Failure.--In the case of
individual health insurance coverage offered in a secondary
State that fails to comply with the covered laws of the
primary State, the applicable State authority of the
secondary State may notify the applicable State authority of
the primary State.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individual health insurance coverage offered,
issued, or sold after the date of the enactment of this Act.
SEC. 5. SEVERABILITY.
If any provision of the Act or the application of such
provision to any person or circumstance is held to be
unconstitutional, the remainder of this Act and the
application of the provisions of such to any other person or
circumstance shall not be affected.
______
By Mr. CHAFEE (for himself, Mr. Inhofe, Mr. Jeffords, Mrs.
Clinton, Mr. Lautenberg, Mr. Vitter, Mr. Baucus, Ms. Murkowski,
Mr. Crapo, Mr. Enzi, and Mr. Corzine):
S. 1017. A bill to reauthorize grants from the water resources
research and technology institutes established under the Water
Resources Research Act of 1984; to the Committee on Environment and
Public Works.
Mr. CHAFEE. Mr. President, I rise today to introduce legislation
reauthorizing appropriations for the Water Resources Research Act. The
Chairman and Ranking Member of the Senate Committee on Environment and
Public Works, Senators Inhofe and Jeffords, respectively, as well as
Senators Clinton, Lautenberg, Baucus, Murkowski, Crapo, Enzi and
Corzine have joined me as original cosponsors of this important
legislation to address our nation's water resource concerns.
Originally enacted in 1964, the Water Resources Research Act
authorizes the establishment of a nationwide, State-based network of
Water Resources Research Institutes. These Institutes represent a
partnership among State universities; Federal, State, and local
governments; and stakeholders aimed at solving problems of water supply
and water quality. They are located at the land-grant universities in
each of the 50 States, the territories and the District of Columbia.
The 54 Water Resources Research Institutes are charged with
conducting competent research to develop new technologies and more
efficient methods for resolving local, State and national water-
resources problems; fostering new research scientists into water
resources fields; and facilitating water research coordination and the
application of research results through information dissemination and
technology transfer.
The Institutes provide important support to the States in their long-
term water planning, policy development, and management. A significant
portion of the Institutes' work is intended to help State and local
water managers implement Federal regulations in ways that are tailored
to local and State institutions and natural conditions. Water quality
regulations, drinking water standards, wastewater treatment, and water
reuse programs are examples of areas in which the Institutes provide
research and information transfer.
In my own State, the Rhode Island Water Resources Center is located
at the University of Rhode Island. The Center's recent activities have
included working with the Rhode Island Airport Corporation to develop a
plan for mitigating runoff contamination due to deicing and anti-icing
operations at T.F.Green Airport. Other work conducted by the Center has
encompassed evaluating the scour potential of streams and river banks
in the State to study how they may be affected by land use and other
changes; developing a statewide public water-supply GIS coverage
program; and working with communities to evaluate MTBE drinking water
contamination.
In addition to research, the outreach and information transfer
activities of the Institutes are highly valued by multi-level
stakeholders at the local, State and regional levels. The Institutes
are the training grounds for the next generation of the Nation's water
scientists, economists and engineers. This nationwide network of water
institutes provides an efficient and effective method to meet the
diverse water resource needs in different parts of our country.
Another key component of the program is the importance of its small
Federal grants for leveraging funding from non-federal sources to
identify and address local and State needs for water research. Without
this Federal seed money, many institutes would lose a valuable resource
and the visibility within their universities and among Federal, State
and local water agencies for working on challenging water resource
problems. The Federal grants allow immense leverage capacity for
conducting water research activities and are the key to maintaining a
valuable national network.
The legislation I am introducing today reauthorizes $62 million in
funding through fiscal year 2010 for the Nation's Water Resources
Research Institutes and $32 million for the Act's Interstate Research
Program. I look forward to working with the bill's original cosponsors
as well as my colleagues on the Environment and Public
[[Page S5106]]
Works Committee to ensure this national network of university-based
research institutes continues to support the water resources needs of
the Nation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1017
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 ``Water Resources Research Act
Amendments of 2005''.
SEC. 2. WATER RESOURCES RESEARCH.
(a) Authorization of Appropriations.--Section 104(f) of the
Water Resources Research Act of 1984 (42 U.S.C. 10303(f)) is
amended--
(1) in the subsection header, by striking ``IN GENERAL'';
(2) by striking paragraph (1) and inserting the following:
``(1) In general.--There is authorized to be appropriated
to carry out this section, to remain available until
expended--
``(A) $12,000,000 for each of fiscal years 2006 through
2008; and
``(B) $13,000,000 for each of fiscal years 2009 and
2010.''; and
(3) in paragraph (2), by striking ``(2) Any'' and inserting
the following:
``(2) Failure to obligate funds.--Any''.
(b) Additional Appropriations Where Research Focused on
Water Problems of Interstate Nature.--Section 104(g) of the
Water Resources Research Act of 1984 (42 U.S.C. 10303(g)) is
amended--
(1) by redesignating paragraph (2) as paragraph (4); and
(2) in paragraph (1)--
(A) in the first sentence--
(i) by striking ``There'' and inserting the following:
``(1) In general.--There''; and
(ii) by striking ``$3,000,000 for fiscal year 2001,
$4,000,000 for fiscal years 2002 and 2003, and $6,000,000 for
fiscal years 2004 and 2005'' and inserting ``$6,000,000 for
each of fiscal years 2006 through 2008 and $7,000,000 for
each of fiscal years 2009 and 2010'';
(B) in the second sentence, by striking ``Such'' and
inserting the following:
``(2) Non-federal matching funds.--The''; and
(C) in the third sentence, by striking ``Funds'' and
inserting the following:
``(3) Availability of funds.--Funds''.
______
By Mr. SARBANES:
S. 1018. A bill to provide that transit pass transportation fringe
benefits be made available to all qualified Federal employees in the
National Capital Region; to alllow passenger carriers which are owned
or leased by the Government to be used to transport Government
employees between their place of employment and mass transit
facilities, and for other purposes; to the Committee on Homeland
Security and Governmental Affairs.
Mr. SARBANES. Mr. President, I am pleased to introduce the Federal
Employee Commuter Benefits Act of 2005, which is cosponsored by my
colleagues Senators Mikulski and Warner. This bill will guarantee
transit benefits to all Federal employees in the National Capital Area
and will remove a restriction that currently forbids Federal agencies
from providing employee shuttles to and from transit stations. This
measure is an important step forward in our efforts to encourage
transit ridership and improve the quality of life for federal employees
in the Washington, D.C. region and throughout the Nation.
All across the Nation, congestion and gridlock are taking their toll
in terms of economic loss, environmental impact, and personal
frustration. According to the Texas Transportation Institute, in 2003
Americans in 85 urban areas spent 3.7 billion hours stuck in traffic,
with an estimated cost to the nation of $64.8 billion in lost time and
wasted fuel. In response, Americans are turning to alternative
transportation in record numbers. The American Public Transportation
Association estimates that Americans now take over 9 billion trips on
transit per year, the highest level in more than 40 years. The Texas
Transportation Institute has estimated that without transit, the 85
urban areas they studied would have suffered an additional 1.1 billion
hours of delay, a 27 percent increase, which would have added $18
billion to the national cost of congestion.
Transit benefit programs are playing a vital role in increasing
transit ridership, which benefits both transit users and drivers. In
1998, the Transportation Equity Act for the 21st Century amended the
tax code to allow financial incentives related to commuting costs for
both employers and employees. These transit benefits allowed employers
to offer a tax-free financial incentive toward the costs of transit
commuting, starting at $65 per month and raised in 2005 to $105 per
month.
Based upon the findings of the Environmental Protection Agency and
the U.S. Department of Transportation, there are clear improvements to
congestion, energy efficiency, and air quality from transit benefit
programs. According to their findings, an employer with 1,000 employees
that participates in a combination of transit benefits, carpool, and
telecommuting programs can take credit for taking 175 cars off the
road, saving 44,000 gallons of gasoline per year, and cutting global
warming pollution by 420 tons per year on average.
In April 2000, an Executive Order was signed requiring all executive
branch agencies in the National Capital Region to offer transit
benefits to their employees. As a result, Federal employees commuting
to Washington, D.C. from Montgomery, Prince George's, and Frederick
Counties, Maryland, several counties in Northern Virginia, and as far
away as West Virginia, are encouraged to choose transit as their means
to get to work.
According to the Washington Metropolitan Area Transit Authority and
the U.S. Department of Transportation, more than 150,000 employees--
more than one-third of all Federal employees in the National Capital
Region--joined the Federal transit benefit program created by the
Executive Order. These program participants alone have eliminated an
estimated 12,500 single-occupancy vehicles from Washington, D.C. area
roads, helping to reduce congestion and improve air quality for our
region.
The Executive Order, however, is limited. It does not cover employees
in the legislative and judicial branches, for example, or in dozens of
independent agencies. While many of the employers in those
organizations provide transit benefits to their employees, the
implementation and level of benefit is up to the discretion of
individual offices. As such, many of these organizations provide
limited benefits or do not provide any benefits at all. Guaranteed
transit benefits would give these employees more choice in their
commuting options and provide an additional incentive to move off our
congested roadways and onto public transit.
Of course, such incentives will be ineffective if employees lack
access to transit services. In my own state of Maryland, the United
States Food and Drug Administration planned to use its own resources to
provide a shuttle service for its employees from its new White Oak
facility to an area Metro station. When they investigated providing
this service, FDA officials found that the current law does not allow
federal agencies to use their own vehicles to shuttle employees to mass
transit stations.
The potential impact of this restriction on regional congestion is
not insignificant. By the middle of this year, FDA expects to have
1,850 employees located at the new White Oak facility, and plans have
been made to eventually house more than 7,000 FDA researchers and
administrators at the new facility. The lack of access from FDA's new
campus to a transit station represents a lost opportunity for reducing
congestion, improving our environment and elevating the quality of life
for employees.
This type of lost opportunity occurs across the nation. Nationally,
the Federal Government employs more than 2.6 million civilian workers
at more than 3,000 Federal Government office buildings. At Federal
offices throughout the country, transit use is often limited as a
commuting option due to lack of employee access to a transit station or
a bus stop.
The Federal Employee Commuter Benefits Act would address both of
these issues faced by Federal employees. First, the bill would put into
law the Executive Order's requirement that transit pass benefits be
made available to all qualified Federal employees in the National
Capital Region. The bill also extends the requirement beyond executive
branch agencies to include the legislative and judicial branches and
the independent agencies, providing guaranteed transit benefits to
thousands of additional federal employees in the Washington, DC region.
[[Page S5107]]
Second, the Federal Employee Commuter Benefits Act would remove the
restriction that prohibits a Federal agency from operating a shuttle
service to a public transit facility. With this legislation, any
Federal agency, anywhere in the United States, can choose to provide a
transit shuttle service for their employees. By providing access to
commuting alternatives, Federal agencies will be able to provide a
benefit to their employees that can make getting to work easier, more
affordable, and more employee-friendly. It will also provide an
opportunity to help reduce congestion and improve air quality across
the Nation.
Since 1982, the U.S. population has grown 20 percent, but the time
spent by commuters in traffic has grown by over 200 percent. Each year,
traffic congestion wastes nine billion gallons of fuel. By encouraging
federal employees to look to transit and by providing access to transit
stations, we can help reduce congestion, improve the environment, and
promote an improved quality of life.
I am introducing the Federal Employee Commuter Benefits Act because
of the opportunities it will give federal agencies to support public
transportation, both by providing employee access to transit facilities
across the nation, and by providing transit benefits to federal
employees in the Washington, D.C. region. Both of these improvements
will aid our efforts to fight congestion and pollution by encouraging
the use of transportation alternatives. This legislation is strongly
supported by federal employees, transit providers, and local elected
officials, and I ask unanimous consent that the text of the bill, along
with letters of support, be printed in the Record. I encourage my
colleagues to join me in supporting the Federal Employee Commuter
Benefits Act.
There being no objection, the materials were ordered to be printed in
the Record, as follows:
S. 1018
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 ``Federal Employee Commuter
Benefits Act of 2005''.
SEC. 2. TRANSIT PASS TRANSPORTATION FRINGE BENEFITS.
(a) In General.--Effective as of the first day of the next
fiscal year beginning after the date of the enactment of this
Act, each covered agency shall implement a program under
which all qualified Federal employees serving in or under
such agency shall be offered transit pass transportation
fringe benefits, as described in subsection (b).
(b) Benefits Described.--The benefits described in this
subsection are the transit pass transportation fringe
benefits which, under section 2 of Executive Order 13150, are
required to be offered by Federal agencies in the National
Capital Region on the date of enactment of this Act.
(c) Definitions.--In this section--
(1) the term ``covered agency'' means any agency, to the
extent of its facilities in the National Capital Region;
(2) the term ``agency'' means any agency (as defined by
7905(a)(2) of title 5, United States Code), the United States
Postal Service, the Postal Rate Commission, and the
Smithsonian Institution;
(3) the term ``National Capital Region'' includes the
District of Columbia and every county or other geographic
area covered by section 2 of Executive Order 13150;
(4) the term ``Executive Order 13150'' refers to Executive
Order 13150 (5 U.S.C. 7905 note);
(5) the term ``Federal agency'' is used in the same way as
under section 2 of Executive Order 13150; and
(6) any determination as to whether or not one is a
``qualified Federal employee'' shall be made applying the
same criteria as would apply under section 2 of Executive
Order 13150.
(d) Rule of Construction.--Nothing in this section shall be
considered to require that a covered agency--
(1) terminate any program or benefits in existence on the
date of the enactment of this Act, or postpone any plans to
implement (before the effective date referred to in
subsection (a)) any program or benefits permitted or required
under any other provision of law; or
(2) discontinue (on or after the effective date referred to
in subsection (a)) any program or benefits referred to in
paragraph (1), so long as such program or benefits satisfy
the requirements of subsections (a) through (c).
SEC. 3. AUTHORITY TO USE GOVERNMENT VEHICLES TO TRANSPORT
FEDERAL EMPLOYEES BETWEEN THEIR PLACE OF
EMPLOYMENT AND MASS TRANSIT FACILITIES.
(a) In General.--Section 1344 of title 31, United States
Code, is amended--
(1) by redesignating subsections (g) and (h) as subsections
(h) and (i), respectively; and
(2) by inserting after subsection (f) the following:
``(g)(1) A passenger carrier may be used to transport an
officer or employee of a Federal agency between the officer's
or employee's place of employment and a mass transit facility
(whether or not publicly owned) in accordance with succeeding
provisions of this subsection.
``(2) Notwithstanding section 1343, a Federal agency that
provides transportation services under this subsection
(including by passenger carrier) shall absorb the costs of
such services using any funds available to such agency,
whether by appropriation or otherwise.
``(3) In carrying out this subsection, a Federal agency
shall--
``(A) to the maximum extent practicable, use alternative
fuel vehicles to provide transportation services;
``(B) to the extent consistent with the purposes of this
subsection, provide transportation services in a manner that
does not result in additional gross income for Federal income
tax purposes; and
``(C) coordinate with other Federal agencies to share, and
otherwise avoid duplication of, transportation services
provided under this subsection.
``(4) For purposes of any determination under chapter 81 of
title 5, an individual shall not be considered to be in the
`performance of duty' by virtue of the fact that such
individual is receiving transportation services under this
subsection.
``(5)(A) The Administrator of General Services, after
consultation with the National Capital Planning Commission
and other appropriate agencies, shall prescribe any
regulations necessary to carry out this subsection.
``(B) Transportation services under this subsection shall
be subject neither to the last sentence of subsection (d)(3)
nor to any regulations under the last sentence of subsection
(e)(1).
``(6) In this subsection, the term `passenger carrier'
means a passenger motor vehicle, aircraft, boat, ship, or
other similar means of transportation that is owned or leased
by the United States Government or the government of the
District of Columbia.''.
(b) Funds for Maintenance, Repair, Etc.--Subsection (a) of
section 1344 of title 31, United States Code, is amended by
adding at the end the following:
``(3) For purposes of paragraph (1), the transportation of
an individual between such individual's place of employment
and a mass transit facility pursuant to subsection (g) is
transportation for an official purpose.''.
(c) Coordination.--The authority to provide transportation
services under section 1344(g) of title 31, United States
Code (as amended by subsection (a)) shall be in addition to
any authority otherwise available to the agency involved.
The American Federation of Government Employees, Local
12, AFL-CIO,
May 11, 2005.
Hon. Paul Sarbanes
U.S. Senate, Washington, DC.
Subject: H.R. 1283
Dear Senator Sarbanes: The American Federation of
Government Employees (AFGE) Local 12 represents 3,600
employees at the U.S. Department of Labor in the Washington
D.C. metropolitan area.
We appreciate very much all the work you have done on
behalf of Federal employees, in particular your work to
assist our local in our three year battle to have the monthly
transit subsidy raised to $100.
We respectfully request that you sponsor and introduce in
the Senate a companion bill to H.R. 1283. The purpose of H.R.
1283 is ``To provide that transit pass transportation fringe
benefits be made available to all qualified Federal employees
in the National Capital Region; to allow passenger carriers
which are owned or leased by the Government to be used to
transport Government employees between their place of
employment and mass transit facilities, and for other
purposes.''
H.R. 1283 was introduced by Congressman Jim Moran and is
co-sponsored by Representatives Eleanor Holmes Norton, Albert
Wynn, Chris Van Hollen, Steny Hoyer, Frank Wolf, and Earl
Blurnenauer. It has been referred to the House Government
Reform Committee.
Passage into law of this legislation would not only help
employees at any Federal agency in this area where management
has decided, for whatever reason, not to offer the tax-free
maximum transit subsidy. It would also benefit the region
generally by giving more Federal employees the incentive to
use mass transit, thus helping to lessen traffic congestion
and air pollution.
The membership of AFGE Local 12 passed a resolution on May
5 of this year in support of this kind of legislation. A copy
of the resolution is attached.
Thank you very much for your consideration of this serious
matter.
Respectfully yours,
Lawrence C. Drake, Jr.
President.
____
Approved by the membership of AFGE Local 12 on May 5, 2005
Resolution on transit subsidy legislation
Whereas: Using mass transit is one of the most cost-
effective, environmentally sound, and energy efficient ways
for Federal employees to commute to their workplaces;
Executive Order 13150 ordered transit subsidies, now valued
at a maximum of $105 a
[[Page S5108]]
month, to be made available to all executive branch
employees;
Pursuant to Executive Order 13150, the number of executive
branch employees utilizing transit subsidies grew from 55,000
to 155,000 participants, reducing highway vehicle miles
commuted by over 40 million;
The Washington DC metropolitan area's traffic congestion is
overall the country's third worst and is worse than any other
metropolitan area outside California;
As the region's largest employer, the Federal government
has the capacity and the moral duty to significantly reduce
road overcrowding and its consequent pollution by providing
appropriate transit benefits to encourage more widespread
mass transit use;
Legislation codifying transit benefits for Federal
employees in the Washington DC metropolitan area and
repealing restrictions on Federal agencies offering their
employees shuttle services between their offices and transit
centers, unanimously approved by the House Government Reform
Committee in the previous Congress, has been re-introduced as
H.R. 1283 by Rep. Jim Moran and six co-sponsors; and
Codifying these benefits would remedy Executive Order
13150's lack of legal recourse against agencies willfully
ignoring its requirements;
Therefore be it resolved that:
American Federation of Government Employees Local 12
endorses legislation such as H.R. 1283 which codifies
Executive Order 13150 and repeals restrictions on Federal
agencies offering their employees shuttle services between
their offices and transit centers; and
AFGE 12 likewise urges other organizational entities with
which it is affiliated in the American Federation of
Government Employees and the AFL-CIO to actively seek
enactment of such legislation.
____
American Public Transportation
Association,
May 11, 2005.
Hon. Paul S. Sarbanes,
Ranking Member, Senate Committee on Banking, Housing, and
Urban Affairs, Washington, DC.
Dear Senator Sarbanes: On behalf of the more than 1,500
member organizations of the American Public Transportation
Association (APTA), I write to express strong support for
legislation you are proposing that would expand the use of
transit-related commuter tax benefits in the Washington, DC
region. This legislation will help promote the use of public
transportation and thereby support regional efforts to reduce
traffic congestion in the National Capital area. We note that
a recent report by the Texas Transportation Institute (TTI)
cited the Washington, DC metropolitan area as the third most
congested in the nation.
As we understand it, your legislation would codify language
currently in an executive order that requires federal
executive branch agencies to offer to their employees transit
benefits equal to employee commuting costs, currently up to
$105 per month. The legislation would also expand the
eligibility of these benefits to legislative and judicial
branch employees in the National Capital area.
We believe that it is important that the federal government
support the use of public transportation in its efforts to
reduce congestion, minimize auto pollution, and make the best
use of existing public transportation facilities that are
built with a substantial federal investment. APTA has been a
long-time proponent of providing federal tax incentives that
promote public transportation at no less a level than those
provided for parking.
We thank you for your leadership on this issue. If you have
questions, please have your staff contact Rob Healy of APTA's
Government Affairs Department at (202) 496-4811 or e-mail
[email protected]. We look forward to working with you to see
this important legislation enacted into law.
Sincerely yours,
William W. Millar,
President.
____
Metro,
April 15, 2005.
Hon. Paul S. Sarbanes,
U. S. Senate, Washington, DC.
Dear Senator Sarbanes: I am pleased to offer the Washington
Metropolitan Area Transit Authority's (WMATA) endorsement of
the legislation you are proposing concerning federal employee
commuter benefits. This legislation is very important in
supporting regional efforts to use every feasible technique
to reduce the severe traffic congestion in the National
Capital Region.
The recently released Texas Transportation Institute (TTI)
report on congestion cites the metropolitan Washington region
as the third most congested in the nation, despite intense
transit use by commuters in this area.
The TTI report cites a number of strategies that help to
reduce congestion and the cost of delay to the residents of
the region. For the Washington metropolitan area, the TTI
report indicates that transit services currently save the
metropolitan area more than $1 billion annually in delay
costs and over 52 percent of current delay time. The
metropolitan Washington region is fifth in the nation in
terms of the hours of delay saved because of the public
transportation network. The TTI report demonstrates the
positive effects of transit services on reducing traffic
congestion in the Washington metropolitan area. With the
unrelentless traffic in this region, it is critical that
transit ridership continues to grow to relieve road
congestion.
It's essential that the federal government as the region's
largest employer, employing more than 374,000 people in this
area, give employees every incentive to take transit. The
tremendously successful transit benefits program, known in
this area as Metrochek, is currently required to be offered
to civilian and military employees of the Executive Branch
and voluntarily provided by the U.S. House and Senate and
several independent agencies. Since the imposition of
Executive Order 13150 on October 1, 2000, the number of
federal employees receiving transit benefits has increased
166 percent, from 57,000 to 151,800 and 47 percent of
Metrorail's peak period riders are federal employees--up from
35 percent in the mid 1980s.
Your proposal will codify the federal employees transit
benefit and expand its eligibility to judicial, legislative
and independent agency employees in the National Capital
Region. While some of these agencies already participate in
the Metrochek program, this legislation ensures that
participation will be uniform across all three branches of
the federal government.
WMATA also supports the proposal to authorize the
establishment of federal agency shuttles to and from mass
transit facilities. While many federal agencies throughout
the region are within walking distance of Metrorail stations,
and other transit facilities, some are not. This legislation
will make transit accessible to many federal workers for whom
transit is not currently a viable alternative because their
work site is not convenient to a Metro station.
Many thanks for your leadership in proposing this
legislation. It is another example in a long list of
initiatives you have sponsored to promote public
transportation in the National Capital Region and the nation.
Sincerely,
Richard A. White,
General Manager and Chief Executive Officer.
____
May 12, 2005.
Hon. Paul Sarbanes,
Ranking Member, Senate Committee on Banking, Housing and
Urban Affairs, Washington, DC.
Dear Senator Sarbanes: I am writing to you to express the
support of the Virginia Railway Express for your efforts to
reintroduce legislation that would provide transit pass
transportation fringe benefits to all qualified Federal
employees in the National Capital region. As someone who has
always been an advocate for the promotion of public
transportation and the mobility it affords the citizenry, we
are fortunate to have you as the Ranking Member of the Senate
Committee on Banking, Housing and Urban Affairs, which
oversees mass transit programs.
As you have witnessed, increased federal investment in
transit under TEA 21 has led to dramatic growth in public
transportation ridership, particularly in the National
Capital Region. The Virginia Railway Express is a prime
example of that growth, with ridership increasing by 17% each
year for the past four years, making us one of the fastest
growing commuter railroads in America. Nearly 64% of our
ridership is comprised of federal and/or military employees
working in the region.
Currently, transit benefits are offered to a select core of
federal employees under Executive Order 13150. The benefit is
limited to the executive branch agencies with no requirement
for participation by the legislative and judicial branches.
Such legislation would codify transit benefits to all
eligible federal employees by broadening the scope of
participation to another 100,000 workers, thus providing
greater flexibility and mobility for the federal work force
in the region.
Your legislation is significant not only because it affords
greater options to our federal workforce, but also because
the use of public transit is the only recourse to help
relieve the growing problem of traffic congestion in the
region. For instance, today VRE transports enough people to
remove more than one lane of traffic off of I-95 and I-66
during peak commuting rush hours in the morning and the
evening. Not only does it reduce car emissions; thus
improving air quality, but also ensures that the federal and
private workforce can get to work in a timely fashion; thus
saving millions of dollars for employers. The passage of this
legislation would only increase these benefits to our region.
In conclusion, let me again thank you for all the support
that you have given to public transportation over the years
and for authoring this much needed legislation. I hope that
with your direct involvement that we will be successful in
seeing this measure signed into law.
Sincerely,
Dale Zehner,
Chief Executive Officer.
______
By Mr. DURBIN:
S. 1019. A bill to amend titles 10 and 38, United States Code, to
increase benefits for members of the Armed Forces who, after September
11, 2001, serve on active duty outside the United States or its
territories or possessions as part of a contingency operation
(including a humanitarian operation, peacekeeping operation, or similar
operation) or a
[[Page S5109]]
combat operation; to the Committee on Finance.
Mr. DURBIN. Mr. President, I rise today to introduce the Welcome Home
G.I. Bill. Similar to the GI Bill for soldiers returning from World War
II, this Welcome Home G.I Bill establishes a program of benefits
designed to reward returning veterans and ease their transition into
civilian life.
These benefits would be available to troops who deployed for six
months or more outside the United States for combat, contingency,
peacekeeping or humanitarian operations after September 11, 2001. The
bill also covers troops who do not meet the six-month service
requirement because they were discharged earlier for medical or
hardship reasons.
This bill provides our returning heroes with improved health care,
education and job training assistance, and help with a down-payment on
a home.
Returning troops deserve better health care coverage. Currently, upon
separating from the military, active duty service members receive six
months of healthcare coverage as a ``transition'' benefit and
thereafter may enroll for an additional 18 months under the Continued
Health Care Benefit Program provided they pay required premiums.
Reservists released from active duty can pay premiums to obtain a year
of coverage for every three months they were mobilized.
Under the Welcome Home G.I. Bill, a returning veteran who is unable
to secure health care coverage from an employer would be entitled to
exactly the same medical care they received while in the service.
Veterans would be entitled to this benefit for up to five years.
Our troops also deserve better medical screening before and after
deployments. Current law establishes a system of pre-deployment and
post-deployment medical examinations, including an assessment of mental
health and the drawing of blood samples, to accurately record the
medical condition of members before and after their deployment.
The Welcome Home G.I. bill improves the quality of pre-deployment and
post-deployment medical screening by requiring that the pre-deployment
exam include disease screening and the collection of clinical data such
as vital signs, immunization history and past physical or mental health
conditions. It also requires post-deployment medical screening to
include a self-administered survey in which the service member may
report information about any relevant exposures during the period of
deployment. These provisions will help identify war-related ailments so
the information will be available to answer any future questions about
the ailment's connection to military service.
Returning warriors need access to educational opportunities that can
enhance their employment prospects in civilian life after they depart
military service. Currently active duty troops have the option of
enrolling in the Montgomery G.I. Bill education benefits program, under
which the service member contributes $100 per month for 12 months while
in service and then later may receive up to $1,004 per month in
education benefits for up to 36 months. Currently, mobilized reservists
receive some portion of the active duty benefit depending on the length
of their activation. Under the Welcome Home G.I. Bill, our Iraq and
Afghanistan veterans both active duty and mobilized reserve component
troops would receive education or job training benefits worth a maximum
of $75,000 over 48 months. So this bill basically adds a little more
than $500 per month to the current benefit and extends it for an extra
year. The benefit could also be used to repay student loans. In
addition, qualifying troops who previously enrolled in the Montgomery
G.I. Bill program would have their contribution refunded.
Finally, the Welcome Home G.I. Bill helps our returning veterans
realize the American dream of owning their own home. For a 5-year
period after completion of their qualifying service, returning veterans
may receive a tax-free $5,000 down payment for the first-time purchase
of a home.
Our veterans who have endured the burdens of war, under the most
trying conditions, at tremendous personal risk and sacrifice, deserve
more than they are currently provided by this Nation upon their return.
They deserve the improved health care, education and job training, and
home-ownership assistance which this bill provides. I invite my
colleagues to join me in supporting this bill.
______
Mr. COLEMAN (for himself and Mr. Pryor):
S. 1020. A bill to make the United States competitive in a global
economy; to the Committee on Finance.
Mr. COLEMAN. Mr. President, today I am introducing legislation to
help the United States compete in an increasingly global economy in
order to keep and to grow good paying, high quality jobs here at home.
I am very pleased to be joined by my very good friend and colleague,
Senator Mark Pryor, who cares as deeply about these issues as I do.
In recent years much has been written about globalization--especially
the ``outsourcing'' of American jobs overseas. In fact, my hometown
paper, the St. Paul Pioneer Press recently ran an editorial
highlighting a survey done by the Federal Reserve that shows despite
all the talk of ``outscouring'' and ``lost jobs'', globalization has
resulted in more jobs and more money for Minnesota's workers. I ask
unanimous consent that this article be included in the record along
with my statement. However, that same editorial warned that as China,
India and the European Union work to expand their own market
opportunities by modernizing their infrastructure and improving the
skills of their workforce, there is no guarantee that the world's best
companies will continue to invest here at home.
Yet, at the same time that the Labor Department has projected that
new jobs requiring advanced science, engineering and technical training
will increase four times faster than the average national job growth
rate, only 36 percent of 9th-12th graders in Minnesota are taking upper
level math courses, and only 22 percent of are taking upper level
science. Moreover, in a high tech economy that values knowledge and
ideas as much as the products they produce the U.S. Patent and
Trademark Office (PTO) has reported that the time it takes someone to
get a patent is exploding. The facts read loud and clear: in order to
maintain our place as the leader in tomorrow's economy, America must
act now to maintain our competitive advantage and remain ahead of the
curve.
That is why we are introducing the Collaborative Opportunities to
Mobilize and Promote Education, Technology, and Enterprise Act of 2005
or the COMPETE ACT of 2005. The COMPETE Act is based on three simple,
fundamental ideas: 1. The U.S. needs to maintain its competitive
advantage in robust technology and innovation; 2. We must continue to
``upskill'' our workforce to ensure they have the skills necessary to
remain competitive in a global economy that is more reliant on
technology than ever before; and 3. We must utilize private-public
partnerships to help improve education in the areas of science,
technology, engineering and mathematics.
America's economic strength is rooted in its ability to innovate, and
so the COMPETE Act strengthens and expands the R&D tax credit.
Expanding the R&D tax credit will help American companies to stay on
the forefront of the technological revolution. This credit helps fuel
job creation here at home and enables companies to bring more products
and services to market.
The COMPETE Act also reforms and improves the U.S. Patent Trademark
Office (PTO). It is no secret that patents and trademarks are the
currency that drives America's high-tech economy. Unfortunately, the
PTO estimates that it will take an average of 49 months by 2009 for it
to issue a patent. This is a lifetime when you are innovating, and
discourages new ideas. Furthermore, the current backlog on patent
applications now totals almost a half million--the highest ever.
Fortunately, the PTO has come up with a solution to this problem.
However, it does not have the money to implement it. The COMPETE Act
provides the PTO with the crucial funding necessary to reform the
patent and trademark process so that U.S. companies remain on the
forefront of the technological revolution.
Today, our employers need more than just raw materials; they need a
highly skilled workforce who adds that extra value to their product.
That is
[[Page S5110]]
why the COMPETE Act establishes a tax credit that will help ``upskill''
America's workers so that they can compete in an economy increasingly
more dependent on information, communication and technology (ICT)
skills. Indeed, ICT skills are today's newest raw material and are the
infrastructure America needs to be a leader in today's global market.
To help close the math and science gap, the COMPETE Act creates a
public-partnership that will leverage the expertise and resources of
the private sector and those in the university community to establish
joint regional training and research centers. These centers will
provide training and technical assistance to teachers so they will be
better equipped to get students interested in math and science at an
early age.
The COMPETE Act rewards high performing schools in math and science
and at the same time provides an incentive for businesses to get more
involved in helping high-need schools to improve in the areas of math
and science. Finally, the COMPETE Act establishes a matching grant
program where federal and private resources will be used to help
graduate students in science, technology, engineering and mathematics
meet the cost of getting a graduate degree. This grant program will
also support outreach and mentoring activities to increase the
participation of underrepresented groups in these fields at every level
of education.
Today is the time to prepare for tomorrow and the COMPETE Act
represents an important step in helping to prepare the U.S. to succeed
in meeting the challenges of a rapidly changing world. The COMPETE Act
will help the U.S. remain ahead of the curve when it comes to competing
in today's global economy. That is why a number of diverse
organizations, including the R&D Credit Coalition, National Council of
Teachers of Mathematics, National Science Teachers Association,
Computing Technology Industry Association (CompTIA), American
Association for the Advancement of Science, National Association of
State Universities & Land-Grant Universities, ASSE Engineering Deans
Council, Council of Graduate Schools, American Society for Training &
Development, Association of American Universities, and the Intellectual
Property Owners Association support one or may of tile provisions of
the COMPETE Act.
I ask unanimous consent that their letters of support be printed in
the Record.
Today our economy is both more vulnerable and more successful than it
has ever been. To ensure that we are maximizing our chances for
success, we need to help employees and individuals innovate. We need to
have a workforce that has the skills necessary to compete in a
worldwide economy that is increasingly dependent on technology. We need
to focus on math and science education to ensure that America continues
to produce the best engineers and scientists in the world. And above
all, we need to do those things necessary to make the U.S. the best
place to do business in the world. The bottom line is we all want
America's moms and dads to enjoy good paying jobs here at home so they
can do what every mom and dad wants to do and that is give our kids a
better life than we had. That's what the COMPETE Act is all about.
There being no objection, the letters were ordered to be printed in
the Record, as follows:
[From the St. Paul Pioneer Press, Dec. 19, 2004]
Minnesota Must Compete in a Global Economy
The Federal Reserve Bank of Minneapolis recently published
the findings of the annual survey conducted by Minnesota
Technology Inc. and the Minnesota Department of Employment
and Economic Development. The clear message from Minnesota
businesses is that globalization is here to stay and it's not
all bad.
``It's the new hard reality,'' said Ron Kirscht, president
of Donnelly Custom Manufacturing Co. in Alexandria.
Indeed, for all the hand wringing over outsourcing and the
fact that Bemidji has to compete with Bangalore, it's clear
that an increasingly global economy has been a net gain for
Minnesota.
``The results showed that state manufacturers and service
providers in industries most likely to be affected by
globalization are integrating rapidly into the global
community, whether through importing, exporting, off shoring
or foreign direct investment,'' the Fed said in fedgazette,
its monthly publication.
For instance, a dozen years ago, Donnelly did very little
importing and no exporting. Today it imports components,
materials and tools, and exports its custom-built products
around the world.
``We couldn't compete if we didn't,'' Kirscht said.
Some executives even admit that globalization has made them
more competitive.
``There's always the feeling that the fewer the competitors
the better,'' said Steven Cheppard, CEO of Kenyon-based
Foldcraft Co. ``But in a sort of convoluted fashion it is
possible to make a positive out of this. It forces us to make
ourselves better and better.''
According to the survey, about 21 percent of respondents
were importers and 32 percent exporters in 1998. Today both
numbers are around 40 percent.
About 20 percent of those surveyed reported increased
employment and production during the same period. On wages,
about 43 percent of businesses expect them to increase; 38
percent see no changes and 19 percent see a decrease due to
increased global competition. Perhaps more important,
businesses expect to add more new production jobs between now
and 2008 than they did between 1998 and 2003.
Not surprisingly, the top three reasons cited for
outsourcing and importing were to reduce or control costs,
increase revenue and increase overall competitiveness. About
43 percent of those surveyed said the cost of employee health
care benefits was a key factor in their decision to move jobs
offshore or out of state. About one-third said wages and
taxes chased them out of Minnesota.
Team Industries, a designer and manufacturer of power
trains for recreational vehicles, has manufacturing plants in
six Minnesota cities, and a market reach that extends around
the globe. Jason Roue, general manager at the company's
Baxter plant in central Minnesota, noted that in the past few
years the company has expanded its network of global
sourcing.
It now imports lower-cost parts and raw materials from
around the world, but at the same time have seen significant
export growth as international demand for its products has
increased.
``If we plan on staying in business, we're going to have to
adapt,'' said Roue. ``By adopting global sourcing and lean
manufacturing techniques, and by differentiating ourselves
from foreign competitors, mainly in China and Korea, we think
we can meet the challenge of global competition.''
The Fed notes that regardless of how businesses ``feel''
about globalization, ``they seem to understand that
membership is not negotiable, but required. ``
We agree. Furthermore, we'd argue that when state and local
lawmakers are considering new taxes and regulations, even
with a projected budget shortfall of $1.4 billion, they also
need to consider how our regimen compares with not just
Seattle and Shreveport, but Shanghai and Singapore. For the
Fed study makes clear that the world--not just the country--
is increasingly the competitive landscape on which Minnesota
must compete.
____
Intellectual Property Owners
Association,
Washington, DC, May 12, 2005.
Hon. Norm Coleman,
Senate Hart Office Building,
Washington, DC.
Hon. Mark Pryor,
Senate Dirksen Office Building,
Washington, DC.
Dear Senators Coleman and Pryor: Intellectual Property
Owners Association (IPO) writes to voice its strong support
for Title III of the COMPETE Act of 2005. As you know, IPO
has long advocated ending diversion of the user fees paid by
patent and trademark applicants to the U.S. Patent and
Trademark Office (USPTO) and Title III of the COMPETE Act of
2005 would accomplish this goal.
Intellectual property rights including patents and
trademarks are the currency that drives America's high-tech
economy. Yet, the USPTO currently faces not only a workload
crisis, but also questions about the quality of the patents
it grants.
IPO's recommended objectives for the USPTO are to: (1)
improve patent quality, (2) reduce the time it takes
applicants to get a patent, and (3) achieve cost
effectiveness in all operations. IPO has supported the
USPTO's ``21st Century Strategic Plan'' as a way to achieve
these objectives, but until now, the USPTO has been hampered
by lack of funding. Last year, Congress passed legislation
raising patent application fees by 15 to 25 percent. The fee
increase will provide more than $200 million a year in
additional revenue to the USPTO through September 2006;
however, a long term solution to USPTO's funding problems is
still needed.
America's innovators remain prepared to pay out of our own
pockets to improve the situation at the PTO provided that the
money will go to the agency and not be diverted to unrelated
programs. This fear is not unfounded, given that Congress
diverted more than three-quarters of a billion dollars of
fees paid by patent and trademark applicants to unrelated
government programs from 1992 until 2004.
IPO firmly believes that it is reasonable and just that the
USPTO keep 100 percent of its own patent and trademark fees.
To allow
[[Page S5111]]
for anything less would be a disservice to inventors and
entrepreneurs and a drag on our nation's competitiveness and
productivity.
We thank you for supporting America's innovators by
introducing legislation that would end the practice of fee
diversion, and we are committed to working with you to ensure
that such legislation is enacted into law.
Sincerely,
Herbert C. Wamsley,
Executive Director.
____
American Society for
Training and Development,
Alexandria, VA, May 11, 2005.
Hon. Norm Coleman,
U.S. Senate,
Washington, DC.
Dear Senator Coleman: On behalf of the American Society for
Training & Development (ASTD), thank you for introducing the
Collaborative Opportunities to Mobilize and Promote
Education, Technology, and Enterprise Act of 2005 (COMPETE
Act). As the world's largest association dedicated to
training, workplace learning, and performance professionals,
ASTD is acutely aware that one of the most critical issues
facing organizations today is developing the knowledge and
capabilities of the workforce. Your bill is a big step in the
right direction to ensuring that the U.S. workforce remains
competitive in the global economy.
Sections 111-112 of Title I, the Tax Credit for Information
and Communications Technology Education and Training Program
Expenses, are of particular interest to ASTD. This tax credit
can benefit all U.S. companies because every industry
requires IT skills, not just IT-based companies. According to
ASTD's 2004 State of the Industry Report, one of the most
important content areas in which employees are trained in
U.S. organizations is IT and systems training. A tax credit
for expenses paid or incurred for IT training demonstrates a
targeted solution for both employer and employee (or an
unemployed individual). Employers identify what training is
needed; employees are able to train or upskill in industries
that need skilled workers. And because employers or
individuals are required to pay half the training or
educational costs, there is a greater likelihood that the
program will be successful. ASTD therefore supports your
efforts to include these sections in the COMPETE Act.
Many businesses find themselves ill-equipped to grow
because the skills required to meet demand for growth are in
short supply in their organizations. A full 66 percent of
respondents to a recent ASTD poll say there is a skills gap
in their organizations right now, and almost 20 percent say
there will be one within the next year. The best approach for
addressing the skills gap is the COMPETE Act's solution of
providing government incentives that enable the private
sector to train or educate more people in the industries in
which skilled workers are needed.
The COMPETE Act is an excellent example of a public-private
partnership that can ensure companies remain competitive, and
individuals seek the education they need to enter or re-enter
the workforce. We look forward to working with you and your
staff as this bill progresses through the Senate.
Sincerely,
Tony Bingham,
President & CEO.
____
Council of Graduate Schools,
Washington, DC.
Hon. Norm Coleman,
U.S. Senate, Washington, DC.
Hon. Mark Pryor,
U.S. Senate, Washington, DC.
Dear Senators Coleman and Pryor: I am writing to commend
you for supporting our nation's economic competitiveness
through the introduction of the Collaborative Opportunities
to Mobilize and Promote Education, Technology and Enterprise
(COMPETE) Act. The Council of Graduate Schools (CGS) and its
460 plus member institutions are very grateful for your
leadership in addressing the important issue of American
competitiveness.
CGS is committed to collaborating with you and others on
developing a coordinated national strategy to enhance
America's competitiveness. The European Union, China, India
and many other countries are making large investments in
education, research and development, greatly expanding their
ability to compete in the global economy. The United States
cannot afford to coast on its past successes and must invest
now to maintain our economic preeminence and national
security in the years ahead.
The policy changes you propose include providing a new
matching fund program to promote competitiveness through
graduate education, extension and enhancement of the R&D tax
credit, and improvements to the Federal patent and trademark
process. These policy proposals along with others designed to
support math and science education in elementary and
secondary schools establish a solid foundation for a longer-
term, comprehensive agenda designed to maintain our nation's
leadership in innovation, research and discovery.
We are also appreciative of your additional legislative
efforts to increase global competition for the best and the
brightest. As you know, the U.S. must continue welcoming
qualified international students to our country and
simultaneously implementing policies to address declining
participation of domestic students across key fields in
science, technology, engineering, mathematics and critical
foreign languages.
Thank you for your leadership in addressing American
competitiveness and for supporting the vital role played by
graduate education as a key part of our national strategy to
maintain our leadership in the global economy.
Sincerely,
Debra W. Stewart.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1020
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Collaborative Opportunities to Mobilize and Promote
Education, Technology, and Enterprise Act of 2005'' or the
``COMPETE Act of 2005''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--TAX INCENTIVES
Subtitle A--Research credit
Sec. 101. Extension of research credit.
Sec. 102. Increase in rates of alternative incremental credit.
Sec. 103. Alternative simplified credit for qualified research
expenses.
Subtitle B--Education
Sec. 111. Credit for information and communications technology
education and training program expenses.
Sec. 112. Eligible educational institution.
Sec. 113. Alternative percentage limitation for corporate charitable
contributions to the mathematics and science partnership
program.
TITLE II--EDUCATION PROVISIONS
Sec. 201. Regional training and research centers.
Sec. 202. Math and science partnership bonus grants.
Sec. 203. Matching funds program to promote American competitiveness
through graduate education.
TITLE III--UNITED STATES PATENT AND TRADEMARK FEE MODERNIZATION
Sec. 301. Patent and Trademark Office funding.
TITLE I--TAX INCENTIVES
Subtitle A--Research Credit
SEC. 101. EXTENSION OF RESEARCH CREDIT.
(a) In General.--Subsection (h) of section 41 of the
Internal Revenue Code of 1986 (relating to termination) is
amended by striking ``2005'' and inserting ``2007''.
(b) Conforming Amendment.--Subparagraph (D) of section
45C(b)(1) of such Code is amended by striking ``2005'' and
inserting ``2007''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after the date of the
enactment of this Act.
SEC. 102. INCREASE IN RATES OF ALTERNATIVE INCREMENTAL
CREDIT.
(a) In General.--Subparagraph (A) of section 41(c)(4) of
the Internal Revenue Code of 1986 (relating to election of
alternative incremental credit) is amended--
(1) by striking ``2.65 percent'' and inserting ``3
percent'';
(2) by striking ``3.2 percent'' and inserting ``4
percent''; and
(3) by striking ``3.75 percent'' and inserting ``5
percent''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.
SEC. 103. ALTERNATIVE SIMPLIFIED CREDIT FOR QUALIFIED
RESEARCH EXPENSES.
(a) In General.--Subsection (c) of section 41 of the
Internal Revenue Code of 1986 (relating to base amount) is
amended by redesignating paragraphs (5) and (6) as paragraphs
(6) and (7), respectively, and by inserting after paragraph
(4) the following new paragraph:
``(5) Election of alternative simplified credit.--
``(A) In general.--At the election of the taxpayer, the
credit determined under subsection (a)(1) shall be equal to
12 percent of so much of the qualified research expenses for
the taxable year as exceeds 50 percent of the average
qualified research expenses for the 3 taxable years preceding
the taxable year for which the credit is being determined.
``(B) Special rule in case of no qualified research
expenses in any of 3 preceding taxable years.--
``(i) Taxpayers to which subparagraph applies.--The credit
under this paragraph shall be determined under this
subparagraph if the taxpayer has no qualified research
expenses in any 1 of the 3 taxable years preceding the
taxable year for which the credit is being determined.
``(ii) Credit rate.--The credit determined under this
subparagraph shall be equal to 6
[[Page S5112]]
percent of the qualified research expenses for the taxable
year.
``(C) Election.--An election under this paragraph shall
apply to the taxable year for which made and all succeeding
taxable years unless revoked with the consent of the
Secretary. An election under this paragraph may not be made
for any taxable year to which an election under paragraph (4)
applies.''.
(b) Coordination With Election of Alternative Incremental
Credit.--
(1) In general.--Section 41(c)(4)(B) of the Internal
Revenue Code of 1986 (relating to election) is amended by
adding at the end the following: ``An election under this
paragraph may not be made for any taxable year to which an
election under paragraph (5) applies.''.
(2) Transition rule.--In the case of an election under
section 41(c)(4) of the Internal Revenue Code of 1986 which
applies to the taxable year which includes the date of the
enactment of this Act, such election shall be treated as
revoked with the consent of the Secretary of the Treasury if
the taxpayer makes an election under section 41(c)(5) of such
Code (as added by subsection (a)) for such year.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.
Subtitle B--Education
SEC. 111. CREDIT FOR INFORMATION AND COMMUNICATIONS
TECHNOLOGY EDUCATION AND TRAINING PROGRAM
EXPENSES.
(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following:
``SEC. 30B. INFORMATION AND COMMUNICATIONS TECHNOLOGY
EDUCATION AND TRAINING PROGRAM EXPENSES.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter for the
taxable year an amount equal to 50 percent of information and
communications technology education and training program
expenses paid or incurred by the taxpayer for the benefit
of--
``(1) in the case of a taxpayer engaged in a trade or
business, an employee of the taxpayer, or
``(2) in the case of a taxpayer who is an individual not so
engaged, such individual.
``(b) Limitations.--
``(1) Employers.--In the case of any taxpayer described in
subsection (a)(1), the amount of expenses which may be taken
into account under subsection (a) for the taxable year shall
not exceed the greater of--
``(A) the excess of--
``(i) the sum of--
``(I) $10,000 multiplied by the number of qualified
individuals who are employees and with respect to whom the
taxpayer has paid or incurred information and communications
technology education and training expenses, plus
``(II) $8,000 multiplied by the number of all other
employees with respect to whom the taxpayer has paid or
incurred such expenses, over
``(ii) the average amount of such expenses paid or incurred
by the taxpayer with respect to all employees for the 3
preceding taxable years, or
``(B) the sum of--
``(i) $4,000 multiplied by the number of qualified
individuals who are employees and with respect to whom the
taxpayer has paid or incurred such expenses, plus
``(ii) $2,500 multiplied by the number of all other
employees with respect to whom the taxpayer has paid or
incurred such expenses.
``(2) Individuals.--The amount of expenses with respect to
any individual described in subsection (a)(2) which may be
taken into account under subsection (a) for the taxable year
shall not exceed $2,500 ($4,000 in the case of a qualified
individual).
``(3) Coordination of credits.--
``(A) In general.--The credit under subsection (a)(1)
allowed to an employer with respect to any employee shall be
reduced by the coordination exclusion amount.
``(B) Portion of credit allowable.--For purposes of
subparagraph (A), the coordination exclusion amount is an
amount which bears the same ratio to the applicable
limitation as--
``(i) the amount (if any) of the limitation applicable to
such employee under subsection (b)(2) which such employee
does not assign to such employer, bears to
``(ii) $2,500 ($4,000 in the case of an employee who is a
qualified individual).
``(C) Applicable limitation.--For purposes of subparagraph
(B), the term `applicable limitation' means the amount under
paragraph (2) with respect to such employee which is used by
such employer to calculate the limitation under such
paragraph.
``(4) Qualified individual.--The term `qualified
individual' means an individual--
``(A) with respect to whom all information and
communications technology education and training program
expenses are paid or incurred in connection with a program
operated--
``(i) in an empowerment zone or enterprise community
designated under part I of subchapter U or a renewal
community designated under part I of subchapter X,
``(ii) in a school district in which at least 50 percent of
the students attending schools in such district are eligible
for free or reduced-cost lunches under the school lunch
program established under the Richard B. Russell National
School Lunch Act,
``(iii) in an area designated as a disaster area by the
Secretary of Agriculture or by the President under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act in
the taxable year or any of the 4 preceding taxable years,
``(iv) in a rural enterprise community designated under
section 766 of the Agriculture, Rural Development, Food and
Drug Administration, and Related Agencies Appropriations Act,
1999,
``(v) in an area designated by the Secretary of Agriculture
as a Rural Economic Area Partnership Zone,
``(vi) in an area over which an Indian tribal government
(as defined in section 7701(a)(40)) has jurisdiction, or
``(vii) by an employer who has 200 or fewer employees for
each business day in each of 20 or more calendar weeks in the
current or preceding calendar year,
``(B) with a disability, or
``(C) who is receiving a benefit under chapter 2 of title
II of the Trade Act of 1974.
``(c) Information Technology Education and Training Program
Expenses.--For purposes of this section--
``(1) In general.--The term `information technology
education and training program expenses' means expenses paid
or incurred by reason of the participation of the taxpayer
(or any employee of the taxpayer) in any information and
communications technology education and training program.
Such expenses shall include expenses paid in connection
with--
``(A) course work,
``(B) certification testing,
``(C) programs carried out under the Act of August 16, 1937
(50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq), which are
registered by the Department of Labor, and
``(D) other expenses that are essential to assessing skill
acquisition.
``(2) Information technology education and training
program.--The term `information technology education and
training program' means a training program in information and
communications technology workplace disciplines or which is
provided in the United States by an accredited college,
university, private career school, postsecondary educational
institution, a commercial information technology provider, or
an employer-owned information technology training
organization.
``(3) Commercial information technology training
provider.--The term `commercial information technology
training provider' means a private sector organization
providing an information and communications technology
education and training program.
``(4) Employer-owned information technology training
organization.--The term `employer-owned information
technology training organization' means a private sector
organization that provides information technology training to
its employees using internal training development and
delivery personnel. The training programs must use industry-
recognized training disciplines and evaluation methods,
comparable to institutional and commercial training
providers.
``(d) Denial of Double Benefit.--
``(1) Disallowance of other credits and deductions.--No
deduction or credit shall be allowed under any other
provision of this chapter for expenses taken into account in
determining the credit under this section.
``(2) Reduction for hope and lifetime learning credits.--
The amount taken into account under subsection (a) shall be
reduced by the information technology education and training
program expenses taken into account in determining the
credits under section 25A.
``(e) Certain Rules Made Applicable.--For purposes of this
section, rules similar to the rules of section 45A(e)(2) and
subsections (c), (d), and (e) of section 52 shall apply.
``(f) Application With Other Credits.--The credit allowed
by subsection (a) for any taxable year shall not exceed the
excess (if any) of--
``(1) the sum of the regular tax liability (as defined by
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under subpart A and
section 27 for the taxable year.
``(g) Inflation Adjustments.--In the case of a taxable year
beginning after 2004, each of the dollar amounts under
paragraphs (1), (2), and (3) of subsection (b) shall be
increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) of the calendar year in which the taxable
year begins, determined by substituting `calendar year 2003'
for `calendar year 1992' in subparagraph (B) thereof.
If any amount as adjusted under the preceding sentence is not
a multiple of $100, such amount shall be rounded to the next
lowest multiple of $100.''.
(b) Clerical Amendment.--The table of sections for subpart
B of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following:
``Sec. 30B. Information and communications technology education and
training program expenses.''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2004.
[[Page S5113]]
SEC. 112. ELIGIBLE EDUCATIONAL INSTITUTION.
(a) In General.--Section 25A(f)(2) of the Internal Revenue
Code of 1986 (relating to eligible educational institution)
is amended to read as follows:
``(2) Eligible educational institution.--The term `eligible
educational institution' means--
``(A) an institution--
``(i) which is described in section 101(b) or 102(a) of the
Higher Education Act of 1965, and
``(ii) which is eligible to participate in a program under
title IV of such Act, or
``(B) a commercial information and communications
technology training provider (as defined in section
30B(c)(3)).''.
(b) Conforming Amendment.--The second sentence of section
221(d)(2) of the Internal Revenue Code of 1986 is amended by
striking ``section 25A(f)(2)'' and inserting ``section
25A(f)(2)(A)''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2004.
SEC. 113. ALTERNATIVE PERCENTAGE LIMITATION FOR CORPORATE
CHARITABLE CONTRIBUTIONS TO THE MATHEMATICS AND
SCIENCE PARTNERSHIP PROGRAM.
(a) In General.--Section 170(b) of the Internal Revenue
Code of 1986 (related to percentage limitations) is amended
by adding at the end the following new paragraph:
``(3) Special rule for corporate contributions to the
mathematics and science partnership program.--
``(A) In general.--In the case of a corporation which makes
an eligible mathematics and science contribution--
``(i) the limitation under paragraph (2) shall apply
separately with respect to all such contributions and all
other charitable contributions, and
``(ii) paragraph (2) shall be applied with respect to all
eligible mathematics and science contributions by
substituting `15 percent' for `10 percent'.
``(B) Eligible mathematics and science contribution.--
``(i) In general.--For purposes of this paragraph, the term
`eligible mathematics and science contribution' means a
charitable contribution (other than a contribution of used
equipment) to a qualified partnership for the purpose of an
activity described in section 2202(c) of the Elementary and
Secondary Education Act of 1965..
``(ii) Qualified partnership.--The term `qualified
partnership' means an eligible partnership (within the
meaning of section 2201(b)(1) of the Elementary and Secondary
Education Act of 1965), but only to the extent that such
partnership does not include a person other than a person
described in paragraph (1)(A).''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after the date of the
enactment of this Act.
TITLE II--EDUCATION PROVISIONS
SEC. 201. REGIONAL TRAINING AND RESEARCH CENTERS.
(a) Centers Established.--From amounts appropriated under
subsection (f), the Director of the National Science
Foundation shall award grants, on a competitive basis, to
eligible entities to enable the eligible entities to
establish 10 regional training and research centers to help
maintain the Nation's workforce and education investment and
infrastructure in the sciences, technology, engineering, and
mathematics.
(b) Eligible Entity Defined.--In this section the term
``eligible entity'' means a partnership between an
institution of higher education and 1 or more of the
following entities:
(1) A research organization.
(2) An organization described in section 501(c)(3) of the
Internal Revenue Code of 1986 that--
(A) is exempt from taxation under section 501(a) of such
Code; and
(B) has expertise in the sciences, technology, engineering,
or mathematics.
(3) A trade or business.
(c) Location.--The Director of the National Science
Foundation shall award a grant for the establishment of 1
regional training and research center in each of the 10
geographic regions of the United States that is served by a
regional educational laboratory under section 174 of the
Education Sciences Reform Act of 2002 (20 U.S.C. 9564).
(d) Designation.--Each regional training and research
center established under this section shall be known as a
``Making America Competitive Center'' (MAC Center).
(e) Use of Funds.--
(1) In general.--Each eligible entity receiving a grant
under this section shall use the grant funds to establish a
regional training and research center that--
(A) provides training, technical assistance, and
professional development in the sciences, technology,
engineering, and mathematics, to or for States, local
educational agencies, qualified teachers, and schools, in the
region served by the regional training and research center;
(B)(i) develops and funds joint cooperative programs, for
qualified teachers and students, with a trade or business
related to the sciences, technology, engineering, or
mathematics; and
(ii) develops instructional materials and teaching methods
in the areas of the sciences, technology, engineering, and
mathematics for use in primary and secondary schools in the
region served by the center; and
(C) builds networks among the sciences, technology,
engineering, and mathematics resources within the 10 regions
and nationally.
(2) Qualified teacher.--For purposes of paragraph (1)(B),
the term ``qualified teacher'' means any individual who--
(A) teaches one or more courses in grades 4 through 12
primarily in--
(i) science;
(ii) computer science;
(iii) occupational preparation with respect to vocational
and technical occupations;
(iv) engineering; or
(v) mathematics; or
(B)(i) received a baccalaureate or similar degree with a
major or a minor in the sciences, technology, engineering, or
mathematics from a college, university, vocational school, or
other postsecondary institution eligible to participate in a
student aid program administered by the Department of
Education; and
(ii) is a teacher who is highly qualified (within the
meaning of section 9101(23) of the Elementary and Secondary
Education Act of 1965).
(f) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section--
(1) $200,000,000 for fiscal year 2006;
(2) $210,000,000 for fiscal year 2007;
(3) $230,000,000 for fiscal year 2008;
(4) $270,000,000 for fiscal year 2009; and
(5) $350,000,000 for fiscal year 2010.
SEC. 202. MATH AND SCIENCE PARTNERSHIP BONUS GRANTS.
Part B of title II of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6661 et seq.) is amended by
adding at the end the following:
``SEC. 2204. MATH AND SCIENCE PARTNERSHIP BONUS GRANTS.
``(a) In General.--From amounts appropriated under
subsection (d), the Secretary shall award a grant--
``(1) for each of the school years 2005-2006 through 2014-
2015, to each of the 5 elementary schools and each of the 5
secondary schools in a State whose students demonstrate the
most improvement in mathematics, as measured by the
improvement in the students' average score on the State's
assessments in mathematics from the school year preceding the
school year for which the grant is awarded to the school year
for which the grant is awarded; and
``(2) for each of the school years 2009-2010 through 2014-
2015, to each of the 5 elementary schools and each of the 5
secondary schools in a State whose students demonstrate the
most improvement in science, as measured by the improvement
in the students' average score on the State's assessments in
science from the school year preceding the school year for
which the grant is awarded to the school year for which the
grant is awarded.
``(b) Grant Amount.--The amount of each grant awarded under
this section shall be $500,000.
``(c) Applicability.--Sections 2201, 2202, and 2203 shall
not apply to this section.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$130,000,000 for each of fiscal years 2006 through 2009, and
$260,000,000 for each of fiscal years 2010 through 2015.''.
SEC. 203. MATCHING FUNDS PROGRAM TO PROMOTE AMERICAN
COMPETITIVENESS THROUGH GRADUATE EDUCATION.
(a) Purpose.--The purpose of this section is to promote
America's economic competitiveness and job creation by--
(1) assisting graduate students studying the sciences,
technology, engineering, and mathematics;
(2) advancing education in the sciences, technology,
engineering, and mathematics;
(3) stimulating greater links between private industry and
graduate education; and
(4) enabling the Office of Science of the Department of
Energy to establish a matching funds program for eligible
institutions of higher education.
(b) Definitions.--In this section:
(1) Eligible institution of higher education.--The term
``eligible institution of higher education'' means an
institution of higher education, as defined in section 101(a)
of the Higher Education Act of 1965 (20 U.S.C. 1001), that--
(A) offers an established program of post-baccalaureate
study leading to a graduate degree in the sciences,
technology, engineering, or mathematics; and
(B) enters into a written agreement with the Director
pursuant to subsection (e) to carry out the authorized
activities described in the application submitted under
subsection (d).
(2) Director.--The term ``Director'' means the Director of
the Office of Science of the Department of Energy.
(c) Grants.--
(1) Grants authorized.--The Director is authorized to award
grants, on a competitive basis, to eligible institutions of
higher education to enable the eligible institutions of
higher education to carry out authorized activities described
in subsection (e).
(2) Matching funds required.--In order to receive a grant
under this subsection an eligible institution of higher
education shall agree to provide matching funds, toward the
cost of the authorized activities to be assisted under the
grant, in an amount equal to 25 percent of the funds received
under the grant.
[[Page S5114]]
(3) Award considerations.--In awarding grants under this
subsection the Director shall take into consideration--
(A) the demonstrated commitment of the eligible institution
of higher education to providing matching funds (including
tuition remission, tuition waivers, and other types of
institutional support) toward the cost of the authorized
activities to be assisted under the grant;
(B) the demonstrated capacity of the eligible institution
of higher education to raise matching funds from private
sources;
(C) the demonstrated ability of the eligible institution of
higher education to work with private corporations and
organizations to promote economic competitiveness and job
creation;
(D) the demonstrated ability of the eligible institution of
higher education to increase the number of the eligible
institution of higher education's graduates in the sciences,
technology, engineering, or mathematics with the
interdisciplinary background and the technical, professional
and personal skills needed to contribute to American
competitiveness and job creation in the future;
(E) the potential for the grant assistance to increase the
number of graduates in the sciences, technology, engineering,
or mathematics at the eligible institution of higher
education; and
(F) the demonstrated track record of the eligible
institution of higher education in outreach and mentoring
activities that have the expressed purpose of recruiting and
retaining women, recognized minorities, and individuals with
disabilities in the sciences, technology, engineering, or
mathematics.
(4) Amount.--The Director shall award each grant under this
subsection in an amount that is not more than $1,000,000 for
each fiscal year.
(5) Equitable geographic distribution.--In awarding grants
under this subsection the Director shall ensure--
(A) an equitable geographic distribution of the grants; and
(B) an equitable distribution among public and independent
eligible institutions of higher education.
(d) Applications.--Each eligible institution of higher
education desiring a grant under this section shall submit an
application to the Director at such time, in such manner, and
accompanied by such information and assurances as the
Director may require. Each such application shall describe--
(1) the authorized activities for which assistance is
sought;
(2) the source and amount of the matching funds to be
provided; and
(3) the amount of funds raised by the eligible institution
of higher education from private sources that will be
allocated and spent to carry out the authorized activities
described in subsection (e).
(e) Authorized Activities; Agreement.--Each eligible
institution of higher education desiring a grant under this
section shall enter into a written agreement with the
Director under which the eligible institution of higher
education agrees to use all of the grant funds--
(1) to provide stipends or other financial assistance (such
as tuition assistance and related expenses) for students who
are enrolled in graduate programs in the sciences,
technology, engineering, or mathematics at the eligible
institution of higher education; and
(2) to support outreach and mentoring activities to
increase the participation of underrepresented groups in the
sciences, technology, engineering, or mathematics at all or
any level of education, including elementary, secondary and
post-secondary education.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section--
(1) $50,000,000 for fiscal year 2006;
(2) $60,000,000 for fiscal year 2007;
(3) $70,000,000 for fiscal year 2008;
(4) $80,000,000 for fiscal year 2009; and
(5) $90,000,000 for fiscal year 2010.
TITLE III--UNITED STATES PATENT AND TRADEMARK FEE MODERNIZATION
SEC. 301. PATENT AND TRADEMARK OFFICE FUNDING.
(a) Amendment.--Section 42(c) of title 35, United States
Code, is amended--
(1) by striking ``(c)'' and inserting ``(c)(1)''; and
(2) by adding at the end the following:
``(2) If estimated fee collections by the Patent and
Trademark Office for a fiscal year exceed the amount
appropriated to the Office for that fiscal year, the Director
shall reduce fees established under section 41 of this title
and section 31(a) of the Act of July 5, 1946 (commonly
referred to as the `Trademark Act of 1946') for that fiscal
year or the remainder of that fiscal year so that estimated
collections for that fiscal year are equal to the amount
appropriated to the Office for that fiscal year. Such
reductions shall take effect on the later of October 1, of
that fiscal year or 2 months after the date of enactment of
the Act making the appropriation, and shall not be
retroactive.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply with respect to fiscal year 2006 and each fiscal
year thereafter.
______
By Mr. ENZI (for himself and Mr. Kennedy):
S. 1021. A bill to reauthorize the Workforce Investment Act of 1998,
and for other purposes; to the Committee on Health, Education, Labor,
and Pensions.
Mr. ENZI. Mr. President I rise today to introduce the Workforce
Investment Act Amendments of 2005. I am pleased to be joined in this
important effort by Senator Kennedy, the Ranking Member of the Health,
Education, Labor and Pensions Committee.
The Workforce Investment Act (WIA), together with the Perkins Career
and Technical Education Act, which we passed earlier this year, and the
Higher Education Act, which we will consider in the next few months,
will provide the important resources that are needed to adequately
prepare our workforce with the skills that are necessary for jobs and
careers in high wage and high skilled occupations.
We are facing an economic challenge that threatens our ability as a
nation to compete in the global economy. As we heard from the witnesses
who testified at a hearing held on April 14, 2005, before the Health,
Education, Labor and Pensions Committee, we have too few workers with
too few skills. The skill and literacy requirements of today's and
tomorrow's workplace cannot be met if we do not provide everyone access
to lifelong education, training and retraining.
Sixty percent of tomorrow's jobs will require skills that only 20
percent of today's workers possess. About half of our current workforce
does not have a postsecondary education degree or credential, when all
projections are that job growth over the next decade will be in jobs
that require some postsecondary education or training.
Technology is demanding that everyone continue to learn and gain
skills. In January of this year the labor force participation rate for
individuals over the age of 16 who are willing and able to work was
68.8 percent, the lowest in over 15 years, as more Americans conclude
that they cannot meet the skill demands of today's workplace and choose
to no longer participate in the workforce.
The legislation I am introducing today helps meet these challenges.
It is the result of a bipartisan process that began in the 108th
Congress. It gives States and local areas the flexibility to provide
training for jobs in high skill, high wage, and high demand
occupations. It strengthens connections with the private sector,
postsecondary education and training, and economic development systems
to prepare the 21st century workforce. It improves the existing
structure of one-stops to ensure an effective response to the changing
needs of employers and workers in a new economy. It includes a new
focus on entrepreneurial skills and micro-enterprises, addresses unique
needs of small businesses and rural areas, and encourages collaboration
locally and regionally with economic development and education.
This legislation also amends the Adult Education and Family Literacy
Act and the Vocational Rehabilitation Act. These amendments encourage
coordination with K-12 schools, postsecondary education and the
workforce system so that individuals with barriers to workforce
participation will have an opportunity to gain the literacy, language
or core skills they will need to enter and advance in the workplace.
I hope that our bipartisan efforts will continue to produce the
results that are needed as we move this bill through the Senate and
into Conference. This legislation is critical to meeting the workforce
challenges of the 21st century. It sends a clear message that we are
serious about helping our workers and employers remain competitive and
closing the skills gap that places America's long-term competitiveness
in jeopardy.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1021
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 ``Workforce Investment Act
Amendments of 2005''.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
[[Page S5115]]
TITLE I--AMENDMENTS TO TITLE I OF THE WORKFORCE INVESTMENT ACT OF 1998
Subtitle A--Definitions
Sec. 101. Definitions.
Subtitle B--Statewide and Local Workforce Investment Systems
Sec. 111. Purpose.
Sec. 112. State workforce investment boards.
Sec. 113. State plan.
Sec. 114. Local workforce investment areas.
Sec. 115. Local workforce investment boards.
Sec. 116. Local plan.
Sec. 117. Establishment of one-stop delivery systems.
Sec. 118. Eligible providers of training services.
Sec. 119. Eligible providers of youth activities.
Sec. 120. Youth activities.
Sec. 121. Adult and dislocated worker employment and training
activities.
Sec. 122. Performance accountability system.
Sec. 123. Authorization of appropriations.
Subtitle C--Job Corps
Sec. 131. Job Corps.
Subtitle D--National Programs
Sec. 141. Native American programs.
Sec. 142. Migrant and seasonal farmworker programs.
Sec. 143. Veterans' workforce investment programs.
Sec. 144. Youth challenge grants.
Sec. 145. Technical assistance.
Sec. 146. Demonstration, pilot, multiservice, research, and multistate
projects.
Sec. 147. National dislocated worker grants.
Sec. 148. Authorization of appropriations for national activities.
Subtitle E--Administration
Sec. 151. Requirements and restrictions.
Sec. 152. Reports.
Sec. 153. Administrative provisions.
Sec. 154. Use of certain real property.
Sec. 155. General program requirements.
Sec. 156. Table of contents.
Subtitle F--Incentive Grants
Sec. 161. Incentive grants.
Subtitle G--Conforming Amendments
Sec. 171. Conforming amendments.
TITLE II--AMENDMENTS TO THE ADULT EDUCATION AND FAMILY LITERACY ACT
Sec. 201. Short title; purpose.
Sec. 202. Definitions.
Sec. 203. Authorization of appropriations.
Sec. 204. Home schools.
Sec. 205. Reservation of funds; grants to eligible agencies;
allotments.
Sec. 206. Performance accountability system.
Sec. 207. State administration.
Sec. 208. State distribution of funds; matching requirement.
Sec. 209. State leadership activities.
Sec. 210. State plan.
Sec. 211. Programs for corrections education and other
institutionalized individuals.
Sec. 212. Grants and contracts for eligible providers.
Sec. 213. Local application.
Sec. 214. Local administrative cost limits.
Sec. 215. Administrative provisions.
Sec. 216. National Institute for Literacy.
Sec. 217. National leadership activities.
Sec. 218. Integrated English literacy and civics education.
Sec. 219. Transition.
TITLE III--AMENDMENTS TO OTHER PROVISIONS OF LAW
Sec. 301. Wagner-Peyser Act.
TITLE IV--REHABILITATION ACT AMENDMENTS
Sec. 401. Short title.
Sec. 402. Technical amendments to table of contents.
Sec. 403. Purpose.
Sec. 404. Definitions.
Sec. 405. Administration of the Act.
Sec. 406. Reports.
Sec. 407. Carryover.
Subtitle A--Vocational Rehabilitation Services
Sec. 411. Declaration of policy; authorization of appropriations.
Sec. 412. State plans.
Sec. 413. Eligibility and individualized plan for employment.
Sec. 414. Vocational rehabilitation services.
Sec. 415. State rehabilitation council.
Sec. 416. Evaluation standards and performance indicators.
Sec. 417. Monitoring and review.
Sec. 418. State allotments.
Sec. 419. Reservation for expanded transition services.
Sec. 420. Client assistance program.
Sec. 421. Incentive grants.
Sec. 422. Vocational rehabilitation services grants.
Sec. 423. GAO studies.
Subtitle B--Research and Training
Sec. 431. Declaration of purpose.
Sec. 432. Authorization of appropriations.
Sec. 433. National Institute on Disability and Rehabilitation Research.
Sec. 434. Interagency committee.
Sec. 435. Research and other covered activities.
Sec. 436. Rehabilitation Research Advisory Council.
Sec. 437. Definition.
Subtitle C--Professional Development and Special Projects and
Demonstrations
Sec. 441. Training.
Sec. 442. Demonstration and training programs.
Sec. 443. Migrant and seasonal farmworkers.
Sec. 444. Recreational programs.
Subtitle D--National Council on Disability
Sec. 451. Authorization of appropriations.
Subtitle E--Rights and Advocacy
Sec. 461. Architectural and Transportation Barriers Compliance Board.
Sec. 462. Protection and advocacy of individual rights.
Subtitle F--Employment Opportunities for Individuals With Disabilities
Sec. 471. Projects with industry.
Sec. 472. Projects with industry authorization of appropriations.
Sec. 473. Services for individuals with significant disabilities
authorization of appropriations.
Subtitle G--Independent Living Services and Centers for Independent
Living
Sec. 481. State plan.
Sec. 482. Statewide Independent Living Council.
Sec. 483. Independent living services authorization of appropriations.
Sec. 484. Program authorization.
Sec. 485. Grants to centers for independent living in States in which
Federal funding exceeds State funding.
Sec. 486. Grants to centers for independent living in States in which
State funding equals or exceeds Federal funding.
Sec. 487. Standards and assurances for centers for independent living.
Sec. 488. Centers for independent living authorization of
appropriations.
Sec. 489. Independent living services for older individuals who are
blind.
Sec. 490. Program of grants.
Sec. 491. Independent living services for older individuals who are
blind authorization of appropriations.
Subtitle H--Miscellaneous
Sec. 495. Helen Keller National Center Act.
TITLE V--TRANSITION AND EFFECTIVE DATE
Sec. 501. Transition provisions.
Sec. 502. Effective date.
SEC. 3. REFERENCES.
Except as otherwise expressly provided, wherever in this
Act an amendment or repeal is expressed 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 Workforce Investment Act of 1998 (29
U.S.C. 2801 et seq.).
TITLE I--AMENDMENTS TO TITLE I OF THE WORKFORCE INVESTMENT ACT OF 1998
Subtitle A--Definitions
SEC. 101. DEFINITIONS.
Section 101 (29 U.S.C. 2801) is amended--
(1) by redesignating paragraphs (1) through (4), (5)
through (16), (17), (18) through (41), and (42) through (53)
as paragraphs (2) through (5), (7) through (18), (20), (23)
through (46), and (48) through (59), respectively;
(2) by inserting before paragraph (2) (as redesignated by
paragraph (1)) the following:
``(1) Accrued expenditures.--The term `accrued
expenditures' means charges incurred by recipients of funds
under this title for a given period requiring the provision
of funds for--
``(A) goods or other tangible property received;
``(B) services performed by employees, contractors,
subgrantees, subcontractors, and other payees; and
``(C) other amounts becoming owed under programs assisted
under this title for which no current services or performance
is required, such as annuities, insurance claims, and other
benefit payments.'';
(3) in paragraph (2) (as redesignated by paragraph (1)), by
striking ``Except in sections 127 and 132,'' and inserting
``Except in section 132,'';
(4) by striking paragraph (5) (as redesignated by paragraph
(1)) and inserting the following:
``(5) Basic skills deficient.--The term `basic skills
deficient' means, with respect to an individual, that the
individual--
``(A) has English reading, writing, or computing skills at
or below the 8th grade level on a generally accepted
standardized test or a comparable score on a criterion-
referenced test; or
``(B) is unable to compute or solve problems, read, write,
or speak English at a level necessary to function on the job,
in the individual's family, or in society.'';
(5) by inserting after paragraph (5) (as redesignated by
paragraph (1)) the following:
``(6) Business intermediary.--The term `business
intermediary' means an entity that brings together various
stakeholders with an expertise in an industry or business
sector.'';
(6) in paragraph (9) (as redesignated by paragraph (1)), by
inserting ``, including a faith-based organization,'' after
``nonprofit organization'';
(7) in paragraph (10) (as redesignated by paragraph (1))--
(A) in subparagraph (B), by striking ``and'' after the
semicolon;
(B) in subparagraph (C)--
(i) by striking ``for not less than 50 percent of the cost
of the training.'' and inserting ``for--
``(i) a significant portion of the cost of training as
determined by the local board,
[[Page S5116]]
taking into account the size of the employer and such other
factors as the local board determines to be appropriate; and
``(ii) in the case of customized training (as defined in
subparagraphs (A) and (B)) with an employer in multiple local
areas in the State, a significant portion of the cost of the
training, as determined by the Governor, taking into account
the size of the employer and such other factors as the
Governor determines to be appropriate.'';
(8) in paragraph (11) (as redesignated by paragraph (1))--
(A) in subparagraph (A)(ii)(II), by striking ``section
134(c)'' and inserting ``section 121(e)'';
(B) in subparagraph (C), by striking ``or'' after the
semicolon;
(C) in subparagraph (D), by striking the period and
inserting ``; or''; and
(D) by adding at the end the following:
``(E)(i) is the spouse of a member of the Armed Forces on
active duty for a period of more than 30 days (as defined in
section 101(d)(2) of title 10, United States Code) who has
experienced a loss of employment as a direct result of
relocation to accommodate a permanent change in duty station
of such member; or
``(ii) is the spouse of a member of the Armed Forces on
active duty who meets the criteria described in paragraph
(12)(B).'';
(9) in paragraph (12)(A) (as redesignated by paragraph
(1))--
(A) by striking ``and'' after the semicolon and inserting
``or'';
(B) by striking ``(A)'' and inserting ``(A)(i)''; and
(C) by adding at the end the following:
``(ii) is the dependent spouse of a member of the Armed
Forces on active duty for a period of more than 30 days (as
defined in section 101(d)(2) of title 10, United States Code)
whose family income is significantly reduced because of a
deployment (as defined in section 991(b) of title 10, United
States Code, or pursuant to paragraph (4) of such section), a
call or order to active duty pursuant to a provision of law
referred to in section 101(a)(13)(B) of title 10, United
States Code, a permanent change of station, or the service-
connected (as defined in section 101(16) of title 38, United
States Code) death or disability of the member; and'';
(10) in paragraph (14)(A) (as redesignated by paragraph
(1)), by striking ``section 122(e)(3)'' and inserting
``section 122'';
(11) by inserting after paragraph (18) (as redesignated by
paragraph (1)) the following:
``(19) Hard-to-serve populations.--The term `hard-to-serve
populations' means populations of individuals who are hard to
serve, including displaced homemakers, low-income
individuals, Native Americans, individuals with disabilities,
older individuals, ex-offenders, homeless individuals,
individuals with limited English proficiency, individuals who
do not meet the definition of literacy in section 203,
individuals facing substantial cultural barriers, migrant and
seasonal farmworkers, individuals within 2 years of
exhausting lifetime eligibility under part A of title IV of
the Social Security Act (42 U.S.C. 601 et seq.), single
parents (including single pregnant women), and such other
groups as the Governor determines to be hard to serve.'';
(12) by inserting after paragraph (20) (as redesignated by
paragraph (1)) the following:
``(21) Integrated training program.--The term `integrated
training program' means a program that combines occupational
skills training with English language acquisition.
``(22) Institution of higher education.--The term
`institution of higher education' has the meaning given the
term in section 101(a), and subparagraphs (A) and (B) of
section 102(a)(1), of the Higher Education Act of 1965 (20
U.S.C. 1001(a), 1002(a)(1)).'';
(13) in paragraph (30) (as redesignated by paragraph (1))--
(A) by redesignating subparagraphs (D) through (F) as
subparagraphs (E) through (G), respectively; and
(B) by inserting after subparagraph (C) the following:
``(D) receives or is eligible to receive a free or reduced
price lunch under the Richard B. Russell National School
Lunch Act (42 U.S.C. 1751 et seq.);'';
(14) in paragraph (31) (as redesignated by paragraph (1)),
by inserting after ``fields of work'' the following: ``,
including occupations in computer science and technology and
other emerging high-skill occupations,'';
(15) in paragraph (35) (as redesignated by paragraph (1)),
by inserting ``, subject to section 121(b)(1)(C)'' after
``121(b)(1)'';
(16) by striking paragraph (38) (as redesignated by
paragraph (1)) and inserting the following:
``(38) Out-of-school youth.--The term `out-of-school youth'
means an out-of-school youth as defined in section
129(a)(1)(B).'';
(17) by inserting after paragraph (46) (as redesignated by
paragraph (1)) the following:
``(47) Self-sufficiency.--The term `self-sufficiency' means
self-sufficiency within the meaning of subsections
(a)(3)(A)(x) and (e)(1)(A)(xii) of section 134.'';
(18) in paragraph (49) (as redesignated by paragraph (1)),
by striking ``clause (iii) or (v) of section 136(b)(3)(A)''
and inserting ``section 136(b)(3)(A)(iii)'';
(19) in paragraph (58) (as redesignated by paragraph (1)),
by striking ``(or as described in section 129(c)(5))'' and
inserting ``(or as described in section 129(a)(2))''; and
(20) in paragraph (59) (as redesignated by paragraph (1)),
by striking ``established under section 117(h)'' and
inserting ``that may be established under section
117(h)(2)''.
Subtitle B--Statewide and Local Workforce Investment Systems
SEC. 111. PURPOSE.
Section 106 (29 U.S.C. 2811) is amended to read as follows:
``SEC. 106. PURPOSES.
``The purposes of this subtitle are the following:
``(1)(A) Primarily, to provide workforce investment
activities, through statewide and local workforce investment
systems, that increase the employment, retention, self-
sufficiency, and earnings of participants, and increase
occupational skill attainment by participants.
``(B) As a result of the provision of the activities, to
improve the quality of the workforce, reduce welfare
dependency, increase self-sufficiency, and enhance the
productivity and competitiveness of the Nation.
``(2) To enhance the workforce investment system of the
Nation by strengthening one-stop centers, providing for more
effective governance arrangements, promoting access to a more
comprehensive array of employment and training and related
services, establishing a targeted approach to serving youth,
improving performance accountability, and promoting State and
local flexibility.
``(3) To provide workforce investment activities in a
manner that promotes the informed choice of participants and
actively involves participants in decisions affecting their
participation in such activities.
``(4) To provide workforce investment systems that are
demand-driven and responsive to the needs of all employers,
including small employers.
``(5) To provide workforce investment systems that work in
all areas of the Nation, including urban and rural areas.
``(6) To allow flexibility to meet State, local, regional,
and individual workforce investment needs.
``(7) To recognize and reinforce the vital link between
economic development and workforce investment activities.
``(8) To provide for accurate data collection, reporting,
and performance measures that are not unduly burdensome.
``(9) To address the ongoing shortage of essential skills
in the United States workforce related to both manufacturing
and knowledge-based economies to ensure that the United
States remains competitive in the global economy.
``(10) To equip workers with higher skills and contribute
to lifelong education.
``(11) To eliminate training disincentives for hard-to-
serve populations and minority workers, including effectively
utilizing community programs, services, and agencies.
``(12) To educate limited English proficient individuals
about skills and language so the individuals are employable.
``(13) To increase the employment, retention and earnings
of individuals with disabilities.''.
SEC. 112. STATE WORKFORCE INVESTMENT BOARDS.
(a) Membership.--
(1) In general.--Section 111(b) (29 U.S.C. 2821(b)) is
amended--
(A) in paragraph (1), by striking subparagraph (C) and
inserting the following:
``(C) representatives appointed by the Governor, who--
``(i) are the lead State agency officials with
responsibility for the programs and activities that are
described in section 121(b) and carried out by one-stop
partners, except that--
``(I) in any case in which no lead State agency official
has responsibility for such a program or activity, the
representative shall be a representative in the State with
expertise relating to such program or activity; and
``(II) in the case of the programs authorized under title I
of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.),
the representative shall be the director of the designated
State unit, as defined in section 7 of the Rehabilitation Act
of 1973 (29 U.S.C. 705);
``(ii) are the State agency officials responsible for
economic development;
``(iii) are representatives of business in the State,
including small businesses, who--
``(I) are owners of businesses, chief executive or
operating officers of businesses, or other business
executives or employers with optimum policymaking or hiring
authority;
``(II) represent businesses with employment opportunities
that reflect employment opportunities in the State; and
``(III) are appointed from among individuals nominated by
State business organizations, business trade associations,
and local boards;
``(iv) are chief elected officials (representing cities and
counties, where appropriate);
``(v) are representatives of labor organizations, who have
been nominated by State labor federations; and
``(vi) are such other State agency officials and other
representatives as the Governor may designate.''; and
(B) in paragraph (3), by striking ``paragraph (1)(C)(i)''
and inserting ``paragraph (1)(C)(iii)''.
(2) Conforming amendment.--Section 111(c) (29 U.S.C.
2821(c)) is amended by striking ``subsection (b)(1)(C)(i)''
and inserting ``subsection (b)(1)(C)(iii)''.
(b) Functions.--Section 111(d) (29 U.S.C. 2821(d)) is
amended--
[[Page S5117]]
(1) in paragraph (1), by striking ``development'' and
inserting ``development, implementation, and revision'';
(2) in paragraph (2)--
(A) by striking ``section 134(c)'' and inserting ``section
121(e)''; and
(B) in subparagraph (A), by inserting after ``section
121(b)'' the following: ``, including granting the authority
for the State employment service under the Wagner-Peyser Act
(29 U.S.C. 49 et seq.) to plan and coordinate employment and
training activities with local boards'';
(3) by striking paragraph (3) and inserting the following:
``(3) reviewing and providing comment on the State plans of
all one-stop partner programs, where applicable, in order to
provide effective strategic leadership in the development of
a high quality, comprehensive statewide workforce investment
system, including commenting at least once annually on the
measures taken pursuant to section 113(b)(3) of the Carl D.
Perkins Vocational and Technical Education Act of 1998 (20
U.S.C. 2323(b)(3)) and title II of this Act;'';
(4) by redesignating paragraphs (4) through (9) as
paragraphs (5) through (10), respectively;
(5) by inserting after paragraph (3) the following:
``(4) development and review of statewide policies
affecting the coordinated provision of services through the
one-stop delivery system described in section 121(e) within
the State, including--
``(A) the development of objective criteria and procedures
for use by local boards in assessing the effectiveness and
continuous improvement of one-stop centers under section
121(g);
``(B) the development of guidance for the allocation of
one-stop center infrastructure funds under section
121(h)(1)(B);
``(C) the development of--
``(i) statewide policies relating to the appropriate roles
and contributions of one-stop partner programs within the
one-stop delivery system, including approaches to
facilitating equitable and efficient cost allocation in the
one-stop delivery system;
``(ii) statewide strategies for providing effective
outreach to individuals, including hard-to-serve populations,
and employers who could benefit from services provided
through the one-stop delivery system;
``(iii) strategies for technology improvements to
facilitate access to services provided through the one-stop
delivery system, in remote areas, and for individuals with
disabilities, which may be utilized throughout the State; and
``(iv) strategies for the effective coordination of
activities between the one-stop delivery system of the State
and the State employment service under the Wagner-Peyser Act
(29 U.S.C. 49 et seq.);
``(D) identification and dissemination of information on
best practices for effective operation of one-stop centers,
including use of innovative business outreach, partnerships,
and service delivery strategies, including for hard-to-serve
populations; and
``(E) conduct of such other matters as may promote
statewide objectives for, and enhance the performance of, the
one-stop delivery system;'';
(6) in paragraph (5) (as redesignated by paragraph (4)), by
inserting ``and the development of statewide criteria to be
used by chief elected officials for the appointment of local
boards consistent with section 117'' after ``section 116'';
(7) in paragraph (6) (as redesignated by paragraph (4)), by
striking ``sections 128(b)(3)(B) and 133(b)(3)(B)'' and
inserting ``sections 128(b)(3) and 133(b)(3)(B)'';
(8) in paragraph (9) (as redesignated by paragraph (4))--
(A) by striking ``employment statistics system'' and
inserting ``workforce and labor market information system'';
and
(B) by striking ``and'' after the semicolon;
(9) in paragraph (10) (as redesignated by paragraph (4))--
(A) by inserting ``section 136(i) and'' before ``section
503''; and
(B) by striking the period and inserting ``; and''; and
(10) by adding at the end the following:
``(11) increasing the availability of skills training,
employment opportunities, and career advancement, for hard-
to-serve populations.''.
(c) Alternative Entity.--Section 111(e) (29 U.S.C. 2821(e))
is amended--
(1) in paragraph (1), by striking ``For'' and inserting
``Subject to paragraph (3), for''; and
(2) by adding at the end the following:
``(3) Failure to meet performance measures.--If a State
fails to have performed successfully, as defined in section
116(a)(2), the Secretary may require the State to establish a
State board in accordance with subsections (a), (b), and (c)
in lieu of the alternative entity established under paragraph
(1).''.
(d) Conflict of Interest.--Section 111(f)(1) (29 U.S.C.
2821(f)(1)) is amended by inserting ``or participate in
action taken on'' after ``vote''.
(e) Sunshine Provision.--Section 111(g) (29 U.S.C. 2821(g))
is amended--
(1) by inserting ``, and modifications to the State plan,''
before ``prior''; and
(2) by inserting ``, and modifications to the State plan''
after ``the plan''.
(f) Authority To Hire Staff.--Section 111 (29 U.S.C. 2821)
is amended by adding at the end the following:
``(h) Authority To Hire Staff.--
``(1) In general.--The State board may hire staff to assist
in carrying out the functions described in subsection (d)
using funds allocated under sections 127(b)(1)(C) and 132(b).
``(2) Limitation on rate.--Funds appropriated under this
title shall not be used to pay staff employed by the State
board, either as a direct cost or through any proration as an
indirect cost, at a rate in excess of the maximum rate
payable for a position at GS-15 of the General Schedule as in
effect on the date of enactment of the Workforce Investment
Act Amendments of 2005.''.
SEC. 113. STATE PLAN.
(a) Planning Cycle.--Section 112(a) (29 U.S.C. 2822(a)) is
amended--
(1) by inserting ``, or a State unified plan as described
in section 501,'' before ``that outlines'';
(2) by striking ``5-year strategy'' and inserting ``4-year
strategy''; and
(3) by adding at the end the following: ``At the end of the
first 2-year period of the 4-year State plan, the State board
shall review and, as needed, amend the 4-year State plan to
reflect labor market and economic conditions. In addition,
the State shall submit a modification to the State plan at
the end of the first 2-year period of the State plan, which
may include redesignation of local areas pursuant to section
116(a) and specification of the levels of performance under
sections 136 for the third and fourth years of the plan.''.
(b) Contents.--Section 112(b) (29 U.S.C. 2822(b)) is
amended--
(1) in paragraph (8)(A)--
(A) in clause (ix), by striking ``and'' after the
semicolon; and
(B) by adding at the end the following:
``(xi) programs authorized under title II of the Social
Security Act (42 U.S.C. 401 et seq.) (relating to Federal
old-age, survivors, and disability insurance benefits), title
XVI of such Act (42 U.S.C. 1381 et seq.) (relating to
supplemental security income), title XIX of such Act (42
U.S.C. 1396 et seq.) (relating to medicaid), and title XX of
such Act (42 U.S.C. 1397 et seq.) (relating to block grants
to States for social services), programs authorized under
title VII of the Rehabilitation Act of 1973 (29 U.S.C. 796 et
seq.), and programs carried out by State agencies relating to
mental retardation and developmental disabilities; and'';
(2) by striking paragraph (10) and inserting the following:
``(10) a description of how the State will use funds the
State received under this subtitle to leverage other Federal,
State, local, and private resources, in order to maximize the
effectiveness of such resources, expand resources for the
provision of education and training services, and expand the
participation of businesses, employees, and individuals in
the statewide workforce investment system, including a
description of incentives and technical assistance the State
will provide to local areas for such purposes;'';
(3) in paragraph (12)(A), by striking ``sections
128(b)(3)(B) and 133(b)(3)(B)'' and inserting ``sections
128(b)(3) and 133(b)(3)(B)'';
(4) in paragraph (14), by striking ``section 134(c)'' and
inserting ``section 121(e)'';
(5) in paragraph (15), by striking ``section 116(a)(5)''
and inserting ``section 116(a)(4)'';
(6) in paragraph (17)--
(A) in subparagraph (A)--
(i) in clause (iii)--
(I) by inserting ``local'' before ``customized training'';
and
(II) by striking ``and'' at the end;
(ii) in clause (iv), by striking ``(including displaced
homemakers),'' and all that follows through ``disabilities)''
and inserting ``, hard-to-serve populations, and individuals
training for nontraditional employment''; and
(iii) by adding after clause (iv) the following:
``(v) how the State will serve the employment and training
needs of individuals with disabilities, consistent with
section 188 and Executive Order 13217 (42 U.S.C. 12131 note;
relating to community-based alternatives for individuals with
disabilities), including the provision of outreach, intake,
the conduct of assessments, service delivery, the development
of adjustments to performance measures established under
section 136, and the training of staff; and''; and
(B) in subparagraph (B), by striking ``and'' at the end;
(7) in paragraph (18)(D)--
(A) by striking ``youth opportunity grants under section
169'' and inserting ``youth challenge grants authorized under
section 169 and other federally funded youth programs''; and
(B) by striking the period and inserting a semicolon; and
(8) by adding at the end the following:
``(19) a description of how the State will utilize
technology to facilitate access to services in remote areas,
which may be utilized throughout the State;
``(20) a description of the State strategy for coordinating
workforce investment activities and economic development
activities, and promoting entrepreneurial skills training and
microenterprise services;
``(21) a description of the State strategy and assistance
to be provided for ensuring regional cooperation within the
State and across State borders as appropriate;
``(22) a description of how the State will use funds the
State receives under this subtitle to--
``(A) implement innovative programs and strategies designed
to meet the needs of all
[[Page S5118]]
businesses in the State, including small businesses, which
may include incumbent worker training programs, sectoral and
industry cluster strategies, regional skills alliances,
career ladder programs, utilization of effective business
intermediaries, and other business services and strategies
that better engage employers in workforce investment
activities and make the statewide workforce investment system
more relevant to the needs of State and local businesses,
consistent with the objectives of this title; and
``(B) provide incentives and technical assistance to assist
local areas in more fully engaging all employers, including
small employers, in local workforce investment activities, to
make the workforce investment system more relevant to the
needs of area businesses, and to better coordinate workforce
investment and economic development efforts to contribute to
the economic well-being of the local area, as determined
appropriate by the local board;
``(23) a description of the State strategy--
``(A) for ensuring cooperation between transportation
providers, including public transportation providers, and
providers of workforce investment activities; and
``(B) for ensuring coordination among appropriate State
agencies and programs to make available skills training,
employment services and opportunities, and career advancement
activities, that will assist ex-offenders in reentering the
workforce;
``(24) a description of how the State will assist local
areas in assuring physical and programmatic accessibility for
individuals with disabilities at one-stop centers;
``(25) a description of the process and methodology that
will be used by the State board to--
``(A) review statewide policies and provide guidance on the
coordinated provision of services through the one-stop
delivery system described in section 121(e);
``(B) establish, in consultation with chief elected
officials and local boards, objective criteria and procedures
for use by local boards in periodically assessing the
effectiveness, physical and programmatic accessibility, and
continuous improvement of one-stop centers and the one-stop
delivery system as described in section 121(g); and
``(C) determine--
``(i) one-stop partner program contributions for the costs
of the infrastructure of one-stop centers under section
121(h)(2); and
``(ii) the formula for allocating the funds described in
section 121(h)(2) to local areas;
``(26) a description of the State strategy for ensuring
that activities carried out under this title are placing men
and women in jobs, education, or training that lead to
comparable pay; and
``(27) a description of the technical assistance available
to one-stop operators and providers of training services for
strategies to serve hard-to-serve populations and promote
placement in nontraditional employment.''.
(c) Modifications to Plan.--Section 112(d) (29 U.S.C.
2822(d)) is amended--
(1) by striking ``5-year period'' and inserting ``4-year
period''; and
(2) by adding at the end the following: ``In addition, the
State shall submit the modifications to the State plan
required under subsection (a), under circumstances prescribed
by the Secretary that are due to changes in Federal law that
significantly affect elements of the State plan.''.
SEC. 114. LOCAL WORKFORCE INVESTMENT AREAS.
(a) Designation of Areas.--
(1) Considerations.--Section 116(a)(1) (29 U.S.C.
2831(a)(1)) is amended--
(A) in subparagraph (A), by striking ``paragraphs (2), (3),
and (4)'' and inserting ``paragraphs (2) and (3)''; and
(B) in subparagraph (B), by adding at the end the
following:
``(vi) The extent to which such local areas will promote
maximum effectiveness in the administration and provision of
services.''.
(2) Automatic designation.--Section 116(a)(2) (29 U.S.C.
2831(a)(2)) is amended to read as follows:
``(2) Automatic designation.--
``(A) In general.--The Governor shall approve a request for
designation as a local area that is submitted prior to the
submission of the State plan, or of a modification to the
State plan relating to area designation, from any area that--
``(i) is a unit of general local government with a
population of 500,000 or more, except that after the initial
2-year period following such designation pursuant to this
clause that occurs after the date of enactment of the
Workforce Investment Act Amendments of 2005, the Governor
shall only be required to approve a request for designation
from such area if such area--
``(I) performed successfully; and
``(II) sustained fiscal integrity;
``(ii) was a local area under this title for the preceding
2-year period, if such local area--
``(I) performed successfully; and
``(II) sustained fiscal integrity;
``(iii) is served by a rural concentrated employment
program grant recipient, except that after the initial 2-year
period following any such designation under the initial State
plan submitted after the date of enactment of the Workforce
Investment Act Amendments of 2005, the Governor shall only be
required to approve a request for designation under this
clause for such area if such area--
``(I) performed successfully; and
``(II) sustained fiscal integrity; or
``(iv) was a local area under section 116(a)(2)(C) (as in
effect on the day before the date of enactment of the
Workforce Investment Act Amendments of 2005), except that
after the initial 2-year period following such designation
pursuant to this clause that occurs after that date of
enactment, the Governor shall only be required to approve a
request for designation under this clause for such area if
such area--
``(I) performed successfully; and
``(II) sustained fiscal integrity.
``(B) Definitions.--For purposes of this paragraph:
``(i) Performed successfully.--The term `performed
successfully', when used with respect to a local area, means
the local area performed at 80 percent or more of the
adjusted level of performance for core indicators of
performance described in section 136(b)(2)(A) for 2
consecutive years.
``(ii) Sustained fiscal integrity.--The term `sustained
fiscal integrity', used with respect to an area, means that
the Secretary has not made a formal determination during the
preceding 2-year period that either the grant recipient or
the administrative entity of the area misexpended funds
provided under this title due to willful disregard of the
requirements of the Act involved, gross negligence, or
failure to comply with accepted standards of
administration.''.
(3) Conforming amendments.--Section 116(a) (29 U.S.C.
2831(a)) is amended--
(A) by striking paragraph (3);
(B) by redesignating paragraphs (4) and (5) as paragraph
(3) and (4), respectively;
(C) in paragraph (3) (as redesignated by subparagraph
(B))--
(i) by striking ``(including temporary designation)''; and
(ii) by striking ``(v)'' and inserting ``(vi)''; and
(D) in paragraph (4) (as redesignated by subparagraph
(B))--
(i) by striking ``under paragraph (2) or (3)'' and
inserting ``under paragraph (2)''; and
(ii) by striking the second sentence.
(b) Single Local Area States.--Section 116(b) (29 U.S.C.
2831(b)) is amended to read as follows:
``(b) Single Local Area States.--
``(1) Continuation of previous designation.--
Notwithstanding subsection (a)(2), the Governor of any State
that was a single local area for purposes of this title as of
July 1, 2004, may continue to designate the State as a single
local area for purposes of this title if the Governor
identifies the State as a local area in the State plan under
section 112(b)(5).
``(2) Redesignation.--The Governor of a State not described
in paragraph (1) may designate the State as a single local
area if, prior to the submission of the State plan or
modification to such plan so designating the State, no local
area meeting the requirements for automatic designation under
subsection (a)(2) requests such designation as a separate
local area.
``(3) Effect on local plan.--In any case in which a State
is designated as a local area pursuant to this subsection,
the local plan prepared under section 118 for the area shall
be submitted to the Secretary for approval as part of the
State plan under section 112.''.
(c) Regional Planning.--Section 116(c) (29 U.S.C. 2831(c))
is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) Planning.--
``(A) In general.--As part of the process for developing
the State plan, a State may require regional planning by
local boards for a designated region in the State. The State
may require the local boards for a designated region to
participate in a regional planning process that results in
the establishment of regional performance measures for
workforce investment activities authorized under this
subtitle. The State, after consultation with local boards and
chief elected officials, may require the local boards for the
designated region to prepare, submit, and obtain approval of
a single regional plan that incorporates local plans for each
of the local areas in the region, as required under section
118. The State may award regional incentive grants to the
designated regions that meet or exceed the regional
performance measures pursuant to section 134(a)(2)(B)(iii).
``(B) Technical assistance.--If the State requires regional
planning as provided in subparagraph (A), the State shall
provide technical assistance and labor market information to
such local areas in the designated regions to assist with
such regional planning and subsequent service delivery
efforts.'';
(2) in paragraph (2), by inserting ``information about the
skill requirements of existing and emerging industries and
industry clusters,'' after ``information about employment
opportunities and trends,''; and
(3) in paragraph (3), by adding at the end the following:
``Such services may be required to be coordinated with
regional economic development services and strategies.''.
SEC. 115. LOCAL WORKFORCE INVESTMENT BOARDS.
(a) Composition.--Section 117(b) (29 U.S.C. 2832(b)) is
amended--
(1) in paragraph (2)(A)--
(A) in clause (i), by striking subclause (II) and inserting
the following:
``(II) collectively, represent businesses with employment
opportunities that reflect the employment opportunities of
the local area, and include representatives of businesses
that are in high-growth and emerging industries, and
representatives of businesses, including small businesses, in
the local area; and'';
(B) by striking clause (ii) and inserting the following:
[[Page S5119]]
``(ii)(I) a superintendent representing the local school
districts involved or another high-level official from such
districts;
``(II) the president or highest ranking official of an
institution of higher education participating in the
workforce investment activities in the local area; and
``(III) an administrator of local entities providing adult
education and literacy activities in the local area;'';
(C) in clause (iv), by inserting ``, hard-to-serve
populations,'' after ``disabilities'';
(D) in clause (v), by striking ``and'' at the end; and
(E) by striking clause (vi) and inserting the following:
``(vi) a representative from the State employment service
under the Wagner-Peyser Act (29 U.S.C. 49 et seq.) who is
serving the local area; and
``(vii) if the local board does not establish or continue a
youth council, representatives with experience serving out-
of-school youth, particularly out-of-school youth facing
barriers to employment; and''; and
(2) by adding at the end the following:
``(6) Special rule.--In the case that there are multiple
school districts or institutions of higher education serving
a local area, the representatives described in subclause (I)
or (II) of paragraph (2)(A)(ii), respectively, shall be
appointed from among individuals nominated by regional or
local educational agencies, institutions, or organizations
representing such agencies or institutions.''.
(b) Authority of Board Members.--Section 117(b)(3) (29
U.S.C. 2832(b)(3)) is amended--
(1) in the heading, by inserting ``and representation''
after ``Authority''; and
(2) by adding at the end the following: ``The members of
the board shall represent diverse geographic sections within
the local area.''.
(c) Conforming Amendment.--Section 117(c)(1)(C) (29 U.S.C.
2832(c)(1)(C)) is amended by striking ``section
116(a)(2)(B)'' and inserting ``section 116(a)(2)(A)(ii)''.
(d) Functions.--Section 117(d) (29 U.S.C. 2832(d)) is
amended--
(1) in paragraph (2)--
(A) in subparagraph (B)--
(i) by inserting ``(except as provided in section 123(b))''
after ``basis''; and
(ii) by inserting ``(where appropriate)'' after ``youth
council''; and
(B) by adding at the end the following:
``(E) Consumer choice requirements.--Consistent with
sections 122 and paragraphs (3) and (4) of 134(d), the local
board shall work to ensure there are sufficient providers of
intensive services and training services serving the local
area in a manner that maximizes consumer choice, including
providers with expertise in assisting individuals with
disabilities.'';
(2) in paragraph (3)(B), by striking clause (ii) and
inserting the following:
``(ii) Staff.--
``(I) In general.--The local board may hire staff.
``(II) Limitation on rate.--Funds appropriated under this
title shall not be used to pay staff employed by the local
board, either as a direct cost or through any proration as an
indirect cost, at a rate in excess of the maximum rate
payable for a position at GS-15 of the General Schedule, as
in effect on the date of enactment of the Workforce
Investment Act Amendments of 2005.'';
(3) in paragraph (4), by inserting ``, and shall ensure the
appropriate use and management of the funds provided under
this subtitle for such programs, activities, and system''
after ``area'';
(4) in paragraph (6)--
(A) by striking ``Employment statistics system'' and
inserting ``Workforce and labor market information system'';
and
(B) by striking ``employment statistics system'' and
inserting ``workforce and labor market information system'';
(5) in paragraph (8)--
(A) by inserting ``, including small employers,'' after
``private sector employers''; and
(B) by striking the period and inserting ``, taking into
account the unique needs of small businesses.''; and
(6) by adding at the end the following:
``(9) Technology improvements.--The local board shall
develop strategies for technology improvements to facilitate
access to services, in remote areas, for services authorized
under this subtitle and carried out in the local area.''.
(e) Conforming Amendment.--Section 117(f)(2) (29 U.S.C.
2832(f)(2)) is amended by striking ``described in section
134(c)''.
(f) Conflict of Interest.--Section 117(g)(1) (29 U.S.C.
2832(g)(1)) is amended by inserting ``or participate in
action taken on'' after ``vote.''
(g) Authority To Establish Councils and Elimination of
Requirement for Youth Councils.--Section 117(h) (29 U.S.C.
2832(h)) is amended to read as follows:
``(h) Councils.--The local board may establish or continue
councils to provide information and advice to assist the
local board in carrying out activities under this title. Such
councils may include--
``(1) a council composed of one-stop partners to advise the
local board on the operation of the one-stop delivery system
involved;
``(2) a youth council composed of experts and stakeholders
in youth programs to advise the local board on youth
activities; and
``(3) such other councils as the local board determines are
appropriate.''.
(h) Alternative Entity Provision.--Section 117(i)(1) (29
U.S.C. 2832(i)(1)) is amended--
(1) in the matter preceding subparagraph (A), by striking
``and paragraphs (1) and (2) of subsection (h),'';
(2) by striking subparagraph (B) and inserting the
following:
``(B) was in existence on August 7, 1998, pursuant to State
law; and'';
(3) by striking subparagraph (C); and
(4) by redesignating subparagraph (D) as subparagraph (C).
SEC. 116. LOCAL PLAN.
(a) Planning Cycle.--Section 118(a) (29 U.S.C. 2833(a)) is
amended--
(1) by striking ``5-year'' and inserting ``4-year''; and
(2) by adding at the end the following: ``At the end of the
first 2-year period of the 4-year plan, the local board shall
review and, as needed, amend the 4-year plan to reflect labor
market and economic conditions.''.
(b) Contents.--Section 118(b) (29 U.S.C. 2833(b)) is
amended--
(1) in paragraph (2)--
(A) in subparagraph (A), by striking ``and'' after the
semicolon;
(B) by striking subparagraph (B) and inserting the
following:
``(B) a description of how the local board will facilitate
access to services provided through the one-stop delivery
system involved, in remote areas, including facilitating
access through the use of technology; and''; and
(C) by adding at the end the following:
``(C) a description of how the local board will ensure
physical and programmatic accessibility for individuals with
disabilities at one-stop centers;'';
(2) in paragraph (9), by striking ``; and'' and inserting a
semicolon;
(3) by redesignating paragraph (10) as paragraph (16); and
(4) by inserting after paragraph (9) the following:
``(10) a description of how the local board will coordinate
workforce investment activities carried out in the local area
with economic development activities carried out in the local
area, and promote entrepreneurial skills training and
microenterprise services;
``(11) a description of the strategies and services that
will be initiated in the local area to more fully engage all
employers, including small employers, in workforce investment
activities, to make the workforce investment system more
relevant to the needs of area businesses, and to better
coordinate workforce investment and economic development
efforts, which may include the implementation of innovative
initiatives such as incumbent worker training programs,
sectoral and industry cluster strategies, regional skills
alliance initiatives, career ladder programs, utilization of
effective business intermediaries, and other business
services and strategies designed to meet the needs of area
employers and contribute to the economic well-being of the
local area, as determined appropriate by the local board,
consistent with the objectives of this title;
``(12) a description of how the local board will expand
access to education and training services for eligible
individuals who are in need of such services through--
``(A) the utilization of programs funded under this title;
and
``(B) the increased leveraging of resources other than
those provided under this title, including tax credits,
private sector-provided training, and other Federal, State,
local, and private funds that are brokered through the one-
stop centers for training services;
``(13) a description of how the local board will coordinate
workforce investment activities carried out in the local area
with the provision of transportation, including public
transportation, in the local area;
``(14) a description of plans for, assurances concerning,
and strategies for maximizing coordination of services
provided by the State employment service under the Wagner-
Peyser Act (29 U.S.C. 49 et seq.) and services provided in
the local area through the one-stop delivery system described
in section 121(e), to improve service delivery and avoid
duplication of services;
``(15) a description of how the local board will coordinate
workforce investment activities carried out in the local area
with other Federal, State, and local area education, job
training, and economic development programs and activities;
and''.
SEC. 117. ESTABLISHMENT OF ONE-STOP DELIVERY SYSTEMS.
(a) One-Stop Partners.--
(1) Required partners.--Section 121(b)(1) (29 U.S.C.
2841(b)(1)) is amended--
(A) by striking subparagraph (A) and inserting the
following:
``(A) Roles and responsibilities of one-stop partners.--
Each entity that carries out a program or activities
described in subparagraph (B) shall--
``(i) provide access through the one-stop delivery system
to the programs and activities carried out by the entity,
including making the core services described in section
134(d)(2) that are applicable to the program of the entity
available at the one-stop centers (in addition to any other
appropriate locations);
``(ii) use a portion of the funds available to the program
of the entity to maintain the one-stop delivery system,
including payment of the infrastructure costs of one-stop
centers in accordance with subsection (h);
``(iii) enter into a local memorandum of understanding with
the local board relating
[[Page S5120]]
to the operation of the one-stop system that meets the
requirements of subsection (c);
``(iv) participate in the operation of the one-stop system
consistent with the terms of the memorandum of understanding,
the requirements of this title, and the requirements of the
Federal laws authorizing the programs carried out by the
entity; and
``(v) provide representation on the State board to the
extent provided under section 111.'';
(B) in subparagraph (B)--
(i) by striking clause (v);
(ii) by redesignating clauses (vi) through (xii) as clauses
(v) through (xi), respectively;
(iii) in clause (x) (as redesignated by clause (ii)), by
striking ``and'' at the end;
(iv) in clause (xi) (as redesignated by clause (ii)), by
striking the period and inserting ``; and''; and
(v) by adding at the end the following:
``(xii) programs authorized under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.), subject to
subparagraph (C).''; and
(C) by adding at the end the following:
``(C) Determination by the governor.--
``(i) In general.--An entity that carries out programs
referred to in subparagraph (B)(xii) shall be included in the
one-stop partners for the local area, as a required partner,
for purposes of this title unless the Governor of the State
provides the notification described in clause (ii).
``(ii) Notification.--The notification referred to in
clause (i) is a notification that--
``(I) is made in writing of a determination by the Governor
not to include such entity in the one-stop partners described
in clause (i); and
``(II) is provided to the Secretary and the Secretary of
Health and Human Services.''.
(2) Additional partners.--
(A) In general.--Section 121(b)(2)(A) (29 U.S.C.
2841(b)(2)(A)) is amended to read as follows:
``(A) In general.--With the approval of the local board and
chief elected official, in addition to the entities described
in paragraph (1), other entities that carry out human
resource programs described in subparagraph (B) may be one-
stop partners and carry out the responsibilities described in
paragraph (1)(A).''.
(B) Additional partners.--Section 121(b)(2)(B) (29 U.S.C.
2841(b)(2)(B)) is amended by striking clauses (i) through
(iii) and inserting the following:
``(i) employment and training programs administered by the
Social Security Administration, including the Ticket to Work
and Self-Sufficiency program established under section 1148
of the Social Security Act (42 U.S.C. 1320b-19);
``(ii) employment and training programs carried out by the
Small Business Administration;
``(iii) programs authorized under section 6(d)(4) of the
Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4));''.
(b) Local Memorandum of Understanding.--Section
121(c)(2)(A) (29 U.S.C. 2841(c)(2)(A)) is amended to read as
follows:
``(A) provisions describing--
``(i) the services to be provided through the one-stop
delivery system consistent with the requirements of this
section, including the manner in which the services will be
coordinated through such system;
``(ii) how the costs of such services and the operating
costs of such system will be funded, through cash and in-kind
contributions, to provide a stable and equitable funding
stream for ongoing one-stop system operations, including the
funding of the infrastructure costs of one-stop centers in
accordance with subsection (h);
``(iii) methods of referral of individuals between the one-
stop operator and the one-stop partners for appropriate
services and activities;
``(iv) methods to ensure the needs of hard-to-serve
populations are addressed in providing access to services
through the one-stop system; and
``(v) the duration of the memorandum of understanding and
the procedures for amending the memorandum during the term of
the memorandum, and assurances that such memorandum shall be
reviewed not less than once every 2-year period to ensure
appropriate funding and delivery of services; and''.
(c) Conforming Amendment.--Section 121(d)(2) (29 U.S.C.
2841(d)(2)) is amended by striking ``section 134(c)'' and
inserting ``section 121(e)''.
(d) Provision of Services.--
(1) Elimination of provisions concerning established
systems.--Section 121 (29 U.S.C. 2841) is amended by striking
subsection (e).
(2) Redesignation.--Subtitle B of title I is amended--
(A) in section 134 (29 U.S.C. 2864), by redesignating
subsection (c) as subsection (e); and
(B) by transferring that subsection (e) so that the
subsection appears after subsection (d) of section 121.
(3) One-stop delivery systems.--Paragraph (1) of section
121(e) (29 U.S.C. 2841(e)) (as redesignated by paragraph (2))
is amended--
(A) in subparagraph (A), by striking ``subsection (d)(2)''
and inserting ``section 134(d)(2)'';
(B) in subparagraph (B)--
(i) by striking ``subsection (d)'' and inserting ``section
134(d)'';
(ii) by striking ``individual training accounts'' and
inserting ``career scholarship accounts''; and
(iii) by striking ``subsection (d)(4)(G)'' and inserting
``section 134(d)(4)(G)'';
(C) in subparagraph (C), by striking ``subsection (e)'' and
inserting ``section 134(e)'';
(D) in subparagraph (D), by striking ``section 121(b)'' and
inserting ``subsection (b)''; and
(E) in subparagraph (E), by striking ``information
described in section 15'' and inserting ``data, information,
and analysis described in section 15(a)''.
(e) Continuous Improvement of One-Stop Centers.--Section
121 (29 U.S.C. 2841) is amended by adding at the end the
following:
``(g) Continuous Improvement of One-Stop Centers.--
``(1) In general.--The State board, in consultation with
chief local elected officials and local boards, shall
establish objective criteria and procedures for use by local
boards in periodically assessing the effectiveness, physical
and programmatic accessibility, and continuous improvement of
one-stop centers and the one-stop delivery system.
``(2) Criteria.--The procedures and criteria developed
under this subsection shall include minimum standards
relating to the scope and degree of service coordination
achieved by the one-stop delivery system with respect to the
programs administered by the one-stop partners at the one-
stop centers, consistent with the guidelines and guidance
provided by the Governor and by the State board, in
consultation with the chief elected official and local
boards, for such partners' participation under subsections
(h)(1)(B) and subsection (i), respectively, and such other
factors relating to the quality, accessibility, and
effectiveness of the one-stop delivery system as the State
board determines to be appropriate.
``(3) Local boards.--Consistent with the criteria developed
by the State, the local board may develop additional criteria
of higher standards to respond to local labor market and
demographic conditions and trends.
``(h) Funding of One-Stop Infrastructure.--
``(1) In general.--
``(A) Options for infrastructure funding.--
``(i) Local options.--The local board, chief elected
officials, and one-stop partners in a local area may choose
to fund the costs of the infrastructure of one-stop centers
through--
``(I) methods described in the local memorandum of
understanding, if, the local board, chief elected officials,
and one-stop partners agree to such methods; or
``(II) the State infrastructure funding mechanism described
in paragraph (2).
``(ii) Failure to reach agreement on funding methods.--If,
as of July 1, 2006, the local board, chief elected officials,
and one-stop partners in a local area fail to reach agreement
on methods of sufficient funding of the infrastructure costs
of one-stop centers, as determined by the local area, the
State infrastructure funding mechanism described in paragraph
(2) shall be applicable to such local area.
``(B) Guidance for infrastructure funding.--In addition to
carrying out the requirements relating to the State mechanism
for one-stop center infrastructure funding described in
paragraph (2), the Governor, after consultation with chief
local elected officials, local boards, and the State board,
and consistent with the guidelines provided by the State
board under subsection (i), shall provide--
``(i) guidelines for State administered one-stop partner
programs in determining such programs' contributions to and
participation in the one-stop delivery system, including
funding for the costs of infrastructure as defined in
paragraph (2)(D), negotiated pursuant to the local memorandum
of understanding under subsection (c); and
``(ii) guidance to assist local areas in identifying
equitable and stable alternative methods of funding of the
costs of the infrastructure of one-stop centers in local
areas.
``(2) State one-stop infrastructure funding.--
``(A) Partner contributions.--
``(i) In general.--Subject to clause (iii), a portion
determined under clause (ii) of the Federal funds provided to
the State and areas within the State under the Federal laws
authorizing the programs described in subsection (b)(1) and
administered by one-stop partners for a fiscal year shall be
provided to the Governor from such programs to assist in
paying the costs of infrastructure of one-stop centers in
those local areas of the State not funded under the option
described in paragraph (1)(A)(i)(I).
``(ii) Determination of governor.--
``(I) In general.--Subject to subclause (II) and clause
(iii), the Governor, after consultation with chief local
elected officials, local boards, and the State board, shall
determine the portion of funds to be provided under clause
(i) by each one-stop partner from each program described in
clause (i). In making such determination, the Governor shall
calculate the proportionate use of the one-stop centers for
the purpose of determining funding contributions pursuant to
clause (i)(II) or (ii) of paragraph (1)(A) by each partner,
and the costs of administration for purposes not related to
one-stop centers for each partner. The Governor shall exclude
from such determination the portion of funds and use of one-
stop centers attributable to the programs of one-stop
partners for those local areas of the State where the
infrastructure of one-stop centers is funded under the option
described in paragraph (1)(A)(i)(I).
[[Page S5121]]
``(II) Special rule.--In a State in which the State
constitution places policymaking authority that is
independent of the authority of the Governor in an entity or
official with respect to the funds provided for adult
education and literacy activities authorized under title II
and for postsecondary vocational and technical education
activities authorized under the Carl D. Perkins Vocational
and Technical Education Act of 1998 (20 U.S.C. 2301 et seq.),
or vocational rehabilitation services offered under the
Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), the
determination described in subclause (I) with respect to the
programs authorized under that title and those Acts shall be
made by the chief officer of the entity with such authority
in consultation with the Governor.
``(III) Appeal by one-stop partners.--The Governor shall
establish a procedure for the one-stop partner administering
a program described in subsection (b) to appeal a
determination regarding the portion of funds to be
contributed under this paragraph on the basis that such
determination is inconsistent with the criteria described in
the State plan or with the requirements of this paragraph.
Such procedure shall ensure prompt resolution of the appeal.
``(iii) Limitations.--
``(I) Provision from administrative funds.--The funds
provided under this paragraph by each one-stop partner shall
be provided only from funds available for the costs of
administration under the program administered by such
partner, and shall be subject to the program limitations with
respect to the portion of funds under such program that may
be used for administration.
``(II) Cap on required contributions.--
``(aa) WIA formula programs and employment service.--The
portion of funds required to be contributed under clause
(i)(II) or (ii) of paragraph (1)(A) by the programs
authorized under chapters 4 and 5 and under the Wagner-Peyser
Act (29 U.S.C. 49 et seq.) shall not be in excess of 3
percent of the amount of Federal funds provided to carry out
each such program in the State for a fiscal year.
``(bb) Other one-stop partners.--The portion of funds
required to be contributed under clause (i)(II) or (ii) of
paragraph (1)(A) by a one-stop partner from a program
described in subsection (b)(1) other than the programs
described under item (aa) shall not be in excess of 1\1/2\
percent of the amount of Federal funds provided to carry out
such program in the State for a fiscal year.
``(cc) Special rule.--Notwithstanding items (aa) and (bb),
an agreement, including a local memorandum of understanding,
entered into prior to the date of enactment of the Workforce
Investment Act Amendments of 2005 by an entity regarding
contributions under this title that permits the percentages
described in such items to be exceeded, may continue to be in
effect until terminated by the parties.
``(dd) Vocational rehabilitation.--Notwithstanding items
(aa) and (bb), an entity administering a program under title
I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.)
shall not be required to provide, for the purposes of this
paragraph, an amount in excess of--
``(AA) 0.75 percent of the amount provided for such program
in the State for the second program year that begins after
the date of enactment of the Workforce Investment Act
Amendments of 2005;
``(BB) 1.0 percent of the amount provided for such program
in the State for the third program year that begins after
such date;
``(CC) 1.25 percent of the amount provided for such program
in the State for the fourth program year that begins after
such date; and
``(DD) 1.5 percent of the amount provided for such program
in the State for the fifth and each succeeding program year
that begins after such date.
``(III) Federal direct spending programs.--An entity
administering a program funded with direct spending as
defined in section 250(c)(8) of the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 900(c)(8))
shall not be required to provide, for purposes of this
paragraph, an amount in excess of the amount determined to be
equivalent to the cost of the proportionate use of the one-
stop centers for such program in the State.
``(IV) Native american programs.--Native American programs
established under section 166 shall not be subject to the
provisions of this subsection or subsection (i). The method
for determining the appropriate portion of funds to be
provided by such Native American programs to pay for the
costs of infrastructure of a one-stop center shall be
determined as part of the development of the memorandum of
understanding under subsection (c) for the one-stop center
and shall be stated in the memorandum.
``(B) Allocation by governor.--From the funds provided
under subparagraph (A), the Governor shall allocate the funds
to local areas in accordance with the formula established
under subparagraph (C) for the purposes of assisting in
paying the costs of infrastructure of one-stop centers.
``(C) Allocation formula.--The State board shall develop a
formula to be used by the Governor to allocate the funds
provided under subparagraph (A) to local areas not funding
infrastructure costs under the option described in paragraph
(1)(A)(i)(I). The formula shall be based on factors including
the number of one-stop centers in a local area, the
population served by such centers, the services provided by
such centers, and other factors relating to the performance
of such centers that the State board determines are
appropriate.
``(D) Costs of infrastructure.--In this subsection, the
term `costs of infrastructure', used with respect to a one-
stop center, means the nonpersonnel costs that are necessary
for the general operation of the one-stop center, including
the rental costs of the facilities, the costs of utilities
and maintenance, equipment (including assessment-related
products and adaptive technology for individuals with
disabilities), and technology to facilitate remote access to
the one-stop center's strategic planning activities, and
common outreach activities.
``(i) Other Funds.--
``(1) In general.--Subject to the memorandum of
understanding described in subsection (c) for the one-stop
delivery system involved, in addition to the funds provided
to carry out subsection (h), a portion of funds made
available under Federal law authorizing the programs
described in subsection (b) and administered by one-stop
partners, or the noncash resources available under such
programs, shall be used to pay the additional costs relating
to the operation of the one-stop delivery system that are not
paid from the funds provided under subsection (h), as
determined in accordance with paragraph (2), to the extent
not inconsistent with the Federal law involved. Such costs
shall include the costs of the provision of core services
described in section 134(d)(2) applicable to each program and
may include common costs that are not paid from the funds
provided under subsection (h).
``(2) Determination and guidance.--The method for
determining the appropriate portion of funds and noncash
resources to be provided by each program under paragraph (1)
for a one-stop center shall be determined as part of the
development of the memorandum of understanding under
subsection (c) for the one-stop center and shall be stated in
the memorandum. The State board shall provide guidance to
facilitate the determination of an appropriate allocation of
the funds and noncash resources in local areas.''.
SEC. 118. ELIGIBLE PROVIDERS OF TRAINING SERVICES.
Section 122 (29 U.S.C. 2842) is amended to read as follows:
``SEC. 122. IDENTIFICATION OF ELIGIBLE PROVIDERS OF TRAINING
SERVICES.
``(a) Eligibility.--
``(1) In general.--The Governor, after consultation with
the State board, shall establish criteria and procedures
regarding the eligibility of providers of training services
described in section 134(d)(4) (referred to in this section
as `training services') to receive funds provided under
section 133(b) for the provision of training services.
``(2) Providers.--Subject to the provisions of this
section, to be eligible to receive the funds provided under
section 133(b) for the provision of training services, the
provider shall be--
``(A) a postsecondary educational institution that--
``(i) is eligible to receive Federal funds under title IV
of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.);
and
``(ii) provides a program that leads to an associate
degree, baccalaureate degree, or industry-recognized
certification;
``(B) an entity that carries out programs under the Act of
August 16, 1937 (commonly known as the `National
Apprenticeship Act'; 50 Stat. 664, chapter 663; 29 U.S.C. 50
et seq.); or
``(C) another public or private provider of a program of
training services.
``(3) Inclusion in list of eligible providers.--A provider
described in subparagraph (A) or (C) of paragraph (2) shall
comply with the criteria and procedures established under
this section to be included on the list of eligible providers
of training services described in subsection (d)(1). A
provider described in paragraph (2)(B) shall be included on
the list of eligible providers of training services described
in subsection (d)(1) for so long as the provider remains
certified by the Department of Labor to carry out the
programs described in paragraph (2)(B).
``(b) Criteria.--
``(1) In general.--The criteria established by the Governor
pursuant to subsection (a) shall take into account--
``(A) the performance of providers of training services
with respect to the performance measures and other matters
for which information is required under paragraph (2) and
other appropriate measures of performance outcomes for those
participants receiving training services under this subtitle
(taking into consideration the characteristics of the
population served and relevant economic conditions);
``(B) the need to ensure access to training services
throughout the State, including any rural areas;
``(C) the information such providers are required to report
to State agencies with respect to Federal and State programs
(other than the program carried out under this subtitle),
including one-stop partner programs;
``(D) the requirements for State licensing of providers of
training services, and the licensing status of each provider
of training services if applicable;
``(E) to the extent practicable, encouraging the use of
industry-recognized standards and certification;
``(F) the ability of the providers to offer programs that
lead to a degree or an industry-recognized certification;
[[Page S5122]]
``(G) the ability to provide training services to hard-to-
serve populations, including individuals with disabilities;
and
``(H) such other factors as the Governor determines are
appropriate to ensure--
``(i) the quality of services provided;
``(ii) the accountability of the providers;
``(iii) that the one-stop centers in the State will ensure
that such providers meet the needs of local employers and
participants;
``(iv) the informed choice of participants under chapter 5;
and
``(v) that the collection of information required is not
unduly burdensome or costly to providers.
``(2) Information.--The criteria established by the
Governor shall require that a provider of training services
submit appropriate, accurate, and timely information to the
State for purposes of carrying out subsection (d), with
respect to participants receiving training services under
this subtitle in the applicable program, including--
``(A) information on degrees and industry-recognized
certifications received by such participants;
``(B) information on costs of attendance for such
participants;
``(C) information on the program completion rate for such
participants; and
``(D) information on the performance of the provider with
respect to the performance measures described in section 136
for such participants (taking into consideration the
characteristics of the population served and relevant
economic conditions), which may include information
specifying the percentage of such participants who entered
unsubsidized employment in an occupation related to the
program.
``(3) Renewal.--The criteria established by the Governor
shall also provide for biennial review and renewal of
eligibility under this section for providers of training
services.
``(4) Local criteria.--A local board in the State may
establish criteria in addition to the criteria established by
the Governor, or may require higher levels of performance
than required under the criteria established by the Governor,
for purposes of determining the eligibility of providers of
training services to receive funds described in subsection
(a) to provide the services in the local area involved.
``(5) Information to establish initial eligibility.--
``(A) In general.--In an effort to provide the highest-
quality training services and responsiveness to new and
emerging industries, providers may seek initial eligibility
under this section as providers of training services. The
criteria established by the Governor shall require that a
provider who has not previously been an eligible provider of
training services under this section provide the information
described in subparagraph (B).
``(B) Information.--The provider shall provide verifiable
program-specific performance information supporting the
provider's ability to serve participants under this subtitle.
The information provided under this subparagraph may include
information on outcome measures such as job placement and
wage increases for individuals participating in the program,
information on business partnerships and other factors that
indicate high-quality training services, and information on
alignment with industries targeted for potential employment
opportunities.
``(C) Provision.--The provider shall provide the
information described in subparagraph (B) to the Governor and
the local boards in a manner that will permit the Governor
and the local boards to make a decision on inclusion of the
provider on the list of eligible providers described in
subsection (d).
``(c) Procedures.--The procedures established under
subsection (a) shall identify the application process for a
provider of training services to become eligible to receive
funds provided under section 133(b) for the provision of
training services, and identify the respective roles of the
State and local areas in receiving and reviewing the
applications and in making determinations of such eligibility
based on the criteria established under this section. The
procedures shall also establish a process for a provider of
training services to appeal a denial or termination of
eligibility under this section, that includes an opportunity
for a hearing and prescribes appropriate time limits to
ensure prompt resolution of the appeal.
``(d) Information To Assist Participants in Choosing
Providers.--In order to facilitate and assist participants in
choosing employment and training activities under chapter 5
and in choosing providers of training services, the Governor
shall ensure that an appropriate list of providers determined
to be eligible under this section in the State, accompanied
by appropriate information, is provided to the one-stop
delivery system in the State. The accompanying information
shall consist of information provided by providers described
in subparagraphs (A) and (C) of subsection (a)(2) in
accordance with subsection (b) (including information on
receipt of degrees and industry-recognized certifications,
and costs of attendance, for participants receiving training
services under this subtitle in applicable programs) and such
other information as the Secretary determines is appropriate.
The list and the accompanying information shall be made
available to such participants and to members of the public
through the one-stop delivery system in the State.
``(e) Enforcement.--
``(1) In general.--The criteria and procedures established
under this section shall provide the following:
``(A) Intentionally supplying inaccurate information.--Upon
a determination, by an individual or entity specified in the
criteria or procedures, that a provider of training services,
or individual providing information on behalf of the
provider, intentionally supplied inaccurate information under
this section, the eligibility of such provider to receive
funds under chapter 5 shall be terminated for a period of
time that is not less than 2 years.
``(B) Substantial violations.--Upon a determination, by an
individual or entity specified in the criteria or procedures,
that a provider of training services substantially violated
any requirement under this title, the eligibility of such
provider to receive funds under the program involved may be
terminated, or other appropriate action may be taken.
``(C) Repayment.--A provider of training services whose
eligibility is terminated under subparagraph (A) or (B) shall
be liable for the repayment of funds received under chapter 5
during a period of noncompliance described in such
subparagraph.
``(2) Construction.--Paragraph (1) shall be construed to
provide remedies and penalties that supplement, but do not
supplant, other civil and criminal remedies and penalties.
``(f) Agreements With Other States.--States may enter into
agreements, on a reciprocal basis, to permit eligible
providers of training services to accept career scholarship
accounts provided in another State.
``(g) Opportunity To Submit Comments.--In establishing
criteria, procedures, requirements for information, and the
list of eligible providers described in subsection (d)(1),
the Governor shall provide an opportunity for interested
members of the public to make recommendations and submit
comments regarding such criteria, procedures, requirements
for information, and list.
``(h) Transition Period for Implementation.--The
requirements of this section shall be implemented not later
than December 31, 2006. In order to facilitate early
implementation of this section, the Governor may establish
transition procedures under which providers eligible to
provide training services under chapter 5 as such chapter was
in effect on the day before the date of enactment of the
Workforce Investment Act Amendments of 2005 may continue to
be eligible to provide such services until December 31, 2006,
or until such earlier date as the Governor determines to be
appropriate.
``(i) On-the-Job Training, Customized Training, or
Incumbent Worker Training Exception.--
``(1) In general.--Providers of on-the-job training,
customized training, or incumbent worker training shall not
be subject to the requirements of subsections (a) through
(h).
``(2) Collection and dissemination of information.--A one-
stop operator in a local area shall collect such performance
information from providers of on-the-job training, customized
training, and incumbent worker training as the Governor may
require, determine whether the providers meet such
performance criteria as the Governor may require, and
disseminate information identifying providers that meet the
criteria as eligible providers, and the performance
information, through the one-stop delivery system. Providers
determined to meet the criteria shall be considered to be
identified as eligible providers of training services.''.
SEC. 119. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.
Section 123 (29 U.S.C. 2843) is amended to read as follows:
``SEC. 123. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.
``(a) In General.--From the funds allocated under section
128(b) to a local area, the local board for such area shall
award grants or contracts on a competitive basis to providers
of youth activities identified based on the criteria in the
State plan described in section 112 and shall conduct
oversight with respect to such providers.
``(b) Exceptions.--A local board may award grants or
contracts on a sole-source basis if such board determines
there is an insufficient number of eligible providers of
youth activities in the local area involved (such as a rural
area) for grants and contracts to be awarded on a competitive
basis under subsection (a).''.
SEC. 120. YOUTH ACTIVITIES.
(a) State Allotments.--Section 127 (29 U.S.C. 2852) is
amended--
(1) in subsection (a)(1), by striking ``opportunity'' and
inserting ``challenge''; and
(2) by striking subsection (b) and inserting the following:
``(b) Allotment Among States.--
``(1) Youth activities.--
``(A) Youth challenge grants and youth activities for
farmworkers and native americans.--
``(i) In general.--For each fiscal year in which the amount
appropriated under section 137(a) exceeds $1,000,000,000, the
Secretary shall reserve a portion of the amount to provide
youth activities under section 167 (relating to migrant and
seasonal farmworker programs) and provide youth challenge
grants and other activities under section 169 (relating to
youth challenge grants).
``(ii) Portion.--The portion referred to in clause (i)
shall equal, for a fiscal year--
``(I) except as provided in subclause (II), the difference
obtained by subtracting $1,000,000,000 from the amount
appropriated under section 137(a) for the fiscal year; or
[[Page S5123]]
``(II) for any fiscal year in which the amount is
$1,250,000,000 or greater, $250,000,000.
``(iii) Youth activities for farmworkers.--For a fiscal
year described in clause (i), the Secretary shall reserve the
greater of $10,000,000 or 4 percent of the portion described
in clause (i) for a fiscal year to provide youth activities
under section 167. For a fiscal year not described in clause
(i), the Secretary shall reserve $10,000,000 of the amount
appropriated under section 137(a) to provide youth activities
under section 167.
``(iv) Youth activities for native americans.--From the
amount appropriated under section 137(a) for each fiscal year
that is not reserved under clause (i) or (iii), the Secretary
shall reserve not more than 1\1/2\ percent of such
appropriated amount to provide youth activities under section
166 (relating to Native Americans).
``(B) Outlying areas.--
``(i) In general.--From the amount appropriated under
section 137(a) for each fiscal year that is not reserved
under subparagraph (A), the Secretary shall reserve not more
than \1/4\ of 1 percent of the appropriated amount to provide
assistance to the outlying areas to carry out youth
activities and statewide workforce investment activities.
``(ii) Limitation for freely associated states.--
``(I) Competitive grants.--The Secretary shall use funds
described in clause (i) to award grants to Guam, American
Samoa, the Commonwealth of the Northern Mariana Islands, and
the Freely Associated States to carry out youth activities
and statewide workforce investment activities.
``(II) Award basis.--The Secretary shall award grants
pursuant to subclause (I) on a competitive basis and pursuant
to the recommendations of experts in the field of employment
and training, working through the Pacific Region Educational
Laboratory in Honolulu, Hawaii.
``(III) Assistance requirements.--Any Freely Associated
State that desires to receive assistance under this
subparagraph shall submit an application to the Secretary and
shall include in the application for assistance--
``(aa) information demonstrating that the Freely Associated
State will meet all conditions that apply to States under
this title;
``(bb) an assurance that, notwithstanding any other
provision of this title, the Freely Associated State will use
such assistance only for the direct provision of services;
and
``(cc) such other information and assurances as the
Secretary may require.
``(IV) Administrative costs.--The Secretary may provide not
more than 5 percent of the funds made available for grants
under subclause (I) to pay the administrative costs of the
Pacific Region Educational Laboratory in Honolulu, Hawaii,
regarding activities assisted under this clause.
``(iii) Additional requirement.--The provisions of Public
Law 95-134, permitting the consolidation of grants by the
outlying areas, shall not apply to assistance provided to
those areas, including the Freely Associated States, under
this subparagraph.
``(C) States.--
``(i) In general.--From the remainder of the amount
appropriated under section 137(a) for a fiscal year that
exists after the Secretary determines the amounts to be
reserved under subparagraphs (A) and (B), the Secretary shall
allot to the States--
``(I) an amount of the remainder that is less than or equal
to the total amount that was allotted to States for fiscal
year 2005 under section 127(b)(1)(C) of this Act (as in
effect on the day before the date of enactment of the
Workforce Investment Act Amendments of 2005), in accordance
with the requirements of such section 127(b)(1)(C); and
``(II) the amount of the remainder, if any, in excess of
the amount referred to in subclause (I), in accordance with
clause (ii).
``(ii) Formula.--Subject to clauses (iii) and (iv), of the
amount described in clause (i)(II)--
``(I) 33\1/3\ percent shall be allotted on the basis of the
relative number of individuals in the civilian labor force
who are ages 16 through 21 in each State, compared to the
total number of individuals in the civilian labor force who
are ages 16 through 21 in all States;
``(II) 33\1/3\ percent shall be allotted on the basis of
the relative number of unemployed individuals in each State,
compared to the total number of unemployed individuals in all
States; and
``(III) 33\1/3\ percent shall be allotted on the basis of
the relative number of disadvantaged youth who are ages 16
through 21 in each State, compared to the total number of
disadvantaged youth who are ages 16 through 21 in all States.
``(iii) Minimum and maximum percentages.--
``(I) Minimum percentage.--The Secretary shall ensure that
no State shall receive an allotment percentage under this
subparagraph for a fiscal year that is less than 90 percent
of the allotment percentage of the State for the preceding
fiscal year.
``(II) Maximum percentage.--Subject to subclause (I), the
Secretary shall ensure that no State shall receive an
allotment percentage under this subparagraph for a fiscal
year that is more than 130 percent of the allotment
percentage of the State for the preceding fiscal year.
``(iv) Small state minimum allotment.--Subject to clause
(iii), the Secretary shall ensure that no State shall receive
an allotment under this subparagraph that is less than the
total of--
``(I) \3/10\ of 1 percent of $1,000,000,000 of the
remainder described in clause (i) for the fiscal year; and
``(II) if the remainder described in clause (i) for the
fiscal year exceeds $1,000,000,000, \2/5\ of 1 percent of the
excess.
``(2) Definitions.--For the purposes of paragraph (1):
``(A) Allotment percentage.--The term `allotment
percentage', used with respect to fiscal year 2006 or a
subsequent fiscal year, means a percentage of the remainder
described in paragraph (1)(C)(i) that is received by the
State involved through an allotment made under this
subsection for the fiscal year. The term, used with respect
to fiscal year 2005, means the percentage of the amounts
allotted to States under this chapter (as in effect on the
day before the date of enactment of the Workforce Investment
Act Amendments of 2005) that is received by the State
involved for fiscal year 2005.
``(B) Disadvantaged youth.--Subject to paragraph (3), the
term `disadvantaged youth' means an individual who is age 16
through 21 who received an income, or is a member of a family
that received a total family income, that, in relation to
family size, does not exceed the higher of--
``(i) the poverty line; or
``(ii) 70 percent of the lower living standard income
level.
``(C) Freely associated state.--The term `Freely Associated
State' means the Republic of the Marshall Islands, the
Federated States of Micronesia, and the Republic of Palau.
``(3) Special rule.--For purposes of the formula specified
in paragraph (1)(C), the Secretary shall, as appropriate and
to the extent practicable, exclude college students and
members of the Armed Forces from the determination of the
number of disadvantaged youth.''.
(b) Reallotment.--
(1) Amendment.--Section 127(c) (29 U.S.C. 2852(c)) is
amended--
(A) by striking paragraph (2) and inserting the following:
``(2) Amount.--The amount available for reallotment for a
program year is equal to the amount by which the unexpended
balance at the end of the program year prior to the program
year for which the determination is made exceeds 30 percent
of the total amount of funds available to the State under
this section during such prior program year (including
amounts allotted to the State in all prior program years that
remained available). For purposes of this paragraph, the
unexpended balance is the amount that is the difference
between--
``(A) the total amount of funds available to the State
under this section during the program year prior to the
program year for which the determination is made (including
amounts allotted to the State in all prior program years that
remained available); and
``(B) the accrued expenditures during such prior program
year.'';
(B) in paragraph (3)--
(i) by striking ``for the prior program year'' and
inserting ``for the program year for which the determination
is made''; and
(ii) by striking ``such prior program year'' and inserting
``such program year'';
(C) by striking paragraph (4) and inserting the following:
``(4) Eligibility.--For purposes of this subsection, an
eligible State means a State that does not have an amount
available for reallotment under paragraph (2) for the program
year for which the determination under paragraph (2) is
made.''; and
(D) in paragraph (5), by striking ``obligation'' and
inserting ``accrued expenditure''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect for the program year that begins after the
date of enactment of this Act.
(c) Within State Allocations.--
(1) Reservation for statewide activities.--Section 128(a)
(29 U.S.C. 2853(a)) is amended to read as follows:
``(a) Reservations for Statewide Activities.--
``(1) In general.--The Governor of a State shall reserve
not more than 15 percent of each of the amounts allotted to
the State under section 127(b)(1)(C) and paragraphs (1)(B)
and (2)(B) of section 132(b) for a fiscal year for statewide
workforce investment activities.
``(2) Use of funds.--Regardless of whether the reserved
amounts were allotted under section 127(b)(1)(C), or under
paragraph (1)(B) or (2)(B) of section 132(b), the Governor
may use the reserved amounts to carry out statewide
activities under section 129(b) or statewide employment and
training activities, for adults or dislocated workers, under
section 134(a).''.
(2) Within state allocation.--Section 128(b) (29 U.S.C.
2853(b)) is amended to read as follows:
``(b) Within State Allocations.--
``(1) In general.--Of the amount allotted to the State
under section 127(b)(1)(C) and not reserved under subsection
(a)(1)--
``(A) a portion equal to not less than 80 percent of such
amount shall be allocated by the Governor to local areas in
accordance with paragraph (2); and
``(B) a portion equal to not more than 20 percent of such
amount may be allocated by the Governor to local areas in
accordance with paragraph (3).
``(2) Established formula.--
[[Page S5124]]
``(A) In general.--Of the portion described in paragraph
(1)(A), the Governor shall allocate--
``(i) 33\1/3\ percent on the basis of the relative number
of individuals in the civilian labor force who are ages 16
through 21 in each local area, compared to the total number
of individuals in the civilian labor force who are ages 16
through 21 in all local areas in the State;
``(ii) 33\1/3\ percent on the basis of the relative number
of unemployed individuals in each local area, compared to the
total number of unemployed individuals in all local areas in
the State; and
``(iii) 33\1/3\ percent on the basis of the relative number
of disadvantaged youth who are ages 16 through 21 in each
local area, compared to the total number of disadvantaged
youth who are ages 16 through 21 in all local areas in the
State.
``(B) Minimum and maximum percentages.--
``(i) Minimum percentage.--The Governor shall ensure that
no local area shall receive an allocation percentage under
this paragraph for a fiscal year that is less than 90 percent
of the allocation percentage of the local area for the
preceding fiscal year.
``(ii) Maximum percentage.--Subject to clause (i), the
Governor shall ensure that no local area shall receive an
allocation percentage under this paragraph for a fiscal year
that is more than 130 percent of the allocation percentage of
the local area for the preceding fiscal year.
``(C) Definitions.--In this paragraph:
``(i) Allocation percentage.--The term `allocation
percentage', used with respect to fiscal year 2006 or a
subsequent fiscal year, means a percentage of the portion
described in paragraph (1)(A) that is received by the local
area involved through an allocation made under this paragraph
for the fiscal year. The term, used with respect to fiscal
year 2005, means the percentage of the amounts allocated to
local areas under this chapter (as in effect on the day
before the date of enactment of the Workforce Investment Act
Amendments of 2005) that is received by the local area
involved for fiscal year 2005.
``(ii) Disadvantaged youth.--The term `disadvantaged youth'
means an individual who--
``(I) is age 16 through 21;
``(II) is not a college student or member of the Armed
Forces; and
``(III) received an income, or is a member of a family that
received a total family income, that, in relation to family
size, does not exceed the higher of--
``(aa) the poverty line; or
``(bb) 70 percent of the lower living standard income
level.
``(3) Youth discretionary allocation.--The Governor may
allocate the portion described in paragraph (1)(B) to local
areas where there are a significant number of eligible youth,
after consultation with the State board and local boards.
``(4) Local administrative cost limit.--
``(A) In general.--Of the amount allocated to a local area
under this subsection and section 133(b) for a fiscal year,
not more than 10 percent of the amount may be used by the
local board involved for the administrative costs of carrying
out local workforce investment activities under this chapter
or chapter 5.
``(B) Use of funds.--Funds made available for
administrative costs under subparagraph (A) may be used for
the administrative costs of any of the local workforce
investment activities described in this chapter or chapter 5,
regardless of whether the funds were allocated under this
subsection or section 133(b).''.
(3) Reallocation.--
(A) Amendment.--Section 128(c) (29 U.S.C. 2853(c)) is
amended--
(i) in paragraph (1), by striking ``paragraph (2)(A) or (3)
of'';
(ii) by striking paragraph (2) and inserting the following:
``(2) Amount.--The amount available for reallocation for a
program year is equal to the amount by which the unexpended
balance at the end of the program year prior to the program
year for which the determination is made exceeds 30 percent
of the total amount of funds available to the local area
under this section during such prior program year (including
amounts allocated to the local area in all prior program
years that remained available). For purposes of this
paragraph, the unexpended balance is the amount that is the
difference between--
``(A) the total amount of funds available to the local area
under this section during the program year prior to the
program year for which the determination is made (including
amounts allocated to the local area in all prior program
years that remained available); and
``(B) the accrued expenditures during such prior program
year.'';
(iii) by amending paragraph (3)--
(I) by striking ``subsection (b)(3)'' each place it appears
and inserting ``subsection (b)'';
(II) by striking ``for the prior program year'' the first
place it appears and inserting ``for the program year for
which the determination is made'';
(III) by striking ``such prior program year'' and inserting
``such program year''; and
(IV) by striking the last sentence; and
(iv) by striking paragraph (4) and inserting the following:
``(4) Eligibility.--For purposes of this subsection, an
eligible local area means a local area that does not have an
amount available for reallocation under paragraph (2) for the
program year for which the determination under paragraph (2)
is made.''.
(B) Effective date.--The amendments made by subparagraph
(A) shall take effect for the later of--
(i) the program year that begins after the date of
enactment of this Act; or
(ii) program year 2006.
(d) Youth Participant Eligibility.--Section 129(a) (29
U.S.C. 2854(a)) is amended to read as follows:
``(a) Youth Participant Eligibility.--
``(1) Eligibility.--
``(A) In general.--To be eligible to participate in
activities carried out under this chapter during any program
year an individual shall, at the time the eligibility
determination is made, be an out-of-school youth or an in-
school youth.
``(B) Out-of-school youth.--In this title the term `out-of-
school youth' means an individual who is--
``(i) not younger than age 16 nor older than age 21; and
``(ii) one of the following:
``(I) A school dropout.
``(II) A youth who is within the age for compulsory school
attendance, but has not attended school for at least 1 school
year calendar quarter.
``(III) A recipient of a secondary school diploma or its
equivalent who is--
``(aa) deficient in basic skills, including limited English
proficiency;
``(bb) a low-income individual; and
``(cc) not attending any school.
``(IV) Subject to the juvenile or adult justice system or
ordered by a court to an alternative school.
``(V) A low-income individual who is pregnant or parenting
and not attending any school.
``(VI) A youth who is not attending school or a youth
attending an alternative school, who is homeless, a runaway,
a foster child, a child eligible for assistance under section
477 of the Social Security Act (42 U.S.C. 677), or in an out-
of-home placement.
``(VII) A low-income individual who is not attending school
and requires additional assistance to enter or complete an
educational program or to secure or hold employment.
``(C) In-school youth.--In this section the term `in-school
youth' means an individual who is--
``(i) not younger than age 14 nor older than age 21;
``(ii) a low-income individual; and
``(iii) one or more of the following:
``(I) Deficient in basic literacy skills, including limited
English proficiency.
``(II) Homeless, a runaway, a foster child, a child
eligible for assistance under section 477 of the Social
Security Act (42 U.S.C. 677), or in an out-of-home placement.
``(III) Pregnant or parenting.
``(IV) An offender (other than an individual described in
subparagraph (B)(ii)(IV)).
``(V) An individual who requires additional assistance to
complete an educational program or to secure or hold
employment.
``(2) Exception.--Not more than 5 percent of the
individuals assisted under this section in each local area,
in the case of individuals for whom low income is a
requirement for eligibility under this section, may be
individuals who are not low income.
``(3) Limitations on activities for in-school youth.--
``(A) In general.--For any program year, not more than 60
percent of the funds available for statewide activities under
subsection (b), and not more than 60 percent of funds
available to local areas under subsection (c), may be used to
provide activities for in-school youth meeting the
requirements of paragraph (1)(B).
``(B) Exception.--A State that receives a minimum allotment
under section 127(b)(1) in accordance with section
127(b)(1)(C)(iv) or under section 132(b)(1) in accordance
with section 132(b)(1)(B)(iv)(II) may increase the percentage
described in subparagraph (A) for a local area in the State,
if--
``(i) after an analysis of the eligible youth population in
the local area, the State determines that the local area will
be unable to use at least 40 percent of the funds available
for activities under subsection (b) or (c) to serve out-of-
school youth due to a low number of out-of-school youth; and
``(ii)(I) the State submits to the Secretary, for the local
area, a request including a proposed increased percentage for
purposes of subparagraph (A), and the summary of the eligible
youth population analysis; and
``(II) the request is approved by the Secretary.
``(4) Consistency with compulsory school attendance laws.--
In providing assistance under this section to an individual
who is required to attend school under applicable State
compulsory school attendance laws, the priority in providing
such assistance shall be for the individual to attend school
regularly.''.
(e) Statewide Activities.--Section 129(b) (29 U.S.C.
2854(b)) is amended to read as follows:
``(b) Statewide Activities.--
``(1) In general.--Funds reserved by a Governor for a State
as described in sections 128(a) and 133(a)(1) shall be used,
regardless of whether the funds were allotted to the State
under section 127(b)(1)(C) or under paragraph (1)(B) or
(2)(B) of section 132(b) for statewide activities, which may
include--
``(A) conducting--
``(i) evaluations under section 136(e) of activities
authorized under this chapter and
[[Page S5125]]
chapter 5 in coordination with evaluations carried out by the
Secretary under section 172;
``(ii) research; and
``(iii) demonstration projects;
``(B) providing incentive grants to local areas for
regional cooperation among local boards (including local
boards in a designated region as described in section
116(c)), for local coordination of activities carried out
under this title, and for performance by local areas as
described in section 136(i)(2);
``(C) providing technical assistance and capacity building
activities to local areas, one-stop operators, one-stop
partners, and eligible providers, including the development
and training of staff, the development of exemplary program
activities, the provision of technical assistance to local
areas that fail to meet local performance measures described
in section 136(c), and the provision of technology to
facilitate remote access to services provided through the
one-stop delivery system in the State;
``(D) operating a fiscal and management accountability
information system under section 136(f);
``(E) carrying out monitoring and oversight of activities
carried out under this chapter and chapter 5, which may
include a review comparing the services provided to male and
female youth;
``(F) providing additional assistance to local areas that
have high concentrations of eligible youth;
``(G) supporting the development of alternative programs
and other activities that enhance the choices available to
eligible youth and encourage such youth to reenter secondary
education, enroll in postsecondary education and advanced
training, and obtain career path employment;
``(H) supporting the provision of core services described
in section 134(d)(2) in the one-stop delivery system in the
State; and
``(I) supporting financial literacy, including--
``(i) supporting the ability to create household budgets,
initiate savings plans, and make strategic investment
decisions for education, retirement, home ownership, wealth
building, or other savings goals;
``(ii) supporting the ability to manage spending, credit,
and debt, including credit card debt, effectively;
``(iii) increasing awareness of the availability and
significance of credit reports and credit scores in obtaining
credit, the importance of their accuracy (and how to correct
inaccuracies), their effect on credit terms, and the effect
common financial decisions may have on credit scores;
``(iv) supporting the ability to ascertain fair and
favorable credit terms;
``(v) supporting the ability to avoid abusive, predatory,
or deceptive credit offers and financial products;
``(vi) supporting the ability to understand, evaluate, and
compare financial products, services, and opportunities;
``(vii) supporting the ability to understand resources that
are easily accessible and affordable, and that inform and
educate an investor as to the investor's rights and avenues
of recourse when the investor believes the investor's rights
have been violated by unprofessional conduct of market
intermediaries;
``(viii) increasing awareness of the particular financial
needs and financial transactions (such as the sending of
remittances) of consumers who are targeted in multilingual
financial literacy and education programs and improving the
development and distribution of multilingual financial
literacy and education materials;
``(ix) promoting bringing individuals who lack basic
banking services into the financial mainstream by opening and
maintaining accounts with financial institutions; and
``(x) improving financial literacy and education through
all other related skills, including personal finance and
related economic education, with the primary goal of programs
not simply to improve knowledge, but rather to improve
consumers' financial choices and outcomes.
``(2) Limitation.--Not more than 5 percent of the funds
allotted to a State under section 127(b)(1)(C) shall be used
by the State for administrative activities carried out under
this subsection or section 134(a).
``(3) Prohibition.--No funds described in this subsection
may be used to develop or implement education curricula for
school systems in the State.''.
(f) Local Elements and Requirements.--
(1) Program design.--Section 129(c)(1) (29 U.S.C.
2854(c)(1)) is amended--
(A) in the matter that precedes subparagraph (A), by
striking ``paragraph (2)(A) or (3), as appropriate, of'';
(B) in subparagraph (B), by inserting ``are directly linked
to 1 or more of the performance measures relating to this
chapter under section 136, and that'' after ``for each
participant that''; and
(C) in subparagraph (C)--
(i) by redesignating clauses (i) through (iv) as clauses
(ii) through (v), respectively;
(ii) by inserting before clause (ii) (as redesignated by
clause (i)) the following:
``(i) activities leading to the attainment of a secondary
school diploma or its equivalent, or another recognized
credential;'';
(iii) in clause (ii) (as redesignated by clause (i)), by
inserting ``and advanced training'' after ``opportunities'';
(iv) in clause (iii) (as redesignated by clause (i))--
(I) by inserting ``instruction based on State academic
content and student academic achievement standards
established under section 1111 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6311)'' after
``academic''; and
(II) by inserting ``that lead to the attainment of
recognized credentials'' after ``learning''; and
(v) by striking clause (v) (as redesignated by clause (i))
and inserting the following:
``(v) effective connections to all employers, including
small employers, in sectors of the local and regional labor
markets that are experiencing high growth in employment
opportunities.''.
(2) Program elements.--Section 129(c)(2) (29 U.S.C.
2854(c)(2)) is amended--
(A) in subparagraph (A), by striking ``secondary school,
including dropout prevention strategies'' and inserting ``the
requirements for a secondary school diploma or its recognized
equivalent (including recognized alternative standards for
individuals with disabilities) or for another recognized
credential, including dropout prevention strategies'';
(B) in subparagraph (B), by inserting ``, with a priority
on exposing youth to technology and nontraditional jobs''
before the semicolon;
(C) in subparagraph (F), by striking ``during nonschool
hours'';
(D) in subparagraph (I), by striking ``and'' at the end;
(E) in subparagraph (J), by striking the period at the end
and inserting a semicolon; and
(F) by adding at the end the following:
``(K) on-the-job training opportunities;
``(L) opportunities to acquire financial literacy skills;
``(M) entrepreneurial skills training and microenterprise
services; and
``(N) information about average wages for a range of jobs
available in the local area, including technology jobs.''.
(3) Additional requirements.--Section 129(c)(3)(A) (29
U.S.C. 2854(c)(3)(A)) is amended in the matter preceding
clause (i) by striking ``or applicant who meets the minimum
income criteria to be considered an eligible youth''.
(4) Priority and exceptions.--Section 129(c) (29 U.S.C.
2854(c)) is amended by striking paragraphs (4) and (5).
(5) Prohibitions and linkages.--Section 129(c) (29 U.S.C.
2854(c)), as amended by paragraph (4), is further amended--
(A) by redesignating paragraphs (6), (7), and (8) as
paragraphs (4), (5), and (6), respectively;
(B) in paragraph (4) (as redesignated by subparagraph
(A))--
(i) by striking subparagraph (B); and
(ii) by redesignating subparagraph (C) as subparagraph (B);
and
(C) in paragraph (5) (as redesignated by subparagraph (A)),
by striking ``youth councils'' and inserting ``local
boards''.
SEC. 121. ADULT AND DISLOCATED WORKER EMPLOYMENT AND TRAINING
ACTIVITIES.
(a) State Allotments.--
(1) Reservations.--Section 132(a)(2)(A) (29 U.S.C. 2862
(a)(2)(A)) is amended by striking ``national emergency
grants, other than under subsection (a)(4), (f), and (g)''
and inserting ``national dislocated worker grants, other than
under paragraph (4) or (5) of subsection (a), subsection (e),
and subsection (f)''.
(2) Allotment among states.--Section 132(b) (29 U.S.C.
2862(b)) is amended--
(A) in paragraph (1)(A)(ii), by striking ``section
127(b)(1)(B),'' and all that follows and inserting ``section
127(b)(1)(B).'';
(B) by striking paragraph (1)(B)(ii) and inserting the
following:
``(ii) Formula.--Subject to clauses (iii) and (iv), of the
remainder--
``(I) 40 percent shall be allotted on the basis of the
relative number of unemployed individuals in areas of
substantial unemployment in each State, compared to the total
number of unemployed individuals in areas of substantial
unemployment in all States;
``(II) 25 percent shall be allotted on the basis of the
relative number of individuals in the civilian labor force in
each State, compared to the total number of such individuals
in all States; and
``(III) 35 percent shall be allotted on the basis of the
relative number of disadvantaged adults in each State,
compared to the total number of disadvantaged adults in all
States, except as described in clause (iii).'';
(C) in paragraph (1)(B)--
(i) in clause (iii), by striking ``section 116(a)(2)(B)''
and inserting ``section 116(a)(2)(A)(iii)'';
(ii) in clause (iv)--
(I) in subclause (I)--
(aa) by striking ``Subject to subclause (IV), the'' and
inserting ``The''; and
(bb) by striking ``than the greater of'' and all that
follows and inserting ``than an amount based on 90 percent of
the allotment percentage of the State for the preceding
fiscal year.'';
(II) in subclause (II), by striking ``subclauses (I),
(III), and (IV)'' and inserting ``subclauses (I) and (III)'';
and
(III) by striking subclause (IV); and
(iii) in clause (v), by striking subclause (VI); and
(D) in paragraph (2)(A)(ii), by striking ``section
127(b)(1)(B)'' and all that follows and inserting ``section
127(b)(1)(B).''.
(3) Reallotment.--Section 132(c) (29 U.S.C. 2862(c)) is
amended--
(A) by striking paragraph (2) and inserting the following:
``(2) Amount.--The amount available for reallotment for a
program year for programs
[[Page S5126]]
funded under subsection (b)(1)(B) (relating to adult
employment and training) and subsection (b)(2)(B) (relating
to dislocated worker employment and training), respectively,
is equal to the amount by which the unexpended balance at the
end of the program year prior to the program year for which
the determination is made exceeds 30 percent of the total
amount of funds available to the State under subsection
(b)(1)(B) or (b)(2)(B), respectively, during such prior
program year (including amounts allotted to the State in all
prior program years under such provisions that remained
available). For purposes of this paragraph, the unexpended
balance is the amount that is the difference between--
``(A) the total amount of funds available to the State
under subsection (b)(1)(B) or (b)(2)(B), respectively, during
the program year prior to the program year for which the
determination is made (including amounts allotted to the
State in all prior program years under such provisions that
remained available); and
``(B) the accrued expenditures from such total amount of
funds available under subsection (b)(1)(B) or (b)(2)(B),
respectively, during such prior program year.'';
(B) in paragraph (3)--
(i) by striking ``under this section for such activities
for the prior program year'' and inserting ``under subsection
(b)(1)(B) or (b)(2)(B), as appropriate, for the program year
for which the determination is made''; and
(ii) by striking ``under this section for such activities
for such prior program year'' and inserting ``under
subsection (b)(1)(B) or (b)(2)(B), as appropriate, for such
program year'';
(C) by striking paragraph (4) and inserting the following:
``(4) Eligibility.--For purposes of this subsection, an
eligible State means--
``(A) with respect to funds allotted under subsection
(b)(1)(B), a State that does not have an amount of such funds
available for reallotment under paragraph (2) for the program
year for which the determination under paragraph (2) is made;
and
``(B) with respect to funds allotted under subsection
(b)(2)(B), a State that does not have an amount of such funds
available for reallotment under paragraph (2) for the program
year for which the determination under paragraph (2) is
made.''; and
(D) in paragraph (5), by striking ``obligation'' and
inserting ``accrued expenditure''.
(4) Effective date.--The amendments made by paragraph (3)
shall take effect for the later of--
(A) the program year that begins after the date of
enactment of this Act; or
(B) program year 2006.
(b) Within State Allocations.--
(1) Allocation.--Section 133(b)(2)(A)(i) (29 U.S.C.
2863(b)(2)(A)(i)) is amended--
(A) in subclause (I), by striking ``33\1/3\ percent'' and
inserting ``40 percent'';
(B) in subclause (II), by striking ``33\1/3\ percent'' and
inserting ``25 percent''; and
(C) in subclause (III), by striking ``33\1/3\ percent'' and
inserting ``35 percent''.
(2) Transfer authority.--Section 133(b)(4) (29 U.S.C.
2863(b)(4)) is amended by striking ``20 percent'' each place
it appears and inserting ``45 percent''.
(3) Requirements.--Clauses (i) and (ii) of section
133(b)(5)(B) (29 U.S.C. 2863(b)(5)(B)) are amended by
striking ``section 134(c)'' and inserting ``section 121(e)''.
(4) Reallocation.--Section 133(c) (29 U.S.C. 2863(c)) is
amended--
(A) in paragraph (1), by inserting ``, and under subsection
(b)(2)(B) for dislocated worker employment and training
activities,'' after ``activities'';
(B) by striking paragraph (2) and inserting the following:
``(2) Amount.--The amount available for reallocation for a
program year for programs funded under paragraphs (2)(A) and
(3) of subsection (b) (relating to adult employment and
training) and subsection (b)(2)(B) (relating to dislocated
worker employment and training), respectively, is equal to
the amount by which the unexpended balance at the end of the
program year prior to the program year for which the
determination is made exceeds 30 percent of the total amount
of funds available to the local area under paragraphs (2)(A)
and (3) of subsection (b), or subsection (b)(2)(B),
respectively, during such prior program year (including
amounts allocated to the local area in all prior program
years under such provisions that remained available). For
purposes of this paragraph, the unexpended balance is the
amount that is the difference between--
``(A) the total amount of funds available to the local area
under paragraphs (2)(A) and (3) of subsection (b), or
subsection (b)(2)(B), respectively, during the program year
prior to the program year for which the determination is made
(including amounts allotted to the local area in all prior
program years under such provisions that remained available);
and
``(B) the accrued expenditures from such total amount of
funds available under paragraphs (2)(A) and (3) of subsection
(b), or subsection (b)(2)(B), respectively, during such prior
program year.'';
(C) by striking paragraph (3) and inserting the following:
``(3) Reallocation.--In making reallocations to eligible
local areas of amounts available pursuant to paragraph (2)
for a program year, the Governor shall allocate to each
eligible local area within the State--
``(A) with respect to amounts that are available for
reallocation under paragraph (2) that were allocated under
paragraphs (2)(A) or (3) of subsection (b), an amount based
on the relative amount allocated to such local area under
paragraphs (2)(A) or (3) of subsection (b), as appropriate,
for the program year for which the determination is made, as
compared to the total amount allocated to all eligible local
areas under paragraphs (2)(A) or (3) of subsection (b), as
appropriate, for such program year; and
``(B) with respect to amounts that are available for
reallocation under paragraph (2) that were allocated under
subsection (b)(2)(B), an amount based on the relative amount
allocated to such local area under subsection (b)(2)(B) for
the program year for which the determination is made, as
compared to the total amount allocated to all eligible local
areas under subsection (b)(2)(B) for such program year.'';
and
(D) by striking paragraph (4) and inserting the following:
``(4) Eligibility.--For purposes of this subsection, an
eligible local area means--
``(A) with respect to funds allocated under paragraphs
(2)(A) or (3) of subsection (b), a local area that does not
have an amount of such funds available for reallocation under
paragraph (2) for the program year for which the
determination under paragraph (2) is made; and
``(B) with respect to funds allocated under subsection
(b)(2)(B), a local area that does not have an amount of such
funds available for reallocation under paragraph (2) for the
program year for which the determination under paragraph (2)
is made.''.
(5) Effective date.--The amendments made by paragraph (3)
shall take effect for the later of--
(A) the program year that begins after the date of
enactment of this Act; or
(B) program year 2006.
(c) Use of Funds for Employment and Training Activities.--
(1) Statewide employment and training activities.--
(A) Statewide rapid response activities.--Section
134(a)(2)(A) (29 U.S.C. 2864(a)(2)(A)) is amended to read as
follows:
``(A) Statewide rapid response activities.--
``(i) In general.--A State shall carry out statewide rapid
response activities using funds reserved by a Governor for a
State under section 133(a)(2). Such activities shall
include--
``(I) provision of rapid response activities, carried out
in local areas by the State or by an entity designated by the
State, working in conjunction with the local boards and the
chief elected officials for the local areas; and
``(II) provision of additional assistance to local areas
that experience disasters, mass layoffs, or plant closings,
or other events that precipitate substantial increases in the
number of unemployed individuals, carried out in local areas
by the State, working in conjunction with the local boards
and the chief elected officials for the local areas.
``(ii) Use of unexpended funds.--Funds reserved under
section 133(a)(2) to carry out this subparagraph that remain
unexpended after the first program year for which such funds
were allotted may be used by the Governor to carry out
statewide activities authorized under subparagraph (B) and
paragraph (3)(A) in addition to activities under this
subparagraph.''.
(B) Statewide employment and training activities.--Section
134(a)(2) (29 U.S.C. 2864(a)(2)) is amended by striking
subparagraph (B) and inserting the following:
``(B) Statewide employment and training activities.--Funds
reserved by a Governor for a State under sections 128(a)(1)
and 133(a)(1) and not used under paragraph (1)(A) (regardless
of whether the funds were allotted to the States under
section 127(b)(1)(C) or paragraphs (1)(B) or (2)(B) of
section 132(b)) shall be used for statewide employment and
training activities, including--
``(i) disseminating--
``(I) the State list of eligible providers of training
services, including eligible providers of nontraditional
training services and eligible providers of apprenticeship
programs described in section 122(a)(2)(B);
``(II) information identifying eligible providers of on-
the-job training, customized training, and incumbent worker
training;
``(III) information on effective business outreach,
partnerships, and services;
``(IV) performance information and information on costs of
attendance, as described in subsections (d) and (i) of
section 122; and
``(V) information on physical and programmatic
accessibility for individuals with disabilities;
``(ii) conducting evaluations under section 136(e) of
activities authorized under this chapter and chapter 5 in
coordination with evaluations carried out by the Secretary
under section 172;
``(iii) providing incentive grants to local areas, in
accordance with section 136(i);
``(iv) developing strategies for ensuring that activities
carried out under this section are placing men and women in
jobs, education, and training that lead to comparable pay;
``(v) providing technical assistance and capacity building
to local areas, one-stop operators, one-stop partners, and
eligible providers, including the development and training of
staff, the development of exemplary program activities, and
the provision of technical assistance to local areas that
fail to meet local performance measures described in section
136(c), which may include
[[Page S5127]]
the development and training of staff to provide
opportunities for hard-to-serve populations to enter high-
wage, high-skilled, and nontraditional occupations;
``(vi) operating a fiscal and management accountability
system under section 136(f); and
``(vii) carrying out monitoring and oversight of activities
carried out under this chapter and chapter 4.''.
(C) Allowable statewide employment and training
activities.--Section 134(a)(3)(A) (29 U.S.C. 2864(a)(3)(A) is
amended to read as follows:
``(A) In general.--Funds reserved by a Governor for a State
under sections 128(a)(1) and 133(a)(1) and not used under
paragraph (1)(A) or (2)(B) (regardless of whether the funds
were allotted to the State under section 127(b)(1)(C) or
paragraph (1)(B) or (2)(B) of section 132(b)) may be used to
carry out additional statewide employment and training
activities, which may include--
``(i) implementing innovative programs and strategies
designed to meet the needs of all businesses in the State,
including small businesses, which may include incumbent
worker training programs, sectoral and industry cluster
strategies and partnerships, including regional skills
alliances, career ladder programs, micro-enterprise and
entrepreneurial training and support programs, utilization of
effective business intermediaries, activities to improve
linkages between the one-stop delivery system in the State
and all employers (including small employers) in the State,
and other business services and strategies that better engage
employers in workforce investment activities and make the
workforce investment system more relevant to the needs of
State and local businesses, consistent with the objectives of
this title;
``(ii) developing strategies for effectively serving hard-
to-serve populations and for coordinating programs and
services among one-stop partners;
``(iii) implementing innovative programs for displaced
homemakers, which for purposes of this clause may include an
individual who is receiving public assistance and is within 2
years of exhausting lifetime eligibility under part A of
title IV of the Social Security Act (42 U.S.C. 601 et seq.);
``(iv) implementing programs to increase the number of
individuals training for and placed in nontraditional
employment;
``(v) carrying out activities to facilitate remote access
to services, including training services described in
subsection (d)(4), provided through a one-stop delivery
system, including facilitating access through the use of
technology;
``(vi) supporting the provision of core services described
in subsection (d)(2) in the one-stop delivery system in the
State;
``(vii) coordinating with the child welfare system to
facilitate services for children in foster care and those who
are eligible for assistance under section 477 of the Social
Security Act (42 U.S.C. 677);
``(viii) activities--
``(I) to improve coordination between workforce investment
activities carried out within the State involved and economic
development activities, and to promote entrepreneurial skills
training and microenterprise services;
``(II) to improve coordination between employment and
training assistance, child support services, and assistance
provided by State and local agencies carrying out part D of
title IV of the Social Security Act (42 U.S.C. 651 et seq.);
``(III) to improve coordination between employment and
training assistance and cooperative extension programs
carried out by the Department of Agriculture;
``(IV) to improve coordination between employment and
training assistance and programs carried out in the local
area for individuals with disabilities, including programs
carried out by State agencies relating to mental retardation
and developmental disabilities, Statewide Independent Living
Councils established under section 705 of the Rehabilitation
Act of 1973 (29 U.S.C. 796d), and centers for independent
living defined in section 702 of the Rehabilitation Act of
1973 (29 U.S.C. 796a);
``(V) to develop and disseminate workforce and labor market
information;
``(VI) to improve coordination with the corrections system
to facilitate provision of training services and employment
opportunities that will assist ex-offenders in reentering the
workforce; and
``(VII) to promote financial literacy, including carrying
out activities described in section 129(b)(1)(I);
``(ix) conducting--
``(I) research; and
``(II) demonstration projects; and
``(x) adopting, calculating, or commissioning a minimum
self-sufficiency standard that specifies the income needs of
families, by family size, the number and ages of children in
the family, and sub-State geographical considerations.''.
(2) Required local employment and training activities.--
(A) Allocated funds.--Section 134(d)(1)(A) (29 U.S.C.
2864(d)(1)(A)) is amended--
(i) in clause (i), by striking ``described in subsection
(c)'';
(ii) in clause (iii), by striking ``and'' at the end;
(iii) in clause (iv), by striking the period and inserting
a semicolon; and
(iv) by adding at the end the following:
``(v) to designate a dedicated business liaison in the
local area who may be funded with funds provided under this
title or from other sources to establish and develop
relationships and networks with large and small employers and
their intermediaries; and
``(vi) in order to improve service delivery to avoid
duplication of services and enhance coordination of services,
to require the colocation of employment services provided
under the Wagner-Peyser Act (29 U.S.C. 49 et seq.) at the
one-stop centers.''.
(B) Core services.--Section 134(d)(2) (29 U.S.C.
2864(d)(2)) is amended--
(i) in the matter preceding subparagraph (A), by striking
``paragraph (1)(A)'' and inserting ``paragraph (1)'';
(ii) in subparagraph (C), by inserting ``(including
literacy, numeracy, and English language proficiency)'' after
``skill levels'';
(iii) by striking subparagraph (D) and inserting the
following:
``(D) labor exchange services, including--
``(i) job search and placement assistance and, in
appropriate cases, career counseling, including--
``(I) exposure to high wage, high skill jobs; and
``(II) nontraditional employment; and
``(ii) appropriate recruitment and other business services
for all employers, including small employers, in the local
area, which may include services described in this
subsection, including information and referral to specialized
business services not traditionally offered through the one-
stop delivery system;'';
(iv) in subparagraph (E)(iii)--
(I) by inserting ``, career ladders,'' after ``earnings'';
and
(II) by striking ``and'' at the end;
(v) in subparagraph (F)--
(I) by striking ``and program cost information''; and
(II) by striking ``described in section 123'';
(vi) by striking subparagraph (H) and inserting the
following:
``(H) provision of accurate information, in formats that
are usable and understandable to all one-stop center
customers, relating to the availability of supportive
services or assistance, including child care, child support,
medical or child health assistance under title XIX or XXI of
the Social Security Act (42 U.S.C. 1396 et seq. and 1397aa et
seq.), benefits under the Food Stamp Act of 1977 (7 U.S.C.
2011 et seq.), the earned income tax credit under section 32
of the Internal Revenue Code of 1986, and assistance under a
State program funded under part A of title IV of the Social
Security Act (42 U.S.C. 601 et seq.) and other supportive
services and transportation provided through funds made
available under such part, available in the local area, and
referral to such services or assistance as appropriate;'';
and
(vii) in subparagraph (J), by striking
``for--'' and all that follows through ``(ii) programs'' and
inserting ``for programs''.
(C) Intensive services.--Section 134(d)(3) (29 U.S.C.
2864(d)(3)) is amended--
(i) by striking subparagraph (A) and inserting the
following:
``(A) In general.--
``(i) Eligibility.--Except as provided in clause (ii),
funds allocated to a local area for adults under paragraph
(2)(A) or (3), as appropriate, of section 133(b), and funds
allocated to the local area for dislocated workers under
section 133(b)(2)(B), shall be used to provide intensive
services to adults and dislocated workers, respectively--
``(I) who are unemployed and who, after an interview,
evaluation, or assessment, have been determined by a one-stop
operator or one-stop partner to be--
``(aa) unlikely or unable to obtain employment, that leads
to self-sufficiency or wages comparable to or higher than
previous employment, through core services described in
paragraph (2); and
``(bb) in need of intensive services to obtain employment
that leads to self-sufficiency or wages comparable to or
higher than previous employment; or
``(II) who are employed, but who, after an interview,
evaluation, or assessment are determined by a one-stop
operator or one-stop partner to be in need of intensive
services to obtain or retain employment that leads to self-
sufficiency.
``(ii) Special rule.--A new interview, evaluation, or
assessment of a participant is not required under clause (i)
if the one-stop operator or one-stop partner determines that
it is appropriate to use a recent assessment of the
participant conducted pursuant to another education or
training program.''; and
(ii) in subparagraph (C)--
(I) in clause (v), by striking ``for participants seeking
training services under paragraph (4)''; and
(II) by adding at the end the following:
``(vii) Internships and work experience.
``(viii) Literacy activities relating to basic work
readiness.
``(ix) Financial literacy services, such as activities
described in section 129(b)(1)(I).
``(x) Out-of-area job search assistance and relocation
assistance.
``(xi) English language acquisition and integrated training
programs.''.
(D) Training services.--Section 134(d)(4) (29 U.S.C.
2864(d)(4)) is amended--
(i) by striking subparagraph (A) and inserting the
following:
``(A) In general.--
``(i) Eligibility.--Except as provided in clause (ii),
funds allocated to a local area for adults under paragraph
(2)(A) or (3), as appropriate, of section 133(b), and funds
allocated to the local area for dislocated workers under
section 133(b)(2)(B), shall be used to
[[Page S5128]]
provide training services to adults and dislocated workers,
respectively--
``(I) who, after an interview, evaluation, or assessment,
and case management, have been determined by a one-stop
operator or one-stop partner, as appropriate, to--
``(aa) be unlikely or unable to obtain or retain
employment, that leads to self-sufficiency or wages
comparable to or higher than previous employment, through the
intensive services described in paragraph (3);
``(bb) be in need of training services to obtain or retain
employment that leads to self-sufficiency or wages comparable
to or higher than previous employment; and
``(cc) have the skills and qualifications to successfully
participate in the selected program of training services;
``(II) who select programs of training services that are
directly linked to the employment opportunities in the local
area or region involved or in another area to which the
adults or dislocated workers are willing to commute or
relocate;
``(III) who meet the requirements of subparagraph (B); and
``(IV) who are determined to be eligible in accordance with
the priority system in effect under subparagraph (E).
``(ii) Special rule.--A new interview, evaluation, or
assessment of a participant is not required under clause (i)
if the one-stop operator or one-stop partner determines that
it is appropriate to use a recent assessment of the
participant conducted pursuant to another education or
training program.'';
(ii) in subparagraph (B)(i), by striking ``Except'' and
inserting ``Notwithstanding section 479B of the Higher
Education Act of 1965 (20 U.S.C. 1087uu) and except'';
(iii) in subparagraph (D)--
(I) in clause (viii), by striking ``and'' after the
semicolon;
(II) in clause (ix), by striking the period and inserting
``; and''; and
(III) by adding at the end the following:
``(x) English language acquisition and integrated training
programs.'';
(iv) in subparagraph (F)--
(I) in clause (ii), by striking ``referred to in subsection
(c), shall make available--'' and all that follows and
inserting ``shall make available a list of eligible providers
of training services, and accompanying information, in
accordance with section 122(d).'';
(II) in the heading of clause (iii), by striking
``Individual training accounts'' and inserting ``Career
scholarship accounts'';
(III) in clause (iii)--
(aa) by striking ``identifying information'' and inserting
``accompanying information'';
(bb) by striking ``clause (ii)(I)'' and inserting ``clause
(ii)''; and
(cc) by striking ``an individual training account'' and
inserting ``a career scholarship account''; and
(IV) by adding at the end the following:
``(iv) Coordination.--Each local board may, through one-
stop centers, coordinate career scholarship accounts with
other Federal, State, local, or private job training programs
or sources to assist the individual in obtaining training
services.''; and
(v) in subparagraph (G)--
(I) in the subparagraph heading, by striking ``individual
training accounts'' and inserting ``career scholarship
accounts'';
(II) in clause (i), by striking ``individual training
accounts'' and inserting ``career scholarship accounts'';
(III) in clause (ii)--
(aa) by striking ``an individual training account'' and
inserting ``a career scholarship account'';
(bb) in subclause (II), by striking ``individual training
accounts'' and inserting ``career scholarship accounts'';
(cc) in subclause (II) by striking ``or'' after the
semicolon;
(dd) in subclause (III), by striking ``special participant
populations that face multiple barriers to employment'' and
inserting ``hard-to-serve populations'';
(ee) in subclause (III), by striking the period and
inserting '``; or''; and
(ff) by adding at the end the following:
``(IV) the local board determines that it would be most
appropriate to award a contract to an institution of higher
education in order to facilitate the training of multiple
individuals in high-demand occupations, if such contract does
not limit customer choice.''; and
(IV) in clause (iv)--
(aa) by redesignating subclause (IV) as subclause (V); and
(bb) by inserting after subclause (III) the following:
``(IV) Individuals with disabilities.''.
(3) Permissible activities.--Section 134(e) (29 U.S.C.
2864(e)) is amended--
(A) by striking the matter preceding paragraph (2) and
inserting the following:
``(e) Permissible Local Employment and Training
Activities.--
``(1) In general.--
``(A) Activities.--Funds allocated to a local area for
adults under paragraph (2)(A) or (3), as appropriate, of
section 133(b), and funds allocated to the local area for
dislocated workers under section 133(b)(2)(B), may be used to
provide, through the one-stop delivery system involved--
``(i) customized screening and referral of qualified
participants in training services described in subsection
(d)(4) to employment;
``(ii) customized employment-related services to employers
on a fee-for-service basis;
``(iii) customer support to enable members of hard-to-serve
populations, including individuals with disabilities, to
navigate among multiple services and activities for such
populations;
``(iv) technical assistance and capacity building for
serving individuals with disabilities in local areas, for
one-stop operators, one-stop partners, and eligible
providers, including the development and training of staff,
the provision of outreach, intake, assessments, and service
delivery, and the development of performance measures;
``(v) employment and training assistance provided in
coordination with child support enforcement activities of the
State and local agencies carrying out part D of title IV of
the Social Security Act (42 U.S.C. 651 et seq.);
``(vi) activities to improve coordination between
employment and training assistance, child support services,
and assistance provided by State and local agencies carrying
out part D of title IV of the Social Security Act (42 U.S.C.
651 et seq.);
``(vii) activities to improve coordination between
employment and training assistance and cooperative extension
programs carried out by the Department of Agriculture;
``(viii) activities to facilitate remote access to services
provided through a one-stop delivery system, including
facilitating access through the use of technology;
``(ix) activities--
``(I) to improve coordination between workforce investment
activities carried out within the local area involved and
economic development activities, and to promote
entrepreneurial skills training and microenterprise services;
and
``(II) to improve services and linkages between the local
workforce investment system including the local one-stop
delivery system, and all employers, including small employers
in the local area, through services described in this
section, including subparagraph (B);
``(x) training programs for displaced homemakers and for
individuals training for nontraditional occupations, in
conjunction with programs operated in the local area;
``(xi) using a portion of the funds allocated under section
133(b), activities to carry out business services and
strategies that meet the workforce investment needs of local
area employers, as determined by the local board, consistent
with the local plan under section 118, which services--
``(I) may be provided through effective business
intermediaries working in conjunction with the local board,
and may also be provided on a fee-for-service basis or
through the leveraging of economic development and other
resources as determined appropriate by the local board; and
``(II) may include--
``(aa) identifying and disseminating to business,
educators, and job seekers, information related to the
workforce, economic and community development needs, and
opportunities of the local economy;
``(bb) development and delivery of innovative workforce
investment services and strategies for area businesses, which
may include sectoral, industry cluster, regional skills
alliances, career ladder, skills upgrading, skill standard
development and certification, apprenticeship, and other
effective initiatives for meeting the workforce investment
needs of area employers and workers;
``(cc) participation in seminars and classes offered in
partnership with relevant organizations focusing on the
workforce-related needs of area employers and job seekers;
``(dd) training consulting, needs analysis, and brokering
services for area businesses, including the organization and
aggregation of training (which may be paid for with funds
other than those provided under this title), for individual
employers and coalitions of employers with similar interests,
products, or workforce needs;
``(ee) assistance to area employers in the aversion of
layoffs and in managing reductions in force in coordination
with rapid response activities;
``(ff) the marketing of business services offered under
this title, to appropriate area employers, including small
and mid-sized employers;
``(gg) information referral on concerns affecting local
employers; and
``(hh) other business services and strategies designed to
better engage employers in workforce investment activities
and to make the workforce investment system more relevant to
the workforce investment needs of area businesses, as
determined by the local board to be consistent with the
objectives of this title;
``(xii) activities to adjust the self-sufficiency standards
for local factors, or activities to adopt, calculate, or
commission a self-sufficiency standard that specifies the
income needs of families, by family size, the number and ages
of children in the family, and sub-State geographical
considerations; and
``(xiii) improved coordination between employment and
training assistance and programs carried out in the local
area for individuals with disabilities, including programs
carried out by State agencies relating to mental retardation
and developmental disabilities, Statewide Independent Living
Councils established under section 705 of the Rehabilitation
Act of 1973 (29 U.S.C. 796d), and centers for independent
living defined in section 702 of the Rehabilitation Act of
1973 (29 U.S.C. 796a).
``(B) Work support activities for low-wage workers.--
``(i) In general.--Funds allocated to a local area for
adults under paragraph (2)(A) or (3), as appropriate, of
section 133(b), and
[[Page S5129]]
funds allocated to the local area for dislocated workers
under section 133(b)(2)(B), may be used to provide, through
the one-stop delivery system involved, work support
activities designed to assist low-wage workers in retaining
and enhancing employment. The one-stop partners shall
coordinate the appropriate programs and resources of the
partners with the activities and resources provided under
this subparagraph.
``(ii) Activities.--The activities described in clause (i)
may include the provision of activities described in this
section through the one-stop delivery system in a manner that
enhances the opportunities of such workers to participate in
the activities, such as the provision of activities described
in this section during nontraditional hours and the provision
of onsite child care while such activities are being
provided.'';
(B) in paragraph (2), by striking the matter preceding
subparagraph (A) and inserting the following:
``(2) Supportive services.--Funds allocated to a local area
for adults under paragraph (2)(A) or (3), as appropriate, of
section 133(b), and funds allocated to the local area for
dislocated workers under section 133(b)(2)(B), may be used to
provide supportive services to adults and dislocated workers,
respectively--''; and
(C) by adding at the end the following:
``(4) Incumbent worker training programs.--
``(A) In general.--The local board may use up to 10 percent
of the funds allocated to the local area involved under
section 133(b) to pay for the Federal share of the cost of
providing training through an incumbent worker training
program carried out in accordance with this paragraph. The
Governor or State board may make recommendations to the local
board regarding incumbent worker training with statewide
impact.
``(B) Training activities.--The training program for
incumbent workers carried out under this paragraph shall be
carried out by the local board in conjunction with the
employers or groups of employers of such workers for the
purpose of assisting such workers in obtaining the skills
necessary to retain employment or avert layoffs.
``(C) Employer share required.--
``(i) In general.--Employers participating in the program
carried out under this paragraph shall be required to pay the
non-Federal share of the costs of providing the training to
incumbent workers of the employers. The local board shall
establish the non-Federal share of such costs, which may
include in-kind contributions. The non-Federal share shall
not be less than--
``(I) 10 percent of the costs, for employers with 50 or
fewer employees;
``(II) 25 percent of the costs, for employers with more
than 50 employees but fewer than 100 employees; and
``(III) 50 percent of the costs, for employers with 100 or
more employees.
``(ii) Calculation of employer share.--The non-Federal
share paid by such an employer may include the amount of the
wages paid by the employer to a worker while the worker is
attending a training program under this paragraph.''.
SEC. 122. PERFORMANCE ACCOUNTABILITY SYSTEM.
(a) State Performance Measures.--
(1) Indicators of performance.--Section 136(b)(2)(A) (29
U.S.C. 2871(b)(2)(A)) is amended--
(A) in clause (i)--
(i) in the matter preceding subclause (I), by striking
``and (for participants who are eligible youth age 19 through
21) for youth activities authorized under section 129'';
(ii) by striking subclause (III) and inserting the
following:
``(III) increases in earnings from unsubsidized employment;
and''; and
(iii) in subclause (IV), by striking ``, or by
participants'' and all that follows through ``unsubsidized
employment''; and
(B) by striking clause (ii) and inserting the following:
``(ii) Core indicators for eligible youth.--The core
indicators of performance for youth activities authorized
under section 129 shall consist of--
``(I) entry into employment, education or advanced
training, or military service;
``(II) school retention, and attainment of secondary school
diplomas or their recognized equivalents and of postsecondary
certificates; and
``(III) literacy or numeracy gains.''.
(2) Additional indicators.--Section 136(b)(2)(C) (29 U.S.C.
2871(b)(2)(C)) is amended to read as follows:
``(C) Additional indicators.--A State may identify in the
State plan additional indicators for workforce investment
activities under this subtitle, including indicators
identified in collaboration with State business and industry
associations, with employee representatives where applicable,
and with local boards, to measure the performance of the
workforce investment system in serving the workforce needs of
business and industry in the State.''.
(3) Levels of performance.--Section 136(b)(3)(A) (29 U.S.C.
2871(b)(3)(A)) is amended--
(A) in clause (iii)--
(i) in the heading, by striking ``for first 3 years'';
(ii) by striking ``and the customer satisfaction indicator
of performance, for the first 3'' and inserting ``described
in clauses (i) and (ii) of paragraph (2)(A) and the customer
satisfaction indicator of performance, for the first 2''; and
(iii) by inserting at the end the following: ``Agreements
on levels of performance for each of the core indicators of
performance for the third and fourth program years covered by
the State plan shall be reached prior to the beginning of the
third program year covered by the State plan, and
incorporated as a modification to the State plan.'';
(B) in clause (iv)--
(i) in the matter preceding subclause (I), by striking ``or
(v)'';
(ii) in subclause (II)--
(I) by striking ``taking into account'' and inserting ``and
shall ensure that the levels involved are adjusted, using
objective statistical methods, based on'';
(II) by inserting ``(such as differences in unemployment
rates and job losses or gains in particular industries)''
after ``economic conditions'';
(III) by inserting ``(such as indicators of poor work
history, lack of work experience, lack of educational or
occupational skills attainment, dislocation from high-wage
and benefit employment, low levels of literacy or English
proficiency, disability status, homelessness, ex-offender
status, and welfare dependency)'' after ``program''; and
(IV) by striking ``and'' at the end;
(iii) in subclause (III), by striking the period and
inserting ``; and''; and
(iv) by adding at the end the following:
``(IV) the extent to which the levels involved will assist
the State in meeting the national goals described in clause
(v).'';
(C) by striking clause (v) and inserting the following:
``(v) Establishment of national goals.--In order to promote
enhanced performance outcomes on the performance measures and
to facilitate the process of reaching agreements with the
States under clause (iii) and to measure systemwide
performance for the one-stop delivery systems of the States,
the Secretary shall establish long-term national goals for
the adjusted levels of performance for that systemwide
performance to be achieved by the programs assisted under
chapters 4 and 5 on the core indicators of performance
described in subparagraphs (A) and (B) of subsection (b)(2).
Such goals shall be established in accordance with the
Government Performance and Results Act of 1993 in
consultation with the States and other appropriate
parties.''; and
(D) in clause (vi)--
(i) by striking ``or (v)''; and
(ii) by striking ``with the representatives described in
subsection (i)'' and inserting ``with the States and other
interested parties''.
(b) Local Performance Measures.--Section 136(c)(3) (29
U.S.C. 2871(c)(3))--
(1) by striking ``shall take into account'' and inserting
``shall ensure that the levels involved are adjusted, using
objective statistical methods, based on'';
(2) by inserting ``(characteristics such as unemployment
rates and job losses or gains in particular industries)''
after ``economic''; and
(3) by inserting ``(characteristics such as indicators of
poor work history, lack of work experience, lack of
educational and occupational skills attainment, dislocation
from high-wage and benefit employment, low levels of literacy
or English proficiency, disability status, homelessness, ex-
offender status, and welfare dependency)'' after
``demographic''.
(c) Report.--Section 136(d) (29 U.S.C. 2871(d)) is
amended--
(1) in paragraph (1), by adding at the end the following:
``In the case of a State or local area that chooses to expend
funds for activities under subsection (a)(3)(A)(i) or
(e)(1)(A)(xi), respectively, of section 134, the report also
shall include the amount of such funds so expended and the
percentage that such funds are of the funds available for
activities under section 134.'';
(2) in paragraph (2)--
(A) in subparagraph (E)--
(i) by striking ``(excluding participants who received only
self-service and informational activities)''; and
(ii) by striking ``and'' after the semicolon;
(B) in subparagraph (F)--
(i) by inserting ``noncustodial parents with child support
obligations, homeless individuals,'' after ``displaced
homemakers,''; and
(ii) by striking the period and inserting a semicolon; and
(C) by adding at the end the following:
``(G) the number of participants who have received
services, other than followup services, authorized under this
title;
``(H) the number of participants who have received
services, other than followup services, authorized under this
title, in the form of core services described in section
134(d)(2), intensive services described in section 134(d)(3),
and training services described in section 134(d)(4),
respectively;
``(I) the number of participants who have received followup
services authorized under this title;
``(J) the cost per participant for services authorized
under this title; and
``(K) the amount of adult and dislocated worker funds spent
on--
``(i) core, intensive, and training services, respectively;
and
``(ii) services provided under subsection (a)(3)(A)(i) or
(e)(1)(A)(xi) of section 134, if applicable.''; and
(3) by adding at the end the following:
``(4) Data validation.--In preparing the reports described
in this subsection, the States shall establish procedures,
consistent with guidelines issued by the Secretary, to
[[Page S5130]]
ensure that the information contained in the reports is valid
and reliable.''.
(d) Evaluation of State Programs.--Section 136(e)(3) is
amended by inserting ``, including information on promoting
self-sufficiency and comparable pay between men and women''
after ``employers''.
(e) Sanctions for State.--Section 136(g) is amended--
(1) in paragraph (1)(B), by striking ``If such failure
continues for a second consecutive year'' and inserting ``If
a State performs at less than 80 percent of the adjusted
level of performance for core indicators of performance
described in subsection (b)(2)(A) for 2 consecutive years'';
and
(2) in paragraph (2), by striking ``section 503'' and
inserting ``subsection (i)(1)''.
(f) Sanctions for Local Area.--Section 136(h)(2)(A) (29
U.S.C. 2871(h)(2)(A)) is amended--
(1) in the matter preceding clause (i), by striking ``If
such failure continues for a second consecutive year'' and
inserting ``If a local area performs at less than 80 percent
of the adjusted level of performance for core indicators of
performance described in subsection (b)(2)(A) for 2
consecutive years'';
(2) in clause (ii), by striking ``or'' after the semicolon;
(3) by redesignating clause (iii) as clause (iv); and
(4) by inserting after clause (ii) the following:
``(iii) redesignate the local area in accordance with
section 116(b)(2); or''.
(g) Incentive Grants.--Section 136(i) (29 U.S.C. 2871(i))
is amended to read as follows:
``(i) Incentive Grants for Local Areas.--
``(1) In general.--From funds reserved under sections
128(a) and 133(a)(1), the Governor involved shall award
incentive grants to local areas for performance described in
paragraph (2) in carrying out programs under chapters 4 and
5.
``(2) Basis.--The Governor shall award the grants on the
basis that the local areas--
``(A) have exceeded the performance measures established
under subsection (c)(2) relating to indicators described in
subsection (b)(3)(A)(iii); or
``(B) have--
``(i) met the performance measures established under
subsection (c)(2) relating to indicators described in
subsection (b)(3)(A)(iii); and
``(ii) demonstrated--
``(I) exemplary coordination of Federal workforce and
education programs, statewide economic development, or
business needs;
``(II) exemplary performance in the State in serving hard-
to-serve populations; or
``(III) effective--
``(aa) coordination of multiple systems into a
comprehensive workforce investment system, including
coordination of employment services under the Wagner-Peyser
Act (29 U.S.C. 49 et seq.) and core activities under this
title as well as one-stop partner programs described in
section 121;
``(bb) expansion of access to training, including through
increased leveraging of resources other than those funded
through programs under this title;
``(cc) implementation of coordination activities through
agreements with relevant regional or local agencies and
offices, including those responsible for programs under the
Adult Education and Family Literacy Act (20 U.S.C. 9201 et
seq.) and the Rehabilitation Act of 1973 (29 U.S.C. 701 et
seq.);
``(dd) regional coordination with other local workforce
investment boards or areas;
``(ee) alignment of management information systems to
integrate participant information across programs; or
``(ff) integration of performance information systems and
common measures for accountability across workforce and
education programs.
``(3) Use of Funds.--The funds awarded to a local area
under this subsection may be used to carry out activities
authorized for local areas and such innovative projects or
programs that increase coordination and enhance service to
program participants, particularly hard-to-serve populations,
as may be approved by the Governor, including--
``(A) activities that support business needs, especially
for incumbent workers and enhancing opportunities for
retention and advancement;
``(B) activities that support linkages with secondary,
postsecondary, or career and technical education programs,
including activities under the Carl D. Perkins Vocational and
Technical Education Act of 1998 (20 U.S.C. 2301 et seq.), the
Adult Education and Family Literacy Act (20 U.S.C. 9201 et
seq.), and the Rehabilitation Act of 1973 (29 U.S.C. 701 et
seq.);
``(C) activities that support regional economic development
plans that support high-wage, high-skill, or high-demand
occupations leading to self-sufficiency;
``(D) activities that coordinate workforce investment
programs with other Federal and State programs related to the
activities under this Act;
``(E) activities that support the development of an
integrated performance information system that includes
common measures;
``(F) activities that align management information systems
with integrated performance information across education and
workforce programs;
``(G) activities that support activities to improve
performance and program coordination with other training
providers; or
``(H) activities that leverage additional training
resources for adults and youth.
``(4) Technical assistance.--The Governor shall reserve 4
percent of the funds available for grants under this
subsection to provide technical assistance to local areas to
replicate best practices or to develop integrated performance
information systems and strengthen coordination with
education and regional economic development.''.
(h) Use of Core Measures in Other Department of Labor
Programs.--Section 136 (29 U.S.C. 2871) is amended by adding
at the end the following:
``(j) Use of Core Indicators for Other Programs.--In
addition to the programs carried out under chapters 4 and 5,
and consistent with the requirements of the applicable
authorizing laws, the Secretary shall use the indicators of
performance described in subparagraphs (A) and (B) of
subsection (b)(2) to assess the effectiveness of the programs
described in clauses (i), (ii), and (vi) of section
121(b)(1)(B) that are carried out by the Secretary.''.
(i) Previous Definitions of Core Indicators.--Section 502
(29 U.S.C. 9272) is repealed.
SEC. 123. AUTHORIZATION OF APPROPRIATIONS.
(a) Youth Activities.--Section 137(a) (29 U.S.C. 2872(a))
is amended by striking ``such sums as may be necessary for
each of fiscal years 1999 through 2003'' and inserting ``such
sums as may be necessary for each of fiscal years 2006
through 2011''.
(b) Adult Employment and Training Activities.--Section
137(b) (29 U.S.C. 2872(b)) is amended by striking ``such sums
as may be necessary for each of fiscal years 1999 through
2003'' and inserting ``such sums as may be necessary for each
of fiscal years 2006 through 2011''.
(c) Dislocated Worker Employment and Training Activities.--
Section 137(c) (29 U.S.C. 2872(c)) is amended by striking
``such sums as may be necessary for each of fiscal years 1999
through 2003'' and inserting ``such sums as may be necessary
for each of fiscal years 2006 through 2011''.
Subtitle C--Job Corps
SEC. 131. JOB CORPS.
(a) Eligibility.--Section 144(3) (29 U.S.C. 2884(3)) is
amended by adding at the end the following:
``(F) A child eligible for assistance under section 477 of
the Social Security Act (42 U.S.C. 677).''.
(b) Implementation of Standards and Procedures.--Section
145(a)(3) (29 U.S.C. 2885(a)(3)) is amended--
(1) in subparagraph (B), by striking ``and'' after the
semicolon;
(2) in subparagraph (C), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following:
``(D) child welfare agencies that are responsible for
children in foster care and children eligible for assistance
under section 477 of the Social Security Act (42 U.S.C.
677).''.
(c) Industry Councils.--Section 154(b) (29 U.S.C. 2894(b))
is amended--
(1) in paragraph (1)(A), by striking ``local and distant'';
and
(2) by adding at the end the following:
``(3) Employers outside of local area.--The industry
council may include, or otherwise provide for consultation
with, employers from outside the local area who are likely to
hire a significant number of enrollees from the Job Corps
center.
``(4) Special rule for single local area states.--In the
case of a single local area State designated under section
116(b), the industry council shall include a representative
of the State Board.''.
(d) Indicators of Performance.--Section 159 (29 U.S.C.
2899) is amended--
(1) in subsection (c)--
(A) by striking paragraph (1) and inserting the following:
``(1) Performance indicators.--The Secretary shall annually
establish expected levels of performance for Job Corps
centers and the Job Corps program relating to each of the
core indicators of performance for youth activities
identified in section 136(b)(2)(A)(ii).'';
(B) in paragraph (2), by striking ``measures'' each place
it appears and inserting ``indicators''; and
(C) in paragraph (3)--
(i) in the first sentence, by striking ``core performance
measures, as compared to the expected performance level for
each performance measure'' and inserting ``performance
indicators described in paragraph (1), as compared to the
expected level of performance established under paragraph (1)
for each performance measure''; and
(ii) in the second sentence, by striking ``measures'' each
place it appears and inserting ``indicators''; and
(2) in subsection (f)(2), in the first sentence, by
striking ``core performance measures'' and inserting
``indicators of performance''.
(e) Authorization of Appropriations.--Section 161 (29
U.S.C. 2901) is amended by striking ``1999 through 2003'' and
inserting ``2006 through 2011''.
Subtitle D--National Programs
SEC. 141. NATIVE AMERICAN PROGRAMS.
(a) Advisory Council.--Section 166(h)(4)(C) (29 U.S.C.
2911(h)(4)(C)) is amended to read as follows:
``(C) Duties.--The Council shall advise the Secretary on
the operation and administration of the programs assisted
under this section, including the selection of the individual
appointed as head of the unit established under paragraph
(1).''.
[[Page S5131]]
(b) Assistance to Unique Populations in Alaska and
Hawaii.--Section 166(j) (29 U.S.C. 2911(j)) is amended to
read as follows:
``(j) Assistance to Unique Populations in Alaska and
Hawaii.--
``(1) In general.--Notwithstanding any other provision of
law, the Secretary is authorized to provide assistance to the
Cook Inlet Tribal Council, Incorporated, and the University
of Hawaii at Maui, for the unique populations who reside in
Alaska or Hawaii, to improve job training and workforce
investment activities.
``(2) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
such sums as may be necessary for fiscal year 2006.''.
(c) Performance Indicators.--Section 166 (29 U.S.C. 2911)
is amended by adding at the end the following:
``(k) Performance Indicators.--
``(1) Development of indicators.--The Secretary, in
consultation with the Native American Employment and Training
Council, shall develop a set of performance indicators and
standards which shall be applicable to programs under this
section.
``(2) Special considerations.--Such performance indicators
and standards shall take into account--
``(A) the purpose of this section as described in
subsection (a)(1);
``(B) the needs of the groups served by this section,
including the differences in needs among such groups in
various geographic service areas; and
``(C) the economic circumstances of the communities served,
including differences in circumstances among various
geographic service areas.''.
SEC. 142. MIGRANT AND SEASONAL FARMWORKER PROGRAMS.
Section 167 (29 U.S.C. 2912) is amended--
(1) in subsection (a), by striking ``2'' and inserting ``2
to 4'';
(2) in subsection (b), by inserting ``and deliver'' after
``administer'';
(3) in subsection (c)--
(A) in paragraph (1), by striking ``2-year'' and inserting
``4-year'';
(B) in paragraph (2)--
(i) in subparagraph (A)--
(I) by inserting ``describe the population to be served
and'' before ``identify''; and
(II) by inserting ``, including upgraded employment in
agriculture'' before the semicolon;
(ii) in subparagraph (B), by striking ``and'' at the end;
(iii) in subparagraph (C), by striking the period and
inserting a semicolon; and
(iv) by adding at the end the following:
``(D) describe the availability and accessibility of local
resources such as supportive services, services provided
through one-stop delivery systems, and education and training
services, and how the resources can be made available to the
population to be served; and
``(E) describe the plan for providing services under this
section, including strategies and systems for outreach, case
management, assessment, and delivery through one-stop
delivery systems.''; and
(C) by striking paragraph (4) and inserting the following:
``(4) Competition.--The competition for grants made and
contracts entered into under this section shall be conducted
every 2 to 4 years.'';
(4) in subsection (d), by striking ``include'' and all that
follows and inserting ``include outreach, employment,
training, educational assistance, literary assistance,
English language and literacy instruction, pesticide and
worker safety training, housing (including permanent
housing), supportive services, school dropout prevention
activities, followup services for those individuals placed in
employment, self-employment and related business or micro-
enterprise development or education as needed by eligible
individuals and as identified pursuant to the plan required
by subsection (c), customized career and technical education
in occupations that will lead to higher wages, enhanced
benefits, and long-term employment in agriculture or another
area, and technical assistance to improve coordination of
services and implement best practices relating to service
delivery through one-stop delivery systems.'';
(5) in subsection (f), by striking ``take into account the
economic circumstances and demographics of eligible migrant
and seasonal farmworkers.'' and inserting ``are adjusted
based on the economic and demographic barriers to employment
of eligible migrant and seasonal farmworkers.'';
(6) in subsection (g), by striking ``(enacted by the Single
Audit Act of 1984)'';
(7) in subsection (h)--
(A) by striking paragraph (1) and inserting the following:
``(1) Dependent.--The term `dependent', used with respect
to an eligible migrant or seasonal farmworker, means an
individual who--
``(A) was claimed as a dependent on the farmworker's
Federal income tax return for the previous year;
``(B) is the spouse of the farmworker; or
``(C) is able to establish--
``(i) a relationship as the farmworker's--
``(I) biological or legally adopted child, grandchild, or
great-grandchild;
``(II) foster child;
``(III) stepchild;
``(IV) brother, sister, half-brother, half-sister,
stepbrother, or stepsister;
``(V) parent, grandparent, or other direct ancestor (but
not foster parent);
``(VI) stepfather or stepmother;
``(VII) uncle or aunt;
``(VIII) niece or nephew; or
``(IX) father-in-law, mother-in-law, son-in-law, daughter-
in-law, brother-in-law, or sister-in-law; and
``(ii) the receipt of over half of the individual's total
support from the farmworker's family during the eligibility
determination period for the farmworker.''; and
(B) in paragraph (4)(A)--
(i) by striking ``disadvantaged person'' and inserting
``low-income individual''; and
(ii) by inserting ``and who faces multiple barriers to
self-sufficiency'' before the semicolon;
(8) by redesignating subsection (h) as subsection (i); and
(9) by inserting before subsection (i) the following:
``(h) Funding Allocation.--From the funds appropriated and
made available to carry out this section, the Secretary shall
reserve not more than 1 percent for discretionary purposes,
such as providing technical assistance to eligible
entities.''
SEC. 143. VETERANS' WORKFORCE INVESTMENT PROGRAMS.
Section 168(a)(3) (29 U.S.C. 2913(a)(3)) is amended--
(1) in subparagraph (A), by inserting ``, including
services provided by one-stop operators and one-stop
partners'' before the semicolon; and
(2) in subparagraph (C), by striking ``section 134(c)'' and
inserting ``section 121(e)''.
SEC. 144. YOUTH CHALLENGE GRANTS.
Section 169 (29 U.S.C. 2914) is amended to read as follows:
``SEC. 169. YOUTH CHALLENGE GRANTS.
``(a) In General.--Of the amounts reserved by the Secretary
under section 127(b)(1)(A) for a fiscal year--
``(1) the Secretary shall use not less than 80 percent to
award competitive grants under subsection (b); and
``(2) the Secretary may use not more than 20 percent to
award competitive grants under subsection (c).
``(b) Competitive Grants to States and Local Areas.--
``(1) Establishment.--From the funds described in
subsection (a)(1), the Secretary shall award competitive
grants to eligible entities to carry out activities
authorized under this subsection to assist eligible youth in
acquiring the skills, credentials, and employment experience
necessary to achieve the performance outcomes for youth
described in section 136.
``(2) Eligible entity.--In this subsection, the term
`eligible entity' means--
``(A) a State or consortium of States;
``(B) a local board or consortium of local boards;
``(C) a recipient of a grant under section 166 (relating to
Native American programs); or
``(D) a public or private entity (including a consortium of
such entities) with expertise in the provision of youth
activities, applying in partnership with a local board or
consortium of local boards.
``(3) Applications.--To be eligible to receive a grant
under this subsection, an eligible entity shall submit an
application to the Secretary at such time, in such manner,
and containing such information as the Secretary may require,
including--
``(A) a description of the activities the eligible entity
will provide to eligible youth under this subsection, and how
the eligible entity will collaborate with State and local
workforce investment systems established under this title in
the provision of such activities;
``(B) a description of the programs of demonstrated
effectiveness on which the provision of the activities under
subparagraph (A) are based, and a description of how such
activities will expand the base of knowledge relating to the
provision of activities for youth;
``(C) a description of the State, local, and private
resources that will be leveraged to provide the activities
described under subparagraph (A) in addition to funds
provided under this subsection, and a description of the
extent of the involvement of employers in the activities;
``(D) the levels of performance the eligible entity expects
to achieve with respect to the indicators of performance for
youth specified in section 136(b)(2)(A)(ii); and
``(E) an assurance that the State board of each State in
which the proposed activities are to be carried out had the
opportunity to review the application, and including the
comments, if any, of the affected State boards on the
application, except that this subparagraph shall not apply to
an eligible entity described in paragraph (2)(C).
``(4) Factors for award.--
``(A) In general.--In awarding grants under this subsection
the Secretary shall consider--
``(i) the quality of the proposed activities;
``(ii) the goals to be achieved;
``(iii) the likelihood of successful implementation;
``(iv) the extent to which the proposed activities are
based on proven strategies or the extent to which the
proposed activities will expand the base of knowledge
relating to the provision of activities for eligible youth;
``(v) the extent of collaboration with the State and local
workforce investment systems in carrying out the proposed
activities;
``(vi) the extent of employer involvement in the proposed
activities;
``(vii) whether there are other Federal and non-Federal
funds available for similar activities to the proposed
activities, and the additional State, local, and private
resources
[[Page S5132]]
that will be provided to carry out the proposed activities;
``(viii) the quality of the proposed activities in meeting
the needs of the eligible youth to be served; and
``(ix) the extent to which the proposed activities will
expand on services provided under section 127.
``(B) Equitable geographic distribution.--In awarding
grants under this subsection the Secretary shall ensure an
equitable distribution of such grants across geographically
diverse areas.
``(5) Use of funds.--
``(A) In general.--An eligible entity that receives a grant
under this subsection shall use the grant funds to carry out
activities that are designed to assist youth in acquiring the
skills, credentials, and employment experience that are
necessary to succeed in the labor market, including the
activities identified in section 129.
``(B) Activities.--The activities carried out pursuant to
subparagraph (A) may include the following:
``(i) Training and internships for out-of-school youth in
sectors of the economy experiencing, or projected to
experience, high growth.
``(ii) Dropout prevention activities for in-school youth.
``(iii) Activities designed to assist special youth
populations, such as court-involved youth and youth with
disabilities.
``(iv) Activities combining remediation of academic skills,
work readiness training, and work experience, and including
linkages to postsecondary education, apprenticeships, and
career-ladder employment.
``(v) Activities, including work experience, paid
internships, and entrepreneurial training, in areas where
there is a migration of youth out of the areas.
``(C) Participant eligibility.--Youth who are 14 years of
age through 21 years of age, as of the time the eligibility
determination is made, may be eligible to participate in
activities carried out under this subsection.
``(6) Grant period.--The Secretary shall make a grant under
this subsection for a period of 2 years and may renew the
grant, if the eligible entity has performed successfully, for
a period of not more than 3 succeeding years.
``(7) Matching funds required.--The Secretary shall require
that an eligible entity that receives a grant under this
subsection provide non-Federal matching funds in an amount to
be determined by the Secretary that is not less than 10
percent of the cost of activities carried out under the
grant. The Secretary may require that such non-Federal
matching funds be provided in cash resources, noncash
resources, or a combination of cash and noncash resources.
``(8) Evaluation.--The Secretary shall reserve not more
than 3 percent of the funds described in subsection (a)(1) to
provide technical assistance to, and conduct evaluations of
(using appropriate techniques as described in section
172(c)), the projects funded under this subsection.
``(c) Competitive First Jobs for Youth.--
``(1) Eligible entity.--In this subsection, the term
`eligible entity' means a consortium that--
``(A) shall include--
``(i)(I) a State board; or
``(II) a local board; and
``(ii) a consortium of businesses, including small
businesses; and
``(B) may include 1 or more--
``(i) local educational agencies;
``(ii) institutions of higher education;
``(iii) business intermediaries;
``(iv) community-based organizations; or
``(v) apprenticeship programs.
``(2) Authorization.--From the funds described in
subsection (a)(2), the Secretary may award grants to eligible
entities to provide activities that will assist youth in
preparing for, entering, and retaining employment.
``(3) Applications.--To be eligible to receive a grant
under this subsection, an eligible entity shall submit an
application to the Secretary at such time, in such manner,
and containing such information as the Secretary may require,
including--
``(A) a description of the area to be served, including
information demonstrating that the area has--
``(i) high unemployment among individuals ages 16 through
21;
``(ii) high unemployment among youth who are individuals
with disabilities; or
``(iii) high job loss;
``(B) a description of the proposed program, including
activities, compensation, and expected outcomes;
``(C) an assurance that the participating employers in the
proposed program are located in the local area to be served,
and a demonstration of the commitment of the participating
employers to hire individuals who--
``(i) have successfully completed the program; or
``(ii) continue to work in the program;
``(D) demographic information about the targeted
populations to be served by the proposed program, including
gender, age, and race;
``(E) a description of how the proposed program will
address the barriers to employment of the targeted
populations;
``(F) a description of the manner in which the eligible
entity will evaluate the program; and
``(G) a description of the ability of the eligible entity
to carry out and expand the program after the expiration of
the grant period.
``(4) Equitable distribution to rural areas.--In awarding
grants under this subsection, the Secretary shall ensure an
equitable distribution of such grants to rural areas.
``(5) Use of funds.--
``(A) In general.--An eligible entity that receives a grant
under this subsection shall use the grant funds to carry
out--
``(i) activities that will assist youth in preparing for,
entering, and retaining employment, including the activities
described in section 129 for out-of-school youth;
``(ii) activities designed to strengthen academic skills
that would assist--
``(I) in-school participants to be successful in secondary
school and continue such participants' education; and
``(II) out-of-school youth to earn a high school diploma or
its recognized equivalent, or prepare for postsecondary
programs;
``(iii) activities designed to assist youth in economically
distressed areas;
``(iv) subsidized employment for not more than 9 months
that provides direct experience in a sector that has
opportunities for full-time employment;
``(v) career and academic advisement, activities to promote
financial literacy and the attainment of entrepreneurial
skills, and labor market information on high-skill, high-
wage, and nontraditional occupations; and
``(vi) such other activities as the Secretary determines
are appropriate to ensure that youth entering the workforce
have the skills needed by employers.
``(B) Participant eligibility.--An individual who is not
younger than 16 years of age and not older than 21 years of
age, as of the time the eligibility determination is made,
who face barriers to employment, including an individual who
is an individual with a disability, may be eligible to
participate in activities under this subsection.
``(6) Special rule.--An eligible entity that receives a
grant under this subsection shall coordinate activities with
the designated State agency (as defined in section 7 of the
Rehabilitation Act of 1973 (29 U.S.C. 705)) and other
appropriate State agencies in the State to be served.
``(7) Matching funds required.--The Secretary shall require
that an eligible entity that receives a grant under this
subsection provide non-Federal matching funds in an amount to
be determined by the Secretary that is not less than 10
percent of the cost of activities carried out under the
grant. The Secretary may require that such non-Federal
matching funds be provided in cash resources, noncash
resources, or a combination of cash and noncash resources.
``(8) Evaluations.--The Secretary may require that an
eligible entity that receives a grant under this subsection
participate in an evaluation of activities carried out under
this subsection, including an evaluation using the techniques
described in section 172(c).''.
SEC. 145. TECHNICAL ASSISTANCE.
Section 170 (29 U.S.C. 2915) is amended--
(1) in subsection (a)(1), by--
(A) inserting ``the training of staff providing rapid
response services, the training of other staff of recipients
of funds under this title, the training of members of State
boards and local boards, peer review activities under this
title,'' after ``localities,''; and
(B) striking ``from carrying out activities'' and all that
follows through the period and inserting ``to implement the
amendments made by the Workforce Investment Act Amendments of
2005.'';
(2) in subsection (a)(2), by adding at the end the
following: ``The Secretary shall also hire staff qualified to
provide the assistance described in paragraph (1).'';
(3) in subsection (b)(2), by striking the last sentence and
inserting ``Such projects shall be administered by the
Employment and Training Administration.''; and
(4) by adding at the end the following:
``(c) Best Practices Coordination.--The Secretary shall--
``(1) establish a system through which States may share
information regarding best practices with regard to the
operation of workforce investment activities under this Act;
``(2) evaluate and disseminate information regarding best
practices and identify knowledge gaps; and
``(3) commission research under section 171(c) to address
knowledge gaps identified under paragraph (2).''.
SEC. 146. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH, AND
MULTISTATE PROJECTS.
(a) Demonstration and Pilot Projects.--Section 171(b) (29
U.S.C. 2916(b)) is amended--
(1) in paragraph (1)--
(A) by striking ``Under a'' and inserting ``Consistent with
the priorities specified in the'';
(B) by striking subparagraphs (A) through (E) and inserting
the following:
``(A) projects that assist national employers in connecting
with the workforce investment system established under this
title in order to facilitate the recruitment and employment
of needed workers for career ladder jobs and to provide
information to such system on skills and occupations in
demand;
``(B) projects that promote the development of systems that
will improve the maximum effectiveness of programs carried
out under this title;
``(C) projects that focus on opportunities for employment
in industries and sectors of
[[Page S5133]]
industries that are experiencing, or are likely to
experience, high rates of growth and jobs with wages leading
to self-sufficiency;
``(D) computerized, individualized, self-paced training
projects targeted to dislocated, disadvantaged, or incumbent
workers utilizing equipment and curriculum designed in
partnership with industries for employment in the operations,
repair, and maintenance of high-tech equipment that is used
in integrated systems technology;
``(E) projects carried out by States and local areas to
test innovative approaches to delivering employment-related
services;'';
(C) in subparagraph (G), by striking ``and'' after the
semicolon; and
(D) by striking subparagraph (H) and inserting the
following:
``(H) projects that provide retention grants, which shall--
``(i) be made to qualified job training programs offering
instruction, assessment, or professional coaching, upon
placement of a low-income individual trained by the program
involved in employment with an employer and retention of the
low-income individual in that employment with that employer
for a period of 1 year, if that employment provides the low-
income individual with an annual salary--
``(I) that is at least $10,000 more than the individual's
federally adjusted income for the previous year; and
``(II) that is not less than twice the poverty line
applicable to the individual; and
``(ii) be made taking into account the economic benefit
received by the Federal Government from the employment and
retention of the individual, including the economic benefit
from tax revenue and decreased public subsidies;
``(I) targeted innovation projects that improve access to
and delivery of employment and training services, with
emphasis given to projects that incorporate advanced
technologies to facilitate the connection of individuals to
the information and tools the individuals need to upgrade
skills;
``(J) projects that promote the use of distance learning,
enabling students to take courses through the use of media
technology such as videos, teleconferencing computers, and
the Internet; and
``(K) projects that provide comprehensive education and
training services, and support services, in coordination with
local boards, for populations in targeted high poverty areas
where the greatest barriers to employment exist, including
ex-offenders, out-of-school youth, and public assistance
recipient populations.''; and
(2) in paragraph (2)--
(A) by striking subparagraph (B); and
(B) by redesignating subparagraph (C) as subparagraph (B).
(b) Multiservice Projects.--Section 171(c)(2)(B) (29 U.S.C.
2916(c)(2)(B)) is amended to read as follows:
``(B) Studies and reports.--
``(i) Net impact studies and reports.--
``(I) In general.--The Secretary, in coordination with the
Secretary of Education, shall conduct studies to determine
the net impacts of, including best practices of, programs,
services, and activities carried out under this title.
``(II) Reports.--The Secretary shall prepare and
disseminate to the public reports containing the results of
the studies conducted under subclause (I).
``(ii) Study on resources available to assist out-of-school
youth.--The Secretary, in coordination with the Secretary of
Education, may conduct a study examining the resources
available at the Federal, State, and local levels to assist
out-of-school youth in obtaining the skills, credentials, and
work experience necessary to become successfully employed,
including the availability of funds provided through average
daily attendance and other methodologies used by States and
local areas to distribute funds.
``(iii) Study of industry-based certification and
credentials.--
``(I) In general.--The Secretary shall conduct a study
concerning the role and benefits of credentialing and
certification to businesses and workers in the economy and
the implications of certification to the services provided
through the workforce investment system. The study may
examine issues such as--
``(aa) the characteristics of successful credentialing and
certification systems that serve business and individual
needs;
``(bb) the relative proportions of certificates and
credentials attained with assistance from the public sector,
with private-sector training of new hires or incumbent
workers, and by individuals on their own initiative without
other assistance, respectively;
``(cc) the return on human capital investments from
occupational credentials and industry-based skill
certifications, including the extent to which acquisition of
such credentials or certificates enhances outcomes such as
entry into employment, retention, earnings (including the
number and amount of wage increases), career advancement, and
layoff aversion;
``(dd) the implications of the effects of skill
certifications and credentials to the types and delivery of
services provided through the workforce investment system;
``(ee) the role that Federal and State governments play in
fostering the development of and disseminating credentials
and skill standards; and
``(ff) the use of credentials by businesses to achieve
goals for workforce skill upgrading and greater operating
efficiency.
``(II) Report to congress.--The Secretary shall prepare and
submit to Congress a report containing the results of the
study conducted pursuant to subclause (I). Such report may
include any recommendations that the Secretary determines are
appropriate to include in such report relating to promoting
the acquisition of industry-based certification and
credentials, and the appropriate role of the Department of
Labor and the workforce investment system in supporting the
needs of business and individuals with respect to such
certification and credentials.
``(iv) Study of effectiveness of workforce investment
system in meeting business needs.--
``(I) In general.--Using funds available to carry out this
section jointly with funds available to the Secretary of
Commerce and Administrator of the Small Business
Administration, the Secretary, in coordination with the
Secretary of Commerce and the Administrator of the Small
Business Administration, may conduct a study of the
effectiveness of the workforce investment system in meeting
the needs of business, with particular attention to the needs
of small business, including in assisting workers to obtain
the skills needed to utilize emerging technologies. In
conducting the study, the Secretary, in coordination with the
Secretary of Commerce and the Administrator of the Small
Business Administration, may examine issues such as--
``(aa) methods for identifying the workforce needs of
businesses and how the requirements of small businesses may
differ from larger establishments;
``(bb) business satisfaction with the workforce investment
system, with particular emphasis on the satisfaction of small
businesses;
``(cc) the extent to which business is engaged as a
collaborative partner in the workforce investment system,
including the extent of business involvement as members of
State boards and local boards, and the extent to which such
boards and one-stop centers effectively collaborate with
business and industry leaders in developing workforce
investment strategies, including strategies to identify high
growth opportunities;
``(dd) ways in which the workforce investment system
addresses changing skill needs of business that result from
changes in technology and work processes;
``(ee) promising practices for serving small businesses;
``(ff) the extent and manner in which the workforce
investment system uses technology to serve business and
individual needs, and how uses of technology could enhance
efficiency and effectiveness in providing services; and
``(gg) the extent to which various segments of the labor
force have access to and utilize technology to locate job
openings and apply for jobs, and characteristics of
individuals utilizing such technology (such as age, gender,
race or ethnicity, industry sector, and occupational groups).
``(II) Report to congress.--The Secretary shall prepare and
submit to Congress a report containing the results of the
study described in subclause (I). Such report may include any
recommendations the Secretary determines are appropriate to
include in such report, including ways to enhance the
effectiveness of the workforce investment system in meeting
the needs of business for skilled workers.''.
(c) Administration.--Section 171(d) (29 U.S.C. 2916(d)) is
amended by striking the last sentence and inserting the
following: ``Such projects shall be administered by the
Employment and Training Administration.''.
(d) Next Generation Technologies.--Section 171 (29 U.S.C.
2916) is amended by adding at the end the following:
``(e) Skill Certification Pilot Projects.--
``(1) Pilot projects.--In accordance with subsection (b)
and from funds appropriated pursuant to paragraph (10), the
Secretary shall establish and carry out not more than 10
pilot projects to establish a system of industry-validated
national certifications of skills, including--
``(A) not more than 8 national certifications of skills in
high-technology industries, including biotechnology,
telecommunications, highly automated manufacturing (including
semiconductors), nanotechnology, and energy technology; and
``(B) not more than 2 cross-disciplinary national
certifications of skills in homeland security technology.
``(2) Grants to eligible entities.--In carrying out the
pilot projects, the Secretary shall make grants to eligible
entities, for periods of not less than 36 months and not more
than 48 months, to carry out the authorized activities
described in paragraph (7) with respect to the certifications
described in paragraph (1). In awarding grants under this
subsection the Secretary shall take into consideration
awarding grants to eligible entities from diverse geographic
areas, including rural areas.
``(3) Eligible entities.--
``(A) Definition of eligible entity.--In this subsection
the term `eligible entity' means an entity that shall work in
conjunction with a local board and shall include as a
principal participant 1 or more of the following:
``(i) An educational institution, including a 2- or 4-year
college, or a technical or vocational school.
``(ii) An advanced technology education center.
``(iii) A local board.
[[Page S5134]]
``(iv) A representative of a business in a target industry
for the certification involved.
``(v) A representative of an industry association, labor
organization, or community development organization.
``(B) History of demonstrated capability required.--To be
eligible to receive a grant under this subsection, an
eligible entity shall have a history of demonstrated
capability for effective collaboration with industry on
workforce investment activities that is consistent with the
objectives of this title.
``(4) Applications.--To be eligible to receive a grant
under this subsection, an eligible entity shall submit an
application to the Secretary at such time, in such manner,
and containing such information as the Secretary may require.
``(5) Criteria.--The Secretary shall establish criteria,
consistent with paragraph (6), for awarding grants under this
subsection.
``(6) Priority.--In selecting eligible entities to receive
grants under this subsection, the Secretary shall give
priority to eligible entities that demonstrate the
availability of and ability to provide matching funds from
industry or nonprofit sources. Such matching funds may be
provided in cash or in kind.
``(7) Authorized activities.--
``(A) In general.--An eligible entity that receives a grant
under this subsection shall use the funds made available
through the grant--
``(i) to facilitate the establishment of certification
requirements for a certification described in paragraph (1)
for an industry;
``(ii) to develop and initiate a certification program that
includes preparatory courses, course materials, procedures,
and examinations, for the certification; and
``(iii) to collect and analyze data related to the program
at the program's completion, and to identify best practices
(consistent with paragraph (8)) that may be used by State and
local workforce investment boards in the future.
``(B) Basis for requirements.--The certification
requirements established under the grant shall be based on
applicable skill standards for the industry involved that
have been developed by or linked to national centers of
excellence under the National Science Foundation's Advanced
Technological Education Program. The requirements shall
require an individual to demonstrate an identifiable set of
competencies relevant to the industry in order to receive
certification. The requirements shall be designed to provide
evidence of a transferable skill set that allows flexibility
and mobility of workers within a high technology industry.
``(C) Relationship to training and education programs.--The
eligible entity shall ensure that--
``(i) a training and education program related to
competencies for the industry involved, that is flexible in
mode and timeframe for delivery and that meets the needs of
those seeking the certification, is offered; and
``(ii) the certification program is offered at the
completion of the training and education program.
``(D) Relationship to the associate degree.--The eligible
entity shall ensure that the certification program is
consistent with the requirements for a 2-year associate
degree.
``(E) Availability.--The eligible entity shall ensure that
the certification program is open to students pursuing
associate degrees, employed workers, and displaced workers.
``(8) Consultation.--The Secretary shall consult with the
Director of the National Science Foundation to ensure that
the pilot projects build on the expertise and information
about best practices gained through the implementation of the
National Science Foundation's Advanced Technological
Education Program.
``(9) Core components; guidelines; reports.--After
collecting and analyzing the data obtained from the pilot
programs, the Secretary shall--
``(A) establish the core components of a model high-
technology certification program;
``(B) establish guidelines to assure development of a
uniform set of standards and policies for such programs;
``(C) prepare and submit a report on the pilot projects to
the Committee on Health, Education, Labor, and Pensions of
the Senate and the Committee on Education and the Workforce
of the House of Representatives; and
``(D) make available to the public both the data and the
report.
``(10) Authorization of appropriations.--In addition to
amounts authorized to be appropriated under section 174(b),
there is authorized to be appropriated $30,000,000 for fiscal
year 2006 to carry out this subsection.''.
(e) Integrated Workforce Training Programs for Adults With
Limited English Proficiency.--Section 171 (29 U.S.C. 2916),
as amended by subsection (d), is further amended by adding at
the end the following:
``(f) Integrated Workforce Training Programs for Adults
With Limited English Proficiency.--
``(1) Definitions.--In this subsection:
``(A) Integrated workforce training.--The term `integrated
workforce training' means training that integrates
occupational skills training with language acquisition.
``(B) Secretary.--The term `Secretary' means the Secretary
of Labor in consultation with the Secretary of Education.
``(2) Demonstration project.--In accordance with subsection
(b) and from funds appropriated pursuant to paragraph (11),
the Secretary shall establish and implement a national
demonstration project designed to both analyze and provide
data on workforce training programs that integrate English
language acquisition and occupational training.
``(3) Grants.--
``(A) In general.--In carrying out the demonstration
project, the Secretary shall make not less than 10 grants, on
a competitive basis, to eligible entities to provide the
integrated workforce training programs. In awarding grants
under this subsection the Secretary shall take into
consideration awarding grants to eligible entities from
diverse geographic areas, including rural areas.
``(B) Periods.--The Secretary shall make the grants for
periods of not less than 24 months and not more than 48
months.
``(4) Eligible entities.--
``(A) In general.--To be eligible to receive a grant under
this subsection, an eligible entity shall work in conjunction
with a local board and shall include as a principal
participant 1 or more of the following:
``(i) An employer or employer association.
``(ii) A nonprofit provider of English language
instruction.
``(iii) A provider of occupational or skills training.
``(iv) A community-based organization.
``(v) An educational institution, including a 2- or 4-year
college, or a technical or vocational school.
``(vi) A labor organization.
``(vii) A local board.
``(B) Expertise.--To be eligible to receive a grant under
this subsection, an eligible entity shall have proven
expertise in--
``(i) serving individuals with limited English proficiency,
including individuals with lower levels of oral and written
English; and
``(ii) providing workforce programs with training and
English language instruction.
``(5) Applications.--
``(A) In general.--To be eligible to receive a grant under
this subsection, an eligible entity shall submit an
application to the Secretary at such time, in such manner,
and containing such information as the Secretary may require.
``(B) Contents.--Each application submitted under
subparagraph (A) shall--
``(i) contain information, including capability statements,
that demonstrates that the eligible entity has the expertise
described in paragraph (4)(B); and
``(ii) include an assurance that the program to be assisted
shall--
``(I) establish a generalized adult bilingual workforce
training and education model that integrates English language
acquisition and occupational training, and incorporates the
unique linguistic and cultural factors of the participants;
``(II) establish a framework by which the employer,
employee, and other relevant members of the eligible entity
can create a career development and training plan that
assists both the employer and the employee to meet their
long-term needs;
``(III) ensure that the framework established under
subclause (II) takes into consideration the knowledge,
skills, and abilities of the employee with respect to both
the current and economic conditions of the employer and
future labor market conditions relevant to the local area;
and
``(IV) establish identifiable measures so that the progress
of the employee and employer and the relative efficacy of the
program can be evaluated and best practices identified.
``(6) Criteria.--The Secretary shall establish criteria for
awarding grants under this subsection.
``(7) Integrated workforce training programs.--
``(A) Program components.--
``(i) Required components.--Each program that receives
funding under this subsection shall--
``(I) test an individual's English language proficiency
levels to assess oral and literacy gains from the beginning
and throughout program enrollment;
``(II) combine training specific to a particular occupation
or occupational cluster, with--
``(aa) English language instruction, such as instruction
through an English as a Second Language program, or an
English for Speakers of Other Languages program;
``(bb) basic skills instruction; and
``(cc) supportive services;
``(III) effectively integrate public and private sector
entities, including the local workforce investment system and
its functions, to achieve the goals of the program; and
``(IV) require matching or in-kind resources from private
and nonprofit entities.
``(ii) Permissible components.--The program may offer other
services, as necessary to promote successful participation
and completion, including work-based learning, substance
abuse treatment, and mental health services.
``(B) Goal.--Each program that receives funding under this
subsection shall be designed to prepare limited English
proficient adults for, and place such adults in employment
in, growing industries with identifiable career ladder paths.
[[Page S5135]]
``(C) Program types.--In selecting programs to receive
funding under this subsection, the Secretary shall select
programs that meet 1 or more of the following criteria:
``(i) A program that--
``(I) serves unemployed, limited English proficient
individuals with significant work experience or substantial
education but persistently low wages; and
``(II) aims to prepare such individuals for, and place such
individuals in, higher paying employment, defined for
purposes of this subparagraph as employment that provides at
least 75 percent of the median wage in the local area.
``(ii) A program that--
``(I) serves limited English proficient individuals with
lower levels of oral and written fluency, who are working but
at persistently low wages; and
``(II) aims to prepare such individuals for, and place such
individuals in, higher paying employment, through services
provided at the worksite, or at a location central to several
work sites, during work hours.
``(iii) A program that--
``(I) serves unemployed, limited English proficient
individuals with lower levels of oral and written fluency,
who have little or no work experience; and
``(II) aims to prepare such individuals for, and place such
individuals in, employment through services that include
subsidized employment, in addition to the components required
in subparagraph (A)(i).
``(iv) A program that includes funds from private and
nonprofit entities.
``(D) Program approaches.--In selecting programs to receive
funding under this subsection, the Secretary shall select
programs with different approaches to integrated workforce
training, in different contexts, in order to obtain
comparative data on multiple approaches to integrated
workforce training and English language instruction, to
ensure programs are tailored to characteristics of
individuals with varying skill levels, and to assess how
different curricula work for limited English proficient
populations. Such approaches may include--
``(i) bilingual programs in which the workplace language
component and the training are conducted in a combination of
an individual's native language and English;
``(ii) integrated workforce training programs that combine
basic skills, language instruction, and job specific skills
training; or
``(iii) sequential programs that provide a progression of
skills, language, and training to ensure success upon an
individual's completion of the program.
``(8) Evaluation by eligible entity.--Each eligible entity
that receives a grant under this subsection for a program
shall carry out a continuous program evaluation and an
evaluation specific to the last phase of the program
operations.
``(9) Evaluation by secretary.--
``(A) In general.--The Secretary shall conduct an
evaluation of program impacts of the programs funded under
the demonstration project, with a random assignment,
experimental design impact study done at each worksite at
which such a program is carried out.
``(B) Data collection and analysis.--The Secretary shall
collect and analyze the data from the demonstration project
to determine program effectiveness, including gains in
language proficiency, acquisition of skills, and job
advancement for program participants.
``(C) Report.--The Secretary shall prepare and submit to
the Committee on Health, Education, Labor, and Pensions of
the Senate and the Committee on Education and the Workforce
of the House of Representatives, and make available to the
public, a report on the demonstration project, including the
results of the evaluation.
``(10) Technical assistance.--The Secretary shall provide
technical assistance to recipients of grants under this
subsection throughout the grant periods.
``(11) Authorization of appropriations.--In addition to
amounts authorized to be appropriated under section 174(b),
there is authorized to be appropriated $10,000,000 for fiscal
year 2006 to carry out this subsection.''.
(f) Community-Based Job Training.--Section 171 (29 U.S.C.
2916), as amended by subsection (e), is further amended by
adding at the end the following:
``(g) Community-Based Job Training.--
``(1) Definitions.--In this subsection:
``(A) Community college.--The term `community college'
means--
``(i) an institution of higher education, as defined in
section 101 of the Higher Education Act of 1965 (20 U.S.C.
1001), that provides a 2-year degree that is acceptable for
full credit toward a bachelor's degree; or
``(ii) a tribally controlled college or university, as
defined in section 2 of the Tribally Controlled College or
University Assistance Act of 1978 (25 U.S.C. 1801).
``(B) Eligible entity.--The term `eligible entity' means a
community college or a consortium composed of a community
college and an institution of higher education, that shall
work with--
``(i) a local board;
``(ii) a business in the qualified industry or an industry
association in the qualified industry, as identified in the
application of the entity; and
``(iii) an economic development entity.
``(C) Institution of higher education.--Except as otherwise
provided in subparagraph (A)(i), the term `institution of
higher education' has the meaning given the term in section
101 of the Higher Education Act of 1965 (20 U.S.C. 1001) and
the meaning given the term postsecondary vocational
institution in section 102(a)(1)(B) of such Act (20 U.S.C.
1002(a)(1)(B)).
``(D) Qualified industry.--The term `qualified industry'
means an industry or economic sector that is projected to
experience significant growth, such as an industry or
economic sector that--
``(i) is projected to add substantial numbers of new jobs
to the regional economy;
``(ii) has or is projected to have significant impact on
the regional economy;
``(iii) impacts or is projected to impact the growth of
other industries or economic sectors in the regional economy;
``(iv) is being transformed by technology and innovation
requiring new knowledge or skill sets for workers;
``(v) is a new or emerging industry or economic sector that
is projected to grow; or
``(vi) requires high skills and has significant labor
shortages in the regional economy.
``(2) Demonstration project.--In addition to the
demonstration projects authorized under subsection (b), the
Secretary may establish and implement a national
demonstration project designed--
``(A) to develop local innovative solutions to the
workforce challenges facing high-growth, high-skill
industries with labor shortages; and
``(B) to increase employment opportunities for workers in
high-growth, high-demand occupations by establishing
partnerships among education entities, the workforce
investment system, and businesses in high-growth, high-skill
industries or sectors.
``(3) Grants.--In carrying out the national demonstration
project authorized under this subsection, the Secretary shall
award grants, on a competitive basis, for 2, 3, or 4 years,
in accordance with generally applicable Federal requirements,
to eligible entities to enable the eligible entities to carry
out activities authorized under this subsection.
``(4) Applications.--To be eligible to receive a grant
under this subsection, an eligible entity shall submit an
application to the Secretary at such time, in such manner,
and containing such information as the Secretary may require,
including--
``(A) a description of the eligible entity that will offer
training under the grant;
``(B) a justification of the need for discretionary funding
under the grant, including the need for external funds to
create a program to carry out the activities described in
paragraph (6);
``(C) an economic analysis of the local labor market to
identify--
``(i) high-growth, high-demand industries;
``(ii) the workforce issues faced by such industries; and
``(iii) potential participants in programs funded under
this subsection;
``(D) a description of the qualified industry for which the
training will occur, the availability of competencies on
which the training will be based, and how the grant will help
workers acquire the competencies and skills necessary for
employment;
``(E) a description of the involvement of the local board
and businesses, including small businesses, in the geographic
area where the proposed grant will be implemented;
``(F) performance measures for the grant, including the
expected number of individuals to be trained in a qualified
industry, the employment and retention rates for such
individuals in a qualified industry, and initial earnings and
earnings increases for such individuals;
``(G) a description of how the activities funded by the
grant will be coordinated with activities provided through
the one-stop center in the local area; and
``(H) a description of the local or private resources that
will--
``(i) support the activities carried out under this
subsection; and
``(ii) enable the entity to carry out and expand such
activities after the expiration of the grant.
``(5) Factors for award of grant.--
``(A) In general.--In awarding grants under this
subsection, the Secretary shall consider--
``(i) the extent of public and private collaboration,
including existing partnerships among qualified industries,
the eligible entity, and the public workforce investment
system;
``(ii) the extent to which the grant will provide job
seekers with high-quality training for employment in high-
growth, high-demand occupations;
``(iii) the extent to which the grant will expand the
eligible entity and local one-stop center's capacity to be
demand-driven and responsive to local economic needs;
``(iv) the extent to which local businesses commit to hire,
retain, or advance individuals who receive training through
the grant; and
``(v) the extent to which the eligible entity commits to
make any newly developed products, such as skill standards,
assessments, or industry-recognized training curricula,
available for dissemination nationally.
``(B) Leveraging of resources.--In awarding grants under
this subsection, the Secretary shall also consider--
``(i) the extent to which local or private resources will
be made available to support the activities carried out under
this subsection, taking into account the resources of the
eligible entity and the entity's partners; and
[[Page S5136]]
``(ii) the ability of an eligible entity to continue to
carry out and expand such activities after the expiration of
the grant.
``(C) Distribution of grants.--In awarding grants under
this subsection, the Secretary shall ensure an equitable
distribution of such grants across diverse industries and
geographic areas.
``(6) Use of funds.--An eligible entity that receives a
grant under this subsection--
``(A) shall use the grant funds for--
``(i) the development by the community college that is a
part of the eligible entity in collaboration with other
partners identified in the application, and, if applicable,
other representatives of qualified industries, of rigorous
training and education programs leading to an industry-
recognized credential or degree and employment in the
qualified industry; and
``(ii) training of adults, incumbent workers, dislocated
workers, or out-of-school youth in the skills and
competencies needed to obtain or upgrade employment in a
qualified industry identified in the eligible entity's
application; and
``(B) may use the grant funds for--
``(i) disseminating information on training available for
high-growth, high-demand occupations in qualified industries
through the one-stop delivery system to prospective
participants, businesses, business intermediaries, and
community-based organizations in the region, including
training available through the grant;
``(ii) referring individuals trained under the grant for
employment in qualified industries;
``(iii) enhancing integration of community colleges,
training and education with businesses, and the one-stop
system to meet the training needs of qualified industries for
new and incumbent workers;
``(iv) providing training and relevant job skills to small
business owners or operators to facilitate small business
development in high-growth industries; or
``(v) expanding or creating programs for distance, evening,
weekend, modular, or compressed learning opportunities that
provide relevant skill training in high-growth, high-demand
industries.
``(7) Authority to require non-federal share.--The
Secretary may require that recipients of grants under this
subsection provide a non-Federal share, from either cash or
noncash resources, of the costs of activities carried out
under a grant awarded under this subsection.
``(8) Performance accountability and evaluation.--
``(A) Performance accountability.--The Secretary shall
require an eligible entity that receives a grant under this
subsection to submit an interim and final report to the
Secretary on the impact on business partners and employment
outcomes obtained by individuals receiving training under
this subsection using the performance measures identified in
the eligible entity's grant application.
``(B) Evaluation.--The Secretary shall require that an
eligible entity that receives a grant under this subsection
participate in an evaluation of activities carried out under
this subsection, including an evaluation using the techniques
described in section 172(c).''.
SEC. 147. NATIONAL DISLOCATED WORKER GRANTS.
(a) In General.--Section 173 (29 U.S.C. 2918) is amended--
(1) by striking the heading and inserting the following:
``SEC. 173. NATIONAL DISLOCATED WORKER GRANTS.'';
and
(2) in subsection (a)--
(A) by striking the matter preceding paragraph (1) and
inserting the following:
``(a) In General.--The Secretary is authorized to award
national dislocated worker grants--'';
(B) in paragraph (1), by striking ``subsection (c)'' and
inserting ``subsection (b)'';
(C) in paragraph (3), by striking ``and'' after the
semicolon; and
(D) by striking paragraph (4) and inserting the following:
``(4) to a State or entity (as defined in subsection
(b)(1)(B)) to carry out subsection (e), including providing
assistance to eligible individuals;
``(5) to a State or entity (as defined in subsection
(b)(1)(B)) to carry out subsection (f), including providing
assistance to eligible individuals;
``(6) to provide additional assistance to a State board or
local board where a higher than average demand for employment
and training activities for dislocated members of the Armed
Forces, or spouses, as described in section 101(11)(E), of
members of the Armed Forces, described in subsection
(b)(2)(A)(iv), exceeds State and local resources for
providing such services, and where such programs are to be
carried out in partnership with the Department of Defense and
Department of Veterans Affairs transition assistance
programs; and
``(7) to provide assistance to a State for statewide or
local use in order to--
``(A) address cases in which there have been worker
dislocations across multiple sectors, across multiple
businesses within a sector, or across multiple local areas,
and such workers remain dislocated;
``(B) meet emerging economic development needs; and
``(C) train eligible individuals who are dislocated workers
described in subparagraph (A).
The Secretary shall issue a final decision on an application
for a national dislocated worker grant under this subsection
not later than 45 calendar days after receipt of the
application. The Secretary shall issue a notice of obligation
for such a grant not later than 10 days after the award of
the grant.''.
(b) Administration and Additional Assistance.--Section 173
(29 U.S.C. 2918) is amended--
(1) by striking subsection (b);
(2) by redesignating subsections (c) through (g) as
subsections (b) through (f), respectively;
(3) in paragraph (2) of subsection (b) (as redesignated by
paragraph (2))--
(A) in subparagraph (A), in the matter preceding clause
(i), by striking ``national emergency grant'' and inserting
``national dislocated worker grant''; and
(B) in subparagraph (C), by striking ``national emergency
grants'' and inserting ``national dislocated worker grants'';
(4) by striking subsection (d) (as redesignated by
paragraph (2)) and inserting the following:
``(d) Additional Assistance.--
``(1) In general.--From the amount appropriated and made
available to carry out this section for any program year, the
Secretary shall use not more than $20,000,000 to make grants
to States to provide employment and training activities under
section 134, in accordance with subtitle B.
``(2) Eligible states.--The Secretary shall make a grant
under paragraph (1) to a State for a program year if--
``(A) the amount of the allotment that was made to the
State for the program year 2003 under the formula specified
in section 132(b)(1)(B) as such section was in effect on July
1, 2003, is greater than
``(B) the amount of the allotment that would be made to the
State for the program year under the formula specified in
section 132(b)(1)(B).
``(3) Amount of grants.--Subject to paragraph (1), the
amount of the grant made under paragraph (1) to a State for a
program year shall be based on the difference between--
``(A) the amount of the allotment that was made to the
State for the program year 2003 under the formula specified
in section 132(b)(1)(B) as such section was in effect on July
1, 2003; and
``(B) the amount of the allotment that would be made to the
State for the program year under the formula specified in
section 132(b)(1)(B).'';
(5) in subsection (e) (as redesignated by paragraph (2))--
(A) in paragraph (1), by striking ``paragraph (4)(A)'' and
inserting ``paragraph (4)'';
(B) in paragraph (2), by striking ``subsection (g)'' and
inserting ``subsection (f)'';
(C) in paragraph (3)(B), by striking ``subsection
(a)(4)(A)'' and inserting ``subsection (a)(4)'';
(D) in paragraph (4), by striking ``subsection (g)'' and
inserting ``subsection (f)'';
(E) in paragraph (5), by striking ``subsection (g)'' and
inserting ``subsection (f)''; and
(F) in paragraph (6)--
(i) by striking ``subsection (g)'' and inserting
``subsection (f)''; and
(ii) by striking ``subsection (c)(1)(B)'' and inserting
``subsection (b)(1)(B)''; and
(6) in subsection (f) (as redesignated by paragraph (2))--
(A) in paragraph (1)--
(i) by striking ``paragraph (4)(B)'' and inserting
``paragraph (5)''; and
(ii) by striking ``subsection (f)(1)(A)'' and inserting
``subsection (e)(1)(A)''; and
(B) in paragraph (4)(B), by striking ``subsection
(a)(4)(B)'' and inserting ``subsection (a)(5)''.
SEC. 148. AUTHORIZATION OF APPROPRIATIONS FOR NATIONAL
ACTIVITIES.
(a) In General.--Section 174(a)(1) (29 U.S.C. 2919(a)(1))
is amended by striking ``1999 through 2003'' and inserting
``2006 through 2011''.
(b) Reservations.--Section 174(b) (29 U.S.C. 2919(b)) is
amended to read as follows:
``(b) Technical Assistance; Demonstration and Pilot
Projects, Evaluations, Incentive Grants.--
``(1) In general.--Subject to paragraph (2), there are
authorized to be appropriated to carry out sections 170
through 172, section 136(i), and section 503 such sums as may
be necessary for each of fiscal years 2006 through 2011.
``(2) Reservation.--Of the amount appropriated pursuant to
the authorization of appropriations under paragraph (1) for a
fiscal year, the Secretary shall, for each of the fiscal
years 2006 through 2011, reserve not less than 25 percent for
carrying out section 503.''.
(c) Assistance for Eligible Workers.--Section 174(c) (29
U.S.C. 2919(c)) is amended--
(1) in paragraphs (1)(A) and (2)(A), by striking
``subsection (a)(4)(A)'' and inserting ``subsection (a)(4)'';
and
(2) in paragraphs (1)(B) and (2)(B), by striking
``subsection (a)(4)(B)'' and inserting ``subsection (a)(5)''.
Subtitle E--Administration
SEC. 151. REQUIREMENTS AND RESTRICTIONS.
Section 181(e) (29 U.S.C. 2931(e)) is amended by striking
``economic development activities,''.
SEC. 152. REPORTS.
Section 185(c) (29 U.S.C. 2935(c)) is amended--
[[Page S5137]]
(1) in paragraph (2), by striking ``and'' after the
semicolon;
(2) in paragraph (3), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(4) shall have the option to submit or disseminate
electronically any reports, records, plans, or any other data
that are required to be collected or disseminated under this
title.''.
SEC. 153. ADMINISTRATIVE PROVISIONS.
(a) Annual Report.--Section 189(d) (29 U.S.C. 2939(d)) is
amended--
(1) in paragraph (3), by striking ``and'' after the
semicolon;
(2) by redesignating paragraph (4) as paragraph (5); and
(3) by inserting after paragraph (3) the following:
``(4) the negotiated levels of performance of the States,
the States' requests for adjustments of such levels, and the
adjustments of such levels that are made; and''.
(b) Availability.--Section 189(g)(2) (29 U.S.C. 2939(g)(2))
is amended, in the first sentence--
(1) by striking ``Funds'' and inserting ``Except as
otherwise provided in this paragraph, funds''; and
(2) by striking ``each State receiving'' and inserting
``each recipient of''.
(c) General Waivers.--Section 189(i)(4) (29 U.S.C.
2939(i)(4)) is amended--
(1) in subparagraph (A)(i), by inserting ``the funding of
infrastructure costs for one-stop centers,'' after ``local
boards,'';
(2) in subparagraph (C), by striking ``90'' and inserting
``60''; and
(3) by adding at the end the following:
``(D) Expedited requests.--The Secretary shall expedite
requests for waivers of statutory or regulatory requirements
that have been approved for a State pursuant to subparagraph
(B), if the requirements of this paragraph have been
satisfied.
``(E) Special rule.--With respect to any State that has a
waiver under this paragraph relating to the transfer
authority under section 133(b)(4), and has the waiver in
effect on the date of enactment of the Workforce Investment
Act Amendments of 2005 or subsequently receives such a
waiver, the waiver shall continue to apply for so long as the
State meets or exceeds State performance measures relating to
the indicators described in section 136(b)(2)(A)(i).''.
SEC. 154. USE OF CERTAIN REAL PROPERTY.
Section 193 (29 U.S.C. 2943) is amended to read as follows:
``SEC. 193. TRANSFER OF FEDERAL EQUITY IN STATE EMPLOYMENT
SECURITY AGENCY REAL PROPERTY TO THE STATES.
``(a) Transfer of Federal Equity.--Notwithstanding any
other provision of law, any Federal equity acquired in real
property through grants to States awarded under title III of
the Social Security Act (42 U.S.C. 501 et seq.) or under the
Wagner-Peyser Act (29 U.S.C. 49 et seq.) is transferred to
the States that used the grants for the acquisition of such
equity. The portion of any real property that is attributable
to the Federal equity transferred under this section shall be
used to carry out activities authorized under title III of
the Social Security Act or the Wagner-Peyser Act. Any
disposition of such real property shall be carried out in
accordance with the procedures prescribed by the Secretary
and the portion of the proceeds from the disposition of such
real property that is attributable to the Federal equity
transferred under this section shall be used to carry out
activities authorized under title III of the Social Security
Act or the Wagner-Peyser Act.
``(b) Limitation on Use.--A State shall not use funds
awarded under title III of the Social Security Act or the
Wagner-Peyser Act to amortize the costs of real property that
is purchased by any State on or after the effective date of
this provision.''.
SEC. 155. GENERAL PROGRAM REQUIREMENTS.
Section 195 (29 U.S.C. 2945) is amended by adding at the
end the following:
``(14) Funds provided under this title shall not be used to
establish or operate fee-for-service enterprises that are not
affiliated with the one-stop service delivery systems
described in section 121(e) and that compete with private
sector employment agencies (as defined in section 701 of the
Civil Rights Act of 1964 (42 U.S.C. 2000e)).''.
SEC. 156. TABLE OF CONTENTS.
Section 1(b) (29 U.S.C. 9201 note) is amended--
(1) by striking the item relating to section 106 and
inserting the following:
``Sec. 106. Purposes.'';
(2) by striking the item relating to section 123 and
inserting the following:
``Sec. 123. Eligible providers of youth activities.'';
(3) by striking the item relating to section 169 and
inserting the following:
``Sec. 169. Youth challenge grants.'';
(4) by striking the item relating to section 173 and
inserting the following:
``Sec. 173. National dislocated worker grants.'';
(5) by striking the item relating to section 193 and
inserting the following:
``Sec. 193. Transfer of Federal equity in State employment security
agency real property to the States.'';
(6) by inserting after the item relating to section 243 the
following:
``Sec. 244. Integrated English literacy and civics education.'';
and
(7) by striking the item relating to section 502.
Subtitle F--Incentive Grants
SEC. 161. INCENTIVE GRANTS.
Section 503 (20 U.S.C. 9273) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) In General.--
``(1) Timeline.--
``(A) Prior to july 1, 2006.--Prior to July 1, 2006, the
Secretary shall award a grant to each State in accordance
with the provisions of this section as this section was in
effect on July 1, 2003.
``(B) Beginning july 1, 2006.--Beginning on July 1, 2006,
the Secretary shall award incentive grants to States for
performance described in paragraph (2) in carrying out
innovative programs consistent with the programs under
chapters 4 and 5 of subtitle B of title I, to implement or
enhance innovative and coordinated programs consistent with
the statewide economic, workforce, and educational interests
of the State.
``(2) Basis.--The Secretary shall award the grants on the
basis that States--
``(A) have exceeded the State adjusted levels of
performance for title I, the adjusted levels of performance
for title II, and the levels of performance under the Carl D.
Perkins Vocational and Technical Education Act of 1998 (20
U.S.C. 2301 et seq.); or
``(B) have--
``(i) met the State adjusted levels of performance for
title I, the adjusted levels of performance for title II, and
the levels of performance under the Carl D. Perkins
Vocational and Technical Education Act of 1998 (20 U.S.C.
2301 et seq.); and
``(ii) demonstrated--
``(I) exemplary coordination of Federal workforce and
education programs, statewide economic development, or
business needs;
``(II) exemplary performance in serving hard-to-serve
populations; or
``(III) effective--
``(aa) coordination of multiple systems into a
comprehensive workforce investment system, including
coordination of employment activities under the Wagner-Peyser
Act (29 U.S.C. 49 et seq.) and core activities under title I
as well as one-stop partner programs described in section
121;
``(bb) expansion of access to training, including through
increased leveraging of resources other than those funded
through programs under title I;
``(cc) implementation of statewide coordination activities
through agreements with relevant State agencies and offices,
including those responsible for programs under the Adult
Education and Family Literacy Act (20 U.S.C. 9201 et seq.)
and the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.);
``(dd) statewide coordination through local workforce
investment boards or areas;
``(ee) alignment of management information systems to
integrate participant information across programs; or
``(ff) integration of performance information systems and
common measures for accountability across workforce and
education programs.
``(3) Use of funds.--The funds awarded to a State under
this section may be used to carry out activities authorized
for States under chapters 4 and 5 of subtitle B of title I,
title II, and the Carl D. Perkins Vocational and Technical
Education Act of 1998 (20 U.S.C. 2301 et seq.), including
demonstration projects, and for such innovative projects or
programs that increase coordination and enhance service to
program participants, particularly hard-to-serve populations,
including--
``(A) activities that support business needs, especially
for incumbent workers and enhancing opportunities for
retention and advancement;
``(B) activities that support linkages with secondary,
postsecondary, or career and technical education programs,
including activities under the Carl D. Perkins Vocational and
Technical Education Act of 1998 (20 U.S.C. 2301 et seq.), the
Adult Education and Family Literacy Act (20 U.S.C. 9201 et
seq.), and the Rehabilitation Act of 1973 (29 U.S.C. 701 et
seq.);
``(C) activities that support statewide economic
development plans that support high-wage, high-skill, or
high-demand occupations leading to self-sufficiency;
``(D) activities that coordinate workforce investment
programs with other Federal and State programs related to the
activities under this Act;
``(E) activities that support the development of a
statewide integrated performance information system that
includes common measures;
``(F) activities that align management information systems
with integrated performance information across education and
workforce programs; or
``(G) activities that support local workforce investment
boards or areas in improving performance and program
coordination.
``(4) Waiver.--For States that have developed and
implemented a statewide integrated performance information
system with common measures, as described in paragraph
(3)(E), for federally funded workforce and education
programs, the Secretary may waive specified Federal reporting
requirements for such State to be in compliance with
reporting requirements under this Act and other workforce and
education programs as the Secretary has authority or
agreement to waive.
[[Page S5138]]
``(5) Technical assistance.--The Secretary shall reserve 4
percent of the funds available for grants under this section
to provide technical assistance to States to replicate best
practices or to develop integrated performance information
systems and strengthen coordination with education and
economic development.''; and
(2) by striking subsection (d).
Subtitle G--Conforming Amendments
SEC. 171. CONFORMING AMENDMENTS.
(a) Older Americans Act of 1965.--Section 512(a) of the
Older Americans Act of 1965 (42 U.S.C. 3056j(a)) is amended
by striking ``(B)(vi)'' and inserting ``(B)(v)''.
(b) Adult Education and Family Literacy Act.--Section
212(b)(3)(A)(vi) of the Adult Education and Family Literacy
Act (20 U.S.C. 9212(b)(3)(A)(vi)) is amended by striking
``the representatives described in section 136(i)(1)'' and
inserting ``representatives of appropriate Federal agencies,
and representatives of States and political subdivisions,
business and industry, employees, eligible providers of
employment and training activities (as defined in section
101), educators, and participants (as defined in section
101), with expertise regarding workforce investment policies
and workforce investment activities (as defined in section
101)''.
TITLE II--AMENDMENTS TO THE ADULT EDUCATION AND FAMILY LITERACY ACT
SEC. 201. SHORT TITLE; PURPOSE.
(a) Short Title.--This title may be cited as the ``Adult
Education and Family Literacy Act Amendments of 2005''.
(b) Purpose.--Section 202 of the Adult Education and Family
Literacy Act (20 U.S.C. 9201) is amended--
(1) in paragraph (2), by striking ``and'' after the
semicolon;
(2) in paragraph (3), by striking ``education.'' and
inserting ``education and in the transition to postsecondary
education; and''; and
(3) by adding at the end the following:
``(4) assist immigrants and other individuals with limited
English proficiency in improving their reading, writing,
speaking, and mathematics skills and acquiring an
understanding of the American free enterprise system,
individual freedom, and the responsibilities of
citizenship.''.
SEC. 202. DEFINITIONS.
Section 203 of the Adult Education and Family Literacy Act
(20 U.S.C. 9202) is amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A), by striking
``services or instruction below the postsecondary level'' and
inserting ``academic instruction and education services below
the postsecondary level that increase an individual's ability
to read, write, and speak in English and perform
mathematics''; and
(B) by striking subparagraph (C)(i) and inserting the
following:
``(i) are basic skills deficient as defined in section
101;'';
(2) in paragraph (2), by striking ``activities described in
section 231(b)'' and inserting ``programs and services which
include reading, writing, speaking, or mathematics skills,
workplace literacy activities, family literacy activities,
English language acquisition activities, or other activities
necessary for the attainment of a secondary school diploma or
its State recognized equivalent'';
(3) in paragraph (5)--
(A) by inserting ``an organization that has demonstrated
effectiveness in providing adult education, that may
include'' after ``means'';
(B) in subparagraph (B), by striking ``of demonstrated
effectiveness'';
(C) in subparagraph (C), by striking ``of demonstrated
effectiveness''; and
(D) in subparagraph (I), by inserting ``or coalition''
after ``consortium'';
(4) in paragraph (6)--
(A) by striking ``literacy program'' and inserting
``language acquisition program'';
(B) by striking ``literacy program'' and inserting
``language acquisition program''; and
(C) by inserting ``reading, writing, and speaking'' after
``competence in'';
(5) by striking paragraph (10);
(6) by redesignating paragraphs (7) through (9) and (12)
through (18) as paragraphs (8) through (10) and (13) through
(19), respectively;
(7) by inserting after paragraph (6) the following:
``(7) Essential components of reading instruction.--The
term `essential components of reading instruction' has the
meaning given the term in section 1208 of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6368).'';
(8) by inserting after paragraph (11) the following:
``(12) Limited english proficiency.--The term `limited
English proficiency', when used with respect to an
individual, means an adult or out-of-school youth who has
limited ability in speaking, reading, writing, or
understanding the English language, and--
``(A) whose native language is a language other than
English; or
``(B) who lives in a family or community environment where
a language other than English is the dominant language.'';
(9) by striking paragraph (15), as redesignated by
paragraph (6), and inserting the following:
``(15) Outlying area.--The term `outlying area' means the
United States Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.''; and
(10) by striking paragraph (19), as redesignated by
paragraph (6), and inserting the following:
``(19) Workplace literacy program.--The term `workplace
literacy program' means an educational program designed to
improve the productivity of the workforce through the
improvement of literacy skills that is offered by an eligible
provider in collaboration with an employer or an employee
organization at a workplace, at an off-site location, or in a
simulated workplace environment.''.
SEC. 203. HOME SCHOOLS.
Section 204 of the Adult Education and Family Literacy Act
(20 U.S.C. 9203) is amended to read as follows:
``SEC. 204. HOME SCHOOLS.
``Nothing in this title shall be construed to affect home
schools, whether a home school is treated as a home school or
a private school under State law, or to compel a parent
engaged in home schooling to participate in an English
language acquisition program, family literacy services, or
adult education.''.
SEC. 204. AUTHORIZATION OF APPROPRIATIONS.
Section 205 of the Adult Education and Family Literacy Act
(20 U.S.C. 9204) is amended--
(1) by striking ``1999'' and inserting ``2006''; and
(2) by striking ``2003'' and inserting ``2011''.
SEC. 205. RESERVATION OF FUNDS; GRANTS TO ELIGIBLE AGENCIES;
ALLOTMENTS.
Section 211 of the Adult Education and Family Literacy Act
(20 U.S.C. 9211) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Reservation of Funds.--From the sum appropriated
under section 205 for a fiscal year, the Secretary--
``(1) shall reserve 1.5 percent to carry out section 242,
except that the amount so reserved shall not exceed
$10,000,000;
``(2) shall reserve 1.5 percent to carry out section 243
and subsection (f)(4), except that the amount so reserved
shall not exceed $8,000,000;
``(3) shall make available, to the Secretary of Labor, 1.72
percent for incentive grants under section 136(i); and
``(4) shall reserve 12 percent of the amount that remains
after reserving funds under paragraphs (1), (2) and (3) to
carry out section 244.'';
(2) in subsection (c)(2)--
(A) by inserting ``and the sole agency responsible for
administering or supervising policy for adult education and
literacy in the Republic of Palau'' after ``an initial
allotment under paragraph (1)'';
(B) by inserting ``or served by the agency for the Republic
of Palau'' after ``by the eligible agency''; and
(C) by striking ``States and outlying areas'' and inserting
``States, outlying areas, and the Republic of Palau'';
(3) in subsection (e)--
(A) in paragraph (1)--
(i) by striking ``the Republic of the Marshall Islands, the
Federated States of Micronesia, and''; and
(ii) by striking ``the Republic of the Marshall Islands,
the Federated States of Micronesia, or'' and inserting
``or''; and
(B) in paragraph (3)--
(i) by striking ``the Republic of the Marshall Islands, the
Federated States of Micronesia, and''; and
(ii) by striking ``2001'' and inserting ``2007''; and
(4) by striking subsection (f) and inserting the following:
``(f) Hold-Harmless Provisions.--
``(1) In general.--Notwithstanding subsection (c) and
subject to paragraph (2), for fiscal year 2005 and each
succeeding fiscal year, no eligible agency shall receive an
allotment under this section that is less than 90 percent of
the allotment the eligible agency received for the preceding
fiscal year under this section.
``(2) 100 percent allotment.--Notwithstanding paragraphs
(1) and (2) of subsection (e), an eligible agency that
receives only an initial allotment under subsection (c)(1)
(and no additional allotment under subsection (c)(2)) shall
receive an allotment under this section that is equal to 100
percent of the initial allotment under subsection (c)(1).
``(3) Ratable reduction.--If for any fiscal year the amount
available for allotment under this subtitle is insufficient
to satisfy the provisions of paragraphs (1) and (2), the
Secretary shall ratably reduce the payments to all eligible
agencies, as necessary.
``(4) Additional assistance.--
``(A) In general.--From amounts reserved under subsection
(a)(2), the Secretary shall make grants to eligible agencies
described in subparagraph (B) to enable such agencies to
provide activities authorized under chapter 2.
``(B) Eligibility.--An eligible agency is eligible to
receive a grant under this paragraph for a fiscal year if the
amount of the allotment such agency receives under this
section for the fiscal year is less than the amount such
agency would have received for the fiscal year if the
allotment formula under this section as in effect on
September 30, 2003, were in effect for such year.
``(C) Amount of grant.--The amount of a grant made to an
eligible agency under this paragraph for a fiscal year shall
be the difference between--
``(i) the amount of the allotment such agency would have
received for the fiscal
[[Page S5139]]
year if the allotment formula under this section as in effect
on September 30, 2003, were in effect for such year; and
``(ii) the amount of the allotment such agency receives
under this section for the fiscal year.''.
SEC. 206. PERFORMANCE ACCOUNTABILITY SYSTEM.
Section 212 of the Adult Education and Family Literacy Act
(20 U.S.C. 9212) is amended--
(1) in subsection (b)--
(A) in paragraph (1)(A)(ii), by striking ``additional
indicators of performance (if any)'' and inserting ``the
employment performance indicators'';
(B) by striking paragraph (2) and inserting the following:
``(2) Indicators of performance.--
``(A) Core indicators of performance.--An eligible agency
shall identify in the State plan individual academic
performance indicators that include, at a minimum, the
following:
``(i) Measurable improvements in literacy skill levels in
reading, writing, and speaking the English language,
numeracy, problem solving, English language acquisition, and
other literacy skills.
``(ii) Placement in, retention in, or completion of,
postsecondary education or other training programs.
``(iii) Completion of a secondary school diploma, its
recognized equivalent, or a recognized alternative standard
for individuals with disabilities.
``(B) Employment performance indicators.--
``(i) In general.--An eligible agency shall identify in the
State plan individual participant employment performance
indicators that include, at a minimum, the following:
``(I) Entry into unsubsidized employment.
``(II) Retention in unsubsidized employment 6 months after
entry into the employment.
``(III) Increases in earnings from unsubsidized employment.
(ii) Data collection.--The State workforce investment board
shall assist the eligible agency in obtaining and using
quarterly wage records to collect data for each of the
indicators described in clause (i), consistent with
applicable Federal and State privacy laws.
``(C) Indicators for workplace literacy programs.--Special
accountability measures may be negotiated for workplace
literacy programs.''; and
(C) in paragraph (3)--
(i) in subparagraph (A)--
(I) in clause (i)(II), by striking ``in performance'' and
inserting ``the agency's performance outcomes in an
objective, quantifiable, and measurable form'';
(II) in clause (ii), by striking ``3 programs years'' and
inserting ``2 program years'';
(III) in clause (iii), by striking ``first 3 years'' and
inserting ``first 2 years'';
(IV) in clause (iii), by striking ``first 3 program years''
and inserting ``first 2 program years'';
(V) in clause (v), by striking ``4th and 5th'' and
inserting ``3rd and 4th'';
(VI) in clause (v), by striking ``to the fourth'' and
inserting ``to the third'';
(VII) in clause (v), by striking ``fourth and fifth'' and
inserting ``third and fourth''; and
(VIII) in clause (vi), by striking ``(II)'' and inserting
``(I)'';
(ii) in subparagraph (B)--
(I) by striking the heading and inserting ``Levels of
employment performance'';
(II) by striking ``may'' and inserting ``shall''; and
(III) by striking ``additional'' and inserting ``employment
performance''; and
(iii) by adding at the end the following:
``(C) Alternative assessment systems.--Eligible agencies
may approve the use of assessment systems that are not
commercially available standardized systems if such systems
meet the Standards for Educational and Psychological Testing
issued by the Joint Committee on Standards for Educational
and Psychological Testing of the American Educational
Research Association, the American Psychological Association,
and the National Council on Measurement in Education.'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by inserting ``the Governor, the State legislature, and
the State workforce investment board'' after ``Secretary'';
and
(ii) by striking ``including'' and all that follows through
the period and inserting ``including the following:
``(A) Information on the levels of performance achieved by
the eligible agency with respect to the core indicators of
performance, and employment performance indicators.
``(B) Information on the number or percentage of qualifying
adults (as defined in section 211(d)) who are participants in
adult education programs under this subtitle and making
satisfactory progress toward 1 or more of each of the
following:
``(i) Core indicators of performance.
``(ii) Employment performance indicators.
``(iii) Other long-term objectives.
``(C) The number and type of each eligible provider that
receives funding under such grant.
``(D) The number of enrollees 16 to 18 years of age who
enrolled in adult education not later than 1 year after
participating in secondary school education.'';
(B) in paragraph (2)(A), by inserting ``eligible providers
and'' after ``available to''; and
(C) by adding at the end the following:
``(3) Data access.--The report made available under
paragraph (2) shall indicate which eligible agencies did not
have access to State unemployment insurance wage data in
measuring employment performance indicators.''; and
(3) by adding at the end the following:
``(d) Program Improvement.--
``(1) In general.--If the Secretary determines that an
eligible agency did not meet its adjusted levels of
performance for the core indicators of performance described
in subsection (b)(2)(A) for any program year, the eligible
agency shall--
``(A) work with the Secretary to develop and implement a
program improvement plan for the 2 program years succeeding
the program year in which the eligible agency did not meet
its adjusted levels of performance; and
``(B) revise its State plan under section 224, if
necessary, to reflect the changes agreed to in the program
improvement plan.
``(2) Further assistance.--If, after the period described
in paragraph (1)(A), the Secretary has provided technical
assistance to the eligible agency but determines that the
eligible agency did not meet its adjusted levels of
performance for the core indicators of performance described
in subsection (b)(2)(A), the Secretary may require the
eligible agency to make further revisions to the program
improvement plan described in paragraph (1). Such further
revisions shall be accompanied by further technical
assistance from the Secretary.''.
SEC. 207. STATE ADMINISTRATION.
Section 221(1) of the Adult Education and Family Literacy
Act (20 U.S.C. 9221(1)) is amended by striking ``and
implementation'' and inserting ``implementation, and
monitoring''.
SEC. 208. STATE DISTRIBUTION OF FUNDS; MATCHING REQUIREMENT.
Section 222 of the Adult Education and Family Literacy Act
(20 U.S.C. 9222) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``82.5'' the first place such term appears
and inserting ``80''; and
(ii) by striking ``the 82.5 percent'' and inserting ``such
amount'';
(B) in paragraph (2), by striking ``not more than 12.5
percent'' and inserting ``not more than 15 percent''; and
(C) in paragraph (3), by striking ``$65,000'' and inserting
``$75,000''; and
(2) in subsection (b)(1), by striking ``equal to'' and
inserting ``that is not less than''.
SEC. 209. STATE LEADERSHIP ACTIVITIES.
Section 223 of the Adult Education and Family Literacy Act
(20 U.S.C. 9223) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by inserting
``to develop or enhance the adult education system of the
State or outlying area'' after ``activities'';
(B) in paragraph (1), by striking ``instruction
incorporating'' and all that follows through the period and
inserting ``instruction incorporating the essential
components of reading instruction and instruction provided by
volunteers or by personnel of a State or outlying area.'';
(C) in paragraph (2), by inserting ``, including
development and dissemination of instructional and
programmatic practices based on the most rigorous research
available in reading, writing, speaking, mathematics, English
language acquisition programs, distance learning, and staff
training'' after ``activities'';
(D) in paragraph (5), by striking ``monitoring and'';
(E) by striking paragraph (6) and inserting the following:
``(6) The development and implementation of technology
applications, translation technology, or distance learning,
including professional development to support the use of
instructional technology.''; and
(F) by striking paragraph (7) through paragraph (11) and
inserting the following:
``(7) Coordination with--
``(A) other partners carrying out activities authorized
under this Act; and
``(B) existing support services, such as transportation,
child care, mental health services, and other assistance
designed to increase rates of enrollment in, and successful
completion of, adult education and literacy activities, for
adults enrolled in such activities.
``(8) Developing and disseminating curricula, including
curricula incorporating the essential components of reading
instruction as such components relate to adults.
``(9) The provision of assistance to eligible providers in
developing, implementing, and reporting measurable progress
in achieving the objectives of this subtitle.
``(10) The development and implementation of a system to
assist in the transition from adult basic education to
postsecondary education, including linkages with
postsecondary educational institutions.
``(11) Integration of literacy and English language
instruction with occupational skill training, and promoting
linkages with employers.
``(12) Activities to promote workplace literacy programs.
``(13) Activities to promote and complement local outreach
initiatives described in section 243(b)(3)(F).
``(14) In cooperation with efforts funded under sections
242 and 243, the development
[[Page S5140]]
of curriculum frameworks and rigorous content standards
that--
``(A) specify what adult learners should know and be able
to do in the areas of reading and language arts, mathematics,
and English language acquisition; and
``(B) take into consideration the following:
``(i) State academic standards established under section
1111(b) of the Elementary and Secondary Education Act of
1965.
``(ii) The current adult skills and literacy assessments
used in the State or outlying area.
``(iii) The core indicators of performance established
under section 212(b)(2)(A).
``(iv) Standards and academic requirements for enrollment
in non-remedial, for-credit, courses in postsecondary
education institutions supported by the State or outlying
area.
``(v) Where appropriate, the basic and literacy skill
content of occupational and industry skill standards widely
used by business and industry in the State or outlying area.
``(15) In cooperation with efforts funded under sections
242 and 243, development and piloting of--
``(A) new assessment tools and strategies that--
``(i) are based on scientifically based research, where
available and appropriate; and
``(ii) identify the needs and capture the gains of students
at all levels, with particular emphasis on--
``(I) students at the lowest achievement level;
``(II) students who have limited English proficiency; and
``(III) adults with learning disabilities;
``(B) options for improving teacher quality and retention;
and
``(C) assistance in converting research into practice.
``(16) The development and implementation of programs and
services to meet the needs of adult learners with learning
disabilities or limited English proficiency.
``(17) Other activities of statewide significance that
promote the purpose of this title.''; and
(2) in subsection (c), by striking ``being State- or
outlying area-imposed'' and inserting ``being imposed by the
State or outlying area''.
SEC. 210. STATE PLAN.
Section 224 of the Adult Education and Family Literacy Act
(20 U.S.C. 9224) is amended--
(1) in subsection (a)--
(A) by striking the heading and inserting ``4-Year Plans'';
and
(B) in paragraph (1), by striking ``5'' and inserting
``4'';
(2) in subsection (b)--
(A) in paragraph (1), by inserting ``and the role of
provider and cooperating agencies in preparing the
assessment'' after ``serve'';
(B) by striking paragraph (2) and inserting the following:
``(2) a description of how the eligible agency will address
the adult education and literacy needs identified under
paragraph (1) in each workforce development area of the
State, using funds received under this subtitle, as well as
other Federal, State, or local funds received in partnership
with other agencies for the purpose of adult literacy as
applicable;'';
(C) in paragraph (3)--
(i) by inserting ``and measure'' after ``evaluate'';
(ii) by inserting ``and improvement'' after
``effectiveness''; and
(iii) by striking ``212'' and inserting ``212, including--
``(A) how the eligible agency will evaluate and measure
annually such effectiveness on a grant-by-grant basis; and
``(B) how the eligible agency--
``(i) will hold eligible providers accountable regarding
the progress of such providers in improving the academic
achievement of participants in adult education programs under
this subtitle and regarding the core indicators of
performance described in section 212(b)(2)(A); and
``(ii) will use technical assistance, sanctions, and
rewards (including allocation of grant funds based on
performance and termination of grant funds based on
performance)'';
(D) by redesignating paragraphs (5) through (12) as
paragraphs (6) through (13), respectively;
(E) by inserting after paragraph (4) the following:
``(5) a description of how the eligible agency will improve
teacher quality, the professional development of eligible
providers, and instruction;'';
(G) in paragraph (6) (as redesignated by subparagraph (D)),
by striking ``who'' and all that follows through the
semicolon and inserting ``that--
``(A) offers flexible schedules and coordinates with
necessary Federal, State, and local support services (such as
child care, transportation, mental health services, and case
management) to enable individuals, including individuals with
disabilities or individuals with other special needs, to
participate in adult education and literacy activities; and
``(B) attempts to coordinate with support services that are
not provided under this subtitle prior to using funds for
adult education and literacy activities provided under this
subtitle for support services;'';
(H) in paragraph (10) (as redesignated by subparagraph
(D)), by striking ``plan;'' and inserting ``plan, which
process--
``(A) shall include the State Workforce Investment Board,
the Governor, State officials representing public schools,
community colleges, welfare agencies, agencies that provide
services to individuals with disabilities, other State
agencies that promote or operate adult education and literacy
activities, and direct providers of such adult literacy
services; and
``(B) may include consultation with the State agency for
higher education, institutions responsible for professional
development of adult education and literacy education program
instructors, institutions of higher education,
representatives of business and industry, refugee assistance
programs, and community-based organizations (as such term is
defined in section 101);'';
(I) in paragraph (11) (as redesignated by subparagraph
(D))--
(i) by inserting ``assess potential population needs and''
after ``will'';
(ii) in subparagraph (A), by striking ``students'' and
inserting ``individuals'';
(iii) in subparagraph (C), by striking ``and'' after the
semicolon; and
(iv) by adding at the end the following:
``(E) the unemployed; and
``(F) those individuals who are employed, but at levels
below self-sufficiency, as defined in section 101.'';
(J) in paragraph (12) (as redesignated by subparagraph
(D))--
(i) by inserting ``and how the plan submitted under this
subtitle is coordinated with the plan submitted by the State
under title I'' after ``eligible agency''; and
(ii) by striking ``and'' after the semicolon;
(K) in paragraph (13) (as redesignated by subparagraph
(D)), by striking ``231(c)(1).'' and inserting ``231(c)(1),
including--
``(A) how the State will build the capacity of
organizations that provide adult education and literacy
activities; and
``(B) how the State will increase the participation of
business and industry in adult education and literacy
activities;''; and
(L) by adding at the end the following:
``(14) a description of how the eligible agency will
consult with any State agency responsible for postsecondary
education to develop adult education programs and services
(including academic skill development and support services)
that prepare students to enter postsecondary education upon
the attainment of a secondary school diploma or its
recognized equivalent;
``(15) a description of how the eligible agency will
consult with the State agency responsible for workforce
development to develop adult education programs and services
that are designed to prepare students to enter the workforce;
and
``(16) a description of how the eligible agency will
improve the professional development of eligible providers of
adult education and literacy activities.'';
(3) in subsection (c), by adding at the end the following:
``At the end of the first 2-year period of the 4-year State
plan, the eligible agency shall review and, as needed, revise
the 4-year State plan.''; and
(4) in subsection (d)--
(A) in paragraph (1), by inserting ``, the chief State
school officer, the State officer responsible for
administering community and technical colleges, and the State
Workforce Investment Board'' after ``Governor''; and
(B) in paragraph (2), by striking ``comments'' and all that
follows through the period and inserting ``comments regarding
the State plan by the Governor, the chief State school
officer, the State officer responsible for administering
community and technical colleges, and the State Workforce
Investment Board, and any revision to the State plan, are
submitted to the Secretary.''.
SEC. 211. PROGRAMS FOR CORRECTIONS EDUCATION AND OTHER
INSTITUTIONALIZED INDIVIDUALS.
Section 225 of the Adult Education and Family Literacy Act
(20 U.S.C. 9225) is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking ``basic education'' and
inserting ``adult education and literacy activities'';
(B) in paragraph (2), by inserting ``and'' after the
semicolon;
(C) by striking paragraph (3); and
(D) by redesignating paragraph (4) as paragraph (3); and
(2) in subsection (d), by striking ``Definition of Criminal
Offender.--'' and inserting ``Definitions.--In this
section:''.
SEC. 212. GRANTS AND CONTRACTS FOR ELIGIBLE PROVIDERS.
Section 231 of the Adult Education and Family Literacy Act
(20 U.S.C. 9241) is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking ``workplace literacy
services'' and inserting ``workplace literacy programs''; and
(B) in paragraph (3), by striking ``literacy'' and
inserting ``language acquisition''; and
(2) in subsection (e)--
(A) in paragraph (1), by inserting ``to be achieved
annually on the core indicators of performance and employment
performance indicators described in section 212(b)(2)'' after
``outcomes'';
(B) by striking paragraph (3) and inserting the following:
``(3) the commitment of the eligible provider to be
responsive to local needs and to serve individuals in the
community who were identified by the assessment as most in
[[Page S5141]]
need of adult literacy services, including individuals who
are low-income, have minimal literacy skills, have learning
disabilities, or have limited English proficiency;'';
(C) in paragraph (4)(B), by striking ``, such as'' and all
that follows through the semicolon and inserting ``that
include the essential components of reading instruction;'';
(D) in paragraph (5), by striking ``research'' and
inserting ``the most rigorous research available, including
scientifically based research,'';
(E) in paragraph (7), by inserting ``, when appropriate and
based on the most rigorous research available, including
scientifically based research,'' after ``real life
contexts'';
(F) in paragraph (9), by inserting ``education, job
training, and social service'' after ``other available'';
(G) in paragraph (10)--
(i) by inserting ``coordination with Federal, State, and
local'' after ``schedules and''; and
(ii) by striking ``and transportation'' and inserting ``,
transportation, mental health services, and case
management'';
(H) in paragraph (11)--
(i) by inserting ``measurable'' after ``report'';
(ii) by striking ``eligible agency'';
(iii) by inserting ``established by the eligible agency''
after ``performance measures''; and
(iv) by striking ``and'' after the semicolon;
(I) in paragraph (12), by striking ``literacy programs.''
and inserting ``language acquisition programs and civics
education programs;''; and
(J) by adding at the end the following:
``(13) the capacity of the eligible provider to produce
information on performance results, including enrollments and
measurable participant outcomes;
``(14) whether reading, writing, speaking, mathematics, and
English language acquisition instruction provided by the
eligible provider are based on the best practices derived
from the most rigorous research available;
``(15) whether the eligible provider's applications of
technology and services to be provided are sufficient to
increase the amount and quality of learning and lead to
measurable learning gains within specified time periods; and
``(16) the capacity of the eligible provider to serve adult
learners with learning disabilities.''.
SEC. 213. LOCAL APPLICATION.
Section 232 of the Adult Education and Family Literacy Act
(20 U.S.C. 9242) is amended--
(1) in paragraph (1)--
(A) by inserting ``consistent with the requirements of this
subtitle'' after ``spent''; and
(B) by striking ``and'' after the semicolon;
(2) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(3) information that addresses each of the considerations
required under section 231(e).''.
SEC. 214. LOCAL ADMINISTRATIVE COST LIMITS.
Section 233 of the Adult Education and Family Literacy Act
(20 U.S.C. 9243) is amended--
(1) in subsection (a)(2)--
(A) by inserting ``and professional'' after ``personnel'';
and
(B) by inserting ``development of measurable goals in
reading, writing, and speaking the English language, and in
mathematical computation,'' after ``development,''; and
(2) in subsection (b)--
(A) by inserting ``and professional'' after ``personnel'';
and
(B) by inserting ``development of measurable goals in
reading, writing, and speaking the English language, and in
mathematical computation,'' after ``development,''.
SEC. 215. ADMINISTRATIVE PROVISIONS.
Section 241(b) of the Adult Education and Family Literacy
Act (20 U.S.C. 9251(b)) is amended--
(1) in paragraph (1)(A)--
(A) by striking ``adult education and literacy activities''
each place the term appears and inserting ``activities under
this subtitle''; and
(B) by striking ``was'' and inserting ``were''; and
(2) in paragraph (4)--
(A) by inserting ``not more than'' after ``this subsection
for''; and
(B) by striking ``only''.
SEC. 216. NATIONAL INSTITUTE FOR LITERACY.
Section 242 of the Adult Education and Family Literacy Act
(20 U.S.C. 9252) is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``literacy'' and
inserting ``effective literacy programs for children, youth,
adults, and families'';
(B) in paragraph (2), by inserting ``and disseminates
information on'' after ``coordinates''; and
(C) by striking paragraph (3)(A) and inserting the
following:
``(A) coordinating and participating in the Federal effort
to identify and disseminate information on literacy that is
derived from scientifically based research, or the most
rigorous research available, and effective programs that
serve children, youth, adults, and families; and'';
(2) by striking subsection (b)(3) and inserting the
following:
``(3) Recommendations.--The Interagency Group, in
consultation with the National Institute for Literacy
Advisory Board (in this section referred to as the `Board')
established under subsection (e), shall plan the goals of the
Institute and the implementation of any programs to achieve
the goals. The Board may also request a meeting of the
Interagency Group to discuss any recommendations the Board
may make.'';
(3) in subsection (c)--
(A) in paragraph (1)--
(i) in subparagraph (A)--
(I) by striking ``to establish'' and inserting ``to
maintain'';
(II) in clause (i), by striking ``phonemic awareness,
systematic phonics, fluency, and reading comprehension'' and
inserting ``the essential components of reading
instruction'';
(III) in clause (iii), by striking ``and'' after the
semicolon;
(IV) in clause (iv), by inserting ``and'' after the
semicolon; and
(V) by adding at the end the following:
``(v) a list of local adult education and literacy
programs;'';
(ii) in subparagraph (C)--
(I) by striking ``reliable and replicable research'' and
inserting ``reliable and replicable research as defined by
the Institute of Education Sciences''; and
(II) by striking ``especially with the Office of
Educational Research and Improvement in the Department of
Education,'';
(iii) in subparagraph (D), by striking ``phonemic
awareness, systematic phonics, fluency, and reading
comprehension based on'' and inserting ``the essential
components of reading instruction and'';
(iv) in subparagraph (H), by striking ``and'' after the
semicolon;
(v) in subparagraph (I), by striking the period at the end
and inserting a semicolon; and
(vi) by adding at the end the following:
``(J) to work cooperatively with the Department of
Education to assist States that are pursuing the
implementation of standards-based educational improvements
for adults through the dissemination of training, technical
assistance, and related support and through the development
and dissemination of related standards-based assessment
instruments; and
``(K) to identify scientifically based research where
available, or the most rigorous research available, on the
effectiveness of instructional practices and organizational
strategies relating to literacy programs on the acquisition
of skills in reading, writing, English acquisition, and
mathematics.''; and
(B) by adding at the end the following:
``(3) Coordination.--In identifying the reliable and
replicable research the Institute will support, the Institute
shall use standards for research quality that are consistent
with those of the Institute of Education Sciences.'';
(4) in subsection (e)--
(A) in paragraph (1)(B)--
(i) in clause (i), by striking ``literacy programs'' and
inserting ``language acquisition programs'';
(ii) in clause (ii), by striking ``literacy programs'' and
inserting ``or have participated in or partnered with
workplace literacy programs'';
(iii) in clause (iv), by inserting ``, including adult
literacy research'' after ``research'';
(iv) in clause (vi), by striking ``and'' after the
semicolon;
(v) in clause (vii), by striking the period at the end and
inserting ``; and''; and
(vi) by adding at the end the following:
``(viii) institutions of higher education.'';
(B) in paragraph (2)--
(i) in subparagraph (B), by striking ``and'' after the
semicolon;
(ii) in subparagraph (C), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(D) review the biennial report submitted to Congress
pursuant to subsection (k).''; and
(C) in paragraph (5), by striking the second sentence and
inserting the following: ``A recommendation of the Board may
be passed only by a majority of the Board's members present
at a meeting for which there is a quorum.''; and
(5) in subsection (k)--
(A) by striking ``Labor and Human Resources'' and inserting
``Health, Education, Labor, and Pensions''; and
(B) by striking ``The Institute shall submit a report
biennially to'' and inserting ``Not later than 1 year after
the date of enactment of the Adult Education and Family
Literacy Act Amendments of 2005, and biennially thereafter,
the Institute shall submit a report to''.
SEC. 217. NATIONAL LEADERSHIP ACTIVITIES.
Section 243 of the Adult Education and Family Literacy Act
(20 U.S.C. 9253) is amended to read as follows:
``SEC. 243. NATIONAL LEADERSHIP ACTIVITIES.
``(a) In General.--The Secretary shall establish and carry
out a program of national leadership activities to enhance
the quality of adult education and literacy programs
nationwide.
``(b) Permissive Activities.--The national leadership
activities described in subsection (a) may include the
following:
``(1) Technical assistance, including--
``(A) assistance provided to eligible providers in
developing and using performance measures for the improvement
of adult education and literacy activities, including family
literacy services;
``(B) assistance related to professional development
activities, and assistance for the purposes of developing,
improving, identifying, and disseminating the most successful
methods and techniques for providing adult
[[Page S5142]]
education and literacy activities, including family literacy
services, based on scientific evidence where available;
``(C) assistance in distance learning and promoting and
improving the use of technology in the classroom;
``(D) assistance in developing valid, measurable, and
reliable performance data, including data about employment
and employment outcome, and using performance information for
the improvement of adult education and literacy programs; and
``(E) assistance to help States, particularly low-
performing States, meet the requirements of section 212.
``(2) A program of grants, contracts, or cooperative
agreements awarded on a competitive basis to national,
regional, or local networks of private nonprofit
organizations, public libraries, or institutions of higher
education to build the capacity of such networks' members to
meet the performance requirements of eligible providers under
this title and involve adult learners in program improvement.
``(3) Funding national leadership activities that are not
described in paragraph (1), either directly or through
grants, contracts, or cooperative agreements awarded on a
competitive basis to or with postsecondary educational
institutions, public or private organizations or agencies, or
consortia of such institutions, organizations, or agencies,
such as--
``(A) developing, improving, and identifying the most
successful methods and techniques for addressing the
education needs of adults, including instructional practices
using the essential components of reading instruction based
on the work of the National Institute of Child Health and
Human Development;
``(B) increasing the effectiveness of, and improving the
quality of, adult education and literacy activities,
including family literacy services;
``(C) carrying out rigorous research, including
scientifically based research where appropriate, on national
literacy basic skill acquisition for adult learning,
including estimating the number of adults functioning at the
lowest levels of literacy proficiency;
``(D)(i) carrying out demonstration programs;
``(ii) disseminating best practices information, including
information regarding promising practices resulting from
federally funded demonstration programs; and
``(iii) developing and replicating best practices and
innovative programs, including--
``(I) the development of models for basic skill
certificates;
``(II) the identification of effective strategies for
working with adults with learning disabilities and with
adults with limited English proficiency;
``(III) integrated basic and workplace skills education
programs;
``(IV) coordinated literacy and employment services; and
``(V) postsecondary education transition programs;
``(E) providing for the conduct of an independent
evaluation and assessment of adult education and literacy
activities through studies and analyses conducted
independently through grants and contracts awarded on a
competitive basis, which evaluation and assessment shall
include descriptions of--
``(i) the effect of performance measures and other measures
of accountability on the delivery of adult education and
literacy activities, including family literacy services;
``(ii) the extent to which the adult education and literacy
activities, including family literacy services, increase the
literacy skills of adults (and of children, in the case of
family literacy services), lead the participants in such
activities to involvement in further education and training,
enhance the employment and earnings of such participants,
and, if applicable, lead to other positive outcomes, such as
reductions in recidivism in the case of prison-based adult
education and literacy activities;
``(iii) the extent to which the provision of support
services to adults enrolled in adult education and family
literacy programs increase the rate of enrollment in, and
successful completion of, such programs; and
``(iv) the extent to which different types of providers
measurably improve the skills of participants in adult
education and literacy programs;
``(F) supporting efforts aimed at capacity building of
programs at the State and local levels such as technical
assistance in program planning, assessment, evaluation, and
monitoring of activities carried out under this subtitle;
``(G) collecting data, such as data regarding the
improvement of both local and State data systems, through
technical assistance and development of model performance
data collection systems;
``(H) supporting the development of an entity that would
produce and distribute technology-based programs and
materials for adult education and literacy programs using an
interconnection system (as defined in section 397 of the
Communications Act of 1934 (47 U.S.C. 397)) and expand the
effective outreach and use of such programs and materials to
adult education eligible providers;
``(I) determining how participation in adult education and
literacy activities prepares individuals for entry into
postsecondary education and employment and, in the case of
prison-based services, has an effect on recidivism; and
``(J) other activities designed to enhance the quality of
adult education and literacy activities nationwide.''.
SEC. 218. INTEGRATED ENGLISH LITERACY AND CIVICS EDUCATION.
Chapter 4 of subtitle A of title II (29 U.S.C. 9251 et
seq.) is amended by adding at the end the following:
``SEC. 244. INTEGRATED ENGLISH LITERACY AND CIVICS EDUCATION.
``(a) In General.--From funds made available under section
211(a)(4) for each fiscal year, the Secretary shall award
grants to States, from allotments under subsection (b), for
integrated English literacy and civics education.
``(b) Allotment.--
``(1) In general.--Subject to paragraph (2), from amounts
made available under section 211(a)(4) for a fiscal year, the
Secretary shall allocate--
``(A) 65 percent to the States on the basis of a State's
need for integrated English literacy and civics education as
determined by calculating each State's share of a 10-year
average of the Immigration and Naturalization Service data
for immigrants admitted for legal permanent residence for the
10 most recent years; and
``(B) 35 percent to the States on the basis of whether the
State experienced growth as measured by the average of the 3
most recent years for which Immigration and Naturalization
Service data for immigrants admitted for legal permanent
residence are available.
``(2) Minimum.--No State shall receive an allotment under
paragraph (1) in an amount that is less than $60,000.''.
SEC. 219. TRANSITION.
The Secretary shall take such steps as the Secretary
determines to be appropriate to provide for the orderly
transition to the authority of the Adult Education and Family
Literacy Act (as amended by this title) from any authority
under provisions of the Adult Education and Family Literacy
Act (as such Act was in effect on the day before the date of
enactment of the Adult Education and Family Literacy Act
Amendments of 2005).
TITLE III--AMENDMENTS TO OTHER PROVISIONS OF LAW
SEC. 301. WAGNER-PEYSER ACT.
(a) Conforming Amendment.--Section 2(3) of the Wagner-
Peyser Act (29 U.S.C. 49a(3)) is amended by striking
``section 134(c)'' and inserting ``section 121(e)''.
(b) Colocation.--Section 3 of the Wagner-Peyser Act (29
U.S.C. 49b) is amended by adding at the end the following:
``(d) In order to avoid duplication of services and enhance
integration of services, employment services offices in each
State shall be colocated with one-stop centers established
under title I of the Workforce Investment Act of 1998 (29
U.S.C. 2801 et seq.).
``(e) The Secretary, in consultation with States, is
authorized to assist in the development of national
electronic tools that may be used to improve access to
workforce information for individuals through--
``(1) the one-stop delivery systems established under
section 121(e) of the Workforce Investment Act of 1998 (29
U.S.C. 2841(e)); and
``(2) such other delivery systems as the Secretary
determines to be appropriate.''.
(c) Cooperative Statistical Program.--Section 14 of the
Wagner-Peyser Act (29 U.S.C. 49l-1) is amended by striking
the section heading and all that follows through ``There''
and inserting the following:
``SEC. 14. COOPERATIVE STATISTICAL PROGRAM.
``There''.
(d) Workforce and Labor Market Information System.--Section
15 of the Wagner-Peyser Act (29 U.S.C. 49l-2) is amended--
(1) by striking the section heading and inserting the
following:
``SEC. 15. WORKFORCE AND LABOR MARKET INFORMATION SYSTEM.'';
(2) by striking ``employment statistics system'' each place
it appears and inserting ``workforce and labor market
information system'';
(3) in subsection (a)(1), by striking ``of employment
statistics'';
(4) in subsection (b)--
(A) in paragraph (1)--
(i) by striking ``The'' and inserting the following:
``(A) Structure.--The''; and
(ii) by adding at the end the following:
``(B) Grants or cooperative agreements.--
``(i) In general.--The Secretary shall carry out the
provisions of this section in a timely manner through grants
or cooperative agreements with States.
``(ii) Distribution of funds.--With regard to distributing
funds appropriated under subsection (g) (relating to
workforce and labor market information funding) for fiscal
years 2006 through 2011, the Secretary shall continue to
distribute the funds to States in the manner in which the
Secretary distributed funds to the States under this section
for fiscal years 1999 through 2003.''; and
(B) in paragraph (2)(E)--
(i) in clause (i), by adding ``and'' at the end;
(ii) in clause (ii), by striking ``; and'' and inserting a
period; and
(iii) by striking clause (iii);
(5) by striking subsections (c) and (d) and inserting the
following:
``(c) Two-Year Plan.--The Secretary, working through the
Commissioner of Labor Statistics, and in cooperation with the
States and with the assistance of the Assistant Secretary for
Employment and Training and heads of other appropriate
Federal agencies, shall prepare a 2-year plan which shall be
the mechanism for achieving cooperative
[[Page S5143]]
management of the nationwide workforce and labor market
information system described in subsection (a) and the
statewide workforce and labor market information systems that
comprise the nationwide system. The plan shall--
``(1) describe the steps the to be taken in the following 2
years to carry out the duties described in subsection (b)(2);
``(2) evaluate the performance of the system and recommend
needed improvements, with particular attention to the
improvements needed at the State and local levels; and
``(3) describe the involvement of States in the development
of the plan, through consultation between the Secretary and
representatives from State agencies in accordance with
subsection (d).
``(d) Coordination With the States.--The Secretary, working
though the Commissioner of Labor Statistics and in
coordination with the Assistant Secretary for Employment and
Training, shall consult at least annually with
representatives of each of the Federal regions of the
Department of Labor, elected (pursuant to a process
established by the Secretary) by and from the State workforce
and labor market information directors affiliated with the
State agencies that perform the duties described in
subsection (e)(2).'';
(6) in subsection (e)(2)--
(A) in subparagraph (G), by adding ``and'' at the end;
(B) by striking subparagraph (H); and
(C) by redesignating subparagraph (I) as subparagraph (H);
and
(7) in subsection (g), by striking ``1999 through 2004''
and inserting ``2006 through 2011''.
TITLE IV--REHABILITATION ACT AMENDMENTS
SEC. 401. SHORT TITLE.
This title may be cited as the ``Rehabilitation Act
Amendments of 2005''.
SEC. 402. TECHNICAL AMENDMENTS TO TABLE OF CONTENTS.
(a) Expanded Transition Services.--Section 1(b) of the
Rehabilitation Act of 1973 is amended by inserting after the
item relating to section 110 the following:
``Sec. 110A. Reservation for expanded transition services.''.
(b) Incentive Grants.--Section 1(b) of the Rehabilitation
Act of 1973 is amended by inserting after the item relating
to section 112 the following:
``Sec. 113. Incentive grants.''.
(c) Independent Living Services for Older Individuals Who
Are Blind.--Section 1(b) of the Rehabilitation Act of 1973 is
amended by striking the items relating to sections 752 and
753 and inserting the following:
``Sec. 752. Training and technical assistance.
``Sec. 753. Program of grants.
``Sec. 754. Authorization of appropriations.''.
SEC. 403. PURPOSE.
Section 2 of the Rehabilitation Act of 1973 (29 U.S.C. 701)
is amended--
(1) in subsection (a)--
(A) in paragraph (5), by striking ``and'' after the
semicolon;
(B) in paragraph (6), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(7)(A) a high proportion of youth who are individuals
with disabilities is leaving special education without being
employed or being enrolled in continuing education; and
``(B) there is a substantial need to support those youth as
the youth transition from school to postsecondary life.'';
and
(2) in subsection (b)--
(A) in paragraph (1)(F), by striking ``and'' after the
semicolon;
(B) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(3) to provide opportunities for employers and vocational
rehabilitation service providers to provide meaningful input
at all levels of government to ensure successful employment
of individuals with disabilities.''.
SEC. 404. DEFINITIONS.
Section 7 of the Rehabilitation Act of 1973 (29 U.S.C. 705)
is amended--
(1) in paragraph (2)(B)--
(A) in the matter preceding clause (i), by inserting ``and
literacy services'' after ``supported employment''; and
(B) in clause (iii), by inserting ``and literacy skills''
after ``educational achievements'';
(2) by striking paragraphs (3) and (4) and inserting the
following:
``(3) Assistive technology definitions.--
``(A) Assistive technology.--The term `assistive
technology' has the meaning given such term in section 3 of
the Assistive Technology Act of 1998 (29 U.S.C. 3002).
``(B) Assistive technology device.--The term `assistive
technology device' has the meaning given such term in section
3 of the Assistive Technology Act of 1998, except that the
reference in such section to the term `individuals with
disabilities' shall be deemed to mean more than one
individual with a disability as defined in paragraph (20)(A).
``(C) Assistive technology service.--The term `assistive
technology service' has the meaning given such term in
section 3 of the Assistive Technology Act of 1998, except
that the reference in such section--
``(i) to the term `individual with a disability' shall be
deemed to mean an individual with a disability, as defined in
paragraph (20)(A); and
``(ii) to the term `individuals with disabilities' shall be
deemed to mean more than one such individual.'';
(3) by striking paragraph (7) and inserting the following:
``(7) Consumer organization.--The term `consumer
organization' means a membership organization in which a
majority of the organization's members and a majority of the
organization's officers are individuals with disabilities.'';
(4) in paragraph (17)--
(A) in subparagraph (C), by striking ``and'' after the
semicolon;
(B) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following:
``(E) maintaining individuals with significant disabilities
in, or transitioning individuals with significant
disabilities to, community-based living.'';
(5) by redesignating paragraphs (24) through (28), (29)
through (34), (35) through (37), and (38) through (39), as
paragraphs (25) through (29), (31) through (36), (38) through
(40), and (42) through (43), respectively;
(6) by inserting after paragraph (23) the following:
``(24) Literacy.--The term `literacy' has the meaning given
the term in section 203 of the Adult Education and Family
Literacy Act (20 U.S.C. 9202).'';
(7) by inserting after paragraph (29), as redesignated by
paragraph (5), the following:
``(30) Post-employment service.--The term `post-employment'
service means a service identified in section 103(a) that
is--
``(A) provided subsequent to the achievement of an
employment outcome; and
``(B) necessary for an individual to maintain, regain, or
advance in employment, consistent with the individual's
strengths, resources, priorities, concerns, abilities,
capabilities, interests, and informed choice.'';
(8) by inserting after paragraph (36), as redesignated by
paragraph (5), the following:
``(37) Student with a disability.--
``(A) In general.--The term `student with a disability'
means an individual with a disability who attends an
elementary school or secondary school and who--
``(i) is not younger than 16 years of age;
``(ii) is not older than 22 years of age;
``(iii) has been determined to be eligible under section
102(a) for assistance under title I; and
``(iv)(I) is eligible for, and receiving, special education
or related services under part B of the Individuals with
Disabilities Education Act (20 U.S.C. 1411 et seq.); or
``(II) is an individual with a disability, for purposes of
section 504.
``(B) Students with disabilities.--The term `students with
disabilities' means more than 1 student with a disability.'';
(9) in paragraph (38)(A)(ii), as redesignated by paragraph
(5), by striking ``paragraph (36)(C)'' and inserting
``paragraph (39)(C)''; and
(10) by inserting after paragraph (40), as redesignated by
paragraph (5), the following:
``(41) Transition services expansion year.--The term
`transition services expansion year' means--
``(A) the first fiscal year for which the amount
appropriated under section 100(b) exceeds the amount
appropriated under section 100(b) for fiscal year 2006 by not
less than $100,000,000; and
``(B) each fiscal year subsequent to that first fiscal
year.''.
SEC. 405. ADMINISTRATION OF THE ACT.
Section 12(a)(1) of the Rehabilitation Act of 1973 (29
U.S.C. 709(a)(1)) is amended--
(1) by inserting ``(A)'' after ``(1)'';
(2) by adding at the end the following:
``(B) provide technical assistance to the designated State
units on developing successful partnerships with local and
multi-State businesses in an effort to employ individuals
with disabilities; and
``(C) provide technical assistance on developing self-
employment opportunities and outcomes for individuals with
disabilities;''.
SEC. 406. REPORTS.
Section 13 of the Rehabilitation Act of 1973 (29 U.S.C.
710) is amended by adding at the end the following:
``(d)(1)(A) The Commissioner shall ensure that the reports,
information, and data described in subparagraph (B) will be
posted in a timely manner on the website of the Department of
Education, in order to inform the public about the
administration and performance of programs in each State
under this Act.
``(B) The reports, information, and data referred to in
subparagraph (A) shall consist of--
``(i) reports submitted by a designated State unit under
this Act;
``(ii) accountability information (including State
performance information relating to evaluation standards and
performance indicators under section 106 and State
performance information relating to State performance
measures under section 136 of the Workforce Investment Act of
1998 (29 U.S.C. 2871)) submitted by a designated State unit
under this Act or submitted under such section 136;
``(iii) data collected from each designated State unit
under this Act with the approval of the Office of Management
and Budget; and
``(iv) monitoring reports conducted under this Act.
``(C) The Commissioner shall maintain, and post on the
website, a listing of the reports, information, and data
required to be submitted by designated State units under this
Act.
[[Page S5144]]
``(D) The Commissioner shall post on the website, or
establish links on the website to, evaluations, studies, and
audits, including evaluations, studies, and audits conducted
by agencies of the Federal government, concerning programs
carried out under this Act.
``(E) The Commissioner shall maintain on the website a list
of the designated State units and shall establish links on
the website to websites maintained by those units.
``(2) The Commissioner shall maintain public use read-only
access to the State and aggregated reports and analyzed data
filed and maintained on the Rehabilitation Services
Administration management information system or a similar
system maintained by the Department of Education.''.
SEC. 407. CARRYOVER.
Section 19 of the Rehabilitation Act of 1973 (29 U.S.C.
716) is amended--
(1) in subsection (a)(1)--
(A) by striking ``, section 509 (except as provided in
section 509(b))'';
(B) by striking ``or C''; and
(C) by striking ``752(b)'' and inserting ``753(b)''; and
(2) by adding at the end the following:
``(c) Client Assistance Program; Protection and Advocacy of
Individual Rights.--
``(1) Appropriated amounts.--Notwithstanding any other
provision of law, any funds appropriated for a fiscal year to
carry out a grant program under section 112 or 509 (except as
provided in section 509(b)), including any funds reallotted
under such grant program, that are not obligated and expended
by recipients prior to the beginning of the succeeding fiscal
year shall remain available for obligation and expenditure by
such recipients during such succeeding fiscal year.
``(2) Program income.--Notwithstanding any other provision
of law, any amounts of program income received by recipients
under a grant program under section 112 or 509 in a fiscal
year that are not obligated and expended by recipients prior
to the beginning of the succeeding fiscal year, shall remain
available until expended.''.
Subtitle A--Vocational Rehabilitation Services
SEC. 411. DECLARATION OF POLICY; AUTHORIZATION OF
APPROPRIATIONS.
Section 100(b)(1) of the Rehabilitation Act of 1973 (29
U.S.C. 720(b)(1)) is amended by striking ``fiscal years 1999
through 2003'' and inserting ``fiscal years 2006 through
2011''.
SEC. 412. STATE PLANS.
(a) In General.--Section 101(a) of the Rehabilitation Act
of 1973 (29 U.S.C. 721(a)) is amended--
(1) in paragraph (2), by adding at the end the following:
``(D) State agency for reimbursement purposes.--A governing
body of an Indian tribe that receives a grant under section
121 shall be considered, for purposes of the cost
reimbursement provisions--
``(i) in section 222(d)(1) of the Social Security Act (42
U.S.C. 422(d)(1)), to be a State; and
``(ii) in subsections (d) and (e) of section 1615 of the
Social Security Act (42 U.S.C. 1382d), to be a State agency
described in subsection (d) of that section.'';
(2) in paragraph (6)(B), by striking ``to employ and
advance in employment'' and inserting ``to recruit, employ,
and advance in employment'';
(3) in paragraph (7)(A)(v), by striking subclause (I) and
inserting the following:
``(I) a system for the continuing education of
rehabilitation professionals and paraprofessionals within the
designated State unit, particularly with respect to
rehabilitation technology, including training implemented in
coordination with State programs carried out under section 4
of the Assistive Technology Act of 1998 (29 U.S.C. 3003);
and'';
(4) in paragraph (10)--
(A) in subparagraph (B), by striking ``annual reporting on
the eligible individuals receiving the services, on those
specific data elements described in section 136(d)(2) of the
Workforce Investment Act of 1998'' and inserting ``annual
reporting of information on eligible individuals receiving
the services that is needed to assess performance on the core
indicators of performance described in section
136(b)(2)(A)(i) of the Workforce Investment Act of 1998 (29
U.S.C. 2871(b)(2)(A)(i))'';
(B) in subparagraph (C), by striking clauses (iii) and (iv)
and inserting the following:
``(iii) the number of applicants and eligible recipients,
including the number of individuals with significant
disabilities, who exited the program carried out under this
title and the number of such individuals who achieved
employment outcomes after receiving vocational rehabilitation
services; and
``(iv) the number of individuals who received vocational
rehabilitation services who entered and retained employment
and the earnings of such individuals, as such entry,
retention, and earnings are defined for purposes of the core
indicators of performance described in section
136(b)(2)(A)(i) of the Workforce Investment Act of 1998 (29
U.S.C. 2871(b)(2)(A)(i)).''; and
(C) in subparagraph (E)(ii), by striking ``in meeting'' and
all that follows through the period and inserting ``in
meeting the standards and indicators established pursuant to
section 106.'';
(5) in paragraph (11)--
(A) by striking subparagraph (C) and inserting the
following:
``(C) Interagency cooperation with other agencies.--The
State plan shall include descriptions of interagency
cooperation with, and utilization of the services and
facilities of, Federal, State, and local agencies and
programs, including the State programs carried out under
section 4 of the Assistive Technology Act of 1998 (29 U.S.C.
3003), programs carried out by the Under Secretary for Rural
Development of the Department of Agriculture, and State use
contracting programs, to the extent that such agencies and
programs are not carrying out activities through the
statewide workforce investment system.'';
(B) by striking subparagraph (D)(ii) and inserting the
following:
``(ii) transition planning by personnel of the designated
State agency and the State educational agency that will
facilitate the development and completion of the
individualized education programs under section 614(d) of the
Individuals with Disabilities Education Act (20 U.S.C.
1414(d)) and, as appropriate, the development and completion
of the individualized plan for employment, in order to
achieve post-school employment outcomes of students with
disabilities;''; and
(C) by adding at the end the following:
``(G) Coordination with assistive technology programs.--The
State plan shall include an assurance that the designated
State unit, and the lead agency and implementing agency (if
any) designated by the Governor of the State under section 4
of the Assistive Technology Act of 1998 (29 U.S.C. 3003),
have developed working relationships and will enter into
agreements for the coordination of their activities,
including the referral of individuals with disabilities to
programs and activities described in that section.
``(H) Coordination with ticket to work and self-sufficiency
program.--The State plan shall include an assurance that the
designated State unit will coordinate activities with any
other State agency that is functioning as an employment
network under the Ticket to Work and Self-Sufficiency Program
established under section 1148 of the Social Security Act (42
U.S.C. 1320b-19).'';
(6) in paragraph (15)--
(A) in subparagraph (A)--
(i) in clause (i)--
(I) in subclause (II), by striking ``and'' after the
semicolon;
(II) in subclause (III), by inserting ``and'' after the
semicolon; and
(III) by adding at the end the following:
``(IV) for purposes of addressing needs in a transition
services expansion year, students with disabilities,
including their need for transition services;'';
(ii) by redesignating clauses (ii) and (iii) as clauses
(iii) and (iv), respectively; and
(iii) by inserting after clause (i) the following:
``(ii) include an assessment of the needs of individuals
with disabilities for transition services provided under this
Act, and coordinated with transition services provided under
the Individuals with Disabilities Education Act (20 U.S.C.
1400 et seq.), and an assessment as to whether the transition
services provided under those Acts meet the needs of
individuals with disabilities;''; and
(B) in subparagraph (D)--
(i) by redesignating clauses (iii), (iv), and (v) as
clauses (iv), (v), and (vi), respectively; and
(ii) by inserting after clause (ii) the following:
``(iii) for use in a transition services expansion year,
the methods to be used to improve and expand vocational
rehabilitation services for students with disabilities,
including the coordination of services designed to facilitate
the transition of such students from the receipt of
educational services in school to postsecondary life,
including the receipt of vocational rehabilitation services
under this title, postsecondary education, or employment;'';
(7) in paragraph (20)--
(A) by redesignating subparagraph (B) as subparagraph (C);
(B) by inserting after subparagraph (A) the following:
``(B) Information on assistance for beneficiaries of
assistance under title ii or xvi of the social security
act.--The State plan shall include an assurance that the
designated State agency will make available to individuals
entitled to benefits under title II or XVI of the Social
Security Act (42 U.S.C. 401 et seq., 1381 et seq.) on the
basis of a disability or blindness--
``(i) information on the availability of benefits and
medical assistance authorized under the State medicaid
program under title XIX of the Social Security Act (42 U.S.C.
1396 et seq.) or under the medicare program under title XVIII
of the Social Security Act (42 U.S.C. 1395 et seq.), and
medical assistance authorized under other federally funded
programs;
``(ii) information on the availability of assistance
through benefits planning and assistance programs authorized
under section 1149 of the Social Security Act (42 U.S.C.
1320b-20) and services provided by the State protection and
advocacy system and authorized under section 1150 of the
Social Security Act (42 U.S.C. 1320b-21); and
``(iii) in the case of individuals who are also eligible
for a ticket under the Ticket to Work and Self-Sufficiency
Program established under section 1148 of the Social Security
Act (42 U.S.C. 1320b-19), general information regarding the
options for using the ticket and information on how to
contact a program manager of the Ticket to Work and Self-
Sufficiency Program to obtain information on approved
employment networks, on providers for the benefits planning
and assistance programs described in subparagraph
[[Page S5145]]
(B) in the State, and on the services provided by the State
protection and advocacy system and described in subparagraph
(B).''; and
(C) in subparagraph (C)(ii), as redesignated by
subparagraph (A)--
(i) in subclause (II), by inserting ``, to the maximum
extent possible,'' after ``point of contact''; and
(ii) in subclause (III), by striking ``or regain'' and
inserting ``regain, or advance in''; and
(8) by adding at the end the following:
``(25) Services for students with disabilities.--The State
plan for a transition services expansion year shall provide
an assurance satisfactory to the Secretary that the State--
``(A) has developed and shall implement, in each transition
services expansion year, strategies to address the needs
identified in the assessment described in paragraph (15), and
achieve the goals and priorities identified by the State, to
improve and expand vocational rehabilitation services for
students with disabilities on a statewide basis in accordance
with paragraph (15); and
``(B) in each transition services expansion year--
``(i) shall not use more than 5 percent of the funds
reserved under section 110A and available for this
subparagraph, to pay for administrative costs; and
``(ii) shall use the remaining funds to carry out programs
or activities designed to improve and expand vocational
rehabilitation services for students with disabilities,
through partnerships described in subparagraph (C), that--
``(I) facilitate the transition of the students with
disabilities from the receipt of educational services in
school, to the receipt of vocational rehabilitation services
under this title, including, at a minimum, those services
specified in the interagency agreement required in paragraph
(11)(D);
``(II) improve the achievement of post-school goals of
students with disabilities through the provision of
transition services, including improving the achievement
through participation (as appropriate when vocational goals
are discussed) in meetings regarding individualized education
programs developed under section 614 of the Individuals with
Disabilities Education Act (20 U.S.C. 1414);
``(III) provide vocational guidance, career exploration
services, and job search skills and strategies and technical
assistance to students with disabilities;
``(IV) support the provision of training and technical
assistance to local educational agency personnel responsible
for the planning and provision of services to students with
disabilities; and
``(V) support outreach activities to students with
disabilities who are eligible for, and need, services under
this title; and
``(C) in each transition services expansion year, shall
ensure that the funds described in subparagraph (B)(ii) are
awarded only to partnerships that--
``(i) shall include local vocational rehabilitation
services providers and local educational agencies; and
``(ii) may include (or may have linkages with) other
agencies such as employment, social service, and health
organizations, that contribute funds for the provision of
vocational rehabilitation services described in subparagraph
(B)(ii) for eligible students with disabilities.''.
(b) Construction.--Section 101 of the Rehabilitation Act of
1973 (29 U.S.C. 721) is amended by adding at the end the
following:
``(c) Construction.--
``(1) Definitions.--In this subsection, the terms `child
with a disability', `free appropriate public education',
`related services', and `special education' have the meanings
given the terms in section 602 of the Individuals with
Disabilities Education Act (20 U.S.C. 1401).
``(2) Obligation to provide or pay for transition
services.--Nothing in this part shall be construed to reduce
the obligation of a local educational agency or any other
agency to provide or pay for any transition services that are
also considered special education or related services and
that are necessary for ensuring a free appropriate public
education to children with disabilities within the State
involved.''.
SEC. 413. ELIGIBILITY AND INDIVIDUALIZED PLAN FOR EMPLOYMENT.
Section 102 of the Rehabilitation Act of 1973 (29 U.S.C.
722) is amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking the semicolon at the
end and inserting ``, including a listing of all the
community resources (including resources from consumer
organizations), to the maximum extent possible, to assist in
the development of such individual's individualized plan for
employment to enable the individual to make informed and
effective choices in developing the individualized plan for
employment;''; and
(ii) in subparagraph (D)--
(I) in clause (i), by striking ``and'' after the semicolon;
(II) in clause (ii), by striking the period at the end and
inserting a semicolon; and
(III) by adding at the end the following:
``(iii) for individuals entitled to benefits under title II
or XVI of the Social Security Act (42 U.S.C. 401 et seq.,
1381 et seq.) on the basis of a disability or blindness--
``(I) information on the availability of benefits and
medical assistance authorized under the State medicaid
program under title XIX of the Social Security Act (42 U.S.C.
1396 et seq.) or under the medicare program under title XVIII
of the Social Security Act (42 U.S.C. 1395 et seq.), and
medical assistance authorized under other federally funded
programs;
``(II) information on the availability of assistance
through benefits planning and assistance programs authorized
under section 1149 of the Social Security Act (42 U.S.C.
1320b-20) and services provided by the State protection and
advocacy system and authorized under section 1150 of the
Social Security Act (42 U.S.C. 1320b-21); and
``(III) in the case of individuals who are also eligible
for a ticket under the Ticket to Work and Self-Sufficiency
Program established under section 1148 of the Social Security
Act (42 U.S.C. 1320b-19), general information regarding the
options for using the ticket and information on how to
contact a program manager of the Ticket to Work and Self-
Sufficiency Program to obtain information on approved
employment networks, on providers for the benefits planning
and assistance programs described in subparagraph (B) in the
State, and on the services provided by the State protection
and advocacy system and described in subparagraph (B).'';
(B) in paragraph (2)(E)--
(i) in clause (i)(II), by striking ``and'' after the
semicolon;
(ii) in clause (ii), by striking the period at the end and
inserting ``; and''; and
(iii) by adding at the end the following:
``(iii) amended, as necessary, to include the post-
employment services and service providers that are necessary
for the individual to maintain, regain, or advance in
employment, consistent with the individual's strengths,
resources, priorities, concerns, abilities, capabilities,
interests, and informed choice.''; and
(C) in paragraph (3)--
(i) in subparagraph (B)(i)(I), by striking ``and personal
assistance services'' and all that follows and inserting
``mentoring services, and personal assistance services,
including training in the management of such services, and
referrals described in section 103(a)(3) to the device
reutilization programs and device demonstrations described in
subparagraphs (B) and (D) of section 4(e)(2) of the Assistive
Technology Act of 1998 (42 U.S.C. 3003(e)(2)) through
agreements developed under section 101(a)(11)(G); and'';
(ii) in subparagraph (F)(ii), by striking ``and'' after the
semicolon;
(iii) in subparagraph (G), by striking the period at the
end and inserting ``; and''; and
(iv) by adding at the end the following:
``(H) for an individual who is receiving assistance from an
employment network under the Ticket to Work and Self-
Sufficiency Program established under section 1148 of the
Social Security Act (42 U.S.C. 1320b-19), a list of the
services that are listed in the individual work plan that the
individual developed with the employment network under
subsection (g) of that section.''; and
(2) in subsection (c)(7), by inserting ``that take into
consideration the informed choice of the individual,'' after
``plan development''.
SEC. 414. VOCATIONAL REHABILITATION SERVICES.
Section 103 of the Rehabilitation Act of 1973 (29 U.S.C.
723) is amended--
(1) in subsection (a)--
(A) in paragraph (5), by inserting ``literacy services,''
after ``vocational adjustment services,'';
(B) by striking paragraph (15) and inserting the following:
``(15) transition services for students with disabilities,
that facilitate the transition from school to postsecondary
life (including employment through the achievement of the
employment outcome identified in the individualized plan for
employment), including, in a transition services expansion
year, services described in clauses (i) through (iii) of
section 101(a)(25)(B);'';
(C) in paragraph (17), by striking ``and'' after the
semicolon;
(D) in paragraph (18), by striking the period at the end
and inserting ``; and''; and
(E) by adding at the end the following:
``(19) mentoring services.''; and
(2) in subsection (b), by striking paragraph (6) and
inserting the following:
``(6)(A)(i) Consultation and technical assistance services
to assist State and local educational agencies in planning
for the transition of students with disabilities from school
to postsecondary life, including employment.
``(ii) In a transition services expansion year, training
and technical assistance described in section
101(a)(25)(B)(iv).
``(B) In a transition services expansion year, services for
groups of individuals with disabilities who meet the
requirements of clauses (i) and (iii) of section 7(35)(A),
including services described in clauses (i), (ii), (iii), and
(v) of section 101(a)(25)(B), to assist in the transition
from school to postsecondary life, including employment.''.
SEC. 415. STATE REHABILITATION COUNCIL.
Section 105 of the Rehabilitation Act of 1973 (29 U.S.C.
725) is amended--
(1) in subsection (b)--
(A) in paragraph (1)(A)--
(i) by striking clause (ix) and inserting the following:
``(ix) in a State in which one or more projects provide
services under section 121, at least one representative of
the directors of the projects;'';
(ii) in clause (x), by striking the ``and'' after the
semicolon;
[[Page S5146]]
(iii) in clause (xi), by striking the period at the end and
inserting ``; and''; and
(iv) by adding at the end the following:
``(xii) the director of the State's comprehensive statewide
program of technology-related assistance funded under section
4 of the Assistive Technology Act of 1998 (29 U.S.C.
3003).''; and
(B) by striking paragraph (5) and inserting the following:
``(5) Chairperson.--The Council shall select a chairperson
from among the voting membership of the Council.''; and
(2) in subsection (c)(6), by inserting before the semicolon
the following: ``and with the activities of entities carrying
out programs under the Assistive Technology Act of 1998 (29
U.S.C. 3001 et seq.)''.
SEC. 416. EVALUATION STANDARDS AND PERFORMANCE INDICATORS.
Section 106 of the Rehabilitation Act of 1973 (29 U.S.C.
726) is amended--
(1) in subsection (a), by striking paragraph (1)(C) and all
that follows through paragraph (2) and inserting the
following:
``(2) Measures.--The standards and indicators shall include
outcome and related measures of program performance that
include measures of the program's performance with respect to
the transition from school to postsecondary life, including
employment, and achievement of the postsecondary vocational
goals, of students with disabilities served under the
program.''; and
(2) in subsection (b)(2)(B)(i), by striking ``, if
necessary'' and all that follows through the semicolon and
inserting ``, if the State has not improved its performance
to acceptable levels, as determined by the Commissioner,
direct the State to make further revisions to the plan to
improve performance, which may include revising the plan to
allocate a higher proportion of the State's resources for
services to individuals with disabilities if the State
agency's spending on such services is low in comparison to
spending on such services by comparable agencies in other
States;''.
SEC. 417. MONITORING AND REVIEW.
Section 107(b)(1) of the Rehabilitation Act of 1973 (29
U.S.C. 727(b)(1)) is amended by inserting before the
semicolon the following: ``, including--
``(A) consulting with the Department of Labor, the Small
Business Administration, other appropriate Federal agencies,
and businesses or business-led intermediaries; and
``(B) based on information obtained through the
consultations, providing technical assistance that improves
that quality by enabling designated State units to develop
successful partnerships with local and multi-State businesses
in an effort to employ individuals with disabilities, and
technical assistance on developing self-employment
opportunities and improving outcomes for individuals with
disabilities''.
SEC. 418. STATE ALLOTMENTS.
Section 110 of the Rehabilitation Act of 1973 (29 U.S.C.
730) is amended--
(1) by striking subsection (b) and inserting the following:
``(b)(1) Not later than 45 days prior to the end of the
fiscal year, the Commissioner shall determine, after
reasonable opportunity for the submission to the Commissioner
of comments by the State agency administering or supervising
the program established under this title, that any amount
from the payment of an allotment to a State under section
111(a) for any fiscal year will not be utilized by such State
in carrying out the purposes of this title.
``(2)(A) As soon as practicable but not later than the end
of the fiscal year, the Commissioner shall reallot the amount
available under paragraph (1) to other States, consistent
with subparagraphs (B) and (C), for carrying out the purposes
of this title to the extent the Commissioner determines such
other State will be able to use such additional amount during
that fiscal year or the subsequent fiscal year for carrying
out such purposes.
``(B)(i) The Commissioner shall reallot a portion of the
amount available under paragraph (1) for a fiscal year to
each State whose allotment under subsection (a) for such
fiscal year is less than such State's allotment under
subsection (a) for the immediately preceding fiscal year
adjusted by the percentage change in the funds available for
subsection (a) from the immediately preceding fiscal year.
``(ii)(I) A State that is eligible to receive a reallotment
under clause (i) shall receive a portion for a fiscal year
from the amount available for reallotment under paragraph (1)
that is equal to the difference between--
``(aa) the amount such State was allotted under subsection
(a) for such fiscal year; and
``(bb) the amount such State was allotted under subsection
(a) for the immediately preceding fiscal year adjusted by the
percentage change in the funds available for subsection (a)
from the immediately preceding fiscal year.
``(II) If the amount available for reallotment under
paragraph (1) is insufficient to provide each State eligible
to receive a reallotment with the portion described in
subclause (I), the amount reallotted to each eligible State
shall be determined by the Commissioner.
``(C) If there are funds remaining after each State
eligible to receive a reallotment under subparagraph (B)(i)
receives the portion described in subparagraph (B)(ii), the
Commissioner shall reallot the remaining funds among the
States requesting a reallotment.
``(3) The Commissioner shall reallot an amount to a State
under this subsection only if the State will be able to make
sufficient payments from non-Federal sources to pay for the
non-Federal share of the cost of vocational rehabilitation
services under the State plan for the fiscal year for which
the amount was appropriated.
``(4) For the purposes of this part, any amount made
available to a State for any fiscal year pursuant to this
subsection shall be regarded as an increase of such State's
allotment (as determined under the preceding provisions of
this section) for such year.''; and
(2) by striking subsection (c)(2) and inserting the
following:
``(2)(A) In this paragraph:
``(i) The term `appropriated amount' means the amount
appropriated under section 100(b)(1) for allotment under this
section.
``(ii) The term `covered year' means a fiscal year--
``(I) that begins after September 30, 2004; and
``(II) for which the appropriated amount exceeds the total
of--
``(aa) the appropriated amount for the preceding fiscal
year; and
``(bb) 0.075 percent of the appropriated amount for the
preceding fiscal year.
``(B) For each covered year, the sum referred to in
paragraph (1) shall be, as determined by the Secretary--
``(i) not less than the total of the sum reserved under
this subsection for the preceding fiscal year and 0.1 percent
of the appropriated amount for the covered year, subject to
clause (ii); and
``(ii) not more than 1.5 percent of the appropriated amount
for the covered year.
``(C) For each fiscal year that is not a covered year, the
sum referred to in paragraph (1) shall be, as determined by
the Secretary--
``(i) not less than the sum reserved under this subsection
for the preceding fiscal year, subject to clause (ii); and
``(ii) not more than 1.5 percent of the appropriated amount
for the covered year.''.
SEC. 419. RESERVATION FOR EXPANDED TRANSITION SERVICES.
The Rehabilitation Act of 1973 is amended by inserting
after section 110 (29 U.S.C. 730) the following:
``SEC. 110A. RESERVATION FOR EXPANDED TRANSITION SERVICES.
``(a) Reservation.--From the State allotment under section
110 in a transition services expansion year, each State shall
reserve an amount calculated by the Commissioner under
subsection (b) to carry out programs and activities under
sections 101(a)(25)(B) and 103(b)(6).
``(b) Calculation.--The Commissioner shall calculate the
amount to be reserved for such programs and activities for a
fiscal year by each State by multiplying $50,000,000 by the
percentage determined by dividing--
``(1) the amount allotted to that State under section 110
for the prior fiscal year; by
``(2) the total amount allotted to all States under section
110 for that prior fiscal year.''.
SEC. 420. CLIENT ASSISTANCE PROGRAM.
Section 112 of the Rehabilitation Act of 1973 (29 U.S.C.
732) is amended--
(1) in subsection (a)--
(A) in the first sentence, by striking ``States'' and
inserting ``agencies designated under subsection (c)''; and
(B) in the second sentence, by striking ``State'' and
inserting ``State in which the program is located'';
(2) in subsection (b), by striking ``the State has in
effect not later than October 1, 1984, a client assistance
program which'' and inserting ``the State designated under
subsection (c) an agency that'';
(3) in subsection (e)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking ``The Secretary'' and
all that follows through the period and inserting the
following: ``After reserving funds under subparagraphs (E)
and (F), the Secretary shall allot the remainder of the sums
appropriated for each fiscal year under this section among
the agencies designated under subsection (c) within the
States (referred to individually in this subsection as a
`designated agency') on the basis of relative population of
each State, except that no such agency shall receive less
than $50,000.'';
(ii) in subparagraph (B), by inserting ``the designated
agencies located in'' after ``each to'';
(iii) in subparagraph (D)(i)--
(I) by inserting ``the designated agencies located in''
after ``$100,000 for''; and
(II) by inserting ``the designated agencies located in''
after ``$45,000 for''; and
(iv) by adding at the end the following:
``(E)(i) For any fiscal year for which the amount
appropriated to carry out this section equals or exceeds
$13,000,000, the Secretary shall reserve funds appropriated
under this section to make a grant to the protection and
advocacy system serving the American Indian Consortium to
provide client assistance services in accordance with this
section. The amount of such a grant shall be the same amount
as is provided to a territory under subparagraph (B), as
increased under clauses (i) and (ii) of subparagraph (D).
``(ii) In this subparagraph:
``(I) The term `American Indian Consortium' has the meaning
given the term in section 102 of the Developmental
Disabilities Assistance and Bill of Rights Act of 2000 (42
U.S.C. 15002).
``(II) The term `protection and advocacy system' means a
protection and advocacy
[[Page S5147]]
system established under subtitle C of title I of the
Developmental Disabilities Assistance and Bill of Rights Act
of 2000 (42 U.S.C. 15041 et seq.).
``(F) For any fiscal year for which the amount appropriated
to carry out this section equals or exceeds $14,000,000, the
Secretary shall reserve not less than 1.8 percent and not
more than 2.2 percent of such amount to provide a grant for
training and technical assistance for the programs
established under this section. Such training and technical
assistance shall be coordinated with activities provided
under section 509(c)(1)(A).''; and
(B) in paragraph (2)--
(i) by striking ``State'' each place such term appears and
inserting ``designated agency''; and
(ii) by striking ``States'' each place such term appears
and inserting ``designated agencies'';
(4) in subsection (f), by striking ``State'' and inserting
``agency designated under subsection (c)'';
(5) in subsection (g)(1), by striking ``State'' and
inserting ``State in which the program is located''; and
(6) in subsection (h), by striking ``fiscal years 1999
through 2003'' and inserting ``fiscal years 2006 through
2011''.
SEC. 421. INCENTIVE GRANTS.
Part B of title I of the Rehabilitation Act of 1973 (29
U.S.C. 730 et seq.) is amended by adding at the end the
following:
``SEC. 113. INCENTIVE GRANTS.
``(a) Authority.--The Commissioner is authorized to make
incentive grants to States that, based on the criteria
established under subsection (b)(1), demonstrate--
``(1) a high level of performance; or
``(2) a significantly improved level of performance in a
reporting period as compared to the previous reporting period
or periods.
``(b) Criteria.--
``(1) Establishment.--Not later than 180 days after the
date of enactment of this section, the Commissioner shall
establish, and publish in the Federal Register, criteria for
making grant awards under subsection (a).
``(2) Development and evaluation standards.--The criteria
established under paragraph (1) shall--
``(A) be developed with input from designated State
agencies and other vocational rehabilitation stakeholders,
including vocational rehabilitation consumers and consumer
organizations; and
``(B) be based upon the evaluation standards and
performance indicators established under section 106 and
other performance-related measures that the Commissioner
determines to be appropriate.
``(c) Use of Funds.--A State that receives a grant under
subsection (a) shall use the grant funds for any approved
activities in the State's State plan submitted under section
101.
``(d) No Non-Federal Share Requirement.--The provisions of
sections 101(a)(3) and 111(a)(2) shall not apply to this
section.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section such
sums as may be necessary for each of fiscal years 2006
through 2011.''.
SEC. 422. VOCATIONAL REHABILITATION SERVICES GRANTS.
Section 121 of the Rehabilitation Act of 1973 (29 U.S.C.
741) is amended--
(1) in subsection (a), in the first sentence, by inserting
``, consistent with such individuals' strengths, resources,
priorities, concerns, abilities, capabilities, interests, and
informed choice, so that such individuals may prepare for,
and engage in, gainful employment'' before the period at the
end; and
(2) in subsection (b)--
(A) in paragraph (1)--
(i) in subparagraph (B), by striking ``and'' after the
semicolon;
(ii) in subparagraph (C), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(D) contains assurances that--
``(i) all decisions affecting eligibility for vocational
rehabilitation services, the nature and scope of available
services, and the provision of such services, will be made by
a representative of the tribal vocational rehabilitation
program; and
``(ii) such decisions will not be delegated to another
agency or individual.'';
(B) in paragraph (3), by striking the first sentence and
inserting the following: ``An application approved under this
part that complies with the program requirements set forth in
the regulations promulgated to carry out this part shall be
effective for 5 years and shall be renewed for additional 5-
year periods if the Commissioner determines that the grant
recipient demonstrated acceptable past performance and the
grant recipient submits a plan, including a proposed budget,
to the Commissioner that the Commissioner approves that
identifies future performance criteria, goals, and
objectives.''; and
(C) by striking paragraph (4) and inserting the following:
``(4) In allocating funds under this part, the Secretary
shall give priority to paying the continuation costs of
projects in existence on the date of the allocation and may
provide for increases in funding for such projects that the
Secretary determines to be necessary.''.
SEC. 423. GAO STUDIES.
(a) Study on Title I and Ticket to Work.--
(1) In general.--The Comptroller General of the United
States shall conduct a study on the interaction of programs
carried out under title I of the Rehabilitation Act of 1973
(29 U.S.C. 720 et seq.) with the Ticket to Work and Self-
Sufficiency Program established under section 1148 of the
Social Security Act (42 U.S.C. 1320b-19), including the
impact of the interaction on beneficiaries, community
rehabilitation programs (as defined in section 7 of the
Rehabilitation Act of 1973 (29 U.S.C. 705)), and State
vocational rehabilitation agencies.
(2) Conduct of study.--In conducting the study under
paragraph (1), the Comptroller General of the United States
shall consult with all types of participants in the Ticket to
Work and Self-Sufficiency Program, including the Social
Security Administration, the Rehabilitation Services
Administration, ticketholders, designated State agencies,
entities carrying out such community rehabilitation programs
(including employment networks and nonemployment networks),
protection and advocacy agencies, MAXIMUS, and organizations
representing the interests of ticketholders.
(3) Report to congress.--Not later than 18 months after the
date of enactment of this Act, the Comptroller General of the
United States shall submit the study conducted pursuant to
this subsection to the appropriate committees of Congress.
(b) Study on the Allotment Formula.--
(1) In general.--The Comptroller General of the United
States shall conduct a study on the relationship between the
State allotment formula under section 110 of the
Rehabilitation Act of 1973 (29 U.S.C. 730) and the ability of
States to provide vocational rehabilitation services in
accordance with the States' State plans under section 101 of
such Act (29 U.S.C. 721).
(2) Conduct of study.--In conducting the study under
paragraph (1), the Comptroller General of the United States
shall consult with appropriate entities.
(3) Report to congress.--Not later than 12 months after the
date of enactment of this Act, the Comptroller General of the
United States shall submit the study conducted pursuant to
this subsection to the appropriate committees of Congress.
Subtitle B--Research and Training
SEC. 431. DECLARATION OF PURPOSE.
Section 200(3) of the Rehabilitation Act of 1973 (29 U.S.C.
760(3)) is amended by inserting ``, in a timely and efficient
manner,'' before ``through''.
SEC. 432. AUTHORIZATION OF APPROPRIATIONS.
Section 201(a) of the Rehabilitation Act of 1973 (29 U.S.C.
761(a)) is amended--
(1) in paragraph (1), by striking ``fiscal years 1999
through 2003'' and inserting ``fiscal years 2006 through
2011''; and
(2) in paragraph (2), by striking ``fiscal years 1999
through 2003'' and inserting ``fiscal years 2006 through
2011''.
SEC. 433. NATIONAL INSTITUTE ON DISABILITY AND REHABILITATION
RESEARCH.
Section 202 of the Rehabilitation Act of 1973 (29 U.S.C.
762) is amended--
(1) in subsection (b)--
(A) in paragraph (6), by inserting before the semicolon the
following: ``, including convening a national assistive
technology summit, to be held at or in conjunction with a
national conference relating to assistive technology with
respect to all categories of disabilities''; and
(B) in paragraph (10), by striking ``and telecommuting''
and inserting ``, supported employment, and telecommuting'';
(2) in subsection (f)(1)--
(A) by striking ``Federal employees'' and inserting
``Department of Education employees''; and
(B) by adding at the end the following: ``The peer review
panel shall include a director of a designated State unit. It
shall include a member of the covered school community (for
an activity resulting in educational materials or a product
to be used in a covered school), a member of the business
community (for an activity resulting in a product to be used
in an employment activity), assistive technology developers
and manufacturers (for an activity relating to assistive
technology), or information technology vendors and
manufacturers (for an activity relating to information
technology).'';
(3) by redesignating subsections (i), (j), and (k) as
subsections (j), (k), and (l), respectively;
(4) by inserting after subsection (h) the following:
``(i)(1) The Director, with the assistance of the
Rehabilitation Research Advisory Council established under
section 205, shall determine if entities that receive
financial assistance under this title are complying with the
applicable requirements of this Act and achieving measurable
goals, described in section 204(d)(2), that are consistent
with the requirements of the programs under which the
entities received the financial assistance.
``(2) To assist the Director in carrying out the
responsibilities described in paragraph (1), the Director
shall require recipients of financial assistance under this
title to submit relevant information to evaluate program
outcomes with respect to the measurable goals described in
section 204(d)(2).''; and
(5) by adding at the end the following:
``(m)(1) Not later than December 31 of each year, the
Secretary shall prepare, and submit to the Secretary, the
Committee on Education and the Workforce of the House of
Representatives, and the Committee on Health, Education,
Labor, and Pensions of
[[Page S5148]]
the Senate, a report on the activities funded under this
title.
``(2) Such report shall include--
``(A) a compilation and summary of the information provided
by recipients of financial assistance for such activities
under this title; and
``(B) a summary of the applications for financial
assistance received under this title and the progress of the
recipients of financial assistance in achieving the
measurable goals described in section 204(d)(2).
``(n)(1) If the Director determines that an entity that
receives financial assistance under this title fails to
comply with the applicable requirements of this Act, or to
make progress toward achieving the measurable goals described
in section 204(d)(2), with respect to the covered activities
involved, the Director shall assist the entity through
technical assistance or other means, within 90 days after
such determination, to develop a corrective action plan.
``(2) If the entity fails to develop and comply with a
corrective action plan described in paragraph (1) during a
fiscal year, the entity shall be subject to 1 of the
following corrective actions selected by the Director:
``(A) Partial or complete termination of financial
assistance for the covered activities, until the entity
develops and complies with such a plan.
``(B) Ineligibility to receive financial assistance for
such covered activities for the following year.
``(3) The Secretary shall establish appeals procedures for
entities described in paragraph (1) that the Secretary
determines fail to comply with the applicable requirements of
this Act, or to make progress toward achieving the measurable
goals.
``(4) As part of the annual report required under
subsection (m), the Secretary shall describe each action
taken by the Secretary under paragraph (1) or (2) and the
outcomes of such action.''.
SEC. 434. INTERAGENCY COMMITTEE.
Section 203 of the Rehabilitation Act of 1973 (29 U.S.C.
763) is amended--
(1) in subsection (a)(1), by striking ``and the Director of
the National Science Foundation'' and inserting ``the
Director of the National Science Foundation, the Secretary of
Commerce, and the Administrator of the Small Business
Administration''; and
(2) in subsection (b)(2)--
(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) conduct a study, on the assistive technology
industry, for which the Committee shall--
``(i) determine the number of individuals who use assistive
technology and the scope of the technologies they use;
``(ii) separately identify categories of assistive
technology companies by the disability group served, and the
type of product or service provided, categorized by--
``(I) size (small, medium, and large) of the companies;
``(II) capitalization of the companies;
``(III) region in which the companies are located; and
``(IV) products or services produced by the companies;
``(iii) compile aggregate data on revenues and unit sales
of such companies, including information on international
sales, for a recent reporting period, categorized by
institution or user type acquiring the products or services,
disability for which the products or services are used, and
industry segment for the companies;
``(iv) identify platform availability and usage, for those
products and services that are electronic and information
technology-related;
``(v) identify the types of clients of the companies, such
as government, school, business, private payor, and
charitable clients, and funding sources for the clients; and
``(vi) specify geographic segments for the companies, to
determine whether there are significant distinctions in
industry opportunities on the basis of geography, other than
distinctions related to population.''.
SEC. 435. RESEARCH AND OTHER COVERED ACTIVITIES.
Section 204 of the Rehabilitation Act of 1973 (29 U.S.C.
764) is amended--
(1) in subsection (a)--
(A) in paragraph (2)(B)--
(i) in clause (vi), by striking ``and'' after the
semicolon;
(ii) in clause (vii), by striking the period at the end and
inserting ``; and''; and
(iii) by adding at the end the following:
``(viii) studies, analyses, and other activities affecting
employment outcomes, including self-employment and
telecommuting, of individuals with disabilities.''; and
(B) by adding at the end the following:
``(3) In carrying out this section, the Director shall
emphasize covered activities that are collaborations
between--
``(A) for-profit companies working in the assistive
technology, rehabilitative engineering, or information
technology fields; and
``(B) States or public or private agencies and
organizations.
``(4) In carrying out this section, the Director shall
emphasize covered activities that include plans for--
``(A) dissemination of educational materials, research
results, or findings, conclusions, and recommendations
resulting from covered activities; or
``(B) the commercialization of marketable products
resulting from the covered activities.'';
(2) in subsection (b)--
(A) in paragraph (1), by striking ``(18)'' each place it
appears and inserting ``(19)'';
(B) in paragraph (2)--
(i) in subparagraph (A)(i), by striking ``rehabilitation
services or'' and inserting ``rehabilitation services,
developers or providers of assistive technology devices,
assistive technology services, or information technology
devices or services, or providers of'' after ``rehabilitation
services'';
(ii) in subparagraph (B)--
(I) in clause (i), by inserting ``improve the evaluation
process for determining the assistive technology needs of
individuals with disabilities,'' after ``conditions,'';
(II) in clause (ii), by inserting ``and assistive
technology services'' before the semicolon; and
(III) in clause (iii), by inserting ``, assistive
technology services personnel,'' before ``and other'';
(iii) in subparagraph (C)--
(I) in clause (i), by inserting ``, including research on
assistive technology devices, assistive technology services,
and accessible electronic and information technology
devices'' before the semicolon; and
(II) in clause (iii), by inserting ``, including the use of
assistive technology devices and accessible electronic and
information technology devices in employment'' before the
semicolon;
(iv) in subparagraph (D), by inserting ``, including
training to provide knowledge about assistive technology
devices, assistive technology services, and accessible
electronic and information technology devices and services,''
after ``personnel''; and
(v) in subparagraph (G)(i), by inserting ``, assistive
technology-related, and accessible electronic and information
technology-related'' before ``courses''; and
(C) in paragraph (3)--
(i) in subparagraph (D)(ii), by adding at the end the
following: ``Each such Center conducting activities including
the creation of an assistance technology device shall include
in the committee representatives from the assistive
technology industry and accessible electronic and information
technology industry. Each such Center conducting activities
involving a covered school, or an employer, shall include in
the committee a representative of the covered school, or of
the employer, respectively.''; and
(ii) in subparagraph (G)(ii) by inserting ``the success of
any commercialized product researched or developed through
the Center,'' after ``disabilities,'';
(D) in paragraph (8), by inserting ``the Department of
Commerce, the Small Business Administration,'' before ``other
Federal agencies,'';
(E) in paragraph (13), in the matter preceding clause (i),
by striking ``employment needs of individuals with
disabilities'' and inserting ``employment needs,
opportunities, and outcomes, including self-employment,
supported employment, and telecommuting needs, opportunities,
and outcomes, of individuals with disabilities, including
older individuals with disabilities, and students with
disabilities who are transitioning from school to
postsecondary life, including employment''; and
(E) by adding at the end the following:
``(19) Research grants may be used to provide for research
and demonstration projects that--
``(A) explore methods and practices for promoting access to
electronic commerce activities for individuals with
disabilities; and
``(B) will--
``(i) ensure dissemination of research findings;
``(ii) provide encouragement and support for initiatives
and new approaches by companies engaged in electronic
commerce activities; and
``(iii) result in the establishment and maintenance of
close working relationships between the disability, research,
and business communities.'';
(3) in subsection (c)(2), by striking ``$500,000'' and
inserting ``$750,000''; and
(4) by adding at the end the following:
``(d)(1) In awarding grants, contracts, or other financial
assistance under this title, the Director shall award the
financial assistance on a competitive basis.
``(2)(A) To be eligible to receive financial assistance
described in paragraph (1) for a covered activity, an entity
shall submit an application to the Director at such time, in
such manner, and containing such information as the Director
may require.
``(B) The application shall include information
describing--
``(i) measurable goals, and a timeline and specific plan
for meeting the goals, that the applicant has set for
addressing priorities related to--
``(I) commercialization of a marketable product (including
a marketable curriculum or research) resulting from the
covered activity;
``(II) in the case of a covered activity relating to
technology, technology transfer;
``(III) in the case of research, dissemination of research
results to, as applicable, government entities, individuals
with disabilities, covered schools, the business community,
the assistive technology community, and the accessible
electronic and information technology community; and
``(IV) other matters as required by the Director; and
[[Page S5149]]
``(ii) information describing how the applicant will
quantifiably measure the goals to determine whether the goals
have been accomplished.
``(3)(A) In the case of an application for financial
assistance under this title to carry out a covered activity
that results in the development of a marketable product, the
application shall also include a commercialization and
dissemination plan, containing commercialization and
marketing strategies for the product involved, and strategies
for disseminating information about the product. The
financial assistance shall not be used to carry out the
commercialization and marketing strategies.
``(B) In the case of any other application for financial
assistance to carry out a covered activity under this title,
the application shall also include a dissemination plan,
containing strategies for disseminating educational
materials, research results, or findings, conclusions, and
recommendations, resulting from the covered activity.''.
SEC. 436. REHABILITATION RESEARCH ADVISORY COUNCIL.
Section 205 of the Rehabilitation Act of 1973 (29 U.S.C.
765) is amended--
(1) in subsection (a), by inserting ``at least'' before
``12''; and
(2) in subsection (c), by inserting after ``rehabilitation
researchers,'' the following: ``the directors of community
rehabilitation programs, the business community (and shall
include a representative of the small business community)
that has experience with the system of vocational
rehabilitation services carried out under this Act and with
hiring individuals with disabilities, the community of
assistive technology developers and manufacturers, the
community of information technology vendors and
manufacturers, the community of entities carrying out
programs under the Assistive Technology Act of 1998 (29
U.S.C. 3001 et seq.), the community of covered school
professionals,''.
SEC. 437. DEFINITION.
Title II of the Rehabilitation Act of 1973 (29 U.S.C. 761
et seq.) is amended by adding at the end the following:
``SEC. 206. DEFINITION.
``In this title, the term `covered school' means an
elementary school or secondary school (as such terms are
defined in section 9101 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7801)), a community college,
or an institution of higher education.''.
Subtitle C--Professional Development and Special Projects and
Demonstrations
SEC. 441. TRAINING.
Section 302 of the Rehabilitation Act of 1973 (29 U.S.C.
772) is amended--
(1) in subsection (a)(1)--
(A) in subparagraph (F), by striking the ``and'' after the
semicolon;
(B) in subparagraph (G), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following:
``(H) personnel trained in providing assistive technology
services.'';
(2) in subsection (b)(1)(B)(i), by striking ``or
prosthetics and orthotics'' and inserting ``prosthetics and
orthotics, rehabilitation teaching for the blind, or
orientation and mobility instruction''; and
(3) in subsection (i), by striking ``fiscal years 1999
through 2003'' and inserting ``fiscal years 2006 through
2011''.
SEC. 442. DEMONSTRATION AND TRAINING PROGRAMS.
Section 303 of the Rehabilitation Act of 1973 (29 U.S.C.
773) is amended--
(1) in subsection (b)(5)(A)(i), by striking ``special
projects'' and inserting ``not less than 2 special
projects'';
(2) by redesignating subsections (c), (d), and (e) as
subsections (f), (g), and (i), respectively;
(3) by inserting after subsection (b) the following:
``(c) Demonstration Projects for Employment of Students
With Intellectual Disabilities or Mental Illness.--
``(1) Purpose.--The purpose of this subsection is to
support model demonstration projects to provide supported and
competitive employment experiences for students with
intellectual disabilities or students with mental illness,
and training for personnel that work with students described
in this paragraph, to enable the students to gain employment
skills and experience that will promote effective transitions
from school to postsecondary life, including employment.
``(2) Awards authorized.--
``(A) Competitive awards authorized.--The Secretary may
award grants, contracts, and cooperative agreements, on a
competitive basis, to eligible organizations described in
paragraph (3), to enable the organizations to carry out
demonstration projects described in paragraph (1).
``(B) Duration.--The Secretary shall award grants,
contracts, and cooperative agreements under this subsection
for periods of 3 to 5 years.
``(3) Eligible organizations.--To be eligible to receive a
grant, contract, or cooperative agreement under this
subsection, an organization shall--
``(A) have expertise in providing employment and support
services for individuals with intellectual disabilities or
individuals with mental illness;
``(B) have a proven track record in successfully running
supported employment programs;
``(C) provide employment services that are exclusively
integrated community-based supported employment services;
``(D) have expertise in creating natural supports for
employment;
``(E) have expertise in providing computer training for the
targeted population for the project involved; and
``(F) have experience operating mentoring programs for the
target population in middle and high schools for at least a
decade in diverse communities throughout the Nation.
``(4) Applications.--Each organization desiring to receive
a grant, contract, or cooperative agreement under this
subsection shall submit an application to the Secretary at
such time, in such manner, and including such information as
the Secretary may require. Each application shall include--
``(A) a description of how the organization plans to carry
out the activities authorized in this subsection through a
demonstration project;
``(B) a description of how the organization will evaluate
the project;
``(C) a description of how the organization will
disseminate information about the activities and the impact
of the activities on the lives of students served by the
project; and
``(D) a description of how the organization will coordinate
activities with any other relevant service providers in the
locality where the organization is based, including federally
supported independent living centers.
``(5) Authorized activities.--An organization that receives
a grant, contract, or cooperative agreement under this
subsection shall use the funds made available through the
grant, contract, or cooperative agreement to carry out 1 or
more of the following activities for individuals, ages 14
through 21, who are students with intellectual disabilities
or students with mental illness:
``(A) Providing supported and competitive employment
experiences.--The development of innovative and effective
supported and competitive employment experiences after
school, on weekends, and in the summer, utilizing natural
supports that lead to competitive high-paying jobs.
``(B) Providing training to school and transition
personnel.--The development and deployment of experts to work
with transition programs (including personnel working with
students on transition) so that personnel from the programs
develop skills needed to train students with intellectual
disabilities or students with mental illness to be successful
in competitive employment in a range of settings, including
office settings. The training shall include training for the
personnel in providing instruction to students in computer
skills, office skills, interview etiquette, and appropriate
social behavior required for successful long-term employment
in professional environments.
``(6) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$5,000,000 for fiscal year 2006 and such sums as may be
necessary for fiscal years 2007 through 2011.
``(d) Demonstration Project for Employment of Individuals
who are Deaf and Low Functioning.--
``(1) Purpose.--The purpose of this subsection is to
support a model demonstration project to provide training and
employment and support services for individuals who are deaf
and low functioning to enable them to gain employment skills
that will allow them to become employed and economically
self-sufficient.
``(2) Definition.--
``(A) In general.--In this subsection, the term `individual
who is deaf and low functioning' means an individual who has
been deaf from birth or very early childhood, reads at or
below the second grade level, has little or no intelligible
speech, and lacks a secondary school diploma or its
recognized equivalent.
``(B) Secondary disabilities.--Such term may include an
individual with a secondary disability.
``(3) Grants authorized.--
``(A) Competitive grants authorized.--The Secretary may
award grants to State agencies, other public agencies or
organizations, or not-for-profit organizations with expertise
in providing training and employment and support services for
individuals who are deaf and low functioning to support model
demonstration projects.
``(B) Duration.--Grants under this subsection shall be
awarded for a period not to exceed 5 years.
``(4) Authorized activities.--
``(A) Developing a comprehensive training program.--Each
grant recipient under this subsection shall develop an
innovative, comprehensive training program for individuals
who are deaf and low functioning that can be implemented at
multiple training locations through such means as distance
learning and use of advanced technology, as appropriate. Such
training program shall be developed to maximize the potential
for replication of the program by other training providers.
``(B) Implementation.--Each grant recipient under this
subsection shall implement the comprehensive training program
developed under subparagraph (A) as soon as feasible. Such
training shall provide instruction on the job and the social
skills necessary for successful long-term employment of
individuals who are deaf and low functioning.
``(C) Establishing a post-training program of employment
and support services.--Each grant recipient under this
subsection shall implement employment and
[[Page S5150]]
support services to assist individuals who complete the
training program under subparagraph (A) in securing
employment and transitioning to the workplace, for a period
of not less than 90 days subsequent to placement in the
employment.
``(5) Applications.--Each entity desiring to receive a
grant under this subsection for a model demonstration project
shall submit an application to the Secretary at such time, in
such manner, and accompanied by such information as the
Secretary may require including--
``(A) a description of how the applicant plans to address
the activities authorized under this subsection;
``(B) a description of the evaluation plan to be used in
the model demonstration project;
``(C) a description of how the applicant will disseminate
information about the training program developed and the
results of the project; and
``(D) a description of how the entity will coordinate
activities with any other relevant service providers or
entities providing training and employment and support
services for individuals who are deaf and low functioning.
``(6) Mandated evaluation and dissemination activities.--
``(A) Annual report.--Not later than 2 years after the date
on which a grant under this subsection is awarded and
annually thereafter, the grant recipient shall submit to the
Commissioner a report containing information on--
``(i) the number of individuals who are participating in
the demonstration project funded under this subsection;
``(ii) the employment and other skills being taught in the
project;
``(iii) the number of individuals participating in the
project that are placed in employment;
``(iv) the job sites in which those individuals are placed
and the type of jobs the individuals are placed in; and
``(v) the number of individuals who have dropped out of the
project and the reasons for their terminating participation
in the project.
``(B) Evaluation of the project.--Each grant recipient
under this subsection shall implement the evaluation plan
approved in its application for determining the results of
the project within the timeframe specified in, and following
the provisions of, the approved application.
``(C) Participant evaluation process; final evaluation.--In
the final year of the project, the grant recipient will
prepare and submit to the Commissioner a final evaluation
report of the results of the model demonstration project
containing--
``(i) information on--
``(I) the number of individuals who participated in the
demonstration project;
``(II) the number of those individuals that are placed in
employment;
``(III) the job sites in which those individuals were
placed and the type of jobs the individuals were placed in;
``(IV) the number of those individuals who have dropped out
of the project and the reasons for their terminating
participation in the project; and
``(V) the number of those individuals who participated in
the project and who remain employed as of 2 months prior to
the date on which the final report is submitted to the
Secretary;
``(ii) a written analysis of the project, including both
the strengths and weaknesses of the project, to assist other
entities in replicating the training program developed
through the project; and
``(iii) such other information as the Secretary determines
appropriate.
``(D) Dissemination.--Not later than 5 years after the date
on which a grant is awarded under this subsection, the
evaluation report containing results of activities funded by
such grant shall be disseminated to designated State
agencies, school systems providing instruction to students
who are individuals who are deaf and low functioning,
supported employment providers, postsecondary vocational
training programs, employers, the Social Security
Administration, and other interested parties.
``(7) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection,
$5,000,000 for fiscal year 2006 and such sums as may be
necessary for each of fiscal years 2007 through 2011.
``(e) Training and Technical Assistance Center To Promote
High-Quality Employment Outcomes for Individuals Receiving
Services from Designated State Agencies.--
``(1) In general.--The Commissioner shall award a grant,
contract, or cooperative agreement to an entity to support a
training and technical assistance program that--
``(A) responds to State-specific information requests
concerning high-quality employment outcomes, from designated
State agencies funded under title I, including--
``(i) requests for information on the expansion of self-
employment, business ownership, and business development
opportunities, and other types of entrepreneural employment
opportunities for individuals with disabilities;
``(ii) requests for information on the expansion and
improvement of transition services to facilitate the
transition of students with disabilities from school to
postsecondary life, including employment;
``(iii) requests for examples of policies, practices,
procedures, or regulations, that have enhanced or may enhance
access to funding for assistive technology devices and
assistive technology services for individuals with
disabilities;
``(iv) requests for information on effective approaches to
enhance informed choice and a consumer-directed State
vocational rehabilitation system;
``(v) requests for assistance developing corrective action
plans;
``(vi) requests for assistance in developing and
implementing effective data collection and reporting systems
that measure the outcomes of the vocational rehabilitation
services, and preparing reports for the Commissioner as
described in section 106(b)(1); and
``(vii) requests for information on effective approaches
that enhance employment outcomes for individuals with
disabilities, including conducting outreach and forming
partnerships with business and industry; and
``(B) provides State-specific, regional, and national
training and technical assistance concerning vocational
rehabilitation services and related information to designated
State agencies, including--
``(i) facilitating onsite and electronic information
sharing using state-of-the-art Internet technologies such as
real-time online discussions, multipoint video conferencing,
and web-based audio/video broadcasts, on emerging topics that
affect vocational rehabilitation programs authorized under
title I;
``(ii) enabling the designated State agencies to coordinate
training and data collection efforts with one-stop centers
established under section 121(e) of the Workforce Investment
Act of 1998 (29 U.S.C. 2841(e));
``(iii) enabling the designated State agencies to provide
information on how the vocational rehabilitation programs
authorized under title I can provide technical assistance to
the one-stop centers on making programs offered through the
centers physically and programmatically accessible to
individuals with disabilities;
``(iv) sharing evidence-based and promising practices among
the vocational rehabilitation programs;
``(v) maintaining an accessible website that includes links
to--
``(I) the vocational rehabilitation programs;
``(II) appropriate Federal departments and agencies, and
private associations;
``(III) State assistive technology device and assistive
technology service demonstration programs, device loan
programs, device reutilization programs, alternative
financing systems, or State financing activities, operated
through, or independently of, comprehensive statewide
programs of technology-related assistance carried out under
section 4 of the Assistive Technology Act of 1998 (29 U.S.C.
3003), telework programs, and other programs that provide
sources of funding for assistive technology devices; and
``(IV) various programs, including programs with tax
credits, available to employers for hiring or accommodating
employees who are individuals with disabilities;
``(vi) enhancing employment outcomes for individuals with
mental illness and individuals with cognitive disabilities;
``(vii) convening experts from the vocational
rehabilitation programs to discuss and make recommendations
with regard to the employment of individuals with
disabilities and national emerging issues of importance to
individuals with vocational rehabilitation needs;
``(viii) enabling the designated State agencies to provide
practical information on effective approaches for business
and industry to use in employing individuals with
disabilities, including provision of reasonable
accommodations;
``(ix) providing information on other emerging issues
concerning the delivery of publicly funded employment and
training services and supports to assist individuals with
disabilities to enter the workforce, achieve improved
outcomes, and become economically self-sufficient; and
``(x) carrying out such other activities as the Secretary
may require.
``(2) Eligible entities.--To be eligible to receive a
grant, contract, or cooperative agreement under this
subsection, an entity shall have (or agree to award a grant
or contract to an entity that has)--
``(A) experience and expertise in administering vocational
rehabilitation services;
``(B) documented experience with and knowledge about self-
employment, business ownership, business development, and
other types of entrepreneural employment opportunities and
outcomes for individuals with disabilities, providing
transition services for students with disabilities, and
assistive technology; and
``(C) the expertise necessary to identify the additional
data elements needed to provide comprehensive reporting of
activities and outcomes of the vocational rehabilitation
programs authorized under title I, and experience in
utilizing data to provide annual reports.
``(3) Collaboration.--In developing and providing training
and technical assistance under this subsection, a recipient
of a grant, contract, or cooperative agreement under this
subsection shall collaborate with other organizations, in
particular--
``(A) agencies carrying out vocational rehabilitation
programs under title I and national organizations
representing such programs;
``(B) organizations representing individuals with
disabilities;
[[Page S5151]]
``(C) organizations representing State officials and
agencies engaged in the delivery of assistive technology;
``(D) relevant employees from Federal departments and
agencies, other than the Department of Education;
``(E) representatives of businesses;
``(F) individuals with disabilities who use assistive
technology and understand the barriers to the acquisition of
such technology and assistive technology services; and
``(G) family members, guardians, advocates, and authorized
representatives of such individuals.'';
(4) by inserting after subsection (g), as redesignated by
paragraph (2), the following:
``(h) Access to Telework.--
``(1) Definition of telework.--In this subsection, the term
`telework' means work from home and other telework sites with
the assistance of a computer and with reasonable
accommodations, including the necessary equipment to
facilitate successful work from home and other telework
sites.
``(2) Authorization of program.--The Commissioner is
authorized to make grants to States and governing bodies of
Indian tribes located on Federal and State reservations (and
consortia of such governing bodies) to pay for the Federal
share of the cost of establishing or expanding a telework
program.
``(3) Application.--A State or Indian tribe that desires to
receive a grant under this subsection shall submit an
application to the Commissioner at such time, in such manner,
and containing such information as the Commissioner may
require.
``(4) Use of funds.--
``(A) In general.--A State or Indian tribe that receives a
grant under this subsection shall establish or expand a
telework program that shall provide assistance through loans
or other alternative financing mechanisms to individuals with
disabilities. The State or Indian tribe shall provide the
assistance through the program to enable such individuals to
purchase computers or other equipment, including adaptive
equipment, to facilitate access to employment and enhance
employment outcomes by providing the individual with the
opportunity--
``(i) to work from home or other telework sites so that
such individuals are able to telework; or
``(ii) to become self-employed on a full-time or part-time
basis from home or other telework sites.
``(B) Development of telework opportunities and business
plans.--A State or Indian tribe that receives a grant under
this subsection may use not more than 10 percent of the grant
award to develop telework opportunities with employers and
assist in the development of business plans for individuals
with disabilities interested in self-employment, before such
individuals apply for assistance through the telework
program.
``(C) Self employment.--A State or Indian tribe that
receives a grant under this subsection shall enter into
cooperative agreements with small business development
centers for the development of business plans as described in
section 103(a)(13) for individuals described in subparagraph
(B), and provide assurances that the State or Indian tribe
will, through plans to achieve self-support, vocational
rehabilitation services, or other means, identify ways for
the individuals described in subparagraph (B) to pay for the
development of business plans, before such individuals apply
for assistance through the telework program.
``(D) Definitions.--In this paragraph:
``(i) Plan to achieve self-support.--The term `plan to
achieve self-support' means a plan described in sections
416.1180 through 416.1182 of title 20, Code of Federal
Regulations (or any corresponding similar regulation or
ruling).
``(ii) Small business development center.--The term `small
business development center' means a center established under
section 21 of the Small Business Act (15 U.S.C. 648).
``(5) Federal share.--The Federal share of the cost of
establishing or expanding a telework program under this
section shall be 10 percent of the cost.
``(6) Existing grant recipients.--An entity that receives a
grant under the Access to Telework Fund Program under
subsection (b) for a fiscal year may use the funds made
available through that grant for that fiscal year in
accordance with this subsection rather than subsection (b).
``(7) Annual report.--
``(A) In general.--A State or Indian tribe that receives a
grant under this subsection shall prepare and submit an
annual report to the Commissioner.
``(B) Contents.--The report under subparagraph (A) shall
include the following:
``(i) Information on the characteristics of each individual
with a disability that receives assistance through a loan or
other alternative financing mechanism under the program,
including information about the individual such as the
following:
``(I) Age.
``(II) Ethnicity.
``(III) Employment status at the time of application for
assistance through a loan or other alternative financing
mechanism under this subsection.
``(IV) Whether the individual attempted to secure financial
support from other sources to enable the individual to
telework and, if so, a description of such sources.
``(V) Whether the individual is working and, if so, whether
the individual teleworks, the occupation in which the
individual is working, the hourly salary the individual
receives, and the hourly salary of the individual prior to
receiving assistance through a loan or other alternative
financing mechanism under the program.
``(VI) Whether the individual has repaid assistance from
the loan or other alternative financing mechanism received
under the program, is in repayment status, is delinquent on
repayments, or has defaulted on the assistance from the loan
or other alternative financing mechanism.
``(ii) An analysis of the individuals with disabilities
that have benefited from the program.
``(iii) Any other information that the Commissioner may
require.''; and
(5) in subsection (i), as redesignated by paragraph (2)--
(A) by striking ``this section'' and inserting ``this
section (other than subsections (c) and (d))''; and
(B) by striking ``fiscal years 1999 through 2003'' and
inserting ``fiscal years 2006 through 2011''.
SEC. 443. DISABILITY CAREER PATHWAYS PROGRAM.
Section 303 of the Rehabilitation Act of 1973 (29 U.S.C.
773) is amended--
(1) by redesignating subsection (i) (as redesignated by
section 442(2) as subsection (j); and
(2) by inserting after subsection (h) the following new
subsection:
``(i) Grants for Disability Career Pathways Program.--
``(1) Definitions.--In this subsection:
``(A) Assistive technology.--The term `assistive
technology' has the meaning given the term in section 3 of
the Assistive Technology Act of 1998 (29 U.S.C. 3002).
``(B) Center for independent living.--The term `center for
independent living' means a center for independent living
funded under subtitle C of title VII.
``(C) Covered institution.--The term `covered institution'
means--
``(i) a secondary school; and
``(ii) in the discretion of the eligible consortium
involved, an institution of higher education.
``(D) Eligible consortium.--The term `eligible consortium'
means a consortium described in paragraph (3)(A).
``(E) Secondary school.--The term `secondary school' has
the meaning given the term in section 9101 of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 7801).
``(2) Purpose of program.--The Commissioner may establish a
Disability Career Pathways program, through which the
Commissioner may make grants, for periods of up to 5 years,
to institutions of higher education that establish eligible
consortia, to enable the consortia to develop and carry out
training and education related to disability studies and
leadership development. The consortia shall provide the
training and education for the purpose of providing career
pathways for students at a covered institution, in fields
pertinent to individuals with disabilities, and particularly
pertinent to the employment of individuals with disabilities.
``(3) Application.--To be eligible to receive a grant under
this subsection on behalf of a consortium, an institution of
higher education shall submit an application to the Secretary
at such time, in such manner, and containing such information
as the Secretary may require, including information
demonstrating--
``(A) that the institution of higher education has
established a consortium of members that represent--
``(i) the institution of higher education;
``(ii) a community college;
``(iii) a secondary school;
``(iv) a center for independent living;
``(v) a designated State agency;
``(vi) a one-stop center established under section 121(e)
of the Workforce Investment Act of 1998 (29 U.S.C. 2841(e));
and
``(vii) the local business community;
``(B) the collaborative working relationships between the
institution of higher education and the other members of the
consortium, and describing the activities that each member
shall undertake; and
``(C) the capacity and expertise of the institution of
higher education--
``(i) to coordinate training and education related to
disability studies and leadership development with
educational institutions and disability-related
organizations; and
``(ii) to conduct such training and education effectively.
``(4) Distribution of grants.--In making grants under this
subsection, the Commissioner shall ensure that the grants
shall be distributed for a geographically diverse set of
eligible consortia throughout all regions.
``(5) Mandatory uses of funds.--An institution of higher
education that receives a grant under this subsection on
behalf of a consortium shall ensure that the consortium shall
use the grant funds to--
``(A) encourage interest in, enhance awareness and
understanding of, and provide educational opportunities in,
disability-related fields, and encourage leadership
development among students at a covered institution,
including such students who are individuals with
disabilities;
``(B) enable the students at a covered institution to gain
practical skills and identify work experience opportunities,
including opportunities developed by the consortium in
conjunction with the private sector, that benefit individuals
with disabilities;
[[Page S5152]]
``(C) develop postsecondary school career pathways leading
to gainful employment, the attainment of an associate or
baccalaureate degree, or the completion of further coursework
or a further degree, in a disability-related field;
``(D) offer credit-bearing, college-level coursework in a
disability-related field to qualified students at a covered
institution; and
``(E) ensure faculty and staff employed by the members are
available to students at a covered institution for
educational and career advising, and to teachers and staff at
a covered institution for disability-related training.
``(6) Permissible uses of funds.--An institution of higher
education that receives a grant under this subsection on
behalf of a consortium may permit the consortium to use the
grant funds to assess the feasibility of developing or
adapting disabilities studies curricula, including curricula
with distance learning opportunities, for use at institutions
of higher education.
``(7) Consultation.--The consortium shall consult with
appropriate agencies that serve or assist individuals with
disabilities, and the parents, family members, guardians,
advocates, or authorized representatives of the individuals,
located in the jurisdiction served by the consortium,
concerning the program of education and training carried out
by the consortium.
``(8) Reviews.--
``(A) Advisory committee.--For an institution of higher
education to be eligible to receive a grant under this
subsection on behalf of a consortium, the consortium shall
have an advisory committee that consists of members that
represent the interests of individuals with disabilities,
including--
``(i) a professional in the field of vocational
rehabilitation;
``(ii) an individual with a disability or a family member
of such an individual; and
``(iii) a representative of each type of entity or
community represented on the consortium.
``(B) Quarterly reviews.--The advisory committee shall meet
at least once during each calendar quarter to conduct a
review of the program of education and training carried out
by the consortium. The committee shall directly advise the
governing board of the institution of higher education in the
consortium about the views and recommendations of the
advisory committee resulting from the review.
``(9) Accountability.--Every 2 years, the Commissioner
shall--
``(A) using information collected from the reviews required
in paragraph (8), assess the effectiveness of the Disability
Career Pathways program carried out under this subsection,
including assessing how many individuals were served by each
eligible consortium and how many of those individuals
received postsecondary education, or entered into employment,
in a disability-related field; and
``(B) prepare and submit to Congress a report containing
the results of the assessments described in subparagraph
(A).''.
SEC. 444. MIGRANT AND SEASONAL FARMWORKERS.
Section 304(b) of the Rehabilitation Act of 1973 (29 U.S.C.
774(b)) is amended by striking ``fiscal years 1999 through
2003'' and inserting ``fiscal years 2006 through 2011''.
SEC. 445. RECREATIONAL PROGRAMS.
Section 305 of the Rehabilitation Act of 1973 (29 U.S.C.
775) is amended--
(1) in subsection (a)(1)(B), by striking ``construction of
facilities for aquatic rehabilitation therapy,''; and
(2) in subsection (b), by striking ``fiscal years 1999
through 2003'' and inserting ``fiscal years 2006 through
2011''.
Subtitle D--National Council on Disability
SEC. 451. AUTHORIZATION OF APPROPRIATIONS.
Section 405 of the Rehabilitation Act of 1973 (29 U.S.C.
785) is amended by striking ``fiscal years 1999 through
2003'' and inserting ``fiscal years 2006 through 2011''.
Subtitle E--Rights and Advocacy
SEC. 461. ARCHITECTURAL AND TRANSPORTATION BARRIERS
COMPLIANCE BOARD.
Section 502(j) of the Rehabilitation Act of 1973 (29 U.S.C.
792(j)) is amended by striking ``fiscal years 1999 through
2003'' and inserting ``fiscal years 2006 through 2011''.
SEC. 462. PROTECTION AND ADVOCACY OF INDIVIDUAL RIGHTS.
Section 509 of the Rehabilitation Act of 1973 (29 U.S.C.
794e) is amended--
(1) in subsection (c)(1)(A), by inserting ``a grant for''
after ``to provide'';
(2) in subsection (g)(2), by striking ``was paid'' and
inserting ``was paid, except that program income generated
from the amount paid to an eligible system shall remain
available to such system until expended''; and
(3) in subsection (l), by striking ``fiscal years 1999
through 2003'' and inserting ``fiscal years 2006 through
2011''.
Subtitle F--Employment Opportunities for Individuals With Disabilities
SEC. 471. PROJECTS WITH INDUSTRY.
Section 611(a) of the Rehabilitation Act of 1973 (29 U.S.C.
795(a)) is amended--
(1) in paragraph (1), by inserting ``, locally and
nationally'' before the period at the end; and
(2) in paragraph (2)--
(A) in the matter preceding subparagraph (A), by inserting
``local and national'' before ``Projects With Industry''; and
(B) in subparagraph (A)--
(i) in clause (iii), by striking ``and'' after the
semicolon;
(ii) in clause (iv), by inserting ``and'' after the
semicolon; and
(iii) by adding at the end the following:
``(v) coordinate activities with the Job Corps center
industry councils established under section 154 of the
Workforce Investment Act of 1998 (29 U.S.C. 2894);''.
SEC. 472. PROJECTS WITH INDUSTRY AUTHORIZATION OF
APPROPRIATIONS.
Section 612 of the Rehabilitation Act of 1973 (29 U.S.C.
795a) is amended by striking ``fiscal years 1999 through
2003'' and inserting ``fiscal years 2006 through 2011''.
SEC. 473. SERVICES FOR INDIVIDUALS WITH SIGNIFICANT
DISABILITIES AUTHORIZATION OF APPROPRIATIONS.
Section 628 of the Rehabilitation Act of 1973 (29 U.S.C.
795n) is amended by striking ``fiscal years 1999 through
2003'' and inserting ``fiscal years 2006 through 2011''.
Subtitle G--Independent Living Services and Centers for Independent
Living
SEC. 481. STATE PLAN.
Section 704 of the Rehabilitation Act of 1973 (42 U.S.C.
795c) is amended by adding at the end the following:
``(o) Promoting Full Access to Community Life.--
``(1) In general.--The plan shall describe how the State
will provide independent living services that promote full
access to community life for individuals with significant
disabilities.
``(2) Services.--The services shall include, as
appropriate--
``(A) facilitating transitions of--
``(i) youth who are individuals with significant
disabilities and have completed individualized education
programs under section 614(d) of the Individuals with
Disabilities Education Act (20 U.S.C. 1414(d)) to
postsecondary life, including employment; and
``(ii) individuals with significant disabilities from
nursing homes and other institutions, including institutions
serving individuals with cognitive disabilities, to
community-based residences;
``(B) assisting individuals with significant disabilities
at risk of entering institutions to remain in the community;
and
``(C) promoting home ownership among individuals with
significant disabilities.''.
SEC. 482. STATEWIDE INDEPENDENT LIVING COUNCIL.
Section 705(b) of the Rehabilitation Act of 1973 (29 U.S.C.
796d(b)) is amended--
(1) in paragraph (2), by striking subparagraph (C) and
inserting the following:
``(C) in a State in which 1 or more projects provide
services under section 121, not less than 1 representative of
the directors of the projects.''; and
(2) by striking paragraph (5) and inserting the following:
``(5) Chairperson.--The Council shall select a chairperson
from among the voting membership of the Council.''.
SEC. 483. INDEPENDENT LIVING SERVICES AUTHORIZATION OF
APPROPRIATIONS.
Section 714 of the Rehabilitation Act of 1973 (29 U.S.C.
796e-3) is amended by striking ``fiscal years 1999 through
2003'' and inserting ``fiscal years 2006 through 2011''.
SEC. 484. PROGRAM AUTHORIZATION.
Section 721 of the Rehabilitation Act of 1973 (42 U.S.C.
796f) is amended--
(1) by striking subsection (c) and inserting the following:
``(c) Allotments to States.--
``(1) Definitions.--In this subsection:
``(A) Additional appropriation.--The term `additional
appropriation' means the amount (if any) by which the
appropriation for a fiscal year exceeds the total of--
``(i) the amount reserved under subsection (b) for that
fiscal year; and
``(ii) the appropriation for fiscal year 2003.
``(B) Appropriation.--The term `appropriation' means the
amount appropriated to carry out this part.
``(C) Base appropriation.--The term `base appropriation'
means the portion of the appropriation for a fiscal year that
is equal to the lesser of--
``(i) an amount equal to 100 percent of the appropriation,
minus the amount reserved under subsection (b) for that
fiscal year; or
``(ii) the appropriation for fiscal year 2003.
``(2) Allotments to states from base appropriation.--After
the reservation required by subsection (b) has been made, the
Commissioner shall allot to each State whose State plan has
been approved under section 706 an amount that bears the same
ratio to the base appropriation as the amount the State
received under this subsection for fiscal year 2003 bears to
the total amount that all States received under this
subsection for fiscal year 2003.
``(3) Allotments to states of additional appropriation.--
From any additional appropriation for each fiscal year, the
Commissioner shall allot to each State whose State plan has
been approved under section 706 an amount equal to the sum
of--
``(A) an amount that bears the same ratio to 50 percent of
the additional appropriation as the population of the State
bears to the population of all States; and
``(B) \1/56\ of 50 percent of the additional
appropriation.''; and
(2) by adding at the end the following:
``(e) Carryover Authority.--Notwithstanding any other
provision of law--
[[Page S5153]]
``(1) any funds appropriated for a fiscal year to carry out
a grant program under section 722 or 723, that are not
obligated and expended by recipients prior to the beginning
of the succeeding fiscal year shall remain available for
obligation and expenditure by such recipients during that
succeeding fiscal year and the subsequent fiscal year; and
``(2) any amounts of program income received by recipients
under a grant program under section 722 or 723 in a fiscal
year, that are not obligated and expended by recipients prior
to the beginning of the succeeding fiscal year, shall remain
available for obligation and expenditure by such recipients
during that succeeding fiscal year and the subsequent fiscal
year.''.
SEC. 485. GRANTS TO CENTERS FOR INDEPENDENT LIVING IN STATES
IN WHICH FEDERAL FUNDING EXCEEDS STATE FUNDING.
Section 722(c) of the Rehabilitation Act of 1973 (29 U.S.C.
796f-1(c)) is amended--
(1) by striking ``grants'' and inserting ``grants for a
fiscal year''; and
(2) by striking ``by September 30, 1997'' and inserting
``for the preceding fiscal year''.
SEC. 486. GRANTS TO CENTERS FOR INDEPENDENT LIVING IN STATES
IN WHICH STATE FUNDING EQUALS OR EXCEEDS
FEDERAL FUNDING.
Section 723(c) of the Rehabilitation Act of 1973 (29 U.S.C.
796f-2(c)) is amended--
(1) by striking ``grants'' and inserting ``grants for a
fiscal year''; and
(2) by striking ``by September 30, 1997'' and inserting
``for the preceding fiscal year''.
SEC. 487. STANDARDS AND ASSURANCES FOR CENTERS FOR
INDEPENDENT LIVING.
Section 725(b) of the Rehabilitation Act of 1973 (29 U.S.C.
796f-4(b)) is amended by adding at the end the following:
``(8) Promoting full access to community life.--
``(A) In general.--The center shall provide independent
living services that promote full access to community life
for individuals with significant disabilities.
``(B) Services.--The services shall include, as
appropriate--
``(i) facilitating transitions of--
``(I) youth who are individuals with significant
disabilities and have completed individualized education
programs under section 614(d) of the Individuals with
Disabilities Education Act (20 U.S.C. 1414(d)) to
postsecondary life, including employment; and
``(II) individuals with significant disabilities from
nursing homes and other institutions, including institutions
serving individuals with cognitive disabilities, to
community-based residences;
``(ii) assisting individuals with significant disabilities
at risk of entering institutions to remain in the community;
and
``(iii) promoting home ownership among individuals with
significant disabilities.''.
SEC. 488. CENTERS FOR INDEPENDENT LIVING AUTHORIZATION OF
APPROPRIATIONS.
Section 727 of the Rehabilitation Act of 1973 (29 U.S.C.
796f-6) is amended by striking ``fiscal years 1999 through
2003'' and inserting ``fiscal years 2006 through 2011''.
SEC. 489. INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS
WHO ARE BLIND.
Chapter 2 of title VII of the Rehabilitation Act of 1973
(29 U.S.C. 796j et seq.) is amended--
(1) by redesignating sections 752 and 753 as sections 753
and 754, respectively; and
(2) by inserting after section 751 the following:
``SEC. 752. TRAINING AND TECHNICAL ASSISTANCE.
``(a) Grants; Contracts; Other Arrangements.--For any
fiscal year for which the funds appropriated to carry out
this chapter exceed the funds appropriated to carry out this
chapter for fiscal year 2003, the Commissioner shall first
reserve from such excess, to provide training and technical
assistance to designated State agencies for such fiscal year,
not less than 1.8 percent, and not more than 2 percent, of
the funds appropriated to carry out this chapter for the
fiscal year involved.
``(b) Allocation.--From the funds reserved under subsection
(a), the Commissioner shall make grants to, and enter into
contracts and other arrangements with, entities that
demonstrate expertise in the provision of services to older
individuals who are blind to provide training and technical
assistance with respect to planning, developing, conducting,
administering, and evaluating independent living programs for
older individuals who are blind.
``(c) Funding Priorities.--The Commissioner shall conduct a
survey of designated State agencies that receive grants under
section 753 regarding training and technical assistance needs
in order to determine funding priorities for grants,
contracts, and other arrangements under this section.
``(d) Review.--To be eligible to receive a grant or enter
into a contract or other arrangement under this section, an
entity shall submit an application to the Commissioner at
such time, in such manner, containing a proposal to provide
such training and technical assistance, and containing such
additional information as the Commissioner may require.
``(e) Prohibition on Combined Funds.--No funds reserved by
the Commissioner under this section may be combined with
funds appropriated under any other Act or part of this Act if
the purpose of combining funds is to make a single
discretionary grant or a single discretionary payment, unless
such reserved funds are separately identified in the
agreement for such grant or payment and are used for the
purposes of this chapter.''.
SEC. 490. PROGRAM OF GRANTS.
Section 753 of the Rehabilitation Act of 1973, as
redesignated by section 489, is amended--
(1) by striking subsection (h);
(2) by redesignating subsections (i) and (j) as subsections
(h) and (i), respectively;
(3) in subsection (b), by striking ``section 753'' and
inserting ``section 754'';
(4) in subsection (c)--
(A) in paragraph (1), by striking ``section 753'' and
inserting ``section 754''; and
(B) in paragraph (2)--
(i) by striking ``subsection (j)'' and inserting
``subsection (i)''; and
(ii) by striking ``subsection (i)'' and inserting
``subsection (h)'';
(5) in subsection (g), by inserting ``, or contracts
with,'' after ``grants to'';
(6) in subsection (h), as redesignated by paragraph (2)--
(A) in paragraph (1), by striking ``subsection (j)(4)'' and
inserting ``subsection (i)(4)''; and
(B) in paragraph (2)--
(i) in subparagraph (A)(vi), by adding ``and'' after the
semicolon;
(ii) in subparagraph (B)(ii)(III), by striking ``; and''
and inserting a period; and
(iii) by striking subparagraph (C); and
(7) in subsection (i), as redesignated by paragraph (2)--
(A) by striking paragraph (2) and inserting the following:
``(2) Minimum allotment.--
``(A) States.--In the case of any of the several States,
the District of Columbia, or the Commonwealth of Puerto Rico,
the amount referred to in paragraph (1)(A) for a fiscal year
is the greater of--
``(i) $350,000;
``(ii) an amount equal to the amount the State, the
District of Columbia, or the Commonwealth of Puerto Rico
received to carry out this chapter for fiscal year 2003; or
``(iii) an amount equal to \1/3\ of 1 percent of the amount
appropriated under section 754, and not reserved under
section 752, for the fiscal year and available for allotments
under subsection (a).
``(B) Certain territories.--In the case of Guam, American
Samoa, the United States Virgin Islands, or the Commonwealth
of the Northern Mariana Islands, the amount referred to in
paragraph (1)(A) for a fiscal year is $60,000.'';
(B) in paragraph (3)(A), by striking ``section 753'' and
inserting ``section 754, and not reserved under section
752,''; and
(C) in paragraph (4)(B)(i), by striking ``subsection (i)''
and inserting ``subsection (h)''.
SEC. 491. INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS
WHO ARE BLIND AUTHORIZATION OF APPROPRIATIONS.
Section 754 of the Rehabilitation Act of 1973, as
redesignated by section 489, is amended by striking ``fiscal
years 1999 through 2003'' and inserting ``fiscal years 2006
through 2011''.
Subtitle H--Miscellaneous
SEC. 495. HELEN KELLER NATIONAL CENTER ACT.
(a) General Authorization of Appropriations.--The first
sentence of section 205(a) of the Helen Keller National
Center Act (29 U.S.C. 1904(a)) is amended by striking ``1999
through 2003'' and inserting ``2006 through 2011''.
(b) Helen Keller National Center Federal Endowment Fund.--
The first sentence of section 208(h) of the Helen Keller
National Center Act (29 U.S.C. 1907(h)) is amended by
striking ``1999 through 2003'' and inserting ``2006 through
2011''.
TITLE V--TRANSITION AND EFFECTIVE DATE
SEC. 501. TRANSITION PROVISIONS.
The Secretary of Labor shall, at the discretion of the
Secretary, take such actions as the Secretary determines to
be appropriate to provide for the orderly implementation of
titles I and III of this Act. The Secretary of Education
shall, at the discretion of the Secretary, take such actions
as the Secretary determines to be appropriate to provide for
the orderly implementation of titles II and IV of this Act.
SEC. 502. EFFECTIVE DATE.
Except as otherwise provided in this Act, this Act and the
amendments made by this Act shall take effect on the date of
enactment of this Act.
Mr. KENNEDY. Mr. President, It is a privilege to join my colleagues
in introducing this bipartisan bill to reauthorize the Workforce
Investment Act and increase the opportunities for workers to obtain the
services and training they need to hold good jobs in the years ahead.
This bill strengthens the current One-Stop system we established in
1998, so that many more people can be served. The bill creates stronger
partnerships with businesses to recruit new workers, collaborate in
training current workers, improve career ladder opportunities, and work
with local leaders to meet the changing needs of their community.
The One-Stop system is needed more than ever now, to serve hard-
working Americans who have lost their jobs
[[Page S5154]]
through no fault of their own as we struggle to rebuild our economy and
adjust to the new century and the globalization forces that are
transforming our society and our workforce. Current employees,
especially the growing number of manufacturing workers, need effective
training to be eligible for the available jobs in their area.
We have also worked to remove the sequencing of services for persons
entering the workforce who face barriers to employment. Providers can
move adults directly to skills training, or create training programs
that include literacy and language skills as well, so that job training
is not delayed.
The bill also encourages local providers to continue the training
programs until employees can be self-sufficient. For those who start on
the minimum wage, the support system should be there to help them
qualify for the better-paying jobs that will enable them to support
their families. Some men and women may obtain their first job through
the system, and continue to participate as they move up their career
ladders.
The bill will also help young people. Last summer, the youth
unemployment rate rose to 17 percent and we were all acutely aware of
the special challenges that young workers face in this economy. The
youth program will continue to work with both in-school and out-of-
school young men and women to help them obtain the education and the
real job experience they need to be competitive.
The bill pays particular attention to the needs of people with
disabilities. Their access to the program is essential if the system is
to be truly universal. It's unacceptable today that hundreds of
thousands of people with disabilities are unable to find employment.
Workforce training programs must coordinate with vocational
rehabilitation programs to provide many more opportunities for those
with physical and mental challenges.
For over thirty years, since the Vocational Rehabilitation Act was
first enacted in 1973, state vocational rehabilitation programs have
brought new hope to individuals with disabilities throughout the
country, so that they can reach their full potential and actively
participate in their communities.
Through vocational rehabilitation, individuals with disabilities can
obtain the training, counseling, support and job opportunities they
need in order to have independent, productive, and fulfilling lives.
For millions of these Americans, vocational rehabilitation is the
difference between dependence and independence, between lost potential
and a productive career.
In 1998, vocational rehabilitation became part of the state-wide
workforce system in each state. This reauthorization will strengthen
that partnership, so that many more working-age individuals with
disabilities, even those with the most significant challenges, have
realistic opportunities to obtain the services and support they need to
reach their employment goals.
The legislation also strengthens other aspects of independent living,
so that students and adults with disabilities can receive the services
and support they need for community-based living.
Our goal in this reauthorization is to see that the talents and
strengths of all individuals with disabilities are recognized,
enhanced, and fairly rewarded in communities and workplaces across the
nation.
The bill also contains the Adult Literacy Act, which funds critical
programs for states to assist adults in obtaining the basic reading,
writing, numeracy and English language skills that they need to be full
participants in the workplace and in society.
We all know that education is the great equalizer. Improving basic
literacy is a key component of job training. Large numbers of persons
are on waiting lists across the country to be served under this
program--25,000 people in Massachusetts alone--and we need to do more
to serve adults who recognize their need to improve these skills in
order to improve their lives.
I commend my colleagues and the many organizations representing
governors, mayors, county officials, youth, women, and low-income
persons who were so actively involved in preparing this legislation. We
have tried to listen carefully to the many leaders who have practical
experience in implementing these laws.
I look forward to continuing this bipartisan effort and to the early
enactment of this needed legislation.
______
By Mr. SMITH (for himself, Mrs. Lincoln, and Mr. Grassley):
S. 1022. A bill to amend the Internal Revenue Code of 1986 to allow
for an energy efficient appliance credit; to the Committee on Finance.
Mr. SMITH. Mr. President, water and energy are precious resources
that we must manage as efficiently as possible. That is why I am
joining with my colleagues Senator Lincoln and Finance Chairman
Grassley to introduce the ``Resource Efficient Appliance Incentives Act
of 2005.'' This bill would provide for manufacturers' tax credits of
varying levels for certain energy and water efficient home appliances.
Under this bill, for the first time, water efficiency is included in
the eligibility criteria for the tax credits for clothes washers. This
bill provides graduated credits to appliance manufacturers. The more
efficient the dishwasher, clothes washer or refrigerator, the higher
the credit.
To spur increased production, the bill provides that these tax
credits would apply only to production that exceeds historical
production levels, and requires a three-year rolling average to
calculated this production baseline. The bill only applies to
appliances manufactured in the United States. This will encourage
innovation and investment in domestic manufacturing facilities, which
employ about 95,000 Americans.
Energy savings from this bill would be significant. Super-energy
efficient and water conserving clothes washers would have to use at
least 65 percent less energy than the 2004 federal standard to qualify
for the higher credit. Refrigerators must exceed the 2001 energy
conservation standards for comparably sized models by at least 15
percent to receive a credit under this bill.
This bill will not only save energy, and reduce the consumers' energy
bills over the life of the appliance. It is estimated that, over twenty
years, the credit would reduce the amount of water used to wash clothes
by approximately a trillion gallons, the amount used in two years by a
city the size of Phoenix, Arizona.
In several parts of the country, development is constrained by the
lack of good quality water and water infrastructure. Having dealt with
the water crisis in the Klamath Basin in 2001, when 1,200 farmers and
ranchers had their irrigation water cut off, I can tell you firsthand
that the conflicts between competing human and environmental needs are
real and are growing.
As Benjamin Franklin observed, ``When the well is dry, we know the
worth of water.'' In many parts of the arid west, the well is running
dry on a regular basis. The 10-year drought in the Colorado River
Basin, which has seen relief this year, had produced the lowest flows
on record last year, straining an important resource for millions of
people. The Columbia River Basin has also experienced below average
flows in recent years.
The daily per capita water use around the world varies significantly.
The U.N. Population Fund cites that, in the United States, we use an
estimated 152 gallons per day per person, while in the United Kingdom
they use 88 gallons. Africans use 12 gallons a day.
According to the Rocky Mountain Institute, 47 percent of all water
supplied to communities in the United States by public and private
utilities is for residential water use. Of that, clothes washers
account for approximately 22 percent of residential use, while
dishwashers account for about 3 percent.
I firmly believe that we can use technology to improve our
environmental stewardship. Water efficiency can extend our finite water
supplies, and also reduce the amount of wastewater that communities
must treat.
I would urge my colleagues to join me in cosponsoring this important
bill to provide incentives for water and energy efficient residential
appliances. I ask unanimous consent that the text of legislation be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
[[Page S5155]]
S. 1022
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 ``Resource Efficient Appliance
Incentives Act of 2005.''.
SEC. 2. CREDIT FOR ENERGY EFFICIENT APPLIANCES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business-related credits) is amended by adding at the end the
following new section:
``SEC. 45J. ENERGY EFFICIENT APPLIANCE CREDIT.
``(a) General Rule.--
``(1) In general.--For purposes of section 38, the energy
efficient appliance credit determined under this section for
any taxable year is an amount equal to the sum of the credit
amounts determined under paragraph (2) for each type of
qualified energy efficient appliance produced by the taxpayer
during the calendar year ending with or within the taxable
year.
``(2) Credit amounts.--The credit amount determined for any
type of qualified energy efficient appliance is--
``(A) the applicable amount determined under subsection (b)
with respect to such type, multiplied by
``(B) the eligible production for such type.
``(b) Applicable Amount.--
``(1) In general.--For purposes of subsection (a)--
``(A) Dishwashers.--The applicable amount is the energy
savings amount in the case of a dishwasher which--
``(i) is manufactured in calendar year 2006 or 2007, and
``(ii) meets the requirements of the Energy Star program
which are in effect for dishwashers in 2007.
``(B) Clothes washers.--The applicable amount is--
``(i) $50, in the case of a clothes washer which--
``(I) is manufactured in calendar year 2005, and
``(II) has an MEF of at least 1.42,
``(ii) $100, in the case of a clothes washer which--
``(I) is manufactured in calendar year 2005, 2006, or 2007,
and
``(II) meets the requirements of the Energy Star program
which are in effect for clothes washers in 2007, and
``(iii) the energy and water savings amount, in the case of
a clothes washer which--
``(I) is manufactured in calendar year 2008, 2009, or 2010,
and
``(II) meets the requirements of the Energy Star program
which are in effect for clothes washers in 2010.
``(C) Refrigerators.--
``(i) 15 percent savings.--The applicable amount is $75 in
the case of a refrigerator which--
``(I) is manufactured in calendar year 2005 or 2006, and
``(II) consumes at least 15 percent less kilowatt hours per
year than the 2001 energy conservation standard.
``(ii) 20 percent savings.--In the case of a refrigerator
which consumes at least 20 percent less kilowatt hours per
year than the 2001 energy conservation standards, the
applicable amount is--
``(I) $125 for a refrigerator which is manufactured in
calendar year 2005, 2006, or 2007, and
``(II) $100 for a refrigerator which is manufactured in
calendar year 2008.
``(iii) 25 percent savings.--In the case of a refrigerator
which consumes at least 25 percent less kilowatt hours per
year than the 2001 energy conservation standards, the
applicable amount is--
``(I) $175 for a refrigerator which is manufactured in
calendar year 2005, 2006, or 2007, and
``(II) $150 for a refrigerator which is manufactured in
calendar year 2008, 2009, or 2010.
``(2) Energy savings amount.--For purposes of paragraph
(1)(A)--
``(A) In general.--The energy savings amount is the lesser
of--
``(i) the product of--
``(I) $3, and
``(II) 100 multiplied by the energy savings percentage, or
``(ii) $100.
``(B) Energy savings percentage.--For purposes of
subparagraph (A), the energy savings percentage is the ratio
of--
``(i) the EF required by the Energy Star program for
dishwashers in 2007 minus the EF required by the Energy Star
program for dishwashers in 2005, to
``(ii) the EF required by the Energy Star program for
dishwashers in 2007.
``(3) Energy and water savings amount.--For purposes of
paragraph (1)(B)(iii)--
``(A) In general.--The energy and water savings amount is
the lesser of--
``(i) the product of--
``(I) $10, and
``(II) 100 multiplied by the energy and water savings
percentage, or
``(ii) $200.
``(B) Energy and water savings percentage.--For purposes of
subparagraph (A), the energy and water savings percentage is
the average of the MEF savings percentage and the WF savings
percentage.
``(C) Mef savings percentage.--For purposes of this
subparagraph, the MEF savings percentage is the ratio of--
``(i) the MEF required by the Energy Star program for
clothes washers in 2010 minus the MEF required by the Energy
Star program for clothes washers in 2007, to
``(ii) the MEF required by the Energy Star program for
clothes washers in 2010.
``(D) Wf savings percentage.--For purposes of this
subparagraph, the WF savings percentage is the ratio of--
``(i) the WF required by the Energy Star program for
clothes washers in 2010 minus the WF required by the Energy
Star program for clothes washers in 2007, to
``(ii) the WF required by the Energy Star program for
clothes washers in 2010.
``(c) Eligible Production.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), the eligible production in a calendar year with respect
to each type of energy efficient appliance is the excess of--
``(A) the number of appliances of such type which are
produced by the taxpayer in the United States during such
calendar year, over
``(B) the average number of appliances of such type which
were produced by the taxpayer (or any predecessor) in the
United States during the preceding 3-calendar year period.
``(2) Special rule for refrigerators.--The eligible
production in a calendar year with respect to each type of
refrigerator described in subsection (b)(1)(C) is the excess
of--
``(A) the number of appliances of such type which are
produced by the taxpayer in the United States during such
calendar year, over
``(B) 110 percent of the average number of appliances of
such type which were produced by the taxpayer (or any
predecessor) in the United States during the preceding 3-
calendar year period.
``(3) Special rule for 2005 production.--For purposes of
determining eligible production for calendar year 2005--
``(A) only production after the date of enactment of this
section shall be taken into account under paragraphs (1)(A)
and (2)(A), and
``(B) the amount taken into account under paragraphs (1)(B)
and (2)(B) shall be an amount which bears the same ratio to
the amount which would (but for this paragraph) be taken into
account under such paragraph as--
``(i) the number of days in calendar year 2005 after the
date of enactment of this section, bears to
``(ii) 365.
``(d) Types of Energy Efficient Appliance.--For purposes of
this section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1)(A),
``(2) clothes washers described in subsection (b)(1)(B)(i),
``(3) clothes washers described in subsection
(b)(1)(B)(ii),
``(4) clothes washers described in subsection
(b)(1)(B)(iii),
``(5) refrigerators described in subsection (b)(1)(C)(i),
``(6) refrigerators described in subsection
(b)(1)(C)(ii)(I),
``(7) refrigerators described in subsection
(b)(1)(C)(ii)(II),
``(8) refrigerators described in subsection
(b)(1)(C)(iii)(I), and
``(9) refrigerators described in subsection
(b)(1)(C)(iii)(II).
``(e) Limitations.--
``(1) Aggregate credit amount allowed.--The aggregate
amount of credit allowed under subsection (a) with respect to
a taxpayer for any taxable year shall not exceed $75,000,000
reduced by the amount of the credit allowed under subsection
(a) to the taxpayer (or any predecessor) for all prior
taxable years.
``(2) Amount allowed for certain appliances.--
``(A) In general.--In the case of appliances described in
subparagraph (C), the aggregate amount of the credit allowed
under subsection (a) with respect to a taxpayer for any
taxable year shall not exceed $20,000,000 reduced by the
amount of the credit allowed under subsection (a) to the
taxpayer (or any predecessor) for all prior taxable years
with respect to such appliances.
``(B) Election to increase allowable credit.--In the case
of any taxpayer who makes an election under this
subparagraph--
``(i) subparagraph (A) shall be applied by substituting
`$25,000,000' for `$20,000,000', and
``(ii) the aggregate amount of the credit allowed under
subsection (a) with respect to such taxpayer for any taxable
year for appliances described in subparagraph (C) and the
additional appliances described in subparagraph (D) shall not
exceed $50,000,000 reduced by the amount of the credit
allowed under subsection (a) to the taxpayer (or any
predecessor) for all prior taxable years with respect to such
appliances.
``(C) Appliances described.--The appliances described in
this subparagraph are--
``(i) clothes washers described in subsection (b)(1)(B)(i),
and
``(ii) refrigerators described in subsection (b)(1)(C)(i).
``(D) Additional appliances.--The additional appliances
described in this subparagraph are--
``(i) refrigerators described in subsection
(b)(1)(C)(ii)(I), and
``(ii) refrigerators described in subsection
(b)(1)(C)(ii)(II).
``(3) Limitation based on gross receipts.--The credit
allowed under subsection
[[Page S5156]]
(a) with respect to a taxpayer for the taxable year shall not
exceed an amount equal to 2 percent of the average annual
gross receipts of the taxpayer for the 3 taxable years
preceding the taxable year in which the credit is determined.
``(4) Gross receipts.--For purposes of this subsection, the
rules of paragraphs (2) and (3) of section 448(c) shall
apply.
``(f) Definitions.--For purposes of this section--
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection (b)(1)(A),
``(B) any clothes washer described in subsection (b)(1)(B),
and
``(C) any refrigerator described in subsection (b)(1)(C).
``(2) Dishwasher.--The term `dishwasher' means a
residential dishwasher subject to the energy conservation
standards established by the Department of Energy.
``(3) Clothes washer.--The term `clothes washer' means a
residential model clothes washer, including a residential
style coin operated washer.
``(4) Refrigerator.--The term `refrigerator' means a
residential model automatic defrost refrigerator-freezer
which has an internal volume of at least 16.5 cubic feet.
``(5) Mef.--The term `MEF' means the modified energy factor
established by the Department of Energy for compliance with
the Federal energy conservation standards.
``(6) Ef.--The term `EF' means the energy factor
established by the Department of Energy for compliance with
the Federal energy conservation standards.
``(7) Wf.--The term `WF' means Water Factor (as determined
by the Secretary of Energy).
``(8) Produced.--The term `produced' includes manufactured.
``(9) 2001 energy conservation standard.--The term `2001
energy conservation standard' means the energy conservation
standards promulgated by the Department of Energy and
effective July 1, 2001.
``(g) Special Rules.--For purposes of this section--
``(1) In general.--Rules similar to the rules of
subsections (c), (d), and (e) of section 52 shall apply.
``(2) Controlled group.--
``(A) In general.--All persons treated as a single employer
under subsection (a) or (b) of section 52 or subsection (m)
or (o) of section 414 shall be treated as a single producer.
``(B) Inclusion of foreign corporations.--For purposes of
subparagraph (A), in applying subsections (a) and (b) of
section 52 to this section, section 1563 shall be applied
without regard to subsection (b)(2)(C) thereof.
``(3) Verification.--No amount shall be allowed as a credit
under subsection (a) with respect to which the taxpayer has
not submitted such information or certification as the
Secretary, in consultation with the Secretary of Energy,
determines necessary.''.
(b) Conforming Amendment.--Section 38(b) of the Internal
Revenue Code of 1986 (relating to general business credit) is
amended by striking ``plus'' at the end of paragraph (18), by
striking the period at the end of paragraph (19) and
inserting ``, plus'', and by adding at the end the following
new paragraph:
``(20) the energy efficient appliance credit determined
under section 45J(a).''.
(c) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new item:
``Sec. 45J. Energy efficient appliance credit''.
(d) Effective Date.--The amendments made by this section
shall apply to appliances produced after the date of the
enactment of this Act, in taxable years ending after such
date.
______
By Mr. DODD (for himself, Ms. Snowe, Mr. Durbin, and Mr. Burns):
S. 1023. A bill to provide for the establishment of a Digital
Opportunity Investment Trust; to the Committee on Health, Education,
Labor, and Pensions.
Mr. DODD. Mr. President, I ask unanimous consent that the text of the
bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1023
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 ``Digital Opportunity
Investment Trust Act''.
SEC. 2. ORGANIZATION.
(a) In General.--There is established a nonprofit
corporation to be known as the ``Digital Opportunity
Investment Trust'' (referred to in this Act as the ``Trust'')
which shall not be an agency or establishment of the United
States Government. The Trust shall be subject to the
provisions of this section, and, to the extent consistent
with this section, to the District of Columbia Nonprofit
Corporation Act (D.C. Code, section 29-501 et seq.).
(b) Funding.--
(1) In general.--There is established in the Treasury a
separate fund to be known as the ``Digital Opportunity
Investment Trust Fund'' (referred to in this Act as the
``Trust Fund''). The Trust Fund shall contain such amounts as
are transferred to the Trust Fund under paragraph (2) and any
interest earned on the investment of amounts in the Trust
Fund under section 4.
(2) Transfer of funds.--The Secretary of the Treasury shall
in each fiscal quarter through the last quarter of fiscal
year 2028, transfer from the General Fund of the Treasury to
the Trust Fund, an amount equal to 30 percent of the proceeds
received by the Federal Government during the preceding
fiscal quarter from any use (including any auction, sale, fee
derived from, or other revenue generated from) of the
electromagnetic spectrum conducted under section 309 (or any
other section) of the Communications Act of 1934 (47 U.S.C.
309 (j)) (or any other provision of Federal law) after
September 30, 2007.
(c) Board of Directors; Functions, and Duties.--
(1) Board.--
(A) In general.--A board of directors of the Trust
(referred to in this Act as the ``Board'') shall be
established to oversee the administration of the Trust. Such
Board shall consist of 9 members to be appointed by the
President, by and with the advice and consent of the Senate,
who--
(i) reflect representation from the public and private
sectors;
(ii) are not regular full-time employees of the Federal
Government;
(iii) are eminent in such fields as telecommunications
including public television, information technology, labor
and workforce development, education, cultural and civic
affairs, or the arts and humanities;
(iv) shall provide, as nearly as practicable, a broad
representation of various regions of the United States,
various professions and occupations, and various kinds of
talent and experience appropriate to the functions and
responsibilities of the Trust; and
(v) shall be responsible for establishing the priorities
and funding obligations of the Trust.
(B) Initial members.--The initial members of the Board
shall serve as incorporators of the Trust and shall take
whatever actions are necessary to establish the Trust under
the District of Columbia Nonprofit Corporation Act (D.C.
Code, section 29-501 et seq.).
(C) Recommendations.--The Majority Leader of the Senate,
the Minority Leader of the Senate, the Speaker of the House
of Representatives, and the Minority Leader of the House of
Representatives shall jointly submit to the President
recommendations of individuals, selected from nominations
submitted to Congress from associations representing the
fields of science and learning relative to the work of the
Board, to serve as members of the Board.
(D) Terms of appointment.--
(i) Date.--Members of the Board shall be appointed not
later than 90 days after the date of enactment of this Act.
(ii) Terms.--
(I) In general.--Except as provided in subclause (II), each
member of the Board shall be appointed for a 6-year term with
terms set to expire in non-Federal election years.
(II) Staggered terms.--With respect to the initial members
of the Board--
(aa) 3 members shall serve for a term of 6 years;
(bb) 3 members shall serve for a term of 4 years; and
(cc) 3 members shall serve for a term of 2 years.
(iii) Vacancies.--A vacancy in the membership of the Board
shall not affect the Board's powers, and shall be filled in
the same manner as the original member was appointed.
(E) Chair and vice-chair.--
(i) Selection.--The Board shall select, from among the
members of the Board, an individual to serve for a 2-year
term as Chair of the Board and an individual to serve for a
2-year term as vice-Chair of the Board.
(ii) Consecutive terms.--An individual may not serve for
more than 2 consecutive terms as Chair of the Board.
(F) Meetings.--
(i) First meeting.--Not later than 30 days after the date
on which all of the members of the Board have been confirmed
by the Senate, the Chair of the Board shall call the first
meeting of the Board.
(ii) Quorum.--A majority of the members of the Board shall
constitute a quorum, but a lesser number of members may hold
hearings.
(G) Board personnel matters.--
(i) Compensation.--Members of the Board shall not receive
compensation, allowances, or benefits by reason of the
members' service on the Board.
(ii) Travel expenses.--The members of the Board 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 Board.
(H) Solicitation of advice.--The Board from time to time
may solicit advice from--
(i) the Secretary of Health and Human Services;
(ii) the Secretary of Commerce;
(iii) the Secretary of Education;
(iv) the Secretary of Agriculture;
(v) the Secretary of Defense;
(vi) the Secretary of Energy;
(vii) the Secretary of Homeland Security;
(viii) the Secretary of the Interior;
[[Page S5157]]
(ix) the Secretary of Labor;
(x) the Administrator of the National Aeronautics and Space
Administration;
(xi) the Director of the National Security Agency;
(xii) the Director of the National Science Foundation;
(xiii) the Director of the Office of Science and Technology
Policy;
(xiv) the Director of the National Endowment for the Arts;
(xv) the Director of the National Endowment for the
Humanities;
(xvi) the Director of the Institute of Museum and Library
Services;
(xvii) the Librarian of Congress; and
(xviii) the President and Chief Executive Officer of the
Corporation for Public Broadcasting.
(2) Director.--A majority of the members of the Board shall
select a Director of the Trust who shall serve at the
discretion of the Board and shall be responsible for
instituting procedures to carry out the policies and
priorities established by the Board, and for hiring all
personnel of the Trust. The rate of compensation of the
Director and personnel shall be fixed by the Board.
(d) Trust Fund Uses.--
(1) Uses of funds.--To achieve the objectives of this Act,
the Director of the Trust, after consultation with the Board,
may use Trust funds--
(A) to support the digitization of collections and other
significant holdings of the nation's universities, museums,
libraries, public television stations, and other cultural
institutions;
(B) to support basic and applied research, including
demonstrations of innovative learning and assessment systems
as well as the components and tools needed to create them;
(C) to use the research results developed under
subparagraph (B) to create prototype applications designed to
meet learning objectives in a variety of subject areas and
designed for learners with many different educational needs,
including--
(i) strengthening instruction in reading, science,
mathematics, history, and the arts in elementary and
secondary schools, community colleges, and other colleges and
universities;
(ii) providing the training needed for people now in the
workplace to advance in a constantly changing work
environment; and
(iii) developing new applications for life-long learning in
non-traditional learning environments such as libraries,
museums, senior and community centers, and public television
and radio;
(D) to conduct assessments of legal, regulatory, and other
issues that must be resolved to ensure rapid development and
use of advanced learning technologies; and
(E) to coordinate and disseminate information about
initiatives throughout the Federal Government that focus on
uses of technology in education and learning.
(2) Contracts and grants.--
(A) In general.--In order to carry out the activities
described in paragraph (1), the Director of the Trust, with
the agreement of a majority of the members of the Board, may
award contracts and grants to nonprofit public institutions
(with or without private partners) and for-profit
organizations and individuals.
(B) Public domain.--
(i) In general.--The research and development properties
and materials associated with a project in which a majority
of the funding used to carry out the project is from a grant
or contract under this Act shall be freely and nonexclusively
available to the general public.
(ii) Exemption.--The Director of the Trust may exempt
specific projects from the requirement of clause (i) if the
Director of the Trust and a majority of the members of the
Board determine that the general public will benefit
significantly in the long run due to the project not being
freely and nonexclusively available to the general public.
(C) Evaluation of proposals.--To the extent practicable,
proposals for such contracts or grants shall be evaluated on
the basis of comparative merit by panels of experts who
represent diverse interests and perspectives, and who are
appointed by the Director of the Trust from recommendations
from the fields served and the Board of Directors.
(3) Cooperation.--The Director of the Trust, after
consultation with the Board, may cooperate with business,
industry, philanthropy, noncommercial education broadcast,
television and radio licensees and permittees, and local and
national public service institutions, including in activities
that seek to enhance the work of such public service
institutions by seeking new ways to put telecommunications
and information technologies to work in their areas of
interest.
SEC. 3. ACCOUNTABILITY AND REPORTING.
(a) Report.--
(1) In general.--Not later than April 30 of each year, the
Director of the Trust shall prepare a report for the
preceding fiscal year that contains the information described
in paragraph (2).
(2) Contents.--A report under paragraph (1) shall include--
(A) a comprehensive and detailed report of the Trust's
operations, activities, financial condition, and
accomplishments, and such recommendations as the Director of
the Trust determines appropriate; and
(B) a comprehensive and detailed inventory of funds
distributed from the Trust Fund during the fiscal year for
which the report is being prepared.
(3) Statement of the board.--Each report under paragraph
(1) shall include a statement from the Board containing--
(A) a clear description of the plans and priorities of the
Board for the subsequent 5-year period for expenditures from
the Trust Fund; and
(B) an estimate of the funds that will be available for
such expenditures from the Trust Fund.
(4) Submission to the president and congress.--A report
under this subsection shall be submitted to the President and
the appropriate committees of Congress.
(b) Testimony.--The Chair of the Board, other members of
the Board, and the Director and principal officers of the
Trust shall testify before the appropriate committees of
Congress, upon request of such committees, with respect to--
(1) a report prepared under subsection (a)(1); and
(2) any other matter that such committees may determine
appropriate.
SEC. 4. INVESTMENT OF TRUST FUNDS.
(a) In General.--The Secretary of the Treasury, after
consultation with the Board, shall invest the funds of the
Trust Fund in interest-bearing obligations of the United
States or in obligations guaranteed as to both principal and
interest by the United States.
(b) Expenditures.--
(1) In general.--The Director of the Trust shall not
undertake grant or contract activities under this Act until
the Trust has received the interest or other proceeds from
the investment of the Trust Funds for not less than 1 year's
duration. Thereafter, upon Board approval of the annual
budget of the Trust, the Director of the Trust may commence
such grant or contract activities at the start of each fiscal
year.
(2) Obligation of funds.--
(A) In general.--Except as provided in subparagraph (B), in
awarding grants or contracts or making other expenditures
under this Act, the Director of the Trust shall not obligate
funds from the Trust that exceed the proceeds received from
the investment of the funds in the Trust Fund during the
preceding fiscal year.
(B) Carry over.--Funds from the Trust Fund that are
available for obligation for a fiscal year that are not
obligated for such fiscal year shall remain available for
obligation for the succeeding fiscal year.
SEC. 5. SPECIAL ACCOUNT FOR DISTRIBUTION TO PUBLIC TELEVISION
STATIONS.
(a) Reservation.--An amount equivalent to 21 percent of the
interest derived from the investment proceeds referred to in
section 2(b)(2) shall be reserved in a special account within
the Trust Fund for distribution on a regular basis to those
noncommercial educational television broadcast stations (as
defined in section 397(6) of the Communications Act of 1934
(47 U.S.C. 397(6)) that are qualified to receive grants from
the Corporation for Public Broadcasting pursuant to section
396(k)(6)(B) of such Act (47 U.S.C. 396(k)(6)(B)) and to the
Public Broadcasting Service in partnership with such
stations.
(b) Responsibility for Distribution.--The Director of the
Trust shall--
(1) through a special contract, designate the Corporation
for Public Broadcasting as the sole agent responsible for the
distribution of funds under this section; and
(2) transfer the funds referred to in subsection (a) to the
Corporation for Public Broadcasting on a regular basis.
(c) Grants.--In making the distribution referred to in
subsection (a), the Corporation for Public Broadcasting shall
utilize a competitive grant application process that is
governed by criteria that ensures that funds are directed to
the creation of locally delivered digital education and
learning services and ensures that a diversity of licensee
types and geographic service areas are adequately served. The
Corporation for Public Broadcasting shall develop such
criteria in consultation with public television licensees,
permitees, and representatives designated by their national
organizations.
______
By Ms. LANDRIEU:
S. 1026. A bill to ensure that offshore energy development on the
outer Continental Shelf continues to serve the needs of the United
States, to create opportunities for new development and the use of
alternative resources, and for other purposes; to the Committee on
Energy and Natural Resources.
Ms. LANDRIEU. Mr. President, today I rise to introduce legislation,
The Stewardship for our Coasts and Opportunities for Reliable Energy
Act--SCORE Act--which will ensure that offshore energy development on
the Outer Continental Shelf--OCS--continues to serve our nation's
needs, create opportunities for new development on the OCS as well as
the use of alternative resources such as renewable energy.
Since the energy frontier of the OCS was officially opened to
significant oil and gas exploration in 1953, no single region has
contributed nearly as much to our Nation's energy production. Today,
the OCS represents more than
[[Page S5158]]
25 percent of our Nation's natural gas production and more than 30
percent of our domestic oil production and it is estimated that 60
percent of the oil and natural gas still to be discovered in U.S. will
come from the OCS.
An average of more than $5 billion in revenues from oil and gas
production are returned to the federal treasury each year from the
OCS--$145 billion since production began. That is the second biggest
contributor of revenue to the Federal Treasury after income taxes.
But just as the Western frontier once represented a great unknown to
our Nation's policymakers, the impact and reality of the OCS seems lost
in a time warp. While much of the OCS has been off limits for decades,
technological advancements have developed in that time to better target
the resources and dramatically reduce the environmental footprint.
These innovations will continue to allow crucial exploration and
production to take place but in an environmentally responsible way. For
example, we have produced three times as many resources on the OCS as
we thought existed 30 years ago.
In fact, the Minerals Management Service--MMS--estimates that from
1985 to 2001, OCS offshore facilities and pipelines accounted for only
2 percent of the oil released into U.S. waters. In fact, 97 percent of
OCS spills are one barrel or less in volume. Serving America's energy
needs and being good stewards of the environment need not be mutually
exclusive goals.
However, despite our technological prowess and responsible
exploration, we have yet to fully realize the potential the OCS has to
offer. Today only 2.5 percent of the 1.76 billion acres that make up
the OCS are leased. Most of the Pacific Coast and the eastern Gulf of
Mexico are off limits as is the entire Atlantic seaboard.
Almost all of the area on the OCS that is currently leased is in the
Central and Western Gulf of Mexico, off the coasts of Louisiana and
Texas, where 98 percent of total OCS production occurs. However, we
cannot continue to take without giving something back in return. A
significant portion of OCS revenues must be returned to the coastal
producing states off whose coasts they are generated.
The Mineral Leasing Act of 1920 shares automatically with states 50
percent of revenues from mineral production on Federal lands within
that State's boundaries. These funds are distributed to States
automatically, outside the budget process and not subject to
appropriations. In fiscal year 2004, the State of Wyoming received $564
million as a result of this law and the State of New Mexico received
$365 million. However, there is no similar provision in law for coastal
producing states to share federal oil and gas revenues generated on the
OCS.
For both onshore and offshore production, the justification for
sharing with the state is the same: the state serves as the platform
which enables the Federal Government to support a basic element of our
daily lives--turning on our lights, heating our homes and running our
commuter trains. In light of the OCS' vital contribution to our
Nation's energy needs, economy and national security, it seems only
fair and logical that we should return a portion of these revenues to
the few states that are providing this crucial supply of energy.
The SCORE Act would automatically distribute a significant portion of
OCS revenues to the five coastal producing States without moratoria off
their coasts Alaska, Texas, Louisiana, Mississippi and Alabama based on
each state's production, with 35 percent of each State's allocation
directed to coastal counties and parishes.
When Hurricane Ivan struck back in September of last year, it should
have been a wake up call to us all. Although the storm did not hit
Louisiana directly, its impact on the price and supply of oil and gas
in this country could still be felt four months later. One can only
imagine what the impact would have been had Ivan cut a more Western
path in the Gulf. How many more hurricane seasons are we going to spend
playing Russian roulette with our oil and gas supply?
Returning a portion of OCS revenues to coastal producing states is
crucial to restoring and preserving the vital wetlands and the billions
in energy investments they protect. It will also help further
strengthen our national economic security by maintaining our current
energy supply and continuing to provide the platform for us to go
further in our quest to develop domestic resources while attempting to
reduce our reliance on foreign energy supplies.
In addition to ensuring that the vital offshore energy development
that has served our Nation's needs for 50 years can continue, the SCORE
Act also seeks to establish opportunities for new development on the
OCS.
The legislation would direct the Secretary of Interior to establish
seaward lateral boundaries for all coastal States by regulation.
Coastal States with a moratoria currently in place off their coasts
would have the option, through their Governor with the consent of the
State legislature, to explore the possibility of offshore energy
development off their coasts.
These coastal States could petition the Secretary of Interior for a
resource assessment of energy sources located within their seaward
lateral boundaries. With these assessments in hand, the State
legislature of the State could request that any or all of the area
within their boundaries, but only beyond 20 miles from their coastline,
be made available for leasing. If the Secretary permits leasing within
the requesting State's boundary, the State qualifies to receive a
portion of revenues generated from any production that takes place
within their seaward lateral boundary.
Finally, SCORE would provide the opportunity for innovative,
alternative uses of the OCS, including renewable energy projects such
as wind, wave and solar. A portion of revenues from this production
would be shared with the State off whose coastline the production took
place.
Next week the Senate Energy and Natural Resources Committee, under
the leadership of Chairman Domenici and Senator Bingaman, will begin
marking up comprehensive energy legislation. I am hopeful that some
aspects of the proposal I have laid out today will be included as part
of the bill reported out of committee. I look forward to working with
my colleagues on the Committee over the next few weeks to further
discuss these concepts and make them a reality.
Quite simply, SCORE allows our country to continue to utilize the
tremendous and vital natural resources of the OCS while also providing
us the opportunity to further explore the unlimited potential of this
vast frontier. It is time to base our decisions on modern successes
rather than out-dated worries.
______
By Mrs. CLINTON (for herself and Ms. Collins):
S. 1028. A bill to amend title 10, United States Code, to enhance the
protection of members of the Armed Forces and their spouses from
unscrupulous financial services sales practices through increased
consumer education, and for other purposes, to the Committee on Armed
Services.
Mrs. CLINTON. Mr. President, today I am introducing the Military
Personnel Financial Services Education Act of 2005. Senator Collins, my
colleague on the Armed Services Committee, has agreed to cosponsor this
legislation. This bill will directly address a problem that has plagued
military servicemen and women for years: a lack of general knowledge
about the insurance and other financial services available to them.
This deficiency in information has led to many of our brave men and
women in uniform being taken advantage of by unscrupulous companies
that have targeted and preyed on junior members of our military.
Last year, a series of articles in the New York Times uncovered a
serious problem: there were a number of companies using misleading
sales practices to sell expensive life insurance policies to Iraq-bound
recruits and other uniformed personnel. These articles led to
investigations by the Department of Justice, reports by the GAO, and
legislation by Congress. Earlier this year, I joined with Senator Enzi
to introduce the Military Personnel Financial Services Protection Act.
That legislation goes a long way toward tracking unscrupulous
companies, and eliminating investment schemes which take advantage of
our men and women in uniform.
But we also need to address our more fundamental responsibilities to
our
[[Page S5159]]
servicemen and women, and their families, to ensure that we provide
them with adequate financial education so that they can make informed
decisions about their future.
This bill will require the Department of Defense to provide consumer
education for members of the armed forces and their spouses. It
instructs the Secretary of Defense to carry out a comprehensive
education program for military members regarding public and private
financial services, including life insurance and the marketing
practices of these services, available to them. This education will be
institutionalized in the initial and recurring training for members of
the military.
This bill also requires that counseling services on these issues be
made available, upon request, to members and their spouses. I think it
is very important to include the spouses in this program, because we
all know that investment decisions should be made as a family. Too many
times, a military spouse has to make these decisions alone, while their
husband or wife is deployed. This bill will require a permanent,
trained counselor at military bases with at least 750 assigned
personnel, and a part-time, equally capable counselor available at
smaller bases with less than 750. By our calculations, this means about
230 installations will have full-time counselors.
Finally, regarding life insurance, this bill will take existing
legislation and DoD policy one more step in the military member's
favor. During counseling of members or spouses regarding life
insurance, counselors must include information on the availability of
Servicemembers' Group Life Insurance--SGLI--as well as other available
products. It requires that any enlisted member in the grades of E1-E4
must provide confirmation that they have received counseling from their
approved counselor or commander before entering into any new contract
with a private sector life insurer. Our legislation will keep the
current rule of a 7 day waiting period for allotments to take effect to
facilitate time for counseling. Existing policies will not be impacted
by our legislation.
I am pleased to be working on this issue with Senator Collins, my
colleague on the Armed Services Committee, who has taken such a strong
interest in ensuring proper financial education for our servicemembers.
In closing, I want to reiterate the importance of this bill to
military families. If implemented, this legislation will ensure our
military families are fully equipped to make informed decisions that
will best meet their financial and insurance needs. In my view, this is
a provision long overdue. Thank you.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1028
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 ``Military Personnel Financial
Services Education Act of 2005''.
SEC. 2. CONSUMER EDUCATION FOR MEMBERS OF THE ARMED FORCES
AND THEIR SPOUSES ON INSURANCE AND OTHER
FINANCIAL SERVICES.
(a) Education and Counseling Requirements.--
(1) In general.--Chapter 50 of title 10, United States
Code, is amended by adding at the end the following new
section:
``Sec. 992. Consumer education: financial services
``(a) Requirement for Consumer Education Program for
Members.--(1) The Secretary concerned shall carry out a
program to provide comprehensive education to members of the
armed forces under the jurisdiction of the Secretary on--
``(A) financial services that are available under law to
members;
``(B) financial services that are routinely offered by
private sector sources to members;
``(C) practices relating to the marketing of private sector
financial services to members;
``(D) such other matters relating to financial services
available to members, and the marketing of financial services
to members, as the Secretary considers appropriate; and
``(E) such other financial practices as the Secretary
considers appropriate.
``(2) Training under this subsection shall be provided to
members as--
``(A) a component of the members' initial entry training;
``(B) a component of each level of the members'
professional development training that is required for
promotion; and
``(C) a component of periodically recurring required
training that is provided for the members at military
installations.
``(3) The training provided at a military installation
under paragraph (2)(C) shall include information on any
financial services marketing practices that are particularly
prevalent at that military installation and in the vicinity.
``(b) Counseling for Members and Spouses.--(1) The
Secretary concerned shall provide counseling on financial
services to each member of the armed forces under the
jurisdiction of the Secretary.
``(2) The Secretary concerned shall, upon request, provide
counseling on financial services to the spouse of any member
of the armed forces under the jurisdiction of the Secretary.
``(2) The Secretary concerned shall provide counseling on
financial services under this subsection as follows:
``(A) In the case of members, and the spouses of members,
assigned to a military installation to which at least 750
members of the armed forces are assigned, through a full-time
financial services counselor at such installation.
``(B) In the case of members, and the spouses of members,
assigned to a military installation other than an
installation described in subparagraph (A), through such
mechanisms as the Secretary considers appropriate, including
through the provision of counseling by a member of the armed
forces in grade E-7 or above, or a civilian, at such
installation who provides such counseling as a part of the
other duties performed by such member or civilian, as the
case may be, at such installation.
``(3) Each financial services counselor under paragraph
(2)(A), and each individual providing counseling on financial
services under paragraph (2)(B), shall be an individual who,
by reason of education, training, or experience, is qualified
to provide helpful counseling to members of the armed forces
and their spouses on financial services and marketing
practices described in subsection (a)(1). Such individual may
be a member of the armed forces or an employee of the Federal
Government.
``(4) The Secretary concerned shall take such action as is
necessary to ensure that each financial services counselor
under paragraph (2)(A), and each individual providing
counseling on financial services under paragraph (2)(B), is
free from conflicts of interest relevant to the performance
of duty under this section and, in the performance of that
duty, is dedicated to furnishing members of the armed forces
and their spouses with helpful information and counseling on
financial services and related marketing practices.
``(5) The Secretary concerned may authorize financial
services counseling to be provided to members of a unit of
the armed forces by unit personnel under the guidance and
with the assistance of a financial services counselor under
paragraph (2)(A) or an individual providing counseling on
financial services under paragraph (2)(B), as applicable.
``(c) Life Insurance.--(1) In counseling a member of the
armed forces, or spouse of a member of the armed forces,
under this section regarding life insurance offered by a
private sector source, a financial services counselor under
subsection (b)(2)(A), or an individual providing counseling
on financial services under subsection (b)(2)(B), shall
furnish the member or spouse, as the case may be, with
information on the availability of Servicemembers' Group Life
Insurance under subchapter III of chapter 19 of title 38,
including information on the amounts of coverage available
and the procedures for electing coverage and the amount of
coverage.
``(2)(A) A covered member of the armed forces may not
authorize payment to be made for private sector life
insurance by means of an allotment of pay to which the member
is entitled under chapter 3 of title 37 unless the
authorization of allotment is accompanied by a written
certification by a commander of the member, or by a financial
services counselor referred to in subsection (b)(2)(A) or an
individual providing counseling on financial services under
subsection (b)(2)(B), as applicable, that the member has
received counseling under paragraph (1) regarding the
purchase of coverage under that private sector life
insurance.
``(B) Subject to subparagraph (C), a written certification
described in subparagraph (A) may not be made with respect to
a member's authorization of allotment as described in
subparagraph (A) until 7 days after the date of the member's
authorization of allotment in order to facilitate the
provision of counseling to the member under paragraph (1).
``(C) The commander of a member may waive the applicability
of subparagraph (B) to a member for good cause, including the
member's imminent change of station.
``(D) In this paragraph, the term `covered member of the
armed forces' means a member of the armed forces in grades E-
1 through E-4.
``(d) Financial Services Defined.--In this section, the
term `financial services' includes the following:
``(1) Life insurance, casualty insurance, and other
insurance.
``(2) Investments in securities or financial
instruments.''.
(2) Clerical amendment.--The table of sections at the
beginning of such chapter is amended by adding at the end the
following new item:
[[Page S5160]]
``992. Consumer education: financial services.''.
(b) Continuing Effect of Existing Allotments for Life
Insurance.--Subsection (c)(2) of section 992 of title 10,
United States Code (as added by subsection (a)), shall not
affect any allotment of pay authorized by a member of the
Armed Forces before the effective date of such section.
(c) Effective Date.--The amendments made by this section
shall take effect on the first day of the first month that
begins more than 120 days after the date of the enactment of
this Act.
Ms. COLLINS. Mr. President, I am pleased to join with Senator Clinton
on legislation that will address the persistent problems that we have
experienced with the sale of inappropriate life insurance and
investment products to our servicemen and women. Although these issues
were newly publicized last year in a series of articles in the New York
Times, these problems actually go back for decades according to a 2002
Defense Department report.
According to that report, deceptive practices have been employed to
sell unnecessary and inappropriate financial products to our military
for more than thirty years. Furthermore, these sales have been in
violation of DoD's policies aimed at regulating the sale of commercial
products on military bases.
One of the report's most alarming findings is that these practices
have a ``clear and present'' effect on morale, discipline and unit
integrity. It states:
Service members who have been coerced or deceived into
buying insurance on a military installation blame not only
the sales agents. The victims blame their military superiors
for placing them in a position to be misled. The trust and
respect that military leaders seek to instill in their
subordinates are clearly reduced among those who have bought
insurance that is of little or no value to them. This
adversely affects the unit integrity.
The author of this study, an Army General and lawyer, spoke to
numerous victims of these deceptive sales practices. He stated in his
report that these soldiers told him that they had less trust in their
military superiors after these incidents. They also expressed a reduced
interest in reenlisting.
With so many of our troops in harm's way, it is time for Congress to
take decisive action on this matter. Although DoD has issued another
set of draft regulations, it is barred by statute from implementing
these reforms until this fall. Moreover, I am not convinced that merely
tightening the regulation of such sales on base will have the desired
outcome of significantly reducing the sale of inappropriate insurance
products.
The Clinton-Collins legislation would: establish a requirement that
DoD provide real financial education for service members and their
spouses; provide for financial counselors at military bases; and
require that junior enlisted personnel receive information on their
federally provided life insurance before allotting part of their pay
toward the purchase of private life insurance products.
These provisions reflect the problems and deficiencies identified by
DoD's own report. Specifically, the report concluded that DoD's current
personal financial education programs were inadequate, noting
particularly that the education provided enlisted personnel was
``substantially less than that provided to junior officers.'' It is our
belief that providing military personnel with a sound financial
education and access to information is the best method of providing
them and their families with the protection that they deserve.
While that report went much further in its recommendations, even
recommending that such sales be barred, our legislation provides for
more moderate measures in the hope that we can make real progress on
this matter without resorting to extreme measures that would unfairly
punish the countless ethical insurance agents who responsibly serve the
military life insurance market. Instead, our legislation would give our
troops the tools to protect themselves against those who engage in
these abusive and deceptive sales practices.
______
By Mr. REED (for himself, Ms. Collins, Mr. Kennedy, and Mrs.
Murray):
S. 1029. A bill to amend the Higher Education Act of 1965 to expand
college access and increase college persistence, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.
______
By Mr. REED (for himself, Ms. Collins, Mr. Kennedy, and Mrs.
Murray):
S. 1030. A bill to amend the Higher Education Act of 1965 to simplify
and improve the process of applying for student assistance, and for
other purposes; to the Committee on Health, Education, Labor, and
Pensions.
Mr. REED. Mr. President, today I introduce two bills to expand access
to college. I am pleased to be joined in this effort by Senators
Collins, Kennedy, and Murray.
We are slated to reauthorize the Higher Education Act this Congress,
after being unable to do so in the 108th Congress. Over the course of
this time, the discussions on higher education have not focused on
proposals that would help the neediest students attend college. This is
troubling, particularly as more and more students are being priced out
of college, which shortchanges their future and that of our Nation.
An individual's climb up the economic ladder is directly related to
the amount of education he or she receives. Given the strong
correlation among educational attainment, employment, and wages, the
cost of not going to college is just too high.
And yet, too many college students are underprepared, underfinanced,
and overworked. Those who make it through are saddled by huge loans.
But as reports such as Empty Promises by the Advisory Committee on
Student Financial Assistance have shown, many more cannot afford the
cost of college at all.
Even though there have been gains due to the Higher Education Act,
the current approach to student aid is not working to close the gap in
college attendance between our lowest and highest income students or
the gap between the aid low-income students receive and the actual cost
of attendance. Indeed, about seven times as many students from high-
income families graduate from college by age 24 as students from low-
income families. Low-income, college-qualified high school graduates
have an annual ``unmet need'' of $4,000 and rising in college expenses.
A decline in real dollars spent on grants and sharp increases in the
cost of college have been key causal factors of this unfortunate
situation. Indeed, there has been a steep decline in the purchasing
power of the Pell Grant, which was established by my predecessor,
Senator Claiborne Pell, to ensure higher education was not an
``unachievable dream.'' According to the State PIRGs' Higher Education
Project, the maximum Pell Grant covered 84 percent of average four-year
public tuition costs in 1976. Today, the maximum Pell Grant of $4,050
covers only about 39 percent.
Over the last 10 years, tuition and fees at public and private 4-year
colleges rose 51 percent and 36 percent, respectively, (after adjusting
for inflation), which is a more rapid growth rate than consumer prices.
Students have felt the bite as states have drastically cut funding for
public colleges.
In 2008, the largest number of students in our history will graduate
from high school. Another demographic reality is that our nation will
need to ensure a steady stream of replacement workers as college-
educated baby boomers begin to retire in increasing numbers.
This crisis calls out for action. An educated citizenry and a world
class workforce should be a national imperative. Our nation cannot
afford to lose out on the countless returns from a robust education
investment.
Today we introduce two bills to expand college access.
The first bill, the ACCESS--Accessing College through Comprehensive
Early Outreach and State Partnerships--Act, focuses on a program I have
long worked with Senator Collins and the other cosponsors to save,
reinvigorate, and fund the Leveraging Educational Assistance
Partnership or LEAP program. LEAP is the only program in which the
federal and state governments are partners in extending higher
education opportunities to financially needy students.
The ACCESS Act forges a new Federal incentive for States to do even
more to help low-income students by creating within LEAP an access and
persistence partnership program. States will be rewarded--via higher
[[Page S5161]]
levels of federal matching dollars--for creating vibrant partnerships
with colleges, early intervention and mentoring programs, foundations,
and businesses and providing cohesion and coordination among these
entities. Access and persistence partnerships have three main goals: to
provide low-income students with a grant that fills the gap of their
unmet need; to increase participation of low-income students in early
information, intervention, mentoring, and outreach programs; and to
provide early notification to low-income students of their eligibility
for financial aid. Research has shown that successful college access
programs are those that offer early intervention and mentoring services
coupled with early information about estimated financial aid awards and
adequate grant funding to make the dream of higher education a reality.
Students participating in such programs are more financially and
academically prepared, and thus more likely to enroll in college and
persist to degree completion.
The second bill we introduce today, the FAFSA--Financial Aid Form
Simplification and Access Act--has several key components designed to
make the college application process both simple and certain. As the
advisory committee's recent report, The Student Aid Gauntlet, has
shown, students today confront an overly burdensome and complex
financial aid application process. Our legislation would simplify this
process by allowing more students to qualify for an Automatic-Zero--
auto-zero--Expected Family Contribution by aligning its eligibility
with the standards of other federal means-tested programs, like free
school lunch, SSI, and Food Stamps. Students and families should not
have to prove over and over again that they are low-income, and asking
students to fill out lengthy forms when they already meet the
eligibility level for Pell Grants is a burden we should ease.
In a similar vein, the legislation establishes a short, paper EZ-
FAFSA application form for students qualifying for the auto-zero;
phases out the printing of the long paper form and utilizes the savings
to bridge the digital divide for students without web access; requires
the utilization of smart technology to create a tailored web-based
application form that ensures students answer only the questions needed
to determine financial aid eligibility in the State in which they
reside; and creates a free telefile system for students without
Internet access. Additionally, the FAFSA Act requires the Secretary, in
cooperation with states and colleges, to develop a system for students
to get early estimates of aid from multiple sources, learn if they
qualify to fill out an EZ FAFSA, and notify those participating in
Federal means-tested programs of their potential eligibility for a
maximum Pell Grant. Simplified forms and an early information system
providing details on what filling out these forms means to students is
critical, particularly given the American Council on Education's
findings that one of every five dependent low-income students and one
of every four independent low-income students failed to take advantage
of financial aid programs because they did not submit a FAFSA.
The FAFSA Act also expands college access for low-income students, in
part by simplifying the application process for students with special
circumstances, including students in foster care and emancipated youth;
ensuring the equitable treatment of prepaid tuition and college savings
plans; and reducing the work penalty. The current income protection
allowance levels are unrealistically low, creating a disincentive for
students to work in order to pay college costs.
We must act on these bills and others to make sure that every student
who works hard and plays by the rules gets the opportunity to live the
American Dream.
I was pleased to work with the Advisory Committee on Student
Financial Assistance and a host of other higher education organizations
and charitable foundations on these bills.
I urge my colleagues to cosponsor these bills and work for their
inclusion in the upcoming reauthorization of the Higher Education Act.
Mr. President, I ask unanimous consent that the text of these bills
be printed in the Record.
There being no objection, the bills were ordered to be printed in the
Record, as follows:
S. 1029
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 ``Accessing College through
Comprehensive Early Outreach and State Partnerships Act''.
SEC. 2. GRANTS FOR ACCESS AND PERSISTENCE.
(a) Authorization of Appropriations.--Section 415A(b) of
the Higher Education Act of 1965 (20 U.S.C. 1070c(b)) is
amended by striking paragraphs (1) and (2) and inserting the
following:
``(1) In general.--There are authorized to be appropriated
to carry out this subpart $500,000,000 for fiscal year 2006,
and such sums as may be necessary for each of the 5
succeeding fiscal years.
``(2) Reservation.--For any fiscal year for which the
amount appropriated under paragraph (1) exceeds $30,000,000,
the excess amount shall be available to carry out section
415E.''.
(b) Applications for Leveraging Educational Assistance
Partnership Programs.--Section 415C(b) of the Higher
Education Act of 1965 (20 U.S.C. 1070c-2(b)) is amended--
(1) in paragraph (2), by striking ``$5,000'' and inserting
``$12,500'';
(2) in paragraph (9), by striking ``and'' after the
semicolon;
(3) in paragraph (10), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(11) provides notification to eligible students that such
grants are--
``(A) Leveraging Educational Assistance Partnership Grants;
and
``(B) funded by the Federal Government and the State.''.
(c) Grants for Access and Persistence.--Section 415E of the
Higher Education Act of 1965 (20 U.S.C. 1070c-3a) is amended
to read as follows:
``SEC. 415E. GRANTS FOR ACCESS AND PERSISTENCE.
``(a) Purpose.--It is the purpose of this section to expand
college access and increase college persistence by making
allotments to States to enable the States to--
``(1) expand and enhance partnerships with institutions of
higher education, early information and intervention,
mentoring, or outreach programs, private corporations,
philanthropic organizations, and other interested parties to
carry out activities under this section and to provide
coordination and cohesion among Federal, State, and local
governmental and private efforts that provide financial
assistance to help low-income students attend college;
``(2) provide need-based access and persistence grants to
eligible low-income students;
``(3) provide early notification to low-income students of
their eligibility for financial aid; and
``(4) encourage increased participation in early
information and intervention, mentoring, or outreach
programs.
``(b) Allotments to States.--
``(1) In general.--
``(A) Authorization.--From sums reserved under section
415A(b)(2) for each fiscal year, the Secretary shall make an
allotment to each State that submits an application for an
allotment in accordance with subsection (c) to enable the
State to pay the Federal share of the cost of carrying out
the activities under subsection (d).
``(B) Determination of allotment.--In making allotments
under subparagraph (A), the Secretary shall consider the
following:
``(i) Continuation of award.--If a State continues to meet
the specifications established in its application under
subsection (c), the Secretary shall make an allotment to such
State that is not less than the allotment made to such State
for the previous fiscal year.
``(ii) Priority.--The Secretary shall give priority in
making allotments to States that meet the requirements under
paragraph (2)(B)(ii).
``(2) Federal share.--
``(A) In general.--The Federal share of the cost of
carrying out the activities under subsection (d) for any
fiscal year may not exceed 66.66 percent.
``(B) Different percentages.--The Federal share under this
section shall be determined in accordance with the following:
``(i) If a State applies for an allotment under this
section in partnership with any number of degree granting
institutions of higher education in the State whose combined
full-time enrollment represents less than a majority of all
students attending institutions of higher education in the
State, and philanthropic organizations that are located in,
or that provide funding in, the State or private corporations
that are located in, or that do business in, the State, then
the Federal share of the cost of carrying out the activities
under subsection (d) shall be equal to 57 percent.
``(ii) If a State applies for an allotment under this
section in partnership with any number of degree granting
institutions of higher education in the State whose combined
full-time enrollment represents a majority of all students
attending institutions of higher education in the State,
philanthropic organizations that are located in, or that
provide funding in, the State, and private corporations that
are located in, or that do business in, the State, then the
Federal
[[Page S5162]]
share of the cost of carrying out the activities under
subsection (d) shall be equal to 66.66 percent.
``(c) Application for Allotment.--
``(1) In general.--
``(A) Submission.--A State that desires to receive an
allotment under this section shall submit an application to
the Secretary at such time, in such manner, and containing
such information as the Secretary may require.
``(B) Content.--An application submitted under subparagraph
(A) shall include the following:
``(i) A description of the State's plan for using the
allotted funds.
``(ii) Assurances that the State will provide matching
funds, from State, institutional, philanthropic, or private
funds, of not less than 33.33 percent of the cost of carrying
out the activities under subsection (d). Matching funds from
philanthropic organizations used to provide early information
and intervention, mentoring, or outreach programs may be in
cash or in kind. The State shall specify the methods by which
matching funds will be paid and include provisions designed
to ensure that funds provided under this section will be used
to supplement, and not supplant, Federal and non-Federal
funds available for carrying out the activities under this
title. A State that uses non-Federal funds to create or
expand existing partnerships with nonprofit organizations or
community-based organizations in which such organizations
match State funds for student scholarships, may apply such
matching funds from such organizations toward fulfilling the
State's matching obligation under this clause.
``(iii) Assurances that early information and intervention,
mentoring, or outreach programs exist within the State or
that there is a plan to make such programs widely available.
``(iv) A description of the organizational structure that
the State has in place to administer the activities under
subsection (d), including a description of the system the
State will use to track the participation of students who
receive grants under this section to degree completion.
``(v) Assurances that the State has a method in place, such
as acceptance of the automatic zero expected family
contribution determination described in section 479, to
identify eligible low-income students and award State grant
aid to such students.
``(vi) Assurances that the State will provide notification
to eligible low-income students that grants under this
section are--
``(I) Leveraging Educational Assistance Partnership Grants;
and
``(II) funded by the Federal Government and the State.
``(2) State agency.--The State agency that submits an
application for a State under section 415C(a) shall be the
same State agency that submits an application under paragraph
(1) for such State.
``(3) Partnership.--In applying for an allotment under this
section, the State agency shall apply for the allotment in
partnership with--
``(A) not less than 1 public and 1 private degree granting
institution of higher education that are located in the
State;
``(B) new or existing early information and intervention,
mentoring, or outreach programs located in the State; and
``(C) not less than 1--
``(i) philanthropic organization located in, or that
provides funding in, the State; or
``(ii) private corporation located in, or that does
business in, the State.
``(4) Roles of partners.--
``(A) State agency.--A State agency that is in a
partnership receiving an allotment under this section--
``(i) shall--
``(I) serve as the primary administrative unit for the
partnership;
``(II) provide or coordinate matching funds, and coordinate
activities among partners;
``(III) encourage each institution of higher education in
the State to participate in the partnership;
``(IV) make determinations and early notifications of
assistance as described under subsection (d)(2); and
``(V) annually report to the Secretary on the partnership's
progress in meeting the purpose of this section; and
``(ii) may provide early information and intervention,
mentoring, or outreach programs.
``(B) Degree granting institutions of higher education.--A
degree granting institution of higher education that is in a
partnership receiving an allotment under this section--
``(i) shall--
``(I) recruit and admit participating qualified students
and provide such additional institutional grant aid to
participating students as agreed to with the State agency;
``(II) provide support services to students who receive an
access and persistence grant under this section and are
enrolled at such institution; and
``(III) assist the State in the identification of eligible
students and the dissemination of early notifications of
assistance as agreed to with the State agency; and
``(ii) may provide funding for early information and
intervention, mentoring, or outreach programs or provide such
services directly.
``(C) Programs.--An early information and intervention,
mentoring, or outreach program that is in a partnership
receiving an allotment under this section shall provide
direct services, support, and information to participating
students.
``(D) Philanthropic organization or private corporation.--A
philanthropic organization or private corporation that is in
a partnership receiving an allotment under this section shall
provide funds for access and persistence grants for
participating students, or provide funds or support for early
information and intervention, mentoring, or outreach
programs.
``(d) Authorized Activities.--
``(1) In general.--
``(A) Establishment of partnership.--Each State receiving
an allotment under this section shall use the funds to
establish a partnership to award access and persistence
grants to eligible low-income students in order to increase
the amount of financial assistance such students receive
under this subpart for undergraduate education expenses.
``(B) Amount.--
``(i) Partnerships with institutions serving less than a
majority of students in the state.--
``(I) In general.--In the case where a State receiving an
allotment under this section is in a partnership described in
subsection (b)(2)(B)(i), the amount of an access and
persistence grant awarded by such State shall be not less
than the amount that is equal to the average undergraduate
tuition and mandatory fees at 4-year public institutions of
higher education in the State where the student resides (less
any other Federal or State sponsored grant amount, college
work study amount, and scholarship amount received by the
student) and such amount shall be used toward the cost of
attendance at an institution of higher education, located in
the State, that is a partner in the partnership.
``(II) Cost of attendance.--A State that has a program,
apart from the partnership under this section, of providing
eligible low-income students with grants that are equal to
the average undergraduate tuition and mandatory fees at 4-
year public institutions of higher education in the State,
may increase the amount of access and persistence grants
awarded by such State up to an amount that is equal to the
average cost of attendance at 4-year public institutions of
higher education in the State (less any other Federal or
State sponsored grant amount, college work study amount, and
scholarship amount received by the student).
``(ii) Partnership with institutions serving the majority
of students in the state.--In the case where a State
receiving an allotment under this section is in a partnership
described in subsection (b)(2)(B)(ii), the amount of an
access and persistence grant awarded by such State shall be
not more than an amount that is equal to the average cost of
attendance at 4-year public institutions of higher education
in the State where the student resides (less any other
Federal or State sponsored grant amount, college work study
amount, and scholarship amount received by the student) and
such amount shall be used by the student to attend an
institution of higher education, located in the State, that
is a partner in the partnership.
``(2) Early notification.--
``(A) In general.--Each State receiving an allotment under
this section shall annually notify low-income students, such
as students who are eligible to receive a free lunch under
the school lunch program established under the Richard B.
Russell National School Lunch Act, in grade 7 through grade
12 in the State of their potential eligibility for student
financial assistance, including an access and persistence
grant, to attend an institution of higher education.
``(B) Content of notice.--The notification under
subparagraph (A)--
``(i) shall include--
``(I) information about early information and intervention,
mentoring, or outreach programs available to the student;
``(II) information that a student's candidacy for an access
and persistence grant is enhanced through participation in an
early information and intervention, mentoring, or outreach
program;
``(III) an explanation that student and family eligibility
and participation in other Federal means-tested programs may
indicate eligibility for an access and persistence grant and
other student aid programs;
``(IV) a nonbinding estimation of the total amount of
financial aid a low-income student with a similar income
level may expect to receive, including an estimation of the
amount of an access and persistence grant and an estimation
of the amount of grants, loans, and all other available types
of aid from the major Federal and State financial aid
programs;
``(V) an explanation that in order to be eligible for an
access and persistence grant, at a minimum, a student shall
meet the requirement under paragraph (3), graduate from
secondary school, and enroll at an institution of higher
education that is a partner in the partnership;
``(VI) information on any additional requirements (such as
a student pledge detailing student responsibilities) that the
State may impose for receipt of an access and persistence
grant under this section; and
``(VII) instructions on how to apply for an access and
persistence grant and an explanation that a student is
required to file a Free Application for Federal Student Aid
authorized under section 483(a) to be eligible for such grant
and assistance from other Federal and State financial aid
programs; and
[[Page S5163]]
``(ii) may include a disclaimer that access and persistence
grant awards are contingent upon--
``(I) a determination of the student's financial
eligibility at the time of the student's enrollment at an
institution of higher education that is a partner in the
partnership;
``(II) annual Federal and State appropriations; and
``(III) other aid received by the student at the time of
the student's enrollment at an institution of higher
education that is a partner in the partnership.
``(3) Eligibility.--In determining which students are
eligible to receive access and persistence grants, the State
shall ensure that each such student meets not less than 1 of
the following:
``(A) Meets not less than 2 of the following criteria, with
priority given to students meeting all of the following
criteria:
``(i) Has an expected family contribution equal to zero (as
described in section 479) or a comparable alternative based
upon the State's approved criteria in section 415C(b)(4).
``(ii) Has qualified for a free lunch, or at the State's
discretion a reduced price lunch, under the school lunch
program established under the Richard B. Russell National
School Lunch Act.
``(iii) Qualifies for the State's maximum undergraduate
award, as authorized under section 415C(b).
``(iv) Is participating in, or has participated in, a
Federal, State, institutional, or community early information
and intervention, mentoring, or outreach program, as
recognized by the State agency administering activities under
this section.
``(B) Is receiving, or has received, an access and
persistence grant under this section, in accordance with
paragraph (5).
``(4) Grant award.--Once a student, including those who
have received early notification under paragraph (2) from the
State, applies for admission to an institution that is a
partner in the partnership, files a Free Application for
Federal Student Aid and any related existing State form, and
is determined eligible by the State under paragraph (3), the
State shall--
``(A) issue the student a preliminary access and
persistence grant award certificate with tentative award
amounts; and
``(B) inform the student that payment of the access and
persistence grant award amounts is subject to certification
of enrollment and award eligibility by the institution of
higher education.
``(5) Duration of award.--An eligible student that receives
an access and persistence grant under this section shall
receive such grant award for each year of such student's
undergraduate education in which the student remains eligible
for assistance under this title, including pursuant to
section 484(c), and remains financially eligible as
determined by the State, except that the State may impose
reasonable time limits to baccalaureate degree completion.
``(e) Administrative Cost Allowance.--A State that receives
an allotment under this section may reserve not more than 3.5
percent of the funds made available annually through the
allotment for State administrative functions required to
carry out this section.
``(f) Statutory and Regulatory Relief for Institutions of
Higher Education.--The Secretary may grant, upon the request
of an institution of higher education that is in a
partnership described in subsection (b)(2)(B)(ii) and that
receives an allotment under this section, a waiver for such
institution from statutory or regulatory requirements that
inhibit the ability of the institution to successfully and
efficiently participate in the activities of the partnership.
``(g) Applicability Rule.--The provisions of this subpart
which are not inconsistent with this section shall apply to
the program authorized by this section.
``(h) Maintenance of Effort Requirement.--Each State
receiving an allotment under this section for a fiscal year
shall provide the Secretary an assurance that the aggregate
amount expended per student or the aggregate expenditures by
the State, from funds derived from non-Federal sources, for
the authorized activities described in subsection (d) for the
preceding fiscal year were not less than the amount expended
per student or the aggregate expenditure by the State for the
activities for the second preceding fiscal year.
``(i) Special Rule.--Notwithstanding subsection (h), for
purposes of determining a State's share of the cost of the
authorized activities described in subsection (d), the State
shall consider only those expenditures from non-Federal
sources that exceed its total expenditures for need-based
grants, scholarships, and work-study assistance for fiscal
year 1999 (including any such assistance provided under this
subpart).
``(j) Reports.--Not later than 3 years after the date of
enactment of the Accessing College through Comprehensive
Early Outreach and State Partnerships Act, and annually
thereafter, the Secretary shall submit a report describing
the activities and the impact of the partnerships under this
section to the Committee on Health, Education, Labor, and
Pensions of the Senate and the Committee on Education and the
Workforce of the House of Representatives.''.
(d) Continuation and Transition.--During the 2-year period
commencing on the date of enactment of this Act, the
Secretary shall continue to award grants under section 415E
of the Higher Education Act of 1965 (20 U.S.C. 1070c-3a), as
such section existed on the day before the date of enactment
of this Act, to States that choose to apply for grants under
such predecessor section.
(e) Implementation and Evaluation.--Section 491(j) of the
Higher Education Act of 1965 (20 U.S.C. 1098(j)) is amended--
(1) in paragraph (4), by striking ``and'' after the
semicolon; and
(2) by striking paragraph (5) and inserting the following:
``(5) not later than 6 months after the date of enactment
of the Accessing College through Comprehensive Early Outreach
and State Partnerships Act, advise the Secretary on means to
implement the activities under section 415E, and the Advisory
Committee shall continue to monitor, evaluate, and make
recommendations on the progress of partnerships that receive
allotments under such section; and''.
S. 1030
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 ``Financial Aid Form
Simplification and Access Act''.
SEC. 2. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO
IMPROVEMENTS.
(a) Simplified Needs Test.--Section 479 of the Higher
Education Act of 1965 (20 U.S.C. 1087ss) is amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) by striking subparagraph (A)(i) and inserting the
following:
``(i) the student's parents--
``(I) file, or are eligible to file, a form described in
paragraph (3);
``(II) certify that they are not required to file an income
tax return;
``(III) 1 of whom is a dislocated worker; or
``(IV) or the student received benefits at some time during
the previous 24-month period under a means-tested Federal
benefit program as defined under subsection (d); and''; and
(ii) by striking subparagraph (B)(i) and inserting the
following:
``(i) the student (and the student's spouse, if any)--
``(I) files, or is eligible to file, a form described in
paragraph (3);
``(II) certifies that the student (and the student's
spouse, if any) is not required to file an income tax return;
``(III) is a dislocated worker; or
``(IV) received benefits at some time during the previous
24-month period under a means-tested Federal benefit program
as defined under subsection (d); and''; and
(B) in paragraph (3), by striking ``A student or family
files a form described in this subsection, or subsection (c),
as the case may be, if the student or family, respectively,
files'' and inserting ``In the case of an independent
student, the student, or in the case of a dependent student,
the family, files a form described in this subsection, or
subsection (c), as the case may be, if the student or family,
as appropriate, files'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by striking subparagraph (A) and inserting the
following:
``(A) the student's parents--
``(i) file, or are eligible to file, a form described in
subsection (b)(3);
``(ii) certify that they are not required to file an income
tax return;
``(iii) 1 of whom is a dislocated worker; or
``(iv) or the student received benefits at some time during
the previous 24-month period under a means-tested Federal
benefit program as defined under subsection (d); and''; and
(ii) by striking subparagraph (B) and inserting the
following:
``(B) the sum of the adjusted gross income of the parents
is less than or equal to $25,000; or'';
(B) in paragraph (2)--
(i) by striking subparagraph (A) and inserting the
following:
``(A) the student (and the student's spouse, if any)--
``(i) files, or is eligible to file, a form described in
subsection (b)(3);
``(ii) certifies that the student (and the student's
spouse, if any) is not required to file an income tax return;
``(iii) is a dislocated worker; or
``(iv) received benefits at some time during the previous
24-month period under a means-tested Federal benefit program
as defined under subsection (d); and''; and
(ii) by striking subparagraph (B) and inserting the
following:
``(B) the sum of the adjusted gross income of the student
and spouse (if appropriate) is less than or equal to
$25,000.''; and
(C) by striking the flush matter at the end and inserting
the following:
``The Secretary shall annually adjust the income level
necessary to qualify an applicant for the zero expected
family contribution. The income level shall be adjusted
according to increases in the Consumer Price Index, as
defined in section 478(f).''; and
(3) by adding at the end the following:
``(d) Definitions.--In this section:
``(1) Dislocated worker.--The term `dislocated worker' has
the same meaning given the term in section 101 of the
Workforce Investment Act of 1998 (29 U.S.C. 2801).
``(2) Means-tested federal benefit program.--The term
`means-tested Federal benefit program' means a mandatory
spending
[[Page S5164]]
program of the Federal Government in which eligibility for
the program's benefits, or the amount of such benefits, or
both, are determined on the basis of income or resources of
the individual or family seeking the benefit, and includes
the supplemental security income program under title XVI of
the Social Security Act (42 U.S.C. 1381 et seq.), the food
stamp program under the Food Stamp Act of 1977 (7 U.S.C. 2011
et seq.), and the free and reduced price school lunch program
established under the Richard B. Russell National School
Lunch Act (42 U.S.C. 1751 et seq.).''.
(b) Discretion of Student Financial Aid Administrators.--
Section 479A(a) of the Higher Education Act of 1965 (20
U.S.C. 1087tt(a)) is amended in the third sentence by
inserting ``a family member who is a dislocated worker (as
defined in section 101 of the Workforce Investment Act of
1998 (29 U.S.C. 2801)),'' after ``recent unemployment of a
family member,''.
(c) Reporting Requirements.--
(1) Eligibility guidelines.--The Secretary of Education
shall regularly evaluate the impact of the eligibility
guidelines in subsections (b)(1)(A)(i), (b)(1)(B)(i),
(c)(1)(A), and (c)(2)(A) of section 479 of the Higher
Education Act of 1965 (20 U.S.C. 1087ss(b)(1)(A)(i),
(b)(1)(B)(i), (c)(1)(A), and (c)(2)(A)).
(2) Means-tested federal benefit program.--The Secretary
shall evaluate every 3 years the impact of including whether
a student or parent received benefits under a means-tested
Federal benefit program (as defined in section 479(d) of the
Higher Education Act of 1965 (20 U.S.C. 1087ss(d)) as a
factor in determining eligibility under subsections (b) and
(c) of section 479 of the Higher Education Act of 1965 (20
U.S.C. 1087ss(b) and (c)).
SEC. 3 IMPROVING PAPER AND ELECTRONIC FORMS.
(a) Simplified Needs Test.--Section 479(a) of the Higher
Education Act of 1965 (20 U.S.C. 1087ss(a)) is amended by
adding at the end the following:
``(3) Simplified forms.--The Secretary shall make special
efforts to notify families meeting the requirements of
subsection (c) that such families may use the EZ FAFSA
described in section 483(a)(2)(B) and notify families meeting
the requirements of subsection (b) that such families may use
the simplified electronic application form described in
section 483(a)(3)(B).''.
(b) Common Financial Aid Form Development and Processing.--
Section 483 of the Higher Education Act of 1965 (20 U.S.C.
1090) is amended--
(1) in subsection (a)--
(A) by striking paragraphs (1), (2), and (5);
(B) by redesignating paragraphs (3), (4), (6), and (7), as
paragraphs (8), (9), (10), and (11), respectively;
(C) by inserting before paragraph (8), as redesignated by
subparagraph (B), the following:
``(1) In general.--
``(A) Common financial reporting forms.--The Secretary, in
cooperation with representatives of agencies and
organizations involved in student financial assistance, shall
produce, distribute, and process free of charge common
financial reporting forms as described in this subsection to
be used for application and reapplication to determine the
need and eligibility of a student for financial assistance
under parts A through E (other than subpart 4 of part A).
These forms shall be made available to applicants in both
paper and electronic formats and shall be referred to (except
as otherwise provided in this subsection) as the `Free
Application for Federal Student Aid' or `FAFSA'.
``(B) Early analysis.--The Secretary shall permit an
applicant to complete a form described in this subsection
prior to enrollment in order to obtain an estimate from the
Secretary of the applicant's expected family contribution, as
defined in section 473. Such applicant shall be permitted to
update information submitted on a form described in this
subsection completed prior to enrollment using the process
described in paragraph (4).
``(2) Paper format.--
``(A) In general.--Subject to subparagraph (C), the
Secretary shall produce, distribute, and process common forms
in paper format to meet the requirements of paragraph (1).
The Secretary shall develop a common paper form for
applicants who do not meet the requirements of subparagraph
(B).
``(B) EZ FAFSA.--
``(i) In general.--The Secretary shall develop and use a
simplified paper application form, to be known as the `EZ
FAFSA', to be used for applicants meeting the requirements of
section 479(c).
``(ii) Reduced data requirements.--The EZ FAFSA shall
permit an applicant to submit for financial assistance
purposes, only the data elements required to make a
determination of whether the applicant meets the requirements
under section 479(c).
``(iii) State data.--The Secretary shall include on the EZ
FAFSA space for information that is required of an applicant
to be eligible for State financial assistance, as provided
under paragraph (5), except the Secretary shall not include a
State's data if that State does not permit its applicants for
State assistance to use the EZ FAFSA.
``(iv) Free availability and processing.--The provisions of
paragraph (6) shall apply to the EZ FAFSA, and the data
collected by means of the EZ FAFSA shall be available to
institutions of higher education, guaranty agencies, and
States in accordance with paragraph (8).
``(v) Testing.--The Secretary shall conduct appropriate
field testing on the EZ FAFSA.
``(C) Phasing out the paper form for students who do not
meet the requirements of the automatic zero expected family
contribution.--
``(i) In general.--The Secretary shall make all efforts to
encourage all applicants to utilize the electronic forms
described in paragraph (3).
``(ii) Phaseout of full paper fafsa.--Not later than 5
years after the date of enactment of the Financial Aid Form
Simplification and Access Act, to the extent practicable, the
Secretary shall phaseout the printing of the full paper Free
Application for Federal Student Aid described in subparagraph
(A) and used by applicants who do not meet the requirements
of the EZ FAFSA described in subparagraph (B).
``(iii) Availability of full paper fafsa.--
``(I) In general.--Prior to and after the phaseout
described in clause (ii), the Secretary shall maintain an
online printable version of the paper forms described in
subparagraphs (A) and (B).
``(II) Accessibility.--The online printable version
described in subclause (I) shall be made easily accessible
and downloadable to students on the same website used to
provide students with the electronic application forms
described in paragraph (3).
``(III) Submission of forms.--The Secretary shall enable,
to the extent practicable, students to submit a form
described in this clause that is downloaded and printed in
order to meet the filing requirements of this section and to
receive aid from programs established under this title.
``(iv) Use of savings to address the digital divide.--
``(I) In general.--The Secretary shall utilize savings
accrued by phasing out the full paper Free Application for
Federal Student Aid and moving more applicants to the
electronic forms, to improve access to the electronic forms
for applicants meeting the requirements of section 479(c).
``(II) Report.--The Secretary shall report annually to the
Committee on Health, Education, Labor, and Pensions of the
Senate and the Committee on Education and the Workforce of
the House of Representatives on steps taken to eliminate the
digital divide and on the phaseout of the full paper Free
Application for Federal Student Aid described in subparagraph
(A). The report shall specifically address the impact of the
digital divide on independent students, adults, and dependent
students, including students completing applications
described in this paragraph and paragraphs (3) and (4).
``(3) Electronic format.--
``(A) In general.--
``(i) Establishment.--The Secretary shall produce,
distribute, and process common financial reporting forms in
electronic format (such as through a website called `FAFSA on
the Web') to meet the requirements of paragraph (1). The
Secretary shall include an electronic version of the EZ FAFSA
form for applicants who meet the requirements of paragraph
(2)(B) and develop common electronic forms for applicants who
meet the requirements of subparagraph (B) and common
electronic forms for applicants who do not meet the
requirements of subparagraph (B).
``(ii) State data.--The Secretary shall include on the
common electronic forms described in clause (i) space for
information that is required of an applicant to be eligible
for State financial assistance, as provided under paragraph
(5). The Secretary may not require an applicant to complete
data required by any State other than the applicant's State
of residence.
(iii) Streamlined format.--The Secretary shall use, to the
fullest extent practicable, all available technology to
ensure that a student answers only the minimum number of
questions necessary.
``(B) Simplified application.--
``(i) In general.--The Secretary shall develop and use a
simplified electronic application form to be used by
applicants meeting the requirements under section 479(b).
``(ii) Reduced data requirements.--The simplified
electronic application form shall permit an applicant to
submit for financial assistance purposes, only the data
elements required to make a determination of whether the
applicant meets the requirements under section 479(b).
``(iii) State data.--The Secretary shall include on the
simplified electronic application form space for information
that is required of an applicant to be eligible for State
financial assistance, as provided under paragraph (5), except
the Secretary shall not include a State's data if that State
does not permit its applicants for State assistance to use
the simplified electronic application form.
``(iv) Free availability and processing.--The provisions of
paragraph (6) shall apply to the simplified electronic
application form, and the data collected by means of the
simplified electronic application form shall be available to
institutions of higher education, guaranty agencies, and
States in accordance with paragraph (8).
``(v) Testing.--The Secretary shall conduct appropriate
field testing on the form developed under this subparagraph.
``(C) Rule of construction.--Nothing in this subsection
shall be construed to prohibit the use of the form developed
by the Secretary pursuant to this paragraph by an eligible
institution, eligible lender, guaranty agency, State grant
agency, private computer software providers, a consortium of
such entities, or such other entities as the Secretary may
designate.
[[Page S5165]]
``(D) Privacy.--The Secretary shall ensure that data
collection under this paragraph complies with section 552a of
title 5, United States Code, and that any entity using the
electronic version of the forms developed by the Secretary
pursuant to this paragraph shall maintain reasonable and
appropriate administrative, technical, and physical
safeguards to ensure the integrity and confidentiality of the
information, and to protect against security threats, or
unauthorized uses or disclosures of the information provided
on the electronic version of the form. Data collected by such
electronic version of the form shall be used only for the
application, award, and administration of aid awarded under
this title, State aid, or aid awarded by eligible
institutions or such entities as the Secretary may designate.
No data collected by such electronic version of the form
shall be used for making final aid awards under this title
until such data have been processed by the Secretary or a
contractor or designee of the Secretary, except as may be
permitted under this title.
``(E) Signature.--Notwithstanding any other provision of
this Act, the Secretary may permit an electronic form to be
submitted without a signature, if a signature is subsequently
submitted by the applicant.
``(F) Personal identification numbers authorized.--The
Secretary is authorized to assign to applicants personal
identification numbers--
``(i) to enable the applicants to use such numbers in lieu
of a signature for purposes of completing a form under this
paragraph; and
``(ii) for any purpose determined by the Secretary to
enable the Secretary to carry out this title.
``(4) Reapplication.--
``(A) In general.--The Secretary shall develop streamlined
reapplication forms and processes, including both paper and
electronic reapplication processes, consistent with the
requirements of this subsection, for an applicant who applies
for financial assistance under this title in the next
succeeding academic year subsequent to the year in which such
applicant first applied for financial assistance under this
title.
``(B) Updated.--The Secretary shall determine, in
cooperation with States, institutions of higher education,
and agencies and organizations involved in student financial
assistance, the data elements that can be updated from the
previous academic year's application.
``(C) Rule of construction.--Nothing in this title shall be
construed as limiting the authority of the Secretary to
reduce the number of data elements required of reapplicants.
``(D) Zero family contribution.--Applicants determined to
have a zero family contribution pursuant to section 479(c)
shall not be required to provide any financial data in a
reapplication form, except that which is necessary to
determine eligibility under such section.
``(5) State requirements.--
``(A) In general.--The Secretary shall include on the forms
developed under this subsection, such State-specific data
items as the Secretary determines are necessary to meet State
requirements for need-based State aid. Such items shall be
selected in consultation with States to assist in the
awarding of State financial assistance in accordance with the
terms of this subsection. The number of such data items shall
not be less than the number included on the form on October
7, 1998, unless States notify the Secretary that they no
longer require those data items for the distribution of State
need-based aid.
``(B) Annual review.--The Secretary shall conduct an annual
review process to determine which forms and data items the
States require to award need-based State aid and other
application requirements that the States may impose.
``(C) Federal register notice.--The Secretary shall publish
on an annual basis a notice in the Federal Register requiring
each State agency to inform the Secretary--
``(i) if the agency is unable to permit applicants to
utilize the forms described in paragraphs (2)(B) and (3)(B);
and
``(ii) of the State-specific data that the agency requires
for delivery of State need-based financial aid.
``(D) State notification to the secretary.--
``(i) In general.--Each State shall notify the Secretary--
``(I) whether the State permits an applicant to file a form
described in paragraph (2)(B) or (3)(B) for purposes of
determining eligibility for State need-based grant aid; and
``(II) of the State-specific data that the State requires
for delivery of State need-based financial aid.
``(ii) No permission.--In the event that a State does not
permit an applicant to file a form described in paragraph
(2)(B) or (3)(B) for purposes of determining eligibility for
State need-based grant aid--
``(I) the State shall notify the Secretary if it is not
permitted to do so because of either State law or because of
agency policy; and
``(II) the notification under subclause (I) shall include
an estimate of the program cost to permit applicants to
complete the forms described in paragraphs (2)(B) and (3)(B).
``(iii) Lack of notification by the state.--If a State does
not notify the Secretary pursuant to clause (i), the
Secretary shall--
``(I) permit residents of that State to complete the forms
described in paragraphs (2)(B) and (3)(B); and
``(II) not require any resident of that State to complete
any data previously required by that State.
``(E) Restriction.--The Secretary shall not require
applicants to complete any nonfinancial data or financial
data that are not required by the applicant's State agency,
except as may be required for applicants who use the paper
forms described in subparagraphs (A) and (B) of paragraph
(2).
``(6) Charges to students and parents for use of forms
prohibited.--The common financial reporting forms prescribed
by the Secretary under this subsection shall be produced,
distributed, and processed by the Secretary and no parent or
student shall be charged a fee by the Secretary, a
contractor, a third party servicer or private software
provider, or any other public or private entity for the
collection, processing, or delivery of financial aid through
the use of such forms. The need and eligibility of a student
for financial assistance under parts A through E (other than
under subpart 4 of part A) may only be determined by using a
form developed by the Secretary pursuant to this subsection.
No student may receive assistance under parts A through E
(other than under subpart 4 of part A), except by use of a
form developed by the Secretary pursuant to this subsection.
No data collected on a paper or electronic form or other
document, which the Secretary determines was created to
replace a form prescribed under this subsection and therefore
violates the integrity of a simplified and free financial aid
application process, for which a fee is charged shall be used
to complete the form prescribed under this subsection. No
person, commercial entity, or other entity shall request,
obtain, or utilize an applicant's Personal Identification
Number for purposes of submitting an application on an
applicant's behalf except State agencies that have entered
into an agreement with the Secretary to streamline
applications, eligible institutions, or programs under this
title as permitted by the Secretary.
``(7) Application processing cycle.--The Secretary shall,
prior to January 1 of a student's planned year of enrollment
to the extent practicable--
``(A) enable the student to submit a form described under
this subsection in order to meet the filing requirements of
this section and receive aid from programs under this title;
and
``(B) initiate the processing of a form under this
subsection submitted by the student.''; and
(D) by adding at the end the following:
``(12) Early application and award demonstration program.--
``(A) In general.--Not later than 2 years after the date of
enactment of this paragraph, the Secretary shall implement an
early application demonstration program enabling dependent
students to--
``(i) complete applications under this subsection in such
students' junior year of secondary school, or in the academic
year that is 2 years prior to such students' intended year of
enrollment at an institution of higher education; and
``(ii) be eligible to receive aid under this title, aid
from participants under this paragraph, State financial
assistance as provided under section 415C, and other aid
provided by participating institutions through the submission
of an application as described in clause (i).
``(B) Purpose.--The purpose of the demonstration program
under this paragraph is to measure the benefits, in terms of
student aspirations and plans to attend college, and the
adverse effects, in terms of program costs, integrity,
distribution, and delivery of aid under this title, of
implementing an early application system for all dependent
students that allows dependent students to apply for
financial aid using information from the year prior to the
year prior to enrollment at an institution of higher
education. Additional objectives associated with
implementation of the demonstration program are the
following:
``(i) Measure the feasibility of enabling dependent
students to apply for Federal, State, and institutional
financial aid in such students' junior year of secondary
school, using information from the year prior to the year
prior to enrollment, by completing any of the application
forms under this subsection.
``(ii) Determine the feasibility, benefits, and adverse
effects of implementing a data match with the Internal
Revenue Service.
``(iii) Identify whether receiving final financial aid
awards not later than the fall of a student's senior year
positively impacts the college aspirations and plans of such
student.
``(iv) Measure the impact of using income information from
the year prior to the year prior to enrollment on--
``(I) eligibility for financial aid under this title and
for other institutional aid; and
``(II) the cost of financial aid programs under this title.
``(v) Effectively evaluate the benefits and adverse effects
of the demonstration program on program costs, integrity,
distribution, and delivery of aid.
``(C) Participants.--The Secretary shall select, in
consultation with States and institutions of higher
education, States and institutions within the States
interested in participating in the demonstration program
under this paragraph. The States and institutions of higher
education shall participate in programs under this title and
be willing to make final financial aid awards to students
[[Page S5166]]
based on such students' application information from the year
prior to the year prior to enrollment. Such awards may be
contingent on the student being admitted to and enrolling in
the participating institution the following year. The
Secretary shall also select as participants in the
demonstration program secondary schools that are located in
the participating States and dependent students who reside in
the participating States.
``(D) Application process.--The Secretary shall ensure that
the following provisions are included in the demonstration
program:
``(i) Participating States and institutions of higher
education shall--
``(I) allow participating students to apply for financial
aid as provided under this title during such students' junior
year of secondary school using information from the year
prior to the year prior to enrollment; and
``(II) award final financial aid awards to participating
students based on the applications provided under the
demonstration program.
``(ii) Participating States and institutions of higher
education shall not require students participating in the
demonstration program to complete an additional application
in the year prior to enrollment in order to receive State aid
under section 415C and any other institutional aid.
``(iii) Financial aid administrators at participating
institutions of higher education shall be allowed to use such
administrators' discretion in awarding financial aid to
participating students, as outlined under sections 479A and
480(d).
``(E) Data match with the internal revenue service.--The
Secretary shall include in the demonstration project a data
match with the Internal Revenue Service in order to verify
data provided by participating students and gauge the
feasibility of implementing such a data match for all
students applying for aid under this title.
``(F) Evaluation.--The Secretary shall conduct a rigorous
evaluation of the demonstration program in order to measure
the program's benefits and adverse effects as required under
subparagraph (B).
``(G) Outreach.--The Secretary shall make appropriate
efforts in order to notify States of the demonstration
program. Upon determination of which States will be
participating in the demonstration program, the Secretary
shall continue to make efforts to notify institutions of
higher education and dependent students within such
participating States of the opportunity to participate in the
demonstration program and of the participation requirements.
``(H) Consultation.--The Secretary shall consult with the
Advisory Committee on Student Financial Assistance,
established under section 491, on the design and
implementation of the demonstration program and on the
evaluation described in paragraph (F).'';
(2) by striking subsection (b) and inserting the following:
``(b) Early Awareness of Aid Eligibility.--
``(1) In general.--The Secretary shall make every effort to
provide students with early information about potential
financial aid eligibility.
``(2) Availability of means to determine eligibility.--
``(A) In general.--The Secretary shall provide, in
cooperation with States, institutions of higher education,
agencies, and organizations involved in student financial
assistance, both through a widely disseminated printed form
and the Internet or other electronic means, a system for
individuals to determine easily, by entering relevant data,
approximately the amount of grant, work-study, and loan
assistance for which an individual would be eligible under
this title upon completion and verification of a form under
subsection (a).
``(B) Determination of whether to use simplified
application.--The system established under this paragraph
shall also permit an individual to determine whether or not
the individual may apply for aid using an EZ FAFSA described
in subsection (a)(2)(B) or a simplified electronic
application form described in subsection (a)(3)(B).
``(3) Availability of means to communicate eligibility.--
``(A) Lower-income students.--The Secretary shall--
``(i) make special efforts to notify students who qualify
for a free or reduced price lunch under the school lunch
program established under the Richard B. Russell National
School Lunch Act (42 U.S.C. 1751 et seq.), benefits under the
food stamp program under the Food Stamp Act of 1977 (7 U.S.C.
2011 et seq.), or benefits under such programs as the
Secretary shall determine, of such students' potential
eligibility for a maximum Federal Pell Grant under subpart 1
of part A; and
``(ii) disseminate informational materials regarding the
linkage between eligibility for means-tested Federal benefit
programs and eligibility for a Federal Pell Grant, as
determined necessary by the Secretary.
``(B) Middle school students.--The Secretary shall, in
cooperation with States, middle schools, programs under this
title that serve middle school students, and other
cooperating independent outreach programs, make special
efforts to notify middle school students of the availability
of financial assistance under this title and of the
approximate amounts of grant, work-study, and loan assistance
an individual would be eligible for under this title.
``(C) Secondary school students.--The Secretary shall, in
cooperation with States, secondary schools, programs under
this title that serve secondary school students, and
cooperating independent outreach programs, make special
efforts to notify students in their junior year of secondary
school the approximate amounts of grant, work-study, and loan
assistance an individual would be eligible for under this
title upon completion and verification of an application form
under subsection (a).'';
(3) in subsection (c), by striking ``Labor and Human
Resources'' and inserting ``Health, Education, Labor, and
Pensions'';
(4) by striking subsection (d);
(5) by redesignating subsection (e) as subsection (d); and
(6) by amending subsection (d), as redesignated by
paragraph (5), to read as follows:
``(d) Assistance in Preparation of Financial Aid
Application.--
``(1) Preparation authorized.--Nothing in this Act shall
limit an applicant from using a preparer for consultative or
preparation services for the completion of the common
financial reporting forms described in subsection (a).
``(2) Preparer identification.--Any common financial
reporting form required to be made under this title shall
include the name, signature, address or employer's address,
social security number or employer identification number, and
organizational affiliation of the preparer of such common
financial reporting form.
``(3) Special rule.--Nothing in this Act shall limit
preparers of common financial reporting forms required to be
made under this title from collecting source information,
including Internal Revenue Service tax forms, in providing
consultative and preparation services in completing the
forms.
``(4) Additional requirements.--A preparer that provides
consultative or preparation services pursuant to this
subsection shall--
``(A) clearly inform individuals upon initial contact
(including advertising in clear and conspicuous language on
the website of the preparer, including by providing a link
directly to the website described in subsection (a)(3), if
the preparer provides such services through a website) that
the common financial reporting forms that are required to
determine eligibility for financial assistance under parts A
through E (other than subpart 4 of part A) may be completed
for free via paper or electronic forms provided by the
Secretary;
``(B) refrain from producing or disseminating any form
other than the forms produced by the Secretary under
subsection (a); and
``(C) not charge any fee to any individual seeking such
services who meets the requirements under subsection (b) or
(c) of section 479.''.
(c) Toll-Free Application and Information.--Section 479 of
the Higher Education Act of 1965 (20 U.S.C. 1087ss), as
amended by section 2, is further amended by adding at the end
the following:
``(e) Toll-Free Application and Information.--The Secretary
shall contract for, or establish, and publicize a toll-free
telephone service to provide an application mechanism and
timely and accurate information to the general public. The
information provided shall include specific instructions on
completing the application form for assistance under this
title. Such service shall also include a service accessible
by telecommunications devices for the deaf (TDD's) and shall,
in addition to the services provided for in the previous
sentence, refer such students to the national clearinghouse
on postsecondary education or another appropriate provider of
technical assistance and information on postsecondary
educational services, that is supported under section 663 of
the Individuals with Disabilities Education Act. Not later
than 2 years after the date of enactment of the Financial Aid
Form Simplification and Access Act, the Secretary shall test
and implement, to the extent practicable, a toll-free
telephone-based application system to permit applicants who
are eligible to utilize the EZ FAFSA described in section
483(a) over such system.''.
(d) Master Calendar.--Section 482(a)(1)(B) of the Higher
Education Act of 1965 (20 U.S.C. 1089(a)(1)(B)) is amended to
read as follows:
``(B) by March 1: proposed modifications and updates
pursuant to sections 478, 479(c), and 483(a)(5) published in
the Federal Register;''.
(e) Simplifying the Verification Process.--Section 484 of
the Higher Education Act of 1965 (20 U.S.C. 1091) is amended
by adding at the end the following:
``(s) Verification of Student Eligibility.--
``(1) Regulatory review.--The Secretary shall review all
regulations of the Department related to verifying the
information provided on a student's financial aid application
in order to simplify the verification process for students
and institutions.
``(2) Report.--Not later than 2 years after the date of
enactment of this subsection, the Secretary shall prepare and
submit a final report to the Committee on Health, Education,
Labor, and Pensions of the Senate and the Committee on
Education and the Workforce of the House of Representatives
on steps taken, to the extent practicable, to simplify the
verification process. The report shall specifically address
steps taken to--
``(A) reduce the burden of verification on students who are
selected for verification at multiple institutions;
[[Page S5167]]
``(B) reduce the number of data elements that are required
to be verified for applicants meeting the requirements of
subsection (b) or (c) of section 479, so that only those data
elements required to determine eligibility under subsection
(b) or (c) of section 479 are subject to verification;
``(C) reduce the burden and costs associated with
verification for institutions that are eligible to
participate in Federal student aid programs under this title;
and
``(D) increase the use of technology in the verification
process.''.
SEC. 4. ALLOWANCE FOR STATE AND OTHER TAXES.
Section 478(g) of the Higher Education Act of 1965 (20
U.S.C. 1087rr(g)) is amended to read as follows:
``(g) State and Other Tax Allowance.--
``(1) Hold harmless.--Notwithstanding any other provision
of law, the annual updates to the allowance for State and
other taxes in the tables used in the Federal Need Analysis
Methodology to determine a student's expected family
contribution for the award year 2005-2006 under part F of
title IV, published in the Federal Register on Thursday,
December 23, 2004 (69 Fed. Reg. 76926), shall not apply to a
student to the extent the updates will reduce the amount of
Federal student assistance for which the student is eligible.
``(2) Publication in the federal register.--For each award
year after award year 2005-2006, the Secretary shall publish
in the Federal Register a revised table of State and other
tax allowances for the purpose of sections 475(c)(2),
475(g)(3), 476(b)(2), and 477(b)(2). The Secretary shall
develop such revised table after review of the Department of
the Treasury's Statistics of Income file and determination of
the percentage of income that each State's taxes represent.
The Secretary shall phase-in the State and other tax
allowances from the revised table for an award year
proportionately over a period of time of not less than 2
years if a revised table was not published in the Federal
Register during the previous award year.
``(3) Agreement.--The Secretary is authorized to enter into
agreement with the Commissioner of the Internal Revenue
Service to develop the data required to revise the table of
State and other tax allowances for the purpose of sections
475(c)(2), 475(g)(3), 476(b)(2), and 477(b)(2).''.
SEC. 5. SUPPORT FOR WORKING STUDENTS.
(a) Dependent Students.--Section 475(g)(2)(D) of the Higher
Education Act of 1965 (20 U.S.C. 1087oo(g)(2)(D)) is amended
to read as follows:
``(D) $9,000;''.
(b) Independent Students Without Dependents Other Than a
Spouse.--Section 476(b)(1)(A)(iv) of the Higher Education Act
of 1965 (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended to read as
follows:
``(iv) an income protection allowance of the following
amount (or a successor amount prescribed by the Secretary
under section 478)--
``(I) $10,000 for single or separated students;
``(II) $10,000 for married students where both are enrolled
pursuant to subsection (a)(2); and
``(III) $13,000 for married students where 1 is enrolled
pursuant to subsection (a)(2);''.
(c) Independent Students With Dependents Other Than a
Spouse.--Section 477(b)(4) of the Higher Education Act of
1965 (20 U.S.C. 1087qq(b)(4)) is amended to read as follows:
``(4) Income protection allowance.--The income protection
allowance is determined by the following table (or a
successor table prescribed by the Secretary under section
478):
``Income Protection Allowance
----------------------------------------------------------------------------------------------------------------
Number in College
Family Size ----------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2 $17,580 $15,230
3 20,940 17,610 $16,260
4 24,950 22,600 20,270 $17,930
5 28,740 26,390 24,060 21,720 $19,390
6 32,950 30,610 28,280 25,940 23,610
----------------------------------------------------------------------------------------------------------------
NOTE: For each additional family member, add $3,280.
For each additional college student, subtract $2,330.''.
SEC. 6. SIMPLIFICATION FOR STUDENTS WITH SPECIAL
CIRCUMSTANCES.
(a) Independent Student.--Section 480(d) of the Higher
Education Act of 1965 (20 U.S.C. 1087vv(d)) is amended to
read as follows:
``(d) Independent Student.--
``(1) Definition.--The term `independent', when used with
respect to a student, means any individual who--
``(A) is 24 years of age or older by December 31 of the
award year;
``(B) is an orphan, in foster care, or a ward of the court,
or was in foster care or a ward of the court until the
individual reached the age of 18;
``(C) is an emancipated minor or is in legal guardianship
as determined by a court of competent jurisdiction in the
individual's State of legal residence;
``(D) is a veteran of the Armed Forces of the United States
(as defined in subsection (c)(1)) or is currently serving on
active duty in the Armed Forces;
``(E) is a graduate or professional student;
``(F) is a married individual;
``(G) has legal dependents other than a spouse; or
``(H) is a student for whom a financial aid administrator
makes a documented determination of independence by reason of
other unusual circumstances.
``(2) Simplifying the dependency override process.--Nothing
in this section shall prohibit a financial aid administrator
from making a determination of independence, as described in
paragraph (1)(H), based upon a determination of independence
previously made by another financial aid administrator in the
same application year.''.
(b) Tailoring Electronic Applications for Students with
Special Circumstances.--Section 483(a) of the Higher
Education Act of 1965 (20 U.S.C. 1090(a)), as amended by
section 3, is further amended by adding at the end the
following:
``(13) Applications for students seeking a documented
determination of independence.--In the case of a dependent
student seeking a documented determination of independence by
a financial aid administrator, as described in section
480(d), nothing in this section shall prohibit the Secretary
from--
``(A) allowing such student to--
``(i) indicate the student's request for a documented
determination of independence on an electronic form developed
pursuant to this subsection; and
``(ii) submit such form for preliminary processing that
only contains those data elements required of independent
students, as defined in section 480(d);
``(B) collecting and processing on a preliminary basis data
provided by such a student using the electronic forms
developed pursuant to this subsection; and
``(C) distributing such data to institutions of higher
education, guaranty agencies, and States for the purposes of
processing loan applications and determining need and
eligibility for institutional and State financial aid awards
on a preliminary basis, pending a documented determination of
independence by a financial aid administrator.''.
SEC. 7. TREATMENT OF PREPAYMENT AND SAVINGS PLANS UNDER
STUDENT FINANCIAL AID NEEDS ANALYSIS.
(a) Definition of Assets.--Section 480(f) of the Higher
Education Act of 1965 (20 U.S.C. 1087vv(f)) is amended--
(1) in paragraph (1), by inserting ``qualified education
benefits, except as provided in subparagraph (2),'' after
``tax shelters,'';
(2) by redesignating paragraph (2) as paragraph (4); and
(3) by inserting after paragraph (1) the following:
``(2) A qualified education benefit shall not be considered
an asset of a dependent student for purposes of section 475.
The value of a qualified education benefit for purposes of
determining the assets of parents or an independent student
shall be--
``(A) the refund value of any tuition credits or
certificates purchased under a qualified education benefit;
or
``(B) the current balance of any account that is
established as a qualified education benefit for the purpose
of meeting the qualified higher education expenses of the
designated beneficiary of the account.
``(3) In this subsection, the term `qualified education
benefit' means--
``(A) a qualified tuition program (as defined in section
529(b)(1) of the Internal Revenue Code of 1986) or another
prepaid tuition plan offered by a State; or
``(B) a Coverdell education savings account (as defined in
section 530(b)(1) of the Internal Revenue Code of 1986).''.
(b) Definition of Other Financial Assistance.--Section
480(j) of the Higher Education Act of 1965 (20 U.S.C.
1087vv(j)) is amended--
(1) in the heading, by striking ``; Tuition Prepayment
Plans'';
(2) by striking paragraph (2);
(3) in paragraph (3), by inserting ``, or a distribution
that is not includable in gross income under section 529 of
such Code, under another prepaid tuition plan offered by a
State, or under a Coverdell education savings account under
section 530 of such Code'' after ``1986''; and
(4) by redesignating paragraph (3) as paragraph (2).
(c) Total Income.--Section 480(a)(2) of the Higher
Education Act of 1965 (20 U.S.C. 1087vv(a)(2)) is amended to
read as follows:
``(2) No portion of any student financial assistance
received from any program by an individual, no portion of a
national service educational award or post-service benefit
received by an individual under title I of the National and
Community Service Act of 1990 (42 U.S.C. 12571 et seq.), no
portion of any tax
[[Page S5168]]
credit taken under section 25A of the Internal Revenue Code
of 1986, and no distribution from any qualified education
benefit defined in subsection (f)(3) that is not subject to
Federal income tax, shall be included as income or assets in
the computation of expected family contribution for any
program funded in whole or in part under this Act.''.
SEC. 8. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.
Section 491 of the Higher Education Act of 1965 (20 U.S.C.
1098) is further amended--
(1) in subsection (a)(2)--
(A) in subparagraph (B), by striking ``and'' after the
semicolon;
(B) in subparagraph (C), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
``(D) to provide knowledge and understanding of early
intervention programs and make recommendations that will
result in early awareness by low- and moderate-income
students and families of their eligibility for assistance
under this title, and, to the extent practicable, their
eligibility for other forms of State and institutional need-
based student assistance; and
``(E) to make recommendations that will expand and improve
partnerships among the Federal Government, States,
institutions, and private entities to increase the awareness
and total amount of need-based student assistance available
to low- and moderate-income students.'';
(2) in subsection (d)--
(A) in paragraph (6), by striking ``, but nothing in this
section shall authorize the committee to perform such
studies, surveys, or analyses'';
(B) in paragraph (8), by striking ``and'' after the
semicolon;
(C) by redesignating paragraph (9) as paragraph (10); and
(D) by inserting after paragraph (8) the following:
``(9) monitor the adequacy of total need-based aid
available to low- and moderate-income students from all
sources, assess the implications for access and persistence,
and report those implications annually to Congress and the
Secretary; and'';
(3) in subsection (j)--
(A) in paragraph (4), by striking ``and'' after the
semicolon;
(B) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(6) monitor and assess implementation of improvements
called for under this title, make recommendations to the
Secretary that ensure the timely design, testing, and
implementation of the improvements, and report annually to
Congress and the Secretary on progress made toward
simplifying overall delivery, reducing data elements and
questions, incorporating the latest technology, aligning
Federal, State, and institutional eligibility, enhancing
partnerships, and improving early awareness of total student
aid eligibility for low- and moderate-income students and
families.''; and
(4) in subsection (k), by striking ``2004'' and inserting
``2011''.
______
By Ms. CANTWELL (for herself, Mr. Jeffords, and Mrs. Clinton):
S. 1031. A bill to enhance the reliability of the electric system; to
the Committee on Energy and Natural Resources.
Ms. CANTWELL. Mr. President, I rise today to reintroduce the Electric
Reliability Act of 2005, which I am pleased to introduce with my
colleagues, Senator Clinton and Senator Jeffords. This legislation
would give the Federal Energy Regulatory Commission--FERC--authority to
devise a system of mandatory and enforceable standards for the reliable
operation of our Nation's electricity grid.
Enactment of this bill is long overdue. The provisions of this bill
have passed the United States Senate many times. They represent crucial
steps forward in the effort to modernize our Nation's electricity grid
and reform the rules by which it is operated. I believe this body can
and must make necessary progress in upgrading our electricity grid.
As surely my colleagues recall, in August of 2003 much of the
Northeast and Midwest suffered a massive power outage, affecting 50
million consumers from New York to Michigan. This blackout, the biggest
in our Nation's history, has underscored the need for mandatory and
enforceable reliability standards--as envisioned in the Electric
Reliability Act of 2005. To date, the system has operated under a set
of voluntary guidelines, with no concrete penalties for those that
break the rules and jeopardize the reliable energy service that is the
foundation of our Nation's economy.
Following the August 2003 blackout in the NE, a joint report issued
by the United States and Canada the following April recommended a
number of policy changes on both sides of our shared border. The first
recommendation in that report was to make reliability standards
mandatory and enforceable with penalties for non-compliance. The
Electric Reliability Security Act of 2005 does exactly that.
While the August 2003 blackout was certainly a potent reminder, the
call for reliability legislation dates back at least another 5 years.
In 1997, both a Task Force established by the Clinton administration's
Department of Energy and a blue ribbon panel formed by the North
American Electric Reliability Council--NERC--determined that
reliability rules for our Nation's electric system had to be made
mandatory and enforceable.
These conclusions resulted, in part, from an August 1996 blackout in
the Western Interconnection, where the short-circuit of two overloaded
transmission lines near Portland, OR, caused a sweeping outage that
knocked out power for up to 16 hours in 10 States, including my home
State of Washington. The blackout affected 7.5 million consumers from
Idaho to California, resulting in the automatic shut-down of 15 large
thermal nuclear generating plants in California and the Southwest--
compromising the West's energy supply for several days, even after
power had mostly been restored to end-users.
As outlined in Economic Impacts of Infrastructure Failures, a 1997
report submitted to the President's Commission on Critical
Infrastructure Protection, the blackout was estimated to exact between
$1 billion and $4 billion in direct and indirect costs to utilities,
industry and consumers. The report also detailed the risks the outage
posed to public health and safety, including an exponential increase in
traffic accidents, hospitals forced to rely on emergency back-up power
generation, and the grounding of more than 2,000 airline passengers.
While it took time to develop consensus, the Senate recognized the
human and economic stakes associated with the reliable operation of the
electricity grid. Stand-alone legislation very similar to what I have
introduced today passed this body in June 2000, when this Chamber was
under Republican control. And even as the majority has twice changed
hands since then, the United States Senate has twice passed the very
provisions included in the Electric Reliability Act of 2005 as part of
comprehensive energy legislation.
Today I am introducing the Electric Reliability Act of 2005 as I
believe it is time for this body to take concrete steps towards
ensuring the continued reliable operation of our electric grid. This
legislation would mark a substantial achievement in the effort to
upgrade the reliability of our Nation's grid and insulate our economy
from the disastrous impacts of electricity outages.
I ask my colleagues to support this bill.
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By Mrs. BOXER:
S. 1032. A bill to improve seaport security; to the Committee on
Commerce, Science, and Transportation.
Mrs. BOXER. Mr. President, at the end of 2002, the Maritime
Transportation Security Act became law.
I was a member of the conference committee on that bill, and I think
it was a good first step in improving security at our Nation's ports.
It had many good provisions, such as the creation of national and
regional maritime transportation/port security plans to be approved by
the Coast Guard; better coordination of Federal State, local, and
private enforcement agencies; and the establishment of a grant program
for port authorities, waterfront facilities operators, and State and
local agencies to provide security infrastructure improvements.
The problem with the bill was that it had no guaranteed funding
mechanism. As a result, we are underfunding port security. Since the
passage of the Maritime Transportation Security Act, the Department of
Homeland Security has awarded approximately $625 million in port
security grants. This is not enough. The Coast Guard has estimated a
need for $5.4 billion over 10 years for port facility upgrades, and
$7.3 billion over 10 years for all port security. At the same time, the
administration only requested $600 million for infrastructure
protection in fiscal year 2006, and this meager figure does not even
specify a dedicated portion for port security grants.
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With over 40 percent of the Nation's goods imported through
California's ports, a terrorist attack at a California port would not
only be tragic but would be devastating for our Nation's economy.
So, today, I am reintroducing a bill to provide more funding to the
ports. Specifically, it will create a Port Security Grant Program in
the Department of Homeland Security; provide $800 million per year for
5 years in grant funding; and--this is very important to California's
ports--allow the Federal Government to help finance larger multi-year
projects similar to what is done with many of our airports for aviation
security.
I hope that the Senate will act on this bill. Now is not the time to
slow down or delay our efforts to increase and improve transportation
security. The job is not done, and it must be done.
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By Mr. McCAIN (for himself, Mr. Kennedy, Mr. Brownback, Mr.
Lieberman, Mr. Graham, and Mr. Salazar):
S. 1033. A bill to improve border security and immigration; to the
Committee on the Judiciary.
Mr. McCAIN. Mr. President, after more than 5 months of work, I am
pleased to be joined by Senators Kennedy, Brownback, Lieberman, Graham,
and Salazar in introducing the Secure America and Orderly Immigration
Act. This bipartisan, comprehensive immigration reform legislation is
designed to fix our Nation's broken immigration system. This landmark
legislation would bring common sense to the current system and promote
our national security interests. I am equally pleased by the effort of
Congressmen Kolbe, Flake, and Gutierrez who are introducing the House
companion bill.
While in previous years we worked independently on immigration reform
legislation, we are coming together today to introduce what we believe
is groundbreaking, comprehensive legislation. Over a year ago, the
President laid out a framework for what comprehensive immigration
reform should look like. We have used the President's framework to
craft this package and I applaud the President for his leadership on
this issue.
The simple fact is that America's immigration system is broken.
Recent vigilante activities along the southwestern border have shown
that the current situation is not sustainable. Americans are frustrated
with our lack of border security and our inability to control illegal
immigration. We have spent billions of dollars on border enforcement.
We have sent more, but still not enough, Federal agents to the border
equipped with sophisticated technology. We have worked to harden the
border in key places. And yet, illegal immigration continues.
I would like to mention some startling statistics that demonstrate
the critical need for immigration reform. I think the numbers speak for
themselves: Over 300 people died last year trying to cross the border;
about 200 of those deaths occurred in Arizona's desert. Last year 1.1
million illegal immigrants were caught by the Border Patrol in 2004.
Fifty-one percent of those were caught in Arizona. The Border Patrol is
currently apprehending over 1,000 undocumented immigrants a day in
Arizona. According to the FBI, an increasing number of these
individuals are OTMs, Other Than Mexicans, from ``countries of
interest.''
Homeland security is our Nation's number one priority, and this
legislation includes numerous provisions that together will make our
nation more secure. This bill includes provisions to strengthen border
security, both on our side of the border and throughout this
hemisphere. Through the establishment of a new electronic employment
verification system, the bill will create a more secure mechanism to
better enforce our nation's immigration laws within our borders.
Additionally, the bill enhances the authority of the Department of
Labor and the Department of Homeland Security to conduct random audits
to ensure that employers are holding up their end of the bargain. And
if they aren't, they face double fines.
Make no mistake, this is not an amnesty bill. We are not here to
reward law-breakers, and any accusations to the contrary are patently
untrue. This bill recognizes the problems inherent in the current
system and provides a logical and effective means to address these
problems. The reality is, there are an estimated million undocumented
people living and working in this country. It would be impossible to
identify and round up all 10 to 11 million of the current undocumented,
and if we did, it would ground our Nation's economy to a halt. These
millions of people are working. Aliens will not come forward to simply
``report and deport.'' We have a national interest in identifying these
individuals, incentivizing them to come forward out of the shadows, go
through security background checks, pay back taxes, pay penalties for
breaking the law, learn to speak English, and regularize their status.
Anyone who thinks this goal can be achieved without providing an
eventual path to a permanent legal status is not serious about solving
this problem.
Part of the failure of the existing system is its inability to
provide sufficient legal channels to pair willing workers with willing
employers. This bill establishes a new market-based temporary worker
program so that when there is no U.S. worker to fill a job, employers
will be able to hire willing and able foreign workers who have gone
through security background checks, medical exams, and paid a fee for
their visa. And, by doing away with outdated numerical caps on this
program, this bill recognizes that the needs of the U.S. economy are
constantly in flux, and our immigration system must match those needs.
I don't believe there is another issue that is more important to our
Nation than immigration reform. For far too long, our Nation's broken
immigration laws have gone unreformed, leaving Americans vulnerable. We
can no longer afford to delay reform.
The complex and difficult problems associated with immigration reform
will not be solved overnight, but they are among the most difficult
challenges facing our Nation today. That is why it is so important that
the President shares our commitment to comprehensive reform. Together
with the President, I am committed to this process and remain very
hopeful that we will succeed.
I want to especially express my appreciation to Senator Kennedy and
his staff for their sincere commitment to this critical issue. Also,
the contributions to the bill as recommended by Senator Brownback have
been invaluable to this effort. I would also like to thank Senator
Lugar, who allowed us to incorporate critical international border
enforcement provisions from his legislation, the North American
Cooperative Security Act.
Through the collective efforts of a wide range of bipartisan
interests in both Houses of Congress, not to mention immigration
advocacy groups, representatives of our Nation's businesses, and
several labor unions, this comprehensive legislation provides a
meaningful direction for how our immigration system should be reformed,
and our border security strengthened.
I look forward to working with all interested parties in the
important and necessary effort to once and for all reform our broken
immigration system.
Mr. KENNEDY. Mr. President, it's an honor to join Senator McCain and
Congressmen Gutierrez, Kolbe, and Flake in introducing our bipartisan
legislation to reform the Nation's immigration laws. The status quo is
unacceptable, and legislation is urgently needed to deal with all the
inadequacies in our current law, to end the suffering of long-separated
families imposed by the broken system, and to do so in a way that
reflects current realities.
We must modernize our broken immigration system to meet the
challenges of the 21st century. And we need policies that continue to
reflect our best values as a nation--fairness, equal opportunity, and
respect for the rule of law.
One of the mistakes of the past is to assume that we can control
illegal immigration on our own. A realistic immigration policy must be
a two-way street. Under our plan, America will do its part, but we
expect Mexico and other nations to do their part, too, to replace an
illegal immigration flow with regulated, legal immigration.
Our bill will make our immigration policies more realistic and
enforceable,
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restore legality as the prevailing norm, and make it easier for
immigrants to cooperate with local authorities. It will protect the
labor rights of all workers, and create an even playing field for
employers. It will strengthen our economy, restore control of our
borders, and improve national security.
Much of the Nation's economy today depends on the hard work and the
many contributions of immigrants. Many industries depend heavily on
immigrant labor. These men and women enrich our Nation and improve the
quality of our lives. Yet, millions of today's immigrant workers are
not here legally. They and their families live shadow lives in constant
fear of deportation, and easy targets for abuse and exploitation by
unscrupulous employers and criminals as well. Many risk great danger,
and even death, to cross our borders.
Our bill offers practical solutions to deal with these basic
problems. It contains an earned legalization program for immigrants who
have been working in the United States for at least 6 years, a way to
reduce the enormous backlog of petitions to unify immigrant families,
and a revised temporary worker program. The bill also contains strict
border security and enforcement provisions, and measures to ensure that
other countries do their part by requiring them to help control the
flow of their citizens to jobs in the United States.
We feel the bill is a realistic and practical solution to the complex
immigration challenges facing the Nation for so long, and we've worked
closely with as many interested groups as possible to make it fair to
all.
Despite our compromises and bipartisan solutions, there are some who
oppose these reforms. They misleadingly categorize our efforts as
``immigrant amnesty.'' They refuse to accept that these reforms simply
create a legalization program for U.S. workers who have already been
residing and working in the U.S. It is not a guarantee of citizenship,
but an opportunity to continue working hard, start playing by the
rules, and earn permanent residency.
And by bringing immigrants out of the shadows so they can earn a fair
day's pay for a fair day's work, we are protecting American workers'
rights and wages, too.
The legal status must be earned by proving past work contributions,
making a substantial future work commitment, and paying of $2,000 in
penalties.
First, workers will receive temporary resident status, based on their
past work contributions. To earn permanent residence, they must work 6
more years. Otherwise, they will be dropped from the program and
required to leave the country.
It's not an amnesty for them, because they have to earn it. We offer
a fair deal: if they are willing to work hard for us openly, then we're
willing to do something fair for them. It is the only realistic
solution.
If there's any amnesty involved, it's what they have today--an
acquiescence in their presence, because countless businesses could not
function without them since no American workers can be found to fill
their jobs. To be eligible for legal status, applicants must have no
criminal or national security problems. All will be required to undergo
rigorous security clearances. Their names will be checked against the
government's criminal and terrorist databases, and the applicant's
fingerprints will be sent to the FBI for a thorough background check.
It's long past time to put the underground economy above ground, and
recognize the reality of immigrants in our workforce. It's the only way
to achieve effective enforcement rules to protect and strengthen our
labor system, and to stabilize our workforce for employers.
Our bill allows long-term, tax-paying immigrant workers to apply for
earned adjustment of status. Studies show that there are now millions
of illegal immigrants working in the U.S., and it would be
irresponsible to continue to ignore this hidden past of our economic
landscape.
Our bill is also about fairness. It ensures that the rights of all
workers are protected--that the rights to organize, to change jobs
between employers, and to have fair wages, fair hours, and fair working
conditions--cannot be denied. Through this legislation, America can be
proud again that our Nation protects the safety and rights of all our
workers.
Our legislation is also about protecting families. Family unity has
always been a fundamental cornerstone of America's immigration policy.
Yet, millions of individuals today are waiting for immigrant visas to
join with their families.
Our bill will allow these families to be reunited more quickly and
humanely. It also removes and amends unnecessary obstacles in current
law that separate families, such as the affidavit-of-support
requirements and the rigid bars to admissibility. Our bill contains
provisions that will expedite visas to reunite spouses and children of
legal immigrants with their loved ones. It also provides measures to
clear up the backlog of employment-based visas.
In addition, this bill recognizes the need for strong border
protection and enforcement as part of immigration reform. It directs
the Secretary of Homeland Security to develop and implement a National
Strategy for Border Security to coordinate the efforts of Federal,
State, local, and tribal authorities on border management and security.
The Strategy will identify the areas most in need of enforcement and
propose cost-effective ways to defend the border, including better ways
of technology, improved intelligence-sharing and coordination. It also
includes plans to combat human smuggling.
To further improve border enforcement, the bill improves the security
of Mexico's southern border and assesses the needs of Central American
governments in securing their borders. It provides a framework for
better management, communication, coordination, and immigration control
for all our governments, and encourages other governments to control
alien smuggling and trafficking, prevent the use and manufacture of
fraudulent travel documents, and share relevant information.
The bill also encourages so-called circular migration patterns. It
provides for unprecedented cooperation with the governments of the
United States, Canada, Mexico, and other Central American countries on
issues of migration. It asks foreign countries to enter into agreements
with the U.S. to help control the flow of their citizens to jobs in the
U.S., with emphasis on encouraging the re-integration of citizens
returning home.
It also encourages the U.S. government to partner with Mexico to
promote economic opportunity back home and reduce the pressure for its
citizens to immigrate to the U.S. It encourages partnership between the
U.S. and Mexico on health care, so that we are not unfairly burdened by
the cost of administering health care to Mexican nationals.
Further, the bill mandates that immigration-related documents issued
by DHS be biometric, machine-readable, and tamper-resistant. It creates
an Employment Eligibility Confirmation System, so that employers can
verify an employee's identity and employment authorization, and an
improved system to collect entry and exit data to determine the status
of aliens after their arrival to and departure from the U.S. It
protects against immigration fraud by improving regulations on who may
appear in immigration matters.
Another important component of our bill is its State Criminal Alien
Assistance Program, to reimburse states for the direct and indirect
costs of incarcerating illegal aliens.
We know that these reforms are long overdue. The illegal workers here
today are not leaving, and new ones continue to come in. A significant
part of the workforce in many sectors of the economy, especially
agriculture, is undocumented. Massive deportations are unrealistic as
policy, impractical to carry out, and unacceptable to businesses that
rely heavily on their labor.
Americans want and deserve realistic solutions to the very real
immigration problems we face. They don't want open borders, and they
don't want closed borders. They want smart borders, which mean fair and
realistic immigration laws that can actually be enforced, immigration
laws that protect our security, respect our ideals, and honor our
heritage as a Nation of immigrants.
America has been the Promised Land for generations of immigrants who
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have found haven, hope, opportunity and freedom here. Immigrants have
always been an indispensable part of our Nation. They have contributed
immensely to our communities, created new jobs and whole new
industries, served in our armed forces, paid their taxes, and help make
America the continuing land of promise it is today.
It's obvious why the Nation's founders chose ``E Pluribus Unum''--
``out of many, one'' as America's motto two centuries ago. These words,
chosen by Benjamin Franklin, John Adams, and Thomas Jefferson, referred
to their ideal that tiny quarreling colonies could be transformed into
one Nation, with one destiny. That basic ideal applies to individuals
as well. Our diversity is our greatest strength.
We are a Nation of immigrants, and we always will be, and our laws
must be true to that proud heritage. Our bipartisan bill attempts to do
that, and I look forward to working with the Administration and our
colleagues on both sides of the aisle to enact it into law.
____________________